Charles Schwab Corporation · Earnings release

SCHWAB REPORTS THIRD QUARTER RESULTS

Total Client Assets Increased 27% Year-Over-Year to a Record $9.92 Trillion

Core Net New Assets Equaled $95.3 Billion, Year-To-Date Exceeds $250 Billion

Quarterly Net Revenues Grew 5% Year-Over-Year to $4.8 Billion

WESTLAKE, Texas, October 15, 2024 – The Charles Schwab Corporation reported net income for the third quarter totaling $1.4 billion, or $.71 diluted earnings per common share. Excluding $153 million of pre-tax transaction-related costs, adjusted (1) net income and diluted common earnings per share equaled $1.5 billion and $.77, respectively.

Client Driven

Growth

Net New Assets

“Our momentum with clients continues to build following the successful completion of the Ameritrade conversion earlier this year. Third quarter net asset gathering of over $95 billion pushed year-to-date core net new assets to $252 billion – up 10% versus 2023 year-to-date.”

Co-Chairman and CEO Walt Bettinger

Modern Wealth

Solutions

YTD Net Inflows to

Schwab’s Managed Investing Solutions

“Record YTD flows into Schwab Wealth AdvisoryTM helped Managed Investing net flows reach $40 billion – an increase of 65% versus 2023 year-to-date. Converted Retail Ameritrade client interest in wealth solutions remains robust, accounting for approximately 35% of these flows.”

Co-Chairman and CEO Walt Bettinger

Diversified Operating Model

Pre-Tax Profit Margin (1)

“Third quarter revenue increased 5% versus 3Q23, driven by sustained investor engagement and market performance. The combination of growing revenue and expense discipline yielded a 38.0% pre-tax profit margin – 41.2% adjusted (1).”

CFO Mike Verdeschi

Balance Sheet

Management

3Q24 Reduction in Bank Supplemental Funding (2)

“Client transactional sweep cash grew by $9 billion sequentially, including net inflows of $17 billion in September. This build in client cash on the balance sheet helped us reduce Bank Supplemental Funding by $8.9 billion sequentially.”

CFO Mike Verdeschi

3Q24 Client and Business Highlights

•Healthy net asset gathering and equity market resilience resulted in record total client assets of $9.92 trillion

•Active brokerage accounts reached 36.0 million, up 4% versus September 2023

•Core net new assets equaled $95.3 billion, bringing the year-to-date total to $252.1 billion – a 10% increase versus 2023 year-to-date

•Assets receiving ongoing advisory services are up 6% sequentially and up 26% versus September 2023, including record net flows into Schwab Wealth AdvisoryTM

•Margin balances grew sequentially by 2% to $73.0 billion, up 17% from year-end 2023

•Trading activity increased relative to the prior quarter as client engagement remained strong

•Schwab ranked #1 by J.D. Power in Participant Satisfaction with Retirement Plan Digital Experiences (3)

•Charles Schwab Bank rated #1 in Investor’s Business Daily Most Trusted Financial Companies survey (4)

- 1 -

Three Months Ended

%

Nine Months Ended

%

Financial Highlights

Change

Change

Net revenues (in millions)

$

$

5%

$

$

(1)%

Net income (in millions)

GAAP

$

$

$

$

2%

Adjusted

$

$

—

$

$

(7)%

Diluted earnings per common share

GAAP

$

$

$

$

1%

Adjusted

$

$

—

$

$

(8)%

Pre-tax profit margin

GAAP

%

%

%

%

Adjusted

%

%

%

%

Return on average common

stockholders’ equity (annualized)

%

%

%

%

Return on tangible

common equity (annualized) (1)

%

%

%

%

Note: Items labeled “adjusted” are non-GAAP financial measures; further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release. All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

3Q24 Financial Commentary

•Net revenues grew on both a year-over-year and sequential basis, up 5% and 3%, respectively

•Sequential net interest margin expanded modestly to 2.08%

•Client transactional sweep cash balances finished September at $384.0 billion, a sequential increase of $9.2 billion

•Bank Supplemental Funding (2) declined sequentially by $8.9 billion to $64.8 billion at September month-end

•Asset management and administration fees achieved a new quarterly record of $1.5 billion

•Trading revenue increased 4% versus 3Q23 as a result of higher volumes and changes in trading mix

•GAAP expenses for the quarter declined 7% versus 3Q23

•Third quarter acquisition and integration-related costs, amortization of acquired intangibles, and restructuring costs equaled $153 million, or a decline of $367 million versus 3Q23; exclusive of these items, adjusted total expenses (1) increased by 6%

•Capital ratios across the firm continue to build – including preliminary consolidated Tier 1 Leverage and adjusted Tier 1 Leverage (1) reaching 9.7% and 6.7%, respectively

(1) Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release.

