10-Q

UNITED STATES

SECURITIES  AND  EXCHANGE  COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)
OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

For the quarterly period ended June 30, 2016

Commission File Number: 1-9700

THE  CHARLES  SCHWAB  CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 94-3025021 (I.R.S. Employer Identification No.)

211 Main Street, San Francisco, CA  94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code:  (415) 667-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes⌧No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer⌧ Non-accelerated filer☐(Do not check if a smaller reporting company) Accelerated filer☐ Smaller reporting company☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐ No⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

1,323,003,955shares of $.01 par value Common Stock

Outstanding on July 27, 2016

THE CHARLES SCHWAB CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2016

Index

Part I - Financial Information			Page
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):
		Statements of Income	27
		Statements of Comprehensive Income	28
		Balance Sheets	29
		Statements of Cash Flows	30
		Notes	31-55
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1-24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25-26
	Item 4.	Controls and Procedures	56
Part II - Other Information
	Item 1.	Legal Proceedings	57
	Item 1A.	Risk Factors	57
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
	Item 3.	Defaults Upon Senior Securities	58
	Item 4.	Mine Safety Disclosures	58
	Item 5.	Other Information	58
	Item 6.	Exhibits	59
Signature			60

Part I – FINANCIAL INFORMATION

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

INTRODUCTION

The Charles Schwab Corporation (CSC) is a savings and loan holding company engaged, through its subsidiaries, in wealth management, securities brokerage, banking, money management, custody, and financial advisory services. Charles Schwab & Co., Inc. (Schwab) is a securities broker-dealer with over 330domestic branch offices in46 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, England. In addition, Schwab serves clients in Hong Kong through one of CSC’s subsidiaries. Other subsidiaries include Charles Schwab Bank (Schwab Bank), a federal savings bank, and Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds, which are referred to as the Schwab Funds®, and for Schwab’s exchange-traded funds (ETFs), which are referred to as the Schwab ETFs™.

CSC and its subsidiaries (collectively, referred to as the Company) operate through two reportable segments – Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services.

This quarterly report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Forward-Looking Statements

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,” “aim,” “target,” “could,” “would,” “continue,” and other similar expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements, which reflect management’s beliefs, objectives, and expectations as of the date hereof, are necessarily estimates based on the best judgment of the Company’s senior management. These statements relate to, among other things:

· the impact of current market conditions and interest rates on the Company’s results of operations (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview” and “– Results of Operations – Net Interest Revenue”);

· management’s ability to adjust spending plans to maintain the balance between profitability and investing for growth (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview”);

· the expected impact of the final Department of Labor fiduciary rule, the final Federal Deposit Insurance Corporation (FDIC) assessment rule, and the proposed rule relating to a regulatory capital deduction for investments in unsecured debt issued by global systemically important banking organizations (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Current Regulatory Environment and Other Developments”);

· sources of liquidity, capital, and level of dividends (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity”);

· the timing of bulk transfers (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity”);

· target capital ratios (see “Part I, Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Management – Regulatory Capital Requirements”);

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

· the likelihood of indemnification and guarantee payment obligations (see “Part I, Item 1. – Condensed Consolidated Financial Statements (Unaudited) – Notes – 8. Commitments and Contingencies – Guarantees and indemnifications”); and

· the impact of legal proceedings and regulatory matters (see “Part I, Item 1. – Condensed Consolidated Financial Statements (Unaudited) – Notes – 8. Commitments and Contingencies – Legal contingencies” and “Part II, Item 1. – Legal Proceedings”).

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.

Important factors that may cause actual results to differ include, but are not limited to:

· changes in general economic and financial market conditions;

· changes in revenues and profit margin due to changes in interest rates;

· the level of interest rates, including yields available on money market mutual fund eligible instruments;

· the Company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets;

· client use of the Company’s investment advisory services and other products and services;

· the Company’s ability to develop and launch new products, services and capabilities in a timely and successful manner;

· fluctuations in client asset values due to changes in equity valuations;

· the performance or valuation of securities available for sale and securities held to maturity;

· trading activity;

· competitive pressures on rates and fees;

· the Company’s ability to manage expenses;

· the timing and impact of changes in the Company’s level of investments in land, leasehold improvements, information technology equipment and software;

· the clarification and interpretation of certain provisions in the final Department of Labor rule concerning fiduciary standards;

· the timing of when the FDIC’s Deposit Insurance Fund reserve ratio reaches a set threshold of insured deposits;

· the adverse impact of financial reform legislation and related regulations;

· the level of client assets, including cash balances;

· the amount of loans to the Company’s brokerage and banking clients;

· the level of the Company’s stock repurchase activity;

· the availability and terms of external financing;

· capital needs and management;

· client sensitivity to interest rates;

· timing, amount and impact of the migration of certain balances from brokerage accounts and sweep money market funds into Schwab Bank;

· regulatory guidance;

· potential breaches of contractual terms for which the Company has indemnification or guarantee obligations;

· the effect of adverse developments in litigation or regulatory matters and the extent of any related charges; and

· amounts recovered on insurance policies.

Certain of these factors, as well as general risk factors affecting the Company, are discussed in greater detail in “Part I –Item 1A – Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and “Part II – Other Information – Item 1A – Risk Factors.”

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

GLOSSARY OF TERMS

Active brokerage accounts: Brokerage accounts with activity within the preceding eight months.

Asset-backed securities: Debt securities backed by financial assets such as loans or receivables.

Assets receiving ongoing advisory services: Client relationships under the guidance of independent advisors and assets enrolled in one of the Company’s retail or other advisory solutions.

Average client assets: The daily average client asset balance for the period.

Basel III: Global regulatory standards on bank capital adequacy and liquidity issued by the Basel Committee on Banking Supervision.

Basis point: One basis point equals 1/100th of 1%, or 0.01%.

Cash and investments segregated and on deposit for regulatory purposes: Client cash or qualified securities balances not used for margin lending are segregated into investment accounts maintained for the exclusive benefit of clients, pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934, by the Company’s broker-dealer subsidiaries.

Client assets: The market value of all client assets custodied at the Company, which includes both cash and securities, at a point in time.  

Client cash as a percentage of client assets: Calculated as money market fund balances, bank deposits, Schwab One® balances, and certain cash equivalents as a percentage of client assets.

Clients’ daily average trades: Includes daily average revenue trades by clients, trades by clients in asset-based pricing relationships, and all commission-free trades.

Commitments to extend credit: Legally binding agreements to extend credit for unused home equity loans and lines of credit (HELOCs), Pledged Asset Lines® (PALs) and other lines of credit.

Common Equity Tier 1 (CET1) Capital: The sum of common stock and related surplus net of treasury stock, retained earnings, accumulated other comprehensive income (AOCI) and qualifying minority interests, less applicable regulatory adjustments and deductions.

Common Equity Tier 1 Risk-Based Capital Ratio: The ratio of CET1 Capital to total risk-weighted assets.

Concentration risk: The potential for loss resulting from holding large positions in financial instruments collateralized by assets with similar economic characteristics or in securities of a single issuer or particular industry or geographical area.

Core net new client assets: Net new client assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary (generally, greater than $10 billion) mutual fund clearing transfers.

Credit risk: The potential for loss due to a borrower, counterparty, or issuer failing to perform its contractual obligations.

Customer Protection Rule: Refers to Rule 15c3-3 of the Securities Exchange Act of 1934.

Daily average revenue trades: Total revenue trades during a certain period, divided by the number of trading days in that period. Revenue trades include all client trades that generate trading revenue (i.e., commission revenue or principal transaction revenue).

Debt to total capital ratio: Calculated as long-term debt divided by stockholders’ equity and long-term debt.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Delinquency roll rates: The rates at which loans transition through delinquency stages, ultimately resulting in a loss. The Company considers a loan to be delinquent if it is 30 days or more past due.

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank): Regulatory reform legislation signed into federal law in 2010 containing numerous provisions which expanded prudential regulation of large financial services companies.

Final Regulatory Capital Rules: Refers to the regulatory capital rules issued by U.S. banking agencies in July 2013 that implemented Basel III and relevant provisions of Dodd-Frank, which apply to savings and loan holding companies, as well as federal savings banks. Implementation began on January 1, 2015.

First Mortgages: Refers to first lien residential real estate mortgage loans, which include two loan classes: first mortgages and purchased first mortgages.

Full-time equivalent employees: Represents the total number of hours worked divided by a 40-hour work week for the following categories: full-time, part-time, and temporary employees and persons employed on a contract basis.

Interest rate risk: The potential for variability in net interest revenue or the fluctuation in the valuation of assets arising from changes in interest rates.

Interest-bearing liabilities: Includes bank deposits, payables to brokerage clients, short-term borrowings, and long-term debt on which the Company pays interest.

Interest-earning assets: Includes cash and cash equivalents, cash and investments segregated, broker-related receivables, receivables from brokerage clients, securities available for sale, securities held to maturity, and bank loans on which the Company earns interest.

Investment grade: Defined as a rating equivalent to a Moody’s Investors Service (Moody’s) rating of “Baa” or higher, or a Standard & Poor’s Ratings Group (Standard & Poor’s) or Fitch Ratings, Ltd (Fitch) rating of “BBB-” or higher.

Liquidity risk:The potential that the Company will be unable to sell assets or meet cash flow obligations when they come due without incurring unacceptable losses.

Loan-to-value ratio:Calculated as the principal amount of a loan divided by the value of the collateral securing the loan.

Margin loans:Advances made to brokerage clients on a secured basis to purchase securities reflected in receivables from brokerage clients on the Company’s balance sheets.

Market risk: The potential for changes in earnings or the value of financial instruments held by the Company as a result of fluctuations in interest rates, equity prices or market conditions.

Master netting arrangement: An agreement between two counterparties that have multiple contracts with each other that provides for net settlement of all contracts through a single cash payment in the event of default or termination of any one contract.

Mortgage-backed security: A type of asset-backed security that is secured by a mortgage or group of mortgages.

Net interest margin: Net interest revenue divided by average interest-earning assets.

Net new client assets: Total inflows of client cash and securities to the Company less client outflows.

New brokerage accounts: All brokerage accounts opened during the period, as well as any accounts added via acquisition.

Nonperforming assets: The total of nonaccrual loans and other real estate owned.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Operational risk: Potential for loss due to inadequate or failed internal processes, systems, and firms or exchanges handling client orders, or loss from external events and relationships impacting the Company and/or any of its key business partners and vendors.

Order flow revenue: Net compensation received from markets and firms to which Schwab and optionsXpress, Inc. send equity and options orders. Reflects rebates received for certain types of orders, minus fees paid for types of orders for which exchange fees or other charges apply.

Pledged Asset Line: A non-purpose revolving line of credit from Schwab Bank secured by eligible assets held in a separate pledged asset account maintained at Schwab.

Return on average common stockholders’ equity: Calculated as net income available to common stockholders annualized divided by average common stockholders’ equity.

Risk-weighted assets: Primarily computed by assigning specific risk-weightings as specified by the regulators to assets and off-balance sheet instruments for capital adequacy calculations.

Tier 1 Capital: The sum of CET1 Capital and additional Tier 1 Capital instruments and related surplus, less applicable adjustments and deductions.

Tier 1 Leverage Ratio: Tier 1 Capital divided by adjusted average total consolidated assets at the end of the quarter.

Trading days: Days in which the markets/exchanges are open for the buying and selling of securities. Early market closures are counted as half-days.

U.S. federal banking agencies: Refers to the Board of Governors of the Federal Reserve System (Federal Reserve), the Office of the Comptroller of the Currency (OCC), the FDIC, and the Consumer Financial Protection Bureau (CFPB).

Uniform Net Capital Rule: Refers to Rule 15c3-1 under the Securities Exchange Act of 1934 which specifies minimum capital requirements that are intended to ensure the general financial soundness and liquidity of broker-dealers.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

OVERVIEW

Management of the Company focuses on several key client activity and financial metrics in evaluating the Company’s financial position and operating performance. Management believes that net revenue growth, pre-tax profit margin, earnings per common share (EPS), and return on average common stockholders’ equity provide broad indicators of the Company’s overall financial health, operating efficiency, and ability to generate acceptable returns. Expenses excluding interest as a percentage of average client assets are considered by management to be a measure of operating efficiency. Results for the second quarters and first halves of 2016 and 2015 are:

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2016			2015			Change		2016			2015			Change
Client Metrics:
Net new client assets(in billions)	$	26.6		$	37.0		(28)	%	$	58.6		$	65.7		(11)	%
Core net new client assets (in billions) (1)	$	26.6		$	37.0		(28)	%	$	58.6		$	71.2		(18)	%
Client assets (in billions, at quarter end)	$	2,622.0		$	2,543.3		3	%
Average client assets (in billions)	$	2,585.4		$	2,576.2		-		$	2,515.4		$	2,542.3		(1)	%
New brokerage accounts (in thousands)		271			280		(3)	%		536			554		(3)	%
Active brokerage accounts (in thousands,
at quarter end)		9,977			9,605		4	%
Assets receiving ongoing advisory services
(in billions, at quarter end)	$	1,315.5		$	1,258.1		5	%
Client cash as a percentage of client assets
(at quarter end)		12.6	%		11.7	%
Company Financial Metrics:
Net revenues	$	1,828		$	1,566		17	%	$	3,592		$	3,092		16	%
Expenses excluding interest		1,108			999		11	%		2,217			2,041		9	%
Income before taxes on income		720			567		27	%		1,375			1,051		31	%
Taxes on income		268			214		25	%		511			396		29	%
Net income		452			353		28	%		864			655		32	%
Preferred stock dividends and other		46			23		100	%		66			34		94	%
Net income available to common stockholders	$	406		$	330		23	%	$	798		$	621		29	%
Earnings per common share – diluted	$	.30		$	.25		20	%	$	.60		$	.47		28	%
Net revenue growth from prior year		17	%		6	%				16	%		5	%
Pre-tax profit margin		39.4	%		36.2	%				38.3	%		34.0	%
Return on average common stockholders’ equity		13	%		12	%				13	%		11	%
Expenses excluding interest as a percentage of
average client assets (annualized)		0.17	%		0.16	%				0.18	%		0.16	%

(1) The six months ended June 30, 2015 excludes an inflow of $6.1 billion to reflect the final impact of the consolidation of the Company’s retirement plan recordkeeping platforms and an outflow of $11.6 billion relating to the Company’s planned resignation from an Advisor Services cash management relationship netting to an adjustment of ($5.5) billion.

