10-Q

UNITED STATES

SECURITIES  AND  EXCHANGE  COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)
OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

For the quarterly period ended March 31, 2014

Commission File Number: 1-9700

THE  CHARLES  SCHWAB  CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 94-3025021 (I.R.S. Employer Identification No.)

211 Main Street, San Francisco, CA  94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code:  (415) 667-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes⌧No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer⌧ Non-accelerated filer☐(Do not check if a smaller reporting company) Accelerated filer☐ Smaller reporting company☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐ No⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

1,301,140,339shares of $.01 par value Common Stock

Outstanding on April 24, 2014

THE CHARLES SCHWAB CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2014

Index

			Page
Part I - Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):
		Statements of Income	1
		Statements of Comprehensive Income	2
		Balance Sheets	3
		Statements of Cash Flows	4
		Notes	5 – 22
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23 – 41
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42–43
	Item 4.	Controls and Procedures	43
Part II - Other Information
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	44
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
	Item 3.	Defaults Upon Senior Securities	45
	Item 4.	Mine Safety Disclosures	45
	Item 5.	Other Information	45
	Item 6.	Exhibits	45
Signature			46

Part I – FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Income

(In Millions, Except Per Share Amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2014		2013
Net Revenues
Asset management and administration fees	$	611	$	552
Interest revenue		579		497
Interest expense		(26)		(28)
Net interest revenue		553		469
Trading revenue		247		223
Other		68		56
Provision for loan losses		(1)		(6)
Net impairment losses on securities (1)		-		(4)
Total net revenues		1,478		1,290
Expenses Excluding Interest
Compensation and benefits		528		536
Professional services		106		99
Occupancy and equipment		80		77
Advertising and market development		63		74
Communications		56		54
Depreciation and amortization		48		51
Other		75		68
Total expenses excluding interest		956		959
Income before taxes on income		522		331
Taxes on income		196		125
Net Income		326		206
Preferred stock dividends		8		8
Net Income Available to Common Stockholders	$	318	$	198
Weighted-Average Common Shares Outstanding — Diluted		1,311		1,282
Earnings Per Common Share — Basic	$	.24	$	.15
Earnings Per Common Share — Diluted	$	.24	$	.15

(1) There were no net impairment losses on securities for the three months ended March 31, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $0 million recognized in other comprehensive income, net of $(4) million reclassified from other comprehensive income, for the three months ended March 31, 2013.

See Notes to Condensed Consolidated Financial Statements.

1

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)

	Three Months Ended
	March 31,
	2014		2013
Net Income	$	326	$	206
Other comprehensive income, before tax:
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)		159		(3)
Reclassification of impairment charges included in net
impairment losses on securities		-		4
Other reclassifications included in other revenue		(1)		-
Other		-		1
Other comprehensive income, before tax		158		2
Income tax effect		(59)		-
Other comprehensive income, net of tax		99		2
Comprehensive Income	$	425	$	208

See Notes to Condensed Consolidated Financial Statements.

2

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)

	March 31,		December 31,
	2014		2013
Assets
Cash and cash equivalents	$	7,173	$	7,728
Cash and investments segregated and on deposit for regulatory purposes
(including resale agreements of $11,776 at March 31, 2014 and $14,016
at December 31, 2013)		20,548		23,553
Receivables from brokers, dealers, and clearing organizations		482		509
Receivables from brokerage clients — net		14,571		13,951
Other securities owned — at fair value		456		517
Securities available for sale		53,080		51,618
Securities held to maturity (fair value — $31,669 at March 31, 2014 and
$29,490 at December 31, 2013)		32,123		30,318
Loans to banking clients — net		12,591		12,419
Equipment, office facilities, and property — net		820		790
Goodwill		1,227		1,227
Intangible assets — net		255		266
Other assets		740		746
Total assets	$	144,066	$	143,642
Liabilities and Stockholders’ Equity
Deposits from banking clients	$	95,591	$	92,972
Payables to brokers, dealers, and clearing organizations		1,918		1,467
Payables to brokerage clients		32,308		35,333
Accrued expenses and other liabilities		1,532		1,586
Long-term debt		1,902		1,903
Total liabilities		133,251		133,261
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation
preference of $885		870		869
Common stock — 3 billion shares authorized; $.01 par value per share;
1,487,543,446 shares issued		15		15
Additional paid-in capital		3,982		3,951
Retained earnings		9,492		9,253
Treasury stock, at cost — 186,648,711 shares at March 31, 2014 and
190,657,263 shares at December 31, 2013		(3,652)		(3,716)
Accumulated other comprehensive income		108		9
Total stockholders’ equity		10,815		10,381
Total liabilities and stockholders’ equity	$	144,066	$	143,642

See Notes to Condensed Consolidated Financial Statements.

3

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Millions)

(Unaudited)

	Three Months Ended
	March 31,
	2014		2013
Cash Flows from Operating Activities
Net income	$	326	$	206
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses		1		6
Net impairment losses on securities		-		4
Stock-based compensation		29		37
Depreciation and amortization		48		51
Premium amortization, net, on securities available for sale and securities held to maturity		27		44
Other		2		7
Net change in:
Cash and investments segregated and on deposit for regulatory purposes		3,005		1,572
Receivables from brokers, dealers, and clearing organizations		29		(134)
Receivables from brokerage clients		(622)		1,003
Other securities owned		61		91
Other assets		(24)		(29)
Payables to brokers, dealers, and clearing organizations		293		84
Payables to brokerage clients		(3,025)		(3,442)
Accrued expenses and other liabilities		(81)		132
Net cash provided by (used for) operating activities		69		(368)
Cash Flows from Investing Activities
Purchases of securities available for sale		(4,250)		(6,703)
Proceeds from sales of securities available for sale		1,285		-
Principal payments on securities available for sale		1,738		3,997
Purchases of securities held to maturity		(2,271)		(6,031)
Principal payments on securities held to maturity		520		1,279
Net increase in loans to banking clients		(171)		(530)
Purchase of equipment, office facilities, and property		(53)		(49)
Other investing activities		(8)		2
Net cash used for investing activities		(3,210)		(8,035)
Cash Flows from Financing Activities
Net change in deposits from banking clients		2,619		3,047
Repayment of commercial paper		-		(300)
Repayment of long-term debt		(2)		(2)
Dividends paid		(100)		(98)
Proceeds from stock options exercised and other		65		25
Other financing activities		4		(1)
Net cash provided by financing activities		2,586		2,671
Decrease in Cash and Cash Equivalents		(555)		(5,732)
Cash and Cash Equivalents at Beginning of Period		7,728		12,663
Cash and Cash Equivalents at End of Period	$	7,173	$	6,931
Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	40	$	40
Income taxes	$	51	$	35
Non-cash investing activity:
Securities purchased during the period but settled after period end	$	158	$	-

See Notes to Condensed Consolidated Financial Statements.

4

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

1.Introduction and Basis of Presentation

The Charles Schwab Corporation (CSC) is a savings and loan holding company engaged, through its subsidiaries, in securities brokerage, banking, money management, and financial advisory services. Charles Schwab & Co., Inc. (Schwab) is a securities broker-dealer with over300 domestic branch offices in45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, England. In addition, Schwab serves clients in Hong Kong through one of CSC’s subsidiaries. Other subsidiaries include Charles Schwab Bank (Schwab Bank), a federal savings bank, and Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds, which are referred to as the Schwab Funds®, and for Schwab’s exchange-traded funds, which are referred to as the Schwab ETFs™.

The accompanying unaudited condensed consolidated financial statements include CSC and its majority-owned subsidiaries (collectively referred to as the Company). Intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (U.S.), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements. Certain estimates relate to other-than-temporary impairment of securities available for sale and securities held to maturity, valuation of goodwill, allowance for loan losses, and legal and regulatory reserves. Actual results may differ from those estimates. These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These adjustments are of a normal recurring nature. The Company’s results for any interim period are not necessarily indicative of results for a full year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The Company’s significant accounting policies are included in note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes to these accounting policies during the first quarter of 2014.

2.New Accounting Standard

New Accounting Standard Not Yet Adopted

In January 2014, the Financial Accounting Standards Board issued new guidance for creditors of consumer mortgage loans, which is effective January 1, 2015. The guidance clarifies when physical possession of a property underlying a consumer mortgage loan transfers to the creditor, and therefore when a loan receivable should be derecognized and the real estate property underlying the loan should be recognized. The adoption of this new guidance is not expected to have a material impact on the Company’s financial position, results of operations, earnings per common share (EPS), or cash flows.

5

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

3.Securities Available for Sale and Securities Held to Maturity

The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale and securities held to maturity are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,404	$	168	$	38	$	18,534
Asset-backed securities		16,642		91		8		16,725
Corporate debt securities		9,043		53		9		9,087
U.S. agency notes		4,490		1		81		4,410
Certificates of deposit		3,424		4		2		3,426
Non-agency residential mortgage-backed securities		593		13		28		578
Non-agency commercial mortgage-backed securities		312		8		-		320
Total securities available for sale	$	52,908	$	338	$	166	$	53,080
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,066	$	219	$	627	$	30,658
Non-agency commercial mortgage-backed securities		957		1		47		911
Other securities		100		-		-		100
Total securities held to maturity	$	32,123	$	220	$	674	$	31,669

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2013	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,554	$	140	$	49	$	18,645
Asset-backed securities		15,201		42		37		15,206
Corporate debt securities		8,973		49		15		9,007
U.S. agency notes		4,239		1		104		4,136
Certificates of deposit		3,650		4		2		3,652
Non-agency residential mortgage-backed securities		616		11		34		593
Non-agency commercial mortgage-backed securities		271		8		-		279
Other securities		100		-		-		100
Total securities available for sale	$	51,604	$	255	$	241	$	51,618
Securities held to maturity:
U.S. agency mortgage-backed securities	$	29,260	$	161	$	921	$	28,500
Non-agency commercial mortgage-backed securities		958		-		68		890
Other securities		100		-		-		100
Total securities held to maturity	$	30,318	$	161	$	989	$	29,490

Schwab Bank pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $131 million at March 31, 2014.

6

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

A summary of securities with unrealized losses, aggregated by category and period of continuous unrealized loss, is as follows:

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	6,119	$	37	$	176	$	1	$	6,295	$	38
Asset-backed securities		1,887		5		769		3		2,656		8
Corporate debt securities		1,180		8		400		1		1,580		9
U.S. agency notes		3,909		81		-		-		3,909		81
Certificates of deposit		1,050		-		98		2		1,148		2
Non-agency residential mortgage-backed
securities		59		1		352		27		411		28
Total	$	14,204	$	132	$	1,795	$	34	$	15,999	$	166
Securities held to maturity:
U.S. agency mortgage-backed securities	$	15,147	$	438	$	2,591	$	189	$	17,738	$	627
Non-agency commercial mortgage-backed
securities		444		23		338		24		782		47
Total	$	15,591	$	461	$	2,929	$	213	$	18,520	$	674
Total securities with unrealized losses (1)	$	29,795	$	593	$	4,724	$	247	$	34,519	$	840

(1) The number of investment positions with unrealized losses totaled 264 for securities available for sale and 154 for securities held to maturity.

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2013	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	5,044	$	47	$	93	$	2	$	5,137	$	49
Asset-backed securities		6,391		33		591		4		6,982		37
Corporate debt securities		1,802		14		499		1		2,301		15
U.S. agency notes		3,636		104		-		-		3,636		104
Certificates of deposit		-		-		299		2		299		2
Non-agency residential mortgage-backed
securities		89		2		374		32		463		34
Total	$	16,962	$	200	$	1,856	$	41	$	18,818	$	241
Securities held to maturity:
U.S. agency mortgage-backed securities	$	19,175	$	698	$	2,345	$	223	$	21,520	$	921
Non-agency commercial mortgage-backed
securities		630		43		260		25		890		68
Total	$	19,805	$	741	$	2,605	$	248	$	22,410	$	989
Total securities with unrealized losses (1)	$	36,767	$	941	$	4,461	$	289	$	41,228	$	1,230

(1) The number of investment positions with unrealized losses totaled 273 for securities available for sale and 193 for securities held to maturity.

Non-agency residential mortgage-backed securities include securities collateralized by loans that are considered to be “Prime” (defined as loans to borrowers with a Fair Isaac Corporation (FICO) credit score of 620 or higher at origination), and “Alt-A” (defined as Prime loans with reduced documentation at origination). Management determined that it does not expect to recover all of the amortized cost of certain of its Alt-A and Prime residential mortgage-backed securities and therefore determined that these securities were other-than-temporarily impaired (OTTI). The Company does not intend to sell these

7

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

securities and it is not “more likely than not” that the Company will be required to sell these securities before anticipated recovery of the unrealized losses on these securities. The Company may recognize an impairment charge equal to the securities’ expected credit losses based on the Company’s cash flow projections for these securities. The expected credit losses are measured as the difference between the present value of expected cash flows and the amortized cost of the securities. There were no impairment charges recognized during the first quarter of 2014. Further deterioration in the performance of the underlying loans in the Company’s non-agency residential mortgage-backed securities portfolio could result in the recognition of impairment losses.

The following table is a rollforward of the amount of credit losses recognized in earnings for OTTI securities held by the Company during the period for which a portion of the impairment was recognized in or reclassified from other comprehensive income:

	Three Months Ended
	March 31,
	2014		2013
Balance at beginning of period	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		-
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		4
Balance at end of period	$	169	$	163

The maturities of securities available for sale and securities held to maturity at March 31, 2014, are as follows:

			After 1 year		After 5 years
	Within		through		through		After
	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	1,005	$	4,015	$	13,514	$	18,534
Asset-backed securities		-		1,513		4,109		11,103		16,725
Corporate debt securities		1,065		8,022		-		-		9,087
U.S. agency notes		-		4,410		-		-		4,410
Certificates of deposit		1,502		1,924		-		-		3,426
Non-agency residential mortgage-backed
securities (1)		-		3		-		575		578
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,567	$	16,877	$	8,124	$	25,512	$	53,080
Total amortized cost	$	2,560	$	16,907	$	8,047	$	25,394	$	52,908
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	609	$	13,036	$	17,013	$	30,658
Non-agency commercial mortgage-backed
securities (1)		-		-		344		567		911
Other securities		100		-		-		-		100
Total fair value	$	100	$	609	$	13,380	$	17,580	$	31,669
Total amortized cost	$	100	$	601	$	13,717	$	17,705	$	32,123

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

8

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Proceeds and gross realized gains from sales of securities available for sale are as follows:

	Three Months Ended
	March 31,
	2014		2013
Proceeds	$	1,285	$	-
Gross realized gains	$	1	$	-

4.Loans to Banking Clients and Related Allowance for Loan Losses

The composition of loans to banking clients by loan segment is as follows:

	March 31,		December 31,
	2014		2013
Residential real estate mortgages	$	8,050	$	8,006
Home equity lines of credit		3,018		3,041
Personal loans secured by securities		1,536		1,384
Other		35		36
Total loans to banking clients (1)		12,639		12,467
Allowance for loan losses		(48)		(48)
Total loans to banking clients – net	$	12,591	$	12,419

(1) All loans are evaluated for impairment by loan segment.

The Company has commitments to extend credit related to unused home equity lines of credit (HELOCs), personal loans secured by securities, and other lines of credit, which totaled $5.9 billion and $5.7 billion at March 31, 2014 and December 31, 2013, respectively. All of the personal loans were fully collateralized by securities with fair values in excess of borrowings at March 31, 2014 and December 31, 2013.

Changes in the allowance for loan losses were as follows:

Three Months Ended	March 31, 2014							March 31, 2013
	Residential							Residential
	real estate		Home equity					real estate		Home equity
	mortgages		lines of credit			Total		mortgages		lines of credit			Total
Balance at beginning of period	$	34		$	14	$	48	$	36		$	20	$	56
Charge-offs		(1)			(1)		(2)		(2)			(2)		(4)
Recoveries		-			1		1		1			-		1
Provision for loan losses		-			1		1		5			1		6
Balance at end of period	$	33		$	15	$	48	$	40		$	19	$	59

Included in the loan portfolio are nonaccrual loans totaling$40 million and $48 million at March 31, 2014 and December 31, 2013, respectively. There wereno loans accruing interest that were contractually 90 days or more past due at March 31, 2014 or December 31, 2013. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled$46 million and $53 million at March 31, 2014 and December 31, 2013, respectively.Troubled debt restructurings were not material at March 31, 2014 or December 31, 2013.

Schwab Bank provides a co-branded loan origination program for Schwab Bank clients (the Program) with Quicken Loans, Inc. (Quicken® Loans®). Pursuant to the Program, Quicken Loans originates and services first lien residential real estate mortgage loans (First Mortgages) and HELOCs for Schwab Bank clients. Under the Program, Schwab Bank purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. Schwab Bank sets the underwriting guidelines and pricing for all loans it intends to purchase for its portfolio. Schwab Bank purchased First Mortgages of $286 millionand $1.3 billionduring the first quarters of 2014 and 2013, respectively. Schwab Bank purchased HELOCs with commitments of

9

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$172 million and $218 million during the first quarters of 2014 and 2013, respectively. The First Mortgages purchased under the Program are included in the First mortgages loan class in the tables below.

The delinquencyanalysis by loan class is as follows:

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
March 31, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	6	$	2		$	25	$	33	$	7,889
Purchased first mortgages		155		1		-			5		6		161
Home equity lines of credit		3,004		3		1			10		14		3,018
Personal loans secured by securities		1,533		3		-			-		3		1,536
Other		35		-		-			-		-		35
Total loans to banking clients	$	12,583	$	13	$	3		$	40	$	56	$	12,639

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
December 31, 2013	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,808	$	3	$	4		$	30	$	37	$	7,845
Purchased first mortgages		154		1		-			6		7		161
Home equity lines of credit		3,025		2		2			12		16		3,041
Personal loans secured by securities		1,384		-		-			-		-		1,384
Other		36		-		-			-		-		36
Total loans to banking clients	$	12,407	$	6	$	6		$	48	$	60	$	12,467

In addition to monitoring delinquency, the Company monitors the credit quality of residential real estate mortgages and HELOCs by stratifying the portfolios by the year of origination, borrower FICOscores at origination (Origination FICO), updated borrower FICOscores (Updated FICO), loan-to-value (LTV) ratios at origination (Origination LTV), and estimated current LTV ratios (Estimated Current LTV), as presented in the following tables. Borrowers’ FICOscores are provided by an independent third party credit reporting service and were last updated in March 2014. The Origination LTV and Estimated Current LTV ratios for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is estimated by reference to a home price appreciation index.

10

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

		Residential real estate mortgages
	First			Purchased					Home equity
March 31, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	818		$	53	$	871		$	2,246
2010			479			7		486			189
2011			694			36		730			151
2012			2,333			26		2,359			157
2013			3,304			36		3,340			239
2014			261			3		264			36
Total		$	7,889		$	161	$	8,050		$	3,018
Origination FICO
<620		$	10		$	1	$	11		$	1
620 – 679			94			13		107			19
680 – 739			1,361			32		1,393			571
>740			6,424			115		6,539			2,427
Total		$	7,889		$	161	$	8,050		$	3,018
Updated FICO
<620		$	54		$	5	$	59		$	38
620 – 679			188			8		196			111
680 – 739			1,017			27		1,044			447
>740			6,630			121		6,751			2,422
Total		$	7,889		$	161	$	8,050		$	3,018
Origination LTV
<70%		$	5,352		$	111	$	5,463		$	2,017
>70% – <90%			2,521			45		2,566			977
>90% – <100%			16			5		21			24
Total		$	7,889		$	161	$	8,050		$	3,018

			Weighted				Percent of Loans
			Average		Utilization		that are on
March 31, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,742		776	N/A			0.06	%
>70% – <90%		1,140		765	N/A			0.28	%
>90% – <100%		77		739	N/A			2.53	%
>100%		91		728	N/A			11.43	%
Total	$	8,050		774	N/A			0.24	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,146		774	36	%		0.06	%
>70% – <90%		651		764	47	%		0.28	%
>90% – <100%		116		754	59	%		0.47	%
>100%		105		743	61	%		2.23	%
Total	$	3,018		770	39	%		0.20	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.

11

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

		Residential real estate mortgages
	First			Purchased					Home equity
December 31, 2013	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	859		$	55	$	914		$	2,304
2010			503			7		510			191
2011			733			38		771			155
2012			2,403			26		2,429			162
2013			3,347			35		3,382			229
Total		$	7,845		$	161	$	8,006		$	3,041
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			96			14		110			20
680 – 739			1,352			32		1,384			576
>740			6,387			114		6,501			2,445
Total		$	7,845		$	161	$	8,006		$	3,041
Updated FICO
<620		$	50		$	5	$	55		$	42
620 – 679			209			10		219			106
680 – 739			1,012			29		1,041			453
>740			6,574			117		6,691			2,440
Total		$	7,845		$	161	$	8,006		$	3,041
Origination LTV
<70%		$	5,306		$	110	$	5,416		$	2,040
>70% – <90%			2,523			45		2,568			977
>90% – <100%			16			6		22			24
Total		$	7,845		$	161	$	8,006		$	3,041

			Weighted				Percent of Loans
			Average		Utilization		that are on
December 31, 2013	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,649		775	N/A			0.05	%
>70% – <90%		1,181		763	N/A			0.34	%
>90% – <100%		86		732	N/A			4.77	%
>100%		90		730	N/A			10.50	%
Total	$	8,006		772	N/A			0.26	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,127		773	36	%		0.13	%
>70% – <90%		664		762	48	%		0.22	%
>90% – <100%		127		752	59	%		1.22	%
>100%		123		743	63	%		1.34	%
Total	$	3,041		769	39	%		0.24	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.

12

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

5.Commitments and Contingencies

The Company has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. The Company partially satisfies the margin requirements by arranging unsecured standby letter of credit agreements (LOCs), in favor of the Options Clearing Corporation, which are issued by multiple banks. At March 31, 2014, the aggregate face amount of these LOCs totaled $240 million. There were no funds drawn under any of these LOCs at March 31, 2014. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

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

The Company believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are certain matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear that the outcome of any such matter could be material to the financial condition, operating results or cash flows of the Company. However, predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; potential opportunities for settlement and the status of any settlement discussions; and potential insurance coverage and indemnification. Often, as in the case of the Auction Rate Securities Regulatory Inquiries and Total Bond Market Fund Litigation matters described below, it is not possible to reasonably estimate potential liability, if any, or a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Auction Rate Securities Regulatory Inquiries: Schwab has been responding to industry wide inquiries from federal and state regulators regarding sales of auction rate securities to clients who were unable to sell their holdings when the normal auction process for those securities froze unexpectedly in February 2008. On August 17, 2009, a civil complaint was filed against Schwab in New York state court by the Attorney General of the State of New York (NYAG) alleging material misrepresentations and omissions by Schwab regarding the risks of auction rate securities, and seeking restitution, disgorgement, penalties and other relief, including repurchase of securities held in client accounts. As reflected in a statement issued August 17, 2009, Schwab has responded that the allegations are without merit, and has been contesting all charges. By order dated October 24, 2011, the court granted Schwab’s motion to dismiss the complaint with prejudice. The NYAG appealed, and in a decision issued August 29, 2013, the Appellate Division reinstated two of the NYAG’s four causes of action. A petition by the NYAG for reconsideration of part of the Appellate Division’s decision was denied, and the NYAG has now filed notice with the trial court of its intention to proceed on the remaining two causes of action.

Total Bond Market Fund Litigation: On August 28, 2008, a class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of investors in the Schwab Total Bond Market Fund™ (Northstar lawsuit). The lawsuit, which alleges violations of state law and federal securities law in connection with the fund’s investment policy,

13

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

names Schwab Investments (registrant and issuer of the fund’s shares) and CSIM as defendants. Allegations include that the fund improperly deviated from its stated investment objectives by investing in collateralized mortgage obligations (CMOs) and investing more than 25% of fund assets in CMOs and mortgage-backed securities without obtaining a shareholder vote. Plaintiffs seek unspecified compensatory and rescission damages, unspecified equitable and injunctive relief, costs and attorneys’ fees. Plaintiffs’ federal securities law claim and certain of plaintiffs’ state law claims were dismissed in proceedings before the court and following a successful petition by defendants to the Ninth Circuit Court of Appeals. On August 8, 2011, the court dismissed plaintiffs’ remaining claims with prejudice. Plaintiffs have again appealed to the Ninth Circuit, where the case is currently pending.

