8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 15, 2019

The Charles Schwab Corporation

(Exact name of registrant as specified in its charter)

Commission File Number:  1-9700

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

211 Main Street, San Francisco, CA 94105

(Address of principal executive offices, including zip code)

(415) 667-7000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock – $.01 par value per share	SCHW	New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 6.00% Non-Cumulative Preferred Stock, Series C	SCHW PrC	New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 5.95% Non-Cumulative Preferred Stock, Series D	SCHW PrD	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On October 15, 2019, The Charles Schwab Corporation issued a press release announcing its financial results for the quarter ended September 30, 2019. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits
Exhibit No.	Description
99.1	Press Release dated October 15, 2019
104	Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Signature(s)

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 hereunto duly authorized.

		THE CHARLES SCHWAB CORPORATION
Date: October 15, 2019	By:	/s/ Peter Crawford
		Peter Crawford
		Executive Vice President and Chief Financial Officer

EX-99.1

		EXHIBIT 99.1
News Release Contacts:
MEDIA: Mayura Hooper Charles Schwab Phone: 415-667-1525	INVESTORS/ANALYSTS: Rich Fowler Charles Schwab Phone: 415-667-1841

SCHWAB REPORTS RECORD EARNINGS PER SHARE OF $.70, UP 8%

Revenues Grow 5% to $2.7 Billion, Net Income Rises 3% to $951 Million, Both Third Quarter Records

Core Net New Assets Total $56.6 Billion, Representing a 7% Annualized Growth Rate

SAN FRANCISCO, October 15, 2019 – The Charles Schwab Corporation announced today that its net income for the third quarter of 2019 was $951 million, up 3% from $923 million for the third quarter of 2018. Net income for the nine months ended September 30, 2019 was $2.9 billion, up 11% from the year-earlier period. The company’s financial results for the third quarter and first nine months of 2019 include severance charges described below.

	Three Months Ended September 30,						%	Nine Months Ended September 30,						%
Financial Highlights	2019			2018			Change	2019			2018			Change
Net revenues (in millions)	$	2,711		$	2,579		5%	$	8,115		$	7,463		9%
Net income (in millions)	$	951		$	923		3%	$	2,852		$	2,572		11%
Diluted earnings per common share	$	.70		$	.65		8%	$	2.05		$	1.79		15%
Pre-tax profit margin	45.6		%	47.3		%		46.0		%	44.9		%
Return on average common
stockholders’ equity (annualized)	20		%	20		%		20		%	19		%
EPS impact of $62 million in severance charges
related to position eliminations (1)	$	(.04	)	—				$	(.04	)	—
Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

⁽¹⁾ The pre-tax severance charges related to position eliminations, which reduced earnings per share by $.04, are included in Compensation and benefits expense.

CEO Walt Bettinger said, “As we remain faithful to our “Through Clients’ Eyes” strategy, investors continue to reward us with strong business growth. Our contemporary full-service model helps us remain a trusted partner as clients navigate an environment that has only grown more cloudy in recent months. The equity markets have shown noteworthy durability – the S&P 500 remained up nearly 20% for the year as of quarter-end. Concerns persist, however, regarding global trade and a generally softening economic outlook. The Federal Reserve has moved forward with expected mid-cycle easing, cutting short-term interest rates 25 bps in both July and September, and long-term rates have also shown significant declines. Against this backdrop, clients brought us $56.6 billion in core net new assets, a third quarter record, which brings our year-to-date total to $145.5 billion, representing a 6% annualized organic growth rate. In addition, we attracted 363,000 new brokerage accounts in the quarter, helping raise active brokerage accounts to 12.1 million, up 6% year-over-year. Client demand for help and guidance continued to grow, with assets receiving ongoing advisory services reaching nearly $2.0 trillion at quarter end, up 7%. Assets in digital advisory solutions grew even faster, rising 20% to $43.0 billion at the end of September. Overall, our client assets totaled a record $3.77 trillion at quarter end, up 6%.”

