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 June 30, 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.

1,303,355,243shares of $.01 par value Common Stock

Outstanding on July 25, 2014

THE CHARLES SCHWAB CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 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 – 45
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46 – 47
	Item 4.	Controls and Procedures	47
Part II - Other Information
	Item 1.	Legal Proceedings	48
	Item 1A.	Risk Factors	48
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
	Item 3.	Defaults Upon Senior Securities	49
	Item 4.	Mine Safety Disclosures	49
	Item 5.	Other Information	49
	Item 6.	Exhibits	49
Signature			50

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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net Revenues
Asset management and administration fees	$	632	$	572	$	1,243	$	1,124
Interest revenue		588		499		1,167		996
Interest expense		(26)		(26)		(52)		(54)
Net interest revenue		562		473		1,115		942
Trading revenue		212		235		459		458
Other		65		59		133		115
Provision for loan losses		7		1		6		(5)
Net impairment losses on securities (1)		-		(3)		-		(7)
Total net revenues		1,478		1,337		2,956		2,627
Expenses Excluding Interest
Compensation and benefits		520		494		1,048		1,030
Professional services		112		106		218		205
Occupancy and equipment		80		77		160		154
Advertising and market development		65		67		128		141
Communications		57		56		113		110
Depreciation and amortization		48		51		96		102
Other		75		74		150		142
Total expenses excluding interest		957		925		1,913		1,884
Income before taxes on income		521		412		1,043		743
Taxes on income		197		156		393		281
Net Income		324		256		650		462
Preferred stock dividends		22		23		30		31
Net Income Available to Common Stockholders	$	302	$	233	$	620	$	431
Weighted-Average Common Shares Outstanding — Diluted		1,313		1,288		1,312		1,285
Earnings Per Common Share — Basic	$	.23	$	.18	$	.47	$	.33
Earnings Per Common Share — Diluted	$	.23	$	.18	$	.47	$	.33

(1) There were no net impairment losses on securities for the three or six months ended June 30, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(1) million reclassified from other comprehensive income, for the three months ended June 30, 2013. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(5) million reclassified from other comprehensive income, for the six months ended June 30, 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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net Income	$	324	$	256	$	650	$	462
Other comprehensive income (loss), before tax:
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)		126		(477)		285		(480)
Reclassification of impairment charges included in net
impairment losses on securities		-		3		-		7
Other reclassifications included in other revenue		(1)		(3)		(2)		(3)
Other		-		-		-		1
Other comprehensive income (loss), before tax		125		(477)		283		(475)
Income tax effect		(47)		180		(106)		180
Other comprehensive income (loss), net of tax		78		(297)		177		(295)
Comprehensive Income (Loss)	$	402	$	(41)	$	827	$	167

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)

	June 30,		December 31,
	2014		2013
Assets
Cash and cash equivalents	$	6,832	$	7,728
Cash and investments segregated and on deposit for regulatory purposes
(including resale agreements of $10,440 at June 30, 2014 and $14,016
at December 31, 2013)		19,093		23,553
Receivables from brokers, dealers, and clearing organizations		522		509
Receivables from brokerage clients — net		14,670		13,951
Other securities owned — at fair value		583		517
Securities available for sale		53,203		51,618
Securities held to maturity (fair value — $32,647 at June 30, 2014 and
$29,490 at December 31, 2013)		32,495		30,318
Loans to banking clients — net		12,869		12,419
Equipment, office facilities, and property — net		883		790
Goodwill		1,227		1,227
Intangible assets — net		244		266
Other assets		780		746
Total assets	$	143,401	$	143,642
Liabilities and Stockholders’ Equity
Deposits from banking clients	$	95,688	$	92,972
Payables to brokers, dealers, and clearing organizations		1,725		1,467
Payables to brokerage clients		31,484		35,333
Accrued expenses and other liabilities		1,433		1,586
Long-term debt		1,901		1,903
Total liabilities		132,231		133,261
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation
preference of $885		871		869
Common stock — 3 billion shares authorized; $.01 par value per share;
1,487,543,446 shares issued		15		15
Additional paid-in capital		4,012		3,951
Retained earnings		9,715		9,253
Treasury stock, at cost — 185,261,252 shares at June 30, 2014 and
190,657,263 shares at December 31, 2013		(3,629)		(3,716)
Accumulated other comprehensive income		186		9
Total stockholders’ equity		11,170		10,381
Total liabilities and stockholders’ equity	$	143,401	$	143,642

See Notes to Condensed Consolidated Financial Statements.

-  3  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Millions)

(Unaudited)

	Six Months Ended
	June 30,
	2014		2013
Cash Flows from Operating Activities
Net income	$	650	$	462
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		(6)		5
Net impairment losses on securities		-		7
Stock-based compensation		54		59
Depreciation and amortization		96		102
Premium amortization, net, on securities available for sale and securities held to maturity		58		92
Other		7		20
Net change in:
Cash and investments segregated and on deposit for regulatory purposes		4,460		1,458
Receivables from brokers, dealers, and clearing organizations		(9)		(62)
Receivables from brokerage clients		(722)		631
Other securities owned		(66)		148
Other assets		(47)		16
Payables to brokers, dealers, and clearing organizations		95		662
Payables to brokerage clients		(3,849)		(3,478)
Accrued expenses and other liabilities		(220)		42
Net cash provided by operating activities		501		164
Cash Flows from Investing Activities
Purchases of securities available for sale		(6,493)		(12,587)
Proceeds from sales of securities available for sale		2,045		3,004
Principal payments on securities available for sale		3,194		7,017
Purchases of securities held to maturity		(3,255)		(9,914)
Principal payments on securities held to maturity		1,132		2,413
Net increase in loans to banking clients		(460)		(976)
Purchase of equipment, office facilities, and property		(165)		(111)
Other investing activities		(8)		2
Net cash used for investing activities		(4,010)		(11,152)
Cash Flows from Financing Activities
Net change in deposits from banking clients		2,716		4,968
Repayment of commercial paper		-		(300)
Repayment of long-term debt		(4)		(3)
Dividends paid		(186)		(184)
Proceeds from stock options exercised and other		81		81
Other financing activities		6		(3)
Net cash provided by financing activities		2,613		4,559
Decrease in Cash and Cash Equivalents		(896)		(6,429)
Cash and Cash Equivalents at Beginning of Period		7,728		12,663
Cash and Cash Equivalents at End of Period	$	6,832	$	6,234
Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	51	$	51
Income taxes	$	403	$	277
Non-cash investing activity:
Securities purchased during the period but settled after period end	$	163	$	420

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 half of 2014.

2.New Accounting Standards

New Accounting Standards Not Yet Adopted

In January 2014, the Financial Accounting Standards Board (FASB) 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.

In May 2014, the FASB issued new guidance on revenue recognition, which is effective January 1, 2017. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS, and 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
June 30, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	17,934	$	225	$	26	$	18,133
Asset-backed securities		17,524		96		3		17,617
Corporate debt securities		9,203		62		3		9,262
U.S. agency notes		4,240		-		56		4,184
Certificates of deposit		3,124		3		-		3,127
Non-agency residential mortgage-backed securities		570		15		25		560
Non-agency commercial mortgage-backed securities		311		9		-		320
Total securities available for sale	$	52,906	$	410	$	113	$	53,203
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,393	$	454	$	284	$	31,563
Non-agency commercial mortgage-backed securities		1,002		7		25		984
Other securities		100		-		-		100
Total securities held to maturity	$	32,495	$	461	$	309	$	32,647

			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 $133 million at June30, 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
June 30, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	4,266	$	22	$	577	$	4	$	4,843	$	26
Asset-backed securities		457		1		853		2		1,310		3
Corporate debt securities		-		-		618		3		618		3
U.S. agency notes		-		-		3,684		56		3,684		56
Non-agency residential mortgage-backed
securities		33		1		331		24		364		25
Total	$	4,756	$	24	$	6,063	$	89	$	10,819	$	113
Securities held to maturity:
U.S. agency mortgage-backed securities	$	415	$	1	$	12,125	$	283	$	12,540	$	284
Non-agency commercial mortgage-backed
securities		-		-		680		25		680		25
Total	$	415	$	1	$	12,805	$	308	$	13,220	$	309
Total securities with unrealized losses (1)	$	5,171	$	25	$	18,868	$	397	$	24,039	$	422

(1) The number of investment positions with unrealized losses totaled 218 for securities available for sale and 115 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 securities and it is not “more likely than not” that the Company will be required to sell these securities before anticipated

-  7  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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 second quarter or first half 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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Balance at beginning of period	$	169	$	163	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		1		-		1
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		2		-		6
Balance at end of period	$	169	$	166	$	169	$	166

The maturities of securities available for sale and securities held to maturity at June 30, 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)	$	-	$	1,183	$	3,964	$	12,986	$	18,133
Asset-backed securities		-		1,491		4,732		11,394		17,617
Corporate debt securities		1,163		8,049		50		-		9,262
U.S. agency notes		-		4,184		-		-		4,184
Certificates of deposit		1,527		1,600		-		-		3,127
Non-agency residential mortgage-backed
securities (1)		-		3		-		557		560
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,690	$	16,510	$	8,746	$	25,257	$	53,203
Total amortized cost	$	2,682	$	16,502	$	8,633	$	25,089	$	52,906
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	613	$	14,053	$	16,897	$	31,563
Non-agency commercial mortgage-backed
securities (1)		-		-		354		630		984
Other securities		100		-		-		-		100
Total fair value	$	100	$	613	$	14,407	$	17,527	$	32,647
Total amortized cost	$	100	$	600	$	14,379	$	17,416	$	32,495

(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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Proceeds	$	760	$	3,004	$	2,045	$	3,004
Gross realized gains	$	1	$	3	$	2	$	3

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

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

	June 30,		December 31,
	2014		2013
Residential real estate mortgages	$	8,055	$	8,006
Home equity lines of credit		3,017		3,041
Personal loans secured by securities		1,804		1,384
Other		34		36
Total loans to banking clients (1)		12,910		12,467
Allowance for loan losses		(41)		(48)
Total loans to banking clients – net	$	12,869	$	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 $6.0 billion and $5.7 billion at June 30, 2014 and December 31, 2013, respectively. All of the personal loans were fully collateralized by securities with fair values in excess of borrowings at June 30, 2014 and December 31, 2013.

Changes in the allowance for loan losses were as follows:

Three Months Ended	June 30, 2014							June 30, 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	$	33		$	15	$	48	$	40		$	19	$	59
Charge-offs		-			(1)		(1)		(1)			(1)		(2)
Recoveries		1			-		1		-			1		1
Provision for loan losses		(6)			(1)		(7)		1			(2)		(1)
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

Six Months Ended	June 30, 2014							June 30, 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)			(2)		(3)		(3)			(3)		(6)
Recoveries		1			1		2		1			1		2
Provision for loan losses		(6)			-		(6)		6			(1)		5
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

-  9  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Included in the loan portfolio are nonaccrual loans totaling$37 million and $48 million at June 30, 2014 and December 31, 2013, respectively. There wereno loans accruing interest that were contractually 90 days or more past due at June 30, 2014 or December 31, 2013. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $44 million and $53 million at June 30, 2014 and December 31, 2013, respectively.Troubled debt restructurings were not material at June 30, 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 $332 millionand $928million during the second quarters of 2014 and 2013, respectively, and $618 million and $2.2 billion during the first halves of 2014 and 2013, respectively. Schwab Bank purchased HELOCs with commitments of $175 million and $221 million during the second quarters of 2014 and 2013, respectively, and $347 million and $439 million during the first halves 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
June 30, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	10	$	3		$	23	$	36	$	7,892
Purchased first mortgages		157		1		-			5		6		163
Home equity lines of credit		3,003		4		1			9		14		3,017
Personal loans secured by securities		1,803		1		-			-		1		1,804
Other		34		-		-			-		-		34
Total loans to banking clients	$	12,853	$	16	$	4		$	37	$	57	$	12,910

							>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 June 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
June 30, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	774		$	51	$	825		$	2,196
2010			427			7		434			182
2011			635			35		670			149
2012			2,256			26		2,282			153
2013			3,215			35		3,250			253
2014			585			9		594			84
Total		$	7,892		$	163	$	8,055		$	3,017
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			90			12		102			19
680 – 739			1,338			32		1,370			564
>740			6,454			118		6,572			2,434
Total		$	7,892		$	163	$	8,055		$	3,017
Updated FICO
<620		$	50		$	5	$	55		$	39
620 – 679			183			7		190			104
680 – 739			1,063			27		1,090			456
>740			6,596			124		6,720			2,418
Total		$	7,892		$	163	$	8,055		$	3,017
Origination LTV
<70%		$	5,362		$	113	$	5,475		$	2,019
>70% – <90%			2,516			44		2,560			975
>90% – <100%			14			6		20			23
Total		$	7,892		$	163	$	8,055		$	3,017

			Weighted				Percent of Loans
			Average		Utilization		that are on
June 30, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,771		775	N/A			0.06	%
>70% – <90%		1,130		765	N/A			0.37	%
>90% – <100%		74		738	N/A			2.21	%
>100%		80		734	N/A			8.08	%
Total	$	8,055		773	N/A			0.21	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,154		773	36	%		0.08	%
>70% – <90%		652		763	47	%		0.25	%
>90% – <100%		110		753	57	%		0.91	%
>100%		101		746	60	%		1.22	%
Total	$	3,017		769	39	%		0.19	%

(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 June 30, 2014, the aggregate face amount of these LOCs totaled $240 million. There were no funds drawn under any of these LOCs at June 30, 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 subsequently denied. On June 10, 2014, Schwab filed a motion for summary judgment of the NYAG’s 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 June 30, 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 June 30, 2014. The Company did not transfer any assets or liabilities between Level 1,Level 2, or Level 3 during the quarter ended June 30, 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 June 30, 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
June 30, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,422		$	-		$	-		$	1,422
Commercial paper			-			41			-			41
Total cash equivalents			1,422			41			-			1,463
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,825			-			3,825
U.S. Government securities			-			322			-			322
Total investments segregated and on deposit for
regulatory purposes			-			4,147			-			4,147
Other securities owned:
Schwab Funds® money market funds			297			-			-			297
Equity and bond mutual funds			219			-			-			219
State and municipal debt obligations			-			35			-			35
Equity, U.S. Government and corporate debt, and
other securities			1			31			-			32
Total other securities owned			517			66			-			583
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,133			-			18,133
Asset-backed securities			-			17,617			-			17,617
Corporate debt securities			-			9,262			-			9,262
U.S. agency notes			-			4,184			-			4,184
Certificates of deposit			-			3,127			-			3,127
Non-agency residential mortgage-backed securities			-			560			-			560
Non-agency commercial mortgage-backed securities			-			320			-			320
Total securities available for sale			-			53,203			-			53,203
Total		$	1,939		$	57,457		$	-		$	59,396

-  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 June 30, 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
June 30, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	5,369		$	-		$	5,369		$	-	$	5,369
Cash and investments segregated and
on deposit for regulatory purposes		14,943			-			14,943			-		14,943
Receivables from brokers, dealers, and
clearing organizations		522			-			522			-		522
Receivables from brokerage clients – net		14,664			-			14,664			-		14,664
Securities held to maturity:
U.S. agency mortgage-backed securities		31,393			-			31,563			-		31,563
Non-agency commercial mortgage-backed
securities		1,002			-			984			-		984
Other securities		100			-			100			-		100
Total securities held to maturity		32,495			-			32,647			-		32,647
Loans to banking clients: (1)
Residential real estate mortgages		8,055			-			8,047			-		8,047
Home equity lines of credit		3,017			-			3,048			-		3,048
Personal loans secured by securities		1,804			-			1,804			-		1,804
Other		34			-			34			-		34
Total loans to banking clients		12,910			-			12,933			-		12,933
Other assets		72			-			72			-		72
Total	$	80,975		$	-		$	81,150		$	-	$	81,150
Liabilities:
Deposits from banking clients	$	95,688		$	-		$	95,688		$	-	$	95,688
Payables to brokers, dealers, and clearing
organizations		1,725			-			1,725			-		1,725
Payables to brokerage clients		31,484			-			31,484			-		31,484
Accrued expenses and other liabilities		519			-			519			-		519
Long-term debt		1,901			-			2,016			-		2,016
Total	$	131,317		$	-		$	131,432		$	-	$	131,432

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $41 million at June 30, 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 to 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 $1.2billion at June 30, 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 $192 million at June 30, 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 (loss) are as follows:

Three Months Ended June 30,			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)	$	126	$	(47)	$	79	$	(477)	$	179	$	(298)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		3		-		3
Other reclassifications included in
other revenue		(1)		-		(1)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		125		(47)		78		(477)		180		(297)
Other comprehensive income (loss)	$	125	$	(47)	$	78	$	(477)	$	180	$	(297)

Six Months Ended June 30,			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)	$	285	$	(106)	$	179	$	(480)	$	181	$	(299)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		7		(2)		5
Other reclassifications included in
other revenue		(2)		-		(2)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		283		(106)		177		(476)		180		(296)
Other		-		-		-		1		-		1
Other comprehensive income (loss)	$	283	$	(106)	$	177	$	(475)	$	180	$	(295)

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			(296)			1			(295)
Balance at June 30, 2013		$	3		$	-		$	3
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			177			-			177
Balance at June 30, 2014		$	186		$	-		$	186

-  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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net income	$	324	$	256	$	650	$	462
Preferred stock dividends		(22)		(23)		(30)		(31)
Net income available to common stockholders	$	302	$	233	$	620	$	431
Weighted-average common shares outstanding — basic		1,302		1,282		1,301		1,280
Common stock equivalent shares related to stock incentive plans		11		6		11		5
Weighted-average common shares outstanding — diluted (1)		1,313		1,288		1,312		1,285
Basic EPS	$	.23	$	.18	$	.47	$	.33
Diluted EPS	$	.23	$	.18	$	.47	$	.33

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 16 million and 28 million shares for the second quarters of 2014 and 2013, respectively, and 17 million and 32 million shares for the first halves 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 June 30, 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 June 30, 2014 are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,261	20.5	%	$	2,125	6.0	%	$	1,417	4.0	%
Total Risk-Based Capital	$	7,303	20.6	%	$	3,542	10.0	%	$	2,834	8.0	%
Tier 1 Leverage	$	7,261	7.0	%	$	5,169	5.0	%	$	4,136	4.0	%
Tangible Equity	$	7,261	7.0	%		N/A			$	2,068	2.0	%

N/A Not applicable.

Based on its regulatory capital ratios at June 30, 2014, Schwab Bank is considered well capitalized (the highest category) pursuant to banking regulatory guidelines. There are no conditions or events since June 30, 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), 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 June 30, 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		$	1,617		10	%		$	0.250		$	316		$	1,301		$	828
optionsXpress, Inc.		$	112		37	%		$	1		$	6		$	106		$	97

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 June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	441	$	402	$	191	$	170	$	-	$	-	$	632	$	572
Net interest revenue		504		418		58		55		-		-		562		473
Trading revenue		145		160		67		75		-		-		212		235
Other		47		43		18		16		-		-		65		59
Provision for loan losses		6		1		1		-		-		-		7		1
Net impairment losses on securities		-		(3)		-		-		-		-		-		(3)
Total net revenues		1,143		1,021		335		316		-		-		1,478		1,337
Expenses Excluding Interest		734		722		223		203		-		-		957		925
Income before taxes on income	$	409	$	299	$	112	$	113	$	-	$	-	$	521	$	412
Taxes on income														197		156
Net Income													$	324	$	256

	Investor Services				Advisor Services				Unallocated				Total
Six Months Ended June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	869	$	789	$	374	$	335	$	-	$	-	$	1,243	$	1,124
Net interest revenue		999		831		116		111		-		-		1,115		942
Trading revenue		316		309		143		149		-		-		459		458
Other		98		85		35		30		-		-		133		115
Provision for loan losses		5		(4)		1		(1)		-		-		6		(5)
Net impairment losses on securities		-		(7)		-		-		-		-		-		(7)
Total net revenues		2,287		2,003		669		624		-		-		2,956		2,627
Expenses Excluding Interest		1,472		1,473		441		411		-		-		1,913		1,884
Income before taxes on income	$	815	$	530	$	228	$	213	$	-	$	-	$	1,043	$	743
Taxes on income														393		281
Net Income													$	650	$	462

11.Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to June30, 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 second quarters and first halves of 2014 and 2013 are:

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2014			2013			Change		2014			2013			Change
Client Activity Metrics:
Net new client assets (1) (in billions)	$	22.7		$	(21.7)		N/M		$	56.9		$	21.7		162	%
Client assets (2) (in billions, at quarter end)	$	2,401.9		$	2,050.9		17	%
New brokerage accounts (3) (in thousands)		242			243		-			500			487		3	%
Active brokerage accounts (4) (in thousands,
at quarter end)		9,252			8,962		3	%
Company Financial Metrics:
Net revenues	$	1,478		$	1,337		11	%	$	2,956		$	2,627		13	%
Expenses excluding interest		957			925		3	%		1,913			1,884		2	%
Income before taxes on income		521			412		26	%		1,043			743		40	%
Taxes on income		197			156		26	%		393			281		40	%
Net income	$	324		$	256		27	%	$	650		$	462		41	%
Preferred stock dividends	$	22		$	23		(4)	%	$	30		$	31		(3)	%
Net income available to common stockholders	$	302		$	233		30	%	$	620		$	431		44	%
Earnings per common share – diluted	$	.23		$	.18		28	%	$	.47		$	.33		42	%
Net revenue growth from prior year		11	%		4	%				13	%		6	%
Pre-tax profit margin		35.3	%		30.8	%				35.3	%		28.3	%
Return on average common stockholders’
equity (annualized) (5)		12	%		10	%				13	%		10	%
Expenses excluding interest as a percentage
of average client assets (annualized)		0.16	%		0.18	%				0.16	%		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, defined as net new client assets before significant one-time flows, is a useful metric when comparing period-to-period client asset flows. There were no significant one-time flows during the second quarter and first half of 2014 and core net new assets totaled $22.6 billion and $66.0 billion in the second quarter and first half of 2013, respectively. See below for items excluded from core net new assets.
(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.

-  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)

The following one-time flows were excluded from core net new assets.

· Second quarter and first half of 2013 include outflows of $44.3 billion relating to the planned transfer of a mutual fund clearing services client.

The Company continued to operate in an environment that contained mixedmarket drivers of performance during the second quarter of 2014.TheNasdaq Composite Index, Standard & Poor’s 500 Index, and Dow Jones Industrial Average increased 30%, 22%, and 13% from the second quarter of 2013, respectively. In addition, long-term interest rates, including the average 10-year Treasury yield, increased compared to the second quarter of 2013. Meanwhile, short-term interest rates continued to be constrained as the federal funds target rate remained unchanged at a range of zero to 0.25% and the average three-month Treasury Bill yield decreased by 2 basis points to 0.02% compared to the second quarter of 2013.

The Company’s full-service investing model continued to attract clients during the second quarter of 2014.Net new client assets of  $22.7 billion in the second quarter of 2014 were comparable to core net new assets in the second quarter of 2013. Total client assets ended the second quarter of 2014 at $2.40 trillion, up 17% from the second quarter of 2013.The Company added 242,000 new brokerage accounts to its client base during the second quarter of 2014, which was relatively flat compared to the second quarter of 2013.Active brokerage accounts ended the second quarterof 2014 at 9.3 million, up 3% on a year-over-year basis.

For the second quarter of 2014, cash held at the Company as part of investing relationships, the Company’s growth in its client base, and higher balances in fee-based products and services all contributed to the Company achieving an 11% increase innet revenues compared to the second quarter of 2013.  Net revenues increased primarily due to increases in net interest revenue and asset management and administration fees, partially offset by a decrease in trading revenue. Net interest revenue increased primarily due to higher balances of interest-earning assets, including margin loans and the Company’s investment portfolio (securities available for sale and securities held to maturity), and 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 growth in client assets enrolled in advisory offers and client assets invested in Mutual Fund OneSource funds and equity and bond funds, and due to other asset management and administration fee revenue. Trading revenue decreased primarily due to lower daily average revenue trades.

For the first half of 2014, net revenues increased by 13% compared to the first half of 2013 primarily due to increases in net interest revenue and asset management and administration fees. Net interest revenue increased primarily due to higher balances of interest-earning assets, including margin loans and the Company’s investment portfolio (securities available for sale and securities held to maturity), and 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 growth in client assets enrolled in advisory offers and client assets invested in Mutual Fund OneSource funds and equity and bond funds, and due to other asset management and administration fee revenue.

Expenses excluding interest increased 3%and 2% in the second quarter and first half of 2014 compared to the same periods in2013, respectively, primarily due to increases in compensation and benefits, professional services, and other expense, partially offset by a decrease in advertising and market development expense.

As a result of the Company’s strong key client activity metrics and expense discipline, the Company achieved a pre-tax profit margin of 35.3% in both the second quarter and first half of 2014. Overall, net income increased by 27%  and 41% in the second quarter and first half of 2014 compared to the same periods in 2013, respectively. The return on average common stockholders’ equity was 12% and 13% in the second quarter and first half of 2014, respectively.

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

-  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)

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 Charles Schwab Bank (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.

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 could begin as early as 2015. The impact of this proposed rule 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 and discovery is proceeding. A trial date for claims relating to an initial group of securities and defendants 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 second quarter and first half of 2014 compared to the same periods in2013.

Net Revenues

The Company’s major sources of net revenues are asset management and administration fees, net interest revenue, and trading revenue. Asset management and administration fees and net interest revenue increased, while trading revenue decreased in the second quarter of 2014 compared to the same period in 2013. Asset management and administration fees and net interest revenue increased, while trading revenue was relatively flat in the first half of 2014 compared to the first half of 2013.

Three Months Ended June 30,			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	%	$	235			$	226
Fee waivers	17	%		(183)				(157)
Schwab money market funds after fee waivers	(25)	%		52	4	%		69	5	%
Equity and bond funds	24	%		47	3	%		38	3	%
Mutual Fund OneSource®	10	%		211	14	%		191	14	%
Total mutual funds	4	%		310	21	%		298	22	%
Advice solutions	18	%		209	14	%		177	13	%
Other	16	%		113	8	%		97	8	%
Asset management and administration fees	10	%		632	43	%		572	43	%
Net interest revenue
Interest revenue	18	%		588	40	%		499	37	%
Interest expense	-			(26)	(2)	%		(26)	(2)	%
Net interest revenue	19	%		562	38	%		473	35	%
Trading revenue
Commissions	(12)	%		199	13	%		226	17	%
Principal transactions	44	%		13	1	%		9	1	%
Trading revenue	(10)	%		212	14	%		235	18	%
Other	10	%		65	4	%		59	4	%
Provision for loan losses	NM			7	1	%		1	-
Net impairment losses on securities	(100)	%		-	-			(3)	-
Total net revenues	11	%	$	1,478	100	%	$	1,337	100	%

-  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)

Six Months Ended June 30,			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	%	$	474			$	456
Fee waivers	18	%		(368)				(312)
Schwab money market funds after fee waivers	(26)	%		106	4	%		144	6	%
Equity and bond funds	26	%		92	3	%		73	3	%
Mutual Fund OneSource®	11	%		415	14	%		375	14	%
Total mutual funds	4	%		613	21	%		592	23	%
Advice solutions	20	%		408	14	%		340	13	%
Other	16	%		222	7	%		192	7	%
Asset management and administration fees	11	%		1,243	42	%		1,124	43	%
Net interest revenue
Interest revenue	17	%		1,167	40	%		996	38	%
Interest expense	(4)	%		(52)	(2)	%		(54)	(2)	%
Net interest revenue	18	%		1,115	38	%		942	36	%
Trading revenue
Commissions	(1)	%		433	15	%		437	16	%
Principal transactions	24	%		26	1	%		21	1	%
Trading revenue	-			459	16	%		458	17	%
Other	16	%		133	4	%		115	4	%
Provision for loan losses	NM			6	-			(5)	-
Net impairment losses on securities	(100)	%		-	-			(7)	-
Total net revenues	13	%	$	2,956	100	%	$	2,627	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.”

Asset management and administration fees increased by $60 million, or 10%, and $119 million, or 11%, in the second quarter and first half of 2014 compared to the same periods in 2013, due to increases in revenue from mutual fund services, advice solutions, and other asset management and administration services.

Mutual fund service fees increased by $12 million, or4%, and $21 million, or 4%, in the second quarter and first half of 2014 compared to the same periods in 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 continued low yields on fund assets.

-  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)

Advice solutions fees increased by $32 million, or 18%, and $68 million, or 20%, in the second quarter and first half of 2014 compared to the same periods in 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 $16 million, or 16%, and $30 million, or 16%, in the second quarter and first half of 2014 compared to the same periods in 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.

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.

