SCHWAB CHARLES CORP

11. Variable Interest Entities

As of December 31, 2024 and 2023, substantially all of Schwab’s involvement with VIEs is through CSB’s CRA-related investments and most of these are related to LIHTC investments. As part of CSB’s community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties and receives tax credits and other tax benefits for these investments. During 2024, 2023, and 2022, CSB recorded amortization of $154 million, $119 million, and $96 million, respectively, and recognized tax credits and other tax benefits of $200 million, $153 million, and $121 million, respectively, associated with these investments. The amortization, as well as the tax credits and other tax benefits, are included intaxes on income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the consolidated statements of cash flows.

Aggregate assets, liabilities, and maximum exposure to loss

The aggregate assets, liabilities, and maximum exposure to loss from those VIEs in which Schwab holds a variable interest, but is not the primary beneficiary, are summarized in the table below:

(1)Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets.

(2)Other investments include non-LIHTC CRA investments that are accounted for as loans at amortized cost, equity method investments, AFS securities, or using the adjusted cost method. Aggregate assets are included in AFS securities, bank loans – net, or other assets on the consolidated balance sheets.

Schwab’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. Schwab’s funding of these remaining commitments is dependent upon the occurrence of certain conditions, and Schwab expects to pay substantially all of these commitments between 2025 and 2028. During the years ended December 31, 2024, 2023, and 2022, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.