Other Regulatory Matters:  A subsidiary of optionsXpress Holdings, Inc. (optionsXpress) and an individual employeeare respondentsin a pending regulatory matter which predates the Company’s acquisition of optionsXpress. On April16, 2012, optionsXpress, Inc., a securities broker-dealer and wholly-owned subsidiary of optionsXpress, was charged by the SEC in an administrative proceeding alleging violations of the firm’s close-out obligations under Regulation SHO (short sale delivery rules) in connection with certain customer trading activity. Following trial, in a decision issued June 7, 2013, the judge held that optionsXpress, Inc. violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered the firm to pay disgorgement and penalties. The Company continues to dispute the allegations and is appealing the decision.  The Company has a contingent liability associated with this matter, which was not material at March 31, 2014.

6.Fair Values of Assets and Liabilities

For a description of the fair value hierarchy and the Company’s fair value methodologies, including the use of independent third-party pricing services, see note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.There were no significant changes in these methodologies during the quarter ended March 31, 2014. The Company did not transfer any assets or liabilities between Level 1 and Level 2 during the quarter ended March 31, 2014, or the year ended December 31, 2013. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at March 31, 2014 or December31, 2013.

14

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Financial Instruments Recorded at Fair Value

The following tables present the fair value hierarchy for assets measured at fair value. Liabilities recorded at fair value were not material, and therefore are not included in the following tables:

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
March 31, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,037		$	-		$	-	$	1,037
Commercial paper			-			14			-		14
Total cash equivalents			1,037			14			-		1,051
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			3,493			-		3,493
U.S. Government securities			-			925			-		925
Total investments segregated and on deposit for regulatory
purposes			-			4,418			-		4,418
Other securities owned:
Schwab Funds® money market funds			208			-			-		208
Equity and bond mutual funds			200			-			-		200
State and municipal debt obligations			-			33			-		33
Equity, U.S. Government and corporate debt, and other
securities			1			14			-		15
Total other securities owned			409			47			-		456
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,534			-		18,534
Asset-backed securities			-			16,725			-		16,725
Corporate debt securities			-			9,087			-		9,087
U.S. agency notes			-			4,410			-		4,410
Certificates of deposit			-			3,426			-		3,426
Non-agency residential mortgage-backed securities			-			578			-		578
Non-agency commercial mortgage-backed securities			-			320			-		320
Other securities			-			-			-		-
Total securities available for sale			-			53,080			-		53,080
Total		$	1,446		$	57,559		$	-	$	59,005

15

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2013	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,141		$	-		$	-	$	1,141
Commercial paper			-			22			-		22
Total cash equivalents			1,141			22			-		1,163
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			2,737			-		2,737
U.S. Government securities			-			2,539			-		2,539
Total investments segregated and on deposit for regulatory
purposes			-			5,276			-		5,276
Other securities owned:
Schwab Funds® money market funds			261			-			-		261
Equity and bond mutual funds			208			-			-		208
State and municipal debt obligations			-			32			-		32
Equity, U.S. Government and corporate debt, and other
securities			1			15			-		16
Total other securities owned			470			47			-		517
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,645			-		18,645
Asset-backed securities			-			15,206			-		15,206
Corporate debt securities			-			9,007			-		9,007
U.S. agency notes			-			4,136			-		4,136
Certificates of deposit			-			3,652			-		3,652
Non-agency residential mortgage-backed securities			-			593			-		593
Non-agency commercial mortgage-backed securities			-			279			-		279
Other securities			-			100			-		100
Total securities available for sale			-			51,618			-		51,618
Total		$	1,611		$	56,963		$	-	$	58,574

16

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Financial Instruments Not Recorded at Fair Value

Descriptions of the valuation methodologies and assumptions used to estimate the fair value of financial instruments not recorded at fair value are also described in note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December31, 2013. There were no significant changes in these methodologies or assumptions during the quarter ended March 31, 2014.  The following tables present the fair value hierarchy for financial instruments not recorded at fair value:

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
March 31, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,122		$	-		$	6,122		$	-	$	6,122
Cash and investments segregated and
on deposit for regulatory purposes		16,127			-			16,127			-		16,127
Receivables from brokers, dealers, and
clearing organizations		482			-			482			-		482
Receivables from brokerage clients – net		14,566			-			14,566			-		14,566
Securities held to maturity:
U.S. agency mortgage-backed securities		31,066			-			30,658			-		30,658
Non-agency commercial mortgage-backed
securities		957			-			911			-		911
Other securities		100			-			100			-		100
Total securities held to maturity		32,123			-			31,669			-		31,669
Loans to banking clients: (1)
Residential real estate mortgages		8,050			-			7,900			-		7,900
Home equity lines of credit		3,018			-			3,180			-		3,180
Personal loans secured by securities		1,536			-			1,536			-		1,536
Other		35			-			34			-		34
Total loans to banking clients		12,639			-			12,650			-		12,650
Other assets		71			-			71			-		71
Total	$	82,130		$	-		$	81,687		$	-	$	81,687
Liabilities:
Deposits from banking clients	$	95,591		$	-		$	95,591		$	-	$	95,591
Payables to brokers, dealers, and clearing
organizations		1,918			-			1,918			-		1,918
Payables to brokerage clients		32,308			-			32,308			-		32,308
Accrued expenses and other liabilities		607			-			607			-		607
Long-term debt		1,902			-			1,995			-		1,995
Total	$	132,326		$	-		$	132,419		$	-	$	132,419

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at March 31, 2014.

17

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2013	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,565		$	-		$	6,565		$	-	$	6,565
Cash and investments segregated and
on deposit for regulatory purposes		18,273			-			18,273			-		18,273
Receivables from brokers, dealers, and
clearing organizations		509			-			509			-		509
Receivables from brokerage clients – net		13,949			-			13,949			-		13,949
Securities held to maturity:
U.S. agency mortgage-backed securities		29,260			-			28,500			-		28,500
Non-agency commercial mortgage-backed
securities		958			-			890			-		890
Other securities		100			-			100			-		100
Total securities held to maturity		30,318			-			29,490			-		29,490
Loans to banking clients: (1)
Residential real estate mortgages		8,006			-			7,930			-		7,930
Home equity lines of credit		3,041			-			3,043			-		3,043
Personal loans secured by securities		1,384			-			1,384			-		1,384
Other		36			-			35			-		35
Total loans to banking clients		12,467			-			12,392			-		12,392
Other assets		64			-			64			-		64
Total	$	82,145		$	-		$	81,242		$	-	$	81,242
Liabilities:
Deposits from banking clients	$	92,972		$	-		$	92,972		$	-	$	92,972
Payables to brokers, dealers, and clearing
organizations		1,467			-			1,467			-		1,467
Payables to brokerage clients		35,333			-			35,333			-		35,333
Accrued expenses and other liabilities		680			-			680			-		680
Long-term debt		1,903			-			1,989			-		1,989
Total	$	132,355		$	-		$	132,441		$	-	$	132,441

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at December 31, 2013.

Securities lending: Payables from brokers, dealers, and clearing organizations include securities loaned. The Company loans client securities temporarily to other brokers in connection with its securities lending activities and receives cash as collateral for the securities loaned. The fair value of client securities pledged in securities lending transactions to other broker-dealers was $1.4billion at March 31, 2014 and $1.1billion at December 31, 2013.  The Company has also pledged a portion of its securities owned in connection with securities lending transactions to other broker-dealers. Additionally, the Company borrows securities from other broker-dealers to fulfill short sales by clients, which are included in receivables from brokers, dealers, and clearing organizations. The fair value of these borrowed securities was $142 million at March 31, 2014 and $276 million at December 31, 2013. All of the Company’s securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers. However, the Company does not net securities lending transactions and therefore, the Company’s securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

Resale agreements: Cash and investments segregated and on deposit for regulatory purposes include securities purchased under agreements to resell (resale agreements), which are collateralized by U.S. Government and agency securities. Schwab enters into collateralized resale agreements principally with other broker-dealers, which could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. Schwab utilizes the collateral provided under these resale agreements to meet obligations under broker-dealer client

18

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

protection rules, which place limitations on its ability to access such segregated securities. The Company’s resale agreements are not subject to master netting arrangements.

7.Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents cumulative gains and losses that are not reflected in earnings. The components of other comprehensive income are as follows:

Three Months Ended March 31,			2014						2013
	Before		Tax			Net of	Before		Tax			Net of
	tax		effect			tax	tax		effect			tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	159	$	(59)	$	100	$	(3)	$	2	$	(1)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		4		(2)		2
Other reclassifications included in
other revenue		(1)		-		(1)		-		-		-
Change in net unrealized gain on
securities available for sale		158		(59)		99		1		-		1
Other		-		-		-		1		-		1
Other comprehensive income	$	158	$	(59)	$	99	$	2	$	-	$	2

Accumulated other comprehensive income balances are as follows:

	Net unrealized						Total
	gain on securities						accumulated other
	available for sale			Other			comprehensive income
Balance at December 31, 2012		$	299		$	(1)		$	298
Other net changes			1			1			2
Balance at March 31, 2013		$	300		$	-		$	300
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			99			-			99
Balance at March 31, 2014		$	108		$	-		$	108

19

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

8.Earnings Per Common Share

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Dilutive potential common shares include, if dilutive, the effect of outstanding stock options and unvested restricted stock awards and units. EPS under the basic and diluted computations is as follows:

	Three Months Ended
	March 31,
	2014		2013
Net income	$	326	$	206
Preferred stock dividends		(8)		(8)
Net income available to common stockholders	$	318	$	198
Weighted-average common shares outstanding — basic		1,299		1,279
Common stock equivalent shares related to stock incentive plans		12		3
Weighted-average common shares outstanding — diluted (1)		1,311		1,282
Basic EPS	$	.24	$	.15
Diluted EPS	$	.24	$	.15

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 17 million and 45 million shares for the first quarters of 2014 and 2013, respectively.

9.Regulatory Requirements

CSC is a savings and loan holding company and Schwab Bank, CSC’s depository institution subsidiary, is a federal savings bank. CSC is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (Federal Reserve) and Schwab Bank is subject to supervision and regulation by the Office of the Comptroller of the Currency (OCC). CSC is currently not subject to specific statutory capital requirements, however, CSC is required to serve as a source of strength for Schwab Bank. CSC will be subject to new capital requirements set by the Federal Reserve that will be phased in beginning January 1, 2015.

Schwab Bank is subject to regulation and supervision and to various requirements and restrictions under federal and state laws, including regulatory capital guidelines. Among other things, these requirements also restrict and govern the terms of affiliate transactions, such as extensions of credit and repayment of loans between Schwab Bank and CSC or CSC’s other subsidiaries. In addition, Schwab Bank is required to provide notice to and may be required to obtain approval of the OCC and the Federal Reserve to declare dividends to CSC. The federal banking agencies have broad powers to enforce these regulations, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver. Under the Federal Deposit Insurance Act, Schwab Bank could be subject to restrictive actions if it were to fall within one of the lowest three of five capital categories. Schwab Bank is required to maintain minimum capital levels as specified in federal banking laws and regulations. Failure to meet the minimum levels could result in certain mandatory, and possibly additional discretionary actions, by the regulators that, if undertaken, could have a direct material effect on Schwab Bank. At March 31, 2014, CSC and Schwab Bank met the capital level requirements.

20

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The regulatory capital and ratios for Schwab Bank at March 31, 2014 are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,026	20.1	%	$	2,094	6.0	%	$	1,396	4.0	%
Total Risk-Based Capital	$	7,074	20.3	%	$	3,490	10.0	%	$	2,792	8.0	%
Tier 1 Leverage	$	7,026	6.8	%	$	5,157	5.0	%	$	4,126	4.0	%
Tangible Equity	$	7,026	6.8	%		N/A			$	2,063	2.0	%

N/A Not applicable.

Based on its regulatory capital ratios at March 31, 2014, Schwab Bank is considered well capitalized (the highest category) pursuant to banking regulatory guidelines. There are no conditions or events since March 31, 2014, that management believes have changed Schwab Bank’s capital category.

CSC’s principal U.S. broker-dealers are Schwab and optionsXpress, Inc. Schwab and optionsXpress, Inc. are both subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule). Schwab and optionsXpress, Inc. compute net capital under the alternative method permitted by the Uniform Net Capital Rule. This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000 for Schwab), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).

Net capital and net capital requirements for Schwab and optionsXpress, Inc. at March 31, 2014 are as follows:

											Net Capital		Net Capital
			% of			Minimum		2% of			in Excess of		in Excess of 5%
			Aggregate			Net Capital		Aggregate			Required		of Aggregate
	Net Capital		Debit Balances			Required		Debit Balances			Net Capital		Debit Balances
Schwab	$	1,548		10	%	$	0.250		$	305	$	1,243		$	786
optionsXpress, Inc.	$	112		32	%	$	1		$	7	$	105		$	94

10.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services to individual investors, retirement plan services, and corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services to independent investment advisors, and retirement business services to independent retirement plan advisors and recordkeepers whose plan assets are held at Schwab Bank. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The Company evaluates the performance of its segments on a pre-tax basis, excluding extraordinary or significant non-recurring itemsand results of discontinued operations. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

21

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Financial information for the Company’s reportable segments is presented in the following table:

	Investor Services				Advisor Services				Unallocated				Total
Three Months Ended March 31,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	428	$	387	$	183	$	165	$	-	$	-	$	611	$	552
Net interest revenue		495		413		58		56		-		-		553		469
Trading revenue		171		149		76		74		-		-		247		223
Other		51		42		17		14		-		-		68		56
Provision for loan losses		(1)		(5)		-		(1)		-		-		(1)		(6)
Net impairment losses on securities		-		(4)		-		-		-		-		-		(4)
Total net revenues		1,144		982		334		308		-		-		1,478		1,290
Expenses Excluding Interest		738		751		218		208		-		-		956		959
Income before taxes on income	$	406	$	231	$	116	$	100	$	-	$	-	$	522	$	331
Taxes on income														196		125
Net Income													$	326	$	206

11.Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to March 31, 2014, through the date the condensed consolidated financial statements were filed with the SEC. Based on this evaluation, other than as recorded or disclosed within these condensed consolidated financial statements and related notes, the Company has determined none of these events were required to be recognized or disclosed.

22

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Management of The Charles Schwab Corporation (CSC) and its subsidiaries (collectively referred to as the Company) focuses on several key client activity and financial metrics in evaluating the Company’s financial position and operating performance. Management believes that earnings per common share (EPS), net revenue growth, pre-tax profit margin, and return on average common stockholders’ equity provide broad indicators of the Company’s overall financial health, operating efficiency, and ability to generate acceptable returns within the context of a given operating environment. Expenses excluding interest as a percentage of average client assets is considered by management to be another measure of operating efficiency. Results for the first quarters of 2014 and 2013 are:

	Three Months Ended
	March 31,						Percent
	2014			2013			Change
Client Activity Metrics:
Net new client assets (1) (in billions)	$	34.2		$	43.4		(21)	%
Client assets (2) (in billions, at quarter end)	$	2,308.0		$	2,084.9		11	%
New brokerage accounts (3) (in thousands)		258			244		6	%
Active brokerage accounts (4) (in thousands, at quarter end)		9,178			8,865		4	%
Company Financial Metrics:
Net revenues	$	1,478		$	1,290		15	%
Expenses excluding interest		956			959		-
Income before taxes on income		522			331		58	%
Taxes on income		196			125		57	%
Net income	$	326		$	206		58	%
Preferred stock dividends	$	8		$	8		-
Net income available to common stockholders	$	318		$	198		61	%
Earnings per common share – diluted	$	.24		$	.15		60	%
Net revenue growth from prior year		15	%		8	%
Pre-tax profit margin		35.3	%		25.7	%
Return on average common stockholders’
equity (annualized) (5)		13	%		9	%
Expenses excluding interest as a percentage of
average client assets (annualized)		0.17	%		0.19	%

(1)	Net new client assets is defined as the total inflows of client cash and securities to the firm less client outflows. Management believes that this metric, along with core net new assets, depicts how well the Company’s products and services appeal to new and existing clients in a given operating environment. Core net new assets is defined as net new client assets before significant one-time flows. There were no significant one-time flows during the first quarters of 2014 and 2013.
(2)	Client assets is the market value of all client assets custodied at the Company. Management considers client assets to be indicative of the Company’s appeal in the marketplace. Additionally, fluctuations in certain components of client assets (e.g., Mutual Fund OneSource® funds) directly impact asset management and administration fees.
(3)	New brokerage accounts include all brokerage accounts opened during the period, as well as any accounts added via acquisition. This metric measures the Company’s effectiveness in attracting new clients and building stronger relationships with existing clients.
(4)	Active brokerage accounts include accounts with balances or activity within the preceding eight months. This metric is an indicator of the Company’s success in both attracting and retaining clients.
(5)	Calculated as net income available to common stockholders divided by average common stockholders’ equity.

The Company continued to operate in an environment that contained mixedmarket drivers of performance during the first quarter of 2014.TheNasdaq Composite Index, Standard & Poor’s 500 Index, and Dow Jones Industrial Average increased 29%, 19%, and 13% from the first quarter of 2013, respectively. Short-term interest rates continued to be constrained as the

23

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

federal funds target rate remained unchanged at a range of zero to 0.25% and the average three-month Treasury Bill yield decreased by 4 basis points to 0.04% compared to the first quarter of 2013. In addition, long-term interest rates increased compared to the first quarter of 2013, including the average 10-year Treasury yield, whichincreased by 83 basis points to 2.76%.

The Company continued to strengthen its earnings power during the first quarter of 2014. Core net new assets, defined as net new client assets before significant one-time flows, were the same as net new client assets in the first quarter of 2014. Net new client assets of  $34.2 billion were up7% from core net new assets sequentially, and decreased 21% from the first quarter of 2013 due to lower mutual fund clearing inflows. Total client assets ended the first quarter of 2014 at $2.31 trillion, up 11% from the first quarter of 2013.  The Company also added 258,000 new brokerage accounts to its client base during the first quarter of 2014, up 6%, and active brokerage accounts were 9.2 million, up 4% on a year-over-year basis.

In addition to growth in its client base, higher levels of client trading activity, balances in fee-based products and services, and cash held at the Company as part of investing relationships all contributed to the Company achieving increases in all three major revenue lines in the first quarter of 2014 compared to the first quarter of 2013.  Overall, net revenues increased by 15% in the first quarter of 2014 compared to the first quarter of 2013, primarily due to increases in net interest revenue, asset management and administration fees, and trading revenue. Net interest revenue increased primarily due to higher balances of interest-earning assets combined with the effect higher average interest rates on securities held to maturity had on the Company’s average net interest margin. Asset management and administration fees increased primarily due to increases in advice solutions fees and other asset management and administration fees. Trading revenue increased primarily due to higher daily average revenue trades.

Expenses excluding interest remained relatively flat in the first quarter of 2014 compared to the first quarter of2013, primarily due to decreases in advertising and market development and compensation and benefits, partially offset by increases in professional services and other expense. Compensation and benefits expense decreased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to a decrease in incentive compensation relating to the transition to a new payout schedule for field incentive plans in the first quarter of 2013 and equity incentive plan changes to vesting for retirement-eligible employees in the first quarter of 2013. Advertising and market development expense decreased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to production costs incurred in the first quarter of 2013 relating to the development of the Company’s advertising and branding initiative, Own your tomorrow™, and lower spending on customer promotions.  

As a result of the Company’s strong key client activity metrics, the Company achieved a pre-tax profit margin of 35.3% in the first quarter of 2014. Overall, net income increased by 58% in the first quarter of 2014 compared to the first quarter of 2013. The return on average common stockholders’ equity was 13% in the first quarter of 2014.

CURRENT MARKET AND REGULATORY ENVIRONMENT AND OTHER DEVELOPMENTS

To the extent short-term interest rates remain at current low levels, the Company’s net interest revenue will continue to be constrained, even as growth in average balances helps to increase such revenue. The low short-term interest rate environment also affects asset management and administration fees. The Company continues to waive a portion of its management fees, as the overall yields on certain Schwab-sponsored money market mutual funds have remained at levels at or below the management fees on those funds. These and certain other Schwab-sponsored money market mutual funds may not be able to replace maturing securities with securities of equal or higher yields. As a result, the yields on such funds may remain around or decline from their current levels, and therefore below the stated management fees on those funds. To the extent this occurs, asset management and administration fees may be negatively affected.

In July 2013, the U.S. banking agencies issued regulatory capital rules that implemented Basel III and relevant provisions of the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the Dodd-Frank Act) (Final Regulatory Capital Rules), which are applicable to savings and loan holding companies, such as CSC, and federal savings banks, such as Schwab Bank. The rules will be phased in beginning on January 1, 2015. The Company does not expect the Final Regulatory Capital Rules to have a material impact on the Company’s business, financial condition, and results of operations.

24

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

On October 24, 2013, the Board of Governors of the Federal Reserve System (Federal Reserve), in collaboration with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation, issued a joint notice of proposed rulemaking that would implement a quantitative liquidity requirement generally consistent with the liquidity coverage ratio (LCR) standard established by Basel III. The LCR would apply to all internationally active banking organizations. The Federal Reserve also proposed a modified LCR standard, which would apply to the Company. Under the modified LCR, a depository institution holding company would be required to maintain high-quality liquid assets in an amount related to its total net cash outflows over a prospective period. The proposed transition period for the rule would begin on January 1, 2015, and institutions would be required to be fully compliant by January 1, 2017. This proposed rule was open for comment until January 31, 2014 and the impact to Schwab cannot be assessed until the final rule is released.

The Company is pursuing lawsuits in state court in San Francisco for rescission and damages against issuers, underwriters, and dealers of individual non-agency residential mortgage-backed securities on which the Company has experienced realized and unrealized losses. The lawsuits allege that offering documents for the securities contained material untrue and misleading statements about the securities and the underwriting standards and credit quality of the underlying loans. On January 27, 2012 and July 24, 2012, the court denied defendants’ motions to dismiss the claims with respect to all but 3 of the 51 securities, and discovery is proceeding. A trial date for claims relating to an initial group of these securities is set for July 2015.

25

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Results of Operations

The following discussion presents an analysis of the Company’s results of operations for the first quarterof 2014 compared to the first quarter of2013.

Net Revenues

The Company’s major sources of net revenues are asset management and administration fees, net interest revenue, and trading revenue, all of which increased in the first quarter of 2014 compared to the first quarter of 2013.

Three Months Ended March 31,			2014				2013
					% of				% of
	Percent				Total Net				Total Net
	Change		Amount		Revenues		Amount		Revenues
Asset management and administration fees
Schwab money market funds before fee waivers	4	%	$	239			$	230
Fee waivers	19	%		(185)				(155)
Schwab money market funds after fee waivers	(28)	%		54	4	%		75	6	%
Equity and bond funds	29	%		45	3	%		35	3	%
Mutual Fund OneSource®	11	%		204	14	%		184	14	%
Total mutual funds	3	%		303	21	%		294	23	%
Advice solutions	22	%		199	13	%		163	13	%
Other	15	%		109	7	%		95	7	%
Asset management and administration fees	11	%		611	41	%		552	43	%
Net interest revenue
Interest revenue	16	%		579	39	%		497	38	%
Interest expense	(7)	%		(26)	(2)	%		(28)	(2)	%
Net interest revenue	18	%		553	37	%		469	36	%
Trading revenue
Commissions	11	%		234	16	%		211	16	%
Principal transactions	8	%		13	1	%		12	1	%
Trading revenue	11	%		247	17	%		223	17	%
Other	21	%		68	5	%		56	4	%
Provision for loan losses	(83)	%		(1)	-			(6)	-
Net impairment losses on securities	(100)	%		-	-			(4)	-
Total net revenues	15	%	$	1,478	100	%	$	1,290	100	%

Asset Management and Administration Fees

Asset management and administration fees include mutual fund service fees and fees for other asset-based financial services provided to individual and institutional clients. The Company earns mutual fund service fees for shareholder services, administration, and investment management provided to its proprietary funds, and recordkeeping and shareholder services provided to third-party funds. These fees are based upon the daily balances of client assets invested in these funds. The Company also earns asset management fees for advice solutions, which include advisory and managed account services that are based on the daily balances of client assets subject to the specific fee for service. The fair values of client assets included in proprietary and third-party mutual funds are based on quoted market prices and other observable market data. Other asset management and administration fees include various asset based fees, such as third-party mutual fund service fees, trust fees, 401(k) record keeping fees, and mutual fund clearing and other service fees. Asset management and administration fees vary with changes in the balances of client assets due to market fluctuations and client activity. For a discussion of the impact of current market conditions on asset management and administration fees, see “Current Market and Regulatory Environment and Other Developments.”

