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 September 30, 2019

or

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

For the transition period from ________ to ________

Commission File Number: 1-9700

THE  CHARLES  SCHWAB  CORPORATION

(Exact name of registrant as specified in its charter)

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 and zip code)

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

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 (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 every Interactive Data File required to be submitted 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 such files).

Yes ☒   No ☐

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

Large accelerated filer ☒                        Accelerated filer ☐

Non-accelerated filer☐                        Smaller reporting company ☐         

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. ☐

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.

1,282,287,840 shares of $.01 par value Common Stock outstanding on October 31, 2019

THE CHARLES SCHWAB CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2019

 Index

Part I - Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):
		Statements of Income	20
		Statements of Comprehensive Income	21
		Balance Sheets	22
		Statements of Stockholders’ Equity	23
		Statements of Cash Flows	24-25
		Notes	26-56
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1-18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
	Item 4.	Controls and Procedures	57
Part II - Other Information
	Item 1.	Legal Proceedings	58
	Item 1A.	Risk Factors	58
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 3.	Defaults Upon Senior Securities	58
	Item 4.	Mine Safety Disclosures	59
	Item 5.	Other Information	59
	Item 6.	Exhibits	60-61
Signature			62

Part I – FINANCIAL INFORMATION

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

INTRODUCTION

The Charles Schwab Corporation (CSC) is a savings and loan holding company and engages, through its subsidiaries, in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Significant business subsidiaries of CSC include the following:

• Charles Schwab & Co., Inc. (CS&Co), a securities broker-dealer;

• Charles Schwab Bank (CSB), a federal savings bank; and

• Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds^®) and for Schwab’s exchange-traded funds (Schwab ETFs™).

Unless otherwise indicated, the terms “Schwab,” “the Company,” “we,” “us,” or “our” mean CSC together with its consolidated subsidiaries.

Schwab 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, and retirement plan services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking, and support services, as well as retirement business services, to independent registered investment advisors (RIAs), independent retirement advisors, and recordkeepers.

Schwab was founded on the belief that all Americans deserve access to a better investing experience. Although much has changed in the intervening years, our purpose remains clear – to champion every client’s goals with passion and integrity. Guided by this purpose and our vision of creating the most trusted leader in investment services, management has adopted a strategy described as “Through Clients’ Eyes.”

This strategy emphasizes placing clients’ perspectives, needs, and desires at the forefront. Because investing plays a fundamental role in building financial security, we strive to deliver a better investing experience for our clients – individual investors and the people and institutions who serve them – by disrupting longstanding industry practices on their behalf and providing superior service. We also aim to offer a broad range of products and solutions to meet client needs with a focus on transparency, value, and trust. In addition, management works to couple Schwab’s scale and resources with ongoing expense discipline to keep costs low and ensure that products and solutions are affordable as well as responsive to client needs. In combination, these are the key elements of our “no trade-offs” approach to serving investors. We believe that following this strategy is the best way to maximize our market valuation and stockholder returns over time.

Management estimates that investable wealth in the United States (U.S.) (consisting of assets in defined contribution, retail wealth management and brokerage, and registered investment advisor channels, along with bank deposits) currently exceeds $45 trillion, which means the Company’s $3.77 trillion in client assets leaves substantial opportunity for growth. Our strategy is based on the principle that developing trusted relationships will translate into more assets from both new and existing clients, ultimately driving more revenue, and along with expense discipline and thoughtful capital management, will generate earnings growth and build long-term stockholder value.

This Management’s Discussion and Analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (2018 Form 10-K).

On our website, https://www.aboutschwab.com, we post the following filings after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC): annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. In addition, the website also includes the Dodd-Frank stress test results, our regulatory capital disclosures based on Basel III, and our quarterly average liquidity coverage ratio (LCR). The SEC maintains a website at https://www.sec.gov that contains reports, proxy statements, and other information that we file electronically with them.

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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)

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,” “could,” “would,” “expand,” and other similar expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

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

• Maximizing our market valuation and stockholder returns over time; our belief that developing trusted relationships will translate into more client assets which drives revenue and, along with expense discipline and thoughtful capital management, generates earnings growth and builds stockholder value (see Introduction in Part I, Item 2);

• Investments to drive efficiency and scale to support our expanding client base (see Overview);

• Delivery of business growth and meaningful capital returns (see Overview);

• The acquisition of assets of USAA’s Investment Management Company (USAA-IMCO) and entering into a referral agreement (see Overview, Risk Management – Liquidity Risk, Capital Management, and Commitments and Contingencies in Part I, Item 1, Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 10);

• The impact of the recent pricing reductions on the Company’s value proposition, competitive positioning, long-term growth in total client assets and client accounts, trading revenue, and total net revenues (see Overview);

• 2019 capital expenditures (see Results of Operations);

• The phase-out of the use of LIBOR (see Risk Management);

• The expected impact of new accounting standards not yet adopted (see New Accounting Standards in Item 1 – Note 2);

• The likelihood of indemnification and guarantee payment obligations (see Commitments and Contingencies in Item 1 – Note 10); and

• The impact of legal proceedings and regulatory matters (see Commitments and Contingencies in Item 1 – Note 10 and Legal Proceedings in Part II, Item 1).

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:

• General market conditions, including the level of interest rates, equity valuations, and trading activity;

• Our ability to attract and retain clients, develop trusted relationships, and grow client assets;

• Client use of our advisory solutions and other products and services;

• The level of client assets, including cash balances;

• Competitive pressure on pricing, including deposit rates;

• Client sensitivity to interest rates;

• Regulatory guidance;

• Capital and liquidity needs and management;

• Our ability to manage expenses;

• Our ability to develop and launch new and enhanced products, services, and capabilities, as well as implement infrastructure, in a timely and successful manner;

• The effect of pricing reductions on client acquisition, retention and asset levels, including cash balances;

• The Company’s ability to monetize client assets;

• The timing and the ability of us and USAA-IMCO to satisfy the closing conditions in the purchase agreement, including regulatory approvals and the implementation of conversion plans;

• The timing of campus expansion work and technology projects;

• Adverse developments in litigation or regulatory matters and any related charges; and

• Potential breaches of contractual terms for which we have indemnification and guarantee obligations.

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 2018 Form 10-K.

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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)

OVERVIEW

Management focuses on several client activity and financial metrics in evaluating Schwab’s financial position and operating performance. Results for the third quarters and first nine months of 2019 and 2018 are:

	Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
	2019			2018					2019			2018
Client Metrics
Net new client assets (in billions) (1)	$	56.6		$	53.5		6	%	$	145.5		$	78.6		85	%
Core net new client assets (in billions)	$	56.6		$	53.5		6	%	$	145.5		$	172.5		(16	)%
Client assets (in billions, at quarter end)	$	3,768.4		$	3,563.7		6	%
Average client assets (in billions)	$	3,736.1		$	3,508.1		6	%	$	3,611.0		$	3,420.2		6	%
New brokerage accounts (in thousands)	363			369			(2	)%	1,135			1,196			(5	)%
Active brokerage accounts (in thousands, at quarter end)	12,118			11,423			6	%
Assets receiving ongoing advisory services (in billions, at quarter end)	$	1,977.9		$	1,851.9		7	%
Client cash as a percentage of client assets (at quarter end)	11.4		%	10.3		%
Company Financial Metrics
Total net revenues	$	2,711		$	2,579		5	%	$	8,115		$	7,463		9	%
Total expenses excluding interest	1,475			1,360			8	%	4,379			4,111			7	%
Income before taxes on income	1,236			1,219			1	%	3,736			3,352			11	%
Taxes on income	285			296			(4	)%	884			780			13	%
Net income	951			923			3	%	2,852			2,572			11	%
Preferred stock dividends and other	38			38			—		127			128			(1	)%
Net income available to common stockholders	$	913		$	885		3	%	$	2,725		$	2,444		11	%
Earnings per common share — diluted	$	.70		$	.65		8	%	$	2.05		$	1.79		15	%
Net revenue growth from prior year	5		%	19		%			9		%	17		%
Pre-tax profit margin	45.6		%	47.3		%			46.0		%	44.9		%
Return on average common stockholders’ equity	20		%	20		%			20		%	19		%
Expenses excluding interest as a percentage of average client assets (annualized)	0.16		%	0.15		%			0.16		%	0.16		%
Consolidated Tier 1 Leverage Ratio (at quarter end)	7.3		%	7.5		%

⁽¹⁾ The first nine months of 2018 includes outflows of $93.9 billion from certain mutual fund clearing services clients.

During the first nine months of 2019, the equity markets showed noteworthy durability, as the S&P 500 remained up nearly 20% for the year through September 30^th. Concerns persisted, however, regarding global trade and a generally softening economic outlook. The Federal Reserve moved forward with mid-cycle easing, cutting short-term interest rates 25 bps in both July and September, and long-term rates also declined significantly. Through this environment, Schwab’s net income grew to $951 million and $2.9 billion in the third quarter and first nine months of 2019, respectively, while diluted earnings per share reached $.70 and $2.05 in the third quarter and first nine months of 2019, representing increases of 8% and 15% from the comparable periods in 2018. Our continued success with clients and our full-service model enabled us to deliver total net revenues of $2.7 billion in the third quarter and $8.1 billion in the first nine months of 2019, up 5% and 9%, respectively, from the comparable periods in 2018.

Largely as a result of generally higher investment yields and higher client cash balances, net interest revenue rose 7% in the third quarter of 2019 to $1.6 billion, which brought our 2019 year-to-date net interest revenue to $4.9 billion, a 17% increase from the first nine months of 2018. Growing client balances in purchased money market funds, advice solutions, and other third-party mutual funds and ETFs helped push asset management and administration fees to $825 million in the third quarter of 2019, up 2% from the third quarter of 2018. Asset management and administration fees totaled $2.4 billion for the first nine months of 2019, down 4% from the same period in 2018, primarily as a result of lower sweep money market fund revenue due to the transfer of sweep money market funds to bank and broker-dealer sweep, as well as declines in Mutual Fund OneSource^®

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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)

balances. Trading revenue decreased 2% and 5% during the third quarter and first nine months of 2019, respectively, compared with the same periods in 2018, due primarily to lower average revenue per revenue trade.

Total expenses excluding interest increased 8% and 7% during the third quarter and first nine months of 2019, respectively. Year-to-date 2019 expenses reflect growth in headcount relative to 2018 and our investments to drive efficiency and scale as we support our expanding client base. The third quarter also included $62 million of 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% expense growth in the third quarter.

Clients opened 363,000 new brokerage accounts during the third quarter, bringing our 2019 year-to-date total to 1.1 million, and helping raise active brokerage accounts to 12.1 million at quarter-end, up 6% from September 30, 2018. Core net new assets of $56.6 billion during the third quarter brought our total to $145.5 billion for the first nine months of 2019, representing an annualized organic growth rate of 6%. Client demand for help and guidance continued to grow, as client assets receiving ongoing advisory services reached $1.98 trillion at quarter-end, up 7% from September 30, 2018. Total client assets rose to $3.77 trillion as of September 30, 2019, representing an increase of $204.7 billion, or 6% from September 30, 2018.

Consistent with our approach to deliver both business growth and meaningful capital returns, we completed $771 million and $2.0 billion of share repurchases during the third quarter and first nine months of 2019, respectively, under our current $4.0 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, as consolidated total assets increased $2.7 billion during the third quarter to $279.0 billion. We ended the third quarter of 2019 with a Tier 1 Leverage Ratio of 7.3%, and produced a return on equity of 20% for both the third quarter and first nine months of 2019.

On July 25, 2019, the Company announced a definitive agreement to acquire assets of USAA-IMCO, including over one million brokerage and managed portfolio accounts with approximately $90 billion in client assets, for $1.8 billion in cash. The companies have also agreed to enter into a long-term referral agreement, effective at closing of the acquisition, that would make Schwab the exclusive wealth management and brokerage provider for USAA members. The transaction is expected to close in mid-2020, subject to satisfaction of closing conditions, including regulatory approvals and the implementation of conversion plans.

Effective October 7, 2019, CS&Co eliminated online trading commissions for U.S. and Canadian-listed stocks and ETFs, as well as the base charge on options. These pricing reductions are consistent with Founder and Chairman Charles Schwab’s vision of making investing accessible to all. Management believes they enhance both our value proposition and our competitive positioning, and will contribute to long-term growth in total client assets and client accounts at Schwab. Based on trading volumes in the third quarter of 2019, we estimate that these pricing reductions were equivalent to approximately $90-100 million of third quarter trading revenue and 3-4% of total net revenues.

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THE CHARLES SCHWAB CORPORATION

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

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

Current Regulatory Environment and Other Developments

In October 2019, the Board of Governors of the Federal Reserve System (Federal Reserve) issued a final enhanced prudential standards rule, and the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) jointly issued a final capital and liquidity rule. Together, the two rules establish a revised framework for applying enhanced prudential standards and capital and liquidity requirements to large U.S. banking organizations with more than $100 billion in total assets, with four categories of standards that reflect the risks of banking organizations in each group. CSC will be in Category III based on having $250-700 billion in total assets and less than $75 billion in cross-jurisdictional activity.

The Federal Reserve final rule, largely unchanged from its October 2018 proposal, for the first time makes large savings and loan holding companies such as CSC subject to enhanced prudential standards, tailoring those regulatory requirements relating to capital stress testing, risk management, liquidity risk management, and single-counterparty credit limits based on an institution’s asset size and four other risk factors. The rule provides that Category III banking organizations will be subject to annual supervisory stress testing and biennial company-run stress testing. The interagency rule similarly tailors requirements under the agencies’ regulatory capital, LCR, and proposed net stable funding ratio rules for banking organizations in each of the four categories. Under the rule, banking organizations in Category III are no longer required to calculate their risk-weighted assets using the “advanced approaches” framework or to include accumulated other comprehensive income (AOCI) in calculating their regulatory capital; however, they will continue to be subject to the supplementary leverage ratio and any future countercyclical capital buffer imposed by the banking agencies. As a Category III banking organization which has less than $75 billion in weighted short-term wholesale funding, as defined in the rule, Schwab will be subject to a reduced LCR requirement calibrated at 85% of the full LCR requirement.

Although the Federal Reserve announced in its final rule that additional capital planning proposals would be issued at a later date, the agency did indicate that all Category III firms, including savings and loan holding companies, will be required to submit annual capital plans that will be subject to qualitative and quantitative assessments evaluated as part of the Comprehensive Capital Analysis and Review (CCAR) process.

In a separate rulemaking, the Federal Reserve and the FDIC excluded savings and loan holding companies such as CSC from any resolution planning requirement.

Schwab is currently assessing the overall impact of the final rules on its capital and liquidity requirements, as well as the stress testing, risk management, and other operational areas that will be affected by the rules.

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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)

RESULTS OF OPERATIONS

Total Net Revenues

The following tables present a comparison of revenue by category:

			2019					2018
Three Months Ended September 30,	Percent Change		Amount			% of Total Net Revenues		Amount			% of Total Net Revenues
Net interest revenue
Interest revenue	8	%	$	1,892		70	%	$	1,755		68	%
Interest expense	14	%	(261		)	(10	)%	(228		)	(9	)%
Net interest revenue	7	%	1,631			60	%	1,527			59	%
Asset management and administration fees
Mutual funds, ETFs, and collective trust funds (CTFs) (1)	—		445			16	%	446			17	%
Advice solutions	4	%	305			11	%	294			11	%
Other (1)	9	%	75			3	%	69			3	%
Asset management and administration fees	2	%	825			30	%	809			31	%
Trading revenue
Commissions	3	%	159			6	%	155			6	%
Principal transactions	(38	)%	13			—		21			1	%
Trading revenue	(2	)%	172			6	%	176			7	%
Other	24	%	83			4	%	67			3	%
Total net revenues	5	%	$	2,711		100	%	$	2,579		100	%

			2019					2018
Nine Months Ended September 30,	Percent Change		Amount			% of Total Net Revenues		Amount			% of Total Net Revenues
Net interest revenue
Interest revenue	22	%	$	5,817		72	%	$	4,766		64	%
Interest expense	57	%	(896		)	(11	)%	(569		)	(8	)%
Net interest revenue	17	%	4,921			61	%	4,197			56	%
Asset management and administration fees
Mutual funds, ETFs, and collective trust funds (CTFs) (1)	(9	)%	1,287			16	%	1,419			19	%
Advice solutions	2	%	878			11	%	859			11	%
Other (1)	3	%	201			2	%	196			3	%
Asset management and administration fees	(4	)%	2,366			29	%	2,474			33	%
Trading revenue
Commissions	(5	)%	477			6	%	501			7	%
Principal transactions	(4	)%	54			1	%	56			1	%
Trading revenue	(5	)%	531			7	%	557			8	%
Other	26	%	297			3	%	235			3	%
Total net revenues	9	%	$	8,115		100	%	$	7,463		100	%

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

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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)

Net Interest Revenue

Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates at the time of origination or purchase, changes in interest rates on floating rate securities and loans, and changes in prepayment levels for mortgage-related securities and loans. Interest rates across maturities declined during the first nine months of 2019 relative to the end of 2018. During the second and third quarters, to maintain our overall targeted interest rate risk profile, we began positioning the securities in our banking entities’ investment portfolios to include a higher percentage of fixed-rate, longer duration investments to lower our interest rate sensitivities to further declines in market interest rates.

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

	2019						2018
Three Months Ended September 30,	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	%
Cash and investments segregated	16,140		92		2.25	%	10,253		51		1.94	%
Broker-related receivables	216		2		2.34	%	307		1		1.94	%
Receivables from brokerage clients	19,438		205		4.13	%	20,224		217		4.19	%
Available for sale securities (1)	53,487		366		2.71	%	55,283		328		2.34	%
Held to maturity securities	136,880		906		2.63	%	137,065		887		2.57	%
Bank loans	16,724		146		3.49	%	16,579		142		3.43	%
Total interest-earning assets	265,173		1,840		2.75	%	258,334		1,720		2.63	%
Other interest revenue			52						35
Total interest-earning assets	$	265,173	$	1,892	2.82	%	$	258,334	$	1,755	2.69	%
Funding sources
Bank deposits	$	208,592	$	166	0.32	%	$	208,666	$	158	0.30	%
Payables to brokerage clients	25,080		21		0.33	%	20,595		16		0.31	%
Short-term borrowings (2)	21		—		2.48	%	—		—		—
Long-term debt	7,425		67		3.58	%	5,790		51		3.52	%
Total interest-bearing liabilities	241,118		254		0.42	%	235,051		225		0.38	%
Non-interest-bearing funding sources	24,055						23,283
Other interest expense			7						3
Total funding sources	$	265,173	$	261	0.39	%	$	258,334	$	228	0.36	%
Net interest revenue			$	1,631	2.43	%			$	1,527	2.33	%

⁽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

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

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

	2019						2018
Nine Months Ended September 30,	Average Balance		Interest Revenue/ Expense		Average Yield/Rate		Average Balance		Interest Revenue/ Expense		Average Yield/Rate
Interest-earning assets
Cash and cash equivalents	$	24,506	$	432	2.33	%	$	16,164	$	217	1.78	%
Cash and investments segregated	14,771		264		2.36	%	12,002		149		1.64	%
Broker-related receivables	225		4		2.21	%	324		4		1.62	%
Receivables from brokerage clients	19,279		636		4.35	%	19,629		600		4.03	%
Available for sale securities (1)	58,738		1,203		2.72	%	52,797		859		2.16	%
Held to maturity securities	134,031		2,721		2.70	%	129,490		2,420		2.48	%
Bank loans	16,621		443		3.56	%	16,522		410		3.31	%
Total interest-earning assets	268,171		5,703		2.82	%	246,928		4,659		2.50	%
Other interest revenue			114						107
Total interest-earning assets	$	268,171	$	5,817	2.88	%	$	246,928	$	4,766	2.56	%
Funding sources
Bank deposits	$	213,089	$	616	0.39	%	$	193,010	$	339	0.23	%
Payables to brokerage clients	23,443		68		0.39	%	21,591		37		0.23	%
Short-term borrowings (2)	18		—		2.49	%	4,488		54		1.59	%
Long-term debt	7,122		192		3.59	%	5,053		131		3.46	%
Total interest-bearing liabilities	243,672		876		0.48	%	224,142		561		0.33	%
Non-interest-bearing funding sources	24,499						22,786
Other interest expense			20						8
Total funding sources	$	268,171	$	896	0.45	%	$	246,928	$	569	0.31	%
Net interest revenue			$	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.

Net interest revenue increased $104 million, or 7%, and $724 million, or 17% in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018, due to generally higher investment yields and growth in interest-earning assets.

Our net interest margin was 2.43% during both the third quarter and first nine months of 2019, up from 2.33% and 2.25% during the third quarter and first nine months of 2018. These increases were driven primarily by higher yields received on interest-earning assets due in part to the Federal Reserve’s 2018 interest rate increases, partially offset by higher interest rates paid on bank deposits and other interest-bearing liabilities.

Average interest-earning assets for the third quarter and first nine months of 2019 were higher by 3% and 9%, respectively, compared to the same periods in 2018. The increase in average interest-earning assets for the third quarter of 2019 primarily reflects higher client cash balances; the increase for the first nine months of 2019 primarily reflects higher bank deposits due to transfers from sweep money market funds to bank sweep, as well as higher client cash balances. Short-term borrowings in 2018 were primarily the result of Federal Home Loan Bank (FHLB) advances, which were used to provide temporary funding for investments ahead of deposit growth during the first half of 2018. There were no FHLB borrowings in the first nine months of 2019.

- 8 -

THE CHARLES SCHWAB CORPORATION

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

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

Asset Management and Administration Fees

The following tables present asset management and administration fees, average client assets, and average fee yields:

Three Months Ended September 30,	2019						2018
	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	%
Schwab equity and bond funds, ETFs, and CTFs (1)	274,005		75		0.11	%	235,148		78		0.13	%
Mutual Fund OneSource® and other non-transaction fee funds	192,409		153		0.32	%	209,560		171		0.32	%
Other third-party mutual funds and ETFs (2)	486,285		84		0.07	%	342,316		75		0.09	%
Total mutual funds, ETFs and CTFs (1,3)	$	1,130,591	445		0.16	%	$	917,226	446		0.19	%
Advice solutions (3)
Fee-based	$	251,591	305		0.48	%	$	234,338	294		0.50	%
Non-fee-based	71,195		—		—		65,146		—		—
Total advice solutions	$	322,786	305		0.37	%	$	299,484	294		0.39	%
Other balance-based fees (1,4)	421,241		56		0.05	%	384,038		52		0.05	%
Other (5)			19						17
Total asset management and administration fees			$	825					$	809

	2019						2018
Nine Months Ended September 30,	Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee
Schwab money market funds	$	166,053	$	378	0.30	%	$	142,177	$	451	0.42	%
Schwab equity and bond funds, ETFs, and CTFs (1)	260,034		219		0.11	%	221,818		228		0.14	%
Mutual Fund OneSource® and other non-transaction fee funds	190,847		452		0.32	%	216,699		524		0.32	%
Other third-party mutual funds and ETFs (2)	469,901		238		0.07	%	329,033		216		0.09	%
Total mutual funds, ETFs and CTFs (1,3)	$	1,086,835	1,287		0.16	%	$	909,727	1,419		0.21	%
Advice solutions (3)
Fee-based	$	241,678	878		0.49	%	$	228,326	859		0.50	%
Non-fee-based	69,136		—		—		62,377		—		—
Total advice solutions	$	310,814	878		0.38	%	$	290,703	859		0.40	%
Other balance-based fees (1,4)	407,762		162		0.05	%	388,836		158		0.05	%
Other (5)			39						38
Total asset management and administration fees			$	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™.

⁽³⁾ Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above.

⁽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.

Asset management and administration fees increased by $16 million, or 2%, in the third quarter of 2019 and decreased by

$108 million, or 4%, in the first nine months of 2019, compared to the same periods in 2018. The increase in asset management and administration fees for the third quarter of 2019 was due to higher revenue from growing asset balances in purchased money market funds, other third-party mutual funds and ETFs, and increased enrollment in advice solutions, compared to the same period in 2018. The decrease in asset management and administration fees for the first nine months of 2019 was due to lower sweep money market fund revenue as a result of transfers to bank and broker-dealer sweep, as well as client asset allocation choices including continued reduced usage of Mutual Fund OneSource^®. Part of the year-to-date decline was offset by revenue from growing asset balances in purchased money market funds, other third-party mutual funds and ETFs, and increased enrollment in advice solutions.

The following tables present a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource^® and other non-transaction fee (NTF) funds. These funds generated 44% of 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)

asset management and administration fees earned during both the third quarter and first nine months of 2019, compared to 46% and 49% for the same periods in 2018:

	Schwab Money Market Funds					Schwab Equity and Bond Funds, ETFs, and CTFs (1)				Mutual Fund OneSource®  and Other NTF funds
Three Months Ended September 30,	2019		2018			2019		2018		2019			2018
Balance at beginning of period	$	168,064	$	134,166		$	254,460	$	216,883	$	197,777		$	212,513
Net inflows (outflows)	18,044		(6,204		)	7,408		6,290		(5,586		)	(7,126		)
Net market gains (losses) and other	843		522			1,296		9,349		2,482			7,228
Balance at end of period	$	186,951	$	128,484		$	263,164	$	232,522	$	194,673		$	212,615

	Schwab Money Market Funds					Schwab Equity and Bond Funds, ETFs, and CTFs (1)				Mutual Fund OneSource®  and Other NTF funds
Nine Months Ended September 30,	2019		2018			2019		2018		2019			2018
Balance at beginning of period	$	153,472	$	163,650		$	209,471	$	196,784	$	180,532		$	225,202
Net inflows (outflows)	30,735		(36,645		)	20,789		24,746		(16,729		)	(25,403		)
Net market gains (losses) and other	2,744		1,479			32,904		10,992		30,870			12,816
Balance at end of period	$	186,951	$	128,484		$	263,164	$	232,522	$	194,673		$	212,615

⁽¹⁾ Beginning in the first quarter of 2019, CTFs are included in these balances. Prior periods have been recast to reflect this change.

Trading Revenue

The following table presents trading revenue and the related drivers:

	Three Months Ended September 30,				Percent Change		Nine Months Ended September 30,				Percent Change
	2019		2018				2019		2018
Daily average revenue trades (DARTs) (in thousands)	395		382		3	%	401		406		(1	)%
Clients’ daily average trades (in thousands)	718		683		5	%	737		732		1	%
Number of trading days	63.5		62.5		2	%	187.5		187.5		—
Daily average revenue per revenue trade	$	6.94	$	7.27	(5	)%	$	7.03	$	7.27	(3	)%
Trading revenue	$	172	$	176	(2	)%	$	531	$	557	(5	)%

During the third quarter and first nine months of 2019, trading revenue decreased $4 million, or 2%, and $26 million, or 5%, compared to the same periods in 2018. These declines were due primarily to decreases in daily average revenue per revenue trade, which decreased 5% and 3% in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018.

Effective October 7, 2019, CS&Co eliminated online trade commissions for U.S. and Canadian-listed stocks and ETFs, as well as the base charge on options. For additional information on the pricing reduction, see Overview.

Other Revenue

Other revenue includes order flow revenue, other service fees, software fees from our portfolio management solutions, exchange processing fees, and non-recurring gains. Other revenue increased $16 million, or 24%, and $62 million, or 26%, in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018. The increase in other revenue for the first nine months of 2019 was primarily due to a gain from the sale of a portfolio management and reporting software solution for advisors to Tamarac Inc. in the second quarter of 2019, and a gain from the assignment of leased office space in the first quarter of 2019. Order flow revenue was $34 million and $33 million during the third quarters of 2019 and 2018, respectively, and $99 million and $104 million during the first nine months of 2019 and 2018, respectively. The decrease in order flow revenue for the first nine months of 2019 was primarily due to lower volume of trades during the first quarter of 2019 compared to the same period in 2018.

- 10 -

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)

Total Expenses Excluding Interest

The following table shows a comparison of expenses excluding interest:

	Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
	2019			2018					2019			2018
Compensation and benefits
Salaries and wages	$	546		$	423		29	%	$	1,498		$	1,253		20	%
Incentive compensation	183			193			(5	)%	597			615			(3	)%
Employee benefits and other	128			121			6	%	419			384			9	%
Total compensation and benefits	$	857		$	737		16	%	$	2,514		$	2,252		12	%
Professional services	168			164			2	%	516			476			8	%
Occupancy and equipment	144			124			16	%	408			368			11	%
Advertising and market development	71			70			1	%	217			220			(1	)%
Communications	63			59			7	%	187			179			4	%
Depreciation and amortization	88			78			13	%	255			226			13	%
Regulatory fees and assessments	30			57			(47	)%	92			158			(42	)%
Other	54			71			(24	)%	190			232			(18	)%
Total expenses excluding interest	$	1,475		$	1,360		8	%	$	4,379		$	4,111		7	%
Expenses as a percentage of total net revenues
Compensation and benefits	32		%	29		%			31		%	30		%
Advertising and market development	3		%	3		%			3		%	3		%
Full-time equivalent employees (in thousands)
At quarter end	19.8			19.1			4	%
Average	20.2			19.0			6	%	20.1			18.4			9	%

Total compensation and benefits increased in the third quarter and first nine months of 2019 compared to the same periods in 2018, primarily due to an increase in employee headcount in 2019 to support our expanding client base as well as $62 million of severance charges in the third quarter of 2019.

Professional services expense increased in the third quarter and first nine months of 2019 compared to the same periods in 2018, primarily due to overall growth in the business and investments in projects to further drive efficiency and scale.

Occupancy and equipment expense increased in the third quarter and first nine months of 2019 compared to the same periods in 2018, primarily due to an increase in software maintenance expenses and additional licenses to support growth in the business.

Depreciation and amortization expenses grew in the third quarter and first nine months of 2019 compared to the same periods in 2018, primarily due to higher amortization of internally developed software associated with continued investments in software and technology enhancements.

Regulatory fees and assessments decreased in the third quarter and first nine months of 2019 compared to the same periods in 2018, primarily due to a decrease in FDIC insurance assessments resulting from the elimination of the FDIC surcharge in the fourth quarter of 2018.

Other expenses decreased in the third quarter and the first nine months of 2019 compared to the same periods in 2018, primarily due to lower bad debt expense and travel and entertainment expense.

Capital expenditures were $190 million and $544 million in the third quarter and first nine months of 2019, respectively, compared with $156 million and $417 million in the third quarter and first nine months of 2018, respectively. The increase in capital expenditures from the prior year was primarily due to the expansion of our campuses in the U.S. We currently anticipate capital expenditures for full-year 2019 will reach approximately 7-8% of total net revenues.

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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)

Taxes on Income

Taxes on income were $285 million and $296 million for the third quarters of 2019 and 2018, respectively, resulting in effective income tax rates on income before taxes of 23.1% and 24.3%, respectively. Taxes on income were $884 million and

$780 million for the first nine months of 2019 and 2018, respectively, resulting in effective income tax rates on income before taxes of 23.7% and 23.3%, respectively. The decrease in the effective tax rate in the third quarter of 2019 compared to the same period in the prior year was primarily due to federal tax benefits recognized during the current period. The increase in the effective tax rate in the first nine months of 2019 compared to the same period in the prior year was primarily due to a decrease in equity compensation tax deduction benefits.

Segment Information

Financial information for our segments is presented in the following tables:

	Investor Services						Advisor Services						Total
Three Months Ended September 30,	Percent Change		2019		2018		Percent Change		2019		2018		Percent Change		2019		2018
Net Revenues
Net interest revenue	4	%	$	1,182	$	1,138	15	%	$	449	$	389	7	%	$	1,631	$	1,527
Asset management and administration fees	4	%	586		565		(2	)%	239		244		2	%	825		809
Trading revenue	(4	)%	108		112		—		64		64		(2	)%	172		176
Other	28	%	68		53		7	%	15		14		24	%	83		67
Total net revenues	4	%	1,944		1,868		8	%	767		711		5	%	2,711		2,579
Expenses Excluding Interest	5	%	1,070		1,015		17	%	405		345		8	%	1,475		1,360
Income before taxes on income	2	%	$	874	$	853	(1	)%	$	362	$	366	1	%	$	1,236	$	1,219

	Investor Services						Advisor Services						Total
Nine Months Ended September 30,	Percent Change		2019		2018		Percent Change		2019		2018		Percent Change		2019		2018
Net Revenues
Net interest revenue	12	%	$	3,531	$	3,158	34	%	$	1,390	$	1,039	17	%	$	4,921	$	4,197
Asset management and administration fees	(3	)%	1,679		1,727		(8	)%	687		747		(4	)%	2,366		2,474
Trading revenue	(7	)%	329		354		—		202		203		(5	)%	531		557
Other	14	%	207		182		70	%	90		53		26	%	297		235
Total net revenues	6	%	5,746		5,421		16	%	2,369		2,042		9	%	8,115		7,463
Expenses Excluding Interest	4	%	3,189		3,069		14	%	1,190		1,042		7	%	4,379		4,111
Income before taxes on income	9	%	$	2,557	$	2,352	18	%	$	1,179	$	1,000	11	%	$	3,736	$	3,352

Investor Services

Total net revenues grew by 4% in the third quarter of 2019 compared to the same period in 2018, primarily due to an increase in net interest revenue and asset management and administration fees. During the first nine months of 2019, total net revenues grew by 6% compared to 2018, primarily due to an increase in net interest revenue, partially offset by lower asset management and administration fees. Net interest revenue increased for both the third quarter and first nine months of 2019, primarily due to higher net interest margin and higher interest-earning assets. During the third quarter of 2019, asset management and administration fees increased primarily due to growing asset balances in purchased money market funds, other third-party mutual funds and ETFs, and advice solutions. Asset management and administration fees decreased during the first nine months of 2019 as a result of lower sweep money market fund revenue due to transfers to bank and broker-dealer sweep, as well as client asset allocation choices including reduced usage of Mutual Fund OneSource^®. Part of the year-to-date decline was offset by growing asset balances in purchased money market funds, other third-party mutual funds and ETFs, and increased enrollment in advice solutions.

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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)

Expenses excluding interest increased by 5% and 4% in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018, primarily as a result of higher compensation and benefits due to increased headcount in 2019 and severance charges in the third quarter of 2019, higher professional services due to overall growth in the business and investments in projects to further drive efficiency and scale, higher occupancy and equipment expenses due to an increase in software maintenance expenses and additional licenses to support growth in the business, and higher amortization of internally developed software associated with continued investments in software and technology enhancements. These increases were partially offset by a decrease in FDIC insurance assessments due to the elimination of the FDIC surcharge in the fourth quarter of 2018 and lower travel and entertainment expenses.

Advisor Services

Total net revenues grew by 8% and 16% in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018, primarily due to increases in net interest revenue and other revenue, partially offset by lower asset management and administration fees. Net interest revenue increased primarily due to higher net interest margin and higher interest-earning assets. Other revenue increased primarily due to a gain from the sale of a portfolio management and reporting software solution for advisors to Tamarac Inc. in the second quarter of 2019. Asset management and administration fees decreased primarily due to lower money market fund revenue as a result of transfers to bank and broker-dealer sweep, as well as client asset allocation choices including reduced usage of Mutual Fund OneSource^®.

Expenses excluding interest increased by 17% and 14% in the third quarter and first nine months of 2019, respectively, compared to the same periods in 2018, primarily due to higher compensation and benefits due to increased headcount in 2019 and severance charges in the third quarter of 2019, higher professional services expense due to overall growth in the business and investments in projects to further drive efficiency and scale, and higher occupancy and equipment expense due to an increase in software maintenance expenses and additional licenses to support growth in the business. These increases were partially offset by a decrease in FDIC insurance assessments due to the elimination of the FDIC surcharge in the fourth quarter of 2018, lower bad debt expenses, and lower travel and entertainment expenses.

RISK MANAGEMENT

Schwab’s business activities expose us to a variety of risks, including operational, credit, market, liquidity, and compliance risks. The Company has a comprehensive risk management program to identify and manage these risks and their associated potential for financial and reputational impact. For a discussion of our risk management programs, see Item 7 – Risk Management in the 2018 Form 10-K.

Expected Phase-out of LIBOR

The Company has established a firm-wide team to address the likely discontinuation of LIBOR. As part of our efforts, we have inventoried our LIBOR exposures, the largest of which are certain investment securities and loans. In purchasing new investment securities, we ensure that appropriate fall-back language is in the security’s prospectus in the event that LIBOR is unavailable or deemed unreliable. We have also started to update loan agreements to ensure new LIBOR-based loans adequately provide for an alternative to LIBOR. Furthermore, we plan to phase-out the use of LIBOR as a reference rate in our new lending products before December 2021. Consistent with our “Through Clients’ Eyes” strategy, our focus throughout the LIBOR transition process is to ensure clients are treated fairly and consistently as this major change is occurring in the financial markets. The market transition process has not yet progressed to a point at which the impact to the Company’s consolidated financial statements of LIBOR’s discontinuation can be estimated.

Net Interest Revenue Simulation

Schwab’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. For our net interest revenue sensitivity analysis, we use 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 simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely estimate the impact of changes in interest rates on net interest revenue.

- 13 -

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)

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.

The simulations in the following table assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of the simulated changes in interest rates. As we actively manage the consolidated balance sheets and interest rate exposure, in all likelihood we would take steps to manage additional interest rate exposure that could result from changes in the interest rate environment. The following table shows the simulated net interest revenue change over the next 12 months beginning September 30, 2019 and December 31, 2018 of a gradual 100 basis point increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period:

	September 30, 2019		December 31, 2018
Increase of 100 basis points	3.8	%	4.4	%
Decrease of 100 basis points	(6.0	)%	(4.9	)%

Liquidity Risk

Schwab’s primary source of funds is cash generated by client activity which includes bank deposits and cash balances in client brokerage accounts. These funds are used to purchase investment securities and extend loans to clients.

Other sources of funds may include cash flows from operations, maturities and sales of investment securities, repayments on loans, securities lending of assets held in client brokerage accounts, repurchase agreements, and cash provided by external financing.

To meet daily funding needs, we maintain liquidity in the form of overnight cash deposits and short-term investments. For unanticipated liquidity needs, a buffer of highly liquid investments, including U.S. Treasury notes, is also maintained.

In addition to internal sources of liquidity, Schwab has access to external funding. The following table describes external debt facilities available at September 30, 2019:

Description	Borrower	Outstanding		Available
Federal Home Loan Bank secured credit facility (1)	Banking subsidiaries	$	—	$	35,200
Uncommitted, unsecured lines of credit with various external banks	CSC, CS&Co	—		1,472
Unsecured commercial paper (2)	CSC	—		750
Committed, unsecured credit facility with various external banks	CSC	—		750
Federal Reserve Bank discount window (3)	Banking subsidiaries	—		8,254

⁽¹⁾ Amounts available are dependent on the amount of First Mortgages, HELOCs, and the fair value of certain investment securities that are pledged as collateral.

⁽²⁾ CSC has authorization from its Board of Directors to issue Commercial Paper Notes to not exceed $1.5 billion. Management has set a current limit not to exceed the amount of the committed, unsecured credit facility.

⁽³⁾ Amounts available are dependent on the fair value of certain investment securities that are pledged as collateral.

CSC’s ratings for Commercial Paper Notes are P1 by Moody’s Investor Service (Moody’s), A1 by Standard & Poor’s Rating Group (Standard & Poor’s), and F1 by Fitch Ratings, Ltd (Fitch).

- 14 -

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)

As Schwab’s consolidated balance sheet assets were above $250 billion at December 31, 2018, Schwab became subject to the non-modified LCR rule on April 1, 2019. The Company was in compliance with the LCR rule at September 30, 2019. See Current Regulatory Environment and Other Developments for information on recently issued rules that will impact Schwab’s LCR requirements. The table below presents information about our average LCR:

	Average for the Three Months Ended September 30, 2019
Total eligible high quality liquid assets	$	53,865
Net cash outflows	$	48,109
LCR	112		%

Borrowings

The following are details of the Senior Notes:

September 30, 2019	Par Outstanding		Maturity	Weighted Average Interest Rate	Moody’s	Standard & Poor’s	Fitch
Senior Notes	$	7,481	2020 - 2029	3.36%	A2	A	A

New Debt Issuance

The new debt issuance in 2019 is a senior unsecured obligation with interest payable semi-annually. Additional details are as follows:

Issuance Date	Issuance Amount		Maturity Date	Interest Rate
May 22, 2019	$	600	5/22/2029	3.250	%

Acquisition of USAA-IMCO

We expect to utilize cash generated from operations to fund the $1.8 billion purchase of assets from USAA-IMCO. The transaction is expected to close in mid-2020, subject to satisfaction of closing conditions, including regulatory approvals and the implementation of conversion plans.

- 15 -

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 MANAGEMENT

Schwab seeks to manage capital to a level and composition sufficient to support execution of our business strategy, including anticipated balance sheet growth, providing financial support to our subsidiaries, and sustained access to the capital markets, while at the same time meeting our regulatory capital requirements and serving as a source of financial strength to our banking subsidiaries. Schwab’s primary sources of capital are funds generated by the operations of subsidiaries and securities issuances by CSC in the capital markets. To ensure that Schwab has sufficient capital to absorb unanticipated losses or declines in asset values, we have adopted a policy to remain well capitalized even in stressed scenarios. Our capital management in coming quarters will incorporate preparations for closing the USAA-IMCO transaction, including the allocation of capital to support client cash that will be added to our balance sheet.

Regulatory Capital Requirements

CSC and CSB are subject to various capital requirements set by regulatory agencies as discussed in further detail in the 2018 Form 10-K and in Item 1 – Note 15. As of September 30, 2019, CSC and CSB are considered well capitalized.