During the second quarter of 2016, the Company continued to grow, steadily building clients and assets with a combination of financial products, service and value. The number of accounts enrolled in one of our retail advisory solutions reached 581,000, up 8%, through June 30, 2016, compared to the same period in 2015. At June 30, 2016, there were 10.0 million active brokerage accounts, 1.1 million banking accounts and 1.6 million retirement plan participants, up 4%, 6%, and 5%, respectively, from the same period in 2015.

Core net new assets were $26.6 billion and $58.6 billion, respectively, for the second quarter and first half of 2016, continuing a pattern of solid organic asset growth. Total client assets ended the second quarter of 2016 at $2.62 trillion, up 3% from the second quarter of 2015.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Net revenues increased by 17% and 16% in the second quarter and first half of 2016 compared to the same periods in 2015, respectively, primarily due to a combination of sustained success in growing our client base and the effects of the Federal Reserve’s initial rate increase in December 2015.

On the expense side, spending increased 11% and 9% in the second quarter and first half of 2016 compared to the same periods in 2015, respectively, in keeping with expectations of reinvesting a portion of improved revenues to support growth. This approach yielded a spread of 580 basis points between the pace of growth in net revenue and expense growth during the second quarter of 2016.

The pre-tax profit margin for the second quarter and first half of 2016 was 39.4% and 38.3%, respectively, compared to 36.2% and 34.0% for the same periods in 2015. Net income grew by 28% and 32%, respectively, for the second quarter and first half 2016 compared to the same periods in 2015.

At the end of the second quarter of 2016, market concerns regarding economic growth, interest rates and equity valuations escalated. While many of the concerns have abated somewhat, the Company recognizes the importance of remaining flexible in order to make the most of the environment as it evolves. The Company’s management is experienced in monitoring conditions and adjusting spending plans as necessary to maintain a balance between near-term profitability and investing for long-term growth.

Current Regulatory Environment and Other Developments

In May 2016, the Federal Reserve, the OCC and the FDIC jointly issued a notice of proposed rulemaking that would impose a minimum net stable funding ratio (NSFR) on certain banking organizations, including CSC. The NSFR is intended to measure an organization’s “available” amount of stable funding relative to its “required” amount of stable funding over a one-year time horizon. The effective date of the rule would be January 1, 2018. The comment period for the proposed rule ends on August 5, 2016 and the impact to the Company cannot be assessed until the final rule is released.

In April 2016, the Department of Labor published a final rule that significantly broadens the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974. Among other things, the new rule subjects broker-dealers who provide non-discretionary investment advice to retirement plans and accounts to a “best interest” standard, as well as other conditions and requirements. Based on the Company’sevaluation of the final rule to date, the Company does not expect the rule to have a material impact on the Company’s business, financial condition or results of operations.

In March 2016, the FDIC issued a final rule that will impose a surcharge on insured depository institutions with total consolidated assets of $10 billion or more in order to increase the reserve ratio of the FDIC’s Deposit Insurance Fund (DIF). Based on expected reductions in the Company’s regular FDIC insurance assessments combined with the surcharge, the Company anticipates that its overall FDIC assessment, relative to its regular assessment base, will increase by a net of approximately 2 to 2.5 basis points annually, beginning in the third quarter of 2016 and likely running through the end of 2018.

In December 2015, the OCC issued proposed guidelines to establish standards for recovery planning by national banks and federal savings banks with total consolidated assets of $50 billion or more. The proposed guidelines would require each bank to develop and maintain a recovery plan that sets forth the bank’s plan for how it will remain a going concern when it is experiencing considerable financial or operational stress. The comment period for the proposed guidelines ended on February 16, 2016 and the guidelines are subject to further modification. The Company will continue to evaluate the impact of the proposed guidelines.

In October 2015, the Federal Reserve issued a notice of proposed rulemaking that would require certain financial institutions that are subject to the Federal Reserve’s capital rules to apply a regulatory capital deduction treatment to their investments in unsecured debt issued by U.S. bank holding companies identified as global systemically important banking organizations. The comment period for the rule proposal ended on February 19, 2016 and the rule proposal is subject to further modification. The proposed effective date of the rule would be January 1, 2019. The Company continues to monitor developments in order to assess the impact of the proposed rule, but does not expect it to have a material impact on the Company’s business, financial condition and results of operations.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Results of Operations

The following discussion presents an analysis of the Company’s results of operations for the second quarter and first half of 2016 compared to the same periods in 2015.

Net Revenues

Three Months Ended June 30,			2016				2015
					% of				% of
	Percent				Total Net				Total Net
	Change		Amount		Revenues		Amount		Revenues
Asset management and administration fees
Mutual funds and ETF service fees (1)	23	%	$	461	25	%	$	375	24	%
Advice solutions	(1)	%		226	12	%		228	15	%
Other (1)	4	%		70	4	%		67	4	%
Asset management and administration fees	13	%		757	41	%		670	43	%
Net interest revenue
Interest revenue	30	%		840	46	%		645	41	%
Interest expense	27	%		(42)	(2)	%		(33)	(2)	%
Net interest revenue	30	%		798	44	%		612	39	%
Trading revenue
Commissions	(1)	%		190	10	%		191	12	%
Principal transactions	(8)	%		11	1	%		12	1	%
Trading revenue	(1)	%		201	11	%		203	13	%
Other	(11)	%		70	4	%		79	5	%
Provision for loan losses	-			2	-			2	-
Total net revenues	17	%	$	1,828	100	%	$	1,566	100	%

Six Months Ended June 30,			2016				2015
					% of				% of
	Percent				Total Net				Total Net
	Change		Amount		Revenues		Amount		Revenues
Asset management and administration fees
Mutual funds and ETF service fees (1)	20	%	$	876	24	%	$	733	24	%
Advice solutions	(2)	%		441	12	%		448	14	%
Other (1)	5	%		139	4	%		133	4	%
Asset management and administration fees	11	%		1,456	40	%		1,314	42	%
Net interest revenue
Interest revenue	31	%		1,650	46	%		1,262	41	%
Interest expense	29	%		(80)	(2)	%		(62)	(2)	%
Net interest revenue	31	%		1,570	44	%		1,200	39	%
Trading revenue
Commissions	(1)	%		405	11	%		409	13	%
Principal transactions	33	%		28	1	%		21	1	%
Trading revenue	1	%		433	12	%		430	14	%
Other	(6)	%		133	4	%		142	5	%
Provision for loan losses	(100)	%		-	-			6	-
Total net revenues	16	%	$	3,592	100	%	$	3,092	100	%

(1) Other third-party mutual funds have been reclassified to Mutual funds and ETFs. Related revenues have been reclassified from Other asset management and administration fees. Prior period information has been recast to reflect this change.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Asset Management and Administration Fees

Asset management and administration fees include mutual fund and ETF service fees and fees for other asset-based financial services provided to individual and institutional clients. The Company earns mutual fund and ETF service fees for shareholder services, administration, and investment management provided to its proprietary funds, and recordkeeping and shareholder services provided to third-party funds. These fees are based upon the daily balances of client assets invested in these funds.

The Company also earns asset management fees for advice solutions, which include managed portfolios, specialized strategies and customized investment advice.  

The fair values of client assets included in proprietary and third-party mutual funds and ETFs are based on quoted market prices and other observable market data.

Other asset management and administration fees include various asset-based fees, such as trust fees,401(k) recordkeeping fees, mutual fund clearing fees, collective trust fund fees, and non-balance based service and transaction fees.

Asset management and administration fees vary with changes in the balances of client assets due to market fluctuations and client activity. For a discussion of the impact of current market conditions on asset management and administration fees, see “Item 3 – Quantitative and Qualitative Disclosures About Market Risk.”

The following tables present a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds and ETFs, and Mutual Fund OneSource®:

		Schwab Money				Schwab Equity and				Mutual Fund
		Market Funds				Bond Funds and ETFs				OneSource®
Three Months Ended June 30,		2016		2015		2016		2015		2016		2015
Balance at beginning of period	$	167,427	$	162,473	$	104,953	$	95,161	$	203,759	$	237,317
Net inflows (outflows)		(6,495)		(6,906)		3,572		3,498		(4,437)		(6,282)
Net market gains (losses) and other		19		10		2,197		(260)		4,030		212
Balance at end of period	$	160,951	$	155,577	$	110,722	$	98,399	$	203,352	$	231,247

		Schwab Money				Schwab Equity and				Mutual Fund
		Market Funds				Bond Funds and ETFs				OneSource®
Six Months Ended June 30,		2016		2015		2016		2015		2016		2015
Balance at beginning of period	$	166,148	$	167,909	$	102,112	$	88,450	$	207,654	$	234,381
Net inflows (outflows)		(5,243)		(12,506)		5,654		8,296		(9,179)		(8,875)
Net market gains (losses) and other		46		174		2,956		1,653		4,877		5,741
Balance at end of period	$	160,951	$	155,577	$	110,722	$	98,399	$	203,352	$	231,247

-  9  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following tables present asset management and administration fees, average client assets, and average fee yields:

Three Months Ended June 30,		2016					2015
	Average Client Assets		Revenue		Average Fee	Average Client Assets		Revenue		Average Fee
Schwab money market funds before fee waivers	$	163,929	$	239	0.59%	$	157,418	$	230	0.59%
Fee waivers				(55)					(168)
Schwab money market funds		163,929		184	0.45%		157,418		62	0.16%
Schwab equity and bond funds and ETFs		112,814		52	0.19%		103,986		56	0.22%
Mutual Fund OneSource®		201,034		169	0.34%		235,433		199	0.34%
Other third-party mutual funds and ETFs (1)		252,405		56	0.09%		257,516		58	0.09%
Total mutual funds and ETFs (2)	$	730,182		461	0.25%	$	754,353		375	0.20%
Advice solutions (2):
Fee-based	$	175,973		226	0.52%	$	174,657		228	0.52%
Intelligent Portfolios		6,620		-	-		2,159		-	-
Legacy Non-Fee		17,015		-	-		16,783		-	-
Total advice solutions	$	199,608		226	0.46%	$	193,599		228	0.47%
Other balance-based fees (3)		338,529		58	0.07%		327,569		57	0.07%
Other (4)				12					10
Total asset management and administration fees			$	757				$	670

Six Months Ended June 30,		2016					2015
	Average Client Assets		Revenue		Average Fee	Average Client Assets		Revenue		Average Fee
Schwab money market funds before fee waivers	$	166,184	$	485	0.59%	$	161,411	$	469	0.59%
Fee waivers				(152)					(353)
Schwab money market funds		166,184		333	0.40%		161,411		116	0.14%
Schwab equity and bond funds and ETFs		108,103		103	0.19%		100,556		108	0.22%
Mutual Fund OneSource®		197,839		333	0.34%		234,342		395	0.34%
Other third-party mutual funds and ETFs (1)		244,820		107	0.09%		253,031		114	0.09%
Total mutual funds and ETFs (2)	$	716,946		876	0.25%	$	749,340		733	0.20%
Advice solutions (2):
Fee-based	$	171,146		441	0.52%	$	172,405		448	0.52%
Intelligent Portfolios		5,868		-	-		1,725		-	-
Legacy Non-Fee		16,712		-	-		16,815		-	-
Total advice solutions	$	193,726		441	0.46%	$	190,945		448	0.47%
Other balance-based fees (3)		328,278		114	0.07%		320,699		112	0.07%
Other (4)				25					21
Total asset management and administration fees			$	1,456				$	1,314

Note: Certain changes have been made to the above categorizations. Prior period information has been recast to reflect these changes.

(1)	Includes Schwab ETF OneSource™.
(2)	Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above.
(3)	Includes various asset-based fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
(4)	Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

Asset management and administration fees increased by $87 million, or 13%, and $142 million, or 11%, in the second quarter and first half of 2016 compared to the same periods in 2015. The increase in mutual fund and ETF service fees is primarily due to higher net yields on money market fund assets, partially offset by a reduction in average client assets in Mutual Fund OneSource.

-  10  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Net Interest Revenue

Net interest revenue is the difference between interest earned on interest-earning assets and interest paid on funding sources. The Company’s interest-earning assets are primarily funded through bank deposits and brokerage client account balances.

Interest-earning assets primarily include cash and cash equivalents, segregated cash and investments, margin loans included in receivables from brokerage clients, investment securities and bank loans on which the Company earns interest. Revenue on interest-earning assets is affected by various factors such as the distribution and composition of assets, prevailing interest rates when purchased, and changes in prepayment levels. Fees earned on securities borrowed and loaned are included in other interest revenue and expense. The rates on the majority of the Company’s investment securities and loans re-price or reset based on short-term interest rates and the remainder is invested in fixed-rate loans and securities.

The Company’s interest-bearing liabilities include bank deposits, payables to brokerage clients, short-term borrowings and long-term debt. Interest-bearing liabilities are primarily sensitive to short-term interest rates and the Company establishes the rates paid on most of these liabilities. The Company expects that the rate paid on these liabilities will generally adjust at some fraction of the movement in short-term interest rates.

The Company expects that net interest revenue will increase as short-term interest rates increase and decline should rates fall below current levels. When interest rates fall, the Company may attempt to mitigate some of this negative impact by lowering rates paid to clients on interest-bearing liabilities. The current low interest rate environment limits the extent to which the Company can reduce interest expense on funding sources. The Company may also alter the amount and type of fixed rate loans and securities that are added to the portfolio. Generally, modest increases in the percentage of fixed-rate assets will reduce the rate at which net interest revenue changes if rates move.

Non-interest bearing funding sources include non-interest bearing cash balances, stockholders’ equity and other miscellaneous assets and liabilities.

