SCHWAB CHARLES CORP 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk For discussion of the quantitative and qualitative disclosures about market risk, see Risk Management in Item 2. - 25 - Part I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements THE CHARLES SCHWAB CORPORATION Condensed Consolidated Statements of Income (In Millions, Except Per Share Amounts) (Unaudited) Three Months Ended March 31, 2026 2025 Net Revenues Interest revenue $ 3,962 $ 3,757 Interest expense ( 818 ) ( 1,051 ) Net interest revenue 3,144 2,706 Asset management and administration fees 1,759 1,530 Trading revenue 1,089 908 Bank deposit account fees 295 245 Other 195 210 Total net revenues 6,482 5,599 Expenses Excluding Interest Compensation and benefits 1,812 1,672 Professional services 303 269 Occupancy and equipment 285 274 Advertising and market development 101 96 Communications 163 153 Depreciation and amortization 201 217 Amortization of acquired intangible assets 132 130 Regulatory fees and assessments 75 89 Other 222 244 Total expenses excluding interest 3,294 3,144 Income before taxes on income 3,188 2,455 Taxes on income 709 546 Net Income 2,479 1,909 Preferred stock dividends and other 82 113 Net Income Available to Common Stockholders $ 2,397 $ 1,796 Weighted-Average Common Shares Outstanding: Basic 1,746 1,817 Diluted 1,752 1,822 Earnings Per Common Shares Outstanding (1) : Basic $ 1.37 $ .99 Diluted $ 1.37 $ .99 (1) For additional information on earnings per common shares outstanding for both voting and nonvoting common stock, see Notes 15 and 17. See Notes to Condensed Consolidated Financial Statements. - 26 - THE CHARLES SCHWAB CORPORATION Condensed Consolidated Statements of Comprehensive Income (In Millions) (Unaudited) Three Months Ended March 31, 2026 2025 Net income $ 2,479 $ 1,909 Other comprehensive income (loss), before tax: Change in net unrealized gain (loss) on available for sale securities: Net unrealized gain (loss) 8 1,061 Other reclassifications included in other revenue — 10 Change in net unrealized gain (loss) on held to maturity securities: Amortization of amounts previously recorded upon transfer to held to maturity from available for sale 496 538 Change in net unrealized gain (loss) on derivatives designated as cash flow hedging instruments: Net unrealized gain (loss) ( 225 ) — Reclassifications included in interest revenue 18 — Other ( 2 ) 1 Other comprehensive income (loss), before tax 295 1,610 Income tax effect ( 69 ) ( 383 ) Other comprehensive income (loss), net of tax 226 1,227 Comprehensive Income (Loss) $ 2,705 $ 3,136 See Notes to Condensed Consolidated Financial Statements. - 27 - THE CHARLES SCHWAB CORPORATION Condensed Consolidated Balance Sheets (In Millions, Except Per Share and Share Amounts) (Unaudited) March 31, 2026 December 31, 2025 Assets Cash and cash equivalents (including resale agreements of $ 6,400 at March 31, 2026) $ 44,975 $ 46,030 Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $ 18,010 and $ 16,901 at March 31, 2026 and December 31, 2025, respectively) 39,778 42,931 Receivables from brokers, dealers, and clearing organizations 11,808 7,190 Receivables from brokerage clients — net 106,211 104,660 Available for sale securities (amortized cost of $ 64,950 and $ 66,225 at March 31, 2026 and December 31, 2025, respectively; including assets pledged of $ 648 and $ 281 , respectively) 61,090 62,357 Held to maturity securities (including assets pledged of $ 2,578 and $ 1,270 at March 31, 2026 and December 31, 2025, respectively) 131,671 133,969 Bank loans — net 60,872 57,955 Equipment, office facilities, and property — net 3,065 3,091 Goodwill 12,298 11,951 Acquired intangible assets — net 7,413 7,233 Other assets 14,138 13,628 Total assets $ 493,319 $ 490,995 Liabilities and Stockholders’ Equity Bank deposits $ 253,041 $ 255,747 Payables to brokers, dealers, and clearing organizations 28,107 25,689 Payables to brokerage clients 117,986 116,341 Accrued expenses and other liabilities 11,979 12,831 Other short-term borrowings 12,486 6,913 Federal Home Loan Bank borrowings — 1,850 Long-term debt 20,486 22,199 Total liabilities 444,085 441,570 Stockholders’ equity: Preferred stock — $ .01 par value per share; aggregate liquidation preference of $ 6,871 at March 31, 2026 and December 31, 2025 6,763 6,763 Common stock — 3 billion shares authorized; $ .01 par value per share; 2,074,188,875 issued at March 31, 2026 and December 31, 2025 21 21 Nonvoting common stock — 300 million shares authorized; $ .01 par value per share; no shares issued at March 31, 2026 and December 31, 2025 — — Additional paid-in capital 28,047 27,996 Retained earnings 45,912 44,065 Treasury stock, at cost — 336,068,055 and 315,863,800 shares at March 31, 2026 and December 31, 2025, respectively ( 20,752 ) ( 18,437 ) Accumulated other comprehensive loss ( 10,757 ) ( 10,983 ) Total stockholders’ equity 49,234 49,425 Total liabilities and stockholders’ equity $ 493,319 $ 490,995 See Notes to Condensed Consolidated Financial Statements. - 28 - THE CHARLES SCHWAB CORPORATION Condensed Consolidated Statements of Stockholders ’ Equity (In Millions) (Unaudited) Accumulated Other Comprehensive Income (Loss) Preferred Stock Common Stock Nonvoting Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock, at cost Total Shares Amount Shares Amount Balance at December 31, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,639 $ 37,568 $ ( 11,196 ) $ ( 14,848 ) $ 48,375 Net income — — — — — — 1,909 — — 1,909 Other comprehensive income (loss), net of tax — — — — — — — — 1,227 1,227 Dividends declared on preferred stock — — — — — — ( 103 ) — — ( 103 ) Dividends declared on common stock — $ .27 per share — — — — — — ( 492 ) — — ( 492 ) 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 — — — — — ( 123 ) — 162 — 39 Share-based compensation — — — — — 116 — — — 116 Other — — — — — 32 — ( 80 ) — ( 48 ) Balance at March 31, 2025 $ 9,191 2,074 $ 21 — $ — $ 27,664 $ 38,882 $ ( 12,626 ) $ ( 13,621 ) $ 49,511 Balance at December 31, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,996 $ 44,065 $ ( 18,437 ) $ ( 10,983 ) $ 49,425 Net income — — — — — — 2,479 — — 2,479 Other comprehensive income (loss), net of tax — — — — — — — — 226 226 Dividends declared on preferred stock — — — — — — ( 70 ) — — ( 70 ) Dividends declared on common stock — $ .32 per share — — — — — — ( 562 ) — — ( 562 ) Repurchase of common stock, inclusive of tax — — — — — — — ( 2,399 ) — ( 2,399 ) Stock option exercises and other — — — — — ( 125 ) — 172 — 47 Share-based compensation — — — — — 127 — — — 127 Other — — — — — 49 — ( 88 ) — ( 39 ) Balance at March 31, 2026 $ 6,763 2,074 $ 21 — $ — $ 28,047 $ 45,912 $ ( 20,752 ) $ ( 10,757 ) $ 49,234 See Notes to Condensed Consolidated Financial Statements. - 29 - THE CHARLES SCHWAB CORPORATION Condensed Consolidated Statements of Cash Flows (in Millions) (Unaudited) Three Months Ended March 31, 2026 2025 Cash Flows from Operating Activities Net income $ 2,479 $ 1,909 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Share-based compensation 138 126 Depreciation and amortization 201 217 Amortization of acquired intangible assets 132 130 Provision (benefit) for deferred income taxes ( 10 ) ( 35 ) Premium amortization, net, on available for sale and held to maturity securities 174 178 Other 183 144 Net change in: Investments segregated and on deposit for regulatory purposes 7,827 3,354 Receivables from brokers, dealers, and clearing organizations ( 4,618 ) ( 488 ) Receivables from brokerage clients ( 1,571 ) 910 Other assets ( 584 ) ( 83 ) Payables to brokers, dealers, and clearing organizations 2,418 2,408 Payables to brokerage clients 1,645 ( 980 ) Accrued expenses and other liabilities ( 1,072 ) ( 1,431 ) Net cash provided by (used for) operating activities 7,342 6,359 Cash Flows from Investing Activities Purchases of available for sale securities ( 2,199 ) ( 1,067 ) Proceeds from sales of available for sale securities 1,541 1,621 Principal payments on available for sale securities 1,838 8,772 Purchases of held to maturity securities ( 635 ) ( 381 ) Principal payments on held to maturity securities 3,319 3,432 Net change in bank loans ( 3,021 ) ( 1,928 ) Cash paid for acquisition, net of cash acquired ( 577 ) — Purchases of equipment, office facilities, and property ( 140 ) ( 117 ) Purchases of FHLB stock — ( 194 ) Proceeds from sales of FHLB stock 80 419 Purchases of Federal Reserve stock — ( 4 ) Proceeds from sales of Federal Reserve stock 13 4 Other investing activities ( 229 ) ( 87 ) Net cash provided by (used for) investing activities ( 10 ) 10,470 Cash Flows from Financing Activities Net change in bank deposits ( 2,706 ) ( 12,961 ) Proceeds from FHLB borrowings — 5,000 Repayments of FHLB borrowings ( 1,850 ) ( 10,200 ) Proceeds from other short-term borrowings 17,137 8,498 Repayments of other short-term borrowings ( 11,594 ) ( 7,574 ) Repayments of long-term debt ( 1,608 ) ( 981 ) Repurchases of common stock and nonvoting common stock ( 2,378 ) ( 1,500 ) Dividends paid ( 632 ) ( 595 ) Proceeds from stock options exercised 47 39 Other financing activities ( 129 ) ( 88 ) Net cash provided by (used for) financing activities ( 3,713 ) ( 20,362 ) Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted 3,619 ( 3,533 ) Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year 69,661 65,514 Cash and Cash Equivalents, including Amounts Restricted at End of Period $ 73,280 $ 61,981 Continued on following page. - 30 - THE CHARLES SCHWAB CORPORATION Condensed Consolidated Statements of Cash Flows (in Millions) (Unaudited) Continued from previous page. Three Months Ended March 31, 2026 2025 Supplemental Cash Flow Information Non-cash investing activity: Changes in accrued equipment, office facilities, and property purchases $ 33 $ 39 Other Supplemental Cash Flow Information: Cash paid during the year for: Interest $ 778 $ 1,193 Income taxes, net $ 92 $ 41 Amounts included in the measurement of lease liabilities $ 64 $ 63 Leased assets obtained in exchange for new operating lease liabilities $ 46 $ 15 March 31, 2026 March 31, 2025 Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (1) Cash and cash equivalents $ 44,975 $ 35,009 Restricted cash and cash equivalents amounts included in cash and investments segregated and on deposit for regulatory purposes 28,305 26,972 Total cash and cash equivalents, including amounts restricted shown in the statement of cash flows $ 73,280 $ 61,981 (1) For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 18. See Notes to Condensed Consolidated Financial Statements. - 31 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 1. Introduction and Basis of Presentation The Charles Schwab Corporation (CSC) is a savings and loan holding company. CSC engages, through its subsidiaries (collectively referred to as Schwab or the Company), in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. Principal business subsidiaries of CSC include the following: • Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer; • Charles Schwab Bank, SSB (CSB), our principal banking entity; and • Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds ® ) and for Schwab’s exchange-traded funds (Schwab ETFs). Unless otherwise indicated, the terms “Schwab,” “the Company,” “we,” “us,” or “our” mean CSC together with its consolidated subsidiaries. These unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements and in the related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Schwab’s 2025 Form 10-K. The significant accounting policies are included in Item 8 – Note 2 in the 2025 Form 10-K. There have been no significant changes to these accounting policies during the first three months of 2026. - 32 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 2. New Accounting Standards Adoption of New Accounting Standards The Company did not adopt any material new accounting standards during the three months ended March 31, 2026. ​ New Accounting Standards Not Yet Adopted Standard Description Required Date of Adoption Effects on the Financial Statements or Other Significant Matters Accounting Standards Update (ASU) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” Requires additional disclosures about certain expenses including, but not limited to, employee compensation, depreciation, amortization of intangible assets, and selling expenses. Also requires annual disclosure of how selling expenses are defined. Adoption allows retrospective or prospective application, with early adoption permitted. January 1, 2027 (applies to the annual financial statements for 2027 and interim periods thereafter) The Company is evaluating the impact of this guidance on its financial statement disclosures. 