“Our commitment to challenge the status quo and disrupt the industry on behalf of clients endures through all environments,” Mr. Bettinger added. “Most recently, we eliminated online trade commissions for stocks, ETFs, and

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options listed on U.S. or Canadian exchanges, a move that represents another significant investment in bringing ever greater value to our clients. This action is consistent with the principles on which our company was founded, helping realize Chuck Schwab’s vision of making investing accessible to all. We also continue to extend our products and platforms, including the recent launch of three new fixed-income ETFs. In support of our independent advisors, we’ve made enhancements to Institutional Intelligent Portfolios^® including a paperless account conversion feature making it simpler than ever to incorporate automated investing into their practices, while freeing up time to spend with investors and scale their businesses. Additionally, on July 25^th, we announced an agreement to acquire certain assets of USAA’s Investment Management Company, with closing targeted for the middle of next year. We are honored to have the opportunity to serve USAA members as their exclusive wealth management and brokerage provider, and are looking forward to exploring a new growth opportunity via the multi-year referral agreement included in this transaction.”

Mr. Bettinger concluded, “Schwab’s ‘Virtuous Cycle’ is renewed by bold steps like our recent price cuts, reflecting our belief that investors will entrust us with more business as we do right by them. We are acting from a position of strength – both financial and competitive – which allows us to take these steps with confidence, knowing we are able to push forward as we choose, not as the current environment might dictate.”

CFO Peter Crawford commented, “Our continued success with clients and full-service model enabled us to deliver third quarter revenues of $2.7 billion, up 5% year-over-year. Net interest revenue rose 7% from a year ago to $1.6 billion, largely a result of generally higher investment yields and higher client cash allocations. Growing client balances in purchased money market funds, advisory solutions, and other third-party mutual funds and ETFs pushed asset management and administration fees to $825 million, increasing 2% year-over-year. A pick-up in trading volumes was more than offset by a decline in average revenue per trade, bringing trading revenue to $172 million, down 2% from a year ago. Turning to expenses, our reported total of $1.5 billion includes $62 million in severance charges associated with our decision to eliminate positions spanning approximately 3% of our workforce, as we work to ensure we remain properly positioned to serve clients through what has become a more challenging environment. These charges contributed roughly half of our 8% year-over-year expense growth. Ongoing expenses remained in line with management expectations and we were able to report a pre-tax profit margin of 45.6% – our sixth consecutive quarter of at least 45%.”

Mr. Crawford added, “Consistent with the evolution of the Schwab story to include both business growth and meaningful capital returns, we repurchased 19.9 million shares for approximately $770 million during the third quarter. We have repurchased more than 49 million shares for $2 billion under our current $4 billion authorization. Our expanding client base and related increases in their cash balances drove modest organic growth in our balance sheet during the third quarter, with consolidated assets increasing $2.7 billion sequentially to $279 billion at September 30^th. Our preliminary Tier 1 Leverage Ratio ended the quarter at 7.3%, slightly above our operating objective of 6.75%-7.00%; our capital management in coming quarters will incorporate preparations for the $1.8 billion USAA transaction next year. With a 20% return on equity for the quarter and year-to-date, we remain well-positioned to drive strong profitable growth into the future through a combination of sustained business momentum, thoughtful expense management, and a healthy balance sheet.”

Commentary from the CFO

Periodically, our Chief Financial Officer provides insight and commentary regarding Schwab’s financial picture at: https://www.aboutschwab.com/cfo-commentary. The most recent commentary, which provides perspective on our decision to reduce online trade commissions for U.S. and Canadian-listed equities, ETFs, and options to $0, was posted on October 1, 2019.