-  11  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following tables present net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheets:

Three Months Ended June 30,	2016						2015
			Interest		Average				Interest		Average
	Average		Revenue/		Yield/		Average		Revenue/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Interest-earning assets:
Cash and cash equivalents	$	10,888	$	14	0.52	%	$	8,540	$	6	0.28	%
Cash and investments segregated		19,155		22	0.46	%		18,265		7	0.15	%
Broker-related receivables (1)		685		-	0.20	%		261		-	0.02	%
Receivables from brokerage clients		15,027		124	3.32	%		15,105		125	3.32	%
Securities available for sale (2)		71,431		211	1.19	%		61,194		153	1.00	%
Securities held to maturity		53,404		335	2.52	%		36,458		227	2.50	%
Bank loans		14,569		98	2.71	%		13,866		91	2.63	%
Total interest-earning assets		185,159		804	1.75	%		153,689		609	1.59	%
Other interest revenue				36						36
Total interest-earning assets	$	185,159	$	840	1.82	%	$	153,689	$	645	1.68	%
Funding sources:
Bank deposits	$	136,009	$	8	0.02	%	$	110,159	$	6	0.02	%
Payables to brokerage clients (1)		25,302		1	0.01	%		25,138		-	0.01	%
Short-term borrowings (1,4)		2,038		2	0.39	%		24		-	0.15	%
Long-term debt (5)		2,876		26	3.64	%		2,889		24	3.33	%
Total interest-bearing liabilities (5)		166,225		37	0.09	%		138,210		30	0.09	%
Non-interest-bearing funding sources (4)		18,934						15,479
Other interest expense (3)				5						3
Total funding sources	$	185,159	$	42	0.09	%	$	153,689	$	33	0.08	%
Net interest revenue			$	798	1.73	%			$	612	1.60	%

(1)	Interest revenue or expense was less than $500,000 in the period or periods presented.
(2)	Amounts have been calculated based on amortized cost.
(3)	Includes the impact of capitalizing interest on building construction and software development.
(4)	Certain prior period amounts have been reclassified to conform to the 2016 presentation.
(5)	Adjusted for the retrospective adoption of Accounting Standards Update (ASU) 2015-03. See “Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) – 2. New Accounting Standards” for additional information.

-  12  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Six Months Ended June 30,	2016						2015
			Interest		Average				Interest		Average
	Average		Revenue/		Yield/		Average		Revenue/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Interest-earning assets:
Cash and cash equivalents	$	10,820	$	27	0.50	%	$	8,959	$	11	0.25	%
Cash and investments segregated		19,710		41	0.42	%		18,884		13	0.14	%
Broker-related receivables (1)		535		-	0.15	%		271		-	0.06	%
Receivables from brokerage clients		14,959		249	3.35	%		14,763		244	3.33	%
Securities available for sale (2)		69,797		409	1.18	%		59,315		295	1.00	%
Securities held to maturity		51,830		657	2.55	%		35,673		445	2.52	%
Bank loans		14,487		197	2.73	%		13,701		181	2.66	%
Total interest-earning assets		182,138		1,580	1.74	%		151,566		1,189	1.58	%
Other interest revenue				70						73
Total interest-earning assets	$	182,138	$	1,650	1.82	%	$	151,566	$	1,262	1.68	%
Funding sources:
Bank deposits	$	133,814	$	16	0.02	%	$	108,008	$	14	0.03	%
Payables to brokerage clients		26,015		1	0.01	%		25,602		1	0.01	%
Short-term borrowings (1,4)		1,029		2	0.39	%		16		-	0.15	%
Long-term debt (5)		2,877		52	3.63	%		2,517		43	3.45	%
Total interest-bearing liabilities (5)		163,735		71	0.09	%		136,143		58	0.09	%
Non-interest-bearing funding sources (4)		18,403						15,423
Other interest expense (3)				9						4
Total funding sources	$	182,138	$	80	0.09	%	$	151,566	$	62	0.08	%
Net interest revenue			$	1,570	1.73	%			$	1,200	1.60	%

(1)	Interest revenue or expense was less than $500,000 in the period or periods presented.
(2)	Amounts have been calculated based on amortized cost.
(3)	Includes the impact of capitalizing interest on building construction and software development.
(4)	Certain prior period amounts have been reclassified to conform to the 2016 presentation.
(5)	Adjusted for the retrospective adoption of ASU 2015-03. See “Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) – 2. New Accounting Standards” for additional information.

Net interest revenue increased $186 million, or 30%,and $370 million, or 31% in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to higher average balances of held to maturity and available for sale securities, and higher average interest rates on securities available for sale and cash and investments segregated. The growth in average balances in bank deposits resulted from an increase in amounts swept to Schwab Bank of uninvested cash balances in certain client brokerage accounts. Starting in June 2016, the Schwab Bank sweep feature became the default investment option for uninvested cash balances within all new brokerage accounts. 

Trading Revenue

Trading revenue includes commission and principal transaction revenues. Commission revenue is affected by the number of revenue trades executed and the average revenue earned per revenue trade. Principal transaction revenue is primarily comprised of revenue from trading activity in fixed income securities with clients. To accommodate clients’ fixed income trading activity, the Company maintains positions in fixed income securities, including U.S. state and municipal debt obligations, U.S. Government and corporate debt, and other securities. The difference between the price at which the Company buys and sells securities to and from its clients and other broker-dealers is recognized as principal transaction revenue. Principal transaction revenue also includes adjustments to the fair value of these securities positions.  

-  13  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following table presents trading revenue and the related drivers:

	Three Months Ended						Six Months Ended
	June 30,				Percent		June 30,				Percent
	2016		2015		Change		2016		2015		Change
Daily average revenue trades (in thousands)		279		267	4	%		303		290	4	%
Clients’ daily average trades (in thousands)		518		494	5	%		566		537	5	%
Number of trading days		64.0		63.0	2	%		125.0		124.0	1	%
Average revenue per revenue trade	$	11.27	$	11.97	(6)	%	$	11.36	$	11.97	(5)	%
Trading revenue	$	201	$	203	(1)	%	$	433	$	430	1	%

Other Revenue

Other revenue includes order flow revenue, nonrecurring gains, software fees from the Company’s portfolio management services, exchange processing fees, and other service fees.

Other revenue decreased by $9 million, or 11%, and $9 million, or 6%, in the second quarter and first half of 2016 compared to the same periods in 2015, respectively, primarily due to higher litigation proceeds in the second quarter of 2015 relating to the Company’s non-agency residential mortgage-backed securities portfolio, partially offset by higher gains on sales of securities available for sale. 

Order flow revenue was $25 million and $52 million during the second quarters and first halves of both 2016 and 2015, respectively.

Expenses Excluding Interest

The following table shows a comparison of expenses excluding interest:

	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,						Percent
	2016			2015			Change		2016			2015			Change
Compensation and benefits	$	602		$	540		11	%	$	1,228		$	1,121		10	%
Professional services		125			112		12	%		241			226		7	%
Occupancy and equipment		101			85		19	%		199			168		18	%
Advertising and market development		70			62		13	%		140			131		7	%
Communications		62			59		5	%		122			117		4	%
Depreciation and amortization		57			55		4	%		113			109		4	%
Other		91			86		6	%		174			169		3	%
Total expenses excluding interest	$	1,108		$	999		11	%	$	2,217		$	2,041		9	%
Expenses as a percentage of total net revenues:
Compensation and benefits		33	%		34	%				34	%		36	%
Advertising and market development		4	%		4	%				4	%		4	%

Compensation and Benefits

Compensation and benefits expense includes salaries and wages, incentive compensation, and related employee benefits. Incentive compensation includes variable compensation, discretionary bonuses, and stock-based compensation. Variable compensation includes payments to certain individuals based on their sales performance. Discretionary bonuses are based on the Company’s overall performance as measured by EPS. Stock-based compensation primarily includes employee and board of director stock options and restricted stock.

-  14  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following table shows a comparison of certain compensation and benefits components and employee data:

	Three Months Ended						Six Months Ended
	June 30,				Percent		June 30,				Percent
	2016		2015		Change		2016		2015		Change
Salaries and wages	$	339	$	313	8	%	$	675	$	630	7	%
Incentive compensation		166		144	15	%		339		301	13	%
Employee benefits and other		97		83	17	%		214		190	13	%
Total compensation and benefits expense	$	602	$	540	11	%	$	1,228	$	1,121	10	%
Full-time equivalent employees (in thousands)
At quarter end		16.1		15.0	7	%
Average		15.9		15.0	6	%		15.7		14.9	5	%

Salaries and wages increased in the second quarter and first half of 2016 compared to the same periods in 2015 primarily due to higher employee headcount to support the growth in the business and annual salary increases.

Incentive compensation increased in the second quarter and first half of 2016 compared to the same periods in 2015 primarily due to higher discretionary bonus expenses, long-term incentive plan costs, and field incentive plan costs relating to increased net client asset flows. The increase in incentive compensation in the first half of 2016 was also due to higher stock compensation expense.

Employee benefits and other expenses increased in the second quarter and first half of 2016 compared to the same periods in 2015 due to increases in healthcare costs and higher employee headcount.

Expenses Excluding Compensation and Benefits

Professional services expense increased in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to higher spending on technology services and an increase in fees paid to outsourced service providers and consultants as the Company continued to invest in the business.

Occupancy and equipment expense increased in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to an increase in software maintenance expense relating to the Company’s information technology systems and increases in property taxes and rent attributable to the changes in the Company’s geographic footprint.

Advertising and market development expense increased in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to an increase in media advertising.

Taxes on Income

The Company’s effective income tax rate on income before taxes was 37.2% and 37.7% for the second quarters and first halves of 2016 and 2015, respectively. The effective income tax rate decreases in the second quarter and first half of 2016 from the same periods in the prior year were primarily due to increases in tax exempt income from U.S. state and municipal securities.

Segment Information

The Company provides financial services to individuals and institutional clients through two segments – Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services.Revenues and expenses are allocated to the Company’s two segments based on which segment services the client. The Company evaluates the performance of its segments on a pre-tax basis, excluding items such as restructuring and other charges. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments.

-  15  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Financial information for the Company’s reportable segments is presented in the following tables:

	Investor Services (1)						Advisor Services (1)						Total
	Percent						Percent						Percent
Three Months Ended June 30,	Change		2016		2015		Change		2016		2015		Change		2016		2015
Net Revenues:
Asset management and
administration fees	11	%	$	514	$	465	19	%	$	243	$	205	13	%	$	757	$	670
Net interest revenue	20	%		628		524	93	%		170		88	30	%		798		612
Trading revenue	(3)	%		129		133	3	%		72		70	(1)	%		201		203
Other	(11)	%		51		57	(14)	%		19		22	(11)	%		70		79
Provision for loan losses	-			2		2	-			-		-	-			2		2
Total net revenues	12	%		1,324		1,181	31	%		504		385	17	%		1,828		1,566
Expenses Excluding Interest	10	%		834		760	15	%		274		239	11	%		1,108		999
Income before taxes on income	16	%	$	490	$	421	58	%	$	230	$	146	27	%	$	720	$	567

	Investor Services (1)						Advisor Services (1)						Total
	Percent						Percent						Percent
Six Months Ended June 30,	Change		2016		2015		Change		2016		2015		Change		2016		2015
Net Revenues:
Asset management and
administration fees	8	%	$	986	$	911	17	%	$	470	$	403	11	%	$	1,456	$	1,314
Net interest revenue	20	%		1,241		1,034	98	%		329		166	31	%		1,570		1,200
Trading revenue	(3)	%		272		280	7	%		161		150	1	%		433		430
Other	(4)	%		97		101	(12)	%		36		41	(6)	%		133		142
Provision for loan losses	(100)	%		-		6	-			-		-	(100)	%		-		6
Total net revenues	11	%		2,596		2,332	31	%		996		760	16	%		3,592		3,092
Expenses Excluding Interest	8	%		1,671		1,546	10	%		546		495	9	%		2,217		2,041
Income before taxes on income	18	%	$	925	$	786	70	%	$	450	$	265	31	%	$	1,375	$	1,051

(1) The Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment in the fourth quarter of 2015. Prior period information has been recast to reflect these changes.

Investor Services

Net revenues increased by $143 million, or 12%, and $264 million, or 11%, in the second quarter and first half of 2016 compared to the same periods in 2015 primarily due to increases in net interest revenue and asset management and administration fees. Net interest revenue increased primarily due to higher balances of interest-earning assets, and higher interest rates on securities available for sale and cash and investments segregated.  Asset management and administration fees increased primarily due to higher net yields on money market fund assets, partially offset by a reduction in client assets in Mutual Fund OneSource®.

Expenses excluding interest increased by $74 million, or 10%,  and $125 million, or 8%, in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to increases in compensation and benefits and occupancy and equipment expenses. Compensation and benefits expenses are higher as a result of higher headcount in client-facing positions and higher incentive compensation associated with growth in net client asset flows.

-  16  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Advisor Services

Net revenues increased by $119 million, or 31%,  and $236 million, or 31%, in the second quarter and first half of 2016 compared to the same periods in 2015 primarily due to increases in net interest revenue, asset management and administration fees and trading revenue. Net interest revenue increased primarily due to higher balances of interest-earning assets. This growth was bolstered by the decision to migrate more uninvested client cash balances in the segment to the Schwab Bank sweep feature. Net interest revenue also improved due to higher interest rates on securities available for sale and cash and investments segregated. Asset management and administration fees increased primarily due to higher net yields on money market fund assets. Trading revenue increased due to higher daily average revenue trades, partially offset by lower commissions per revenue trade.

Expenses excluding interest increased by $35 million, or 15%,  and $51 million, or 10%, in the second quarter and first half of 2016 compared to the same periods in 2015, primarily due to increases in compensation and benefits and occupancy and equipment expenses.

Risk Management

The Company’s business activities expose it to a variety of risks, including operational, credit, market, liquidity, compliance and legal risk. The Company has a comprehensive risk management program to identify and manage these risks and their associated potential for financial and reputational impact. Despite the Company’s efforts to identify areas of risk and implement risk management policies and procedures, there can be no assurance that the Company will not suffer unexpected losses due to these risks.

For a discussion on risks that the Company faces and the Company’s process of risk identification and assessment, risk measurement, risk monitoring and reporting and risk mitigation, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. For updated information on the Company’s credit risk and concentration risk exposures, see below. See “Item 3 – Quantitative and Qualitative Disclosures About Market Risk” for additional information relating to market risk.