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. 3. Business Acquisition On March 2, 2026, the Company completed its acquisition of Forge Global Holdings, Inc. (Forge) for $ 636 million of cash and other consideration. Forge provides eligible investors with direct and indirect access to shares of private companies through direct share purchase, single company funds, and multicompany funds. The Company anticipates that incorporating Forge’s private company investment capabilities will enhance Schwab’s ability to meet the evolving needs of investors across our growing client base. The Company accounted for the Forge acquisition as a business combination under GAAP and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. The determination of fair values requires management to make significant estimates and assumptions. The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, and consideration transferred; however, due to the timing of and limited time since the close of the acquisition, these estimates are provisional and may be adjusted upon the availability of new information regarding facts and circumstances which existed at the acquisition date. Any adjustments to the initial estimates of the fair values of the acquired assets and liabilities assumed will be recorded as adjustments to the respective assets and liabilities, with the residual amounts allocated to goodwill, in subsequent periods as prescribed in ASC 805 Business Combinations . - 33 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) The following table summarizes provisional information including the consideration transferred, fair value estimates of the assets acquired and liabilities assumed, and resulting goodwill as of the March 2, 2026 acquisition date: Fair value of assets acquired: Cash and cash equivalents $ 39 Acquired intangible assets 310 Other assets 42 Total assets acquired 391 Fair value of liabilities assumed: Accrued expenses and other liabilities 86 Total liabilities assumed 86 Fair value of net identifiable assets acquired $ 305 Consideration transferred $ 636 Plus: Fair value of noncontrolling interest acquired (1) 16 Less: Fair value of net identifiable assets acquired ( 305 ) Goodwill $ 347 (1) Subsequent to the acquisition date, Schwab purchased the equity interest attributable to the noncontrolling party resulting in the subsidiary becoming 100%-owned by Schwab as of March 31, 2026. The provisional identifiable intangible assets of $ 310 million are subject to amortization. The following table summarizes the major classes of intangible assets acquired and their respective estimated fair values and weighted-average useful lives: Method Used to Estimate Fair Value Fair Value Weighted-Average Useful Life (Years) Client relationships Income Approach $ 205 9 Existing technology Replacement Cost Approach 82 3 Data and trade names Income Approach 23 6 Total acquired intangible assets $ 310 Goodwill recorded of $ 347 million, primarily attributable to the expanded product offerings and capabilities anticipated from the Forge acquisition, was assigned to the Investor Services segment and is not deductible for tax purposes. The Company’s condensed consolidated statements of income include total net revenues and net loss attributable to the Forge acquisition of $ 14 million and $ 6 million, respectively, for the period March 2, 2026 through March 31, 2026. Certain Forge equity awards, whether vested or unvested, were assumed by the Company upon acquisition. The awards are subject to the same terms and conditions that were applicable immediately before the acquisition, except for performance-based restricted stock units which were converted into restricted stock units without performance conditions. The portion of the fair value of the replacement awards related to services provided prior to the acquisition of $ 13 million was accounted for as consideration transferred. The remaining portion is associated with future services and had a fair value of $ 37 million on the acquisition date, with remaining weighted-average service periods of 2.3 years for restricted stock awards and 2.2 years for restricted stock units. - 34 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 4. Revenue Recognition Disaggregation of Schwab’s revenue by major source is as follows: Three Months Ended March 31, 2026 2025 Net interest revenue Cash and cash equivalents $ 288 $ 328 Cash and investments segregated 397 412 Receivables from brokerage clients (1) 1,499 1,379 Available for sale securities 326 433 Held to maturity securities 567 622 Bank loans 627 493 Securities lending revenue 91 60 Other interest revenue (1) 167 30 Interest revenue 3,962 3,757 Bank deposits ( 118 ) ( 436 ) Payables to brokers, dealers, and clearing organizations ( 217 ) ( 137 ) Payables to brokerage clients (1) ( 56 ) ( 49 ) Other short-term borrowings ( 92 ) ( 82 ) Federal Home Loan Bank borrowings ( 12 ) ( 133 ) Long-term debt ( 201 ) ( 212 ) Other interest expense (1) ( 122 ) ( 2 ) Interest expense ( 818 ) ( 1,051 ) Net interest revenue 3,144 2,706 Asset management and administration fees Mutual funds, ETFs, CTFs, and alternatives (2) 991 878 Managed investing solutions 674 569 Other (2) 94 83 Asset management and administration fees 1,759 1,530 Trading revenue Commissions 489 431 Order flow revenue 560 443 Principal transactions 40 34 Trading revenue 1,089 908 Bank deposit account fees 295 245 Other 195 210 Total net revenues $ 6,482 $ 5,599 (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 strategies were previously presented in receivables from brokerage clients and payables to brokerage clients, respectively, and 2025 amounts have been reclassified to reflect this change. (2) Beginning in the first quarter of 2026, alternative investments revenue was moved from other asset management and administration fees to mutual funds, ETFs, CTFs, and alternatives. Prior period amounts have been reclassified to reflect this change. For a summary of revenue provided by our reportable segments, see Note 19. The recognition of revenue is not impacted by the operating segment in which revenue is generated. Contract balances : Receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606 Revenue From Contracts With Customers (ASC 606), are included in other assets on the condensed consolidated balance sheets, and totaled $ 901 million and $ 819 million at March 31, 2026 and December 31, 2025, respectively. The Company had net contract assets of $ 188 million and $ 193 million at March 31, 2026 and December 31, 2025, 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 - 35 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) remaining contractual term as a reduction to bank deposit account fee revenue. For additional discussion of the 2023 IDA agreement, see Note 11. Unsatisfied performance obligations : We do not have any unsatisfied performance obligations other than those that are subject to an elective practical expedient under ASC 606. The practical expedient applies to and is elected for contracts where we recognize revenue at the amount to which we have the right to invoice for services performed. 5. Receivables from and Payables to Brokers, Dealers, and Clearing Organizations Receivables from and payables to brokers, dealers, and clearing organizations are detailed below: March 31, 2026 December 31, 2025 Receivables Securities borrowed $ 8,593 $ 4,797 Receivables from clearing organizations 3,095 2,327 Other receivables from broker-dealers 88 24 Receivables for securities failed to deliver 32 42 Receivables from brokers, dealers, and clearing organizations $ 11,808 $ 7,190 Payables Deposits for securities loaned $ 26,484 $ 25,131 Other payables to broker-dealers 651 302 Broker-dealer repurchase agreements 500 50 Payables to clearing organizations 392 115 Payables for securities failed to receive 80 91 Payables to brokers, dealers, and clearing organizations $ 28,107 $ 25,689 See Note 13 for additional information regarding securities lending and borrowing activities, and repurchase agreements. - 36 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 6. Investment Securities The amortized cost, gross unrealized gains and losses, and fair value of the Company’s AFS and HTM investment securities are as follows: March 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale securities U.S. agency mortgage-backed securities $ 42,843 $ — $ 3,152 $ 39,691 U.S. Treasury securities 11,512 — 176 11,336 Corporate debt securities (1) 5,142 — 357 4,785 Asset-backed securities (2) 4,723 — 134 4,589 U.S. state and municipal securities 591 — 33 558 Non-agency commercial mortgage-backed securities 120 — 7 113 Other 21 — 3 18 Unallocated portfolio layer method (PLM) fair value basis adjustments (3) ( 2 ) — ( 2 ) — Total available for sale securities (4) $ 64,950 $ — $ 3,860 $ 61,090 Held to maturity securities U.S. agency mortgage-backed securities $ 131,155 $ 1,291 $ 9,907 $ 122,539 U.S. Treasury securities 516 — 4 512 Total held to maturity securities $ 131,671 $ 1,291 $ 9,911 $ 123,051 December 31, 2025 Available for sale securities U.S. agency mortgage-backed securities $ 44,585 $ — $ 3,151 $ 41,434 U.S. Treasury securities 11,543 3 182 11,364 Corporate debt securities (1) 5,027 — 360 4,667 Asset-backed securities (2) 4,332 — 133 4,199 U.S. state and municipal securities 595 — 34 561 Non-agency commercial mortgage-backed securities 120 — 7 113 Other 21 — 2 19 Unallocated PLM fair value basis adjustments (3) 2 — 2 — Total available for sale securities (4) $ 66,225 $ 3 $ 3,871 $ 62,357 Held to maturity securities U.S. agency mortgage-backed securities $ 133,563 $ 1,732 $ 9,646 $ 125,649 U.S. Treasury securities 406 — — 406 Total held to maturity securities $ 133,969 $ 1,732 $ 9,646 $ 126,055 (1) As of March 31, 2026, approximately 28 %, 26 %, and 21 % of total AFS corporate debt securities were issued by institutions in the information technology, consumer staples, and healthcare industries, respectively. As of December 31, 2025, approximately 28 %, 27 %, and 19 % of total AFS corporate debt securities were issued by institutions in the information technology, consumer staples, and healthcare industries, respectively. (2) As of March 31, 2026, approximately 62 % and 21 % of 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, 2025, approximately 70 % and 21 % of total AFS 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 Note 12 for more information on PLM hedge accounting. (4) Included in cash and cash equivalents on the condensed consolidated balance sheets, but excluded from this table, is $ 291 million of AFS commercial paper and $ 2.0 billion of AFS U.S. Treasury securities as of March 31, 2026 and December 31, 2025, respectively. These holdings had maturities of three months or less at the time of acquisition, and an aggregate market value equal to amortized cost. At March 31, 2026, our banking subsidiaries had pledged investment securities with a fair value of $ 12.9 billion (collateral value of $ 12.0 billion) as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 10). 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 $ 29.7 billion (collateral value of $ 28.6 billion) as collateral for this facility at March 31, 2026. 