8-K

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 15, 2010

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)	(I.R.S. Employer Identification No.)

211 Main Street, San Francisco, CA 94105

(Address of principal executive offices, including zip code)

(415) 667-7000

(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))

Item 2.02 Results of Operations and Financial Condition

On October 15, 2010, The Charles Schwab Corporation issued a press release announcing its financial results for the quarter ended September 30, 2010. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits
99.1	Press Release dated October 15, 2010 (“Schwab Reports Third Quarter Revenues Up 5% Year-Over-Year – Profits rise 9% prior to previously announced charges”)

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 15, 2010	By:	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
Ex 99.1	Press Release dated October 15, 2010 (“Schwab Reports Third Quarter Revenues Up 5% Year-Over-Year – Profits rise 9% prior to previously announced charges”)

EX-99.1

EXHIBIT 99.1

News Release

Contacts:

MEDIA:	INVESTORS/ANALYSTS:
Greg Gable	Rich Fowler
Charles Schwab	Charles Schwab
Phone: 415-667-0473	Phone: 415-667-1841

SCHWAB REPORTS THIRD QUARTER REVENUES UP 5% YEAR-OVER-YEAR

Profits rise 9% prior to previously announced charges

SAN FRANCISCO, October 15, 2010 – The Charles Schwab Corporation announced today that its net income was $124 million for the third quarter of 2010, down 38% from $200 million for the third quarter of 2009. Schwab’s third quarter net income was $218 million prior to the inclusion of previously announced charges totaling $94 million after-tax. Those charges relate to the company’s decisions to cover the net remaining losses recognized by its money market mutual funds as a result of their investments in a single structured investment vehicle that defaulted in 2008, and to end the sponsorship of its affinity credit card program. For the nine months ended September 30, 2010, the company’s net income was $335 million, down 46% from the year-earlier period. The company’s year-to-date results also include charges totaling $120 million after-tax relating to the settlement of a civil class action lawsuit involving the Schwab YieldPlus Fund^®, an ultra-short bond fund. The company’s year-to-date net income prior to the inclusion of charges totaled $555 million after-tax.

Chairman Charles Schwab commented, “During the third quarter, we demonstrated the operating leverage in our diversified business model as we grew revenue 5% from the year-ago quarter while expanding profits 9% after adjusting for charges. At a time when investors need help more than ever, we believe our model is the best for assisting clients in finding the right path forward, whether they’re utilizing our unique combination of investment principles, market and economic perspectives, personalized guidance and investment products, or working with an independent investment advisor. Over $670 billion of the client assets currently at Schwab are either enrolled in one of our advisory offerings or under the guidance of an independent advisor, which represents a compound annual growth rate of 7% over the past 24 months.”

Financial Highlights	Three Months Ended —September 30,—						%  Change			Nine Months Ended —September 30,—						%  Change
	2010			2009						2010			2009
Net revenues (in millions)	$	1,063		$	1,011			5	%	$	3,121		$	3,207			(3	%)
Net income (in millions)	$	124		$	200			(38	%)	$	335		$	623			(46	%)
Diluted earnings per share	$	.10		$	.17			(41	%)	$	.28		$	.54			(48	%)
Pre-tax profit margin		18.7	%		31.7	%					17.6	%		31.5	%
Return on stockholders’ equity (annualized)		8	%		17	%					8	%		19	%

CEO Walt Bettinger said, “During the third quarter we continued to invest in long-term growth strategies that are driving change in our industry by looking at investor needs from their perspective. We recently announced the pending acquisition of Windward Investment Management, Inc., a money manager with a long-term track record of managing broadly diversified, ETF-based investment portfolios with an emphasis on downside risk management. And we are continuing to invest in other growth related product and service capabilities, including a ground-breaking platform for

actively trading investors, significantly expanded fixed income capabilities and new issue access, new integrated mobile applications for banking and brokerage, a major rebuild of our investment advisor service and custodial platform, and expanded global research and equity trading capabilities.”