(2) Bank Supplemental Funding includes repurchase agreements at the banks, Schwab Bank Certificates of Deposit (CDs), and Federal Home Loan Bank balances.

(3) Charles Schwab received the highest score in the J.D. Power 2021-2022, and 2024 U.S. Retirement Plan Digital Satisfaction Studies, which measures group retirement plan participant satisfaction with plan provider digital experiences. Visit https://www.jdpower.com/business/awards for more details. Use of study results in promotional materials is subject to a license fee.

(4) The Investor’s Business Daily Most Trusted Bank accolade/recognition was published by Investor’s Business Daily on September 20, 2024, and is licensed for a 15-month timeframe. The criteria, evaluation, and ranking were determined by Investor’s Business Daily in conjunction with its research partner, TechnoMetrica Market Intelligence, and were based on consumer surveys conducted May-July 2024. (https://www.investors.com/news/most-trusted-financial-companies-top-30-list-2024/) Schwab paid a licensing fee to York Graphic Services, LLC. for uses of the award and logos through January 4, 2026.

Fall Business Update

The company will host its Fall Business Update for institutional investors this morning from 7:30 a.m. - 8:30 a.m. CT, 8:30 a.m. - 9:30 a.m. ET.

Registration for this Update webcast is accessible at https://www.aboutschwab.com/schwabevents.

Forward-Looking Statements

This press release contains forward-looking statements relating to asset gathering and the company’s momentum with clients; client interest in wealth solutions; the company’s diversified operating model; and capital ratios. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed

- 2 -

expectations. Important factors that may cause such differences are described in the company’s most recent reports on Form 10-K and Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on the company’s website (https://www.aboutschwab.com/financial-reports) and on the Securities and Exchange Commission’s website (https://www.sec.gov). The company makes no commitment to update any forward-looking statements.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 36.0 million active brokerage accounts, 5.4 million workplace plan participant accounts, 2.0 million banking accounts, and $9.92 trillion in client assets. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org), and its affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services.

Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

Contact Information

MEDIA

public.relations@schwab.com

INVESTORS/ANALYSTS

investor.relations@schwab.com

- 3 -

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

Net Revenues

Interest revenue

$

$

$

$

Interest expense

Net interest revenue

Asset management and administration fees

Trading revenue

Bank deposit account fees

Other

Total net revenues

Expenses Excluding Interest

Compensation and benefits

Professional services

Occupancy and equipment

Advertising and market development

Communications

Depreciation and amortization

Amortization of acquired intangible assets

Regulatory fees and assessments

Other

Total expenses excluding interest

Income before taxes on income

Taxes on income

Net Income

Preferred stock dividends and other

Net Income Available to Common Stockholders

$

$

$

$

Weighted-Average Common Shares Outstanding:

Basic

Diluted

Earnings Per Common Shares Outstanding (1):

Basic

$

$

$

$

Diluted

$

$

$

$

(1) The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

- 4 -

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)

vs.

vs.

Third

Second

First

Fourth

Third

(In millions, except per share amounts and as noted)

Quarter

Quarter

Quarter

Quarter

Quarter

Net Revenues

Net interest revenue

(1)

%

3

%

$

$

$

$

$

Asset management and administration fees

%

7

%

Trading revenue

4

%

3

%

Bank deposit account fees

%

(1)

%

Other

%

(9)

%

Total net revenues

5

%

3

%

Expenses Excluding Interest

Compensation and benefits (1)

%

5

%

Professional services

(7)

%

(1)

%

Occupancy and equipment

%

9

%

Advertising and market development

(1)

%

(6)

%

Communications

(3)

%

%

Depreciation and amortization

%

(1)

%

Amortization of acquired intangible assets

(4)

