What changed in this filing

/stocks — the workspaceLOADING

Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-08-07 compared with 2026-05-08 · 375 added, 209 removed, 1329 unchanged (31% of the section changed)

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Interest revenue $ 4,146 $ 3,787 $ 8,108 $ 7,544

34 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net income $ 2,800 $ 2,126 $ 5,279 $ 4,035

19 unchanged sentences

(In Millions, Except Per Share and Share Amounts)

March 31, 2026 December 31, 2025

Cash and cash equivalents (including resale agreements of $ 6,400 at March 31, 2026)

June 30, 2026 December 31, 2025

Cash and cash equivalents (including resale agreements of $ 600 at June 30, 2026)

$ 40,580 $ 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,

agreements of $ 12,636 and $ 16,901 at June 30, 2026 and December 31, 2025,

respectively)

2 unchanged sentences

Receivables from brokerage clients — net 122,848 104,660

Available for sale securities (amortized cost of $ 64,950 and $ 66,225 at March 31, 2026 and

Available for sale securities (amortized cost of $ 66,312 and $ 66,225 at June 30, 2026 and

December 31, 2025, respectively;

2 unchanged sentences

Held to maturity securities (including assets pledged of $ 3,933 and $ 1,270 at

March 31, 2026 and December 31, 2025, respectively)

June 30, 2026 and December 31, 2025, respectively)

130,568 133,969

16 unchanged sentences

Preferred stock — $ .01 par value per share;

aggregate liquidation preference of $ 6,871 at March 31, 2026 and December 31, 2025

aggregate liquidation preference of $ 6,315 and $ 6,871 at June 30, 2026 and December 31, 2025, respectively

Common stock — 3 billion shares authorized;

$ .01 par value per share;

2,074,188,875 issued at March 31, 2026 and December 31, 2025

2,074,188,875 issued

at June 30, 2026 and December 31, 2025

Nonvoting common stock — 300 million shares authorized;

$ .01 par value per share;

no shares issued at March 31, 2026 and December 31, 2025

no shares issued at June 30, 2026 and December 31, 2025

Additional paid-in capital 28,179 27,996

Retained earnings 48,044 44,065

Treasury stock, at cost — 336,068,055 and 315,863,800 shares at March 31, 2026

Treasury stock, at cost — 346,069,683 and 315,863,800 shares at June 30, 2026

and December 31, 2025, respectively

8 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock,

at cost Total

Shares Amount

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

Net income — — — — 2,126 — — 2,126

Other comprehensive income (loss), net of tax — — — — — — 1,030 1,030

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

Dividends declared on preferred stock — — — — ( 115 ) — — ( 115 )

Dividends declared on common stock — $ .27 per share

— — — — ( 493 ) — — ( 493 )

Repurchase of common stock, inclusive of tax — — — — — ( 353 ) — ( 353 )

Stock option exercises and other — — — 34 — 36 — 70

Share-based compensation — — — 65 — — — 65

Other — — — 50 4 14 — 68

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

Balance at March 31, 2026 $ 6,763 2,074 $ 21 $ 28,047 $ 45,912 $ ( 20,752 ) $ ( 10,757 ) $ 49,234

Net income — — — — 2,800 — — 2,800

Other comprehensive income (loss), net of tax — — — — — — 182 182

Issuance of preferred stock, net 1,480 — — — — — — 1,480

Redemption of preferred stock ( 2,030 ) — — — ( 25 ) — — ( 2,055 )

Dividends declared on preferred stock — — — — ( 82 ) — — ( 82 )

Dividends declared on common stock — $ .32 per share

— — — — ( 561 ) — — ( 561 )

Repurchase of common stock, inclusive of tax — — — — — ( 1,008 ) — ( 1,008 )

Stock option exercises and other — — — ( 7 ) — 18 — 11

Share-based compensation — — — 84 — — — 84

Other — — — 55 — 7 — 62

Balance at June 30, 2026 $ 6,213 2,074 $ 21 $ 28,179 $ 48,044 $ ( 21,735 ) $ ( 10,575 ) $ 50,147

Continued on following page.

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Stockholders ’ Equity

(In Millions)

Continued from previous page.

Preferred Stock Common Stock Nonvoting

Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock,

at cost Total

at cost Accumulated Other Comprehensive Income (Loss) Total

Shares Amount Shares Amount

2 unchanged sentences

Other comprehensive income (loss), net of tax — — — — — — — — 2,257 2,257

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

Dividends declared on preferred stock — — — — — — ( 218 ) — — ( 218 )

1 unchanged sentence

— — — — — — ( 985 ) — — ( 985 )

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 ) — — — — —

Repurchase of common stock, inclusive of tax — — — — — — — ( 353 ) — ( 353 )

Repurchase of nonvoting common stock, inclusive of tax — 19 — ( 19 ) — — — ( 1,512 ) — ( 1,512 )

Conversion of nonvoting common stock to common stock — 32 1 ( 32 ) ( 1 ) — — — — —