The following table details CSC’s consolidated and CSB’s capital ratios as of September 30, 2019 and December 31, 2018:

	September 30, 2019 (1)						December 31, 2018
	CSC			CSB			CSC			CSB
Total stockholders’ equity	$	21,354		$	15,591		$	20,670		$	15,615
Less:
Preferred stock	2,793			—			2,793			—
Common Equity Tier 1 Capital before regulatory adjustments	$	18,561		$	15,591		$	17,877		$	15,615
Less:
Goodwill, net of associated deferred tax liabilities	$	1,188		$	13		$	1,188		$	13
Other intangible assets, net of associated deferred tax liabilities	106			—			125			—
Deferred tax assets, net of valuation allowances and deferred tax liabilities	3			1			3			1
AOCI adjustment (1)	—			—			(252		)	(231		)
Common Equity Tier 1 Capital	$	17,264		$	15,577		$	16,813		$	15,832
Tier 1 Capital	$	20,057		$	15,577		$	19,606		$	15,832
Total Capital	20,075			15,594			19,628			15,853
Risk-Weighted Assets	86,161			68,154			95,441			80,513
Total Leverage Exposure (1)	280,591			217,468			N/A			N/A
Common Equity Tier 1 Capital/Risk-Weighted Assets	20.0		%	22.9		%	17.6		%	19.7		%
Tier 1 Capital/Risk-Weighted Assets	23.3		%	22.9		%	20.5		%	19.7		%
Total Capital/Risk-Weighted Assets	23.3		%	22.9		%	20.6		%	19.7		%
Tier 1 Leverage Ratio	7.3		%	7.4		%	7.1		%	7.2		%
Supplementary Leverage Ratio (1)	7.1		%	7.2		%	N/A			N/A

⁽¹⁾ Beginning in 2019, CSC and CSB are subject to the “advanced approaches” framework under the Basel III capital rule. As a result, we are now required to include all components of AOCI in regulatory capital and report our supplementary leverage ratio, which is calculated as Tier 1 capital divided by total leverage exposure. Total leverage exposure includes all on-balance sheet assets and certain off-balance sheet exposures, including unused commitments. Prior to 2019, CSC and CSB elected to opt-out of the requirement to include most components of AOCI in Common Equity Tier 1 Capital; the amounts and ratios for December 31, 2018 are presented on this basis. See Current Regulatory Environment and Other Developments for information on recently issued rules that will impact Schwab’s regulatory capital requirements.

N/A Not applicable.

CSB is also subject to regulatory requirements that restrict and govern the terms of affiliate transactions. In addition, CSB is required to provide notice to, and may be required to obtain approval from, the OCC and the Federal Reserve to declare dividends to CSC.

Schwab’s primary broker-dealer subsidiary, CS&Co, is subject to regulatory requirements of the Uniform Net Capital Rule. At September 30, 2019, CS&Co was in compliance with its net capital requirements.

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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)

In addition to the capital requirements above, Schwab’s subsidiaries are subject to other regulatory requirements intended to ensure financial soundness and liquidity. See Item 1 – Note 15 for additional information on the components of stockholders’ equity and information on the capital requirements of significant subsidiaries.

Dividends

On January 30, 2019, the Board of Directors of the Company declared a four cent, or 31%, increase in the quarterly cash dividend to $.17 per common share.

Cash dividends paid and per share amounts for the first nine months of 2019 and 2018 are as follows:

	2019				2018
Nine Months Ended September 30,	Cash Paid		Per Share Amount		Cash Paid		Per Share Amount
Common Stock	$	679	$	.51	$	448	$	.33
Series A Preferred Stock (1)	28		70.00		28		70.00
Series C Preferred Stock (2)	27		45.00		27		45.00
Series D Preferred Stock (2)	33		44.64		33		44.64
Series E Preferred Stock (3)	28		4,625.00		28		4,625.00
Series F Preferred Stock (4)	13		2,500.00		15		2,930.56

⁽¹⁾ Dividends paid semi-annually until February 1, 2022 and quarterly thereafter.

⁽²⁾ Dividends paid quarterly.

⁽³⁾ Dividends paid semi-annually until March 1, 2022 and quarterly thereafter.

⁽⁴⁾ Dividends paid semi-annually beginning on June 1, 2018 until December 1, 2027, and quarterly thereafter.

Share Repurchases

On January 30, 2019, CSC publicly announced that its Board of Directors authorized the repurchase of up to $4.0 billion of common stock. The authorization does not have an expiration date. During the third quarter and first nine months of 2019, CSC repurchased 20 million and 49 million shares of its common stock for $771 million and $2.0 billion, respectively, leaving $2.0 billion remaining on our existing authorization as of September 30, 2019.

OTHER

Foreign Exposure

At September 30, 2019, Schwab had exposure to non-sovereign financial and non-financial institutions in foreign countries, as well as agencies of foreign governments. At September 30, 2019, the fair value of these holdings totaled $5.4 billion, with the top three exposures being to issuers and counterparties domiciled in France at $2.7 billion, Japan at $603 million, and Canada at $572 million.

In addition to the direct holdings in foreign companies and securities issued by foreign government agencies, Schwab generates indirect exposure to foreign countries through its investments in CSIM money market funds (collectively, the Funds) resulting from brokerage clearing activities. Certain of the Funds’ positions include certificates of deposit, time deposits, commercial paper, and corporate debt securities issued by counterparties in foreign countries. Schwab had outstanding margin loans to foreign residents of $667 million at September 30, 2019.

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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

Schwab enters into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients. These arrangements include firm commitments to extend credit. Additionally, Schwab enters into guarantees and other similar arrangements in the ordinary course of business. For information on each of these arrangements, see Item 1 – Note 5, Note 6, Note 8, Note 10, and Note 11, and Item 8 – Note 14 in the 2018 Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

Certain of our 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 2018 Form 10-K. There have been no changes to critical accounting estimates during the nine months of 2019.

- 18 -

THE CHARLES SCHWAB CORPORATION

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For discussion of the quantitative and qualitative disclosures about market risk, see Risk Management in Item 2.

- 19 -

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 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 (1)	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 (2)	1,308			1,364			1,329			1,363
Earnings Per Common Shares Outstanding:
Basic	$	.70		$	.66		$	2.06		$	1.81
Diluted (2)	$	.70		$	.65		$	2.05		$	1.79

⁽¹⁾ Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

⁽²⁾ Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 17 million and 11 million shares for the third quarters of 2019 and 2018, respectively, and 18 million and 12 million shares for the first nine months of 2019 and 2018, respectively.

See Notes to Condensed Consolidated Financial Statements.

- 20 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	951		$	923		$	2,852		$	2,572
Other comprehensive income (loss), before tax:
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	51			(43		)	496			(184		)
Other reclassifications included in other revenue	(1		)	—			(5		)	—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10			8			30			26
Other comprehensive income (loss), before tax	60			(35		)	521			(158		)
Income tax effect	(15		)	9			(125		)	39
Other comprehensive income (loss), net of tax	45			(26		)	396			(119		)
Comprehensive Income	$	996		$	897		$	3,248		$	2,453

See Notes to Condensed Consolidated Financial Statements.

- 21 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)

	September 30, 2019			December 31, 2018
Assets
Cash and cash equivalents	$	20,252		$	27,938
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $9,707 at September 30, 2019 and $7,195 at December 31, 2018)	16,164			13,563
Receivables from brokers, dealers, and clearing organizations	1,317			553
Receivables from brokerage clients — net	21,069			21,651
Other securities owned — at fair value	497			539
Available for sale securities	56,483			66,578
Held to maturity securities	140,194			144,009
Bank loans — net	16,895			16,609
Equipment, office facilities, and property — net	2,017			1,769
Goodwill	1,227			1,227
Other assets	2,872			2,046
Total assets	$	278,987		$	296,482
Liabilities and Stockholders’ Equity
Bank deposits	$	209,327		$	231,423
Payables to brokers, dealers, and clearing organizations	1,736			1,831
Payables to brokerage clients	35,622			32,726
Accrued expenses and other liabilities	3,521			2,954
Long-term debt	7,427			6,878
Total liabilities	257,633			275,812
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $2,850	2,793			2,793
Common stock — 3 billion shares authorized; $.01 par value per share; 1,487,543,446 shares issued	15			15
Additional paid-in capital	4,640			4,499
Retained earnings	19,374			17,329
Treasury stock, at cost — 198,611,926 shares at September 30, 2019 and 155,116,695 shares at December 31, 2018	(5,612		)	(3,714		)
Accumulated other comprehensive income (loss)	144			(252		)
Total stockholders’ equity	21,354			20,670
Total liabilities and stockholders’ equity	$	278,987		$	296,482

See Notes to Condensed Consolidated Financial Statements.

- 22 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity

(In Millions)

(Unaudited)

															Accumulated Other Comprehensive Income (Loss)
	Preferred Stock		Common stock			Additional Paid-in Capital			Retained Earnings			Treasury Stock, at cost						Total
			Shares	Amount
Balance at June 30, 2018	$	2,793	1,488	$	15	$	4,447		$	15,903		$	(2,783	)	$	(278	)	$	20,097
Net income	—		—	—		—			923			—			—			923
Other comprehensive income (loss), net of tax	—		—	—		—			—			—			(26		)	(26		)
Dividends declared on preferred stock	—		—	—		—			(34		)	—			—			(34		)
Dividends declared on common stock — $.13 per share	—		—	—		—			(177		)	—			—			(177		)
Stock option exercises and other	—		—	—		—			—			9			—			9
Share-based compensation	—		—	—		28			—			—			—			28
Other	—		—	—		9			—			5			—			14
Balance at September 30, 2018	$	2,793	1,488	$	15	$	4,484		$	16,615		$	(2,769	)	$	(304	)	$	20,834
Balance at June 30, 2019	$	2,793	1,488	$	15	$	4,599		$	18,680		$	(4,866	)	$	99		$	21,320
Net income	—		—	—		—			951			—			—			951
Other comprehensive income (loss), net of tax	—		—	—		—			—			—			45			45
Dividends declared on preferred stock	—		—	—		—			(34		)	—			—			(34		)
Dividends declared on common stock — $.17 per share	—		—	—		—			(223		)	—			—			(223		)
Repurchase of common stock	—		—	—		—			—			(771		)	—			(771		)
Stock option exercises and other	—		—	—		(2		)	—			19			—			17
Share-based compensation	—		—	—		33			—			—			—			33
Other	—		—	—		10			—			6			—			16
Balance at September 30, 2019	$	2,793	1,488	$	15	$	4,640		$	19,374		$	(5,612	)	$	144		$	21,354

															Accumulated Other Comprehensive Income (Loss)
	Preferred Stock		Common stock			Additional Paid-in Capital			Retained Earnings			Treasury Stock, at cost						Total
			Shares	Amount
Balance at December 31, 2017	$	2,793	1,488	$	15	$	4,353		$	14,408		$	(2,892	)	$	(152	)	$	18,525
Adoption of accounting standards	—		—	—		—			200			—			(33		)	167
Net income	—		—	—		—			2,572			—			—			2,572
Other comprehensive income (loss), net of tax	—		—	—		—			—			—			(119		)	(119		)
Dividends declared on preferred stock	—		—	—		—			(117		)	—			—			(117		)
Dividends declared on common stock — $.33 per share	—		—	—		—			(448		)	—			—			(448		)
Stock option exercises and other	—		—	—		(8		)	—			116			—			108
Share-based compensation	—		—	—		106			—			—			—			106
Other	—		—	—		33			—			7			—			40
Balance at September 30, 2018	$	2,793	1,488	$	15	$	4,484		$	16,615		$	(2,769	)	$	(304	)	$	20,834
Balance at December 31, 2018	$	2,793	1,488	$	15	$	4,499		$	17,329		$	(3,714	)	$	(252	)	$	20,670
Net income	—		—	—		—			2,852			—			—			2,852
Other comprehensive income (loss), net of tax	—		—	—		—			—			—			396			396
Dividends declared on preferred stock	—		—	—		—			(115		)	—			—			(115		)
Dividends declared on common stock — $.51 per share	—		—	—		—			(679		)	—			—			(679		)
Repurchase of common stock	—		—	—		—			—			(1,991		)	—			(1,991		)
Stock option exercises and other	—		—	—		(15		)	—			80			—			65
Share-based compensation	—		—	—		121			—			—			—			121
Other	—		—	—		35			(13		)	13			—			35
Balance at September 30, 2019	$	2,793	1,488	$	15	$	4,640		$	19,374		$	(5,612	)	$	144		$	21,354

See Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(in Millions)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash Flows from Operating Activities
Net income	$	2,852		$	2,572
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Share-based compensation	131			113
Depreciation and amortization	255			226
Premium amortization, net, on available for sale and held to maturity securities	282			276
Other	127			108
Net change in:
Investments segregated and on deposit for regulatory purposes	(858		)	6,973
Receivables from brokers, dealers, and clearing organizations	(756		)	(147		)
Receivables from brokerage clients	576			(1,858		)
Other securities owned	42			39
Other assets	(28		)	(143		)
Payables to brokers, dealers, and clearing organizations	(95		)	43
Payables to brokerage clients	2,896			(3,392		)
Accrued expenses and other liabilities	(403		)	(155		)
Net cash provided by (used for) operating activities	5,021			4,655
Cash Flows from Investing Activities
Purchases of available for sale securities	(20,744		)	(19,781		)
Proceeds from sales of available for sale securities	21,710			115
Principal payments on available for sale securities	18,374			12,091
Purchases of held to maturity securities	(18,861		)	(30,639		)
Principal payments on held to maturity securities	13,653			12,382
Net change in bank loans	(338		)	(86		)
Purchases of equipment, office facilities, and property	(515		)	(400		)
Purchases of Federal Home Loan Bank stock	(2		)	(156		)
Proceeds from sales of Federal Home Loan Bank stock	—			528
Other investing activities	(18		)	(74		)
Net cash provided by (used for) investing activities	13,259			(26,020		)
Cash Flows from Financing Activities
Net change in bank deposits (1)	(22,096		)	43,752
Net change in short-term borrowings	—			(15,000		)
Issuance of long-term debt	593			1,936
Repayment of long-term debt	—			(906		)
Dividends paid	(808		)	(579		)
Proceeds from stock options exercised	65			108
Repurchases of common stock	(1,964		)	—
Other financing activities	(13		)	(12		)
Net cash provided by (used for) financing activities	(24,223		)	29,299
Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted	(5,943		)	7,934
Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year	38,227			19,160
Cash and Cash Equivalents, including Amounts Restricted at End of Period	$	32,284		$	27,094

Continued on following page.

- 24 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(in Millions)

(Unaudited)

Continued from previous page.

	Nine Months Ended September 30,
	2019		2018
Supplemental Cash Flow Information
Non-cash investing activity:
Securities purchased during the period but settled after period end	$	—	$	221
Non-cash financing activity:
Extinguishment of finance lease obligation through an assignment agreement	$	52	$	—
Common stock repurchased during the period but settled after period end	$	27	$	—
Other Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	922	$	550
Income taxes	$	907	$	649
Amounts included in the measurement of lease liabilities (2)	$	99	N/A
Leased assets obtained in exchange for new operating lease liabilities (2)	$	87	N/A
	September 30, 2019		September 30, 2018
Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (3)
Cash and cash equivalents	$	20,252	$	21,830
Restricted cash and cash equivalents amounts included in cash and investments segregated and on deposit for regulatory purposes	12,032		5,264
Total cash and cash equivalents, including amounts restricted shown in the statement of cash flows	$	32,284	$	27,094

⁽¹⁾ Includes transfers from other sweep features to bank sweep of $10.3 billion and $67.8 billion for the nine months ended September 30, 2019 and 2018, respectively.

⁽²⁾ These amounts are presented beginning in 2019 as part of the adoption of ASU 2016-02. See Notes 2 and 9 for additional information related to this adoption.

⁽³⁾ For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 15.

N/A Not applicable.

See Notes to Condensed Consolidated Financial Statements.

- 25 -

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 and engages, through its subsidiaries, in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Significant business subsidiaries of CSC include the following:

• Charles Schwab & Co., Inc. (CS&Co), a securities broker-dealer;

• Charles Schwab Bank (CSB), a federal savings bank; and

• Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds^®) and for Schwab’s exchange-traded funds (Schwab ETFs™).

Unless otherwise indicated, the terms “Schwab,” “the Company,” “we,” “us,” or “our” mean CSC together with its consolidated subsidiaries.

These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (GAAP), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements, and in the related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Schwab’s 2018 Form 10-K.

The significant accounting policies are included in Note 2 in the 2018 Form 10-K. There have been no significant changes to these accounting policies during the first nine months of 2019, except as described in Note 2 below.

- 26 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

2.    New Accounting Standards

Adoption of New Accounting Standards

Standard	Description	Date of Adoption	Effects on the Financial Statements or Other Significant Matters
Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)”	Amends the accounting for leases by lessees and lessors. The primary change from the new guidance is the recognition of right-of-use (ROU) assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances, and expanded lease disclosures. Adoption provides for modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard or, optionally, through another transition method by which a cumulative-effect adjustment is recorded to retained earnings as of the beginning of the period of adoption. Certain transition relief is permitted if elected by the entity.	January 1, 2019	The Company adopted the new lease accounting guidance as of January 1, 2019 under the optional transition method provided electing not to recast its comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption resulted in a gross up of the consolidated balance sheet due to recognition of ROU assets and lease liabilities primarily related to the CS&Co leases of office space and branches. The amounts were based on the present value of our remaining operating lease payments. The Company’s ROU assets and related lease liabilities upon adoption were $596 million and $662 million, respectively. Further details on the impact of adoption are included below in this Note as well as in Note 9.
ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”	Shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature with a fixed price on a preset date. ASU 2017-08 does not impact the accounting for callable debt securities held at a discount. Adoption requires modified retrospective transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings.	January 1, 2019	The Company adopted this guidance as of January 1, 2019 using the modified retrospective method. Adoption resulted in an immaterial cumulative-effect adjustment to retained earnings as of the date of adoption.
ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”	This ASU amends hedge accounting guidance to better align hedge accounting with risk management activities, while reducing the complexity of applying and reporting on hedge accounting. In addition, for a closed pool of prepayable financial assets, entities will be able to hedge an amount that is not expected to be affected by prepayments, defaults and other events under the “last-of-layer” method. The guidance also permits a one-time reclassification of debt securities eligible to be hedged under the “last-of-layer” method from held to maturity (HTM) to available for sale (AFS) upon adoption.	January 1, 2019	The Company adopted this ASU on January 1, 2019. As part of its adoption, the Company made a one-time election to reclassify a portion of its HTM securities eligible to be hedged under the “last-of-layer” method to AFS. As of January 1, 2019, the securities reclassified had a fair value of $8.8 billion and resulted in a net of tax increase to AOCI of $19 million. The adoption of this standard had no other impact on the Company’s financial statements.

- 27 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

New Accounting Standards Not Yet Adopted

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	Provides guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and HTM debt securities. Requires estimating current expected credit losses (CECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions, and reasonable forecasts. The initial estimate of, and the subsequent changes in, CECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. Amends the other-than-temporary impairment (OTTI) model for AFS debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Adoption requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for AFS debt securities for which an OTTI has been recognized prior to the effective date.	January 1, 2020 (early adoption permitted)	The Company expects that its allowance for credit losses will increase when CECL is adopted, primarily due to an incremental allowance that will be recorded on its HTM corporate debt securities. The incremental allowance at adoption is expected to be immaterial, but the impact of adoption will depend on, among other things, the economic environment, the proportion of securities classified as AFS versus HTM, and the size and type of loan and securities portfolios held by the Company on the date of adoption. A large portion of the securities in the Company’s portfolio will have zero expectation of credit losses based on industry views and regulatory guidance for U.S. Treasury and U.S. agency mortgage-backed securities. Further, we expect to apply the practical expedient based on continuous collateral replenishment to the Company’s pledged asset lines (PALs) and margin loans. The Company has completed the development of credit loss estimation methods for loans and the securities in its portfolio that do not have zero expectation of credit losses, including corporate debt securities and structured products. We are continuing the development of CECL policies and processes and testing and validation of credit loss estimation methods. We have also completed the first of the two planned quarterly CECL parallel runs.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”	Aligns the criteria for capitalizing implementation costs for cloud computing arrangements (CCA) that are service contracts with internal-use software that is developed or purchased and CCAs that include an internal-use software license. This guidance requires that the capitalized implementation costs be recognized over the period of the CCA service contract, subject to impairment evaluation on an ongoing basis. The guidance prescribes the balance sheet, income statement, and statement of cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. Adoption provides for retrospective or prospective application to all implementation costs incurred after the date of adoption.	January 1, 2020 (early adoption permitted)	Historically, Schwab has expensed implementation costs as they are incurred for CCAs that are service contracts. Therefore, adopting this guidance will change the Company’s accounting treatment for these types of implementation costs. The Company plans to adopt this guidance on a prospective basis and continues to evaluate the impacts of this guidance on its financial statements, including EPS.

The cumulative effect of the changes made to our consolidated January 1, 2019 balance sheet for the adoption of ASU 2016-02, Leases (Topic 842) were as follows:

	Balance at December 31, 2018		Adjustments Due to ASU 2016-02		Balance at January 1, 2019
Assets
Other assets (1)	$	2,046	$	588	$	2,634
Liabilities
Accrued expenses and other liabilities (2)	$	2,954	$	588	$	3,542

⁽¹⁾ The adoption adjustment is comprised of two parts: 1) an increase of $596 million for the recognition of the January 1, 2019 ROU asset and 2) an $8 million decrease related to prepaid rent and initial direct costs, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

⁽²⁾ The adoption adjustment is comprised of two parts: 1) an increase of $662 million for the recognition of the January 1, 2019 lease liability and 2) a

$74 million decrease related to deferred rent and lease incentives, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

3.    Revenue Recognition

Disaggregated Revenue

Disaggregation of Schwab’s revenue by major source is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net interest revenue
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
Mutual funds, ETFs, and CTFs (1)	445			446			1,287			1,419
Advice solutions	305			294			878			859
Other (1)	75			69			201			196
Asset management and administration fees	825			809			2,366			2,474
Trading revenue
Commissions	159			155			477			501
Principal transactions	13			21			54			56
Trading revenue	172			176			531			557
Other	83			67			297			235
Total net revenues	$	2,711		$	2,579		$	8,115		$	7,463

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

For a summary of revenue provided by our reportable segments, see Note 16. The recognition of revenue is not impacted by the operating segment in which revenue is generated.

Contract balances

Receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606, Revenue From Contracts With Customers (ASC 606) were $338 million at September 30, 2019 and $307 million at December 31, 2018 and were recorded in other assets on the condensed consolidated balance sheets. Schwab does not have any other significant contract assets or contract liability balances as of September 30, 2019.

Unsatisfied performance obligations

We do not have any unsatisfied performance obligations other than those that are subject to an elective practical expedient under ASC 606. The practical expedient applies to and is elected for contracts where we recognize revenue at the amount to which we have the right to invoice for services performed.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

4.    Investment Securities

The amortized cost, gross unrealized gains and losses, and fair value of AFS and HTM securities are as follows:

September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale securities
U.S. agency mortgage-backed securities	$	40,179	$	299	$	47	$	40,431
U.S. Treasury securities	5,034		3		10		5,027
Asset-backed securities (1)	4,773		35		7		4,801
Corporate debt securities (2)	4,630		57		1		4,686
Certificates of deposit	1,000		4		—		1,004
Commercial paper (2,3)	520		1		—		521
Non-agency commercial mortgage-backed securities	13		—		—		13
Total available for sale securities	$	56,149	$	399	$	65	$	56,483
Held to maturity securities
U.S. agency mortgage-backed securities	$	114,276	$	1,974	$	238	$	116,012
Asset-backed securities (1)	18,323		74		38		18,359
Corporate debt securities (2)	4,659		58		2		4,715
U.S. state and municipal securities	1,306		107		—		1,413
Non-agency commercial mortgage-backed securities	1,136		28		—		1,164
U.S. Treasury securities	224		6		—		230
Certificates of deposit	200		—		—		200
Foreign government agency securities	50		—		—		50
Other	20		—		—		20
Total held to maturity securities	$	140,194	$	2,247	$	278	$	142,163

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	25,594	$	44	$	82	$	25,556
U.S. Treasury securities	18,410		—		108		18,302
Asset-backed securities (1)	10,086		14		15		10,085
Corporate debt securities (2)	7,477		10		20		7,467
Certificates of deposit	3,682		4		1		3,685
U.S. agency notes	900		—		2		898
Commercial paper (2,3)	522		—		—		522
Foreign government agency securities	50		—		1		49
Non-agency commercial mortgage-backed securities	14		—		—		14
Total available for sale securities	$	66,735	$	72	$	229	$	66,578
Held to maturity securities
U.S. agency mortgage-backed securities	$	118,064	$	217	$	2,188	$	116,093
Asset-backed securities (1)	18,502		83		39		18,546
Corporate debt securities (2)	4,477		2		47		4,432
U.S. state and municipal securities	1,327		24		3		1,348
Non-agency commercial mortgage-backed securities	1,156		3		17		1,142
U.S. Treasury securities	223		—		6		217
Certificates of deposit	200		1		—		201
Foreign government agency securities	50		—		1		49
Other	10		—		—		10
Total held to maturity securities	$	144,009	$	330	$	2,301	$	142,038

⁽¹⁾ Approximately 43% and 36% of asset-backed securities held as of September 30, 2019 and December 31, 2018, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 42% of the asset-backed securities held as of September 30, 2019 and December 31, 2018.

⁽²⁾ As of September 30, 2019 and December 31, 2018, approximately 35% and 26%, respectively, of the total AFS and HTM investments in corporate debt securities and commercial paper were issued by institutions in the financial services industry. Approximately 18% of the holdings of these securities were issued by institutions in the information technology industry as of September 30, 2019 and December 31, 2018.

⁽³⁾ Included in cash and cash equivalents on the condensed consolidated balance sheets, but excluded from this table is $0.9 billion and $4.9 billion of AFS commercial paper as of September 30, 2019 and December 31, 2018, respectively. These holdings have maturities of three months or less at the time of acquisition and an aggregate market value equal to amortized cost.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

On January 1, 2019 the Company transferred certain U.S. agency mortgage-backed securities with a fair value of $8.8 billion from the HTM category to the AFS category as permitted by ASU 2017-12. For additional information on the transfer, see Notes 2 and 14.

At September 30, 2019, our banking subsidiaries had pledged securities with a fair value of $26.8 billion as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 8). Certain banking subsidiaries also pledge investment securities as collateral to secure borrowing capacity at the Federal Reserve Bank discount window, and had pledged securities with a fair value of $8.3 billion as collateral for this facility at September 30, 2019. CSB also pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $918 million at September 30, 2019.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows:

	Less than 12 months				12 months or longer				Total
September 30, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale securities
U.S. agency mortgage-backed securities	$	12,063	$	24	$	6,317	$	23	$	18,380	$	47
U.S. Treasury securities	377		—		3,161		10		3,538		10
Asset-backed securities	763		1		398		6		1,161		7
Corporate debt securities	149		1		499		—		648		1
Total	$	13,352	$	26	$	10,375	$	39	$	23,727	$	65
Held to maturity securities
U.S. agency mortgage-backed securities	$	11,838	$	37	$	20,897	$	201	$	32,735	$	238
Asset-backed securities	7,638		34		556		4		8,194		38
Corporate debt securities	416		1		354		1		770		2
Total	$	19,892	$	72	$	21,807	$	206	$	41,699	$	278
Total securities with unrealized losses (1)	$	33,244	$	98	$	32,182	$	245	$	65,426	$	343

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	9,529	$	32	$	4,257	$	50	$	13,786	$	82
U.S. Treasury securities	4,951		6		7,037		102		11,988		108
Asset-backed securities	4,050		9		837		6		4,887		15
Corporate debt securities	3,561		19		254		1		3,815		20
Certificates of deposit	1,217		1		150		—		1,367		1
U.S. agency notes	195		—		304		2		499		2
Foreign government agency securities	—		—		49		1		49		1
Total	$	23,503	$	67	$	12,888	$	162	$	36,391	$	229
Held to maturity securities
U.S. agency mortgage-backed securities	$	29,263	$	222	$	56,435	$	1,966	$	85,698	$	2,188
Asset-backed securities	6,795		35		376		4		7,171		39
Corporate debt securities	2,909		29		1,066		18		3,975		47
U.S. state and municipal securities	77		2		18		1		95		3
Non-agency commercial mortgage-backed securities	283		2		632		15		915		17
U.S. Treasury securities	—		—		218		6		218		6
Foreign government agency securities	—		—		49		1		49		1
Total	$	39,327	$	290	$	58,794	$	2,011	$	98,121	$	2,301
Total securities with unrealized losses (2)	$	62,830	$	357	$	71,682	$	2,173	$	134,512	$	2,530

⁽¹⁾ The number of investment positions with unrealized losses totaled 343 for AFS securities and 625 for HTM securities.

⁽²⁾ The number of investment positions with unrealized losses totaled 441 for AFS securities and 1,524 for HTM securities.

At September 30, 2019, substantially all rated securities in the investment portfolios were investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government or U.S. government-sponsored enterprises.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Management evaluates whether investment securities are other-than-temporarily impaired on a quarterly basis as described in Note 2 in the 2018 Form 10-K. No amounts were recognized as OTTI in earnings or other comprehensive income during the nine months ended September 30, 2019 or the year ended December 31, 2018. As of September 30, 2019 and December 31, 2018, Schwab did not hold any securities on which OTTI was previously recognized.

In the table below, mortgage-backed securities and other asset-backed securities have been allocated to maturity groupings based on final contractual maturities. As borrowers may have the right to call or prepay certain obligations underlying our investment securities, actual maturities may differ from the scheduled contractual maturities presented below.

The maturities of AFS and HTM securities are as follows:

September 30, 2019	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Available for sale securities
U.S. agency mortgage-backed securities	$	51	$	1,909	$	11,061	$	27,410	$	40,431
U.S. Treasury securities	3,541		1,486		—		—		5,027
Asset-backed securities	35		3,752		794		220		4,801
Corporate debt securities	1,100		3,415		171		—		4,686
Certificates of deposit	501		503		—		—		1,004
Commercial paper	521		—		—		—		521
Non-agency commercial mortgage-backed securities	—		—		—		13		13
Total fair value	$	5,749	$	11,065	$	12,026	$	27,643	$	56,483
Total amortized cost	$	5,743	$	10,994	$	11,996	$	27,416	$	56,149
Held to maturity securities
U.S. agency mortgage-backed securities	$	663	$	15,472	$	35,048	$	64,829	$	116,012
Asset-backed securities	—		3,227		7,940		7,192		18,359
Corporate debt securities	778		3,079		858		—		4,715
U.S. state and municipal securities	—		99		452		862		1,413
Non-agency commercial mortgage-backed securities	—		367		—		797		1,164
U.S. Treasury securities	—		—		230		—		230
Certificates of deposit	200		—		—		—		200
Foreign government agency securities	—		50		—		—		50
Other	—		—		—		20		20
Total fair value	$	1,641	$	22,294	$	44,528	$	73,700	$	142,163
Total amortized cost	$	1,637	$	21,989	$	43,368	$	73,200	$	140,194

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proceeds	$	5,436	$	—	$	21,710	$	115
Gross realized gains	5		—		15		—
Gross realized losses	4		—		10		—

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

5.    Bank Loans and Related Allowance for Loan Losses

The composition of bank loans and delinquency analysis by loan type is as follows:

September 30, 2019	Current		30-59 days past due		60-89 days past due		>90 days past due and other nonaccrual loans (3)		Total past due and other nonaccrual loans		Total loans		Allowance for loan losses		Total bank loans – net
First Mortgages (1,2)	$	10,607	$	20	$	2	$	11	$	33	$	10,640	$	10	$	10,630
HELOCs (1,2)	1,208		3		1		8		12		1,220		4		1,216
Pledged asset lines	4,876		2		—		—		2		4,878		—		4,878
Other	172		—		—		2		2		174		3		171
Total bank loans	$	16,863	$	25	$	3	$	21	$	49	$	16,912	$	17	$	16,895
December 31, 2018
First Mortgages (1,2)	$	10,349	$	21	$	2	$	12	$	35	$	10,384	$	14	$	10,370
HELOCs (1,2)	1,493		3		1		8		12		1,505		5		1,500
Pledged asset lines	4,558		3		—		—		3		4,561		—		4,561
Other	180		—		—		—		—		180		2		178
Total bank loans	$	16,580	$	27	$	3	$	20	$	50	$	16,630	$	21	$	16,609

⁽¹⁾ First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $71 million and $73 million at September 30, 2019 and December 31, 2018, respectively.

⁽²⁾ At September 30, 2019 and December 31, 2018, 46% and 47%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

⁽³⁾ There were no loans accruing interest that were contractually 90 days or more past due at September 30, 2019 or December 31, 2018.

At September 30, 2019, CSB had pledged $10.8 billion of First Mortgages and HELOCs as collateral to secure borrowing capacity on a secured credit facility with the FHLB (see Note 8).

Substantially all of the bank loans were collectively evaluated for impairment at both September 30, 2019 and December 31, 2018.

Changes in the allowance for loan losses were as follows:

	September 30, 2019											September 30, 2018
Three Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other		Total (1)
Balance at beginning of period	$	12		$	5		$	2	$	19		$	17	$	7		$	2	$	26
Charge-offs	—			—			—		—			—		—			—		—
Recoveries	—			—			—		—			—		1			—		1
Provision for loan losses	(2		)	(1		)	1		(2		)	—		(1		)	—		(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2	$	26

	September 30, 2019											September 30, 2018
Nine Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other			Total (1)
Balance at beginning of period	$	14		$	5		$	2	$	21		$	16	$	8		$	2		$	26
Charge-offs	—			—			—		—			—		—			(1		)	(1		)
Recoveries	1			1			—		2			—		2			—			2
Provision for loan losses	(5		)	(2		)	1		(6		)	1		(3		)	1			(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2		$	26

⁽¹⁾ All PALs were fully collateralized by securities with fair values in excess of borrowings as of each period presented.

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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 impaired bank loan-related assets is as follows:

	September 30, 2019		December 31, 2018
Nonaccrual loans (1)	$	21	$	21
Other real estate owned (2)	2		3
Total nonperforming assets	23		24
Troubled debt restructurings	2		4
Total impaired assets	$	25	$	28

⁽¹⁾ Nonaccrual loans include nonaccrual troubled debt restructurings.

⁽²⁾ Included in other assets on the condensed consolidated balance sheets.

Credit Quality

In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following:

• Year of origination;

• Borrower FICO scores at origination (Origination FICO);

• Updated borrower FICO scores (Updated FICO);

• Loan-to-value (LTV) ratios at origination (Origination LTV); and

• Estimated current LTV ratios (Estimated Current LTV).

Borrowers’ FICO scores are provided by an independent third-party credit reporting service and updated quarterly. The Origination LTV and Estimated Current LTV 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 updated on a monthly basis by reference to a home price appreciation index.

- 36 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The credit quality indicators of the Company’s bank loan portfolio are detailed below:

September 30, 2019	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,574	776	0.03	%
>70% – <90%	1,061		770	0.28	%
>90% – <100%	4		756	—
>100%	1		768	—
Total	$	10,640	776	0.05	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,157	769	0.25	%
>70% – <90%	58		751	0.83	%
>90% – <100%	3		716	5.06	%
>100%	2		659	—
Total	$	1,220	768	0.29	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,878	767	—

December 31, 2018	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,396	776	0.04	%
>70% – <90%	985		769	0.41	%
>90% – <100%	2		717	—
>100%	1		753	—
Total	$	10,384	775	0.07	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,416	770	0.13	%
>70% – <90%	80		752	0.60	%
>90% – <100%	6		729	3.36	%
>100%	3		702	—
Total	$	1,505	769	0.17	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,561	766	—

⁽¹⁾ Represents the LTV for the full line of credit (drawn and undrawn).

- 37 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2019	First Mortgages		HELOCs
Year of origination
Pre-2015	$	1,815	$	872
2015	889		85
2016	2,382		82
2017	2,137		90
2018	1,611		67
2019	1,806		24
Total	$	10,640	$	1,220
Origination FICO
<620	$	4	$	—
620 – 679	76		6
680 – 739	1,624		236
>740	8,936		978
Total	$	10,640	$	1,220
Origination LTV
<70%	$	7,980	$	869
>70% – <90%	2,656		346
>90% – <100%	4		5
Total	$	10,640	$	1,220

December 31, 2018	First Mortgages		HELOCs
Year of origination
Pre-2015	$	2,387	$	1,140
2015	1,050		106
2016	2,606		95
2017	2,366		99
2018	1,975		65
Total	$	10,384	$	1,505
Origination FICO
<620	$	5	$	—
620 – 679	83		8
680 – 739	1,626		282
>740	8,670		1,215
Total	$	10,384	$	1,505
Origination LTV
<70%	$	7,815	$	1,064
>70% – <90%	2,564		434
>90% – <100%	5		7
Total	$	10,384	$	1,505

At September 30, 2019, First Mortgage loans of $9.6 billion had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that adjust annually thereafter. Approximately 29% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 65% of the balance of these interest-only loans are not scheduled to reset for three or more years. Schwab’s mortgage loans do not include interest terms described as temporary introductory rates below current market rates.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating rate based on the prime rate plus a margin.

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

September 30, 2019	Balance
Converted to an amortizing loan by period end	$	551
Within 1 year	52
> 1 year – 3 years	84
> 3 years – 5 years	170
> 5 years	363
Total	$	1,220

At September 30, 2019, $1.0 billion of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At September 30, 2019, the borrowers on approximately 54% of HELOC loan balances outstanding only paid the minimum amount due.

6.    Variable Interest Entities

As of September 30, 2019 and December 31, 2018, all of Schwab’s involvement with variable interest entities (VIEs) is through CSB’s Community Reinvestment Act (CRA)-related investments and most of those are related to Low-Income Housing Tax Credit (LIHTC) investments. As part of CSB’s community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties. CSB receives tax credits and other tax benefits for these investments.

Aggregate assets, liabilities and maximum exposure to loss

The aggregate assets, liabilities, and maximum exposure to loss from those VIEs in which Schwab holds a variable interest, but is not the primary beneficiary, are summarized in the table below:

	September 30, 2019						December 31, 2018
	Aggregate assets		Aggregate liabilities		Maximum exposure to loss		Aggregate assets		Aggregate liabilities		Maximum exposure to loss
LIHTC investments (1)	$	498	$	298	$	498	$	338	$	188	$	338
Other CRA investments (2)	91		—		125		70		—		124
Total	$	589	$	298	$	623	$	408	$	188	$	462

⁽¹⁾ Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheets.

⁽²⁾ Other CRA investments are recorded using either the adjusted cost method, equity method, or as HTM securities. Aggregate assets are included in HTM securities, bank loans – net, or other assets on the condensed consolidated balance sheets.

Schwab’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. CSB’s funding of these remaining commitments is dependent upon the occurrence of certain conditions, and CSB expects to pay substantially all of these commitments between 2019 and 2022. During the nine months ended September 30, 2019 and year ended December 31, 2018, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

- 39 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

7.    Bank Deposits

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

	September 30, 2019		December 31, 2018
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	191,456	$	212,311
Checking	12,020		12,523
Savings and other	5,146		5,827
Total interest-bearing deposits	208,622		230,661
Non-interest-bearing deposits	705		762
Total bank deposits	$	209,327	$	231,423

8.    Borrowings

CSC’s Senior Notes are unsecured obligations. CSC may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes and quarterly for the floating-rate Senior Notes. The following table lists long-term debt by instrument outstanding as of September 30, 2019 and December 31, 2018:

	Date of	Principal Amount Outstanding
	Issuance	September 30, 2019			December 31, 2018
Fixed-rate Senior Notes:
4.450% due July 22, 2020	07/22/10	$	700		$	700
3.250% due May 21, 2021	05/22/18	600			600
3.225% due September 1, 2022	08/29/12	256			256
2.650% due January 25, 2023	12/07/17	800			800
3.550% due February 1, 2024	10/31/18	500			500
3.000% due March 10, 2025	03/10/15	375			375
3.850% due May 21, 2025	05/22/18	750			750
3.450% due February 13, 2026	11/13/15	350			350
3.200% due March 2, 2027	03/02/17	650			650
3.200% due January 25, 2028	12/07/17	700			700
4.000% due February 1, 2029	10/31/18	600			600
3.250% due May 22, 2029	05/22/19	600			—
Floating-rate Senior Notes:
Three-month LIBOR + 0.32% due May 21, 2021	05/22/18	600			600
Total Senior Notes		7,481			6,881
5.450% Finance lease obligation (1)	06/04/04	—			52
Unamortized discount — net		(14		)	(15		)
Debt issuance costs		(40		)	(40		)
Total long-term debt		$	7,427		$	6,878

⁽¹⁾ The finance lease obligation was extinguished through an assignment agreement during the first quarter of 2019.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Annual maturities on long-term debt outstanding at September 30, 2019 are as follows:

	Maturities
2019	$	—
2020	700
2021	1,200
2022	256
2023	800
Thereafter	4,525
Total maturities	7,481
Unamortized discount — net	(14		)
Debt issuance costs	(40		)
Total long-term debt	$	7,427

Short-term borrowings: Our banking subsidiaries maintain secured credit facilities with the FHLB. Amounts available under these facilities are dependent on the amount of our First Mortgages, HELOCs, and the fair value of certain of their investment securities that are pledged as collateral. As of September 30, 2019 and December 31, 2018, the collateral pledged provided a total borrowing capacity of $35.2 billion and $35.5 billion, respectively, of which no amounts were outstanding at the end of either period.

As a condition of the FHLB borrowings, we are required to hold FHLB stock, which was recorded in other assets on the condensed consolidated balance sheets. The investment in FHLB was $34 million at September 30, 2019 and $32 million at December 31, 2018.

9.    Leases

The Company has operating leases for corporate offices, branch locations, and server equipment and determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The lease liability may include payments that depend on a rate or index (such as the Consumer Price Index), measured using the rate or index at the commencement date. Payments that vary because of changes in facts or circumstances occurring after the commencement date are considered variable. These payments are not recognized as part of the lease liability and are expensed in the period incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We have lease agreements with lease and non-lease components. For the majority of our leases (real estate leases), the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component. We have not elected the practical expedient for equipment leases and account for lease and non-lease components separately for those classes of leases.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include periods covered by options to extend when it is reasonably certain that we will exercise those options. The lease terms may also include periods covered by options to terminate when it is reasonably certain that we will not exercise that option.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company does not have any finance leases and had an immaterial amount of sublease income for all periods presented.

- 41 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The following table details the amounts and locations of lease assets and liabilities on the condensed consolidated balance sheet:

Leases	Balance Sheet Classification	September 30, 2019
Assets
Operating lease assets	Other assets	$	596
Liabilities
Operating lease liabilities	Accrued expenses and other liabilities	$	665

The components of lease expense are as follows:

Lease Cost	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost (1)	$	34	$	100
Variable lease cost (2)	8		25

⁽¹⁾ Includes short-term leases, which are immaterial.

⁽²⁾ Includes payments that are entirely variable and amounts that represent the difference between payments based on an index or rate that would be reflected in the lease liability and what is actually incurred.

The following tables present supplemental lease information as of September 30, 2019:

Lease Term and Discount Rate
Weighted-average remaining lease term (years)	7.18
Weighted-average discount rate	3.47	%

Maturity of Lease Liabilities	Operating Leases (1)
2019	$	26
2020	136
2021	113
2022	92
2023	84
Thereafter	309
Total lease payments	760
Less: Interest	95
Present value of lease liabilities	$	665

⁽¹⁾ Operating lease payments exclude $41 million of legally binding minimum lease payments for leases signed but not yet commenced. These leases will commence between 2019 and 2020 with lease terms of five years to 20 years.

