schw-20231016

0000316709-23-000047.txt : 20231016 0000316709-23-000047.hdr.sgml : 20231016 20231016161722 ACCESSION NUMBER: 0000316709-23-000047 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20231016 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20231016 DATE AS OF CHANGE: 20231016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHWAB CHARLES CORP CENTRAL INDEX KEY: 0000316709 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 943025021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09700 FILM NUMBER: 231327503 BUSINESS ADDRESS: STREET 1: 3000 SCHWAB WAY CITY: WESTLAKE STATE: TX ZIP: 76262 BUSINESS PHONE: 817-859-5000 MAIL ADDRESS: STREET 1: 3000 SCHWAB WAY CITY: WESTLAKE STATE: TX ZIP: 76262 8-K 1 schw-20231016.htm 8-K schw-20231016

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (date of earliest event reported): October 16, 2023

The Charles Schwab Corporation

(Exact name of registrant as specified in its charter)

Commission File Number: 1-9700


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

3000 Schwab Way, Westlake, TX 76262

(Address of principal executive offices, including zip code)

(817) 859-5000

(Registrant’s telephone number, including area code)

N/A

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

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



☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock – $.01 par value per share	SCHW	New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 5.95% Non-Cumulative Preferred Stock, Series D	SCHW PrD	New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 4.450% Non-Cumulative Preferred Stock, Series J	SCHW PrJ	New York Stock Exchange


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

Emerging growth company ☐

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



Item 2.02			Results of Operations and Financial Condition

On October 16, 2023, The Charles Schwab Corporation issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report.



Item 9.01			Financial Statements and Exhibits



(d)						Exhibits

Exhibit No.						Description
99.1						Press Release dated October 1 6 , 2023
104						Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Signature(s)

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



			THE CHARLES SCHWAB CORPORATION


Date:	October 16, 2023	By:	/s/ Peter Crawford
			Peter Crawford
			Managing Director and Chief Financial Officer

EX-99.1 2 a3q23exhibit991_093023.htm EX-99.1 Document


		EXHIBIT 99.1
News Release Contacts:
MEDIA: Mayura Hooper Charles Schwab Phone: 415-667-1525	INVESTORS/ANALYSTS: Jeff Edwards Charles Schwab Phone: 415-667-1524

SCHWAB REPORTS THIRD QUARTER RESULTS

Successfully Completed Largest Brokerage Conversion Event in History

September Core Net New Assets Exceeded $27 Billion

Bank Sweep Deposits Grew During September

WESTLAKE, Texas, October 16, 2023 – The Charles Schwab Corporation announced today that its net income for the third quarter of 2023 was $1.1 billion compared with $2.0 billion for the third quarter of 2022. Net income for the nine months ended September 30, 2023 was $4.0 billion, compared with $5.2 billion for the year-earlier period.


	Three Months Ended September 30,						%	Nine Months Ended September 30,						%
Financial Highlights (1)	2023			2022			Change	2023			2022			Change

Net revenues (in millions)	$	4,606		$	5,500		(16)%	$	14,378		$	15,265		(6)%
Net income (in millions)
GAAP	$	1,125		$	2,020		(44)%	$	4,022		$	5,215		(23)%
Adjusted (1)	$	1,518		$	2,211		(31)%	$	4,792		$	5,783		(17)%
Diluted earnings per common share
GAAP	$	.56		$	.99		(43)%	$	2.03		$	2.53		(20)%
Adjusted (1)	$	.77		$	1.10		(30)%	$	2.45		$	2.83		(13)%
Pre-tax profit margin
GAAP	30.0		%	48.7		%		36.1		%	44.5		%
Adjusted (1)	41.3		%	53.3		%		43.1		%	49.4		%
Return on average common
stockholders’ equity (annualized)	14		%	25		%		18		%	18		%
Return on tangible
common equity (annualized) (1)	58		%	74		%		66		%	42		%

Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.
(1) Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release.

Co-Chairman and CEO Walt Bettinger stated, “Against a very challenging economic and geopolitical backdrop, investors continued turning to Schwab as a trusted partner and a wealth management leader. It is truly humbling to see our clients award us with near-record Client Promoter Scores and allow us the privilege to help them move toward their financial goals – particularly during a period where the U.S. government narrowly avoided a shutdown, major equity markets posted a quarterly loss, and long-term interest rates touched levels not seen in many years. Third parties also continue to recognize the firm, with Investor’s Business Daily naming us one of its most trusted financial services firms and Charles Schwab Bank as its most trusted bank for 2023.”

“By seeing ‘through clients’ eyes’ for the last 50 years, we have earned consistent confidence from investors that helps power our strong organic growth,” continued Mr. Bettinger. “During the third quarter, we gathered $46 billion in core net new assets, including $27 billion in September following the completion of our latest Ameritrade client conversion cohort. While expected deal-related attrition has temporarily weighed on net new asset flows, our underlying

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growth recipe remains very much intact. Year-to-date, we have attracted $248 billion of core net new assets from accounts originally opened at Schwab – an annualized Schwab originated organic growth rate of over 6%. As of September 30, investors have entrusted us with a total of $7.82 trillion in client assets across 34.5 million accounts.”