%

1

%

Regulatory fees and assessments

%

(8)

%

Other (2)

%

4

%

Total expenses excluding interest

(7)

%

2

%

Income before taxes on income

%

5

%

Taxes on income

%

5

%

Net Income

%

6

%

Preferred stock dividends and other

1

%

%

Net Income Available to Common Stockholders

%

7

%

$

$

$

$

$

Earnings per common share (3):

Basic

%

8

%

$

$

$

$

$

Diluted

%

8

%

$

$

$

$

$

Dividends declared per common share

—

—

$

$

$

$

$

Weighted-average common shares outstanding:

Basic

—

—

Diluted

—

—

Performance Measures

Pre-tax profit margin

%

%

%

%

%

Return on average common stockholders’ equity (annualized) (4)

%

%

%

%

%

Financial Condition (at quarter end, in billions)

Cash and cash equivalents

5

%

%

$

$

$

$

$

Cash and investments segregated

%

%

Receivables from brokerage clients — net

7

%

2

%

Available for sale securities

%

(4)

%

Held to maturity securities

(8)

%

(2)

%

Bank loans — net

7

%

3

%

Total assets

(2)

%

4

%

Bank deposits

%

(2)

%

Payables to brokerage clients

%

%

Other short-term borrowings

%

6

%

Federal Home Loan Bank borrowings

%

(7)

%

Long-term debt

%

—

Stockholders’ equity

%

7

%

Other

Full-time equivalent employees (at quarter end, in thousands)

%

(1)

%

Capital expenditures — purchases of equipment, office facilities, and property,

net (in millions)

%

%

$

$

$

$

$

Expenses excluding interest as a percentage of average client assets (annualized)

%

%

%

%

%

Clients’ Daily Average Trades (DATs) (in thousands)

9

%

4

%

Number of Trading Days

2

%

1

%

Revenue Per Trade (5)

(6)

%

(2)

%

$

$

$

$

$

(1) Fourth quarter of 2023 includes $16 million in restructuring costs. Third quarter of 2023 includes $276 million in restructuring costs.

(2) Fourth quarter of 2023 includes $181 million in restructuring costs.

(3) The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

(4) Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

(5) Revenue per trade is calculated as trading revenue divided by the product of DATs multiplied by the number of trading days.

- 5 -

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions, except ratios or as noted)

(Unaudited)

Three Months Ended

Nine Months Ended

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Interest-earning assets

Cash and cash equivalents

$

$

%

$

$

%

$

$

%

$

$

%

Cash and investments segregated

%

%

%

%

Receivables from brokerage clients

%

%

%

%

Available for sale securities (1)

%

%

%

%

Held to maturity securities

%

%

%

%

Bank loans

%

%

%

%

Total interest-earning assets

%

%

%

%

Securities lending revenue

Other interest revenue

Total interest-earning assets

$

$

%

$

$

%

$

$

%

$

$

%

Funding sources

Bank deposits

$

$

%

$

$

%

$

$

%

$

$

%

Payables to brokerage clients

%

%

%

%

Other short-term borrowings

%

%

%

%

Federal Home Loan Bank borrowings

%

%

%

%

Long-term debt

%

%

%

%

Total interest-bearing liabilities

%

%

%

%

Non-interest-bearing funding sources

Securities lending expense

Other interest expense

—

1

2

2

Total funding sources

$

$

%

$

$

%

$

$

%

$

$

%

Net interest revenue

$

%

$

%

$

%

$

%

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

- 6 -

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions, except ratios or as noted)

(Unaudited)

Three Months Ended

Nine Months Ended

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Schwab money market funds

$

$

%

$

$

%

$

$

%

$

$

%

Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs)

%

%

%

%

Mutual Fund OneSource® and other no-transaction-

fee funds

%

%

%

%

Other third-party mutual funds and ETFs

%

%

%

%

Total mutual funds, ETFs, and CTFs (1)

$

$

%

$

$

%

$

$

%

$

$

%

Advice solutions (1)

Fee-based

$

$

%

$

$

%

$

$

%

$

$

%

Non-fee-based

—

—

—

—

—

—

—

—

Total advice solutions

$

$

%

$

$

%

$

$

%

$

$

%

Other balance-based fees (2)

%

%

%

%

Other (3)

Total asset management and administration fees

$

$

$

$

(1) Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Wealth AdvisoryTM, Schwab Managed PortfoliosTM, Managed Account Select®, Schwab Advisor Network®, Windhaven Strategies®, ThomasPartners® Strategies, Schwab Index Advantage advised retirement plan balances, Schwab Intelligent Portfolios®, Institutional Intelligent Portfolios®, Schwab Intelligent Portfolios Premium®, AdvisorDirect®, Essential Portfolios, Selective Portfolios, and Personalized Portfolios; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. For the total end of period view, please see the Monthly Activity Report.

