Regulatory Requirements

9 Months Ended

Sep. 30, 2022

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Regulatory Requirements

Regulatory Requirements

At September 30, 2022, CSC and CSB met all of their respective capital requirements. Regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

	Actual				Minimum to be Well Capitalized				Minimum Capital Requirement
September 30, 2022	Amount		Ratio		Amount		Ratio		Amount		Ratio (1)
CSC
Common Equity Tier 1 Risk-Based Capital	$	30,828	21.2	%	N/A				$	6,544	4.5	%
Tier 1 Risk-Based Capital	41,125		28.3	%	N/A				8,725		6.0	%
Total Risk-Based Capital	41,182		28.3	%	N/A				11,633		8.0	%
Tier 1 Leverage	41,125		6.8	%	N/A				24,022		4.0	%
Supplementary Leverage Ratio	41,125		6.8	%	N/A				18,142		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	30,468	29.4	%	$	6,739	6.5	%	$	4,665	4.5	%
Tier 1 Risk-Based Capital	30,468		29.4	%	8,294		8.0	%	6,220		6.0	%
Total Risk-Based Capital	30,519		29.4	%	10,367		10.0	%	8,294		8.0	%
Tier 1 Leverage	30,468		7.6	%	20,148		5.0	%	16,119		4.0	%
Supplementary Leverage Ratio	30,468		7.5	%	N/A				12,185		3.0	%
December 31, 2021
CSC
Common Equity Tier 1 Risk-Based Capital	$	27,967	19.7	%	N/A				$	6,389	4.5	%
Tier 1 Risk-Based Capital	37,921		26.7	%	N/A				8,518		6.0	%
Total Risk-Based Capital	37,950		26.7	%	N/A				11,358		8.0	%
Tier 1 Leverage	37,921		6.2	%	N/A				24,346		4.0	%
Supplementary Leverage Ratio	37,921		6.2	%	N/A				18,434		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	28,014	26.8	%	$	6,787	6.5	%	$	4,698	4.5	%
Tier 1 Risk-Based Capital	28,014		26.8	%	8,353		8.0	%	6,265		6.0	%
Total Risk-Based Capital	28,033		26.8	%	10,441		10.0	%	8,353		8.0	%
Tier 1 Leverage	28,014		7.1	%	19,790		5.0	%	15,832		4.0	%
Supplementary Leverage Ratio	28,014		7.0	%	N/A				12,016		3.0	%

(1) Under risk-based capital rules, CSC and CSB are also required to maintain additional capital buffers above the regulatory minimum risk-based capital ratios. As of September 30, 2022, CSC was subject to a stress capital buffer of 2.5%. In June 2022, CSC received its 2022 stress capital buffer requirement from the Federal Reserve of 2.5%, which became effective beginning October 1, 2022. In addition, CSB is required to maintain a capital conservation buffer of 2.5%. CSC and CSB are also required to maintain a countercyclical capital buffer above the regulatory minimum risk-based capital ratios, which was zero for both periods presented. If a buffer falls below the minimum requirement, CSC and CSB would be subject to increasingly strict limits on capital distributions and discretionary bonus payments to executive officers. At September 30, 2022, the minimum capital ratio requirements for both CSC and CSB, inclusive of their respective buffers, were 7.0%, 8.5%, and 10.5% for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital, respectively.

N/A Not applicable.

Based on its regulatory capital ratios at September 30, 2022, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since September 30, 2022 that management believes have changed CSB’s capital category.

At September 30, 2022, the balance sheets of Charles Schwab Premier Bank, SSB (CSPB) and Charles Schwab Trust Bank (Trust Bank) consisted primarily of investment securities, and the entities held total assets of $33.5 billion and $14.2 billion, respectively. Based on their regulatory capital ratios, at September 30, 2022, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

Net capital and net capital requirements for CS&Co, TDAC, and TD Ameritrade, Inc., are as follows:

	September 30, 2022		December 31, 2021
CS&Co
Net capital	$	4,787	$	5,231
Minimum dollar requirement	0.250		0.250
2% of aggregate debit balances	894		941
Net capital in excess of required net capital	$	3,893	$	4,290
TDAC
Net capital	$	5,241	$	5,337
Minimum dollar requirement	1.500		1.500
2% of aggregate debit balances	739		1,007
Net capital in excess of required net capital	$	4,502	$	4,330
TD Ameritrade, Inc.
Net capital	$	837	$	711
Minimum dollar requirement	0.250		0.250
2% of aggregate debit balances	—		—
Net capital in excess of required net capital	$	837	$	711

Pursuant to the SEC’s Customer Protection Rule and other applicable regulations, Schwab had cash and investments segregated for the exclusive benefit of clients at September 30, 2022. The SEC’s 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.