Mr. Bettinger added, “Over Labor Day Weekend, we successfully completed the single largest conversion event in our industry’s history. During those three days, we transitioned $1.3 trillion in client assets – including more than 7,000 Registered Investment Advisors (RIA) served by the Ameritrade Institutional business and 3.6 million retail accounts. The thoughtful planning and relentless dedication of our employees helped ensure there were no significant disruptions to the client experience and overall service levels remained strong – including answering client calls in under 1 minute. We have now converted approximately 80% of Ameritrade client assets and accounts, with deal-related attrition tracking markedly better than our initial expectations. In addition to these favorable retention trends, engagement levels across recently converted clients has also picked up – including positive new account formation and net asset flows across both Retail and RIA clients.”

Mr. Bettinger concluded, “Concurrent with progressing the Ameritrade integration, we remain focused on further enhancing Schwab’s modern wealth platform by advancing our key strategic initiatives of scale and efficiency, win-win monetization, and segmentation. We have identified a number of opportunities for increased efficiency, including capturing the remaining deal expense synergies, streamlining our operational design, aligning our geographic footprint to match our hybrid workforce, and harnessing the benefits of increased automation. Once fully implemented, we expect these actions to deliver at least $1 billion of incremental annual expense savings. Even as we seek to improve upon our industry leading cost structure, we are continuing to enhance our segmented offering for the broad range of clients we serve. For clients seeking assistance with their portfolios, our wealth management solutions attracted year-to-date net flows of $24 billion – including record flows into Schwab Wealth AdvisoryTM, Wasmer SchroederTM Strategies, and Schwab Personalized Indexing®. At the same time, Schwab is expanding the suite of tools and resources available to self-directed investors to help them achieve better financial outcomes. Today we announced the launch of our new end-to-end trader experience that combines access to thinkorswim® with curated education for all levels and specialized service and support. This offer is tailored to meet the specific needs of a highly engaged client group that on average maintains approximately 4x more assets at the firm relative to other retail households while also utilizing a broad array of other products offered across Schwab. Continuing to invest in our platform allows us to meet the evolving needs of investors, while keeping us positioned for sustained growth over time.”

CFO Peter Crawford noted, “Our continued success with clients and diversified model helped produce third quarter net revenues of $4.6 billion. This result represents a 16% decline from last year’s record period, primarily driven by the temporary utilization of higher cost funding, lower interest-earning assets, and softer trading volumes. Net interest revenue was down 24% year-over-year to $2.2 billion, reflecting the impact of client allocation decisions within a higher interest rate environment. However, cash realignment activity decelerated further during the quarter – even with the brief uptick in August and an increase in long-term interest rates. September was particularly strong as net outflows from transactional cash were lower than any prior monthly period this cycle and bank sweep deposits increased month-over-month for the first time since March 2022. Additionally, the combination of ongoing interest in Schwab’s proprietary fund products, growth in no-transaction fee platform balances, and strong flows into our advised solutions pushed asset management and administration fees to a quarterly record of $1.2 billion, up 17% versus the prior year.”

“We maintained Schwab’s balanced approach to expense management while successfully reaching another key checkpoint in the Ameritrade integration effort,” added Mr. Crawford. “GAAP expenses were up 14% to $3.2 billion, including $106 million in acquisition and integration-related costs, $135 million in amortization of acquired intangibles, and $279 million in costs related to our previously announced restructuring. Exclusive of those items, adjusted total expenses (1) equaled $2.7 billion, or a year-over-year increase of 5%. Pre-tax profit margins finished the quarter at 30.0%, or 41.3% on an adjusted (1) basis – the 12th consecutive quarter above 40%.”

Mr. Crawford concluded, “During the quarter, our balance sheet management continued to prioritize flexibility in support of our growing client base. In late August, we issued approximately $2.4 billion of senior notes across two tranches due in 2026 and 2034, further bolstering our diversified liquidity profile. Schwab’s consolidated balance sheet totaled $475 billion at quarter-end, down 7% sequentially, as available net cash flows from our investment portfolio were used to pay down supplemental borrowings. Our capital levels also continued to build during the quarter as our consolidated Tier 1 Leverage ratio increased to 8.2% and our Adjusted Tier 1 Leverage Ratio (1) expanded by more than 40 basis points to 4.1%. Ratios at Charles Schwab Bank, SSB (CSB) followed a similar trajectory with CSB Tier 1

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Leverage increasing to 9.6%, or 4.4% on an adjusted (1) basis. As we move towards a new year, our consistent strategy, key competitive advantages, and ‘through the cycle’ financial model keep us well-positioned to deliver long-term value to all of our stakeholders.”

(1) Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release.

Commentary from the CFO

Periodically, our Chief Financial Officer provides insight and commentary regarding Schwab’s financial picture at: https://www.aboutschwab.com/cfo-commentary. The most recent commentary, which provides perspective on client cash realignment trends and second quarter revenue expectations, was posted on June 14, 2023.

Fall Business Update

The company will host its Fall Business Update for institutional investors this morning from 8:00 a.m. - 9:00 a.m. CT, 9:00 a.m. - 10:00 a.m. ET. Registration for this Update webcast is accessible at https://www.aboutschwab.com/schwabevents.