Forward-Looking Statements

This press release contains forward-looking statements relating to business growth; enhancements to products and platforms; the company’s acquisition of certain assets of USAA’s Investment Management Company (IMCO), including timing of closing and entering into a referral agreement; financial and competitive strength; capital returns to stockholders; growth in the client base, client accounts and assets; cash balances; Tier 1 Leverage Ratio operating objective; profitable growth; expense management; and the balance sheet. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

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Important factors that may cause such differences include, but are not limited to, general market conditions, including the level of interest rates, equity valuations, and trading activity; the company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; competitive pressures on pricing, including deposit rates; the company’s ability to develop and launch new and enhanced products, services, and capabilities, as well as implement infrastructure, in a timely and successful manner; client use of the company’s advisory solutions and other products and services; client sensitivity to rates; failure of the parties to satisfy the closing conditions in the USAA IMCO purchase agreement in a timely manner or at all, including regulatory approvals and the implementation of conversion plans; capital and liquidity needs and management; level of client assets, including cash balances; the company’s ability to manage expenses; and other factors set forth in the company’s most recent report on Form 10-K.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 365 offices and 12.1 million active brokerage accounts, 1.7 million corporate retirement plan participants, 1.4 million banking accounts, and $3.77 trillion in client assets as of September 30, 2019. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.schwab.com and https://www.aboutschwab.com.

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THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net Revenues
Interest revenue	$	1,892		$	1,755		$	5,817		$	4,766
Interest expense	(261		)	(228		)	(896		)	(569		)
Net interest revenue	1,631			1,527			4,921			4,197
Asset management and administration fees	825			809			2,366			2,474
Trading revenue	172			176			531			557
Other	83			67			297			235
Total net revenues	2,711			2,579			8,115			7,463
Expenses Excluding Interest
Compensation and benefits	857			737			2,514			2,252
Professional services	168			164			516			476
Occupancy and equipment	144			124			408			368
Advertising and market development	71			70			217			220
Communications	63			59			187			179
Depreciation and amortization	88			78			255			226
Regulatory fees and assessments	30			57			92			158
Other	54			71			190			232
Total expenses excluding interest	1,475			1,360			4,379			4,111
Income before taxes on income	1,236			1,219			3,736			3,352
Taxes on income	285			296			884			780
Net Income	951			923			2,852			2,572
Preferred stock dividends and other	38			38			127			128
Net Income Available to Common Stockholders	$	913		$	885		$	2,725		$	2,444
Weighted-Average Common Shares Outstanding:
Basic	1,300			1,351			1,320			1,349
Diluted	1,308			1,364			1,329			1,363
Earnings Per Common Shares Outstanding:
Basic	$	.70		$	.66		$	2.06		$	1.81
Diluted	$	.70		$	.65		$	2.05		$	1.79