- 42 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

In accordance with the disclosure requirements for our adoption of ASU 2016-02, the Company is presenting the operating leases commitment table as of December 31, 2018. The following table is unchanged from the disclosure in Note 14 in the 2018 Form 10-K:

	Operating Leases		Subleases		Net
2019	$	131	$	4	$	127
2020	125		4		121
2021	101		4		97
2022	79		2		77
2023	72		1		71
Thereafter	282		—		282
Total	$	790	$	15	$	775

10.    Commitments and Contingencies

Loan Portfolio: CSB provides a co-branded loan origination program for CSB clients (the Program) with Quicken Loans, Inc. (Quicken Loans^®). Pursuant to the Program, Quicken Loans originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. CSB purchased First Mortgages of $842 million and $491 million during the third quarters of 2019 and 2018, respectively, and

$2.0 billion and $1.6 billion during the first nine months of 2019 and 2018, respectively. CSB purchased HELOCs with commitments of $52 million and $104 million during the third quarters of 2019 and 2018, respectively, and $180 million and $311 million during the first nine months of 2019 and 2018, respectively.

The Company’s commitments to extend credit on bank lines of credit and to purchase First Mortgages are as follows:

	September 30, 2019		December 31, 2018
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$	11,234	$	11,046
Commitments to purchase First Mortgage loans	1,976		268
Total	$	13,210	$	11,314

In the third quarter of 2019, volume in new and refinanced First Mortgages increased as a result of lower interest rates and enhancements to customer incentives, leading to additional purchases during the third quarter and an increase in commitments to purchase First Mortgages as of September 30, 2019.

Guarantees and indemnifications: Schwab has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. We partially satisfy the margin requirements by arranging unsecured standby letter of credit agreements (LOCs), in favor of the Options Clearing Corporation, which are issued by several banks. At September 30, 2019, the aggregate face amount of these LOCs totaled $225 million. There were no funds drawn under any of these LOCs at September 30, 2019. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

Schwab 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. Schwab’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. The potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

Acquisition of USAA-IMCO: On July 25, 2019, the Company announced a definitive agreement to acquire assets of USAA-IMCO, including over one million brokerage and managed portfolio accounts with approximately $90 billion in client assets,

- 43 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

for $1.8 billion in cash. The companies have also agreed to enter into a long-term referral agreement, effective at closing of the acquisition, that would make Schwab the exclusive wealth management and brokerage provider for USAA members. The transaction is expected to close in mid-2020, subject to satisfaction of closing conditions, including regulatory approvals and the implementation of conversion plans.

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

Predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; and potential opportunities for settlement and the status of any settlement discussions. It may not be reasonably possible to estimate a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Schwab believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below is a certain matter in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results, or cash flows of the Company.

Crago Order Routing Litigation: On July 13, 2016, a securities class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of a putative class of customers executing equity orders through CS&Co. The lawsuit names CS&Co and CSC as defendants and alleges that an agreement under which CS&Co routed orders to UBS Securities LLC between July 13, 2011 and December 31, 2014 violated CS&Co’s duty to seek best execution. Plaintiffs seek unspecified damages, interest, injunctive and equitable relief, and attorneys’ fees and costs. After a first amended complaint was dismissed with leave to amend, plaintiffs filed a second amended complaint on August 14, 2017. Defendants again moved to dismiss, and in a decision issued December 5, 2017, the court denied the motion. Defendants have answered the complaint to deny all allegations, and are vigorously contesting the lawsuit.

11.     Financial Instruments Subject to Off-Balance Sheet Credit Risk

Resale agreements: 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. To mitigate this risk, Schwab requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of the resale price. Schwab also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. The collateral provided under these resale agreements is utilized to meet obligations under broker-dealer client protection rules, which place limitations on our ability to access such segregated securities. For Schwab to repledge or sell this collateral, we would be required to deposit cash and/or securities of an equal amount into our segregated reserve bank accounts in order to meet our segregated cash and investment requirement. Schwab’s resale agreements are not subject to master netting arrangements.

Securities lending: Schwab loans brokerage client securities temporarily to other brokers and clearing houses in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to

- 44 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our client obligations. Schwab mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities. The fair value of these borrowed securities was $860 million and $99 million at September 30, 2019 and December 31, 2018, respectively. Substantially all of our securities lending transactions are through a program with a clearing organization, which guarantees the return of cash to us and is subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, the securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

The following table presents information about our resale agreements and securities lending activity depicting the potential effect of rights of setoff between these recognized assets and recognized liabilities at September 30, 2019 and December 31, 2018:

	Gross Assets/ Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets							Net Amount
							Counterparty Offsetting			Collateral
September 30, 2019
Assets
Resale agreements (1)	$	9,707	$	—	$	9,707	$	—		$	(9,707	)	(2)	$	—
Securities borrowed (3)	877		—		877		(871		)	(6		)		—
Total	$	10,584	$	—	$	10,584	$	(871	)	$	(9,713	)		$	—
Liabilities
Securities loaned (4,5)	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
Total	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
December 31, 2018
Assets
Resale agreements (1)	$	7,195	$	—	$	7,195	$	—		$	(7,195	)	(2)	$	—
Securities borrowed (3)	101		—		101		(98		)	(3		)		—
Total	$	7,296	$	—	$	7,296	$	(98	)	$	(7,198	)		$	—
Liabilities
Securities loaned (4,5)	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111
Total	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111

⁽¹⁾ Included in cash and investments segregated and on deposit for regulatory purposes in the condensed consolidated balance sheets.

⁽²⁾ Actual collateral was greater than or equal to 102% of the related assets. At September 30, 2019 and December 31, 2018, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $9.9 billion and $7.4 billion, respectively.

⁽³⁾ Included in receivables from brokers, dealers, and clearing organizations in the condensed consolidated balance sheets.

⁽⁴⁾ Included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at September 30, 2019 and December 31, 2018.

⁽⁵⁾ Securities loaned are predominantly comprised of equity securities held in client brokerage accounts with overnight and continuous remaining contractual maturities.

- 45 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Margin lending: Clients with margin loans have agreed to allow Schwab to pledge securities in their brokerage accounts in accordance with federal regulations. The following table summarizes the fair value of client securities that were available, under such regulations, that could have been used as collateral, and the amounts that we had pledged:

	September 30, 2019		December 31, 2018
Fair value of client securities available to be pledged	$	26,614	$	26,628
Fair value of client securities pledged for:
Fulfillment of requirements with the Options Clearing Corporation (1)	1,778		2,315
Fulfillment of client short sales	2,023		1,292
Securities lending to other broker-dealers	1,204		974
Total collateral pledged	$	5,005	$	4,581

Note: Excludes amounts available and pledged for securities lending from fully-paid client securities. The fair value of fully-paid client securities available and pledged was $139 million as of September 30, 2019 and $97 million as of December 31, 2018.

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

12.    Fair Values of Assets and Liabilities

Assets and liabilities measured at fair value on a recurring basis

Schwab’s assets and liabilities measured at fair value on a recurring basis include: certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, other securities owned, and AFS securities. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. We generally obtain prices from three independent third-party pricing sources for assets recorded at fair value.

Our primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar “to-be-issued” securities. We compare the prices obtained from the primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. Schwab does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in material differences in the amounts recorded.

For a description of the fair value hierarchy and Schwab’s fair value methodologies, see Note 2 in the 2018 Form 10-K. We did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the nine months ended September 30, 2019, or the year ended December 31, 2018. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at September 30, 2019 or December 31, 2018.

- 46 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

September 30, 2019	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	4,193	$	—	$	—	$	4,193
Commercial paper	—		923		—		923
Total cash equivalents	4,193		923		—		5,116
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,951		—		1,951
U.S. Government securities	—		1,605		—		1,605
Total investments segregated and on deposit for regulatory purposes	—		3,556		—		3,556
Other securities owned:
Equity and bond mutual funds	378		—		—		378
State and municipal debt obligations	—		32		—		32
Equity, U.S. Government and corporate debt, and other securities	3		74		—		77
Schwab Funds® money market funds	10		—		—		10
Total other securities owned	391		106		—		497
Available for sale securities:
U.S. agency mortgage-backed securities	—		40,431		—		40,431
U.S. Treasury securities	—		5,027		—		5,027
Asset-backed securities	—		4,801		—		4,801
Corporate debt securities	—		4,686		—		4,686
Certificates of deposit	—		1,004		—		1,004
Commercial paper	—		521		—		521
Non-agency commercial mortgage-backed securities	—		13		—		13
Total available for sale securities	—		56,483		—		56,483
Total	$	4,584	$	61,068	$	—	$	65,652

- 47 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

December 31, 2018	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	3,429	$	—	$	—	$	3,429
Commercial paper	—		4,863		—		4,863
Total cash equivalents	3,429		4,863		—		8,292
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,396		—		1,396
U.S. Government securities	—		3,275		—		3,275
Total investments segregated and on deposit for regulatory purposes	—		4,671		—		4,671
Other securities owned:
Equity and bond mutual funds	441		—		—		441
State and municipal debt obligations	—		39		—		39
Equity, U.S. Government and corporate debt, and other securities	3		30		—		33
Schwab Funds® money market funds	26		—		—		26
Total other securities owned	470		69		—		539
Available for sale securities:
U.S. agency mortgage-backed securities	—		25,556		—		25,556
U.S. Treasury securities	—		18,302		—		18,302
Asset-backed securities	—		10,085		—		10,085
Corporate debt securities	—		7,467		—		7,467
Certificates of deposit	—		3,685		—		3,685
U.S. agency notes	—		898		—		898
Commercial paper	—		522		—		522
Foreign government agency securities	—		49		—		49
Non-agency commercial mortgage-backed securities	—		14		—		14
Total available for sale securities	—		66,578		—		66,578
Total	$	3,899	$	76,181	$	—	$	80,080

 

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Fair Value of Other Financial Instruments

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

September 30, 2019	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	15,136	$	—	$	15,136	$	—	$	15,136
Cash and investments segregated and on deposit for regulatory purposes	12,595		—		12,595		—		12,595
Receivables from brokers, dealers, and clearing organizations	1,317		—		1,317		—		1,317
Receivables from brokerage clients — net	21,061		—		21,061		—		21,061
Held to maturity securities:
U.S. agency mortgage-backed securities	114,276		—		116,012		—		116,012
Asset-backed securities	18,323		—		18,359		—		18,359
Corporate debt securities	4,659		—		4,715		—		4,715
U.S. state and municipal securities	1,306		—		1,413		—		1,413
Non-agency commercial mortgage-backed securities	1,136		—		1,164		—		1,164
U.S. Treasury securities	224		—		230		—		230
Certificates of deposit	200		—		200		—		200
Foreign government agency securities	50		—		50		—		50
Other	20		—		20		—		20
Total held to maturity securities	140,194		—		142,163		—		142,163
Bank loans — net:
First Mortgages	10,630		—		10,682		—		10,682
HELOCs	1,216		—		1,255		—		1,255
Pledged asset lines	4,878		—		4,878		—		4,878
Other	171		—		171		—		171
Total bank loans — net	16,895		—		16,986		—		16,986
Other assets	617		—		617		—		617
Total	$	207,815	$	—	$	209,875	$	—	$	209,875
Liabilities
Bank deposits	$	209,327	$	—	$	209,327	$	—	$	209,327
Payables to brokers, dealers, and clearing organizations	1,736		—		1,736		—		1,736
Payables to brokerage clients	35,622		—		35,622		—		35,622
Accrued expenses and other liabilities	1,252		—		1,252		—		1,252
Long-term debt	7,427		—		7,771		—		7,771
Total	$	255,364	$	—	$	255,708	$	—	$	255,708

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

December 31, 2018	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	19,646	$	—	$	19,646	$	—	$	19,646
Cash and investments segregated and on deposit for regulatory purposes	8,886		—		8,886		—		8,886
Receivables from brokers, dealers, and clearing organizations	553		—		553		—		553
Receivables from brokerage clients — net	21,641		—		21,641		—		21,641
Held to maturity securities:
U.S. agency mortgage-backed securities	118,064		—		116,093		—		116,093
Asset-backed securities	18,502		—		18,546		—		18,546
Corporate debt securities	4,477		—		4,432		—		4,432
U.S. state and municipal securities	1,327		—		1,348		—		1,348
Non-agency commercial mortgage-backed securities	1,156		—		1,142		—		1,142
U.S. Treasury securities	223		—		217		—		217
Certificates of deposit	200		—		201		—		201
Foreign government agency securities	50		—		49		—		49
Other	10		—		10		—		10
Total held to maturity securities	144,009		—		142,038		—		142,038
Bank loans — net:
First Mortgages	10,370		—		10,193		—		10,193
HELOCs	1,500		—		1,583		—		1,583
Pledged asset lines	4,561		—		4,561		—		4,561
Other	178		—		178		—		178
Total bank loans — net	16,609		—		16,515		—		16,515
Other assets	460		—		460		—		460
Total	$	211,804	$	—	$	209,739	$	—	$	209,739
Liabilities
Bank deposits	$	231,423	$	—	$	231,423	$	—	$	231,423
Payables to brokers, dealers, and clearing organizations	1,831		—		1,831		—		1,831
Payables to brokerage clients	32,726		—		32,726		—		32,726
Accrued expenses and other liabilities	1,370		—		1,370		—		1,370
Long-term debt	6,878		—		6,827		—		6,827
Total	$	274,228	$	—	$	274,177	$	—	$	274,177

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

13.    Stockholders’ Equity

On January 30, 2019, CSC publicly announced that its Board of Directors authorized a new Share Repurchase Program to repurchase up to $4.0 billion of common stock. The share repurchase authorization does not have an expiration date. During the third quarter and first nine months of 2019, CSC repurchased 20 million and 49 million shares of its common stock under this authorization for $771 million and $2.0 billion, respectively.

The Company’s preferred stock issued and outstanding is as follows:

			Liquidation Preference Per Share							Dividend Rate in Effect at September 30, 2019		Earliest Redemption Date	Date at Which Dividend Rate Becomes Floating	Floating Annual Rate of Three-Month LIBOR plus:
	Shares Issued and Outstanding (in thousands) at				Carrying Value at
	September 30, 2019 (1)	December 31, 2018 (1)			September 30, 2019		December 31, 2018		Issue Date
Fixed-rate:
Series C	600	600	$	1,000	$	585	$	585	08/03/15	6.000	%	12/01/20	N/A	N/A
Series D	750	750	1,000		728		728		03/07/16	5.950	%	06/01/21	N/A	N/A
Fixed-to-floating-rate:
Series A	400	400	1,000		397		397		01/26/12	7.000	%	02/01/22	02/01/22	4.820	%
Series E	6	6	100,000		591		591		10/31/16	4.625	%	03/01/22	03/01/22	3.315	%
Series F	5	5	100,000		492		492		10/31/17	5.000	%	12/01/27	12/01/27	2.575	%
Total preferred stock	1,761	1,761			$	2,793	$	2,793

⁽¹⁾ Represented by depositary shares, except for Series A.

N/A Not applicable.

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

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
	Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount
Series A	$	—	$	—	$	—	$	—	$	14	$	35.00	$	14	$	35.00
Series C	9		15.00		9		15.00		27		45.00		27		45.00
Series D	11		14.88		11		14.88		33		44.64		33		44.64
Series E	14		2,312.50		14		2,312.50		28		4,625.00		28		4,625.00
Series F	—		—		—		—		13		2,500.00		15		2,930.56
Total	$	34			$	34			$	115			$	117

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

14.    Accumulated Other Comprehensive Income

The components of other comprehensive income (loss) are as follows:

	2019									2018
Three Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	51		$	(12	)	$	39		$	(43	)	$	11		$	(32	)
Other reclassifications included in other revenue	(1		)	—			(1		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10			(3		)	7			8			(2		)	6
Other comprehensive income (loss)	$	60		$	(15	)	$	45		$	(35	)	$	9		$	(26	)

	2019									2018
Nine Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	496		$	(119	)	$	377		$	(184	)	$	45		$	(139	)
Other reclassifications included in other revenue	(5		)	1			(4		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	30			(7		)	23			26			(6		)	20
Other comprehensive income (loss)	$	521		$	(125	)	$	396		$	(158	)	$	39		$	(119	)

AOCI balances are as follows:

	Total AOCI
Balance at June 30, 2018	$	(278	)
Available for sale securities:
Net unrealized gain (loss)	(32		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	6
Balance at September 30, 2018	$	(304	)
Balance at June 30, 2019	$	99
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	39
Other reclassifications included in other revenue	(1		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	7
Balance at September 30, 2019	$	144

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

	Total AOCI
Balance at December 31, 2017	$	(152	)
Adoption of accounting standards	(33		)
Available for sale securities:
Net unrealized gain (loss)	(139		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	20
Balance at September 30, 2018	$	(304	)
Balance at December 31, 2018	$	(252	)
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	358
Net unrealized gain on securities transferred to available for sale from held to maturity (1)	19
Other reclassifications included in other revenue	(4		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	23
Balance at September 30, 2019	$	144

⁽¹⁾ As part of the adoption of ASU 2017-12, in the first quarter of 2019, the Company made a one-time election to transfer a portion of its HTM securities to AFS. The transfer resulted in a net of tax increase to AOCI of $19 million. See Notes 2 and 4 for additional discussion on the transfer of HTM securities to AFS.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

15.    Regulatory Requirements

At September 30, 2019, CSC and CSB met all of their respective capital requirements. The regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

	Actual (1)				Minimum to be Well Capitalized				Minimum Capital Requirement
September 30, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio (2)
CSC
Common Equity Tier 1 Risk-Based Capital	$	17,264	20.0	%	N/A				$	3,877	4.5	%
Tier 1 Risk-Based Capital	20,057		23.3	%	N/A				5,170		6.0	%
Total Risk-Based Capital	20,075		23.3	%	N/A				6,893		8.0	%
Tier 1 Leverage	20,057		7.3	%	N/A				10,945		4.0	%
Supplementary Leverage Ratio (1)	20,057		7.1	%	N/A				8,418		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,577	22.9	%	$	4,430	6.5	%	$	3,067	4.5	%
Tier 1 Risk-Based Capital	15,577		22.9	%	5,452		8.0	%	4,089		6.0	%
Total Risk-Based Capital	15,594		22.9	%	6,815		10.0	%	5,452		8.0	%
Tier 1 Leverage	15,577		7.4	%	10,537		5.0	%	8,429		4.0	%
Supplementary Leverage Ratio (1)	15,577		7.2	%	N/A		N/A		6,524		3.0	%
December 31, 2018
CSC
Common Equity Tier 1 Risk-Based Capital	$	16,813	17.6	%	N/A				$	4,295	4.5	%
Tier 1 Risk-Based Capital	19,606		20.5	%	N/A				5,726		6.0	%
Total Risk-Based Capital	19,628		20.6	%	N/A				7,635		8.0	%
Tier 1 Leverage	19,606		7.1	%	N/A				11,058		4.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,832	19.7	%	$	5,233	6.5	%	$	3,623	4.5	%
Tier 1 Risk-Based Capital	15,832		19.7	%	6,441		8.0	%	4,831		6.0	%
Total Risk-Based Capital	15,853		19.7	%	8,051		10.0	%	6,441		8.0	%
Tier 1 Leverage	15,832		7.2	%	11,044		5.0	%	8,836		4.0	%

⁽¹⁾ Beginning in 2019, CSC and CSB are subject to the “advanced approaches” framework under the Basel III capital rule. As a result, we are now required to include all components of AOCI in regulatory capital and report our supplementary leverage ratio, which is calculated as Tier 1 capital divided by total leverage exposure. Total leverage exposure includes all on-balance sheet assets and certain off-balance sheet exposures, including unused commitments. Prior to 2019, CSC and CSB elected to opt-out of the requirement to include most components of AOCI in Common Equity Tier 1 Capital; the amounts and ratios for December 31, 2018 are presented on this basis.

⁽²⁾ Under the Basel III capital rule, CSC and CSB are also required to maintain a capital conservation buffer and, beginning in 2019, a countercyclical capital buffer above the regulatory minimum risk-based capital ratios. The capital conservation buffer became 2.5% on January 1, 2019 (1.875% at December 31, 2018). At September 30, 2019, the countercyclical capital buffer was zero percent. If either buffer falls below the minimum requirement, the Company would be subject to limits on capital distributions and discretionary bonus payments to executive officers. At September 30, 2019 the minimum capital requirement plus capital conservation buffer and countercyclical capital buffer for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital ratios were 7.0%, 8.5%, and 10.5%, respectively.

N/A Not applicable.

Based on its regulatory capital ratios at September 30, 2019, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since September 30, 2019 that management believes have changed CSB’s capital category.

In late 2017, Schwab acquired a federal savings bank charter which is now called Charles Schwab Premier Bank. At September 30, 2019, the balance sheet of Charles Schwab Premier Bank consisted primarily of investment securities, and held total assets of $13.5 billion. Charles Schwab Premier Bank is subject to similar regulatory guidelines and requirements, and seeks to maintain a Tier 1 Leverage Ratio similar to CSB.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

	September 30, 2019		December 31, 2018
Net Capital	$	2,235	$	2,304
Minimum net capital required	0.250		0.250
2% of aggregate debit balances	440		436
Net Capital in excess of required net capital	$	1,795	$	1,868

In accordance with the SEC Customer Protection Rule, CS&Co had portions of its cash and investments segregated for the exclusive benefit of clients at September 30, 2019. The SEC Customer Protection Rule requires broker-dealers to segregate client fully-paid securities and cash balances not collateralizing margin positions and not swept to money market funds or bank deposit accounts. Amounts included in cash and investments segregated and on deposit for regulatory purposes represent actual balances on deposit. Cash and cash equivalents included in cash and investments segregated and on deposit for regulatory purposes are presented as part of Schwab’s cash balances in the consolidated statements of cash flows.

16.    Segment Information

Schwab’s two reportable segments are Investor Services and Advisor Services. Schwab structures the operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services to individual investors, and retirement plan services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking, and support services, as well as retirement business services, to independent RIAs, independent retirement advisors, and recordkeepers. Revenues and expenses are allocated to the two segments based on which segment services the client.

Management evaluates the performance of the segments on a pre-tax basis. 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.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Financial information for the segments is presented in the following tables:

	Investor Services				Advisor Services				Total
Three Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	1,182	$	1,138	$	449	$	389	$	1,631	$	1,527
Asset management and administration fees	586		565		239		244		825		809
Trading revenue	108		112		64		64		172		176
Other	68		53		15		14		83		67
Total net revenues	1,944		1,868		767		711		2,711		2,579
Expenses Excluding Interest	1,070		1,015		405		345		1,475		1,360
Income before taxes on income	$	874	$	853	$	362	$	366	$	1,236	$	1,219

	Investor Services				Advisor Services				Total
Nine Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	3,531	$	3,158	$	1,390	$	1,039	$	4,921	$	4,197
Asset management and administration fees	1,679		1,727		687		747		2,366		2,474
Trading revenue	329		354		202		203		531		557
Other	207		182		90		53		297		235
Total net revenues	5,746		5,421		2,369		2,042		8,115		7,463
Expenses Excluding Interest	3,189		3,069		1,190		1,042		4,379		4,111
Income before taxes on income	$	2,557	$	2,352	$	1,179	$	1,000	$	3,736	$	3,352

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THE CHARLES SCHWAB CORPORATION

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 September 30, 2019. 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 September 30, 2019.

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 September 30, 2019, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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THE CHARLES SCHWAB CORPORATION

PART  II  -  OTHER  INFORMATION

Item 1.     Legal Proceedings

For a discussion of legal proceedings, see Item 1 – Note 10.

Item 1A.     Risk Factors

During the first nine months of 2019, there have been no material changes to the risk factors in Part I – Item 1A – Risk Factors in the 2018 Form 10-K.

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

Issuer Purchases of Equity Securities

On January 30, 2019, CSC publicly announced that its Board of Directors authorized the repurchase of up to $4.0 billion of common stock. The authorization does not have an expiration date.

The following table summarizes purchases made by or on behalf of CSC of its common stock for each calendar month in the third quarter of 2019 (in millions, except number of shares, which are in thousands, and per share amounts):

Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Program
July:
Share repurchase program	—	$	—	—	$	2,780
Employee transactions (1)	20	$	40.95	N/A	N/A
August:
Share repurchase program	12,793	$	37.39	12,793	$	2,301
Employee transactions (1)	3	$	40.05	N/A	N/A
September:
Share repurchase program	7,141	$	40.94	7,141	$	2,009
Employee transactions (1)	6	$	38.33	N/A	N/A
Total:
Share repurchase program	19,934	$	38.69	19,934	$	2,009
Employee transactions (1)	29	$	40.35	N/A	N/A

⁽¹⁾ 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.

Item 3.     Defaults Upon Senior Securities

None.

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THE CHARLES SCHWAB CORPORATION

Item 4.     Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

None.

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THE CHARLES SCHWAB CORPORATION

Item 6.     Exhibits

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

Exhibit Number	Exhibit
10.397	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.381).	(1),(2)
10.398	Form of Notice and Retainer Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.382).	(1),(2)
10.399	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans (supersedes Exhibit 10.383).	(1),(2)
10.401	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans (supersedes Exhibit 10.384).	(1),(2)
10.402	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.393).	(1),(2)
10.403	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.394).	(1),(2)
10.404	Form of Notice and Restricted Stock Unit Agreement (no accelerating vesting for retirement) under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.396).	(1),(2)
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	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	(3)
101.SCH	Inline XBRL Taxonomy Extension Schema	(3)
101.CAL	Inline XBRL Taxonomy Extension Calculation	(3)
101.DEF	Inline XBRL Extension Definition	(3)

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THE CHARLES SCHWAB CORPORATION

Exhibit Number	Exhibit
101.LAB	Inline XBRL Taxonomy Extension Label	(3)
101.PRE	Inline XBRL Taxonomy Extension Presentation	(3)
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(1)	Furnished as an exhibit to this Quarterly Report on Form 10-Q.
(2)	Management contract or compensatory plan.
(3)	Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 are the following materials formatted in Inline 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 Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

SIGNATURE

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

		THE CHARLES SCHWAB CORPORATION
		(Registrant)
Date:	November 7, 2019	/s/ Peter Crawford
		Peter Crawford
		Executive Vice President and Chief Financial Officer

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EX-10.397

EXHIBIT 10.397

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

RETAINER STOCK OPTION GRANT

You have been granted the following option to purchase common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”):

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule:	So long as you continue as a non‑employee director on the Board of Directors of Schwab (“Board”) or the board of a subsidiary of Schwab or an employee of Schwab or its subsidiaries and subject to the terms of the Stock Option Agreement, you will acquire the right to exercise this option (become "vested" in this option) on the following dates and in the following amounts:
	Number of Options on Vesting Date:
	<vesting_schedule>

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan and the Stock Option Agreement, both of which are made a part of this notice. Please review the Plan and the Stock Option Agreement carefully, as they explain the terms and conditions of this option. You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Retainer Stock Option Agreement and in the Plan.

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THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR RETAINER STOCK OPTION AGREEMENT

Tax Treatment	This option is a non-qualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	This option becomes vested in installments as described in the Notice of Non-Employee Director Retainer Stock Option Grant. If you become a common-law employee of The Charles Schwab Corporation (“Schwab”) Schwab or its subsidiaries, then this option will continue to vest as described in the Notice of Non-Employee Director Retainer Stock Option Grant so long as you continue as either a non-employee director or an employee of Schwab or its subsidiaries.
Accelerated Vesting	This option will become fully exercisable if your service as a non‑employee director terminates on account of your death, disability or retirement. If, prior to the date your service terminates, Schwab is subject to a “change in control” (as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”) document), this option will become fully exercisable immediately preceding the change in control. If the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Schwab determines that a change in control is likely to occur, Schwab will advise you and this option will become fully exercisable as of the date 10 days prior to the anticipated date of the change in control.
Definition of Disability	For all purposes of this Agreement, "disability" means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, "retirement" means your resignation or removal from the Board or the board of a subsidiary of Schwab at any time after you have attained age 70 or completed 5 continuous years of service as a non‑employee director on the Board and/or the board of a subsidiary of Schwab. Serving simultaneously for a year on the Board and the board of a subsidiary of Schwab is counted as one year total for purposes of determining years of service. If you serve on the Board and the board of a subsidiary of Schwab, you must leave both boards to qualify for retirement.

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Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by Schwab. If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative's right to exercise this option. After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
	•Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding (this exercise method is sometimes referred to as “Exercise and Hold”). •Shares surrendered to Schwab. These Shares will be valued at their fair market value on the date when the new Shares are purchased. (This exercise method is sometimes referred to as a “Stock Swap.”) •By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price. (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the 10th anniversary of the Grant Date but may expire earlier upon your termination of service, as described below.
Termination of Service as a Non‑Employee Director	This option will expire on the date three months following the date of your termination of service as a non-employee director if such service terminates for any reason other than on account of becoming a common‑law employee of Schwab or its subsidiaries, death, disability or retirement. The terms “disability” and “retirement” are defined above. If you become an employee of Schwab or its subsidiaries, this option will expire on the date three months following the date you cease to be an employee of Schwab and its subsidiaries (other than by reason of disability, death or retirement). If you cease to be a non-employee director or an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability. If you cease to be a non‑employee director by reason of your retirement, then this option will expire on the 10th anniversary of the Grant Date.

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Restrictions on Exercise and Issuance or Transfer of Shares	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any applicable law, regulation, or rule. Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations, or rules.
No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
No Right to Remain Director or Employee	Nothing in this Agreement will be construed as giving you the right to be retained as a director or an employee of Schwab and its subsidiaries.
Transfer of Option	In general, only you may exercise this option prior to your death. You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of this option, except as provided below. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may dispose of this option in your will or in a beneficiary designation. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. This option may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.

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Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab. For purposes of this section on “Limitation on Payments,” the term “Schwab" will include affiliated corporations to the extent determined by the Auditors (as defined below) in accordance with section 280G(d)(5) of the Code.
	In the event that the independent auditors most recently selected by the Board (the “Auditors”) determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.
	For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

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	If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount. You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals the Reduced Amount). You will advise Schwab in writing of your election within 10 days of receipt of the notice. If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan). Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code. The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan and will promptly pay or transfer to or for your benefit in the future such amounts as become due to you under the Plan.
	As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment will be treated for all purposes as a loan to you that you will repay to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.

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Adjustments	In the event of a stock split, a stock dividend or a similar change in Shares, the Compensation Committee shall adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan constitute the entire understanding between you and Schwab regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement, signed by both parties. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

BY ACCEPTING THIS OPTION GRANT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLAN.

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EX-10.398

EXHIBIT 10.398

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

RETAINER RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units. A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”), under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”). Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Vesting Schedule:	So long as you continue as a non‑employee director on the Board of Directors of Schwab (“Board”) or the board of a subsidiary of Schwab or an employee of Schwab or its subsidiaries and subject to the terms of the Restricted Stock Unit Agreement, the Restricted Stock Units subject to this grant will become vested and distributable on the following dates and in the following amounts, subject to the restrictions below:
	Number of Restricted Stock Units on Vesting Date:
	<vesting_schedule>

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Any vested Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Restricted Stock Unit Agreement and the Plan carefully, as they explain the terms and conditions of this grant. You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan.

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THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR

RETAINER RESTRICTED STOCK UNIT AGREEMENT

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested and distributable as of the earliest of the following: (1) The applicable Vesting Date for the Restricted Stock Unit indicated in the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant. (2) Your death. (3) Your disability. (4) Your separation from service, if the separation qualifies as a retirement. (5) A change in control. If you become a common-law employee of Schwab or a subsidiary of Schwab (“subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”)), then the Restricted Stock Units will continue to vest as described in the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant so long as you continue as either a non‑employee director or an employee of Schwab or its subsidiaries. Unvested units will be considered “Restricted Stock Units.” If your service terminates for any reason, then your Restricted Stock Units will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination. This means that the Restricted Stock Units will immediately revert to Schwab. You will receive no payment for Restricted Stock Units that are forfeited. Schwab determines when your service terminates for this purpose.
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.
Definition of Disability	For all purposes of this Agreement, "disability" means that you have a disability that qualifies as such under section 409A of the Code.

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Definition of Retirement	For all purposes of this Agreement, "retirement" means your resignation or removal from the Board of Directors of Schwab (the “Board”) or a subsidiary of Schwab at any time after you have attained age 70 or completed 5 continuous years of service as a non‑employee director on the Board and/or a subsidiary of Schwab. Serving simultaneously for a year on the Board and the board of a subsidiary of Schwab is counted as one year total for purposes of determining years of service. If you serve on the Board and the board of a subsidiary of Schwab, you must leave both boards to qualify for retirement.
Definition of Change in Control	For all purposes of this Agreement, "change in control" means an event that qualifies as a change in control event under section 409A of the Code and as a change in control as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).
Definition of Separation From Service	For all purposes of this Agreement, "separation from service" means a separation from service as defined under section 409A of the Code.
Payment of Shares	Any vested Restricted Stock Units will be paid in shares of common stock of Schwab (“Shares”) as provided herein. Shares that have become vested and distributable under this Agreement shall be distributed as follows: (1) Shares that vest and become distributable on a Vesting Date shall be distributed within 30 days of the Vesting Date. (2) Shares that vest and become distributable on death, disability or a change in control shall be distributable within 90 days of such event. (3) Shares that vest and become distributable on a separation from service that qualifies as a retirement shall be distributed within 90 days of the separation from service. Notwithstanding the foregoing, if at the time of your separation from service, you are a “specified employee”, you will receive your Shares six months after your separation from service. "Specified Employee" means a "specified employee" within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.

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Restrictions on Restricted Stock Units	You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of any Restricted Stock Units without Schwab’s written consent. Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Restricted Stock Units may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale. This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights. You have no rights as a Schwab stockholder until your Restricted Stock Units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, you will receive cash equal to the dividend per Share multiplied by the number of unvested Restricted Stock Units. Each such payment shall be made as soon as practicable following the payment of the actual dividend, but in no event beyond March 15 of the year following the year the actual dividend is paid.
No Right to Remain Employee or Director	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker or director of Schwab and its subsidiaries for any specific duration or at all.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment under section 280G of the Code or if there have been

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certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant.

If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab. For purposes of this section on “Limitation on Payments,” the term “Schwab " will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code.

In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee (the “Compensation Committee”) of the Board of Schwab may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.

For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount. The Auditors will determine which and how much of the Payments will be eliminated or reduced (such that the aggregate present value of the Payments equals the Reduced Amount). Schwab will notify you promptly of the Auditor's determination. Present value will be determined in accordance with section 280G(d)(4) of the

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	Code. The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, provided that no such Underpayment related to Shares distributable under this Agreement shall be paid beyond the deadline for making such payments under section 409A of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant, and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture will be adjusted accordingly.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.

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The Plan and Other Agreements The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant and the Plan constitute the entire understanding between you and Schwab regarding this grant. Any prior agreements, commitments or negotiations concerning this grant are superseded. This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

BY ACCEPTING THIS GRANT, YOU AGREE TO ALL OF THE TERMS AND

CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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EX-10.399

EXHIBIT 10.399

THE CHARLES SCHWAB CORPORATION

2013 STOCK INCENTIVE PLAN

NOTICE OF NON-EMPLOYEE DIRECTOR

DEFERRED COMPENSATION STOCK OPTION GRANT

You have been granted the following option to purchase common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”) under The Charles Schwab Corporation 2013 Stock Incentive Plan (the “Plan”):

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule:	This option is fully vested and non-forfeitable at all times.

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan, The Charles Schwab Corporation Directors' Deferred Compensation Plan II and the Stock Option Agreement, which are made a part of this notice. Please review the Plan and the Stock Option Agreement carefully, as they explain the terms and conditions of this option. You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Deferred Compensation Stock Option Agreement and in the Plan.

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THE CHARLES SCHWAB CORPORATION

2013 STOCK INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR

DEFERRED COMPENSATION STOCK OPTION AGREEMENT

Tax Treatment	This option is a non-qualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	This option has been issued under The Charles Schwab Corporation 2013 Stock Incentive Plan (the “Plan”) pursuant to your deferral election under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II (the "Deferred Compensation Plan") and is fully vested and non-forfeitable at all times.
Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by The Charles Schwab Corporation (“Schwab”). If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative's right to exercise this option. After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
	•    Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding (this exercise method is sometimes referred to as “Exercise and Hold”).
	•    Shares surrendered to Schwab. These Shares will be valued at their fair market value on the date when the new Shares are purchased. (This exercise method is sometimes referred to as a “Stock Swap.”)
	•    By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price. (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the 10th anniversary of the Grant Date but may expire earlier upon your termination of service, as described below.

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Termination of Service as Non‑Employee Director	This option will expire on the date three months following the date of your termination of service as a non-employee director if such service terminates for any reason other than on account of becoming a common‑law employee of Schwab or its subsidiaries, death, disability or retirement. The terms “disability” and “retirement” are defined below. If you become an employee of Schwab or its subsidiaries, this option will expire on the date three months following the date you cease to be an employee of Schwab and its subsidiaries (other than by reason of disability, death or retirement). If you cease to be a non-employee director or an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability. If you cease to be a non‑employee director by reason of your retirement, then this option will expire on the 10th anniversary of the Grant Date.
Definition of Disability	For all purposes of this Agreement, "disability" means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, "retirement" means your resignation or removal from the Board of Directors of Schwab (“Board”) or the board of a subsidiary of Schwab at any time after you have attained age 70 or completed 5 continuous years of service as a non‑employee director on the Board and/or the board of a subsidiary of Schwab. Serving simultaneously for a year on the Board and the board of a subsidiary of Schwab is counted as one year total for purposes of determining years of service. If you serve on the Board and the board of a subsidiary of Schwab, you must leave both boards to qualify for retirement.
Restrictions on Exercise and Issuance or Transfer of Shares	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any applicable law, regulation or rule. Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations, or rules.

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No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
No Right to Remain Director or Employee	Nothing in this Agreement will be construed as giving you the right to be retained as a director or an employee of Schwab and its subsidiaries.
Transfer of Option	In general, only you may exercise this option prior to your death. You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of this option, except as provided below. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may dispose of this option in your will or in a beneficiary designation. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. This option may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the Compensation Committee of the Board shall adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

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Applicable Law

This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.

The Plan and Other Agreements

The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan constitute the entire understanding between you and Schwab regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement, signed by both parties. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

BY ACCEPTING THIS OPTION GRANT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLANS.

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EX-10.401

EXHIBIT 10.401

THE CHARLES SCHWAB CORPORATION

2013 STOCK INCENTIVE PLAN

NOTICE OF NON-EMPLOYEE DIRECTOR

DEFERRED COMPENSATION RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units. A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”), under The Charles Schwab Corporation 2013 Stock Incentive Plan (the “Plan”). Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:
Total Number of Restricted Stock Units Granted:
Grant Date:
Vesting Schedule:	These Restricted Stock Units are fully vested and non-forfeitable at all times.

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that these units are granted under and governed by the terms and conditions of the Plan, The Charles Schwab Corporation Directors' Deferred Compensation Plan II and the Restricted Stock Unit Agreement, which are made a part of this notice. Please review the Plan and Restricted Stock Unit Agreement carefully, as they explain the terms and conditions of these units. You agree that Schwab may deliver electronically all documents relating to the Plan or these units (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Deferred Compensation Restricted Stock Unit Agreement and in the Plan.

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THE CHARLES SCHWAB CORPORATION

2013 STOCK INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR

DEFERRED COMPENSATION RESTRICTED STOCK UNIT AGREEMENT

Vesting	These restricted stock units have been issued under The Charles Schwab Corporation 2013 Stock Incentive Plan (the “Plan”) pursuant to your deferral election under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II (the "Deferred Compensation Plan") and are fully vested and non-forfeitable at all times.
Nature of Units	Your units are mere bookkeeping entries. They represent only The Charles Schwab Corporation’s (“Schwab’s”) unfunded and unsecured promise to issue shares of Schwab common stock (“Shares”) on a future date. As a holder of units, you have no rights other than the rights of a general creditor of Schwab.
Voting Rights and Dividend Equivalent Rights	Your units carry no voting or dividend rights. If Schwab pays cash dividends on Shares, any dividend equivalents paid on Restricted Stock Units shall be credited to you as additional Restricted Stock Units. Otherwise, you have no rights as a Schwab stockholder until your units are settled by issuing Shares.
Settlement of Units	Your units will be settled in accordance with the terms of the Deferred Compensation Plan. At the time of settlement, you will receive one Share for each unit.
Other Terms and Conditions	Your units will be governed by all of the applicable terms and conditions of the Deferred Compensation Plan, which are made part of this Restricted Stock Unit Agreement (“Agreement”).
Restrictions on Restricted Stock Units	You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of any Restricted Stock Units. Schwab will deliver Shares to you in accordance with the terms of the Deferred Compensation Plan. Restricted Stock Units may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more

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	beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Restrictions on Resale	You agree not to sell any shares at a time when applicable laws, Schwab policies, or an agreement between Schwab and its underwriters prohibit a sale. This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Non-Employee Director Deferred Compensation Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Shares, the number of your units will be adjusted accordingly, as Schwab may determine pursuant to the Plan.
The Plan and Other Agreements	The text of the Plan and the Deferred Compensation Plan (the "Plans") are incorporated in this Agreement by reference. This Agreement and the Plans constitute the entire understanding between you and Schwab regarding these units. Any prior agreements, commitments or negotiations concerning these units are superseded. This Agreement may be amended only by another written agreement, signed by both parties. If there is any inconsistency or conflict between any provision of this Agreement and the Plans, the terms of the Plans will control.

BY ACCEPTING THIS GRANT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLANS.

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EX-10.402

EXHIBIT 10.402

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NONQUALIFIED STOCK OPTION GRANT

You have been granted the following option to purchase common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”). A stock option represents the right to purchase Shares at a fixed price, called the exercise price, within a certain period of time. Your option is granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price Per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule	So long as you remain employed in good standing by Schwab or its subsidiaries and subject to the terms of the Nonqualified Stock Option Agreement, you will acquire the right to exercise this option (become "vested" in this option) on the following dates and in the following amounts: Number of Shares on Vesting Date: <vesting_schedule>

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan and the Nonqualified Stock Option Agreement, both of which are made a part of this notice. Please review the Plan and the Nonqualified Stock Option Agreement carefully, as they explain the terms and conditions of this option. You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.