Mr. Bettinger continued, “We believe that no firm meets the needs of a diverse population of investors better than Schwab, as demonstrated by the nearly $400 billion in net new assets brought to the company by clients since the beginning of 2007, excluding significant one-time flows. Net new assets totaled approximately $15 billion in the third quarter alone, despite ultra-low interest rates and a choppy equity market. Total client assets equaled $1.47 trillion at month-end September, up 8% from last year. We ended September serving 7.9 million active brokerage accounts, 665,000 bank accounts, and 1.5 million retirement plan participants.”

CFO Joe Martinetto noted, “Our diversified business model enabled us to grow revenues during the third quarter even as interest rates declined somewhat during the period. Although our trading revenue declined by 24% from year-earlier levels as a result of our improved pricing and the environment’s effect on client activity, our net interest revenue rose by 31% over the year-earlier total while our net interest margin remained relatively flat. Our asset management and administration fees also showed year-over-year improvement in the third quarter – for the first time in two years – through higher client balances in Mutual Fund OneSource^® and advisory programs such as Schwab Managed Portfolios™, as well as further easing in money market fund fee waivers. Overall, our third quarter revenue growth represents the first year-over-year increase since the second quarter of 2008.”

“Our business model also enables us to grow earnings power and further solidify our balance sheet without a rising interest rate environment”, Mr. Martinetto added. “With ongoing expense discipline helping to ensure that our spending remains in line with planned levels, our third quarter net income reached $218 million, prior to the inclusion of the two charges we announced previously. This improved operating performance helps support a growing capital position that in turn enables the company to keep pace with the needs of our growing client base. Stockholders’ equity totaled $6.0 billion as of month-end September 2010, up 22% from $4.9 billion a year ago.”

Business highlights for the third quarter (data as of quarter-end unless otherwise noted):

Investor Services

• Net new accounts for the quarter totaled approximately 11,000, excluding internal transfers. Total accounts reached 5.6 million as of September 30, 2010 up 4% year-over-year.

Institutional Services

Advisor Services

• Administrative Trustee Services surpassed $1 billion in client assets. This service allows Advisors to retain investment management responsibilities while working with Schwab as a corporate or directed trustee. Additionally, client assets reached $1.7 billion in Personal Trust Reporting Services, which assists advisors in managing assets when an individual is serving as trustee on an irrevocable trust.

Other Institutional Services

• Released findings of a research study, “The New Rules of Engagement for 401(k) Success,” which documents that professional advice has a direct and positive impact on the behavior of 401(k) plan participants.

Products and Infrastructure

• For Charles Schwab Bank:

• Balance sheet assets = $53.0 billion, up 39% year-over-year.

• Outstanding mortgage and home equity loans = $7.7 billion, up 15% year-over-year.

• First mortgage originations during the quarter = $1.1 billion.

• Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.96%, 0.58% and 0.61%, respectively, at month-end September.

• Schwab Bank High Yield Investor Checking^® accounts = 495,000, with $9.6 billion in balances.

• Introduced three proprietary bond ETFs, providing single-investment exposure to three types of U.S. Treasuries – short-term, intermediate-term and inflation-protected securities.

• Month-end September total assets under management in Schwab ETFs™ = $1.7 billion. Total assets in Schwab Managed Portfolios-ETFs = $1.5 billion.

• Client assets enrolled in the four PIMCO Municipal Bond Ladder SMA strategies introduced in March reached $497 million.

Supporting schedules are either attached or located at: http://www.aboutschwab.com/media/xls/q3_2010_schedule.xls

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 7.9 million client brokerage accounts, 1.5 million corporate retirement plan participants, 665,000 banking accounts, and $1.47 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Named Highest in Investor Satisfaction by J.D. Power and Associates, its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and 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 its Advisor Services division. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at www.schwab.com.