-  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)

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

Three Months Ended June 30,	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	$	6,001	$	3	0.20	%	$	6,148	$	3	0.20	%
Cash and investments segregated		19,614		6	0.12	%		26,438		9	0.14	%
Broker-related receivables (1)		312		-	-			398		-	0.12	%
Receivables from brokerage clients		13,634		120	3.53	%		11,571		106	3.67	%
Securities available for sale (2)		52,564		138	1.05	%		48,611		137	1.13	%
Securities held to maturity		32,043		206	2.58	%		22,857		133	2.33	%
Loans to banking clients		12,775		88	2.76	%		11,603		79	2.73	%
Total interest-earning assets		136,943		561	1.64	%		127,626		467	1.47	%
Other interest revenue				27						32
Total interest-earning assets	$	136,943	$	588	1.72	%	$	127,626	$	499	1.57	%
Funding sources:
Deposits from banking clients	$	94,938	$	8	0.03	%	$	82,260	$	7	0.03	%
Payables to brokerage clients (1)		26,352		-	0.01	%		31,164		-	0.01	%
Long-term debt		1,901		18	3.80	%		1,630		17	4.18	%
Total interest-bearing liabilities		123,191		26	0.08	%		115,054		24	0.08	%
Non-interest-bearing funding sources		13,752						12,572
Other interest expense (1)				-						2
Total funding sources	$	136,943	$	26	0.07	%	$	127,626	$	26	0.08	%
Net interest revenue			$	562	1.65	%			$	473	1.49	%

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

-  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)

Six Months Ended June 30,	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	$	6,349	$	7	0.22	%	$	7,023	$	8	0.23	%
Cash and investments segregated		20,611		12	0.12	%		27,011		21	0.16	%
Broker-related receivables (1)		303		-	0.15	%		379		-	0.13	%
Receivables from brokerage clients		13,397		236	3.55	%		11,457		212	3.73	%
Securities available for sale (2)		52,269		278	1.07	%		47,764		275	1.16	%
Securities held to maturity		31,448		405	2.60	%		21,965		264	2.42	%
Loans to banking clients		12,661		175	2.79	%		11,348		159	2.83	%
Total interest-earning assets		137,038		1,113	1.64	%		126,947		939	1.49	%
Other interest revenue				54						57
Total interest-earning assets	$	137,038	$	1,167	1.72	%	$	126,947	$	996	1.58	%
Funding sources:
Deposits from banking clients	$	94,360	$	15	0.03	%	$	81,306	$	17	0.04	%
Payables to brokerage clients		26,779		1	0.01	%		31,627		1	0.01	%
Long-term debt		1,902		36	3.82	%		1,631		34	4.20	%
Total interest-bearing liabilities		123,041		52	0.09	%		114,564		52	0.09	%
Non-interest-bearing funding sources		13,997						12,383
Other interest expense (1)				-						2
Total funding sources	$	137,038	$	52	0.08	%	$	126,947	$	54	0.08	%
Net interest revenue			$	1,115	1.64	%			$	942	1.50	%

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

Net interest revenue increased in the second quarter and first half of 2014 compared to the same periods in 2013, primarily due to higher balances of interest-earning assets, including margin loans and the Company’s investment portfolio (securities available for sale and securities held to maturity), and 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.

-  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)

Trading revenue decreased by $23 million, or 10%, in the second quarter of 2014 compared to the second quarter of 2013, due to lower daily average revenue trades. Trading revenue remained relatively flat in the first half of 2014 compared to the first half of 2013. Daily average revenue trades decreased in the second quarter of 2014 primarily due to a lower volume of equity, mutual fund, future, and option trades. Daily average revenue trades were relatively flat in the first half of 2014 primarily due to a higher volume of equity, future, and option trades, offset by a lower volume of mutual fund trades. Average revenue per revenue trade remained relatively flat in the second quarter and first half of 2014 compared to the same periods in 2013.

	Three Months Ended						Six Months Ended
	June 30,				Percent		June 30,				Percent
	2014		2013		Change		2014		2013		Change
Daily average revenue trades (1) (in thousands)		274		302	(9)	%		305		300	2	%
Clients’ daily average trades (2) (in thousands)		483		497	(3)	%		518		498	4	%
Number of trading days		63.0		64.0	(2)	%		124.0		124.0	-
Average revenue per revenue trade	$	12.26	$	12.19	1	%	$	12.13	$	12.26	(1)	%

(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 includes payments 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 $6 million, or 10%, and $18 million, or 16%, in the second quarter and first half of 2014 compared to the same periods in 2013, respectively, primarily due to increases in payments from order flow and software fees from the Company’s portfolio management services.

Expenses Excluding Interest

As shown in the table below, expenses excluding interest increased in the second quarter and first half of 2014 compared to the same periods in 2013.Increases in compensation and benefits, professional services, and other expense were partially offset by a decrease in advertising and market development expense.

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2014			2013			Change		2014			2013			Change
Compensation and benefits	$	520		$	494		5	%	$	1,048		$	1,030		2	%
Professional services		112			106		6	%		218			205		6	%
Occupancy and equipment		80			77		4	%		160			154		4	%
Advertising and market development		65			67		(3)	%		128			141		(9)	%
Communications		57			56		2	%		113			110		3	%
Depreciation and amortization		48			51		(6)	%		96			102		(6)	%
Other		75			74		1	%		150			142		6	%
Total expenses excluding interest	$	957		$	925		3	%	$	1,913		$	1,884		2	%
Expenses as a percentage of total net revenues:
Total expenses excluding interest		65	%		69	%				65	%		72	%
Advertising and market development		4	%		5	%				4	%		5	%

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.

-  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)

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 fluctuate with this measure. Stock-based compensation primarily includes employee and board of director stock options, restricted stock units, and restricted stock awards.

Compensation and benefits expense increased by $26 million, or 5%, in the second quarter of 2014 compared to the second quarter of 2013 due to increases in salaries and wages and incentive compensation. Compensation and benefits expense was relatively flat in the first half of 2014 compared to the first half of 2013, primarily due to an increase in salaries and wages, offset by a decrease in incentive compensation. The following table shows a comparison of certain compensation and benefits components and employee data:

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2014			2013			Change		2014			2013			Change
Salaries and wages	$	293		$	280		5	%	$	588		$	564		4	%
Incentive compensation		147			140		5	%		294			303		(3)	%
Employee benefits and other		80			74		8	%		166			163		2	%
Total compensation and benefits expense	$	520		$	494		5	%	$	1,048		$	1,030		2	%
Compensation and benefits expense as a
percentage of total net revenues:
Salaries and wages		20	%		21	%				20	%		21	%
Incentive compensation		10	%		10	%				10	%		12	%
Employee benefits and other		5	%		6	%				5	%		6	%
Total compensation and benefits expense		35	%		37	%				35	%		39	%
Full-time equivalent employees (1) (in thousands)
At quarter end		14.1			13.9		1	%
Average		14.0			13.9		-			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 second quarter and first half of 2014 compared to the second quarter and first half of 2013, primarily due to annual salary increases.

Incentive compensation increased in the second quarter of 2014 compared to the second quarter of 2013, primarily due to an increase in discretionary bonus costs, partially offset by the impact the new payout schedule for field incentive plans had on 2013 expense. Incentive compensation decreased in the first half of 2014 compared to the first half of 2013 primarily due to the impact the transition to a new payout schedule for field incentive plans had in 2013, partially offset by an increase in discretionary bonus costs.

Expenses Excluding Compensation and Benefits

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

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

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

-  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)

Taxes on Income

The Company’s effective income tax rate on income before taxes was 37.8% and 37.9% for the second quarters of 2014 and 2013, respectively. The Company’s effective income tax rate on income before taxes was 37.7% and 37.8% for the first half of 2014 and 2013, respectively.

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 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 June 30,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	10	%	$	441	$	402	12	%	$	191	$	170
Net interest revenue	21	%		504		418	5	%		58		55
Trading revenue	(9)	%		145		160	(11)	%		67		75
Other	9	%		47		43	13	%		18		16
Provision for loan losses	N/M			6		1	-			1		-
Net impairment losses on securities	(100)	%		-		(3)	-			-		-
Total net revenues	12	%		1,143		1,021	6	%		335		316
Expenses Excluding Interest	2	%		734		722	10	%		223		203
Income before taxes on income	37	%	$	409	$	299	(1)	%	$	112	$	113
	Unallocated						Total
	Percent						Percent
Three Months Ended June 30,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	-		$	-	$	-	10	%	$	632	$	572
Net interest revenue	-			-		-	19	%		562		473
Trading revenue	-			-		-	(10)	%		212		235
Other	-			-		-	10	%		65		59
Provision for loan losses	-			-		-	N/M			7		1
Net impairment losses on securities	-			-		-	(100)	%		-		(3)
Total net revenues	-			-		-	11	%		1,478		1,337
Expenses Excluding Interest	-			-		-	3	%		957		925
Income before taxes on income	-		$	-	$	-	26	%	$	521	$	412
Taxes on income							26	%		197		156
Net Income							27	%	$	324	$	256

-  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)

	Investor Services						Advisor Services
	Percent						Percent
Six Months Ended June 30,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	10	%	$	869	$	789	12	%	$	374	$	335
Net interest revenue	20	%		999		831	5	%		116		111
Trading revenue	2	%		316		309	(4)	%		143		149
Other	15	%		98		85	17	%		35		30
Provision for loan losses	N/M			5		(4)	(200)	%		1		(1)
Net impairment losses on securities	(100)	%		-		(7)	-			-		-
Total net revenues	14	%		2,287		2,003	7	%		669		624
Expenses Excluding Interest	-			1,472		1,473	7	%		441		411
Income before taxes on income	54	%	$	815	$	530	7	%	$	228	$	213
	Unallocated						Total
	Percent						Percent
Six Months Ended June 30,	Change		2014		2013		Change		2014		2013
Net Revenues:
Asset management and administration fees	-		$	-	$	-	11	%	$	1,243	$	1,124
Net interest revenue	-			-		-	18	%		1,115		942
Trading revenue	-			-		-	-			459		458
Other	-			-		-	16	%		133		115
Provision for loan losses	-			-		-	N/M			6		(5)
Net impairment losses on securities	-			-		-	(100)	%		-		(7)
Total net revenues	-			-		-	13	%		2,956		2,627
Expenses Excluding Interest	-			-		-	2	%		1,913		1,884
Income before taxes on income	-		$	-	$	-	40	%	$	1,043	$	743
Taxes on income							40	%		393		281
Net Income							41	%	$	650	$	462

Investor Services

Net revenues increased by $122 million, or 12%, and $284 million, or 14%, in the second quarter and first half of 2014 compared to the same periods in 2013 primarily due to increases in net interest revenue and asset management and administration fees. The increase in net revenues for the second quarter of 2014 was partially offset by a decrease in trading revenue. Net interest revenue increased primarily due to higher balances of interest-earning assets, including margin loans and the Company’s investment portfolio, and 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 due to increases in revenue from mutual fund services, advice solutions, and other asset management and administration services. 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. Advice solutions fees increased primarily due to growth in client assets enrolled in advisory offers.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. Trading revenue decreased primarily due to lower daily average revenue trades.

Expenses excluding interest increased by $12 million, or 2%, in the second quarter of 2014 compared to the second quarter of 2013 primarily due to an increase in compensation and benefits expense. Expenses excluding interest remained flat in the first half of 2014 compared to the first half of 2013 primarily due to increases in occupancy and equipment, professional services, and other expense, offset by a decrease in advertising and market development expense.

-  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)

Advisor Services

Net revenues increased by $19 million, or 6%, and $45 million, or 7%, in the second quarter and first half of 2014 compared to the same periods in 2013 primarily due to an increase in asset management and administration fees, partially offset by a decrease in trading revenue. Asset management and administration fees increased due to increases in revenue from mutual fund services, advice solutions, and other asset management and administration services. 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. Advice solutions fees increased primarily due to growth in client assets enrolled in advisory offers. 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. Trading revenue decreased primarily due to lower daily average revenue trades.

Expenses excluding interest increased by $20 million, or 10%, and $30 million, or 7%, in the second quarter and first half of 2014 compared to the same periods in 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 June 30, 2014, CSC’s Tier 1 Leverage Ratio was 6.8%, Tier1 Capital Ratio was 17.2%, and Total Capital Ratio was 17.3%. Beginning in 2015, CSC will be subject to new capital requirements set by the Federal Reserve.

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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)

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

	Par						Standard
June 30, 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 June 30, 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 2015. This facility replaced a similar facility that expired in June 2014 and was unused during the first half 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, excluding accumulated other comprehensive income. At June 30, 2014, the minimum level of stockholders’ equity required under this facility was $7.5 billion (CSC’s stockholders’ equity, excluding accumulated other comprehensive income, at June 30, 2014 was $11.0 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 $1.0billion 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 half of 2014.

In addition, Schwab provided CSC with a $1.0 billion credit facility during the first half of 2014,  which was scheduled to expire in December 2014. There were no funds drawn under this facility at June 30, 2014.In July 2014, this credit facility was terminated by Schwab.

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 $29.6billion and $33.2 billion at June 30, 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 June 30, 2014, Schwab’s net capital was$1.6 billion (10% of aggregate debit balances), which was $1.3 billion in excess of its minimum required net capital and $828 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

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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)

clearing organizations primarily represent current open transactions, which usually settle, or can be closed out, within a few business days.

Schwab has a finance lease obligation related to an office building and land under a 20-year lease. The remaining finance lease obligation of $85 million at June 30, 2014 is being reduced by a portion of the lease payments over the remaining lease term of 10 years.

To manage short-term liquidity, Schwab maintains uncommitted, unsecured bank credit lines with a group of seven banks totaling $1.0 billion at June 30, 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. Schwab used such borrowings for 3 days during the first half of 2014, with average daily amounts borrowed of $25 million. There were no borrowings outstanding under these lines at June 30, 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 June 30, 2014. There were no funds drawn under any of these LOCs during the first half 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 June 30, 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. There were no funds drawn under this facility at June 30, 2014.

Schwab Bank

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

Deposits from banking clients at June 30, 2014 were $95.7billion, 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 June 30, 2014, these balances totaled $75.3 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 June 30, 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
June 30, 2014	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,261	20.5	%	$	2,125	6.0	%	$	1,417	4.0	%
Total Risk-Based Capital	$	7,303	20.6	%	$	3,542	10.0	%	$	2,834	8.0	%
Tier 1 Leverage	$	7,261	7.0	%	$	5,169	5.0	%	$	4,136	4.0	%
Tangible Equity	$	7,261	7.0	%		N/A			$	2,068	2.0	%

N/A Not applicable.

-  37  -

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 June 30, 2014, $2.5 billion was available under this arrangement. There were no funds drawn under this arrangement during the first half 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 June 30, 2014, $7.3 billion was available under this facility. There were no funds drawn under this facility during the first half 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 June 30, 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 June 30, 2014, optionsXpress, Inc.’s net capital was $112 million (37% of aggregate debit balances), which was $106 million in excess of its minimum required net capital and $97 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 June 30, 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 June 30, 2014. There were no funds drawn under this LOC during the first half 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 June 30, 2014.

optionsXpress has a term loan with CSC, of which $26 million was outstanding at June 30, 2014, and it matures in December 2017.  

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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)

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 30%. The Company’s total financial capital (long-term debt plus stockholders’ equity) at June 30, 2014 was $13.1 billion, up $787million, or 6%, 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 June 30, 2014, and December 31, 2013, the Company had long-term debt of $1.9 billion, or 15% of total financial capital. At June 30, 2014, the Company had long term debt that bears interest at a weighted-average rate of 3.60%. The Company repaid $4 million of long-term debt in the first half of 2014.

Capital Expenditures

The Company’s capital expenditures were $168 million and $115 million in the first halves of 2014 and 2013, respectively. Capital expenditures in the first half 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 half of 2013 were primarily for developing internal-use software, software and equipment relating to the Company’s information technology systems, buildings, and land. Capitalized costs for developing internal-use software were $36 million and $37 million in the first halves 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 second quarter management revised the Company’s estimated full-year 2014 capital expenditures to approximately 75% higher than 2013 levels primarily due to the decision to acquire additional facilities and land to support future growth and expansion. The Company intends to occupy certain of these facilities beginning in the third quarter of 2014.

Dividends

CSC paid common stock cash dividends of $157 million ($0.12 per share) and $155 million ($0.12 per share) inthe first halvesof 2014 and 2013, respectively.

CSC paid Series A Preferred Stock cash dividends of $14 million ($35.00 per share) in both the first halves of 2014 and 2013.CSC paid Series B Preferred Stock cash dividends of $15 million ($30 per share) in both the first halves of 2014 and 2013.

Share Repurchases

There were no repurchases of CSC’s common stock in the first halves of 2014 and 2013. As of June 30, 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.

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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)

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 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 June 30, 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 June 30, 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 June 30, 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 June 30, 2014,  22% of HELOCs ($665 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.  

-  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 monitors the estimated current LTV ratios of its First Mortgage and HELOC portfolios on an ongoing basis. At June 30, 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 June 30, 2014, the weighted-average updated FICOscores were 773 and 769 for the First Mortgage and HELOC portfolios, respectively.

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 June 30, 2014, $2.4 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 June 30, 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:

	June 30,			December 31,
	2014			2013
Loan delinquencies (1)		0.32	%		0.48	%
Nonaccrual loans		0.29	%		0.39	%
Allowance for loan losses		0.32	%		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 $53.2 billion and $32.6 billion at June 30, 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 June 30, 2014,  with the exception of certain non-agency residential mortgage-backed securities, 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 June 30, 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 $51.6 billion at June 30, 2014. Of these, $49.7 billion were issued by U.S. agencies and $1.9billion 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 $9.4 billion at June30,  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

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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)

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 June 30, 2014. The Company’s adjustable rate mortgages primarily 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 current market rates.At June 30, 2014,  46% of the residential real estate mortgages and 52% 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:

June 30, 2014	Balance
Converted to amortizing loan by period end	$	232
Within 1 year		247
> 1 year – 3 years		419
> 3 years – 5 years		1,192
> 5 years		927
Total	$	3,017

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 $10.7 billion at June 30, 2014.

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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)

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 June 30, 2014.

	Fair Value as of June 30, 2014
															United
	France		Germany		Italy		Netherlands		Norway		Sweden		Switzerland		Kingdom		Total
Cash equivalents	$	268	$	-	$	-	$	-	$	-	$	-	$	-	$	150	$	418
Cash and investments
segregated and on deposit
for regulatory purposes		-		400		-		-		-		-		-		-		400
Securities available for sale		356		150		200		136		76		1,198		650		808		3,574
Securities held to maturity		-		-		-		-		-		-		100		-		100
Total fair value	$	624	$	550	$	200	$	136	$	76	$	1,198	$	750	$	958	$	4,492
Total amortized cost	$	623	$	550	$	200	$	135	$	75	$	1,195	$	750	$	956	$	4,484
Maturities:
Overnight	$	268	$	400	$	-	$	-	$	-	$	-	$	-	$	150	$	818
1 day – < 6 months		-		-		-		-		-		200		100		72		372
6 months – < 1 year		200		150		200		-		-		326		225		201		1,302
1 year – 2 years		70		-		-		101		-		301		425		385		1,282
> 2 years		86		-		-		35		76		371		-		150		718
Total fair value	$	624	$	550	$	200	$	136	$	76	$	1,198	$	750	$	958	$	4,492

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. At June 30, 2014, the Company had $297 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 half of 2014.

As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, the Company’s annual goodwill impairment testing date is April 1. In testing for potential impairment of goodwill on April 1, 2014, management performed an assessment of each of the Company’s reporting units (generally defined as the Company’s businesses for which financial information is available and reviewed regularly by management) and concluded that goodwill was not impaired.

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.

-  43  -

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)

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 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”);

· 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”);

· 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;

· 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;

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

· 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;

· capital needs and management;

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

· the availability and terms of external financing;

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

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

-  44  -

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 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; and

· acquisition integration costs.

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.”

-  45  -

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. Current 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

-  46  -

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 half 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 June 30, 2014 and December 31, 2013.

	June 30,		December 31,
	2014		2013
Increase of 100 basis points	10.7	%	11.0	%
Decrease of 100 basis points	(4.5)	%	(4.5)	%

The sensitivities shown in the simulation reflect the fact that short-term interest rates in the first half 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 June30, 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 June30, 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 June30, 2014, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

-  47  -

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 half 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 second 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)
April:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	6	$	27.58	N/A			N/A
May:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	5	$	26.70	N/A			N/A
June:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	4	$	25.21	N/A			N/A
Total:
Share repurchase program (1)	-	$	-	-		$	596
Employee transactions (2)	15	$	26.60	N/A			N/A

(1)

There were no share repurchases under the Share Repurchase Program during the second 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
10.363	Credit Agreement (364 – Day Commitment) dated as of June 6, 2014, between the Registrant and financial institutions therein (supersedes Exhibit 10.361)
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 June 30, 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.

-  49  -

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

-  50  -

EX-10.363

Exhibit 10.363

EXECUTION COPY

$800,000,000

CREDIT AGREEMENT

(364-DAY COMMITMENT)

dated as of June 6, 2014

Among

THE CHARLES SCHWAB CORPORATION

and

CITIBANK, N.A.

as Administrative Agent

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

and

THE BANK OF NEW YORK MELLON

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

UBS SECURITIES LLC

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents

and

JPMORGAN CHASE BANK, N.A.

as Syndication Agent

and

CITIGROUP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES LLC

as Joint Lead Arrangers and Book Managers

NYDOCS01/1362879.4

1.	DEFINITIONS		1
2.	THE CREDIT FACILITY		13
	2.1	The Revolving Credit Facility	13
	2.2	Term Loan Facility	13
	2.3	Evidence of Borrowing/Promissory Notes	14
	2.4	Making of Revolving Loans and Term Loans, Borrowings; Interest Periods; Notice.	14
	2.5	Conversion and Continuation Elections.	16
	2.6	Interest Periods	17
	2.7	Interest Rates	17
	2.8	Substitute Rates	18
	2.9	Fees	19
	2.10	Reduction of Credit	19
	2.11	Termination Date; Extensions	20
	2.12	Payments by the Lenders to the Agent	20
	2.13	Sharing of Payments, Etc.	21
	2.14	Computation of Fees and Interest	21
	2.15	Defaulting Lenders	22
3.	PAYMENT		23
	3.1	Repayment	23
	3.2	Method of Payment	23
	3.3	Optional Prepayment	23
	3.4	Taxes/Net Payments	24
	3.5	Illegality	24
	3.6	Increased Costs and Reduction of Return	25
	3.7	Funding Losses	26
	3.8	Certificates of Lenders	26
	3.9	Substitution of Lenders	27
	3.10	Survival	27
4.	CONDITIONS.		27
	4.1	Conditions Precedent to the Effectiveness of this Agreement	27
	4.2	Conditions Precedent to Revolving Loans and Term Loans	28
5.	REPRESENTATIONS AND WARRANTIES.		29
	5.1	Organization and Good Standing	29
	5.2	Corporate Power and Authority	29
	5.3	Enforceability	29
	5.4	No Violation of Laws or Agreements	29
	5.5	No Consents	30

i

NYDOCS01/1362879.4

	5.6	Financial Statements	30
	5.7	Broker Subsidiary Licenses, Etc	30
	5.8	Broker Subsidiary/Broker Registration	30
	5.9	Broker Subsidiary/SIPC	30
	5.10	Taxes	30
	5.11	ERISA	30
	5.12	No Extension of Credit for Default Remedy/Hostile Acquisition	31
	5.13	Use of Proceeds/Margin Regulations	31
	5.14	Authorized Persons	31
	5.15	Material Contracts	31
	5.16	Litigation	31
	5.17	Investment Company	31
	5.18	Designated Persons	31
6.	AFFIRMATIVE COVENANTS.		31
	6.1	Notice of Events of Default	32
	6.2	Financial Statements	32
	6.3	Insurance	32
	6.4	Books and Records	32
	6.5	Change in Business	32
	6.6	Capital Requirements	32
	6.7	Anti-Corruption Laws and Sanctions	32
7.	NEGATIVE COVENANTS.		33
	7.1	Net Capital	33
	7.2	Minimum Stockholders' Equity	33
	7.3	Merger/Disposition of Assets	33
	7.4	Broker Subsidiary Indebtedness	33
	7.5	Indebtedness Secured by Subsidiary Stock	33
	7.6	Liens and Encumbrances	34
	7.7	Use of Proceeds	34
8.	EVENTS OF DEFAULT.		34
	8.1	Defaults	34
	8.2	Remedies	36
9.	THE AGENT.		36
	9.1	Appointment and Authorization	36
	9.2	Delegation of Duties	37
	9.3	Liability of Agent	37
	9.4	Reliance by Agent	37
	9.5	Notice of Default	38
	9.6	Credit Decision	38
	9.7	Indemnification of Agent	38

ii

NYDOCS01/1362879.4

	9.8	Agent in Individual Capacity	39
	9.9	Successor Agent	39
	9.10	Withholding Tax	39
	9.11	Co-Agents	41
10.	MISCELLANEOUS.		41
	10.1	Amendments and Waivers	41
	10.2	Notices	42
	10.3	No Waiver-Cumulative Remedies	43
	10.4	Costs and Expenses	44
	10.5	Borrower Indemnification	44
	10.6	Payments Set Aside	45
	10.7	Successors and Assigns	45
	10.8	Assignments, Participations Etc	45
	10.9	Confidentiality	48
	10.10	Notification of Addresses, Lending Offices, Etc	49
	10.11	Counterparts	49
	10.12	Severability	49
	10.13	No Third Parties Benefited	50
	10.14	Governing Law and Jurisdiction	50
	10.15	Waiver of Jury Trial	50
	10.16	Entire Agreement	51
	10.17	Headings	51
	10.18	USA Patriot Act	52

iii

NYDOCS01/1362879.4

SCHEDULES:

Schedule 1 - Lenders’ Commitments

Schedule 2 - List of Borrowing Agreements

Schedule 6.2 – Compliance Certificate

Schedule 10.2 - Notices

EXHIBITS:

Exhibit A-1 - Revolving Note

Exhibit A-2 - Term Note

Exhibit B - Borrowing Advice

Exhibit C - Notice of Conversion/Continuation

Exhibit D - Commitment and Termination Date Extension Request

Exhibit E - Borrower’s Opinion of Counsel

Exhibit F - Form of Assignment and Acceptance

iv

NYDOCS01/1362879.4

CREDIT AGREEMENT(364-DAY COMMITMENT)

THIS CREDIT AGREEMENT (364-DAY COMMITMENT) ("this Agreement") is entered into as of June 6, 2014, among The Charles Schwab Corporation, a Delaware corporation (the "Borrower"), the several financial institutions from time to time party to this Agreement (collectively the "Lenders"; individually each a "Lender"), and Citibank, N.A., as administrative agent for the Lenders (the "Agent").

WHEREAS, the Lenders are willing to make from time to time Revolving Loans to the Borrower through June 5, 2015, and to make Term Loans to the Borrower on or before June 5, 2015 and maturing no later than June 3, 2016, upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants herein contained, the parties hereto agree as follows:

1.	DEFINITIONS.	The following terms have the following meanings:
	Affiliate:	As to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract, or otherwise.
	Agent:	Citibank in its capacity as administrative agent for the Lenders hereunder and any successor agent appointed under Section 9.9.
	Agent-Related
	Persons:	Citibank and any successor agent appointed under Section 9.9, together with Citibank’s Affiliate, the Arranger, and the officers, directors, employees, agents and attorney-in-fact of such Persons and Affiliate.
	Agreement:	This Credit Agreement.
	Agent’s
	Payment Office:	The address for payments set forth on the signature page hereto in relation to the Agent, or such other address as the Agent may from time to time specify.
	Anti-Corruption
	Laws	The U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, each as may be amended, and any rules or regulations thereunder.

NYDOCS01/1362879.4

Applicable Margin:	(i)with respect to Eurodollar Rate Loans, 0.875% per annum; and
	(ii)with respect to Base Rate Loans, 0.00% per annum.
Arrangers:	Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.
Assignee:	The meaning specified in Section 10.8.
Attorney Costs:	Without duplication, (1) all fees and disbursements of any law firm or other external counsel, and (2) the allocated cost of internal legal services and all disbursements of internal counsel.
Bank Subsidiary:	Any Federal savings association (as defined in 12 U.S.C. §1813(b)(2), any national member bank (as defined in 12 U.S.C. §1813(d)(1)) or state member bank (as defined in 12 U.S.C. §1813(d)(2)) that is a subsidiary (as defined in 12 U.S.C. §1841(d)) of the Borrower.
Bankruptcy Code:	The Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, etseq.), as amended.
Base Rate:	For any day, the highest of:  (a) 0.500% per annum above the Federal Funds Rate; (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank, N.A. as its "Base Rate" and (c) the ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) applicable to Dollars for a period of one month (“One Month LIBOR”) plus 1.00% (for the avoidance of doubt, the One Month LIBOR for any day shall be based on the rate appearing on Reuters LIBOR01 Page (or other commercially available source providing such quotations as designated by the Agent from time to time) at approximately 11:00 a.m. London time on such day).  The "Base Rate" described in clause (b) is a rate set by Citibank, N.A. based upon various factors including Citibank, N.A.'s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citibank, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change.
Base Rate Loan:	A Revolving Loan or Term Loan that bears interest based on the Base Rate.
Borrowing:	A borrowing hereunder consisting of Revolving Loans or Term Loans of the same Type made to the Borrower on the same day by

2

NYDOCS01/1362879.4

	the Lenders under Section 2 and, other than in the case of a Base Rate Loan, having the same Interest Period.
Borrowing Advice:	A written request made by the Borrower with respect to any Loan substantially in the form of Exhibit B specifying the information required in Section 2.4 hereof and executed by the Borrower from time to time.
Borrowing
Agreements:	The credit agreement(s) between the Borrower and the lenders listed in Schedule 2.
Borrowing Date:	Any date on which a Borrowing occurs under Section 2.4.
Broker Subsidiary:	Charles Schwab & Co., Inc., a California corporation, and its successors and assigns.
Business Day:	A day other than a Saturday, Sunday or any other day on which commercial banks are authorized or required to close in California or New York and, if the applicable Business Day relates to a Eurodollar Rate Loan, such a day on which dealings are carried on in the applicable offshore dollar interbank market.
Capital Adequacy
Regulation:	Any guideline, directive or requirement of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.  For the avoidance of doubt, Capital Adequacy Regulation shall include all rules, guidelines or directives concerning capital adequacy (x) issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued.
Change in
Control:	The consummation of a reorganization, merger or consolidation by the Borrower or the sale or other disposition of all or substantially all of the assets of the Borrower (a "Business Combination"), unless, following such Business Combination, (i) no person or entity (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Borrower or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or

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	more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation (except to the extent that such ownership existed prior to the Business Combination); and (ii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the board of directors of the Borrower as of the time of the action of the board of directors of the Borrower providing for such Business Combination.
Citibank:	Citibank, N.A., a national banking association.
Closing Date:	The date (not before June 6, 2014) on which all conditions precedent set forth in Section 4 are satisfied or waived by all Lenders or, in the case of subsection 4.1(g), waived by the person entitled to receive such payment.
Code:	The Internal Revenue Code of 1986, as amended, and Regulations promulgated thereunder.
Commitment:	The meaning specified in Section 2.1.
Commitment Fee:	The meaning specified in subsection 2.9(b).
Consolidated
Stockholders' Equity:	With respect to any Person, as of any date of determination, all amounts that would, in accordance with GAAP, be included under shareholders’ equity on a consolidated balance sheet of such Person as at such date, including any preferred stock, but excluding accumulated other comprehensive income (or loss).
Controlled
Subsidiary:	Any corporation 80% of whose voting stock (except for any qualifying shares) is owned directly or indirectly by the Borrower.
Conversion/
Continuation Date:	Any date on which under Section 2.5, the Borrower (a) converts Loans of one Type to another Type, or (b) continues as Loans of the same Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.
Credit:	The aggregate amount of the Commitments of all Lenders to make Revolving Loans under the Revolving Credit Facility and Term Loans under the Term Loan Facility in an amount not to exceed Eight Hundred Million and no/100 Dollars ($800,000,000.00), as the same may be reduced under Section 2.10.