Forward-Looking Statements

This press release contains forward-looking statements relating to the company’s strategy and approach; growth in the client base, client accounts, and assets; Ameritrade integration and deal-related attrition; opportunities for increased efficiency and resulting incremental annual expense savings; positioning; success with clients; model; competitive advantages; and stakeholder value. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; capture Ameritrade deal expense synergies, streamline its operational design, align its real estate footprint, and harness the benefits of automation in order to deliver expected incremental annual expense savings, and the costs incurred in connection with such actions; manage expenses; and monetize client assets. Other important factors include client use of the company’s advisory solutions and other products and services; general market conditions, including the level of interest rates and equity valuations; asset attrition from clients originating at Ameritrade is higher than expected; client cash allocation decisions; client sensitivity to rates; level of client assets, including cash balances; competitive pressures on pricing; the level and mix of client trading activity; market volatility; capital and liquidity needs and management; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; new or changed legislation, regulation or regulatory expectations; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 34.5 million active brokerage accounts, 2.5 million corporate retirement plan participants, 1.8 million banking accounts, and $7.82 trillion in client assets. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com. TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net Revenues
Interest revenue	$	4,028	$	3,357	$	12,148	$	8,386
Interest expense	(1,791)		(431)		(4,851)		(733)
Net interest revenue	2,237		2,926		7,297		7,653
Asset management and administration fees (1)	1,224		1,047		3,515		3,167
Trading revenue	768		930		2,463		2,778
Bank deposit account fees	205		413		531		1,059
Other	172		184		572		608


Total net revenues	4,606		5,500		14,378		15,265
Expenses Excluding Interest
Compensation and benefits	1,770		1,476		4,906		4,448
Professional services	275		264		805		766
Occupancy and equipment	305		292		923		855
Advertising and market development	102		89		293		296
Communications	151		131		485		444
Depreciation and amortization	198		167		566		476
Amortization of acquired intangible assets	135		152		404		460
Regulatory fees and assessments	114		65		277		200
Other	173		187		535		530
Total expenses excluding interest	3,223		2,823		9,194		8,475
Income before taxes on income	1,383		2,677		5,184		6,790
Taxes on income	258		657		1,162		1,575
Net Income	1,125		2,020		4,022		5,215
Preferred stock dividends and other	108		136		299		401
Net Income Available to Common Stockholders	$	1,017	$	1,884	$	3,723	$	4,814
Weighted-Average Common Shares Outstanding:
Basic	1,821		1,887		1,825		1,892
Diluted	1,827		1,895		1,832		1,901
Earnings Per Common Shares Outstanding (2):
Basic	$	.56	$	1.00	$	2.04	$	2.54
Diluted	$	.56	$	.99	$	2.03	$	2.53

(1) No fee waivers were recognized for the three and nine months ended September 30, 2023, or for the three months ended September 30, 2022. Includes fee waivers of $57 million for the nine months ended September 30, 2022.

(2) The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

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THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
	Q3-23 % change				2023									2022
	vs.		vs.		Third			Second			First			Fourth			Third
(In millions, except per share amounts and as noted)	Q3-22		Q2-23		Quarter			Quarter			Quarter			Quarter			Quarter
Net Revenues
Net interest revenue	(24)	%	(2)	%	$	2,237		$	2,290		$	2,770		$	3,029		$	2,926
Asset management and administration fees	17	%	4	%	1,224			1,173			1,118			1,049			1,047
Trading revenue	(17)	%	(4)	%	768			803			892			895			930
Bank deposit account fees	(50)	%	17	%	205			175			151			350			413
Other	(7)	%	(20)	%	172			215			185			174			184