Credit Risk Exposures

The Company’s exposure to credit risk mainly results from margin lending and client option and futures activities, securities lending activities, mortgage lending activities, pledged asset lending, its role as a counterparty in financial contracts and other investing activities. To manage the risks of such losses, the Company has established policies and procedures which include: establishing and reviewing credit limits, monitoring of credit limits and quality of counterparties, and adjusting margin, PAL, option, and futures requirements for certain securities. Collateral arrangements relating to margin loans, PALs, option positions, securities lending agreements, and resale agreements include provisions that require additional collateral in the event market fluctuations result in declines in the value of collateral received. Additionally, for margin loan, PAL and securities lending agreements, collateral arrangements require that the fair value of such collateral exceeds the amounts loaned.

Schwab performs clearing services for all securities transactions in its client accounts. Schwab has exposure to credit risk due to its obligation to settle transactions with clearing corporations, mutual funds, and other financial institutions even if Schwab’s clients or a counterparty fail to meet their obligations to Schwab.

The Company’s bank loan portfolio includes First Mortgages, HELOCs, PALs and other loans. The credit risk exposure related to loans is actively managed through individual and portfolio reviews. Management regularly reviews asset quality, including concentrations, delinquencies, nonaccrual loans, charge-offs, and recoveries. All are factors in the determination of an appropriate allowance for loan losses.

The Company’s residential loan underwriting guidelines include maximum loan-to-value (LTV) ratios, cash out limits, and minimum Fair Isaac Corporation (FICO) credit scores. The specific guidelines are dependent on the individual characteristics of a loan (for example, whether the property is a primary or secondary residence, whether the loan is for investment property,

-  17  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

whether the loan is for an initial purchase of a home or refinance of an existing home, and whether the loan size is conforming or jumbo).

The Company does not originate or purchase residential loans that allow for negative amortization and does not purchase subprime loans (generally defined as extensions of credit to borrowers with a FICO score of less than 620 at origination), unless the borrower has compensating credit factors.

Among other items, the Company monitors the following information in evaluating the First Mortgage and HELOC portfolios and in the determination of an appropriate allowance for loan losses:

	First
June 30, 2016	Mortgages			HELOCs
Percentage of loans to borrowers with updated FICO scores <620		1	%		1	%
Weighted-average origination FICO scores		771			769
Weighted-average updated FICO scores		774			770
Weighted-average origination LTV ratios		58	%		58	%
Weighted-average current LTV ratios		47	%		49	%

A portion of the Company’s HELOC portfolio is secured by second liens on the associated properties. Second lien mortgage loans possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. At June 30, 2016, $2.0 billion, or 79%, of the HELOC portfolio was in a second lien position. In addition to the credit monitoring activities described above, the Company also monitors credit risk on second lien HELOC loans by reviewing the delinquency status of the first lien loan on the associated property. At June 30, 2016, approximately 30% of the HELOC borrowers that had a balance only paid the minimum amount of interest due.

The following table presents certain of the Company’s bank loan quality metrics as a percentage of total outstanding bank loans:

	June 30,			December 31,
	2016			2015
Loan delinquencies (1)		0.23	%		0.25	%
Nonaccrual loans (2)		0.18	%		0.19	%
Allowance for loan losses		0.21	%		0.22	%

(1)	Loan delinquencies include loans that are 30 days or more past due.
(2)	Nonaccrual loans include loans past due more than 90 days and other nonaccrual loans.

For more information on the Company’s credit quality indicators relating to its First Mortgage and HELOC portfolios, including delinquency characteristics, borrower FICO scores at origination (Origination FICO), updated borrower FICO scores (Updated FICO), LTV ratios at origination (Origination LTV), and estimated current LTV ratios (Estimated Current LTV), see “Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) – 4. Bank Loans and Related Allowance for Loan Losses.”

The Company has exposure to credit risk associated with its available for sale and securities held to maturity securities which include U.S. agency and non-agency mortgage-backed securities, asset-backed securities, corporate debt securities, U.S. agency notes, U.S. Treasury securities, certificates of deposit, U.S. state and municipal securities, and commercial paper.  

At June 30, 2016, all securities in the available for sale and held to maturity portfolios were rated investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government-sponsored enterprises.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Concentration Risk Exposures

The Company has exposure to concentration risk when holding large positions in financial instruments collateralized by assets with similar economic characteristics or in securities of a single issuer or within a particular industry or geographical area.

The fair value of the Company’s investments in mortgage-backed securities totaled $88.3 billion at June 30, 2016. Of these, $87.1 billion were issued by U.S. agencies and $1.2 billion were issued by private entities (non-agency securities). These U.S. agency and non-agency securities are included in securities available for sale and securities held to maturity.

The fair value of the Company’s investments in asset-backed securities totaled $21.8 billion at June 30, 2016. The Company holds $10.6 billion floating rate Federal Family Education Loan Program Asset-Backed Securities (FFELP ABS). Two Nationally Recognized Statistical Rating Organizations have placed a portion of FFELP ABS on review for downgrade. Both agencies have indicated that some classes could be downgraded below investment grade due to the risk that some remainder of the securities could be outstanding after their legal final maturity dates. The timing of FFELP ABS principal payment is inherently uncertain given the variety of payment options available to student loan borrowers. Loans collateralizing these securities continue to be covered by a guarantee from the Department of Education of at least 97% of principal and interest. The Company holds only senior class notes that have additional credit enhancement of 3% or more that, together with the Department of Education guarantee, provide 100% or more credit enhancement. The Company has an independent credit assessment function and it does not rely on rating agencies. The Company does not consider these securities to be impaired because it expects full payment of principal and interest. Therefore, the Company continues to assign them the highest internal credit rating.

The fair value of the Company’s investments in corporate debt securities and commercial paper totaled $11.0 billion at June 30, 2016, with the majority issued by institutions in the financial services industry. These securities are included in securities available for sale, cash and cash equivalents, and other securities owned in the Company’s condensed consolidated balance sheets. Issuer, geographic, and sector concentrations are controlled by established credit policy limits to each concentration type.

The Company’s bank loans include $7.6 billion of adjustable rate First Mortgage loans at June 30, 2016. The Company’s adjustable rate mortgages have initial fixed interest rates for three to ten years and interest rates that adjust annually thereafter. Approximately 38% of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 55% of these interest-only loans are not scheduled to reset for three or more years. The Company’s mortgage loans do not include interest terms described as temporary introductory rates below current market rates.

The Company’s HELOC product has a 30-year loan term with a revolving period of ten years from the date of origination. After the revolving period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the revolving period and the 20-year amortizing period is a floating rate based on the prime rate plus a margin. HELOCs that convert to an amortizing loan may experience higher delinquencies and higher loss rates than those in the revolving period. The Company’s allowance for loan loss methodology takes this increased inherent risk into consideration. The following table presents when current outstanding HELOCs will convert to amortizing loans:

June 30, 2016	Balance
Converted to amortizing loan by period end	$	482
Within 1 year		139
> 1 year – 3 years		950
> 3 years – 5 years		258
> 5 years		753
Total	$	2,582

The Company also has exposure to concentration risk from its margin and securities lending, PAL, and client option and futures activities collateralized by or referencing securities of a single issuer, an index, or within a single industry. This concentration risk is mitigated by collateral arrangements that require the fair value of such collateral exceed the amounts loaned.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The Company has indirect exposure to U.S. Government and agency securities held as collateral to secure its resale agreements. The Company’s primary credit exposure on these resale transactions is with its counterparty. The Company would have exposure to the U.S. Government and agency securities only in the event of the counterparty’s default on the resale agreements. The fair value of U.S. Government and agency securities held as collateral for resale agreements totaled $7.4 billion at June 30, 2016.

Foreign Holdings

At June 30, 2016, theCompany had exposure to non-sovereign financial and non-financial institutions in foreign countries of $6.8 billion, with the fair value of the top three exposures being to issuers and counterparties domiciled in Sweden at $1.4 billion, Canada at $1.4 billion and Australia at $1.3 billion. The Company has no direct exposure to sovereign foreign governments. The Company does not have unfunded commitments to counterparties in foreign countries, nor does it have exposure as a result of credit default protection purchased or sold separately as of June 30, 2016.In addition to the direct holdings in foreign companies, the Company has indirect exposure to foreign countries through its investments in Schwab sponsored money market funds (collectively, the Funds) resulting from brokerage clearing activities. At June 30, 2016, the Company had $162 million in investments in these Funds. Certain of the Funds’ positions include certificates of deposits, time deposits, commercial paper and corporate debt securities issued by counterparties in foreign countries.Additionally, at June 30, 2016, the Company had outstanding margin loans to foreign residents of $434 million, which are fully collateralized.

LIQUIDITY

CSC’s liquidity needs are primarily driven by the capital needs of Schwab Bank and liquidity and capital needs of Schwab, the amount of dividend payments on CSC’s common and preferred stock and principal and interest due on corporate debt. The liquidity needs of its brokerage subsidiaries are primarily driven by client activity including trading and margin borrowing activities and capital expenditures; and the capital needs of its bank subsidiary are primarily driven by client deposits.

The Company has established liquidity policies to support the successful execution of its business strategies, while ensuring ongoing and sufficient liquidity to meet its operational needs and satisfy applicable regulatory requirements under both normal and stress conditions. For additional information on the policies and methodologies used to monitor and manage liquidity, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Beginning on January 1, 2016, the Company became subject to the modified liquidity coverage ratio (LCR) rule which, when fully phased in, will require CSC to hold high-quality liquid assets equal to at least 70% of projected net cash outflows over a 30-day period, as defined by the rule. At June 30, 2016, the Company was in compliance with the fully phased-in modified LCR rule. For additional information on the LCR rule, see “Item 1 – Business – Regulation” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The Company’s primary source of funds is cash generated by client activity: bank deposits and cash balances in brokerage client accounts. Bank deposits swept from brokerage accounts were $116.0 billion at June 30, 2016 compared to $108.1 billion at December 31, 2015. These funds were used to invest in interest earning assets, thereby funding a significant portion of the 8% growth in the Company’s balance sheet.

Other sources of funds may include cash flows from operations, maturities and sales of investment securities, repayments on loans, securities lending, and cash provided by external financing or equity offerings.

To meet daily funding needs, the Company maintains liquidity in the form of overnight cash deposits and short-term investments. For unanticipated liquidity needs, the Company maintains a buffer of highly liquid investments, currently comprised of U.S. Treasury notes.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

In addition to internal sources of liquidity, the Company has sources of external funding. CSC maintains a$750 million committed, unsecured credit facility with a group of banks that is scheduled to expire in June 2017.  This facility replaced a similar facility that expired in June 2016, and both facilities  were unused during the first half of 2016. The funds under this facility are available for general corporate purposes. The financial covenants require Schwab to maintain a minimum net capital ratio, Schwab Bank to be well capitalized, and CSC to maintain a minimum level of stockholders’ equity, adjusted to exclude AOCI.  At June 30, 2016, the minimum level of stockholders’ equity required under this facility was $9.7 billion (CSC’s stockholders’ equity, excluding AOCI, at June 30, 2016 was $15.0 billion). Management believes these restrictions will not have a material effect on CSC’s ability to meet foreseeable dividend or funding requirements.

CSC and Schwab also have access to uncommitted, unsecured bank credit lines with several banks. The need for short-term borrowings from these sources arises primarily from timing differences between cash flow requirements, scheduled liquidation of interest-earning investments, and movements of cash to meet regulatory brokerage client cash segregation requirements. These lines were not used by CSC during the first half of 2016. Schwab used such borrowings for one day during the first half of 2016 for $15 million, and there were no borrowings outstanding under these lines at June 30, 2016.

To partially satisfy the margin requirement of client option transactions with the Options Clearing Corporation, the broker-dealer subsidiaries have unsecured standby letter of credit agreements (LOCs) with several banks in favor of the Options Clearing Corporation aggregating $310 million at June 30, 2016. There were no funds drawn under any of these LOCs during the first half of 2016. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The collateral requirements were satisfied by providing cash as collateral.

Schwab Bank has access to short-term secured funding through the Federal Reserve’s discount window. Amounts available under the Federal Reserve discount window are dependent on the fair value of certain of Schwab Bank’s securities available for sale and/or securities held to maturity that are pledged as collateral. Schwab Bank maintains policies and procedures necessary to access this funding and tests discount window borrowing procedures on a periodic basis. At June 30, 2016, $1.8 billion was available under this arrangement. There were no funds drawn under this arrangement during the first half of 2016.

Schwab Bank also maintains a secured credit facility with the Federal Home Loan Bank of San Francisco. Amounts available under this facility are dependent on the amount of Schwab Bank’s First Mortgages, HELOCs, and the fair value of certain of Schwab’s securities available for sale and/or securities held to maturity that are pledged as collateral. Schwab Bank maintains policies and procedures necessary to access this funding and tests borrowing procedures on a periodic basis. At June 30, 2016, $5.0billion was outstanding under this facility with an additional $3.9 billion available based on the loans currently pledged there. This funding source is being used to temporarily support recent investment purchases until later in 2016 when management expects to complete planned bulk transfers of uninvested client brokerage cash to Schwab Bank.

CSC has authorization from its Board of Directors to issue unsecured commercial paper notes (Commercial Paper Notes) not to exceed $1.5 billion. Management has set a current limit for the commercial paper program not to exceed the amount of the committed, unsecured credit facility, which was $750 million at June 30, 2016. The maturities of the Commercial Paper Notes may vary, but are not to exceed 270 days from the date of issue. The commercial paper is not redeemable prior to maturity and cannot be voluntarily prepaid. The proceeds of the commercial paper program are to be used for general corporate purposes. CSC’s ratings for these short-term borrowings are P1 byMoody’s, A1 by Standard & Poor’s, and F1 by Fitch. CSC had no Commercial Paper Notesoutstanding as of June 30, 2016.

CSC had long-term debt of $2.9 billion  at  June 30, 2016 and December 31, 2015, bearing a weighted-average interest rate of 3.38%. CSC has a universal automatic shelf registration statement on file with the Securities and Exchange Commission (SEC) which enables it to issue debt, equity, and other securities.