Stock option exercises and other — — — — — ( 89 ) — 198 — 109

1 unchanged sentence

Other — — — — — 82 4 ( 66 ) — 20

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

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

Balance at December 31, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,996 $ 44,065 $ ( 18,437 ) $ ( 10,983 ) $ 49,425

1 unchanged sentence

Other comprehensive income (loss), net of tax — — — — — — — — 408 408

Issuance of preferred stock, net 1,480 — — — — — — — — 1,480

Redemption of preferred stock ( 2,030 ) — — — — — ( 25 ) — — ( 2,055 )

Dividends declared on preferred stock — — — — — — ( 152 ) — — ( 152 )

5 unchanged sentences

Other — — — — — 104 — ( 81 ) — 23

Balance at March 31, 2026 $ 6,763 2,074 $ 21 — $ — $ 28,047 $ 45,912 $ ( 20,752 ) $ ( 10,757 ) $ 49,234

Balance at June 30, 2026 $ 6,213 2,074 $ 21 — $ — $ 28,179 $ 48,044 $ ( 21,735 ) $ ( 10,575 ) $ 50,147

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in Millions)

Three Months Ended

Six Months Ended

Cash Flows from Operating Activities

37 unchanged sentences

Repayments of other short-term borrowings ( 32,664 ) ( 17,906 )

Issuances of long-term debt 3,231 —

Repayments of long-term debt ( 3,114 ) ( 2,237 )

Repurchases of common stock and nonvoting common stock ( 3,377 ) ( 1,833 )

Net proceeds from preferred stock offerings 1,480 —

Redemption of preferred stock ( 2,055 ) ( 2,458 )

Dividends paid ( 1,275 ) ( 1,203 )

10 unchanged sentences

Continued from previous page.

Three Months Ended

Six Months Ended

Supplemental Cash Flow Information

1 unchanged sentence

Changes in accrued equipment, office facilities, and property purchases $ 640 $ 47

Non-cash financing activity:

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

Other Supplemental Cash Flow Information:

4 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 100 $ 55

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (1)

24 unchanged sentences

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.

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 six months of 2026.

THE CHARLES SCHWAB CORPORATION

3 unchanged sentences

Adoption of New Accounting Standards

The Company did not adopt any material new accounting standards during the three months ended March 31, 2026.

The Company did not adopt any material new accounting standards during the six months ended June 30, 2026.

New Accounting Standards Not Yet Adopted

27 unchanged sentences

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 .

During the three months ended June 30, 2026, we made measurement period adjustments to the purchase price allocation resulting in additions of $ 10 million, $ 4 million, and $ 6 million to our initial estimates of the fair value of acquired intangible assets, other

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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:

assets, and accrued expenses and other liabilities, respectively, and a reduction of $ 8 million to our initial estimate of the fair value of goodwill.

Fair value of assets acquired:

21 unchanged sentences

Goodwill recorded of $ 339 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.

The Company’s condensed consolidated statements of income include total net revenues and net loss attributable to the Forge acquisition of $ 40 million and $ 33 million, respectively, for the three months ended June 30, 2026 and $ 54 million and $ 39 million, respectively, for the period March 2, 2026 through June 30, 2026.

Certain Forge equity awards, whether vested or unvested, were assumed by the Company upon acquisition.

1 unchanged sentence

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.

The remaining portion was associated with future services and had a fair value of $ 37 million on the acquisition date.

As of June 30, 2026, there was $ 14 million of unrecognized compensation cost related to these awards.

THE CHARLES SCHWAB CORPORATION

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net interest revenue

2 unchanged sentences

Receivables from brokerage clients (1)

1,609 1,321 3,108 2,700

Available for sale securities 358 405 684 838

20 unchanged sentences

Mutual funds, ETFs, CTFs, and alternatives (3)

1,020 898 2,011 1,776

Managed investing solutions 707 589 1,381 1,158

98 83 192 166

Asset management and administration fees 1,825 1,570 3,584 3,100

7 unchanged sentences

Total net revenues $ 7,072 $ 5,851 $ 13,554 $ 11,450

(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.

(1) Beginning in the fourth quarter of 2025, interest revenue and expense from client margin loans and short credits related to client long/short strategies from which the Company earns a fixed net yield were moved from receivables from brokerage clients and payables to brokerage clients, respectively, to other interest revenue and other interest expense, respectively.

Amounts for 2025 periods have been reclassified to reflect this change.

(2) Beginning in the second quarter of 2026, the net fixed yield earned on client long/short strategies is presented in other interest revenue;

amounts for periods prior to the three months ended June 30, 2026 have not been recast as the impact of this change was not material.

(3) 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.

3 unchanged sentences

Contract balances :

Receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606 Revenue From Contracts With Customers (ASC 606), are included in other assets on the condensed consolidated balance sheets, and totaled $ 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

Receivables from contracts with customers within the scope of ASC 606 Revenue From Contracts With Customers (ASC 606), are included in other assets on the condensed consolidated balance sheets, and totaled $ 928 million and $ 819 million at June 30, 2026 and December 31, 2025, respectively.