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Debtor Relief Laws:	The Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
Default:	Any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.
Defaulting Lender:	Subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Agent or the Borrower, to confirm in writing to the Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or

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	provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b)) upon delivery of written notice of such determination to the Borrower and each Lender.
Designated Person:	A Person named on (a) the list of Specially Designated Nationals and Blocked Persons issued by OFAC or any successor office or agency within the U.S. Department of the Treasury, or similar issuance by the U.S. Department of State, or (b) any similar list issued by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
Dollars,
dollars, and $:	Each mean lawful money of the United States.
Effective Amount:	With respect to any Revolving Loans and Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Revolving Loans and Term Loans occurring on such date.
Eligible Assignee:	(i) A commercial bank organized under the laws of the United States, or any state thereof, and having total equity capital of at least $1,000,000,000 and a senior debt rating of a least "A" by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc. or at least "A-2" by Moody’s Investors Service, Inc. or, if not rated by either of the foregoing organizations, an equivalent rating from a nationally recognized statistical rating organization; or (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the OECD), or a political subdivision of any such country, and having total equity capital of at least $1,000,000,000 and a senior debt rating of at least "A" by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc. or at least "A-2" by Moody’s Investors Service, Inc., or, if not rated by either of the foregoing organizations, an equivalent rating from a nationally recognized statistical rating organization; provided that such bank is acting through a branch or agency located in the United States.
Eurodollar
Base Rate:	For any Interest Period:

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	(a)the rate per annum equal to the rate determined by the Agent to be the offered rate that appears on the page of the Reuters screen (or any successor thereto) that displays an average ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
	(b)in the event the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Agent to be the offered rate on such other page or other service that displays an average ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.
Eurodollar Rate:	The rate obtained by dividing (i) Eurodollar Base Rate by (ii) a percentage (expressed as a decimal) equal to 1.00 minus the Eurodollar Rate Reserve Percentage.
Eurodollar Rate
Loan:	A Revolving Loan or Term Loan that bears interest based on the Eurodollar Rate.
Eurodollar Rate
Reserve Percentage:	For any Interest Period for any Loan for which the Eurodollar Rate has been selected or is applicable, the percentage (expressed as a decimal) as calculated by the Agent that is in effect on the first day of such Interest Period, as prescribed by the Board of Governors of the U.S. Federal Reserve System (or any successor), for determining reserve requirements to be maintained by the Agent under Regulation D (or any successor regulation thereof) as amended to the date hereof (including such reserve requirements as become applicable to the Agent pursuant to phase-in or other similar requirements of Regulation D at any time subsequent to the date hereof) in respect of "Eurocurrency liabilities" (as defined in Regulation D).  The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Rate Reserve Percentage.

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Event of Default:	Any of the events or circumstances specified in Section 8.1.
Exchange Act:	The Securities and Exchange Act of 1934, as amended, and regulations promulgated thereunder.
Federal Funds Rate:	For any day, the interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York.
Fee Letters:	The meaning specified in subsection 2.9(a).
FATCA:	Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.
FRB:	The Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.
GAAP:	Generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.
Governmental
Authority:	Any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

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Hedge Agreements:	Interest rate swap, interest rate cap or interest rate collar agreements.
Indebtedness:	As to any corporation, any obligation of, or guaranteed or assumed by, such corporation for (i) borrowed money evidenced by bonds, debentures, notes or other similar instruments, (ii) the deferred purchase price of property or services (excluding trade and other accounts payable), (iii) the leasing of tangible personal property under leases which, under any applicable Financial Accounting Standards Board Statement, have been or should be recorded as capitalized leases, (iv) direct or contingent obligations under letters of credit issued for the account of such corporation or (v) net obligations in respect of Hedge Agreements entered into with any counterparty.
Indemnified
Liabilities:	The meaning specified in Section 10.5.
Indemnified Person:	The meaning specified in Section 10.5.
Insolvency
Proceeding:	As to a debtor, (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors, undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.
Interest
Payment Date:	As to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and, as to any Base Rate Loan, the last Business Day of each calendar quarter, provided,  however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the date that falls three months after the beginning of such Interest Period and after each Interest Payment Date thereafter is also an Interest Payment Date.
Interest Period:	Any period specified in accordance with Section 2.6 hereof.
Intermediate
Parent:	Schwab Holdings, Inc., a Delaware corporation and its successors and assigns.
Lender:	The meaning specified in the introductory clause hereto.

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Lending Office:	As to any Lender, the office or offices of such Lender specified as its "Lending Office" or "Domestic Lending Office" or "Offshore Lending Office", as the case may be, on Schedule 10.2, or such other office or offices as such Lender may from time to time notify the Borrower and the Agent.
Loan:	An extension of credit by a Lender to the Borrower under Section 2 in the form of a Revolving Loan or Term Loan.
Loan Document:	This Agreement, any Notes, the Fee Letters, and all other documents delivered to the Agent or any Lender in connection herewith.
Minimum
Stockholders' Equity:	As of the Closing Date, and the last day of each fiscal quarter thereafter, the greater of:
	(a)$7,300,000,000, or
	(b)the sum of –
	(i) $7,300,000,000, plus
	(ii) 50% of the sum of cumulative Net Earnings for each fiscal quarter commencing with the fiscal quarter ended June 30, 2014.
Net Capital Ratio:	As of the date of determination, that percentage of net capital to aggregate debit items of any entity subject to the Net Capital Rule 15c3-1 promulgated by the Securities Exchange Commission pursuant to the Securities Exchange Act of 1934 and any successor or replacement rule or regulation therefor.
Net Earnings:	With respect to any fiscal period, the consolidated net income of the Borrower and its Subsidiaries, after taking into account all extraordinary items, taxes and other proper charges and reserves for the applicable period, determined in accordance with GAAP, consistently applied.
Non-Defaulting
Lender:	At any time, each Lender that is not a Defaulting Lender at such time.
Note:	A promissory note executed by the Borrower in favor of a Lender pursuant to Section 2.3 in substantially the form of Exhibits A-1 and A-2.

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Notice of Conversion/
Continuation:	A notice in substantially the form of Exhibit C.
Obligations:	All borrowings, debts, liabilities, obligations, covenants and duties arising under any Loan Document owing by the Borrower to any Lender, the Agent, or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising.
OFAC:	The U.S. Department of the Treasury’s Office of Foreign Assets Control.
Person:	An individual, partnership, corporation, limited liability company, business trust, unincorporated association, trust, joint venture or other entity or Governmental Authority.
Pro Rata Share:	As to any Lender at any time, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender’s Commitment divided by the combined Commitments of all Lenders.
Reference Banks:	Citibank, N.A. and JPMorgan Chase Bank, N.A.
Replacement Lender:	The meaning specified in Section 3.9.
Required Lenders:	At any time at least two Lenders then holding in excess of 50% of the then aggregate unpaid principal amount of the Loans, or, if no such principal amount is then outstanding, at least two Lenders then having in excess of 50% of the Commitments.  The Loans owing to, and Commitments of, any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
Requirement of Law:	As to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
Responsible Officer:	Any senior vice president or more senior officer of the Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer, executive vice president-finance, controller or the treasurer of the Borrower, or any other officer having substantially the same authority and responsibility.

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Revolving Credit
Facility:	The revolving credit facility available to the Borrower pursuant to Section 2.1 hereof.
Revolving Loan:	The meaning specified in Section 2.1, and may be a Base Rate Loan or a Eurodollar Rate Loan (each a "Type" of Revolving Loan).
Revolving Note:	The meaning specified in Section 2.3.
Revolving
Termination Date:	The earlier to occur of:
	(a)June 5, 2015; and
	(b)the date on which the Commitments terminate in accordance with the provisions of this Agreement.
Sanctions:	Economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) OFAC or any successor office or agency within the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
SEC:	The Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
Senior Medium-
Term Notes,
Series A:	Senior debt securities or senior subordinated debt securities issued by The Charles Schwab Corporation with a maturity between 9 months and 30 years in accordance with the Senior Indenture, as amended, and the Senior Subordinated Indenture, as amended, both dated as of July 15, 1993 by and between The Charles Schwab Corporation and The Bank of New York Mellon Trust Company, N.A. as successor trustee to The Chase Manhattan Bank.
Subsidiary:	Any corporation or other entity of which a sufficient number of voting securities or other interests having power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Borrower.
Term Commitment:	Eight Hundred Million and no/100 Dollars ($800,000,000.00), as the same may be reduced under Section 2.10.

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Term Loan:	The meaning specified in Section 2.2 and may be a Base Rate Loan or Eurodollar Rate Loan (each a "Type" of Term Loan).
Term Loan Facility:	The term loan facility available to the Borrower pursuant to Section 2.2 hereof.
Term Loan Maturity
Date:	The meaning specified in Section 2.2.
Term Note:	The meaning specified in Section 2.3.
Term Out Fee:	The meaning specified in subsection 2.9(c).
Type:	The meaning specified in the definition of "Revolving Loan".

2.      THE CREDIT FACILITY.

2.1       The Revolving Credit FacilityEach Lender severally agrees, on the terms and conditions set forth herein, to make loans to the Borrower (each such loan, a "Revolving Loan") from time to time on any Business Day during the period from the Closing Date to the Revolving Termination Date, in an aggregate amount not to exceed at any time outstanding, together with the principal amount of Term Loans outstanding in favor of such Lender at such time, the amount set forth next to such Lender's name on Schedule 1 (suchamount together with the Lender’s Pro Rata Shareof the TermCommitment, as the same may be reduced under Section 2.10 or as a result of one or more assignments under Section 10.8, the Lender’s "Commitment"); provided,  however, that, after giving effect to any Borrowing of Revolving Loans, the Effective Amount of all outstanding Revolving Loans shall not at any time exceed the combined Commitments; and providedfurther that the Effective Amount of the Revolving Loans, together with all Term Loans outstanding at such time, of any Lender shall not at any time exceed such Lender’s Commitment.  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.1, prepay under Section 3.3 and reborrow under this Section 2.1.

2.2       Term Loan Facility.  Each Lender severally agrees, on the terms and conditions set forth herein, to make Loans to the Borrower during the period from the Closing Date to June 5, 2015, in an aggregate amount not to exceed such Lender’s Pro Rata Share of the Term Commitment.  The Borrower from time to time may borrow under the Term Loan Facility (and may reborrow any amount theretofore prepaid) until close of business on June 5, 2015, for a term not to exceed 364 days from the date of the Borrowing.  Each such loan under the Term Loan Facility (a "Term Loan") shall be in the minimum amount of $10,000,000 and shall become due and payable on the last day of the term selected by the Borrower for such Term Loan (the "Term Loan Maturity Date"), which shall in no event be later than 364 days from the date of such Term Loan.  The maximum availability under the Term Loan Facility shall be the amount of the Credit minus the aggregate outstanding principal amount of Revolving Loans and Term Loans made by the Lenders; provided,  however, that to the extent the proceeds of a Term Loan are used to repay an outstanding Revolving Loan (or a portion thereof), such Revolving Loan (or portion thereof) shall not be considered part of the aggregate principal amount of outstanding Revolving Loans

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made by the Lenders for purposes of this sentence (such maximum availability hereafter being referred to as the "Term Loan Availability").  Under no circumstances shall the aggregate outstanding principal amount of Term Loans and Revolving Loans made by the Lenders exceed the Credit, and under no circumstances shall any Lender be obligated (i) to make any Term Loan (nor may the Borrower reborrow any amount heretofore prepaid) after June 5, 2015, or (ii) to make any Term Loan in excess of the Term Loan Availability.  Each Term Loan made hereunder shall fully and finally mature and be due and payable in full on the Term Loan Maturity Date specified in the Borrowing Advice for such Term Loan; provided,  however, that to the extent the Borrowing Advice for any Term Loan selects an Interest Period that expires before the Term Loan Maturity Date specified in such Borrowing Advice, the Borrower may from time to time select additional interest rate options and Interest Periods (none of which shall extend beyond the Term Loan Maturity Date for such Term Loan) by delivering a Borrowing Advice or Notice of Conversion/Continuation, as applicable.

2.3       Evidence of Borrowing/Promissory Notes.  The obligation of the Borrower to repay the aggregate unpaid principal amount of the Revolving Loans and Term Loans shall be evidenced by promissory notes of the Borrower (respectively the "Revolving Note and the Term Note") in substantially the form attached hereto as Exhibits A-1 and A-2, with the blanks appropriately completed, payable to the order of each Lender in the principal amount of its Commitment, bearing interest as hereinafter specified.  Each Revolving Note and Term Note shall be dated, and shall be delivered to each Lender, on the date of the execution and delivery of this Agreement by the Borrower.  Each Lender shall, and is hereby authorized by the Borrower to,endorse on the schedule contained on the Revolving Note and Term Note, or on a continuation of such schedule attached thereto and made a part thereof, appropriate notations regarding the Revolving Loans and Term Loans evidenced by such Note as specifically provided therein and such Lender’s record shall be conclusive absent manifest error; provided,  however, that the failure to make, or error in making, any such notation shall not limit or otherwise affect the obligations of the Borrower hereunder or under the Revolving Note and Term Note. The Agent, by notice to the Borrower (to be given not later than two Business Days prior to the initial Borrowing or Term Loan hereunder) may request that Revolving Loans or Term Loans made hereunder for which the interest calculation is to be based on the Eurodollar Rate be evidenced by separate Revolving Notes (in the case of Revolving Loans) and Term Notes (in the case of Term Loans), substantially in the form of Exhibit A-1 hereto (in the case of Revolving Loans) and Exhibit A-2 hereto (in the case of Term Loans), payable to the order of each Lender for the account of its office, branch or affiliate it may designate as its Lending Office.

2.4     Making of Revolving Loans and Term Loans, Borrowings; Interest Periods; Notice.

(a)Each Borrowing of Revolving Loans or Term Loans shall be made upon Borrower’s irrevocable written notice delivered to the Agent in the form of a Borrowing Advice (which notice must be received by the Agent prior to 10:00 a.m. San Francisco time for a Eurodollar Rate Loan, and prior to 11:00 a.m. San Francisco time for a Base Rate Loan) (i) the same Business Day as the requested Borrowing Date in the case of Base Rate Loans to be made on such Business Day, or (ii) three Business Days prior to the requested Borrowing Date in the case of Eurodollar Rate Loans, with each Borrowing Advice setting forth the following information:

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(A)    the requested Borrowing Date, which shall be a Business Day, on which such Revolving Loan or Term Loan is to be made;

(B)     for a Eurodollar Rate Loan, the duration of the Interest Period selected in accordance with Section 2.6 hereof (if the Borrowing Advice fails to specify the duration of the Interest Period for any Borrowing comprised of a Eurodollar Rate Loan, such Interest Period shall be three months);

(C)     the Type of Loans comprising the Borrowing and the interest rate option selected in accordance with Section 2.7 hereof; and

(D)       the aggregate principal amount of the Revolving Loan or Term Loan (which shall be in an aggregate minimum amount of $10,000,000) to which such Interest Period and interest rate shall apply.

(b)     The Agent will promptly notify each Lender of its receipt of any Borrowing Advice and of the amount of such Lender’s Pro Rata Share of that Borrowing.

(c)     Each Lender will make the amount of its Pro Rata Share of each Borrowing available to the Agent for the account of the Borrower at the Agent’s Payment Office by 1:00 p.m. San Francisco time on the Borrowing Date requested by the Borrower in funds immediately available to the Agent.  Each Loan to the Borrower under this Agreement shall be made by 1:30 p.m. (San Francisco time) on the date of the Requested Borrowing Date, and shall be in immediately available funds (in the aggregate amount made available to the Agent by the Lenders) wired to the Borrower’s account at Citibank, N.A. or such other account as may be designated by the Borrower in writing.

(d)     After giving effect to any Borrowing, there may not be more than ten (10) different Interest Periods in effect.

With respect to any Borrowing having an Interest Period ending on or before June 5, 2015, if prior to the last day of the Interest Period for such Borrowing the Borrower fails timely to provide a Notice of Conversion/Continuation in accordance with Section 2.5, such Borrowing shall, on the last day of the then-existing Interest Period for such Borrowing, automatically convert into a Base Rate Loan.  In the event of any such automatic conversion, the Borrower on the date of such conversion shall be deemed to make a representation and warranty to the Lenders that, to the best of the Borrower’s knowledge, (i) neither the Borrower nor any Bank Subsidiary is in violation of the capital requirements as described in Section 6.6, (ii) the Broker Subsidiary is not in violation of minimum net capital requirements as described in Section 7.1, (iii) the Borrower’s Consolidated Stockholders' Equity is not below the Minimum Stockholders' Equity as described in Section 7.2, and (iv) no amount owing with respect to any Commitment Fee, any outstanding Borrowing, or any interest thereon, or any other amount hereunder, is due and unpaid.  If prior to the last day of the Interest Period applicable to any Term Loan the Borrower fails timely to provide a Notice of Conversion/Continuation in accordance with

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Section 2.5, such Term Loan shall, on the last day of the then-existing Interest Period for such Term Loan, automatically convert into a Base Rate Loan.

2.5      Conversion and Continuation Elections.

(a)     The Borrower may, upon irrevocable written notice to the Agent in accordance with this Section 2.5:

(i)     elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of any other Type of Loan, to convert any such Loan (or any part thereof in an amount not less than $10,000,000), into Loans of any other Type; or

(ii)    elect as of the last day of the applicable Interest Period, to continue any Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $10,000,000);

provided, that if at any time the aggregate amount of Eurodollar Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $10,000,000, such Eurodollar Rate Loans shall automatically convert into Base Rate Loans.

(b)    The Borrower shall deliver a Notice of Conversion/Continuation to be received by the Agent not later than 10:00 a.m. San Francisco time for a Eurodollar Rate Loan, and not later than 11:00 a.m. San Francisco time for a Base Rate Loan, at least (i) three Business Days in advance of the Conversion/Continuation Date, as to any Loan that is to be converted into or continued as a Eurodollar Rate Loan; and (ii) the same Business Day as the Conversion/Continuation Date, as to any Loan that is to be converted into a Base Rate Loan, specifying:

(A)     the proposed Conversion/Continuation Date;

(B)     the aggregate amount of the Loan or Loans to be converted or renewed;

(C)     the Type of Loan or Loans resulting from the proposed conversion or continuation; and

(D)     other than in the case of conversions into Base Rate Loans, the duration of the requested Interest Period.

(c)    If upon the expiration of any Interest Period applicable to Eurodollar Rate Loans, the Borrower has failed to select timely a new Interest Period to be applicable to such Eurodollar Rate Loans, or if any Default or Event of Default then exists, the Borrower shall be deemed to have elected to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.

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(d)    The Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Borrower, the Agent will promptly notify each Lender of the details of any automatic conversion.  All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given as held by each Lender.

(e)    Unless the Required Lenders otherwise agree, during the existence of a Default or Event of Default, the Borrower may not elect to have a Loan converted into or continued as a Eurodollar Rate Loan.

(f)    After giving effect to any conversion or continuation of Loans, there may not be more than ten (10) different Interest Periods in effect.

2.6 Interest Periods.  The Borrower may select for any Eurodollar Rate Loan the Interest Period (as defined in the next sentence) for each Borrowing, it being understood that the Borrower may request multiple Borrowings on the same day and may select a different Interest Period for each such Borrowing.  An Interest Period shall be each period, as selected by the Borrower in accordance with the terms of this Agreement, beginning on the Borrowing Date of any Eurodollar Rate Loan, or on the Conversion/Continuation Date on which any Loan is converted into or continued as a Eurodollar Rate Loan, and ending on the date specified by the Borrower that is one, two, three or six months thereafter; provided that whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month; and providedfurther that if the last day of an Interest Period would be a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such next succeeding Business Day is in a different calendar month, in which case such interest period shall end on the next preceding Business Day; but provided,  however, that (i) no Interest Period applicable to any Revolving Loan shall extend beyond the Revolving Termination Date; and (ii) no Interest Period applicable to any Term Loan shall extend beyond the Term Loan Maturity Date specified in the Borrowing Advice for such Term Loan, which in no event shall be later than June 3, 2016.

2.7        Interest Rates.

(a)     (i)  Each Revolving Loan, while outstanding, shall bear interest from the applicable Borrowing Date at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be, (and subject to the Borrower’s right to convert to other Types of Loans under Section 2.5) plus the Applicable Margin.

(ii)  Each Term Loan, while outstanding, shall bear interest from the applicable Borrowing Date at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be, (and subject to the Borrower’s right to convert to other Types of Loans under Section 2.5) plus the Applicable Margin.

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(b)     Interest on each Revolving Loan and Term Loan shall be paid in arrears on each Interest Payment Date.  Interest shall also be paid on the date of any prepayment of Loans under Section 3.3 for the portion of the Loan so prepaid and upon payment (including prepayment) in full thereof, and, during the existence of any Event of Default interest shall be paid on demand of the Agent at the request or with the consent of the Required Lenders.

(c)     After the principal amount of any Revolving Loan or Term Loan, accrued interest upon such Loan, the commitment fee, or any other amount hereunder shall have become due and payable by acceleration, or otherwise, it shall thereafter (until paid) bear interest, payable on demand, (i) until the end of the Interest Period with respect to such Loan at a rate per annum equal to 2% per annum in excess of the rate or rates in effect with respect to such Loan, and (ii) thereafter, at a rate per annum equal to 2% per annum in excess of the Base Rate.

2.8     Substitute Rates.  If upon receipt by the Agent of a Borrowing Advice relating to any Borrowing or of a Notice of Conversion/Continuation:

(a)     the Agent shall determine that by reason of changes affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the applicable Eurodollar Rate with respect to any Interest Period; or

(b)     the Agent shall determine that by reason of any change since the date hereof in any applicable law or governmental regulation (other than any such change in the regulations described in the definition of Eurodollar Rate Reserve Percentage in Section 1 hereof), guideline or order (or any interpretation thereof), the adoption or enactment of any new law or governmental regulation or order or any other circumstance affecting the Lenders or the London interbank market, the Eurodollar Rate shall no longer represent the effective cost to the Lenders of U.S. dollar deposits in the relevant amount and for the relevant period; or

(c)     Agent shall determine that, as a result of any change since the date hereof in any applicable law or governmental regulation or as a result of the adoption of any new applicable law or governmental regulation, the applicable Eurodollar Rate would be unlawful; or

(d)     the applicable Reuters screen (or any successor page of such service, or any successor or substitute for such service, as provided in the definition herein for Eurodollar Base Rate) is unavailable and fewer than two Reference Banks furnish timely information to the Agent for determining the Eurodollar Base Ratefor any Eurodollar Rate Loans, after the Agent has requested such information;

then, the Agent will promptly so notify the Borrower and each Lender, whereupon, the obligation of the Lenders to make or maintain Eurodollar Rate Loans hereunder shall be suspended until the Agent upon the instruction of the Required Lenders revokes such notice in writing.  Upon receipt of such notice, the Borrower may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it and, at its election, submit a Borrowing Advice or Notice of Conversion/Continuation selecting another Type of Loan.  If the Borrower does not revoke such Notice or give a Notice as provided herein, the Lenders shall make, convert or continue the Loans, as proposed by the Borrower in the amount specified in the applicable

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notice submitted by the Borrower, but such Loans shall be made, converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.

2.9     Fees.

(a)     Arrangement, Agency Fees.  The Borrower shall pay an arrangement fee to the Arrangers for their respective accounts, and shall pay an agency fee to the Agent for the Agent’s account, as required by the separate letter agreements ("Fee Letters") between the Borrower and each of the Arrangers and between the Borrower and the Agent, each dated May 6, 2014.

(b)     Commitment Fee.  The Borrower shall pay to the Agent for the account of each Lender a commitment fee (the "Commitment Fee") on the actual daily unused portion of such Lender’s Commitment computed on a quarterly basis in arrears on the last Business Day of each quarter based upon the daily utilization for that quarter as calculated by the Agent, equal to seven one hundredths of one percent (0.07%) per annum.  For purposes of calculating utilization under this subsection, the Commitments shall be deemed used to the extent of the Effective Amount of Revolving Loans and Term Loans then outstanding.  Such Commitment Fee shall accrue from the Closing Date to the Revolving Termination Date and shall be due and payable quarterly in arrears on the last Business Day of each quarter commencing on the quarter ending June 30, 2014 through the Revolving Termination Date, with the final payment to be made on the Revolving Termination Date; provided that, in connection with any reduction or termination of Commitments under Section 2.10, the accrued commitment fee calculated for the period ending on such date shall also be paid on the date of such reduction or termination, with the following quarterly payment being calculated on the basis of the period from such reduction or termination date to such quarterly payment date.

(c)     Term Loan Fee.  The Borrower shall pay to the Agent for the account of each Lender a term loan fee (the "Term Out Fee") equal to one percent (1.00%) of the aggregate principal amount of all Term Loans outstanding on June 5, 2015, payable on such date.

2.10     Reduction of Credit.  The Borrower, from time to time, upon at least three (3) Business Days’ written notice to the Agent, may terminate the commitments, or permanently reduce the Commitments by an aggregate minimum amount of $10,000,000, without penalty or premium; unless after giving effect thereto and to any prepayments of Loans made on the effective date thereof, the Effective Amount of all Revolving Loans and Term Loans together would exceed the amount of the combined Commitments then in effect.  Once reduced in accordance with this Section, the Commitments may not be increased.  Any reduction of the Commitments shall be applied to each Lender’s Commitment according to its Pro Rata Share.  All accrued Commitment Fees to, but not including, the effective date of any reduction or termination of Commitments, shall be paid on the effective date of such reduction or termination.  During the continuation of the Credit, the computation of the Commitment Fee and the Lenders’ obligations to make Revolving Loans or Term Loans shall be based upon such reduced Commitments.  In the event the Credit shall be reduced to zero pursuant to this Section, the Credit shall be deemedterminated, and any Commitment Fee or any other amount payable hereunder then accrued shall become immediately payable.  Such termination of the Credit shall

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terminate the Borrower’s obligations with respect to the Commitment Fee to the extent not theretofore accrued and shall terminate the Lenders’ obligations to make any further Revolving Loans or Term Loans under this Agreement.

2.11   Termination Date; Extensions.  The termination date of each Lender’s Commitment with respect to the Credit (the "Termination Date"), including both the Revolving Credit Facility under Section 2.1 hereof and the Term Loan Facility under Section 2.2 hereof, is initially June 5, 2015.  At any time no earlier than forty-five (45) days and no later than thirty (30) days prior to the Termination Date then in effect (whether the initial Termination Date of June 5, 2015 or any later Termination Date as extended under this Section 2.11), the Borrower may, by written notice to the Agent in the form attached as Exhibit D hereto, request that the Termination Date be extended for a period of 364 calendar days.  Such request shall be irrevocable and binding upon the Borrower.  In no event will any Lender agree to approve any extension more than thirty (30) days before the Termination Date then in effect.  Failure of any Lender to respond shall mean that such Lender has not approved such extension.  If each Lender (in its sole discretion) agrees to so extend its Commitment and the Termination Date (which agreement may be given or withheld in such Lender's sole and absolute discretion), the Agent shall evidence such agreement by executing and returning to the Borrower a copy of the Borrower’s written request no later than fifteen (15) days after the Agent’s receipt of the Borrower’s written request.  If the Agent fails to so respond to and accept the Borrower’s request for extension of the Termination Date then in effect, the Lenders’ Commitments shall be terminated on the Termination Date then in effect.  If, on the other hand, the Agent so responds to and accepts the Borrower’s request for extension of the Termination Date, then upon receipt by the Borrower of a copy of the Borrower’s written request countersigned by the Agent, (i) the Lenders’ Commitments then in effect and the Termination Date then in effect shall automatically be extended for the 364-day period specified in such written request, and (ii) each reference in this Agreement to "June 5, 2015", and "June 3, 2016" (and any prior extension thereof pursuant to this Section 2.11) also shall automatically be correspondingly extended for 364 days.

2.12     Payments by the Lenders to the Agent.

(a)     Unless the Agent receives notice from a Lender on or prior to the Closing Date or, with respect to any Borrowing after the Closing Date, at least one Business Day before the date of such Borrowing in the case of a Eurodollar Rate Loan, or, in the case of a Base Rate Loan, prior to noon (12:00) San Francisco time on the date of such Borrowing, that such Lender will not make available as and when required hereunder to the Agent for the account of the Company the amount of that Lender’s Pro Rata Share of the Borrowing, the Agent may assume that each Lender has made such amount available to the Agent in immediately available funds on the Borrowing Date and the Agent may (but shall not be so required), in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent any Lender shall not have made its full amount available to the Agent in immediately available funds and the Agent in such circumstances has made a corresponding amount available to the Borrower such Lender shall on the Business Day following such Borrowing Date make such amount available to the Agent, together with interest at the Federal Funds Rate for each day during such period.  A notice of the Agent submitted to any Lender with respect to amounts owing under this subsection (a) shall be conclusive, absent manifest error.  If

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such amount is so made available, such payment to the Agent shall constitute such Lender’s Loan on the date of Borrowing for all purposes of this Agreement.  If such amount is not made available to the Agent on the Business Day following the Borrowing Date, the Agent will notify the Borrower of such failure to fund and, upon demand by the Agent, the Borrower shall pay such amount to the Agent for the Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.