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following are details of CSC’s long-term debt:

	Par				Weighted Average		Standard
June 30, 2016	Outstanding			Maturity	Interest Rate	Moody’s	& Poor’s	Fitch
Senior Notes		$	2,581	2018 – 2026	3.03% fixed	A2	A	A
Medium-Term Notes		$	250	2017	6.375% fixed	A2	A	A

On March 7, 2016, CSC completed an equity offering of 30 million depositary shares, each representing a 1/40th ownership interest in a share of 5.95% non-cumulative perpetual preferred stock (Series D Preferred Stock). The net proceeds from the sale were $725 million. CSC’s preferred stock is rated Baa2 by Moody’s, BBB by Standard & Poor’s, and BB+ by Fitch.

For further discussion of CSC’s long-term debt and information on the equity offering, see “Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) – 7. Borrowings and 11. Stockholders’ Equity.”

CAPITAL MANAGEMENT

The Company seeks to manage capital to a level and composition sufficient to support execution of its business strategy, including anticipated balance sheet growth, providing financial support to its subsidiaries, and sustained access to the capital markets, while at the same time meeting its regulatory capital requirements and serving as a source of financial strength to Schwab Bank. The Company’s primary sources of capital are funds generated by the operations of its subsidiaries and securities issuances by CSC in the capital markets. To ensure that it has a sufficient amount of capital to absorb unanticipated losses or declines in asset values, the Company has adopted a policy to remain well capitalized even in stressed scenarios.

Internal guidelines are set, for both the Company and its regulated subsidiaries, to ensure capital levels are in line with the Company’s strategy and regulatory requirements, and capital forecasts are reviewed monthly at Capital Planning and Asset-Liability Management and Pricing Committee meetings. A number of early warning indicators are monitored to help identify potential problems that could impact capital. In addition, the Company monitors its subsidiaries’ capital levels and requirements. Subject to regulatory capital requirements and any required approvals, any excess capital held by subsidiaries is transferred to CSC in the form of dividends and returns of capital. When subsidiaries have need of additional capital, funds are provided by CSC as equity investments and also as subordinated loans (in a form approved as regulatory capital by regulators) for Schwab. The details and method used for each cash infusion are based on an analysis of the particular entity’s needs and financing alternatives. The amounts and structure of infusions must take into consideration maintenance of regulatory capital requirements, debt/equity ratios, and equity double leverage ratios.

The Company conducts regular capital stress testing to assess the potential financial impacts of various adverse macroeconomic and company-specific events to which the Company could be subjected. The objective of the Company’s capital stress testing is (1) to explore various potential outcomes – including rare and extreme events and (2) to assess impacts of potential stressful outcomes on both capital and liquidity. Additionally, the Company has a comprehensive Capital Contingency Plan to provide action plans for certain low probability/high impact capital events that the Company might face. The Capital Contingency Plan is issued under the authority of the Asset-Liability Management and Pricing Committee and provides guidelines for sustained capital events. It does not specifically address every contingency, but is designed to provide a framework for responding to any capital stress. The Capital Contingency Plan is reviewed annually and updated as appropriate.

For additional information, see “Part I –Item 1 – Business – Regulation” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Regulatory Capital Requirements

CSC is subject to capital requirements set by the Federal Reserve and is required to serve as a source of strength for Schwab Bank and to provide financial assistance if Schwab Bank experiences financial distress. To manage capital adequacy, the Company currently utilizes a target Tier 1 Leverage Ratio for CSC of at least 6%. Due to the relatively low risk of the

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THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Company’s balance sheet assets and risk-based capital ratios at CSC and Schwab Bank that are well in excess of regulatory requirements, the Tier 1 Leverage Ratio is the most restrictive capital constraint on CSC’s asset growth.

Schwab Bank is subject to capital requirements set by the OCC that are substantially similar to those imposed on CSC by the Federal Reserve. Schwab Bank’s failure to remain well capitalized could result in certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on the bank. The Company currently utilizes a target Tier 1 Leverage Ratio for Schwab Bank of at least  6.25%. Based on its regulatory capital ratios at June 30, 2016, Schwab Bank is considered well capitalized.

The following table details CSC’s and Schwab Bank’s capital ratios:

June 30, 2016		CSC			Schwab Bank
Total stockholders’ equity	$	14,990		$	10,546
Less:
Preferred Stock		2,189			-
Common Equity Tier 1 Capital before regulatory adjustments	$	12,801		$	10,546
Less:
Goodwill, net of associated deferred tax liabilities	$	1,180		$	11
Other intangible assets, net of associated deferred tax liabilities		56			-
Deferred tax assets, net of valuation allowances and deferred tax liabilities		1			-
AOCI adjustment (1)		(17)			(29)
Common Equity Tier 1 Capital	$	11,581		$	10,564
Tier 1 Capital	$	13,770		$	10,564
Total Capital		13,802			10,595
Risk-Weighted Assets		64,615			55,963
Common Equity Tier 1 Capital/Risk-Weighted Assets		17.9	%		18.9	%
Tier 1 Capital/Risk-Weighted Assets		21.3	%		18.9	%
Total Capital/Risk-Weighted Assets		21.4	%		18.9	%
Tier 1 Leverage Ratio		7.2	%		7.1	%

(1) CSC and Schwab Bank have elected to opt-out of the requirement to include most components of AOCI in CET1 Capital.

Schwab Bank is also subject to regulatory requirements that restrict and govern the terms of affiliate transactions. In addition, Schwab Bank is required to provide notice to, and may be required to obtain approval from, the OCC and the Federal Reserve to declare dividends to CSC.

The Company’s broker-dealer subsidiaries (Schwab and optionsXpress, Inc.) are subject to regulatory requirements of the Uniform Net Capital Rule. The rule is intended to ensure the general financial soundness and liquidity of broker-dealers. These regulations prohibit the broker-dealer subsidiaries from paying cash dividends, making unsecured advances and loans to their parent company and employees, and from repaying subordinated borrowings from CSC if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement of $250,000. As such, the broker-dealer subsidiaries are required to maintain, at all times, at least the minimum level of net capital required under Rule 15c3-1. At June 30, 2016, Schwab and optionsXpress, Inc. met and exceeded their net capital requirements.

In addition to the capital requirements above, the Company’s subsidiaries are subject to various regulatory requirements that are intended to ensure financial soundness and liquidity. See “Item 1 – Condensed Consolidated Balance Sheets and Notes to Condensed Consolidated Financial Statements (Unaudited) – 14. Regulatory Requirements” for additional information on the components of stockholders’ equity and information on the capital requirements of each of the subsidiaries.

-  23  -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Dividends

On April 21, 2016, the Board of Directors of the Company declared a one cent, or 17%, increase in the quarterly cash dividend to $0.07 per common share. The following table details the CSC cash dividends paid and per share amounts for the first halves of 2016 and 2015:

Six Months Ended June 30,	2016				2015
				Per Share				Per Share
	Cash Paid		Amount		Cash Paid		Amount
Common Stock	$	173	$	0.13	$	159	$	0.12
Series A Preferred Stock		14		35.00		14		35.00
Series B Preferred Stock		15		30.00		15		30.00
Series C Preferred Stock		18		30.00		-		-
Series D Preferred Stock (1)		10		13.89		-		-

(1) Series D Preferred Stock was issued on March 7, 2016.

Off-Balance Sheet Arrangements

The Company enters into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of its clients. These arrangements include firm commitments to extend credit. Additionally, the Company enters into guarantees and other similar arrangements as part of transactions in the ordinary course of business. For discussion on the Company’s off-balance sheet arrangements, see “Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity – Off-Balance Sheet Arrangements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and “Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) – 8. Commitments and Contingencies.”

Critical Accounting ESTIMATES

Certain of the Company’s accounting policies that involve a higher degree of judgment and complexity are discussed in “Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There have been no changes to these critical accounting estimates during the first half of 2016.

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THE CHARLES SCHWAB CORPORATION

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to interest rate risk primarily from changes in market interest rates on its interest-earning assets relative to changes in the costs of its funding sources that finance these assets. The majority of the Company’s interest-earning assets and interest-bearing liabilities are sensitive to changes in short-term interest rates. To a lesser degree, a portion of the Company’s investment portfolios is sensitive to changes in long-term interest rates. To manage the Company’s interest rate risk, management utilizes simulation models, which include the net interest revenue sensitivity analysis described below.

Net interest revenue is affected by various factors, such as the distribution and composition of interest-earning assets and interest-bearing liabilities, the spread between yields earned on interest-earning assets and rates paid on interest-bearing liabilities, which may reprice at different times or by different amounts, and the spread between short and long-term interest rates. Interest-earning assets primarily include investment securities, margin loans and bank loans. These assets are sensitive to changes in interest rates and changes in prepayment levels that tend to increase in a declining rate environment and decrease in a rising rate environment. Because the Company establishes the rates paid on certain brokerage client cash balances and bank deposits and the rates charged on certain margin loans and bank loans, and controls the composition of its investment securities, it has some ability to manage its net interest spread, depending on competitive factors and market conditions.

To mitigate the risk of declining revenue, the Company has established policies and procedures which include setting guidelines on the amount of net interest revenue at risk, and monitoring the net interest margin and average maturity of its interest-earning assets and funding sources. To remain within these guidelines, the Company manages the maturity, repricing, and cash flow characteristics of the investment portfolios.

Financial instruments held by the Company are also subject to the risk that valuations will be negatively affected by changes in demand and the underlying market for a financial instrument. The Company is also subject to market risk as a result of fluctuations in option and equity prices. The Company’s direct holdings of option and equity securities and its associated exposure to option and equity prices are not material. The Company is indirectly exposed to option, futures, and equity market fluctuations in connection with client option and futures accounts, securities collateralizing margin loans to brokerage customers, and client securities loaned out as part of the Company’s securities lending activities. Equity market valuations may also affect the level of brokerage client trading activity, margin borrowing, and overall client engagement with the Company. Additionally, the Company earns mutual fund and ETF service fees and asset management fees based upon daily balances of certain client assets. Fluctuations in these client asset balances caused by changes in equity valuations directly impact the amount of fee revenue earned by the Company.

The Company’s market risk related to financial instruments held for trading is not material.

Net Interest Revenue Simulation

For the Company’s net interest revenue sensitivity analysis, the Company uses net interest revenue simulation modeling techniques to evaluate and manage the effect of changing interest rates. The simulation includes all interest-sensitive assets and liabilities. Key variables in the simulation include the repricing of financial instruments, prepayment, reinvestment, and product pricing assumptions. The Company uses constant balances and market rates in the simulation assumptions in order to minimize the number of variables and to better isolate risks. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely estimate net interest revenue or predict the impact of changes in interest rates on net interest revenue. Actual results may differ from simulated results due to balance growth or decline and the timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions and management strategies, including changes in asset and liability mix.

If the Company’s guidelines for its net interest revenue sensitivity are breached, management must report the breach to the Company’s Corporate Asset-Liability Management and Pricing Committee and establish a plan to address the interest rate risk. This plan could include, but is not limited to, rebalancing certain investment portfolios or using derivative instruments to mitigate the interest rate risk. Depending on the severity and expected duration of the breach, as well as the then current interest rate environment, the plan could also be to take no action. Any plan that recommends taking action is required to be approved by the Company’s Corporate Asset-Liability Management and Pricing Committee. There were no breaches of the Company’s net interest revenue sensitivity guidelines during the first half of 2016 or year ended December 31, 2015.

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THE CHARLES SCHWAB CORPORATION

As represented by the simulations presented below, the Company’s investment strategy is structured to produce an increase in net interest revenue when interest rates rise and, conversely, a decrease in net interest revenue when interest rates fall.

The simulations in the following table assume that the asset and liability structure of the consolidated balance sheet would not be changed as a result of the simulated changes in interest rates. As the Company actively manages its consolidated balance sheet and interest rate exposure, in all likelihood the Company would take steps to manage additional interest rate exposure that could result from changes in the interest rate environment. The following table shows the simulated net interest revenue change over the next 12 months beginning June 30, 2016 and December 31, 2015 of a gradual 100 basis point increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period.

	June 30,		December 31,
	2016		2015
Increase of 100 basis points	9.1	%	8.2	%
Decrease of 100 basis points	(10.7)	%	(9.5)	%

The sensitivities shown in the simulation reflect the fact that short-term interest rates in the first half of 2016 remained at low levels despite the increase in federal funds target range to .25% to .50% as directed by the Federal Open Markets Committee in December 2015. The current low interest rate environment limits the extent to which the Company can reduce interest expense paid on funding sources. A decline in interest rates could negatively impact the yield on the Company’s investment portfolio to a greater degree than any offsetting reduction in interest expense, further compressing net interest margin. Any increases in short-term interest rates result in a greater impact as yields on interest-earning assets are expected to rise faster than the cost of funding sources.

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Part I – FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Income

(In Millions, Except Per Share Amounts)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net Revenues
Asset management and administration fees (1)	$	757	$	670	$	1,456	$	1,314
Interest revenue		840		645		1,650		1,262
Interest expense		(42)		(33)		(80)		(62)
Net interest revenue		798		612		1,570		1,200
Trading revenue		201		203		433		430
Other		70		79		133		142
Provision for loan losses		2		2		-		6
Total net revenues		1,828		1,566		3,592		3,092
Expenses Excluding Interest
Compensation and benefits		602		540		1,228		1,121
Professional services		125		112		241		226
Occupancy and equipment		101		85		199		168
Advertising and market development		70		62		140		131
Communications		62		59		122		117
Depreciation and amortization		57		55		113		109
Other		91		86		174		169
Total expenses excluding interest		1,108		999		2,217		2,041
Income before taxes on income		720		567		1,375		1,051
Taxes on income		268		214		511		396
Net Income		452		353		864		655
Preferred stock dividends and other (2)		46		23		66		34
Net Income Available to Common Stockholders	$	406	$	330	$	798	$	621
Weighted-Average Common Shares Outstanding:
Basic		1,322		1,314		1,322		1,313
Diluted		1,333		1,326		1,331		1,325
Earnings Per Common Share:
Basic	$	.31	$	.25	$	.60	$	.47
Diluted	$	.30	$	.25	$	.60	$	.47
Dividends Declared Per Common Share	$	.07	$	.06		.13		.12

(1)	Includes fee waivers of $55and $168 during the second quarters of 2016 and 2015, respectively and $152 and $353 during the first halves of 2016 and 2015, respectively, relating to Schwab-sponsored money market funds.
(2)	Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

See Notes to Condensed Consolidated Financial Statements.