The Company had net contract assets of $ 182 million and $ 193 million at June 30, 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 remaining

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

remaining contractual term as a reduction to bank deposit account fee revenue.

contractual term as a reduction to bank deposit account fee revenue.

For additional discussion of the 2023 IDA agreement, see Note 11.

3 unchanged sentences

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 from and payables to brokers, dealers, and clearing organizations are as follows:

June 30, 2026 December 31, 2025

Securities borrowed $ 19,027 $ 4,797

Receivables from clearing organizations 2,855 2,327

Other receivables from broker-dealers 88 24

Receivables for securities failed to deliver 94 42

Other receivables from broker-dealers 28 24

Receivables from brokers, dealers, and clearing organizations $ 22,004 $ 7,190

Deposits for securities loaned $ 38,659 $ 25,131

Other payables to broker-dealers 651 302

Broker-dealer repurchase agreements 3,500 50

Payables to clearing organizations 701 115

Other payables to broker-dealers 690 302

Payables for securities failed to receive 276 91

6 unchanged sentences

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

March 31, 2026 Amortized

June 30, 2026 Amortized

Available for sale securities

34 unchanged sentences

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.

(1) As of June 30, 2026, approximately 28 %, 25 %, and 20 % 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.

(2) As of June 30, 2026, approximately 38 % and 33 % 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.

1 unchanged sentence

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.

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

Treasury securities as of December 31, 2025 ( none as of June 30, 2026).

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.

At June 30, 2026, our banking subsidiaries had pledged investment securities with a fair value of $ 12.7 billion (collateral value of $ 11.8 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 $ 28.9 billion (collateral value of $ 28.0 billion) as collateral for this facility at June 30, 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.

The fair value and collateral value of these pledged securities was $ 1.6 billion at June 30, 2026.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

At March 31, 2026, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions and the FICC.

At June 30, 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.

1 unchanged sentence

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.

At June 30, 2026, the Company had pledged AFS securities consisting of U.S.

Treasury securities with an aggregate fair value of $ 760 million as initial margin on interest rate swaps (see Notes 12 and 13).

4 unchanged sentences

Less than 12 months 12 months or longer Total

March 31, 2026 Fair

June 30, 2026 Fair

Value Unrealized

3 unchanged sentences

agency mortgage-backed securities $ 82 $ 1 $ 37,618 $ 3,196 $ 37,700 $ 3,197

$ 21 $ — $ 39,669 $ 3,152 $ 39,690 $ 3,152

Treasury securities 8,964 26 2,621 120 11,585 146

Corporate debt securities 405 2 4,591 327 4,996 329

60 — 4,660 357 4,720 357

Asset-backed securities 2,787 11 3,640 121 6,427 132

state and municipal securities (1)

25 — 399 35 424 35

Non-agency commercial mortgage-backed securities — — 112 8 112 8

15 unchanged sentences

(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.

(2) For purposes of this table, unrealized losses on AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $( 4 ) million and $ 2 million at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026, substantially all rated securities in the investment portfolios were investment grade.

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

3 unchanged sentences

For a description of management’s quarterly evaluation of AFS securities in unrealized loss positions, see Item 8 – Note 2 in the 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.

No amounts were recognized as credit loss expense and no securities were written down to fair value through earnings for the six months ended June 30, 2026 and the year ended December 31, 2025.

None of the Company’s AFS securities held as of June 30, 2026 and December 31, 2025 had an allowance for credit losses.

HTM securities as of June 30, 2026 and December 31, 2025 were U.S.

agency mortgage-backed securities and U.S.

3 unchanged sentences

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

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.

The Company had $ 381 million and $ 386 million of accrued interest for AFS and HTM securities as of June 30, 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:

There were no writeoffs of accrued interest receivable on AFS and HTM securities during the six months ended June 30, 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 June 30, 2026:

Estimated effective duration, exclusive of derivatives:

8 unchanged sentences

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

March 31, 2026 Within

June 30, 2026 Within

1 year After 1 year

19 unchanged sentences

Total amortized cost $ 628 $ 30,952 $ 25,206 $ 73,782 $ 130,568

(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.

(1) For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $( 4 ) million at June 30, 2026.

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

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Proceeds $ 4,550 $ 2,584 $ 6,091 $ 4,205

6 unchanged sentences

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

June 30, 2026 Current 30-59 days

past due 60-89 days

22 unchanged sentences

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.

(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $ 144 million and $ 131 million at June 30, 2026 and December 31, 2025, respectively.

(2) At June 30, 2026 and December 31, 2025, 40 % and 41 %, respectively, of the First Mortgage and HELOC portfolios were concentrated in California.

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

(3) There were no loans accruing interest that were contractually 90 days or more past due at 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).

(3) There were no loans accruing interest that were contractually 90 days or more past due at June 30, 2026 or December 31, 2025.

At June 30, 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).