THE CHARLES SCHWAB CORPORATION[2013 STOCK INCENTIVE PLAN]
NONQUALIFIED STOCK OPTION AGREEMENT

Tax Treatment	This option is a nonqualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	Subject to the provisions of this Nonqualified Stock Option Agreement (“Agreement”), this option becomes vested in installments as described in the Notice of Nonqualified Stock Option Grant.
Accelerated Vesting	This option will become fully exercisable if your service with The Charles Schwab Corporation (“Schwab”) and its subsidiaries terminates on account of your death or disability. This option will become fully exercisable if your service with Schwab and its subsidiaries terminates on account of your retirement as defined below. If, prior to the date your service terminates, Schwab is subject to a “change in control” (as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”)), this option will become fully exercisable immediately preceding the change in control. If the Compensation Committee (or its delegate) (the “Compensation Committee”) of the Board of Directors of Schwab (the “Board”) determines that a change in control is likely to occur, Schwab will advise you and this option will become fully exercisable as of the date 10 days prior to the anticipated date of the change in control.
Definition of Disability	For all purposes of this Agreement, "disability" means that you have a disability such that you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, “retirement” will mean any termination of employment with Schwab and its subsidiaries for any reason other than death at any time after the earlier of when you attain age 55, but only if, at the time of your termination, you have been credited with at least 10 years of service or when you attain age 65, but only if, at the time of your termination, you have been credited with at least 5 years of service.

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	The phrase "years of service" above has the same meaning given to it under the SchwabPlan Retirement Savings and Investment Plan (or any successor plan).
Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by Schwab. If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative’s right to exercise this option. After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
	• Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding (this exercise method is sometimes referred to as “Exercise and Hold”).
	• Shares are surrendered to Schwab. These shares will be valued at their fair market value on the date when the new Shares are purchased. (This exercise method is sometimes referred to as a “Stock Swap.”)
	• By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price. (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the Expiration Date specified in the Notice of Nonqualified Stock Option Grant but may expire earlier upon your termination of service, as described below.
Termination of Service	This option will expire on the date three months following the date of your termination of employment with Schwab and its subsidiaries for any reason other than on account of death, disability or retirement. The terms “disability” and “retirement” are defined above. If you cease to be an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability.

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	If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 5 years of service, then this option will expire on the earlier of the fifth anniversary of the date of your termination or the Expiration Date specified in the Notice of Nonqualified Stock Option Grant. If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 15 years of service, then this option will expire on the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.
Effect of Entitlement to Severance	If you are entitled to severance benefits under The Charles Schwab Severance Pay Plan (or any successor plan) and have signed your Severance Agreement, then vesting of this option shall be determined under the terms of that plan.
Cancellation of Options	To the fullest extent permitted by applicable laws, this option will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment. The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion.
Withholding Taxes and Stock Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to Schwab to pay any applicable withholding of income and employment taxes that may be due as a result of the option exercise. These arrangements may include without limitation withholding Shares that otherwise would be issued to you when you exercise this option. In the event you do not elect to pay applicable withholding taxes in cash, Schwab shall withhold Shares. Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date, required to satisfy such applicable withholding taxes. Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings. While Schwab will withhold to satisfy applicable withholding taxes, you acknowledge that, regardless of any action taken by Schwab, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you, is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab.
Restrictions on Exercise and	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any

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Issuance or Transfer of Shares	applicable law, regulation, or rule. Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations or rules.
No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to Schwab and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
No Right to Employment	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, consultant, or director of Schwab and its subsidiaries for any specific duration or at all.
Transfer of Option	In general, only you may exercise this option prior to your death. You may not transfer or assign this option, except as provided below. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid.
	You may dispose of this option in your will or in a beneficiary designation. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. This option may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment or if there have been certain securities law violations, then your grant may be reduced or cancelled and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under the Internal Revenue Code of 1986, as amended (the “Code”), such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250

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employees of Schwab, or (c) a 1% stockholder of Schwab.

For purposes of this section on “Limitation on Payments,” the term “Schwab " will include affiliated corporations to the extent determined by the Auditors (as defined below) in accordance with section 280G(d)(5) of the Code.

In the event that the independent auditors most recently selected by the Board (the “Auditors”) determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.

For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation and of the Reduced Amount. You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan). You will advise Schwab in writing of your election within 10 days of receipt of the notice. If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount). Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code. The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable.

As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan, and will promptly pay

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	or transfer to or for your benefit in the future such amounts as become due to you under the Plan. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success determine that an Overpayment has been made, such Overpayment will be treated for all purposes as a loan to you that you will repay to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this option and to construe the terms of the Plan, the Notice of Nonqualified Stock Option Grant, and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Shares, the Compensation Committee, in its discretion, may adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement (including the Additional Terms and Conditions for Non-U.S. Recipients and the Country-Specific Provisions), the Notice

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of Nonqualified Stock Option Grant, and the Plan constitute the entire understanding between you and Schwab regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement approved by the Compensation Committee and signed by both parties. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control. Nothing in this Agreement gives you the ability to negotiate or change the key terms and conditions described above, in the Notice of Nonqualified Stock Option Grant and in the Plan.

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ADDITIONAL TERMS AND CONDITIONS FOR NON-U.S. RECIPIENTS

The additional (or, if so indicated, different) terms and conditions set forth below are specifically incorporated into the Nonqualified Stock Option Agreement (the “Agreement”) for awards granted outside the United States (“U.S.”). These terms and conditions govern this option granted under the Plan if you reside or work outside of the U.S. Due to the complexities of legal, regulatory and tax issues, you should seek appropriate professional advice as to how the relevant laws in the applicable country may apply to your individual situation.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and/or the Agreement.

Withholding Taxes and Stock Withholding: The following provisions supplement the Withholding Taxes and Stock Withholding section of the Agreement:

You acknowledge that, regardless of any action taken by Schwabor, if different, your employer (“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“withholding taxes”), is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab or your Employer. You further acknowledge that Schwab and/or your Employer (1) make no representations or undertakings regarding the treatment of any withholding taxes in connection with any aspect of this option, including, but not limited to, the grant, vesting or exercise of this option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this option to reduce or eliminate your liability for withholding taxes or achieve any particular tax result. Further, if you are subject to withholding taxes in more than one jurisdiction, you acknowledge that Schwaband/or your Employer (or former employer, as applicable) may be required to withhold or account for withholding taxes in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to Schwab and/or the Employer to satisfy all withholding taxes.

In this regard, you authorize Schwab and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all withholding taxes by one or a combination of the following: (a) withholding from your wages or other cash compensation paid to you by Schwab and/or the Employer; (b) withholding from funds in your Schwab brokerage account; (c) requiring you to make a cash payment in an amount equal to the withholding obligations for withholding taxes; (d) withholding from proceeds of the sale of Shares acquired upon exercise of this option either through a voluntary sale or through a mandatory sale arranged by Schwab (on your behalf pursuant to this authorization without further consent); (e) withholding in Shares to be issued upon exercise of this option; or (f) any other method of withholding determined by Schwab and permitted by applicable law.

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Depending on the withholding method, Schwab may withhold or account for withholding taxes by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Shares. If the obligation for withholding taxes is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the exercised option, notwithstanding that a number of the Shares are held back solely for the purpose of paying the withholding taxes.

Nature of Grant: In accepting this option, you acknowledge, understand and agree that:

(1) the Plan is established voluntarily by Schwab, it is discretionary in nature and it may be modified, amended, suspended or terminated by Schwab at any time, to the extent permitted by the Plan;

(2) the grant of this option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;

(3) all decisions with respect to future options or other grants, if any, will be at the sole discretion of Schwab;

(4) you are voluntarily participating in the Plan;

(5) this option, any Shares acquired under this option, and the income and value of same, are not intended to replace any pension rights or compensation;

(6) this option and any Shares acquired under this option, and the income and value of same, are not part of normal or expected compensation for any purpose, including calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;

(7) unless otherwise agreed with Schwab, this option and the Shares acquired under this option, and the income and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of Schwab;

(8) the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

(9) if the underlying Shares do not increase in value, this option will have no value;

(10) if you exercise this option and acquire Shares, the value of such Shares may increase or decrease in value, even below the exercise price;

(11) for purposes of this option, your employment or service relationship will be considered terminated as of the date you are no longer actively providing

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services to Schwab and its subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by Schwab, (i) your right to vest in this option under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); and (ii) the period (if any) during which you may exercise this option after such termination of your employment or service relationship will commence on the date you cease to actively provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where you are employed or terms of your employment agreement, if any; the Plan administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of this option grant (including whether you may still be considered to be providing services while on a leave of absence);

(12) unless otherwise provided in the Plan or by Schwabin its discretion, this option and the benefits evidenced by this Agreement do not create any entitlement to have this option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(13) neither Schwab, its subsidiaries nor your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of this option or of any amounts due to you pursuant to the exercise of this option or the subsequent sale of any Shares acquired upon exercise.

No Advice Regarding Grant: Schwab is not providing any tax, legal or financial advice, nor is Schwab making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Compliance with Law: Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, Schwab shall not be required to deliver any Shares issuable upon exercise of this option prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Schwab shall, in its absolute discretion, deem necessary or advisable. You understand that Schwab is under no obligation to register or qualify the Shares with the SEC or any state or foreign

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securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that Schwabshall have unilateral authority to amend the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Insider Trading/Market Abuse Laws: You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker’s country, if different, which may affect your ability to accept, acquire, sell, attempt to sell or otherwise dispose of Shares, rights to Shares (e.g., this option) or rights linked to the value of Shares during such times you are considered to have “inside information” regarding Schwab (as defined in the laws or regulations in applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party, including fellow employees and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Schwab insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and are advised to speak to your personal advisor on this matter.

Foreign Asset/Account Reporting: Please be aware that your country may have certain foreign asset and/or account reporting requirements which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You acknowledge that it is your responsibility to be compliant with such regulations, and you should speak to your personal advisor on this matter.

Data Privacy:

(1) Declaration of Consent. You hereby agree with the data processing practices described in this Agreement and consent to the collection, processing and use, in electronic or other form, of your personal data as described herein and the transfer of such personal data to the recipients mentioned below, including recipients located in countries which may not have a similar level of protection from the perspective of your country’s data protection laws.

(2) Data Collection and Usage. Schwab and your Employer will collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in Schwab, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing the Plan. The legal basis, where required, for

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the processing of Data is your consent. Where required under applicable law, Data may also be disclosed to certain securities or other regulatory authorities where Schwab’s securities are listed or traded or regulatory filings are made and the legal basis, where required, for such disclosure are the applicable laws.

(3) Stock Plan Administration Service Providers. Schwab transfers Data to certain of its subsidiaries providing stock plan and broker services, or such other third party stock plan service provider as may be selected by Schwab in the future, which is assisting Schwab with the implementation, administration and management of the Plan. You may be asked to agree on separate terms and data processing practices, with such agreement being a condition of the ability to participate in the Plan.

(4) Other Service Provider Data Recipients. Schwab also may transfer Data to other third party service providers, if necessary to ensure compliance with applicable tax, exchange control, securities and labor law. Such third party service providers may include Schwab’s legal counsel as well as Schwab’s auditor, accountant, or other third party vendor (currently Deloitte & Touche LLP). Wherever possible, Schwab will anonymize Data, but you understand that your Data may need to be transferred to such providers to ensure compliance with applicable law and/or tax requirements.

(5) International Data Transfers. Schwab and its other service providers described above under (4) are located in the United States. The United States may have different data privacy laws and protections than your country. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program, which is open to companies subject to Federal Trade Commission jurisdiction. Schwab’s legal basis, where required, for the transfer of Data is your consent.

(6) Data Retention. Schwab will hold and use the Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and securities laws. When Schwab no longer needs the Data, Schwab will remove it from its systems. If Schwab keeps Data longer, it would be to satisfy legal or regulatory obligations and Schwab’s legal basis would be relevant laws or regulations.

(7) Data Subject Rights. You understand that data subject rights vary depending on applicable law and that, depending on where you are based and subject to the conditions set out under applicable law, you may have, without limitation, the rights to (i) request access to or copies of Data that Schwab processes, (ii) rectify or supplement Data that is incorrect, incomplete or out-of-date in light of the purposes underlying the processing, (iii) delete Data, (iv) restrict processing of Data, (v) restrict portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction and/or (vii) receive a list with the

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names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you understand that you can contact your local human resources representative.

(8) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service with your Employer will not be affected; the only consequence of refusing or withdrawing your consent is that Schwab would not be able to grant you options or other equity awards or administer or maintain such awards.

(9) Declaration of Consent. By accepting the options and indicating consent via Schwab’s online acceptance procedure, you are declaring that you agree with the data processing practices described herein and consent to the collection, processing and use of Data by Schwab and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.

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COUNTRY-SPECIFIC PROVISIONS

Terms and Conditions

These additional terms and conditions govern this option granted to you under the Plan if you are an employee and reside and/or work in one of the countries listed below.

Notifications

These provisions may also include information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of September 2019. These laws are often complex and change frequently. As a result, you should not rely on the information in these additional terms and conditions as the only source of information relating to your participation in the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and Schwab is not in a position to assure you of a particular result. Accordingly, you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

You understand that if you are a citizen or resident of a country other than the one in which you currently reside and/or work, transfer to another country after the date of grant, or are considered a resident of another country for local law purposes, Schwab shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you. In addition, the notifications contained herein may not be applicable to you in the same manner.

HONG KONG

Terms and Conditions

Sale Restriction: Any Shares acquired pursuant to exercise of this option are accepted as a personal investment. In the event that you exercise this option and Shares are issued to you (or your heir) within 6 months of the date of grant, you (or your heir) agree that such Shares will not be offered to the public or otherwise disposed of prior to the 6-month anniversary of the date of grant.

Notifications

Securities Law: WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Neither the grant of the options nor the issuance of Shares upon exercise constitutes a public offering of securities under Hong Kong law and are available only to employees of Schwab and its subsidiaries. This Agreement, the Plan and other incidental communication materials distributed in connection with the options (i) have not been prepared in accordance with and are not intended to constitute

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a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of Schwab or its subsidiaries and may not be distributed to any other person.

Nature of Scheme. Schwab specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”).

UNITED KINGDOM

Terms and Conditions

Withholding Taxes and Stock Withholding: This section supplements the “Withholding Taxes and Stock Withholding” section of the Agreement:

Without limitation to the “Withholding Taxes and Stock Withholding” section of the Agreement, you agree that you are liable for all withholding taxes and hereby covenant to pay all such withholding taxes as and when requested by Schwab or your Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified Schwab and your Employer against any taxes that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

Notwithstanding the foregoing, if you are an executive officer or director (as within the meaning of Section 13(k) of the Exchange Act), you understand that you may not be able to indemnify Schwab or your Employer for the amount of any income tax not collected from or paid by you, as it may be considered a loan. In the event that you are an executive officer or director and income tax due is not collected from or paid by you within 90 days after the end of the United Kingdom tax year in which the event giving rise to the income tax occurs, the amount of any income tax due may constitute a benefit to you on which additional income tax and national insurance contributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying Schwab or your Employer (as appropriate) for the value of any employee national insurance contributions due on this additional benefit, which Schwab or your Employer may recover from you by any means referred to in this Agreement.

Retirement: Notwithstanding the terms and conditions set forth in the Agreement, the options of employees in the United Kingdom will not vest upon retirement and any options that are vested prior to retirement will terminate on the earlier of the date three months following the date of your retirement or the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.

BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE

TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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EX-10.403

EXHIBIT 10.403

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units. A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”). Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Vesting Schedule:	So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement, the Restricted Stock Units subject to this grant will become vested and distributable on the following dates and in the following amounts, subject to the restrictions below: Number of Restricted Stock Units on Vesting Date: <vesting_schedule>

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Any vested Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Plan and the Restricted Stock Unit Agreement carefully, as they explain the terms and conditions of this grant. You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan, and you have no right whatsoever to change or negotiate such terms and conditions.

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

RESTRICTED STOCK UNIT AGREEMENT

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested and distributable as of the earliest of the following: (1) The applicable Vesting Date for the Restricted Stock Unit indicated in the Notice of Restricted Stock Unit Grant. (2) Your death. (3) Your disability. (4) Your separation from service, if the separation qualifies as a retirement or a severance eligible termination (provided that vesting shall occur upon a severance eligible termination only to the extent provided in The Charles Schwab Severance Pay Plan (or any successor plan)). (5) A change in control. Unvested units will be considered “Restricted Stock Units.” If your service terminates for any reason, then your Restricted Stock Units will be forfeited to the extent that they have not vested on or before the termination date and do not vest as a result of the termination. This means that the Restricted Stock Units will immediately revert to Schwab. You will receive no payment for Restricted Stock Units that are forfeited. Schwab determines when your service terminates for this purpose. For all purposes of this Agreement, “service” means continuous employment as a common-law employee of Schwab or a parent corporation or subsidiary of Schwab, and “subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”).
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.
Definition of Disability	For all purposes of this Agreement, “disability” means that

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	you have a disability that qualifies as such under section 409A of the Code and due to which you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	If you are an employee of Schwab and its subsidiaries, “retirement” means a separation from service for any reason other than death at any time after the earlier of when you attain age 55, but only if, at the time of your separation, you have been credited with at least 10 years of service or when you attain age 65, but only if, at the time of your termination, you have been credited with at least 5 years of service. The phrase “years of service” above has the same meaning given to it under The SchwabPlan Retirement Savings and Investment Plan (or any successor plan).
Definition of Severance Eligible Termination	For all purposes of this Agreement, "severance eligible termination" means a separation from service entitling you to severance benefits when you have signed your Severance Agreement under The Charles Schwab Severance Pay Plan (or any successor plan).
Definition of Change in Control	For all purposes of this Agreement, "change in control" means an event that qualifies as a change in control event under section 409A of the Code and as a change in control as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).
Definition of Separation From Service	For all purposes of this Agreement, "separation from service" means a separation from service as defined under section 409A of the Code.
Payment of Shares	Any vested Restricted Stock Units will be paid in shares of common stock of Schwab (“Shares”) as provided herein. Shares that have become vested and distributable under this Agreement shall be distributed as follows: (1) Shares that vest and become distributable on a Vesting Date shall be distributed within 30 days of the Vesting Date.

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	(2) Shares that vest and become distributable on death, disability or a change in control, shall be distributable within 90 days of such event.
	(3) Shares that vest and become distributable on a separation from service (either a retirement or a severance eligible termination) shall be distributed within 90 days of the separation from service. Generally, for severance eligible terminations, the distribution date shall be the “termination date” specified in the notice under The Charles Schwab Severance Pay Plan. Notwithstanding the foregoing, if at the time of your separation from service, you are a “specified employee”, you will receive your Shares six months after your separation from service. “Specified Employee” means a “specified employee” within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.
Restrictions on Restricted Stock Units	You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of any Restricted Stock Units without Schwab’s written consent. Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Restricted Stock Units may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Cancellation of Restricted Stock Units	To the fullest extent permitted by applicable laws, these Restricted Stock Units will immediately be cancelled and will

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	expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment. The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion, and will be entitled to deference upon any review.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale. This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
Withholding Taxes	Shares will not be distributed unless you have made acceptable arrangements to pay any applicable withholding taxes that may be due as a result of the vesting and or the distribution of the Shares. These arrangements may include withholding Shares. Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date, required to satisfy such applicable withholding taxes. Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings. In the event you do not elect to pay applicable withholding taxes in cash, Schwab shall withhold Shares as noted above. While Schwab will withhold to satisfy applicable withholding taxes, you acknowledge that, regardless of any action taken by Schwab, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you, is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab. Applicable withholding taxes due on the distribution of Shares subject to this award following termination of employment will be withheld as noted above, unless you have made acceptable arrangements to pay any applicable withholding taxes in cash. If you elect to pay applicable withholding taxes due upon the distribution of Shares in cash, you are responsible for having sufficient funds in your Schwab brokerage account to cover the applicable withholding taxes at the time they are due.

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	Any withholding taxes due prior to distribution of Shares (e.g., under section 3121(v)(2) of the Code upon retirement eligibility) shall be paid by accelerating the vesting of and withholding of Shares payable in connection with such Restricted Stock Units for participants other than executive officers of Schwab (i.e., individuals holding the office of Executive Vice President or above), who shall pay such withholding taxes in cash upon Schwab’s request. Prior to the distribution of Shares, the number of Shares accelerated and withheld for withholding taxes will be rounded down to the next whole Share, and any amounts of less than the fair market value of a Share will be deducted from your pay to cover the applicable withholding taxes due prior to distribution of Shares. Participants may not make any election as to the payment of withholding taxes due prior to the distribution of Shares (e.g., under section 3121(v)(2) of the Code upon retirement eligibility).
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights. You have no rights as a Schwab stockholder until your Restricted Stock Units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, you will receive cash equal to the dividend per Share multiplied by the number of unvested Restricted Stock Units. Each such payment shall be made as soon as practicable following the payment of the actual dividend, but in no event beyond March 15 of the year following the year the actual dividend is paid.
No Right to Remain Employee	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker, or director of Schwab and its subsidiaries for any specific duration or at all.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment under section 280G of the Code or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will

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be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab. For purposes of this section on “Limitation on Payments,” the term “Schwab” will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code.

In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee (the “Compensation Committee”) of the Board of Directors may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.

For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount. The Auditors will determine which and how much of the Payments will be eliminated or reduced (such that the aggregate present value of the Payments equals the Reduced Amount and is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan). Schwab will notify you promptly of the Auditor’s determination. Present value will be determined in accordance with section 280G(d)(4) of the Code. The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable.

As a result of uncertainty in the application of section 280G of

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	the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, provided that no such Underpayment related to Shares distributable under this Agreement shall be paid beyond the deadline for making such payments under section 409A of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture will be adjusted accordingly.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement (including the Additional Terms

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and Conditions for Non-U.S. Recipients and the Country-Specific Provisions), the Notice of Restricted Stock Unit Grant, and the Plan constitute the entire understanding between you and Schwab regarding this grant. Any prior agreements, commitments or negotiations concerning this grant are superseded. This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

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ADDITIONAL TERMS AND CONDITIONS FOR NON-U.S. RECIPIENTS

The additional (or, if so indicated, different) terms and conditions set forth below are specifically incorporated into the Restricted Stock Unit Agreement (the “Agreement”) for awards granted outside the United States (“U.S.”). These terms and conditions govern the Restricted Stock Units granted under the Plan if you reside or work outside of the U.S. Due to the complexities of legal, regulatory and tax issues, you should seek appropriate professional advice as to how the relevant laws in the applicable country may apply to your individual situation.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and/or the Agreement.

Withholding Taxes: the following provisions supplement the Withholding Taxes section of the Restricted Stock Unit Agreement:

You acknowledge that, regardless of any action taken by Schwabor, if different, your employer (“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“withholding taxes”), is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab or your Employer. You further acknowledge that Schwab and/or your Employer (1) make no representations or undertakings regarding the treatment of any withholding taxes in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate your liability for withholding taxes or achieve any particular tax result. Further, if you are subject to withholding taxes in more than one jurisdiction, you acknowledge that Schwaband/or your Employer (or former employer, as applicable) may be required to withhold or account for withholding taxes in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to Schwab and/or the Employer to satisfy all withholding taxes.

In this regard, you authorize Schwab and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all withholding taxes by one or a combination of the following: (a) withholding from your wages or other cash compensation paid to you by Schwab and/or the Employer; (b) withholding from funds in your Schwab brokerage account; (c) requiring you to make a cash payment in an amount equal to the withholding obligations for withholding taxes; (d) withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by Schwab (on your behalf pursuant to this authorization without further consent); (e) withholding in Shares to be issued upon settlement of the Restricted Stock Units; or (f) any other method of withholding determined by Schwab and permitted by applicable law.

Depending on the withholding method, Schwab may withhold or account for withholding taxes by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s), in which case you may receive

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a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Shares. If the obligation for withholding taxes is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Restricted Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the withholding taxes.

Nature of Grant: In accepting the grant, you acknowledge, understand and agree that:

(1) the Plan is established voluntarily by Schwab, it is discretionary in nature and it may be modified, amended, suspended or terminated by Schwab at any time, to the extent permitted by the Plan;

(2) the grant of the Restricted Stock Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

(3) all decisions with respect to future Restricted Stock Units or other grants, if any, will be at the sole discretion of Schwab;

(4) you are voluntarily participating in the Plan;

(5) the Restricted Stock Units, the Shares subject to the Restricted Stock Units, and the income and value of same, are not intended to replace any pension rights or compensation;

(6) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same, are not part of normal or expected compensation for any purpose, including calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;

(7) unless otherwise agreed with Schwab, the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of Schwab;

(8) the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

(9) for purposes of the Restricted Stock Units, your service will be considered terminated as of the date you are no longer actively providing services to Schwab and its subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by Schwab, your right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in

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the jurisdiction where you are employed or the terms of your employment agreement, if any); the Plan administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your Restricted Stock Unit grant (including whether you may still be considered to be providing services while on a leave of absence);

(10) unless otherwise provided in the Plan or by Schwabin its discretion, the Restricted Stock Units and the benefits evidenced by this Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(11) neither Schwab, its subsidiaries nor your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Restricted Stock Units or of any amounts due to you pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement.

No Advice Regarding Grant: Schwab is not providing any tax, legal or financial advice, nor is Schwab making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Compliance with Law: Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, Schwab shall not be required to deliver any Shares issuable upon settlement of the Restricted Stock Units prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Schwab shall, in its absolute discretion, deem necessary or advisable. You understand that Schwab is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that Schwabshall have unilateral authority to amend the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Insider Trading/Market Abuse Laws: You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker’s country, if different, which may affect your ability to accept, acquire, sell, attempt to sell or otherwise dispose of Shares, rights to Shares (e.g., Restricted Stock Units) or rights linked to the value of Shares (e.g., dividend equivalents) during such times you are considered to have “inside information” regarding Schwab (as defined in the laws or regulations in applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party, including fellow

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employees and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Schwab insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and are advised to speak to your personal advisor on this matter.

Foreign Asset/Account Reporting: Please be aware that your country may have certain foreign asset and/or account reporting requirements which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends or dividend equivalents received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You acknowledge that it is your responsibility to be compliant with such regulations, and you should speak to your personal advisor on this matter.

Data Privacy:

(1) Declaration of Consent. You hereby agree with the data processing practices described in this Agreement and consent to the collection, processing and use, in electronic or other form, of your personal data as described herein and the transfer of such personal data to the recipients mentioned below, including recipients located in countries which may not have a similar level of protection from the perspective of your country’s data protection laws.

(2) Data Collection and Usage. Schwab and your Employer will collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in Schwab, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing the Plan. The legal basis, where required, for the processing of Data is your consent. Where required under applicable law, Data may also be disclosed to certain securities or other regulatory authorities where Schwab’s securities are listed or traded or regulatory filings are made and the legal basis, where required, for such disclosure are the applicable laws.

(3) Stock Plan Administration Service Providers. Schwab transfers Data to certain of its subsidiaries providing stock plan and broker services, or such other third party stock plan service provider as may be selected by Schwab in the future, which is assisting Schwab with the implementation, administration and management of the Plan. You may be asked to agree on separate terms and data processing practices, with such agreement being a condition of the ability to participate in the Plan.

(4) Other Service Provider Data Recipients. Schwab also may transfer Data to other third party service providers, if necessary to ensure compliance with applicable tax, exchange control, securities and labor law. Such third party service providers may include Schwab’s legal counsel as well as Schwab’s auditor, accountant, or other third party vendor (currently Deloitte & Touche LLP). Wherever possible, Schwab

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will anonymize Data, but you understand that your Data may need to be transferred to such providers to ensure compliance with applicable law and/or tax requirements.

(5) International Data Transfers. Schwab and its other service providers described above under (4) are located in the United States. The United States may have different data privacy laws and protections than your country. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program, which is open to companies subject to Federal Trade Commission jurisdiction. Schwab’s legal basis, where required, for the transfer of Data is your consent.

(6) Data Retention. Schwab will hold and use the Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and securities laws. When Schwab no longer needs the Data, Schwab will remove it from its systems. If Schwab keeps Data longer, it would be to satisfy legal or regulatory obligations and Schwab’s legal basis would be relevant laws or regulations.

(7) Data Subject Rights. You understand that data subject rights vary depending on applicable law and that, depending on where you are based and subject to the conditions set out under applicable law, you may have, without limitation, the rights to (i) request access or copies of Data that Schwab processes, (ii) rectify or supplement Data that is incorrect, incomplete or out-of-date in light of the purposes underlying the processing, (iii) delete Data, (iv) restrict processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you understand that you can contact your local human resources representative.

(8) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service with your Employer will not be affected; the only consequence of refusing or withdrawing your consent is that Schwab would not be able to grant you Restricted Stock Units or other equity awards or administer or maintain such awards.

(9) Declaration of Consent. By accepting the Restricted Stock Units and indicating consent via Schwab’s online acceptance procedure, you are declaring that you agree with the data processing practices described herein and consent to the collection, processing and use of Data by Schwab and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.

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COUNTRY-SPECIFIC PROVISIONS

Terms and Conditions

These additional terms and conditions govern the Restricted Stock Units granted to you under the Plan if you are an employee and reside and/or work in one of the countries listed below.

Notifications

These provisions may also include information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of September 2019. These laws are often complex and change frequently. As a result, you should not rely on the information in these additional terms and conditions as the only source of information relating to your participation in the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and Schwab is not in a position to assure you of a particular result. Accordingly, you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

You understand that if you are a citizen or resident of a country other than the one in which you currently reside and/or work, transfer to another country after the date of grant, or are considered a resident of another country for local law purposes, Schwab shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you. In addition, the notifications contained herein may not be applicable to you in the same manner.

HONG KONG

Terms and Conditions

Form of Payment:     Notwithstanding any discretion in Section 5(d) of the Plan to the contrary, if you reside in Hong Kong, the Restricted Stock Units shall be payable in Shares only.

Sale Restriction: Any Shares received at vesting are accepted as a personal investment. In the event that the Restricted Stock Units vest and Shares are issued to you (or your heir) within 6 months of the date of grant, you (or your heir) agree that the Shares will not be offered to the public or otherwise disposed of prior to the 6-month anniversary of the date of grant.

Notifications

Securities Law: WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Neither the grant of the Restricted Stock Units nor the issuance of Shares upon vesting of the Restricted Stock Units constitutes a public offering of securities under Hong Kong law and are available only to employees of Schwab and its subsidiaries. This Agreement, the Plan and other incidental communication materials distributed in connection with the Restricted Stock Units (i) have not been prepared in accordance with and are not intended to

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constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong, and (ii) are intended only for the personal use of each eligible employee of Schwab or its subsidiaries and may not be distributed to any other person.

Nature of Scheme. Schwab specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”).

UNITED KINGDOM

Terms and Conditions

Withholding Taxes: This section supplements the “Withholding Taxes” section of the Agreement:

Without limitation to the “Withholding Taxes” section of the Agreement, you agree that you are liable for all withholding taxes and hereby covenant to pay all such withholding taxes as and when requested by Schwab or your Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified Schwab and your Employer against any taxes that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

Notwithstanding the foregoing, if you are an executive officer or director (as within the meaning of Section 13(k) of the Exchange Act), you understand that you may not be able to indemnify Schwab or your Employer for the amount of any income tax not collected from or paid by you, as it may be considered a loan. In the event that you are an executive officer or director and income tax due is not collected within 90 days of the end of the United Kingdom tax year in which the event giving rise to the income tax occurs, the amount of any income tax due may constitute a benefit to you on which additional income tax and national insurance contributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying Schwab or your Employer (as appropriate) for the value of any employee national insurance contributions due on this additional benefit, which Schwab or your Employer may recover from you by any means referred to in this Agreement.

Retirement: Notwithstanding the terms and conditions set forth in the Agreement, the Restricted Stock Units of employees in the United Kingdom will not vest upon retirement.

BY ACCEPTING THIS GRANT, YOU AGREE TO ALL OF THE TERMS AND

CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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EX-10.404

EXHIBIT 10.404

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF RESTRICTED STOCK UNIT GRANT (RETENTION)

You have been granted Restricted Stock Units. A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”). Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Vesting Schedule:	So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement, the Restricted Stock Units subject to this grant will become vested and distributable on the following dates and in the following amounts, subject to the restrictions below: Number of Restricted Stock Units on Vesting Date: <vesting_schedule> Restricted Stock Units subject to this grant will not vest upon retirement.

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Any vested Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Plan and the Restricted Stock Unit Agreement carefully, as they explain the terms and conditions of this grant. You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan, and you have no right whatsoever to change or negotiate such terms and conditions.

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

RESTRICTED STOCK UNIT AGREEMENT (RETENTION)

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested and distributable as of the earliest of the following:
	(1) The applicable Vesting Date for the Restricted Stock Unit indicated in the Notice of Restricted Stock Unit Grant.
	(2) Your death.
	(3) Your disability.
	(4) Your separation from service due to a severance eligible termination under The Charles Schwab Severance Pay Plan (or any successor plan)).
	(5) A change in control.
	Unvested units will be considered “Restricted Stock Units.” If your service terminates for any reason, then your Restricted Stock Units will be forfeited to the extent that they have not vested on or before the termination date and do not vest as a result of the termination. This means that the Restricted Stock Units will immediately revert to Schwab. You will receive no payment for Restricted Stock Units that are forfeited. Schwab determines when your service terminates for this purpose. For all purposes of this Agreement, “service” means continuous employment as a common-law employee of Schwab or a parent corporation or subsidiary of Schwab, and “subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”).
Retirement	Restricted Stock Units subject to this grant will not vest upon retirement.
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.

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Definition of Disability	For all purposes of this Agreement, "disability" means that you have a disability that qualifies as such under section 409A of the Code and due to which you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Severance Eligible Termination	For all purposes of this Agreement, "severance eligible termination" means a separation from service entitling you to severance benefits when you have signed your Severance Agreement under The Charles Schwab Severance Pay Plan (or any successor plan).
Definition of Change in Control	For all purposes of this Agreement, "change in control" means an event that qualifies as a change in control event under section 409A of the Code and as a change in control as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).
Definition of Separation From Service	For all purposes of this Agreement, "separation from service" means a separation from service as defined under section 409A of the Code.
Payment of Shares	Any vested Restricted Stock Units will be paid in shares of common stock of Schwab (“Shares”) as provided herein. Shares that have become vested and distributable under this Agreement shall be distributed as follows: (1) Shares that vest and become distributable on a Vesting Date shall be distributed within 30 days of the Vesting Date. (2) Shares that vest and become distributable on death, disability or a change in control, shall be distributable within 90 days of such event. (3) Shares that vest and become distributable on a separation from service due to a severance eligible termination shall be distributed within 90 days of the separation from service. Generally, the distribution date shall be the "termination date" specified in the notice under The Charles Schwab Severance Pay Plan. Notwithstanding the foregoing, if at the time of your separation from service, you are a “specified employee”, you will receive your Shares six months after your separation from service. "Specified Employee" means a "specified

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	employee" within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.
Restrictions on Restricted Stock Units	You may not assign, sell, transfer, pledge, encumber, or otherwise dispose of any Restricted Stock Units without Schwab’s written consent. Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Restricted Stock Units may not be assigned, transferred, pledged, encumbered, or otherwise disposed of in any settlement, judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights or domestic property rights.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab. You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death. If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Cancellation of Restricted Stock Units	To the fullest extent permitted by applicable laws, these Restricted Stock Units will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment. The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion, and will be entitled to deference upon any review.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale. This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.

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Withholding Taxes	Shares will not be distributed unless you have made acceptable arrangements to pay any applicable withholding taxes that may be due as a result of the vesting and or the distribution of the Shares. These arrangements may include withholding Shares. Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date, required to satisfy such applicable withholding taxes. Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings. In the event you do not elect to pay applicable withholding taxes in cash, Schwab shall withhold Shares as noted above. While Schwab will withhold to satisfy applicable withholding taxes, you acknowledge that, regardless of any action taken by Schwab, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you, is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab. Applicable withholding taxes due on the distribution of Shares subject to this award following termination of employment will be withheld as noted above, unless you have made acceptable arrangements to pay any applicable withholding taxes in cash. If you elect to pay applicable withholding taxes due upon the distribution of Shares in cash, you are responsible for having sufficient funds in your Schwab brokerage account to cover the applicable withholding taxes at the time they are due.
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights. You have no rights as a Schwab stockholder until your Restricted Stock Units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, you will receive cash equal to the dividend per Share multiplied by the number of unvested Restricted Stock Units. Each such payment shall be made as soon as practicable following the payment of the actual dividend, but in no event beyond March 15 of the year following the year the actual dividend is paid.

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No Right to Remain Employee

Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker, or director of Schwab and its subsidiaries for any specific duration or at all.

Limitation on Payments

If a payment from the Plan would constitute an excess parachute payment under section 280G of the Code or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab. For purposes of this section on “Limitation on Payments,” the term “Schwab" will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code. In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee (the “Compensation Committee”) of the Board of Directors may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section. For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code. If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a

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	copy of the detailed calculation of the Reduced Amount. The Auditors will determine which and how much of the Payments will be eliminated or reduced (such that the aggregate present value of the Payments equals the Reduced Amount and is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan). Schwab will notify you promptly of the Auditor's determination. Present value will be determined in accordance with section 280G(d)(4) of the Code. The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, provided that no such Underpayment related to Shares distributable under this Agreement shall be paid beyond the deadline for making such payments under section 409A of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture will be adjusted accordingly.

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Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement (including the Additional Terms and Conditions for Non-U.S. Recipients and the Country-Specific Provisions), the Notice of Restricted Stock Unit Grant, and the Plan constitute the entire understanding between you and Schwab regarding this grant. Any prior agreements, commitments or negotiations concerning this grant are superseded. This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

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ADDITIONAL TERMS AND CONDITIONS FOR NON-U.S. RECIPIENTS

The additional (or, if so indicated, different) terms and conditions set forth below are specifically incorporated into the Restricted Stock Unit Agreement (the “Agreement”) for awards granted outside the United States (“U.S.”). These terms and conditions govern the Restricted Stock Units granted under the Plan if you reside or work outside of the U.S. Due to the complexities of legal, regulatory and tax issues, you should seek appropriate professional advice as to how the relevant laws in the applicable country may apply to your individual situation.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and/or the Agreement.

Withholding Taxes: the following provisions supplement the Withholding Taxes section of the Restricted Stock Unit Agreement:

You acknowledge that, regardless of any action taken by Schwabor, if different, your employer (“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“withholding taxes”), is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab or your Employer. You further acknowledge that Schwab and/or your Employer (1) make no representations or undertakings regarding the treatment of any withholding taxes in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate your liability for withholding taxes or achieve any particular tax result. Further, if you are subject to withholding taxes in more than one jurisdiction, you acknowledge that Schwaband/or your Employer (or former employer, as applicable) may be required to withhold or account for withholding taxes in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to Schwab and/or the Employer to satisfy all withholding taxes.

In this regard, you authorize Schwab and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all withholding taxes by one or a combination of the following: (a) withholding from your wages or other cash compensation paid to you by Schwab and/or the Employer; (b) withholding from funds in your Schwab brokerage account; (c) requiring you to make a cash payment in an amount equal to the withholding obligations for withholding taxes; (d) withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by Schwab (on your behalf pursuant to this authorization without further consent); (e) withholding in Shares to be issued upon settlement of the Restricted Stock Units; or (f) any other method of withholding determined by Schwab and permitted by applicable law.

Depending on the withholding method, Schwab may withhold or account for withholding taxes by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s), in which case you may receive

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a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Shares. If the obligation for withholding taxes is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Restricted Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the withholding taxes.

Nature of Grant: In accepting the grant, you acknowledge, understand and agree that:

(1) the Plan is established voluntarily by Schwab, it is discretionary in nature and it may be modified, amended, suspended or terminated by Schwab at any time, to the extent permitted by the Plan;

(2) the grant of the Restricted Stock Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

(3) all decisions with respect to future Restricted Stock Units or other grants, if any, will be at the sole discretion of Schwab;

(4) you are voluntarily participating in the Plan;

(5) the Restricted Stock Units, the Shares subject to the Restricted Stock Units, and the income and value of same, are not intended to replace any pension rights or compensation;

(6) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same, are not part of normal or expected compensation for any purpose, including calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;

(7) unless otherwise agreed with Schwab, the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of Schwab;

(8) the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

(9) for purposes of the Restricted Stock Units, your service will be considered terminated as of the date you are no longer actively providing services to Schwab and its subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by Schwab, your right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in

9

the jurisdiction where you are employed or the terms of your employment agreement, if any); the Plan administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your Restricted Stock Unit grant (including whether you may still be considered to be providing services while on a leave of absence);

(10) unless otherwise provided in the Plan or by Schwabin its discretion, the Restricted Stock Units and the benefits evidenced by this Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(11) neither Schwab, its subsidiaries nor your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Restricted Stock Units or of any amounts due to you pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement.

No Advice Regarding Grant: Schwab is not providing any tax, legal or financial advice, nor is Schwab making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Compliance with Law: Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, Schwab shall not be required to deliver any Shares issuable upon settlement of the Restricted Stock Units prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Schwab shall, in its absolute discretion, deem necessary or advisable. You understand that Schwab is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that Schwabshall have unilateral authority to amend the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Insider Trading/Market Abuse Laws: You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker’s country, if different, which may affect your ability to accept, acquire, sell, attempt to sell or otherwise dispose of Shares, rights to Shares (e.g., Restricted Stock Units) or rights linked to the value of Shares (e.g., dividend equivalents) during such times you are considered to have “inside information” regarding Schwab (as defined in the laws or regulations in applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party, including fellow

10

employees and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Schwab insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and are advised to speak to your personal advisor on this matter.

Foreign Asset/Account Reporting: Please be aware that your country may have certain foreign asset and/or account reporting requirements which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends or dividend equivalents received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You acknowledge that it is your responsibility to be compliant with such regulations, and you should speak to your personal advisor on this matter.

Data Privacy:

(1) Declaration of Consent. You hereby agree with the data processing practices described in this Agreement and consent to the collection, processing and use, in electronic or other form, of your personal data as described herein and the transfer of such personal data to the recipients mentioned below, including recipients located in countries which may not have a similar level of protection from the perspective of your country’s data protection laws.

(2) Data Collection and Usage. Schwab and your Employer will collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in Schwab, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing the Plan. The legal basis, where required, for the processing of Data is your consent. Where required under applicable law, Data may also be disclosed to certain securities or other regulatory authorities where Schwab’s securities are listed or traded or regulatory filings are made and the legal basis, where required, for such disclosure are the applicable laws.