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 $ 1.6 billion at March 31, 2026. - 37 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) At March 31, 2026, 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 amortized cost of $ 3.1 billion, of which $ 2.6 billion may be sold, repledged, or otherwise used by the counterparties. See Notes 10 and 13 for additional information on these repurchase agreements. At March 31, 2026, the Company had pledged AFS securities consisting of U.S. Treasury securities with an aggregate fair value of $ 648 million as initial margin on interest rate swaps (see Notes 12 and 13). All of Schwab’s interest rate swaps are cleared through central counterparty (CCP) clearing houses which require the Company to post initial margin as collateral against potential losses. Initial margin is posted through futures commission merchants (FCM) which serve as the intermediary between the CCPs and Schwab. The FCM agreements governing our swaps allow for securities pledged as initial margin to be sold, repledged, or otherwise used by the FCM. AFS investment securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows: Less than 12 months 12 months or longer Total March 31, 2026 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale securities U.S. agency mortgage-backed securities (1) $ 21 $ — $ 39,669 $ 3,152 $ 39,690 $ 3,152 U.S. Treasury securities 5,720 15 5,314 161 11,034 176 Corporate debt securities (1) 60 — 4,660 357 4,720 357 Asset-backed securities 629 2 3,845 132 4,474 134 U.S. state and municipal securities 31 2 527 31 558 33 Non-agency commercial mortgage-backed securities — — 113 7 113 7 Other — — 18 3 18 3 Total (2) $ 6,461 $ 19 $ 54,146 $ 3,843 $ 60,607 $ 3,862 December 31, 2025 Available for sale securities U.S. agency mortgage-backed securities (1) $ 4 $ — $ 41,394 $ 3,151 $ 41,398 $ 3,151 U.S. Treasury securities (1) 1,558 — 5,424 182 6,982 182 Corporate debt securities — — 4,667 360 4,667 360 Asset-backed securities (1) 147 — 4,046 133 4,193 133 U.S. state and municipal securities 27 2 534 32 561 34 Non-agency commercial mortgage-backed securities — — 113 7 113 7 Other — — 19 2 19 2 Total (2) $ 1,736 $ 2 $ 56,197 $ 3,867 $ 57,933 $ 3,869 (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 $ 2 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, substantially all rated securities in the investment portfolios were investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government or U.S. government-sponsored enterprises. For a description of management’s quarterly evaluation of AFS securities in unrealized loss positions, see Item 8 – Note 2 in the 2025 Form 10-K. No amounts were recognized as credit loss expense and no securities were written down to fair value through earnings for the three months ended March 31, 2026 and the year ended December 31, 2025. None of the Company’s AFS securities held as of March 31, 2026 and December 31, 2025 had an allowance for credit losses. HTM securities as of March 31, 2026 and December 31, 2025 were U.S. agency mortgage-backed securities and U.S. Treasury securities and therefore had no allowance for credit losses because expected nonpayment of the amortized cost basis is zero. - 38 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) The Company had $ 398 million and $ 386 million of accrued interest for AFS and HTM securities as of March 31, 2026 and December 31, 2025, 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 three months ended March 31, 2026, or for the year ended December 31, 2025. The following table presents the Company’s estimated effective duration, which reflects anticipated future payments, by category at March 31, 2026: In years Estimated effective duration, exclusive of derivatives: AFS investment securities portfolio 2.3 AFS and HTM investment securities portfolios 3.7 Estimated effective duration, inclusive of derivatives (1) : AFS investment securities portfolio 2.0 AFS and HTM investment securities portfolios 3.6 (1) See Note 12 for additional discussion of the Company’s derivatives. In the table below, mortgage-backed securities and other asset-backed securities have been allocated to maturity groupings based on final contractual maturities. As borrowers may have the right to call or prepay certain obligations underlying our investment securities, actual maturities may differ from the scheduled contractual maturities presented below. The maturities of AFS and HTM investment securities are as follows: March 31, 2026 Within 1 year After 1 year through 5 years After 5 years through 10 years After 10 years Total Available for sale securities U.S. agency mortgage-backed securities $ 1,352 $ 6,654 $ 22,346 $ 9,339 $ 39,691 U.S. Treasury securities 4,610 6,524 202 — 11,336 Corporate debt securities 848 3,780 157 — 4,785 Asset-backed securities 124 1,391 358 2,716 4,589 U.S. state and municipal securities 3 293 258 4 558 Non-agency commercial mortgage-backed securities — — — 113 113 Other — — — 18 18 Total fair value $ 6,937 $ 18,642 $ 23,321 $ 12,190 $ 61,090 Total amortized cost (1) $ 6,997 $ 19,610 $ 25,525 $ 12,820 $ 64,952 Held to maturity securities U.S. agency mortgage-backed securities $ 583 $ 26,928 $ 21,139 $ 73,889 $ 122,539 U.S. Treasury securities — 512 — — 512 Total fair value $ 583 $ 27,440 $ 21,139 $ 73,889 $ 123,051 Total amortized cost $ 583 $ 28,230 $ 21,747 $ 81,111 $ 131,671 (1) For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $( 2 ) million at March 31, 2026. Proceeds and gross realized gains and losses from sales of AFS investment securities are as follows: Three Months Ended March 31, 2026 2025 Proceeds $ 1,541 $ 1,621 Gross realized gains 1 — Gross realized losses 1 10 - 39 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 7. Bank Loans and Related Allowance for Credit Losses The composition of bank loans and delinquency analysis by portfolio segment and class of financing receivable is as follows: March 31, 2026 Current 30-59 days past due 60-89 days past due > 90 days past due and other nonaccrual loans (3) Total past due and other nonaccrual loans Total loans Allowance for credit losses Total bank loans — net Residential real estate: First Mortgages (1,2) $ 31,237 $ 11 $ — $ 21 $ 32 $ 31,269 $ 29 $ 31,240 HELOCs (1,2) 419 — — 3 3 422 1 421 Total residential real estate 31,656 11 — 24 35 31,691 30 31,661 Pledged asset lines 28,733 45 4 8 57 28,790 — 28,790 Other 427 — — — — 427 6 421 Total bank loans $ 60,816 $ 56 $ 4 $ 32 $ 92 $ 60,908 $ 36 $ 60,872 December 31, 2025 Residential real estate: First Mortgages (1,2) $ 30,429 $ 13 $ 5 $ 37 $ 55 $ 30,484 $ 28 $ 30,456 HELOCs (1,2) 423 1 — 3 4 427 1 426 Total residential real estate 30,852 14 5 40 59 30,911 29 30,882 Pledged asset lines 26,570 20 10 3 33 26,603 — 26,603 Other 477 — — — — 477 7 470 Total bank loans $ 57,899 $ 34 $ 15 $ 43 $ 92 $ 57,991 $ 36 $ 57,955 (1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $ 136 million and $ 131 million at March 31, 2026 and December 31, 2025, respectively. (2) At both March 31, 2026 and December 31, 2025, 41 % 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 March 31, 2026 or December 31, 2025. 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 March 31, 2026 and December 31, 2025. At March 31, 2026, 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 10). Changes in the allowance for credit losses on bank loans were as follows: First Mortgages HELOCs Total residential real estate Pledged asset lines Other Total Balance at December 31, 2024 $ 14 $ 1 $ 15 $ — $ 6 $ 21 Charge-offs — — — — — — Recoveries — — — — — — Provision for credit losses — — — — — — Balance at March 31, 2025 $ 14 $ 1 $ 15 $ — $ 6 $ 21 Balance at December 31, 2025 $ 28 $ 1 $ 29 $ — $ 7 $ 36 Charge-offs — — — — — — Recoveries — — — — — — Provision for credit losses 1 — 1 — ( 1 ) — Balance at March 31, 2026 $ 29 $ 1 $ 30 $ — $ 6 $ 36 Consistent with Schwab’s loan charge-off policy for PALs as disclosed in Item 8 – Note 2 of the 2025 Form 10-K, the Company charges off any unsecured balances no later than 90 days past due. As of March 31, 2026, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 Financial Instruments — Credit Losses . All PALs were fully collateralized by securities with fair values in excess of borrowings as of March 31, 2026 and December 31, 2025, and no allowance for credit losses for PALs as of those dates was required. The U.S. economy experienced soft hiring and steady core inflation at the end of the first quarter of 2026. Geopolitical unrest persists amid a backdrop of elevated uncertainty due to economic impacts of emerging trade policy and a constrained energy - 40 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) supply. Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market. Though higher mortgage rates are easing demand and reducing borrower affordability, we expect constrained housing supply to keep home prices relatively stable. Furthermore, credit quality metrics in the Company’s bank loans portfolio remain strong. As a result of these factors, we held projected loss rates constant at March 31, 2026, as compared to December 31, 2025. Credit Quality In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following: • Year of origination; • Borrower Fair Isaac Corporation (FICO) scores at origination (Origination FICO); • Refreshed borrower FICO scores (Refreshed FICO); • Loan-to-value (LTV) ratios at origination (Origination LTV); and • 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 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 credit quality indicators of the Company’s First Mortgages and HELOCs are detailed below: First Mortgages Amortized Cost Basis by Origination Year March 31, 2026 2026 2025 2024 2023 2022 pre-2022 Total First Mortgages Revolving HELOCs amortized cost basis HELOCs converted to term loans Total HELOCs Origination FICO <620 $ — $ — $ 1 $ — $ 2 $ 2 $ 5 $ — $ — $ — 620 – 679 15 19 15 4 23 48 124 — 1 1 680 – 739 144 516 247 207 656 1,471 3,241 53 23 76 ≥740 1,730 5,179 2,292 1,473 4,468 12,757 27,899 259 86 345 Total $ 1,889 $ 5,714 $ 2,555 $ 1,684 $ 5,149 $ 14,278 $ 31,269 $ 312 $ 110 $ 422 Origination LTV ≤70% $ 1,388 $ 3,877 $ 1,731 $ 1,140 $ 3,827 $ 12,205 $ 24,168 $ 297 $ 78 $ 375 >70% – ≤90% 501 1,837 824 544 1,322 2,072 7,100 15 32 47 >90% – ≤100% — — — — — 1 1 — — — Total $ 1,889 $ 5,714 $ 2,555 $ 1,684 $ 5,149 $ 14,278 $ 31,269 $ 312 $ 110 $ 422 Refreshed FICO <620 $ — $ 7 $ 7 $ 5 $ 21 $ 42 $ 82 $ 3 $ 4 $ 7 620 – 679 18 44 19 24 62 154 321 6 6 12 680 – 739 168 478 220 141 462 1,102 2,571 42 17 59 ≥740 1,703 5,185 2,309 1,514 4,604 12,980 28,295 261 83 344 Total $ 1,889 $ 5,714 $ 2,555 $ 1,684 $ 5,149 $ 14,278 $ 31,269 $ 312 $ 110 $ 422 Estimated Refreshed LTV (1) ≤70% $ 1,376 $ 3,740 $ 1,826 $ 1,390 $ 4,637 $ 14,167 $ 27,136 $ 310 $ 110 $ 420 >70% – ≤90% 513 1,968 727 291 508 109 4,116 2 — 2 >90% – ≤100% — 6 2 3 4 2 17 — — — Total $ 1,889 $ 5,714 $ 2,555 $ 1,684 $ 5,149 $ 14,278 $ 31,269 $ 312 $ 110 $ 422 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Percent of Loans on Nonaccrual Status 0.01 % 0.01 % 0.01 % 0.01 % 0.05 % 0.12 % 0.07 % 0.11 % 2.18 % 0.71 % (1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs. - 41 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) First Mortgages Amortized Cost Basis by Origination Year December 31, 2025 2025 2024 2023 2022 pre-2022 Total First Mortgages Revolving HELOCs amortized cost basis HELOCs converted to term loans Total HELOCs Origination FICO <620 $ — $ 1 $ — $ 3 $ 2 $ 6 $ — $ — $ — 620 – 679 23 16 4 23 49 115 — 1 1 680 – 739 526 272 219 667 1,508 3,192 52 24 76 ≥740 5,480 2,534 1,573 4,546 13,038 27,171 260 90 350 Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 14,597 $ 30,484 $ 312 $ 115 $ 427 Origination LTV ≤70% $ 4,105 $ 1,925 $ 1,216 $ 3,891 $ 12,473 $ 23,610 $ 296 $ 80 $ 376 >70% – ≤90% 1,924 898 580 1,348 2,123 6,873 16 34 50 >90% – ≤100% — — — — 1 1 — 1 1 Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 14,597 $ 30,484 $ 312 $ 115 $ 427 Refreshed FICO <620 $ 8 $ 4 $ 3 $ 36 $ 55 $ 106 $ 3 $ 3 $ 6 620 – 679 59 31 25 61 140 316 5 6 11 680 – 739 570 227 153 483 1,157 2,590 48 20 68 ≥740 5,392 2,561 1,615 4,659 13,245 27,472 256 86 342 Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 14,597 $ 30,484 $ 312 $ 115 $ 427 Estimated Refreshed LTV (1) ≤70% $ 3,877 $ 1,989 $ 1,450 $ 4,696 $ 14,483 $ 26,495 $ 310 $ 115 $ 425 >70% – ≤90% 2,148 829 342 537 114 3,970 2 — 2 >90% – ≤100% 4 5 4 6 — 19 — — — Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 