SCHWAB CHARLES CORP
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
SCHW$91.49-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0000316709-25-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0000316709-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 247 previous paragraphs and 244 current paragraphs.
131 unchanged; 72 reworded; 37 added; 37 removed; 7 previous and 4 current paragraphs rearranged.
Tables are not compared: 25 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
•Industry and competitive trends including artificial intelligence, digital assets, private company securities and other alternative investments;
Current report
•The Company’s rollout of trading in select cryptocurrencies (see Overview in Part I – Item 2);
Current report
•The Company’s development and deployment of artificial intelligence capabilities;
Current report
•Opportunities for deepening and monetizing client relationships;
Current report
•SEC transaction fee increases (see Results of Operations in Part I – Item 2);
Current report
•The impact of new and emerging technologies;
Current report
In the first quarter of 2026, Schwab supported our clients through market volatility and heightened uncertainty. Equity markets retreated in March, giving up early-quarter gains, as the Standard and Poor’s® 500 Index and NASDAQ Composite® finished the first quarter of 2026 down 5% and 7%, respectively. Amid inflationary pressures and geopolitical uncertainty, the Federal Reserve kept the target federal funds overnight rate unchanged in the first quarter.
Current report
Strong client asset gathering partially offset equity market declines, as total client assets ended the first quarter of the year at $11.77 trillion, down 1% from year-end 2025. Core net new assets rose 2% year-over-year in the first quarter of 2026 to $140.0 billion, which included a $17.5 billion outflow from a planned mutual fund clearing client deconversion. Clients opened 1.3 million new brokerage accounts in the first quarter of 2026, up 10% from the prior-year first quarter, and active brokerage accounts were 39.1 million at March 31, 2026, up 6% year-over-year. Clients were highly engaged in the markets to begin the year, as clients’ daily average trades (DATs) rose significantly year-over-year to 9.9 million for the first quarter of 2026.
Current report
Schwab delivered strong financial performance in the first quarter of 2026, reflecting strong asset gathering and client engagement, sustained client demand for Schwab’s lending offerings and managed investing solutions, and lower wholesale bank borrowings. Net income was $2.5 billion in the first quarter of 2026, increasing 30% year-over-year. Diluted earnings per
Current report
4 - common share (EPS) and adjusted diluted EPS(1) for the first quarter of 2026 totaled $1.37 and $1.43, respectively, both rising 38% from the first quarter of the prior year.
Current report
Total expenses excluding interest in the first quarter of 2026 were $3.3 billion, and adjusted total expenses(1) were $3.2 billion, both higher by 5% year-over-year, reflecting strong client engagement and ongoing investments to support our key strategic initiatives including organic growth, new products, and ongoing scale and efficiency efforts. The increases were primarily attributable to higher compensation and benefits expense due to annual merit increases and growth in headcount, including financial consultants and wealth advisors to support our expanding client base, and higher professional services expense resulting from overall growth in the business, partially offset by lower industry fees within other expense.
Current report
Schwab continued to support our clients’ evolving needs through effective balance sheet management, including supporting sustained demand for margin and bank lending. Total balance sheet assets were $493.3 billion at the end of the first quarter of 2026, increasing slightly from year-end 2025. Client demand for margin loans continued to be strong to start 2026, with margin loans ending the first quarter at $126.7 billion, up 13% from year-end 2025. This growth reflected ongoing demand for margin lending as a result of engagement in the markets and long/short strategies implemented by RIA clients, and was supported in part by wholesale funding. Bank loans totaled $60.9 billion at the end of the first quarter, rising 5% from year-end 2025 due to growth in pledged asset lines (PALs) and First Mortgages.
Current report
During the first quarter, the Company repurchased $2.4 billion in common stock, and also increased its common dividend by 19% to $.32 per share. Inclusive of both returns of capital and organic capital generation during the quarter from earnings, the Company’s consolidated Tier 1 Leverage Ratio at March 31, 2026 was 8.9%, down from 9.3% at year-end 2025. Our consolidated adjusted Tier 1 Leverage Ratio(1) was 6.8% at March 31, down from 7.1% at year-end 2025, and within our long-term operating objective of 6.75% to 7.00%. In addition, subsequent to quarter-end, the Company issued $1.5 billion of Series L preferred stock on April 22, 2026.
Current report
In April 2026, Schwab announced a spot crypto trading offer that will be offered to retail clients through a phased rollout. The Company plans to provide clients direct access to bitcoin and ethereum trading, combined with educational content and professional support with investment experience. Schwab’s subsidiary, Charles Schwab Premier Bank, SSB (CSPB), will serve as the custodian of clients’ digital assets, responsible for safekeeping and record-keeping. CSPB has engaged Paxos Trust Company, NA, a regulated blockchain infrastructure provider, to deliver sub-custody and trade execution services. Over time, CSPB plans to add additional cryptocurrencies to the platform, as well as transfer capabilities for in-kind deposits and withdrawals, allowing clients with existing digital asset investments to bring them to the Schwab platform alongside their other investments. See Part I – Item 1A – Risk Factors in the 2025 10-K for additional information.
Current report
On March 2, 2026, Schwab completed its acquisition of Forge Global Holdings, Inc. (Forge), an operator of a leading private market platform and trading marketplace, for $636 million of cash and other consideration. Integration work is underway, and we anticipate that incorporating Forge’s private company investment capabilities will enhance our ability to meet the evolving needs of investors across our growing client base. Our condensed consolidated financial statements include the financial condition and results of operations for Forge beginning on March 2, 2026. See also Item 1 – Note 3.
Current report
In March 2026, the U.S. federal banking agencies issued a notice of proposed rulemaking regarding amendments to the regulatory capital rules. The March 2026 proposal would replace the banking agencies’ 2023 proposal, and, among other things would require us to include AOCI in regulatory capital under a revised standardized approach, subject to a five-year phase-in period. The comment period for the proposed rules ends on June 18, 2026. The Company’s capital management for consolidated CSC and our banking subsidiaries incorporates measures that are inclusive of AOCI, and we do not anticipate that the proposed rules will have a material impact to the Company’s business, financial condition, or results of operations.
Current report
(1)Beginning in the first quarter of 2026, alternative investments revenue was moved from other asset management and administration fees to mutual funds, ETFs, CTFs, and alternatives. Prior period amounts have been reclassified to reflect this change.
Current report
Schwab’s average interest-earning assets increased 2% in the first quarter of 2026 from the same period in 2025, reflecting growth in margin lending, which was supported by higher payables to brokerage clients and payables to brokers, dealers, and clearing organizations, as well as increases in bank lending and cash and investments segregated, partially offset by lower balances of AFS and HTM securities. Client demand for margin and bank lending remained strong in the first quarter of 2026, reflecting client engagement and growth in long/short strategies implemented by RIA clients. Margin loan balances ended the first quarter at $126.7 billion, increasing 52% from March 31, 2025, including $21.3 billion related to long/short strategies implemented by RIA clients. Total bank loans finished the first quarter of 2026 at $60.9 billion, higher by 29% from March 31, 2025, due primarily to growth in PALs and First Mortgages.
Current report
Client cash activity during the first quarter of 2026 reflected seasonality, organic growth from asset gathering, and client asset allocation decisions against a backdrop of increased market volatility. Bank sweep deposits and payables to brokerage clients increased by a total of $42.1 billion, or 14%, from March 31, 2025 to the end of the first quarter of 2026.