(3) Stock Plan Administration Service Providers. Schwab transfers Data to certain of its subsidiaries providing stock plan and broker services, or such other third party stock plan service provider as may be selected by Schwab in the future, which is assisting Schwab with the implementation, administration and management of the Plan. You may be asked to agree on separate terms and data processing practices, with such agreement being a condition of the ability to participate in the Plan.

(4) Other Service Provider Data Recipients. Schwab also may transfer Data to other third party service providers, if necessary to ensure compliance with applicable tax, exchange control, securities and labor law. Such third party service providers may include Schwab’s legal counsel as well as Schwab’s auditor, accountant, or other third party vendor (currently Deloitte & Touche LLP). Wherever possible, Schwab

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will anonymize Data, but you understand that your Data may need to be transferred to such providers to ensure compliance with applicable law and/or tax requirements.

(5) International Data Transfers. Schwab and its other service providers described above under (4) are located in the United States. The United States may have different data privacy laws and protections than your country. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program, which is open to companies subject to Federal Trade Commission jurisdiction. Schwab’s legal basis, where required, for the transfer of Data is your consent.

(6) Data Retention. Schwab will hold and use the Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and securities laws. When Schwab no longer needs the Data, Schwab will remove it from its systems. If Schwab keeps Data longer, it would be to satisfy legal or regulatory obligations and Schwab’s legal basis would be relevant laws or regulations.

(7) Data Subject Rights. You understand that data subject rights vary depending on applicable law and that, depending on where you are based and subject to the conditions set out under applicable law, you may have, without limitation, the rights to (i) request access or copies of Data that Schwab processes, (ii) rectify or supplement Data that is incorrect, incomplete or out-of-date in light of the purposes underlying the processing, (iii) delete Data, (iv) restrict processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you understand that you can contact your local human resources representative.

(8) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service with your Employer will not be affected; the only consequence of refusing or withdrawing your consent is that Schwab would not be able to grant you Restricted Stock Units or other equity awards or administer or maintain such awards.

(9) Declaration of Consent. By accepting the Restricted Stock Units and indicating consent via Schwab’s online acceptance procedure, you are declaring that you agree with the data processing practices described herein and consent to the collection, processing and use of Data by Schwab and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.

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COUNTRY-SPECIFIC PROVISIONS

Terms and Conditions

These additional terms and conditions govern the Restricted Stock Units granted to you under the Plan if you are an employee and reside and/or work in one of the countries listed below.

Notifications

These provisions may also include information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of September 2019. These laws are often complex and change frequently. As a result, you should not rely on the information in these additional terms and conditions as the only source of information relating to your participation in the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and Schwab is not in a position to assure you of a particular result. Accordingly, you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

You understand that if you are a citizen or resident of a country other than the one in which you currently reside and/or work, transfer to another country after the date of grant, or are considered a resident of another country for local law purposes, Schwab shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you. In addition, the notifications contained herein may not be applicable to you in the same manner.

HONG KONG

Terms and Conditions

Form of Payment:     Notwithstanding any discretion in Section 5(d) of the Plan to the contrary, if you reside in Hong Kong, the Restricted Stock Units shall be payable in Shares only.

Sale Restriction: Any Shares received at vesting are accepted as a personal investment. In the event that the Restricted Stock Units vest and Shares are issued to you (or your heir) within 6 months of the date of grant, you (or your heir) agree that the Shares will not be offered to the public or otherwise disposed of prior to the 6-month anniversary of the date of grant.

Notifications

Securities Law: WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Neither the grant of the Restricted Stock Units nor the issuance of Shares upon vesting of the Restricted Stock Units constitutes a public offering of securities under Hong Kong law and are available only to employees of Schwab and its subsidiaries. This Agreement, the Plan and other incidental communication materials distributed in connection with the

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Restricted Stock Units (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong, and (ii) are intended only for the personal use of each eligible employee of Schwab or its subsidiaries and may not be distributed to any other person.

Nature of Scheme. Schwab specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”).

UNITED KINGDOM

Terms and Conditions

Withholding Taxes: This section supplements the “Withholding Taxes” section of the Agreement:

Without limitation to the “Withholding Taxes” section of the Agreement, you agree that you are liable for all withholding taxes and hereby covenant to pay all such withholding taxes as and when requested by Schwab or your Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified Schwab and your Employer against any taxes that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

Notwithstanding the foregoing, if you are an executive officer or director (as within the meaning of Section 13(k) of the Exchange Act), you understand that you may not be able to indemnify Schwab or your Employer for the amount of any income tax not collected from or paid by you, as it may be considered a loan. In the event that you are an executive officer or director and income tax due is not collected within 90 days of the end of the United Kingdom tax year in which the event giving rise to the income tax occurs, the amount of any income tax due may constitute a benefit to you on which additional income tax and national insurance contributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying Schwab or your Employer (as appropriate) for the value of any employee national insurance contributions due on this additional benefit, which Schwab or your Employer may recover from you by any means referred to in this Agreement.

BY ACCEPTING THIS GRANT, YOU AGREE TO ALL OF THE TERMS AND

CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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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:	November 7, 2019	/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, Peter Crawford, 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:	November 7, 2019	/s/ Peter Crawford
		Peter Crawford
		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 September 30, 2019 (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:	November 7, 2019
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 September 30, 2019 (the Report), I, Peter Crawford, 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/ Peter Crawford	Date:	November 7, 2019
Peter Crawford
Executive Vice President and Chief Financial Officer

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

XML

Bank Deposits (Tables)

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Deposits from Banking Clients Consisting of Interest Bearing and Noninterest Bearing Deposits

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

	September 30, 2019		December 31, 2018
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	191,456	$	212,311
Checking	12,020		12,523
Savings and other	5,146		5,827
Total interest-bearing deposits	208,622		230,661
Non-interest-bearing deposits	705		762
Total bank deposits	$	209,327	$	231,423

XML

Financial Instruments Subject to Off-Balance Sheet Credit Risk (Tables)

9 Months Ended

Sep. 30, 2019

Offsetting [Abstract]

Offsetting Assets and Liabilities

The following table presents information about our resale agreements and securities lending activity depicting the potential effect of rights of setoff between these recognized assets and recognized liabilities at September 30, 2019 and December 31, 2018:

	Gross Assets/ Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets							Net Amount
							Counterparty Offsetting			Collateral
September 30, 2019
Assets
Resale agreements (1)	$	9,707	$	—	$	9,707	$	—		$	(9,707	)	(2)	$	—
Securities borrowed (3)	877		—		877		(871		)	(6		)		—
Total	$	10,584	$	—	$	10,584	$	(871	)	$	(9,713	)		$	—
Liabilities
Securities loaned (4,5)	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
Total	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
December 31, 2018
Assets
Resale agreements (1)	$	7,195	$	—	$	7,195	$	—		$	(7,195	)	(2)	$	—
Securities borrowed (3)	101		—		101		(98		)	(3		)		—
Total	$	7,296	$	—	$	7,296	$	(98	)	$	(7,198	)		$	—
Liabilities
Securities loaned (4,5)	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111
Total	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111

⁽¹⁾ Included in cash and investments segregated and on deposit for regulatory purposes in the condensed consolidated balance sheets.

⁽²⁾ Actual collateral was greater than or equal to 102% of the related assets. At September 30, 2019 and December 31, 2018, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $9.9 billion and $7.4 billion, respectively.

⁽³⁾ Included in receivables from brokers, dealers, and clearing organizations in the condensed consolidated balance sheets.

⁽⁴⁾ Included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at September 30, 2019 and December 31, 2018.

⁽⁵⁾ Securities loaned are predominantly comprised of equity securities held in client brokerage accounts with overnight and continuous remaining contractual maturities.

Summary of the Fair Value of Client Securities Available to Utilize as Collateral and Amounts Pledged

The following table summarizes the fair value of client securities that were available, under such regulations, that could have been used as collateral, and the amounts that we had pledged:

	September 30, 2019		December 31, 2018
Fair value of client securities available to be pledged	$	26,614	$	26,628
Fair value of client securities pledged for:
Fulfillment of requirements with the Options Clearing Corporation (1)	1,778		2,315
Fulfillment of client short sales	2,023		1,292
Securities lending to other broker-dealers	1,204		974
Total collateral pledged	$	5,005	$	4,581

Note: Excludes amounts available and pledged for securities lending from fully-paid client securities. The fair value of fully-paid client securities available and pledged was $139 million as of September 30, 2019 and $97 million as of December 31, 2018.

⁽¹⁾  

Client securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Loan Portfolio: CSB provides a co-branded loan origination program for CSB clients (the Program) with Quicken Loans, Inc. (Quicken Loans^®). Pursuant to the Program, Quicken Loans originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. CSB purchased First Mortgages of $842 million and $491 million during the third quarters of 2019 and 2018, respectively, and

$2.0 billion and $1.6 billion during the first nine months of 2019 and 2018, respectively. CSB purchased HELOCs with commitments of $52 million and $104 million during the third quarters of 2019 and 2018, respectively, and $180 million and $311 million during the first nine months of 2019 and 2018, respectively.

The Company’s commitments to extend credit on bank lines of credit and to purchase First Mortgages are as follows:

	September 30, 2019		December 31, 2018
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$	11,234	$	11,046
Commitments to purchase First Mortgage loans	1,976		268
Total	$	13,210	$	11,314

In the third quarter of 2019, volume in new and refinanced First Mortgages increased as a result of lower interest rates and enhancements to customer incentives, leading to additional purchases during the third quarter and an increase in commitments to purchase First Mortgages as of September 30, 2019.

Guarantees and indemnifications: Schwab has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. We partially satisfy the margin requirements by arranging unsecured standby letter of credit agreements (LOCs), in favor of the Options Clearing Corporation, which are issued by several banks. At September 30, 2019, the aggregate face amount of these LOCs totaled $225 million. There were no funds drawn under any of these LOCs at September 30, 2019. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

Schwab 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. Schwab’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. The potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

Acquisition of USAA-IMCO: On July 25, 2019, the Company announced a definitive agreement to acquire assets of USAA-IMCO, including over one million brokerage and managed portfolio accounts with approximately $90 billion in client assets,

for $1.8 billion in cash. The companies have also agreed to enter into a long-term referral agreement, effective at closing of the acquisition, that would make Schwab the exclusive wealth management and brokerage provider for USAA members. The transaction is expected to close in mid-2020, subject to satisfaction of closing conditions, including regulatory approvals and the implementation of conversion plans.

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

Predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; and potential opportunities for settlement and the status of any settlement discussions. It may not be reasonably possible to estimate a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Schwab believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below is a certain matter in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results, or cash flows of the Company.

Crago Order Routing Litigation: On July 13, 2016, a securities class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of a putative class of customers executing equity orders through CS&Co. The lawsuit names CS&Co and CSC as defendants and alleges that an agreement under which CS&Co routed orders to UBS Securities LLC between July 13, 2011 and December 31, 2014 violated CS&Co’s duty to seek best execution. Plaintiffs seek unspecified damages, interest, injunctive and equitable relief, and attorneys’ fees and costs. After a first amended complaint was dismissed with leave to amend, plaintiffs filed a second amended complaint on August 14, 2017. Defendants again moved to dismiss, and in a decision issued December 5, 2017, the court denied the motion. Defendants have answered the complaint to deny all allegations, and are vigorously contesting the lawsuit.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2019

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

As of September 30, 2019 and December 31, 2018, all of Schwab’s involvement with variable interest entities (VIEs) is through CSB’s Community Reinvestment Act (CRA)-related investments and most of those are related to Low-Income Housing Tax Credit (LIHTC) investments. As part of CSB’s community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties. CSB receives tax credits and other tax benefits for these investments.

Aggregate assets, liabilities and maximum exposure to loss

The aggregate assets, liabilities, and maximum exposure to loss from those VIEs in which Schwab holds a variable interest, but is not the primary beneficiary, are summarized in the table below:

	September 30, 2019						December 31, 2018
	Aggregate assets		Aggregate liabilities		Maximum exposure to loss		Aggregate assets		Aggregate liabilities		Maximum exposure to loss
LIHTC investments (1)	$	498	$	298	$	498	$	338	$	188	$	338
Other CRA investments (2)	91		—		125		70		—		124
Total	$	589	$	298	$	623	$	408	$	188	$	462

⁽¹⁾ Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheets.

⁽²⁾ Other CRA investments are recorded using either the adjusted cost method, equity method, or as HTM securities. Aggregate assets are included in HTM securities, bank loans – net, or other assets on the condensed consolidated balance sheets.

Schwab’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. CSB’s funding of these remaining commitments is dependent upon the occurrence of certain conditions, and CSB expects to pay substantially all of these commitments between 2019 and 2022. During the nine months ended September 30, 2019 and year ended December 31, 2018, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

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New Accounting Standards

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

New Accounting Standards

New Accounting Standards

Adoption of New Accounting Standards

Standard	Description	Date of Adoption	Effects on the Financial Statements or Other Significant Matters
Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)”	Amends the accounting for leases by lessees and lessors. The primary change from the new guidance is the recognition of right-of-use (ROU) assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances, and expanded lease disclosures. Adoption provides for modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard or, optionally, through another transition method by which a cumulative-effect adjustment is recorded to retained earnings as of the beginning of the period of adoption. Certain transition relief is permitted if elected by the entity.	January 1, 2019	The Company adopted the new lease accounting guidance as of January 1, 2019 under the optional transition method provided electing not to recast its comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption resulted in a gross up of the consolidated balance sheet due to recognition of ROU assets and lease liabilities primarily related to the CS&Co leases of office space and branches. The amounts were based on the present value of our remaining operating lease payments. The Company’s ROU assets and related lease liabilities upon adoption were $596 million and $662 million, respectively. Further details on the impact of adoption are included below in this Note as well as in Note 9.
ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”	Shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature with a fixed price on a preset date. ASU 2017-08 does not impact the accounting for callable debt securities held at a discount. Adoption requires modified retrospective transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings.	January 1, 2019	The Company adopted this guidance as of January 1, 2019 using the modified retrospective method. Adoption resulted in an immaterial cumulative-effect adjustment to retained earnings as of the date of adoption.
ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”	This ASU amends hedge accounting guidance to better align hedge accounting with risk management activities, while reducing the complexity of applying and reporting on hedge accounting. In addition, for a closed pool of prepayable financial assets, entities will be able to hedge an amount that is not expected to be affected by prepayments, defaults and other events under the “last-of-layer” method. The guidance also permits a one-time reclassification of debt securities eligible to be hedged under the “last-of-layer” method from held to maturity (HTM) to available for sale (AFS) upon adoption.	January 1, 2019	The Company adopted this ASU on January 1, 2019. As part of its adoption, the Company made a one-time election to reclassify a portion of its HTM securities eligible to be hedged under the “last-of-layer” method to AFS. As of January 1, 2019, the securities reclassified had a fair value of $8.8 billion and resulted in a net of tax increase to AOCI of $19 million. The adoption of this standard had no other impact on the Company’s financial statements.

New Accounting Standards Not Yet Adopted

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	Provides guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and HTM debt securities. Requires estimating current expected credit losses (CECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions, and reasonable forecasts. The initial estimate of, and the subsequent changes in, CECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. Amends the other-than-temporary impairment (OTTI) model for AFS debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Adoption requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for AFS debt securities for which an OTTI has been recognized prior to the effective date.	January 1, 2020 (early adoption permitted)	The Company expects that its allowance for credit losses will increase when CECL is adopted, primarily due to an incremental allowance that will be recorded on its HTM corporate debt securities. The incremental allowance at adoption is expected to be immaterial, but the impact of adoption will depend on, among other things, the economic environment, the proportion of securities classified as AFS versus HTM, and the size and type of loan and securities portfolios held by the Company on the date of adoption. A large portion of the securities in the Company’s portfolio will have zero expectation of credit losses based on industry views and regulatory guidance for U.S. Treasury and U.S. agency mortgage-backed securities. Further, we expect to apply the practical expedient based on continuous collateral replenishment to the Company’s pledged asset lines (PALs) and margin loans. The Company has completed the development of credit loss estimation methods for loans and the securities in its portfolio that do not have zero expectation of credit losses, including corporate debt securities and structured products. We are continuing the development of CECL policies and processes and testing and validation of credit loss estimation methods. We have also completed the first of the two planned quarterly CECL parallel runs.

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”	Aligns the criteria for capitalizing implementation costs for cloud computing arrangements (CCA) that are service contracts with internal-use software that is developed or purchased and CCAs that include an internal-use software license. This guidance requires that the capitalized implementation costs be recognized over the period of the CCA service contract, subject to impairment evaluation on an ongoing basis. The guidance prescribes the balance sheet, income statement, and statement of cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. Adoption provides for retrospective or prospective application to all implementation costs incurred after the date of adoption.	January 1, 2020 (early adoption permitted)	Historically, Schwab has expensed implementation costs as they are incurred for CCAs that are service contracts. Therefore, adopting this guidance will change the Company’s accounting treatment for these types of implementation costs. The Company plans to adopt this guidance on a prospective basis and continues to evaluate the impacts of this guidance on its financial statements, including EPS.

The cumulative effect of the changes made to our consolidated January 1, 2019 balance sheet for the adoption of ASU 2016-02, Leases (Topic 842) were as follows:

	Balance at December 31, 2018		Adjustments Due to ASU 2016-02		Balance at January 1, 2019
Assets
Other assets (1)	$	2,046	$	588	$	2,634
Liabilities
Accrued expenses and other liabilities (2)	$	2,954	$	588	$	3,542

⁽¹⁾ The adoption adjustment is comprised of two parts: 1) an increase of $596 million for the recognition of the January 1, 2019 ROU asset and 2) an $8 million decrease related to prepaid rent and initial direct costs, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

⁽²⁾ The adoption adjustment is comprised of two parts: 1) an increase of $662 million for the recognition of the January 1, 2019 lease liability and 2) a

$74 million decrease related to deferred rent and lease incentives, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

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Regulatory Requirements (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total assets	$ 278,987	$ 296,482
Charles Schwab Premier Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total assets	$ 13,500

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Financial Instruments Subject to Off-Balance Sheet Credit Risk (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Resale agreements
Gross Assets	$ 9,707	$ 7,195
Gross Amounts Offset in the Condensed Consolidated Balance Sheets	0	0
Net Amounts Presented in the Condensed Consolidated Balance Sheets	9,707	7,195
Counterparty Offsetting	0	0
Collateral	(9,707)	(7,195)
Net Amount	0	0
Securities borrowed
Gross Assets	877	101
Gross Amounts Offset in the Condensed Consolidated Balance Sheets	0	0
Net Amounts Presented in the Condensed Consolidated Balance Sheets	877	101
Counterparty Offsetting	(871)	(98)
Collateral	(6)	(3)
Net Amount	0	0
Total Gross Assets	10,584	7,296
Total Assets, Gross Amounts Offset in the Condensed Consolidated Balance Sheets	0	0
Total Assets, Net Amounts Presented in the Condensed Consolidated Balance Sheets	10,584	7,296
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(871)	(98)
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(9,713)	(7,198)
Total Assets, Net Amount	0	0
Securities loaned
Gross Liabilities	1,471	1,184
Gross Amounts Offset in the Condensed Consolidated Balance Sheets	0	0
Net Amounts Presented in the Condensed Consolidated Balance Sheets	1,471	1,184
Counterparty Offsetting	(871)	(98)
Collateral	(489)	(975)
Net Amount	111	111
Total Gross Liabilities	1,471	1,184
Total Liabilities, Net Amounts Presented in the Consolidated Balance Sheet	1,471	1,184
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(871)	(98)
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(489)	(975)
Total Liabilities, Net Amount	111	111
Offsetting Assets [Line Items]
Fair value of client securities available to be pledged	$ 26,614	$ 26,628
Resale And Repurchase Agreements [Member]
Offsetting Assets [Line Items]
Percentage of collateral to related assets	102.00%	102.00%
Fair value of client securities available to be pledged	$ 9,900	$ 7,400

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Stockholders' Equity (Narrative) (Details) - USD ($) shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 30, 2019
Class of Stock [Line Items]
Shares repurchased	$ 771,000,000	$ 1,991,000,000
Common Stock [Member]
Class of Stock [Line Items]
Share repurchase, authorized amount			$ 4,000,000,000.0
Shares repurchased (in shares)	20	49
Shares repurchased	$ 771,000,000	$ 2,000,000,000.0

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Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Balances) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income
Beginning Balance	$ 99	$ (278)	$ (252)	$ (152)
Other net changes	45	(26)	396	(119)
Ending Balance	144	(304)	144	(304)
Adoption of accounting standards [Member] | ASU 2018-02 [Member]
Accumulated Other Comprehensive Income
Other net changes				(33)
Net unrealized gain (loss) on available for sale securities [Member]
Accumulated Other Comprehensive Income
Other net changes	39	(32)	358	(139)
Net unrealized gain on securities transferred to available for sale from held to maturity [Member]
Accumulated Other Comprehensive Income
Other net changes			19
Other reclassifications included in other revenue [Member]
Accumulated Other Comprehensive Income
Other net changes	(1)		(4)
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale [Member]
Accumulated Other Comprehensive Income
Other net changes	$ 7	$ 6	$ 23	$ 20

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Variable Interest Entities (Aggregate Assets, Liabilities and Maximum Exposure to Loss) (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Aggregate assets	$ 589	$ 408
Aggregate liabilities	298	188
Maximum exposure to loss	623	462
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	498	338
Aggregate liabilities	298	188
Maximum exposure to loss	498	338
Other CRA Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	91	70
Aggregate liabilities	0	0
Maximum exposure to loss	$ 125	$ 124

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Bank Loans and Related Allowance for Loan Losses (Changes in Allowance for Loan Losses) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	$ 19	$ 26	$ 21	$ 26
Charge-offs	0	0	0	(1)
Recoveries	0	1	2	2
Provision for loan losses	(2)	(1)	(6)	(1)
Balance at end of period	17	26	17	26
First Mortgage [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	12	17	14	16
Charge-offs	0	0	0	0
Recoveries	0	0	1	0
Provision for loan losses	(2)	0	(5)	1
Balance at end of period	10	17	10	17
HELOCs [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	5	7	5	8
Charge-offs	0	0	0	0
Recoveries	0	1	1	2
Provision for loan losses	(1)	(1)	(2)	(3)
Balance at end of period	4	7	4	7
Other [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	2	2	2	2
Charge-offs	0	0	0	(1)
Recoveries	0	0	0	0
Provision for loan losses	1	0	1	1
Balance at end of period	$ 3	$ 2	$ 3	$ 2

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Financial Instruments Subject to Off-Balance Sheet Credit Risk (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Securities Financing Transaction, Fair Value [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Fair value of borrowed securities from other broker-dealers to fulfill short sales by clients	$ 860	$ 99

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$ 9,707	$ 7,195
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, aggregate liquidation preference	$ 2,850	$ 2,850
Common stock, shares authorized (shares)	3,000,000,000	3,000,000,000
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares issued (shares)	1,487,543,446	1,487,543,446
Treasury stock (shares)	198,611,926	155,116,695

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COVER PAGE - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
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
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,282,287,840
Entity Central Index Key	0000316709
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
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

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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions		Sep. 30, 2019	Sep. 30, 2018
Reconciliation of cash, cash equivalents and amounts reported within the balance sheet
Cash and cash equivalents	[1]	$ 20,252	$ 21,830
Restricted cash and cash equivalents amounts included in cash and investments segregated and on deposit for regulatory purposes	[1]	12,032	5,264
Total cash and cash equivalents, including amounts restricted shown in the statement of cash flows	[1]	$ 32,284	$ 27,094

[1] For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 15.

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Leases (Maturity of Lease Liabilities) (Details) $ in Millions	Sep. 30, 2019 USD ($)
Lessor, Lease, Description [Line Items]
2019	$ 26
2020	136
2021	113
2022	92
2023	84
Thereafter	309
Total lease payments	760
Less: Interest	95
Operating lease liability	665
Lease not yet commenced	$ 41
Minimum [Member]
Lessor, Lease, Description [Line Items]
Lease not yet commenced, term	5 years
Maximum [Member]
Lessor, Lease, Description [Line Items]
Lease not yet commenced, term	20 years

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Borrowings (Narrative) (Details) - Federal Home Loan Bank Advances [Member] - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
FHLB stock	$ 34,000,000	$ 32,000,000
Secured Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, current borrowing capacity	35,200,000,000	35,500,000,000
Amounts outstanding	$ 0	$ 0

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New Accounting Standards (Details) - USD ($) $ in Millions	Jan. 01, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use asset		$ 596
Operating lease liability		665
Accumulated other comprehensive income (loss)		$ 144	$ 99	$ (252)	$ (304)	$ (278)	$ (152)
ASU 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use asset	$ 596
Operating lease liability	662
ASU 2017-12 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Fair value of securities transferred from held to maturity	8,800
Accumulated other comprehensive income (loss)	$ 19

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Investment Securities (Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Available for Sale and Held to Maturity Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Available for sale securities:
Amortized Cost	$ 56,149	$ 66,735
Gross Unrealized Gains	399	72
Gross Unrealized Losses	65	229
Fair Value	56,483	66,578
Held to maturity securities:
Amortized Cost	140,194	144,009
Gross Unrealized Gains	2,247	330
Gross Unrealized Losses	278	2,301
Fair Value	142,163	142,038
U.S. agency mortgage-backed securities [Member]
Available for sale securities:
Amortized Cost	40,179	25,594
Gross Unrealized Gains	299	44
Gross Unrealized Losses	47	82
Fair Value	40,431	25,556
Held to maturity securities:
Amortized Cost	114,276	118,064
Gross Unrealized Gains	1,974	217
Gross Unrealized Losses	238	2,188
Fair Value	116,012	116,093
U.S. Treasury securities [Member]
Available for sale securities:
Amortized Cost	5,034	18,410
Gross Unrealized Gains	3	0
Gross Unrealized Losses	10	108
Fair Value	5,027	18,302
Held to maturity securities:
Amortized Cost	224	223
Gross Unrealized Gains	6	0
Gross Unrealized Losses	0	6
Fair Value	230	217
Asset-backed securities [Member]
Available for sale securities:
Amortized Cost	4,773	10,086
Gross Unrealized Gains	35	14
Gross Unrealized Losses	7	15
Fair Value	4,801	10,085
Held to maturity securities:
Amortized Cost	18,323	18,502
Gross Unrealized Gains	74	83
Gross Unrealized Losses	38	39
Fair Value	18,359	18,546
Corporate debt securities [Member]
Available for sale securities:
Amortized Cost	4,630	7,477
Gross Unrealized Gains	57	10
Gross Unrealized Losses	1	20
Fair Value	4,686	7,467
Held to maturity securities:
Amortized Cost	4,659	4,477
Gross Unrealized Gains	58	2
Gross Unrealized Losses	2	47
Fair Value	4,715	4,432
Certificates of deposit [Member]
Available for sale securities:
Amortized Cost	1,000	3,682
Gross Unrealized Gains	4	4
Gross Unrealized Losses	0	1
Fair Value	1,004	3,685
Held to maturity securities:
Amortized Cost	200	200
Gross Unrealized Gains	0	1
Gross Unrealized Losses	0	0
Fair Value	200	201
U.S. agency notes [Member]
Available for sale securities:
Amortized Cost		900
Gross Unrealized Gains		0
Gross Unrealized Losses		2
Fair Value		898
U.S. state and municipal securities [Member]
Held to maturity securities:
Amortized Cost	1,306	1,327
Gross Unrealized Gains	107	24
Gross Unrealized Losses	0	3
Fair Value	1,413	1,348
Commercial paper [Member]
Available for sale securities:
Amortized Cost	520	522
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	0
Fair Value	521	522
Available-for-sale securities, current	900	4,900
Foreign government agency securities [Member]
Available for sale securities:
Amortized Cost		50
Gross Unrealized Gains		0
Gross Unrealized Losses		1
Fair Value		49
Held to maturity securities:
Amortized Cost	50	50
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	1
Fair Value	50	49
Non-agency commercial mortgage-backed securities [Member]
Available for sale securities:
Amortized Cost	13	14
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	13	14
Held to maturity securities:
Amortized Cost	1,136	1,156
Gross Unrealized Gains	28	3
Gross Unrealized Losses	0	17
Fair Value	1,164	1,142
Other [Member]
Held to maturity securities:
Amortized Cost	20	10
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	$ 20	$ 10
Federal Family Education Loan Program (FFELP) Guaranteed Loans [Member]
Held to maturity securities:
Asset-backed securities percentage	43.00%	36.00%
Collateralized Credit Card Securities [Member]
Held to maturity securities:
Asset-backed securities percentage	42.00%	42.00%
Corporate debt securities issued by financial services industry [Member]
Held to maturity securities:
AFS and HTM securities percentage	35.00%	26.00%
Corporate debt securities, information technology [Member]
Held to maturity securities:
AFS and HTM securities percentage	18.00%	18.00%

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New Accounting Standards (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements

Adoption of New Accounting Standards

Standard	Description	Date of Adoption	Effects on the Financial Statements or Other Significant Matters
Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)”	Amends the accounting for leases by lessees and lessors. The primary change from the new guidance is the recognition of right-of-use (ROU) assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances, and expanded lease disclosures. Adoption provides for modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard or, optionally, through another transition method by which a cumulative-effect adjustment is recorded to retained earnings as of the beginning of the period of adoption. Certain transition relief is permitted if elected by the entity.	January 1, 2019	The Company adopted the new lease accounting guidance as of January 1, 2019 under the optional transition method provided electing not to recast its comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption resulted in a gross up of the consolidated balance sheet due to recognition of ROU assets and lease liabilities primarily related to the CS&Co leases of office space and branches. The amounts were based on the present value of our remaining operating lease payments. The Company’s ROU assets and related lease liabilities upon adoption were $596 million and $662 million, respectively. Further details on the impact of adoption are included below in this Note as well as in Note 9.
ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”	Shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature with a fixed price on a preset date. ASU 2017-08 does not impact the accounting for callable debt securities held at a discount. Adoption requires modified retrospective transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings.	January 1, 2019	The Company adopted this guidance as of January 1, 2019 using the modified retrospective method. Adoption resulted in an immaterial cumulative-effect adjustment to retained earnings as of the date of adoption.
ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”	This ASU amends hedge accounting guidance to better align hedge accounting with risk management activities, while reducing the complexity of applying and reporting on hedge accounting. In addition, for a closed pool of prepayable financial assets, entities will be able to hedge an amount that is not expected to be affected by prepayments, defaults and other events under the “last-of-layer” method. The guidance also permits a one-time reclassification of debt securities eligible to be hedged under the “last-of-layer” method from held to maturity (HTM) to available for sale (AFS) upon adoption.	January 1, 2019	The Company adopted this ASU on January 1, 2019. As part of its adoption, the Company made a one-time election to reclassify a portion of its HTM securities eligible to be hedged under the “last-of-layer” method to AFS. As of January 1, 2019, the securities reclassified had a fair value of $8.8 billion and resulted in a net of tax increase to AOCI of $19 million. The adoption of this standard had no other impact on the Company’s financial statements.

New Accounting Standards Not Yet Adopted

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	Provides guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and HTM debt securities. Requires estimating current expected credit losses (CECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions, and reasonable forecasts. The initial estimate of, and the subsequent changes in, CECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. Amends the other-than-temporary impairment (OTTI) model for AFS debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Adoption requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for AFS debt securities for which an OTTI has been recognized prior to the effective date.	January 1, 2020 (early adoption permitted)	The Company expects that its allowance for credit losses will increase when CECL is adopted, primarily due to an incremental allowance that will be recorded on its HTM corporate debt securities. The incremental allowance at adoption is expected to be immaterial, but the impact of adoption will depend on, among other things, the economic environment, the proportion of securities classified as AFS versus HTM, and the size and type of loan and securities portfolios held by the Company on the date of adoption. A large portion of the securities in the Company’s portfolio will have zero expectation of credit losses based on industry views and regulatory guidance for U.S. Treasury and U.S. agency mortgage-backed securities. Further, we expect to apply the practical expedient based on continuous collateral replenishment to the Company’s pledged asset lines (PALs) and margin loans. The Company has completed the development of credit loss estimation methods for loans and the securities in its portfolio that do not have zero expectation of credit losses, including corporate debt securities and structured products. We are continuing the development of CECL policies and processes and testing and validation of credit loss estimation methods. We have also completed the first of the two planned quarterly CECL parallel runs.

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”	Aligns the criteria for capitalizing implementation costs for cloud computing arrangements (CCA) that are service contracts with internal-use software that is developed or purchased and CCAs that include an internal-use software license. This guidance requires that the capitalized implementation costs be recognized over the period of the CCA service contract, subject to impairment evaluation on an ongoing basis. The guidance prescribes the balance sheet, income statement, and statement of cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. Adoption provides for retrospective or prospective application to all implementation costs incurred after the date of adoption.	January 1, 2020 (early adoption permitted)	Historically, Schwab has expensed implementation costs as they are incurred for CCAs that are service contracts. Therefore, adopting this guidance will change the Company’s accounting treatment for these types of implementation costs. The Company plans to adopt this guidance on a prospective basis and continues to evaluate the impacts of this guidance on its financial statements, including EPS.

The cumulative effect of the changes made to our consolidated January 1, 2019 balance sheet for the adoption of ASU 2016-02, Leases (Topic 842) were as follows:

	Balance at December 31, 2018		Adjustments Due to ASU 2016-02		Balance at January 1, 2019
Assets
Other assets (1)	$	2,046	$	588	$	2,634
Liabilities
Accrued expenses and other liabilities (2)	$	2,954	$	588	$	3,542

⁽¹⁾ The adoption adjustment is comprised of two parts: 1) an increase of $596 million for the recognition of the January 1, 2019 ROU asset and 2) an $8 million decrease related to prepaid rent and initial direct costs, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

⁽²⁾ The adoption adjustment is comprised of two parts: 1) an increase of $662 million for the recognition of the January 1, 2019 lease liability and 2) a

$74 million decrease related to deferred rent and lease incentives, which were reclassified to the ROU asset upon adoption of ASU 2016-02.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The components of other comprehensive income (loss) are as follows:

	2019									2018
Three Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	51		$	(12	)	$	39		$	(43	)	$	11		$	(32	)
Other reclassifications included in other revenue	(1		)	—			(1		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10			(3		)	7			8			(2		)	6
Other comprehensive income (loss)	$	60		$	(15	)	$	45		$	(35	)	$	9		$	(26	)

	2019									2018
Nine Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	496		$	(119	)	$	377		$	(184	)	$	45		$	(139	)
Other reclassifications included in other revenue	(5		)	1			(4		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	30			(7		)	23			26			(6		)	20
Other comprehensive income (loss)	$	521		$	(125	)	$	396		$	(158	)	$	39		$	(119	)

AOCI balances are as follows:

	Total AOCI
Balance at June 30, 2018	$	(278	)
Available for sale securities:
Net unrealized gain (loss)	(32		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	6
Balance at September 30, 2018	$	(304	)
Balance at June 30, 2019	$	99
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	39
Other reclassifications included in other revenue	(1		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	7
Balance at September 30, 2019	$	144

	Total AOCI
Balance at December 31, 2017	$	(152	)
Adoption of accounting standards	(33		)
Available for sale securities:
Net unrealized gain (loss)	(139		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	20
Balance at September 30, 2018	$	(304	)
Balance at December 31, 2018	$	(252	)
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	358
Net unrealized gain on securities transferred to available for sale from held to maturity (1)	19
Other reclassifications included in other revenue	(4		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	23
Balance at September 30, 2019	$	144

⁽¹⁾ As part of the adoption of ASU 2017-12, in the first quarter of 2019, the Company made a one-time election to transfer a portion of its HTM securities to AFS. The transfer resulted in a net of tax increase to AOCI of $19 million. See Notes 2 and 4 for additional discussion on the transfer of HTM securities to AFS.

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018
Cash Flows from Operating Activities
Net income		$ 2,852	$ 2,572
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Share-based compensation		131	113
Depreciation and amortization		255	226
Premium amortization, net, on available for sale and held to maturity securities		282	276
Other		127	108
Net change in:
Investments segregated and on deposit for regulatory purposes		(858)	6,973
Receivables from brokers, dealers, and clearing organizations		(756)	(147)
Receivables from brokerage clients		576	(1,858)
Other securities owned		42	39
Other assets		(28)	(143)
Payables to brokers, dealers, and clearing organizations		(95)	43
Payables to brokerage clients		2,896	(3,392)
Accrued expenses and other liabilities		(403)	(155)
Net cash provided by (used for) operating activities		5,021	4,655
Cash Flows from Investing Activities
Purchases of available for sale securities		(20,744)	(19,781)
Proceeds from sales of available for sale securities		21,710	115
Principal payments on available for sale securities		18,374	12,091
Purchases of held to maturity securities		(18,861)	(30,639)
Principal payments on held to maturity securities		13,653	12,382
Net change in bank loans		(338)	(86)
Purchases of equipment, office facilities, and property		(515)	(400)
Purchases of Federal Home Loan Bank stock		(2)	(156)
Proceeds from sales of Federal Home Loan Bank stock		0	528
Other investing activities		(18)	(74)
Net cash provided by (used for) investing activities		13,259	(26,020)
Cash Flows from Financing Activities
Net change in bank deposits	[1]	(22,096)	43,752
Net change in short-term borrowings		0	(15,000)
Issuance of long-term debt		593	1,936
Repayment of long-term debt		0	(906)
Dividends paid		(808)	(579)
Proceeds from stock options exercised		65	108
Repurchases of common stock		(1,964)	0
Other financing activities		(13)	(12)
Net cash provided by (used for) financing activities		(24,223)	29,299
Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted		(5,943)	7,934
Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year		38,227	19,160
Cash and Cash Equivalents, including Amounts Restricted at End of Period	[2]	32,284	27,094
Non-cash investing activity:
Securities purchased during the period but settled after period end		0	221
Non-cash financing activity:
Extinguishment of finance lease obligation through an assignment agreement		52	0
Common stock repurchased during the period but settled after period end		27	0
Cash paid during the period for:
Interest		922	550
Income taxes		907	649
Amounts included in the measurement of lease liabilities	[3]	99
Leased assets obtained in exchange for new operating lease liabilities	[3]	87
Transfers from other sweep features to bank sweep		$ 10,300	$ 67,800

[1] Includes transfers from other sweep features to bank sweep of $10.3 billion and $67.8 billion for the nine months ended September 30, 2019 and 2018, respectively.

[2] For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 15.

[3] These amounts are presented beginning in 2019 as part of the adoption of ASU 2016-02. See Notes 2 and 9 for additional information related to this adoption.

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Leases (Lease Term and Discount Rate) (Details)	Sep. 30, 2019
Leases [Abstract]
Weighted-average remaining lease term (years)	7 years 2 months 4 days
Weighted-average discount rate	3.47%

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Borrowings (Annual Maturities on Long-term Debt Outstanding) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
2019	$ 0
2020	700
2021	1,200
2022	256
2023	800
Thereafter	4,525
Total maturities	7,481
Unamortized discount, net	(14)	$ (15)
Debt issuance costs	(40)	(40)
Total long-term debt	$ 7,427	$ 6,878

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Commitments and Contingencies (Details) account in Millions	Jul. 25, 2019 USD ($) account	Sep. 30, 2019 USD ($)
Loss Contingencies [Line Items]
Aggregate face amount of letter of credit agreements		$ 225,000,000
Number of brokerage and managed portfolio accounts acquired | account	1,000,000
Client assets acquired	$ 90,000,000,000
Payments to acquire businesses	$ 1,800,000,000
Performance Guarantee [Member]
Loss Contingencies [Line Items]
Liability for guarantees		0
Margin Requirements [Member]
Loss Contingencies [Line Items]
Funds drawn under LOC's		$ 0

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2019		Dec. 31, 2018
Assets
Cash and cash equivalents	$ 20,252	[1]	$ 27,938
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $9,707 at September 30, 2019 and $7,195 at December 31, 2018)	16,164		13,563
Receivables from brokers, dealers, and clearing organizations	1,317		553
Receivables from brokerage clients — net	21,069		21,651
Other securities owned — at fair value	497		539
Available for sale securities	56,483		66,578
Held to maturity securities	140,194		144,009
Bank loans — net	16,895		16,609
Equipment, office facilities, and property — net	2,017		1,769
Goodwill	1,227		1,227
Other assets	2,872		2,046
Total assets	278,987		296,482
Liabilities and Stockholders’ Equity
Bank deposits	209,327		231,423
Payables to brokers, dealers, and clearing organizations	1,736		1,831
Payables to brokerage clients	35,622		32,726
Accrued expenses and other liabilities	3,521		2,954
Long-term debt	7,427		6,878
Total liabilities	257,633		275,812
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $2,850	2,793		2,793
Common stock — 3 billion shares authorized; $.01 par value per share; 1,487,543,446 shares issued	15		15
Additional paid-in capital	4,640		4,499
Retained earnings	19,374		17,329
Treasury stock, at cost — 198,611,926 shares at September 30, 2019 and 155,116,695 shares at December 31, 2018	(5,612)		(3,714)
Accumulated other comprehensive income (loss)	144		(252)
Total stockholders’ equity	21,354		20,670
Total liabilities and stockholders’ equity	$ 278,987		$ 296,482

[1] For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 15.

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New Accounting Standards (Cumulative Effect of Changes for the Adoption of ASU 2016-02) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Other assets		$ 2,634	$ 2,046
Operating lease right-of-use asset	$ 596
Liabilities
Accrued expenses and other liabilities		3,542	$ 2,954
Operating lease liability	$ 665
ASU 2016-02 [Member]
Assets
Operating lease right-of-use asset		596
Prepaid rent and initial direct costs		8
Liabilities
Operating lease liability		662
Deferred rent and lease incentives		74
ASU 2016-02 [Member] | Adjustments [Member]
Assets
Other assets		588
Liabilities
Accrued expenses and other liabilities		$ 588

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Investment Securities (Narrative) (Details) - USD ($)		9 Months Ended	12 Months Ended
	Jan. 01, 2019	Sep. 30, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
OTTI recognized in earnings or other comprehensive income		$ 0	$ 0
Deposits [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value of pledged securities		918,000,000
Federal Reserve Bank Advances [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value of pledged securities		8,300,000,000
Federal Home Loan Bank of San Francisco [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value of pledged securities		$ 26,800,000,000
ASU 2017-12 [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value of securities transferred from held to maturity	$ 8,800,000,000

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New Accounting Standards (Policy)

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (GAAP), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements, and in the related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Schwab’s 2018 Form 10-K.