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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

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

Charge-offs — — — — — —

1 unchanged sentence

Provision for credit losses 1 — 1 — — 1

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

Balance at March 31, 2026 $ 29 $ 1 $ 30 $ — $ 6 $ 36

Charge-offs — — — — — —

Recoveries — — — — — —

Provision for credit losses 1 — 1 — — 1

Balance at June 30, 2026 $ 30 $ 1 $ 31 $ — $ 6 $ 37

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

2 unchanged sentences

Provision for credit losses 1 — 1 — — 1

Balance at March 31, 2026 $ 29 $ 1 $ 30 $ — $ 6 $ 36

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

Balance at December 31, 2025 $ 28 $ 1 $ 29 $ — $ 7 $ 36

Charge-offs — — — — — —

Recoveries — — — — — —

Provision for credit losses 2 — 2 — ( 1 ) 1

Balance at June 30, 2026 $ 30 $ 1 $ 31 $ — $ 6 $ 37

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.

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

As of June 30, 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 June 30, 2026 and December 31, 2025, and no allowance for credit losses for PALs as of those dates was required.

economy experienced soft hiring and elevated core inflation at the end of the second quarter of 2026.

Geopolitical unrest persists amid a backdrop of elevated uncertainty due to economic impacts of developing trade policy and a constrained energy supply.

Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market.

1 unchanged sentence

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.

As a result of these factors, we held projected loss rates constant at June 30, 2026, as compared to December 31, 2025.

Credit Quality

8 unchanged sentences

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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

First Mortgages Amortized Cost Basis by Origination Year

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

June 30, 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

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(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.

At June 30, 2026, $ 28.5 billion of First Mortgage loans had adjustable interest rates.

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

1 unchanged sentence

The interest rates on approximately 62 % 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.

At June 30, 2026 and December 31, 2025, Schwab had $ 255 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.

5 unchanged sentences

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

March 31, 2026 Balance

June 30, 2026 Balance

Converted to an amortizing loan by period end (1)

3 unchanged sentences

> 5 years 206

(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.

(1) Includes $ 2 million and $ 5 million of HELOCs converted to amortizing loans during the three and six months ended June 30, 2026, respectively.

At June 30, 2026, $ 324 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.

At June 30, 2026, the borrowers on approximately 61 % of HELOC loan balances outstanding only paid the minimum amount due.

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 of June 30, 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.

During the three months ended June 30, 2026 and 2025, CSB recorded amortization of $ 68 million and $ 47 million, respectively, and recognized tax credits and other tax benefits of $ 89 million and $ 65 million, respectively, associated with these investments.

During the six months ended June 30, 2026 and 2025, CSB recorded amortization of $ 127 million and $ 94 million, respectively, and recognized tax credits and other tax benefits of $ 166 million and $ 126 million, respectively, associated with these investments.

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

2 unchanged sentences

The aggregate assets, 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

June 30, 2026 December 31, 2025

assets Aggregate

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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.

During the six months ended June 30, 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.

THE CHARLES SCHWAB CORPORATION

3 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Interest-bearing deposits:

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(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.

The weighted-average interest rates on outstanding time certificates of deposit at June 30, 2026 and December 31, 2025 were 3.90 % and 4.03 %, respectively.

As of June 30, 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 June 30, 2026 mature in July 2026.

CSC Senior Notes :

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Interest is payable semi-annually for the fixed-rate Senior Notes.

Other Finance Liabilities :

CS&Co entered into a third-party long-term software licensing agreement during the second quarter of 2026 for $ 633 million.

In accordance with ASC 350 Intangibles — Goodwill and Other , CS&Co recorded the multi-year software license as an asset within equipment, office facilities, and property — net, and the corresponding liability as long-term debt on the consolidated balance sheets.

An initial debt payment of $ 49 million was made during the second quarter of 2026, and future payments are due annually through March 2033.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

The following table lists long-term debt by instrument outstanding as of March 31, 2026 and December 31, 2025:

The following table lists long-term debt by instrument outstanding as of June 30, 2026 and December 31, 2025:

Date of Issuance Principal Amount Outstanding

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

CSC Fixed-rate Senior Notes:

41 unchanged sentences

05/19/23 1,200 1,200

4.603 % due July 27, 2029

06/25/26 1,000 —

6.196 % due November 17, 2029

11/17/23 1,300 1,300

4.744 % due May 21, 2030

05/21/26 1,000 —

4.343 % due November 14, 2031

6 unchanged sentences

11/14/25 1,000 1,000

5.493 % due May 21, 2037

05/21/26 1,250 —

Total CSC Senior Notes 22,269 22,119

6 unchanged sentences

Finance lease liabilities 23 37

Other finance liabilities (2)

Unamortized premium — net 24 33

2 unchanged sentences

Total long-term debt $ 22,669 $ 22,199

(1) Interest rates presented are those in effect at March 31, 2026.

(1) Interest rates presented are those in effect at June 30, 2026.

See table below for additional information regarding future interest rates on fixed-to-floating rate Senior Notes.

(2) This represents the total liability, including imputed interest, related to a software licensing agreement entered into during the second quarter of 2026.

(3) This represents the amount of fair value hedge basis adjustments related to Senior Notes hedged.