26

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Asset management and administration fees increased by $59 million, or 11%, in the first quarter of 2014 compared to the first quarter of 2013, due to increases in mutual fund service fees, advice solutions fees and other asset management and administration fees.

Mutual fund service fees increased by $9 million, or 3%, in the first quarter of 2014 compared to the first quarter of 2013, primarily due to growth in client assets invested in the Company’s Mutual Fund OneSource funds and equity and bond funds, partially offset by a decrease in net money market mutual fund fees as a result of lower yields on fund assets.

Advice solutions fees increased by $36 million, or 22%, in the first quarter of 2014 compared to the first quarter of 2013, primarily due to growth in client assets enrolled in advisory offers, including Schwab Private Client™, Windhaven®, and ThomasPartners®.

Other asset management and administration fees increased by $14 million, or 15%, in the first quarter of 2014 compared to the first quarter of 2013, primarily due to an increase in third-party mutual fund service fees as a result of an increase in client asset balances invested in other third-party mutual funds.

Net Interest Revenue

Net interest revenue is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest revenue is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. The majority of the Company’s interest-earning assets and interest-bearing liabilities are sensitive to changes in short-term interest rates. The Company’s investment strategy is structured to produce an increase in net interest revenue when interest rates rise and, conversely, a decrease in net interest revenue when interest rates fall, from current levels. When interest rates fall, the Company may attempt to mitigate some of this negative impact by extending the maturities of assets in investment portfolios to lock in asset yields, and by lowering rates paid to clients on interest-bearing liabilities. Since the Company establishes the rates paid on certain brokerage client cash balances and deposits from banking clients, as well as the rates charged on receivables from brokerage clients, and also controls the composition of its investment securities, it has some ability to manage its net interest spread. However, the spread is influenced by external factors such as the interest rate environment and competition. The current low interest rate environment limits the extent to which the Company can reduce interest expense paid on funding sources. To a lesser degree, the Company is sensitive to changes in long-term interest rates through some of its investment portfolios. To mitigate the related risk, the Company may alter the types of investments purchased. For discussion of the impact of current market conditions on net interest revenue, see “Current Market and Regulatory Environment and Other Developments.”

The Company’s interest-earning assets are financed primarily by brokerage client cash balances and deposits from banking clients. Non-interest-bearing funding sources include non-interest-bearing brokerage client cash balances, stockholders’ equity, and proceeds from stock-lending activities. Revenue from stock-lending activities is included in other interest revenue.

Schwab Bank maintains available for sale and held to maturity investment portfolios for liquidity as well as to earn interest by investing funds from deposits that are in excess of loans to banking clients and liquidity requirements. Schwab Bank lends funds to banking clients primarily in the form of mortgage loans, HELOCs, and personal loans secured by securities. These loans are largely funded by interest-bearing deposits from banking clients.

In clearing their clients’ trades, Charles Schwab & Co., Inc. (Schwab) and optionsXpress, Inc., a securities broker-dealer and wholly-owned subsidiary of optionsXpress Holdings, Inc. (optionsXpress), hold cash balances payable to clients. In most cases, Schwab and optionsXpress, Inc. pay their clients interest on cash balances awaiting investment, and in turn invest these funds and earn interest revenue. Receivables from brokerage clients consist primarily of margin loans to brokerage clients. Margin loans are loans made to clients on a secured basis to purchase securities. Pursuant to applicable regulations, client cash balances that are not used for margin lending are generally segregated into investment accounts that are maintained for the exclusive benefit of clients, which are recorded in cash and investments segregated on the Company’s condensed consolidated balance sheets.

27

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

The following table presents net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheet:

Three Months Ended March 31,	2014						2013
			Interest		Average				Interest		Average
	Average		Revenue/		Yield/		Average		Revenue/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Interest-earning assets:
Cash and cash equivalents	$	6,701	$	4	0.24	%	$	7,907	$	5	0.26	%
Cash and investments segregated		21,619		6	0.11	%		27,590		12	0.18	%
Broker-related receivables (1)		294		-	0.35	%		361		-	0.13	%
Receivables from brokerage clients		13,158		116	3.58	%		11,342		106	3.79	%
Securities available for sale (2)		51,971		140	1.09	%		46,908		138	1.19	%
Securities held to maturity		30,846		199	2.62	%		21,063		131	2.52	%
Loans to banking clients		12,546		87	2.81	%		11,091		80	2.93	%
Total interest-earning assets		137,135		552	1.63	%		126,262		472	1.52	%
Other interest revenue				27						25
Total interest-earning assets	$	137,135	$	579	1.71	%	$	126,262	$	497	1.60	%
Funding sources:
Deposits from banking clients	$	93,776	$	7	0.03	%	$	80,341	$	10	0.05	%
Payables to brokerage clients		27,210		1	0.01	%		32,096		1	0.01	%
Long-term debt		1,902		18	3.84	%		1,632		17	4.22	%
Total interest-bearing liabilities		122,888		26	0.09	%		114,069		28	0.10	%
Non-interest-bearing funding sources		14,247						12,193
Total funding sources	$	137,135	$	26	0.07	%	$	126,262	$	28	0.09	%
Net interest revenue			$	553	1.64	%			$	469	1.51	%

(1)	Interest revenue was less than $500,000 in the periods presented.
(2)	Amounts have been calculated based on amortized cost.

Net interest revenue increased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to higher balances of interest-earning assets, including securities held to maturity and securities available for sale, combined with the effect higher average interest rates on securities held to maturity had on the Company’s average net interest margin. The growth in the average balance of deposits from banking clients funded the increase in the balances of securities held to maturity and securities available for sale.

Trading Revenue

Trading revenue includes commission and principal transaction revenues. Commission revenue is affected by the number of revenue trades executed and the average revenue earned per revenue trade. Principal transaction revenue is primarily comprised of revenue from trading activity in client fixed income securities. To accommodate clients’ fixed income trading activity, the Company maintains positions in fixed income securities, including state and municipal debt obligations, U.S. Government, corporate debt, and other securities. The difference between the price at which the Company buys and sells securities to and from its clients and other broker-dealers is recognized as principal transaction revenue. Principal transaction revenue also includes adjustments to the fair value of these securities positions. Factors that influence principal transaction revenue include the volume of client trades and market price volatility.

28

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Trading revenue increased by $24 million, or 11%, in the first quarter of 2014 compared to the first quarter of 2013,due to higher daily average revenue trades. Daily average revenue trades increased in the first quarter of 2014, primarily due to a higher volume of equity, future, and option trades. Average revenue per revenue trade decreased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to lower revenue per trade for futures and options.

	Three Months Ended
	March 31,				Percent
	2014		2013		Change
Daily average revenue trades (1) (in thousands)		337.3		298.7	13	%
Clients’ daily average trades (2) (in thousands)		553.6		498.9	11	%
Number of trading days		61.0		60.0	2	%
Average revenue per revenue trade	$	12.03	$	12.34	(3)	%

(1)	Includes all client trades that generate trading revenue (i.e., commission revenue or principal transaction revenue).
(2)	Includes daily average revenue trades, trades by clients in asset-based pricing relationships, and all commission-free trades, including the Company’s Mutual Fund OneSource funds and exchange-traded funds (ETFs), and other proprietary products. Clients’ daily average trades is an indicator of client engagement with securities markets.

Other Revenue

Other revenue includesrevenue from order flow,  software fees from the Company’s portfolio management services, exchange processing fees, realized gains or losses on sales of securities available for sale, and other service fees. Other revenue increased by $12 million, or 21%, in the first quarter of 2014 compared to the first quarter of 2013, primarily due to an increase in revenue from order flow.

Expenses Excluding Interest

As shown in the table below, expenses excluding interest remained relatively flat in the first quarterof 2014 compared to the first quarter of 2013.Decreases in advertising and market development and compensation and benefits were offset by increases in professional services and other expense.

	Three Months Ended
	March 31,						Percent
	2014			2013			Change
Compensation and benefits	$	528		$	536		(1)	%
Professional services		106			99		7	%
Occupancy and equipment		80			77		4	%
Advertising and market development		63			74		(15)	%
Communications		56			54		4	%
Depreciation and amortization		48			51		(6)	%
Other		75			68		10	%
Total expenses excluding interest	$	956		$	959		-
Expenses as a percentage of total net revenues:
Total expenses excluding interest		65	%		74	%
Advertising and market development		4	%		6	%

Compensation and Benefits

Compensation and benefits expense includes salaries and wages, incentive compensation, and related employee benefits and taxes. Incentive compensation includes variable compensation, discretionary bonuses, and stock-based compensation. Variable compensation includes payments to certain individuals based on their sales performance. Discretionary bonuses are based on the Company’s overall performance as measured by EPS, and therefore will fluctuate with this measure. Stock-based compensation primarily includes employee and board of director stock options, restricted stock units, and restricted stock awards.

29

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Compensation and benefits expense remained relatively flat in the first quarter of 2014 compared to the first quarter of 2013.Adecrease in incentive compensation was offset by an increase in salaries and wages. The following table shows a comparison of certain compensation and benefits components and employee data:

	Three Months Ended
	March 31,						Percent
	2014			2013			Change
Salaries and wages	$	295		$	284		4	%
Incentive compensation		147			163		(10)	%
Employee benefits and other		86			89		(3)	%
Total compensation and benefits expense	$	528		$	536		(1)	%
Compensation and benefits expense as a percentage of total net revenues:
Salaries and wages		20	%		22	%
Incentive compensation		10	%		13	%
Employee benefits and other		6	%		7	%
Total compensation and benefits expense		36	%		42	%
Full-time equivalent employees (1) (in thousands)
At quarter end		14.0			14.0		-
Average		14.0			14.0		-

(1) Includes full-time, part-time and temporary employees, and persons employed on a contract basis, and excludes employees of outsourced service providers.

Salaries and wages increased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to annual salary increases.

Incentive compensation decreased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to the transition to a new payout schedule for field incentive plans in the first quarter of 2013 and equity incentive plan changes to vesting for retirement-eligible employees in the first quarter of 2013.

Expenses Excluding Compensation and Benefits

Professional services expense increased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to an increase in fees paid to outsourced service providers and consultants, and higher spending on technology services and enhancements.

Advertising and market development expense decreased in the first quarterof 2014 compared to the first quarter of 2013, primarily due to production costs incurred in the first quarter of 2013 relating to the development of the Company’s advertising and branding initiative, Own your tomorrow™, and lower spending on customer promotions.

Other expense increased in the first quarter of 2014 compared to the first quarter of 2013, primarily due to an increase in regulatory assessments.

Taxes on Income

The Company’s effective income tax rate on income before taxes was 37.5% and 37.8% for the first quarters of 2014 and 2013, respectively. The slight decrease was primarily due to a lower effective state income tax rate in the first quarter of 2014.

Segment Information

The Company provides financial services to individuals and institutional clients through two segments – Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services to individual investors, retirement plan services, and corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services to independent investment advisors, and retirement business services to independent retirement plan advisors

30

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

and recordkeepers whose plan assets are held at Schwab Bank. Banking revenues and expenses are allocated to the Company’s two segments based on which segment services the client. The Company evaluates the performance of its segments on a pre-tax basis, excluding items such as significant nonrecurring gains, impairment charges on non-financial assets, discontinued operations, extraordinary items, and significant restructuring and other charges. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments.

Financial information for the Company’s reportable segments is presented in the following tables:

	Investor Services						Advisor Services
	Percent						Percent
Three Months Ended March 31,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	11	%	$	428	$	387	11	%	$	183	$	165
Net interest revenue	20	%		495		413	4	%		58		56
Trading revenue	15	%		171		149	3	%		76		74
Other	21	%		51		42	21	%		17		14
Provision for loan losses	(80)	%		(1)		(5)	(100)	%		-		(1)
Net impairment losses on securities	(100)	%		-		(4)	-			-		-
Total net revenues	16	%		1,144		982	8	%		334		308
Expenses Excluding Interest	(2)	%		738		751	5	%		218		208
Income before taxes on income	76	%	$	406	$	231	16	%	$	116	$	100
	Unallocated						Total
	Percent						Percent
Three Months Ended March 31,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	-		$	-	$	-	11	%	$	611	$	552
Net interest revenue	-			-		-	18	%		553		469
Trading revenue	-			-		-	11	%		247		223
Other	-			-		-	21	%		68		56
Provision for loan losses	-			-		-	(83)	%		(1)		(6)
Net impairment losses on securities	-			-		-	(100)	%		-		(4)
Total net revenues	-			-		-	15	%		1,478		1,290
Expenses Excluding Interest	-			-		-	-			956		959
Income before taxes on income	-		$	-	$	-	58	%	$	522	$	331
Taxes on income							57	%		196		125
Net Income							58	%	$	326	$	206

Investor Services

Net revenues increased by $162 million, or 16%, in the first quarter of 2014 compared to the first quarter of 2013 primarily due to increases in net interest revenue, asset management and administration fees, trading revenue, and other revenue. Net interest revenue increased primarily due to higher balances of interest-earning assets combined with the effect higher average interest rates on securities held to maturity had on the Company’s average net interest margin. Asset management and administration fees increased primarily due to increases in advice solutions fees and mutual fund service fees. Advice solutions fees increased primarily due to growth in client assets enrolled in advisory offers. Mutual fund service fees increased primarily due to growth in client assets invested in the Company’s Mutual Fund OneSource funds and equity and bond funds, partially offset by a decrease in net money market mutual fund fees as a result of lower yields on fund assets. Trading revenue increased primarily due to higher daily average revenue trades. Other revenue increased primarily due to an increase in revenue from order flow.

Expenses excluding interest decreased by $13 million, or 2%, in the first quarter of 2014 compared to the first quarter of 2013 primarily due to decreases in compensation and benefits and advertising and market development expenses, partially offset by an increase in other expense.

31

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Advisor Services

Net revenues increased by $26 million, or 8%, in the first quarter of 2014 compared to the first quarter of 2013 primarily due to increases in asset management and administration fees and other revenue. Asset management and administration fees increased due to increases in advice solutions fees, mutual fund service fees, and other asset management and administration fees. Advice solutions fees increased due to growth in client assets enrolled in advisory offers. Mutual fund service fees increased primarily due to growth in client assets invested in the Company’s Mutual Fund OneSource funds and equity and bond funds, partially offset by a decrease in net money market mutual fund fees as a result of lower yields on fund assets. Other asset management and administration fees increased primarily due to an increase in third-party mutual fund service fees as a result of an increase in client asset balances invested in other third-party mutual funds. Other revenue increased primarily due to an increase in revenue from order flow.

Expenses excluding interest increased by $10 million, or 5%, in the first quarter of 2014 compared to the first quarter of 2013 primarily due to increases in compensation and benefits and professional services expenses.

Liquidity and CapitalResources

CSC conducts substantially all of its business through its wholly-owned subsidiaries. The Company’s capital structure is designed to provide each subsidiary with capital and liquidity to meet its operational needs and regulatory requirements.

CSC is a savings and loan holding company and Schwab Bank, CSC’s depository institution, is a federal savings bank. CSC is subject to supervision and regulation by the Federal Reserve and Schwab Bank is subject to supervision and regulation by the OCC.

Liquidity

CSC

CSC’s liquidity needs arise from funding its subsidiaries’ operations, including margin and mortgage lending, and transaction settlement, in addition to funding cash dividends, acquisitions, investments, short- and long-term debt, and managing statutory capital requirements.

CSC’s liquidity needs are generally met through cash generated by its subsidiaries, as well as cash provided by external financing. CSC has a universal automatic shelf registration statement on file with the SEC which enables CSC to issue debt, equity and other securities. CSC maintains excess liquidity in the form of overnight cash deposits and short-term investments to cover daily funding needs and to support growth in the Company’s business. Generally, CSC does not hold liquidity at its subsidiaries in excess of amounts deemed sufficient to support the subsidiaries’ operations, including any regulatory capital requirements. Schwab, Schwab Bank, and optionsXpress, Inc. are subject to regulatory requirements that may restrict them from certain transactions with CSC, as further discussed below. Management believes that funds generated by the operations of CSC’s subsidiaries will continue to be the primary funding source in meeting CSC’s liquidity needs, providing adequate liquidity to meet Schwab Bank’s capital guidelines, and maintaining Schwab and optionsXpress, Inc.’s net capital.

While CSC is not currently subject to specific statutory capital requirements, CSC is required to serve as a source of strength for Schwab Bank and must have the ability to provide financial assistance if Schwab Bank experiences financial distress. To manage capital adequacy, the Company currently utilizes a target Tier 1 Leverage Ratio for CSC, as currently defined by the Federal Reserve, of at least 6%. At March 31, 2014, CSC’s Tier 1 Leverage Ratio was 6.6%, Tier1 Capital Ratio was 17.1%, and Total Capital Ratio was 17.2%. Beginning in 2015, CSC will be subject to new capital requirements set by the Federal Reserve.

32

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

The following are details of CSC’s long-term debt:

	Par						Standard
March 31, 2014	Outstanding			Maturity	Interest Rate	Moody’s	& Poor’s	Fitch
Senior Notes		$	1,581	2015 – 2022	0.850% to 4.45% fixed	A2	A	A
Medium-Term Notes		$	250	2017	6.375% fixed	A2	A	A

CSC has authorization from its Board of Directors to issue unsecured commercial paper notes (Commercial Paper Notes) not to exceed $1.5 billion. Management has set a current limit for the commercial paper program of $800 million. The maturities of the Commercial Paper Notes may vary, but are not to exceed 270 days from the date of issue. The commercial paper is not redeemable prior to maturity and cannot be voluntarily prepaid. The proceeds of the commercial paper program are to be used for general corporate purposes. There were no borrowings of Commercial Paper Notes outstanding at March 31, 2014. CSC’s ratings for these short-term borrowings are P1 by Moody’s, A1 by Standard & Poor’s, and F1 by Fitch.

CSC maintains an $800 million committed, unsecured credit facility with a group of 12 banks, which is scheduled to expire in June 2014. This facility was unused during the first quarter of 2014. The funds under this facility are available for general corporate purposes. The financial covenants under this facility require Schwab to maintain a minimum net capital ratio, as defined, Schwab Bank to be well capitalized, as defined, and CSC to maintain a minimum level of stockholders’ equity. At March 31, 2014, the minimum level of stockholders’ equity required under this facility was $7.3 billion (CSC’s stockholders’ equity at March 31, 2014 was $10.8 billion). Management believes that these restrictions will not have a material effect on CSC’s ability to meet foreseeable dividend or funding requirements.

CSC also has direct access to $647 million of the $942million uncommitted, unsecured bank credit lines discussed below, that are primarily utilized by Schwab to manage short-term liquidity. These lines were not used by CSC during the first quarter of 2014.

In addition, Schwab provides CSC with a $1.0 billion credit facility, which is scheduled to expire in December 2014. There were no funds drawn under this facility at March 31, 2014.

Schwab

Schwab’s liquidity needs relating to client trading and margin borrowing activities are met primarily through cash balances in brokerage client accounts, which were $30.2billion and $33.2 billion at March 31, 2014 and December 31, 2013, respectively. Management believes that brokerage client cash balances and operating earnings will continue to be the primary sources of liquidity for Schwab.

Schwab is subject to regulatory requirements of Rule 15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule) that are intended to ensure the general financial soundness and liquidity of broker-dealers. These regulations prohibit Schwab from repaying subordinated borrowings from CSC, paying cash dividends, or making unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement of $250,000. At March 31, 2014, Schwab’s net capital was $1.5 billion (10% of aggregate debit balances), which was $1.2 billion in excess of its minimum required net capital and $786 million in excess of 5% of aggregate debit balances.

Schwab is also subject to Rule 15c3-3 under the Securities Exchange Act of 1934 and other applicable regulations that require it to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of clients. These funds are included in cash and investments segregated and on deposit for regulatory purposes in the Company’s condensed consolidated balance sheets and are not available as a general source of liquidity.

Most of Schwab’s assets are readily convertible to cash, consisting primarily of short-term investment-grade, interest-earning investments (the majority of which are segregated for the exclusive benefit of clients pursuant to regulatory requirements), receivables from brokerage clients, and receivables from brokers, dealers, and clearing organizations. Client margin loans are demand loan obligations secured by readily marketable securities. Receivables from and payables to brokers, dealers, and clearing organizations primarily represent current open transactions, which usually settle, or can be closed out, within a few business days.

33

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Schwab has a finance lease obligation related to an office building and land under a 20-year lease. The remaining finance lease obligation of $87 million at March 31, 2014 is being reduced by a portion of the lease payments over the remaining lease term of 11 years.

To manage short-term liquidity, Schwab maintains uncommitted, unsecured bank credit lines with a group of six banks totaling $942 million at March 31, 2014. The need for short-term borrowings arises primarily from timing differences between cash flow requirements, scheduled liquidation of interest-earning investments, and movements of cash to meet regulatory brokerage client cash segregation requirements. These lines were not used by Schwab during the first quarter of 2014.

To partially satisfy the margin requirement of client option transactions with the Options Clearing Corporation, Schwab has unsecured standby letter of credit agreements (LOCs) with five banks in favor of the Options Clearing Corporation aggregating $225 million at March 31, 2014. There were no funds drawn under any of these LOCs during the first quarter of 2014. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. Schwab satisfies the collateral requirements by providing cash as collateral.

To manage Schwab’s regulatory capital requirement, CSC provides Schwab with a $1.4 billion subordinated revolving credit facility, which is scheduled to expire in March 2016. The amount outstanding under this facility at March 31, 2014 was $315 million. Borrowings under this subordinated lending arrangement qualify as regulatory capital for Schwab.

In addition, CSC provides Schwab with a $2.5 billion credit facility, which is scheduled to expire in December 2014. Borrowings under this facility do not qualify as regulatory capital for Schwab. The amount outstanding under this facility at March 31, 2014 was $125 million.

Schwab Bank

Schwab Bank’s liquidity needs are met through deposits from banking clients and equity capital.

Deposits from banking clients at March 31, 2014 were $95.6billion, which includes the excess cash held in certain Schwab and optionsXpress, Inc. brokerage client accounts that is swept into deposit accounts at Schwab Bank. At March 31, 2014, these balances totaled $74.5 billion.

Schwab Bank is subject to regulatory requirements that restrict and govern the terms of affiliate transactions, such as extensions of credit and repayment of loans between Schwab Bank and CSC or CSC’s other subsidiaries. In addition, Schwab Bank is required to provide notice to and may be required to obtain approval of the OCC and the Federal Reserve to declare dividends to CSC.

Schwab Bank is required to maintain capital levels as specified in federal banking laws and regulations. Failure to meet the minimum levels could result in certain mandatory, and possibly additional discretionary actions, by the regulators that, if undertaken, could have a direct material effect on Schwab Bank.The Company currently utilizes a target Tier 1 Leverage Ratio for Schwab Bank of at least 6.25%. Beginning in 2015, Schwab Bankwill be subject to new capital requirements set by the OCC. Based on its regulatory capital ratios at March 31, 2014, Schwab Bank is considered well capitalized. Schwab Bank’s regulatory capital and ratios are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
March 31, 2014	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,026	20.1	%	$	2,094	6.0	%	$	1,396	4.0	%
Total Risk-Based Capital	$	7,074	20.3	%	$	3,490	10.0	%	$	2,792	8.0	%
Tier 1 Leverage	$	7,026	6.8	%	$	5,157	5.0	%	$	4,126	4.0	%
Tangible Equity	$	7,026	6.8	%		N/A			$	2,063	2.0	%

N/A Not applicable.

34

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Schwab Bank has access to traditional funding sources such as deposits, federal funds purchased, and repurchase agreements. Additionally, Schwab Bank has access to short-term funding through the Federal Reserve Bank (FRB) discount window. Amounts available under the FRB discount window are dependent on the fair value of certain of Schwab Bank’s securities available for sale and/or securities held to maturity that are pledged as collateral to the FRB. Schwab Bank maintains policies and procedures necessary to access this funding and tests discount window borrowing procedures annually. At March 31, 2014, $2.6 billion was available under this arrangement. There were no funds drawn under this arrangement during the first quarter of 2014.