-  27  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net Income	$	452	$	353	$	864	$	655
Other comprehensive income (loss), before tax:
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)		168		(91)		189		16
Other reclassifications included in other revenue		(3)		-		(3)		-
Other		-		-		1		-
Other comprehensive income (loss), before tax		165		(91)		187		16
Income tax effect		(62)		34		(70)		(7)
Other comprehensive income (loss), net of tax		103		(57)		117		9
Comprehensive Income	$	555	$	296	$	981	$	664

See Notes to Condensed Consolidated Financial Statements.

-  28  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)

	June 30,		December 31,
	2016		2015 (1)
Assets
Cash and cash equivalents	$	12,976	$	11,978
Cash and investments segregated and on deposit for regulatory purposes
(including resale agreements of $7,270 at June 30, 2016 and $8,088
at December 31, 2015)		18,593		19,598
Receivables from brokers, dealers, and clearing organizations		1,008		582
Receivables from brokerage clients — net		16,822		17,313
Other securities owned — at fair value		525		533
Securities available for sale		74,228		65,646
Securities held to maturity (fair value — $57,195 at June 30, 2016 and
$50,088 at December 31, 2015)		55,307		50,007
Bank loans — net		14,670		14,334
Equipment, office facilities, and property — net		1,242		1,145
Goodwill		1,227		1,227
Intangible assets — net		163		181
Other assets		1,291		1,161
Total assets	$	198,052	$	183,705
Liabilities and Stockholders’ Equity
Bank deposits	$	137,295	$	129,502
Payables to brokers, dealers, and clearing organizations		3,392		2,588
Payables to brokerage clients		32,679		33,185
Accrued expenses and other liabilities		1,820		2,151
Short-term borrowings		5,000		-
Long-term debt		2,876		2,877
Total liabilities		183,062		170,303
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference
of $2,235 at June 30, 2016 and $1,485 at December 31, 2015		2,189		1,459
Common stock — 3 billion shares authorized; $.01 par value per share;
1,487,543,446 shares issued		15		15
Additional paid-in capital		4,223		4,152
Retained earnings		11,882		11,253
Treasury stock, at cost — 164,670,326 shares at June 30, 2016 and
167,205,881 shares at December 31, 2015		(3,302)		(3,343)
Accumulated other comprehensive income		(17)		(134)
Total stockholders’ equity		14,990		13,402
Total liabilities and stockholders’ equity	$	198,052	$	183,705

(1) Adjusted for the retrospective adoption of ASU 2015-03. See “Notes – 2. New Accounting Standards” for additional information.

See Notes to Condensed Consolidated Financial Statements.

-  29  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Millions)

(Unaudited)

	Six Months Ended
	June 30,
	2016		2015
Cash Flows from Operating Activities
Net income	$	864	$	655
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses		-		(6)
Stock-based compensation		75		69
Depreciation and amortization		113		109
Premium amortization, net, on securities available for sale and securities held to maturity		107		77
Other		17		3
Net change in:
Cash and investments segregated and on deposit for regulatory purposes		1,005		2,897
Receivables from brokers, dealers, and clearing organizations		(431)		(445)
Receivables from brokerage clients		486		(954)
Other securities owned		8		(95)
Other assets		(37)		(33)
Payables to brokers, dealers, and clearing organizations		153		269
Payables to brokerage clients		(506)		(2,825)
Accrued expenses and other liabilities		(331)		(458)
Net cash provided by (used for) operating activities		1,523		(737)
Cash Flows from Investing Activities
Purchases of securities available for sale		(16,598)		(12,423)
Proceeds from sales of securities available for sale		4,074		594
Principal payments on securities available for sale		4,763		3,404
Purchases of securities held to maturity		(7,582)		(5,070)
Principal payments on securities held to maturity		2,198		1,688
Net increase in bank loans		(362)		(632)
Purchases of equipment, office facilities, and property		(195)		(125)
Other investing activities		(132)		(4)
Net cash used for investing activities		(13,834)		(12,568)
Cash Flows from Financing Activities
Net change in bank deposits		7,793		10,096
Proceeds from short-term borrowings		5,000		-
Issuance of long-term debt		-		998
Repayment of long-term debt		(3)		(4)
Net proceeds from preferred stock offering		725		-
Dividends paid		(230)		(188)
Proceeds from stock options exercised and other		19		50
Other financing activities		5		7
Net cash provided by financing activities		13,309		10,959
Increase (Decrease) in Cash and Cash Equivalents		998		(2,346)
Cash and Cash Equivalents at Beginning of Period		11,978		11,363
Cash and Cash Equivalents at End of Period	$	12,976	$	9,017
Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	74	$	53
Income taxes	$	505	$	386
Non-cash investing activity:
Securities purchased during the period but settled after period end	$	651	$	245

See Notes to Condensed Consolidated Financial Statements.

-  30  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

1.Introduction and Basis of Presentation

CSC is a savings and loan holding company engaged, through its subsidiaries, in wealth management, securities brokerage, banking, money management, custody, and financial advisory services. Schwab is a securities broker-dealer with over 330 domestic branch offices in 46 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, England. In addition, Schwab serves clients in Hong Kong through one of CSC’s subsidiaries. Other subsidiaries include Schwab Bank, a federal savings bank, and CSIM, the investment advisor for Schwab’s proprietary mutual funds, which are referred to as the Schwab Funds®, and for Schwab’s exchange-traded funds, which are referred to as the Schwab ETFs™.

The accompanying unaudited condensed consolidated financial statements include CSC and its majority-owned subsidiaries (collectively referred to as the Company). Intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements. Certain estimates relate to other-than-temporary impairment (OTTI) of securities available for sale and securities held to maturity, valuation of goodwill, allowance for loan losses, and legal and regulatory reserves. Actual results may differ from those estimates.

These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These adjustments are of a normal recurring nature. The Company’s results for any interim period are not necessarily indicative of results for a full year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The Company’s significant accounting policies are included in “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There have been no significant changes to these accounting policies during the first half of 2016.

Principles of Consolidation

The Company evaluates for consolidation all entities in which it has financial interests, except for money market funds which are specifically excluded from consolidation guidance. For an entity subject to consolidation, the Company evaluates whether the Company’s interest in the entity constitutes a controlling financial interest under either the variable interest entity (VIE) model or a voting interest entity (VOE) model. Based upon the Company’s assessments, the Company is not deemed to have a controlling financial interest in and, therefore, is not required to consolidate any VIEs. See “Notes – 5. Variable Interest Entities” for further information about VIEs. The Company consolidates all VOEs in which it has majority voting interests.

For investments in entities in which the Company does not have a controlling financial interest, the Company accounts for those investments under the equity method of accounting when the Company has the ability to exercise significant influence over operating and financing decisions of the entity. Investments in entities for which the Company does not have the ability to exercise significant influence are generally carried at cost. Both equity method and cost method investments are included in other assets on the condensed consolidated balance sheets.

2.New Accounting Standards

Adoption of New Accounting Standards

On January 1, 2016, the Company adopted ASU 2015-02, “Consolidation (Topic 810),” which amends the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new guidance is applicable to all entities but provides an exception for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 did not have an impact on the Company’s consolidated financial statements or EPS as the new guidance did not change any existing consolidation conclusions reached in accordance with the previous guidance.

On January 1, 2016, the Company adopted ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30).” ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction

-  31  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

from the carrying amount of that debt liability, consistent with debt discounts. Previously, debt issuance costs were presented as a separate asset on the balance sheet. The guidance in ASU 2015-03 has been applied on a retrospective basis which requires the adjustment of all prior period consolidated balance sheets. The effect of the adoption on the Company’s December 31, 2015 consolidated balance sheet was to decrease other assets and total assets by $13 million and to decrease long-term debt and total liabilities by $13 million. A similar amount was also reclassified in the prior year. The Company considers the reclassifications immaterial.

On January 1, 2016, the Company also adopted ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40),” which provides new guidance that clarifies customer’s accounting for fees paid in a cloud computing arrangement. Under the new guidance, if a cloud computing arrangement includes a software license, the customer shall account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the cloud computing arrangement does not include a software license, the customer shall account for the arrangement as a service contract. The guidance applies to all new arrangements entered into after January 1, 2016. The adoption of ASU 2015-05 did not have an impact on the Company’s financial statements or EPS.

New Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which provides new guidance on revenue recognition. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts the timing of the related transfer of goods or performance of services at an amount that reflects the expected consideration. The new guidance will become effective January 1, 2018, with early adoption permitted as of January 1, 2017. Entities may elect either full or modified retrospective transition. Full retrospective transition will require a cumulative effect adjustment to retained earnings as of the earliest comparative period presented. Modified retrospective transition will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10),” which will become effective January 1, 2018. This new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions of the guidance include (i) most equity investments are to be measured at fair value with changes in fair value recognized in net income, except for those accounted for under the equity method or those that do not have readily determinable fair values for which a practical expedient can be elected, (ii) requires the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial instrument on the balance sheet or in the accompanying notes. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” which amends the accounting for leases by lessees and lessors. The primary change as a result of the new standard is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances and expanded lease disclosures. ASU 2016-02 will become effective January 1, 2019, with early adoption permitted, and requires entities to apply the new guidance using a modified retrospective transition. Modified retrospective transition requires entities to apply the new guidance as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard. Certain transition reliefs are permitted if elected by the entity. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In March 2016, the FASB issued ASU 2016-09, “Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)” which amends certain aspects of how an entity accounts for share-based payments to employees. The new guidance requires entities to recognize the income tax effects of share-based awards in the income statement when the awards vest or are settled, rather than recording such effects in additional paid-in capital. Entities will also be permitted to elect to account for forfeitures of share-based payments as they occur or continue with current practice which requires estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change. ASU 2016-09 will become effective January 1, 2017, with early adoption permitted. The change in recognition of income tax effects of share-based awards will be applied prospectively. If an entity elects to account for forfeitures of share-based payments as they occur, such change will be applied using a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

-  32  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which provides new guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and held to maturity debt securities. The new guidance will require estimating expected credit losses (ECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions and reasonable forecasts. The initial estimate of and the subsequent changes in ECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. The new guidance also amends the OTTI model for available for sale debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. ASU 2016-13 will become effective January 1, 2020, with early adoption permitted as of January 1, 2019. The new guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for available for sale debt securities for which an OTTI had been recognized before the effective date. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

-  33  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

3.Securities Available for Sale and Securities Held to Maturity

The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale and securities held to maturity are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
June 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	30,942	$	251	$	60	$	31,133
Asset-backed securities		22,117		11		372		21,756
Corporate debt securities		10,095		60		8		10,147
U.S. Treasury securities		4,966		52		-		5,018
U.S. agency notes		2,972		1		-		2,973
Certificates of deposit		2,180		1		3		2,178
U.S. state and municipal securities		613		38		-		651
Commercial paper		213		-		-		213
Non-agency commercial mortgage-backed securities		158		1		-		159
Total securities available for sale	$	74,256	$	415	$	443	$	74,228
Securities held to maturity:
U.S. agency mortgage-backed securities	$	54,087	$	1,829	$	-	$	55,916
Non-agency commercial mortgage-backed securities		998		46		-		1,044
U.S. Treasury securities		222		13		-		235
Total securities held to maturity	$	55,307	$	1,888	$	-	$	57,195

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	22,014	$	183	$	48	$	22,149
Asset-backed securities		21,784		7		306		21,485
Corporate debt securities		10,764		14		31		10,747
U.S. Treasury securities		5,719		2		17		5,704
U.S. agency notes		3,177		-		27		3,150
Certificates of deposit		1,685		1		3		1,683
U.S. state and municipal securities		414		10		-		424
Non-agency commercial mortgage-backed securities		298		1		-		299
Other securities		5		-		-		5
Total securities available for sale	$	65,860	$	218	$	432	$	65,646
Securities held to maturity:
U.S. agency mortgage-backed securities	$	48,785	$	391	$	293	$	48,883
Non-agency commercial mortgage-backed securities		999		6		20		985
U.S. Treasury securities		223		-		3		220
Total securities held to maturity	$	50,007	$	397	$	316	$	50,088

Schwab Bank pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $170 million atJune 30, 2016.

-  34  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

A summary of securities with unrealized losses, aggregated by category and period of continuous unrealized loss, is as follows:

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,613	$	52	$	1,420	$	8	$	10,033	$	60
Asset-backed securities		10,733		261		3,789		111		14,522		372
Corporate debt securities		1,452		3		1,471		5		2,923		8
Certificates of deposit		843		3		299		-		1,142		3
Total securities with unrealized losses (1)	$	21,641	$	319	$	6,979	$	124	$	28,620	$	443

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,541	$	47	$	813	$	1	$	9,354	$	48
Asset-backed securities		17,127		240		2,743		66		19,870		306
Corporate debt securities		5,433		25		942		6		6,375		31
U.S. Treasury securities		5,010		17		-		-		5,010		17
U.S. agency notes		1,281		10		1,547		17		2,828		27
Certificates of deposit		773		2		599		1		1,372		3
Total	$	38,165	$	341	$	6,644	$	91	$	44,809	$	432
Securities held to maturity:
U.S. agency mortgage-backed securities	$	24,219	$	253	$	1,842	$	40	$	26,061	$	293
Non-agency commercial mortgage-backed
securities		729		20		-		-		729		20
U.S. Treasury securities		220		3		-		-		220		3
Total	$	25,168	$	276	$	1,842	$	40	$	27,010	$	316
Total securities with unrealized losses (2)	$	63,333	$	617	$	8,486	$	131	$	71,819	$	748

(1)	The number of investment positions with unrealized losses totaled 322 for securities available for sale.
(2)	The number of investment positions with unrealized losses totaled 409 for securities available for sale and 286 for securities held to maturity.