3 unchanged sentences

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

The following table details the changes in future interest rates on fixed-to-floating rate Senior Notes as of March 31, 2026:

The following table details the changes in future interest rates on fixed-to-floating rate Senior Notes as of June 30, 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 %

July 27, 2029 4.603 % 06/25/26 SOFR + 0.622 %

November 17, 2029 6.196 % 11/17/23 SOFR + 1.878 %

May 21, 2030 4.744 % 05/21/26 SOFR + 0.780 %

November 14, 2031 4.343 % 11/14/25 SOFR + 0.940 %

2 unchanged sentences

November 14, 2036 4.914 % 11/14/25 SOFR + 1.230 %

Annual maturities on all long-term debt outstanding at March 31, 2026 are as follows:

May 21, 2037 5.493 % 05/21/26 SOFR+ 1.280 %

Annual maturities on all long-term debt outstanding at June 30, 2026 are as follows:

Thereafter 9,616

9 unchanged sentences

Amounts available under these facilities are dependent on the amount of bank loans and the value of certain investment securities that are pledged as collateral.

There 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.

There was $ 500 million and $ 1.9 billion outstanding under these facilities as of June 30, 2026 and December 31, 2025, respectively, and these borrowings had a weighted-average interest rate of 3.79 % and 3.90 %, respectively.

As of June 30, 2026 and December 31, 2025, the collateral pledged provided additional borrowing capacity of $ 32.8 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.

Total other short-term borrowings outstanding at June 30, 2026 and December 31, 2025 were $ 13.9 billion and $ 6.9 billion, respectively, and had a weighted-average interest rate of 3.25 % 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.

The Company had $ 4.3 billion and $ 1.3 billion outstanding pursuant to such repurchase agreements at June 30, 2026 and December 31, 2025, respectively.

Repurchase agreements outstanding at June 30, 2026 mature between July 2026 and August 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.

As of June 30, 2026 and December 31, 2025, our collateral pledged provided total borrowing capacity of $ 28.0 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.

There was $ 2.5 billion gross par value before discount of $ 16 million outstanding at June 30, 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.

There was $ 4.9 billion gross par value before discount of $ 48 million outstanding as of June 30, 2026.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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 June 30, 2026 or December 31, 2025.

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:

There was $ 2.3 billion and $ 3.8 billion outstanding at June 30, 2026 and December 31, 2025, respectively, pursuant to these agreements.

Annual maturities on other short-term borrowings outstanding at June 30, 2026 are as follows:

2026 2027 Total

FHLB borrowings $ 500 $ — $ 500

Other short-term borrowings 13,219 726 13,945

Total $ 13,719 $ 726 $ 14,445

Commitments and Contingencies

3 unchanged sentences

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.

CSB purchased First Mortgages of $ 2.6 billion and $ 1.7 billion during the second quarter of 2026 and 2025, respectively, and

$ 4.6 billion and $ 2.7 billion during the first six months of 2026 and 2025, respectively.

CSB purchased HELOCs with commitments of $ 71 million and $ 79 million during the second quarter of 2026 and 2025, respectively, and $ 133 million and $ 129 million during the first six months 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

June 30, 2026 December 31, 2025

Commitments to extend credit related to unused HELOCs and other lines of credit $ 1,868 $ 1,793

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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

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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.

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 $ 3.0 billion of BDA balances to its balance sheet during the first six months of 2026.

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

As of June 30, 2026, the total ending IDA balance was $ 70.7 billion, of which $ 59.8 billion was fixed-rate obligation amounts and $ 10.9 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.

29 unchanged sentences

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.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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.

Fair Value Hedges of Interest Rate Risk

8 unchanged sentences

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 Company had outstanding interest rate swaps with aggregate notional amounts of $ 61.6 billion and $ 42.2 billion at June 30, 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 $ 77.1 billion and $ 18.7 billion at June 30, 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;

3 unchanged sentences

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.

As of June 30, 2026, through its cash flow hedges, the Company hedged interest receipts on $ 20.0 billion of margin loans with a total outstanding notional of $ 43.6 billion, and interest receipts on $ 24.8 billion of PALs with a total outstanding notional of $ 33.5 billion.

As of June 30, 2026, through fair value hedges, the Company hedged $ 21.8 billion of Senior Notes with a total outstanding notional amount of $ 50.3 billion and $ 11.3 billion of AFS securities with a total outstanding notional amount of $ 11.3 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

June 30, 2026 December 31, 2025

Assets Liabilities Assets Liabilities

2 unchanged sentences

(1) Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheets.

Derivative assets as of June 30, 2026 were less than $ 500 thousand.

(2) Includes reductions related to variation margin settlements.

Settlements on derivative positions cleared through CCPs are reflected as reductions to the associated derivative asset and liability balances.

As of 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 June 30, 2026, there was a $ 80 million reduction of derivative assets and a $ 693 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.

8 unchanged sentences

Assets and Liabilities

March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025

Line item in which the hedged item is included:

4 unchanged sentences

(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.