14,597 $ 30,484 $ 312 $ 115 $ 427 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Percent of Loans on Nonaccrual Status 0.01 % 0.01 % 0.11 % 0.10 % 0.20 % 0.12 % 0.16 % 1.80 % 0.70 % (1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs. At March 31, 2026, $ 27.0 billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter. Approximately 23 % of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 63 % of the balance of these interest-only loans are not scheduled to reset for three or more years. At March 31, 2026 and December 31, 2025, Schwab had $ 234 million and $ 223 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the condensed consolidated balance sheets. The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating-rate based on the prime rate plus a margin. - 42 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) The following table presents when current outstanding HELOCs will convert to amortizing loans: March 31, 2026 Balance Converted to an amortizing loan by period end (1) $ 110 Within 1 year 14 > 1 year – 3 years 34 > 3 years – 5 years 59 > 5 years 205 Total $ 422 (1) Includes $ 3 million of HELOCs converted to amortizing loans during the three months ended March 31, 2026. At March 31, 2026, $ 322 million of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At March 31, 2026, the borrowers on approximately 55 % of HELOC loan balances outstanding only paid the minimum amount due. 8. Variable Interest Entities As of March 31, 2026 and December 31, 2025, 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 March 31, 2026 and 2025, CSB recorded amortization of $ 59 million and $ 47 million, respectively, and recognized tax credits and other tax benefits of $ 77 million and $ 61 million, respectively, associated with these investments. The amortization, as well as the tax credits and other tax benefits, are included in taxes on income on the condensed consolidated statements of income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows. Aggregate assets, aggregate liabilities, and maximum exposure to loss The aggregate assets, aggregate 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: March 31, 2026 December 31, 2025 Aggregate assets Aggregate liabilities Maximum exposure to loss Aggregate assets Aggregate liabilities Maximum exposure to loss LIHTC investments (1) $ 2,175 $ 1,134 $ 2,175 $ 2,084 $ 1,111 $ 2,084 Other investments (2) 259 — 350 250 — 342 Total $ 2,434 $ 1,134 $ 2,525 $ 2,334 $ 1,111 $ 2,426 (1) Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheets. (2) Other investments include non-LIHTC CRA investments that are accounted for as loans at amortized cost, equity method investments, AFS securities, or using the adjusted cost method. Aggregate assets are included in AFS securities, bank loans — net, or other assets on the condensed consolidated balance sheets. Schwab’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. Schwab’s funding of these remaining commitments is dependent upon the occurrence of certain conditions, and Schwab expects to pay substantially all of these commitments between 2026 and 2029. During the three months ended March 31, 2026 and year ended December 31, 2025, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide. - 43 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 9. Bank Deposits Bank deposits consist of interest-bearing and non-interest-bearing deposits as follows: March 31, 2026 December 31, 2025 Interest-bearing deposits: Deposits swept from brokerage accounts $ 228,543 $ 232,410 Checking 17,030 16,473 Time certificates of deposit (1) 2,435 2,000 Savings and other 3,576 3,637 Total interest-bearing deposits 251,584 254,520 Non-interest-bearing deposits 1,457 1,227 Total bank deposits $ 253,041 $ 255,747 (1) Time certificates of deposit consist of brokered CDs. The weighted-average interest rates on outstanding time certificates of deposit at March 31, 2026 and December 31, 2025 were 3.77 % and 4.03 %, respectively. As of March 31, 2026 and December 31, 2025, there were no time deposits that were in excess of FDIC insurance limits or otherwise uninsured. Time certificates of deposit outstanding at March 31, 2026 mature between April 2026 and June 2026. 10. Borrowings CSC Senior Notes: CSC’s Senior Notes are unsecured obligations. CSC may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes and quarterly for the floating-rate Senior Notes. Interest for the fixed-to-floating rate Senior Notes is payable semi-annually during the fixed-rate period of the notes and quarterly during the floating-rate period of the notes. Ameritrade Holding LLC Senior Notes: Ameritrade Holding LLC’s Senior Notes are unsecured obligations. Ameritrade Holding LLC may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes. - 44 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) The following table lists long-term debt by instrument outstanding as of March 31, 2026 and December 31, 2025: Date of Issuance Principal Amount Outstanding March 31, 2026 December 31, 2025 CSC Fixed-rate Senior Notes: 3.450 % due February 13, 2026 11/13/15 $ — $ 350 0.900 % due March 11, 2026 12/11/20 — 1,250 1.150 % due May 13, 2026 05/13/21 1,000 1,000 5.875 % due August 24, 2026 08/24/23 1,000 1,000 3.200 % due March 2, 2027 03/02/17 650 650 2.450 % due March 3, 2027 03/03/22 1,500 1,500 3.300 % due April 1, 2027 09/24/21 744 744 3.200 % due January 25, 2028 12/07/17 700 700 2.000 % due March 20, 2028 03/18/21 1,250 1,250 4.000 % due February 1, 2029 10/31/18 600 600 3.250 % due May 22, 2029 05/22/19 600 600 2.750 % due October 1, 2029 09/24/21 475 475 4.625 % due March 22, 2030 03/24/20 500 500 1.650 % due March 11, 2031 12/11/20 750 750 2.300 % due May 13, 2031 05/13/21 750 750 1.950 % due December 1, 2031 08/26/21 850 850 2.900 % due March 3, 2032 03/03/22 1,000 1,000 CSC Floating-rate Senior Notes: SOFR + 0.520 % due May 13, 2026 05/13/21 500 500 SOFR + 1.050 % due March 3, 2027 03/03/22 500 500 CSC Fixed-to-Floating rate Senior Notes (1) : 5.643 % due May 19, 2029 05/19/23 1,200 1,200 6.196 % due November 17, 2029 11/17/23 1,300 1,300 4.343 % due November 14, 2031 11/14/25 1,000 1,000 5.853 % due May 19, 2034 05/19/23 1,300 1,300 6.136 % due August 24, 2034 08/24/23 1,350 1,350 4.914 % due November 14, 2036 11/14/25 1,000 1,000 Total CSC Senior Notes 20,519 22,119 Ameritrade Holding LLC Fixed-rate Senior Notes: 3.300 % due April 1, 2027 04/27/17 56 56 2.750 % due October 1, 2029 08/16/19 25 25 Total Ameritrade Holding LLC Senior Notes 81 81 Finance lease liabilities 30 37 Unamortized premium — net 29 33 Debt issuance costs ( 76 ) ( 82 ) Fair value hedging basis adjustments (2) ( 97 ) 11 Total long-term debt $ 20,486 $ 22,199 (1) Interest rates presented are those in effect at March 31, 2026. See table below for additional information regarding future interest rates on fixed-to-floating rate Senior Notes. (2) This represents the amount of fair value hedge basis adjustments related to Senior Notes hedged. See Note 12 for more information on hedging of Senior Notes. - 45 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) The following table details the changes in future interest rates on fixed-to-floating rate Senior Notes as of March 31, 2026: Maturity Date Fixed Semi-annual Interest Rate Date of Issuance Floating Quarterly Interest Rate Interest Rate Reset Date May 19, 2029 5.643 % 05/19/23 SOFR + 2.210 % 05/19/28 November 17, 2029 6.196 % 11/17/23 SOFR + 1.878 % 11/17/28 November 14, 2031 4.343 % 11/14/25 SOFR + 0.940 % 11/14/30 May 19, 2034 5.853 % 05/19/23 SOFR + 2.500 % 05/19/33 August 24, 2034 6.136 % 08/24/23 SOFR + 2.010 % 08/24/33 November 14, 2036 4.914 % 11/14/25 SOFR + 1.230 % 11/14/35 Annual maturities on all long-term debt outstanding at March 31, 2026 are as follows: Maturities 2026 $ 2,517 2027 3,463 2028 1,950 2029 4,200 2030 500 Thereafter 8,000 Total maturities 20,630 Unamortized premium — net 29 Debt issuance costs ( 76 ) Fair value hedging basis adjustments (1) ( 97 ) Total long-term debt $ 20,486 (1) This represents the amount of fair value hedge basis adjustments related to long-term debt hedged. See Note 12 for more information on hedging of long-term debt. FHLB borrowings : Our banking subsidiaries maintain secured credit facilities with the FHLB. Amounts available under these facilities are dependent on the amount of bank loans and the value of certain investment securities that are pledged as collateral. There were no amounts outstanding under these facilities as of March 31, 2026. There was $ 1.9 billion outstanding under these facilities as of December 31, 2025 and these borrowings had a weighted-average interest rate of 3.90 %. As of March 31, 2026 and December 31, 2025, the collateral pledged provided additional borrowing capacity of $ 33.5 billion and $ 74.2 billion, respectively. Other short-term borrowings : Total other short-term borrowings outstanding at March 31, 2026 and December 31, 2025 were $ 12.5 billion and $ 6.9 billion, respectively, and had a weighted-average interest rate of 3.98 % and 4.09 %, 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 $ 3.0 billion and $ 1.3 billion outstanding pursuant to such repurchase agreements at March 31, 2026 and December 31, 2025, respectively. Repurchase agreements outstanding at March 31, 2026 mature between April 2026 and June 2026. Our banking subsidiaries have access to funding through the Federal Reserve discount window. Amounts available are dependent upon the value of certain investment securities that are pledged as collateral. As of March 31, 2026 and December 31, 2025, our collateral pledged provided total borrowing capacity of $ 28.6 billion and $ 29.3 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 $ 4.7 billion gross par value before discount of $ 39 million outstanding at March 31, 2026, and $ 1.9 billion gross par value before discount of $ 32 million outstanding at December 31, 2025. At the end of the first quarter of 2026, CS&Co received authorization from its Board of Directors to issue up to $ 10.0 billion of unsecured commercial paper notes with maturities of up to 270 days. There were no amounts outstanding as of March 31, 2026. CSC and CS&Co also have access to unsecured uncommitted lines of credit with external banks with total borrowing capacity of $ 1.9 billion; no amounts were outstanding as of March 31, 2026 or December 31, 2025. - 46 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 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. There was $ 4.8 billion and $ 3.8 billion outstanding at March 31, 2026 and December 31, 2025, respectively, pursuant to these agreements. Annual maturities on other short-term borrowings outstanding at March 31, 2026 are as follows: 2026 Other short-term borrowings $ 12,486 11. Commitments and Contingencies Loan portfolio : CSB provides a co-branded loan origination program for CSB clients (the Program) with Rocket Mortgage, LLC. Pursuant to the Program, Rocket Mortgage, LLC originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Rocket Mortgage, LLC. CSB purchased First Mortgages of $ 2.0 billion and $ 963 million during the first quarter of 2026 and 2025, respectively. CSB purchased HELOCs with commitments of $ 62 million and $ 50 million during the first quarter of 2026 and 2025, respectively. The Company’s commitments to extend credit on lines of credit and to purchase First Mortgages are as follows: March 31, 2026 December 31, 2025 Commitments to extend credit related to unused HELOCs and other lines of credit $ 1,852 $ 1,793 Commitments to purchase First Mortgage loans 1,714 925 Total $ 3,566 $ 2,718 Guarantees and indemnifications : Schwab has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. We satisfy the margin requirements of these transactions through pledging certain client securities. For additional information on these pledged securities, refer to Note 13. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral. The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the amounts it has posted as collateral. The Company also engages third-party firms to clear clients’ futures and options on futures transactions and to facilitate clients’ foreign exchange trading, and has agreed to indemnify these firms for any losses that they may incur from the client transactions introduced to them by the Company. The potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees and indemnifications. IDA agreement : The 2023 IDA agreement with the TD Depository Institutions specifies responsibilities, including certain contingent obligations, of the Company. Pursuant to the 2023 IDA agreement, uninvested cash within eligible brokerage client accounts is swept off-balance sheet to deposit accounts at the TD Depository Institutions. Schwab provides recordkeeping and support services to the TD Depository Institutions with respect to the deposit accounts for which Schwab receives an aggregate monthly fee. Under the 2023 IDA agreement, the service fee on client cash deposits held at the TD Depository Institutions is 15 basis points. The Company’s ability to migrate these balances to its balance sheet is dependent on multiple factors including having sufficient capital levels to sustain these incremental deposits and certain binding limitations specified in the 2023 IDA agreement. 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 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, Schwab moved $ 1.1 billion of BDA balances to its balance sheet during the first three months of 2026. 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 - 47 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) the required IDA balance minimum as described above, Schwab would be required to make a nonperformance payment to the TD Depository Institutions pursuant to the terms of the 2023 IDA agreement. As of March 31, 2026, the total ending IDA balance was $ 73.6 billion, of which $ 59.6 billion was fixed-rate obligation amounts and $ 14.0 billion was floating-rate obligation amounts. As of December 31, 2025, the total ending IDA balance was $ 76.3 billion, of which $ 59.6 billion was fixed-rate obligation amounts and $ 16.7 billion was floating-rate obligation amounts. Legal contingencies : Schwab is subject to claims and lawsuits in the ordinary course of business, including arbitrations, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. Predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; and potential opportunities for settlement and the status of any settlement discussions. It may not be reasonably possible to estimate a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available. Schwab believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are any matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results, or cash flows of the Company. Corrente Antitrust Litigation : On June 6, 2022, CSC was sued in the U.S. District Court for the Eastern District of Texas on behalf of a putative class of customers who purchased or sold securities through CS&Co or TD Ameritrade, Inc. (now part of CS&Co) from October 26, 2020 to the present. The lawsuit alleges that CSC’s acquisition of Ameritrade violated Section 7 of the Clayton Act because it has resulted in an anticompetitive market for the execution of retail customer orders. Plaintiffs seek unspecified damages, as well as injunctive and other relief. A motion by the Company to dismiss the lawsuit was denied by the court on February 24, 2023. On December 12, 2024, the parties filed a joint stipulation proposing a settlement of the lawsuit on a class basis under which defendants would commit to certain non-monetary undertakings and payments of plaintiffs’ attorneys’ fees and costs in an amount that would be immaterial. The court granted final approval of the settlement on November 24, 2025, and certain objectors to the settlement have appealed the decision to the Fifth Circuit Court of Appeals. 12. Derivative Instruments and Hedging Activities Risk Management Objective of Using Derivatives The Company utilizes derivative instruments to manage interest rate risk exposures that arise from business activities related to changes in fair values or the receipt and payment of future known and uncertain cash amounts due to changes in interest rates. The Company uses derivative instruments to manage changes in the fair values of, as well as changes in the amounts and/or timing of known or expected cash receipts and payments related to, our AFS investment portfolio, margin loans, PALs, and Senior Notes. For a description of how the Company accounts for derivative instruments, see Item 8 – Note 2 in the 2025 Form 10-K. For additional information on the basis of presentation for derivative instruments on the Company’s condensed consolidated balance sheets and related offsetting considerations, see Note 13. Cash flows associated with derivative instruments are reflected as cash flows from operating activities in the condensed consolidated statements of cash flows consistent with the treatment and nature of the items being hedged. - 48 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) Fair Value Hedges of Interest Rate Risk The Company is exposed to changes in the fair value of its fixed-rate AFS securities and Senior Notes, as well as its fixed-to-floating rate Senior Notes during the fixed-rate period, due to changes in benchmark interest rates. The Company uses cleared interest rate swaps to manage its exposure to changes in fair value of these instruments attributable to changes in the designated benchmark interest rate. Cleared interest rate swaps designated as fair value hedges of AFS securities involve the payment of fixed-rate amounts to a CCP in exchange for the Company receiving floating-rate payments over the life of the agreements. Cleared interest rate swaps designated as fair value hedges of Senior Notes involve the receipt of fixed-rate amounts from a CCP in exchange for the Company’s floating-rate payments over the life of the agreements. Cash Flow Hedges of Interest Rate Risk The Company uses cleared interest rate swaps designated as cash flows hedges as part of its interest rate risk management strategy to add stability to interest revenue and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a CCP in exchange for the Company’s floating-rate payments over the life of the agreements. Such derivatives are used to hedge the variable cash flows associated with Schwab’s margin loans and PALs. Notional Amounts of Derivative Instruments The Company had outstanding interest rate swaps with aggregate notional amounts of $ 68.2 billion and $ 42.2 billion at March 31, 2026 and December 31, 2025, respectively, that were designated as fair value hedges of interest rate risk. The Company had outstanding interest rate swaps with aggregate notional amounts of $ 66.5 billion and $ 18.7 billion at March 31, 2026 and December 31, 2025, respectively, that were designated as cash flow hedges of interest rate risk. The notional amount is the basis upon which the pay-fixed/receive-float and receive-fixed/pay-float payments are determined; however, the amount is not exchanged. While the notional amounts give an indication of the volume of our derivative activity, they do not necessarily provide information on the amount of the underlying exposure being hedged. For example, we may enter into multiple hedges covering different periods of time but relating to the same underlying principal balances to hedge interest receipts or payments on AFS securities, margin loans, PALs, and Senior Notes. As a result, at certain times the combined notional amount of hedges may exceed the underlying principal balances. As of March 31, 2026, through its cash flow hedges, the Company hedged interest receipts on $ 20.0 billion of margin loans with a total notional outstanding of $ 43.6 billion, and interest receipts on $ 19.8 billion of PALs with a total outstanding notional of $ 22.9 billion. As of March 31, 2026, through fair value hedges, the Company hedged $ 19.5 billion of Senior Notes with a total outstanding notional amount of $ 57.0 billion and $ 11.2 billion of AFS securities with a total outstanding notional amount of $ 11.2 billion. 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: March 31, 2026 December 31, 2025 Assets Liabilities Assets Liabilities Interest rate swaps (1,2) $ 1 $ 2 $ 1 $ 1 (1) Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. (2) Includes reductions related to variation margin settlements. Settlements on derivative positions cleared through CCPs are reflected as reductions to the associated derivative asset and liability balances. As of March 31, 2026, there was a $ 53 million reduction of derivative assets and a $ 270 million reduction of derivative liabilities related to variation margin settlements. As of December 31, 2025, there was a $ 93 million reduction of derivative assets and a $ 21 million reduction of derivative liabilities related to variation margin settlements. - 49 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) Effects of Fair Value Hedge Accounting The following amounts are included on the condensed consolidated balance sheets related to fair value hedges: Carrying Amount of the Hedged Assets/(Liabilities) Cumulative Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets and Liabilities March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025 Line item in which the hedged item is included: Available for sale securities (1,2) $ 11,216 $ 12,249 $ ( 38 ) $ ( 16 ) Long-term debt (3) $ ( 19,370 ) $ ( 20,726 ) $ 101 $ ( 6 ) (1) Includes the amortized cost basis of AFS securities included in PLM hedging relationships. At March 31, 2026 and December 31, 2025, the amortized cost basis of the closed portfolios used in these hedging relationships was $ 995 million and $ 1.1 billion, respectively, of which $ 663 million and $ 771 million was designated in a portfolio layer hedging relationship at March 31, 2026 and December 31, 2025, respectively. The cumulative basis adjustments associated with these hedging relationships were a reduction of $ 2 million and an increase of $ 2 million of the amortized cost basis of the closed portfolios at March 31, 2026 and December 31, 2025, 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 $ 30 million and $ 26 million at March 31, 2026 and December 31, 2025, respectively, 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 $ 4 million and $ 5 million at March 31, 2026 and December 31, 2025, respectively, 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: Location and Amount of Gain (Loss) Recognized in Income Interest Revenue Interest Expense Three Months Ended March 31, 2026 2025 2026 2025 Gain (loss) on fair value hedging relationships: Hedged items $ ( 31 ) $ 161 $ 107 $ ( 25 ) Derivatives designated as hedging instruments (1) 31 ( 161 ) ( 107 ) 27 (1) Interest revenue excludes net gain (loss) from periodic interest accruals and receipts (payments) of $ 1 million and $ 18 million for the three months ended March 31, 2026 and 2025, respectively. Interest expense excludes net gain (loss) from periodic interest accruals and receipts (payments) of $ 5 million and $( 10 ) million for the three months ended March 31, 2026 and 2025, respectively. 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 (pre-tax) and the condensed consolidated statements of income: Balance at December 31, 2025 $ 49 Gain (loss) recognized in other comprehensive income (1) ( 225 ) Realized (gain) loss reclassified from AOCI to interest revenue 18 Balance at March 31, 2026 $ ( 158 ) (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 March 31, 2026, the Company expects to reclassify from AOCI into interest revenue approximately $ 74 million of pre-tax losses. 