(b)     The failure of any Lender to make any Loan on any Borrowing Date shall not relieve any other Lender of any obligation hereunder to make a Loan on such Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date.

2.13     Sharing of Payments, Etc..  If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share, such Lender shall immediately (a) notify the Agent of such fact, and (b) purchase from the other Lenders such participation in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment pro rata with each of them; provided,  however, (a) that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered and (b) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.5) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  The Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participation purchased under this Section and will in each case notify the Lenders following any such purchase or repayment.

2.14     Computation of Fees and Interest.

(a)     All computations of interest for Base Rate Loans when the Base Rate is determined by Citibank N.A.'s "Base Rate" shall be made on the basis of a year of 365 or 366days, as the case may be, and actual days elapsed.  All other computations of interest, and all computation of fees under subsection 2.9(b) and (c) shall be made on the basis of a 360-day year and actual days elapsed.  Interest and such fees shall accrue during each period during which

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interest or such fees are computed from and including the first day thereof to and excluding the last day thereof.

(b)     Each Reference Bankmay, if requested by the Agent,  furnish to the Agent timely information for the purpose of determining each Eurodollar Base Rate.  If any one or more of the Reference Banksshall not furnish such timely information to the Agent for the purpose of determining any such interest rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks, subject to the provisions of Section 2.8.  The Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Agent for purposes of Section 2.7(a) (it being understood that the Agent shall not be required to disclose to any party hereto (other than the Borrower) any information regarding any Reference Bankor any rate provided by such Reference Bankin accordance with this subsection, including, without limitation, whether a Reference Bankhas provided a rate or the rate provided by any individual Reference Bank).

2.15     Defaulting Lenders.

(a)     Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i)     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii)     Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, as the Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; third, if so determined by the Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to

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being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)     Certain Fees.  No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(b)     Defaulting Lender Cure.  If the Borrower and the Agent agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,  further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

3.     PAYMENT.

3.1     Repayment.

(a)     The Term Credit.  The Borrower shall repay to the Agent for the account of the Lenders the aggregate principal amount of the Term Loans outstanding on each Term Loan Maturity Date, as applicable.

(b)     The Revolving Credit.  The Borrower shall repay to the Agent, for the account of the Lenders, on the Revolving Termination Date the aggregate principal amount of Revolving Loans outstanding on such date.

3.2     Method of Payment.  All payments hereunder and under the Revolving Note and the Term Note shall be payable in lawful money of the United States of America and in immediately available funds not later than 12:00 noon (San Francisco time) on the date when due at the principal office of the Agent or at such other place as the Agent may, from time to time, designate in writing to the Borrower.

3.3     Optional Prepayment.  Subject to Section 3.7, the Borrower shall be entitled at any time or from time to time, upon not less than one (1) Business Day irrevocable notice to the Agent, to ratably prepay Loans in whole or in part in minimum amounts of $10,000,000 without premium or penalty.  Each notice of payment shall specify the date and aggregate principal

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amount of any such prepayment and the Type(s) of Loans to be repaid.  The Agent will promptly notify each Lender of its receipt of any such Notice and of such Lender’s Pro Rata Share of such prepayment.  If such Notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount, specified in such Notice shall be due and payable on the date specified therein, together with all accrued interest to each such date on the amount prepaid, and any amounts required in accordance with Section 3.7 hereof as a result of such prepayment.

3.4     Taxes/Net Payments.  All payments by Borrower hereunder and under the Revolving Note and the Term Note to the Agent or any Lender shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments, afterdeduction or withholding for or on account of any present or future taxes, levies, imposts, dutiesor other charges of whatsoever nature imposed by any Governmental Authority or taxing authority thereof (collectively, "Taxes"), shall not be less than the amounts otherwise specified to be paid under this Agreement. The Borrower shall pay all Taxes when due and shall promptly send to the Lender original tax receipts or copies thereof certified by the relevant taxing authority together with such other documentary evidence with respect to such payments as may be required from time to time by the Agent.  If the Borrower fails to pay any Taxes to the appropriate taxing authorities when due or fails to remit to the Agent or Lender any such original tax receipts or certified copies thereof as aforesaid or other required documentary evidence, the Borrower shall indemnify the Agent or Lender within thirty (30) days of demand by the Lender or Agent for any taxes, interest or penalties that may become payable by the Agent or Lender as a result of such failure.

Notwithstanding the foregoing, (i) the Borrower shall not be liable for the payment of any tax on or measured by the net income of any Lender pursuant to the laws of the jurisdiction where an office of such Lender making any loan hereunder is located or does business, and (ii) the foregoing obligation to gross up the payments to any Lender so as not to deduct or offset any withholding taxes or Taxes paid or payable by the Borrower with respect to any payments to such Lender shall not apply (x) to any payment to any Lender which is a "foreign corporation, partnership or trust" within the meaning of the Code if such Lender is not, on the date hereof (or on the date it becomes a Lender under this Agreement pursuant to the assignment terms of this Agreement), or on any date hereafter that it is a Lender under this Agreement, entitled to submit either a Form W-8BEN or any successor form thereto (relating to such Lender and entitling it to a complete exemption from withholding on all interest to be received by it hereunder in respect of the Loans) or Form W-8ECI or any successor form thereto (relating to all interest to be received by such Lender hereunder in respect of the Loans) of the U.S. Department of Treasury, (y) to any item referred to in the preceding sentence that would not have been imposed but for the failure by such Lender to comply with any applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections of such Lender with the United States if such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such item or (z) to any taxes imposed pursuant to FATCA.

3.5     Illegality.

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(a)     If any Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make Eurodollar Rate Loans, then, on notice thereof by the Lender to the Borrower through the Agent, any obligation of that Lender to make Eurodollar Rate Loans shall be suspended until the Lender notifies the Agent and the Borrower that the circumstances giving rise to such determination no longer exist.

(b)     If a Lender determines that it is unlawful to maintain any Eurodollar Rate Loan, the Borrower shall, upon its receipt of notice of such fact and demand from such Lender (with a copy to the Agent), prepay in full such Eurodollar Rate Loans of that Lender then outstanding, together with interest accrued thereon and amounts required under Section 3.7, either on the last day of the Interest Period thereof, if the Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such Eurodollar Rate Loan.  If the Borrower is required to so prepay any Eurodollar Rate Loan, then concurrently with such prepayment, the Borrower shall borrow from the affected Lender, in the amount of such repayment, a Base Rate Loan.

(c)     If the obligation of any Lender to make or maintain Eurodollar Rate Loans has been so terminated or suspended, the Borrower may elect, by giving notice to the Lender through the Agent that all Loans which would otherwise be made by the Lender as Eurodollar Rate Loans shall be instead Base Rate Loans.

(d)     Before giving any notice to the Agent under this Section, the affected Lender shall designate a different Lending Office with respect to its Eurodollar Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.

3.6     Increased Costs and Reduction of Return.

(a)     If any Lender determines that, due to either (i) the introduction of or any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the Eurodollar Rate) in or in the interpretation of any law or regulation, or (ii) the compliance by that Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any Eurodollar Rate Loan, then the Borrower shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs.

(b)     If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof,

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or (iv) compliance by the Lender (or its Lending Office) or any corporation controlling the Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital  or liquidity required or expected to be maintained by the Lender or any corporation controlling the Lender and determines that the amount of such capital or liquidity is increased as a consequence of its Commitment, Loans, credits or obligations under this Agreement then, upon demand of such Lender to the Borrower through the Agent, the Borrower shall pay to the Lender, from time to time as specified by the Lender, additional amounts sufficient to compensate the Lender for the cost of such increase.

3.7     Funding Losses.  The Borrower shall reimburse each Lender and hold each Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of:

(a)     the failure of the Borrower to make on a timely basis any payment of principal of any Eurodollar Rate Loan;

(b)     the failure of the Borrower to borrow, continue or convert a Loan after the Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;

(c)     the failure of the Borrower to make any prepayment in accordance with any notice delivered under Section 3.3;

(d)     the prepayment or other payment (including after acceleration thereof) of any Eurodollar Rate Loan on a day that is not the last day of the relevant Interest Period; or

(e)     the automatic conversion under Section 2.5 of any Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period,

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Eurodollar Rate Loans or from fees payable to terminate the deposits from which such funds were obtained.  For purposes of calculating amounts payable by the Borrower to the Lenders under this Section and under subsection 3.6(a), each Eurodollar Rate Loan made by a Lender and each related reserve, special deposit or similar requirement shall be conclusively deemed to have been funded at the LIBO-based rate used in determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan is in fact so funded.

3.8     Certificates of Lenders.  Any Lender claiming reimbursement or compensation under this Section 3 shall deliver to the Borrower (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable to the Lender hereunder and such certificate shall be conclusive and binding on the Borrower in the absence of manifest error.

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3.9     Substitution of Lenders.  Upon the receipt by the Borrower from any Lender (an "Affected Lender") of a claim for compensation under Section 3.6, of if any Lender is a Defaulting Lender (an Affected Lender or a Defaulting Lender is a “Replaceable Lender”), the Borrower may:  (i) request the Replaceable Lender to use its best efforts to obtain a replacement bank or financial institution satisfactory to the Borrower to acquire and assume all or a ratable part of all of such Replaceable Lender’s Loans and Commitment (a "Replacement Lender"); (ii) request one or more of the other Lenders to acquire and assume all or part of such Replaceable Lender’s Loans and Commitment (but no other Lender shall be required to do so); or (iii) designate a Replacement Lender.  Any such designation of a Replacement Lender under clause (ii) or (iii) shall be subject to the prior written consent of the Agent (which consent shall not be unreasonably withheld).

3.10     Survival.  The agreements and obligations of the Borrower in this Section 3 shall survive the payment of all other Obligations.

4.     CONDITIONS.

4.1     Conditions Precedent to the Effectiveness of this Agreement.  The obligation of each Lender to make its initial extension of credit hereunder is subject to the condition that the Agent has received on or before the Closing Date all of the following in form and substance satisfactory to the Agent and each Lender, in sufficient copies for each Lender;

(a)      This Agreement and the Notes executed by each party thereto.

(b)    A copy of a resolution or resolutions adopted by the Board of Directors or Executive Committee of the Borrower, certified by the Secretary or an Assistant Secretary of the Borrower as being in full force and effect on the date hereof, authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and a copy of the Certificate of Incorporation and the By-Laws of the Borrower, similarly certified.

(c)      A certificate, signed by the Secretary or an Assistant Secretary of the Borrower and dated the date hereof, as to the incumbency of the person or persons authorized to execute and deliver this Agreement.

(d)    A certificate signed by the Chief Financial Officer, Treasurer or Corporate Controller of the Borrower that, as of the date hereof, there has been no material adverse change in its consolidated financial condition since December 31, 2013 not reflected on its Quarterly Report on Form 10-Q filed with the SEC for the period ending March 31, 2014.

(e)      A certificate, signed by the Secretary or an Assistant Secretary of the Borrower and dated the date hereof, as to the persons authorized to execute and deliver a Borrowing Advice, a Notice of Conversion/Continuation, and the Revolving Notes and the Term Notes.  The Agent and each Lender may rely on such certificate with respect to the Revolving Loans and Term Loans hereunder unless and until it shall have received an updated certificate and, after receipt of such updated certificate, similarly may rely thereon.

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(f)     A written opinion, dated the date hereof, of counsel for the Borrower, in the form of Exhibit E.

(g)     Evidence of payment by the Borrower of all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with Attorney Costs of Citibank to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute Citibank’s reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Borrower and Citibank); including any such costs, fees and expenses arising under or referenced in Sections 2.9 and 10.4.

(h)     Written evidence that all of the Borrowing Agreements have been or concurrently herewith are being terminated.

(i)     A certificate, signed by the Chief Financial Officer, Treasurer or an Assistant Treasurer of the Borrower and dated as of the date hereof, which confirms that after giving effect to this Agreement, the aggregate principal amount of credit available under all of the Borrower's committed unsecured revolving credit facilities combined will not exceed the amount authorized under the resolutions of the Borrower referenced in subsection 4.1(b).

4.2     Conditions Precedent to Revolving Loans and Term Loans.  The obligation of each Lender to make any Revolving Loan or Term Loan to be made by it (including its initial Revolving Loan), or to continue or convert any Loan under Section 2.5 is subject to the satisfaction of the following conditions precedent on the relevant Borrowing Date or Conversion/Continuation Date:

The Agent shall have received a Borrowing Advice or a Notice of Conversion/Continuation, as applicable.  Each Borrowing Advice or Notice of Conversion/Continuation given by the Borrower shall be deemed to be a representation and warranty by the Borrower to each Lender, effective on and as of the date of such Notice and as ofsuch Borrowing Date for a Revolving Loan or Term Loan covered thereby, that (i) the representations and warranties set forth in Section 5 hereof are true and correct as of such date, and (ii) no Default or Event of Default has occurred and is continuing.  No Lender shall be required to make any Loan hereunder if:

(a)     the Credit, the Revolving Credit Facility (in the case of a Revolving Loan) or the Term Loan Facility (in the case of a Term Loan) has been terminated; or

(b)     any of the representations or warranties of the Borrower set forth in Section 5 hereof shall prove to have been untrue in any material respect when made, or when any Default or Event of Default as defined in Section 8, has occurred; or

(c)     the Borrower or any Bank Subsidiary is in violation of the capital requirements as described in Section 6.6; or

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(d)     the Broker Subsidiary is in violation of minimum net capital requirements as described in Section 7.1; or

(e)     the Borrower’s Consolidated Stockholders' Equity is below the Minimum Stockholders' Equity as described in Section 7.2; or

(f)     any amount owing with respect to any Commitment Fee or any outstanding Revolving Loan or Term Loan or any interest thereon or any other amount payable hereunder is due and unpaid.

5.     REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and each Lender, as of the date of delivery of this Agreement and as of the date of any Revolving Loan or Term Loan, as follows:

5.1     Organization and Good Standing.  The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and has full power, authority and legal right and has all governmental licenses, authorizations, qualifications and approvals required to own its property and assets and to transact the business in which it is engaged, except where the failure to have any such license, authorization, qualification or approval, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis; and all of the outstanding shares of capital stock of Borrower have been duly authorized and validly issued, are fully paid and non-assessable.

5.2     Corporate Power and Authority.  The Borrower has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Agreement, and to borrow hereunder, and has taken all necessary corporate and legal action to authorize the borrowings hereunder on the terms and conditions of this Agreement and to authorize the execution and delivery of this Agreement, and the performance of the terms thereof.

5.3     Enforceability.  This Agreement has been duly authorized and executed by the Borrower, and when delivered to the Lenders will be a legal, valid and binding agreement oftheBorrower, enforceable against the Borrower in accordance with its terms, except, in each case, as enforcement thereof may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors’ rights or by general equity principles.

5.4     No Violation of Laws or Agreements.  The execution and delivery of this Agreement by the Borrower and the performance of the terms hereof will not violate (i) any provision of any law or regulation or any judgment, order or determination of any court or governmental authority or of the charter or by-laws of the Borrower, or (ii) any securities issued by the Borrower or any provision of any mortgage, indenture, loan or security agreement, or other instrument, to which the Borrower is a party or which purports to be binding upon it or any of its assets, in each case in this clause (ii), in any respect that reasonably could be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis; nor will the execution and the delivery of this Agreement by the Borrower

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and the performance of the terms hereof result in the creation of any lien or security interest on any assets of the Borrower pursuant to the provisions of any of the foregoing.

5.5     No Consents.  Except as disclosed in writing by Borrower, no consents of others (including, without limitation, stockholders and creditors of the Borrower) nor any consents or authorizations of, exemptions by, or registrations, filings or declarations with, any Governmental Authority are required to be obtained by the Borrower in connection with the execution and delivery of this Agreement and the performance of the terms thereof.

5.6     Financial Statements.  The consolidated financial statements of the Borrower contained in the documents previously delivered to each Lender have been prepared in accordance with U.S. generally accepted accounting principles and present fairly the consolidated financial position of the Borrower.

5.7     Broker Subsidiary Licenses, Etc.  The Broker Subsidiary possesses all material licenses, permits and approvals necessary for the conduct of its business as now conducted and as presently proposed to be conducted as are required by law or the applicable rules of the SEC and the Financial Industry Regulatory Authority.

5.8     Broker Subsidiary/Broker Registration.  The Broker Subsidiary is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended.

5.9     Broker Subsidiary/SIPC.  The Broker Subsidiary is not in arrears with respect to any assessment made upon it by the Securities Investor Protection Corporation, except for any assessment being contested by the Broker Subsidiary in good faith by appropriate proceedings and with respect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles.

5.10      Taxes.  The Borrower has paid and discharged or caused to be paid and discharged all taxes, assessments, and governmental charges prior to the date on which the same would have become delinquent, except to the extent that such taxes, assessments or charges are being contested in good faith and by appropriate proceedings by or on behalf of the Borrower andwithrespect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles.

5.11     ERISA.  The Borrower is in all material respects in compliance with the provisions of and regulations under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the Code applicable to any pension or other employee benefit plan established or maintained by the Borrower or to which contributions are made by the Borrower (the "Plans").  The Borrower has met all of the funding standards applicable to each of its Plans, and there exists no event or condition that would permit the institution of proceedings to terminate any of the Plans under Section 4042 of ERISA.  The estimated current value of the benefits vested under each of the Plans does not, and upon termination of any of the Plans will not, exceed the estimated current value of any such Plan’s assets.  The Borrower has not, with respect to any of the Plans, engaged in a prohibited transaction set forth in Section 406 of ERISA

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or Section 4975(c) of the Code that could be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis.

5.12     No Extension of Credit for Default Remedy/Hostile Acquisition.  The Borrower will not use any amounts borrowed by it under this Agreement to remedy a default under any mortgage, indenture, agreement or instrument under which there may be issued any Indebtedness of the Borrower to any bank or bank holding company, or their respective assignees, for borrowed money.  Further, the Borrower will not use any amounts advanced to it under this Agreement for the immediate purpose of acquiring a company where the Board of Directors or other governing body of the entity being acquired has made (and not rescinded) a public statement opposing such acquisition.

5.13     Use of Proceeds/Margin Regulations.  The Borrower will use the proceeds for general corporate purposes.  The Borrower will not use the proceeds of any loan provided hereby in such a manner as to result in a violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

5.14    Authorized Persons.  The persons named for such purpose in the certificates delivered pursuant to subsection 4.1(e) hereof are authorized to execute Borrowing Advices.

5.15     Material Contracts.  Borrower is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note or lease to which the Borrower is a party or by which it may be bound.

5.16     Litigation.  Except for any matter disclosed in the Form 10-Q filed by the Borrower with the SEC on May 7, 2014, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower, threatened against or affecting, the Borrower or any of its Subsidiaries before any court, arbitrator, governmental body, agency or official in which there is a significant probability of an adverse decision which could have a material adverse effect on the business or the financial condition of the Borrower.

5.17    Investment Company.  The Borrower is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

5.18      Designated Persons.  None of the Borrower, the Broker Subsidiary or any Bank Subsidiary, nor, to the knowledge of the Borrower, any of their respective directors or officers, is a Designated Person.  No Borrowing or the use of proceeds thereof by the Borrower or any Subsidiary will, directly or, to the knowledge of the Borrower, indirectly, violate Anti-Corruption Laws or Sanctions.

6.       AFFIRMATIVE COVENANTS.

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The Borrower covenants and agrees that so long as any Lender shall have a Commitment hereunder or any Loan or other obligation hereunder shall remain outstanding, unpaid or unsatisfied and until full payment of all amounts due to the Lenders hereunder, it will, unless and to the extent the Required Lenders waive compliance in writing:

6.1     Notice of Events of Default.  Give prompt notice to the Agent and each Lender, no later than three Business Days after becoming aware thereof, of any Default or Event of Default.

6.2     Financial Statements.  Deliver to the Agent, in form and detail satisfactory to the Agent and the Required Lenders with sufficient copies for each Lender, within ten Business Days of the filing thereof with the SEC, a copy of (i) each registration statement filed under the Securities Act of 1933, (ii) each Form 10-Q and Form 10-K (in each case including exhibits) filed by the Borrower with the SEC under the Securities Exchange Act of 1934, as amended, accompanied by a compliance certificate with an attached schedule of calculations (in the form attached hereto as Schedule 6.2) demonstrating compliance with the Section 7.1 and 7.2 financial covenants, and (iii) each Form 8-K (with exhibits) and proxy statement filed by the Borrower with the SEC under the Securities Exchange Act of 1934, as amended; and, in the event the Borrower requests an extension of any such filing from the SEC, promptly (but not later than the second Business Day following the filing of such request) deliver a copy of such request to the Agent.

6.3     Insurance.  Maintain and keep in force in adequate amounts such insurance as is usual in the business carried on by the Borrower and cause the Broker Subsidiary to maintain and keep in force in adequate amounts such insurance as is usual in the business carried on by the Broker Subsidiary.

6.4     Books and Records.  Maintain adequate books, accounts and records and prepare all financial statements required hereunder in accordance with U.S. generally accepted accounting principles and practices and in compliance with the regulations of any governmental regulatory body having jurisdiction thereof.

6.5     Change in Business.  Advise the Agent and each Lender, in a timely manner, of material changes to the nature of business of the Borrower or the Broker Subsidiary as at present conducted.  The Broker Subsidiary is at present engaged in the business of providing financial services, primarily to individual investors and/or their advisors.

6.6     Capital Requirements.  The Borrower will maintain, and cause each Bank Subsidiary to maintain, at all times such amount of capital as may be prescribed by such entity’s prudential supervisor, from time to time, whether by regulation, agreement or order.  The Borrower shall at all times ensure that all Bank Subsidiaries shall be "well capitalized" within the meaning of 12 U.S.C. §1831(o), as amended, reenacted or redesignated from time to time.

6.7     Anti-Corruption Laws and Sanctions.  The Borrower has implemented and will maintain in effect policies and procedures reasonably designed to ensure compliance with Anti-Corruption Laws and Sanctions.

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7.       NEGATIVE COVENANTS.

The Borrower covenants and agrees that so long as any Lender shall have any Commitment hereunder, or any Loan or other obligation, shall remain outstanding, unpaid or unsatisfied and until full payment of all amounts due to the Lenders hereunder, unless and to the extent the Required Lenders waive compliance in writing:

7.1     Net Capital.  The Borrower will not permit the Broker Subsidiary to allow any month-end Net Capital Ratio to be less than 5%.

7.2     Minimum Stockholders' Equity.  The Borrower will not allow its Consolidated Stockholders' Equity to fall below the Minimum Stockholders' Equity.

7.3     Merger/Disposition of Assets.  The Borrower will not (i) permit either Broker Subsidiary or Intermediate Parent to (a) merge or consolidate, unless the surviving company is a Controlled Subsidiary, or (b) convey or transfer its properties and assets substantially as an entirety except to one or more Controlled Subsidiaries; or (ii) except as permitted by subsection 7.3(i) sell, transfer or otherwise dispose of any voting stock of Broker Subsidiary or Intermediate Parent, or permit either Broker Subsidiary or Intermediate Parent to issue, sell or otherwise dispose of any of its voting stock, unless, after giving effect to any such transaction, Broker Subsidiary or Intermediate Parent, as the case may be, remains a Controlled Subsidiary.

7.4     Broker Subsidiary Indebtedness.  The Borrower will not permit the Broker Subsidiary to create, incur or assume any Indebtedness other than:

(a)     (i)     Indebtedness to customers, other brokers or dealers, securities exchanges or securities markets, self-regulatory organizations, clearing houses and like institutions (including, without limitation, letters of credit or similar credit support devices issued for the account of Broker Subsidiary and for the benefit of any of the foregoing in order to comply with any margin, collateral or similar requirements imposed by or for the benefit of any of the foregoing), (ii) "broker call" credit, (iii) indebtedness consisting of borrowings secured solely by margin loans made by Broker Subsidiary, together with any underlying collateral of Broker Subsidiary, (iv) stock loans, (v) obligations to banks for disbursement accounts, (vi) Indebtedness incurred for the purchase of tangible personal property on a non-recourse basis or for the leasing of tangible personal property under a capitalized lease, (vii) Indebtedness incurred for the purchase, installation or servicing of computer equipment and software, and (viii) Indebtedness incurred in the ordinary course of the Broker Subsidiary’s business, to the extent not already included in the foregoing clauses (i) through (vii);

(b)     intercompany Indebtedness; and

(c)     other Indebtedness in the aggregate not exceeding $100,000,000.

7.5     Indebtedness Secured by Subsidiary Stock.  The Borrower will not, and will not permit any Subsidiary at any time directly or indirectly to create, assume, incur or permit to existany Indebtedness secured by a pledge, lien or other encumbrance (hereinafter referred to as a

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"lien") on the voting stock of any Subsidiary without making effective provision whereby the Revolving Notes and the Term Notes shall be secured equally and ratably with such secured Indebtedness so long as other Indebtedness shall be so secured; provided,  however, that the foregoing covenant shall not be applicable to any liens permitted pursuant to subsections (a) through (d)  in Section 7.6 below.

7.6     Liens and Encumbrances.  The Borrower will not create, incur, assume or suffer to exist any lien or encumbrance upon or with respect to any of its properties, whether now owned or hereafter acquired, except the following:

(a)     liens securing taxes, assessments or governmental charges or levies, or in connection with workers’ compensation, unemployment insurance or social security obligations, or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons not yet delinquent or which are being contested in good faith by appropriate proceedings with respect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles;

(b)     liens not for borrowed money incidental to the conduct of its business or the ownership of property that do not materially detract from the value of any item of property;

(c)     attachment, judgment or other similar liens arising in the connection with court proceedings that do not, in the aggregate, materially detract from the value of its property, materially impair the use thereof in the operation of its businesses and (i) that are discharged or stayed within sixty (60) days of attachment or levy, or (ii) payment of which is covered in full (subject to customary and reasonable deductibles) by insurance or surety bonds;

(d)     (liens existing at Closing Date provided that the obligations secured thereby are not increased; and

(e)     liens in respect of Hedge Agreements securing net payment obligations in an aggregate amount not to exceed $500,000,000 at any time outstanding.

7.7     Use of Proceeds.The Borrower will not request any Borrowing, and shall not use the proceeds of any Borrowing, in any manner that, directly or, to the knowledge of the Borrower, indirectly, would result in the violation of any Anti-Corruption Laws or Sanctions.

8.      EVENTS OF DEFAULT.

8.1     Defaults.  The occurrence of any of the following events shall constitute an "Event of Default":

(a)     The Borrower shall fail to pay any interest with respect to the Revolving Notes or the Term Notes or any Commitment Fee or Term Out Fee in accordance with the terms hereof within 10 days after such payment is due.

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(b)     The Borrower shall fail to pay any principal with respect to the Revolving Notes or the Term Notes in accordance with the terms thereof on the date when due.

(c)     Any representation or warranty made by the Borrower herein or hereunder or in any certificate or other document furnished by the Borrower hereunder shall prove to have been incorrect when made (or deemed made) in any respect that is materially adverse to the interests of the Lenders or their rights and remedies hereunder.

(d)     Except as specified in (a) and (b) above, the Borrower shall default in the performance of, or breach, any covenant of the Borrower with respect to this Agreement, and such default or breach shall continue for a period of thirty days after there has been given, by registered or certified mail, to the Borrower by the Agent a written notice specifying such default or breach and requiring it to be remedied.

(e)     An event of default as defined in any mortgage, indenture, agreement or instrument under which there is issued, or by which there is secured or evidenced, any Indebtedness (other than in respect of Hedge Agreements) of the Borrower in a principal amount not less than $100,000,000 shall have occurred and shall result in such Indebtedness becoming or being declared due and payable prior to the date on which it otherwise would become due and payable, or an event of default or a termination event as defined in any Hedge Agreement shall have occurred and shall result in a net payment obligation of the Borrower thereunder of not less than $100,000,000 in aggregate for all such Hedge Agreements; provided,  however, that if such event of default shall be remedied or cured by the Borrower, or waived by the holders of such Indebtedness, within twenty days after the Borrower has received written notice of such event of default and acceleration, then the Event of Default hereunder by reason thereof shall be deemed likewise to have thereupon been remedied, cured or waived without further action upon the part of either the Borrower or the Agent and Lenders.

(f)      Any involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief against the Borrower or the Broker Subsidiary, or against all or a substantial part of the property of either of them, under Title 11 of the United States Code or any other federal, state or foreign bankruptcy, insolvency, reorganization or similar law, (ii) the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Borrower or the Broker Subsidiary or for all or a substantial part of the property of either of them, or (iii) the winding-up or liquidation of the Borrower or the Broker Subsidiary; and, in any such case, such involuntary proceeding or involuntary petition shall continue undismissed for 60 days, or, before such 60-day period has elapsed, there shall be entered an order or decree ordering the relief requested in such involuntary proceeding or involuntary petition.

(g)     The Borrower or the Broker Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case under such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Borrower or Broker Subsidiary or for any substantial part of its respective properties, or shall make any general assignment for the

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benefit of creditors, or shall fail generally to pay its respective debts as they become due or shall take any corporate action in furtherance of any of the foregoing.

(h)     A final judgment or judgments for the payment of money in excess of $100,000,000 in the aggregate shall be entered against the Borrower by a court or courts of competent jurisdiction, and the same shall not be discharged (or provisions shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Borrower shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal.

(i)     At any time after a Change in Control, the Borrower fails to maintain at least one of the following credit ratings for its Senior Medium-Term Notes, Series A:  (a) BBB- (or better) by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc., or (b) Baa3 (or better) by Moody’s Investors Service, Inc.