At June 30, 2026 and December 31, 2025, the amortized cost basis of the closed portfolios used in these hedging relationships was $ 685 million and $ 1.1 billion, respectively, of which $ 416 million and $ 771 million was designated in a portfolio layer hedging relationship at June 30, 2026 and December 31, 2025, respectively.

The cumulative basis adjustments associated with these hedging relationships were a reduction of $ 4 million and an increase of $ 2 million of the amortized cost basis of the closed portfolios at June 30, 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.

The cumulative amount of fair value hedging adjustments remaining for these securities was a reduction of the amortized cost basis of $ 73 million and $ 26 million at June 30, 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 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 June 30, 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:

2 unchanged sentences

Interest Expense

Three Months Ended March 31, 2026 2025 2026 2025

Three Months Ended June 30, 2026 2025 2026 2025

Gain (loss) on fair value hedging relationships:

2 unchanged sentences

76 ( 94 ) ( 134 ) ( 9 )

(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.

Six Months Ended June 30, 2026 2025 2026 2025

Gain (loss) on fair value hedging relationships:

Hedged items $ ( 107 ) $ 255 $ 241 $ ( 16 )

Derivatives designated as hedging instruments (1)

107 ( 255 ) ( 241 ) 18

(1) Interest revenue excludes net gain (loss) from periodic interest accruals and receipts (payments) of $ 1 million and $ 2 million for the three and six months ended June 30, 2026, respectively, and $ 14 million and $ 32 million for the three and six months ended June 30, 2025, respectively.

Interest expense excludes net gain (loss) from periodic interest accruals and receipts (payments) of $( 11 ) million and $( 6 ) million for the three and six months ended June 30, 2026, respectively, and $( 14 ) million and $( 24 ) million for the three and six months ended June 30, 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

Three Months Ended

June 30, 2026 Six Months Ended

June 30, 2026 Three and Six Months Ended

June 30, 2025

AOCI at beginning of period $ ( 158 ) $ 49 $ —

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

( 315 ) ( 540 ) ( 15 )

Realized (gain) loss reclassified from AOCI to interest revenue 22 40 17

Balance at March 31, 2026 $ ( 158 )

AOCI at end of period $ ( 451 ) $ ( 451 ) $ 2

(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.

For the twelve months following June 30, 2026, the Company expects to reclassify from AOCI into interest revenue approximately $ 197 million of pre-tax losses.

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

Financial Instruments Subject to Off-Balance Sheet Credit Risk

3 unchanged sentences

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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.

CS&Co also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate.

The collateral provided under these resale agreements is utilized to meet obligations under broker-dealer client protection rules, which place limitations on our ability to access such segregated securities.

For 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.

4 unchanged sentences

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.

There were no securities repledged or sold under these arrangements as of June 30, 2026 and December 31, 2025.

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.

The Company’s collateralized resale agreements 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 :

5 unchanged sentences

We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities.

The fair value of these borrowed securities was $ 8.6 billion and $ 4.6 billion at March 31, 2026 and December 31, 2025, respectively.

The fair value of these borrowed securities was $ 18.6 billion and $ 4.6 billion at June 30, 2026 and December 31, 2025, respectively.

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

12 unchanged sentences

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.

Repurchase agreements at Schwab’s banking subsidiaries are included in other short-term borrowings in the

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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 :

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Schwab pledges investment securities as collateral in order to meet the CCP’s initial margin requirements.

Initial margin is posted

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

through FCMs which serve as the intermediary between CCPs and Schwab.

Initial margin is posted through FCMs which serve as the intermediary between CCPs and Schwab.

Our interest rate swaps are subject to enforceable master netting arrangements allowing a right of setoff within each FCM-CCP relationship;

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Offsetting Collateral

March 31, 2026

June 30, 2026

Resale agreements

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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.

(1) At June 30, 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 $ 13.5 billion and $ 17.2 billion, respectively.

(2) At June 30, 2026 and December 31, 2025, the fair value of initial margin pledged as collateral related to interest rate swaps was $ 760 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.

(3) At June 30, 2026 and December 31, 2025, repurchase agreements outstanding at CS&Co had continuous contractual maturities of 35 - 125 days.

(4) At June 30, 2026 and December 31, 2025, the fair value of collateral pledged in connection with repurchase agreements at the Company’s banking subsidiaries was $ 4.5 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.

At June 30, 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 June 30, 2026, $ 27.2 billion of securities loaned had overnight and continuous remaining contractual maturities and $ 11.5 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.

At June 30, 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.

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

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

As of June 30, 2026 and December 31, 2025, the fair value of client securities available to be pledged under these regulations was $ 228.2 billion and $ 155.5 billion, respectively.

The Company may also pledge collateral obtained through securities borrowed transactions.

The following table summarizes the fair value of client margin securities and securities obtained from securities borrowed transactions that we had pledged to third parties:

June 30, 2026 December 31, 2025

Fair value of securities pledged for:

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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.

The fair value of fully-paid client securities available and pledged was $ 265 million and $ 217 million at June 30, 2026 and December 31, 2025, respectively.

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

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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.