Total net revenues	(16)	%	(1)	%	4,606			4,656			5,116			5,497			5,500
Expenses Excluding Interest
Compensation and benefits (1)	20	%	18	%	1,770			1,498			1,638			1,488			1,476
Professional services	4	%	1	%	275			272			258			266			264
Occupancy and equipment	4	%	(4)	%	305			319			299			320			292
Advertising and market development	15	%	(1)	%	102			103			88			123			89
Communications	15	%	(20)	%	151			188			146			144			131
Depreciation and amortization	19	%	4	%	198			191			177			176			167
Amortization of acquired intangible assets	(11)	%	1	%	135			134			135			136			152
Regulatory fees and assessments	75	%	43	%	114			80			83			62			65
Other	(7)	%	(4)	%	173			180			182			184			187
Total expenses excluding interest	14	%	9	%	3,223			2,965			3,006			2,899			2,823
Income before taxes on income	(48)	%	(18)	%	1,383			1,691			2,110			2,598			2,677
Taxes on income	(61)	%	(35)	%	258			397			507			630			657
Net Income	(44)	%	(13)	%	1,125			1,294			1,603			1,968			2,020
Preferred stock dividends and other	(21)	%	(11)	%	108			121			70			147			136
Net Income Available to Common Stockholders	(46)	%	(13)	%	$	1,017		$	1,173		$	1,533		$	1,821		$	1,884
Earnings per common share (2):
Basic	(44)	%	(13)	%	$	.56		$	.64		$	.84		$	.98		$	1.00
Diluted	(43)	%	(13)	%	$	.56		$	.64		$	.83		$	.97		$	.99
Dividends declared per common share	14	%	—		$	.25		$	.25		$	.25		$	.22		$	.22
Weighted-average common shares outstanding:
Basic	(3)	%	—		1,821			1,820			1,834			1,864			1,887
Diluted	(4)	%	—		1,827			1,825			1,842			1,873			1,895
Performance Measures
Pre-tax profit margin					30.0		%	36.3		%	41.2		%	47.3		%	48.7		%
Return on average common stockholders’ equity (annualized) (3)					14		%	17		%	23		%	27		%	25		%
Financial Condition (at quarter end, in billions)
Cash and cash equivalents	(28)	%	(30)	%	$	33.3		$	47.7		$	49.2		$	40.2		$	46.5
Cash and investments segregated	(58)	%	(26)	%	18.6			25.1			31.0			43.0			44.1
Receivables from brokerage clients — net	(6)	%	6	%	69.1			65.2			63.2			66.6			73.9
Available for sale securities	(53)	%	(12)	%	110.3			125.8			141.3			147.9			236.5
Held to maturity securities	69	%	(2)	%	162.5			166.3			169.9			173.1			96.3
Bank loans — net	—		—		40.3			40.1			40.0			40.5			40.4
Total assets	(18)	%	(7)	%	475.2			511.5			535.6			551.8			577.6
Bank deposits	(28)	%	(7)	%	284.4			304.4			325.7			366.7			395.7
Payables to brokerage clients	(34)	%	(14)	%	72.8			84.8			87.6			97.4			110.0
Other short-term borrowings (4)	N/M		(3)	%	7.6			7.8			7.1			4.7			0.5
Federal Home Loan Bank borrowings (4)	N/M		(22)	%	31.8			41.0			45.6			12.4			—
Long-term debt	19	%	10	%	24.8			22.5			20.0			20.8			20.8
Stockholders’ equity	2	%	2	%	37.8			37.1			36.3			36.6			37.0
Other
Full-time equivalent employees (at quarter end, in thousands)	2	%	(2)	%	35.9			36.6			36.0			35.3			35.2
Capital expenditures — purchases of equipment, office facilities, and property, net (in millions)	30	%	49	%	$	250		$	168		$	187		$	211		$	193
Expenses excluding interest as a percentage of average client assets (annualized)					0.16		%	0.15%			0.17%			0.16%			0.16%
Clients’ Daily Average Trades (DATs) (in thousands)	(6)	%	(1)	%	5,218			5,272			5,895			5,389			5,523
Number of Trading Days	(2)	%	1	%	62.5			62.0			62.0			62.5			64.0
Revenue Per Trade (5)	(11)	%	(4)	%	$	2.35		$	2.46		$	2.44		$	2.66		$	2.63

(1) Third quarter of 2023 includes $276 million in restructuring costs.

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

(4) Beginning in the first quarter of 2023, Federal Home Loan Bank borrowings are presented separately from other short-term borrowings. Prior period amounts have been reclassified to reflect this change.

(5) Revenue per trade is calculated as trading revenue divided by DATs multiplied by the number of trading days.

N/M Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

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THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions, except ratios or as noted)

(Unaudited)


	Three Months Ended September 30,												Nine Months Ended September 30,
	2023						2022						2023						2022
	Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate
Interest-earning assets
Cash and cash equivalents	$	34,391	$	459	5.22	%	$	53,127	$	294	2.16	%	$	38,700	$	1,419	4.83	%	$	63,598	$	461	0.95	%
Cash and investments segregated	21,987		285		5.08	%	49,554		214		1.69	%	29,752		1,041		4.61	%	50,891		308		0.80	%

Receivables from brokerage clients	63,760		1,282		7.87	%	72,751		912		4.91	%	61,682		3,533		7.55	%	78,630		2,244		3.76	%
Available for sale securities (1,2)	129,545		724		2.22	%	273,968		1,161		1.69	%	143,360		2,340		2.17	%	281,897		3,196		1.51	%
Held to maturity securities	163,904		706		1.72	%	97,568		345		1.41	%	167,405		2,172		1.73	%	100,890		1,062		1.40	%
Bank loans	40,177		426		4.23	%	39,984		300		2.99	%	40,183		1,227		4.08	%	38,238		717		2.50	%
Total interest-earning assets	453,764		3,882		3.37	%	586,952		3,226		2.17	%	481,082		11,732		3.23	%	614,144		7,988		1.73	%
Securities lending revenue			105						124						341						383
Other interest revenue			41						7						75						15
Total interest-earning assets	$	453,764	$	4,028	3.50	%	$	586,952	$	3,357	2.26	%	$	481,082	$	12,148	3.35	%	$	614,144	$	8,386	1.81	%
Funding sources
Bank deposits	$	290,853	$	911	1.24	%	$	420,132	$	241	0.23	%	$	315,309	$	2,392	1.01	%	$	440,801	$	285	0.09	%
Payables to brokerage clients	63,731		66		0.41	%	96,802		41		0.17	%	68,548		205		0.40	%	101,472		47		0.06	%
Other short-term borrowings (3)	7,315		97		5.26	%	708		4		1.95	%	7,286		280		5.13	%	2,656		12		0.60	%
Federal Home Loan Bank borrowings (3,4)	36,287		477		5.18	%	—		—		—		35,896		1,387		5.11	%	—		—		—
Long-term debt	23,492		193		3.30	%	21,024		131		2.49	%	21,685		489		3.01	%	20,673		363		2.34	%
Total interest-bearing liabilities	421,678		1,744		1.64	%	538,666		417		0.31	%	448,724		4,753		1.41	%	565,602		707		0.17	%
Non-interest-bearing funding sources	32,086						48,286						32,358						48,542
Securities lending expense			46						13						96						28
Other interest expense			1						1						2						(2)
Total funding sources	$	453,764	$	1,791	1.56	%	$	586,952	$	431	0.29	%	$	481,082	$	4,851	1.35	%	$	614,144	$	733	0.16	%
Net interest revenue			$	2,237	1.94	%			$	2,926	1.97	%			$	7,297	2.00	%			$	7,653	1.65	%

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

(2) Beginning in the first quarter of 2023, amounts include the impact of derivative financial instruments and the related hedge accounting on our available for sale securities.