8.2     Remedies.  If an Event of Default occurs and is continuing, then and in every such case the Agent shall, at the request of, or may, with the consent of, the Required Lenders (i) declare the Commitment of each Lender to make Loans to be terminated whereupon such Commitments and obligation shall be terminated, and (ii) declare the unpaid principal of all outstanding Loans, any and all accrued and unpaid interest, any accrued and unpaid Commitment Fees, or any other amounts owing or payable under the Notes, to be immediately due and payable, by a notice in writing to the Borrower, and upon such declaration such principal, interest, Commitment Fees, or other amounts payable hereunder and accrued thereon shall become immediately due and payable, together with any funding losses that may result as a consequence of such declaration, without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower; provided,  however, that in the case of any of the Events of Default specified in subsection (f) or (g) of Section 8.1, automatically without any notice to the Borrower or any other act by the Agent, the Credit and the obligations of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans, any accrued and unpaid interest, any accrued and unpaid Commitment Fees or any other amounts payable hereunder shall become immediately due and payable, together with any funding losses that may result as a consequence thereof, without further act of the Agent or any Lender and without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower.

9.     THE AGENT.

9.1     Appointment and Authorization.  Each Lender hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes the Agent to take such action on its behalf underthe provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any duties or responsibilities except those expressly set forth, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities

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shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent.

9.2    Delegation of Duties.  The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

9.3     Liability of Agent.  None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Borrower or any of the Borrower’s Subsidiaries or Affiliates.

9.4     Reliance by Agent.

(a)     The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Agent.  The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of takingor continuing to take any such action.  The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

(b)     For purposes of determining compliance with the conditions specified in Section 4.1, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either

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sent by Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender.

9.5     Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Lenders, unless the Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default".  The Agent will notify the Lenders of its receipt of any such notice.  The Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 8;  provided,  however, that unless and until the Agent has received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.

9.6     Credit Decision.  Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Borrower and its Subsidiaries, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender.  Each Lender represents to the Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and its Subsidiaries, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower.  Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower which may come into the possession of any of the Agent-Related Persons.

9.7     Indemnification of Agent.  Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), pro rata, from and against any and all Indemnified Liabilities; provided,  however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Liabilities resulting solely from any such Person's gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender shall reimburse the Agentupon demand for its ratable share, of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery,

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administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of the Agent.

9.8     Agent in Individual Capacity.  Citibank and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower and its Subsidiaries and Affiliates as though Citibank were not the Agent hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, Citibank or its Affiliates may receive information regarding the Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Subsidiary) and acknowledge that the Agent shall be under no obligation to provide such information to them.  With respect to its Loans, Citibank shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent.

9.9     Successor Agent.  The Agent may, and at the request of the Required Lenders shall, resign as Agent upon 30 days' notice to the Lenders and Borrower.  If the Agent resigns under this Agreement, the Required Lenders, with the consent of the Borrower, which consent shall not be unreasonably withheld, shall appoint from among the Lenders a successor agent for the Lenders which successor agent shall be approved by the Borrower.  If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent with the consent of the Borrower, which consent shall not be unreasonably withheld, may appoint, after consulting with the Lenders and the Borrower, a successor agent from among the Lenders.  Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated.  After any retiring Agent's resignation hereunder as Agent, the provisions of this Section 9 and Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  The retiring Agent shallrefund to Borrower that portion of any agency fee paid to such Agent as is not earned due to such Agent’s resignation, prorated to the date of such Agent’s resignation.

9.10     Withholding Tax.

(a)     If any Lender is a "foreign corporation, partnership or trust" within the meaning of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding tax under Section 1441 or 1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver to the Agent:

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(i)     if such Lender claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, properly completed IRS Form W-8BEN before the payment of any interest in the first calendar year and before the payment of any interest in any subsequent calendar year during which the Form W-8BEN (or any successor thereto) then in effect expires;

(ii)     if such Lender claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, two properly completed copies of IRS Form W-8ECI or any successor form thereto before the payment of any interest is due in the first taxable year of such Lender and before the payment of any interest in any subsequent calendar year during which the Form W-8ECI (or any successor thereto) then in effect expires; and

(iii)     such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.

Such Lender agrees to promptly notify the Agent of any change in circumstances which would render invalid any claimed exemption or reduction.

(b)     If any Lender claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to notify the Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of the Company to such Lender.  To the extent of such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN or any successor form thereto as no longer valid.

(c)     If any Lender claiming exemption from United States withholding tax by filing IRS Form W-8ECI or any successor form thereto with the Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

(d)     If any Lender is entitled to a reduction in the applicable withholding tax, the Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable withholding tax after taking into account such reduction.  If the forms or other documentation required by subsection (a) of this Section are not delivered to the Agent or if any Lender which is a "foreign corporation, partnership or trust" within the meaning of the Code is not entitled to claim exemption from or a reduction of U.S. withholding tax under Section 1441 or 1442 of the Code, then the Agent shall withhold from any interest payment to such Lender not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

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(e)     If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason other than the Agent’s gross negligence or willful misconduct) such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, together with all costs and expenses (including Attorney Costs).  The obligation of the Lenders under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Agent.

9.11     Co-Agents.  None of the Lenders identified on the facing page or signature pages of this Agreement as a "co-agent", "managing agent", "syndication agent" or "documentation agent" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders so identified as a "co-agent", "syndication agent" or "documentation agent" shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

10.     MISCELLANEOUS.

10.1     Amendments and Waivers.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Borrower or any applicable Subsidiary therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by the Agent at the written request of the Required Lenders) and the Borrower and acknowledged by the Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided,  however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders and the Borrower and acknowledged by the Agent, do any of the following:

(a)     increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.2);

(b)     postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document;

(c)     reduce the principal of, or the rate of interest specified herein on any Loan, or (subject to clause (ii) below) any fees or other amounts payable hereunder or under any other Loan Document;

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(d)     change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which is required for the Lenders or any of them to take any action hereunder; or

(e)     amend this Section, or Section 2.13, or any provision herein providing for consent or other action by all Lenders;

and, providedfurther, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Loan Document, and (ii) the respective Fee Letters may be amended or rights or privileges thereunder waived, in a writing executed by the parties thereto.

10.2     Notices.

(a)     All notices, requests and other communications shall be either (i) in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Borrower by facsimile shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 10.2) or (ii) as and to the extent set forth in clause (d) below, by electronic mail.

(b)     All such notices, requests and communications shall, when transmitted by overnight delivery, faxed or e-mailed, be effective when delivered for overnight (next-day) delivery, transmitted in legible form by facsimile machine (provided that the sender has retained its facsimile machine-generated confirmation of the receipt of such fax by the recipient's facsimile machine) or transmitted by e-mail (provided that the e-mail was sent to the e-mail address provided by the recipient and that the e-mail was not returned to the sender as undeliverable), respectively, or if mailed, upon the third Business Day after the date deposited into the U.S. mail, or if delivered, upon delivery; except that notices pursuant to Section 2 or 9 shall not be effective until actually received by the Agent.

(c)     The agreement of the Agent and the Lenders herein to receive certain notices by telephone, facsimile or e-mail is solely for the convenience of the Borrower, the Agent and the Lenders.  The Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person who is named in the then-current certificate delivered pursuant to subsection 4.1(e) hereof as authorized to execute Borrowing Advices (each an "Authorized Person") and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Agent or the Lenders in reliance upon such telephonic, facsimile or e-mail notice, provided the Agent and the Lenders reasonably believe such Person to be an Authorized Person.  The obligation of the Borrower to repay the Loans shall not be affected in any way to any extent by any failure by the Agent and the Lenders to receive written confirmation of any telephonic, facsimile or e-mail notice or the receipt by the Agent and the Lenders of a confirmation which is at variance with the terms understood by the Agent and the Lenders to be contained in the telephonic, facsimile or e-mail notice.

(d)     The compliance certificate described in Section 6.2 shall be delivered to the Agent by the Borrower by mail or overnight delivery.  Except for the compliance

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certificate described in Section 6.2, materials required to be delivered pursuant to Section 6.2 shall be delivered to the Agent in an electronic medium format reasonably acceptable to the Agent by e-mail at oploanswebadmin@citigroup.com.  The Borrower agrees that the Agent may make such materials (collectively, the "Communications") available to the Lenders by posting such materials on Debt Domain or a substantially similar electronic transmission system (collectively, the "Platform").  In addition, to the extent the Borrower in its sole discretion so elects and confirms in writing or by e-mail to the Agent, any other written information, documents, instruments or other material relating to the Borrower, any of its Subsidiaries or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby and supplied by the Borrower to the Agent (other than any such communication that (i) relates to a request for a new, or a conversion of an existing, Borrowing (including any election of an interest rate or Interest Period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent set forth in Section 4.1 or Section 4.2), shall, to the extent of such election and confirmation by the Borrower, constitute materials that are "Communications" for purposes of this subparagraph (d).  The Borrower and each of the Lenders acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided "as is" and "as available" and (iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform (provided, as to such disclaimer, that the Agent and its Affiliates have not been grossly negligent or engaged in any willful misconduct in respect of the Platform).  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in connection with the Platform.

(e)     Each Lender agrees that notice to it (as provided in the next sentence) (a "Notice") specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender for purposes of this Agreement.  Each Lender agrees (i) to notify the Agent in writing of such Lender's e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.

(f)     The Agent agrees to give to each Lender prompt notice of all materials delivered by the Borrower pursuant to Section 6.2.

10.3     No Waiver-Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

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10.4     Costs and Expenses.  The Borrower shall:

(a)     whether or not the transactions contemplated hereby are consummated, pay or reimburse Citibank including in its capacity as Agent and Lender within five Business Days after demand, subject to subsection 4.1(g) for all reasonable costs and expenses incurred by Citibank including in its capacity as Agent and Lender in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Attorney Costs incurred by Citibank (including in its capacity as Agent and Lender with respect thereto); and

(b)     pay or reimburse the Agent, the Arranger and each Lender within five Business Days after demand (subject to subsection 4.1(g)) for all reasonable costs and expenses (including reasonable Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding).  In connection with any claim, demand, action or cause of action relating to the enforcement, preservation or exercise of any rights or remedies covered by this Section 10.4 against the Borrower, all Lenders shall be represented by the same legal counsel selected by such Lenders; provided, that if such legal counsel determines in good faith that representing all such Lenders would or could result in a conflict of interest under laws or ethical principles applicable to such legal counsel or that a claim is available to a Lender that is not available to all such Lenders, then to the extent reasonably necessary to avoid such a conflict of interest or to permit an unqualified assertion of such a claim, each Lender shall be entitled to separate representation by legal counsel selected by that Lender, with all such legal counsel using reasonable efforts to avoid unnecessary duplication of effort by counsel for all Lenders.

10.5     Borrower Indemnification.  Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold the Agent-Related Persons, andeach Lender and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Loans and the termination, resignation or replacement of theAgent or replacement of any Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any Insolvency Proceeding or appellate proceeding) related to or arising out of this Agreement or the Loans or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing,

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collectively, the "Indemnified Liabilities"); provided, that the Borrower shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person.  If any claim, demand, action or cause of action is asserted against any Indemnified Person, such Indemnified Person shall promptly notify Borrower, but the failure to so promptly notify Borrower shall not affect Borrower’s obligations under this Section unless such failure materially prejudices Borrower’s right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided.  If requested by Borrower in writing, such Indemnified Person shall in good faith contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Borrower to participate in such contest.  Any Indemnified Person that proposes to settle or compromise any claim or proceeding for which Borrower may be liable for payment of indemnity hereunder shall give Borrower written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Borrower’s prior consent.  In connection with any claim, demand, action or cause of action covered by this Section 10.5 against more than one Indemnified Person, all such Indemnified Persons shall be represented by the same legal counsel selected by the Indemnified Persons and reasonably acceptable to Borrower; provided, that if such legal counsel determines in good faith that representing all such Indemnified Persons would or could result in a conflict of interest under laws or ethical principles applicable to such legal counsel or that a defense or counterclaim is available to an Indemnified Person that is not available to all such Indemnified Persons, then to the extent reasonably necessary to avoid such a conflict of interest or to permit unqualified assertion of such a defense or counterclaim, each Indemnified Person shall be entitled to separate representation by legal counsel selected by that Indemnified Person and reasonably acceptable to Borrower, with all such legal counsel using reasonable efforts to avoid unnecessary duplication of effort by counsel for all Indemnified Persons.  The agreements in this Section shall survive payment of all other Obligations.

10.6     Payments Set Aside.  To the extent that the Borrower makes a payment to the Agent or the Lenders, or the Agent or the Lenders exercise any right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of suchrecovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had notoccurred, and (b) each Lender severally agrees to pay to the Agent upon demand its pro rata share of any amount so recovered from or repaid by the Agent.

10.7     Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Agent and each Lender.

10.8     Assignments, Participations Etc.

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(a)     (i) Any Lender may, with the written consent of the Agent and the Borrower, which consent shall not be unreasonably withheld (except Borrower’s consent shall not be required if a Default or an Event of Default exists and is continuing), at any time assign and delegate to one or more Eligible Assignees (provided that no written consent of the Agent shall be required in connection with any assignment and delegation by a Lender to an Eligible Assignee that is an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all, of the Loans, the Commitments, and the other rights and obligations of such Lender hereunder, in a minimum amount of $10,000,000; provided,  however, that (x) the Borrower and, the Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (A) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to the Borrower and the Agent by such Lender and the Assignee; (B) such Lender and its Assignee shall have delivered to the Borrower and the Agent an Assignment and Acceptance in the form of Exhibit F ("Assignment and Acceptance") together with any Note or Notes subject to such assignment; and (C) the assignor Lender or Assignee has paid to the Agent a processing fee in the amount of $3,500 and (y) no such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender.

(ii)     Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations, or other compensating actions, including funding, with the consent of the Borrower and the Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent, and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans in accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(b)     From and after the date that the Agent notifies the assignor Lender and the Borrower that it has received (and the Borrower and the Agent have provided their consent with respect to) an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents.

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(c)     Within five Business Days after its receipt of notice by the Agent that it has received an executed Assignment and Acceptance and payment of the processing fee (and provided that it consents to such assignment in accordance with subsection 10.8(a)), the Borrower shall execute and deliver to the Agent, new Notes evidencing such Assignee's assigned Loans and Commitment and, if the assignor Lender has retained a portion of its Loans and its Commitment, replacement Notes in the principal amount of the Commitment retained by the assignor Lender (such Notes to be in exchange for, but not in payment of, the Notes held by such Lender).  Immediately upon each Assignee's making its processing fee payment under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assignee shall reduce such Commitments of the assignor Lender protanto.

(d)     Any Lender may at any time sell to one or more commercial banks or other Persons not Affiliates of the Borrower (a "Participant") participating interests in any Loans, the Commitment of that Lender and the other interests of that Lender (the "originating Lender") hereunder and under the other Loan Documents; provided,  however, that (i) the originating Lender's obligations under this Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrower, and the Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender's rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which the Participant has rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document.  Any Lender that sells a participation to any Person that is a "foreign corporation, partnership or trust" within the meaning of the Code shall include in its participation agreement with such Person a covenant by such Person that such Person will comply with the provisions of Section 9.10 as if such Person were a Lender and provide that the Agent and the Borrower shall be third party beneficiaries of such covenant.

(e)     Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and the Note held by it in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

(f)     Any Lender (a "Granting Lender") may, with notice to the Agent, grant to a special purpose funding vehicle (an "SPC") the option to fund all or any part of any Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Agreement.  The funding of a Loan by an SPC hereunder shall utilize the Revolving Credit Commitment of the Granting Lender to the same extent, and as if, such Loan were funded by such Granting Lender.  Each party hereto hereby agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes such payment.  Notwithstanding anything to the contrary contained in the foregoing or anywhere else in this

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Agreement, (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Lender shall be obligated to fund such Loan pursuant to the terms hereof, and (iii) the Borrower and Agent shall continue to deal exclusively with the Granting Lender and any funding by an SPC hereunder shall not constitute an assignment, assumption or participation of any rights or obligations of the Granting Lender.  Any SPC may disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or guarantee to such SPC, provided, as a condition precedent to such disclosure, (A) such agency, dealer or provider has delivered to such Granting Lender for the benefit of Borrower a written confidentiality agreement substantially similar to Section 10.9, and (B) simultaneous with or prior to such disclosure, such Granting Lender has given written notice to Borrower of the agency, dealer or provider to which such disclosure is being made and the contents of such disclosure.  This Section may not be amended without the prior written consent of each Granting Lender, all or any part of whose Loan is being funded by an SPC at the time of such amendment.

10.9     Confidentiality.  Each Lender agrees to hold any confidential information that it may receive from Borrower or from the Agent on such Borrower’s behalf, pursuant to this Agreement in confidence, except for disclosure:  (a) to legal counsel and accountants for Borrower or any Lender; (b) to other professional advisors to Borrower or any Lender, provided that the recipient has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9; (c) to regulatory officials having jurisdiction over any Lender; (d) as required by applicable law or legal process or in connection with any legal proceeding in which any Lender and Borrower are adverse parties; (e) to Affiliates or agents of such Lender to the extent the Affiliate or agent is involved in the administration of the credit facilities extended to Borrower and its Subsidiaries hereunder, provided, however, that (i) as to any such Affiliate, such Affiliate has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9, and (ii) as to any such agent, such agent has been informed by such Lender of the confidential nature of such confidential information and has been instructed by such Lender to maintain the confidentiality of such confidential information;and (f) to another financial institution in connection with a disposition or proposed disposition to that financial institution of all or part of any Lender’s interests hereunder or a participation interest in the Revolving Note and/or the Term Note, each in accordance with Section 10.8 hereof, provided that the recipient has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9.  Each Lender further agrees that it will not use such confidential information in any activity or for any purpose other than the administration of credit facilities extended to Borrower and its Subsidiaries and, without limitation, will take such steps as are reasonably appropriate to preclude access to any such confidential information to be obtained by any Person employed by any Lender, or by an affiliate of any Lender, who is not involved in the administration of credit facilities extended to Borrower and its Subsidiaries.  For purposes of the foregoing, "confidential information" shall mean any information respecting Borrower or its Subsidiaries reasonably specified by Borrower as confidential, other than (i) information filed with any governmental agency and available to the public, and (ii) information disclosed by Borrower to any Person not associated with Borrower without a written confidentiality agreement substantially similar to this Section 10.9.  Certain of the confidential information pursuant to this Agreement is or may be valuable proprietary information that constitutes a trade

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secret of Borrower or its Subsidiaries; neither the provision of such confidential information to any Lender or the limited disclosures thereof permitted by this Section 10.9 shall affect the status of any such confidential information as a trade secret of Borrower and its Subsidiaries.  Each Lender, and each other Person who agrees to be bound by this Section 10.9, acknowledges that any breach of the agreements contained in this Section 10.9 would result in losses that could not be reasonably or adequately compensated by money damages.  Accordingly, if any Lender or any other person breaches its obligations hereunder, such Lender or such other Person recognizes and consents to the right of Borrower, Intermediate Parent, and/or Broker Subsidiary to seek injunctive relief to compel such Lender or other Person to abide by the terms of this Section 10.9.

The Agent agrees to provide to the Borrower, upon the Borrower’s request, each interest rate that is furnished by any Reference Bankto the Agent pursuant to Section 2.14(b) (each, a “Reference BankRate”), which information is to be treated by the Borrower as confidential except (i) the Borrower may disclose any actual interest rate payable under this Agreement, and (ii) the Borrower may disclose any Reference BankRate (a) to legal counsel and accountants for Borrower; (b) to other professional advisors to Borrower, provided that the recipient has delivered to the Borrower a written confidentiality agreement substantially similar to this Section 10.9; (c) to regulatory officials having jurisdiction over the Borrower; (d) as required by applicable law,  legal process,the New York Stock Exchange or any similar self-regulatory exchange of which Borrower is a member, or in connection with any legal proceeding in which any Lender and Borrower are adverse parties; (e) to Affiliates or agents of the Borrower to the extent the Affiliate or agent is involved in the administration of the credit facilities extended to the Borrower and its Subsidiaries hereunder, provided, however, that (i) as to any such Affiliate, such Affiliate has delivered to the Borrower a written confidentiality agreement substantially similar to this Section 10.9, and (ii) as to any such agent, such agent has been informed by the Borrower of the confidential nature of such confidential information and has been instructed by the Borrowerto maintain the confidentiality of such Reference BankRate.  The Borrower further agrees that it will not use such confidential information in any activity or for any purpose other than the administration of this Agreement and, without limitation, will take such steps as are reasonably appropriate to preclude access to any such confidential information to be obtained by any Person employed by the Borrower, or by an affiliate of the Borrower, who is not involved in the administration of this Agreement.

10.10     Notification of Addresses, Lending Offices, Etc.  Each Lender shall notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request.

10.11     Counterparts.  This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument.

10.12     Severability.  The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or

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impair thelegality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

10.13     No Third Parties Benefited.  This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Lenders, the Agent and the Arranger, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents.

10.14     Governing Law and Jurisdiction.

(a)     THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.

10.15     Waiver of Jury Trial.

(a)     TO THE FULL EXTENT PERMITTED BY LAW, THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  TO THE FULL EXTENT PERMITTED BY LAW, THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT AJURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE

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VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANYSUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

(b)     WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT IMMEDIATELY ABOVE TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if such waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between the Borrower, on the one hand, and any one or more of the other parties to this Agreement, on the other, arising out of this Agreement at any time shall be decided by a reference to a private judge, mutually selected by the parties to such dispute (or, if they cannot agree, by the Presiding Judge of the California Superior Court in and for the County of San Francisco) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in San Francisco County, California; and the parties hereby submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential, and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the California Superior Court in and for the County of San Francisco for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral (if any), or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

10.16     Entire Agreement.  This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the Borrower, the Lenders and the Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof.

10.17     Headings.  Articles and Section headings in this Agreement are included herein for the convenience of reference only.

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10.18    USA Patriot Act.  Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies each borrower, guarantor or grantor (the "Loan Parties"), which information includes the name and address of each Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.

(SIGNATURE PAGE FOLLOWS)

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the date first above written.

Borrower:

THE CHARLES SCHWAB CORPORATION

By:	/s/  William F. Quinn
Name:		William F. Quinn
Title:		Senior Vice President and Treasurer

Lenders:
CITIBANK, N.A., as Agent and
individually as Lender
By:	/s/  Michael Vondriska
Name:		Michael Vondriska
Title:		Vice President

JPMORGAN CHASE BANK, N.A.
By:	/s/  Leo Lai
Name:		Leo Lai
Title:		Executive Director

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
By:	/s/  Doreen Barr
Name:		Doreen Barr
Title:		Authorized Signatory
By:	/s/  Alex Verdone
Name:		Alex Verdone
Title:		Authorized Signatory

THE BANK OF NEW YORK MELLON
By:	/s/  Thomas Caruso
Name:		Thomas Caruso
Title:		Managing Director

UBS AG, STAMFORD BRANCH
By:	/s/  Lana Gifas
Name:		Lana Gifas
Title:		Director
By:	/s/  Jennifer Anderson
Name:		Jennifer Anderson
Title:		Director

2

WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/  Karen Hanke
Name:		Karen Hanke
Title:		Managing Director

BANK OF AMERICA, N.A.
By:	/s/  Matthew Derr
Name:		Matthew Derr
Title:		Assistant Vice President

GOLDMAN SACHS BANK USA
By:	/s/  Mark Walton
Name:		Mark Walton
Title:		Authorized Signatory

HSBC BANK USA, NATIONAL ASSOCIATION
By:	/s/  Jeffrey Roth
Name:		Jeffrey Roth
Title:		Vice President

LLOYDS BANK PLC
By:	/s/  Stephen Giacolone
Name:		Stephen Giacolone G011
Title:		Assistant Vice President
By:	/s/  Dennis McClellan
Name:		Dennis McClellan M040
Title:		Assistant Vice President

PNC BANK, NATIONAL ASSOCIATION
By:	/s/  Cara Gentile
Name:		Cara Gentile
Title:		Senior Vice President

3

STATE STREET BANK AND TRUST COMPANY
By:	/s/  Carolyn L. Baker
Name:		Carolyn L. Baker
Title:		Vice President

4

Schedule 1

LENDERS’ COMMITMENTS

The Charles Schwab Corporation $800,000,000 Credit Agreement (364-Day Commitment) dated as of June 6, 2014.

		Lender Commitment Amount
1.	Citibank, N.A.		1.	$85,000,000
2.	JPMorgan Chase Bank, N.A.		2.	$85,000,000
3.	Credit Suisse AG, Cayman Islands Branch		3.	$75,000,000
4.	The Bank of New York Mellon		4.	$75,000,000
5.	UBS AG, Stamford Branch		5.	$75,000,000
6.	Wells Fargo Bank, National Association		6.	$75,000,000
7.	Bank of America, N.A.		7.	$55,000,000
8.	Goldman Sachs Bank USA		8.	$55,000,000
9.	HSBC Bank USA, National Association		9.	$55,000,000
10.	Lloyds Bank plc		10.	$55,000,000
11.	PNC Bank, National Association		11.	$55,000,000
12.	State Street Bank and Trust Company		12.	$55,000,000
	Total			$800,000,000

5

Schedule 2

LIST OF BORROWING AGREEMENTS

1.$800,000,000 Credit Agreement (364-Day Commitment) dated as of June 7, 2013 among the Borrower, the lenders party thereto, and Citibank, N.A., as administrative agent for such lenders.

Schedule 6.2

COMPLIANCE CERTIFICATE

I, ____________________, certify that I am the _______________________ of The Charles Schwab Corporation (the "Borrower"), and that as such I am authorized to execute this Compliance Certificate on behalf of the Borrower, and do hereby further certify on behalf of the Borrower that:

1.I have reviewed the terms of that certain Credit Agreement (364-Day Commitment) dated as of June 6, 2014 among the Borrower, the financial institutions named therein (the "Lenders") and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement"), and I have made, or have caused to be made by employees or agents under my supervision, a detailed review of the transactions and conditions of the Borrower during the accounting period covered by the attached financial statements dated ______________, 20___.

2.The examination described in paragraph 1 did not disclose, and I have no knowledge of the existence of any condition or event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below.

3.Schedule I attached hereto sets forth financial data and computations evidencing compliance with the covenants set forth in Sections 7.1 and 7.2 of the Credit Agreement, all of which data and computations are true, complete and correct.  Capitalized terms not otherwise defined herein are defined in the Credit Agreement.

4.Described below are the exceptions, if any, to paragraph 2 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event.

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Compliance Certificate in support hereof, are made and delivered this ___ day of _____________ 20___.

By:

Name:

Title:

The Charles Schwab Corporation

Credit Agreement (364-Day Commitment)

Dated as of June 6, 2014

Schedule I

to

Compliance Certificate

(Dollars in Thousands)

1.	Net Capital Ratio of the Broker Subsidiary.
	Requirement:  Broker Subsidiary - month-end ratio not less than 5%.
	Net Capital Ratio for Broker Subsidiary
	Month	Month-end Ratio
2.	Minimum Stockholders' Equity of Borrower.
	Requirement:  As of _____________, 20____, required Minimum Stockholders' Equity is the greater of (a) $7,300,000,000 or (b) $7,300,000,000 plus 50% of the sum of cumulative Net Earnings for each fiscal quarter commencing with the fiscal quarter ended June 30, 2014.

Schedule 10.2

NOTICES

If to the Borrower:

If by U.S. mail:	The Charles Schwab Corporation
	Treasury Department
	Attn:  Christy M. Silvanic or Successor
	211 Main Street (Mail Stop SF215FMT-04-120)
	San Francisco, CA 94105

If by hand delivery
(including courier
and overnight
messenger service):	The Charles Schwab Corporation
	Treasury Department
	Attn:  Christy M. Silvanic or Successor
	215 Fremont Street, 4th Floor
	San Francisco, CA 94105
Telephone:	(415) 667-8886
Facsimile:	(415) 667-8565

If to the Agent:

See information under Citibank, N.A. in table below pertaining to Lenders.