The Company did not adjust prices received from the primary independent third-party pricing service at June 30, 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

June 30, 2026 Level 1 Level 2 Level 3 Balance at

Cash equivalents:

Money market funds $ 18,504 $ — $ — $ 18,504

Commercial paper — 291 — 291

Total cash equivalents 18,504 — — 18,504

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Total other securities owned 3,561 177 — 3,738

Interest rate swaps — 1 — 1

Total other assets 3,561 177 — 3,738

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

March 31, 2026 Carrying

June 30, 2026 Carrying

Amount Level 1 Level 2 Level 3 Balance at

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Other short-term borrowings 13,945 — 13,945 — 13,945

Federal Home Loan Bank borrowings 500 — 500 — 500

Long-term debt 22,054 — 22,014 — 22,014

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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.

During the three and six months ended June 30, 2026, CSC repurchased 11.2 million and 35.5 million shares, respectively, of its common stock under its $ 20.0 billion share repurchase authorization for $ 1.0 billion and $ 3.4 billion, respectively.

As of June 30, 2026 approximately $ 11.1 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.

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

CSC repurchased an additional 3.9 million shares of its common stock for $ 351 million during the three months ended June 30, 2025 under its previous $ 15.0 billion authorization.

THE CHARLES SCHWAB CORPORATION

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Preferred Stock

On June 1, 2026, the Company redeemed 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 were redeemed at a redemption price of $ 1,000 per depositary share for a total of $ 2.1 billion.

The difference between the total redemption price and the prior carrying value of the Series I preferred stock resulted in a $ 25 million deemed dividend that was included in the calculation of EPS.

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 offering expenses.

On June 2, 2025, the Company redeemed all of the 24,580 outstanding shares of its fixed-rate reset non-cumulative perpetual preferred stock, Series G, and the corresponding 2,457,964 depositary shares, each representing a 1/100th interest in a share of the Series G preferred stock.

The depositary shares were redeemed at a redemption price of $ 1,000 per depositary share for a total of $ 2.5 billion.

The difference between the total redemption and the prior carrying value of the Series G preferred stock resulted in a $ 30 million deemed dividend that was included in the calculation of EPS.

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

Liquidation Preference Per Share Dividend Rate in Effect at June 30, 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

June 30, 2026 December 31, 2025 Issue Date

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

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22,267 22,267 100,000 2,200 2,200 12/11/20 4.000 % 12/01/30 12/01/30 10 -Year Treasury

— 20,554 — — 2,030 03/18/21 — — — — —

7,500 7,500 100,000 740 740 03/04/22 5.000 % 06/01/27 06/01/27 5 -Year Treasury

Series L (5,6)

15,000 — 100,000 1,480 — 04/22/26 6.100 % 06/01/31 06/01/31 5 -Year Treasury

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(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.

(2) 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.

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

(4) Series I was redeemed on June 1, 2026.

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

(6) The Series L dividend rate resets on each five-year anniversary beginning on June 1, 2031 based on a five-year treasury rate, representing the average yields on actively traded U.S.

Treasury securities adjusted to constant maturity for five-year maturities.

Series L is only redeemable on divided payment dates on or after the first reset date.

N/A Not applicable.

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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

Three Months Ended March 31,

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

2026 2025 2026 2025

Declared Per Share

$ 11.1 $ 14.88 $ 11.1 $ 14.88 $ 22.3 $ 29.76 $ 22.3 $ 29.76

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6.7 11.13 6.7 11.13 13.4 22.26 13.4 22.26

9.5 1,250.00 9.5 1,250.00 18.8 2,500.00 18.8 2,500.00

— — — — — — — —

Total $ 82.3 $ 115.3 $ 152.4 $ 218.4

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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.

(4) Series I was redeemed on June 1, 2026.

Prior to redemption, dividends were paid quarterly.

The final dividend was paid on June 1, 2026.

(5) Series L was issued on April 22, 2026.

Dividends are paid quarterly.

The first dividend payment will be on September 1, 2026.

THE CHARLES SCHWAB CORPORATION

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

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

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

Available for sale securities:

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Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 61

Derivatives designated as cash flow hedging instruments:

Net unrealized gain (loss), net of tax expense (benefit) of $( 4 )

Reclassifications included in interest revenue, net of tax expense (benefit) of $ 4

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

Balance at March 31, 2026 $ ( 10,757 )

Available for sale securities:

Net unrealized gain (loss), net of tax expense (benefit) of $( 4 )

Other reclassifications included in other revenue, net of tax expense (benefit) of $ 6

Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 121

Derivatives designated as cash flow hedging instruments:

Net unrealized gain (loss), net of tax expense (benefit) of $( 74 )

Reclassifications included in interest revenue, net of tax expense (benefit) of $ 5

Balance at June 30, 2026 $ ( 10,575 )

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

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Net unrealized gain (loss), net of tax expense (benefit) of $ 369

Other reclassifications included in other revenue, net of tax expense (benefit) of $ 10

Held to maturity securities:

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Reclassifications included in interest revenue, net of tax expense (benefit) of $ 4

Balance at March 31, 2026 $ ( 10,757 )

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

Balance at December 31, 2025 $ ( 10,983 )

Available for sale securities:

Net unrealized gain (loss), net of tax expense (benefit) of $( 2 )

Other reclassifications included in other revenue, net of tax expense (benefit) of $ 6

Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 238

Derivatives designated as cash flow hedging instruments:

Net unrealized gain (loss), net of tax expense (benefit) of $( 128 )

Reclassifications included in interest revenue, net of tax expense (benefit) of $ 9

Balance at June 30, 2026 $ ( 10,575 )

(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).