Management evaluates whether securities available for sale and securities held to maturity are OTTI on a quarterly basis as described in “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

-  35  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The maturities of securities available for sale and securities held to maturity are as follows:

			After 1 year		After 5 years
	Within		through		through		After
June 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	3	$	3,072	$	15,661	$	12,397	$	31,133
Asset-backed securities		-		8,787		4,176		8,793		21,756
Corporate debt securities		2,601		7,546		-		-		10,147
U.S. Treasury securities		-		4,809		209		-		5,018
U.S. agency notes		-		2,973		-		-		2,973
Certificates of deposit		786		1,392		-		-		2,178
U.S. state and municipal securities		-		-		29		622		651
Commercial paper		213		-		-		-		213
Non-agency commercial mortgage-backed
securities		-		-		-		159		159
Total fair value	$	3,603	$	28,579	$	20,075	$	21,971	$	74,228
Total amortized cost	$	3,596	$	28,417	$	20,106	$	22,137	$	74,256
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	3,399	$	21,564	$	30,953	$	55,916
Non-agency commercial mortgage-backed
securities (1)		-		-		378		666		1,044
U.S. Treasury securities		-		-		235		-		235
Total fair value	$	-	$	3,399	$	22,177	$	31,619	$	57,195
Total amortized cost	$	-	$	3,232	$	21,116	$	30,959	$	55,307

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and gross realized gains and losses from sales of securities available for sale are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Proceeds	$	3,774	$	444	$	4,074	$	594
Gross realized gains		3		1		3		1
Gross realized losses		-		1		-		1

-  36  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

4.Bank Loans and Related Allowance for Loan Losses

The composition of bank loans and delinquency analysis by loan segment is as follows:

									>90 days past			Total past due					Allowance		Total
			30-59 days			60-89 days			due and other			and other			Total		for loan		bank
June 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,472		$	13		$	1		$	16		$	30	$	8,502	$	20	$	8,482
Home equity loans and lines of credit		2,564			5			1			12			18		2,582		10		2,572
Pledged asset lines		3,530			-			1			-			1		3,531		-		3,531
Other		86			-			-			-			-		86		1		85
Total bank loans	$	14,652		$	18		$	3		$	28		$	49	$	14,701	$	31	$	14,670
December 31, 2015
Residential real estate mortgages	$	8,304		$	11		$	1		$	18		$	30	$	8,334	$	20	$	8,314
Home equity loans and lines of credit		2,720			4			1			10			15		2,735		11		2,724
Pledged asset lines		3,228			3			1			-			4		3,232		-		3,232
Other		64			-			-			-			-		64		-		64
Total bank loans	$	14,316		$	18		$	3		$	28		$	49	$	14,365	$	31	$	14,334

First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $79 million and $80 million at June 30, 2016 and December 31, 2015, respectively. The Company had commitments to extend credit related to unused HELOCs, PALs, and other lines of credit, which totaled $7.8 billion and $7.4 billion at June 30, 2016 and December 31, 2015, respectively. The Company had commitments to purchase First Mortgage loans of $569 million and $260 million at June 30, 2016 and December 31, 2015, respectively. All PALs were fully collateralized by securities with fair values in excess of borrowings at June 30, 2016 and December 31, 2015.

Schwab Bank provides a co-branded loan origination program for Schwab Bank clients (the Program) with Quicken Loans, Inc. (Quicken Loans®). Pursuant to the Program, Quicken Loans originates and services First Mortgages and HELOCs for Schwab Bank clients. Under the Program, Schwab Bank purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. Schwab Bank purchased First Mortgages of $691 million and $542 million during the second quarters of 2016 and 2015, respectively, and $1.2 billion and $982 million during the first halves of 2016 and 2015, respectively. Schwab purchased HELOCs with commitments of $112 million and $165 million during the second quarters of 2016 and 2015, respectively, and $222 million and $282 million during the first halves of 2016 and 2015, respectively.

-  37  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Credit Quality

Changes in the allowance for loan losses were as follows:

Three Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit			Total
Balance at beginning of period	$	21		$	11	$	1	$	33	$	26		$	12	$	38
Charge-offs		-			-		-		-		-			(1)		(1)
Recoveries		-			-		-		-		-			1		1
Provision for loan losses		(1)			(1)		-		(2)		(3)			1		(2)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Six Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit				Total
Balance at beginning of period	$	20		$	11	$	-	$	31	$	29		$	13	$	42
Charge-offs		(1)			-		-		(1)		-			(2)		(2)
Recoveries		1			-		-		1		-			2		2
Provision for loan losses		-			(1)		1		-		(6)			-		(6)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Substantially all of the bank loans were collectively evaluated for impairment at June 30, 2016 and December 31, 2015. There were no loans accruing interest that were contractually 90 days or more past due at June 30, 2016 or December 31, 2015. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $35 million and $36 million at June 30, 2016 and December 31, 2015, respectively. Impaired assets, which include nonaccrual loans, other real estate owned and troubled debt restructurings, totaled $48 million and $50 million at June 30, 2016 and December 31, 2015, respectively. Troubled debt restructurings were not material at June 30, 2016 or December 31, 2015.

In addition to monitoring delinquency, the Company monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the year of origination, borrower Origination FICO, Updated FICO, Origination LTV, and Estimated Current LTV. Borrowers’ FICO scores are provided by an independent third-party credit reporting service and were last updated in June 2016. The Origination LTV and Estimated Current LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is estimated by reference to a home price appreciation index.

As of June 30, 2016 and December 31, 2015, 48% of the Company’s HELOC and First Mortgage portfolio was concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

-  38  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

			Weighted				Percent of
			Average		Utilization		Loans on
June 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,740		776	N/A			0.03	%
>70% – <90%		703		766	N/A			0.23	%
>90% – <100%		35		743	N/A			1.40	%
>100%		24		708	N/A			12.44	%
Total	$	8,502		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,187		773	36	%		0.13	%
>70% – <90%		318		759	49	%		0.30	%
>90% – <100%		44		753	57	%		1.01	%
>100%		33		738	68	%		2.01	%
Total	$	2,582		770	38	%		0.19	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,531		762	48	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
June 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,171	$	1,875
2012		1,385		114
2013		2,126		212
2014		874		174
2015		1,744		159
2016		1,202		48
Total	$	8,502	$	2,582
Origination FICO
<620	$	9	$	1
620 – 679		84		14
680 – 739		1,391		470
>740		7,018		2,097
Total	$	8,502	$	2,582
Origination LTV
<70%	$	6,178	$	1,771
>70% – <90%		2,312		796
>90% – <100%		12		15
Total	$	8,502	$	2,582

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

			Weighted				Percent of
			Average		Utilization		Loans on
December 31, 2015	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,508		774	N/A			0.03	%
>70% – <90%		759		764	N/A			0.31	%
>90% – <100%		37		736	N/A			5.54	%
>100%		30		713	N/A			7.72	%
Total	$	8,334		773	N/A			0.11	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,277		772	37	%		0.09	%
>70% – <90%		373		760	50	%		0.48	%
>90% – <100%		48		748	63	%		1.02	%
>100%		37		739	67	%		1.79	%
Total	$	2,735		770	39	%		0.18	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,232		764	49	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
December 31, 2015	mortgages		lines of credit
Year of origination
Pre-2012	$	1,306	$	2,048
2012		1,644		125
2013		2,450		232
2014		1,021		188
2015		1,913		142
Total	$	8,334	$	2,735
Origination FICO
<620	$	10	$	-
620 – 679		88		16
680 – 739		1,381		498
>740		6,855		2,221
Total	$	8,334	$	2,735
Origination LTV
<70%	$	5,913	$	1,858
>70% – <90%		2,408		860
>90% – <100%		13		17
Total	$	8,334	$	2,735

5.Variable Interest Entities

A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates all entities in which it has a financial interest to determine if the entity is a VIE and if so, whether the Company is the primary beneficiary. See the “Principles of Consolidation” section of “Notes – 1. Introduction and Basis of Presentation” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for discussion of the Company’s evaluations of VIEs and whether it is

-  40  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

deemed to be the primary beneficiary of any VIEs in which it holds an interest. The Company was not the primary beneficiary of, and therefore, not required to consolidate any VIEs at June 30, 2016 and December 31, 2015.

Community Reinvestment Act investments

Schwab Bank is subject to the Community Reinvestment Act (CRA). The CRA is intended to encourage banks to help meet the credit needs of the communities in which they operate, including low and moderate income neighborhoods, consistent with safe and sound banking operations. As part of Schwab Bank’s community reinvestment initiatives, Schwab Bank invests with other institutional investors in funds that make equity investments in multifamily affordable housing properties. Schwab Bank receives tax credits and other tax benefits for these investments. Schwab Bank’s Low-Income Housing Tax Credit (LIHTC) investments are accounted for using the proportional amortization method. Amortization, tax credits, and other tax benefits recognized in relation to LIHTC investments are included in taxes on income on the condensed consolidated statements of income. As of June 30, 2016 and December 31, 2015, the majority of the Company’s VIEs related to Schwab Bank’s LIHTC investments.

The carrying value of the LIHTC investments was $138 million and $104 million as of June 30, 2016 and December 31, 2015, respectively, which is included in other assets on the condensed consolidated balance sheets. Schwab Bank recorded liabilities of $106 million and $84 million for unfunded commitments related to LIHTC investments at June 30, 2016 and December 31, 2015, respectively, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. Schwab Bank’s funding of these remaining commitments is dependent upon the occurrence of certain conditions and Schwab Bank expects to pay substantially all of these commitments between 2016 and 2019.

Aggregate assets, liabilities and maximum exposure to loss

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

		June 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments (1)	$	138	$	106	$	138	$	104	$	84	$	104
Other CRA investments (2)		57		-		65		57		-		66
Total	$	195	$	106	$	203	$	161	$	84	$	170

(1)	LIHTC investments are recorded using the proportional amortization method.
(2)	Other CRA investments are recorded using either the cost method or the equity method. Aggregate assets are included in either other assets or bank loans – net on the condensed consolidated balance sheets.

The Company’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. During the six months ended June 30, 2016 and 2015, the Company did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

-  41  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

6.Bank Deposits

Bank deposits consist of interest-bearing and non-interest-bearing deposits as follows:

	June 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	116,024	$	108,137
Checking		12,685		12,822
Savings and other		8,052		7,896
Total interest-bearing deposits		136,761		128,855
Non-interest-bearing deposits		534		647
Total bank deposits	$	137,295	$	129,502

7.Borrowings

Long-term debt, including unamortized debt discounts and premiums, and debt issuance costs, where applicable, consists of the following:

	June 30,		December 31,
	2016		2015
Senior Notes (1)	$	2,555	$	2,553
Senior Medium-Term Notes (1)		249		249
Finance lease obligation		72		75
Total long-term debt	$	2,876	$	2,877

(1) Balances as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

Annual maturities on long-term debt outstanding at June 30, 2016 are as follows:

2016	$	4
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,903
Unamortized discount, net		(15)
Debt issuance costs		(12)
Total long-term debt	$	2,876

Short-term borrowings: Schwab Bank maintains a secured credit facility with the Federal Home Loan Bank of San Francisco. At June 30, 2016, $5.0 billion was outstanding under this facility with an additional $3.9 billion available based on the loans currently pledged there. As a condition of the borrowings, Schwab Bank purchased $118 million of FHLB stock, recorded at par, in the first half of 2016, with the investment recorded in other assets on the condensed consolidated balance sheets. No funds were drawn under this facility as of December 31, 2015. Amounts outstanding under this facility are included in short-term borrowings on the condensed consolidated balance sheets.

CSC has authorization from its Board of Directors to issue Commercial Paper Notes not to exceed $1.5 billion. Management has set a current limit for the commercial paper program not to exceed the amount of the committed, unsecured credit facility, which was $750 million at June 30, 2016. The maturities of the Commercial Paper Notes may vary, but are not to exceed

-  42  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

270 days from the date of issue. The commercial paper is not redeemable prior to maturity and cannot be voluntarily prepaid. The proceeds of the commercial paper program are to be used for general corporate purposes. CSC had no borrowings of Commercial Paper Notes outstanding at June 30, 2016 and December 31, 2015.

8.Commitments and Contingencies

Guarantees and indemnifications: The Company has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. The Company partially satisfies the margin requirements by arranging unsecured standby LOCs, in favor of the Options Clearing Corporation, which are issued by several banks. At June 30, 2016, the aggregate face amount of these LOCs totaled $310million. There were no funds drawn under any of these LOCs at June 30, 2016. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

Legal contingencies: The Company is subject to claims and lawsuits in the ordinary course of business, including arbitrations, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies.

The Company believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are certain matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter.

With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results or cash flows of the Company. However, predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; potential opportunities for settlement and the status of any settlement discussions; and potential insurance coverage and indemnification. Itmay not be possible to reasonably estimate potential liability, if any, or a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Total Bond Market Fund Litigation: On August 28, 2008, a class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of investors in the Schwab Total Bond Market Fund™. The lawsuit, which alleged violations of state law and federal securities law in connection with the fund’s investment policy, named CSIM, Schwab Investments (registrant and issuer of the fund’s shares) and certain current and former fund trustees as defendants. Allegations include that the fund improperly deviated from its stated investment objectives by investing in collateralized mortgage obligations (CMOs) and investing more than 25% of fund assets in CMOs and mortgage-backed securities without obtaining a shareholder vote. Plaintiff seeks unspecified compensatory and rescission damages, unspecified equitable and

-  43  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

injunctive relief, costs and attorneys’ fees. Plaintiff’s federal securities law claim and certain of plaintiff’s state law claims were dismissed. On August 8, 2011, the court dismissed plaintiff’s remaining claims with prejudice. Plaintiff appealed to the Ninth Circuit, which issued a ruling on March 9, 2015 reversing the district court’s dismissal of the case and remanding the case for further proceedings. Plaintiff filed a fourth amended complaint on June 25, 2015, and in decisions issued October 6, 2015 and February 23, 2016, the court dismissed all claims with prejudice. Plaintiff has appealed to the Ninth Circuit, where the case is again pending.