###

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,
	2010			2009			2010			2009
Net Revenues
Asset management and administration fees	$	468		$	451		$	1,325		$	1,439
Interest revenue		442			356			1,261			1,063
Interest expense		(58	)		(62	)		(169	)		(161	)
Net interest revenue		384			294			1,092			902
Trading revenue		182			241			624			772
Other		32			36			99			132
Net impairment losses on securities (1)		(3	)		(11	)		(19	)		(38	)
Total net revenues		1,063			1,011			3,121			3,207
Expenses Excluding Interest
Compensation and benefits		381			371			1,176			1,173
Professional services		85			70			249			194
Occupancy and equipment		66			67			202			245
Advertising and market development		34			34			139			141
Communications		49			48			154			155
Depreciation and amortization		35			38			108			121
Class action litigation reserve		—			—			196			—
Money market mutual fund charges		132			—			132			—
Other		82			63			215			168
Total expenses excluding interest		864			691			2,571			2,197
Income before taxes on income		199			320			550			1,010
Taxes on income		(75	)		(120	)		(215	)		(387	)
Net Income	$	124		$	200		$	335		$	623
Weighted-Average Common Shares Outstanding — Diluted		1,194			1,163			1,192			1,160
Earnings Per Share — Basic	$	.10		$	.17		$	.28		$	.54
Earnings Per Share — Diluted	$	.10		$	.17		$	.28		$	.54

⁽¹⁾ Net impairment losses on securities include total other-than-temporary impairment losses of $0 million and $52 million, net of $(3) million and $41 million recognized in other comprehensive income, for the three months ended September 30, 2010 and 2009, respectively, and total other-than-temporary impairment losses of $41 million and $239 million, net of $22 million and $201 million recognized in other comprehensive income, for the nine months ended September 30, 2010 and 2009, respectively.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)

	Q3-10 % change				2010									2009
(In millions, except per share amounts and as noted)	vs. Q3-09		vs. Q2-10		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Net Revenues
Asset management and administration fees	4	%	7	%	$	468		$	437		$	420		$	436		$	451
Net interest revenue	31	%	1	%		384			382			326			305			294
Trading revenue	(24	%)	(22	%)		182			233			209			224			241
Other	(11	%)	(11	%)		32			36			31			43			36
Net impairment losses on securities	(73	%)	(63	%)		(3	)		(8	)		(8	)		(22	)		(11	)
Total net revenues	5	%	(2	%)		1,063			1,080			978			986			1,011
Expenses Excluding Interest
Compensation and benefits	3	%	(3	%)		381			393			402			371			371
Professional services	21	%	1	%		85			84			80			81			70
Occupancy and equipment	(1	%)	(3	%)		66			68			68			73			67
Advertising and market development	—		(21	%)		34			43			62			50			34
Communications	2	%	(8	%)		49			53			52			51			48
Depreciation and amortization	(8	%)	(3	%)		35			36			37			38			38
Class action litigation reserve (1)	—		—			—			—			196			—			—
Money market mutual fund charges (2)	N/M		N/M			132			—			—			—			—
Other	30	%	26	%		82			65			68			56			63
Total expenses excluding interest	25	%	16	%		864			742			965			720			691
Income before taxes on income	(38	%)	(41	%)		199			338			13			266			320
Taxes on income	(38	%)	(44	%)		(75	)		(133	)		(7	)		(102	)		(120	)
Net Income	(38	%)	(40	%)	$	124		$	205		$	6		$	164		$	200
Basic earnings per share	(41	%)	(41	%)	$	.10		$	.17		$	—		$	.14		$	.17
Diluted earnings per share	(41	%)	(41	%)	$	.10		$	.17		$	—		$	.14		$	.17
Dividends declared per common share	—		—		$	.06		$	.06		$	.06		$	.06		$	.06
Weighted-average common shares outstanding – diluted	3	%	—			1,194			1,195			1,188			1,163			1,163
Performance Measures
Pre-tax profit margin						18.7	%		31.3	%		1.3	%		27.0	%		31.7	%
Return on stockholders’ equity (annualized)						8	%		14	%		—			13	%		17	%
Financial Condition (at quarter end, in billions)
Cash and investments segregated	16	%	6	%	$	20.1		$	18.9		$	19.5		$	18.4		$	17.4
Receivables from brokerage clients	24	%	(1	%)	$	9.8		$	9.9		$	9.0		$	8.6		$	7.9
Loans to banking clients	19	%	5	%	$	8.2		$	7.8		$	7.6		$	7.3		$	6.9
Total assets	28	%	6	%	$	87.3		$	82.3		$	78.3		$	75.4		$	68.0
Deposits from banking clients	37	%	6	%	$	48.8		$	45.9		$	42.1		$	38.8		$	35.5
Payables to brokerage clients	18	%	5	%	$	27.7		$	26.4		$	26.4		$	26.2		$	23.4
Long-term debt (3)	33	%	54	%	$	2.0		$	1.3		$	1.3		$	1.5		$	1.5
Stockholders’ equity	22	%	2	%	$	6.0		$	5.9		$	5.7		$	5.1		$	4.9
Other
Full-time equivalent employees (at quarter end, in thousands)	2	%	—			12.5			12.5			12.6			12.4			12.2
Annualized net revenues per average full-time equivalent employee (in thousands)	3	%	(1	%)	$	340		$	343		$	310		$	321		$	331
Capital expenditures—cash purchases of equipment, office facilities, and property, net (in millions)	(23	%)	8	%	$	27		$	25		$	24		$	32		$	35
Asset Management and Administration Fees
Asset management and administration fees before money market mutual fund fee waivers	6	%	2	%	$	561		$	550		$	545		$	546		$	529
Money market mutual fund fee waivers	19	%	(18	%)		(93	)		(113	)		(125	)		(110	)		(78	)
Asset management and administration fees	4	%	7	%	$	468		$	437		$	420		$	436		$	451
Clients’ Daily Average Trades (in thousands)
Revenue trades (4)	(15	%)	(23	%)		233.2			302.9			275.7			266.3			273.7
Asset-based trades (5)	(18	%)	(20	%)		36.8			46.1			45.6			41.5			44.8
Other trades (6)	2	%	(6	%)		82.6			87.6			94.2			80.6			80.7
Total	(12	%)	(19	%)		352.6			436.6			415.5			388.4			399.2
Average Revenue Per Revenue Trade (4)	(12	%)	1	%	$	12.32		$	12.15		$	12.60		$	13.59		$	13.93