13. Financial Instruments Subject to Off-Balance Sheet Credit Risk Resale agreements : CS&Co enters into collateralized resale agreements principally with other broker-dealers to meet obligations related to customer protection under SEC Rule 15c3-3. These collateralized resale agreements could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. To mitigate this risk, CS&Co requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of the resale price. CS&Co also sets standards for the credit quality of the - 50 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. The collateral provided under these resale agreements is utilized to meet obligations under broker-dealer client protection rules, which place limitations on our ability to access such segregated securities. For CS&Co 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. CS&Co’s resale agreements as of March 31, 2026 and December 31, 2025 were not subject to master netting arrangements. Amounts related to these resale agreements are included in cash and investments segregated and on deposit for regulatory purposes in the condensed consolidated balance sheets. Schwab’s banking subsidiaries also enter into collateralized resale agreements with the FICC in which they buy securities and agree to resell these securities at a future date at an agreed upon price. Schwab receives collateral with a fair value equal to or in excess of the carrying value of the related receivables, including accrued interest, and requires additional collateral where deemed appropriate. Schwab is permitted by contract to repledge or sell collateral received under these resale agreements. In order to repledge or sell this collateral, the banking subsidiaries would be required to deposit additional securities of an equal amount with the custodian to replace the collateral received and maintain the net position. T he ability to repledge or sell collateral maintained by the custodian in conjunction with collateralized resale agreements is subject to operational limitations, which may restrict Schwab’s use of the securities. There were no securities repledged or sold under these arrangements as of March 31, 2026 and December 31, 2025. These collateralized resale agreements with each counterparty are considered to be enforceable master netting arrangements. However, we do not net these arrangements. As such, amounts recognized pursuant to these arrangements are presented gross in the condensed consolidated balance sheet and are included in cash and cash equivalents or other assets in the condensed consolidated balance sheets based upon the maturity date of the transaction. Securities lending : Schwab loans brokerage client securities temporarily to other broker-dealers and clearing houses in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event a counterparty to these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our client obligations. Schwab mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. In addition, most of our securities lending transactions are through a program with a clearing organization, which guarantees the return of collateral to us. We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities. The fair value of these borrowed securities was $ 8.6 billion and $ 4.6 billion at March 31, 2026 and December 31, 2025, respectively. Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, amounts related to securities borrowed and securities loaned are presented gross in the condensed consolidated balance sheets and are included in receivables from brokers, dealers, and clearing organizations and payables to brokers, dealers, and clearing organizations, respectively, in the condensed consolidated balance sheets. Repurchase agreements : Schwab’s banking subsidiaries enter into collateralized repurchase agreements with external financial institutions and the FICC in which they sell securities and agree to repurchase these securities on a specified future date at a stated repurchase price. These repurchase agreements are collateralized by investment securities with a fair value equal to or in excess of the secured borrowing liability. CS&Co also enters into collateralized repurchase agreements with external financial institutions in which CS&Co utilizes qualifying securities in client margin accounts as collateral. These repurchase agreements are collateralized by client margin securities with a fair value equal to or in excess of the secured borrowing liability. Client margin securities are transferred to an independent agent on behalf of CS&Co and the counterparty, who assumes the responsibility of receiving eligible securities and assigning these securities to the counterparty. Decreases in security prices posted as collateral for repurchase agreements may require Schwab to transfer cash and/or additional securities deemed acceptable by the counterparty. To mitigate this risk, Schwab monitors the fair value of underlying securities pledged as collateral compared to the related liability. Our collateralized repurchase agreements with each external financial institution are considered to be enforceable master netting arrangements. However, we do not net these arrangements. As such, the secured borrowings associated with these collateralized repurchase agreements are presented gross in the condensed consolidated balance sheets. Repurchase agreements at Schwab’s banking subsidiaries are included in other short-term borrowings in the consolidated balance sheets and repurchase agreements at CS&Co are included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. Interest rate swaps : Schwab uses interest rate swaps to manage certain interest rate risk exposures. Schwab’s interest rate swaps are cleared through CCPs which require the Company to post initial margin as collateral against potential losses. Schwab pledges investment securities as collateral in order to meet the CCP’s initial margin requirements. Initial margin is posted - 51 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) through FCMs which serve as the intermediary between CCPs and Schwab. Our interest rate swaps are subject to enforceable master netting arrangements allowing a right of setoff within each FCM-CCP relationship; however, we do not net these positions. Therefore, interest rate swaps are presented gross in the condensed consolidated balance sheets. Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities in the condensed consolidated balance sheets. See Note 12 for additional information on the Company’s interest rate swaps. The following table presents information about our interest rate swaps, resale agreements, securities lending, repurchase agreements, and other activity depicting the potential effect of rights of setoff between these recognized assets and liabilities. Collateral disclosed in the table below is limited to the amount of the related recognized asset or liability for each counterparty, even when the collateral value exceeds the gross asset or liability value: Gross Assets/ Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets Net Amount Counterparty Offsetting Collateral March 31, 2026 Assets Resale agreements $ 24,410 $ — $ 24,410 $ — $ ( 24,410 ) (1) $ — Securities borrowed 8,593 — 8,593 ( 5,713 ) ( 2,876 ) 4 Interest rate swaps 1 — 1 ( 1 ) — (2) — Total $ 33,004 $ — $ 33,004 $ ( 5,714 ) $ ( 27,286 ) $ 4 Liabilities Repurchase agreements (3) $ 3,499 $ — $ 3,499 $ — $ ( 3,499 ) (4) $ — Securities loaned (5) 26,484 — 26,484 ( 5,713 ) ( 20,625 ) 146 Secured short-term borrowings (6) 4,800 — 4,800 — ( 4,800 ) — Interest rate swaps 2 — 2 ( 1 ) ( 1 ) (2) — Total $ 34,785 $ — $ 34,785 $ ( 5,714 ) $ ( 28,925 ) $ 146 December 31, 2025 Assets Resale agreements $ 16,901 $ — $ 16,901 $ — $ ( 16,901 ) (1) $ — Securities borrowed 4,797 — 4,797 ( 3,069 ) ( 1,677 ) 51 Interest rate swaps 1 — 1 — — (2) 1 Total $ 21,699 $ — $ 21,699 $ ( 3,069 ) $ ( 18,578 ) $ 52 Liabilities Repurchase agreements (3) $ 1,301 $ — $ 1,301 $ — $ ( 1,301 ) (4) $ — Securities loaned (5) 25,131 — 25,131 ( 3,069 ) ( 21,137 ) 925 Secured short-term borrowings (6) 3,800 — 3,800 — ( 3,800 ) — Interest rate swaps 1 — 1 — — (2) 1 Total $ 30,233 $ — $ 30,233 $ ( 3,069 ) $ ( 26,238 ) $ 926 (1) At March 31, 2026 and December 31, 2025, the fair value of collateral received in connection with resale agreements that was available to be repledged or sold was $ 24.8 billion and $ 17.2 billion, respectively. (2) At March 31, 2026 and December 31, 2025, the fair value of initial margin pledged as collateral related to interest rate swaps was $ 648 million and $ 281 million, respectively. See Notes 6 and 12 for additional information. (3) At March 31, 2026 and December 31, 2025, repurchase agreements outstanding at CS&Co had continuous contractual maturities of 35 - 60 days. (4) At March 31, 2026 and December 31, 2025, the fair value of collateral pledged in connection with repurchase agreements at the Company’s banking subsidiaries was $ 3.1 billion and $ 1.3 billion, respectively. See Note 10 for additional information. At March 31, 2026 and December 31, 2025, collateral pledged for repurchase agreements outstanding at CS&Co was comprised of equity securities held in client brokerage accounts. See table below for fair value of client margin securities held in client brokerage accounts pledged as collateral. (5) Securities loaned are predominantly comprised of equity securities held in client brokerage accounts. At March 31, 2026, $ 13.4 billion of securities loaned had overnight and continuous remaining contractual maturities and $ 13.1 billion of securities loaned had contractual maturities of 35 - 95 days. At December 31, 2025, $ 15.0 billion of securities loaned had overnight and continuous remaining contractual maturities and $ 10.1 billion of securities loaned had contractual maturities of 35 - 95 days. (6) Included in other short-term borrowings in the condensed consolidated balance sheets. At March 31, 2026 and December 31, 2025, collateral pledged for secured short-term borrowings was comprised of equity securities held in client brokerage accounts. See below for amount of collateral pledged and Note 10 for additional information. - 52 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) Margin lending : Clients with margin loans have agreed to allow Schwab to pledge collateralized securities in their brokerage accounts in accordance with federal regulations. The following table summarizes the fair value of client securities that were available, under such regulations, that could have been used as collateral, as well as the fair value of securities that we had pledged to third parties under such regulations and from securities borrowed transactions: March 31, 2026 December 31, 2025 Fair value of client securities available to be pledged $ 174,936 $ 155,525 Fair value of securities pledged for: Fulfillment of requirements with the Options Clearing Corporation (1) $ 38,963 $ 34,791 Fulfillment of client short sales 20,258 16,196 Securities lending to other broker-dealers 26,440 23,867 Collateral for secured short-term borrowings 5,475 4,376 Collateral for repurchase agreements 516 56 Total collateral pledged to third parties $ 91,652 $ 79,286 Note: Excludes amounts available and pledged for securities lending from fully-paid client securities. The fair value of fully-paid client securities available and pledged was $ 301 million and $ 217 million at March 31, 2026 and December 31, 2025, respectively. (1) Securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation. 14. Fair Values of Assets and Liabilities Assets and Liabilities Measured at Fair Value on a Recurring Basis Schwab’s assets and liabilities measured at fair value on a recurring basis include certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, AFS securities, certain other assets, interest rate derivatives, and certain accrued expenses and other liabilities. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. Quoted prices for investments in exchange-traded securities represent end-of-day close prices published by exchanges. Quoted prices for money market funds and other mutual funds represent reported net asset values. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices in active markets do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets, and we generally obtain prices from three independent third-party pricing sources for such assets recorded at fair value. Our primary independent pricing service provides prices for our fixed income investments such as commercial paper; certificates of deposit; U.S. government and agency securities; state and municipal securities; corporate debt securities; asset-backed securities; foreign government agency securities; and non-agency commercial mortgage-backed securities. Such prices are based on observable trades, broker/dealer quotes, and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar “to-be-issued” securities. We compare the prices obtained from the primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. Schwab does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in material differences in the amounts recorded. Liabilities measured at fair value on a recurring basis include interest rate swaps, securities sold but not yet purchased, and repurchase liabilities related to client-held fractional shares of equities, ETFs, and other securities, which are included in other assets on the condensed consolidated balance sheets. The fair values of securities sold but not yet purchased are based on quoted market prices or other observable market data. The Company has elected the fair value option pursuant to ASC 825 Financial Instruments for the repurchase liabilities to match the measurement and accounting of the related client-held fractional shares. The fair values of the repurchase liabilities are based on quoted market prices or other observable market data consistent with the related client-held fractional shares. Unrealized gains and losses on client-held fractional shares offset the unrealized gains and losses on the corresponding repurchase liabilities, resulting in no impact to the condensed consolidated statements of income. The Company’s liabilities to repurchase client-held fractional shares do not have credit risk, and, as a result, the Company has not recognized any gains or losses in the condensed consolidated statements of income or comprehensive income attributable to instrument-specific credit risk for these repurchase liabilities. The repurchase liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. - 53 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 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. Valuation is based on both spot and forward rates on the swap yield curve. See Note 12 for additional information on the Company’s interest rate derivatives. For a description of the fair value hierarchy and Schwab’s fair value methodologies, see Item 8 – Note 2 in the 2025 Form 10-K. The Company did not adjust prices received from the primary independent third-party pricing service at March 31, 2026 or December 31, 2025. 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: March 31, 2026 Level 1 Level 2 Level 3 Balance at Fair Value Cash equivalents: Money market funds $ 21,565 $ — $ — $ 21,565 Commercial paper — 291 — 291 Total cash equivalents 21,565 291 — 21,856 Investments segregated and on deposit for regulatory purposes: U.S. government securities — 18,865 — 18,865 Total investments segregated and on deposit for regulatory purposes — 18,865 — 18,865 Available for sale securities: U.S. agency mortgage-backed securities — 39,691 — 39,691 U.S. Treasury securities — 11,336 — 11,336 Corporate debt securities — 4,785 — 4,785 Asset-backed securities — 4,589 — 4,589 U.S. state and municipal securities — 558 — 558 Non-agency commercial mortgage-backed securities — 113 — 113 Other — 18 — 18 Total available for sale securities — 61,090 — 61,090 Other assets: Other securities owned: Equity, corporate debt, and other securities 1,705 83 — 1,788 Mutual funds and ETFs 1,310 — — 1,310 State and municipal debt obligations — 25 — 25 U.S. government securities — 5 — 5 Total other securities owned 3,015 113 — 3,128 Interest rate swaps — 1 — 1 Total other assets 3,015 114 — 3,129 Total assets $ 24,580 $ 80,360 $ — $ 104,940 Accrued expenses and other liabilities: Interest rate swaps $ — $ 2 $ — $ 2 Other 2,807 33 — 2,840 Total accrued expenses and other liabilities 2,807 35 — 2,842 Total liabilities $ 2,807 $ 35 $ — $ 2,842 - 54 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) December 31, 2025 Level 1 Level 2 Level 3 Balance at Fair Value Cash equivalents: Money market funds $ 13,947 $ — $ — $ 13,947 U.S. Treasury securities — 1,989 — 1,989 Total cash equivalents 13,947 1,989 — 15,936 Investments segregated and on deposit for regulatory purposes: U.S. government securities — 23,555 — 23,555 Total investments segregated and on deposit for regulatory purposes — 23,555 — 23,555 Available for sale securities: U.S. agency mortgage-backed securities — 41,434 — 41,434 U.S. Treasury securities — 11,364 — 11,364 Corporate debt securities — 4,667 — 4,667 Asset-backed securities — 4,199 — 4,199 U.S. state and municipal securities — 561 — 561 Non-agency commercial mortgage-backed securities — 113 — 113 Other — 19 — 19 Total available for sale securities — 62,357 — 62,357 Other assets: Other securities owned: Equity, corporate debt, and other securities 1,704 84 — 1,788 Mutual funds and ETFs 1,314 — — 1,314 State and municipal debt obligations — 45 — 45 U.S. government securities — 15 — 15 Total other securities owned 3,018 144 — 3,162 Interest rate swaps — 1 — 1 Total other assets 3,018 145 — 3,163 Total assets $ 16,965 $ 88,046 $ — $ 105,011 Accrued expenses and other liabilities: Interest rate swaps $ — $ 1 $ — $ 1 Other 2,804 40 — 2,844 Total accrued expenses and other liabilities 2,804 41 — 2,845 Total liabilities $ 2,804 $ 41 $ — $ 2,845 - 55 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) Fair Value of Other Financial Instruments The following tables present the fair value hierarchy for other financial instruments: March 31, 2026 Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value Assets Cash and cash equivalents $ 23,119 $ 16,719 $ 6,400 $ — $ 23,119 Cash and investments segregated and on deposit for regulatory purposes 20,848 2,898 17,950 — 20,848 Receivables from brokers, dealers, and clearing organizations 11,808 — 11,808 — 11,808 Receivables from brokerage clients — net 106,172 — 106,172 — 106,172 Held to maturity securities: U.S. agency mortgage-backed securities 131,155 — 122,539 — 122,539 U.S. Treasury securities 516 — 512 — 512 Total held to maturity securities 131,671 — 123,051 — 123,051 Bank loans — net: First Mortgages 31,240 — 29,346 — 29,346 HELOCs 421 — 415 — 415 Pledged asset lines 28,790 — 28,790 — 28,790 Other 421 — 421 — 421 Total bank loans — net 60,872 — 58,972 — 58,972 Other assets 676 — 676 — 676 Liabilities Bank deposits $ 253,041 $ — $ 253,041 $ — $ 253,041 Payables to brokers, dealers, and clearing organizations 28,107 — 28,107 — 28,107 Payables to brokerage clients 117,986 — 117,986 — 117,986 Accrued expenses and other liabilities 1,470 — 1,470 — 1,470 Other short-term borrowings 12,486 — 12,486 — 12,486 Long-term debt 20,456 — 20,292 — 20,292 - 56 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) December 31, 2025 Carrying Amount Level 1 Level 2 Level 3 Balance at Fair Value Assets Cash and cash equivalents $ 30,094 $ 30,094 $ — $ — $ 30,094 Cash and investments segregated and on deposit for regulatory purposes 19,290 2,470 16,820 — 19,290 Receivables from brokers, dealers, and clearing organizations 7,190 — 7,190 — 7,190 Receivables from brokerage clients — net 104,625 — 104,625 — 104,625 Held to maturity securities: U.S. agency mortgage-backed securities 133,563 — 125,649 — 125,649 U.S. Treasury securities 406 — 406 — 406 Total held to maturity securities 133,969 — 126,055 — 126,055 Bank loans — net: First Mortgages 30,456 — 28,612 — 28,612 HELOCs 426 — 431 — 431 Pledged asset lines 26,603 — 26,603 — 26,603 Other 470 — 470 — 470 Total bank loans — net 57,955 — 56,116 — 56,116 Other assets 766 — 766 — 766 Liabilities Bank deposits $ 255,747 $ — $ 255,747 $ — $ 255,747 Payables to brokers, dealers, and clearing organizations 25,689 — 25,689 — 25,689 Payables to brokerage clients 116,341 — 116,341 — 116,341 Accrued expenses and other liabilities 1,359 — 1,359 — 1,359 Other short-term borrowings 6,913 — 6,913 — 6,913 Federal Home Loan Bank borrowings 1,850 — 1,850 — 1,850 Long-term debt 22,162 — 22,059 — 22,059 15. Stockholders’ Equity Common and Nonvoting Common Stock During the three months ended March 31, 2026, CSC repurchased 24.3 million shares of its common stock under its $ 20.0 billion authorization for $ 2.4 billion. As of March 31, 2026 approximately $ 12.1 billion remained on the $ 20.0 billion authorization. On February 12, 2025, TD Group US Holdings LLC, an affiliate of TD Bank, completed a secondary public offering of the Company’s common shares through which TD Group US Holdings LLC sold 133.8 million shares of the Company’s common stock and 31.7 million shares of the Company’s nonvoting common stock, which automatically converted into common stock. The offering was completed at a price of $ 79.25 per share, for an aggregate amount of $ 13.1 billion. The Company did not receive any of the proceeds from this sale. Concurrent with the completion of the secondary offering, and pursuant to a repurchase agreement dated February 9, 2025, the Company repurchased directly from TD Group US Holdings LLC its remaining 19.2 million shares of nonvoting common stock at a price of $ 77.982 per share for an aggregate repurchase amount of $ 1.5 billion, which settled on February 12, 2025. The shares of nonvoting common stock automatically converted into common stock upon repurchase and transferred to treasury stock, reducing the number of shares outstanding. These shares were purchased under CSC’s previous $ 15.0 billion share repurchase authorization. Through the completion of the secondary offering and the Company’s repurchase of nonvoting common stock, TD Bank disposed of all of its common shares of CSC and as of February 12, 2025, the Company had no remaining nonvoting common stock outstanding. - 57 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 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 The Company’s preferred stock issued and outstanding is as follows: Liquidation Preference Per Share Dividend Rate in Effect at March 31, 2026 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 March 31, 2026 (1) December 31, 2025 (1) March 31, 2026 December 31, 2025 Issue Date Fixed-rate: Series D 750,000 750,000 $ 1,000 $ 728 $ 728 03/07/16 5.95 % 06/01/21 N/A N/A N/A Series J 600,000 600,000 1,000 584 584 03/30/21 4.450 % 06/01/26 N/A N/A N/A Fixed-to-floating rate/Fixed-rate reset: Series F 4,884 4,884 100,000 481 481 10/31/17 5.000 % 12/01/27 12/01/27 3 M LIBOR (4) 2.575 % Series H (2) 22,267 22,267 100,000 2,200 2,200 12/11/20 4.000 % 12/01/30 12/01/30 10 -Year Treasury 3.079 % Series I (3) 20,554 20,554 100,000 2,030 2,030 03/18/21 4.000 % 06/01/26 06/01/26 5 -Year Treasury 3.168 % Series K (3) 7,500 7,500 100,000 740 740 03/04/22 5.000 % 06/01/27 06/01/27 5 -Year Treasury 3.256 % Total preferred stock 1,405,205 1,405,205 $ 6,763 $ 6,763 (1) Represented by depositary shares. (2) The dividend rate for Series H resets on each ten-year anniversary from the first reset date. (3) The dividend rate for Series I and Series K resets on each five-year anniversary from the first reset date. (4) The reset/floating rate for Series F will be determined by the calculation agent prior to the commencement of the floating rate period using what the calculation agent determines to be the industry-accepted substitute or successor base rate to LIBOR. N/A Not applicable. Dividends declared on the Company’s preferred stock are as follows: Three Months Ended March 31, 2026 2025 Total Declared Per Share Amount Total Declared Per Share Amount Series D (1) $ 11.2 $ 14.88 $ 11.2 $ 14.88 Series F (2) — — — — Series G (3) — — 33.0 1,343.75 Series H (1) 22.3 1,000.00 22.3 1,000.00 Series I (1) 20.6 1,000.00 20.6 1,000.00 Series J (1) 6.7 11.13 6.7 11.13 Series K (1) 9.3 1,250.00 9.3 1,250.00 Total $ 70.1 $ 103.1 (1) Dividends paid quarterly. (2) Dividends paid semi-annually until December 1, 2027 and quarterly thereafter. (3) Series G was redeemed on June 2, 2025. Prior to redemption, dividends were paid quarterly. The final dividend was paid on June 2, 2025. Subsequent to March 31, 2026, on April 22, 2026, the Company issued and sold 1,500,000 depositary shares, each representing a 1/100th ownership interest in a share of 6.100 % fixed-rate reset non-cumulative perpetual preferred stock, Series L, $ .01 par