(3) Beginning in the first quarter of 2023, Federal Home Loan Bank borrowings are presented separately from other short-term borrowings. Prior period amounts have been reclassified to reflect this change.

(4) Average balance and interest expense was less than $500 thousand in the prior period.

- 6 -

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions, except ratios or as noted)

(Unaudited)


	Three Months Ended September 30,												Nine Months Ended September 30,
	2023						2022						2023						2022
	Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee		Average Client Assets		Revenue		Average Fee
Schwab money market funds before fee waivers	$	414,074	$	270	0.26	%	$	184,834	$	132	0.28	%	$	368,788	$	735	0.27	%	$	158,525	$	340	0.29	%
Fee waivers			—						—						—						(57)
Schwab money market funds	414,074		270		0.26	%	184,834		132		0.28	%	368,788		735		0.27	%	158,525		283		0.24	%
Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs)	485,326		99		0.08	%	422,711		89		0.08	%	466,995		284		0.08	%	436,928		278		0.09	%
Mutual Fund OneSource® and other no-transaction-fee funds	255,039		170		0.26	%	183,019		139		0.30	%	235,561		469		0.27	%	196,032		453		0.31	%
Other third-party mutual funds and ETFs	632,902		127		0.08	%	747,676		160		0.08	%	663,577		393		0.08	%	805,204		510		0.08	%
Total mutual funds, ETFs, and CTFs (1)	$	1,787,341	666		0.15	%	$	1,538,240	520		0.13	%	$	1,734,921	1,881		0.14	%	$	1,596,689	1,524		0.13	%
Advice solutions (1)
Fee-based	$	468,305	476		0.40	%	$	431,276	452		0.42	%	$	455,730	1,393		0.41	%	$	446,979	1,409		0.42	%
Non-fee-based	97,957		—		—		85,567		—		—		95,951		—		—		87,528		—		—
Total advice solutions	$	566,262	476		0.33	%	$	516,843	452		0.35	%	$	551,681	1,393		0.34	%	$	534,507	1,409		0.35	%
Other balance-based fees (2)	610,450		64		0.04	%	537,809		58		0.04	%	588,922		189		0.04	%	573,733		186		0.04	%
Other (3)			18						17						52						48
Total asset management and administration fees			$	1,224					$	1,047					$	3,515					$	3,167

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

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

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

- 7 -

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)


	Q3-23 % Change				2023						2022
	vs.		vs.		Third		Second		First		Fourth		Third
(In billions, at quarter end, except as noted)	Q3-22		Q2-23		Quarter		Quarter		Quarter		Quarter		Quarter
Assets in client accounts
Schwab One®, certain cash equivalents and bank deposits	(30)	%	(8)	%	$	353.1	$	384.4	$	408.5	$	459.4	$	501.4
Bank deposit account balances	(29)	%	(3)	%	99.5		102.7		106.5		126.6		139.6
Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs
Money market funds (1)	107	%	11	%	436.3		392.9		357.8		278.9		211.1
Equity and bond funds and CTFs (2)	19	%	(3)	%	167.9		172.6		163.1		153.6		141.5
Total proprietary mutual funds and CTFs	71	%	7	%	604.2		565.5		520.9		432.5		352.6
Mutual Fund Marketplace® (3)
Mutual Fund OneSource® and other no-transaction-fee funds	59	%	13	%	288.0		254.6		244.3		235.7		181.5
Mutual fund clearing services	24	%	(2)	%	216.9		220.7		201.7		191.1		175.3
Other third-party mutual funds (4)	(5)	%	(8)	%	1,055.3		1,150.8		1,123.6		1,077.1		1,105.7
Total Mutual Fund Marketplace	7	%	(4)	%	1,560.2		1,626.1		1,569.6		1,503.9		1,462.5
Total mutual fund assets	19	%	(1)	%	2,164.4		2,191.6		2,090.5		1,936.4		1,815.1
Exchange-traded funds
Proprietary ETFs (2)	23	%	(2)	%	286.2		293.2		280.6		259.3		232.2
Other third-party ETFs	24	%	(2)	%	1,352.6		1,381.4		1,297.5		1,208.4		1,094.6
Total ETF assets	24	%	(2)	%	1,638.8		1,674.6		1,578.1		1,467.7		1,326.8
Equity and other securities	18	%	(4)	%	2,886.4		3,002.7		2,772.2		2,529.4		2,451.3
Fixed income securities	55	%	3	%	747.4		722.6		684.7		593.4		481.5
Margin loans outstanding	(9)	%	4	%	(65.1)		(62.8)		(60.5)		(63.1)		(71.5)
Total client assets	18	%	(2)	%	$	7,824.5	$	8,015.8	$	7,580.0	$	7,049.8	$	6,644.2
Client assets by business
Investor Services	19	%	(3)	%	$	4,157.7	$	4,267.9	$	4,001.9	$	3,682.1	$	3,508.1
Advisor Services	17	%	(2)	%	3,666.8		3,747.9		3,578.1		3,367.7		3,136.1
Total client assets	18	%	(2)	%	$	7,824.5	$	8,015.8	$	7,580.0	$	7,049.8	$	6,644.2
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services (5)	(48)	%	(21)	%	$	28.6	$	36.0	$	79.4	$	64.3	$	55.1
Advisor Services (6)	(67)	%	(46)	%	19.6		36.0		71.3		64.1		59.5
Total net new assets	(58)	%	(33)	%	$	48.2	$	72.0	$	150.7	$	128.4	$	114.6
Net market gains (losses)					(239.5)		363.8		379.5		277.2		(302.9)
Net growth (decline)					$	(191.3)	$	435.8	$	530.2	$	405.6	$	(188.3)
New brokerage accounts (in thousands, for the quarter ended)	—		(7)	%	894		960		1,042		931		897
Client accounts (in thousands)
Active brokerage accounts (7)	2	%	—		34,540		34,382		34,120		33,758		33,875
Banking accounts	6	%	1	%	1,799		1,781		1,746		1,716		1,696
Corporate retirement plan participants	7	%	1	%	2,463		2,443		2,379		2,351		2,305