⁽¹⁾ In the first quarter of 2010, the Company recognized a class action litigation reserve of $196 million relating to the Schwab YieldPlus Fund^®.

⁽²⁾ In the third quarter of 2010, the Company recognized a charge of $132 million relating to losses recognized by Schwab money market mutual funds.

⁽³⁾ In the third quarter of 2010, the Company issued $700 million of Senior Notes that mature in 2020.

⁽⁴⁾ Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART.

⁽⁵⁾ Includes eligible trades executed by clients who participate in one or more of the Company’s asset-based pricing relationships.

⁽⁶⁾ Includes all commission free trades, including Schwab Mutual Fund OneSource^® funds and ETFs, and other proprietary products.

N/M Not meaningful.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)

	Three Months Ended September 30,														Nine Months Ended September 30,
	2010							2009							2010							2009
	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	$	8,265	$	6		0.29	%	$	9,366	$	7		0.30	%	$	7,848	$	16		0.27	%	$	7,795	$	27		0.46	%
Cash and investments segregated		19,286		16		0.33	%		16,584		16		0.38	%		19,046		41		0.29	%		15,815		67		0.57	%
Broker-related receivables (1)		287		—		0.12	%		383		—		0.14	%		297		—		0.04	%		355		1		0.38	%
Receivables from brokerage clients		9,151		111		4.81	%		7,006		89		5.04	%		8,720		322		4.94	%		6,457		254		5.26	%
Other securities owned (2)		—		—		—			158		—		0.87	%		98		—		0.45	%		53		—		0.88	%
Securities available for sale (3)		25,148		124		1.96	%		18,942		127		2.66	%		23,841		376		2.11	%		17,235		389		3.02	%
Securities held to maturity		10,776		95		3.50	%		2,874		28		3.87	%		8,799		240		3.65	%		1,443		43		3.98	%
Loans to banking clients		8,052		69		3.40	%		6,795		61		3.56	%		7,802		204		3.50	%		6,497		177		3.64	%
Loans held for sale		69		1		4.72	%		69		1		5.75	%		69		3		4.84	%		121		5		5.52	%
Total interest-earning assets		81,034		422		2.07	%		62,177		329		2.10	%		76,520		1,202		2.10	%		55,771		963		2.31	%
Other interest revenue				20							27							59							100
Total interest-earning assets	$	81,034	$	442		2.16	%	$	62,177	$	356		2.27	%	$	76,520	$	1,261		2.20	%	$	55,771	$	1,063		2.55	%
Funding sources:
Deposits from banking clients	$	46,942	$	29		0.25	%	$	33,792	$	32		0.38	%	$	43,434	$	85		0.26	%	$	29,285	$	73		0.33	%
Payables to brokerage clients (4)		22,882		1		0.02	%		18,474		—		0.01	%		22,103		2		0.01	%		17,393		2		0.02	%
Long-term debt		1,827		25		5.43	%		1,535		22		5.69	%		1,527		64		5.60	%		1,134		51		6.01	%
Total interest-bearing liabilities		71,651		55		0.30	%		53,801		54		0.40	%		67,064		151		0.30	%		47,812		126		0.35	%
Non-interest-bearing funding sources		9,383							8,376							9,456							7,959
Other interest expense				—							1							—							2
Total funding sources	$	81,034	$	55		0.27	%	$	62,177	$	55		0.35	%	$	76,520	$	151		0.26	%	$	55,771	$	128		0.31	%
Net interest revenue before provision for credit losses			$	387		1.89	%			$	301		1.92	%			$	1,110		1.94	%			$	935		2.24	%
Provision for credit losses				3							7							18							33
Net interest revenue			$	384		1.88	%			$	294		1.88	%			$	1,092		1.91	%			$	902		2.16	%

