Regulatory Requirements

9 Months Ended

Sep. 30, 2024

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Regulatory Requirements

Regulatory Requirements

At September 30, 2024, CSC and its banking subsidiaries 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, 2024	Amount		Ratio		Amount		Ratio		Amount		Ratio (1)
CSC
Common Equity Tier 1 Risk-Based Capital	$	34,501	29.1	%	N/A				$	5,338	4.5	%
Tier 1 Risk-Based Capital	43,692		36.8	%	N/A				7,117		6.0	%
Total Risk-Based Capital	43,721		36.9	%	N/A				9,489		8.0	%
Tier 1 Leverage	43,692		9.7	%	N/A				18,030		4.0	%
Supplementary Leverage Ratio	43,692		9.6	%	N/A				13,618		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	32,225	40.6	%	$	5,165	6.5	%	$	3,576	4.5	%
Tier 1 Risk-Based Capital	32,225		40.6	%	6,357		8.0	%	4,768		6.0	%
Total Risk-Based Capital	32,246		40.6	%	7,946		10.0	%	6,357		8.0	%
Tier 1 Leverage	32,225		11.2	%	14,396		5.0	%	11,517		4.0	%
Supplementary Leverage Ratio	32,225		11.1	%	N/A				8,700		3.0	%
December 31, 2023
CSC
Common Equity Tier 1 Risk-Based Capital	$	31,411	24.5	%	N/A				$	5,770	4.5	%
Tier 1 Risk-Based Capital	40,602		31.7	%	N/A				7,694		6.0	%
Total Risk-Based Capital	40,645		31.7	%	N/A				10,258		8.0	%
Tier 1 Leverage	40,602		8.5	%	N/A				19,043		4.0	%
Supplementary Leverage Ratio	40,602		8.5	%	N/A				14,379		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	31,777	37.9	%	$	5,448	6.5	%	$	3,771	4.5	%
Tier 1 Risk-Based Capital	31,777		37.9	%	6,705		8.0	%	5,029		6.0	%
Total Risk-Based Capital	31,816		38.0	%	8,381		10.0	%	6,705		8.0	%
Tier 1 Leverage	31,777		10.1	%	15,793		5.0	%	12,634		4.0	%
Supplementary Leverage Ratio	31,777		10.0	%	N/A				9,540		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, 2024, CSC was subject to a stress capital buffer of 2.5%. 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, 2024, 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, 2024, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since September 30, 2024 that management believes have changed CSB’s capital category.

CSC’s other banking subsidiaries are Charles Schwab Premier Bank, SSB (CSPB) and Charles Schwab Trust Bank (Trust Bank). CSPB is a Texas state-chartered savings bank that provides banking and custody services, and Trust Bank is a Nevada state-chartered savings bank that provides trust and custody services. At September 30, 2024, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities, and the entities held total assets of $25.8 billion and $9.6 billion, respectively. Based on their regulatory capital ratios, at September 30, 2024, 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:

	September 30, 2024		December 31, 2023
CS&Co
Net capital	$	9,888	$	5,629
Minimum dollar requirement	0.250		0.250
2% of aggregate debit balances	1,786		1,069
Net capital in excess of required net capital	$	8,102	$	4,560

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, 2024. 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.

Following the completion of the final client account conversions to CS&Co from the Ameritrade broker-dealers in May 2024, TD Ameritrade, Inc. and TDAC subsequently submitted Uniform Requests for Broker-Dealer Withdrawal (BDW) to terminate their registration as broker-dealers with the SEC, the Financial Industry Regulatory Authority, Inc. (FINRA), and other applicable regulatory organizations. As of September 30, 2024, TDAC continued to be registered as a broker-dealer and was in compliance with its respective net capital requirements. As of September 30, 2024, TD Ameritrade, Inc. was no longer registered as a broker-dealer with the SEC and FINRA and was not subject to the Uniform Net Capital Rule.