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

(2) Includes balances held on and off the Schwab platform. As of September 30, 2023, off-platform equity and bond funds, CTFs, and ETFs were $24.3 billion, $3.4 billion, and $95.2 billion, respectively.

(3) Excludes all proprietary mutual funds and ETFs.

(4) As of September 30, 2023, third-party money funds were $1.0 billion.

(5) Third quarter of 2023 includes net inflows of $3.3 billion from off-platform Schwab Bank Retail Certificates of Deposit (CDs). Second quarter of 2023 includes an inflow of $12.0 billion from a mutual fund clearing services client and inflows of $7.8 billion from off-platform Schwab Bank Retail CDs. First quarter of 2023 includes inflows of $19.0 billion from off-platform Schwab Bank Retail CDs.

(6) Third quarter of 2023 includes an outflow of $0.8 billion from an international relationship.

(7) Fourth quarter of 2022 includes the Company-initiated closure of approximately 350 thousand low-balance accounts. Third quarter of 2022 includes the Company-initiated closure of approximately 152 thousand low-balance accounts.

- 8 -

The Charles Schwab Corporation Monthly Activity Report For September 2023


	2022								2023																		Change
	Sep		Oct		Nov		Dec		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep		Mo.		Yr.
Market Indices (at month end)
Dow Jones Industrial Average®	28,726		32,733		34,590		33,147		34,086		32,657		33,274		34,098		32,908		34,408		35,560		34,722		33,508		(3)	%	17	%
Nasdaq Composite®	10,576		10,988		11,468		10,466		11,585		11,456		12,222		12,227		12,935		13,788		14,346		14,035		13,219		(6)	%	25	%
Standard & Poor’s® 500	3,586		3,872		4,080		3,840		4,077		3,970		4,109		4,169		4,180		4,450		4,589		4,508		4,288		(5)	%	20	%
Client Assets (in billions of dollars)
Beginning Client Assets	7,127.6		6,644.2		7,004.6		7,320.6		7,049.8		7,480.6		7,380.2		7,580.0		7,631.5		7,650.2		8,015.8		8,241.0		8,094.7
Net New Assets (1)	39.8		42.0		33.1		53.3		36.1		41.7		72.9		13.6		24.6		33.8		12.9		8.1		27.2		N/M		(32)	%
Net Market Gains (Losses)	(523.2)		318.4		282.9		(324.1)		394.7		(142.1)		126.9		37.9		(5.9)		331.8		212.3		(154.4)		(297.4)
Total Client Assets (at month end)	6,644.2		7,004.6		7,320.6		7,049.8		7,480.6		7,380.2		7,580.0		7,631.5		7,650.2		8,015.8		8,241.0		8,094.7		7,824.5		(3)	%	18	%
Core Net New Assets (2)	39.8		42.0		33.1		53.3		36.1		41.7		53.9		(2.3)		20.7		33.8		13.7		4.9		27.1		N/M		(32)	%
Receiving Ongoing Advisory Services (at month end)
Investor Services	466.6		487.3		514.0		499.8		524.6		515.5		526.2		530.7		526.3		547.5		560.6		552.2		533.0		(3)	%	14	%
Advisor Services (3)	2,950.9		3,106.0		3,270.5		3,173.4		3,345.4		3,289.6		3,369.3		3,394.9		3,377.8		3,527.8		3,619.8		3,554.2		3,448.0		(3)	%	17	%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts (4)	33,875		33,896		33,636		33,758		33,878		34,010		34,120		34,248		34,311		34,382		34,434		34,440		34,540		—		2	%
Banking Accounts	1,696		1,706		1,705		1,716		1,729		1,733		1,746		1,757		1,768		1,781		1,792		1,798		1,799		—		6	%
Corporate Retirement Plan Participants	2,305		2,322		2,336		2,351		2,369		2,384		2,379		2,391		2,401		2,443		2,458		2,458		2,463		—		7	%
Client Activity
New Brokerage Accounts (in thousands)	287		298		303		330		344		320		378		331		314		315		303		311		280		(10)	%	(2)	%
Client Cash as a Percentage of Client Assets (5,6)	12.9	%	12.2	%	11.5	%	12.2	%	11.5	%	11.6	%	11.2	%	10.8	%	10.9	%	10.5	%	10.2	%	10.4	%	10.8	%	40 bp		(210) bp
Derivative Trades as a Percentage of Total Trades	23.6	%	24.1	%	24.6	%	23.2	%	23.0	%	23.5	%	22.8	%	23.4	%	23.5	%	23.9	%	23.0	%	24.4	%	24.2	%	(20) bp		60 bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (7)	568,351		552,631		527,019		520,100		512,893		503,122		497,627		493,215		483,438		479,752		466,659		449,483		444,864		(1)	%	(22)	%
Average Margin Balances	73,224		69,188		66,011		64,759		60,211		60,575		60,848		60,338		60,250		61,543		63,040		64,226		64,014		—		(13)	%
Average Bank Deposit Account Balances (8)	141,198		136,036		130,479		126,953		122,387		115,816		109,392		104,775		103,149		102,917		102,566		101,928		100,404		(1)	%	(29)	%
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (9,10) (in millions of dollars)
Equities	(2,662)		3,984		3,777		(1,837)		7,236		5,850		(3,234)		1,126		(1,366)		9,190		7,423		(278)		675
Hybrid	(938)		(1,380)		(2,052)		(1,595)		(433)		47		(1,641)		(462)		(889)		(903)		(407)		(1,037)		(828)
Bonds	(5,801)		(7,218)		(3,721)		(3,260)		5,646		4,281		6,158		2,575		2,029		3,302		2,515		4,696		2,723
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (9)	(15,200)		(18,473)		(17,143)		(21,851)		552		(2,338)		(7,423)		(4,904)		(7,157)		(4,485)		(3,333)		(6,476)		(5,853)
Exchange-Traded Funds (10)	5,799		13,859		15,147		15,159		11,897		12,516		8,706		8,143		6,931		16,074		12,864		9,857		8,423
Money Market Funds	17,018		21,542		16,929		27,778		24,285		23,347		27,106		6,291		15,256		9,112		7,911		16,869		13,388

Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.

(1) Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs – including March 2023 which reflects inflows of $19.0 billion from off-platform Schwab Bank Retail CDs issued year-to-date through March 31, 2023. September 2023 also includes an outflow of $0.8 billion from an international relationship. April 2023 also includes an inflow of $12.0 billion from a mutual fund clearing services client.

(2) Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods.

(3) Excludes Retirement Business Services.

(4) November 2022 includes the Company-initiated closure of approximately 350 thousand low-balance accounts. September 2022 includes the Company-initiated closure of 152 thousand low-balance accounts.

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

(6) Beginning July 2023, client cash as a percentage of client assets excludes brokered CDs issued by Charles Schwab Bank. Prior periods have been recast to reflect this change.

(7) Represents average total interest-earning assets on the Company’s balance sheet. November 2022 includes the impact of transferring certain investment securities from the available for sale category to the held-to-maturity category.

(8) Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.

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

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

N/M - Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

- 9 -

THE CHARLES SCHWAB CORPORATION

Non-GAAP Financial Measures

(In millions, except ratios and per share amounts)

(Unaudited)

In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Schwab’s third quarter earnings release contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab’s results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies.

Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below. Beginning in the third quarter of 2023, these adjustments also include restructuring costs, which the Company began incurring in connection with its previously announced plans to streamline its operations to prepare for post-integration of TD Ameritrade. See Part I – Item 1 – Note 10 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 for additional information.


Non-GAAP Adjustment or Measure	Definition	Usefulness to Investors and Uses by Management
Acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs	Schwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company’s acquisitions, amortization of acquired intangible assets, restructuring costs, and, where applicable, the income tax effect of these expenses. Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company’s revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives.	We exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab’s ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods. Costs related to acquisition and integration or restructuring fluctuate based on the timing of acquisitions, integration and restructuring activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company’s ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company’s underlying operating performance.
Return on tangible common equity	Return on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets — net, and related deferred tax liabilities.	Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab’s balance sheet.
Adjusted Tier 1 Leverage Ratio	Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for CSB, adjusted to reflect the inclusion of accumulated other comprehensive income (AOCI) in the ratio.	Inclusion of the impacts of AOCI in the Company’s Tier 1 Leverage Ratio provides additional information regarding the Company’s current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company’s capital levels.

The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC’s Board of Directors maintains discretion in evaluating performance against these criteria.

