SCHWAB CHARLES CORP

10. Other Assets

The components of other assets are detailed below:

(1)Includes fractional shares held in client brokerage accounts. Corresponding client repurchase liabilities in an equal amount for these client-held fractional shares are included in accrued expenses and other liabilities on the consolidated balance sheet. See also Notes 2 and 18.

(2)Includes LIHTC investments and certain other CRA-related investments (see Note 11). This item also includes investments in FHLB stock of $98 million and $703 million at December 31, 2025 and 2024, respectively, which are required to be held as a condition of borrowing with the FHLB (see Note 13) and can only be sold to the issuer at its par value. Any cash dividends received from investments in FHLB stock are recognized as interest revenue in the consolidated statements of income. Other investments also includes investments in Federal Reserve stock of $655 million and $657 million at December 31, 2025 and 2024, respectively; these holdings are a condition of CSB, CSPB, and Trust Bank’s membership with the Federal Reserve.

(3)Represents receivables from contracts with customers within the scope of ASC 606.

Capitalized contract costs

Capitalized contract costs relate to incremental costs of obtaining a contract with a customer, including sales commissions paid to employees for obtaining contracts with clients, and are presented in the table above. These costs are amortized to expense on a straight-line basis over a period that is consistent with how the related revenue is recognized. Amortization expense related to capitalized contract costs was $111 million, $97 million, and $85 million during the years ended December 31, 2025, 2024, and 2023, respectively, which was recorded in compensation and benefits expense on the consolidated statements of income.

Contract assets

Contract assets relate to the buy down of fixed-rate obligation amounts pursuant to the 2023 IDA agreement, and are presented in the table above. These assets are amortized on a straight-line basis over the remaining contractual term as a reduction to bank deposit account fee revenue. For additional discussion of the 2023 IDA agreement, see Note 15.

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