(2) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.

(3) Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

- 7 -

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

vs.

vs.

Third

Second

First

Fourth

Third

(In billions, at quarter end, except as noted)

Quarter

Quarter

Quarter

Quarter

Quarter

Assets in client accounts

Schwab One®, certain cash equivalents, and bank deposits

(5)

%

1

%

$

$

$

$

$

Bank deposit account balances

%

(1)

%

Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs

Money market funds (1)

%

5

%

Equity and bond funds and CTFs (2)

%

7

%

Total proprietary mutual funds and CTFs

%

6

%

Mutual Fund Marketplace® (3)

Mutual Fund OneSource® and other no-transaction-fee funds

%

4

%

Mutual fund clearing services

%

6

%

Other third-party mutual funds

%

5

%

Total Mutual Fund Marketplace

%

5

%

Total mutual fund assets

%

5

%

Exchange-traded funds

Proprietary ETFs (2)

%

%

Other third-party ETFs

%

9

%

Total ETF assets

%

9

%

Equity and other securities

%

5

%

Fixed income securities

6

%

—

Margin loans outstanding

%

2

%

Total client assets

%

5

%

$

$

$

$

$

Client assets by business

Investor Services

%

5

%

$

$

$

$

$

Advisor Services

%

6

%

Total client assets

%

5

%

$

$

$

$

$

Net growth in assets in client accounts (for the quarter ended)

Net new assets by business

Investor Services (4)

%

(8)

%

$

$

$

$

$

Advisor Services (5)

%

%

Total net new assets

%

%

$

$

$

$

$

Net market gains (losses)

Net growth (decline)

$

$

$

$

$

New brokerage accounts (in thousands, for the quarter ended)

9

%

(1)

%

Client accounts (in thousands)

Active brokerage accounts

4

%

1

%

Banking accounts

9

%

1

%

Workplace Plan Participant Accounts (6)

5

%

—

(1) Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations.

(2) Includes balances held on and off the Schwab platform. As of September 30, 2024, off-platform equity and bond funds, CTFs, and ETFs were $34.4 billion, $4.1 billion, and $129.3 billion, respectively.

(3) Excludes all proprietary mutual funds and ETFs.

(4) Third quarter of 2024 includes net outflows of $4.4 billion from off-platform Schwab Bank Retail CDs and an outflow of $0.1 billion from an international relationship. Second quarter of 2024 includes net inflows of $2.7 billion from off-platform Schwab Bank Retail CDs and an inflow of $10.3 billion from a mutual fund clearing services client. First quarter of 2024 includes net outflows of $7.4 billion from off-platform Schwab Bank Retail CDs. Fourth quarter of 2023 includes net inflows of $2.4 billion from off-platform Schwab Bank Retail CDs and outflows of $5.8 billion from an international relationship. Third quarter of 2023 includes net inflows of $3.3 billion from off-platform Schwab Bank Retail CDs.

(5) Fourth quarter of 2023 includes outflows of $6.4 billion from an international relationship. Third quarter of 2023 includes an outflow of $0.8 billion from an international relationship.

(6) Beginning in the fourth quarter 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Third quarter 2023 has been recast to reflect this change.

- 8 -

The Charles Schwab Corporation Monthly Activity Report For September 2024

Change

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Mo.

Yr.

Market Indices (at month end)

Dow Jones Industrial Average®

2

%

%

Nasdaq Composite®

3

%

%

Standard & Poor’s® 500

2

%

%

Client Assets (in billions of dollars)

Beginning Client Assets

Net New Assets (1)

(4)

%

%

Net Market Gains (Losses)

Total Client Assets (at month end)