Schwab Bank maintains a credit facility with the Federal Home Loan Bank System. Amounts available under this facility are dependent on the amount of Schwab Bank’s residential real estate mortgages and HELOCs that are pledged as collateral. Schwab Bank maintains policies and procedures necessary to access this funding and tests borrowing procedures annually. At March 31, 2014, $7.0 billion was available under this facility. There were no funds drawn under this facility during the first quarter of 2014.

optionsXpress, Inc.

optionsXpress, Inc.’s liquidity needs relating to client trading and margin borrowing activities are met primarily through cash balances in brokerage client accounts, which were $1.1 billion at both March 31, 2014 and December 31, 2013. Management believes that brokerage client cash balances and operating earnings will continue to be the primary sources of liquidity for optionsXpress, Inc.

optionsXpress, Inc. is subject to regulatory requirements of the Uniform Net Capital Rule that are intended to ensure the general financial soundness and liquidity of broker-dealers. These regulations prohibit optionsXpress, Inc. from paying cash dividends or making unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement of $250,000. At March 31, 2014, optionsXpress, Inc.’s net capital was $112 million (32% of aggregate debit balances), which was $105 million in excess of its minimum required net capital and $94 million in excess of 5% of aggregate debit balances.

optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc. as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in customer accounts and 8% of the total risk margin requirements for all positions carried in non-customer accounts (as defined in Reg. 1.17). At March 31, 2014, optionsXpress, Inc. met the requirements of Reg. 1.17.

Additionally, optionsXpress, Inc. is subject to Rule 15c3-3 under the Securities Exchange Act of 1934 and other applicable regulations that require it to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of clients. These funds are included in cash and investments segregated and on deposit for regulatory purposes in the Company’s condensed consolidated balance sheets and are not available as a general source of liquidity.

To partially satisfy the margin requirement of client option transactions with the Options Clearing Corporation, optionsXpress, Inc. has an unsecured standby LOC with one bank in favor of the Options Clearing Corporation in the amount of $15 million at March 31, 2014. There were no funds drawn under this LOC during the first quarter of 2014.

CSC provides optionsXpress, Inc. with a $200 million credit facility, which is scheduled to expire in December 2014. Borrowings under this facility do not qualify as regulatory capital for optionsXpress, Inc. There were no borrowings outstanding under this facility at March 31, 2014.

optionsXpress has a term loan with CSC, of which $31 million was outstanding at March 31, 2014, and it matures in December 2017.  

Capital Resources

The Company monitors both the relative composition and absolute level of its capital structure. Management is focused on optimizing the Company’s use of capital and currently targets a long-term debt to total financial capital ratio not to exceed

35

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

30%. The Company’s total financial capital (long-term debt plus stockholders’ equity) at March 31, 2014 was $12.7 billion, up $433million, or 4%, from December 31, 2013.

The Company’s cash position (reported as cash and cash equivalents on its condensed consolidated balance sheets) and cash flows are affected by changes in brokerage client cash balances and the associated amounts required to be segregated under regulatory guidelines. Timing differences between cash and investments actually segregated on a given date and the amount required to be segregated for that date may arise in the ordinary course of business, and are addressed by the Company in accordance with applicable regulations. Other factors which affect the Company’s cash position and cash flows include investment activity in security portfolios, levels of capital expenditures, acquisition and divestiture activity, banking client deposit activity, brokerage and banking client loan activity, financing activity in long-term debt, payments of dividends, and repurchases and issuances of CSC’s preferred and common stock. The combination of these factors can cause significant fluctuations in the cash position during specific time periods.

Long-term Debt

At both March 31, 2014, and December 31, 2013, the Company had long-term debt of $1.9 billion, or 15% of total financial capital. At March 31, 2014, the Company had long term debt that bears interest at a weighted-average rate of 3.60%. The Company repaid $2 million of long-term debt in the first quarter of 2014.

Capital Expenditures

The Company’s capital expenditures were $67 million and $46 million in the first quarters of 2014 and 2013, respectively. Capital expenditures in the first quarter of 2014 were primarily for buildings, developing internal-use software, and software and equipment relating to the Company’s information technology systems. Capital expenditures for the first quarter of 2013 were primarily for developing internal-use software, software and equipment relating to the Company’s information technology systems, and land. Capitalized costs for developing internal-use software were $18 million and $17 million in the first quarters of 2014 and 2013, respectively.

As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, management anticipated that 2014 capital expenditures would be approximately 20% higher than 2013. However, during the current quarter management revised the Company’s estimated full-year 2014 capital expenditures to approximately 50% higher than 2013 levels primarily due to the decision to acquire additional facilities to support future growth and expansion.

Dividends

CSC paid common stock cash dividends of $79 million ($0.06 per share) and $77 million ($0.06 per share) inthe first quartersof 2014 and 2013, respectively.

CSC paid Series A Preferred Stock cash dividends of $14 million ($35.00 per share) in both the first quarters of 2014 and 2013.CSC paid Series B Preferred Stock cash dividends of $7 million ($15.00 per share) in both the first quarters of 2014 and 2013.

Share Repurchases

There were no repurchases of CSC’s common stock in the first quarters of 2014 and 2013. As of March 31, 2014, CSC had remaining authority from the Board of Directors to repurchase up to $596 million of its common stock, which is not  subject to expiration.

Off-Balance Sheet Arrangements

The Company enters into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of its clients. These arrangements include firm commitments to extend credit. Additionally, the Company enters into guarantees and other similar arrangements as part of transactions in the ordinary course of business. For discussion on the Company’s off-balance sheet arrangements, see “Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources– Off-Balance Sheet Arrangements” in the

36

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Company’s Annual Report on Form 10-K for the year ended December 31, 2013, and “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 5. Commitments and Contingencies.”

Risk Management

The Company’s business activities expose it to a variety of risks, including operational, credit, market, liquidity, compliance and legal risk. The Company has a comprehensive risk management program to identify and manage these risks and their associated potential for financial and reputational impact. Despite the Company’s efforts to identify areas of risk and implement risk management policies and procedures, there can be no assurance that the Company will not suffer unexpected losses due to these risks.  

For a discussion on risks that the Company faces and the Company’s process of risk identification and assessment, risk measurement, risk monitoring and reporting and risk mitigation, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. For updated information on the Company’s credit risk and concentration risk exposures, see below. See “Item 3 – Quantitative and Qualitative Disclosures About Market Risk” for additional information relating to market risk.

Credit Risk Exposures

The Company’s credit risk exposure related to loans to banking clients is actively managed through individual and portfolio reviews performed by management. Management regularly reviews asset quality, including concentrations, delinquencies, nonaccrual loans, charge-offs, and recoveries. All are factors in the determination of an appropriate allowance for loan losses. The Company’s mortgage loan portfolios primarily include first lien residential real estate mortgage loans (First Mortgages) of $8.1 billion and HELOCs of $3.0 billion at March 31, 2014.

The Company’s underwriting guidelines include maximum loan-to-value (LTV) ratios, cash out limits, and minimum Fair Isaac Corporation (FICO) credit scores. The specific guidelines are dependent on the individual characteristics of a loan (for example, whether the property is a primary or secondary residence, whether the loan is for investment property, whether the loan is for an initial purchase of a home or refinance of an existing home, and whether the loan is conforming or jumbo). These credit underwriting standards have limited the exposure to the types of loans that experienced high foreclosures and loss rates elsewhere in the industry in recent years. In January 2014, the Company revised its First Mortgage underwriting criteria in conformance with the Consumer Financial Protection Bureau’s new guidance on Qualified Mortgage lending and a borrower’s ability to repay. Revisions were made to requirements affecting debt to income ratio, loan to value ratio, and liquid asset holdings. These revised underwriting criteria are not expected to have a material impact on the credit quality of the Company’s First Mortgage or HELOC portfolios. The Company does not purchase loans that allow for negative amortization and does not purchase subprime loans (generally defined as extensions of credit to borrowers with a FICO score of less than 620 at origination), unless the borrower has compensating credit factors. At March 31, 2014, approximately 1% of both the First Mortgage and HELOC portfolios consisted of loans to borrowers with updated FICO scores of less than 620.

At March 31, 2014, the weighted-average originated LTV ratio was 59% for both the First Mortgage and HELOC portfolios. The computation of the origination LTV ratio for a HELOC includes any first lien mortgage outstanding on the same property at the time of origination. At March 31, 2014,  22% of HELOCs ($672 million of the HELOC portfolio) were in a first lien position. The weighted-average originated FICO score was 769 and 768 for the First Mortgage and HELOC portfolios, respectively.  

The Company monitors the estimated current LTV ratios of its First Mortgage and HELOC portfolios on an ongoing basis. At March 31, 2014, the weighted-average estimated current LTV ratios were 52% and 58% for the First Mortgage and HELOC portfolios, respectively. The computation of the estimated current LTV ratio for a HELOC includes any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Company estimates the current LTV ratio for each loan by reference to a home price appreciation index. The Company also monitors updated borrower FICOscores, delinquency trends, and verified liquid assets held by individual borrowers. At March 31, 2014, the weighted-average updated FICOscores were 774 and 770 for the First Mortgage and HELOC portfolios, respectively.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

A portion of the Company’s HELOC portfolio is secured by second liens on the associated properties. Second lien mortgage loans possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. At March 31, 2014, $2.3 billion, or 78%, of the HELOC portfolio was in a second lien position. In addition to the credit monitoring activities described above, the Company also monitors credit risk on second lien HELOC loans by reviewing the delinquency status of the first lien loan on the associated property. Additionally, at March 31, 2014, approximately 30% of the HELOC borrowers that had a balance only paid the minimum amount due.

For more information on the Company’s credit quality indicators relating to its First Mortgage and HELOC portfolios, including delinquency characteristics, borrower FICOscores at origination, updated borrower FICOscores, LTV ratios at origination, and estimated current LTV ratios, see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 4. Loans to Banking Clients and Related Allowance for Loan Losses.”

The following table presents certain of the Company’s loan quality metrics as a percentage of total outstanding loans:

	March 31,	December 31,
	2014	2013
Loan delinquencies (1)	0.44%	0.48%
Nonaccrual loans	0.32%	0.39%
Allowance for loan losses	0.38%	0.39%

(1) Loan delinquencies include loans that are 30 days or more past due and other nonaccrual loans.

The Company has exposure to credit risk associated with its securities available for sale and securities held to maturity portfolios, whose fair values totaled $53.1 billion and $31.7 billion at March 31, 2014, respectively. These portfolios include U.S. agency and non-agency mortgage-backed securities, asset-backed securities, corporate debt securities, U.S. agency notes, and certificates of deposit. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government-sponsored enterprises.

At March 31, 2014, all securities in the available for sale and held to maturity portfolios were rated investment grade (defined as a rating equivalent to a Moody’s rating of “Baa” or higher, or a Standard & Poor’s rating of “BBB-” or higher). Although the Company has recognized net impairment losses on certain non-agency residential mortgage-backed securities in prior quarters, at March 31, 2014, the amortized cost of all non-agency residential mortgage-backed securities represented less than 1% of the securities available for sale and securities held to maturity portfolios.

Concentration Risk Exposures

The Company has exposure to concentration risk when holding large positions in financial instruments collateralized by assets with similar economic characteristics or in securities of a single issuer or within a particular industry.

The fair value of the Company’s investments in mortgage-backed securities totaled $51.0 billion at March 31, 2014. Of these, $49.2 billion were issued by U.S. agencies and $1.8billion were issued by private entities (non-agency securities). These U.S. agency and non-agency securities are included in securities available for sale and securities held to maturity.

The fair value of the Company’s investments in corporate debt securities and commercial paper totaled $9.2 billion at March31,  2014, with the majority issued by institutions in the financial services industry. These securities are included in securities available for sale, securities held to maturity, cash and cash equivalents, and other securities owned in the Company’s condensed consolidated balance sheets. Issuer, geographic, and sector concentrations are controlled by established credit policy limits to each concentration type.

The Company’s loans to banking clients include $7.3 billion of adjustable rate first lien residential real estate mortgage loans at March 31, 2014. The Company’s adjustable rate mortgages have initial fixed interest rates for three to ten years and interest rates that adjust annually thereafter. Approximately 40% of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 65% of these interest-only loans are not scheduled to reset for three or more years. The Company’s mortgage loans do not include interest terms described as temporary introductory rates below

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

current market rates.At March 31, 2014,  46% of the residential real estate mortgages and 51% of the HELOC balances were secured by properties which are located in California.

The Company’s HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating rate based on the prime rate plus a margin. The following table presents when current outstanding HELOCs will convert to amortizing loans:

March 31, 2014	Balance
Converted to amortizing loan by period end	$	184
Within 1 year		221
> 1 year – 3 years		477
> 3 years – 5 years		1,203
> 5 years		933
Total	$	3,018

The Company also has exposure to concentration risk from its margin and securities lending activities collateralized by securities of a single issuer or within a single industry. This concentration risk is mitigated by collateral arrangements that require the fair value of such collateral exceeds the amounts loaned.

The Company has indirect exposure to U.S. Government and agency securities held as collateral to secure its resale agreements. The Company’s primary credit exposure on these resale transactions is with its counterparty. The Company would have exposure to the U.S. Government and agency securities only in the event of the counterparty’s default on the resale agreements. The fair value of U.S. Government and agency securities held as collateral for resale agreements totaled $12.0 billion at March 31, 2014.

European Holdings

The Company has exposure to non-sovereign financial and non-financial institutions in Europe. The following table shows the balances of this exposure by each country in Europe in which the issuer or counterparty is domiciled. The Company has no direct exposure to sovereign governments in Europe. The Company does not have unfunded commitments to counterparties in Europe, nor does it have exposure as a result of credit default protection purchased or sold separately as of March 31, 2014.

	Fair Value as of March 31, 2014
															United
	France		Germany		Italy		Netherlands		Norway		Sweden		Switzerland		Kingdom		Total
Cash equivalents	$	400	$	-	$	-	$	-	$	-	$	-	$	-	$	200	$	600
Cash and investments
segregated and on deposit
for regulatory purposes		-		400		-		-		-		-		-		-		400
Securities available for sale		356		150		200		236		75		1,298		650		846		3,811
Securities held to maturity		-		-		-		-		-		-		100		-		100
Total fair value	$	756	$	550	$	200	$	236	$	75	$	1,298	$	750	$	1,046	$	4,911
Total amortized cost	$	755	$	550	$	200	$	235	$	75	$	1,295	$	750	$	1,045	$	4,905
Maturities:
Overnight	$	400	$	400	$	-	$	-	$	-	$	-	$	-	$	200	$	1,000
1 day – < 6 months		-		-		-		100		-		100		-		159		359
6 months – < 1 year		200		150		100		-		-		526		100		152		1,228
1 year – 2 years		70		-		100		101		-		201		500		485		1,457
> 2 years		86		-		-		35		75		471		150		50		867
Total fair value	$	756	$	550	$	200	$	236	$	75	$	1,298	$	750	$	1,046	$	4,911

In addition to the direct holdings of European companies listed above, the Company also has indirect exposure to Europe through its investments in Schwab sponsored money market funds (collectively, the Funds) resulting from clearing activities.

39

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

At March 31, 2014, the Company had $208 million in investments in these Funds. Certain of the Funds’ positions include certificates of deposits, time deposits, commercial paper and corporate debt securities issued by counterparties in Europe.

Critical Accounting ESTIMATES

Certain of the Company’s accounting policies that involve a higher degree of judgment and complexity are discussed in “Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no changes to these critical accounting estimates during the first quarter of 2014.

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “estimate,” “appear,” “aim,” “target,” “could,” and other similar expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements, which reflect management’s beliefs, objectives, and expectations as of the date hereof, are necessarily estimates based on the best judgment of the Company’s senior management. These statements relate to, among other things:

· the impact of current market conditions on the Company’s results of operations (see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 3. Securities Available for Sale and Securities Held to Maturity,”“Current Market and Regulatory Environment and Other Developments,” and “Results of Operations – Net Interest Revenue”);

· the expected impact of the final regulatory capital rules, which implemented Basel III and relevant provisions of the Dodd-Frank Act, and the Federal Reserve notice of proposed rulemaking regarding quantitative liquidity requirements (see “Current Market and Regulatory Environment and Other Developments”);

· the impact of changes in the likelihood of indemnification and guarantee payment obligations on the Company’s results of operations (see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 5.Commitments and Contingencies”);

· the impact of legal proceedings and regulatory matters (see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 5. Commitments and Contingencies– Legal contingencies” and “Part II – Other Information – Item 1 – Legal Proceedings”);

· target capital and debt ratios (see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 9.Regulatory Requirements” and “Liquidity and Capital Resources”);

· sources of liquidity, capital, and level of dividends (see “Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 9. Regulatory Requirements” and “Liquidity and Capital Resources”);

· capital expenditures (see “Liquidity and Capital Resources – Capital Resources– Capital Expenditures”); and

· the impact of the revised underwriting criteria on the credit quality of the Company’s mortgage portfolio (see “Risk Management – Credit Risk Exposures”).

Achievement of the expressed beliefs, objectives, and expectations described in these statements is subject to certain risks and uncertainties that could cause actual results to differ materially from the expressed beliefs, objectives, and expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents incorporated by reference, as of the date of those documents.

Important factors that may cause actual results to differ include, but are not limited to:

· changes in general economic and financial market conditions;

· changes in revenues and profit margin due to changes in interest rates;

· the Company’s ability to attract and retain clients and grow client assets and relationships;

40

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

· the Company’s ability to develop and launch new products, services and capabilities in a timely and successful manner;

· fluctuations in client asset values due to changes in equity valuations;

· the Company’s ability to monetize client assets;

· the performance or valuation of securities available for sale and securities held to maturity;

· trading activity;

· the level of interest rates, including yields available on money market mutual fund eligible instruments;

· the adverse impact of financial reform legislation and related regulations;

· adverse developments in litigation or regulatory matters;

· amounts recovered on insurance policies;

· the extent of any charges associated with litigation and regulatory matters;

· the amount of loans to the Company’s brokerage and banking clients;

· the level of the Company’s stock repurchase activity;

· the level of brokerage client cash balances and deposits from banking clients;

· the availability and terms of external financing;

· capital needs and management;

· the level of field sales volume and related incentive compensation;

· level of expenses;

· the Company’s ability to manage expenses;

· regulatory guidance;

· the level of client assets, including cash balances;

· competitive pressures on rates and fees;

· acquisition integration costs;

· the timing and impact of changes in the Company’s level of investments in buildings, land, and leasehold improvements;

· potential breaches of contractual terms for which the Company has indemnification and guarantee obligations; and

· the extent to which past performance of the Company’s mortgage portfolio is indicative of future performance.

Certain of these factors, as well as general risk factors affecting the Company, are discussed in greater detail in “Part I –Item 1A – Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, and “Part II – Other Information – Item 1A – Risk Factors.”

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THE CHARLES SCHWAB CORPORATION

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential for changes in earnings or the value of financial instruments held by the Company as a result of fluctuations in interest rates, equity prices or market conditions.

The Company is exposed to interest rate risk primarily from changes in market interest rates on its interest-earning assets relative to changes in the costs of its funding sources that finance these assets. The majority of the Company’s interest-earning assets and interest-bearing liabilities are sensitive to changes in short-term interest rates. To a lesser degree, the Company is sensitive to changes in long-term interest rates through some of its investment portfolios. To manage the Company’s market risk related to interest rates, management utilizes simulation models, which include the net interest revenue sensitivity analysis described below.

Net interest revenue is affected by various factors, such as the distribution and composition of interest-earning assets and interest-bearing liabilities, the spread between yields earned on interest-earning assets and rates paid on interest-bearing liabilities, which may reprice at different times or by different amounts, and the spread between short and long-term interest rates. Interest-earning assets include residential real estate loans and mortgage-backed securities. These assets are sensitive to changes in interest rates and to changes to prepayment levels that tend to increase in a declining rate environment and decrease in a rising rate environment. Because the Company establishes the rates paid on certain brokerage client cash balances and deposits from banking clients and the rates charged on margin loans and loans to banking clients, and controls the composition of its investment securities, it has some ability to manage its net interest spread, depending on competitive factors and market conditions.

To mitigate the risk of loss, the Company has established policies and procedures which include setting guidelines on the amount of net interest revenue at risk, and monitoring the net interest margin and average maturity of its interest-earning assets and funding sources. To remain within these guidelines, the Company manages the maturity, repricing, and cash flow characteristics of the investment portfolios.

The Company is also subject to market risk as a result of fluctuations in option and equity prices. The Company’s direct holdings of option and equity securities and its associated exposure to option and equity prices are not material. The Company is indirectly exposed to option and equity market fluctuations in connection with client option accounts, securities collateralizing margin loans to brokerage customers, and customer securities loaned out as part of the Company’s securities lending activities. Equity market valuations may also affect the level of brokerage client trading activity, margin borrowing, and overall client engagement with the Company. Additionally, the Company earns mutual fund service fees and asset management fees based upon daily balances of certain client assets. Fluctuations in these client asset balances caused by changes in equity valuations directly impact the amount of fee revenue earned by the Company.

Financial instruments held by the Company are also subject to liquidity risk – that is, the risk that valuations will be negatively affected by changes in demand and the underlying market for a financial instrument. Recent conditions in the credit markets have significantly reduced market liquidity in a wide range of financial instruments, including the types of instruments held by the Company, and fair value can differ significantly from the value implied by the credit quality and actual performance of the instrument’s underlying cash flows.

For discussion of the impact of current market conditions on asset management and administration fees and net interest revenue, see “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Current Market and Regulatory Environment and Other Developments.”

The Company’s market risk related to financial instruments held for trading is not material.

Net Interest Revenue Simulation

For the Company’s net interest revenue sensitivity analysis, the Company uses net interest revenue simulation modeling techniques to evaluate and manage the effect of changing interest rates. The simulation includes all interest-sensitive assets and liabilities. Key variables in the simulation include the repricing of financial instruments, prepayment, reinvestment, and product pricing assumptions. The Company uses constant balances and market rates in the simulation assumptions in order to minimize the number of variables and to better isolate risks. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely estimate net interest revenue or predict the impact of changes in interest rates on

42

THE CHARLES SCHWAB CORPORATION

net interest revenue. Actual results may differ from simulated results due to balance growth or decline and the timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions and management strategies, including changes in asset and liability mix.

If the Company’s guidelines for its net interest revenue sensitivity are breached, management must report the breach to the Company’s Corporate Asset-Liability Management and Pricing Committee (Corporate ALCO) and establish a plan to address the interest rate risk. This plan could include, but is not limited to, rebalancing certain investment portfolios or using derivative instruments to mitigate the interest rate risk. Depending on the severity and expected duration of the breach, as well as the then current interest rate environment, the plan could also be to take no action. Any plan that recommends taking action is required to be approved by the Company’s Corporate ALCO. There were no breaches of the Company’s net interest revenue sensitivity guidelines during the first quarter of 2014 or year-ending December 31, 2013.

As represented by the simulations presented below, the Company’s investment strategy is structured to produce an increase in net interest revenue when interest rates rise and, conversely, a decrease in net interest revenue when interest rates fall.

The simulations in the following table assume that the asset and liability structure of the consolidated balance sheet would not be changed as a result of the simulated changes in interest rates. As the Company actively manages its consolidated balance sheet and interest rate exposure, in all likelihood the Company would take steps to manage any additional interest rate exposure that could result from changes in the interest rate environment. The following table shows the results of a gradual 100 basis point increase or decrease in market interest rates relative to the Company’s current market rates forecast on simulated net interest revenue over the next 12 months beginning March 31, 2014 and December 31, 2013.

	March 31,		December 31,
	2014		2013
Increase of 100 basis points	10.2	%	11.0	%
Decrease of 100 basis points	(4.4)	%	(4.5)	%

The sensitivities shown in the simulation reflect the fact that short-term interest rates in the first quarter of 2014 remained at historically low levels, including the federal funds target rate, which was unchanged at a range of zero to 0.25%. The current low interest rate environment limits the extent to which the Company can reduce interest expense paid on funding sources. A decline in interest rates could negatively impact the yield on the Company’s investment portfolio to a greater degree than any offsetting reduction in interest expense, further compressing net interest margin. Any increases in short-term interest rates result in a greater impact as yields on interest-earning assets are expected to rise faster than the cost of funding sources.

Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures: The management of the Company, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2014. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2014.