- 10 -

THE CHARLES SCHWAB CORPORATION

Non-GAAP Financial Measures

(In millions, except ratios and per share amounts)

(Unaudited)

The tables below present reconciliations of GAAP measures to non-GAAP measures:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
	Total Expenses Excluding Interest		Net Income		Total Expenses Excluding Interest		Net Income		Total Expenses Excluding Interest		Net Income		Total Expenses Excluding Interest		Net Income
Total expenses excluding interest (GAAP), Net income (GAAP)	$	3,223	$	1,125	$	2,823	$	2,020	$	9,194	$	4,022	$	8,475	$	5,215
Acquisition and integration-related costs (1)	(106)		106		(101)		101		(334)		334		(291)		291
Amortization of acquired intangible assets	(135)		135		(152)		152		(404)		404		(460)		460
Restructuring costs (2)	(279)		279		—		—		(279)		279		—		—
Income tax effects (3)	N/A		(127)		N/A		(62)		N/A		(247)		N/A		(183)
Adjusted total expenses (non-GAAP), Adjusted net income (non-GAAP)	$	2,703	$	1,518	$	2,570	$	2,211	$	8,177	$	4,792	$	7,724	$	5,783

(1) Acquisition and integration-related costs for the three and nine months ended September 30, 2023 primarily consist of $52 million and $158 million of compensation and benefits, $37 million and $111 million of professional services, $7 million and $21 million of occupancy and equipment, and $4 million and $26 million of other. Acquisition and integration-related costs for the three and nine months ended September 30, 2022 primarily consist of $57 million and $166 million of compensation and benefits, $36 million and $102 million of professional services, and $6 million and $14 million of occupancy and equipment.

(2) Restructuring costs for the three and nine months ended September 30, 2023 primarily consist of $276 million of compensation and benefits. There were no restructuring costs for the three and nine months ended September 30, 2022.

(3) The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs, amortization of acquired intangible assets and restructuring costs on an after-tax basis.

N/A Not applicable.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
	Amount		% of Total Net Revenues		Amount		% of Total Net Revenues		Amount		% of Total Net Revenues		Amount		% of Total Net Revenues
Income before taxes on income (GAAP), Pre-tax profit margin (GAAP)	$	1,383	30.0	%	$	2,677	48.7	%	$	5,184	36.1	%	$	6,790	44.5	%
Acquisition and integration-related costs	106		2.3	%	101		1.8	%	334		2.3	%	291		1.9	%
Amortization of acquired intangible assets	135		2.9	%	152		2.8	%	404		2.8	%	460		3.0	%
Restructuring costs	279		6.1	%	—		—		279		1.9	%	—		—
Adjusted income before taxes on income (non-GAAP), Adjusted pre-tax profit margin (non-GAAP)	$	1,903	41.3	%	$	2,930	53.3	%	$	6,201	43.1	%	$	7,541	49.4	%


	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
	Amount		Diluted EPS		Amount		Diluted EPS		Amount		Diluted EPS		Amount		Diluted EPS
Net income available to common stockholders (GAAP), Earnings per common share — diluted (GAAP)	$	1,017	$	.56	$	1,884	$	.99	$	3,723	$	2.03	$	4,814	$	2.53
Acquisition and integration-related costs	106		.06		101		.05		334		.18		291		.15
Amortization of acquired intangible assets	135		.07		152		.08		404		.22		460		.24
Restructuring costs	279		.15		—		—		279		.15		—		—
Income tax effects	(127)		(.07)		(62)		(.02)		(247)		(.13)		(183)		(.09)
Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP)	$	1,410	$	.77	$	2,075	$	1.10	$	4,493	$	2.45	$	5,382	$	2.83

- 11 -

THE CHARLES SCHWAB CORPORATION

Non-GAAP Financial Measures

(In millions, except ratios and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Return on average common stockholders’ equity (GAAP)	14		%	25		%	18		%	18		%
Average common stockholders’ equity	$	28,274		$	30,282		$	27,747		$	36,526
Less: Average goodwill	(11,951)			(11,951)			(11,951)			(11,952)
Less: Average acquired intangible assets — net	(8,457)			(8,999)			(8,589)			(9,151)
Plus: Average deferred tax liabilities related to goodwill and acquired intangible assets — net	1,822			1,848			1,830			1,867
Average tangible common equity	$	9,688		$	11,180		$	9,037		$	17,290
Adjusted net income available to common stockholders (1)	$	1,410		$	2,075		$	4,493		$	5,382
Return on tangible common equity (non-GAAP)	58		%	74		%	66		%	42		%

(1) See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP).


	September 30, 2023
	CSC			CSB
Tier 1 Leverage Ratio (GAAP)	8.2		%	9.6		%
Tier 1 Capital	$	39,971		$	31,764
Plus: AOCI adjustment	(20,752)			(18,143)
Adjusted Tier 1 Capital	19,219			13,621
Average assets with regulatory adjustments	488,627			330,908
Plus: AOCI adjustment	(20,033)			(17,950)
Adjusted average assets with regulatory adjustments	$	468,594		$	312,958
Adjusted Tier 1 Leverage Ratio (non-GAAP)	4.1		%	4.4		%

- 12 -

Document and Entity Information	Oct. 16, 2023
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Oct. 16, 2023
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	3000 Schwab Way
Entity Address, City or Town	Westlake
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76262
City Area Code	817
Local Phone Number	859-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000316709
Amendment Flag	false
Common Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock – $.01 par value per share
Trading Symbol	SCHW
Security Exchange Name	NYSE
Series 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
Series J 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 4.450% Non-Cumulative Preferred Stock, Series J
Trading Symbol	SCHW PrJ
Security Exchange Name	NYSE