If to the Lenders:

Credit Contact	Operations Contact	Lending Office	Payment Instructions
Bank of America, N.A. 335 Madison Ave. New York, NY 10017 Attention: Michael Ugliarolo Assistant Vice President (646) 556-0564 Fax:  704 409 0892	Bank of America, N.A. Building No, 5 Ste 5a Mindspace - Raheja It Park, Hitec City, Hyderabad 500081 Attention:  Aditya Tha +91040 23145000 ext. 64675 Fax: (312) 453-2986	Bank of America, N.A. 2001 Clayton Road Concord, California 94520	Bank of America, N.A. ABA #:  026009593 Charlotte, NC Acct #:  4426457864 Attention:  Bilateral Clearing Account Ref:  Charles Schwab Corporation
The Bank of New York Mellon One Wall Street, 19th Floor New York, NY 10286 Attention:  Thomas Caruso                   Managing Director (212) 635-6745 Fax:  (212) 635-1194	The Bank of New York Mellon 6023 Airport Road Oriskany, NY 13424 Attention:  Richard Scalice (315)765-4192 Fax:  (315) 765-4783	The Bank of New York Mellon One Wall Street, 19th Floor New York, NY 10286	The Bank of New York ABA #: 021-000-018 Acct #: GLA111-231 Acct name:  Broker Services Attn:  Bradley Fike Ref:  Charles Schwab Corporation

8219			Agency/Medium TermFinance
Credit Contact	Operations Contact	Lending Office	Payment Instructions
Citibank, N.A. 388 Greenwich Street New York, NY 10013 Attention: Dane Graham Director (212) 816-8219 Fax:  (212) 816-1212	Citibank, N.A. 1615 Brett Road, Bldg #3 New Castle, DE 19720 Attention:  Investor Relations (302) 894-6010 Fax: (212) 994-0961	Citibank, N.A. 399 Park Avenue New York, NY 10043	Citibank NA ABA #:  021-000-089 New York, NY Acct #:  36852248 Acct Name:  Agency/Medium TermFinance Ref:  The Charles Schwab Corporation
Credit Suisse AG, Cayman Islands Branch Eleven Madison Avenue New York, NY 10010 Attention: Doreen Barr /                 Alex Verdone Phone:       (212) 325-9914 /                  (212) 325-0703 Fax:           (212) 743-2737 /	Credit Suisse AG, Cayman Islands Branch One Madison Avenue New York, NY 10010 Attention:  Jason Golz                  Loan Closers /                  Cecelia Harrison                  Administrator Phone:       (919) 994-6378 /                  (919) 994-6359 Fax:           (866) 469-3871	Credit Suisse AG, Cayman Islands Branch Eleven Madison Avenue New York, NY 10010	Credit Suisse ABA #:  021-000-018 New York, NY Acct #:  890-0492-627 Acct Name:  CS Agency Cayman Ref:  The Charles Schwab Corporation
Goldman Sachs Bank USA Michelle Latzoni c/o Goldman, Sachs & Co. 30 Hudson Street, 5th Floor Jersey City, NJ 07302 Email: gsd.link@gs.com Tel: (212)934-3921	Goldman Sachs Bank USA c/o Goldman, Sachs & Co. 30 Hudson Street, 5th Floor Jersey City, NJ 07302 gs-sbd-admin-contacts@ny.email.gs.com Tel: (212)902-1099 Fax: (917)977-3966	Goldman Sachs Bank USA 200 West Street New York, NY 10282	Goldman Sachs Bank USA Swift Code: CITIUS33 Aba: 021000089 Bank Name: Citibank N.A. City: New York A/C #: 30627664 Entity Name: Goldman Sachs Bank USA
HSBC Bank USA, National Association 452 Fifth Avenue New York, NY 10018 Attention: Jeffrey Roth /                 Stephen J. Contino Phone:       (212) 525-4341 /                   (212) 525-7054	HSBC Bank USA, New York 452 Fifth Avenue New York, NY 10018 Attention: CTLA Lan Admin Phone:       (212) 525-1529 / Fax:           (847) 793-3415	HSBC Bank USA, National Association 452 fifth Avenue New York, NY 10018	HSBC Bank USA, National Association ABA #:  021-000-1088 Acct #:  713011777 Acct Name:  NY Loan Agency Attn:  CTLA Laon Admin Ref:  The Charles Schwab Corporation
JPMorgan Chase Bank, N.A. 383 Madison Avenue, Floor 23 New York, NY 10179 Attention: Catherine Grossman  Vice President / (212) 270-1153 Fax:  (212) 270-1511	JPMorgan Chase Bank, N.A. JPM-Bangalore Loan Operations Prestige Tech Park, Floor 4 Sarjapur outer Ring Rd, Vathur Hobli Bangalore, India 560 087 91 80 66761709 Fax:  (201) 244-3885	JPMorgan Chase Bank, N.A. 500 Stanton Christiana Road, Ops 2, Floor 3 Newark, DE 19713-2107	JPMorgan Chase Bank, N.A. New York, NY ABA #:  021000021 Acct #:  9008113381H2832 Acct Name: LS2 Incoming Account Attn: Loan & Agency Ref:  Charles Schwab
Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036 Attention: Sammy Asoli Vice President (212) 284-0418 Fax:  (212) 930-5098	Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036 Attention:  Indira Girisankar /  Ramona Rojas (212) 930-5051/8978 Fax:  (212) 930-5098	Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036	Bank of America International, New York New York, NY ABA #:  026-009-593 Acct #: 655-010-1938 Acct Name: Lloyds Bank plc, New York Ref:  Charles Schwab

2

Howard Potter
Credit Contact	Operations Contact	Lending Office	Payment Instructions
PNC Bank, N. A. One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222 Attention: Howard Potter Senior Vice President / Van Paul Assistant Vice President (412) 762-7348 / (412) 768-3326 Fax:  (412) 768-5151	PNC Bank, N. A. 6750 Miller Road Mail Stop:  BR-YB58-01O Brecksville, OH 44141 Attention: Brian Kus  Loan Administration (440) 546-7399 Fax:  (877) 718-2651	PNC Bank, N. A. One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222	PNC Bank, N.A. Pittsburgh, PA ABA #:  043-000-096 Acct #: 13076-0016-803 Acct Name:  Commercial Loan Operations Attn:  Brian Kus Ref: Charles Schwab Corp
State Street Bank and Trust Company Box 5303 Boston, MA 02206 Attention:  Carolyn Baker Vice President / Charlie Garrity Vice President (617) 662-8625 / 8827 Fax:  (617) 662-8664	State Street Bank and Trust Company Box 5302 Boston, MA  02206 Attention:  Robyn Shepard (617) 662-8575 Fax:  (617) 988-6677	State Street Bank and Trust Company 100 Huntington Ave., Tower 1, Floor 4 Boston, MA  02206	State Street Bank and Trust Company, Boston, MA ABA#:  011-000-028 Acct #:  0006-332-1 Acct. Name:  IS Loan Operations / CSU Internal Ref: The Charles Schwab Corporation Attn:  Robyn Shepard, ext 2-8575
UBS AG 1285 Avenue of the Americas New York, NY 10019 Attention:  Deborah White (212) 713-2801 Email:  Deborah.white@ubs.com	UBS AG, Stamford Branch 677 Washington Boulevard Stamford, CT  06901 Attention:  SH-OBP@ubs.com (203) 719-7813 Fax:  (203) 719-3888	UBS AG, Stamford Branch 677 Washington Boulevard Stamford, CT  06901	UBS AG, Stamford Branch Stamford, CT 06901 ABA #:  026 007 993 Acct #:  101-WA-894001-001 Acct. Name:  BPS Loan Finance Account Attn:  SH-OBP@ubs.com Ref:  The Charles Schwab Corporation
Wells Fargo Bank, National Association 301 S. College St. 14th Floor MAC D1053-144 Charlotte, NC 28202 Attention: Karen Hanke Managing Director / (704) 374-3061 (Fax:  (704) 715--1486	Wells Fargo Bank, National Association 1700 Lincoln Street, 5th Floor MAC C7300-059 Denver, CO 80203-4500 Attention:  Dorothy Cardenas  Loan Servicing Spec. (303) 863-5917 Fax:  (303) 863-2729	Wells Fargo Bank, National Association 90 South 7th Street, 7th Floor MAC N9305-075 Minneapolis, MN 55402-3903	Wells Fargo Bank, National Association ABA #:  121000248 Acct #: 00029694050720 Account Name:  WLS Denver Attn:  Dorothy Cardenas Ref: Charles Schwab

3

EXHIBIT A-1

REVOLVING NOTE

$____________________ (Amount of Commitment) Date:  June 6, 2014

For Value Received, The Charles Schwab Corporation ("Schwab") hereby promises to pay to the order of ________________ (the "Lender") to Citibank, N.A., as Agent, at Agent’s office located at 388 Greenwich Street, New York, New York  10013, for the account of the applicable Lending Office of the Lender, the principal amount of ____________________ ($___________) or the aggregate amount of all Revolving Loans made to Schwab by the Lender, whichever is less, on June 5, 2015.  The undersigned also promises to pay interest on the unpaid principal amount of each Borrowing from the date of such Borrowing until such principal amount is paid, at the rates per annum, and payable at such times, as are specified in the Credit Agreement.  This Note shall be subject to the terms of the Credit Agreement, and all principal and interest payable hereunder shall be due and payable in accordance with the terms of the Credit Agreement.

Schwab hereby authorizes the Lender to endorse on the Schedule attached to this Note the amount and Type of Revolving Loans made to Schwab by the Lender and all renewals, conversions, and payments of principal amounts in respect of such Revolving Loans, which endorsements shall, in the absence of manifest error, be conclusive as to the outstanding principal amount of all such Revolving Loans, provided,  however, that the failure to make such notation with respect to any Revolving Loans or payments shall not limit or otherwise affect the obligation of Schwab under the Credit Agreement or this Note.

This Note is the Revolving Note referred to in the Credit Agreement (364-Day Commitment), dated as of June 6, 2014 among Schwab, the Lender, certain other Lenders party thereto, and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement").  Terms defined in the Credit Agreement are used herein with the same meanings.  The Credit Agreement, among other things, contains provisions for acceleration of the maturity of this Note, upon the happening of certain stated events and also for prepayments on account of the principal of this Note prior to the maturity of this Note upon the terms and conditions specified in the Credit Agreement.

Principal and interest payments shall be in money of the United States of America, lawful at such times for the satisfaction of public and private debts, and shall be in immediately available funds.

Schwab promises to pay the costs of collection, including reasonable attorney’s fees, if default is made in the payment of this Note.

The terms and provisions of this Note shall be governed by the applicable laws of the State of California.

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its officers thereunto duly authorized and directed by appropriate corporate authority.

The Charles Schwab Corporation

By:

Name:

Title:

2

EXHIBIT A-1

SCHEDULE TO REVOLVING NOTE

Date
Made,
Continued,
Converted,
or Paid


Type of
Loan


Amount
of Loan Amount of
Principal
Continued,
Converted,
or Paid Unpaid
Principal
Balance of
Revolving
Note
Name of
Person
Making
Notation

3

EXHIBIT A-2

TERM NOTE

Date:  June 6, 2014

FOR VALUE RECEIVED, the undersigned, The Charles Schwab Corporation ("Schwab") hereby promises to pay to the order of ___________________ (the "Lender") to Citibank, N.A., as Agent, at the Agent's office located at 388 Greenwich Street, New York, New York 10013, for the account of the applicable Lending Office of the Lender, the principal amount of each Term Loan made by the Lender to Schwab pursuant to the terms of the Credit Agreement (364-Day Commitment), dated as of June 6, 2014, as amended, among Schwab, the Lender, certain other Lenders party thereto, and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement"), as shown in the schedule attached hereto and any continuation thereof,  in lawful money of the United States and in immediately available funds on the Term Loan Maturity Date for such Term Loan.  The undersigned also promises to pay interest on the unpaid principal amount of each Term Loan from the date of such Term Loan until such principal amount is paid, in like money, at said office for the account of the Lender’s applicable Lending Office, at the rates per annum, and payable at such times as are specified in the Credit Agreement.  This Term Note shall be subject to the terms of the Credit Agreement and all principal and interest payable hereunder should be due and payable in accordance with the terms of the Credit Agreement.  Terms defined in the Credit Agreement are used herein with the same meanings.

This Term Note is one of the Term Notes referred to in, and is entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things, contains provisions for acceleration of the maturity of this Term Note upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity of the Term Note upon the terms and conditions specified in the Credit Agreement. 

Schwab promises to pay costs of collection, including reasonable attorney's fees, if default is made in the payment of this Note.

The terms and provisions of this Term Note shall be governed by the applicable laws of the State of California.

IN WITNESS WHEREOF, the undersigned has caused this Term Note to be executed by its officer thereunto duly authorized and directed by appropriate corporate authority.

The Charles Schwab Corporation

By:

Name:

Title:

EXHIBIT A-2

SCHEDULE TO TERM NOTE

Date
Made,
Continued,
Converted,
or Paid

Type of
Loan

Amount
of Loan

Term Loan
Maturity Date Amount of
Principal
Continued,
Converted,
or Paid Unpaid
Principal
Balance of
Term Note
Name of
Person
Making
Notation

2

EXHIBIT B

BORROWING ADVICE

1.This Borrowing Advice is executed and delivered by The Charles Schwab Corporation ("Borrower") to you pursuant to that certain Credit Agreement dated as of June 6, 2014 (the "Credit Agreement"), entered into by Borrower, Citibank, N.A. ("Citibank") and certain other Lenders parties thereto, collectively with Citibank (the "Lenders") and Citibank as Agent for the Lenders (herein "Agent").  Terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement.

2.Borrower hereby requests that the Lenders make a Revolving [or Term Loan] for the account of Borrower (at _______________, Account No. ________________) pursuant to Section 2.4 of the Credit Agreement as follows:

(a)Amount of Revolving [or Term Loan]:.

(b)Borrowing Date of Revolving [or Term Loan]: _________________.

(c)[If a Revolving Loan] Type of Revolving Loan (check one only):

________ Eurodollar Rate with ________- day Interest Period

________ Base Rate

(d)[If a Term Loan] Type of Term Loan (check one only):

________ Eurodollar Rate with initial ________- day Interest Period

________ Base Rate

(e)[If a Term Loan] Maturity Date of Term Loan:  .

3.Following this request for a Revolving Loan [or Term Loan], the aggregate outstanding amount of all Revolving Loans and Term Loans under the Revolving Note will not exceed the aggregate amount of the Commitments.

4.This Borrowing Advice is executed on ______________ by the Borrower.

BORROWER:

THE CHARLES SCHWAB CORPORATION,

a Delaware Corporation

By:

Name:

Title:

2

EXHIBIT C

NOTICE OF CONVERSION/CONTINUATION

Dated as of: _________________

Citibank, N.A., as Agent

___________________________

___________________________

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Continuation (this "Notice") is delivered to you under the Credit Agreement (364-Day Commitment) dated as of June 6, 2014 (as amended, restated or otherwise modified, the "Credit Agreement") by and among The Charles Schwab Corporation, a Delaware corporation (the "Company") (herein "Borrower"); and Citibank, N.A., a Delaware corporation (herein "Citibank") and the other Lenders signatory thereto (together with Citibank, collectively "Lenders"), and Citibank as agent for the Lenders (herein "Agent").

1.This Notice is submitted for the purpose of:

(check one and complete applicable information in accordance with the Credit Agreement)

[__]Converting or[__] continuing all or a portion of the following type of Loan:

(a)(check, as applicable)

Base Rate Loan ____________________;

Eurodollar Rate Loan ________________.

(b)The aggregate outstanding principal balance of the above Loan is $_________________.

(c)As applicable, the last day of the current Interest Period for such Loan is __________________.

(d)The principal amount of such Loan to be [converted or continued] is $_________________.

(e)Such principal amount should be converted/continued into the following type of Loan:

Base Rate Loan ____________________;

Eurodollar Rate Loan ________________.

(f)The requested effective date of the [conversion/continuation] of such Loan is _____________________.

(g)As applicable, the requested Interest Period applicable to the new Loan is _____________________.

2.No Default or Event of Default under the Credit Agreement has occurred and is continuing or will be caused by the advance requested hereby.

3.The representations and warranties set forth in Section 5 of the Credit Agreement are true and correct as if made on the date hereof (except for such representations and warranties as expressly relate to a prior date).

Capitalized terms used herein which are not defined herein shall have the respective meanings set forth in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned officer of the Company has executed this Notice of Conversion/Continuation this ___ day of __________, _____.

THE CHARLES SCHWAB CORPORATION
By:
Name:
Title:
	[must be signed by an Authorized Officer]

2

EXHIBIT D

COMMITMENT AND TERMINATION DATE EXTENSION REQUEST

[Bank name and address][Date]

Reference is made to that certain Credit Agreement (364-Day Commitment) dated as of June 6, 2014 ("Credit Agreement") entered into by The Charles Schwab Corporation ("Borrower"), Citibank, N.A., as Agent and Lenders party thereto.  Terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement.

Pursuant to Section 2.11 of the Credit Agreement, Borrower hereby requests Agent to obtain each Lender’s agreement to the extension of such Lender’s Commitment presently in effect, in the amount of $[specify amount of existing Commitment], and the Termination Date presently in effect, for an additional 364 days.

Agent’s execution of a copy of this letter in the space provided below and the transmission of such executed copy to Borrower shall constitute all Lenders’ acceptance of Borrower’s request and all Lenders’ agreement to the 364-day extension sought herein.  More specifically, upon the execution of a copy of this letter by Agent on behalf of Lenders and the transmission thereof to Borrower within 15 days after Agent’s receipt of this letter, (1) the Termination Date as defined in Section 2.11 of the Credit Agreement shall be extended 364 days and deemed changed to ___________________, and (2) all other dates appearing in the Credit Agreement that are referred to in Section 2.11 of the Credit Agreement shall correspondingly be extended 364 days.

This Commitment and Termination Date Extension Request is executed by Borrower on ________________.

BORROWER:

THE CHARLES SCHWAB CORPORATION,

a Delaware Corporation

By:

Name:

Title:

ACCEPTED AND AGREED:

Agent, on Behalf of Lenders

By:

Name:

Title:

EXHIBIT E

BORROWER’S OPINION OF COUNSEL

[Arnold & Porter LLP Letterhead]

[Date]

Citibank, N.A., as Agent

___________________________

___________________________

Re:Credit Agreement (364-Day Commitment), dated June 6, 2014, among

The Charles Schwab Corporation, Citibank, N.A., as Agent

and the Lenders party thereto

Ladies and Gentlemen:

This opinion is delivered at the request of The Charles Schwab Corporation to you in your capacity as Agent, on behalf of the Lenders, under the Credit Agreement (364-Day Commitment) dated as of June 6, 2014 (the "Credit Agreement") among The Charles Schwab Corporation, a Delaware corporation ("Borrower"), Citibank, N.A., as the Administrative Agent and the Lenders signatories thereto (each a "Lender" and collectively, the "Lenders").  This opinion letter speaks as of close of business on June 6, 2014 (hereafter the "operative date").

We have acted as special counsel to Borrower in connection with the Credit Agreement.  In such capacity we have examined originals, or copies represented to us by Borrower to be true copies, of the Credit Agreement; and we have obtained such certificates of such responsible officials of Borrower and of public officials as we have deemed necessary for purposes of this opinion.  We have assumed without investigation the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as photostatic copies of originals, and the accuracy and completeness of all corporate records certified to us by the Borrower to be accurate and complete.  We have further assumed that the Credit Agreement is binding upon and enforceable against the Agent and the Lenders.  As to factual matters, we have relied upon the representations and warranties contained in and made pursuant to the Credit Agreement.

Capitalized terms not otherwise defined herein have the meanings given for such terms in the Credit Agreement.  For the purpose of this opinion, "Loan Documents" as used herein means the Credit Agreement and the Notes.

Based upon the foregoing and in reliance thereon, and subject to the exceptions and qualifications set forth herein, we are of the opinion that:

1.Borrower is a corporation duly formed, validly existing, and in good standing under the laws of Delaware.

2.Borrower has all requisite corporate power and authority to execute, deliver and perform all of its obligations under the Loan Documents.

3.Each Loan Document has been duly authorized, executed and delivered by Borrower.  Each Loan Document constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such validity, binding nature or enforceability may be limited by:

(a)the effect of applicable federal or state bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other similar laws and court decisions relating to or affecting creditors’ rights generally;

(b)the effect of legal and equitable principles upon the availability of creditors’ remedies, regardless of whether considered in a proceeding in equity or at law;

(c)the effect of California judicial decisions involving statutes or principles of equity which have held that certain covenants or other provisions of agreements, including without limitation those providing for the acceleration of indebtedness due under debt instruments upon the occurrence of events therein described, are unenforceable under circumstances where it cannot be demonstrated that the enforcement of such provisions is reasonably necessary for the protection of the lender, has been undertaken in good faith under the circumstances then existing, and is commercially reasonable;

(d)the effect of Section 1670.5 of the California Civil Code, which provides that a court may refuse to enforce a contract or may limit the application thereof or any clause thereof which the court finds as a matter of law to have been unconscionable at the time it was made;

(e)the unenforceability, under certain circumstances, of provisions purporting to require the award of attorneys’ fees, expenses, or costs, where such provisions do not satisfy the requirements of California Civil Code Section 1717 etseq., or in any action where the lender is not the prevailing party;

(f)the unenforceability, under certain circumstances, of provisions waiving stated rights or unknown future rights and waiving defenses to obligations, where such waivers are contrary to applicable law or against public policy;

(g)the unenforceability, under certain circumstances, of provisions which provide for penalties, late charges, additional interest in the event of a default by the borrower or fees or costs related to such charges;

(h)the unenforceability, under certain circumstances, of provisions to the effect that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy, or that the election of some particular remedy or remedies does not preclude recourse to one or another remedy;

(i)the unenforceability of provisions prohibiting waivers of provisions of either of the Loan Documents otherwise than in writing to the extent that Section 1698 of the California Civil Code permits oral modifications that have been executed;

2

(j)limitations on the enforceability of release, contribution, exculpatory, or nonliability provisions, under federal or state securities laws, Sections 1542 and 1543 of the California Civil Code, and any other applicable statute or court decisions;

(k)limitations on the enforceability of any indemnity obligations imposed upon or undertaken by the borrower to the extent that such obligations do not satisfy the requirements of Sections 2772 etseq. of the California Civil Code and any judicial decisions thereunder; provided that the limitations and qualifications set forth in the immediately preceding sub-paragraphs (b) through (k) do not, in our opinion, render the remedies available to the Lenders under the Loan Documents inadequate for the practical realization of the primary rights and benefits reasonably expected by an institutional lender in a comparable unsecured credit facility transaction governed by California law; and

(l)the effect of Grafton Partners L.P. v. Superior Court, 36 Cal. 4th 944, 2005 WL 1831995 (Cal. 2005), in which the California Supreme Court held that predispute contractual waivers of trial by jury are invalid, as well as the effect of Section 631(d) of the California Code of Civil Procedure, which provides that a court may, in its discretion upon just terms, allow a trial by jury although there may have been a waiver of trial by jury.

The foregoing opinions are subject to the following exceptions and qualifications:

a.We have not been requested to verify and have not verified the validity, accuracy, or reasonableness of any of the factual representations contained in either or both of the Loan Documents, and we express no opinion with respect to any of such matters.

b.We are members of the bar of the State of California.  We are opining herein only concerning matters governed by the Federal laws of the United States of America, the substantive laws of the State of California, and the General Corporation Law of the State of Delaware, and only with respect to Borrower.  We express no opinion concerning the applicability to either or both of the Loan Documents, or the effect thereon, of the laws of any other jurisdiction.  Furthermore, we express no opinion with respect to choice of law or conflicts of law, and none of the opinions stated herein shall be deemed to include or refer to choice of law or conflict of law.

c.We express no opinion on any Federal or state securities laws as they may relate to either or both of the Loan Documents.

d.We express no opinion as to compliance with the usury laws of any jurisdiction.

The opinions set forth herein are given as of the operative date.  We disclaim any obligation to notify you or any other person or entity after the operative date if any change in fact and/or law should change our opinion with respect to any matters set forth herein.  This opinion letter is rendered to you in your capacity as the Agent on behalf of the Lenders under the Credit Agreement and may not be relied upon, circulated or quoted, in whole or in part, by any other person or entity (other than the Lenders and a person or entity who becomes an assignee or successor in interest of any Lender or acquires a participation from any Lender consistent with the terms of the Loan Documents) and shall not be referred to in any report or document furnished to any other person or entity without our prior written consent; provided,  however, that

3

the foregoing shall not preclude any Lender from describing or otherwise disclosing the existence or contents of this letter to (i) any bank regulatory authority having jurisdiction over such Lender, as required by such authority, (ii) a person or entity who, in good-faith discussions between such Lender and such person or entity, is proposed to become an assignee or successor in interest of such Lender or to acquire a participation from the Bank consistent with the terms of the Loan Documents, and (iii) counsel to the Agent and the Lenders.

	Very truly yours,
	ARNOLD & PORTER LLP
By:

4

EXHIBIT F

FORM OF ASSIGNMENT AND ACCEPTANCE

To:CITIBANK, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement (364-Day Commitment) dated as of June 6, 2014 between THE CHARLES SCHWAB CORPORATION, a Delaware corporation ("Borrower"), Lenders from time to time party thereto, and CITIBANK, N.A., as Administrative Agent (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement", the terms defined therein being used herein as therein defined).

1.We hereby give you notice of, and request your consent to, the assignment by _______________________ (the "Assignor") to __________________ (the "Assignee") of _________% of the right, title and interest of the Assignor in and to the Loan Documents, including, without limitation, the right, title and interest of the Assignor in and to the Commitment of the Assignor, and all outstanding Loans made by the Assignor.  Before giving effect to such assignment:

(a)the aggregate amount of the Assignor's Commitment is $_______________.

(b)the aggregate principal amount of its outstanding Loans is $_____________.

2.The Assignee hereby represents and warrants that it has complied with the requirements of Section 10.8 of the Agreement in connection with this assignment and acknowledges and agrees that:  (a) other than the representation and warranty that it is the legal and beneficial owner of the Pro Rata Share being assigned hereby free and clear of any adverse claim, the Assignor has made no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the execution, legality, validity, enforceability, genuineness or sufficiency of the Agreement of any other Loan Document; (b) the Assignor had made no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance by Borrower of the Obligations; (c) it has received a copy of the Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.2 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (d) it will independently and without reliance upon Administrative Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; (e) it appoints and authorizes Administrative Agent to take such action and to exercise such powers under the Agreement and the other Loan Documents as are delegated to Administrative Agent by the Agreement and such other Loan Documents; and (f) it will perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Lender.

3.The Assignee agrees that, upon receiving your consent to such assignment and form and after _______________, the Assignee will be bound by the terms of the Loan Documents, with respect to the interest in the Loan Documents assigned to it as specified above, as fully and to the same extent as if the Assignee were a Lender originally holding such interest in the Loan Documents.

4.The following administrative details apply to the Assignee:

(a)Credit Contact:

Assignee name:

Address:

Attention:

Telephone:

Telecopier:

(b)Operations Contract:

Assignee name:

Address:

Attention:

Telephone:

Telecopier:

(c)Lending Office:

Assignee name:

Address:

(d)Payment Instructions:

Assignee name:

ABA No.:

Account No.:

Attention

Reference

2

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance to be executed by their respective duly authorized officials, officers or agents as of the date first above mentioned.

Very truly yours,

[ASSIGNOR]

By:

Name:

Title:

[ASSIGNEE]

By:

Name:

Title:

We hereby consent to the

foregoing assignment.

THE CHARLES SCHWAB CORPORATION,

as Borrower

By:

Name:

Title:

CITIBANK, N.A.,

as Administrative Agent

By:

Name:

Title:

3

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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Earnings before taxes on earnings	$	521	$	412	$	1,043	$	743
Fixed charges
Interest expense:
Deposits from banking clients		8		7		15		17
Payables to brokerage clients		-		-		1		1
Long-term debt		18		17		36		34
Other		-		2		-		2
Total		26		26		52		54
Interest portion of rental expense		18		17		36		34
Total fixed charges (A)		44		43		88		88
Earnings before taxes on earnings and fixed charges (B)	$	565	$	455	$	1,131	$	831
Ratio of earnings to fixed charges (B) ÷ (A)(1)		12.8		10.6		12.9		9.4
Ratio of earnings to fixed charges, excluding deposits from banking
clients and payables to brokerage clients interest expense(2)		15.5		12.4		15.5		11.6
Total fixed charges	$	44	$	43	$	88	$	88
Preferred stock dividends (3)		35		37		48		50
Total fixed charges and preferred stock dividends (C)	$	79	$	80	$	136	$	138
Ratio of earnings to fixed charges and preferred stock
dividends (B) ÷ (C) (1)		7.2		5.7		8.3		6.0
Ratio of earnings to fixed charges and preferred stock dividends,
excluding deposits from banking clients and payables to
brokerage clients interest expense (2)		7.8		6.1		9.3		6.8

(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:	August 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:	August 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 June 30, 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:	August 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 June30, 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:	August 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.

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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		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	$ 48	$ 59	$ 48	$ 56
Charge-offs	(1)	(2)	(3)	(6)
Recoveries	1	1	2	2
Provision for loan losses	(7)	(1)	(6)	5
Balance at end of period	41	57	41	57
Residential real estate mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	33	40	34	36
Charge-offs		(1)	(1)	(3)
Recoveries	1		1	1
Provision for loan losses	(6)	1	(6)	6
Balance at end of period	28	40	28	40
Home equity lines of credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	15	19	14	20
Charge-offs	(1)	(1)	(2)	(3)
Recoveries		1	1	1
Provision for loan losses	(1)	(2)		(1)
Balance at end of period	$ 13	$ 17	$ 13	$ 17

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Earnings Per Common Share (EPS under Basic and Diluted Computations) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Earnings Per Common Share [Abstract]
Net income	$ 324		$ 256		$ 650		$ 462
Preferred stock dividends	(22)		(23)		(30)		(31)
Net income available to common stockholders	$ 302		$ 233		$ 620		$ 431
Weighted-average common shares outstanding — basic	1,302		1,282		1,301		1,280
Common stock equivalent shares related to stock incentive plans	11		6		11		5
Weighted-average common shares outstanding — diluted	1,313	[1]	1,288	[1]	1,312	[1]	1,285	[1]
Basic EPS	$ 0.23		$ 0.18		$ 0.47		$ 0.33
Diluted EPS	$ 0.23		$ 0.18		$ 0.47		$ 0.33
Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS	16		28		17		32

[1] Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 16 million and 28 million shares for the second quarters of 2014 and 2013, respectively, and 17 million and 32 million shares for the first halves of 2014 and 2013, respectively.