Current report
(1)Beginning in the fourth quarter of 2025, average balances of client margin loans and short credits related to certain client long/short strategies from which the Company earns a fixed net yield are excluded from interest-earning assets and funding sources. Prior period amounts and average yields have been reclassified and recalculated to reflect this change. Average margin loans related to these client strategies totaled $14.1 billion and $235 million for the three months ended March 31, 2026 and 2025, respectively. Average short credits related to these client strategies totaled $14.4 billion and $237 million for the three months ended March 31, 2026 and 2025, respectively. Interest revenue and expense related to these client strategies are presented in other interest revenue and other interest expense, respectively.
Current report
Net interest revenue increased $438 million, or 16%, in the first quarter of 2026, compared to the same period in 2025. This increase was primarily due to growth in margin and bank lending, lower aggregate balances of wholesale funding, and lower average rates paid on funding sources, partially offset by lower yields on floating-rate assets due to lower market rates and a decrease in AFS and HTM securities.
Current report
(1)Beginning in the first quarter of 2026, alternative investments and related revenue were moved from other balance-based fees to other third-party mutual funds, ETFs, and alternatives. Prior period amounts and average fees have been reclassified and recalculated to reflect this change.
Current report
Trading revenue increased $181 million, or 20%, in the first quarter of 2026 compared to the same period in 2025, driven by an increase in order flow revenue, which resulted from market volatility and higher client options trading volume, as well as changes in the mix of equity securities trading. Commissions revenue increased primarily due to higher client trading volume.
Current report
Bank deposit account fees increased $50 million, or 20%, in the first quarter of 2026 compared to the same period in 2025, primarily due to an increase in average net yield and a decrease in the amount paid to clients as a result of lower interest rates. This was partially offset by lower average BDA balances, which reduced the base on which bank deposit account fees are
Current report
Other revenue decreased $15 million, or 7%, in the first quarter of 2026 compared to the same period in 2025, primarily due to lower industry fees. This decrease was partially offset by higher other service fees and gains recognized on certain equity investments in the first quarter of 2026, and by losses recognized in the first quarter of 2025 on sales of AFS securities. Industry fees decreased primarily due to lower SEC fee rates in effect during the first quarter of 2026 compared to the same period in 2025.
Current report
At the end of February 2026, the SEC announced that effective April 4, 2026, it would increase the fee rate applicable to most securities transactions from zero, which has been in effect since May 14, 2025. This change will result in higher industry fees in other revenue and a corresponding increase in other expense after the effective date, resulting in no impact to net income.
Current report
Regulatory fees and assessments decreased in the first quarter of 2026 compared to the same period in 2025, primarily due to lower Federal Deposit Insurance Corporation (FDIC) deposit insurance assessments driven by lower assessment rates due to a decrease in brokered CDs.
Current report
Other expense decreased in the first quarter of 2026 compared to the same period in 2025, primarily as a result of lower industry fees due to lower average fee rates stemming from the SEC decreasing the fee rate applicable to most securities transactions to zero effective May 14, 2025. The decrease was partially offset by certain higher costs resulting from growth of the business and increased trading volume. At the end of February 2026, the SEC announced that effective April 4, 2026, it would increase the fee rate applicable to most securities transactions from zero. This change will result in higher industry fees in other expense and a corresponding increase in other revenue after the effective date, resulting in no impact to net income.
Current report
Capital expenditures were $173 million and $156 million in the first quarter of 2026 and 2025, respectively. Capital expenditures increased 11% in the first quarter of 2026 compared to the same period in 2025, primarily due to leasehold improvements and telecommunications and information technology equipment related to certain office expansions, and higher investment in internally developed software. This was partially offset by lower investment in purchased software.
Current report
14 - lower exchange quotation services expenses. Regulatory fees and assessments decreased for both segments, primarily due to lower FDIC assessments driven by lower assessment rates.
Current report
(1) The duration of margin loans exclusive of derivatives was less than 0.1 years at both March 31, 2026 and 2025.
Current report
(3) Repurchase agreements outstanding as of March 31, 2026 at CS&Co maintain continuous contractual maturities of 35-60 days and are included in payables to brokers, dealers, and clearing organizations on the condensed consolidated balance sheets.
Current report
CSB issues brokered CDs as a source of funding. As of March 31, 2026, there were $2.4 billion brokered CDs issued by CSB outstanding with maturities ranging from April 2026 to June 2026 and a weighted-average interest of 3.77%.
Current report
The Company’s consolidated Tier 1 Leverage Ratio was 8.9% at March 31, 2026, down from 9.3% at year-end 2025. This decrease reflects returns of excess capital and higher total Company assets, partially offset by organic growth from net income. CSB’s Tier 1 Leverage Ratio decreased from 11.1% at year-end 2025, ending the first quarter of 2026 at 10.9%, primarily as a result of dividends to CSC, partially offset by lower total assets as well as net income during the quarter.
Current report
As of March 31, 2026, our adjusted Tier 1 Leverage Ratio (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results) was 6.8% for CSC (consolidated), decreasing from 7.1% as of year-end 2025 as a result of returns of excess capital, partially offset by net income. CSB’s adjusted Tier 1 Leverage Ratio (see Non-GAAP Financial Measures) was 7.5%, down slightly from 7.6% as of year-end 2025 due to dividends to CSC, largely offset by net income.
Current report
(1) Dividends are paid quarterly.
Current report
During the three months ended March 31, 2026, CSC repurchased 24.3 million shares of its common stock under its $20 billion authorization for $2.4 billion. As of March 31, 2026, approximately $12.1 billion remained on the $20 billion authorization.
Removed paragraphs (37)
Previous report
•Management’s ability to close the acquisition of Forge on the anticipated terms and timing; required regulatory approvals and approval by Forge’s stockholders; disruptions to Forge’s business as a result of the announcement and pendency of the acquisition; and the ability and timeframe to integrate the business and realize the anticipated benefits;
Previous report
The first nine months of 2025 continued to present a changing landscape for investors. Though macroeconomic uncertainty continued, during the third quarter of 2025, investor sentiment further improved and equity markets reached record levels. The Standard and Poor’s® 500 Index rose 8% and 14% during the third quarter and first nine months of 2025, respectively, and the NASDAQ Composite® increased 11% and 17% during the third quarter and year-to-date periods. The Federal Reserve reduced the target federal funds overnight rate 25 basis points in September, representing the first such rate cut since December 2024.
Previous report
Schwab saw strong client asset gathering, growth in new client accounts, and sustained client engagement continue through the first nine months of 2025. Core net new assets totaled $137.5 billion and $355.5 billion in the third quarter and first nine months of the year, respectively, increasing 44% and 41% from the comparative prior-year periods. Clients opened 1.1 million and 3.4 million new brokerage accounts in the third quarter and first nine months of the year, respectively, up 18% and 12% from the respective periods in 2024, and active brokerage accounts reached 38.0 million at the end of the third quarter of 2025, up 6% year-over-year. Though clients’ daily average trades (DATs) in third quarter of 2025 declined slightly from the second quarter, client engagement with the markets remained strong. DATs were 7.4 million and 7.5 million for the third quarter and first nine months of 2025, respectively, up 30% and 31% from the same periods in 2024.
Previous report
Schwab’s financial performance in the third quarter and first nine months of 2025 reflected strong asset gathering, sustained client engagement and equity market appreciation, continued demand for Schwab’s lending offerings and managed investing solutions, as well as reduction of higher-cost bank supplemental funding and balanced expense management. Net income was $2.4 billion and $6.4 billion in the third quarter and first nine months of 2025, respectively, growing 67% and 56% from the same prior-year periods. Diluted earnings per common share (EPS) was $1.26 and $3.33 for the third quarter and first nine months of 2025, respectively, rising 77% and 62% from the same periods in 2024. Adjusted diluted EPS(1) was $1.31 and $3.49 for the third quarter and first nine months of 2025, respectively, increasing 70% and 55% from the same periods in 2024.
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Total expenses excluding interest were $3.1 billion and $9.3 billion in the third quarter and first nine months of 2025, respectively, increasing 4% and 5% from the same periods in 2024. For the third quarter and first nine months of 2025, adjusted total expenses(1) were $3.0 billion and $8.9 billion, respectively, up 5% and 6% from the comparable prior-year periods. The increases in total expenses excluding interest and adjusted total expenses(1) reflect ongoing investments to support growth of the business and enhance client-serving capabilities while driving incremental efficiencies across the Company. The increases were primarily attributable to higher compensation and benefits expense and higher professional services expense, partially offset by lower regulatory fees and assessments, and for the quarter-to-date period, lower industry fees within other expense.
Previous report
In the first nine months of 2025, Schwab supported strong client demand in margin and bank lending, while significantly reducing bank supplemental funding. Balance sheet assets totaled $465.3 billion as of September 30, 2025, up 1% during the third quarter and down 3% from year-end 2024. Principal and interest from our AFS and HTM securities portfolio along with normal client cash activity allowed for further reduction in bank supplemental funding, which includes brokered CDs, Federal Home Loan Bank (FHLB) borrowings, and borrowings under repurchase agreements at our banks. In September, we transferred $3.0 billion of BDA balances to our balance sheet (see Item 1 – Note 10) to accelerate the paydown of bank supplemental borrowings. In the first nine months of 2025, Schwab reduced the outstanding balance of total bank supplemental funding by $35.1 billion, or 70%, including a reduction of $12.9 billion during the third quarter. As of September 30, 2025, remaining balances totaled $14.8 billion, which is within a range generally consistent with our diversified funding strategy. Client margin loans increased during the third quarter to $97.2 billion at September 30, up 16% from year-end 2024, reflecting strong client demand amid rising equity markets and improved investor sentiment. Bank loans totaled $53.6 billion as of the end of the third quarter, increasing 18% in the first nine months of 2025 due to growth of pledged asset lines (PALs) and First Mortgages.
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The Company also returned meaningful excess capital in the first nine months of 2025. During the third quarter, the Company repurchased $2.7 billion in common stock, bringing total year-to-date common stock repurchases to $4.6 billion. In addition, the Company increased its common dividend by 8% to $.27 per share in the first quarter of the year, and redeemed its Series G preferred stock for $2.5 billion in the second quarter. Inclusive of these capital actions and organic capital generation from net
Previous report
5 - income in the first nine months of the year, the Company’s consolidated Tier 1 Leverage Ratio was 9.7% at September 30, 2025, down slightly from year-end 2024. Our consolidated adjusted Tier 1 Leverage Ratio(1) increased to 7.3%, driven by net income in the first nine months of the 2025 and improvement in AOCI.
Previous report
Subsequent Events
Previous report
On November 6, 2025, Schwab announced that it has entered into a definitive agreement to acquire Forge Global Holdings, Inc. (Forge), operator of a leading private market platform and trading marketplace, in a transaction valued at approximately $660 million. The Company anticipates that incorporating Forge’s private markets capabilities will enhance Schwab’s ability to meet the evolving needs of investors across our growing client base. The transaction is expected to close in the first half of 2026, subject to customary closing conditions, including approval by Forge’s stockholders and regulatory approvals.
Previous report
On June 12, 2025, the SEC withdrew certain notices of proposed rulemaking issued between March 2022 and November 2023, including the SEC’s December 2022 equity market structure rule proposals, “Order Competition Rule” and “Regulation Best Execution”, previously referenced in Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K.
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On March 3, 2025, the Federal Deposit Insurance Corporation (FDIC) withdrew certain notices of proposed rulemaking issued in 2023 and 2024, including the July 2024 proposal related to the brokered deposits framework, previously referenced in Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K.
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•The FDIC’s November 2023 and February 2024 special assessments on banks, including the Company’s banking subsidiaries, to recover losses incurred by the Deposit Insurance Fund to protect uninsured depositors due to the March 2023 closures of two banks;
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•The U.S. federal banking agencies’ July 2023 notice of proposed rulemaking with amendments to the regulatory capital rules, which, among other things, would require us to include AOCI in regulatory capital and to calculate our risk-weighted assets using a revised risk-based approach, a component of which is based on operational risk.
Previous report
Schwab’s average interest-earning assets for the third quarter and first nine months of 2025 were relatively consistent in aggregate with the same periods in 2024, while the mix of interest-earning assets shifted year-over-year to reflect higher margin and bank lending, higher cash and investments segregated, and lower balances of AFS and HTM securities. Client demand for margin and bank lending continued to be strong in the first nine months of 2025, reflecting positive equity market performance and client engagement, as margin loan balances rebounded following market volatility in late March and early April and rose further in the third quarter. Margin loan balances ended the third quarter at $97.2 billion, increasing 16% from both the second quarter of 2025 and year-end 2024, and up 33% from September 30, 2024. Total bank loans increased 6% and 18% in the third quarter and first nine months of 2025, respectively, finishing the third quarter at $53.6 billion, higher by 24% from September 30, 2024, due primarily to growth in PALs and First Mortgages.
Previous report
Client cash activity during the first nine months of 2025 reflected normal cash behavior, inclusive of organic growth, engagement in equity markets, and seasonality. Bank sweep deposits and payables to brokerage clients increased by a total of $15.0 billion, or 5%, during the third quarter of 2025, $12.5 billion, or 4%, during the first nine months of 2025, and $42.6 billion, or 15%, from September 30, 2024 to September 30, 2025. Principal and interest payments on AFS and HTM securities, as well as September transfers of $3.0 billion of BDA balances to our balance sheet (see Results of Operations – Bank Deposit Account Fees and Item 1 – Note 10) supported paydowns in bank supplemental funding of $12.9 billion, or 47%, during the third quarter of 2025, and $35.1 billion, or 70%, during the first nine months of 2025. Since September 30, 2024, the Company has reduced bank supplemental funding by $50.0 billion, or 77%.
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(2)Beginning in the fourth quarter of 2024, payables to brokers, dealers, and clearing organizations is presented separately from non-interest-bearing funding sources and included in total interest-bearing liabilities. This line item includes securities loaned and related interest expense. Prior period amounts have been reclassified to reflect this change.
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Net interest revenue increased $828 million, or 37%, and $2.0 billion, or 30%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. These increases were primarily due to lower balances of bank supplemental funding, lower average rates paid on funding sources, growth in margin and bank lending, and increases in securities lending, partially offset by lower yields on floating-rate assets due to lower market rates. Average interest-earning assets remained relatively flat, increasing slightly in the third quarter of 2025, and decreasing slightly in the first nine months of 2025, compared to the same periods in 2024. Both the third quarter and first nine months of 2025 saw higher balances of cash and investments segregated, growth in margin lending supported by higher payables to brokerage clients, and an increase in bank loans compared to the same periods in 2024. The decrease in average interest-earning assets during the first nine months of 2025 was due primarily to lower average balances in AFS and HTM securities, as cash inflows from investment securities were used to pay down bank supplemental funding.
Previous report
Schwab’s diversified funding strategy includes the use of wholesale funding. With the paydowns of bank supplemental funding in the first nine months of 2025, the outstanding balance of $14.8 billion is within a range generally consistent with our diversified funding strategy. Our use and the financial impacts of wholesale funding are dependent on a number of market and client activity factors. See also Risk Management – Liquidity Risk, Capital Management, Item 1 – Notes 8, 9, and 12, and Part II – Item 7 – Results of Operations – Net Interest Revenue in the 2024 Form 10-K for additional information on these and other funding sources.
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(4)The first nine months of 2025 include transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource® and other NTF funds.
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(1) Includes $63.3 billion of transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource® and other NTF Funds for the nine months ended September 30, 2025.
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Trading revenue increased $198 million, or 25%, and $464 million, or 19%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, driven by an increase in order flow and commissions revenue reflecting higher volume.
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Other revenue decreased $30 million, or 15%, in the third quarter of 2025 compared to the same period in 2024, primarily due to lower industry fees, partially offset by higher other service fees. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024. This change resulted in lower industry fees in the third quarter of 2025 compared to the same period in 2024. Other revenue increased $62 million, or 11%, in the first nine months of 2025 compared to the same period in 2024, primarily due to a gain from the sale of an equity investment, higher other service fees, and higher industry fees. Industry fees increased primarily due to higher DATs, partially offset by the decrease in SEC fee rates.
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Regulatory fees and assessments decreased in the third quarter and first nine months of 2025 compared to the same periods in 2024. The decrease in the third quarter of 2025 was primarily due to a $13 million reduction in the FDIC special assessment coupled with lower FDIC deposit insurance assessments. The decrease in the first nine months of 2025 was primarily due to a $30 million incremental FDIC special assessment in the first nine months of 2024 and the $13 million reduction in the special assessment in the third quarter of 2025, coupled with lower FDIC deposit insurance assessments reflecting a decrease in brokered CDs and a lower assessment base.
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Other expense decreased in the third quarter and increased in the first nine months of 2025 compared to the same periods in 2024. The decrease in the third quarter of 2025 was primarily driven by lower industry fees, partially offset by certain higher costs in 2025 related to growth of the business and increased client trading volume. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024, resulting in lower industry fees in the third quarter of 2025 compared to the same period in 2024. The increase in the first nine months of 2025 from the same period in 2024 was primarily due to higher industry fees in the first half of the year and certain higher costs resulting from growth of the business and increased trading volume. The increase was also partially offset by a charge recognized in the second quarter of 2024 for the SEC’s industry-wide review of off-channel communications. Other expense included restructuring costs of $13 million in the first nine months of 2024.
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Capital expenditures were $152 million and $135 million in the third quarter of 2025 and 2024, respectively, and $444 million and $349 million in the first nine months of 2025 and 2024, respectively. Capital expenditures increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to higher investment in purchased software and telecommunications and other equipment, partially offset by lower internally developed software for the year-to-date period. The completion of certain construction projects resulted in a decrease of building-related capital expenditures during the third quarter of 2025. As a result of higher year-to-date total net revenues and lower spending, we now estimate capital expenditures for full-year 2025 will be on the lower end of our previously disclosed expected range of approximately 3-5% of total net revenues.
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(1)In connection with certain changes in Schwab’s organizational management structure, in the fourth quarter of 2024, the Retirement Business Services business unit was transferred from the Advisor Services segment to the Investor Services segment. Accordingly, amounts related to the Retirement Business Services business unit are included within Investor Services for the third quarter and nine months ended September 30, 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.
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In addition, our banking subsidiaries are counterparties to the Standing Repo Facility with the Federal Reserve Bank of New York; other than de minimis tests performed to satisfy the Federal Reserve Bank of New York’s testing requirements, this facility was not used during the first nine months of 2025 and there were no amounts outstanding at September 30, 2025. CSC maintains standing bilateral repurchase agreements with external banks. Other than de minimis tests, these facilities were not used during the first nine months of 2025 and there were no amounts outstanding under these facilities at September 30, 2025.
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CSB issues brokered CDs as a supplemental funding source. The following table provides information about brokered CDs issued by CSB and outstanding as of September 30, 2025:
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On June 2, 2025, the Company redeemed all of the 24,580 outstanding shares of its fixed-rate reset non-cumulative perpetual preferred stock, Series G, and the corresponding 2,457,964 depositary shares. The depositary shares were redeemed at a redemption price of $1,000 per depositary share for a total of $2.5 billion.
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The Company’s consolidated Tier 1 Leverage Ratio was 9.7% at September 30, 2025, down slightly from 9.8% at June 30, 2025 and 9.9% at year-end 2024. These changes reflect returns of excess capital, partially offset by organic growth from net income and lower average assets in the third quarter and first nine months of 2025. The Company repurchased $2.7 billion of common stock in the third quarter and $4.6 billion total voting and nonvoting common stock in the first nine months of 2025. The Company also increased its common dividend by 8% to $.27 per share in the first quarter and redeemed its Series G preferred stock for $2.5 billion in the second quarter of 2025. CSB’s Tier 1 Leverage Ratio increased from 12.2% at June 30, 2025 and 11.6% at year-end 2024, ending the third quarter of 2025 at 12.4%, primarily as a result of lower total assets as well as net income during the third quarter and first nine months of 2025.
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The Company continues to manage its capital as described above and in Part II – Item 7 – Capital Management of the 2024 Form 10-K. In evaluating returns of excess capital to stockholders, we will consider the amount of bank supplemental funding outstanding, and may choose to utilize the liquidity we would otherwise use for capital returns to repay outstanding bank supplemental funding balances.
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(1)The Company had no nonvoting common stock outstanding as of the record date for the Company’s 2025 dividends and accordingly, no dividends were paid on nonvoting common stock during the nine months ended September 30, 2025.
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(2) Dividends paid quarterly.
Previous report
CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025. These shares were purchased under CSC’s $15.0 billion share repurchase authorization. On July 24, 2025, CSC publicly announced that its Board of Directors terminated the $15.0 billion share repurchase authorization and replaced it with a new authorization to repurchase up to $20.0 billion of common stock. The new share repurchase authorization does not have an expiration date. During the three months ended September 30, 2025, CSC repurchased 28.9 million shares of its common stock under the new authorization for $2.7 billion. As of September 30, 2025, approximately $17.3 billion remained on the new authorization.
Previous report
There were no repurchases of CSC’s common stock during the three and nine months ended September 30, 2024.
Previous report
(2) There were no restructuring costs for the three and nine months ended September 30, 2025 and three months ended September 30, 2024. Restructuring costs for the nine months ended September 30, 2024 reflect a benefit due to a change in estimate of $34 million in compensation and benefits, offset by $3 million of occupancy and equipment expense and $13 million of other expense.
Reworded paragraphs (72)
Previous wording
Management estimates that investable wealth in the United States (U.S.) (consisting of assets in defined contribution, retail wealth management and brokerage, and registered investment advisor channels, along with bank deposits) currently exceeds $75 trillion, which means the Company’s $11.59 trillion in client assets leaves substantial opportunity for growth. Our strategy is based on the principle that developing trusted relationships will translate into more assets from both new and existing clients, ultimately driving more revenue, and along with expense discipline and thoughtful capital management, will generate earnings growth and build long-term stockholder value.
Current wording
Management estimates that investable wealth in the United States (U.S.) (consisting of assets in defined contribution, retail wealth management and brokerage, and registered investment advisor channels, along with bank deposits) currently exceeds $85 trillion, which means the Company’s $11.77 trillion in client assets leaves substantial opportunity for growth. Our strategy is based on the principle that developing trusted relationships will translate into more assets from both new and existing clients, ultimately driving more revenue, and along with expense discipline and thoughtful capital management, will generate earnings growth and build long-term stockholder value.
Previous wording
In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “prioritize,” “will,” “may,” “estimate,” “appear,” “could,” “would,” “maintain,” “continue,” “seek,” and other similar expressions. In addition, any statements that refer to expectations, strategy, objectives, projections, or other characterizations of future events or circumstances are forward-looking statements.
Current wording
In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “estimate,” “appear,” “could,” “would,” “aim,” “maintain,” “continue,” “seek,” and other similar expressions. In addition, any statements that refer to expectations, strategy, objectives, projections, or other characterizations of future events or circumstances are forward-looking statements.
Previous wording
These forward-looking statements, which reflect management’s beliefs, objectives, and expectations as of the date hereof, are estimates based on the best judgment of Schwab’s senior management. These statements relate to, among other things:
Current wording
These forward-looking statements, which reflect management’s expectations and objectives as of the date hereof, are based on the best judgment of Schwab’s senior management. These statements relate to, among other things:
Previous wording
•Wholesale funding, funding strategy, and expectations for paydown of bank supplemental funding (see Results of Operations in Part I – Item 2, and Liquidity Risk in Part I – Item 2);
Current wording
•Wholesale funding and funding strategy (see Results of Operations in Part I – Item 2, and Liquidity Risk in Part I – Item 2);
Previous wording
•Funding sources and uses of liquidity (see Liquidity Risk in Part I – Item 2);
Current wording
•Sources and uses of liquidity (see Liquidity Risk in Part I – Item 2);
Previous wording
•Capital management; long-term operating objective; and uses of capital and return of excess capital to stockholders (see Capital Management in Part I – Item 2 and Commitments and Contingencies in Part I – Item 1 – Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 10);
Current wording
•Capital management; long-term operating objective; and uses of capital and return of excess capital to stockholders (see Capital Management in Part I – Item 2 and Commitments and Contingencies in Item 1 – Note 11);
Previous wording
•The likelihood of indemnification and guarantee payment obligations and clients failing to fulfill contractual obligations (see Commitments and Contingencies in Item 1 – Note 10); and
Current wording
•The likelihood of indemnification and guarantee payment obligations and clients failing to fulfill contractual obligations (see Commitments and Contingencies in Item 1 – Note 11, and Financial Instruments Subject to Off-Balance Sheet Credit Risk in Item 1 – Note 13); and
Previous wording
Achievement of the expressed beliefs, objectives, and expectations described in these statements is subject to certain risks and uncertainties that could cause actual results to differ materially from the expressed beliefs, objectives, and expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents incorporated by reference, as of the date of those documents.
Current wording
Achievement of these expectations and objectives is subject to certain risks and uncertainties that could cause actual results to differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents incorporated by reference, as of the date of those documents.
Previous wording
•Our ability to monetize client assets;
Current wording
•Our ability to monetize client assets through value-added products and services;
Previous wording
Management focuses on several client activity and financial metrics in evaluating Schwab’s financial position and operating performance. Results for the third quarter and first nine months of 2025 and 2024 are as follows:
Current wording
Management focuses on several client activity and financial metrics in evaluating Schwab’s financial position and operating performance. Results for the first quarter of 2026 and 2025 are as follows:
Previous wording
(1) The third quarter and first nine months of 2025 include net outflows of $3.1 billion and $15.1 billion, respectively, from off-platform brokered certificates of deposit (CDs) issued by CSB. The third quarter and first nine months of 2024 include net outflows of $4.4 billion and $9.1 billion, respectively, from off-platform brokered CDs issued by CSB and an outflow of $0.1 billion from an international relationship. The first nine months of 2024 also includes an inflow of $10.3 billion from a mutual fund clearing services client.
Current wording
(1) The first quarter of 2026 and 2025 include net outflows of $0.1 billion and $5.3 billion, respectively, from off-platform brokered certificates of deposit (CDs) issued by CSB.
Previous wording
Total net revenues grew 27% year-over-year in the third quarter of 2025 to reach $6.1 billion, resulting in a year-to-date total of $17.6 billion, an increase of 23% from the same period in 2024. Net interest revenue was $3.1 billion and $8.6 billion in the third quarter and first nine months of 2025, respectively, up 37% and 30% from the same periods in 2024, primarily due to lower interest expense from reductions in bank supplemental funding and lower rates on funding sources, as well as growth in bank and margin lending and higher cash and investments segregated, which more than offset lower yields on interest-earning assets due to lower market rates. Asset management and administration fees were $1.7 billion and $4.8 billion in the third quarter and first nine months of 2025, respectively, increasing 13% from both prior-year periods, due primarily to continued growth in money market funds and also higher client asset balances, reflecting asset gathering, equity market appreciation, and growth in managed investing solutions. Trading revenue was $995 million and $2.9 billion in the third quarter and first nine months of 2025, respectively, higher by 25% and 19% from comparable prior-year periods, due primarily to higher trading volume. Bank deposit account fee revenue rose to $247 million and $739 million in the third quarter and first nine months of the year, respectively, up 63% and 51% from the same periods in 2024 due primarily to higher net yields, partially offset by lower bank deposit account balances (BDA balances).
Current wording
Total net revenues rose 16% year-over-year to $6.5 billion in the first quarter of 2026. Net interest revenue totaled $3.1 billion in the first quarter of 2026, rising 16% from the prior-year’s first quarter, which reflected growth in margin and bank lending as well as lower aggregate wholesale borrowings, partially offset by lower yields on floating-rate assets. Asset management and administration fees were $1.8 billion in the first quarter of 2026, an increase of 15% year-over-year, due primarily to higher average client asset balances, reflecting asset gathering, year-over-year market appreciation, and growth in managed investing solutions, money market funds, and other proprietary fund products. Trading revenue grew 20% year-over-year to $1.1 billion in the first quarter of 2026, reflecting higher order flow revenue and commissions amid market volatility and higher trading volume. Bank deposit account fee revenue totaled $295 million in the first quarter of 2026, higher by 20% from the prior-year period, due primarily to higher net yields, partially offset by lower average bank deposit account balances (BDA balances).
Previous wording
Return on average common stockholders’ equity was 21% and 20% for the third quarter and first nine months of 2025, respectively, up from 14% in both comparable prior-year periods. These increases were due to higher net income, which more than offset higher average common stockholders’ equity. Return on tangible common equity(1) (ROTCE) was 38% and 37% for the third quarter and first nine months of 2025, respectively, up from 31% and 33% for the same periods in the prior year, as growth in adjusted net income available to common stockholders(1) more than offset growth in average common stockholders’ equity. Average common stockholders’ equity increased primarily as a result of growth in retained earnings and improved average accumulated other comprehensive income (AOCI), partially offset by higher treasury stock due to common stock repurchases in 2025. The improvement in average AOCI was due to lower unrealized losses on available for sale (AFS) investment securities and securities previously transferred from AFS to held to maturity (HTM).
Current wording
Return on average common stockholders’ equity was 23% in the first quarter of 2026, up from 18% in the first quarter of the prior year, primarily as a result of growth in net income, which more than offset higher average common stockholders’ equity. Return on tangible common equity(1) was 40% in the first quarter of 2026, increasing from 35% in the first quarter of 2025, as growth in adjusted net income available to common stockholders(1) more than offset growth in average common stockholders’ equity. Average common stockholders’ equity increased as a result of growth in retained earnings and improved average accumulated other comprehensive income (AOCI), partially offset by higher treasury stock due to repurchases of common stock in 2025 and the first quarter of 2026. The improvement in average AOCI resulted from lower unrealized losses on available for sale (AFS) investment securities, driven by lower market interest rates and lower investment holdings in 2026, and from amortization of losses on securities previously transferred from AFS to held to maturity (HTM).
Previous wording
•The acquisition of Forge Global Holdings, Inc. (Forge) and our expectation that incorporating Forge’s private markets capabilities will enhance Schwab’s ability to meet the evolving needs of investors across our growing client base (see Subsequent Events in Overview and Item 1 – Note 19);
Current wording
Acquisition of Forge Global Holdings, Inc.
Previous wording
•The U.S. Department of Labor’s April 2024 final rule significantly broadening the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974 and related litigation;
Current wording
In March 2026, federal district courts reached final resolutions on pending litigation and formally vacated the U.S. Department of Labor’s April 2024 final rule to broaden the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974. Following the courts’ ruling, the U.S. Department of Labor’s Employee Benefits Security Administration removed the rule from the Code of Federal Regulations.
Previous wording
Refer to Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K for information regarding pending regulatory matters including:
Current wording
Refer to Part II – Item 7 – Current Regulatory and Other Developments in our 2025 Form 10-K for information regarding pending regulatory matters, including the U.S. federal banking agencies’ August 2023 proposed rulemaking on long-term debt requirements for certain large banking organizations.
Previous wording
Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates and spreads at the time of origination or purchase, changes in interest rates on cash and cash equivalents, floating-rate securities and loans, and changes in prepayment levels for mortgage-backed and other asset-backed securities and loans. Schwab establishes the rates paid on client-related liabilities, and management expects that it will generally adjust the rates paid on these liabilities at some fraction of any movement in short-term rates. Interest expense on long-term debt, FHLB borrowings, other short-term borrowings, and other funding sources is impacted by market interest rates at the time of borrowing and changes in interest rates on floating-rate liabilities. Net interest revenue reflects the impacts of derivatives used to manage interest rate risk. See also Risk Management – Market Risk and Item 1 – Note 11 for additional information.
Current wording
Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates and spreads at the time of origination or purchase, changes in interest rates on cash and cash equivalents, floating-rate securities and loans, and changes in prepayment levels for mortgage-backed and other asset-backed securities and loans. Schwab establishes the rates paid on client-related liabilities, and management expects that it will generally adjust the rates paid on these liabilities at some fraction of any movement in short-term rates. Interest expense on long-term debt, Federal Home Loan Bank (FHLB) borrowings, other short-term borrowings, and other funding sources is impacted by market interest rates at the time of borrowing and changes in interest rates on floating-rate liabilities. Schwab’s use and the financial impacts of the Company’s various funding sources are dependent on a number of market and client activity factors. Net interest revenue reflects the impacts of derivatives used to manage interest rate risk. See also Risk Management – Market Risk and Item 1 – Note 12 for additional information. See also Risk Management – Liquidity Risk, Item 1 – Notes 9, 10 and 13, and Part II – Item 7 – Results of Operations – Net Interest Revenue in the 2025 Form 10-K for additional information on the Company’s funding sources.
Previous wording
The Federal Reserve maintained the upper bound of the target overnight rate at 5.50% through most of 2024 before reducing the rate by 50 basis points during the third quarter of 2024 and another 50 basis points across two cuts during the fourth quarter of 2024. The Federal Reserve maintained the upper bound of the target overnight rate at 4.50% for most of the first nine months of 2025 before reducing the rate by 25 basis points in mid-September to 4.25%.
Current wording
During the first quarter of 2026, the Federal Reserve maintained the upper bound of the target overnight rate at 3.75%. In 2025, the Federal Reserve maintained the upper bound of the target overnight rate at 4.50% before reducing the rate by 25 basis points in the third quarter and an additional 50 basis points across two cuts in the fourth quarter of 2025.
Previous wording
(1)Amounts have been calculated based on amortized cost. Interest revenue on investment securities is presented net of related premium amortization.
Current wording
(2) Amounts have been calculated based on amortized cost. Interest revenue on investment securities is presented net of related premium amortization.
Previous wording
Net interest margin increased to 2.86% and 2.68% in the third quarter and first nine months of 2025, respectively, compared to 2.08% and 2.04% during the same periods in 2024, as reduced balances of bank supplemental funding and lower rates paid on funding sources more than offset lower yields on floating-rate assets due to lower market interest rates.
Current wording
Net interest margin increased to 2.88% in the first quarter of 2026 compared to 2.53% during the same period in 2025, as reduced aggregate use of wholesale funding and lower rates paid on funding sources more than offset lower yields on floating-rate assets due to lower market interest rates.
Previous wording
(1)Average client assets for managed investing solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above.
Current wording
(2)Average client assets for managed investing solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above.
Previous wording
(2)Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
Current wording
(3)Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
Previous wording
Asset management and administration fees increased by $197 million, or 13%, and $566 million, or 13%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. These increases were primarily a result of continued growth in Schwab money market funds amid the ongoing elevated interest rate environment. These increases were also due to growth in fee-based managed investing solutions, Mutual Fund OneSource®, and Schwab equity and bond funds, ETFs, and CTFs, reflecting the Company’s asset gathering and net inflows into managed investing solutions, as well as year-over-year equity market appreciation.
Current wording
Asset management and administration fees increased by $229 million, or 15%, in the first quarter of 2026 compared to the same period in 2025. This increase was primarily a result of continued growth in fee-based managed investing solutions and Schwab money market funds, as well as growth in Mutual Fund OneSource®, and Schwab equity and bond funds, ETFs, and CTFs. This growth was driven primarily by higher client asset balances, reflecting year-over-year equity market appreciation, the Company’s asset gathering, and net flows into managed investing solutions, which more than offset equity market declines experienced in the first quarter of 2026.
Previous wording
The following tables present a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource®and other NTF funds. These funds generated 51% and 50% of the asset management and administration fees earned in the third quarter and first nine months of 2025, respectively, compared with 49% in both the third quarter and first nine months of 2024:
Current wording
The following table presents a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource and other NTF funds. These funds generated 50% of the asset management and administration fees earned in both the first quarter of 2026 and 2025:
Previous wording
(1) Revenue per trade is calculated as trading revenue divided by the product of DATs multiplied by the number of trading days.
Current wording
(1) Revenue per trade is calculated as trading revenue divided by the product of DATs and the number of trading days.
Previous wording
The Company earns bank deposit account fee revenue from TD Bank USA, National Association and TD Bank, National Association (together, the TD Depository Institutions), in accordance with the Second Amended and Restated Insured Deposit Account Agreement (2023 IDA agreement). These fees are affected by changes in interest rates and the composition of balances designated as fixed- and floating-rate obligation amounts. See Item 1 – Note 10 for additional information.
Current wording
The Company earns bank deposit account fee revenue from TD Bank USA, National Association and TD Bank, National Association (together, the TD Depository Institutions), in accordance with the Second Amended and Restated Insured Deposit Account Agreement (2023 IDA agreement). Bank deposit account fee revenue is presented net of interest paid to clients, and other applicable fees, and is affected by changes in interest rates and the composition of balances designated as fixed- and floating-rate obligation amounts. See Item 1 – Note 11 for additional information.
Previous wording
Bank deposit account fees increased $95 million, or 63%, and $251 million, or 51%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, primarily due to a decrease in the amount paid to clients as a result of lower interest rates, partially offset by lower average BDA balances. The decrease in average BDA balances in the third quarter and first nine months of 2025 compared to the same periods in 2024 was primarily due to client cash allocation decisions in 2024 in response to elevated short-term market interest rates through most of 2024, as well as the transfer of $3.0 billion of BDA balances to Schwab’s balance sheet in September 2025. Pursuant to the 2023 IDA agreement, after September 10, 2025, Schwab has broader discretion to withdraw balances, subject to certain constraints, as described in Item 1 – Note 10. Transfers of BDA balances to Schwab’s balance sheet result in lower balances upon which bank deposit account fee revenue is earned but provide a source of funding to invest in interest-earning assets or pay down borrowings to increase net interest revenue.
Current wording
10 - earned. The decrease in average BDA balances in the first quarter of 2026 compared to the same period in 2025 was primarily due to the transfer of $1.1 billion of BDA balances to Schwab’s balance sheet during the first three months of 2026 and $6.7 billion of BDA balances transferred in the prior year after September 10, 2025, as well as client cash allocation decisions. Transfers of BDA balances to Schwab’s balance sheet result in lower balances upon which bank deposit account fee revenue is earned but provide a source of funding to invest in interest-earning assets or reduce reliance on borrowings to increase net interest revenue.
Previous wording
Average net yield increased in the third quarter and first nine months of 2025 compared to the same periods in 2024 due to an increase in the average amount of floating-rate BDA balances, which was partially offset by a decrease in the average net yields on fixed-rate and floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of September 30, 2025 were 76% and 24%, respectively.
Current wording
Average net yield increased in the first quarter of 2026 compared to the same period in 2025 due to an increase in the average net yield on fixed-rate BDA balances, which was partially offset by decreases in the average amount of fixed-rate and floating-rate BDA balances and in the net yield on floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of March 31, 2026 were 81% and 19%, respectively.
Previous wording
Other revenue includes industry fees, certain service fees, other gains and losses from the sale of assets, and the provision for credit losses on bank loans.
Current wording
Other revenue includes industry fees, certain service fees, other gains and losses, and the provision for credit losses on bank loans.
Previous wording
Expenses excluding interest increased $109 million, or 4%, and $416 million, or 5%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. Adjusted total expenses, which excludes acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, increased 5% and 6% in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. There were no acquisition and integration-related costs or restructuring costs in the third quarter and first nine months of 2025.
Current wording
Expenses excluding interest increased $150 million, or 5%, in the first quarter of 2026, compared to the same period in 2025. Adjusted total expenses, which excludes acquisition and integration-related costs and amortization of acquired intangible assets, increased $137 million, or 5%, in the first quarter of 2026 compared to the same period in 2025. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. The Company’s first quarter 2026 results include expenses related to Forge subsequent to our March 2, 2026 acquisition (see also Item 1 – Note 3). Acquisition and integration-related costs related to Forge in thefirst quarter of 2026 totaled $11 million; there were no acquisition and integration-related costs in the first quarter of 2025.
Previous wording
Total compensation and benefits expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to annual merit increases, higher incentive compensation, and higher other employee-related costs. Compensation and benefits included a $34 million benefit in the first nine months of 2024 due to a change in estimated restructuring costs. Compensation and benefits also included acquisition and integration-related costs of $9 million and $44 million in thethird quarter and first nine months of 2024, respectively.
Current wording
Total compensation and benefits expense increased in the first quarter of 2026 compared to the same period in 2025, primarily due to annual merit increases and growth in headcount, higher incentive compensation, and higher other employee-related costs.
Previous wording
Professional services expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, reflecting overall growth of the business and increased utilization of technology and other professional services. Professional services included acquisition and integration-related costs of $3 million and $32 million in the third quarter and first nine months of 2024, respectively.
Current wording
Professional services expense increased in the first quarter of 2026 compared to the same period in 2025, reflecting overall growth of the business and increased utilization of other professional services. Professional services included acquisition and integration-related costs of$11 million in thefirst quarter of 2026.
Previous wording
Occupancy and equipment expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily driven by higher technology equipment and software costs, as well as building expenses, related to growth of the business, and a benefit related to property taxes reflected in 2024.
Current wording
Occupancy and equipment expense increased in the first quarter of 2026 compared to the same period in 2025, primarily driven by higher software subscription costs related to growth of the business.
Previous wording
Advertising and market development expense remained consistent in the third quarter and increased in the first nine months of 2025 compared to the same periods in 2024. In the third quarter of 2025, higher digital advertising costs were largely offset by lower client promotional spending, and the increase in the first nine months of 2025 primarily reflected higher digital advertising costs.
Current wording
Advertising and market development expense increased in the first quarter of 2026 compared to the same period in 2025, primarily driven by higher client promotional spending.
Previous wording
Communications expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024. The increase in thethird quarter was primarily due to higher proxy-related expenses reflecting growth in the business, partially offset by lower printing and telecommunications expenses. The increase in the year-to-date period primarily reflected higher proxy-related expenses and exchange quotation services, partially offset by lower telecommunications expenses.
Current wording
Communications expense increased in the first quarter of 2026 compared to the same period in 2025, primarily due to higher proxy-related expenses, partially offset by lower exchange quotation services expenses.
Previous wording
Depreciation and amortization expense decreased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to finance lease terminations in 2024 and lower depreciation on equipment due to abandonment of certain data centers in 2024 related to the integration of Ameritrade Holding LLC (Ameritrade Holding) and its consolidated subsidiaries (collectively, Ameritrade). Depreciation and amortization expense included acquisition and integration-related costs of$8 million and $13 million in the third quarter and first nine months of 2024, respectively.
Current wording
Depreciation and amortization expense decreased in the first quarter of 2026 compared to the same period in 2025, primarily due to lower amortization on internally developed software.
Previous wording
Amortization of acquired intangible assets was largely consistent in the third quarter and first nine months of 2025 compared to the same periods in 2024.
Current wording
Amortization of acquired intangible assets was largely consistent in the first quarter of 2026 compared to the same period in 2025.
Previous wording
Taxes on income were $663 million and $434 million for the third quarter of 2025 and 2024, respectively, resulting in effective tax rates of 21.9% and 23.6%, respectively. Taxes on income were $1.9 billion and $1.3 billion for the first nine months of 2025 and 2024, respectively, resulting in tax rates of 22.8% and 23.9%, respectively. The decrease in the effective tax rate in the third quarter of 2025 compared to the same period in 2024 was primarily due to a decrease in state taxes and in non-deductible FDIC deposit insurance assessments, partially offset by a decrease in certain tax credits. The decrease in the effective tax rate in the first nine months of 2025 compared to the same period in 2024 was primarily due to a decrease in the state tax rate and in non-deductible FDIC deposit insurance assessments, and an increase in equity compensation tax deduction benefits, partially offset by a decrease in certain tax credits.
Current wording
Taxes on income were $709 million and $546 million for the first quarter of 2026 and 2025, respectively, resulting in effective tax rates of 22.2% for both periods. The effective tax rate in the first quarter of 2026 remained consistent with the same period in 2025 primarily due to an increase in equity compensation tax deduction benefits and decreases in non-deductible FDIC deposit insurance assessments and in state tax reserves, offset by a decrease in certain tax credits.
Previous wording
(2)In the third quarter and first nine months of 2025, Investor Services includes net outflows of $3.1 billion and $15.1 billion, respectively, from off-platform brokered CDs issued by CSB. In the third quarter and first nine months of 2024, Investor Services includes net outflows of $4.4 billion and $9.1 billion, respectively, from off-platform brokered CDs issued by CSB and an outflow of $0.1 billion from a large international relationship. Also, in the first nine months of 2024, Investor Services includes an inflow of $10.3 billion from a mutual fund clearing services client.
Current wording
(1)In the first quarter of 2026 and 2025, Investor Services includes net outflows of $0.1 billion and $5.3 billion, respectively, from off-platform brokered CDs issued by CSB.
Previous wording
Investor Services and Advisor Services total net revenues increased by 27% and 25%, respectively, in the third quarter of 2025, and increased by 24% and 22%, respectively, in the first nine months of 2025, compared to the same periods in 2024. Changes in Schwab’s net revenues were driven by similar factors for both segments in the third quarter and first nine months of 2025 compared to the same periods in 2024. Net interest revenue increased primarily due to reductions in bank supplemental funding, lower average rates paid on funding sources, and growth of bank and margin lending balances, partially offset by lower yields on interest-earning assets. Asset management and administration fees increased primarily as a result of higher balances in money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource®, and, additionally for Investor Services, managed investing solutions. Trading revenue increased primarily due to higher order flow revenue and commission revenue reflecting higher volume. Bank deposit account fees increased primarily due to improved net yields partially offset by lower average BDA balances. Other revenue increased for both segments in the first nine months of 2025, and in the third quarter of 2025 decreased for Investor Services while slightly increasing for Advisor Services. Both segments saw growth in other revenue due to higher industry fees in the first half of 2025, higher other service fees, and a recognized gain on the sale of an equity investment, offset by lower industry fees in the third quarter of 2025.
Current wording
Investor Services and Advisor Services total net revenues increased by 14% and 22%, respectively, in the first quarter of 2026 compared to the same period in 2025. Net interest revenue increased for both segments primarily due to growth of margin and bank lending balances, lower aggregate wholesale borrowings, and lower average rates paid on funding sources, partially offset by lower yields on interest-earning assets. Asset management and administration fees increased for both segments primarily as a result of higher balances in managed investing services for Investor Services, coupled with higher balances in Schwab equity and bond funds, ETFs, and CTFs, Mutual Fund OneSource®, and money market funds for both Investor Services and Advisor Services. Trading revenue increased for both segments primarily due to higher order flow revenue, and, for Investor Services, higher commission revenue reflecting higher trading volume. Bank deposit account fees increased for both segments primarily due to improved net yields partially offset by lower average BDA balances. Investor Services other revenue decreased due to lower industry fees, which were partially offset by higher other service fees, gains recognized from certain equity investments and losses recognized on the sale of AFS securities in the first quarter of 2025. Advisor Services other revenue increased as higher other service fees, gains from equity investments, and first quarter 2025 losses on the sale of AFS securities more than offset the impact of lower industry fees.
Showing the first 40 of 72 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
•The integration of Forge Global Holdings, Inc. and its private market capabilities (see Overview in Part I – Item 2 and Business Acquisition in Part I – Item 1 – Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 3);
Current report — wording carried from elsewhere
15 - increase in a declining rate environment and decrease in a rising rate environment. Because we establish the rates paid on certain brokerage client cash balances and bank deposits and the rates charged on certain margin and bank loans, and control the composition of our investment securities, we are able to take certain actions to manage our net interest spread, depending on competitive factors and market conditions. When liquidity needs exceed our primary sources of funding, the Company will utilize higher-cost funding sources, which can reduce net interest margin and net interest revenue.
Current report — wording carried from elsewhere
CS&Co has a variety of external debt facilities available. CS&Co maintains unsecured uncommitted bank credit lines with a group of banks as a source of short-term liquidity, which can also be accessed by CSC. CS&Co also maintains secured uncommitted lines of credit, under which CS&Co may borrow on a short-term basis and pledge either client margin securities or firm securities as collateral, based on the terms of the agreements. At the end of the first quarter of 2026, CS&Co received authorization from its Board of Directors to issue unsecured Commercial Paper Notes of up to $10.0 billion. CS&Co’s ratings for Commercial Paper Notes were P1 by Moody’s and A1 by Standard & Poor’s at March 31, 2026. CS&Co also engages with
Current report — wording carried from elsewhere
Schwab had outstanding margin loans to foreign residents of $5.2 billion and $4.8 billion at March 31, 2026 and December 31, 2025, respectively.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
•The U.S. federal banking agencies’ August 2023 proposed rulemaking on long-term debt requirements for certain large banking organizations; and
Previous report — wording carried elsewhere
Management also uses EVE simulations to measure interest rate risk. EVE sensitivity measures the long-term impact of interest rate changes on the net present value of assets and liabilities, and includes the impact of derivative instruments. While EVE does not have a direct accounting relationship, the measure aims to capture a theoretical value of assets and liabilities under a variety of interest rate environments. EVE is calculated by subjecting the balance sheet to hypothetical instantaneous shifts in the level of interest rates. This analysis is highly dependent upon asset and liability assumptions based on historical and certain
Previous report — wording carried elsewhere
Our net interest revenue, EVE, and bank deposit account fee revenue simulations reflect the assumption of non-negative investment yields.
Previous report — wording carried elsewhere
To meet daily funding needs, we maintain liquidity in the form of overnight cash deposits and short-term investments. For unanticipated liquidity needs, we also maintain a buffer of highly liquid investments, including U.S. Treasury securities.
Previous report — wording carried elsewhere
CSC’s ratings for Commercial Paper Notes were P1 by Moody’s Investor Service (Moody’s), A2 by Standard & Poor’s Rating Group (Standard & Poor’s), and F1 by Fitch Ratings, Inc. (Fitch) at September 30, 2025.
Previous report — wording carried elsewhere
22 - issuances. In managing compliance with our LCR requirements, the broker-dealer subsidiary may also retain client cash balances rather than sweeping such balances to our banking subsidiaries.
Previous report — wording carried elsewhere
The Company maintains a long-term operating objective for its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. As of September 30, 2025, our adjusted Tier 1 Leverage Ratio was 7.3% for CSC (consolidated) and 8.7% for CSB (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results).