Changes in internal control over financial reporting: No change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) was identified during the quarter ended March 31, 2014, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

43

THE CHARLES SCHWAB CORPORATION

PART  II  -  OTHER  INFORMATION

Item 1.Legal Proceedings

For a discussion of legal proceedings, see “Part I – Financial Information – Item 1 – Condensed Consolidated Financial Statements (Unaudited) – Notes – 5. Commitments and Contingencies.”

Item 1A.Risk Factors

During the first quarter of 2014, there have been no material changes to the risk factors in “Part I – Item 1A – Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table summarizes purchases made by or on behalf of CSC of its common stock for each calendar month in the first quarter of 2014:

				Total Number	Approximate
				of Shares Purchased	Dollar Value of
	Total Number			as Part of Publicly	Shares that May
	of Shares	Average		Announced	Yet be Purchased
	Purchased	Price Paid		Program (1)	Under the Program
Month	(in thousands)	per Share		(in thousands)	(in millions)
January:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	5	$	25.84	N/A			N/A
February:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	9	$	24.98	N/A			N/A
March:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	219	$	25.99	N/A			N/A
Total:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	233	$	25.95	N/A			N/A

(1)

There were no share repurchases under the Share Repurchase Program during the first quarter. Repurchases under this program would occur under two authorizations by CSC’s Board of Directors, each covering up to $500 million of common stock that were publicly announced by the Company on April 25, 2007 and March 13, 2008. The remaining authorizations do not have an expiration date.

(2)

Includes restricted shares withheld (under the terms of grants under employee stock incentive plans) to offset tax withholding obligations that occur upon vesting and release of restricted shares. The Company may receive shares delivered or attested to pay the exercise price and/or to satisfy tax withholding obligations by employees who exercise stock options (granted under employee stock incentive plans), which are commonly referred to as stock swap exercises.

N/A Not applicable.

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THE CHARLES SCHWAB CORPORATION

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

Item 6.Exhibits

The following exhibits are filed as part of this Quarterly Report on Form 10-Q.

Exhibit Number	Exhibit
12.1	Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(1)
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(1)
101.INS	XBRL Instance Document	(2)
101.SCH	XBRL Taxonomy Extension Schema	(2)
101.CAL	XBRL Taxonomy Extension Calculation	(2)
101.DEF	XBRL Extension Definition	(2)
101.LAB	XBRL Taxonomy Extension Label	(2)
101.PRE	XBRL Taxonomy Extension Presentation	(2)
(1)	Furnished as an exhibit to this Quarterly Report on Form 10-Q.
(2)	Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014 are the following materials formatted in XBRL (Extensible Business Reporting Language) (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		THE CHARLES SCHWAB CORPORATION
		(Registrant)
Date:	May 7, 2014	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Executive Vice President and
		Chief Financial Officer

46

EX-12.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 12.1

Computation of Ratio of Earnings to Fixed Charges and

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(Dollar amounts in millions)

(Unaudited)

	Three Months Ended
	March 31,
	2014		2013
Earnings before taxes on earnings	$	522	$	331
Fixed charges
Interest expense:
Deposits from banking clients		7		10
Payables to brokerage clients		1		1
Long-term debt		18		17
Total		26		28
Interest portion of rental expense		18		17
Total fixed charges (A)		44		45
Earnings before taxes on earnings and fixed charges (B)	$	566	$	376
Ratio of earnings to fixed charges (B) ÷ (A)(1)		12.9		8.4
Ratio of earnings to fixed charges, excluding deposits from banking
clients and payables to brokerage clients interest expense(2)		15.5		10.7
Total fixed charges	$	44	$	45
Preferred stock dividends (3)		13		13
Total fixed charges and preferred stock dividends (C)	$	57	$	58
Ratio of earnings to fixed charges and preferred stock
dividends (B) ÷ (C) (1)		9.9		6.5
Ratio of earnings to fixed charges and preferred stock dividends,
excluding deposits from banking clients and payables to
brokerage clients interest expense (2)		11.4		7.8

(1)	The ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends are calculated in accordance with SEC requirements. For such purposes, “earnings” consist of earnings before taxes on earnings and fixed charges. “Fixed charges” consist of interest expense as listed above, and one-third of rental expense, which is estimated to be representative of the interestfactor.
(2)	Because interest expense incurred in connection with both deposits from banking clients and payables to brokerage clients is completely offset by interest revenue on related investments and loans, the Company considers such interest to be an operating expense. Accordingly, the ratio of earnings to fixed charges, excluding deposits from banking clients and payables to brokerage clients interest expense, and the ratio of earnings to fixed charges and preferred stock dividends, excluding deposits from banking clients and payables to brokerage clients interest expense, reflect the elimination of such interest expense as a fixed charge.
(3)	The preferred stock dividend amounts represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock.

EX-31.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a‑14(a)/15d‑14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter W. Bettinger II, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 7, 2014	/s/ Walter W. Bettinger II
		Walter W. Bettinger II
		President and Chief Executive Officer

EX-31.2

THE CHARLES SCHWAB CORPORATION

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a‑14(a)/15d‑14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph R. Martinetto, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 7, 2014	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Executive Vice President and Chief Financial Officer

EX-32.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended March 31, 2014 (the Report), I, Walter W. Bettinger II, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

/s/ Walter W. Bettinger II	Date:	May 7, 2014
Walter W. Bettinger II
President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

THE CHARLES SCHWAB CORPORATION

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended March 31, 2014 (the Report), I, Joseph R. Martinetto, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

/s/ Joseph R. Martinetto	Date:	May 7, 2014
Joseph R. Martinetto
Executive Vice President and
Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Loans to Banking Clients and Related Allowance for Loan Losses (Changes in Allowance for Loan Losses) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of year	$ 48	$ 56
Charge-offs	(2)	(4)
Recoveries	1	1
Provision for loan losses	1	6
Balance at end of year	48	59
Residential real estate mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of year	34	36
Charge-offs	(1)	(2)
Recoveries		1
Provision for loan losses		5
Balance at end of year	33	40
Home equity lines of credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of year	14	20
Charge-offs	(1)	(2)
Recoveries	1
Provision for loan losses	1	1
Balance at end of year	$ 15	$ 19

XML

Earnings Per Common Share (EPS under Basic and Diluted Computations) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Earnings Per Common Share [Abstract]
Net income	$ 326		$ 206
Preferred stock dividends	(8)		(8)
Net income available to common stockholders	$ 318		$ 198
Weighted-average common shares outstanding — basic	1,299		1,279
Common stock equivalent shares related to stock incentive plans	12		3
Weighted-average common shares outstanding — diluted	1,311	[1]	1,282	[1]
Basic EPS	$ 0.24		$ 0.15
Diluted EPS	$ 0.24		$ 0.15
Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS	17		45

[1] Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 17 million and 45 million shares for the first quarters of 2014 and 2013, respectively.

XML

Accumulated Other Comprehensive Income (Components of Other Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Change in net unrealized gain on Securities available for sale:
Net unrealized gain (loss)	$ 159	$ (3)
Reclassification of impairment charges included in net impairment losses on securities		4
Other reclassifications included in other revenue	(1)
Change in net unrealized gain on securities available for sale	158	1
Other		1
Other comprehensive income, before tax	158	2
Change in net unrealized gain on Securities available for sale:
Net unrealized gain (loss)	(59)	2
Reclassification of impairment charges included in net impairment losses on securities		(2)
Change in net unrealized gain on securities available for sale	(59)
Other comprehensive (loss) income, tax effect	(59)
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	100	(1)
Reclassification of impairment charges included in net impairment losses on securities		2
Other reclassifications included in other revenue	(1)
Change in net unrealized gain on securities available for sale	99	1
Other		1
Other comprehensive income, net of tax	$ 99	$ 2

XML

Securities Available for Sale and Securities Held to Maturity (Rollforward Amount of Credit Losses Recognized in Earnings for OTTI Securities for Portion of Impairment Recognized in or Reclassified From Other Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Dec. 31, 2013
Securities Available for Sale and Securities Held to Maturity [Abstract]
Balance at beginning of year	$ 159	$ 169	$ 169
Credit losses recognized into current period earnings on debt securities for which an other-than-temporary impairment was previously recognized	4
Balance at end of year	$ 163	$ 169	$ 169

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Information [Abstract]

Financial Information for Reportable Segments

	Investor Services				Advisor Services				Unallocated				Total
Three Months Ended March 31,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	428	$	387	$	183	$	165	$	-	$	-	$	611	$	552
Net interest revenue		495		413		58		56		-		-		553		469
Trading revenue		171		149		76		74		-		-		247		223
Other		51		42		17		14		-		-		68		56
Provision for loan losses		(1)		(5)		-		(1)		-		-		(1)		(6)
Net impairment losses on securities		-		(4)		-		-		-		-		-		(4)
Total net revenues		1,144		982		334		308		-		-		1,478		1,290
Expenses Excluding Interest		738		751		218		208		-		-		956		959
Income before taxes on income	$	406	$	231	$	116	$	100	$	-	$	-	$	522	$	331
Taxes on income														196		125
Net Income													$	326	$	206

XML

Regulatory Requirements (Regulatory Capital and Ratios) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Tier 1 Risk-Based Capital
Actual Amount	$ 7,026
Minimum Capital Requirement Amount	1,396
Minimum to be Well Capitalized Amount	2,094
Actual Ratio	20.10%
Minimum Capital Requirement Ratio	4.00%
Minimum to be Well Capitalized Ratio	6.00%
Total Risk-Based Capital
Actual Amount	7,074
Minimum Capital Requirement Amount	2,792
Minimum to be Well Capitalized Amount	3,490
Actual Ratio	20.30%
Minimum Capital Requirement Ratio	8.00%
Minimum to be Well Capitalized Ratio	10.00%
Tier 1 Leverage
Actual Amount	7,026
Minimum Capital Requirement Amount	4,126
Minimum to be Well Capitalized Amount	5,157
Actual Ratio	6.80%
Minimum Capital Requirement Ratio	4.00%
Minimum to be Well Capitalized Ratio	5.00%
Tangible Equity
Actual Amount	7,026
Minimum Capital Requirement Amount	$ 2,063
Actual Ratio	6.80%
Minimum Capital Requirement Ratio	2.00%

XML

Commitments and Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014 Standby letters of credit [Member]	Mar. 31, 2014 Performance Guarantee [Member]	Aug. 28, 2008 Bond Market Fund Litigation [Member]	Mar. 31, 2014 Margin Requirements [Member]
Commitments and Contingencies Disclosure [Line Items]
Aggregate face amount of letter of credit agreements	$ 240
Funds drawn under LOC's				0
Alleged minimum percentage of fund assets invested in CMOs and mortgage-backed securities without obtaining shareholder vote			25.00%
Liability for guarantees		$ 0

XML

Loans to Banking Clients and Related Allowance for Loan Losses (Narrative) (Details) (USD $)			3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 First Mortgage [Member]	Mar. 31, 2013 First Mortgage [Member]	Mar. 31, 2014 Home equity lines of credit [Member]	Mar. 31, 2013 Home equity lines of credit [Member]
Loans Receivable [Line Items]
Commitments to extend credit related to unused home equity lines of credit, personal loans secured by securities, and other lines of credit	$ 5,900,000,000	$ 5,700,000,000
Total nonaccrual loans	40,000,000	48,000,000
Loans accruing interest contractually 90 days or more past due	0	0
Nonperforming assets, including nonaccrual loans and other real estate owned	46,000,000	53,000,000
Purchased first mortgages and HELOCs			$ 286,000,000	$ 1,300,000,000	$ 172,000,000	$ 218,000,000

XML

Segment Information (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014 segment
Segment Information [Abstract]
Number of reportable segments	2

XML

Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Balances) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	$ 9	$ 298
Other net changes	99	2
Ending Balance	108	300
Net Unrealized Gain On Securities Available For Sale [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	9	299
Other net changes	99	1
Ending Balance	108	300
Other [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance		(1)
Other net changes		$ 1

XML

New Accounting Standard

3 Months Ended

Mar. 31, 2014

New Accounting Standard [Abstract]

New Accounting Standard

2.New Accounting Standard

New Accounting Standard Not Yet Adopted

In January 2014, the Financial Accounting Standards Board issued new guidance for creditors of consumer mortgage loans, which is effective January 1, 2015. The guidance clarifies when physical possession of a property underlying a consumer mortgage loan transfers to the creditor, and therefore when a loan receivable should be derecognized and the real estate property underlying the loan should be recognized. The adoption of this new guidance is not expected to have a material impact on the Company’s financial position, results of operations, earnings per common share (EPS), or cash flows.

XML

Fair Values of Assets and Liabilities (Narrative) (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Values of Assets and Liabilities [Abstract]
Fair value of client securities pledged in securities lending transactions to other broker-dealers	$ 1,400,000,000	$ 1,100,000,000
Fair value of borrowed securities from other broker-dealers to fulfill short sales by clients	$ 142,000,000	$ 276,000,000

XML

Securities Available for Sale and Securities Held to Maturity (Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Held to Maturity) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	$ 32,123		$ 30,318
Securities held to maturity Gross Unrealized Gains	220		161
Securities held to maturity Gross Unrealized Losses	674		989
Securities held to maturity, fair value	31,669		29,490
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	31,066		29,260
Securities held to maturity Gross Unrealized Gains	219		161
Securities held to maturity Gross Unrealized Losses	627		921
Securities held to maturity, fair value	30,658	[1]	28,500
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	957		958
Securities held to maturity Gross Unrealized Gains	1
Securities held to maturity Gross Unrealized Losses	47		68
Securities held to maturity, fair value	911	[1]	890
Other securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	100		100
Securities held to maturity, fair value	$ 100		$ 100

[1] Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

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Securities Available for Sale and Securities Held to Maturity (Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Available for Sale) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	$ 52,908		$ 51,604
Securities available for sale Gross Unrealized Gains	338		255
Securities available for sale Gross Unrealized Losses	166		241
Securities available for sale	53,080		51,618
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	18,404		18,554
Securities available for sale Gross Unrealized Gains	168		140
Securities available for sale Gross Unrealized Losses	38		49
Securities available for sale	18,534	[1]	18,645
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	16,642		15,201
Securities available for sale Gross Unrealized Gains	91		42
Securities available for sale Gross Unrealized Losses	8		37
Securities available for sale	16,725		15,206
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	9,043		8,973
Securities available for sale Gross Unrealized Gains	53		49
Securities available for sale Gross Unrealized Losses	9		15
Securities available for sale	9,087		9,007
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	4,490		4,239
Securities available for sale Gross Unrealized Gains	1		1
Securities available for sale Gross Unrealized Losses	81		104
Securities available for sale	4,410		4,136
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	3,424		3,650
Securities available for sale Gross Unrealized Gains	4		4
Securities available for sale Gross Unrealized Losses	2		2
Securities available for sale	3,426		3,652
Non-agency residential mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	593		616
Securities available for sale Gross Unrealized Gains	13		11
Securities available for sale Gross Unrealized Losses	28		34
Securities available for sale	578	[1]	593
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	312		271
Securities available for sale Gross Unrealized Gains	8		8
Securities available for sale	320	[1]	279
Other securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost			100
Securities available for sale			$ 100

[1] Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

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Fair Values of Assets and Liabilities (Fair Value Hierarchy for Assets Measured at Fair Value) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	$ 456	$ 517
Securities available for sale	53,080	51,618
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,051	1,163
Investments segregated and on deposit for regulatory purposes	4,418	5,276
Other securities owned	456	517
Securities available for sale	53,080	51,618
Total	59,005	58,574
Fair Value, Measurements, Recurring [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,037	1,141
Fair Value, Measurements, Recurring [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	14	22
Fair Value, Measurements, Recurring [Member] | Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	3,493	2,737
Securities available for sale	3,426	3,652
Fair Value, Measurements, Recurring [Member] | U.S. Government securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	925	2,539
Fair Value, Measurements, Recurring [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	208	261
Fair Value, Measurements, Recurring [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	200	208
Fair Value, Measurements, Recurring [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	33	32
Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	15	16
Fair Value, Measurements, Recurring [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	18,534	18,645
Fair Value, Measurements, Recurring [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	16,725	15,206
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	9,087	9,007
Fair Value, Measurements, Recurring [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	4,410	4,136
Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	578	593
Fair Value, Measurements, Recurring [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	320	279
Fair Value, Measurements, Recurring [Member] | Other securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale		100
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,037	1,141
Other securities owned	409	470
Total	1,446	1,611
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,037	1,141
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	208	261
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	200	208
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	1	1
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	14	22
Investments segregated and on deposit for regulatory purposes	4,418	5,276
Other securities owned	47	47
Securities available for sale	53,080	51,618
Total	57,559	56,963
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	14	22
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	3,493	2,737
Securities available for sale	3,426	3,652
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Government securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	925	2,539
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	33	32
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	14	15
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	18,534	18,645
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	16,725	15,206
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	9,087	9,007
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	4,410	4,136
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	578	593
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	320	279
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Other securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale		$ 100

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Securities Available for Sale and Securities Held to Maturity (Available For Sale Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014 security	Dec. 31, 2013 security
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	$ 14,204	$ 16,962
Securities available for sale Less than 12 months Unrealized Losses	132	200
Securities available for sale 12 months or longer Fair Value	1,795	1,856
Securities available for sale 12 months or longer Unrealized Losses	34	41
Total Securities available for sale with unrealized losses Total Fair Value	15,999	18,818
Total Securities available for sale with unrealized losses Total Unrealized Losses	166	241
Number of available for sale securities in unrealized loss positions	264	273
U.S. agency mortgage-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	6,119	5,044
Securities available for sale Less than 12 months Unrealized Losses	37	47
Securities available for sale 12 months or longer Fair Value	176	93
Securities available for sale 12 months or longer Unrealized Losses	1	2
Total Securities available for sale with unrealized losses Total Fair Value	6,295	5,137
Total Securities available for sale with unrealized losses Total Unrealized Losses	38	49
Asset-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	1,887	6,391
Securities available for sale Less than 12 months Unrealized Losses	5	33
Securities available for sale 12 months or longer Fair Value	769	591
Securities available for sale 12 months or longer Unrealized Losses	3	4
Total Securities available for sale with unrealized losses Total Fair Value	2,656	6,982
Total Securities available for sale with unrealized losses Total Unrealized Losses	8	37
Corporate debt securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	1,180	1,802
Securities available for sale Less than 12 months Unrealized Losses	8	14
Securities available for sale 12 months or longer Fair Value	400	499
Securities available for sale 12 months or longer Unrealized Losses	1	1
Total Securities available for sale with unrealized losses Total Fair Value	1,580	2,301
Total Securities available for sale with unrealized losses Total Unrealized Losses	9	15
U.S. agency notes [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	3,909	3,636
Securities available for sale Less than 12 months Unrealized Losses	81	104
Total Securities available for sale with unrealized losses Total Fair Value	3,909	3,636
Total Securities available for sale with unrealized losses Total Unrealized Losses	81	104
Certificates of deposit [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	1,050
Securities available for sale 12 months or longer Fair Value	98	299
Securities available for sale 12 months or longer Unrealized Losses	2	2
Total Securities available for sale with unrealized losses Total Fair Value	1,148	299
Total Securities available for sale with unrealized losses Total Unrealized Losses	2	2
Non-agency residential mortgage-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	59	89
Securities available for sale Less than 12 months Unrealized Losses	1	2
Securities available for sale 12 months or longer Fair Value	352	374
Securities available for sale 12 months or longer Unrealized Losses	27	32
Total Securities available for sale with unrealized losses Total Fair Value	411	463
Total Securities available for sale with unrealized losses Total Unrealized Losses	$ 28	$ 34

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Securities Available for Sale and Securities Held to Maturity (Held To Maturity Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014 security	Dec. 31, 2013 security
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	$ 15,591	$ 19,805
Securities held to maturity Less than 12 months Unrealized Losses	461	741
Securities held to maturity 12 months or longer Fair Value	2,929	2,605
Securities held to maturity 12 months or longer Unrealized Losses	213	248
Total Securities held to maturity with unrealized losses Total Fair Value	18,520	22,410
Total Securities held to maturity with unrealized losses Total Unrealized Losses	674	989
Number of held to maturity securities in unrealized loss positions	154	193
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	15,147	19,175
Securities held to maturity Less than 12 months Unrealized Losses	438	698
Securities held to maturity 12 months or longer Fair Value	2,591	2,345
Securities held to maturity 12 months or longer Unrealized Losses	189	223
Total Securities held to maturity with unrealized losses Total Fair Value	17,738	21,520
Total Securities held to maturity with unrealized losses Total Unrealized Losses	627	921
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	444	630
Securities held to maturity Less than 12 months Unrealized Losses	23	43
Securities held to maturity 12 months or longer Fair Value	338	260
Securities held to maturity 12 months or longer Unrealized Losses	24	25
Total Securities held to maturity with unrealized losses Total Fair Value	782	890
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 47	$ 68

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Introduction and Basis of Presentation

3 Months Ended

Mar. 31, 2014

Introduction and Basis of Presentation [Abstract]

Introduction and Basis of Presentation

1.Introduction and Basis of Presentation

The Charles Schwab Corporation (CSC) is a savings and loan holding company engaged, through its subsidiaries, in securities brokerage, banking, money management, and financial advisory services. Charles Schwab & Co., Inc. (Schwab) is a securities broker-dealer with over300 domestic branch offices in45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, England. In addition, Schwab serves clients in Hong Kong through one of CSC’s subsidiaries. Other subsidiaries include Charles Schwab Bank (Schwab Bank), a federal savings bank, and Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds, which are referred to as the Schwab Funds®, and for Schwab’s exchange-traded funds, which are referred to as the Schwab ETFs™.

The accompanying unaudited condensed consolidated financial statements include CSC and its majority-owned subsidiaries (collectively referred to as the Company). Intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (U.S.), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements. Certain estimates relate to other-than-temporary impairment of securities available for sale and securities held to maturity, valuation of goodwill, allowance for loan losses, and legal and regulatory reserves. Actual results may differ from those estimates. These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These adjustments are of a normal recurring nature. The Company’s results for any interim period are not necessarily indicative of results for a full year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The Company’s significant accounting policies are included in note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes to these accounting policies during the first quarter of 2014.

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Securities Available for Sale and Securities Held to Maturity (Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Securities Available for Sale and Securities Held to Maturity [Abstract]
Securities available for sale Less than 12 months Fair Value	$ 14,204		$ 16,962
Securities available for sale Less than 12 months Unrealized Losses	132		200
Securities available for sale 12 months or longer Fair Value	1,795		1,856
Securities available for sale 12 months or longer Unrealized Losses	34		41
Total Securities available for sale with unrealized losses Total Fair Value	15,999		18,818
Total Securities available for sale with unrealized losses Total Unrealized Losses	166		241
Securities held to maturity Less than 12 months Fair Value	15,591		19,805
Securities held to maturity Less than 12 months Unrealized Losses	461		741
Securities held to maturity 12 months or longer Fair Value	2,929		2,605
Securities held to maturity 12 months or longer Unrealized Losses	213		248
Total Securities held to maturity with unrealized losses Total Fair Value	18,520		22,410
Total Securities held to maturity with unrealized losses Total Unrealized Losses	674		989
Securities Less than 12 months Fair Value	29,795	[1]	36,767	[2]
Securities Less than 12 months Unrealized Losses	593	[1]	941	[2]
Securities 12 months or longer Fair Value	4,724	[1]	4,461	[2]
Securities 12 months or longer Unrealized Losses	247	[1]	289	[2]
Total securities with unrealized losses Total Fair Value	34,519	[1]	41,228	[2]
Total securities with unrealized losses Total Unrealized Losses	$ 840	[1]	$ 1,230	[2]

[1] The number of investment positions with unrealized losses totaled 264 for securities available for sale and 154 for securities held to maturity.

[2] The number of investment positions with unrealized losses totaled 273 for securities available for sale and 193 for securities held to maturity.