⁽¹⁾ Includes receivables from brokers, dealers, and clearing organizations. Interest revenue on broker-related receivables was less than $500,000 in the third quarters of 2010 and 2009 and first nine months of 2010.

⁽²⁾ Interest revenue on other securities owned was less than $500,000 in the third quarter of 2009 and first nine months of 2010 and 2009.

⁽³⁾ Amounts have been calculated based on amortized cost.

⁽⁴⁾ Interest expense on payables to brokerage clients was less than $500,000 in the third quarter of 2009.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

Notes to Consolidated Statements of Income, Financial and Operating Highlights,

and Net Interest Revenue Information

(Unaudited)

The Company

The consolidated statements of income, financial and operating highlights, and net interest revenue information include The Charles Schwab Corporation (CSC) and its majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc. and Charles Schwab Bank. Certain prior year amounts have been reclassified to conform to the 2010 presentation. The consolidated statements of income, financial and operating highlights, and net interest revenue information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

**********

THE CHARLES SCHWAB CORPORATION

Reconciliation of Net Income Excluding Certain Charges to Reported Net Income

(In millions)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2010			2009		2010			2009
Net Income Excluding Certain Charges	$	218		$	200	$	555		$	623
Class action litigation reserve (1)		—			—		196			—
Money market mutual fund charges (2)		132			—		132			—
Other expense (3)		21			—		30			—
Total charges		153			—		358			—
Tax effect		(59	)		—		(138	)		—
Total charges, net of tax		94			—		220			—
Reported Net Income	$	124		$	200	$	335		$	623

⁽¹⁾ In the first quarter of 2010, the Company recognized a class action litigation reserve relating to the Schwab YieldPlus Fund^®.

⁽²⁾ In the third quarter of 2010, the Company recognized a charge relating to losses recognized by the Schwab money market mutual funds.

⁽³⁾ In the third quarter and first quarter of 2010, the Company recognized charges of $21 million and $9 million, respectively, to terminate its affinity credit card program.