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Accumulated Other Comprehensive Income (Components of Other Comprehensive Income (Loss)) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Change in net unrealized gain on Securities available for sale:
Net unrealized gain (loss)	$ 126	$ (477)	$ 285	$ (480)
Reclassification of impairment charges included in net impairment losses on securities		3		7
Other reclassifications included in other revenue	(1)	(3)	(2)	(3)
Change in net unrealized gain on securities available for sale	125	(477)	283	(476)
Other				1
Other comprehensive income (loss), before tax	125	(477)	283	(475)
Change in net unrealized gain on Securities available for sale:
Net unrealized gain (loss)	(47)	179	(106)	181
Reclassification of impairment charges included in net impairment losses on securities				(2)
Other reclassifications included in other revenue		1		1
Change in net unrealized gain on securities available for sale	(47)	180	(106)	180
Other comprehensive (loss) income, tax effect	(47)	180	(106)	180
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	79	(298)	179	(299)
Reclassification of impairment charges included in net impairment losses on securities		3		5
Other reclassifications included in other revenue	(1)	(2)	(2)	(2)
Change in net unrealized gain on securities available for sale	78	(297)	177	(296)
Other				1
Other comprehensive income (loss), net of tax	$ 78	$ (297)	$ 177	$ (295)

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	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Securities Available for Sale and Securities Held to Maturity [Abstract]
Balance at beginning of year	$ 163	$ 159	$ 169	$ 169	$ 169
Credit losses recognized into current period earnings on debt securities for which an other-than-temporary impairment was not previously recognized	1	1
Credit losses recognized into current period earnings on debt securities for which an other-than-temporary impairment was previously recognized	2	6
Balance at end of year	$ 166	$ 166	$ 169	$ 169	$ 169

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Financial Information for Reportable Segments

	Investor Services				Advisor Services				Unallocated				Total
Three Months Ended June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	441	$	402	$	191	$	170	$	-	$	-	$	632	$	572
Net interest revenue		504		418		58		55		-		-		562		473
Trading revenue		145		160		67		75		-		-		212		235
Other		47		43		18		16		-		-		65		59
Provision for loan losses		6		1		1		-		-		-		7		1
Net impairment losses on securities		-		(3)		-		-		-		-		-		(3)
Total net revenues		1,143		1,021		335		316		-		-		1,478		1,337
Expenses Excluding Interest		734		722		223		203		-		-		957		925
Income before taxes on income	$	409	$	299	$	112	$	113	$	-	$	-	$	521	$	412
Taxes on income														197		156
Net Income													$	324	$	256

	Investor Services				Advisor Services				Unallocated				Total
Six Months Ended June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	869	$	789	$	374	$	335	$	-	$	-	$	1,243	$	1,124
Net interest revenue		999		831		116		111		-		-		1,115		942
Trading revenue		316		309		143		149		-		-		459		458
Other		98		85		35		30		-		-		133		115
Provision for loan losses		5		(4)		1		(1)		-		-		6		(5)
Net impairment losses on securities		-		(7)		-		-		-		-		-		(7)
Total net revenues		2,287		2,003		669		624		-		-		2,956		2,627
Expenses Excluding Interest		1,472		1,473		441		411		-		-		1,913		1,884
Income before taxes on income	$	815	$	530	$	228	$	213	$	-	$	-	$	1,043	$	743
Taxes on income														393		281
Net Income													$	650	$	462

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Regulatory Requirements (Regulatory Capital and Ratios) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Tier 1 Risk-Based Capital
Actual Amount	$ 7,261
Minimum Capital Requirement Amount	1,417
Minimum to be Well Capitalized Amount	2,125
Actual Ratio	20.50%
Minimum Capital Requirement Ratio	4.00%
Minimum to be Well Capitalized Ratio	6.00%
Total Risk-Based Capital
Actual Amount	7,303
Minimum Capital Requirement Amount	2,834
Minimum to be Well Capitalized Amount	3,542
Actual Ratio	20.60%
Minimum Capital Requirement Ratio	8.00%
Minimum to be Well Capitalized Ratio	10.00%
Tier 1 Leverage
Actual Amount	7,261
Minimum Capital Requirement Amount	4,136
Minimum to be Well Capitalized Amount	5,169
Actual Ratio	7.00%
Minimum Capital Requirement Ratio	4.00%
Minimum to be Well Capitalized Ratio	5.00%
Tangible Equity
Actual Amount	7,261
Minimum Capital Requirement Amount	$ 2,068
Actual Ratio	7.00%
Minimum Capital Requirement Ratio	2.00%

XML

Commitments and Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014 Standby letters of credit [Member]	Jun. 30, 2014 Performance Guarantee [Member]	Aug. 28, 2008 Bond Market Fund Litigation [Member]	Jun. 30, 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		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 First Mortgage [Member]	Jun. 30, 2013 First Mortgage [Member]	Jun. 30, 2014 First Mortgage [Member]	Jun. 30, 2013 First Mortgage [Member]	Jun. 30, 2014 Home equity lines of credit [Member]	Jun. 30, 2013 Home equity lines of credit [Member]	Jun. 30, 2014 Home equity lines of credit [Member]	Jun. 30, 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	$ 6,000,000,000	$ 5,700,000,000
Total nonaccrual loans	37,000,000	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	44,000,000	53,000,000
Purchased first mortgages and HELOCs			$ 332,000,000	$ 928,000,000	$ 618,000,000	$ 2,200,000,000	$ 175,000,000	$ 221,000,000	$ 347,000,000	$ 439,000,000

XML

Segment Information (Narrative) (Details)	6 Months Ended
	Jun. 30, 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		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance			$ 9	$ 298
Other net changes	78	(297)	177	(295)
Ending Balance	186	3	186	3
Net Unrealized Gain On Securities Available For Sale [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance			9	299
Other net changes			177	(296)
Ending Balance	186	3	186	3
Other [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance				(1)
Other net changes				$ 1

XML

New Accounting Standards

6 Months Ended

Jun. 30, 2014

New Accounting Standards [Abstract]

New Accounting Standards

2.New Accounting Standards

New Accounting Standards Not Yet Adopted

In January 2014, the Financial Accounting Standards Board (FASB) 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.

In May 2014, the FASB issued new guidance on revenue recognition, which is effective January 1, 2017. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS, and cash flows.

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Fair Values of Assets and Liabilities (Narrative) (Details) (USD $)	Jun. 30, 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	$ 1,200,000,000	$ 1,100,000,000
Fair value of borrowed securities from other broker-dealers to fulfill short sales by clients	$ 192,000,000	$ 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	Jun. 30, 2014		Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	$ 32,495		$ 30,318
Securities held to maturity Gross Unrealized Gains	461		161
Securities held to maturity Gross Unrealized Losses	309		989
Securities held to maturity, fair value	32,647		29,490
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	31,393		29,260
Securities held to maturity Gross Unrealized Gains	454		161
Securities held to maturity Gross Unrealized Losses	284		921
Securities held to maturity, fair value	31,563	[1]	28,500
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	1,002		958
Securities held to maturity Gross Unrealized Gains	7
Securities held to maturity Gross Unrealized Losses	25		68
Securities held to maturity, fair value	984	[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	Jun. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	$ 52,906		$ 51,604
Securities available for sale Gross Unrealized Gains	410		255
Securities available for sale Gross Unrealized Losses	113		241
Securities available for sale	53,203		51,618
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	17,934		18,554
Securities available for sale Gross Unrealized Gains	225		140
Securities available for sale Gross Unrealized Losses	26		49
Securities available for sale	18,133	[1]	18,645
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	17,524		15,201
Securities available for sale Gross Unrealized Gains	96		42
Securities available for sale Gross Unrealized Losses	3		37
Securities available for sale	17,617		15,206
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	9,203		8,973
Securities available for sale Gross Unrealized Gains	62		49
Securities available for sale Gross Unrealized Losses	3		15
Securities available for sale	9,262		9,007
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	4,240		4,239
Securities available for sale Gross Unrealized Gains			1
Securities available for sale Gross Unrealized Losses	56		104
Securities available for sale	4,184		4,136
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	3,124		3,650
Securities available for sale Gross Unrealized Gains	3		4
Securities available for sale Gross Unrealized Losses			2
Securities available for sale	3,127		3,652
Non-agency residential mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	570		616
Securities available for sale Gross Unrealized Gains	15		11
Securities available for sale Gross Unrealized Losses	25		34
Securities available for sale	560	[1]	593
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale Amortized Cost	311		271
Securities available for sale Gross Unrealized Gains	9		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	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	$ 583	$ 517
Securities available for sale	53,203	51,618
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,463	1,163
Investments segregated and on deposit for regulatory purposes	4,147	5,276
Other securities owned	583	517
Securities available for sale	53,203	51,618
Total	59,396	58,574
Fair Value, Measurements, Recurring [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,422	1,141
Fair Value, Measurements, Recurring [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	41	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	3,825	2,737
Securities available for sale	3,127	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	322	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	297	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	219	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	35	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	32	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	18,133	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	17,617	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	9,262	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	4,184	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	560	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	1,422	1,141
Other securities owned	517	470
Total	1,939	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	1,422	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	297	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	219	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	41	22
Investments segregated and on deposit for regulatory purposes	4,147	5,276
Other securities owned	66	47
Securities available for sale	53,203	51,618
Total	57,457	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	41	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	3,825	2,737
Securities available for sale	3,127	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	322	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	35	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	31	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	18,133	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	17,617	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	9,262	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	4,184	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	560	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	Jun. 30, 2014 security	Dec. 31, 2013 security
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	$ 4,756	$ 16,962
Securities available for sale Less than 12 months Unrealized Losses	24	200
Securities available for sale 12 months or longer Fair Value	6,063	1,856
Securities available for sale 12 months or longer Unrealized Losses	89	41
Total Securities available for sale with unrealized losses Total Fair Value	10,819	18,818
Total Securities available for sale with unrealized losses Total Unrealized Losses	113	241
Number of available for sale securities in unrealized loss positions	218	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	4,266	5,044
Securities available for sale Less than 12 months Unrealized Losses	22	47
Securities available for sale 12 months or longer Fair Value	577	93
Securities available for sale 12 months or longer Unrealized Losses	4	2
Total Securities available for sale with unrealized losses Total Fair Value	4,843	5,137
Total Securities available for sale with unrealized losses Total Unrealized Losses	26	49
Asset-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	457	6,391
Securities available for sale Less than 12 months Unrealized Losses	1	33
Securities available for sale 12 months or longer Fair Value	853	591
Securities available for sale 12 months or longer Unrealized Losses	2	4
Total Securities available for sale with unrealized losses Total Fair Value	1,310	6,982
Total Securities available for sale with unrealized losses Total Unrealized Losses	3	37
Corporate debt securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value		1,802
Securities available for sale Less than 12 months Unrealized Losses		14
Securities available for sale 12 months or longer Fair Value	618	499
Securities available for sale 12 months or longer Unrealized Losses	3	1
Total Securities available for sale with unrealized losses Total Fair Value	618	2,301
Total Securities available for sale with unrealized losses Total Unrealized Losses	3	15
U.S. agency notes [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value		3,636
Securities available for sale Less than 12 months Unrealized Losses		104
Securities available for sale 12 months or longer Fair Value	3,684
Securities available for sale 12 months or longer Unrealized Losses	56
Total Securities available for sale with unrealized losses Total Fair Value	3,684	3,636
Total Securities available for sale with unrealized losses Total Unrealized Losses	56	104
Certificates of deposit [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale 12 months or longer Fair Value		299
Securities available for sale 12 months or longer Unrealized Losses		2
Total Securities available for sale with unrealized losses Total Fair Value		299
Total Securities available for sale with unrealized losses Total Unrealized Losses		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	33	89
Securities available for sale Less than 12 months Unrealized Losses	1	2
Securities available for sale 12 months or longer Fair Value	331	374
Securities available for sale 12 months or longer Unrealized Losses	24	32
Total Securities available for sale with unrealized losses Total Fair Value	364	463
Total Securities available for sale with unrealized losses Total Unrealized Losses	$ 25	$ 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	Jun. 30, 2014 security	Dec. 31, 2013 security
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	$ 415	$ 19,805
Securities held to maturity Less than 12 months Unrealized Losses	1	741
Securities held to maturity 12 months or longer Fair Value	12,805	2,605
Securities held to maturity 12 months or longer Unrealized Losses	308	248
Total Securities held to maturity with unrealized losses Total Fair Value	13,220	22,410
Total Securities held to maturity with unrealized losses Total Unrealized Losses	309	989
Number of held to maturity securities in unrealized loss positions	115	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	415	19,175
Securities held to maturity Less than 12 months Unrealized Losses	1	698
Securities held to maturity 12 months or longer Fair Value	12,125	2,345
Securities held to maturity 12 months or longer Unrealized Losses	283	223
Total Securities held to maturity with unrealized losses Total Fair Value	12,540	21,520
Total Securities held to maturity with unrealized losses Total Unrealized Losses	284	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		630
Securities held to maturity Less than 12 months Unrealized Losses		43
Securities held to maturity 12 months or longer Fair Value	680	260
Securities held to maturity 12 months or longer Unrealized Losses	25	25
Total Securities held to maturity with unrealized losses Total Fair Value	680	890
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 25	$ 68

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Introduction and Basis of Presentation

6 Months Ended

Jun. 30, 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 half 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	Jun. 30, 2014		Dec. 31, 2013
Securities Available for Sale and Securities Held to Maturity [Abstract]
Securities available for sale Less than 12 months Fair Value	$ 4,756		$ 16,962
Securities available for sale Less than 12 months Unrealized Losses	24		200
Securities available for sale 12 months or longer Fair Value	6,063		1,856
Securities available for sale 12 months or longer Unrealized Losses	89		41
Total Securities available for sale with unrealized losses Total Fair Value	10,819		18,818
Total Securities available for sale with unrealized losses Total Unrealized Losses	113		241
Securities held to maturity Less than 12 months Fair Value	415		19,805
Securities held to maturity Less than 12 months Unrealized Losses	1		741
Securities held to maturity 12 months or longer Fair Value	12,805		2,605
Securities held to maturity 12 months or longer Unrealized Losses	308		248
Total Securities held to maturity with unrealized losses Total Fair Value	13,220		22,410
Total Securities held to maturity with unrealized losses Total Unrealized Losses	309		989
Securities Less than 12 months Fair Value	5,171	[1]	36,767	[2]
Securities Less than 12 months Unrealized Losses	25	[1]	941	[2]
Securities 12 months or longer Fair Value	18,868	[1]	4,461	[2]
Securities 12 months or longer Unrealized Losses	397	[1]	289	[2]
Total securities with unrealized losses Total Fair Value	24,039	[1]	41,228	[2]
Total securities with unrealized losses Total Unrealized Losses	$ 422	[1]	$ 1,230	[2]

[1] The number of investment positions with unrealized losses totaled 218 for securities available for sale and 115 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	Jun. 30, 2014		Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 12,853		$ 12,407
30-59 days past due	16		6
60-89 days past due	4		6
>90 days past due and other nonaccrual loans	37		48
Total past due	57		60
Total loans	12,910	[1]	12,467	[1]
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	10		3
60-89 days past due	3		4
>90 days past due and other nonaccrual loans	23		30
Total past due	36		37
Total loans	7,892		7,845
Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	157		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	163		161
Home equity lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,003		3,025
30-59 days past due	4		2
60-89 days past due	1		2
>90 days past due and other nonaccrual loans	9		12
Total past due	14		16
Total loans	3,017		3,041
Personal loans secured by securities [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,803		1,384
30-59 days past due	1
Total past due	1
Total loans	1,804		1,384
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	34		36
Total loans	$ 34		$ 36

[1] All loans are evaluated for impairment by loan segment.

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Segment Information (Financial Information for Reportable Segments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013		Jun. 30, 2014	Jun. 30, 2013
Net Revenues:
Asset management and administration fees	$ 632	$ 572		$ 1,243	$ 1,124
Net interest revenue	562	473		1,115	942
Trading revenue	212	235		459	458
Other	65	59		133	115
Provision for loan losses	7	1		6	(5)
Net impairment losses on securities		(3)	[1]		(7)	[1]
Total net revenues	1,478	1,337		2,956	2,627
Expenses Excluding Interest	957	925		1,913	1,884
Income before taxes on income	521	412		1,043	743
Taxes on income	197	156		393	281
Net Income	324	256		650	462
Investor Services [Member]
Net Revenues:
Asset management and administration fees	441	402		869	789
Net interest revenue	504	418		999	831
Trading revenue	145	160		316	309
Other	47	43		98	85
Provision for loan losses	6	1		5	(4)
Net impairment losses on securities		(3)			(7)
Total net revenues	1,143	1,021		2,287	2,003
Expenses Excluding Interest	734	722		1,472	1,473
Income before taxes on income	409	299		815	530
Advisor Services [Member]
Net Revenues:
Asset management and administration fees	191	170		374	335
Net interest revenue	58	55		116	111
Trading revenue	67	75		143	149
Other	18	16		35	30
Provision for loan losses	1			1	(1)
Total net revenues	335	316		669	624
Expenses Excluding Interest	223	203		441	411
Income before taxes on income	$ 112	$ 113		$ 228	$ 213

[1] There were no net impairment losses on securities for the three or six months ended June 30, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(1) million reclassified from other comprehensive income, for the three months ended June 30, 2013. Net impairment losses on securities include total other-than-temporary impairment losses of $2

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Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Net Revenues:
Asset management and administration fees	$ 632		$ 572		$ 1,243		$ 1,124
Interest revenue	588		499		1,167		996
Interest expense	(26)		(26)		(52)		(54)
Net interest revenue	562		473		1,115		942
Trading revenue	212		235		459		458
Other	65		59		133		115
Provision for loan losses	7		1		6		(5)
Net impairment losses on securities			(3)	[1]			(7)	[1]
Total net revenues	1,478		1,337		2,956		2,627
Expenses Excluding Interest
Compensation and benefits	520		494		1,048		1,030
Professional services	112		106		218		205
Occupancy and equipment	80		77		160		154
Advertising and market development	65		67		128		141
Communications	57		56		113		110
Depreciation and amortization	48		51		96		102
Other	75		74		150		142
Total expenses excluding interest	957		925		1,913		1,884
Income before taxes on income	521		412		1,043		743
Taxes on income	197		156		393		281
Net Income	324		256		650		462
Preferred stock dividends	22		23		30		31
Net Income Available to Common Stockholders	$ 302		$ 233		$ 620		$ 431
Weighted-Average Common Shares Outstanding - Diluted	1,313	[2]	1,288	[2]	1,312	[2]	1,285	[2]
Earnings Per Common Share - Basic	$ 0.23		$ 0.18		$ 0.47		$ 0.33
Earnings Per Common Share - Diluted	$ 0.23		$ 0.18		$ 0.47		$ 0.33

[1] There were no net impairment losses on securities for the three or six months ended June 30, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(1) million reclassified from other comprehensive income, for the three months ended June 30, 2013. Net impairment losses on securities include total other-than-temporary impairment losses of $2

[2] Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 16 million and 28 million shares for the second quarters of 2014 and 2013, respectively, and 17 million and 32 million shares for the first halves 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	Jun. 30, 2014		Mar. 31, 2014	Dec. 31, 2013		Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Assets:
Securities held to maturity	$ 32,647			$ 29,490
Liabilities:
Allowance for loan losses	41		48	48		57	59	56
Residential real estate mortgages [Member]
Liabilities:
Allowance for loan losses	28		33	34		40	40	36
Home equity lines of credit [Member]
Liabilities:
Allowance for loan losses	13		15	14		17	19	20
Carrying Amount [Member]
Assets:
Cash and cash equivalents	5,369			6,565
Cash and investments segregated and on deposit for regulatory purposes	14,943			18,273
Receivables from brokers, dealers, and clearing organizations	522			509
Receivables from brokerage clients - net	14,664			13,949
Securities held to maturity	32,495			30,318
Loans to banking clients	12,910	[1]		12,467	[2]
Other assets	72			64
Total	80,975			82,145
Liabilities:
Deposits from banking clients	95,688			92,972
Payables to brokers, dealers, and clearing organizations	1,725			1,467
Payables to brokerage clients	31,484			35,333
Accrued expenses and other liabilities	519			680
Long-term debt	1,901			1,903
Total	131,317			132,355
Carrying Amount [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	8,055	[1]		8,006	[2]
Carrying Amount [Member] | Home equity lines of credit [Member]
Assets:
Loans to banking clients	3,017	[1]		3,041	[2]
Carrying Amount [Member] | Personal loans secured by securities [Member]
Assets:
Loans to banking clients	1,804	[1]		1,384	[2]
Carrying Amount [Member] | Other [Member]
Assets:
Loans to banking clients	34	[1]		36	[2]
Carrying Amount [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	31,393			29,260
Carrying Amount [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	1,002			958
Carrying Amount [Member] | Other securities [Member]
Assets:
Securities held to maturity	100			100
Fair Value [Member]
Assets:
Cash and cash equivalents	5,369			6,565
Cash and investments segregated and on deposit for regulatory purposes	14,943			18,273
Receivables from brokers, dealers, and clearing organizations	522			509
Receivables from brokerage clients - net	14,664			13,949
Securities held to maturity	32,647			29,490
Loans to banking clients	12,933	[1]		12,392	[2]
Other assets	72			64
Total	81,150			81,242
Liabilities:
Deposits from banking clients	95,688			92,972
Payables to brokers, dealers, and clearing organizations	1,725			1,467
Payables to brokerage clients	31,484			35,333
Accrued expenses and other liabilities	519			680
Long-term debt	2,016			1,989
Total	131,432			132,441
Fair Value [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	8,047	[1]		7,930	[2]
Fair Value [Member] | Home equity lines of credit [Member]
Assets:
Loans to banking clients	3,048	[1]		3,043	[2]
Fair Value [Member] | Personal loans secured by securities [Member]
Assets:
Loans to banking clients	1,804	[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	31,563			28,500
Fair Value [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	984			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	5,369			6,565
Cash and investments segregated and on deposit for regulatory purposes	14,943			18,273
Receivables from brokers, dealers, and clearing organizations	522			509
Receivables from brokerage clients - net	14,664			13,949
Securities held to maturity	32,647			29,490
Loans to banking clients	12,933	[1]		12,392	[2]
Other assets	72			64
Total	81,150			81,242
Liabilities:
Deposits from banking clients	95,688			92,972
Payables to brokers, dealers, and clearing organizations	1,725			1,467
Payables to brokerage clients	31,484			35,333
Accrued expenses and other liabilities	519			680
Long-term debt	2,016			1,989
Total	131,432			132,441
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Residential real estate mortgages [Member]
Assets:
Loans to banking clients	8,047	[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	3,048	[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	1,804	[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	31,563			28,500
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	984			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 $41 million at June 30, 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	Jun. 30, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets [Abstract]
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$ 10,440	$ 14,016
Securities held to maturity, fair value	32,647	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	185,261,252	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	Jun. 30, 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	613
Securities held to maturity After 5 years through 10 years	14,407
Securities held to maturity After 10 years	17,527
Securities held to maturity, fair value	32,647		29,490
Securities held to maturity Within 1 year amortized cost	100
Securities held to maturity After 1 year through 5 years amortized cost	600
Securities held to maturity After 5 years through 10 years amortized cost	14,379
Securities held to maturity After 10 years amortized cost	17,416
Securities held to maturity, Amortized Cost	32,495		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	613	[1]
Securities held to maturity After 5 years through 10 years	14,053	[1]
Securities held to maturity After 10 years	16,897	[1]
Securities held to maturity, fair value	31,563	[1]	28,500
Securities held to maturity, Amortized Cost	31,393		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	354	[1]
Securities held to maturity After 10 years	630	[1]
Securities held to maturity, fair value	984	[1]	890
Securities held to maturity, Amortized Cost	1,002		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, Amortized Cost	$ 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)

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income [Abstract]

Components of Other Comprehensive Income (Loss)

Three Months Ended June 30,			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)	$	126	$	(47)	$	79	$	(477)	$	179	$	(298)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		3		-		3
Other reclassifications included in
other revenue		(1)		-		(1)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		125		(47)		78		(477)		180		(297)
Other comprehensive income (loss)	$	125	$	(47)	$	78	$	(477)	$	180	$	(297)

Six Months Ended June 30,			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)	$	285	$	(106)	$	179	$	(480)	$	181	$	(299)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		7		(2)		5
Other reclassifications included in
other revenue		(2)		-		(2)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		283		(106)		177		(476)		180		(296)
Other		-		-		-		1		-		1
Other comprehensive income (loss)	$	283	$	(106)	$	177	$	(475)	$	180	$	(295)

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			(296)			1			(295)
Balance at June 30, 2013		$	3		$	-		$	3
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			177			-			177
Balance at June 30, 2014		$	186		$	-		$	186

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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		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Securities Available for Sale and Securities Held to Maturity [Abstract]
Proceeds	$ 760	$ 3,004	$ 2,045	$ 3,004
Gross realized gains	$ 1	$ 3	$ 2	$ 3

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Regulatory Requirements (Tables)

6 Months Ended

Jun. 30, 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	$	7,261	20.5	%	$	2,125	6.0	%	$	1,417	4.0	%
Total Risk-Based Capital	$	7,303	20.6	%	$	3,542	10.0	%	$	2,834	8.0	%
Tier 1 Leverage	$	7,261	7.0	%	$	5,169	5.0	%	$	4,136	4.0	%
Tangible Equity	$	7,261	7.0	%		N/A			$	2,068	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		$	1,617		10	%		$	0.250		$	316		$	1,301		$	828
optionsXpress, Inc.		$	112		37	%		$	1		$	6		$	106		$	97

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Condensed Consolidated Statement of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities
Net income	$ 650	$ 462
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	(6)	5
Net impairment losses on securities		7	[1]
Stock-based compensation	54	59
Depreciation and amortization	96	102
Premium amortization, net, on securities available for sale and securities held to maturity	58	92
Other	7	20
Net change in:
Cash and investments segregated and on deposit for regulatory purposes	4,460	1,458
Receivables from brokers, dealers, and clearing organizations	(9)	(62)
Receivables from brokerage clients	(722)	631
Other securities owned	(66)	148
Other assets	(47)	16
Payables to brokers, dealers, and clearing organizations	95	662
Payables to brokerage clients	(3,849)	(3,478)
Accrued expenses and other liabilities	(220)	42
Net cash provided by operating activities	501	164
Cash Flows from Investing Activities
Purchases of securities available for sale	(6,493)	(12,587)
Proceeds from sales of securities available for sale	2,045	3,004
Principal payments on securities available for sale	3,194	7,017
Purchases of securities held to maturity	(3,255)	(9,914)
Principal payments on securities held to maturity	1,132	2,413
Net increase in loans to banking clients	(460)	(976)
Purchase of equipment, office facilities, and property	(165)	(111)
Other investing activities	(8)	2
Net cash used for investing activities	(4,010)	(11,152)
Cash Flows from Financing Activities
Net change in deposits from banking clients	2,716	4,968
Repayment of commercial paper		(300)
Repayment of long-term debt	(4)	(3)
Dividends paid	(186)	(184)
Proceeds from stock options exercised and other	81	81
Other financing activities	6	(3)
Net cash provided by financing activities	2,613	4,559
Decrease in Cash and Cash Equivalents	(896)	(6,429)
Cash and Cash Equivalents at Beginning of Period	7,728	12,663
Cash and Cash Equivalents at End of Period	6,832	6,234
Cash paid during the period for:
Interest	51	51
Income taxes	403	277
Non-cash investing activity:
Securities purchased during the period but settled after period end	$ 163	$ 420

[1] There were no net impairment losses on securities for the three or six months ended June 30, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(1) million reclassified from other comprehensive income, for the three months ended June 30, 2013. Net impairment losses on securities include total other-than-temporary impairment losses of $2

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Condensed Consolidated Statements of Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Condensed Consolidated Statements of Income [Abstract]
Total other-than-temporary impairment losses	$ 2	$ 2
Impairment losses reclassified from other comprehensive income	$ (1)	$ (5)

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Segment Information

6 Months Ended

Jun. 30, 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 June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	441	$	402	$	191	$	170	$	-	$	-	$	632	$	572
Net interest revenue		504		418		58		55		-		-		562		473
Trading revenue		145		160		67		75		-		-		212		235
Other		47		43		18		16		-		-		65		59
Provision for loan losses		6		1		1		-		-		-		7		1
Net impairment losses on securities		-		(3)		-		-		-		-		-		(3)
Total net revenues		1,143		1,021		335		316		-		-		1,478		1,337
Expenses Excluding Interest		734		722		223		203		-		-		957		925
Income before taxes on income	$	409	$	299	$	112	$	113	$	-	$	-	$	521	$	412
Taxes on income														197		156
Net Income													$	324	$	256

	Investor Services				Advisor Services				Unallocated				Total
Six Months Ended June 30,	2014		2013		2014		2013		2014		2013		2014		2013
Net Revenues:
Asset management and administration fees	$	869	$	789	$	374	$	335	$	-	$	-	$	1,243	$	1,124
Net interest revenue		999		831		116		111		-		-		1,115		942
Trading revenue		316		309		143		149		-		-		459		458
Other		98		85		35		30		-		-		133		115
Provision for loan losses		5		(4)		1		(1)		-		-		6		(5)
Net impairment losses on securities		-		(7)		-		-		-		-		-		(7)
Total net revenues		2,287		2,003		669		624		-		-		2,956		2,627
Expenses Excluding Interest		1,472		1,473		441		411		-		-		1,913		1,884
Income before taxes on income	$	815	$	530	$	228	$	213	$	-	$	-	$	1,043	$	743
Taxes on income														393		281
Net Income													$	650	$	462

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 25, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
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		1,303,355,243

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

11.Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to June 30, 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		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net Income	$ 324	$ 256	$ 650	$ 462
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	126	(477)	285	(480)
Reclassification of impairment charges included in net impairment losses on securities		3		7
Other reclassifications included in other revenue	(1)	(3)	(2)	(3)
Other				1
Other comprehensive income (loss), before tax	125	(477)	283	(475)
Income tax effect	(47)	180	(106)	180
Other comprehensive income (loss), net of tax	78	(297)	177	(295)
Comprehensive Income (Loss)	$ 402	$ (41)	$ 827	$ 167

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Commitments and Contingencies

6 Months Ended

Jun. 30, 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 June 30, 2014, the aggregate face amount of these LOCs totaled$240 million. There were no funds drawn under any of these LOCs at June 30, 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 subsequently denied. On June 10, 2014, Schwab filed a motion for summary judgment of the NYAG’s 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 June 30, 2014.

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Loans to Banking Clients and Related Allowance for Loan Losses

6 Months Ended

Jun. 30, 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:

	June 30,		December 31,
	2014		2013
Residential real estate mortgages	$	8,055	$	8,006
Home equity lines of credit		3,017		3,041
Personal loans secured by securities		1,804		1,384
Other		34		36
Total loans to banking clients (1)		12,910		12,467
Allowance for loan losses		(41)		(48)
Total loans to banking clients – net	$	12,869	$	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  $6.0 billion and$5.7 billion at June 30, 2014 and December 31, 2013, respectively. All of the personal loans were fully collateralized by securities with fair values in excess of borrowings at June 30, 2014 and December 31, 2013.