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Loans to Banking Clients and Related Allowance for Loan Losses (Delinquency Analysis by Loan Class) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 12,583	$ 12,407
30-59 days past due	13	6
60-89 days past due	3	6
>90 days past due and other nonaccrual loans	40	48
Total past due	56	60
Total loans	12,639	12,467
Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	7,856	7,808
30-59 days past due	6	3
60-89 days past due	2	4
>90 days past due and other nonaccrual loans	25	30
Total past due	33	37
Total loans	7,889	7,845
Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	155	154
30-59 days past due	1	1
>90 days past due and other nonaccrual loans	5	6
Total past due	6	7
Total loans	161	161
Home equity lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,004	3,025
30-59 days past due	3	2
60-89 days past due	1	2
>90 days past due and other nonaccrual loans	10	12
Total past due	14	16
Total loans	3,018	3,041
Personal loans secured by securities [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,533	1,384
30-59 days past due	3
Total past due	3
Total loans	1,536	1,384
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	35	36
Total loans	$ 35	$ 36

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Segment Information (Financial Information for Reportable Segments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net Revenues:
Asset management and administration fees	$ 611	$ 552
Net interest revenue	553	469
Trading revenue	247	223
Other	68	56
Provision for loan losses	(1)	(6)
Net impairment losses on securities		(4)	[1]
Total net revenues	1,478	1,290
Expenses Excluding Interest	956	959
Income before taxes on income	522	331
Taxes on income	196	125
Net Income	326	206
Investor Services [Member]
Net Revenues:
Asset management and administration fees	428	387
Net interest revenue	495	413
Trading revenue	171	149
Other	51	42
Provision for loan losses	(1)	(5)
Net impairment losses on securities		(4)
Total net revenues	1,144	982
Expenses Excluding Interest	738	751
Income before taxes on income	406	231
Advisor Services [Member]
Net Revenues:
Asset management and administration fees	183	165
Net interest revenue	58	56
Trading revenue	76	74
Other	17	14
Provision for loan losses		(1)
Total net revenues	334	308
Expenses Excluding Interest	218	208
Income before taxes on income	$ 116	$ 100

[1] There were no net impairment losses on securities for the three months ended March 31, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $0 million recognized in other comprehensive income, net of $(4) million reclassified from other comprehensive income, for the three months ended March 31, 2013.

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Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Net Revenues:
Asset management and administration fees	$ 611		$ 552
Interest revenue	579		497
Interest expense	(26)		(28)
Net interest revenue	553		469
Trading revenue	247		223
Other	68		56
Provision for loan losses	(1)		(6)
Net impairment losses on securities			(4)	[1]
Total net revenues	1,478		1,290
Expenses Excluding Interest
Compensation and benefits	528		536
Professional services	106		99
Occupancy and equipment	80		77
Advertising and market development	63		74
Communications	56		54
Depreciation and amortization	48		51
Other	75		68
Total expenses excluding interest	956		959
Income before taxes on income	522		331
Taxes on income	196		125
Net Income	326		206
Preferred stock dividends	8		8
Net Income Available to Common Stockholders	$ 318		$ 198
Weighted-Average Common Shares Outstanding - Diluted	1,311	[2]	1,282	[2]
Earnings Per Common Share - Basic	$ 0.24		$ 0.15
Earnings Per Common Share - Diluted	$ 0.24		$ 0.15

[1] There were no net impairment losses on securities for the three months ended March 31, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $0 million recognized in other comprehensive income, net of $(4) million reclassified from other comprehensive income, for the three months ended March 31, 2013.

[2] Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 17 million and 45 million shares for the first quarters of 2014 and 2013, respectively.

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Fair Values of Assets and Liabilities (Fair Value Hierarchy for Financial Instruments Not Recorded at Fair Value) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013	Dec. 31, 2012
Assets:
Securities held to maturity	$ 31,669		$ 29,490
Liabilities:
Allowance for loan losses	48		48		59	56
Residential real estate mortgages [Member]
Liabilities:
Allowance for loan losses	33		34		40	36
Home equity lines of credit [Member]
Liabilities:
Allowance for loan losses	15		14		19	20
Carrying Amount [Member]
Assets:
Cash and cash equivalents	6,122		6,565
Cash and investments segregated and on deposit for regulatory purposes	16,127		18,273
Receivables from brokers, dealers, and clearing organizations	482		509
Receivables from brokerage clients - net	14,566		13,949
Securities held to maturity	32,123		30,318
Loans to banking clients	12,639	[1]	12,467	[2]
Other assets	71		64
Total	82,130		82,145
Liabilities:
Deposits from banking clients	95,591		92,972
Payables to brokers, dealers, and clearing organizations	1,918		1,467
Payables to brokerage clients	32,308		35,333
Accrued expenses and other liabilities	607		680
Long-term debt	1,902		1,903
Total	132,326		132,355
Carrying Amount [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	8,050	[1]	8,006	[2]
Carrying Amount [Member] | Home equity lines of credit [Member]
Assets:
Loans to banking clients	3,018	[1]	3,041	[2]
Carrying Amount [Member] | Personal loans secured by securities [Member]
Assets:
Loans to banking clients	1,536	[1]	1,384	[2]
Carrying Amount [Member] | Other [Member]
Assets:
Loans to banking clients	35	[1]	36	[2]
Carrying Amount [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	31,066		29,260
Carrying Amount [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	957		958
Carrying Amount [Member] | Other securities [Member]
Assets:
Securities held to maturity	100		100
Fair Value [Member]
Assets:
Cash and cash equivalents	6,122		6,565
Cash and investments segregated and on deposit for regulatory purposes	16,127		18,273
Receivables from brokers, dealers, and clearing organizations	482		509
Receivables from brokerage clients - net	14,566		13,949
Securities held to maturity	31,669		29,490
Loans to banking clients	12,650	[1]	12,392	[2]
Other assets	71		64
Total	81,687		81,242
Liabilities:
Deposits from banking clients	95,591		92,972
Payables to brokers, dealers, and clearing organizations	1,918		1,467
Payables to brokerage clients	32,308		35,333
Accrued expenses and other liabilities	607		680
Long-term debt	1,995		1,989
Total	132,419		132,441
Fair Value [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	7,900	[1]	7,930	[2]
Fair Value [Member] | Home equity lines of credit [Member]
Assets:
Loans to banking clients	3,180	[1]	3,043	[2]
Fair Value [Member] | Personal loans secured by securities [Member]
Assets:
Loans to banking clients	1,536	[1]	1,384	[2]
Fair Value [Member] | Other [Member]
Assets:
Loans to banking clients	34	[1]	35	[2]
Fair Value [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	30,658		28,500
Fair Value [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	911		890
Fair Value [Member] | Other securities [Member]
Assets:
Securities held to maturity	100		100
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets:
Cash and cash equivalents	6,122		6,565
Cash and investments segregated and on deposit for regulatory purposes	16,127		18,273
Receivables from brokers, dealers, and clearing organizations	482		509
Receivables from brokerage clients - net	14,566		13,949
Securities held to maturity	31,669		29,490
Loans to banking clients	12,650	[1]	12,392	[2]
Other assets	71		64
Total	81,687		81,242
Liabilities:
Deposits from banking clients	95,591		92,972
Payables to brokers, dealers, and clearing organizations	1,918		1,467
Payables to brokerage clients	32,308		35,333
Accrued expenses and other liabilities	607		680
Long-term debt	1,995		1,989
Total	132,419		132,441
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	7,900	[1]	7,930	[2]
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Home equity lines of credit [Member]
Assets:
Loans to banking clients	3,180	[1]	3,043	[2]
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Personal loans secured by securities [Member]
Assets:
Loans to banking clients	1,536	[1]	1,384	[2]
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other [Member]
Assets:
Loans to banking clients	34	[1]	35	[2]
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	30,658		28,500
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	911		890
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other securities [Member]
Assets:
Securities held to maturity	$ 100		$ 100

[1] The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at March 31, 2014.

[2] The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at December 31, 2013.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets [Abstract]
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$ 11,776	$ 14,016
Securities held to maturity, fair value	31,669	29,490
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, aggregate liquidation preference	$ 885	$ 885
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	1,487,543,446	1,487,543,446
Treasury stock, shares	186,648,711	190,657,263

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Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Held to Maturity) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Within 1 year	$ 100
Securities held to maturity After 1 year through 5 years	609
Securities held to maturity After 5 years through 10 years	13,380
Securities held to maturity After 10 years	17,580
Securities held to maturity, fair value	31,669		29,490
Securities held to maturity Within 1 year amortized cost	100
Securities held to maturity After 1 year through 5 years amortized cost	601
Securities held to maturity After 5 years through 10 years amortized cost	13,717
Securities held to maturity After 10 years amortized cost	17,705
Securities held to maturity	32,123		30,318
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Within 1 year		[1]
Securities held to maturity After 1 year through 5 years	609	[1]
Securities held to maturity After 5 years through 10 years	13,036	[1]
Securities held to maturity After 10 years	17,013	[1]
Securities held to maturity, fair value	30,658	[1]	28,500
Securities held to maturity	31,066		29,260
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity After 5 years through 10 years	344	[1]
Securities held to maturity After 10 years	567	[1]
Securities held to maturity, fair value	911	[1]	890
Securities held to maturity	957		958
Other securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Within 1 year	100
Securities held to maturity, fair value	100		100
Securities held to maturity	$ 100		$ 100

[1] Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income [Abstract]

Components of Other Comprehensive Income

Three Months Ended March 31,			2014						2013
	Before		Tax			Net of	Before		Tax			Net of
	tax		effect			tax	tax		effect			tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	159	$	(59)	$	100	$	(3)	$	2	$	(1)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		4		(2)		2
Other reclassifications included in
other revenue		(1)		-		(1)		-		-		-
Change in net unrealized gain on
securities available for sale		158		(59)		99		1		-		1
Other		-		-		-		1		-		1
Other comprehensive income	$	158	$	(59)	$	99	$	2	$	-	$	2

Accumulated Other Comprehensive Income Balances

	Net unrealized						Total
	gain on securities						accumulated other
	available for sale			Other			comprehensive income
Balance at December 31, 2012		$	299		$	(1)		$	298
Other net changes			1			1			2
Balance at March 31, 2013		$	300		$	-		$	300
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			99			-			99
Balance at March 31, 2014		$	108		$	-		$	108

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Securities Available for Sale and Securities Held to Maturity (Proceeds and Gross Realized Gains from Sales of Securities Available for Sale) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Securities Available for Sale and Securities Held to Maturity [Abstract]
Proceeds	$ 1,285
Gross realized gains	$ 1

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Regulatory Requirements (Tables)

3 Months Ended

Mar. 31, 2014

Regulatory Requirements [Abstract]

Regulatory Capital and Ratios

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,026	20.1	%	$	2,094	6.0	%	$	1,396	4.0	%
Total Risk-Based Capital	$	7,074	20.3	%	$	3,490	10.0	%	$	2,792	8.0	%
Tier 1 Leverage	$	7,026	6.8	%	$	5,157	5.0	%	$	4,126	4.0	%
Tangible Equity	$	7,026	6.8	%		N/A			$	2,063	2.0	%

N/A Not applicable.

Net Capital and Net Capital Requirements for Schwab and optionsXpress, Inc.

											Net Capital		Net Capital
			% of			Minimum		2% of			in Excess of		in Excess of 5%
			Aggregate			Net Capital		Aggregate			Required		of Aggregate
	Net Capital		Debit Balances			Required		Debit Balances			Net Capital		Debit Balances
Schwab	$	1,548		10	%	$	0.250		$	305	$	1,243		$	786
optionsXpress, Inc.	$	112		32	%	$	1		$	7	$	105		$	94

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Condensed Consolidated Statement of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows from Operating Activities
Net income	$ 326	$ 206
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses	1	6
Net impairment losses on securities		4	[1]
Stock-based compensation	29	37
Depreciation and amortization	48	51
Premium amortization, net, on securities available for sale and securities held to maturity	27	44
Other	2	7
Net change in:
Cash and investments segregated and on deposit for regulatory purposes	3,005	1,572
Receivables from brokers, dealers, and clearing organizations	29	(134)
Receivables from brokerage clients	(622)	1,003
Other securities owned	61	91
Other assets	(24)	(29)
Payables to brokers, dealers, and clearing organizations	293	84
Payables to brokerage clients	(3,025)	(3,442)
Accrued expenses and other liabilities	(81)	132
Net cash provided by (used for) operating activities	69	(368)
Cash Flows from Investing Activities
Purchases of securities available for sale	(4,250)	(6,703)
Proceeds from sales of securities available for sale	1,285
Principal payments on securities available for sale	1,738	3,997
Purchases of securities held to maturity	(2,271)	(6,031)
Principal payments on securities held to maturity	520	1,279
Net increase in loans to banking clients	(171)	(530)
Purchase of equipment, office facilities, and property	(53)	(49)
Other investing activities	(8)	2
Net cash used for investing activities	(3,210)	(8,035)
Cash Flows from Financing Activities
Net change in deposits from banking clients	2,619	3,047
Repayment of commercial paper		(300)
Repayment of long-term debt	(2)	(2)
Dividends paid	(100)	(98)
Proceeds from stock options exercised and other	65	25
Other financing activities	4	(1)
Net cash provided by financing activities	2,586	2,671
Decrease in Cash and Cash Equivalents	(555)	(5,732)
Cash and Cash Equivalents at Beginning of Period	7,728	12,663
Cash and Cash Equivalents at End of Period	7,173	6,931
Cash paid during the period for:
Interest	40	40
Income taxes	51	35
Non-cash investing activity:
Securities purchased during the period but settled after period end	$ 158

[1] There were no net impairment losses on securities for the three months ended March 31, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $0 million recognized in other comprehensive income, net of $(4) million reclassified from other comprehensive income, for the three months ended March 31, 2013.

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Condensed Consolidated Statements of Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Condensed Consolidated Statements of Income [Abstract]
Total other-than-temporary impairment losses	$ 0
Impairment losses reclassified from other comprehensive income	$ (4)

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Segment Information

3 Months Ended

Mar. 31, 2014

Segment Information [Abstract]

Segment Information

10.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services to individual investors, retirement plan services, and corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services to independent investment advisors, and retirement business services to independent retirement plan advisors and recordkeepers whose plan assets are held at Schwab Bank. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The Company evaluates the performance of its segments on a pre-tax basis, excluding extraordinary or significant non-recurring itemsand results of discontinued operations. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

Financial information for the Company’s reportable segments is presented in the following table:

	Investor Services				Advisor Services				Unallocated				Total
Three Months Ended March 31,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	428	$	387	$	183	$	165	$	-	$	-	$	611	$	552
Net interest revenue		495		413		58		56		-		-		553		469
Trading revenue		171		149		76		74		-		-		247		223
Other		51		42		17		14		-		-		68		56
Provision for loan losses		(1)		(5)		-		(1)		-		-		(1)		(6)
Net impairment losses on securities		-		(4)		-		-		-		-		-		(4)
Total net revenues		1,144		982		334		308		-		-		1,478		1,290
Expenses Excluding Interest		738		751		218		208		-		-		956		959
Income before taxes on income	$	406	$	231	$	116	$	100	$	-	$	-	$	522	$	331
Taxes on income														196		125
Net Income													$	326	$	206

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 24, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	SCHW
Entity Registrant Name	SCHWAB CHARLES CORP
Entity Central Index Key	0000316709
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,301,140,339

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

11.Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to March 31, 2014, through the date the condensed consolidated financial statements were filed with the SEC. Based on this evaluation, other than as recorded or disclosed within these condensed consolidated financial statements and related notes, the Company has determined none of these events were required to be recognized or disclosed.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 326	$ 206
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	159	(3)
Reclassification of impairment charges included in net impairment losses on securities		4
Other reclassifications included in other revenue	(1)
Other		1
Other comprehensive income, before tax	158	2
Income tax effect	(59)
Other comprehensive income, net of tax	99	2
Comprehensive Income	$ 425	$ 208

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

5.Commitments and Contingencies

The Company has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. The Company partially satisfies the margin requirements by arranging unsecured standby letter of credit agreements (LOCs), in favor of the Options Clearing Corporation, which are issued by multiple banks. At March 31, 2014, the aggregate face amount of these LOCs totaled $240 million. There were no funds drawn under any of these LOCs at March 31, 2014. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

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

The Company believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are certain matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear that the outcome of any such matter could be material to the financial condition, operating results or cash flows of the Company. However, predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; potential opportunities for settlement and the status of any settlement discussions; and potential insurance coverage and indemnification. Often, as in the case of the Auction Rate Securities Regulatory Inquiries and Total Bond Market Fund Litigation matters described below, it is not possible to reasonably estimate potential liability, if any, or a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Auction Rate Securities Regulatory Inquiries: Schwab has been responding to industry wide inquiries from federal and state regulators regarding sales of auction rate securities to clients who were unable to sell their holdings when the normal auction process for those securities froze unexpectedly in February 2008. On August 17, 2009, a civil complaint was filed against Schwab in New York state court by the Attorney General of the State of New York (NYAG) alleging material misrepresentations and omissions by Schwab regarding the risks of auction rate securities, and seeking restitution, disgorgement, penalties and other relief, including repurchase of securities held in client accounts. As reflected in a statement issued August 17, 2009, Schwab has responded that the allegations are without merit, and has been contesting all charges. By order dated October 24, 2011, the court granted Schwab’s motion to dismiss the complaint with prejudice. The NYAG appealed, and in a decision issued August 29, 2013, the Appellate Division reinstated two of the NYAG’s four causes of action. A petition by the NYAG for reconsideration of part of the Appellate Division’s decision was denied, and the NYAG has now filed notice with the trial court of its intention to proceed on the remaining two causes of action.

Total Bond Market Fund Litigation: On August 28, 2008, a class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of investors in the Schwab Total Bond Market Fund™ (Northstar lawsuit). The lawsuit, which alleges violations of state law and federal securities law in connection with the fund’s investment policy, names Schwab Investments (registrant and issuer of the fund’s shares) and CSIM as defendants. Allegations include that the fund improperly deviated from its stated investment objectives by investing in collateralized mortgage obligations (CMOs) and investing more than 25% of fund assets in CMOs and mortgage-backed securities without obtaining a shareholder vote. Plaintiffs seek unspecified compensatory and rescission damages, unspecified equitable and injunctive relief, costs and attorneys’ fees. Plaintiffs’ federal securities law claim and certain of plaintiffs’ state law claims were dismissed in proceedings before the court and following a successful petition by defendants to the Ninth Circuit Court of Appeals. On August 8, 2011, the court dismissed plaintiffs’ remaining claims with prejudice. Plaintiffs have again appealed to the Ninth Circuit, where the case is currently pending.

Other Regulatory Matters:  A subsidiary of optionsXpress Holdings, Inc. (optionsXpress) and an individual employeeare respondentsin a pending regulatory matter which predates the Company’s acquisition of optionsXpress. On April16, 2012, optionsXpress, Inc., a securities broker-dealer and wholly-owned subsidiary of optionsXpress, was charged by the SEC in an administrative proceeding alleging violations of the firm’s close-out obligations under Regulation SHO (short sale delivery rules) in connection with certain customer trading activity. Following trial, in a decision issued June 7, 2013, the judge held that optionsXpress, Inc. violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered the firm to pay disgorgement and penalties. The Company continues to dispute the allegations and is appealing the decision.  The Company has a contingent liability associated with this matter, which was not material at March 31, 2014.

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Loans to Banking Clients and Related Allowance for Loan Losses

3 Months Ended

Mar. 31, 2014

Loans to Banking Clients and Related Allowance for Loan Losses [Abstract]

Loans to Banking Clients and Related Allowance for Loan Losses

4.Loans to Banking Clients and Related Allowance for Loan Losses

The composition of loans to banking clients by loan segment is as follows:

	March 31,		December 31,
	2014		2013
Residential real estate mortgages	$	8,050	$	8,006
Home equity lines of credit		3,018		3,041
Personal loans secured by securities		1,536		1,384
Other		35		36
Total loans to banking clients (1)		12,639		12,467
Allowance for loan losses		(48)		(48)
Total loans to banking clients – net	$	12,591	$	12,419

(1) All loans are evaluated for impairment by loan segment.

The Company has commitments to extend credit related to unused home equity lines of credit (HELOCs), personal loans secured by securities, and other lines of credit, which totaled  $5.9 billion and$5.7 billion at March 31, 2014 and December 31, 2013, respectively. All of the personal loans were fully collateralized by securities with fair values in excess of borrowings at March 31, 2014 and December 31, 2013.

Changes in the allowance for loan losses were as follows:

Three Months Ended	March 31, 2014							March 31, 2013
	Residential							Residential
	real estate		Home equity					real estate		Home equity
	mortgages		lines of credit			Total		mortgages		lines of credit			Total
Balance at beginning of period	$	34		$	14	$	48	$	36		$	20	$	56
Charge-offs		(1)			(1)		(2)		(2)			(2)		(4)
Recoveries		-			1		1		1			-		1
Provision for loan losses		-			1		1		5			1		6
Balance at end of period	$	33		$	15	$	48	$	40		$	19	$	59

Included in the loan portfolio are nonaccrual loans totaling$40 million and  $48 million at March 31, 2014 and December 31, 2013, respectively. There wereno loans accruing interest that were contractually 90 days or more past due at March 31, 2014 or December 31, 2013. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled$46 million and  $53 million at March 31, 2014 and December 31, 2013, respectively.Troubled debt restructurings were not material at March 31, 2014 or December 31, 2013.

Schwab Bank provides a co-branded loan origination program for Schwab Bank clients (the Program) with Quicken Loans, Inc. (Quicken® Loans®). Pursuant to the Program, Quicken Loans originates and services first lien residential real estate mortgage loans (First Mortgages) and HELOCs for Schwab Bank clients. Under the Program, Schwab Bank purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. Schwab Bank sets the underwriting guidelines and pricing for all loans it intends to purchase for its portfolio. Schwab Bank purchased First Mortgages of  $286 millionand  $1.3 billionduring the first quarters of 2014 and 2013, respectively. Schwab Bank purchased HELOCs with commitments of$172 million and$218 million during the first quarters of 2014 and 2013, respectively. The First Mortgages purchased under the Program are included in the First mortgages loan class in the tables below.

The delinquencyanalysis by loan class is as follows:

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
March 31, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	6	$	2		$	25	$	33	$	7,889
Purchased first mortgages		155		1		-			5		6		161
Home equity lines of credit		3,004		3		1			10		14		3,018
Personal loans secured by securities		1,533		3		-			-		3		1,536
Other		35		-		-			-		-		35
Total loans to banking clients	$	12,583	$	13	$	3		$	40	$	56	$	12,639

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
December 31, 2013	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,808	$	3	$	4		$	30	$	37	$	7,845
Purchased first mortgages		154		1		-			6		7		161
Home equity lines of credit		3,025		2		2			12		16		3,041
Personal loans secured by securities		1,384		-		-			-		-		1,384
Other		36		-		-			-		-		36
Total loans to banking clients	$	12,407	$	6	$	6		$	48	$	60	$	12,467

In addition to monitoring delinquency, the Company monitors the credit quality of residential real estate mortgages and HELOCs by stratifying the portfolios by the year of origination, borrower FICOscores at origination (Origination FICO), updated borrower FICOscores (Updated FICO), loan-to-value (LTV) ratios at origination (Origination LTV), and estimated current LTV ratios (Estimated Current LTV), as presented in the following tables. Borrowers’ FICOscores are provided by an independent third party credit reporting service and were last updated in March 2014. The Origination LTV and Estimated Current LTV ratios for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is estimated by reference to a home price appreciation index.

		Residential real estate mortgages
	First			Purchased					Home equity
March 31, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	818		$	53	$	871		$	2,246
2010			479			7		486			189
2011			694			36		730			151
2012			2,333			26		2,359			157
2013			3,304			36		3,340			239
2014			261			3		264			36
Total		$	7,889		$	161	$	8,050		$	3,018
Origination FICO
<620		$	10		$	1	$	11		$	1
620 – 679			94			13		107			19
680 – 739			1,361			32		1,393			571
>740			6,424			115		6,539			2,427
Total		$	7,889		$	161	$	8,050		$	3,018
Updated FICO
<620		$	54		$	5	$	59		$	38
620 – 679			188			8		196			111
680 – 739			1,017			27		1,044			447
>740			6,630			121		6,751			2,422
Total		$	7,889		$	161	$	8,050		$	3,018
Origination LTV
<70%		$	5,352		$	111	$	5,463		$	2,017
>70% – <90%			2,521			45		2,566			977
>90% – <100%			16			5		21			24
Total		$	7,889		$	161	$	8,050		$	3,018

			Weighted				Percent of Loans
			Average		Utilization		that are on
March 31, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,742		776	N/A			0.06	%
>70% – <90%		1,140		765	N/A			0.28	%
>90% – <100%		77		739	N/A			2.53	%
>100%		91		728	N/A			11.43	%
Total	$	8,050		774	N/A			0.24	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,146		774	36	%		0.06	%
>70% – <90%		651		764	47	%		0.28	%
>90% – <100%		116		754	59	%		0.47	%
>100%		105		743	61	%		2.23	%
Total	$	3,018		770	39	%		0.20	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.