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THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
	Q3-19 % change				2019									2018
	vs.		vs.		Third			Second			First			Fourth			Third
(In millions, except per share amounts and as noted)	Q3-18		Q2-19		Quarter			Quarter			Quarter			Quarter			Quarter
Net Revenues
Net interest revenue	7	%	1	%	$	1,631		$	1,609		$	1,681		$	1,626		$	1,527
Asset management and administration fees	2	%	5	%	825			786			755			755			809
Trading revenue	(2	)%	(1	)%	172			174			185			206			176
Other	24	%	(26	)%	83			112			102			82			67
Total net revenues	5	%	1	%	2,711			2,681			2,723			2,669			2,579
Expenses Excluding Interest
Compensation and benefits	16	%	6	%	857			807			850			805			737
Professional services	2	%	(6	)%	168			178			170			178			164
Occupancy and equipment	16	%	8	%	144			133			131			128			124
Advertising and market development	1	%	(8	)%	71			77			69			93			70
Communications	7	%	2	%	63			62			62			63			59
Depreciation and amortization	13	%	5	%	88			84			83			80			78
Regulatory fees and assessments	(47	)%	—		30			30			32			31			57
Other	(24	)%	(27	)%	54			74			62			81			71
Total expenses excluding interest	8	%	2	%	1,475			1,445			1,459			1,459			1,360
Income before taxes on income	1	%	—		1,236			1,236			1,264			1,210			1,219
Taxes on income	(4	)%	(5	)%	285			299			300			275			296
Net Income	3	%	1	%	$	951		$	937		$	964		$	935		$	923
Preferred stock dividends and other	—		(24	)%	38			50			39			50			38
Net Income Available to Common Stockholders	3	%	3	%	$	913		$	887		$	925		$	885		$	885
Earnings per common share:
Basic	6	%	4	%	$	.70		$	.67		$	.69		$	.66		$	.66
Diluted	8	%	6	%	$	.70		$	.66		$	.69		$	.65		$	.65
Dividends declared per common share	31	%	—		$	.17		$	.17		$	.17		$	.13		$	.13
Weighted-average common shares outstanding:
Basic	(4	)%	(2	)%	1,300			1,328			1,333			1,343			1,351
Diluted	(4	)%	(2	)%	1,308			1,337			1,344			1,354			1,364
Performance Measures
Pre-tax profit margin					45.6		%	46.1		%	46.4		%	45.3		%	47.3		%
Return on average common stockholders’ equity (annualized) (1)					20		%	19		%	20		%	20		%	20		%
Financial Condition (at quarter end, in billions)
Cash and cash equivalents	(7	)%	(16	)%	$	20.3		$	24.2		$	32.6		$	27.9		$	21.8
Cash and investments segregated	91	%	15	%	16.2			14.1			13.9			13.6			8.5
Receivables from brokerage clients — net	(6	)%	(1	)%	21.1			21.4			20.5			21.7			22.4
Available for sale securities	(2	)%	3	%	56.5			54.6			60.0			66.6			57.6
Held to maturity securities	1	%	1	%	140.2			138.3			132.4			144.0			139.0
Bank loans — net	2	%	2	%	16.9			16.6			16.5			16.6			16.6
Total assets	3	%	1	%	279.0			276.3			282.8			296.5			272.1
Bank deposits	(2	)%	—		209.3			208.4			219.5			231.4			213.4
Payables to brokerage clients	28	%	15	%	35.6			31.0			29.7			32.7			27.9
Long-term debt	28	%	—		7.4			7.4			6.8			6.9			5.8
Stockholders’ equity	3	%	—		21.4			21.3			21.6			20.7			20.8
Other
Full-time equivalent employees (at quarter end, in thousands)	4	%	(3	)%	19.8			20.5			20.0			19.5			19.1
Capital expenditures — purchases of equipment, office facilities, and property, net (in millions)	22	%	10	%	$	190		$	173		$	181		$	159		$	156
Expenses excluding interest as a percentage of average client assets (annualized)					0.16		%	0.16		%	0.17		%	0.17		%	0.15		%
Clients’ Daily Average Trades (in thousands)
Revenue trades (2)	3	%	1	%	395			392			418			466			382
Asset-based trades (3)	(5	)%	(11	)%	123			138			149			188			129
Other trades (4)	16	%	8	%	200			186			210			213			172
Total	5	%	—		718			716			777			867			683
Average Revenue Per Revenue Trade (2)	(5	)%	—		$	6.94		$	6.94		$	7.19		$	7.13		$	7.27

⁽¹⁾ Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

⁽²⁾ Includes all client trades that generate trading revenue (i.e., commission revenue or principal transaction revenue); also known as DART.

⁽³⁾ Includes eligible trades executed by clients who participate in one or more of the company’s asset-based pricing relationships.

⁽⁴⁾ Includes all commission-free trades, including Schwab Mutual Fund OneSource^® funds and ETFs, and other proprietary products.

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THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)