Adoption of New Accounting Standards and New Accounting Standards Not Yet Adopted

Adoption of New Accounting Standards

Standard	Description	Date of Adoption	Effects on the Financial Statements or Other Significant Matters
Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)”	Amends the accounting for leases by lessees and lessors. The primary change from the new guidance is the recognition of right-of-use (ROU) assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances, and expanded lease disclosures. Adoption provides for modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard or, optionally, through another transition method by which a cumulative-effect adjustment is recorded to retained earnings as of the beginning of the period of adoption. Certain transition relief is permitted if elected by the entity.	January 1, 2019	The Company adopted the new lease accounting guidance as of January 1, 2019 under the optional transition method provided electing not to recast its comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption resulted in a gross up of the consolidated balance sheet due to recognition of ROU assets and lease liabilities primarily related to the CS&Co leases of office space and branches. The amounts were based on the present value of our remaining operating lease payments. The Company’s ROU assets and related lease liabilities upon adoption were $596 million and $662 million, respectively. Further details on the impact of adoption are included below in this Note as well as in Note 9.
ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”	Shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature with a fixed price on a preset date. ASU 2017-08 does not impact the accounting for callable debt securities held at a discount. Adoption requires modified retrospective transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings.	January 1, 2019	The Company adopted this guidance as of January 1, 2019 using the modified retrospective method. Adoption resulted in an immaterial cumulative-effect adjustment to retained earnings as of the date of adoption.
ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”	This ASU amends hedge accounting guidance to better align hedge accounting with risk management activities, while reducing the complexity of applying and reporting on hedge accounting. In addition, for a closed pool of prepayable financial assets, entities will be able to hedge an amount that is not expected to be affected by prepayments, defaults and other events under the “last-of-layer” method. The guidance also permits a one-time reclassification of debt securities eligible to be hedged under the “last-of-layer” method from held to maturity (HTM) to available for sale (AFS) upon adoption.	January 1, 2019	The Company adopted this ASU on January 1, 2019. As part of its adoption, the Company made a one-time election to reclassify a portion of its HTM securities eligible to be hedged under the “last-of-layer” method to AFS. As of January 1, 2019, the securities reclassified had a fair value of $8.8 billion and resulted in a net of tax increase to AOCI of $19 million. The adoption of this standard had no other impact on the Company’s financial statements.

New Accounting Standards Not Yet Adopted

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	Provides guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and HTM debt securities. Requires estimating current expected credit losses (CECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions, and reasonable forecasts. The initial estimate of, and the subsequent changes in, CECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. Amends the other-than-temporary impairment (OTTI) model for AFS debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Adoption requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for AFS debt securities for which an OTTI has been recognized prior to the effective date.	January 1, 2020 (early adoption permitted)	The Company expects that its allowance for credit losses will increase when CECL is adopted, primarily due to an incremental allowance that will be recorded on its HTM corporate debt securities. The incremental allowance at adoption is expected to be immaterial, but the impact of adoption will depend on, among other things, the economic environment, the proportion of securities classified as AFS versus HTM, and the size and type of loan and securities portfolios held by the Company on the date of adoption. A large portion of the securities in the Company’s portfolio will have zero expectation of credit losses based on industry views and regulatory guidance for U.S. Treasury and U.S. agency mortgage-backed securities. Further, we expect to apply the practical expedient based on continuous collateral replenishment to the Company’s pledged asset lines (PALs) and margin loans. The Company has completed the development of credit loss estimation methods for loans and the securities in its portfolio that do not have zero expectation of credit losses, including corporate debt securities and structured products. We are continuing the development of CECL policies and processes and testing and validation of credit loss estimation methods. We have also completed the first of the two planned quarterly CECL parallel runs.

Standard	Description	Required Date of Adoption	Effects on the Financial Statements or Other Significant Matters
ASU 2018-15, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”	Aligns the criteria for capitalizing implementation costs for cloud computing arrangements (CCA) that are service contracts with internal-use software that is developed or purchased and CCAs that include an internal-use software license. This guidance requires that the capitalized implementation costs be recognized over the period of the CCA service contract, subject to impairment evaluation on an ongoing basis. The guidance prescribes the balance sheet, income statement, and statement of cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. Adoption provides for retrospective or prospective application to all implementation costs incurred after the date of adoption.	January 1, 2020 (early adoption permitted)	Historically, Schwab has expensed implementation costs as they are incurred for CCAs that are service contracts. Therefore, adopting this guidance will change the Company’s accounting treatment for these types of implementation costs. The Company plans to adopt this guidance on a prospective basis and continues to evaluate the impacts of this guidance on its financial statements, including EPS.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

On January 30, 2019, CSC publicly announced that its Board of Directors authorized a new Share Repurchase Program to repurchase up to $4.0 billion of common stock. The share repurchase authorization does not have an expiration date. During the third quarter and first nine months of 2019, CSC repurchased 20 million and 49 million shares of its common stock under this authorization for $771 million and $2.0 billion, respectively.

The Company’s preferred stock issued and outstanding is as follows:

			Liquidation Preference Per Share							Dividend Rate in Effect at September 30, 2019		Earliest Redemption Date	Date at Which Dividend Rate Becomes Floating	Floating Annual Rate of Three-Month LIBOR plus:
	Shares Issued and Outstanding (in thousands) at				Carrying Value at
	September 30, 2019 (1)	December 31, 2018 (1)			September 30, 2019		December 31, 2018		Issue Date
Fixed-rate:
Series C	600	600	$	1,000	$	585	$	585	08/03/15	6.000	%	12/01/20	N/A	N/A
Series D	750	750	1,000		728		728		03/07/16	5.950	%	06/01/21	N/A	N/A
Fixed-to-floating-rate:
Series A	400	400	1,000		397		397		01/26/12	7.000	%	02/01/22	02/01/22	4.820	%
Series E	6	6	100,000		591		591		10/31/16	4.625	%	03/01/22	03/01/22	3.315	%
Series F	5	5	100,000		492		492		10/31/17	5.000	%	12/01/27	12/01/27	2.575	%
Total preferred stock	1,761	1,761			$	2,793	$	2,793

⁽¹⁾ Represented by depositary shares, except for Series A.

N/A Not applicable.

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

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
	Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount
Series A	$	—	$	—	$	—	$	—	$	14	$	35.00	$	14	$	35.00
Series C	9		15.00		9		15.00		27		45.00		27		45.00
Series D	11		14.88		11		14.88		33		44.64		33		44.64
Series E	14		2,312.50		14		2,312.50		28		4,625.00		28		4,625.00
Series F	—		—		—		—		13		2,500.00		15		2,930.56
Total	$	34			$	34			$	115			$	117

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-term Debt Including Unamortized Debt Discounts and Premiums

The following table lists long-term debt by instrument outstanding as of September 30, 2019 and December 31, 2018:

	Date of	Principal Amount Outstanding
	Issuance	September 30, 2019			December 31, 2018
Fixed-rate Senior Notes:
4.450% due July 22, 2020	07/22/10	$	700		$	700
3.250% due May 21, 2021	05/22/18	600			600
3.225% due September 1, 2022	08/29/12	256			256
2.650% due January 25, 2023	12/07/17	800			800
3.550% due February 1, 2024	10/31/18	500			500
3.000% due March 10, 2025	03/10/15	375			375
3.850% due May 21, 2025	05/22/18	750			750
3.450% due February 13, 2026	11/13/15	350			350
3.200% due March 2, 2027	03/02/17	650			650
3.200% due January 25, 2028	12/07/17	700			700
4.000% due February 1, 2029	10/31/18	600			600
3.250% due May 22, 2029	05/22/19	600			—
Floating-rate Senior Notes:
Three-month LIBOR + 0.32% due May 21, 2021	05/22/18	600			600
Total Senior Notes		7,481			6,881
5.450% Finance lease obligation (1)	06/04/04	—			52
Unamortized discount — net		(14		)	(15		)
Debt issuance costs		(40		)	(40		)
Total long-term debt		$	7,427		$	6,878

⁽¹⁾ The finance lease obligation was extinguished through an assignment agreement during the first quarter of 2019.

Annual Maturities on Long-term Debt Outstanding

Annual maturities on long-term debt outstanding at September 30, 2019 are as follows:

	Maturities
2019	$	—
2020	700
2021	1,200
2022	256
2023	800
Thereafter	4,525
Total maturities	7,481
Unamortized discount — net	(14		)
Debt issuance costs	(40		)
Total long-term debt	$	7,427

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Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

September 30, 2019	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	4,193	$	—	$	—	$	4,193
Commercial paper	—		923		—		923
Total cash equivalents	4,193		923		—		5,116
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,951		—		1,951
U.S. Government securities	—		1,605		—		1,605
Total investments segregated and on deposit for regulatory purposes	—		3,556		—		3,556
Other securities owned:
Equity and bond mutual funds	378		—		—		378
State and municipal debt obligations	—		32		—		32
Equity, U.S. Government and corporate debt, and other securities	3		74		—		77
Schwab Funds® money market funds	10		—		—		10
Total other securities owned	391		106		—		497
Available for sale securities:
U.S. agency mortgage-backed securities	—		40,431		—		40,431
U.S. Treasury securities	—		5,027		—		5,027
Asset-backed securities	—		4,801		—		4,801
Corporate debt securities	—		4,686		—		4,686
Certificates of deposit	—		1,004		—		1,004
Commercial paper	—		521		—		521
Non-agency commercial mortgage-backed securities	—		13		—		13
Total available for sale securities	—		56,483		—		56,483
Total	$	4,584	$	61,068	$	—	$	65,652

December 31, 2018	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	3,429	$	—	$	—	$	3,429
Commercial paper	—		4,863		—		4,863
Total cash equivalents	3,429		4,863		—		8,292
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,396		—		1,396
U.S. Government securities	—		3,275		—		3,275
Total investments segregated and on deposit for regulatory purposes	—		4,671		—		4,671
Other securities owned:
Equity and bond mutual funds	441		—		—		441
State and municipal debt obligations	—		39		—		39
Equity, U.S. Government and corporate debt, and other securities	3		30		—		33
Schwab Funds® money market funds	26		—		—		26
Total other securities owned	470		69		—		539
Available for sale securities:
U.S. agency mortgage-backed securities	—		25,556		—		25,556
U.S. Treasury securities	—		18,302		—		18,302
Asset-backed securities	—		10,085		—		10,085
Corporate debt securities	—		7,467		—		7,467
Certificates of deposit	—		3,685		—		3,685
U.S. agency notes	—		898		—		898
Commercial paper	—		522		—		522
Foreign government agency securities	—		49		—		49
Non-agency commercial mortgage-backed securities	—		14		—		14
Total available for sale securities	—		66,578		—		66,578
Total	$	3,899	$	76,181	$	—	$	80,080

Fair Value of Other Financial Instruments

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

September 30, 2019	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	15,136	$	—	$	15,136	$	—	$	15,136
Cash and investments segregated and on deposit for regulatory purposes	12,595		—		12,595		—		12,595
Receivables from brokers, dealers, and clearing organizations	1,317		—		1,317		—		1,317
Receivables from brokerage clients — net	21,061		—		21,061		—		21,061
Held to maturity securities:
U.S. agency mortgage-backed securities	114,276		—		116,012		—		116,012
Asset-backed securities	18,323		—		18,359		—		18,359
Corporate debt securities	4,659		—		4,715		—		4,715
U.S. state and municipal securities	1,306		—		1,413		—		1,413
Non-agency commercial mortgage-backed securities	1,136		—		1,164		—		1,164
U.S. Treasury securities	224		—		230		—		230
Certificates of deposit	200		—		200		—		200
Foreign government agency securities	50		—		50		—		50
Other	20		—		20		—		20
Total held to maturity securities	140,194		—		142,163		—		142,163
Bank loans — net:
First Mortgages	10,630		—		10,682		—		10,682
HELOCs	1,216		—		1,255		—		1,255
Pledged asset lines	4,878		—		4,878		—		4,878
Other	171		—		171		—		171
Total bank loans — net	16,895		—		16,986		—		16,986
Other assets	617		—		617		—		617
Total	$	207,815	$	—	$	209,875	$	—	$	209,875
Liabilities
Bank deposits	$	209,327	$	—	$	209,327	$	—	$	209,327
Payables to brokers, dealers, and clearing organizations	1,736		—		1,736		—		1,736
Payables to brokerage clients	35,622		—		35,622		—		35,622
Accrued expenses and other liabilities	1,252		—		1,252		—		1,252
Long-term debt	7,427		—		7,771		—		7,771
Total	$	255,364	$	—	$	255,708	$	—	$	255,708

December 31, 2018	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	19,646	$	—	$	19,646	$	—	$	19,646
Cash and investments segregated and on deposit for regulatory purposes	8,886		—		8,886		—		8,886
Receivables from brokers, dealers, and clearing organizations	553		—		553		—		553
Receivables from brokerage clients — net	21,641		—		21,641		—		21,641
Held to maturity securities:
U.S. agency mortgage-backed securities	118,064		—		116,093		—		116,093
Asset-backed securities	18,502		—		18,546		—		18,546
Corporate debt securities	4,477		—		4,432		—		4,432
U.S. state and municipal securities	1,327		—		1,348		—		1,348
Non-agency commercial mortgage-backed securities	1,156		—		1,142		—		1,142
U.S. Treasury securities	223		—		217		—		217
Certificates of deposit	200		—		201		—		201
Foreign government agency securities	50		—		49		—		49
Other	10		—		10		—		10
Total held to maturity securities	144,009		—		142,038		—		142,038
Bank loans — net:
First Mortgages	10,370		—		10,193		—		10,193
HELOCs	1,500		—		1,583		—		1,583
Pledged asset lines	4,561		—		4,561		—		4,561
Other	178		—		178		—		178
Total bank loans — net	16,609		—		16,515		—		16,515
Other assets	460		—		460		—		460
Total	$	211,804	$	—	$	209,739	$	—	$	209,739
Liabilities
Bank deposits	$	231,423	$	—	$	231,423	$	—	$	231,423
Payables to brokers, dealers, and clearing organizations	1,831		—		1,831		—		1,831
Payables to brokerage clients	32,726		—		32,726		—		32,726
Accrued expenses and other liabilities	1,370		—		1,370		—		1,370
Long-term debt	6,878		—		6,827		—		6,827
Total	$	274,228	$	—	$	274,177	$	—	$	274,177

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Bank Loans and Related Allowance for Loan Losses

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Bank Loans and Related Allowance for Loan Losses

Bank Loans and Related Allowance for Loan Losses

The composition of bank loans and delinquency analysis by loan type is as follows:

September 30, 2019	Current		30-59 days past due		60-89 days past due		>90 days past due and other nonaccrual loans (3)		Total past due and other nonaccrual loans		Total loans		Allowance for loan losses		Total bank loans – net
First Mortgages (1,2)	$	10,607	$	20	$	2	$	11	$	33	$	10,640	$	10	$	10,630
HELOCs (1,2)	1,208		3		1		8		12		1,220		4		1,216
Pledged asset lines	4,876		2		—		—		2		4,878		—		4,878
Other	172		—		—		2		2		174		3		171
Total bank loans	$	16,863	$	25	$	3	$	21	$	49	$	16,912	$	17	$	16,895
December 31, 2018
First Mortgages (1,2)	$	10,349	$	21	$	2	$	12	$	35	$	10,384	$	14	$	10,370
HELOCs (1,2)	1,493		3		1		8		12		1,505		5		1,500
Pledged asset lines	4,558		3		—		—		3		4,561		—		4,561
Other	180		—		—		—		—		180		2		178
Total bank loans	$	16,580	$	27	$	3	$	20	$	50	$	16,630	$	21	$	16,609

⁽¹⁾ First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $71 million and $73 million at September 30, 2019 and December 31, 2018, respectively.

⁽²⁾ At September 30, 2019 and December 31, 2018, 46% and 47%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

⁽³⁾ There were no loans accruing interest that were contractually 90 days or more past due at September 30, 2019 or December 31, 2018.

At September 30, 2019, CSB had pledged $10.8 billion of First Mortgages and HELOCs as collateral to secure borrowing capacity on a secured credit facility with the FHLB (see Note 8).

Substantially all of the bank loans were collectively evaluated for impairment at both September 30, 2019 and December 31, 2018.

Changes in the allowance for loan losses were as follows:

	September 30, 2019											September 30, 2018
Three Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other		Total (1)
Balance at beginning of period	$	12		$	5		$	2	$	19		$	17	$	7		$	2	$	26
Charge-offs	—			—			—		—			—		—			—		—
Recoveries	—			—			—		—			—		1			—		1
Provision for loan losses	(2		)	(1		)	1		(2		)	—		(1		)	—		(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2	$	26

	September 30, 2019											September 30, 2018
Nine Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other			Total (1)
Balance at beginning of period	$	14		$	5		$	2	$	21		$	16	$	8		$	2		$	26
Charge-offs	—			—			—		—			—		—			(1		)	(1		)
Recoveries	1			1			—		2			—		2			—			2
Provision for loan losses	(5		)	(2		)	1		(6		)	1		(3		)	1			(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2		$	26

⁽¹⁾ All PALs were fully collateralized by securities with fair values in excess of borrowings as of each period presented.

A summary of impaired bank loan-related assets is as follows:

	September 30, 2019		December 31, 2018
Nonaccrual loans (1)	$	21	$	21
Other real estate owned (2)	2		3
Total nonperforming assets	23		24
Troubled debt restructurings	2		4
Total impaired assets	$	25	$	28

⁽¹⁾ Nonaccrual loans include nonaccrual troubled debt restructurings.

⁽²⁾ Included in other assets on the condensed consolidated balance sheets.

Credit Quality

In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following:

• Year of origination;

• Borrower FICO scores at origination (Origination FICO);

• Updated borrower FICO scores (Updated FICO);

• Loan-to-value (LTV) ratios at origination (Origination LTV); and

• Estimated current LTV ratios (Estimated Current LTV).

Borrowers’ FICO scores are provided by an independent third-party credit reporting service and updated quarterly. The Origination LTV and Estimated Current LTV 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 updated on a monthly basis by reference to a home price appreciation index.

The credit quality indicators of the Company’s bank loan portfolio are detailed below:

September 30, 2019	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,574	776	0.03	%
>70% – <90%	1,061		770	0.28	%
>90% – <100%	4		756	—
>100%	1		768	—
Total	$	10,640	776	0.05	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,157	769	0.25	%
>70% – <90%	58		751	0.83	%
>90% – <100%	3		716	5.06	%
>100%	2		659	—
Total	$	1,220	768	0.29	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,878	767	—

December 31, 2018	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,396	776	0.04	%
>70% – <90%	985		769	0.41	%
>90% – <100%	2		717	—
>100%	1		753	—
Total	$	10,384	775	0.07	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,416	770	0.13	%
>70% – <90%	80		752	0.60	%
>90% – <100%	6		729	3.36	%
>100%	3		702	—
Total	$	1,505	769	0.17	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,561	766	—

⁽¹⁾ Represents the LTV for the full line of credit (drawn and undrawn).

September 30, 2019	First Mortgages		HELOCs
Year of origination
Pre-2015	$	1,815	$	872
2015	889		85
2016	2,382		82
2017	2,137		90
2018	1,611		67
2019	1,806		24
Total	$	10,640	$	1,220
Origination FICO
<620	$	4	$	—
620 – 679	76		6
680 – 739	1,624		236
>740	8,936		978
Total	$	10,640	$	1,220
Origination LTV
<70%	$	7,980	$	869
>70% – <90%	2,656		346
>90% – <100%	4		5
Total	$	10,640	$	1,220

December 31, 2018	First Mortgages		HELOCs
Year of origination
Pre-2015	$	2,387	$	1,140
2015	1,050		106
2016	2,606		95
2017	2,366		99
2018	1,975		65
Total	$	10,384	$	1,505
Origination FICO
<620	$	5	$	—
620 – 679	83		8
680 – 739	1,626		282
>740	8,670		1,215
Total	$	10,384	$	1,505
Origination LTV
<70%	$	7,815	$	1,064
>70% – <90%	2,564		434
>90% – <100%	5		7
Total	$	10,384	$	1,505

At September 30, 2019, First Mortgage loans of $9.6 billion had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that adjust annually thereafter. Approximately 29% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 65% of the balance of these interest-only loans are not scheduled to reset for three or more years. Schwab’s mortgage loans do not include interest terms described as temporary introductory rates below current market rates.

The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating rate based on the prime rate plus a margin.

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

September 30, 2019	Balance
Converted to an amortizing loan by period end	$	551
Within 1 year	52
> 1 year – 3 years	84
> 3 years – 5 years	170
> 5 years	363
Total	$	1,220

At September 30, 2019, $1.0 billion of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At September 30, 2019, the borrowers on approximately 54% of HELOC loan balances outstanding only paid the minimum amount due.

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Introduction and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Introduction and Basis of Presentation

Introduction and Basis of Presentation

The Charles Schwab Corporation (CSC) is a savings and loan holding company and engages, through its subsidiaries, in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Significant business subsidiaries of CSC include the following:

• Charles Schwab & Co., Inc. (CS&Co), a securities broker-dealer;

• Charles Schwab Bank (CSB), a federal savings bank; and

• Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds^®) and for Schwab’s exchange-traded funds (Schwab ETFs™).

Unless otherwise indicated, the terms “Schwab,” “the Company,” “we,” “us,” or “our” mean CSC together with its consolidated subsidiaries.

These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (GAAP), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements, and in the related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Schwab’s 2018 Form 10-K.

The significant accounting policies are included in Note 2 in the 2018 Form 10-K. There have been no significant changes to these accounting policies during the first nine months of 2019, except as described in Note 2 below.

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

The Company has operating leases for corporate offices, branch locations, and server equipment and determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The lease liability may include payments that depend on a rate or index (such as the Consumer Price Index), measured using the rate or index at the commencement date. Payments that vary because of changes in facts or circumstances occurring after the commencement date are considered variable. These payments are not recognized as part of the lease liability and are expensed in the period incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We have lease agreements with lease and non-lease components. For the majority of our leases (real estate leases), the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component. We have not elected the practical expedient for equipment leases and account for lease and non-lease components separately for those classes of leases.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include periods covered by options to extend when it is reasonably certain that we will exercise those options. The lease terms may also include periods covered by options to terminate when it is reasonably certain that we will not exercise that option.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company does not have any finance leases and had an immaterial amount of sublease income for all periods presented.

The following table details the amounts and locations of lease assets and liabilities on the condensed consolidated balance sheet:

Leases	Balance Sheet Classification	September 30, 2019
Assets
Operating lease assets	Other assets	$	596
Liabilities
Operating lease liabilities	Accrued expenses and other liabilities	$	665

The components of lease expense are as follows:

Lease Cost	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost (1)	$	34	$	100
Variable lease cost (2)	8		25

⁽¹⁾ Includes short-term leases, which are immaterial.

⁽²⁾ Includes payments that are entirely variable and amounts that represent the difference between payments based on an index or rate that would be reflected in the lease liability and what is actually incurred.

The following tables present supplemental lease information as of September 30, 2019:

Lease Term and Discount Rate
Weighted-average remaining lease term (years)	7.18
Weighted-average discount rate	3.47	%

Maturity of Lease Liabilities	Operating Leases (1)
2019	$	26
2020	136
2021	113
2022	92
2023	84
Thereafter	309
Total lease payments	760
Less: Interest	95
Present value of lease liabilities	$	665

⁽¹⁾ Operating lease payments exclude $41 million of legally binding minimum lease payments for leases signed but not yet commenced. These leases will commence between 2019 and 2020 with lease terms of five years to 20 years.

In accordance with the disclosure requirements for our adoption of ASU 2016-02, the Company is presenting the operating leases commitment table as of December 31, 2018. The following table is unchanged from the disclosure in Note 14 in the 2018 Form 10-K:

	Operating Leases		Subleases		Net
2019	$	131	$	4	$	127
2020	125		4		121
2021	101		4		97
2022	79		2		77
2023	72		1		71
Thereafter	282		—		282
Total	$	790	$	15	$	775

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Regulatory Requirements (Regulatory Capital and Ratios) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
CSC [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 17,264	$ 16,813
Actual Ratio	20.00%	17.60%
Minimum Capital Requirement Amount	$ 3,877	$ 4,295
Minimum Capital Requirement Ratio	4.50%	4.50%
Tier 1 Risk-Based Capital
Actual Amount	$ 20,057	$ 19,606
Actual Ratio	23.30%	20.50%
Minimum Capital Requirement Amount	$ 5,170	$ 5,726
Minimum Capital Requirement Ratio	6.00%	6.00%
Total Risk-Based Capital
Actual Amount	$ 20,075	$ 19,628
Actual Ratio	23.30%	20.60%
Minimum Capital Requirement Amount	$ 6,893	$ 7,635
Minimum Capital Requirement Ratio	8.00%	8.00%
Tier 1 Leverage
Actual Amount	$ 20,057	$ 19,606
Actual Ratio	7.30%	7.10%
Minimum Capital Requirement Amount	$ 10,945	$ 11,058
Minimum Capital Requirement Ratio	4.00%	4.00%
Supplemental Leverage Ratio
Actual Amount	$ 20,057
Actual Ratio	7.10%
Minimum Capital Requirement Amount	$ 8,418
Minimum Capital Requirement Ratio	3.00%
CSB [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 15,577	$ 15,832
Actual Ratio	22.90%	19.70%
Minimum to be Well Capitalized Amount	$ 4,430	$ 5,233
Minimum to be Well Capitalized Ratio	6.50%	6.50%
Minimum Capital Requirement Amount	$ 3,067	$ 3,623
Minimum Capital Requirement Ratio	4.50%	4.50%
Tier 1 Risk-Based Capital
Actual Amount	$ 15,577	$ 15,832
Actual Ratio	22.90%	19.70%
Minimum to be Well Capitalized Amount	$ 5,452	$ 6,441
Minimum to be Well Capitalized Ratio	8.00%	8.00%
Minimum Capital Requirement Amount	$ 4,089	$ 4,831
Minimum Capital Requirement Ratio	6.00%	6.00%
Total Risk-Based Capital
Actual Amount	$ 15,594	$ 15,853
Actual Ratio	22.90%	19.70%
Minimum to be Well Capitalized Amount	$ 6,815	$ 8,051
Minimum to be Well Capitalized Ratio	10.00%	10.00%
Minimum Capital Requirement Amount	$ 5,452	$ 6,441
Minimum Capital Requirement Ratio	8.00%	8.00%
Tier 1 Leverage
Actual Amount	$ 15,577	$ 15,832
Actual Ratio	7.40%	7.20%
Minimum to be Well Capitalized Amount	$ 10,537	$ 11,044
Minimum to be Well Capitalized Ratio	5.00%	5.00%
Minimum Capital Requirement Amount	$ 8,429	$ 8,836
Minimum Capital Requirement Ratio	4.00%	4.00%
Supplemental Leverage Ratio
Actual Amount	$ 15,577
Actual Ratio	7.20%
Minimum Capital Requirement Amount	$ 6,524
Minimum Capital Requirement Ratio	3.00%

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Regulatory Requirements (Net Capital and Net Capital Requirements) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Banking and Thrift [Abstract]
Net Capital	$ 2,235,000	$ 2,304,000
Minimum net capital required	250	250
2% of aggregate debit balances	440,000	436,000
Net Capital in excess of required net capital	$ 1,795,000	$ 1,868,000

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Financial Instruments Subject to Off-Balance Sheet Credit Risk (Summary of the Fair Value of Client Securities Available to Utilize as Collateral and Amounts Pledged) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Securities Financing Transaction [Line Items]
Fair value of client securities available to be pledged	$ 26,614	$ 26,628
Total collateral pledged	5,005	4,581
Fulfillment of Requirements with the Options Clearing Corporation [Member]
Securities Financing Transaction [Line Items]
Total collateral pledged	1,778	2,315
Fulfillment of Client Short Sales [Member]
Securities Financing Transaction [Line Items]
Total collateral pledged	2,023	1,292
Securities Lending to Other Broker-Dealers [Member]
Securities Financing Transaction [Line Items]
Total collateral pledged	1,204	974
Fully Paid Client Securities [Member]
Securities Financing Transaction [Line Items]
Total collateral pledged	$ 139	$ 97

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Stockholders' Equity (Preferred Stock Issued and Outstanding) (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Shares issued (in shares)	1,761,000	1,761,000
Shares outstanding (in shares)	1,761,000	1,761,000
Carrying Value	$ 2,793	$ 2,793
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Shares issued (in shares)	600,000	600,000
Shares outstanding (in shares)	600,000	600,000
Liquidation preference per share (USD per share)	$ 1,000
Carrying Value	$ 585	$ 585
Dividend Rate in Effect	6.00%
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Shares issued (in shares)	750,000	750,000
Shares outstanding (in shares)	750,000	750,000
Liquidation preference per share (USD per share)	$ 1,000
Carrying Value	$ 728	$ 728
Dividend Rate in Effect	5.95%
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Shares issued (in shares)	400,000	400,000
Shares outstanding (in shares)	400,000	400,000
Liquidation preference per share (USD per share)	$ 1,000
Carrying Value	$ 397	$ 397
Dividend Rate in Effect	7.00%
Series A Preferred Stock [Member] | LIBOR [Member]
Class of Stock [Line Items]
Floating Annual Rate	4.82%
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Shares issued (in shares)	6,000	6,000
Shares outstanding (in shares)	6,000	6,000
Liquidation preference per share (USD per share)	$ 100,000
Carrying Value	$ 591	$ 591
Dividend Rate in Effect	4.625%
Series E Preferred Stock [Member] | LIBOR [Member]
Class of Stock [Line Items]
Floating Annual Rate	3.315%
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Shares issued (in shares)	5,000	5,000
Shares outstanding (in shares)	5,000	5,000
Liquidation preference per share (USD per share)	$ 100,000
Carrying Value	$ 492	$ 492
Dividend Rate in Effect	5.00%
Series F Preferred Stock [Member] | LIBOR [Member]
Class of Stock [Line Items]
Floating Annual Rate	2.575%

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Bank Loans and Related Allowance for Loan Losses (Convert to Amortizing Loans) (Details) - HELOCs [Member] $ in Millions	Sep. 30, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Converted to an amortizing loan by period end	$ 551
Within 1 year	52
1 year – 3 years	84
3 years – 5 years	170
5 years	363
Total	$ 1,220

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Bank Loans and Related Allowance for Loan Losses (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total bank loans	$ 16,912	$ 16,630
First Mortgage and HELOC [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans pledged as collateral	10,800
Adjustable Rate First Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Bank loans	$ 9,600
Percent of loans with interest-only payments	29.00%
Percent of interest only adjustable rate	65.00%
Adjustable Rate First Mortgage [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fixed rate interest rate period	3 years
Interest-only reset period	3 years
Adjustable Rate First Mortgage [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fixed rate interest rate period	10 years
HELOCs [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan term	30 years
Initial draw period	10 years
Converting to amortizing loans period	20 years
Total bank loans	$ 1,220	$ 1,505
Percent of loan balance outstanding, borrowers paid only minimum due	54.00%
Home Equity Secured By Second Liens [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total bank loans	$ 1,000

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Financial Information for Reportable Segments

Financial information for the segments is presented in the following tables:

	Investor Services				Advisor Services				Total
Three Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	1,182	$	1,138	$	449	$	389	$	1,631	$	1,527
Asset management and administration fees	586		565		239		244		825		809
Trading revenue	108		112		64		64		172		176
Other	68		53		15		14		83		67
Total net revenues	1,944		1,868		767		711		2,711		2,579
Expenses Excluding Interest	1,070		1,015		405		345		1,475		1,360
Income before taxes on income	$	874	$	853	$	362	$	366	$	1,236	$	1,219

	Investor Services				Advisor Services				Total
Nine Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	3,531	$	3,158	$	1,390	$	1,039	$	4,921	$	4,197
Asset management and administration fees	1,679		1,727		687		747		2,366		2,474
Trading revenue	329		354		202		203		531		557
Other	207		182		90		53		297		235
Total net revenues	5,746		5,421		2,369		2,042		8,115		7,463
Expenses Excluding Interest	3,189		3,069		1,190		1,042		4,379		4,111
Income before taxes on income	$	2,557	$	2,352	$	1,179	$	1,000	$	3,736	$	3,352

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Revenue Recognition (Capitalized Contract Costs and Contract Balances) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Receivables from contracts with customers	$ 338	$ 307

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Investment Securities (Maturities of Securities Available for Sale and Held to Maturity) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Available for sale securities, fair value
Within 1 year	$ 5,749
After 1 year through 5 years	11,065
After 5 years through 10 years	12,026
After 10 years	27,643
Fair Value	56,483	$ 66,578
Available for sale securities, amortized cost
Within 1 year	5,743
After 1 year through 5 years	10,994
After 5 years through 10 years	11,996
After 10 years	27,416
Amortized Cost	56,149	66,735
Held to maturity securities, fair value
Within 1 year	1,641
After 1 year through 5 years	22,294
After 5 years through 10 years	44,528
After 10 years	73,700
Fair Value	142,163	142,038
Held to maturity securities, amortized cost
Within 1 year	1,637
After 1 year through 5 years	21,989
After 5 years through 10 years	43,368
After 10 years	73,200
Amortized Cost	140,194	144,009
U.S. agency mortgage-backed securities [Member]
Available for sale securities, fair value
Within 1 year	51
After 1 year through 5 years	1,909
After 5 years through 10 years	11,061
After 10 years	27,410
Fair Value	40,431	25,556
Available for sale securities, amortized cost
Amortized Cost	40,179	25,594
Held to maturity securities, fair value
Within 1 year	663
After 1 year through 5 years	15,472
After 5 years through 10 years	35,048
After 10 years	64,829
Fair Value	116,012	116,093
Held to maturity securities, amortized cost
Amortized Cost	114,276	118,064
U.S. Treasury securities [Member]
Available for sale securities, fair value
Within 1 year	3,541
After 1 year through 5 years	1,486
After 5 years through 10 years	0
After 10 years	0
Fair Value	5,027	18,302
Available for sale securities, amortized cost
Amortized Cost	5,034	18,410
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	0
After 5 years through 10 years	230
After 10 years	0
Fair Value	230	217
Held to maturity securities, amortized cost
Amortized Cost	224	223
Asset-backed securities [Member]
Available for sale securities, fair value
Within 1 year	35
After 1 year through 5 years	3,752
After 5 years through 10 years	794
After 10 years	220
Fair Value	4,801	10,085
Available for sale securities, amortized cost
Amortized Cost	4,773	10,086
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	3,227
After 5 years through 10 years	7,940
After 10 years	7,192
Fair Value	18,359	18,546
Held to maturity securities, amortized cost
Amortized Cost	18,323	18,502
Corporate debt securities [Member]
Available for sale securities, fair value
Within 1 year	1,100
After 1 year through 5 years	3,415
After 5 years through 10 years	171
After 10 years	0
Fair Value	4,686	7,467
Available for sale securities, amortized cost
Amortized Cost	4,630	7,477
Held to maturity securities, fair value
Within 1 year	778
After 1 year through 5 years	3,079
After 5 years through 10 years	858
After 10 years	0
Fair Value	4,715	4,432
Held to maturity securities, amortized cost
Amortized Cost	4,659	4,477
Certificates of deposit [Member]
Available for sale securities, fair value
Within 1 year	501
After 1 year through 5 years	503
After 5 years through 10 years	0
After 10 years	0
Fair Value	1,004	3,685
Available for sale securities, amortized cost
Amortized Cost	1,000	3,682
Held to maturity securities, fair value
Within 1 year	200
After 1 year through 5 years	0
After 5 years through 10 years	0
After 10 years	0
Fair Value	200	201
Held to maturity securities, amortized cost
Amortized Cost	200	200
U.S. state and municipal securities [Member]
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	99
After 5 years through 10 years	452
After 10 years	862
Fair Value	1,413	1,348
Held to maturity securities, amortized cost
Amortized Cost	1,306	1,327
Commercial paper [Member]
Available for sale securities, fair value
Within 1 year	521
After 1 year through 5 years	0
After 5 years through 10 years	0
After 10 years	0
Fair Value	521	522
Available for sale securities, amortized cost
Amortized Cost	520	522
Foreign government agency securities [Member]
Available for sale securities, fair value
Fair Value		49
Available for sale securities, amortized cost
Amortized Cost		50
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	50
After 5 years through 10 years	0
After 10 years	0
Fair Value	50	49
Held to maturity securities, amortized cost
Amortized Cost	50	50
Non-agency commercial mortgage-backed securities [Member]
Available for sale securities, fair value
Within 1 year	0
After 1 year through 5 years	0
After 5 years through 10 years	0
After 10 years	13
Fair Value	13	14
Available for sale securities, amortized cost
Amortized Cost	13	14
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	367
After 5 years through 10 years	0
After 10 years	797
Fair Value	1,164	1,142
Held to maturity securities, amortized cost
Amortized Cost	1,136	1,156
Other [Member]
Held to maturity securities, fair value
Within 1 year	0
After 1 year through 5 years	0
After 5 years through 10 years	0
After 10 years	20
Fair Value	20	10
Held to maturity securities, amortized cost
Amortized Cost	$ 20	$ 10

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Leases (Maturity of Lease Liabilities Before 842) (Details) $ in Millions	Dec. 31, 2018 USD ($)
Operating Leases
2019	$ 131
2020	125
2021	101
2022	79
2023	72
Thereafter	282
Total	790
Subleases
2019	4
2020	4
2021	4
2022	2
2023	1
Thereafter	0
Total	15
Net
2019	127
2020	121
2021	97
2022	77
2023	71
Thereafter	282
Total	$ 775

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Leases (Leases) (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating lease assets	$ 596
Operating lease liabilities	$ 665

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Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, at cost [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Increase (Decrease) in Stockholders' Equity
Adoption of accounting standards	$ 167				$ 200		$ (33)
Beginning balance at Dec. 31, 2017	18,525	$ 2,793	$ 15	$ 4,353	14,408	$ (2,892)	(152)
Beginning balance (shares) at Dec. 31, 2017			1,488
Increase (Decrease) in Stockholders' Equity
Net income	2,572				2,572
Other comprehensive income (loss), net of tax	(119)						(119)
Dividends declared on preferred stock	(117)				(117)
Dividends declared on common stock	(448)				(448)
Stock option exercises and other	108			(8)		116
Share-based compensation	106			106
Other	40			33		7
Ending balance (shares) at Sep. 30, 2018			1,488
Ending balance at Sep. 30, 2018	20,834	2,793	$ 15	4,484	16,615	(2,769)	(304)
Beginning balance at Jun. 30, 2018	20,097	2,793	$ 15	4,447	15,903	(2,783)	(278)
Beginning balance (shares) at Jun. 30, 2018			1,488
Increase (Decrease) in Stockholders' Equity
Net income	923				923
Other comprehensive income (loss), net of tax	(26)						(26)
Dividends declared on preferred stock	(34)				(34)
Dividends declared on common stock	(177)				(177)
Stock option exercises and other	9			0		9
Share-based compensation	28			28
Other	14			9		5
Ending balance (shares) at Sep. 30, 2018			1,488
Ending balance at Sep. 30, 2018	20,834	2,793	$ 15	4,484	16,615	(2,769)	(304)
Beginning balance at Dec. 31, 2018	20,670	2,793	$ 15	4,499	17,329	(3,714)	(252)
Beginning balance (shares) at Dec. 31, 2018			1,488
Increase (Decrease) in Stockholders' Equity
Net income	2,852				2,852
Other comprehensive income (loss), net of tax	396						396
Dividends declared on preferred stock	(115)				(115)
Dividends declared on common stock	(679)				(679)
Repurchase of common stock	(1,991)					(1,991)
Stock option exercises and other	65			(15)		80
Share-based compensation	121			121
Other	35			35	(13)	13
Ending balance (shares) at Sep. 30, 2019			1,488
Ending balance at Sep. 30, 2019	21,354	2,793	$ 15	4,640	19,374	(5,612)	144
Beginning balance at Jun. 30, 2019	21,320	2,793	$ 15	4,599	18,680	(4,866)	99
Beginning balance (shares) at Jun. 30, 2019			1,488
Increase (Decrease) in Stockholders' Equity
Net income	951				951
Other comprehensive income (loss), net of tax	45						45
Dividends declared on preferred stock	(34)				(34)
Dividends declared on common stock	(223)				(223)
Repurchase of common stock	(771)					(771)
Stock option exercises and other	17			(2)		19
Share-based compensation	33			33
Other	16			10	0	6
Ending balance (shares) at Sep. 30, 2019			1,488
Ending balance at Sep. 30, 2019	$ 21,354	$ 2,793	$ 15	$ 4,640	$ 19,374	$ (5,612)	$ 144

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Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 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
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	[1]	38	38	127	128
Net Income Available to Common Stockholders		$ 913	$ 885	$ 2,725	$ 2,444
Weighted-Average Common Shares Outstanding:
Basic (shares)		1,300	1,351	1,320	1,349
Diluted (shares)	[2]	1,308	1,364	1,329	1,363
Earnings Per Common Shares Outstanding:
Basic (USD per share)		$ 0.70	$ 0.66	$ 2.06	$ 1.81
Diluted (USD per share)	[2]	$ 0.70	$ 0.65	$ 2.05	$ 1.79
Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS (in shares)		17	11	18	12
Asset management and administration fees [Member]
Net Revenues
Asset management and administration fees and Trading revenue		$ 825	$ 809	$ 2,366	$ 2,474
Trading revenue [Member]
Net Revenues
Asset management and administration fees and Trading revenue		$ 172	$ 176	$ 531	$ 557

[1] Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

[2] Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 17 million and 11 million shares for the third quarters of 2019 and 2018, respectively, and 18 million and 12 million shares for the first nine months of 2019 and 2018, respectively.