		Residential real estate mortgages
	First			Purchased					Home equity
December 31, 2013	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	859		$	55	$	914		$	2,304
2010			503			7		510			191
2011			733			38		771			155
2012			2,403			26		2,429			162
2013			3,347			35		3,382			229
Total		$	7,845		$	161	$	8,006		$	3,041
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			96			14		110			20
680 – 739			1,352			32		1,384			576
>740			6,387			114		6,501			2,445
Total		$	7,845		$	161	$	8,006		$	3,041
Updated FICO
<620		$	50		$	5	$	55		$	42
620 – 679			209			10		219			106
680 – 739			1,012			29		1,041			453
>740			6,574			117		6,691			2,440
Total		$	7,845		$	161	$	8,006		$	3,041
Origination LTV
<70%		$	5,306		$	110	$	5,416		$	2,040
>70% – <90%			2,523			45		2,568			977
>90% – <100%			16			6		22			24
Total		$	7,845		$	161	$	8,006		$	3,041

			Weighted				Percent of Loans
			Average		Utilization		that are on
December 31, 2013	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,649		775	N/A			0.05	%
>70% – <90%		1,181		763	N/A			0.34	%
>90% – <100%		86		732	N/A			4.77	%
>100%		90		730	N/A			10.50	%
Total	$	8,006		772	N/A			0.26	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,127		773	36	%		0.13	%
>70% – <90%		664		762	48	%		0.22	%
>90% – <100%		127		752	59	%		1.22	%
>100%		123		743	63	%		1.34	%
Total	$	3,041		769	39	%		0.24	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Common Share [Abstract]

EPS under Basic and Diluted Computations

	Three Months Ended
	March 31,
	2014		2013
Net income	$	326	$	206
Preferred stock dividends		(8)		(8)
Net income available to common stockholders	$	318	$	198
Weighted-average common shares outstanding — basic		1,299		1,279
Common stock equivalent shares related to stock incentive plans		12		3
Weighted-average common shares outstanding — diluted (1)		1,311		1,282
Basic EPS	$	.24	$	.15
Diluted EPS	$	.24	$	.15

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled17 million and45 million shares for the first quarters of 2014 and 2013, respectively.

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Securities Available for Sale and Securities Held to Maturity (Tables)

3 Months Ended

Mar. 31, 2014

Securities Available for Sale and Securities Held to Maturity [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Available for Sale and Securities Held to Maturity

:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,404	$	168	$	38	$	18,534
Asset-backed securities		16,642		91		8		16,725
Corporate debt securities		9,043		53		9		9,087
U.S. agency notes		4,490		1		81		4,410
Certificates of deposit		3,424		4		2		3,426
Non-agency residential mortgage-backed securities		593		13		28		578
Non-agency commercial mortgage-backed securities		312		8		-		320
Total securities available for sale	$	52,908	$	338	$	166	$	53,080
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,066	$	219	$	627	$	30,658
Non-agency commercial mortgage-backed securities		957		1		47		911
Other securities		100		-		-		100
Total securities held to maturity	$	32,123	$	220	$	674	$	31,669

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2013	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,554	$	140	$	49	$	18,645
Asset-backed securities		15,201		42		37		15,206
Corporate debt securities		8,973		49		15		9,007
U.S. agency notes		4,239		1		104		4,136
Certificates of deposit		3,650		4		2		3,652
Non-agency residential mortgage-backed securities		616		11		34		593
Non-agency commercial mortgage-backed securities		271		8		-		279
Other securities		100		-		-		100
Total securities available for sale	$	51,604	$	255	$	241	$	51,618
Securities held to maturity:
U.S. agency mortgage-backed securities	$	29,260	$	161	$	921	$	28,500
Non-agency commercial mortgage-backed securities		958		-		68		890
Other securities		100		-		-		100
Total securities held to maturity	$	30,318	$	161	$	989	$	29,490

Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	6,119	$	37	$	176	$	1	$	6,295	$	38
Asset-backed securities		1,887		5		769		3		2,656		8
Corporate debt securities		1,180		8		400		1		1,580		9
U.S. agency notes		3,909		81		-		-		3,909		81
Certificates of deposit		1,050		-		98		2		1,148		2
Non-agency residential mortgage-backed
securities		59		1		352		27		411		28
Total	$	14,204	$	132	$	1,795	$	34	$	15,999	$	166
Securities held to maturity:
U.S. agency mortgage-backed securities	$	15,147	$	438	$	2,591	$	189	$	17,738	$	627
Non-agency commercial mortgage-backed
securities		444		23		338		24		782		47
Total	$	15,591	$	461	$	2,929	$	213	$	18,520	$	674
Total securities with unrealized losses (1)	$	29,795	$	593	$	4,724	$	247	$	34,519	$	840

(1) The number of investment positions with unrealized losses totaled 264 for securities available for sale and 154 for securities held to maturity.

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2013	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	5,044	$	47	$	93	$	2	$	5,137	$	49
Asset-backed securities		6,391		33		591		4		6,982		37
Corporate debt securities		1,802		14		499		1		2,301		15
U.S. agency notes		3,636		104		-		-		3,636		104
Certificates of deposit		-		-		299		2		299		2
Non-agency residential mortgage-backed
securities		89		2		374		32		463		34
Total	$	16,962	$	200	$	1,856	$	41	$	18,818	$	241
Securities held to maturity:
U.S. agency mortgage-backed securities	$	19,175	$	698	$	2,345	$	223	$	21,520	$	921
Non-agency commercial mortgage-backed
securities		630		43		260		25		890		68
Total	$	19,805	$	741	$	2,605	$	248	$	22,410	$	989
Total securities with unrealized losses (1)	$	36,767	$	941	$	4,461	$	289	$	41,228	$	1,230

(1) The number of investment positions with unrealized losses totaled 273 for securities available for sale and193 for securities held to maturity.

Rollforward Amount of Credit Losses Recognized in Earnings for OTTI Securities for Portion of Impairment Recognized in or Reclassified From Other Comprehensive Income

	Three Months Ended
	March 31,
	2014		2013
Balance at beginning of period	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		-
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		4
Balance at end of period	$	169	$	163

Maturities of Securities Available for Sale and Securities Held to Maturity

			After 1 year		After 5 years
	Within		through		through		After
	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	1,005	$	4,015	$	13,514	$	18,534
Asset-backed securities		-		1,513		4,109		11,103		16,725
Corporate debt securities		1,065		8,022		-		-		9,087
U.S. agency notes		-		4,410		-		-		4,410
Certificates of deposit		1,502		1,924		-		-		3,426
Non-agency residential mortgage-backed
securities (1)		-		3		-		575		578
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,567	$	16,877	$	8,124	$	25,512	$	53,080
Total amortized cost	$	2,560	$	16,907	$	8,047	$	25,394	$	52,908
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	609	$	13,036	$	17,013	$	30,658
Non-agency commercial mortgage-backed
securities (1)		-		-		344		567		911
Other securities		100		-		-		-		100
Total fair value	$	100	$	609	$	13,380	$	17,580	$	31,669
Total amortized cost	$	100	$	601	$	13,717	$	17,705	$	32,123

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and Gross Realized Gains from Sales of Securities Available for Sale

	Three Months Ended
	March 31,
	2014		2013
Proceeds	$	1,285	$	-
Gross realized gains	$	1	$	-

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2014

Earnings Per Common Share [Abstract]

Earnings Per Common Share

8.Earnings Per Common Share

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Dilutive potential common shares include, if dilutive, the effect of outstanding stock options and unvested restricted stock awards and units. EPS under the basic and diluted computations is as follows:

	Three Months Ended
	March 31,
	2014		2013
Net income	$	326	$	206
Preferred stock dividends		(8)		(8)
Net income available to common stockholders	$	318	$	198
Weighted-average common shares outstanding — basic		1,299		1,279
Common stock equivalent shares related to stock incentive plans		12		3
Weighted-average common shares outstanding — diluted (1)		1,311		1,282
Basic EPS	$	.24	$	.15
Diluted EPS	$	.24	$	.15

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled17 million and45 million shares for the first quarters of 2014 and 2013, respectively.

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Fair Values of Assets and Liabilities

3 Months Ended

Mar. 31, 2014

Fair Values of Assets and Liabilities [Abstract]

Fair Values of Assets and Liabilities

6.Fair Values of Assets and Liabilities

For a description of the fair value hierarchy and the Company’s fair value methodologies, including the use of independent third-party pricing services, see note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.There were no significant changes in these methodologies during the quarter ended March 31, 2014. The Company did not transfer any assets or liabilities between Level 1 and Level 2 during the quarter ended March 31, 2014, or the year ended December 31, 2013. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at March 31, 2014 or December31, 2013.

Financial Instruments Recorded at Fair Value

The following tables present the fair value hierarchy for assets measured at fair value. Liabilities recorded at fair value were not material, and therefore are not included in the following tables:

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
March 31, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,037		$	-		$	-	$	1,037
Commercial paper			-			14			-		14
Total cash equivalents			1,037			14			-		1,051
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			3,493			-		3,493
U.S. Government securities			-			925			-		925
Total investments segregated and on deposit for regulatory
purposes			-			4,418			-		4,418
Other securities owned:
Schwab Funds® money market funds			208			-			-		208
Equity and bond mutual funds			200			-			-		200
State and municipal debt obligations			-			33			-		33
Equity, U.S. Government and corporate debt, and other
securities			1			14			-		15
Total other securities owned			409			47			-		456
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,534			-		18,534
Asset-backed securities			-			16,725			-		16,725
Corporate debt securities			-			9,087			-		9,087
U.S. agency notes			-			4,410			-		4,410
Certificates of deposit			-			3,426			-		3,426
Non-agency residential mortgage-backed securities			-			578			-		578
Non-agency commercial mortgage-backed securities			-			320			-		320
Other securities			-			-			-		-
Total securities available for sale			-			53,080			-		53,080
Total		$	1,446		$	57,559		$	-	$	59,005

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2013	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,141		$	-		$	-	$	1,141
Commercial paper			-			22			-		22
Total cash equivalents			1,141			22			-		1,163
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			2,737			-		2,737
U.S. Government securities			-			2,539			-		2,539
Total investments segregated and on deposit for regulatory
purposes			-			5,276			-		5,276
Other securities owned:
Schwab Funds® money market funds			261			-			-		261
Equity and bond mutual funds			208			-			-		208
State and municipal debt obligations			-			32			-		32
Equity, U.S. Government and corporate debt, and other
securities			1			15			-		16
Total other securities owned			470			47			-		517
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,645			-		18,645
Asset-backed securities			-			15,206			-		15,206
Corporate debt securities			-			9,007			-		9,007
U.S. agency notes			-			4,136			-		4,136
Certificates of deposit			-			3,652			-		3,652
Non-agency residential mortgage-backed securities			-			593			-		593
Non-agency commercial mortgage-backed securities			-			279			-		279
Other securities			-			100			-		100
Total securities available for sale			-			51,618			-		51,618
Total		$	1,611		$	56,963		$	-	$	58,574

Financial Instruments Not Recorded at Fair Value

Descriptions of the valuation methodologies and assumptions used to estimate the fair value of financial instruments not recorded at fair value are also described in note “2 – Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December31, 2013. There were no significant changes in these methodologies or assumptions during the quarter ended March 31, 2014.  The following tables present the fair value hierarchy for financial instruments not recorded at fair value:

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
March 31, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,122		$	-		$	6,122		$	-	$	6,122
Cash and investments segregated and
on deposit for regulatory purposes		16,127			-			16,127			-		16,127
Receivables from brokers, dealers, and
clearing organizations		482			-			482			-		482
Receivables from brokerage clients – net		14,566			-			14,566			-		14,566
Securities held to maturity:
U.S. agency mortgage-backed securities		31,066			-			30,658			-		30,658
Non-agency commercial mortgage-backed
securities		957			-			911			-		911
Other securities		100			-			100			-		100
Total securities held to maturity		32,123			-			31,669			-		31,669
Loans to banking clients: (1)
Residential real estate mortgages		8,050			-			7,900			-		7,900
Home equity lines of credit		3,018			-			3,180			-		3,180
Personal loans secured by securities		1,536			-			1,536			-		1,536
Other		35			-			34			-		34
Total loans to banking clients		12,639			-			12,650			-		12,650
Other assets		71			-			71			-		71
Total	$	82,130		$	-		$	81,687		$	-	$	81,687
Liabilities:
Deposits from banking clients	$	95,591		$	-		$	95,591		$	-	$	95,591
Payables to brokers, dealers, and clearing
organizations		1,918			-			1,918			-		1,918
Payables to brokerage clients		32,308			-			32,308			-		32,308
Accrued expenses and other liabilities		607			-			607			-		607
Long-term debt		1,902			-			1,995			-		1,995
Total	$	132,326		$	-		$	132,419		$	-	$	132,419

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at March 31, 2014.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2013	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,565		$	-		$	6,565		$	-	$	6,565
Cash and investments segregated and
on deposit for regulatory purposes		18,273			-			18,273			-		18,273
Receivables from brokers, dealers, and
clearing organizations		509			-			509			-		509
Receivables from brokerage clients – net		13,949			-			13,949			-		13,949
Securities held to maturity:
U.S. agency mortgage-backed securities		29,260			-			28,500			-		28,500
Non-agency commercial mortgage-backed
securities		958			-			890			-		890
Other securities		100			-			100			-		100
Total securities held to maturity		30,318			-			29,490			-		29,490
Loans to banking clients: (1)
Residential real estate mortgages		8,006			-			7,930			-		7,930
Home equity lines of credit		3,041			-			3,043			-		3,043
Personal loans secured by securities		1,384			-			1,384			-		1,384
Other		36			-			35			-		35
Total loans to banking clients		12,467			-			12,392			-		12,392
Other assets		64			-			64			-		64
Total	$	82,145		$	-		$	81,242		$	-	$	81,242
Liabilities:
Deposits from banking clients	$	92,972		$	-		$	92,972		$	-	$	92,972
Payables to brokers, dealers, and clearing
organizations		1,467			-			1,467			-		1,467
Payables to brokerage clients		35,333			-			35,333			-		35,333
Accrued expenses and other liabilities		680			-			680			-		680
Long-term debt		1,903			-			1,989			-		1,989
Total	$	132,355		$	-		$	132,441		$	-	$	132,441

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at December 31, 2013.

Securities lending: Payables from brokers, dealers, and clearing organizations include securities loaned. The Company loans client securities temporarily to other brokers in connection with its securities lending activities and receives cash as collateral for the securities loaned. The fair value of client securities pledged in securities lending transactions to other broker-dealers was  $1.4billion at March 31, 2014 and  $1.1billion at December 31, 2013.  The Company has also pledged a portion of its securities owned in connection with securities lending transactions to other broker-dealers. Additionally, the Company borrows securities from other broker-dealers to fulfill short sales by clients, which are included in receivables from brokers, dealers, and clearing organizations. The fair value of these borrowed securities was  $142 million at March 31, 2014 and  $276 million at December 31, 2013. All of the Company’s securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers. However, the Company does not net securities lending transactions and therefore, the Company’s securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

Resale agreements: Cash and investments segregated and on deposit for regulatory purposes include securities purchased under agreements to resell (resale agreements), which are collateralized by U.S. Government and agency securities. Schwab enters into collateralized resale agreements principally with other broker-dealers, which could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. Schwab utilizes the collateral provided under these resale agreements to meet obligations under broker-dealer client protection rules, which place limitations on its ability to access such segregated securities. The Company’s resale agreements are not subject to master netting arrangements.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

7.Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents cumulative gains and losses that are not reflected in earnings. The components of other comprehensive income are as follows:

Three Months Ended March 31,			2014						2013
	Before		Tax			Net of	Before		Tax			Net of
	tax		effect			tax	tax		effect			tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	159	$	(59)	$	100	$	(3)	$	2	$	(1)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		4		(2)		2
Other reclassifications included in
other revenue		(1)		-		(1)		-		-		-
Change in net unrealized gain on
securities available for sale		158		(59)		99		1		-		1
Other		-		-		-		1		-		1
Other comprehensive income	$	158	$	(59)	$	99	$	2	$	-	$	2

Accumulated other comprehensive income balances are as follows:

	Net unrealized						Total
	gain on securities						accumulated other
	available for sale			Other			comprehensive income
Balance at December 31, 2012		$	299		$	(1)		$	298
Other net changes			1			1			2
Balance at March 31, 2013		$	300		$	-		$	300
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			99			-			99
Balance at March 31, 2014		$	108		$	-		$	108

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Regulatory Requirements

3 Months Ended

Mar. 31, 2014

Regulatory Requirements [Abstract]

Regulatory Requirements

9.Regulatory Requirements

CSC is a savings and loan holding company and Schwab Bank, CSC’s depository institution subsidiary, is a federal savings bank. CSC is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (Federal Reserve) and Schwab Bank is subject to supervision and regulation by the Office of the Comptroller of the Currency (OCC). CSC is currently not subject to specific statutory capital requirements, however, CSC is required to serve as a source of strength for Schwab Bank. CSC will be subject to new capital requirements set by the Federal Reserve that will be phased in beginning January 1, 2015.

Schwab Bank is subject to regulation and supervision and to various requirements and restrictions under federal and state laws, including regulatory capital guidelines. Among other things, these requirements also restrict and govern the terms of affiliate transactions, such as extensions of credit and repayment of loans between Schwab Bank and CSC or CSC’s other subsidiaries. In addition, Schwab Bank is required to provide notice to and may be required to obtain approval of the OCC and the Federal Reserve to declare dividends to CSC. The federal banking agencies have broad powers to enforce these regulations, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver. Under the Federal Deposit Insurance Act, Schwab Bank could be subject to restrictive actions if it were to fall within one of the lowest three of five capital categories. Schwab Bank is required to maintain minimum capital levels as specified in federal banking laws and regulations. Failure to meet the minimum levels could result in certain mandatory, and possibly additional discretionary actions, by the regulators that, if undertaken, could have a direct material effect on Schwab Bank. At March 31, 2014, CSC and Schwab Bank met the capital level requirements.

The regulatory capital and ratios for Schwab Bank at March 31, 2014 are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,026	20.1	%	$	2,094	6.0	%	$	1,396	4.0	%
Total Risk-Based Capital	$	7,074	20.3	%	$	3,490	10.0	%	$	2,792	8.0	%
Tier 1 Leverage	$	7,026	6.8	%	$	5,157	5.0	%	$	4,126	4.0	%
Tangible Equity	$	7,026	6.8	%		N/A			$	2,063	2.0	%

N/A Not applicable.

Based on its regulatory capital ratios at March 31, 2014, Schwab Bank is considered well capitalized (the highest category) pursuant to banking regulatory guidelines. There are no conditions or events since March 31, 2014, that management believes have changed Schwab Bank’s capital category.

CSC’s principal U.S. broker-dealers are Schwab and optionsXpress, Inc. Schwab and optionsXpress, Inc. are both subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule). Schwab and optionsXpress, Inc. compute net capital under the alternative method permitted by the Uniform Net Capital Rule. This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000 for Schwab), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).

Net capital and net capital requirements for Schwab and optionsXpress, Inc. at March 31, 2014 are as follows:

											Net Capital		Net Capital
			% of			Minimum		2% of			in Excess of		in Excess of 5%
			Aggregate			Net Capital		Aggregate			Required		of Aggregate
	Net Capital		Debit Balances			Required		Debit Balances			Net Capital		Debit Balances
Schwab	$	1,548		10	%	$	0.250		$	305	$	1,243		$	786
optionsXpress, Inc.	$	112		32	%	$	1		$	7	$	105		$	94

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Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Available for Sale) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	$ 2,567
Securities available for sale fair value After 1 year through 5 years	16,877
Securities available for sale fair value After 5 years through 10 years	8,124
Securities available for sale fair value After 10 years	25,512
Securities available for sale	53,080		51,618
Securities available for sale Within 1 year amortized cost	2,560
Securities available for sale After 1 year through 5 years amortized cost	16,907
Securities available for sale After 5 years through 10 years amortized cost	8,047
Securities available for sale After 10 years amortized cost	25,394
Securities available for sale Amortized Cost	52,908		51,604
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value After 1 year through 5 years	1,005	[1]
Securities available for sale fair value After 5 years through 10 years	4,015	[1]
Securities available for sale fair value After 10 years	13,514	[1]
Securities available for sale	18,534	[1]	18,645
Securities available for sale Amortized Cost	18,404		18,554
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value After 1 year through 5 years	1,513
Securities available for sale fair value After 5 years through 10 years	4,109
Securities available for sale fair value After 10 years	11,103
Securities available for sale	16,725		15,206
Securities available for sale Amortized Cost	16,642		15,201
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	1,065
Securities available for sale fair value After 1 year through 5 years	8,022
Securities available for sale	9,087		9,007
Securities available for sale Amortized Cost	9,043		8,973
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value After 1 year through 5 years	4,410
Securities available for sale	4,410		4,136
Securities available for sale Amortized Cost	4,490		4,239
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	1,502
Securities available for sale fair value After 1 year through 5 years	1,924
Securities available for sale	3,426		3,652
Securities available for sale Amortized Cost	3,424		3,650
Non-agency residential mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value After 1 year through 5 years	3	[1]
Securities available for sale fair value After 10 years	575	[1]
Securities available for sale	578	[1]	593
Securities available for sale Amortized Cost	593		616
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value After 10 years	320	[1]
Securities available for sale	320	[1]	279
Securities available for sale Amortized Cost	$ 312		$ 271

[1] Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

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Regulatory Requirements (Net Capital and Net Capital Requirements for Schwab and optionsXpress, Inc) (Details) (USD $)	Mar. 31, 2014
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	$ 1,548,000,000
% of Aggregate Debit Balances	10.00%
Minimum Net Capital Required	250,000
2% of Aggregate Debit Balances	305,000,000
Net Capital in Excess of Required Net Capital	1,243,000,000
Net Capital in Excess of 5% of Aggregate Debit Balances	786,000,000
OptionsXpress, Inc. [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	112,000,000
% of Aggregate Debit Balances	32.00%
Minimum Net Capital Required	1,000,000
2% of Aggregate Debit Balances	7,000,000
Net Capital in Excess of Required Net Capital	105,000,000
Net Capital in Excess of 5% of Aggregate Debit Balances	$ 94,000,000

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Fair Values of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Fair Values of Assets and Liabilities [Abstract]

Fair Value Hierarchy for Assets Measured at Fair Value

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
March 31, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,037		$	-		$	-	$	1,037
Commercial paper			-			14			-		14
Total cash equivalents			1,037			14			-		1,051
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			3,493			-		3,493
U.S. Government securities			-			925			-		925
Total investments segregated and on deposit for regulatory
purposes			-			4,418			-		4,418
Other securities owned:
Schwab Funds® money market funds			208			-			-		208
Equity and bond mutual funds			200			-			-		200
State and municipal debt obligations			-			33			-		33
Equity, U.S. Government and corporate debt, and other
securities			1			14			-		15
Total other securities owned			409			47			-		456
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,534			-		18,534
Asset-backed securities			-			16,725			-		16,725
Corporate debt securities			-			9,087			-		9,087
U.S. agency notes			-			4,410			-		4,410
Certificates of deposit			-			3,426			-		3,426
Non-agency residential mortgage-backed securities			-			578			-		578
Non-agency commercial mortgage-backed securities			-			320			-		320
Other securities			-			-			-		-
Total securities available for sale			-			53,080			-		53,080
Total		$	1,446		$	57,559		$	-	$	59,005

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2013	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,141		$	-		$	-	$	1,141
Commercial paper			-			22			-		22
Total cash equivalents			1,141			22			-		1,163
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit			-			2,737			-		2,737
U.S. Government securities			-			2,539			-		2,539
Total investments segregated and on deposit for regulatory
purposes			-			5,276			-		5,276
Other securities owned:
Schwab Funds® money market funds			261			-			-		261
Equity and bond mutual funds			208			-			-		208
State and municipal debt obligations			-			32			-		32
Equity, U.S. Government and corporate debt, and other
securities			1			15			-		16
Total other securities owned			470			47			-		517
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,645			-		18,645
Asset-backed securities			-			15,206			-		15,206
Corporate debt securities			-			9,007			-		9,007
U.S. agency notes			-			4,136			-		4,136
Certificates of deposit			-			3,652			-		3,652
Non-agency residential mortgage-backed securities			-			593			-		593
Non-agency commercial mortgage-backed securities			-			279			-		279
Other securities			-			100			-		100
Total securities available for sale			-			51,618			-		51,618
Total		$	1,611		$	56,963		$	-	$	58,574

Fair Value Hierarchy for Financial Instruments Not Recorded at Fair Value

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
March 31, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,122		$	-		$	6,122		$	-	$	6,122
Cash and investments segregated and
on deposit for regulatory purposes		16,127			-			16,127			-		16,127
Receivables from brokers, dealers, and
clearing organizations		482			-			482			-		482
Receivables from brokerage clients – net		14,566			-			14,566			-		14,566
Securities held to maturity:
U.S. agency mortgage-backed securities		31,066			-			30,658			-		30,658
Non-agency commercial mortgage-backed
securities		957			-			911			-		911
Other securities		100			-			100			-		100
Total securities held to maturity		32,123			-			31,669			-		31,669
Loans to banking clients: (1)
Residential real estate mortgages		8,050			-			7,900			-		7,900
Home equity lines of credit		3,018			-			3,180			-		3,180
Personal loans secured by securities		1,536			-			1,536			-		1,536
Other		35			-			34			-		34
Total loans to banking clients		12,639			-			12,650			-		12,650
Other assets		71			-			71			-		71
Total	$	82,130		$	-		$	81,687		$	-	$	81,687
Liabilities:
Deposits from banking clients	$	95,591		$	-		$	95,591		$	-	$	95,591
Payables to brokers, dealers, and clearing
organizations		1,918			-			1,918			-		1,918
Payables to brokerage clients		32,308			-			32,308			-		32,308
Accrued expenses and other liabilities		607			-			607			-		607
Long-term debt		1,902			-			1,995			-		1,995
Total	$	132,326		$	-		$	132,419		$	-	$	132,419

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at March 31, 2014.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2013	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	6,565		$	-		$	6,565		$	-	$	6,565
Cash and investments segregated and
on deposit for regulatory purposes		18,273			-			18,273			-		18,273
Receivables from brokers, dealers, and
clearing organizations		509			-			509			-		509
Receivables from brokerage clients – net		13,949			-			13,949			-		13,949
Securities held to maturity:
U.S. agency mortgage-backed securities		29,260			-			28,500			-		28,500
Non-agency commercial mortgage-backed
securities		958			-			890			-		890
Other securities		100			-			100			-		100
Total securities held to maturity		30,318			-			29,490			-		29,490
Loans to banking clients: (1)
Residential real estate mortgages		8,006			-			7,930			-		7,930
Home equity lines of credit		3,041			-			3,043			-		3,043
Personal loans secured by securities		1,384			-			1,384			-		1,384
Other		36			-			35			-		35
Total loans to banking clients		12,467			-			12,392			-		12,392
Other assets		64			-			64			-		64
Total	$	82,145		$	-		$	81,242		$	-	$	81,242
Liabilities:
Deposits from banking clients	$	92,972		$	-		$	92,972		$	-	$	92,972
Payables to brokers, dealers, and clearing
organizations		1,467			-			1,467			-		1,467
Payables to brokerage clients		35,333			-			35,333			-		35,333
Accrued expenses and other liabilities		680			-			680			-		680
Long-term debt		1,903			-			1,989			-		1,989
Total	$	132,355		$	-		$	132,441		$	-	$	132,441

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $48 million at December 31, 2013.

