Regulatory Requirements

3 Months Ended

Mar. 31, 2020

Banking and Thrift [Abstract]

Regulatory Requirements

Regulatory Requirements

At March 31, 2020, 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
March 31, 2020	Amount		Ratio		Amount		Ratio		Amount		Ratio (2)
CSC
Common Equity Tier 1 Risk-Based Capital	$	18,197	18.4	%	N/A				$	4,457	4.5	%
Tier 1 Risk-Based Capital	20,990		21.2	%	N/A				5,942		6.0	%
Total Risk-Based Capital	21,023		21.2	%	N/A				7,923		8.0	%
Tier 1 Leverage	20,990		6.9	%	N/A				12,137		4.0	%
Supplementary Leverage Ratio	20,990		6.8	%	N/A				9,309		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	15,413	19.7	%	$	5,075	6.5	%	$	3,514	4.5	%
Tier 1 Risk-Based Capital	15,413		19.7	%	6,247		8.0	%	4,685		6.0	%
Total Risk-Based Capital	15,445		19.8	%	7,808		10.0	%	6,247		8.0	%
Tier 1 Leverage	15,413		6.9	%	11,114		5.0	%	8,891		4.0	%
Supplementary Leverage Ratio	15,413		6.7	%	N/A		N/A		6,867		3.0	%
December 31, 2019
CSC
Common Equity Tier 1 Risk-Based Capital	$	17,660	19.5	%	N/A				$	4,073	4.5	%
Tier 1 Risk-Based Capital	20,453		22.6	%	N/A				5,431		6.0	%
Total Risk-Based Capital	20,472		22.6	%	N/A				7,241		8.0	%
Tier 1 Leverage	20,453		7.3	%	N/A				11,189		4.0	%
Supplementary Leverage Ratio	20,453		7.1	%	N/A				8,604		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	14,819	20.7	%	$	4,649	6.5	%	$	3,218	4.5	%
Tier 1 Risk-Based Capital	14,819		20.7	%	5,722		8.0	%	4,291		6.0	%
Total Risk-Based Capital	14,837		20.7	%	7,152		10.0	%	5,722		8.0	%
Tier 1 Leverage	14,819		7.1	%	10,486		5.0	%	8,389		4.0	%
Supplementary Leverage Ratio	14,819		6.8	%	N/A		N/A		6,497		3.0	%

⁽¹⁾ In the interagency regulatory capital and liquidity rules adopted in October 2019, Category III banking organizations such as CSC were given the ability to opt-out of the inclusion of AOCI in regulatory capital, and CSC made this opt-out election as of January 1, 2020. Therefore, AOCI is excluded from the amounts and ratios presented as of March 31, 2020. In 2019, CSC and CSB were required to include all components of AOCI in regulatory capital; the amounts and ratios for December 31, 2019 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 a countercyclical capital buffer above the regulatory minimum risk-based capital ratios. The capital conservation buffer and countercyclical capital buffer were 2.5% and zero percent, respectively, for both periods presented. 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 March 31, 2020, 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 March 31, 2020, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since March 31, 2020 that management believes have changed CSB’s capital category.

At March 31, 2020, the balance sheets of CSPB and Charles Schwab Trust Bank (Trust Bank) consisted primarily of investment securities, and the entities held total assets of $22.4 billion and $10.7 billion, respectively. Based on their regulatory capital ratios, at March 31, 2020, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

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

	March 31, 2020		December 31, 2019
Net Capital	$	3,472	$	3,700
Minimum net capital required	0.250		0.250
2% of aggregate debit balances	419		446
Net Capital in excess of required net capital	$	3,053	$	3,254

Pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934 and other applicable regulations, Schwab had cash and investments segregated for the exclusive benefit of clients at March 31, 2020. 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 condensed consolidated statements of cash flows.