	Three Months Ended September 30,												Nine Months Ended September 30,
	2019						2018						2019						2018
	Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate
Interest-earning assets
Cash and cash equivalents	$	22,288	$	123	2.16	%	$	18,623	$	94	1.98	%	$	24,506	$	432	2.33	%	$	16,164	$	217	1.78	%
Cash and investments segregated	16,140		92		2.25	%	10,253		51		1.94	%	14,771		264		2.36	%	12,002		149		1.64	%
Broker-related receivables	216		2		2.34	%	307		1		1.94	%	225		4		2.21	%	324		4		1.62	%
Receivables from brokerage clients	19,438		205		4.13	%	20,224		217		4.19	%	19,279		636		4.35	%	19,629		600		4.03	%
Available for sale securities (1)	53,487		366		2.71	%	55,283		328		2.34	%	58,738		1,203		2.72	%	52,797		859		2.16	%
Held to maturity securities	136,880		906		2.63	%	137,065		887		2.57	%	134,031		2,721		2.70	%	129,490		2,420		2.48	%
Bank loans	16,724		146		3.49	%	16,579		142		3.43	%	16,621		443		3.56	%	16,522		410		3.31	%
Total interest-earning assets	265,173		1,840		2.75	%	258,334		1,720		2.63	%	268,171		5,703		2.82	%	246,928		4,659		2.50	%
Other interest revenue			52						35						114						107
Total interest-earning assets	$	265,173	$	1,892	2.82	%	$	258,334	$	1,755	2.69	%	$	268,171	$	5,817	2.88	%	$	246,928	$	4,766	2.56	%
Funding sources
Bank deposits	$	208,592	$	166	0.32	%	$	208,666	$	158	0.30	%	$	213,089	$	616	0.39	%	$	193,010	$	339	0.23	%
Payables to brokerage clients	25,080		21		0.33	%	20,595		16		0.31	%	23,443		68		0.39	%	21,591		37		0.23	%
Short-term borrowings (2)	21		—		2.48	%	—		—		—		18		—		2.49	%	4,488		54		1.59	%
Long-term debt	7,425		67		3.58	%	5,790		51		3.52	%	7,122		192		3.59	%	5,053		131		3.46	%
Total interest-bearing liabilities	241,118		254		0.42	%	235,051		225		0.38	%	243,672		876		0.48	%	224,142		561		0.33	%
Non-interest-bearing funding sources	24,055						23,283						24,499						22,786
Other interest expense			7						3						20						8
Total funding sources	$	265,173	$	261	0.39	%	$	258,334	$	228	0.36	%	$	268,171	$	896	0.45	%	$	246,928	$	569	0.31	%
Net interest revenue			$	1,631	2.43	%			$	1,527	2.33	%			$	4,921	2.43	%			$	4,197	2.25	%

⁽¹⁾ Amounts have been calculated based on amortized cost.

⁽²⁾ Interest revenue or expense was less than $500,000 in the period or periods presented.

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THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)

	Three Months Ended September 30,												Nine Months Ended September 30,
	2019						2018						2019						2018
	Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee
Schwab money market funds	$	177,892	$	133	0.30	%	$	130,202	$	122	0.37	%	$	166,053	$	378	0.30	%	$	142,177	$	451	0.42	%
Schwab equity and bond funds, ETFs, and   collective trust funds (CTFs) (1)	274,005		75		0.11	%	235,148		78		0.13	%	260,034		219		0.11	%	221,818		228		0.14	%
Mutual Fund OneSource® and other non-   transaction fee funds	192,409		153		0.32	%	209,560		171		0.32	%	190,847		452		0.32	%	216,699		524		0.32	%
Other third-party mutual funds and ETFs (2)	486,285		84		0.07	%	342,316		75		0.09	%	469,901		238		0.07	%	329,033		216		0.09	%
Total mutual funds, ETFs, and CTFs (3)	$	1,130,591	445		0.16	%	$	917,226	446		0.19	%	$	1,086,835	1,287		0.16	%	$	909,727	1,419		0.21	%
Advice solutions (3)
Fee-based	$	251,591	305		0.48	%	$	234,338	294		0.50	%	$	241,678	878		0.49	%	$	228,326	859		0.50	%
Non-fee-based	71,195		—		—		65,146		—		—		69,136		—		—		62,377		—		—
Total advice solutions	$	322,786	305		0.37	%	$	299,484	294		0.39	%	$	310,814	878		0.38	%	$	290,703	859		0.40	%
Other balance-based fees (1,4)	421,241		56		0.05	%	384,038		52		0.05	%	407,762		162		0.05	%	388,836		158		0.05	%
Other (5)			19						17						39						38
Total asset management and administration fees			$	825					$	809					$	2,366					$	2,474

⁽¹⁾ Beginning in the first quarter of 2019, a change was made to move CTFs from other balance-based fees. Prior periods have been recast to reflect this change.

⁽²⁾ Includes Schwab ETF OneSource^TM.

⁽³⁾ Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Private Client^TM, Schwab Managed Portfolios^TM, Managed Account Select^®, Schwab Advisor Network^®, Windhaven^® Strategies, ThomasPartners^® Strategies, Schwab Index Advantage^® advised retirement plan balances, Schwab Intelligent Portfolios^®, Institutional Intelligent Portfolios^®, and Schwab Intelligent Portfolios Premium^TM; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. For the total end of period view, please see the Monthly Activity Report.

⁽⁴⁾ Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.

⁽⁵⁾ Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

- 7 -

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

	Q3-19 % Change				2019									2018
	vs.		vs.		Third			Second			First			Fourth			Third
(In billions, at quarter end, except as noted)	Q3-18		Q2-19		Quarter			Quarter			Quarter			Quarter			Quarter
Assets in client accounts
Schwab One®, certain cash equivalents and bank deposits	1	%	2	%	$	242.9		$	237.3		$	247.0		$	261.2		$	239.5
Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs
Money market funds (1)	46	%	11	%	187.0			168.1			159.7			153.5			128.5
Equity and bond funds and CTFs (2,3)	5	%	1	%	112.4			110.9			106.2			94.3			107.4
Total proprietary mutual funds and CTFs	27	%	7	%	299.4			279.0			265.9			247.8			235.9
Mutual Fund Marketplace® (4)
Mutual Fund OneSource® and other non-transaction fee funds	(8	)%	(2	)%	194.7			197.8			195.1			180.5			212.6
Mutual fund clearing services	8	%	2	%	197.2			192.9			182.7			164.4			182.2
Other third-party mutual funds	5	%	1	%	776.8			767.3			737.2			650.4			740.1
Total Mutual Fund Marketplace	3	%	1	%	1,168.7			1,158.0			1,115.0			995.3			1,134.9
Total mutual fund assets	7	%	2	%	1,468.1			1,437.0			1,380.9			1,243.1			1,370.8
Exchange-traded funds (ETFs)
Proprietary ETFs (3)	20	%	5	%	150.8			143.6			134.7			115.2			125.2
Schwab ETF OneSource™ (4)	183	%	7	%	94.1			88.1			82.5			30.6			33.3
Other third-party ETFs	(5	)%	2	%	321.6			315.7			303.7			309.9			338.6
Total ETF assets	14	%	3	%	566.5			547.4			520.9			455.7			497.1
Equity and other securities (2)	(1	)%	1	%	1,178.0			1,168.3			1,131.3			1,005.4			1,186.7
Fixed income securities	14	%	—		332.3			332.1			324.1			306.1			290.4
Margin loans outstanding	(7	)%	(2	)%	(19.4		)	(19.7		)	(18.8		)	(19.3		)	(20.8		)
Total client assets	6	%	2	%	$	3,768.4		$	3,702.4		$	3,585.4		$	3,252.2		$	3,563.7
Client assets by business
Investor Services	5	%	2	%	$	1,978.7		$	1,946.5		$	1,886.7		$	1,701.7		$	1,876.9
Advisor Services	6	%	2	%	1,789.7			1,755.9			1,698.7			1,550.5			1,686.8
Total client assets	6	%	2	%	$	3,768.4		$	3,702.4		$	3,585.4		$	3,252.2		$	3,563.7
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services	(9	)%	42	%	$	25.4		$	17.9		$	29.2		$	28.7		$	27.8
Advisor Services	21	%	62	%	31.2			19.3			22.5			26.6			25.7
Total net new assets	6	%	52	%	$	56.6		$	37.2		$	51.7		$	55.3		$	53.5
Net market gains (losses)	(92	)%	(88	)%	9.4			79.8			281.5			(366.8		)	113.2
Net growth (decline)	(60	)%	(44	)%	$	66.0		$	117.0		$	333.2		$	(311.5	)	$	166.7
New brokerage accounts (in thousands, for the quarter ended)	(2	)%	(6	)%	363			386			386			380			369
Client accounts (in thousands)
Active brokerage accounts (5)	6	%	1	%	12,118			11,967			11,787			11,593			11,423
Banking accounts	6	%	2	%	1,361			1,336			1,300			1,302			1,283
Corporate retirement plan participants	6	%	1	%	1,718			1,698			1,684			1,655			1,627

⁽¹⁾ Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations.

⁽²⁾ Beginning in the first quarter of 2019, a change was made to move CTFs from equity and other securities. Prior periods have been recast to reflect this change.

⁽³⁾ Includes balances held on and off the Schwab platform. As of September 30, 2019, off-platform equity and bond funds, CTFs, and ETFs were $12.6 billion, $4.8 billion, and $39.9 billion, respectively.

⁽⁴⁾ Excludes all proprietary mutual funds and ETFs.

⁽⁵⁾ In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.

- 8 -

The Charles Schwab Corporation Monthly Activity Report For September 2019

	2018								2019																		Change
	Sep		Oct		Nov		Dec		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep		Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average	26,458		25,116		25,538		23,327		25,000		25,916		25,929		26,593		24,815		26,600		26,864		26,403		26,917		2	%	2	%
Nasdaq Composite	8,046		7,306		7,331		6,635		7,282		7,533		7,729		8,095		7,453		8,006		8,175		7,963		7,999		—		(1	)%
Standard & Poor’s 500	2,914		2,712		2,760		2,507		2,704		2,784		2,834		2,946		2,752		2,942		2,980		2,926		2,977		2	%	2	%
Client Assets (in billions of dollars)
Beginning Client Assets	3,555.9		3,563.7		3,388.1		3,431.9		3,252.2		3,447.7		3,533.0		3,585.4		3,668.5		3,530.6		3,702.4		3,746.7		3,716.5
Net New Assets	16.4		14.9		15.6		24.8		15.1		18.3		18.3		(0.3	)	17.3		20.2		19.3		19.9		17.4		(13	)%	6	%
Net Market Gains (Losses)	(8.6	)	(190.5	)	28.2		(204.5	)	180.4		67.0		34.1		83.4		(155.2	)	151.6		25.0		(50.1	)	34.5
Total Client Assets (at month end)	3,563.7		3,388.1		3,431.9		3,252.2		3,447.7		3,533.0		3,585.4		3,668.5		3,530.6		3,702.4		3,746.7		3,716.5		3,768.4		1	%	6	%
Core Net New Assets (1)	16.4		14.9		15.6		24.8		15.1		18.3		18.3		(0.3	)	17.3		20.2		19.3		19.9		17.4		(13	)%	6	%
Receiving Ongoing Advisory Services (at month end)
Investor Services	292.7		280.3		284.7		272.4		286.9		294.2		298.4		305.7		298.5		311.6		314.8		314.2		318.5		1	%	9	%
Advisor Services (2)	1,559.2		1,485.8		1,510.1		1,436.1		1,514.2		1,551.6		1,572.8		1,608.0		1,554.6		1,626.6		1,646.1		1,635.7		1,659.4		1	%	6	%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts (3)	11,423		11,479		11,529		11,593		11,653		11,712		11,787		11,870		11,929		11,967		12,026		12,085		12,118		—		6	%
Banking Accounts (4)	1,283		1,289		1,297		1,302		1,312		1,313		1,300		1,310		1,323		1,336		1,352		1,361		1,361		—		6	%
Corporate Retirement Plan Participants	1,627		1,634		1,639		1,655		1,679		1,685		1,684		1,690		1,699		1,698		1,701		1,711		1,718		—		6	%
Client Activity
New Brokerage Accounts (in thousands)	119		133		115		132		131		115		140		147		123		116		129		126		108		(14	)%	(9	)%
Inbound Calls (in thousands)	1,715		1,976		1,681		1,839		1,924		1,742		1,882		1,966		1,671		1,595		1,773		1,759		1,570		(11	)%	(8	)%
Web Logins (in thousands)	53,923		59,261		54,654		53,920		64,563		60,121		63,692		65,669		61,522		60,824		65,809		63,928		63,530		(1	)%	18	%
Client Cash as a Percentage of Client Assets (5)	10.3	%	11.1	%	11.2	%	12.8	%	11.7	%	11.5	%	11.3	%	10.9	%	11.3	%	10.9	%	11.0	%	11.3	%	11.4	%	10 bp		110 bp
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells)(6, 7) (in millions of dollars)
Large Capitalization Stock	311		308		331		717		1,343		1,109		1,045		980		1,114		206		717		328		23
Small / Mid Capitalization Stock	151		(1,344	)	(456	)	(1,414	)	1,329		638		302		136		(190	)	18		10		(374	)	(212	)
International	(88	)	(109	)	(418	)	(2,163	)	2,212		1,086		1,274		863		(100	)	225		744		(1,390	)	(355	)
Specialized	73		(914	)	(397	)	(2,105	)	124		609		750		(109	)	(440	)	341		418		353		583
Hybrid	(324	)	(1,313	)	(1,248	)	(2,985	)	(321	)	(309	)	(357	)	(228	)	(316	)	(181	)	(366	)	(569	)	(372	)
Taxable Bond	1,371		(351	)	(836	)	(4,342	)	3,956		2,871		1,923		3,029		1,821		2,378		3,806		2,725		2,935
Tax-Free Bond	262		(591	)	(407	)	(409	)	1,184		1,111		1,133		760		1,057		682		960		760		593
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (6)	(1,538	)	(5,734	)	(7,955	)	(21,372	)	6,740		2,312		1,850		1,860		86		7		2,151		(1,281	)	(573	)
Exchange-Traded Funds (7)	3,294		1,420		4,524		8,671		3,087		4,803		4,220		3,571		2,860		3,662		4,138		3,114		3,768
Money Market Funds	(1,933	)	2,546		8,515		13,548		4,944		(1,577	)	1,785		(2,097	)	5,067		4,570		6,143		6,068		5,833
Average Interest-Earning Assets(8)
(in millions of dollars)	261,741		264,156		265,648		274,913		277,068		270,718		272,727		270,308		263,718		262,759		263,993		265,005		266,430		1	%	2	%

⁽¹⁾ Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client. These flows may span multiple reporting periods.

⁽²⁾ Excludes Retirement Business Services.

⁽³⁾ In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.

⁽⁴⁾ In March 2019, banking accounts were reduced by approximately 23,000 as a result of inactive account closures.

⁽⁵⁾ Schwab One^®, certain cash equivalents, bank deposits, and money market fund balances as a percentage of total client assets.

⁽⁶⁾ Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers. Excludes money market fund transactions.

⁽⁷⁾ Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

⁽⁸⁾ Represents average total interest-earning assets on the company’s balance sheet.

- 9 -

XML

Document and Entity Information	Oct. 15, 2019
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Oct. 15, 2019
Entity File Number	1-9700
Entity Registrant Name	SCHWAB CHARLES CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3025021
Entity Address, Address Line One	211 Main Street
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94105
City Area Code	415
Local Phone Number	667-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000316709
Amendment Flag	false
Common Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock – $.01 par value per share
Trading Symbol	SCHW
Security Exchange Name	NYSE
Series C Preferred Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th ownership interest in a share of 6.00% Non-Cumulative Preferred Stock, Series C
Trading Symbol	SCHW PrC
Security Exchange Name	NYSE
Series D Preferred Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th ownership interest in a share of 5.95% Non-Cumulative Preferred Stock, Series D
Trading Symbol	SCHW PrD
Security Exchange Name	NYSE