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Introduction and Basis of Presentation (Details)	Mar. 31, 2014 state item
Introduction and Basis of Presentation [Abstract]
Minimum number of domestic branch offices	300
States with domestic branch offices	45

XML

Regulatory Requirements (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Percentage of aggregate debit balances required as minimum net capital	2.00%
Net capital under the alternative method permitted by the Uniform Net Capital Rule	This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000 for Schwab), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.
Percentage of net capital to aggregate debit balances required for a broker-dealer to repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees	5.00%
Percentage of net capital to the Company's minimum dollar requirement required for a broker-dealer to repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees	120.00%
Description of Net Capital Requirements under Commodity Exchange Act	optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).
Net capital required for optionsXpress, Inc. under Reg 1.17 of the Commodity Exchange Act	$ 1,000,000
Minimum percentage of the total risk margin requirements for all positions carried in customer accounts to be added to the minimum percentage of the total risk margin requirements for all positions carried in non-customer accounts for optionsXpress, Inc. minimum net capital calculation	8.00%
Minimum percentage of the total risk margin requirements for all positions carried in non-customer accounts to be added to the minimum percentage of the total risk margin requirements for all positions carried in customer accounts for optionsXpress, Inc. minimum net capital calculation	8.00%
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Minimum capital requirement	$ 250,000

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Loans to Banking Clients and Related Allowance for Loan Losses (Credit Quality of Residential Real Estate Mortgages and HELOCs by Reviewing FICO Scores at Origination, Current FICO Scores, Loan-To-Value Ratio) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	$ 12,639		$ 12,467
Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	7,889		7,845
Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	161		161
Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	8,050		8,006
Weighted Average Updated FICO	774		772
Percent of Loans that are on Nonaccrual Status	0.24%		0.26%
Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,018		3,041
Weighted Average Updated FICO	770		769
Utilization Rate	39.00%	[1]	39.00%	[1]
Percent of Loans that are on Nonaccrual Status	0.20%		0.24%
Year of origination Pre 2010 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	818		859
Year of origination Pre 2010 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	53		55
Year of origination Pre 2010 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	871		914
Year of origination Pre 2010 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,246		2,304
Year of origination 2010 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	479		503
Year of origination 2010 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	7		7
Year of origination 2010 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	486		510
Year of origination 2010 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	189		191
Year of origination 2011 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	694		733
Year of origination 2011 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	36		38
Year of origination 2011 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	730		771
Year of origination 2011 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	151		155
Year of origination 2012 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,333		2,403
Year of origination 2012 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	26		26
Year of origination 2012 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,359		2,429
Year of origination 2012 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	157		162
Year of origination 2013 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,304		3,347
Year of origination 2013 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	36		35
Year of origination 2013 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,340		3,382
Year of origination 2013 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	239		229
Year of origination 2014 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	261
Year of origination 2014 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3
Year of origination 2014 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	264
Year of origination 2014 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	36
Origination FICO Score Below 620 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	10		10
Origination FICO Score Below 620 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1		1
Origination FICO Score Below 620 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	11		11
Origination FICO Score Below 620 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1
Origination FICO Score 620 Through 679 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	94		96
Origination FICO Score 620 Through 679 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	13		14
Origination FICO Score 620 Through 679 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	107		110
Origination FICO Score 620 Through 679 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	19		20
Origination FICO Score 680 Through 739 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1,361		1,352
Origination FICO Score 680 Through 739 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	32		32
Origination FICO Score 680 Through 739 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1,393		1,384
Origination FICO Score 680 Through 739 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	571		576
Origination FICO Score 740 And Above [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,424		6,387
Origination FICO Score 740 And Above [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	115		114
Origination FICO Score 740 And Above [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,539		6,501
Origination FICO Score 740 And Above [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,427		2,445
Updated FICO Score Below 620 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	54		50
Updated FICO Score Below 620 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	5		5
Updated FICO Score Below 620 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	59		55
Updated FICO Score Below 620 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	38		42
Updated FICO Score 620 Through 679 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	188		209
Updated FICO Score 620 Through 679 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	8		10
Updated FICO Score 620 Through 679 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	196		219
Updated FICO Score 620 Through 679 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	111		106
Updated FICO Score 680 Through 739 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1,017		1,012
Updated FICO Score 680 Through 739 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	27		29
Updated FICO Score 680 Through 739 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1,044		1,041
Updated FICO Score 680 Through 739 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	447		453
Updated FICO Score 740 And Above [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,630		6,574
Updated FICO Score 740 And Above [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	121		117
Updated FICO Score 740 And Above [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,751		6,691
Updated FICO Score 740 And Above [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,422		2,440
Origination Loan To Value Ratio 70% And Below [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	5,352		5,306
Origination Loan To Value Ratio 70% And Below [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	111		110
Origination Loan To Value Ratio 70% And Below [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	5,463		5,416
Origination Loan To Value Ratio 70% And Below [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,017		2,040
Origination Loan to Value Ratio Greater Than 70% Through 90% [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,521		2,523
Origination Loan to Value Ratio Greater Than 70% Through 90% [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	45		45
Origination Loan to Value Ratio Greater Than 70% Through 90% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,566		2,568
Origination Loan to Value Ratio Greater Than 70% Through 90% [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	977		977
Origination Loan to Value Ratio Greater Than 90% Through 100% [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	16		16
Origination Loan to Value Ratio Greater Than 90% Through 100% [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	5		6
Origination Loan to Value Ratio Greater Than 90% Through 100% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	21		22
Origination Loan to Value Ratio Greater Than 90% Through 100% [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	24		24
Estimated Current LTV 70% And Below [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,742		6,649
Weighted Average Updated FICO	776		775
Percent of Loans that are on Nonaccrual Status	0.06%		0.05%
Estimated Current LTV 70% And Below [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,146		2,127
Weighted Average Updated FICO	774		773
Utilization Rate	36.00%	[1]	36.00%	[1]
Percent of Loans that are on Nonaccrual Status	0.06%		0.13%
Estimated Current LTV Greater Than 70% through 90% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	1,140		1,181
Weighted Average Updated FICO	765		763
Percent of Loans that are on Nonaccrual Status	0.28%		0.34%
Estimated Current LTV Greater Than 70% through 90% [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	651		664
Weighted Average Updated FICO	764		762
Utilization Rate	47.00%	[1]	48.00%	[1]
Percent of Loans that are on Nonaccrual Status	0.28%		0.22%
Estimated Current LTV Greater Than 90% through 100% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	77		86
Weighted Average Updated FICO	739		732
Percent of Loans that are on Nonaccrual Status	2.53%		4.77%
Estimated Current LTV Greater Than 90% through 100% [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	116		127
Weighted Average Updated FICO	754		752
Utilization Rate	59.00%	[1]	59.00%	[1]
Percent of Loans that are on Nonaccrual Status	0.47%		1.22%
Estimated Current LTV Greater Than 100% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	91		90
Weighted Average Updated FICO	728		730
Percent of Loans that are on Nonaccrual Status	11.43%		10.50%
Estimated Current LTV Greater Than 100% [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	$ 105		$ 123
Weighted Average Updated FICO	743		743
Utilization Rate	61.00%	[1]	63.00%	[1]
Percent of Loans that are on Nonaccrual Status	2.23%		1.34%

[1] The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 7,173	$ 7,728
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $11,776 at March 31, 2014 and $14,016 at December 31, 2013)	20,548	23,553
Receivables from brokers, dealers, and clearing organizations	482	509
Receivables from brokerage clients — net	14,571	13,951
Other securities owned — at fair value	456	517
Securities available for sale	53,080	51,618
Securities held to maturity (fair value — $31,669 at March 31, 2014 and $29,490 at December 31, 2013)	32,123	30,318
Loans to banking clients — net	12,591	12,419
Equipment, office facilities, and property — net	820	790
Goodwill	1,227	1,227
Intangible assets — net	255	266
Other assets	740	746
Total assets	144,066	143,642
Liabilities and Stockholders' Equity
Deposits from banking clients	95,591	92,972
Payables to brokers, dealers, and clearing organizations	1,918	1,467
Payables to brokerage clients	32,308	35,333
Accrued expenses and other liabilities	1,532	1,586
Long-term debt	1,902	1,903
Total liabilities	133,251	133,261
Stockholders' equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $885	870	869
Common stock — 3 billion shares authorized; $.01 par value per share; 1,487,543,446 shares issued	15	15
Additional paid-in capital	3,982	3,951
Retained earnings	9,492	9,253
Treasury stock, at cost — 186,648,711 shares at March 31, 2014 and 190,657,263 shares at December 31, 2013	(3,652)	(3,716)
Accumulated other comprehensive income	108	9
Total stockholders' equity	10,815	10,381
Total liabilities and stockholders' equity	$ 144,066	$ 143,642

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Securities Available for Sale and Securities Held to Maturity

3 Months Ended

Mar. 31, 2014

Securities Available for Sale and Securities Held to Maturity [Abstract]

Securities Available for Sale and Securities Held to Maturity

3.Securities Available for Sale and Securities Held to Maturity

The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale and securities held to maturity are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,404	$	168	$	38	$	18,534
Asset-backed securities		16,642		91		8		16,725
Corporate debt securities		9,043		53		9		9,087
U.S. agency notes		4,490		1		81		4,410
Certificates of deposit		3,424		4		2		3,426
Non-agency residential mortgage-backed securities		593		13		28		578
Non-agency commercial mortgage-backed securities		312		8		-		320
Total securities available for sale	$	52,908	$	338	$	166	$	53,080
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,066	$	219	$	627	$	30,658
Non-agency commercial mortgage-backed securities		957		1		47		911
Other securities		100		-		-		100
Total securities held to maturity	$	32,123	$	220	$	674	$	31,669

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2013	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	18,554	$	140	$	49	$	18,645
Asset-backed securities		15,201		42		37		15,206
Corporate debt securities		8,973		49		15		9,007
U.S. agency notes		4,239		1		104		4,136
Certificates of deposit		3,650		4		2		3,652
Non-agency residential mortgage-backed securities		616		11		34		593
Non-agency commercial mortgage-backed securities		271		8		-		279
Other securities		100		-		-		100
Total securities available for sale	$	51,604	$	255	$	241	$	51,618
Securities held to maturity:
U.S. agency mortgage-backed securities	$	29,260	$	161	$	921	$	28,500
Non-agency commercial mortgage-backed securities		958		-		68		890
Other securities		100		-		-		100
Total securities held to maturity	$	30,318	$	161	$	989	$	29,490

Schwab Bank pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $131 million at March 31, 2014.

A summary of securities with unrealized losses, aggregated by category and period of continuous unrealized loss, is as follows:

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	6,119	$	37	$	176	$	1	$	6,295	$	38
Asset-backed securities		1,887		5		769		3		2,656		8
Corporate debt securities		1,180		8		400		1		1,580		9
U.S. agency notes		3,909		81		-		-		3,909		81
Certificates of deposit		1,050		-		98		2		1,148		2
Non-agency residential mortgage-backed
securities		59		1		352		27		411		28
Total	$	14,204	$	132	$	1,795	$	34	$	15,999	$	166
Securities held to maturity:
U.S. agency mortgage-backed securities	$	15,147	$	438	$	2,591	$	189	$	17,738	$	627
Non-agency commercial mortgage-backed
securities		444		23		338		24		782		47
Total	$	15,591	$	461	$	2,929	$	213	$	18,520	$	674
Total securities with unrealized losses (1)	$	29,795	$	593	$	4,724	$	247	$	34,519	$	840

(1) The number of investment positions with unrealized losses totaled 264 for securities available for sale and 154 for securities held to maturity.

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2013	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	5,044	$	47	$	93	$	2	$	5,137	$	49
Asset-backed securities		6,391		33		591		4		6,982		37
Corporate debt securities		1,802		14		499		1		2,301		15
U.S. agency notes		3,636		104		-		-		3,636		104
Certificates of deposit		-		-		299		2		299		2
Non-agency residential mortgage-backed
securities		89		2		374		32		463		34
Total	$	16,962	$	200	$	1,856	$	41	$	18,818	$	241
Securities held to maturity:
U.S. agency mortgage-backed securities	$	19,175	$	698	$	2,345	$	223	$	21,520	$	921
Non-agency commercial mortgage-backed
securities		630		43		260		25		890		68
Total	$	19,805	$	741	$	2,605	$	248	$	22,410	$	989
Total securities with unrealized losses (1)	$	36,767	$	941	$	4,461	$	289	$	41,228	$	1,230

(1) The number of investment positions with unrealized losses totaled 273 for securities available for sale and193 for securities held to maturity.

Non-agency residential mortgage-backed securities include securities collateralized by loans that are considered to be “Prime” (defined as loans to borrowers with a Fair Isaac Corporation (FICO) credit score of 620 or higher at origination), and “Alt-A” (defined as Prime loans with reduced documentation at origination). Management determined that it does not expect to recover all of the amortized cost of certain of its Alt-A and Prime residential mortgage-backed securities and therefore determined that these securities were other-than-temporarily impaired (OTTI). The Company does not intend to sell these securities and it is not “more likely than not” that the Company will be required to sell these securities before anticipated recovery of the unrealized losses on these securities. The Company may recognize an impairment charge equal to the securities’ expected credit losses based on the Company’s cash flow projections for these securities. The expected credit losses are measured as the difference between the present value of expected cash flows and the amortized cost of the securities. There were no impairment charges recognized during the first quarter of 2014. Further deterioration in the performance of the underlying loans in the Company’s non-agency residential mortgage-backed securities portfolio could result in the recognition of impairment losses.

The following table is a rollforward of the amount of credit losses recognized in earnings for OTTI securities held by the Company during the period for which a portion of the impairment was recognized in or reclassified from other comprehensive income:

	Three Months Ended
	March 31,
	2014		2013
Balance at beginning of period	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		-
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		4
Balance at end of period	$	169	$	163

The maturities of securities available for sale and securities held to maturity at March 31, 2014, are as follows:

			After 1 year		After 5 years
	Within		through		through		After
	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	1,005	$	4,015	$	13,514	$	18,534
Asset-backed securities		-		1,513		4,109		11,103		16,725
Corporate debt securities		1,065		8,022		-		-		9,087
U.S. agency notes		-		4,410		-		-		4,410
Certificates of deposit		1,502		1,924		-		-		3,426
Non-agency residential mortgage-backed
securities (1)		-		3		-		575		578
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,567	$	16,877	$	8,124	$	25,512	$	53,080
Total amortized cost	$	2,560	$	16,907	$	8,047	$	25,394	$	52,908
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	609	$	13,036	$	17,013	$	30,658
Non-agency commercial mortgage-backed
securities (1)		-		-		344		567		911
Other securities		100		-		-		-		100
Total fair value	$	100	$	609	$	13,380	$	17,580	$	31,669
Total amortized cost	$	100	$	601	$	13,717	$	17,705	$	32,123

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and gross realized gains from sales of securities available for sale are as follows:

	Three Months Ended
	March 31,
	2014		2013
Proceeds	$	1,285	$	-
Gross realized gains	$	1	$	-

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Securities Available for Sale and Securities Held to Maturity (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014 item
Securities Available for Sale and Securities Held to Maturity [Abstract]
Fair value of pledged securities	$ 131
Fair Isaac & Company minimum credit score for Prime loan origination	620

XML

Loans to Banking Clients and Related Allowance for Loan Losses (Composition of Loans to Banking Clients by Loan Segment) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	$ 12,639	$ 12,467
Allowance for loan losses	(48)	(48)	(59)	(56)
Total loans to banking clients - net	12,591	12,419
Residential real estate mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	8,050	8,006
Allowance for loan losses	(33)	(34)	(40)	(36)
Home equity lines of credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	3,018	3,041
Allowance for loan losses	(15)	(14)	(19)	(20)
Personal loans secured by securities [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	1,536	1,384
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	$ 35	$ 36

XML

Loans to Banking Clients and Related Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2014

Loans to Banking Clients and Related Allowance for Loan Losses [Abstract]

Composition of Loans to Banking Clients by Loan Segment

	March 31,		December 31,
	2014		2013
Residential real estate mortgages	$	8,050	$	8,006
Home equity lines of credit		3,018		3,041
Personal loans secured by securities		1,536		1,384
Other		35		36
Total loans to banking clients (1)		12,639		12,467
Allowance for loan losses		(48)		(48)
Total loans to banking clients – net	$	12,591	$	12,419

(1) All loans are evaluated for impairment by loan segment.

Changes in Allowance for Loan Losses

Three Months Ended	March 31, 2014							March 31, 2013
	Residential							Residential
	real estate		Home equity					real estate		Home equity
	mortgages		lines of credit			Total		mortgages		lines of credit			Total
Balance at beginning of period	$	34		$	14	$	48	$	36		$	20	$	56
Charge-offs		(1)			(1)		(2)		(2)			(2)		(4)
Recoveries		-			1		1		1			-		1
Provision for loan losses		-			1		1		5			1		6
Balance at end of period	$	33		$	15	$	48	$	40		$	19	$	59

Delinquency Analysis by Loan Class

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
March 31, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	6	$	2		$	25	$	33	$	7,889
Purchased first mortgages		155		1		-			5		6		161
Home equity lines of credit		3,004		3		1			10		14		3,018
Personal loans secured by securities		1,533		3		-			-		3		1,536
Other		35		-		-			-		-		35
Total loans to banking clients	$	12,583	$	13	$	3		$	40	$	56	$	12,639

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
December 31, 2013	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,808	$	3	$	4		$	30	$	37	$	7,845
Purchased first mortgages		154		1		-			6		7		161
Home equity lines of credit		3,025		2		2			12		16		3,041
Personal loans secured by securities		1,384		-		-			-		-		1,384
Other		36		-		-			-		-		36
Total loans to banking clients	$	12,407	$	6	$	6		$	48	$	60	$	12,467

Credit Quality of Residential Real Estate Mortgages and HELOCs by Reviewing FICO Scores at Origination, Current FICO Scores, Loan-To-Value Ratio

		Residential real estate mortgages
	First			Purchased					Home equity
March 31, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	818		$	53	$	871		$	2,246
2010			479			7		486			189
2011			694			36		730			151
2012			2,333			26		2,359			157
2013			3,304			36		3,340			239
2014			261			3		264			36
Total		$	7,889		$	161	$	8,050		$	3,018
Origination FICO
<620		$	10		$	1	$	11		$	1
620 – 679			94			13		107			19
680 – 739			1,361			32		1,393			571
>740			6,424			115		6,539			2,427
Total		$	7,889		$	161	$	8,050		$	3,018
Updated FICO
<620		$	54		$	5	$	59		$	38
620 – 679			188			8		196			111
680 – 739			1,017			27		1,044			447
>740			6,630			121		6,751			2,422
Total		$	7,889		$	161	$	8,050		$	3,018
Origination LTV
<70%		$	5,352		$	111	$	5,463		$	2,017
>70% – <90%			2,521			45		2,566			977
>90% – <100%			16			5		21			24
Total		$	7,889		$	161	$	8,050		$	3,018

			Weighted				Percent of Loans
			Average		Utilization		that are on
March 31, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,742		776	N/A			0.06	%
>70% – <90%		1,140		765	N/A			0.28	%
>90% – <100%		77		739	N/A			2.53	%
>100%		91		728	N/A			11.43	%
Total	$	8,050		774	N/A			0.24	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,146		774	36	%		0.06	%
>70% – <90%		651		764	47	%		0.28	%
>90% – <100%		116		754	59	%		0.47	%
>100%		105		743	61	%		2.23	%
Total	$	3,018		770	39	%		0.20	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.

		Residential real estate mortgages
	First			Purchased					Home equity
December 31, 2013	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	859		$	55	$	914		$	2,304
2010			503			7		510			191
2011			733			38		771			155
2012			2,403			26		2,429			162
2013			3,347			35		3,382			229
Total		$	7,845		$	161	$	8,006		$	3,041
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			96			14		110			20
680 – 739			1,352			32		1,384			576
>740			6,387			114		6,501			2,445
Total		$	7,845		$	161	$	8,006		$	3,041
Updated FICO
<620		$	50		$	5	$	55		$	42
620 – 679			209			10		219			106
680 – 739			1,012			29		1,041			453
>740			6,574			117		6,691			2,440
Total		$	7,845		$	161	$	8,006		$	3,041
Origination LTV
<70%		$	5,306		$	110	$	5,416		$	2,040
>70% – <90%			2,523			45		2,568			977
>90% – <100%			16			6		22			24
Total		$	7,845		$	161	$	8,006		$	3,041

			Weighted				Percent of Loans
			Average		Utilization		that are on
December 31, 2013	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,649		775	N/A			0.05	%
>70% – <90%		1,181		763	N/A			0.34	%
>90% – <100%		86		732	N/A			4.77	%
>100%		90		730	N/A			10.50	%
Total	$	8,006		772	N/A			0.26	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,127		773	36	%		0.13	%
>70% – <90%		664		762	48	%		0.22	%
>90% – <100%		127		752	59	%		1.22	%
>100%		123		743	63	%		1.34	%
Total	$	3,041		769	39	%		0.24	%

(1) The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.