value per share, with a liquidation preference of $ 100,000 per share (equivalent of $ 1,000 per depositary share). The net proceeds of the offering were approximately $ 1.5 billion, after deducting the underwriting discount and estimated offering expenses. Subsequent to March 31, 2026, on May 4, 2026, the Company announced that it will redeem on June 1, 2026 all of the 20,554 outstanding shares of its fixed-rate reset non-cumulative perpetual preferred stock, Series I, and the corresponding 2,055,433 depositary shares, each representing a 1/100th interest in a share of the Series I preferred stock. The depositary shares will be redeemed at a redemption price of $ 1,000 per depositary share for a total of $ 2.1 billion. The redemption price does not include the regular quarterly dividend that was declared on April 23, 2026 and will be paid separately on June 1, 2026. - 58 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 16. Accumulated Other Comprehensive Income AOCI represents cumulative gains and losses that are not reflected in earnings. AOCI balances and the components of other comprehensive income (loss) are as follows: Balance at December 31, 2024 $ ( 14,848 ) Available for sale securities: Net unrealized gain (loss), net of tax expense (benefit) of $ 253 808 Other reclassifications included in other revenue, net of tax expense (benefit) of $ 2 8 Held to maturity securities: Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 128 410 Other (1) 1 Balance at March 31, 2025 $ ( 13,621 ) Balance at December 31, 2025 $ ( 10,983 ) Available for sale securities: Net unrealized gain (loss), net of tax expense (benefit) of $ 2 6 Held to maturity securities: Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 117 379 Derivatives designated as cash flow hedging instruments: Net unrealized gain (loss), net of tax expense (benefit) of $( 54 ) ( 171 ) Reclassifications included in interest revenue, net of tax expense (benefit) of $ 4 14 Other (1) ( 2 ) Balance at March 31, 2026 $ ( 10,757 ) (1) Tax expense (benefit) was less than $ 500 thousand. As of March 31, 2026, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $ 7.7 billion net of tax effect ($ 10.1 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. - 59 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 17. Earnings Per Common Share As described in Note 15, 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. For details regarding the computations of basic and diluted EPS for the periods presented below, see Item 8 – Note 25 in the 2025 Form 10-K. EPS under the basic and diluted computations for the three months ended March 31, 2026 is as follows: Three Months Ended March 31, 2026 Net income $ 2,479 Preferred stock dividends and other (1) ( 82 ) Net income available to common stockholders $ 2,397 Weighted-average common shares outstanding — basic 1,746 Common stock equivalent shares related to stock incentive plans 6 Weighted-average common shares outstanding — diluted (2) 1,752 Basic earnings per share $ 1.37 Diluted earnings per share $ 1.37 (1) Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested participating restricted stock units. (2) Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 13 million for the three months ended March 31, 2026. The computations of basic and diluted EPS for the three months ended March 31, 2025 are as follows: Three Months Ended March 31, 2025 Common Stock Nonvoting Common Stock Consolidated Common Stock Basic earnings per share: Numerator Net income $ 1,891 $ 18 $ 1,909 Preferred stock dividends and other (1) ( 112 ) ( 1 ) ( 113 ) Net income available to common stockholders $ 1,779 $ 17 $ 1,796 Denominator Weighted-average common shares outstanding — basic 1,794 51 1,817 Basic earnings per share $ .99 $ .33 $ .99 Diluted earnings per share: Numerator Net income available to common stockholders $ 1,779 $ 17 $ 1,796 Reallocation of net income available to common stockholders as a result of conversion of nonvoting to voting shares 17 — — Allocation of net income available to common stockholders $ 1,796 $ 17 $ 1,796 Denominator Weighted-average common shares outstanding — basic 1,794 51 1,817 Conversion of nonvoting shares to voting shares 23 — — Common stock equivalent shares related to stock incentive plans 5 — 5 Weighted-average common shares outstanding — diluted (2) 1,822 51 1,822 Diluted earnings per share $ .99 $ .33 $ .99 (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 14 million for the three months ended March 31, 2025. - 60 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) 18. Regulatory Requirements At March 31, 2026, CSC and its banking subsidiaries met all of their respective capital requirements. Regulatory capital and ratios for CSC (consolidated) and CSB are as follows: Actual Minimum to be Well Capitalized Minimum Capital Requirement March 31, 2026 Amount Ratio Amount Ratio Amount Ratio (1) CSC Common Equity Tier 1 Risk-Based Capital $ 35,131 26.3 % N/A $ 6,011 4.5 % Tier 1 Risk-Based Capital 41,894 31.4 % N/A 8,014 6.0 % Total Risk-Based Capital 41,937 31.4 % N/A 10,686 8.0 % Tier 1 Leverage 41,894 8.9 % N/A 18,857 4.0 % Supplementary Leverage Ratio 41,894 8.8 % N/A 14,268 3.0 % CSB Common Equity Tier 1 Risk-Based Capital $ 27,474 34.0 % $ 5,255 6.5 % $ 3,638 4.5 % Tier 1 Risk-Based Capital 27,474 34.0 % 6,467 8.0 % 4,850 6.0 % Total Risk-Based Capital 27,512 34.0 % 8,084 10.0 % 6,467 8.0 % Tier 1 Leverage 27,474 10.9 % 12,601 5.0 % 10,081 4.0 % Supplementary Leverage Ratio 27,474 10.8 % N/A 7,635 3.0 % December 31, 2025 CSC Common Equity Tier 1 Risk-Based Capital $ 36,081 30.4 % N/A $ 5,345 4.5 % Tier 1 Risk-Based Capital 42,844 36.1 % N/A 7,127 6.0 % Total Risk-Based Capital 42,894 36.1 % N/A 9,503 8.0 % Tier 1 Leverage 42,844 9.3 % N/A 18,499 4.0 % Supplementary Leverage Ratio 42,844 9.2 % N/A 13,974 3.0 % CSB Common Equity Tier 1 Risk-Based Capital $ 28,126 35.9 % $ 5,088 6.5 % $ 3,523 4.5 % Tier 1 Risk-Based Capital 28,126 35.9 % 6,262 8.0 % 4,697 6.0 % Total Risk-Based Capital 28,163 36.0 % 7,828 10.0 % 6,262 8.0 % Tier 1 Leverage 28,126 11.1 % 12,641 5.0 % 10,113 4.0 % Supplementary Leverage Ratio 28,126 11.0 % N/A 7,649 3.0 % (1) Under risk-based capital rules, CSC and CSB are also required to maintain additional capital buffers above the regulatory minimum risk-based capital ratios. As of March 31, 2026 and December 31, 2025, CSC was subject to a stress capital buffer of 2.5% and CSB was required to maintain a capital conservation buffer of 2.5%. CSC and CSB are also required to maintain a countercyclical capital buffer above the regulatory minimum risk-based capital ratios, which was zero for both periods presented. If a buffer falls below the minimum requirement, CSC and CSB would be subject to increasingly strict limits on capital distributions and discretionary bonus payments to executive officers. At March 31, 2026 and December 31, 2025, the minimum capital ratio requirements for both CSC and CSB, inclusive of their respective buffers, were 7.0%, 8.5%, and 10.5% for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital, respectively. N/A Not applicable. Based on its regulatory capital ratios at March 31, 2026 and December 31, 2025, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since March 31, 2026 that management believes have changed CSB’s capital category. CSC’s other banking subsidiaries are CSPB and Charles Schwab Trust Bank (Trust Bank). CSPB is a Texas-chartered state savings bank that provides banking and custody services, and Trust Bank is a Nevada state-chartered savings bank that provides trust and custody services. At March 31, 2026 and December 31, 2025, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities. At March 31, 2026 and December 31, 2025, CSPB held total assets of $ 27.4 billion and $ 27.0 billion, respectively, and Trust Bank held total assets of $ 10.4 billion for both periods. Based on their regulatory capital ratios at March 31, 2026 and December 31, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules. - 61 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) As a securities broker-dealer, CS&Co is subject to the SEC’s Uniform Net Capital Rule. Net capital and net capital requirements for CS&Co are as follows: March 31, 2026 December 31, 2025 Net capital $ 13,441 $ 13,188 Minimum dollar requirement 0.250 0.250 2% of aggregate debit balances 2,707 2,559 Net capital in excess of required net capital 10,734 10,629 Pursuant to the SEC’s Customer Protection Rule and other applicable regulations, Schwab had cash and investments segregated for the exclusive benefit of clients at March 31, 2026. The SEC’s Customer Protection Rule requires broker-dealers to segregate client fully-paid securities and cash balances not collateralizing margin positions and not swept to money market funds or bank deposit accounts. Amounts included in cash and investments segregated and on deposit for regulatory purposes represent actual balances on deposit. Cash and cash equivalents included in cash and investments segregated and on deposit for regulatory purposes are presented as part of Schwab’s cash balances in the condensed consolidated statements of cash flows. 19. Segment Information Schwab’s two reportable segments are Investor Services and Advisor Services. Schwab structures the operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage, investment advisory, and banking and trust services to individual investors, retirement plan and business services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking and trust, and support services to independent RIAs, independent retirement advisors, and recordkeepers. Revenues and expenses are attributed to the two segments based on which segment services the client. Schwab’s chief operating decision makers (CODMs) are the President and Chief Executive Officer, and the Managing Director and Chief Financial Officer. The accounting policies of the segments are the same as those described in Item 8 – Note 2 in the 2025 Form 10-K. For the computation of its segment information, Schwab utilizes an activity-based costing model to allocate traditional income statement line item expenses (e.g., compensation and benefits, depreciation and amortization, and professional services) to the business activities driving segment expenses (e.g., client service, opening new accounts, or business development) and a funds transfer pricing methodology to allocate certain revenues. The CODMs evaluate the performance of the segments on a pre-tax basis and use income before taxes on income to allocate resources, including employees and capital, to the segments during the annual budgeting process. The CODMs consider budget-to-actual variances on a monthly basis when making decisions about allocating resources to the segments throughout the year. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments. - 62 - THE CHARLES SCHWAB CORPORATION Notes to Condensed Consolidated Financial Statements (Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted) (Unaudited) Financial information for the segments is presented in the following table: Investor Services Advisor Services Total Three Months Ended March 31, 2026 2025 2026 2025 2026 2025 Net Revenues Net interest revenue $ 2,425 $ 2,158 $ 719 $ 548 $ 3,144 $ 2,706 Asset management and administration fees 1,294 1,114 465 416 1,759 1,530 Trading revenue 980 805 109 103 1,089 908 Bank deposit account fees 226 191 69 54 295 245 Other 152 177 43 33 195 210 Total net revenues 5,077 4,445 1,405 1,154 6,482 5,599 Expenses Excluding Interest Compensation and benefits 1,399 1,285 413 387 1,812 1,672 Professional services 249 214 54 55 303 269 Occupancy and equipment 223 215 62 59 285 274 Advertising and market development 79 64 22 32 101 96 Communications 113 113 50 40 163 153 Depreciation and amortization 153 165 48 52 201 217 Amortization of acquired intangible assets 109 106 23 24 132 130 Regulatory fees and assessments 59 70 16 19 75 89 Other 184 202 38 42 222 244 Total expenses excluding interest 2,568 2,434 726 710 3,294 3,144 Income before taxes on income $ 2,509 $ 2,011 $ 679 $ 444 $ 3,188 $ 2,455 - 63 - THE CHARLES SCHWAB CORPORATION