Changes in the allowance for loan losses were as follows:

Three Months Ended	June 30, 2014							June 30, 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	$	33		$	15	$	48	$	40		$	19	$	59
Charge-offs		-			(1)		(1)		(1)			(1)		(2)
Recoveries		1			-		1		-			1		1
Provision for loan losses		(6)			(1)		(7)		1			(2)		(1)
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

Six Months Ended	June 30, 2014							June 30, 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)			(2)		(3)		(3)			(3)		(6)
Recoveries		1			1		2		1			1		2
Provision for loan losses		(6)			-		(6)		6			(1)		5
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

Included in the loan portfolio are nonaccrual loans totaling$37 million and  $48 million at June 30, 2014 and December 31, 2013, respectively. There wereno loans accruing interest that were contractually 90 days or more past due at June 30, 2014 or December 31, 2013. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $44 million and  $53 million at June 30, 2014 and December 31, 2013, respectively.Troubled debt restructurings were not material at June 30, 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  $332 millionand  $928million during the second quarters of 2014 and 2013, respectively, and$618 million and$2.2 billion during the first halves of 2014 and 2013, respectively. Schwab Bank purchased HELOCs with commitments of$175 million and$221 million during the second quarters of 2014 and 2013, respectively, and$347 million and$439 million during the first halves 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
June 30, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	10	$	3		$	23	$	36	$	7,892
Purchased first mortgages		157		1		-			5		6		163
Home equity lines of credit		3,003		4		1			9		14		3,017
Personal loans secured by securities		1,803		1		-			-		1		1,804
Other		34		-		-			-		-		34
Total loans to banking clients	$	12,853	$	16	$	4		$	37	$	57	$	12,910

							>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 June 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
June 30, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	774		$	51	$	825		$	2,196
2010			427			7		434			182
2011			635			35		670			149
2012			2,256			26		2,282			153
2013			3,215			35		3,250			253
2014			585			9		594			84
Total		$	7,892		$	163	$	8,055		$	3,017
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			90			12		102			19
680 – 739			1,338			32		1,370			564
>740			6,454			118		6,572			2,434
Total		$	7,892		$	163	$	8,055		$	3,017
Updated FICO
<620		$	50		$	5	$	55		$	39
620 – 679			183			7		190			104
680 – 739			1,063			27		1,090			456
>740			6,596			124		6,720			2,418
Total		$	7,892		$	163	$	8,055		$	3,017
Origination LTV
<70%		$	5,362		$	113	$	5,475		$	2,019
>70% – <90%			2,516			44		2,560			975
>90% – <100%			14			6		20			23
Total		$	7,892		$	163	$	8,055		$	3,017

			Weighted				Percent of Loans
			Average		Utilization		that are on
June 30, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,771		775	N/A			0.06	%
>70% – <90%		1,130		765	N/A			0.37	%
>90% – <100%		74		738	N/A			2.21	%
>100%		80		734	N/A			8.08	%
Total	$	8,055		773	N/A			0.21	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,154		773	36	%		0.08	%
>70% – <90%		652		763	47	%		0.25	%
>90% – <100%		110		753	57	%		0.91	%
>100%		101		746	60	%		1.22	%
Total	$	3,017		769	39	%		0.19	%

(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)

6 Months Ended

Jun. 30, 2014

Earnings Per Common Share [Abstract]

EPS under Basic and Diluted Computations

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net income	$	324	$	256	$	650	$	462
Preferred stock dividends		(22)		(23)		(30)		(31)
Net income available to common stockholders	$	302	$	233	$	620	$	431
Weighted-average common shares outstanding — basic		1,302		1,282		1,301		1,280
Common stock equivalent shares related to stock incentive plans		11		6		11		5
Weighted-average common shares outstanding — diluted (1)		1,313		1,288		1,312		1,285
Basic EPS	$	.23	$	.18	$	.47	$	.33
Diluted EPS	$	.23	$	.18	$	.47	$	.33

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 16 million and 28 million shares for the second quarters of 2014 and 2013, respectively, and 17 million and 32 million shares for the first halves of 2014 and 2013, respectively.

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

6 Months Ended

Jun. 30, 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
June 30, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	17,934	$	225	$	26	$	18,133
Asset-backed securities		17,524		96		3		17,617
Corporate debt securities		9,203		62		3		9,262
U.S. agency notes		4,240		-		56		4,184
Certificates of deposit		3,124		3		-		3,127
Non-agency residential mortgage-backed securities		570		15		25		560
Non-agency commercial mortgage-backed securities		311		9		-		320
Total securities available for sale	$	52,906	$	410	$	113	$	53,203
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,393	$	454	$	284	$	31,563
Non-agency commercial mortgage-backed securities		1,002		7		25		984
Other securities		100		-		-		100
Total securities held to maturity	$	32,495	$	461	$	309	$	32,647

			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
June 30, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	4,266	$	22	$	577	$	4	$	4,843	$	26
Asset-backed securities		457		1		853		2		1,310		3
Corporate debt securities		-		-		618		3		618		3
U.S. agency notes		-		-		3,684		56		3,684		56
Non-agency residential mortgage-backed
securities		33		1		331		24		364		25
Total	$	4,756	$	24	$	6,063	$	89	$	10,819	$	113
Securities held to maturity:
U.S. agency mortgage-backed securities	$	415	$	1	$	12,125	$	283	$	12,540	$	284
Non-agency commercial mortgage-backed
securities		-		-		680		25		680		25
Total	$	415	$	1	$	12,805	$	308	$	13,220	$	309
Total securities with unrealized losses (1)	$	5,171	$	25	$	18,868	$	397	$	24,039	$	422

(1) The number of investment positions with unrealized losses totaled 218 for securities available for sale and 115 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 totaled273 for securities available for sale and 193 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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Balance at beginning of period	$	169	$	163	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		1		-		1
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		2		-		6
Balance at end of period	$	169	$	166	$	169	$	166

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)	$	-	$	1,183	$	3,964	$	12,986	$	18,133
Asset-backed securities		-		1,491		4,732		11,394		17,617
Corporate debt securities		1,163		8,049		50		-		9,262
U.S. agency notes		-		4,184		-		-		4,184
Certificates of deposit		1,527		1,600		-		-		3,127
Non-agency residential mortgage-backed
securities (1)		-		3		-		557		560
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,690	$	16,510	$	8,746	$	25,257	$	53,203
Total amortized cost	$	2,682	$	16,502	$	8,633	$	25,089	$	52,906
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	613	$	14,053	$	16,897	$	31,563
Non-agency commercial mortgage-backed
securities (1)		-		-		354		630		984
Other securities		100		-		-		-		100
Total fair value	$	100	$	613	$	14,407	$	17,527	$	32,647
Total amortized cost	$	100	$	600	$	14,379	$	17,416	$	32,495

(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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Proceeds	$	760	$	3,004	$	2,045	$	3,004
Gross realized gains	$	1	$	3	$	2	$	3

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Earnings Per Common Share

6 Months Ended

Jun. 30, 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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net income	$	324	$	256	$	650	$	462
Preferred stock dividends		(22)		(23)		(30)		(31)
Net income available to common stockholders	$	302	$	233	$	620	$	431
Weighted-average common shares outstanding — basic		1,302		1,282		1,301		1,280
Common stock equivalent shares related to stock incentive plans		11		6		11		5
Weighted-average common shares outstanding — diluted (1)		1,313		1,288		1,312		1,285
Basic EPS	$	.23	$	.18	$	.47	$	.33
Diluted EPS	$	.23	$	.18	$	.47	$	.33

(1) Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 16 million and 28 million shares for the second quarters of 2014 and 2013, respectively, and 17 million and 32 million shares for the first halves of 2014 and 2013, respectively.

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Fair Values of Assets and Liabilities

6 Months Ended

Jun. 30, 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 June 30, 2014. The Company did not transfer any assets or liabilities between Level 1,Level 2, or Level 3 during the quarter ended June 30, 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 June 30, 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
June 30, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,422		$	-		$	-		$	1,422
Commercial paper			-			41			-			41
Total cash equivalents			1,422			41			-			1,463
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,825			-			3,825
U.S. Government securities			-			322			-			322
Total investments segregated and on deposit for
regulatory purposes			-			4,147			-			4,147
Other securities owned:
Schwab Funds® money market funds			297			-			-			297
Equity and bond mutual funds			219			-			-			219
State and municipal debt obligations			-			35			-			35
Equity, U.S. Government and corporate debt, and
other securities			1			31			-			32
Total other securities owned			517			66			-			583
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,133			-			18,133
Asset-backed securities			-			17,617			-			17,617
Corporate debt securities			-			9,262			-			9,262
U.S. agency notes			-			4,184			-			4,184
Certificates of deposit			-			3,127			-			3,127
Non-agency residential mortgage-backed securities			-			560			-			560
Non-agency commercial mortgage-backed securities			-			320			-			320
Total securities available for sale			-			53,203			-			53,203
Total		$	1,939		$	57,457		$	-		$	59,396

	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 June 30, 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
June 30, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	5,369		$	-		$	5,369		$	-	$	5,369
Cash and investments segregated and
on deposit for regulatory purposes		14,943			-			14,943			-		14,943
Receivables from brokers, dealers, and
clearing organizations		522			-			522			-		522
Receivables from brokerage clients – net		14,664			-			14,664			-		14,664
Securities held to maturity:
U.S. agency mortgage-backed securities		31,393			-			31,563			-		31,563
Non-agency commercial mortgage-backed
securities		1,002			-			984			-		984
Other securities		100			-			100			-		100
Total securities held to maturity		32,495			-			32,647			-		32,647
Loans to banking clients: (1)
Residential real estate mortgages		8,055			-			8,047			-		8,047
Home equity lines of credit		3,017			-			3,048			-		3,048
Personal loans secured by securities		1,804			-			1,804			-		1,804
Other		34			-			34			-		34
Total loans to banking clients		12,910			-			12,933			-		12,933
Other assets		72			-			72			-		72
Total	$	80,975		$	-		$	81,150		$	-	$	81,150
Liabilities:
Deposits from banking clients	$	95,688		$	-		$	95,688		$	-	$	95,688
Payables to brokers, dealers, and clearing
organizations		1,725			-			1,725			-		1,725
Payables to brokerage clients		31,484			-			31,484			-		31,484
Accrued expenses and other liabilities		519			-			519			-		519
Long-term debt		1,901			-			2,016			-		2,016
Total	$	131,317		$	-		$	131,432		$	-	$	131,432

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $41 million at June 30, 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 to 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 $1.2billion at June 30, 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 $192 million at June 30, 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

6 Months Ended

Jun. 30, 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 (loss) are as follows:

Three Months Ended June 30,			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)	$	126	$	(47)	$	79	$	(477)	$	179	$	(298)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		3		-		3
Other reclassifications included in
other revenue		(1)		-		(1)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		125		(47)		78		(477)		180		(297)
Other comprehensive income (loss)	$	125	$	(47)	$	78	$	(477)	$	180	$	(297)

Six Months Ended June 30,			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)	$	285	$	(106)	$	179	$	(480)	$	181	$	(299)
Reclassification of impairment charges
included in net impairment losses
on securities		-		-		-		7		(2)		5
Other reclassifications included in
other revenue		(2)		-		(2)		(3)		1		(2)
Change in net unrealized gain on
securities available for sale		283		(106)		177		(476)		180		(296)
Other		-		-		-		1		-		1
Other comprehensive income (loss)	$	283	$	(106)	$	177	$	(475)	$	180	$	(295)

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			(296)			1			(295)
Balance at June 30, 2013		$	3		$	-		$	3
Balance at December 31, 2013		$	9		$	-		$	9
Other net changes			177			-			177
Balance at June 30, 2014		$	186		$	-		$	186

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Regulatory Requirements

6 Months Ended

Jun. 30, 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 June 30, 2014, CSC and Schwab Bank met the capital level requirements.

The regulatory capital and ratios for Schwab Bank at June 30, 2014 are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Risk-Based Capital	$	7,261	20.5	%	$	2,125	6.0	%	$	1,417	4.0	%
Total Risk-Based Capital	$	7,303	20.6	%	$	3,542	10.0	%	$	2,834	8.0	%
Tier 1 Leverage	$	7,261	7.0	%	$	5,169	5.0	%	$	4,136	4.0	%
Tangible Equity	$	7,261	7.0	%		N/A			$	2,068	2.0	%

N/A Not applicable.

Based on its regulatory capital ratios at June 30, 2014, Schwab Bank is considered well capitalized (the highest category) pursuant to banking regulatory guidelines. There are no conditions or events since June 30, 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), 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 June 30, 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		$	1,617		10	%		$	0.250		$	316		$	1,301		$	828
optionsXpress, Inc.		$	112		37	%		$	1		$	6		$	106		$	97

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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	Jun. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	$ 2,690
Securities available for sale fair value After 1 year through 5 years	16,510
Securities available for sale fair value After 5 years through 10 years	8,746
Securities available for sale fair value After 10 years	25,257
Securities available for sale	53,203		51,618
Securities available for sale Within 1 year amortized cost	2,682
Securities available for sale After 1 year through 5 years amortized cost	16,502
Securities available for sale After 5 years through 10 years amortized cost	8,633
Securities available for sale After 10 years amortized cost	25,089
Securities available for sale Amortized Cost	52,906		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	1,183	[1]
Securities available for sale fair value After 5 years through 10 years	3,964	[1]
Securities available for sale fair value After 10 years	12,986	[1]
Securities available for sale	18,133	[1]	18,645
Securities available for sale Amortized Cost	17,934		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	1,491
Securities available for sale fair value After 5 years through 10 years	4,732
Securities available for sale fair value After 10 years	11,394
Securities available for sale	17,617		15,206
Securities available for sale Amortized Cost	17,524		15,201
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	1,163
Securities available for sale fair value After 1 year through 5 years	8,049
Securities available for sale fair value After 5 years through 10 years	50
Securities available for sale	9,262		9,007
Securities available for sale Amortized Cost	9,203		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	4,184
Securities available for sale	4,184		4,136
Securities available for sale Amortized Cost	4,240		4,239
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale fair value Within 1 year	1,527
Securities available for sale fair value After 1 year through 5 years	1,600
Securities available for sale	3,127		3,652
Securities available for sale Amortized Cost	3,124		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	557	[1]
Securities available for sale	560	[1]	593
Securities available for sale Amortized Cost	570		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	$ 311		$ 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 $)	Jun. 30, 2014
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	$ 1,617,000,000
% of Aggregate Debit Balances	10.00%
Minimum Net Capital Required	250,000
2% of Aggregate Debit Balances	316,000,000
Net Capital in Excess of Required Net Capital	1,301,000,000
Net Capital in Excess of 5% of Aggregate Debit Balances	828,000,000
OptionsXpress, Inc. [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	112,000,000
% of Aggregate Debit Balances	37.00%
Minimum Net Capital Required	1,000,000
2% of Aggregate Debit Balances	6,000,000
Net Capital in Excess of Required Net Capital	106,000,000
Net Capital in Excess of 5% of Aggregate Debit Balances	$ 97,000,000

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Fair Values of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 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
June 30, 2014	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,422		$	-		$	-		$	1,422
Commercial paper			-			41			-			41
Total cash equivalents			1,422			41			-			1,463
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,825			-			3,825
U.S. Government securities			-			322			-			322
Total investments segregated and on deposit for
regulatory purposes			-			4,147			-			4,147
Other securities owned:
Schwab Funds® money market funds			297			-			-			297
Equity and bond mutual funds			219			-			-			219
State and municipal debt obligations			-			35			-			35
Equity, U.S. Government and corporate debt, and
other securities			1			31			-			32
Total other securities owned			517			66			-			583
Securities available for sale:
U.S. agency mortgage-backed securities			-			18,133			-			18,133
Asset-backed securities			-			17,617			-			17,617
Corporate debt securities			-			9,262			-			9,262
U.S. agency notes			-			4,184			-			4,184
Certificates of deposit			-			3,127			-			3,127
Non-agency residential mortgage-backed securities			-			560			-			560
Non-agency commercial mortgage-backed securities			-			320			-			320
Total securities available for sale			-			53,203			-			53,203
Total		$	1,939		$	57,457		$	-		$	59,396

	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
June 30, 2014	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	5,369		$	-		$	5,369		$	-	$	5,369
Cash and investments segregated and
on deposit for regulatory purposes		14,943			-			14,943			-		14,943
Receivables from brokers, dealers, and
clearing organizations		522			-			522			-		522
Receivables from brokerage clients – net		14,664			-			14,664			-		14,664
Securities held to maturity:
U.S. agency mortgage-backed securities		31,393			-			31,563			-		31,563
Non-agency commercial mortgage-backed
securities		1,002			-			984			-		984
Other securities		100			-			100			-		100
Total securities held to maturity		32,495			-			32,647			-		32,647
Loans to banking clients: (1)
Residential real estate mortgages		8,055			-			8,047			-		8,047
Home equity lines of credit		3,017			-			3,048			-		3,048
Personal loans secured by securities		1,804			-			1,804			-		1,804
Other		34			-			34			-		34
Total loans to banking clients		12,910			-			12,933			-		12,933
Other assets		72			-			72			-		72
Total	$	80,975		$	-		$	81,150		$	-	$	81,150
Liabilities:
Deposits from banking clients	$	95,688		$	-		$	95,688		$	-	$	95,688
Payables to brokers, dealers, and clearing
organizations		1,725			-			1,725			-		1,725
Payables to brokerage clients		31,484			-			31,484			-		31,484
Accrued expenses and other liabilities		519			-			519			-		519
Long-term debt		1,901			-			2,016			-		2,016
Total	$	131,317		$	-		$	131,432		$	-	$	131,432

(1) The carrying value of loans to banking clients excludes the allowance for loan losses of $41 million at June 30, 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)	Jun. 30, 2014 state item
Introduction and Basis of Presentation [Abstract]
Minimum number of domestic branch offices	300
States with domestic branch offices	45

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Regulatory Requirements (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 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), 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	Jun. 30, 2014		Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	$ 12,910	[1]	$ 12,467	[1]
Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	7,892		7,845
Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	163		161
Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	8,055		8,006
Weighted Average Updated FICO	773		772
Percent of Loans that are on Nonaccrual Status	0.21%		0.26%
Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,017		3,041
Weighted Average Updated FICO	769		769
Utilization Rate	39.00%	[2]	39.00%	[2]
Percent of Loans that are on Nonaccrual Status	0.19%		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	774		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	51		55
Year of origination Pre 2010 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	825		914
Year of origination Pre 2010 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,196		2,304
Year of origination 2010 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	427		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	434		510
Year of origination 2010 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	182		191
Year of origination 2011 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	635		733
Year of origination 2011 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	35		38
Year of origination 2011 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	670		771
Year of origination 2011 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	149		155
Year of origination 2012 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	2,256		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	2,282		2,429
Year of origination 2012 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	153		162
Year of origination 2013 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,215		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	35		35
Year of origination 2013 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	3,250		3,382
Year of origination 2013 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	253		229
Year of origination 2014 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	585
Year of origination 2014 [Member] | Residential real estate mortgages, purchased first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	9
Year of origination 2014 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	594
Year of origination 2014 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	84
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 620 Through 679 [Member] | Residential real estate mortgages, first mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	90		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	12		14
Origination FICO Score 620 Through 679 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	102		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	1,338		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	1,370		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	564		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	6,454		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	118		114
Origination FICO Score 740 And Above [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,572		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	2,434		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	50		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	55		55
Updated FICO Score Below 620 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	39		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	183		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	7		10
Updated FICO Score 620 Through 679 [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	190		219
Updated FICO Score 620 Through 679 [Member] | Home equity lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	104		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	1,063		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	1,090		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	456		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	6,596		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	124		117
Updated FICO Score 740 And Above [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,720		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	2,418		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	5,362		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	113		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	5,475		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	2,019		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	2,516		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	44		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	2,560		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	975		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	14		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	6		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	20		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	23		24
Estimated Current LTV 70% And Below [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	6,771		6,649
Weighted Average Updated FICO	775		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	2,154		2,127
Weighted Average Updated FICO	773		773
Utilization Rate	36.00%	[2]	36.00%	[2]
Percent of Loans that are on Nonaccrual Status	0.08%		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	1,130		1,181
Weighted Average Updated FICO	765		763
Percent of Loans that are on Nonaccrual Status	0.37%		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	652		664
Weighted Average Updated FICO	763		762
Utilization Rate	47.00%	[2]	48.00%	[2]
Percent of Loans that are on Nonaccrual Status	0.25%		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	74		86
Weighted Average Updated FICO	738		732
Percent of Loans that are on Nonaccrual Status	2.21%		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	110		127
Weighted Average Updated FICO	753		752
Utilization Rate	57.00%	[2]	59.00%	[2]
Percent of Loans that are on Nonaccrual Status	0.91%		1.22%
Estimated Current LTV Greater Than 100% [Member] | Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to banking clients	80		90
Weighted Average Updated FICO	734		730
Percent of Loans that are on Nonaccrual Status	8.08%		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	$ 101		$ 123
Weighted Average Updated FICO	746		743
Utilization Rate	60.00%	[2]	63.00%	[2]
Percent of Loans that are on Nonaccrual Status	1.22%		1.34%

[1] All loans are evaluated for impairment by loan segment.

[2] 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	Jun. 30, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 6,832	$ 7,728
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $10,440 at June 30, 2014 and $14,016 at December 31, 2013)	19,093	23,553
Receivables from brokers, dealers, and clearing organizations	522	509
Receivables from brokerage clients — net	14,670	13,951
Other securities owned — at fair value	583	517
Securities available for sale	53,203	51,618
Securities held to maturity (fair value — $32,647 at June 30, 2014 and $29,490 at December 31, 2013)	32,495	30,318
Loans to banking clients — net	12,869	12,419
Equipment, office facilities, and property — net	883	790
Goodwill	1,227	1,227
Intangible assets — net	244	266
Other assets	780	746
Total assets	143,401	143,642
Liabilities and Stockholders' Equity
Deposits from banking clients	95,688	92,972
Payables to brokers, dealers, and clearing organizations	1,725	1,467
Payables to brokerage clients	31,484	35,333
Accrued expenses and other liabilities	1,433	1,586
Long-term debt	1,901	1,903
Total liabilities	132,231	133,261
Stockholders' equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $885	871	869
Common stock — 3 billion shares authorized; $.01 par value per share; 1,487,543,446 shares issued	15	15
Additional paid-in capital	4,012	3,951
Retained earnings	9,715	9,253
Treasury stock, at cost — 185,261,252 shares at June 30, 2014 and 190,657,263 shares at December 31, 2013	(3,629)	(3,716)
Accumulated other comprehensive income	186	9
Total stockholders' equity	11,170	10,381
Total liabilities and stockholders' equity	$ 143,401	$ 143,642

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Securities Available for Sale and Securities Held to Maturity

6 Months Ended

Jun. 30, 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
June 30, 2014	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	17,934	$	225	$	26	$	18,133
Asset-backed securities		17,524		96		3		17,617
Corporate debt securities		9,203		62		3		9,262
U.S. agency notes		4,240		-		56		4,184
Certificates of deposit		3,124		3		-		3,127
Non-agency residential mortgage-backed securities		570		15		25		560
Non-agency commercial mortgage-backed securities		311		9		-		320
Total securities available for sale	$	52,906	$	410	$	113	$	53,203
Securities held to maturity:
U.S. agency mortgage-backed securities	$	31,393	$	454	$	284	$	31,563
Non-agency commercial mortgage-backed securities		1,002		7		25		984
Other securities		100		-		-		100
Total securities held to maturity	$	32,495	$	461	$	309	$	32,647

			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 $133 million at June30, 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
June 30, 2014	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S agency mortgage-backed securities	$	4,266	$	22	$	577	$	4	$	4,843	$	26
Asset-backed securities		457		1		853		2		1,310		3
Corporate debt securities		-		-		618		3		618		3
U.S. agency notes		-		-		3,684		56		3,684		56
Non-agency residential mortgage-backed
securities		33		1		331		24		364		25
Total	$	4,756	$	24	$	6,063	$	89	$	10,819	$	113
Securities held to maturity:
U.S. agency mortgage-backed securities	$	415	$	1	$	12,125	$	283	$	12,540	$	284
Non-agency commercial mortgage-backed
securities		-		-		680		25		680		25
Total	$	415	$	1	$	12,805	$	308	$	13,220	$	309
Total securities with unrealized losses (1)	$	5,171	$	25	$	18,868	$	397	$	24,039	$	422

(1) The number of investment positions with unrealized losses totaled 218 for securities available for sale and 115 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 totaled273 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 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 second quarter or first half 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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Balance at beginning of period	$	169	$	163	$	169	$	159
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was not previously recognized		-		1		-		1
Credit losses recognized into current period earnings on debt securities for
which an other-than-temporary impairment was previously recognized		-		2		-		6
Balance at end of period	$	169	$	166	$	169	$	166

The maturities of securities available for sale and securities held to maturity at June 30, 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)	$	-	$	1,183	$	3,964	$	12,986	$	18,133
Asset-backed securities		-		1,491		4,732		11,394		17,617
Corporate debt securities		1,163		8,049		50		-		9,262
U.S. agency notes		-		4,184		-		-		4,184
Certificates of deposit		1,527		1,600		-		-		3,127
Non-agency residential mortgage-backed
securities (1)		-		3		-		557		560
Non-agency commercial mortgage-backed
securities (1)		-		-		-		320		320
Total fair value	$	2,690	$	16,510	$	8,746	$	25,257	$	53,203
Total amortized cost	$	2,682	$	16,502	$	8,633	$	25,089	$	52,906
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	613	$	14,053	$	16,897	$	31,563
Non-agency commercial mortgage-backed
securities (1)		-		-		354		630		984
Other securities		100		-		-		-		100
Total fair value	$	100	$	613	$	14,407	$	17,527	$	32,647
Total amortized cost	$	100	$	600	$	14,379	$	17,416	$	32,495

(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				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Proceeds	$	760	$	3,004	$	2,045	$	3,004
Gross realized gains	$	1	$	3	$	2	$	3

XML

Securities Available for Sale and Securities Held to Maturity (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014 item
Securities Available for Sale and Securities Held to Maturity [Abstract]
Fair value of pledged securities	$ 133
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	Jun. 30, 2014		Mar. 31, 2014	Dec. 31, 2013		Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	$ 12,910	[1]		$ 12,467	[1]
Allowance for loan losses	(41)		(48)	(48)		(57)	(59)	(56)
Total loans to banking clients - net	12,869			12,419
Residential real estate mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	8,055			8,006
Allowance for loan losses	(28)		(33)	(34)		(40)	(40)	(36)
Home equity lines of credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	3,017			3,041
Allowance for loan losses	(13)		(15)	(14)		(17)	(19)	(20)
Personal loans secured by securities [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	1,804			1,384
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to banking clients	$ 34			$ 36

[1] All loans are evaluated for impairment by loan segment.

XML

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

6 Months Ended

Jun. 30, 2014

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

Composition of Loans to Banking Clients by Loan Segment

	June 30,		December 31,
	2014		2013
Residential real estate mortgages	$	8,055	$	8,006
Home equity lines of credit		3,017		3,041
Personal loans secured by securities		1,804		1,384
Other		34		36
Total loans to banking clients (1)		12,910		12,467
Allowance for loan losses		(41)		(48)
Total loans to banking clients – net	$	12,869	$	12,419

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

Changes in Allowance for Loan Losses

Three Months Ended	June 30, 2014							June 30, 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	$	33		$	15	$	48	$	40		$	19	$	59
Charge-offs		-			(1)		(1)		(1)			(1)		(2)
Recoveries		1			-		1		-			1		1
Provision for loan losses		(6)			(1)		(7)		1			(2)		(1)
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

Six Months Ended	June 30, 2014							June 30, 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)			(2)		(3)		(3)			(3)		(6)
Recoveries		1			1		2		1			1		2
Provision for loan losses		(6)			-		(6)		6			(1)		5
Balance at end of period	$	28		$	13	$	41	$	40		$	17	$	57

Delinquency Analysis by Loan Class

							>90 days past
			30-59 days		60-89 days		due and other			Total		Total
June 30, 2014	Current		past due		past due		nonaccrual loans			past due		loans
Residential real estate mortgages:
First mortgages	$	7,856	$	10	$	3		$	23	$	36	$	7,892
Purchased first mortgages		157		1		-			5		6		163
Home equity lines of credit		3,003		4		1			9		14		3,017
Personal loans secured by securities		1,803		1		-			-		1		1,804
Other		34		-		-			-		-		34
Total loans to banking clients	$	12,853	$	16	$	4		$	37	$	57	$	12,910

							>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
June 30, 2014	mortgages			first mortgages			Total		lines of credit
Year of origination
Pre-2010		$	774		$	51	$	825		$	2,196
2010			427			7		434			182
2011			635			35		670			149
2012			2,256			26		2,282			153
2013			3,215			35		3,250			253
2014			585			9		594			84
Total		$	7,892		$	163	$	8,055		$	3,017
Origination FICO
<620		$	10		$	1	$	11		$	-
620 – 679			90			12		102			19
680 – 739			1,338			32		1,370			564
>740			6,454			118		6,572			2,434
Total		$	7,892		$	163	$	8,055		$	3,017
Updated FICO
<620		$	50		$	5	$	55		$	39
620 – 679			183			7		190			104
680 – 739			1,063			27		1,090			456
>740			6,596			124		6,720			2,418
Total		$	7,892		$	163	$	8,055		$	3,017
Origination LTV
<70%		$	5,362		$	113	$	5,475		$	2,019
>70% – <90%			2,516			44		2,560			975
>90% – <100%			14			6		20			23
Total		$	7,892		$	163	$	8,055		$	3,017

			Weighted				Percent of Loans
			Average		Utilization		that are on
June 30, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	6,771		775	N/A			0.06	%
>70% – <90%		1,130		765	N/A			0.37	%
>90% – <100%		74		738	N/A			2.21	%
>100%		80		734	N/A			8.08	%
Total	$	8,055		773	N/A			0.21	%
Home equity lines of credit:
Estimated Current LTV
<70%	$	2,154		773	36	%		0.08	%
>70% – <90%		652		763	47	%		0.25	%
>90% – <100%		110		753	57	%		0.91	%
>100%		101		746	60	%		1.22	%
Total	$	3,017		769	39	%		0.19	%

(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.