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

	Q3-10 % change				2010									2009
(In billions, at quarter end, except as noted)	vs. Q3-09		vs. Q2-10		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Assets in client accounts
Schwab One®, other cash equivalents and deposits from banking clients	31	%	8	%	$	77.9		$	72.4		$	68.0		$	65.1		$	59.3
Proprietary funds (Schwab Funds® and Laudus Funds®):
Money market funds	(15	%)	(2	%)		152.4			156.2			164.1			171.2			178.7
Equity and bond funds	7	%	9	%		42.7			39.2			43.5			41.6			40.0
Total proprietary funds	(11	%)	—			195.1			195.4			207.6			212.8			218.7
Mutual Fund Marketplace® (1)
Mutual Fund OneSource® (2)	19	%	9	%		193.9			177.2			187.4			175.0			162.8
Mutual fund clearing services	(50	%)	28	%		37.5			29.3			86.0			81.8			74.4
Other third-party mutual funds (2)	19	%	10	%		275.0			249.9			258.7			243.8			230.4
Total Mutual Fund Marketplace	8	%	11	%		506.4			456.4			532.1			500.6			467.6
Total mutual fund assets	2	%	8	%		701.5			651.8			739.7			713.4			686.3
Equity and other securities (1)	15	%	11	%		526.4			474.2			522.2			485.0			456.3
Fixed income securities	3	%	1	%		174.7			172.2			169.5			167.0			169.0
Margin loans outstanding	26	%	1	%		(9.2	)		(9.1	)		(8.3	)		(7.9	)		(7.3	)
Total client assets	8	%	8	%	$	1,471.3		$	1,361.5		$	1,491.1		$	1,422.6		$	1,363.6
Client assets by business
Investor Services	14	%	13	%	$	644.6		$	568.7		$	606.4		$	583.2		$	564.8
Advisor Services	8	%	2	%		609.9			596.7			624.0			590.4			564.2
Other Institutional Services	(8	%)	11	%		216.8			196.1			260.7			249.0			234.6
Total client assets by business	8	%	8	%	$	1,471.3		$	1,361.5		$	1,491.1		$	1,422.6		$	1,363.6
Net growth in assets in client accounts (for the quarter ended)
Net new assets
Investor Services	—		77	%	$	2.3		$	1.3		$	4.4		$	3.1		$	2.3
Advisor Services	(28	%)	(22	%)		8.0			10.2			14.7			12.9			11.1
Other Institutional Services (3)	(34	%)	N/M			4.3			(49.0	)		4.2			8.8			6.5
Total net new assets	(27	%)	N/M			14.6			(37.5	)		23.3			24.8			19.9
Net market gains (losses)	(20	%)	N/M			95.2			(92.1	)		45.2			34.2			119.4
Net growth (decline)	(21	%)	N/M		$	109.8		$	(129.6	)	$	68.5		$	59.0		$	139.3
New brokerage accounts (in thousands, for the quarter ended)	(7	%)	(18	%)		168			206			230			202			181
Clients (in thousands)
Active Brokerage Accounts	4	%	—			7,919			7,883			7,805			7,701			7,620
Banking Accounts (4)	25	%	5	%		665			634			605			567			531
Corporate Retirement Plan Participants	—		—			1,473			1,467			1,469			1,465			1,471

⁽¹⁾ Excludes all proprietary money market, equity, and bond funds.

⁽²⁾ Certain client assets at December 31 and September 30, 2009, have been reclassified from Mutual Fund OneSource^® to other third-party mutual funds.

⁽³⁾ Includes net outflows of $51.5 billion in the second quarter of 2010 related to the planned deconversion of a mutual fund clearing services client.

⁽⁴⁾ The number of banking accounts excludes credit cards, which totaled 169,000 at month end September 2010. Prior period amounts have been recast to reflect this change.

N/M Not meaningful.

The Charles Schwab Corporation Monthly Market Activity Report For September 2010

	2009 Sep		Oct		Nov		Dec		2010 Jan		Feb		Mar		Apr		May		Jun		Jul		Aug				% change
																									Sep		Mo.		Yr.
Change in Client Assets (in billions of dollars)
Net New Assets (1)	5.8		8.6		6.0		10.2		6.0		7.9		9.4		3.8		(24.8	)	(16.5	)	6.2		4.2		4.2		—		(28	%)
Net Market Gains (Losses)	39.5		(22.4	)	41.6		15.0		(27.9	)	23.7		49.4		16.9		(74.5	)	(34.5	)	53.7		(31.5	)	73.0
Total Client Assets (at month end, in billions of dollars)	1,363.6		1,349.8		1,397.4		1,422.6		1,400.7		1,432.3		1,491.1		1,511.8		1,412.5		1,361.5		1,421.4		1,394.1		1,471.3		6	%	8	%
New Brokerage Accounts (in thousands)	62		63		59		80		75		66		89		89		59		58		53		59		56		(5	%)	(10	%)
Clients (at month end, in thousands)
Active Brokerage Accounts	7,620		7,642		7,664		7,701		7,734		7,760		7,805		7,852		7,869		7,883		7,891		7,908		7,919		—		4	%
Banking Accounts (2)	531		543		555		567		581		592		605		616		625		634		643		655		665		2	%	25	%
Corporate Retirement Plan Participants	1,471		1,452		1,461		1,465		1,467		1,467		1,469		1,467		1,462		1,467		1,468		1,467		1,473		—		—
Clients’ Daily Average Trades  (3) (in thousands)	417.6		421.8		375.3		366.0		465.3		394.8		391.3		439.9		512.7		364.4		365.3		346.7		346.0		—		(17	%)
Market Indices (at month end)
Dow Jones Industrial Average	9,712		9,713		10,345		10,428		10,067		10,325		10,857		11,009		10,137		9,774		10,466		10,015		10,788		8	%	11	%
Nasdaq Composite	2,122		2,045		2,145		2,269		2,147		2,238		2,398		2,461		2,257		2,109		2,255		2,114		2,369		12	%	12	%
Standard & Poor’s 500	1,057		1,036		1,096		1,115		1,074		1,104		1,169		1,187		1,089		1,031		1,102		1,049		1,141		9	%	8	%
Daily Average Market Share Volume (in millions)
NYSE	1,376		1,304		1,108		1,099		1,162		1,145		1,052		1,216		1,678		1,378		1,151		1,003		1,007		—		(27	%)
Nasdaq	2,399		2,326		1,987		1,825		2,443		2,255		2,334		2,540		2,849		2,251		2,126		1,943		2,033		5	%	(15	%)
Total	3,775		3,630		3,095		2,924		3,605		3,400		3,386		3,756		4,527		3,629		3,277		2,946		3,040		3	%	(19	%)
Mutual Fund Net Buys (Sells) (4) (in millions of dollars)
Large Capitalization Stock	(352.9	)	(283.7	)	(465.8	)	(345.0	)	(14.0	)	(344.7	)	74.4		233.7		(515.0	)	(322.5	)	(254.5	)	(773.9	)	(467.6	)
Small / Mid Capitalization Stock	266.6		(67.1	)	(153.9	)	(51.5	)	238.3		132.8		416.3		465.3		(273.1	)	(122.0	)	(461.7	)	(502.6	)	(239.5	)
International	294.6		447.1		446.4		225.9		621.2		352.5		565.3		552.5		(1,118.6	)	107.2		63.9		40.1		423.0
Specialized	192.8		272.0		133.5		51.4		86.1		198.4		17.4		143.2		(74.8	)	42.4		8.3		(24.4	)	115.8
Hybrid	545.5		429.4		615.0		775.1		1,037.5		779.3		1,096.6		767.0		203.0		495.2		363.1		556.0		405.1
Taxable Bond	3,958.7		3,336.2		2,820.2		1,771.6		2,262.2		1,654.9		2,786.5		1,777.5		863.1		1,848.4		2,103.3		1,849.0		1,730.6
Tax-Free Bond	893.6		478.3		480.5		473.4		356.0		325.3		331.9		157.3		114.3		8.6		195.4		340.0		(39.8	)
Money Market Funds	(4,938.0	)	(3,397.1	)	(1,863.5	)	(2,204.7	)	(1,907.1	)	(756.7	)	(4,481.4	)	(5,372.7	)	1,565.1		(4,139.0	)	(1,007.5	)	(1,028.2	)	(1,889.2	)

⁽¹⁾ June 2010 and May 2010 include net outflows of $22.0 billion and $29.5 billion, respectively, from the planned deconversion of a mutual fund clearing services client.

⁽²⁾ The number of banking accounts excludes credit cards, which totaled 169,000 at month end September 2010. Prior period amounts have been recast to reflect this change.

⁽³⁾ Includes revenue trades from commissions or principal mark-ups, trades by clients in asset-based pricing relationships and all commission-free trades, including Schwab Mutual Fund OneSource^® funds and ETFs, and other proprietary products.

⁽⁴⁾ 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.