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Schwab's Revenue

Disaggregation of Schwab’s revenue by major source is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net interest revenue
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
Mutual funds, ETFs, and CTFs (1)	445			446			1,287			1,419
Advice solutions	305			294			878			859
Other (1)	75			69			201			196
Asset management and administration fees	825			809			2,366			2,474
Trading revenue
Commissions	159			155			477			501
Principal transactions	13			21			54			56
Trading revenue	172			176			531			557
Other	83			67			297			235
Total net revenues	$	2,711		$	2,579		$	8,115		$	7,463

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

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Regulatory Requirements

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Regulatory Requirements

Regulatory Requirements

At September 30, 2019, CSC and CSB met all of their respective capital requirements. The regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

	Actual (1)				Minimum to be Well Capitalized				Minimum Capital Requirement
September 30, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio (2)
CSC
Common Equity Tier 1 Risk-Based Capital	$	17,264	20.0	%	N/A				$	3,877	4.5	%
Tier 1 Risk-Based Capital	20,057		23.3	%	N/A				5,170		6.0	%
Total Risk-Based Capital	20,075		23.3	%	N/A				6,893		8.0	%
Tier 1 Leverage	20,057		7.3	%	N/A				10,945		4.0	%
Supplementary Leverage Ratio (1)	20,057		7.1	%	N/A				8,418		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,577	22.9	%	$	4,430	6.5	%	$	3,067	4.5	%
Tier 1 Risk-Based Capital	15,577		22.9	%	5,452		8.0	%	4,089		6.0	%
Total Risk-Based Capital	15,594		22.9	%	6,815		10.0	%	5,452		8.0	%
Tier 1 Leverage	15,577		7.4	%	10,537		5.0	%	8,429		4.0	%
Supplementary Leverage Ratio (1)	15,577		7.2	%	N/A		N/A		6,524		3.0	%
December 31, 2018
CSC
Common Equity Tier 1 Risk-Based Capital	$	16,813	17.6	%	N/A				$	4,295	4.5	%
Tier 1 Risk-Based Capital	19,606		20.5	%	N/A				5,726		6.0	%
Total Risk-Based Capital	19,628		20.6	%	N/A				7,635		8.0	%
Tier 1 Leverage	19,606		7.1	%	N/A				11,058		4.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,832	19.7	%	$	5,233	6.5	%	$	3,623	4.5	%
Tier 1 Risk-Based Capital	15,832		19.7	%	6,441		8.0	%	4,831		6.0	%
Total Risk-Based Capital	15,853		19.7	%	8,051		10.0	%	6,441		8.0	%
Tier 1 Leverage	15,832		7.2	%	11,044		5.0	%	8,836		4.0	%

⁽¹⁾ Beginning in 2019, CSC and CSB are subject to the “advanced approaches” framework under the Basel III capital rule. As a result, we are now required to include all components of AOCI in regulatory capital and report our supplementary leverage ratio, which is calculated as Tier 1 capital divided by total leverage exposure. Total leverage exposure includes all on-balance sheet assets and certain off-balance sheet exposures, including unused commitments. Prior to 2019, CSC and CSB elected to opt-out of the requirement to include most components of AOCI in Common Equity Tier 1 Capital; the amounts and ratios for December 31, 2018 are presented on this basis.

⁽²⁾ Under the Basel III capital rule, CSC and CSB are also required to maintain a capital conservation buffer and, beginning in 2019, a countercyclical capital buffer above the regulatory minimum risk-based capital ratios. The capital conservation buffer became 2.5% on January 1, 2019 (1.875% at December 31, 2018). At September 30, 2019, the countercyclical capital buffer was zero percent. If either buffer falls below the minimum requirement, the Company would be subject to limits on capital distributions and discretionary bonus payments to executive officers. At September 30, 2019 the minimum capital requirement plus capital conservation buffer and countercyclical capital buffer for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital ratios were 7.0%, 8.5%, and 10.5%, respectively.

N/A Not applicable.

Based on its regulatory capital ratios at September 30, 2019, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since September 30, 2019 that management believes have changed CSB’s capital category.

In late 2017, Schwab acquired a federal savings bank charter which is now called Charles Schwab Premier Bank. At September 30, 2019, the balance sheet of Charles Schwab Premier Bank consisted primarily of investment securities, and held total assets of $13.5 billion. Charles Schwab Premier Bank is subject to similar regulatory guidelines and requirements, and seeks to maintain a Tier 1 Leverage Ratio similar to CSB.

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

	September 30, 2019		December 31, 2018
Net Capital	$	2,235	$	2,304
Minimum net capital required	0.250		0.250
2% of aggregate debit balances	440		436
Net Capital in excess of required net capital	$	1,795	$	1,868

In accordance with the SEC Customer Protection Rule, CS&Co had portions of its cash and investments segregated for the exclusive benefit of clients at September 30, 2019. The SEC Customer Protection Rule requires broker-dealers to segregate client fully-paid securities and cash balances not collateralizing margin positions and not swept to money market funds or bank deposit accounts. Amounts included in cash and investments segregated and on deposit for regulatory purposes represent actual balances on deposit. Cash and cash equivalents included in cash and investments segregated and on deposit for regulatory purposes are presented as part of Schwab’s cash balances in the consolidated statements of cash flows.

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Financial Instruments Subject to Off-Balance Sheet Credit Risk

9 Months Ended

Sep. 30, 2019

Offsetting [Abstract]

Financial Instruments Subject to Off-Balance Sheet Credit Risk

Financial Instruments Subject to Off-Balance Sheet Credit Risk

Resale agreements: 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. To mitigate this risk, Schwab requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of the resale price. Schwab also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. The collateral provided under these resale agreements is utilized to meet obligations under broker-dealer client protection rules, which place limitations on our ability to access such segregated securities. For Schwab to repledge or sell this collateral, we would be required to deposit cash and/or securities of an equal amount into our segregated reserve bank accounts in order to meet our segregated cash and investment requirement. Schwab’s resale agreements are not subject to master netting arrangements.

Securities lending: Schwab loans brokerage client securities temporarily to other brokers and clearing houses in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to

these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our client obligations. Schwab mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities. The fair value of these borrowed securities was $860 million and $99 million at September 30, 2019 and December 31, 2018, respectively. Substantially all of our securities lending transactions are through a program with a clearing organization, which guarantees the return of cash to us and is subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, the securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

The following table presents information about our resale agreements and securities lending activity depicting the potential effect of rights of setoff between these recognized assets and recognized liabilities at September 30, 2019 and December 31, 2018:

	Gross Assets/ Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets							Net Amount
							Counterparty Offsetting			Collateral
September 30, 2019
Assets
Resale agreements (1)	$	9,707	$	—	$	9,707	$	—		$	(9,707	)	(2)	$	—
Securities borrowed (3)	877		—		877		(871		)	(6		)		—
Total	$	10,584	$	—	$	10,584	$	(871	)	$	(9,713	)		$	—
Liabilities
Securities loaned (4,5)	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
Total	$	1,471	$	—	$	1,471	$	(871	)	$	(489	)		$	111
December 31, 2018
Assets
Resale agreements (1)	$	7,195	$	—	$	7,195	$	—		$	(7,195	)	(2)	$	—
Securities borrowed (3)	101		—		101		(98		)	(3		)		—
Total	$	7,296	$	—	$	7,296	$	(98	)	$	(7,198	)		$	—
Liabilities
Securities loaned (4,5)	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111
Total	$	1,184	$	—	$	1,184	$	(98	)	$	(975	)		$	111

⁽¹⁾ Included in cash and investments segregated and on deposit for regulatory purposes in the condensed consolidated balance sheets.

⁽²⁾ Actual collateral was greater than or equal to 102% of the related assets. At September 30, 2019 and December 31, 2018, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $9.9 billion and $7.4 billion, respectively.

⁽³⁾ Included in receivables from brokers, dealers, and clearing organizations in the condensed consolidated balance sheets.

⁽⁴⁾ Included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at September 30, 2019 and December 31, 2018.

⁽⁵⁾ Securities loaned are predominantly comprised of equity securities held in client brokerage accounts with overnight and continuous remaining contractual maturities.

Margin lending: Clients with margin loans have agreed to allow Schwab to pledge securities in their brokerage accounts in accordance with federal regulations. The following table summarizes the fair value of client securities that were available, under such regulations, that could have been used as collateral, and the amounts that we had pledged:

	September 30, 2019		December 31, 2018
Fair value of client securities available to be pledged	$	26,614	$	26,628
Fair value of client securities pledged for:
Fulfillment of requirements with the Options Clearing Corporation (1)	1,778		2,315
Fulfillment of client short sales	2,023		1,292
Securities lending to other broker-dealers	1,204		974
Total collateral pledged	$	5,005	$	4,581

Note: Excludes amounts available and pledged for securities lending from fully-paid client securities. The fair value of fully-paid client securities available and pledged was $139 million as of September 30, 2019 and $97 million as of December 31, 2018.

⁽¹⁾  

Client securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation.

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Bank Deposits

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Bank Deposits

Bank Deposits

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

	September 30, 2019		December 31, 2018
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	191,456	$	212,311
Checking	12,020		12,523
Savings and other	5,146		5,827
Total interest-bearing deposits	208,622		230,661
Non-interest-bearing deposits	705		762
Total bank deposits	$	209,327	$	231,423

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Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregated Revenue

Disaggregation of Schwab’s revenue by major source is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net interest revenue
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
Mutual funds, ETFs, and CTFs (1)	445			446			1,287			1,419
Advice solutions	305			294			878			859
Other (1)	75			69			201			196
Asset management and administration fees	825			809			2,366			2,474
Trading revenue
Commissions	159			155			477			501
Principal transactions	13			21			54			56
Trading revenue	172			176			531			557
Other	83			67			297			235
Total net revenues	$	2,711		$	2,579		$	8,115		$	7,463

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

For a summary of revenue provided by our reportable segments, see Note 16. The recognition of revenue is not impacted by the operating segment in which revenue is generated.

Contract balances

Receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606, Revenue From Contracts With Customers (ASC 606) were $338 million at September 30, 2019 and $307 million at December 31, 2018 and were recorded in other assets on the condensed consolidated balance sheets. Schwab does not have any other significant contract assets or contract liability balances as of September 30, 2019.

Unsatisfied performance obligations

We do not have any unsatisfied performance obligations other than those that are subject to an elective practical expedient under ASC 606. The practical expedient applies to and is elected for contracts where we recognize revenue at the amount to which we have the right to invoice for services performed.

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2019

Variable Interest Entities [Abstract]

Aggregate Assets, Liabilities and Maximum Exposure to Loss

The aggregate assets, liabilities, and maximum exposure to loss from those VIEs in which Schwab holds a variable interest, but is not the primary beneficiary, are summarized in the table below:

	September 30, 2019						December 31, 2018
	Aggregate assets		Aggregate liabilities		Maximum exposure to loss		Aggregate assets		Aggregate liabilities		Maximum exposure to loss
LIHTC investments (1)	$	498	$	298	$	498	$	338	$	188	$	338
Other CRA investments (2)	91		—		125		70		—		124
Total	$	589	$	298	$	623	$	408	$	188	$	462

⁽¹⁾ Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheets.

⁽²⁾ Other CRA investments are recorded using either the adjusted cost method, equity method, or as HTM securities. Aggregate assets are included in HTM securities, bank loans – net, or other assets on the condensed consolidated balance sheets.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Commitments to Purchase or Sell

The Company’s commitments to extend credit on bank lines of credit and to purchase First Mortgages are as follows:

	September 30, 2019		December 31, 2018
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$	11,234	$	11,046
Commitments to purchase First Mortgage loans	1,976		268
Total	$	13,210	$	11,314

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) are as follows:

	2019									2018
Three Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	51		$	(12	)	$	39		$	(43	)	$	11		$	(32	)
Other reclassifications included in other revenue	(1		)	—			(1		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10			(3		)	7			8			(2		)	6
Other comprehensive income (loss)	$	60		$	(15	)	$	45		$	(35	)	$	9		$	(26	)

	2019									2018
Nine Months Ended September 30,	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	$	496		$	(119	)	$	377		$	(184	)	$	45		$	(139	)
Other reclassifications included in other revenue	(5		)	1			(4		)	—			—			—
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	30			(7		)	23			26			(6		)	20
Other comprehensive income (loss)	$	521		$	(125	)	$	396		$	(158	)	$	39		$	(119	)

Accumulated Other Comprehensive Income Balances

AOCI balances are as follows:

	Total AOCI
Balance at June 30, 2018	$	(278	)
Available for sale securities:
Net unrealized gain (loss)	(32		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	6
Balance at September 30, 2018	$	(304	)
Balance at June 30, 2019	$	99
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	39
Other reclassifications included in other revenue	(1		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	7
Balance at September 30, 2019	$	144

	Total AOCI
Balance at December 31, 2017	$	(152	)
Adoption of accounting standards	(33		)
Available for sale securities:
Net unrealized gain (loss)	(139		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	20
Balance at September 30, 2018	$	(304	)
Balance at December 31, 2018	$	(252	)
Available for sale securities:
Net unrealized gain (loss), excluding transfers to available for sale from held to maturity	358
Net unrealized gain on securities transferred to available for sale from held to maturity (1)	19
Other reclassifications included in other revenue	(4		)
Held to maturity securities:
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	23
Balance at September 30, 2019	$	144

⁽¹⁾ As part of the adoption of ASU 2017-12, in the first quarter of 2019, the Company made a one-time election to transfer a portion of its HTM securities to AFS. The transfer resulted in a net of tax increase to AOCI of $19 million. See Notes 2 and 4 for additional discussion on the transfer of HTM securities to AFS.

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Bank Deposits (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Interest-bearing deposits:
Deposits swept from brokerage accounts	$ 191,456	$ 212,311
Checking	12,020	12,523
Savings and other	5,146	5,827
Total interest-bearing deposits	208,622	230,661
Non-interest-bearing deposits	705	762
Total bank deposits	$ 209,327	$ 231,423

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Bank Loans and Related Allowance for Loan Losses (Impaired Assets) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings	$ 2	$ 4
Total impaired assets	25	28
Nonperforming Financial Instruments [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total nonperforming assets	23	24
Nonperforming Financial Instruments [Member] | Nonaccrual Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total nonperforming assets	21	21
Nonperforming Financial Instruments [Member] | Other Real Estate Owned [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total nonperforming assets	$ 2	$ 3

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Investment Securities (Proceeds and Gross Realized Gains And Losses from Sales of Securities Available for Sale) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales of available for sale securities	$ 5,436	$ 0	$ 21,710	$ 115
Gross realized gains	5	0	15	0
Gross realized losses	$ 4	$ 0	$ 10	$ 0

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Segment Information (Financial Information for Reportable Segments) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Revenues
Net interest revenue	$ 1,631	$ 1,527	$ 4,921	$ 4,197
Other	83	67	297	235
Total net revenues	2,711	2,579	8,115	7,463
Expenses Excluding Interest	1,475	1,360	4,379	4,111
Income before taxes on income	1,236	1,219	3,736	3,352
Asset management and administration fees [Member]
Net Revenues
Asset management and administration fees and Trading revenue	825	809	2,366	2,474
Trading revenue [Member]
Net Revenues
Asset management and administration fees and Trading revenue	172	176	531	557
Investor Services [Member]
Net Revenues
Net interest revenue	1,182	1,138	3,531	3,158
Other	68	53	207	182
Total net revenues	1,944	1,868	5,746	5,421
Expenses Excluding Interest	1,070	1,015	3,189	3,069
Income before taxes on income	874	853	2,557	2,352
Investor Services [Member] | Asset management and administration fees [Member]
Net Revenues
Asset management and administration fees and Trading revenue	586	565	1,679	1,727
Investor Services [Member] | Trading revenue [Member]
Net Revenues
Asset management and administration fees and Trading revenue	108	112	329	354
Advisor Services [Member]
Net Revenues
Net interest revenue	449	389	1,390	1,039
Other	15	14	90	53
Total net revenues	767	711	2,369	2,042
Expenses Excluding Interest	405	345	1,190	1,042
Income before taxes on income	362	366	1,179	1,000
Advisor Services [Member] | Asset management and administration fees [Member]
Net Revenues
Asset management and administration fees and Trading revenue	239	244	687	747
Advisor Services [Member] | Trading revenue [Member]
Net Revenues
Asset management and administration fees and Trading revenue	$ 64	$ 64	$ 202	$ 203

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Fair Values of Assets and Liabilities (Fair Value of Other Financial Instruments) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Assets
Held to maturity securities	$ 142,163	$ 142,038
U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	116,012	116,093
Asset-backed securities [Member]
Assets
Held to maturity securities	18,359	18,546
Corporate debt securities [Member]
Assets
Held to maturity securities	4,715	4,432
U.S. state and municipal securities [Member]
Assets
Held to maturity securities	1,413	1,348
Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	1,164	1,142
U.S. Treasury securities [Member]
Assets
Held to maturity securities	230	217
Certificates of deposit [Member]
Assets
Held to maturity securities	200	201
Foreign government agency securities [Member]
Assets
Held to maturity securities	50	49
Carrying Amount [Member]
Assets
Cash and cash equivalents	15,136	19,646
Cash and investments segregated and on deposit for regulatory purposes	12,595	8,886
Receivables from brokers, dealers, and clearing organizations	1,317	553
Receivables from brokerage clients — net	21,061	21,641
Held to maturity securities	140,194	144,009
Bank loans – net	16,895	16,609
Other assets	617	460
Total	207,815	211,804
Liabilities
Bank deposits	209,327	231,423
Payables to brokers, dealers, and clearing organizations	1,736	1,831
Payables to brokerage clients	35,622	32,726
Accrued expenses and other liabilities	1,252	1,370
Long-term debt	7,427	6,878
Total	255,364	274,228
Carrying Amount [Member] | First Mortgage [Member]
Assets
Bank loans – net	10,630	10,370
Carrying Amount [Member] | HELOCs [Member]
Assets
Bank loans – net	1,216	1,500
Carrying Amount [Member] | Pledged asset lines [Member]
Assets
Bank loans – net	4,878	4,561
Carrying Amount [Member] | Other [Member]
Assets
Bank loans – net	171	178
Carrying Amount [Member] | U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	114,276	118,064
Carrying Amount [Member] | Asset-backed securities [Member]
Assets
Held to maturity securities	18,323	18,502
Carrying Amount [Member] | Corporate debt securities [Member]
Assets
Held to maturity securities	4,659	4,477
Carrying Amount [Member] | U.S. state and municipal securities [Member]
Assets
Held to maturity securities	1,306	1,327
Carrying Amount [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	1,136	1,156
Carrying Amount [Member] | U.S. Treasury securities [Member]
Assets
Held to maturity securities	224	223
Carrying Amount [Member] | Certificates of deposit [Member]
Assets
Held to maturity securities	200	200
Carrying Amount [Member] | Foreign government agency securities [Member]
Assets
Held to maturity securities	50	50
Carrying Amount [Member] | Other [Member]
Assets
Held to maturity securities	20	10
Portion at Other than Fair Value Measurement [Member]
Assets
Cash and cash equivalents	15,136	19,646
Cash and investments segregated and on deposit for regulatory purposes	12,595	8,886
Receivables from brokers, dealers, and clearing organizations	1,317	553
Receivables from brokerage clients — net	21,061	21,641
Held to maturity securities	142,163	142,038
Bank loans – net	16,986	16,515
Other assets	617	460
Total	209,875	209,739
Liabilities
Bank deposits	209,327	231,423
Payables to brokers, dealers, and clearing organizations	1,736	1,831
Payables to brokerage clients	35,622	32,726
Accrued expenses and other liabilities	1,252	1,370
Long-term debt	7,771	6,827
Total	255,708	274,177
Portion at Other than Fair Value Measurement [Member] | First Mortgage [Member]
Assets
Bank loans – net	10,682	10,193
Portion at Other than Fair Value Measurement [Member] | HELOCs [Member]
Assets
Bank loans – net	1,255	1,583
Portion at Other than Fair Value Measurement [Member] | Pledged asset lines [Member]
Assets
Bank loans – net	4,878	4,561
Portion at Other than Fair Value Measurement [Member] | Other [Member]
Assets
Bank loans – net	171	178
Portion at Other than Fair Value Measurement [Member] | U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	116,012	116,093
Portion at Other than Fair Value Measurement [Member] | Asset-backed securities [Member]
Assets
Held to maturity securities	18,359	18,546
Portion at Other than Fair Value Measurement [Member] | Corporate debt securities [Member]
Assets
Held to maturity securities	4,715	4,432
Portion at Other than Fair Value Measurement [Member] | U.S. state and municipal securities [Member]
Assets
Held to maturity securities	1,413	1,348
Portion at Other than Fair Value Measurement [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	1,164	1,142
Portion at Other than Fair Value Measurement [Member] | U.S. Treasury securities [Member]
Assets
Held to maturity securities	230	217
Portion at Other than Fair Value Measurement [Member] | Certificates of deposit [Member]
Assets
Held to maturity securities	200	201
Portion at Other than Fair Value Measurement [Member] | Foreign government agency securities [Member]
Assets
Held to maturity securities	50	49
Portion at Other than Fair Value Measurement [Member] | Other [Member]
Assets
Held to maturity securities	20	10
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member]
Assets
Cash and cash equivalents	0	0
Cash and investments segregated and on deposit for regulatory purposes	0	0
Receivables from brokers, dealers, and clearing organizations	0	0
Receivables from brokerage clients — net	0	0
Held to maturity securities	0	0
Bank loans – net	0	0
Other assets	0	0
Total	0	0
Liabilities
Bank deposits	0	0
Payables to brokers, dealers, and clearing organizations	0	0
Payables to brokerage clients	0	0
Accrued expenses and other liabilities	0	0
Long-term debt	0	0
Total	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | First Mortgage [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | HELOCs [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Pledged asset lines [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Other [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Asset-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Corporate debt securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | U.S. state and municipal securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | U.S. Treasury securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Certificates of deposit [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Foreign government agency securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 1 [Member] | Other [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member]
Assets
Cash and cash equivalents	15,136	19,646
Cash and investments segregated and on deposit for regulatory purposes	12,595	8,886
Receivables from brokers, dealers, and clearing organizations	1,317	553
Receivables from brokerage clients — net	21,061	21,641
Held to maturity securities	142,163	142,038
Bank loans – net	16,986	16,515
Other assets	617	460
Total	209,875	209,739
Liabilities
Bank deposits	209,327	231,423
Payables to brokers, dealers, and clearing organizations	1,736	1,831
Payables to brokerage clients	35,622	32,726
Accrued expenses and other liabilities	1,252	1,370
Long-term debt	7,771	6,827
Total	255,708	274,177
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | First Mortgage [Member]
Assets
Bank loans – net	10,682	10,193
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | HELOCs [Member]
Assets
Bank loans – net	1,255	1,583
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Pledged asset lines [Member]
Assets
Bank loans – net	4,878	4,561
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Other [Member]
Assets
Bank loans – net	171	178
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	116,012	116,093
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Asset-backed securities [Member]
Assets
Held to maturity securities	18,359	18,546
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Corporate debt securities [Member]
Assets
Held to maturity securities	4,715	4,432
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | U.S. state and municipal securities [Member]
Assets
Held to maturity securities	1,413	1,348
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	1,164	1,142
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | U.S. Treasury securities [Member]
Assets
Held to maturity securities	230	217
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Certificates of deposit [Member]
Assets
Held to maturity securities	200	201
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Foreign government agency securities [Member]
Assets
Held to maturity securities	50	49
Portion at Other than Fair Value Measurement [Member] | Level 2 [Member] | Other [Member]
Assets
Held to maturity securities	20	10
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member]
Assets
Cash and cash equivalents	0	0
Cash and investments segregated and on deposit for regulatory purposes	0	0
Receivables from brokers, dealers, and clearing organizations	0	0
Receivables from brokerage clients — net	0	0
Held to maturity securities	0	0
Bank loans – net	0	0
Other assets	0	0
Total	0	0
Liabilities
Bank deposits	0	0
Payables to brokers, dealers, and clearing organizations	0	0
Payables to brokerage clients	0	0
Accrued expenses and other liabilities	0	0
Long-term debt	0	0
Total	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | First Mortgage [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | HELOCs [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Pledged asset lines [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Other [Member]
Assets
Bank loans – net	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | U.S. agency mortgage-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Asset-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Corporate debt securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | U.S. state and municipal securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | U.S. Treasury securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Certificates of deposit [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Foreign government agency securities [Member]
Assets
Held to maturity securities	0	0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member] | Other [Member]
Assets
Held to maturity securities	$ 0	$ 0

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Accumulated Other Comprehensive Income (Components of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Other comprehensive income (loss) before tax
Net unrealized gain (loss)	$ 51	$ (43)	$ 496	$ (184)
Other reclassifications included in other revenue	(1)	0	(5)	0
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10	8	30	26
Other comprehensive income (loss), before tax	60	(35)	521	(158)
Tax Effect
Net unrealized gain (loss)	(12)	11	(119)	45
Other reclassifications included in other revenue	0	0	1	0
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	(3)	(2)	(7)	(6)
Other comprehensive income (loss)	(15)	9	(125)	39
Net of Tax
Net unrealized gain (loss)	39	(32)	377	(139)
Other reclassifications included in other revenue	(1)	0	(4)	0
Amortization of amounts previously recorded upon transfer from available for sale	7	6	23	20
Other comprehensive income (loss), net of tax	$ 45	$ (26)	$ 396	$ (119)

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Borrowings

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Borrowings

Borrowings

CSC’s Senior Notes are unsecured obligations. CSC may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes and quarterly for the floating-rate Senior Notes. The following table lists long-term debt by instrument outstanding as of September 30, 2019 and December 31, 2018:

	Date of	Principal Amount Outstanding
	Issuance	September 30, 2019			December 31, 2018
Fixed-rate Senior Notes:
4.450% due July 22, 2020	07/22/10	$	700		$	700
3.250% due May 21, 2021	05/22/18	600			600
3.225% due September 1, 2022	08/29/12	256			256
2.650% due January 25, 2023	12/07/17	800			800
3.550% due February 1, 2024	10/31/18	500			500
3.000% due March 10, 2025	03/10/15	375			375
3.850% due May 21, 2025	05/22/18	750			750
3.450% due February 13, 2026	11/13/15	350			350
3.200% due March 2, 2027	03/02/17	650			650
3.200% due January 25, 2028	12/07/17	700			700
4.000% due February 1, 2029	10/31/18	600			600
3.250% due May 22, 2029	05/22/19	600			—
Floating-rate Senior Notes:
Three-month LIBOR + 0.32% due May 21, 2021	05/22/18	600			600
Total Senior Notes		7,481			6,881
5.450% Finance lease obligation (1)	06/04/04	—			52
Unamortized discount — net		(14		)	(15		)
Debt issuance costs		(40		)	(40		)
Total long-term debt		$	7,427		$	6,878

⁽¹⁾ The finance lease obligation was extinguished through an assignment agreement during the first quarter of 2019.

Annual maturities on long-term debt outstanding at September 30, 2019 are as follows:

	Maturities
2019	$	—
2020	700
2021	1,200
2022	256
2023	800
Thereafter	4,525
Total maturities	7,481
Unamortized discount — net	(14		)
Debt issuance costs	(40		)
Total long-term debt	$	7,427

Short-term borrowings: Our banking subsidiaries maintain secured credit facilities with the FHLB. Amounts available under these facilities are dependent on the amount of our First Mortgages, HELOCs, and the fair value of certain of their investment securities that are pledged as collateral. As of September 30, 2019 and December 31, 2018, the collateral pledged provided a total borrowing capacity of $35.2 billion and $35.5 billion, respectively, of which no amounts were outstanding at the end of either period.

As a condition of the FHLB borrowings, we are required to hold FHLB stock, which was recorded in other assets on the condensed consolidated balance sheets. The investment in FHLB was $34 million at September 30, 2019 and $32 million at December 31, 2018.

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Investment Securities

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost, gross unrealized gains and losses, and fair value of AFS and HTM securities are as follows:

September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale securities
U.S. agency mortgage-backed securities	$	40,179	$	299	$	47	$	40,431
U.S. Treasury securities	5,034		3		10		5,027
Asset-backed securities (1)	4,773		35		7		4,801
Corporate debt securities (2)	4,630		57		1		4,686
Certificates of deposit	1,000		4		—		1,004
Commercial paper (2,3)	520		1		—		521
Non-agency commercial mortgage-backed securities	13		—		—		13
Total available for sale securities	$	56,149	$	399	$	65	$	56,483
Held to maturity securities
U.S. agency mortgage-backed securities	$	114,276	$	1,974	$	238	$	116,012
Asset-backed securities (1)	18,323		74		38		18,359
Corporate debt securities (2)	4,659		58		2		4,715
U.S. state and municipal securities	1,306		107		—		1,413
Non-agency commercial mortgage-backed securities	1,136		28		—		1,164
U.S. Treasury securities	224		6		—		230
Certificates of deposit	200		—		—		200
Foreign government agency securities	50		—		—		50
Other	20		—		—		20
Total held to maturity securities	$	140,194	$	2,247	$	278	$	142,163

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	25,594	$	44	$	82	$	25,556
U.S. Treasury securities	18,410		—		108		18,302
Asset-backed securities (1)	10,086		14		15		10,085
Corporate debt securities (2)	7,477		10		20		7,467
Certificates of deposit	3,682		4		1		3,685
U.S. agency notes	900		—		2		898
Commercial paper (2,3)	522		—		—		522
Foreign government agency securities	50		—		1		49
Non-agency commercial mortgage-backed securities	14		—		—		14
Total available for sale securities	$	66,735	$	72	$	229	$	66,578
Held to maturity securities
U.S. agency mortgage-backed securities	$	118,064	$	217	$	2,188	$	116,093
Asset-backed securities (1)	18,502		83		39		18,546
Corporate debt securities (2)	4,477		2		47		4,432
U.S. state and municipal securities	1,327		24		3		1,348
Non-agency commercial mortgage-backed securities	1,156		3		17		1,142
U.S. Treasury securities	223		—		6		217
Certificates of deposit	200		1		—		201
Foreign government agency securities	50		—		1		49
Other	10		—		—		10
Total held to maturity securities	$	144,009	$	330	$	2,301	$	142,038

⁽¹⁾ Approximately 43% and 36% of asset-backed securities held as of September 30, 2019 and December 31, 2018, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 42% of the asset-backed securities held as of September 30, 2019 and December 31, 2018.

⁽²⁾ As of September 30, 2019 and December 31, 2018, approximately 35% and 26%, respectively, of the total AFS and HTM investments in corporate debt securities and commercial paper were issued by institutions in the financial services industry. Approximately 18% of the holdings of these securities were issued by institutions in the information technology industry as of September 30, 2019 and December 31, 2018.

⁽³⁾ Included in cash and cash equivalents on the condensed consolidated balance sheets, but excluded from this table is $0.9 billion and $4.9 billion of AFS commercial paper as of September 30, 2019 and December 31, 2018, respectively. These holdings have maturities of three months or less at the time of acquisition and an aggregate market value equal to amortized cost.

On January 1, 2019 the Company transferred certain U.S. agency mortgage-backed securities with a fair value of $8.8 billion from the HTM category to the AFS category as permitted by ASU 2017-12. For additional information on the transfer, see Notes 2 and 14.

At September 30, 2019, our banking subsidiaries had pledged securities with a fair value of $26.8 billion as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 8). Certain banking subsidiaries also pledge investment securities as collateral to secure borrowing capacity at the Federal Reserve Bank discount window, and had pledged securities with a fair value of $8.3 billion as collateral for this facility at September 30, 2019. CSB also pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $918 million at September 30, 2019.

Securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows:

	Less than 12 months				12 months or longer				Total
September 30, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale securities
U.S. agency mortgage-backed securities	$	12,063	$	24	$	6,317	$	23	$	18,380	$	47
U.S. Treasury securities	377		—		3,161		10		3,538		10
Asset-backed securities	763		1		398		6		1,161		7
Corporate debt securities	149		1		499		—		648		1
Total	$	13,352	$	26	$	10,375	$	39	$	23,727	$	65
Held to maturity securities
U.S. agency mortgage-backed securities	$	11,838	$	37	$	20,897	$	201	$	32,735	$	238
Asset-backed securities	7,638		34		556		4		8,194		38
Corporate debt securities	416		1		354		1		770		2
Total	$	19,892	$	72	$	21,807	$	206	$	41,699	$	278
Total securities with unrealized losses (1)	$	33,244	$	98	$	32,182	$	245	$	65,426	$	343

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	9,529	$	32	$	4,257	$	50	$	13,786	$	82
U.S. Treasury securities	4,951		6		7,037		102		11,988		108
Asset-backed securities	4,050		9		837		6		4,887		15
Corporate debt securities	3,561		19		254		1		3,815		20
Certificates of deposit	1,217		1		150		—		1,367		1
U.S. agency notes	195		—		304		2		499		2
Foreign government agency securities	—		—		49		1		49		1
Total	$	23,503	$	67	$	12,888	$	162	$	36,391	$	229
Held to maturity securities
U.S. agency mortgage-backed securities	$	29,263	$	222	$	56,435	$	1,966	$	85,698	$	2,188
Asset-backed securities	6,795		35		376		4		7,171		39
Corporate debt securities	2,909		29		1,066		18		3,975		47
U.S. state and municipal securities	77		2		18		1		95		3
Non-agency commercial mortgage-backed securities	283		2		632		15		915		17
U.S. Treasury securities	—		—		218		6		218		6
Foreign government agency securities	—		—		49		1		49		1
Total	$	39,327	$	290	$	58,794	$	2,011	$	98,121	$	2,301
Total securities with unrealized losses (2)	$	62,830	$	357	$	71,682	$	2,173	$	134,512	$	2,530

⁽¹⁾ The number of investment positions with unrealized losses totaled 343 for AFS securities and 625 for HTM securities.

⁽²⁾ The number of investment positions with unrealized losses totaled 441 for AFS securities and 1,524 for HTM securities.

At September 30, 2019, substantially all rated securities in the investment portfolios were investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government or U.S. government-sponsored enterprises.

Management evaluates whether investment securities are other-than-temporarily impaired on a quarterly basis as described in Note 2 in the 2018 Form 10-K. No amounts were recognized as OTTI in earnings or other comprehensive income during the nine months ended September 30, 2019 or the year ended December 31, 2018. As of September 30, 2019 and December 31, 2018, Schwab did not hold any securities on which OTTI was previously recognized.

In the table below, mortgage-backed securities and other asset-backed securities have been allocated to maturity groupings based on final contractual maturities. As borrowers may have the right to call or prepay certain obligations underlying our investment securities, actual maturities may differ from the scheduled contractual maturities presented below.

The maturities of AFS and HTM securities are as follows:

September 30, 2019	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Available for sale securities
U.S. agency mortgage-backed securities	$	51	$	1,909	$	11,061	$	27,410	$	40,431
U.S. Treasury securities	3,541		1,486		—		—		5,027
Asset-backed securities	35		3,752		794		220		4,801
Corporate debt securities	1,100		3,415		171		—		4,686
Certificates of deposit	501		503		—		—		1,004
Commercial paper	521		—		—		—		521
Non-agency commercial mortgage-backed securities	—		—		—		13		13
Total fair value	$	5,749	$	11,065	$	12,026	$	27,643	$	56,483
Total amortized cost	$	5,743	$	10,994	$	11,996	$	27,416	$	56,149
Held to maturity securities
U.S. agency mortgage-backed securities	$	663	$	15,472	$	35,048	$	64,829	$	116,012
Asset-backed securities	—		3,227		7,940		7,192		18,359
Corporate debt securities	778		3,079		858		—		4,715
U.S. state and municipal securities	—		99		452		862		1,413
Non-agency commercial mortgage-backed securities	—		367		—		797		1,164
U.S. Treasury securities	—		—		230		—		230
Certificates of deposit	200		—		—		—		200
Foreign government agency securities	—		50		—		—		50
Other	—		—		—		20		20
Total fair value	$	1,641	$	22,294	$	44,528	$	73,700	$	142,163
Total amortized cost	$	1,637	$	21,989	$	43,368	$	73,200	$	140,194

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proceeds	$	5,436	$	—	$	21,710	$	115
Gross realized gains	5		—		15		—
Gross realized losses	4		—		10		—

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Preferred Stock Issued and Outstanding

The Company’s preferred stock issued and outstanding is as follows:

			Liquidation Preference Per Share							Dividend Rate in Effect at September 30, 2019		Earliest Redemption Date	Date at Which Dividend Rate Becomes Floating	Floating Annual Rate of Three-Month LIBOR plus:
	Shares Issued and Outstanding (in thousands) at				Carrying Value at
	September 30, 2019 (1)	December 31, 2018 (1)			September 30, 2019		December 31, 2018		Issue Date
Fixed-rate:
Series C	600	600	$	1,000	$	585	$	585	08/03/15	6.000	%	12/01/20	N/A	N/A
Series D	750	750	1,000		728		728		03/07/16	5.950	%	06/01/21	N/A	N/A
Fixed-to-floating-rate:
Series A	400	400	1,000		397		397		01/26/12	7.000	%	02/01/22	02/01/22	4.820	%
Series E	6	6	100,000		591		591		10/31/16	4.625	%	03/01/22	03/01/22	3.315	%
Series F	5	5	100,000		492		492		10/31/17	5.000	%	12/01/27	12/01/27	2.575	%
Total preferred stock	1,761	1,761			$	2,793	$	2,793

⁽¹⁾ Represented by depositary shares, except for Series A.

N/A Not applicable.

Dividends Declared

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

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
	Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount
Series A	$	—	$	—	$	—	$	—	$	14	$	35.00	$	14	$	35.00
Series C	9		15.00		9		15.00		27		45.00		27		45.00
Series D	11		14.88		11		14.88		33		44.64		33		44.64
Series E	14		2,312.50		14		2,312.50		28		4,625.00		28		4,625.00
Series F	—		—		—		—		13		2,500.00		15		2,930.56
Total	$	34			$	34			$	115			$	117

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Bank Loans and Related Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Composition of Bank Loans and Delinquency Analysis by Loan Segment

The composition of bank loans and delinquency analysis by loan type is as follows:

September 30, 2019	Current		30-59 days past due		60-89 days past due		>90 days past due and other nonaccrual loans (3)		Total past due and other nonaccrual loans		Total loans		Allowance for loan losses		Total bank loans – net
First Mortgages (1,2)	$	10,607	$	20	$	2	$	11	$	33	$	10,640	$	10	$	10,630
HELOCs (1,2)	1,208		3		1		8		12		1,220		4		1,216
Pledged asset lines	4,876		2		—		—		2		4,878		—		4,878
Other	172		—		—		2		2		174		3		171
Total bank loans	$	16,863	$	25	$	3	$	21	$	49	$	16,912	$	17	$	16,895
December 31, 2018
First Mortgages (1,2)	$	10,349	$	21	$	2	$	12	$	35	$	10,384	$	14	$	10,370
HELOCs (1,2)	1,493		3		1		8		12		1,505		5		1,500
Pledged asset lines	4,558		3		—		—		3		4,561		—		4,561
Other	180		—		—		—		—		180		2		178
Total bank loans	$	16,580	$	27	$	3	$	20	$	50	$	16,630	$	21	$	16,609

⁽¹⁾ First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $71 million and $73 million at September 30, 2019 and December 31, 2018, respectively.

⁽²⁾ At September 30, 2019 and December 31, 2018, 46% and 47%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

⁽³⁾ There were no loans accruing interest that were contractually 90 days or more past due at September 30, 2019 or December 31, 2018.

Changes in Allowance for Loan Losses

Changes in the allowance for loan losses were as follows:

	September 30, 2019											September 30, 2018
Three Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other		Total (1)
Balance at beginning of period	$	12		$	5		$	2	$	19		$	17	$	7		$	2	$	26
Charge-offs	—			—			—		—			—		—			—		—
Recoveries	—			—			—		—			—		1			—		1
Provision for loan losses	(2		)	(1		)	1		(2		)	—		(1		)	—		(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2	$	26

	September 30, 2019											September 30, 2018
Nine Months Ended	First Mortgages			HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other			Total (1)
Balance at beginning of period	$	14		$	5		$	2	$	21		$	16	$	8		$	2		$	26
Charge-offs	—			—			—		—			—		—			(1		)	(1		)
Recoveries	1			1			—		2			—		2			—			2
Provision for loan losses	(5		)	(2		)	1		(6		)	1		(3		)	1			(1		)
Balance at end of period	$	10		$	4		$	3	$	17		$	17	$	7		$	2		$	26

⁽¹⁾ All PALs were fully collateralized by securities with fair values in excess of borrowings as of each period presented.

Impaired Bank Loan Related Assets

A summary of impaired bank loan-related assets is as follows:

	September 30, 2019		December 31, 2018
Nonaccrual loans (1)	$	21	$	21
Other real estate owned (2)	2		3
Total nonperforming assets	23		24
Troubled debt restructurings	2		4
Total impaired assets	$	25	$	28

⁽¹⁾ Nonaccrual loans include nonaccrual troubled debt restructurings.

⁽²⁾ Included in other assets on the condensed consolidated balance sheets.

Credit Quality Indicators of Bank Loan Portfolio

The credit quality indicators of the Company’s bank loan portfolio are detailed below:

September 30, 2019	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,574	776	0.03	%
>70% – <90%	1,061		770	0.28	%
>90% – <100%	4		756	—
>100%	1		768	—
Total	$	10,640	776	0.05	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,157	769	0.25	%
>70% – <90%	58		751	0.83	%
>90% – <100%	3		716	5.06	%
>100%	2		659	—
Total	$	1,220	768	0.29	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,878	767	—

December 31, 2018	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,396	776	0.04	%
>70% – <90%	985		769	0.41	%
>90% – <100%	2		717	—
>100%	1		753	—
Total	$	10,384	775	0.07	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,416	770	0.13	%
>70% – <90%	80		752	0.60	%
>90% – <100%	6		729	3.36	%
>100%	3		702	—
Total	$	1,505	769	0.17	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,561	766	—

⁽¹⁾ Represents the LTV for the full line of credit (drawn and undrawn).

September 30, 2019	First Mortgages		HELOCs
Year of origination
Pre-2015	$	1,815	$	872
2015	889		85
2016	2,382		82
2017	2,137		90
2018	1,611		67
2019	1,806		24
Total	$	10,640	$	1,220
Origination FICO
<620	$	4	$	—
620 – 679	76		6
680 – 739	1,624		236
>740	8,936		978
Total	$	10,640	$	1,220
Origination LTV
<70%	$	7,980	$	869
>70% – <90%	2,656		346
>90% – <100%	4		5
Total	$	10,640	$	1,220

December 31, 2018	First Mortgages		HELOCs
Year of origination
Pre-2015	$	2,387	$	1,140
2015	1,050		106
2016	2,606		95
2017	2,366		99
2018	1,975		65
Total	$	10,384	$	1,505
Origination FICO
<620	$	5	$	—
620 – 679	83		8
680 – 739	1,626		282
>740	8,670		1,215
Total	$	10,384	$	1,505
Origination LTV
<70%	$	7,815	$	1,064
>70% – <90%	2,564		434
>90% – <100%	5		7
Total	$	10,384	$	1,505

Converting to Amortizing Loans

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

September 30, 2019	Balance
Converted to an amortizing loan by period end	$	551
Within 1 year	52
> 1 year – 3 years	84
> 3 years – 5 years	170
> 5 years	363
Total	$	1,220

XML

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Leases

The following table details the amounts and locations of lease assets and liabilities on the condensed consolidated balance sheet:

Leases	Balance Sheet Classification	September 30, 2019
Assets
Operating lease assets	Other assets	$	596
Liabilities
Operating lease liabilities	Accrued expenses and other liabilities	$	665

Schedule of Lease Cost and Lease Term and Discount Rate

The components of lease expense are as follows:

Lease Cost	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost (1)	$	34	$	100
Variable lease cost (2)	8		25

⁽¹⁾ Includes short-term leases, which are immaterial.