As of June 30, 2026, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $ 7.3 billion net of tax effect ($ 9.6 billion pre-tax).

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

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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:

EPS under the basic and diluted computations for the three and six months ended June 30, 2026 is as follows:

Three Months Ended

June 30, Six Months Ended

Net income $ 2,800 $ 5,279

Preferred stock dividends and other (1)

( 119 ) ( 201 )

Net income available to common stockholders $ 2,681 $ 5,078

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(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,

Stock Nonvoting Common Stock Consolidated Common Stock

(2) Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 10 million and 12 million for the three and six months ended June 30, 2026, respectively.

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

Three Months Ended

June 30, Six Months Ended

Stock Nonvoting Common Stock Consolidated Common Stock Common

Stock Nonvoting

Common Stock Consolidated Common Stock

Basic earnings per share:

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Net income available to common stockholders $ 1,977 $ — $ 1,977 $ 3,756 $ 17 $ 3,773

Reallocation of net income available to common stockholders as a result of

conversion of nonvoting to voting shares

Reallocation of net income available to common stockholders

as a result of conversion of nonvoting to voting shares — — — 17 — —

Allocation of net income available to common stockholders $ 1,977 $ — $ 1,977 $ 3,773 $ 17 $ 3,773

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Conversion of nonvoting shares to voting shares — — — 12 — —

Common stock equivalent shares related to stock incentive plans 5 — 5

Common stock equivalent shares related to stock incentive

plans 5 — 5 6 — 6

Weighted-average common shares outstanding — diluted (2)

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(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.

(2) Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 9 million and 13 million for the three and six months ended June 30, 2025, respectively.

THE CHARLES SCHWAB CORPORATION

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Regulatory Requirements

At March 31, 2026, CSC and its banking subsidiaries met all of their respective capital requirements.

At June 30, 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:

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Well Capitalized Minimum Capital Requirement

March 31, 2026 Amount Ratio Amount Ratio Amount Ratio (1)

June 30, 2026 Amount Ratio Amount Ratio Amount Ratio (1)

Common Equity Tier 1 Risk-Based Capital $ 36,538 24.4 % N/A $ 6,751 4.5 %

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(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%.

As of June 30, 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.

At June 30, 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.

Based on its regulatory capital ratios at June 30, 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 June 30, 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.

At June 30, 2026 and December 31, 2025, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities.

At June 30, 2026 and December 31, 2025, CSPB held total assets of $ 26.6 billion and $ 27.0 billion, respectively, and Trust Bank held total assets of $ 10.5 billion and $ 10.4 billion, respectively.

Based on their regulatory capital ratios at June 30, 2026 and December 31, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

THE CHARLES SCHWAB CORPORATION

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Net capital $ 16,124 $ 13,188

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Net capital in excess of required net capital 12,578 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.

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

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Investor Services Advisor Services Total

Three Months Ended March 31, 2026 2025 2026 2025 2026 2025

Three Months Ended June 30, 2026 2025 2026 2025 2026 2025

Net interest revenue $ 2,575 $ 2,244 $ 782 $ 578 $ 3,357 $ 2,822

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Income before taxes on income $ 2,865 $ 2,274 $ 804 $ 529 $ 3,669 $ 2,803

THE CHARLES SCHWAB CORPORATION

Six Months Ended June 30,

Net interest revenue $ 5,000 $ 4,402 $ 1,501 $ 1,126 $ 6,501 $ 5,528

Asset management and administration fees 2,643 2,258 941 842 3,584 3,100

Trading revenue 2,067 1,657 237 203 2,304 1,860

Bank deposit account fees 483 385 145 107 628 492

Other 412 378 125 92 537 470

Total net revenues 10,605 9,080 2,949 2,370 13,554 11,450

Expenses Excluding Interest

Compensation and benefits 2,798 2,476 804 732 3,602 3,208

Professional services 498 445 112 115 610 560

Occupancy and equipment 460 427 126 117 586 544

Advertising and market development 165 134 47 70 212 204

Communications 243 233 118 96 361 329

Depreciation and amortization 303 327 96 105 399 432

Amortization of acquired intangible assets 228 210 46 48 274 258

Regulatory fees and assessments 106 132 32 34 138 166

Other 430 411 85 80 515 491

Total expenses excluding interest 5,231 4,795 1,466 1,397 6,697 6,192

Income before taxes on income $ 5,374 $ 4,285 $ 1,483 $ 973 $ 6,857 $ 5,258

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

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk