SCHWAB CHARLES CORP
For the period ended Jun 30, 2026. Filed Aug 7, 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.
Jun 30, 2026 · Filed Aug 7, 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 2026-03-31; filed 2026-05-08.
0000316709-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0000316709-26-000031
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 244 previous paragraphs and 251 current paragraphs.
146 unchanged; 76 reworded; 25 added; 17 removed; 5 previous and 4 current paragraphs rearranged.
Tables are not compared: 22 previous and 26 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 (25)
Current report
•The Company’s spot crypto trading offer (see Overview in Part I – Item 2);
Current report
•Estimates of market opportunity (see Introduction in Part I – Item 2);
Current report
•Growth of our client base and our business, strong client engagement, sustained demand for the Company’s offerings and solutions, and strategic initiatives (see Overview in Part I – Item 2);
Current report
The second quarter and first six months of 2026 was a changing but generally positive macroeconomic environment for clients. While equity markets declined amid elevated volatility in the first quarter of 2026, market returns rebounded strongly positive and volatility eased in the second quarter, as the Standard and Poor’s® 500 Index and NASDAQ Composite® rose 15% and 21%, respectively, in the second quarter, finishing the first half of the year up 10% and 13%, respectively. The Federal Reserve kept the target federal funds overnight rate unchanged throughout the first six months of 2026, while the 10-year U.S. Treasury yield rose 25 basis points to 4.44% at June 30.
Current report
Supported by equity market growth and strong asset gathering, total client assets increased to $13.08 trillion at June 30, up 10% from year-end 2025. Schwab attracted core net new assets of $119.8 billion in the second quarter of 2026, up 49% from the same period in 2025, bringing the total for the first half of the year to $259.8 billion, up 19% from the first half of 2025. New brokerage accounts were 1.4 million and 2.7 million in the second quarter and first half of 2026, respectively, up 26% and 18% from the same prior-year periods, and active brokerage accounts reached 39.8 million at June 30, 2026, up 6% year-over-year. Clients continued to be highly engaged in the markets throughout the first half of 2026, with DATs reaching 11.9 million and 10.9 million in the second quarter and first six months of 2026, respectively, higher by 57% and 46% from the respective 2025 periods.
Current report
Schwab’s financial results for the second quarter and first six months of 2026 reflected the growth of our client base, strong client engagement, and sustained demand for Schwab’s lending offerings and managed investing solutions. Net income increased to $2.8 billion and $5.3 billion in the second quarter and first six months of 2026, respectively, higher by 32% and 31% from the same periods in 2025. Diluted EPS was $1.54 and $2.91 in the second quarter and first six months of 2026, respectively, rising year-over-year 43% and 41%, respectively. Adjusted diluted EPS(1) was $1.62 and $3.05 in the second quarter and first six months of 2026, respectively, up 42% and 41% from the same prior-year periods.
Current report
Total expenses excluding interest were $3.4 billion and $6.7 billion in the second quarter and first six months of 2026, respectively, up 12% and 8% from the same prior-year periods. For the second quarter and first six months of 2026, adjusted total expenses(1) were $3.2 billion and $6.4 billion, respectively, increasing 11% and 8% from the comparable periods in 2025. These increases in expenses were driven by strong client engagement and the inclusion of Forge Global Holdings, Inc. (Forge) beginning in March 2026, as well as continued investments in key strategic initiatives including supporting organic growth, new products, and ongoing scale and efficiency efforts. These factors contributed to higher compensation and benefits expenses, reflecting growth in headcount, including financial consultants and wealth advisors, and higher incentive compensation, higher professional services and occupancy and equipment expenses, and, for the quarter-to-date period, higher industry fees within other expense.
Current report
Crypto Trading Offer
Current report
Schwab engages in securities lending and borrowing activities. Schwab temporarily loans client securities to other broker-dealers and clearinghouses and receives cash as collateral for securities loaned; liabilities for securities loaned are included in payables to brokers, dealers, and clearing organizations within funding sources in the presentation of net interest revenue. We may also borrow securities from other broker-dealers to fulfill short sales by clients and deliver cash to the lender in exchange for the securities, and receivables from securities borrowed are excluded from interest-earning assets.
Current report
(3)Beginning in the second quarter of 2026, the net fixed yield earned on client long/short strategies is presented in other interest revenue; amounts for periods prior to the three months ended June 30, 2026 have not been recast as the impact of this change was not material.
Current report
Net interest revenue increased $535 million, or 19%, and $973 million, or 18%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. These increases were primarily due to growth in margin and bank lending, lower average wholesale borrowings, and lower yields on most funding sources, partially offset by lower yields on floating-rate assets due to lower market rates, and lower balances of AFS and HTM securities and cash and investments segregated. Securities lending revenue increased in the second quarter and first six months of 2026, reflecting growth in fees received for securities borrowed transactions to facilitate certain client short sales related to long/short strategies, partially supported by growth in securities loaned.
Current report
(1)The second quarter and first six months of 2025 include transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource and other NTF funds.
Current report
(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 three and six months ended June 30, 2025.
Current report
11 - first six months of 2026 compared to the same periods in 2025 due to higher volume, partially offset by changes in the mix of client trading activity.
Current report
Additionally, the increases in both the second quarter and first six months of 2026 compared to the same periods in 2025 were driven by gains recognized on certain equity investments, higher other service fees, and lower losses on sales of AFS securities in 2026.
Current report
The Company’s second quarter and first six months of 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 totaled $28 million and $39 million in the second quarter and first six months of 2026, respectively. While underlying 2026 expense growth remains in-line with expectations communicated earlier in the year (see Part II – Item 7 – Results of Operations in the 2025 10-K), the Company now expects total expenses excluding interest for full-year 2026 will increase approximately 10% to 11%, inclusive of volume-related expenses to support strong business performance and trading activity, and expenses related to the operations and integration of Forge.
Current report
Amortization of acquired intangible assets increased in the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to amortization on intangible assets from the Forge acquisition.
Current report
Capital expenditures were $792 million and $136 million in the second quarter of 2026 and 2025, respectively, and$965 million and $292 million in the first six months of 2026 and 2025, respectively. Capital expenditures increased in the second quarter and firstsix months of 2026 compared to the same periods in 2025, primarily due to a $633 million multi-year software license agreement which was recognized with a corresponding liability in long-term debt in accordance with Accounting Standards Codification 350 Intangibles — Goodwill and Other(see also Item 1 – Note 10). The increase in capital expenditures was additionally due to higher telecommunications equipment, leasehold improvement and building expenses related to certain office expansions. As a result of higher year-to-date spending and total net revenues, we now estimate capital expenditures for full-year 2026 will be slightly higher than our previously disclosed expected range of approximately 3-5% of total net revenues.
Current report
As the Company’s balance sheet has continued to evolve, we have increasingly utilized dynamically-sized balance sheet modeling as a primary framework for managing interest rate risk. Dynamically-sized balance sheet modeling provides another perspective of the Company’s interest rate risk profile and risk management strategy, incorporating certain expected changes in balance sheet composition and size that may result from changes in interest rates.
Current report
The long-term debt issuances below in 2026 were senior unsecured obligations issued by CSC. Additional details are as follows:
Current report
(1)Interest rates presented are those in effect at June 30, 2026. For additional information regarding future interest rates on fixed-to-floating rate Senior Notes, see Item 1 – Note 10.
Current report
CSC’s preferred stock issued and net proceeds for the first six months of 2026 are as follows:
Current report
On June 1, 2026, the Company redeemed all of its Series I preferred stock and corresponding depositary shares. For further discussion see Item 1 – Note 15 for equity outstanding balances, issuances, and redemptions.
Current report
(5)Series L was issued on April 22, 2026. Dividends are paid quarterly. The first dividend payment will be on September 1, 2026.
Current report
CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025 under its previous $15.0 billion authorization.
Removed paragraphs (17)
Previous report
•The Company’s rollout of trading in select cryptocurrencies (see Overview in Part I – Item 2);
Previous report
•The Company’s development and deployment of artificial intelligence capabilities;
Previous report
•Opportunities for deepening and monetizing client relationships;
Previous report
•The expected impact of new accounting standards not yet adopted (see New Accounting Standards in Item 1 – Note 2);
Previous report
•Our ability to monetize client assets through value-added products and services;
Previous 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.
Previous 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.
Previous 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
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Amortization of acquired intangible assets was largely consistent in the first quarter of 2026 compared to the same period in 2025.
Previous 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.
Previous report
AFS and HTM securities comprised approximately 39% and 47% of the Company’s consolidated total assets as of March 31, 2026 and 2025, respectively. The estimated effective duration of the remaining balance sheet assets, excluding the effect of hedging, in aggregate was less than one year as of both March 31, 2026 and 2025.
Previous report
There were no new debt issuances of senior unsecured obligations in the first three months of 2026.
Previous report
There were no new issuances of preferred stock in the first three months of 2026. On April 22, 2026, the Company issued $1.5 billion of Series L preferred stock. Additionally, on May 4, 2026, the Company announced it will redeem on June 1, 2026 all of the outstanding shares of its Series I preferred stock and the corresponding depositary shares.
Reworded paragraphs (76)
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 $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.
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 RIA channels, along with bank deposits) currently exceeds $90 trillion, which means the Company’s $13.08 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
•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 wording
•The integration of Forge Global Holdings, Inc. and its private market capabilities (see Overview in Part I – Item 2);
Previous wording
•Net interest revenue, client cash allocation behavior, and adjustment of rates paid on client-related liabilities (see Results of Operations in Part I – Item 2);
Current wording
•Net interest revenue, client cash allocation, and adjustment of rates paid on client-related liabilities (see Results of Operations 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 Item 1 – Note 11);
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);
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 11, and Financial Instruments Subject to Off-Balance Sheet Credit Risk in Item 1 – Note 13); and
Current wording
•The likelihood of indemnification and guarantee payment obligations and clients failing to fulfill contractual obligations (see Commitments and Contingencies in Part I – Item 1 – Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 11, and Financial Instruments Subject to Off-Balance Sheet Credit Risk in Item 1 – Note 13); and
Previous wording
•The outcome and impact of legal proceedings and regulatory matters (see Commitments and Contingencies in Item 1 – Note 11, and Legal Proceedings in Part II – Item 1).
Current wording
•The outcome and impact of legal proceedings and regulatory matters (see Legal Proceedings in Part II – Item 1, and Commitments and Contingencies in Item 1 – Note 11).
Previous wording
•The level and mix of client trading activity, including daily average trades, margin balances, and balance sheet cash;
Current wording
•The level and mix of client trading activity, including daily average trades (DATs), margin balances, and balance sheet cash;
Previous wording
•Our ability to access funding sources;
Current wording
•Our ability to access funding sources and the cost of funding;
Previous 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:
Current wording
Management focuses on several client activity and financial metrics in evaluating Schwab’s financial position and operating performance. Results for the second quarter and first six months of 2026 and 2025 are as follows:
Previous 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.
Current wording
(1) The second quarter and first six months of 2026 include net outflows of $1.1 billion and $1.2 billion, respectively, from off-platform brokered certificates of deposit (CDs) issued by CSB. The second quarter and first six months of 2025 include net outflows of $6.7 billion and $12.0 billion, respectively, from off-platform brokered CDs issued by CSB.
Previous 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).
Current wording
Total net revenues were $7.1 billion and $13.6 billion in the second quarter and first six months of 2026, respectively, growing 21% and 18% from the same periods in 2025. Net interest revenue was $3.4 billion and $6.5 billion in the second quarter and first six months of the year, respectively, higher by 19% and 18% from the same periods in 2025, reflecting growth in margin and bank lending solutions and lower average wholesale borrowings, partially offset by lower yields on floating-rate assets, lower available for sale (AFS) and held to maturity (HTM) securities, and lower segregated cash and investments. Asset management and administration fees totaled $1.8 billion and $3.6 billion in the second quarter and first six months of 2026, respectively, increasing 16% from both comparable periods in 2025, due primarily to higher average client assets driven by asset gathering, market appreciation, and growth in managed investing solutions. Trading revenue was $1.2 billion and $2.3 billion in the second quarter and first half of 2026, respectively, increasing 28% and 24% from the comparable periods in 2025, reflecting higher order flow revenue and commissions due to higher trading volume and mix of trading activity. Bank deposit account fee revenue was $333 million and $628 million in the second quarter and first six months of 2026, respectively, increasing 35% and 28% from the same periods in 2025, 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 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).
Current wording
Return on average common stockholders’ equity was 25% and 23% for the second quarter and first six months of 2026, respectively, up from 19% and 18% from the same periods in 2025. These increases were due primarily to growth in net income, which more than offset higher average common stockholders’ equity. Return on tangible common equity(1)was 44% and 41% for the second quarter and first half of 2026, respectively, rising from 35% and 34% from the same 2025 periods, 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 common stock repurchases in 2025 and the first half of 2026. The improvement in average AOCI resulted from amortization of losses on securities previously transferred from AFS to HTM and lower unrealized losses on AFS securities.
Previous wording
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 wording
Schwab continued to support our clients’ evolving needs through effective management of the balance sheet and financial resources, including sustained demand for margin and bank lending in the first half of 2026. Total balance sheet assets were $517.3 billion at June 30, increasing 5% from year-end 2025. Client demand for margin loans was strong, with receivables from brokerage clients reaching $122.8 billion at June 30, rising 16% during the second quarter and 17% year-to-date. Bank loans totaled $67.0 billion at June 30, 2026, rising 16% year-to-date and 10% during the second quarter, reflecting growth in pledged asset lines (PALs) and first lien residential real estate mortgage loans (First Mortgages).
Previous wording
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 wording
During the second quarter and first six months of 2026, the Company repurchased common stock of $1.0 billion and $3.4 billion, respectively, and also increased its common dividend by 19% to $.32 per share during the first quarter of the year. During the second quarter, the Company issued $1.5 billion of Series L preferred stock, and redeemed $2.1 billion of Series I preferred stock. Inclusive of both returns of capital and capital generation during the first half of 2026 from earnings, the Company’s consolidated Tier 1 Leverage Ratio at June 30, 2026 was 8.7%, down from 9.3% at year-end 2025. Our consolidated adjusted Tier 1 Leverage Ratio(1) was 6.8% at the end of the second quarter, down from 7.1% at year-end 2025, and within our long-term operating objective of 6.75% - 7.00%.
Previous wording
Acquisition of Forge Global Holdings, Inc.
Current wording
Acquisition of Forge
Previous wording
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 wording
On March 2, 2026, Schwab completed its acquisition of Forge, an operator of a leading private market platform and trading marketplace, for $636 million of cash and other consideration. Integration work is progressing, 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.
Previous wording
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 wording
In May 2026, Schwab began a phased rollout to retail clients of Schwab Crypto TM, our spot crypto trading offer. The Company provides clients direct access to bitcoin and ether trading, combined with educational content and professional support with investment experience. Charles Schwab Premier Bank, SSB (CSPB), serves as the custodian of clients’ digital assets, responsible for safekeeping and record-keeping. CSPB has engaged Paxos Trust Company, NA (sub-custodian), a regulated blockchain infrastructure provider, to deliver sub-custody and trade execution services, and we may engage one or more additional sub-custodians in the future. 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.
Previous wording
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 wording
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 ended 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.
Previous 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.
Current wording
During the first half of 2026, the Federal Reserve held the upper bound of the target overnight rate unchanged 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
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 wording
Schwab’s average interest-earning assets increased 5% and 4% in the second quarter and first six months of 2026, respectively, from the same periods in 2025, primarily due to growth in margin lending, which was supported in part by wholesale funding, as well as increases in bank lending, partially offset by lower balances of AFS and HTM securities and cash and investments segregated. Client demand for margin and bank lending continued to grow in the second quarter and first six months of 2026. Receivables from brokerage clients, which are primarily comprised of margin loans, ended the second quarter at $122.8 billion, increasing 48% and 17% from June 30, 2025, and December 31, 2025, respectively. Total bank loans finished the second quarter of 2026 at $67.0 billion, higher by 33% and 16% from June 30, 2025 and December 31, 2025, respectively, due primarily to growth in PALs and First Mortgages.
Previous wording
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 wording
Client cash activity during the second quarter and first six months of 2026 reflected seasonality, organic growth from asset gathering, and client asset allocation decisions. Bank sweep deposits and payables to brokerage clients increased by a total of $42.7 billion, or 14%, from June 30, 2025 to the end of the second quarter of 2026 and $3.6 billion, or 1%, from December 31, 2025. Clients’ use of long/short strategies is presented on a net basis on the condensed consolidated balance sheet. While timing differences can arise between long and short positions, these strategies typically result in limited direct increases to assets and liabilities due to netting in the clients’ accounts.
Previous wording
The following table presents net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheets:
Current wording
The following tables present net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheets:
Previous wording
(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 wording
(1)Beginning in the fourth quarter of 2025, margin loans and short credits related to client long/short strategies from which the Company earns a fixed net yield are excluded from interest-earning assets and funding sources. Also beginning in the fourth quarter of 2025, related interest revenue and expense were moved from receivables from brokerage clients and payables to brokerage clients, respectively, to other interest revenue and other interest expense, respectively. Amounts and average yields have been reclassified and recalculated for 2025 periods to reflect these changes. Average margin loans related to these client strategies totaled $33.1 billion and $23.7 billion for the three and six months ended June 30, 2026, respectively, compared to $884 million and $562 million for the same periods in 2025. Average short credits related to these client strategies totaled $34.3 billion and $24.5 billion for the three and six months ended June 30, 2026, respectively, compared to $898 billion and $569 million for the same periods in 2025.
Previous 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.
Current wording
Net interest margin increased to 3.00% and 2.94% in the second quarter and first six months of 2026, respectively, compared to 2.66% and 2.59% during the same periods in 2025, primarily due to the growth in margin and bank lending, along with the reduced aggregate use of wholesale funding and lower rates paid on most funding sources, which more than offset lower yields on floating-rate assets due to lower market interest rates.
Previous wording
(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 wording
(2)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.
Previous 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.
Current wording
(3)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
(3)Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
Current wording
(4)Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
Previous wording
(4) Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.
Current wording
(5) Includes miscellaneous service and transaction fees, including fees relating to mutual funds and ETFs that are not balance-based.
Previous 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.
Current wording
Asset management and administration fees increased by $255 million, or 16%, and $484 million, or 16%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. These increases were primarily a result of continued growth in fee-based managed investing solutions and Mutual Fund OneSource®, as well as growth in Schwab money market funds, and Schwab equity and bond funds, ETFs, and CTFs. This growth was driven primarily by higher client asset
Previous 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:
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 49% and 50% of the asset management and administration fees earned in the second quarter and first six months of 2026, respectively, compared with 50% in both the second quarter and first six months of 2025:
Previous wording
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 wording
Trading revenue increased $263 million, or 28%, and $444 million, or 24%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025, driven by an increase in order flow revenue reflecting higher rates and volume, as well as changes in the mix of client trading activity. Commissions revenue increased during the second quarter and
Previous 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.
Current wording
Bank deposit account fees increased $86 million, or 35%, and $136 million, or 28%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025, primarily due to an increase in average net yield and decreases in the amount paid to clients as a result of lower interest rates and in other applicable fees paid. This was partially offset by lower average BDA balances, which reduced the base on which bank deposit account fees are earned. The decrease in average BDA balances in the second quarter and first six months of 2026 compared to the same periods in 2025 was primarily due to the transfer of $3.0 billion of BDA balances to Schwab’s balance sheet during the first six 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 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.
Current wording
Average net yield increased in the second quarter and first six months of 2026 compared to the same periods in 2025 due to an increase in the average net yield on fixed-rate BDA balances, partially offset by decreases in the average amount of and net yield on floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of June 30, 2026 were 85% and 15%, respectively.
Previous wording
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 wording
Other revenue increased $82 million, or 32%, and $67 million, or 14%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. The increase in the second quarter of 2026 compared to the same period in 2025 was largely driven by higher industry fees. Effective April 4, 2026, the SEC increased the fee rate applicable to most securities transactions from zero, which had 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. The timing of the increase in the fee rate resulted in only an incremental net increase in industry fees in the first six months of 2026 compared to the same period in 2025.
Previous 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.
Current wording
Expenses excluding interest increased $355 million, or 12%, and $505 million, or 8%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. Adjusted total expenses, which excludes acquisition and integration-related costs and amortization of acquired intangible assets, increased 11% and 8% in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results.
Previous 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.
Current wording
Total compensation and benefits expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to annual merit increases and growth in headcount, including growth in financial consultants and wealth advisors and the acquisition of Forge, higher incentive compensation driven by the Company’s financial performance, and higher other employee-related costs. Compensation and benefits included acquisition and integration-related costs of $26 million in thesecond quarter and first six months of 2026.
Previous 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.
Current wording
Professional services expense increased in the second quarter and firstsix months of 2026 compared to the same periods in 2025, reflecting overall growth of the business and increased utilization of other professional services. Professional services included acquisition and integration-related costs of $2 million and$13 million in the second quarter and firstsix months of 2026, respectively.
Previous 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.
Current wording
Occupancy and equipment expense increased in the second quarter and firstsix months of 2026 compared to the same periods in 2025, primarily driven by higher software subscription costs and building expenses related to growth of the business, coupled with an increase in property tax expense.
Previous 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.
Current wording
Advertising and market development expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily driven by higher client promotional spending.
Previous 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.
Current wording
Communications expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to higher proxy-related and postage expenses.
Showing the first 40 of 76 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
10 - balances, reflecting year-over-year equity market appreciation, the Company’s asset gathering, and net flows into managed investing solutions.
Current report — wording carried from elsewhere
16 - changes, as well as changes in market conditions and management strategies, including changes in asset and liability mix. Financial instruments are also subject to the risk that valuations will be negatively affected by changes in demand and the underlying market for a financial instrument.
Current report — wording carried from elsewhere
Due to its role as a source of financial strength, CSC’s liquidity needs are primarily driven by: the liquidity and capital needs of CS&Co, our principal broker-dealer subsidiary; the capital needs of the banking subsidiaries; principal and interest due on
Current report — wording carried from elsewhere
(4)Series I was redeemed on June 1, 2026. Prior to redemption, dividends were paid quarterly. The final divided was paid on June 1, 2026.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
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.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
(2) The duration of PALs was less than 0.1 years at March 31, 2025.
Previous report — wording carried 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.