⁽²⁾ Includes payments that are entirely variable and amounts that represent the difference between payments based on an index or rate that would be reflected in the lease liability and what is actually incurred.

The following tables present supplemental lease information as of September 30, 2019:

Lease Term and Discount Rate
Weighted-average remaining lease term (years)	7.18
Weighted-average discount rate	3.47	%

Schedule of Maturity of Lease Liabilities

Maturity of Lease Liabilities	Operating Leases (1)
2019	$	26
2020	136
2021	113
2022	92
2023	84
Thereafter	309
Total lease payments	760
Less: Interest	95
Present value of lease liabilities	$	665

⁽¹⁾ Operating lease payments exclude $41 million of legally binding minimum lease payments for leases signed but not yet commenced. These leases will commence between 2019 and 2020 with lease terms of five years to 20 years.

Schedule of Maturity of Lease Liabilities, Before 842

In accordance with the disclosure requirements for our adoption of ASU 2016-02, the Company is presenting the operating leases commitment table as of December 31, 2018. The following table is unchanged from the disclosure in Note 14 in the 2018 Form 10-K:

	Operating Leases		Subleases		Net
2019	$	131	$	4	$	127
2020	125		4		121
2021	101		4		97
2022	79		2		77
2023	72		1		71
Thereafter	282		—		282
Total	$	790	$	15	$	775

XML

Bank Loans and Related Allowance for Loan Losses (Credit Quality Indicators of Bank Loan Portfolio) (Details) $ in Millions	Sep. 30, 2019 USD ($) credit_rating	Dec. 31, 2018 USD ($) credit_rating
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 16,912	$ 16,630
First Mortgage [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 10,640	$ 10,384
Weighted Average Updated FICO | credit_rating	776	775
Percent of Loans on Nonaccrual Status	0.05%	0.07%
First Mortgage [Member] | Origination FICO Score Below 620 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 4	$ 5
First Mortgage [Member] | Origination FICO Score 620 Through 679 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	76	83
First Mortgage [Member] | Origination FICO Score 680 Through 739 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	1,624	1,626
First Mortgage [Member] | Origination FICO Score 740 and Above [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	8,936	8,670
First Mortgage [Member] | Year of origination Pre 2015 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	1,815	2,387
First Mortgage [Member] | Year of origination 2015 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	889	1,050
First Mortgage [Member] | Year of origination 2016 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	2,382	2,606
First Mortgage [Member] | Year of origination 2017 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	2,137	2,366
First Mortgage [Member] | Year of origination 2018 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	1,611	1,975
First Mortgage [Member] | Year of origination 2019 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	1,806
First Mortgage [Member] | Estimated Current LTV 70% and Below [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 9,574	$ 9,396
Weighted Average Updated FICO | credit_rating	776	776
Percent of Loans on Nonaccrual Status	0.03%	0.04%
First Mortgage [Member] | Estimated Current LTV Greater Than 70% through 90% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 1,061	$ 985
Weighted Average Updated FICO | credit_rating	770	769
Percent of Loans on Nonaccrual Status	0.28%	0.41%
First Mortgage [Member] | Estimated Current LTV Greater Than 90% through 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 4	$ 2
Weighted Average Updated FICO | credit_rating	756	717
Percent of Loans on Nonaccrual Status	0.00%	0.00%
First Mortgage [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 1	$ 1
Weighted Average Updated FICO | credit_rating	768	753
Percent of Loans on Nonaccrual Status	0.00%	0.00%
First Mortgage [Member] | Origination Loan to Value Ratio 70% and Below [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 7,980	$ 7,815
First Mortgage [Member] | Origination Loan to Value Ratio Greater Than 70% Through 90% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	2,656	2,564
First Mortgage [Member] | Origination Loan to Value Ratio Greater Than 90% Through 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	4	5
HELOCs [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 1,220	$ 1,505
Weighted Average Updated FICO | credit_rating	768	769
Percent of Loans on Nonaccrual Status	0.29%	0.17%
HELOCs [Member] | Origination FICO Score Below 620 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 0	$ 0
HELOCs [Member] | Origination FICO Score 620 Through 679 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	6	8
HELOCs [Member] | Origination FICO Score 680 Through 739 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	236	282
HELOCs [Member] | Origination FICO Score 740 and Above [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	978	1,215
HELOCs [Member] | Year of origination Pre 2015 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	872	1,140
HELOCs [Member] | Year of origination 2015 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	85	106
HELOCs [Member] | Year of origination 2016 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	82	95
HELOCs [Member] | Year of origination 2017 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	90	99
HELOCs [Member] | Year of origination 2018 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	67	65
HELOCs [Member] | Year of origination 2019 [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	24
HELOCs [Member] | Estimated Current LTV 70% and Below [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 1,157	$ 1,416
Weighted Average Updated FICO | credit_rating	769	770
Percent of Loans on Nonaccrual Status	0.25%	0.13%
HELOCs [Member] | Estimated Current LTV Greater Than 70% through 90% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 58	$ 80
Weighted Average Updated FICO | credit_rating	751	752
Percent of Loans on Nonaccrual Status	0.83%	0.60%
HELOCs [Member] | Estimated Current LTV Greater Than 90% through 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 3	$ 6
Weighted Average Updated FICO | credit_rating	716	729
Percent of Loans on Nonaccrual Status	5.06%	3.36%
HELOCs [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 2	$ 3
Weighted Average Updated FICO | credit_rating	659	702
Percent of Loans on Nonaccrual Status	0.00%	0.00%
HELOCs [Member] | Origination Loan to Value Ratio 70% and Below [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 869	$ 1,064
HELOCs [Member] | Origination Loan to Value Ratio Greater Than 70% Through 90% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	346	434
HELOCs [Member] | Origination Loan to Value Ratio Greater Than 90% Through 100% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	5	7
Pledged asset lines [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	4,878	4,561
Pledged asset lines [Member] | Weighted Average Loan to Value Ratio =70% [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Balance	$ 4,878	$ 4,561
Weighted Average Updated FICO | credit_rating	767	766
Percent of Loans on Nonaccrual Status	0.00%	0.00%

XML

Bank Loans and Related Allowance for Loan Losses (Composition of Bank Loans and Delinquency Analysis by Loan Segment) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Past Due [Line Items]
Current	$ 16,863,000,000	$ 16,580,000,000
Past due and other nonaccrual loans	49,000,000	50,000,000
Total loans	16,912,000,000	16,630,000,000
Allowance for loan losses	17,000,000	21,000,000	$ 19,000,000	$ 26,000,000	$ 26,000,000	$ 26,000,000
Total bank loans – net	16,895,000,000	16,609,000,000
Loans 90 days past due and still accruing	0	0
30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	25,000,000	27,000,000
60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	3,000,000	3,000,000
More Than 90 Days Past Due and Other Nonaccrual Loans [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	21,000,000	20,000,000
First Mortgage [Member]
Financing Receivable, Past Due [Line Items]
Current	10,607,000,000	10,349,000,000
Past due and other nonaccrual loans	33,000,000	35,000,000
Total loans	10,640,000,000	10,384,000,000
Allowance for loan losses	10,000,000	14,000,000	12,000,000	17,000,000	17,000,000	16,000,000
Total bank loans – net	10,630,000,000	10,370,000,000
First Mortgage [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	20,000,000	21,000,000
First Mortgage [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	2,000,000	2,000,000
First Mortgage [Member] | More Than 90 Days Past Due and Other Nonaccrual Loans [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	11,000,000	12,000,000
HELOCs [Member]
Financing Receivable, Past Due [Line Items]
Current	1,208,000,000	1,493,000,000
Past due and other nonaccrual loans	12,000,000	12,000,000
Total loans	1,220,000,000	1,505,000,000
Allowance for loan losses	4,000,000	5,000,000	5,000,000	7,000,000	7,000,000	8,000,000
Total bank loans – net	1,216,000,000	1,500,000,000
HELOCs [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	3,000,000	3,000,000
HELOCs [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	1,000,000	1,000,000
HELOCs [Member] | More Than 90 Days Past Due and Other Nonaccrual Loans [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	8,000,000	8,000,000
Pledged asset lines [Member]
Financing Receivable, Past Due [Line Items]
Current	4,876,000,000	4,558,000,000
Past due and other nonaccrual loans	2,000,000	3,000,000
Total loans	4,878,000,000	4,561,000,000
Allowance for loan losses	0	0
Total bank loans – net	4,878,000,000	4,561,000,000
Pledged asset lines [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	2,000,000	3,000,000
Pledged asset lines [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	0	0
Pledged asset lines [Member] | More Than 90 Days Past Due and Other Nonaccrual Loans [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	0	0
Other [Member]
Financing Receivable, Past Due [Line Items]
Current	172,000,000	180,000,000
Past due and other nonaccrual loans	2,000,000	0
Total loans	174,000,000	180,000,000
Allowance for loan losses	3,000,000	2,000,000	$ 2,000,000	$ 2,000,000	$ 2,000,000	$ 2,000,000
Total bank loans – net	171,000,000	178,000,000
Other [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	0	0
Other [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	0	0
Other [Member] | More Than 90 Days Past Due and Other Nonaccrual Loans [Member]
Financing Receivable, Past Due [Line Items]
Past due and other nonaccrual loans	2,000,000	0
First Mortgage and HELOC [Member]
Financing Receivable, Past Due [Line Items]
Unamortized premiums and discounts and direct origination costs	$ 71,000,000	$ 73,000,000
First Mortgage and HELOC [Member] | Loans, Geographic Area [Member] | California [Member]
Financing Receivable, Past Due [Line Items]
Concentration risk percentage	46.00%	47.00%

XML

Borrowings (Long-term Debt Including Unamortized Debt Discounts and Premiums) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Fixed Interest Rate	5.45%
Senior Notes	$ 7,481	$ 6,881
Finance lease obligation	0	52
Unamortized discount — net	(14)	(15)
Debt issuance costs	(40)	(40)
Total long-term debt	$ 7,427	6,878
Senior Notes [Member] | Senior Notes Due 2020 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	4.45%
Senior Notes	$ 700	700
Senior Notes [Member] | Senior Notes Due 2021 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.25%
Senior Notes	$ 600	600
Senior Notes [Member] | Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.225%
Senior Notes	$ 256	256
Senior Notes [Member] | Senior Notes Due 2023 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	2.65%
Senior Notes	$ 800	800
Senior Notes [Member] | Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.55%
Senior Notes	$ 500	500
Senior Notes [Member] | Senior Notes Due 2025 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.00%
Senior Notes	$ 375	375
Senior Notes [Member] | Senior Notes Due May 2025 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.85%
Senior Notes	$ 750	750
Senior Notes [Member] | Senior Notes Due 2026 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.45%
Senior Notes	$ 350	350
Senior Notes [Member] | Senior Notes Due 2027 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.20%
Senior Notes	$ 650	650
Senior Notes [Member] | Senior Notes Due 2028 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.20%
Senior Notes	$ 700	700
Senior Notes [Member] | Senior Notes Due 2029 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	4.00%
Senior Notes	$ 600	600
Senior Notes [Member] | Senior Notes Due May 2029 [Member]
Debt Instrument [Line Items]
Fixed Interest Rate	3.25%
Senior Notes	$ 600	0
Senior Notes [Member] | Floating Rate Senior Notes Due 2021 [Member]
Debt Instrument [Line Items]
Senior Notes	$ 600	$ 600
Senior Notes [Member] | Floating Rate Senior Notes Due 2021 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread rate	0.32%

XML

Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2019 segment
Segment Reporting [Abstract]
Number of reportable segments	2

XML

Fair Values of Assets and Liabilities (Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	$ 497	$ 539
Available for sale securities	56,483	66,578
Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	521	522
Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	1,004	3,685
U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	40,431	25,556
U.S. Treasury securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	5,027	18,302
Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,801	10,085
Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,686	7,467
U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		898
Foreign government agency securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		49
Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	13	14
Fair Value, Recurring [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	5,116	8,292
Investments segregated and on deposit for regulatory purposes	3,556	4,671
Other securities owned	497	539
Available for sale securities	56,483	66,578
Total	65,652	80,080
Fair Value, Recurring [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	4,193	3,429
Fair Value, Recurring [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	923	4,863
Available for sale securities	521	522
Fair Value, 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	1,951	1,396
Available for sale securities	1,004	3,685
Fair Value, 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	1,605	3,275
Fair Value, Recurring [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	378	441
Fair Value, Recurring [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	32	39
Fair Value, 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	77	33
Fair Value, Recurring [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	10	26
Fair Value, Recurring [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	40,431	25,556
Fair Value, Recurring [Member] | U.S. Treasury securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	5,027	18,302
Fair Value, Recurring [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,801	10,085
Fair Value, Recurring [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,686	7,467
Fair Value, Recurring [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		898
Fair Value, Recurring [Member] | Foreign government agency securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		49
Fair Value, Recurring [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	13	14
Fair Value, Recurring [Member] | Level 1 [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	4,193	3,429
Investments segregated and on deposit for regulatory purposes	0	0
Other securities owned	391	470
Available for sale securities	0	0
Total	4,584	3,899
Fair Value, Recurring [Member] | Level 1 [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	4,193	3,429
Fair Value, Recurring [Member] | Level 1 [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	0	0
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [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	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	378	441
Fair Value, Recurring [Member] | Level 1 [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 1 [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	3	3
Fair Value, Recurring [Member] | Level 1 [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	10	26
Fair Value, Recurring [Member] | Level 1 [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | U.S. Treasury securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 1 [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		0
Fair Value, Recurring [Member] | Level 1 [Member] | Foreign government agency securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		0
Fair Value, Recurring [Member] | Level 1 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 2 [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	923	4,863
Investments segregated and on deposit for regulatory purposes	3,556	4,671
Other securities owned	106	69
Available for sale securities	56,483	66,578
Total	61,068	76,181
Fair Value, Recurring [Member] | Level 2 [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair Value, Recurring [Member] | Level 2 [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	923	4,863
Available for sale securities	521	522
Fair Value, Recurring [Member] | Level 2 [Member] | Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	1,951	1,396
Available for sale securities	1,004	3,685
Fair Value, Recurring [Member] | Level 2 [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	1,605	3,275
Fair Value, Recurring [Member] | Level 2 [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 2 [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	32	39
Fair Value, Recurring [Member] | Level 2 [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	74	30
Fair Value, Recurring [Member] | Level 2 [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 2 [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	40,431	25,556
Fair Value, Recurring [Member] | Level 2 [Member] | U.S. Treasury securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	5,027	18,302
Fair Value, Recurring [Member] | Level 2 [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,801	10,085
Fair Value, Recurring [Member] | Level 2 [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	4,686	7,467
Fair Value, Recurring [Member] | Level 2 [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		898
Fair Value, Recurring [Member] | Level 2 [Member] | Foreign government agency securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		49
Fair Value, Recurring [Member] | Level 2 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	13	14
Fair Value, Recurring [Member] | Level 3 [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Investments segregated and on deposit for regulatory purposes	0	0
Other securities owned	0	0
Available for sale securities	0	0
Total	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Commercial paper [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Certificates of deposit [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	0	0
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [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	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Equity and bond mutual funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | State and municipal debt obligations [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 3 [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	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Schwab Funds money market funds [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | U.S. agency mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | U.S. Treasury securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Asset-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | Corporate debt securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	0	0
Fair Value, Recurring [Member] | Level 3 [Member] | U.S. agency notes [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		0
Fair Value, Recurring [Member] | Level 3 [Member] | Foreign government agency securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities		0
Fair Value, Recurring [Member] | Level 3 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 0	$ 0

XML

Stockholders' Equity (Dividends Declared) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Class of Stock [Line Items]
Dividends declared	$ 34	$ 34	$ 115	$ 117
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared	$ 0	$ 0	$ 14	$ 14
Dividends declared, per share amount (USD per share)	$ 0	$ 0	$ 35.00	$ 35.00
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared	$ 9	$ 9	$ 27	$ 27
Dividends declared, per share amount (USD per share)	$ 15.00	$ 15.00	$ 45.00	$ 45.00
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared	$ 11	$ 11	$ 33	$ 33
Dividends declared, per share amount (USD per share)	$ 14.88	$ 14.88	$ 44.64	$ 44.64
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared	$ 14	$ 14	$ 28	$ 28
Dividends declared, per share amount (USD per share)	$ 2,312.50	$ 2,312.50	$ 4,625.00	$ 4,625.00
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Dividends declared	$ 0	$ 0	$ 13	$ 15
Dividends declared, per share amount (USD per share)	$ 0	$ 0	$ 2,500.00	$ 2,930.56

XML

Investment Securities (Available For Sale and Held to Maturity Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) $ in Millions	Sep. 30, 2019 USD ($) security	Dec. 31, 2018 USD ($) security
Available for sale securities:
Less than 12 months Fair Value	$ 13,352	$ 23,503
Less than 12 months Unrealized Losses	26	67
12 months or longer Fair Value	10,375	12,888
12 months or longer Unrealized Losses	39	162
Total Fair Value	23,727	36,391
Total Unrealized Losses	65	229
Held to maturity securities:
Less than 12 months Fair Value	19,892	39,327
Less than 12 months Unrealized Losses	72	290
12 months or longer Fair Value	21,807	58,794
12 months or longer Unrealized Losses	206	2,011
Total Fair Value	41,699	98,121
Total Unrealized Losses	278	2,301
Total securities with unrealized losses
Less than 12 months Fair Value	33,244	62,830
Less than 12 months Unrealized Losses	98	357
12 months or longer Fair Value	32,182	71,682
12 months or longer Unrealized Losses	245	2,173
Total Fair Value	65,426	134,512
Total Unrealized Losses	$ 343	$ 2,530
Number of available for sale securities in unrealized loss positions | security	343	441
Number of held to maturity securities in unrealized loss positions | security	625	1,524
U.S. agency mortgage-backed securities [Member]
Available for sale securities:
Less than 12 months Fair Value	$ 12,063	$ 9,529
Less than 12 months Unrealized Losses	24	32
12 months or longer Fair Value	6,317	4,257
12 months or longer Unrealized Losses	23	50
Total Fair Value	18,380	13,786
Total Unrealized Losses	47	82
Held to maturity securities:
Less than 12 months Fair Value	11,838	29,263
Less than 12 months Unrealized Losses	37	222
12 months or longer Fair Value	20,897	56,435
12 months or longer Unrealized Losses	201	1,966
Total Fair Value	32,735	85,698
Total Unrealized Losses	238	2,188
U.S. Treasury securities [Member]
Available for sale securities:
Less than 12 months Fair Value	377	4,951
Less than 12 months Unrealized Losses	0	6
12 months or longer Fair Value	3,161	7,037
12 months or longer Unrealized Losses	10	102
Total Fair Value	3,538	11,988
Total Unrealized Losses	10	108
Held to maturity securities:
Less than 12 months Fair Value		0
Less than 12 months Unrealized Losses		0
12 months or longer Fair Value		218
12 months or longer Unrealized Losses		6
Total Fair Value		218
Total Unrealized Losses		6
Asset-backed securities [Member]
Available for sale securities:
Less than 12 months Fair Value	763	4,050
Less than 12 months Unrealized Losses	1	9
12 months or longer Fair Value	398	837
12 months or longer Unrealized Losses	6	6
Total Fair Value	1,161	4,887
Total Unrealized Losses	7	15
Held to maturity securities:
Less than 12 months Fair Value	7,638	6,795
Less than 12 months Unrealized Losses	34	35
12 months or longer Fair Value	556	376
12 months or longer Unrealized Losses	4	4
Total Fair Value	8,194	7,171
Total Unrealized Losses	38	39
Corporate debt securities [Member]
Available for sale securities:
Less than 12 months Fair Value	149	3,561
Less than 12 months Unrealized Losses	1	19
12 months or longer Fair Value	499	254
12 months or longer Unrealized Losses	0	1
Total Fair Value	648	3,815
Total Unrealized Losses	1	20
Held to maturity securities:
Less than 12 months Fair Value	416	2,909
Less than 12 months Unrealized Losses	1	29
12 months or longer Fair Value	354	1,066
12 months or longer Unrealized Losses	1	18
Total Fair Value	770	3,975
Total Unrealized Losses	$ 2	47
U.S. state and municipal securities [Member]
Held to maturity securities:
Less than 12 months Fair Value		77
Less than 12 months Unrealized Losses		2
12 months or longer Fair Value		18
12 months or longer Unrealized Losses		1
Total Fair Value		95
Total Unrealized Losses		3
Certificates of deposit [Member]
Available for sale securities:
Less than 12 months Fair Value		1,217
Less than 12 months Unrealized Losses		1
12 months or longer Fair Value		150
12 months or longer Unrealized Losses		0
Total Fair Value		1,367
Total Unrealized Losses		1
Non-agency commercial mortgage-backed securities [Member]
Held to maturity securities:
Less than 12 months Fair Value		283
Less than 12 months Unrealized Losses		2
12 months or longer Fair Value		632
12 months or longer Unrealized Losses		15
Total Fair Value		915
Total Unrealized Losses		17
U.S. agency notes [Member]
Available for sale securities:
Less than 12 months Fair Value		195
Less than 12 months Unrealized Losses		0
12 months or longer Fair Value		304
12 months or longer Unrealized Losses		2
Total Fair Value		499
Total Unrealized Losses		2
Foreign government agency securities [Member]
Available for sale securities:
Less than 12 months Fair Value		0
Less than 12 months Unrealized Losses		0
12 months or longer Fair Value		49
12 months or longer Unrealized Losses		1
Total Fair Value		49
Total Unrealized Losses		1
Held to maturity securities:
Less than 12 months Fair Value		0
Less than 12 months Unrealized Losses		0
12 months or longer Fair Value		49
12 months or longer Unrealized Losses		1
Total Fair Value		49
Total Unrealized Losses		$ 1

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Regulatory Requirements (Tables)

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Regulatory Capital and Ratios

The regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

	Actual (1)				Minimum to be Well Capitalized				Minimum Capital Requirement
September 30, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio (2)
CSC
Common Equity Tier 1 Risk-Based Capital	$	17,264	20.0	%	N/A				$	3,877	4.5	%
Tier 1 Risk-Based Capital	20,057		23.3	%	N/A				5,170		6.0	%
Total Risk-Based Capital	20,075		23.3	%	N/A				6,893		8.0	%
Tier 1 Leverage	20,057		7.3	%	N/A				10,945		4.0	%
Supplementary Leverage Ratio (1)	20,057		7.1	%	N/A				8,418		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,577	22.9	%	$	4,430	6.5	%	$	3,067	4.5	%
Tier 1 Risk-Based Capital	15,577		22.9	%	5,452		8.0	%	4,089		6.0	%
Total Risk-Based Capital	15,594		22.9	%	6,815		10.0	%	5,452		8.0	%
Tier 1 Leverage	15,577		7.4	%	10,537		5.0	%	8,429		4.0	%
Supplementary Leverage Ratio (1)	15,577		7.2	%	N/A		N/A		6,524		3.0	%
December 31, 2018
CSC
Common Equity Tier 1 Risk-Based Capital	$	16,813	17.6	%	N/A				$	4,295	4.5	%
Tier 1 Risk-Based Capital	19,606		20.5	%	N/A				5,726		6.0	%
Total Risk-Based Capital	19,628		20.6	%	N/A				7,635		8.0	%
Tier 1 Leverage	19,606		7.1	%	N/A				11,058		4.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,832	19.7	%	$	5,233	6.5	%	$	3,623	4.5	%
Tier 1 Risk-Based Capital	15,832		19.7	%	6,441		8.0	%	4,831		6.0	%
Total Risk-Based Capital	15,853		19.7	%	8,051		10.0	%	6,441		8.0	%
Tier 1 Leverage	15,832		7.2	%	11,044		5.0	%	8,836		4.0	%

⁽¹⁾ Beginning in 2019, CSC and CSB are subject to the “advanced approaches” framework under the Basel III capital rule. As a result, we are now required to include all components of AOCI in regulatory capital and report our supplementary leverage ratio, which is calculated as Tier 1 capital divided by total leverage exposure. Total leverage exposure includes all on-balance sheet assets and certain off-balance sheet exposures, including unused commitments. Prior to 2019, CSC and CSB elected to opt-out of the requirement to include most components of AOCI in Common Equity Tier 1 Capital; the amounts and ratios for December 31, 2018 are presented on this basis.

⁽²⁾ Under the Basel III capital rule, CSC and CSB are also required to maintain a capital conservation buffer and, beginning in 2019, a countercyclical capital buffer above the regulatory minimum risk-based capital ratios. The capital conservation buffer became 2.5% on January 1, 2019 (1.875% at December 31, 2018). At September 30, 2019, the countercyclical capital buffer was zero percent. If either buffer falls below the minimum requirement, the Company would be subject to limits on capital distributions and discretionary bonus payments to executive officers. At September 30, 2019 the minimum capital requirement plus capital conservation buffer and countercyclical capital buffer for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital ratios were 7.0%, 8.5%, and 10.5%, respectively.

N/A Not applicable.

Net Capital and Net Capital Requirements

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

	September 30, 2019		December 31, 2018
Net Capital	$	2,235	$	2,304
Minimum net capital required	0.250		0.250
2% of aggregate debit balances	440		436
Net Capital in excess of required net capital	$	1,795	$	1,868

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Revenue Recognition (Disaggregated Revenue) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
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
Other	83	67	297	235
Total net revenues	2,711	2,579	8,115	7,463
Mutual funds, ETFs, and CTFs [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	445	446	1,287	1,419
Advice solutions [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	305	294	878	859
Other [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	75	69	201	196
Asset management and administration fees [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	825	809	2,366	2,474
Commissions [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	159	155	477	501
Principal Transactions [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	13	21	54	56
Trading revenue [Member]
Disaggregation of Revenue [Line Items]
Asset management and administration fees and Trading revenue	$ 172	$ 176	$ 531	$ 557

XML

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Stockholders' Equity [Abstract]
Dividends declared on common stock (USD per share)	$ 0.17	$ 0.13	$ 0.51	$ 0.33

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 951	$ 923	$ 2,852	$ 2,572
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	51	(43)	496	(184)
Other reclassifications included in other revenue	(1)	0	(5)	0
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale	10	8	30	26
Other comprehensive income (loss), before tax	60	(35)	521	(158)
Income tax effect	(15)	9	(125)	39
Other comprehensive income (loss), net of tax	45	(26)	396	(119)
Comprehensive Income	$ 996	$ 897	$ 3,248	$ 2,453

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Commitments and Contingencies (Commitments to Extend/Purchase) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to purchase			$ 13,210		$ 11,314
First Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchased during period	$ 842	$ 491	2,000	$ 1,600
Commitments to purchase			1,976		268
HELOCs [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchased during period	52	$ 104	180	$ 311
Home Equity Loans and Lines of Credit Pledged Asset Lines and Other Lines of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$ 11,234		$ 11,234		$ 11,046

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Leases (Lease Cost) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 34	$ 100
Variable lease cost	$ 8	$ 25

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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

Schwab’s two reportable segments are Investor Services and Advisor Services. Schwab structures the operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services to individual investors, and retirement plan services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking, and support services, as well as retirement business services, to independent RIAs, independent retirement advisors, and recordkeepers. Revenues and expenses are allocated to the two segments based on which segment services the client.

Management evaluates the performance of the segments on a pre-tax basis. 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 segments is presented in the following tables:

	Investor Services				Advisor Services				Total
Three Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	1,182	$	1,138	$	449	$	389	$	1,631	$	1,527
Asset management and administration fees	586		565		239		244		825		809
Trading revenue	108		112		64		64		172		176
Other	68		53		15		14		83		67
Total net revenues	1,944		1,868		767		711		2,711		2,579
Expenses Excluding Interest	1,070		1,015		405		345		1,475		1,360
Income before taxes on income	$	874	$	853	$	362	$	366	$	1,236	$	1,219

	Investor Services				Advisor Services				Total
Nine Months Ended September 30,	2019		2018		2019		2018		2019		2018
Net Revenues
Net interest revenue	$	3,531	$	3,158	$	1,390	$	1,039	$	4,921	$	4,197
Asset management and administration fees	1,679		1,727		687		747		2,366		2,474
Trading revenue	329		354		202		203		531		557
Other	207		182		90		53		297		235
Total net revenues	5,746		5,421		2,369		2,042		8,115		7,463
Expenses Excluding Interest	3,189		3,069		1,190		1,042		4,379		4,111
Income before taxes on income	$	2,557	$	2,352	$	1,179	$	1,000	$	3,736	$	3,352

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Fair Values of Assets and Liabilities

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Values of Assets and Liabilities

Fair Values of Assets and Liabilities

Assets and liabilities measured at fair value on a recurring basis

Schwab’s assets and liabilities measured at fair value on a recurring basis include: certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, other securities owned, and AFS securities. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. We generally obtain prices from three independent third-party pricing sources for assets recorded at fair value.

Our primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar “to-be-issued” securities. We compare the prices obtained from the primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. Schwab does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in material differences in the amounts recorded.

For a description of the fair value hierarchy and Schwab’s fair value methodologies, see Note 2 in the 2018 Form 10-K. We did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the nine months ended September 30, 2019, or the year ended December 31, 2018. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at September 30, 2019 or December 31, 2018.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

September 30, 2019	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	4,193	$	—	$	—	$	4,193
Commercial paper	—		923		—		923
Total cash equivalents	4,193		923		—		5,116
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,951		—		1,951
U.S. Government securities	—		1,605		—		1,605
Total investments segregated and on deposit for regulatory purposes	—		3,556		—		3,556
Other securities owned:
Equity and bond mutual funds	378		—		—		378
State and municipal debt obligations	—		32		—		32
Equity, U.S. Government and corporate debt, and other securities	3		74		—		77
Schwab Funds® money market funds	10		—		—		10
Total other securities owned	391		106		—		497
Available for sale securities:
U.S. agency mortgage-backed securities	—		40,431		—		40,431
U.S. Treasury securities	—		5,027		—		5,027
Asset-backed securities	—		4,801		—		4,801
Corporate debt securities	—		4,686		—		4,686
Certificates of deposit	—		1,004		—		1,004
Commercial paper	—		521		—		521
Non-agency commercial mortgage-backed securities	—		13		—		13
Total available for sale securities	—		56,483		—		56,483
Total	$	4,584	$	61,068	$	—	$	65,652

December 31, 2018	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	3,429	$	—	$	—	$	3,429
Commercial paper	—		4,863		—		4,863
Total cash equivalents	3,429		4,863		—		8,292
Investments segregated and on deposit for regulatory purposes:
Certificates of deposit	—		1,396		—		1,396
U.S. Government securities	—		3,275		—		3,275
Total investments segregated and on deposit for regulatory purposes	—		4,671		—		4,671
Other securities owned:
Equity and bond mutual funds	441		—		—		441
State and municipal debt obligations	—		39		—		39
Equity, U.S. Government and corporate debt, and other securities	3		30		—		33
Schwab Funds® money market funds	26		—		—		26
Total other securities owned	470		69		—		539
Available for sale securities:
U.S. agency mortgage-backed securities	—		25,556		—		25,556
U.S. Treasury securities	—		18,302		—		18,302
Asset-backed securities	—		10,085		—		10,085
Corporate debt securities	—		7,467		—		7,467
Certificates of deposit	—		3,685		—		3,685
U.S. agency notes	—		898		—		898
Commercial paper	—		522		—		522
Foreign government agency securities	—		49		—		49
Non-agency commercial mortgage-backed securities	—		14		—		14
Total available for sale securities	—		66,578		—		66,578
Total	$	3,899	$	76,181	$	—	$	80,080

 

Fair Value of Other Financial Instruments

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

September 30, 2019	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	15,136	$	—	$	15,136	$	—	$	15,136
Cash and investments segregated and on deposit for regulatory purposes	12,595		—		12,595		—		12,595
Receivables from brokers, dealers, and clearing organizations	1,317		—		1,317		—		1,317
Receivables from brokerage clients — net	21,061		—		21,061		—		21,061
Held to maturity securities:
U.S. agency mortgage-backed securities	114,276		—		116,012		—		116,012
Asset-backed securities	18,323		—		18,359		—		18,359
Corporate debt securities	4,659		—		4,715		—		4,715
U.S. state and municipal securities	1,306		—		1,413		—		1,413
Non-agency commercial mortgage-backed securities	1,136		—		1,164		—		1,164
U.S. Treasury securities	224		—		230		—		230
Certificates of deposit	200		—		200		—		200
Foreign government agency securities	50		—		50		—		50
Other	20		—		20		—		20
Total held to maturity securities	140,194		—		142,163		—		142,163
Bank loans — net:
First Mortgages	10,630		—		10,682		—		10,682
HELOCs	1,216		—		1,255		—		1,255
Pledged asset lines	4,878		—		4,878		—		4,878
Other	171		—		171		—		171
Total bank loans — net	16,895		—		16,986		—		16,986
Other assets	617		—		617		—		617
Total	$	207,815	$	—	$	209,875	$	—	$	209,875
Liabilities
Bank deposits	$	209,327	$	—	$	209,327	$	—	$	209,327
Payables to brokers, dealers, and clearing organizations	1,736		—		1,736		—		1,736
Payables to brokerage clients	35,622		—		35,622		—		35,622
Accrued expenses and other liabilities	1,252		—		1,252		—		1,252
Long-term debt	7,427		—		7,771		—		7,771
Total	$	255,364	$	—	$	255,708	$	—	$	255,708

December 31, 2018	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	19,646	$	—	$	19,646	$	—	$	19,646
Cash and investments segregated and on deposit for regulatory purposes	8,886		—		8,886		—		8,886
Receivables from brokers, dealers, and clearing organizations	553		—		553		—		553
Receivables from brokerage clients — net	21,641		—		21,641		—		21,641
Held to maturity securities:
U.S. agency mortgage-backed securities	118,064		—		116,093		—		116,093
Asset-backed securities	18,502		—		18,546		—		18,546
Corporate debt securities	4,477		—		4,432		—		4,432
U.S. state and municipal securities	1,327		—		1,348		—		1,348
Non-agency commercial mortgage-backed securities	1,156		—		1,142		—		1,142
U.S. Treasury securities	223		—		217		—		217
Certificates of deposit	200		—		201		—		201
Foreign government agency securities	50		—		49		—		49
Other	10		—		10		—		10
Total held to maturity securities	144,009		—		142,038		—		142,038
Bank loans — net:
First Mortgages	10,370		—		10,193		—		10,193
HELOCs	1,500		—		1,583		—		1,583
Pledged asset lines	4,561		—		4,561		—		4,561
Other	178		—		178		—		178
Total bank loans — net	16,609		—		16,515		—		16,515
Other assets	460		—		460		—		460
Total	$	211,804	$	—	$	209,739	$	—	$	209,739
Liabilities
Bank deposits	$	231,423	$	—	$	231,423	$	—	$	231,423
Payables to brokers, dealers, and clearing organizations	1,831		—		1,831		—		1,831
Payables to brokerage clients	32,726		—		32,726		—		32,726
Accrued expenses and other liabilities	1,370		—		1,370		—		1,370
Long-term debt	6,878		—		6,827		—		6,827
Total	$	274,228	$	—	$	274,177	$	—	$	274,177

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

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

The amortized cost, gross unrealized gains and losses, and fair value of AFS and HTM securities are as follows:

September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale securities
U.S. agency mortgage-backed securities	$	40,179	$	299	$	47	$	40,431
U.S. Treasury securities	5,034		3		10		5,027
Asset-backed securities (1)	4,773		35		7		4,801
Corporate debt securities (2)	4,630		57		1		4,686
Certificates of deposit	1,000		4		—		1,004
Commercial paper (2,3)	520		1		—		521
Non-agency commercial mortgage-backed securities	13		—		—		13
Total available for sale securities	$	56,149	$	399	$	65	$	56,483
Held to maturity securities
U.S. agency mortgage-backed securities	$	114,276	$	1,974	$	238	$	116,012
Asset-backed securities (1)	18,323		74		38		18,359
Corporate debt securities (2)	4,659		58		2		4,715
U.S. state and municipal securities	1,306		107		—		1,413
Non-agency commercial mortgage-backed securities	1,136		28		—		1,164
U.S. Treasury securities	224		6		—		230
Certificates of deposit	200		—		—		200
Foreign government agency securities	50		—		—		50
Other	20		—		—		20
Total held to maturity securities	$	140,194	$	2,247	$	278	$	142,163

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	25,594	$	44	$	82	$	25,556
U.S. Treasury securities	18,410		—		108		18,302
Asset-backed securities (1)	10,086		14		15		10,085
Corporate debt securities (2)	7,477		10		20		7,467
Certificates of deposit	3,682		4		1		3,685
U.S. agency notes	900		—		2		898
Commercial paper (2,3)	522		—		—		522
Foreign government agency securities	50		—		1		49
Non-agency commercial mortgage-backed securities	14		—		—		14
Total available for sale securities	$	66,735	$	72	$	229	$	66,578
Held to maturity securities
U.S. agency mortgage-backed securities	$	118,064	$	217	$	2,188	$	116,093
Asset-backed securities (1)	18,502		83		39		18,546
Corporate debt securities (2)	4,477		2		47		4,432
U.S. state and municipal securities	1,327		24		3		1,348
Non-agency commercial mortgage-backed securities	1,156		3		17		1,142
U.S. Treasury securities	223		—		6		217
Certificates of deposit	200		1		—		201
Foreign government agency securities	50		—		1		49
Other	10		—		—		10
Total held to maturity securities	$	144,009	$	330	$	2,301	$	142,038

⁽¹⁾ Approximately 43% and 36% of asset-backed securities held as of September 30, 2019 and December 31, 2018, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 42% of the asset-backed securities held as of September 30, 2019 and December 31, 2018.

⁽²⁾ As of September 30, 2019 and December 31, 2018, approximately 35% and 26%, respectively, of the total AFS and HTM investments in corporate debt securities and commercial paper were issued by institutions in the financial services industry. Approximately 18% of the holdings of these securities were issued by institutions in the information technology industry as of September 30, 2019 and December 31, 2018.

⁽³⁾ Included in cash and cash equivalents on the condensed consolidated balance sheets, but excluded from this table is $0.9 billion and $4.9 billion of AFS commercial paper as of September 30, 2019 and December 31, 2018, respectively. These holdings have maturities of three months or less at the time of acquisition and an aggregate market value equal to amortized cost.

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

Securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows:

	Less than 12 months				12 months or longer				Total
September 30, 2019	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale securities
U.S. agency mortgage-backed securities	$	12,063	$	24	$	6,317	$	23	$	18,380	$	47
U.S. Treasury securities	377		—		3,161		10		3,538		10
Asset-backed securities	763		1		398		6		1,161		7
Corporate debt securities	149		1		499		—		648		1
Total	$	13,352	$	26	$	10,375	$	39	$	23,727	$	65
Held to maturity securities
U.S. agency mortgage-backed securities	$	11,838	$	37	$	20,897	$	201	$	32,735	$	238
Asset-backed securities	7,638		34		556		4		8,194		38
Corporate debt securities	416		1		354		1		770		2
Total	$	19,892	$	72	$	21,807	$	206	$	41,699	$	278
Total securities with unrealized losses (1)	$	33,244	$	98	$	32,182	$	245	$	65,426	$	343

December 31, 2018
Available for sale securities
U.S. agency mortgage-backed securities	$	9,529	$	32	$	4,257	$	50	$	13,786	$	82
U.S. Treasury securities	4,951		6		7,037		102		11,988		108
Asset-backed securities	4,050		9		837		6		4,887		15
Corporate debt securities	3,561		19		254		1		3,815		20
Certificates of deposit	1,217		1		150		—		1,367		1
U.S. agency notes	195		—		304		2		499		2
Foreign government agency securities	—		—		49		1		49		1
Total	$	23,503	$	67	$	12,888	$	162	$	36,391	$	229
Held to maturity securities
U.S. agency mortgage-backed securities	$	29,263	$	222	$	56,435	$	1,966	$	85,698	$	2,188
Asset-backed securities	6,795		35		376		4		7,171		39
Corporate debt securities	2,909		29		1,066		18		3,975		47
U.S. state and municipal securities	77		2		18		1		95		3
Non-agency commercial mortgage-backed securities	283		2		632		15		915		17
U.S. Treasury securities	—		—		218		6		218		6
Foreign government agency securities	—		—		49		1		49		1
Total	$	39,327	$	290	$	58,794	$	2,011	$	98,121	$	2,301
Total securities with unrealized losses (2)	$	62,830	$	357	$	71,682	$	2,173	$	134,512	$	2,530

⁽¹⁾ The number of investment positions with unrealized losses totaled 343 for AFS securities and 625 for HTM securities.

⁽²⁾ The number of investment positions with unrealized losses totaled 441 for AFS securities and 1,524 for HTM securities.

Maturities of Securities Available for Sale and Securities Held to Maturity

The maturities of AFS and HTM securities are as follows:

September 30, 2019	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Available for sale securities
U.S. agency mortgage-backed securities	$	51	$	1,909	$	11,061	$	27,410	$	40,431
U.S. Treasury securities	3,541		1,486		—		—		5,027
Asset-backed securities	35		3,752		794		220		4,801
Corporate debt securities	1,100		3,415		171		—		4,686
Certificates of deposit	501		503		—		—		1,004
Commercial paper	521		—		—		—		521
Non-agency commercial mortgage-backed securities	—		—		—		13		13
Total fair value	$	5,749	$	11,065	$	12,026	$	27,643	$	56,483
Total amortized cost	$	5,743	$	10,994	$	11,996	$	27,416	$	56,149
Held to maturity securities
U.S. agency mortgage-backed securities	$	663	$	15,472	$	35,048	$	64,829	$	116,012
Asset-backed securities	—		3,227		7,940		7,192		18,359
Corporate debt securities	778		3,079		858		—		4,715
U.S. state and municipal securities	—		99		452		862		1,413
Non-agency commercial mortgage-backed securities	—		367		—		797		1,164
U.S. Treasury securities	—		—		230		—		230
Certificates of deposit	200		—		—		—		200
Foreign government agency securities	—		50		—		—		50
Other	—		—		—		20		20
Total fair value	$	1,641	$	22,294	$	44,528	$	73,700	$	142,163
Total amortized cost	$	1,637	$	21,989	$	43,368	$	73,200	$	140,194

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

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proceeds	$	5,436	$	—	$	21,710	$	115
Gross realized gains	5		—		15		—
Gross realized losses	4		—		10		—