Regulatory Matters: On April16, 2012, optionsXpress, Inc. was charged by the SEC in an administrative proceeding alleging violations of the firm’s close-out obligations under Regulation SHO (short sale delivery rules) in connection with certain customer trading activity. Following trial, in a decision issued June 7, 2013, the judge held that the firm had violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered the firm and the customer to pay disgorgement and penalties in an amount that would not be material. The Company continues to dispute the allegations and is appealing the decision.

9.Offsetting Assets and Liabilities

Resale and repurchase agreements: Schwab enters into collateralized resale agreements principally with other broker-dealers, which could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. To mitigate this risk, Schwab requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of 102% of the resale price. Schwab also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. At June 30, 2016 and December 31, 2015, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $7.4 billion and $8.2 billion, respectively. Schwab utilizes the collateral provided under these resale agreements to meet obligations under broker-dealer client protection rules, which place limitations on its ability to access such segregated securities. For Schwab to repledge or sell this collateral, it would be required to deposit cash and/or securities of an equal amount into its segregated reserve bank accounts in order to meet its segregated cash and investment requirement. The Company’s resale agreements are not subject to master netting arrangements.

Securities lending: The Company loans client securities temporarily to other brokers in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities or provide additional cash collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its client obligations. The Company mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. The fair value of client securities pledged in securities lending transactions to other broker-dealers was $2.1 billion at June 30, 2016 and $1.9 billion at December 31, 2015. The Company has also pledged a portion of its securities owned in connection with securities lending transactions to other broker-dealers. Additionally, the Company borrows securities from other broker-dealers to fulfill short sales by clients and delivers cash to the lender in exchange for the securities. The fair value of these borrowed securities was $442 million at June 30, 2016 and $72 million at December 31, 2015. All of the Company’s securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers. However, the Company does not net securities lending transactions and therefore, the Company’s securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

-  44  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The following table presents information about the Company’s resale agreements and securities lending activity to enable the users of the Company’s financial statements to evaluate the potential effect of rights of setoff between these recognized assets and recognized liabilities at June 30, 2016 and December 31, 2015.

			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Condensed Consolidated
		Gross		Condensed		Condensed	Balance Sheets
		Assets/	Consolidated		Consolidated		Counterparty						Net
		Liabilities	Balance Sheets		Balance Sheets		Offsetting		Collateral				Amount
June 30, 2016
Assets:
Resale agreements (1)	$	7,270	$	-	$	7,270	$	-	$	(7,270)	(2)	$	-
Securities borrowed (3)		643		-		643		(436)		(206)			1
Total	$	7,913	$	-	$	7,913	$	(436)	$	(7,476)		$	1
Liabilities:
Securities loaned (4,5)	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
Total	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
December 31, 2015
Assets:
Resale agreements (1)	$	8,088	$	-	$	8,088	$	-	$	(8,088)	(2)	$	-
Securities borrowed (3)		198		-		198		(70)		(127)			1
Total	$	8,286	$	-	$	8,286	$	(70)	$	(8,215)		$	1
Liabilities:
Securities loaned (4,5)	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173
Total	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173

(1)	Included in cash and investments segregated and on deposit for regulatory purposes in the Company’s condensed consolidated balance sheets.
(2)	Actual collateral was greater than or equal to 102% of the related assets.
(3)	Included in receivables from brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(4)	Included in payables to brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(5)	Securities loaned are predominantly comprised of equity securities with overnight and continuous remaining contractual maturities.

10.Fair Values of Assets and Liabilities

Assets and liabilities measured at fair value on a recurring basis

The Company’s assets and liabilities measured at fair value on a recurring basis include certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, other securities owned, and securities available for sale. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. The Company generally obtains prices from at least three independent pricing sources for assets recorded at fair value.

The Company’s primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar “to-be-issued” securities. The Company compares the prices obtained from its primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. The Company

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts.

Fair value of other financial instruments

Descriptions of the valuation methodologies and assumptions used to estimate the fair value of other financial instruments are described below. The Company’s financial instruments not recorded at fair value but for which fair value can be approximated and disclosed include:

· Cash and cash equivalents are short-term in nature and accordingly are recorded at amounts that approximate fair value.

· Cash and investments segregated and on deposit for regulatory purposes include cash and securities purchased under resale agreements. Securities purchased under resale agreements are short-term in nature and are backed by collateral that both exceeds the carrying value of the resale agreement and is highly liquid in nature. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Receivables from/payables to brokers, dealers, and clearing organizations are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Receivables from/payables to brokerage clients — net are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Securities held to maturity – The fair values of securities held to maturity are obtained using an independent third-party pricing service similar to investment assets recorded at fair value as discussed above.

· Bank loans – The fair values of the Company’s First Mortgages and HELOCs are estimated based on prices of mortgage-backed securities collateralized by similar types of loans. PALs are non-purpose revolving lines of credit secured by eligible assets; accordingly, the carrying values of these loans approximate their fair values.

· Financial instruments included in other assets primarily consist of LIHTC investments, cost method investments and Federal Home Loan Bank (FHLB) stock, whose carrying values approximate their fair values. FHLB stock is recorded at par, which approximates fair value.

· Bank deposits have no stated maturity and are recorded at the amount payable on demand as of the balance sheet date. The Company considers the carrying values of these deposits to approximate their fair values.

· Financial instruments included in accrued expenses and other liabilities consist of drafts payable and certain amounts due under contractual obligations, including unfunded LIHTC commitments. The carrying values of these instruments approximate their fair values.

· Short-term borrowings consist of commercial paper and funds drawn on Schwab Bank’s secured credit facility with the Federal Home Loan Bank of San Francisco. Due to the short-term nature of these borrowings, carrying value approximates fair value.

· Long-term debt – Except for the finance lease obligation, the fair values of long-term debt are estimated using indicative, non-binding quotes from independent brokers. The Company validates indicative prices for its debt through comparison to other independent non-binding quotes. The finance lease obligation is recorded at carrying value, which approximates fair value.

-  46  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

· Firm commitments to extend credit – The Company extends credit to banking clients through HELOCs and PALs. The Company considers the fair value of these unused commitments to not be material because the interest rates earned on these balances are based on floating interest rates that reset monthly.

For a description of the fair value hierarchy, see “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There were no significant changes in these policies and methodologies during the first six months of 2016. The Company did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the six months ended June 30, 2016, or the year ended December 31, 2015. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at June 30, 2016 or December 31, 2015.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the fair value hierarchy for assets measured at fair value on a recurring basis. Liabilities recorded at fair value were not material, and therefore are not included in the following tables:

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
June 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	2,350		$	-		$	-		$	2,350
Commercial paper			-			567			-			567
Total cash equivalents			2,350			567			-			2,917
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,151			-			3,151
U.S. Government securities			-			4,150			-			4,150
Total investments segregated and on deposit for
regulatory purposes			-			7,301			-			7,301
Other securities owned:
Schwab Funds® money market funds			162			-			-			162
Equity and bond mutual funds			241			10			-			251
State and municipal debt obligations			-			64			-			64
Equity, U.S. Government and corporate debt, and
other securities			2			46			-			48
Total other securities owned			405			120			-			525
Securities available for sale:
U.S. agency mortgage-backed securities			-			31,133			-			31,133
Asset-backed securities			-			21,756			-			21,756
Corporate debt securities			-			10,147			-			10,147
U.S. Treasury securities			-			5,018			-			5,018
U.S. agency notes			-			2,973			-			2,973
Certificates of deposit			-			2,178			-			2,178
U.S. state and municipal securities			-			651			-			651
Commercial paper			-			213			-			213
Non-agency commercial mortgage-backed securities			-			159			-			159
Total securities available for sale			-			74,228			-			74,228
Total		$	2,755		$	82,216		$	-		$	84,971

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2015	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,968		$	-		$	-		$	1,968
Commercial paper			-			360			-			360
Total cash equivalents			1,968			360			-			2,328
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,430			-			3,430
U.S. Government securities			-			4,517			-			4,517
Total investments segregated and on deposit for
regulatory purposes			-			7,947			-			7,947
Other securities owned:
Schwab Funds® money market funds			261			-			-			261
Equity and bond mutual funds			205			-			-			205
State and municipal debt obligations			-			50			-			50
Equity, U.S. Government and corporate debt, and
other securities			1			16			-			17
Total other securities owned			467			66			-			533
Securities available for sale:
U.S. agency mortgage-backed securities			-			22,149			-			22,149
Asset-backed securities			-			21,485			-			21,485
Corporate debt securities			-			10,747			-			10,747
U.S. Treasury securities			-			5,704			-			5,704
U.S. agency notes			-			3,150			-			3,150
Certificates of deposit			-			1,683			-			1,683
U.S. state and municipal securities			-			424			-			424
Non-agency commercial mortgage-backed securities			-			299			-			299
Other securities			-			5			-			5
Total securities available for sale			-			65,646			-			65,646
Total		$	2,435		$	74,019		$	-		$	76,454

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Fair Value of Other Financial Instruments

The following tables present the fair value hierarchy for other financial instruments:

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
June 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	10,059		$	-		$	10,059		$	-	$	10,059
Cash and investments segregated and
on deposit for regulatory purposes		11,287			-			11,287			-		11,287
Receivables from brokers, dealers, and
clearing organizations		1,008			-			1,008			-		1,008
Receivables from brokerage clients – net		16,819			-			16,819			-		16,819
Securities held to maturity:
U.S. agency mortgage-backed securities		54,087			-			55,916			-		55,916
Non-agency commercial mortgage-backed
securities		998			-			1,044			-		1,044
U.S. Treasury securities		222			-			235			-		235
Total securities held to maturity		55,307			-			57,195			-		57,195
Bank loans: (1)
Residential real estate mortgages		8,502			-			8,632			-		8,632
Home equity loans and lines of credit		2,582			-			2,718			-		2,718
Pledged asset lines		3,531			-			3,531			-		3,531
Other		86			-			86			-		86
Total bank loans		14,701			-			14,967			-		14,967
Other assets		333			-			333			-		333
Total	$	109,514		$	-		$	111,668		$	-	$	111,668
Liabilities:
Bank deposits	$	137,295		$	-		$	137,295		$	-	$	137,295
Payables to brokers, dealers, and clearing
organizations		3,392			-			3,392			-		3,392
Payables to brokerage clients		32,679			-			32,679			-		32,679
Accrued expenses and other liabilities		835			-			835			-		835
Short-term borrowings		5,000			-			5,000			-		5,000
Long-term debt		2,876			-			3,033			-		3,033
Total	$	182,077		$	-		$	182,234		$	-	$	182,234

(1) The carrying value of bank loans excludes the allowance for loan losses of $31 million at June 30, 2016.

-  49  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2015	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	9,650		$	-		$	9,650		$	-	$	9,650
Cash and investments segregated and
on deposit for regulatory purposes		11,647			-			11,647			-		11,647
Receivables from brokers, dealers, and
clearing organizations		582			-			582			-		582
Receivables from brokerage clients – net		17,310			-			17,310			-		17,310
Securities held to maturity:
U.S. agency mortgage-backed securities		48,785			-			48,883			-		48,883
Non-agency commercial mortgage-backed
securities		999			-			985			-		985
U.S. Treasury securities		223			-			220			-		220
Total securities held to maturity		50,007			-			50,088			-		50,088
Bank loans: (1)
Residential real estate mortgages		8,334			-			8,347			-		8,347
Home equity loans and lines of credit		2,735			-			2,857			-		2,857
Pledged asset lines		3,232			-			3,232			-		3,232
Other		64			-			64			-		64
Total bank loans		14,365			-			14,500			-		14,500
Other assets		184			-			184			-		184
Total	$	103,745		$	-		$	103,961		$	-	$	103,961
Liabilities:
Bank deposits	$	129,502		$	-		$	129,502		$	-	$	129,502
Payables to brokers, dealers, and clearing
organizations		2,588			-			2,588			-		2,588
Payables to brokerage clients		33,185			-			33,185			-		33,185
Accrued expenses and other liabilities		1,115			-			1,115			-		1,115
Long-term debt (2)		2,877			-			2,967			-		2,967
Total	$	169,267		$	-		$	169,357		$	-	$	169,357

(1)	The carrying value of bank loans excludes the allowance for loan losses of $31 million at December 31, 2015.
(2)	The amounts as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

11.Stockholders’ Equity

There have been no significant changes to the Company’s stockholders’ equity with the exception of the issuance disclosed below. The Company did not issue any shares of common stock during the six months ended June 30, 2016, or the year ended December 31, 2015.

On March 7, 2016, the Company issued and sold 30 million depositary shares, each representing a 1/40th ownership interest in a share of 5.95% non-cumulative perpetual preferred stock, Series D, $0.01 par value, with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). The Series D Preferred Stock has a fixed dividend rate of 5.95%.

-  50  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Including the Series D issuance discussed above, the Company’s preferred stock issued and outstanding is as follows:

	June 30, 2016							December 31, 2015
	Shares							Shares
	Issued and	Liquidation						Issued and	Liquidation
	Outstanding	Preference		Liquidation		Carrying		Outstanding	Preference		Liquidation		Carrying
	(In thousands)	Per Share		Preference		Value		(In thousands)	Per Share		Preference		Value
Series A	400	$	1,000	$	400	$	397	400	$	1,000	$	400	$	396
Series B	485		1,000		485		482	485		1,000		485		480
Series C	600		1,000		600		584	600		1,000		600		583
Series D	750		1,000		750		726	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,189	1,485			$	1,485	$	1,459

12.Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents cumulative gains and losses that are not reflected in earnings. The components of other comprehensive income are as follows:

Three Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	168	$	(63)	$	105	$	(91)	$	34	$	(57)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		165		(62)		103		(91)		34		(57)
Other comprehensive income (loss)	$	165	$	(62)	$	103	$	(91)	$	34	$	(57)

Six Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	189	$	(71)	$	118	$	16	$	(7)	$	9
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		186		(70)		116		16		(7)		9
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	187	$	(70)	$	117	$	16	$	(7)	$	9

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Accumulated other comprehensive income balances are as follows:

	Total
	Accumulated Other
	Comprehensive Income
Balance at December 31, 2014		$	165
Net unrealized gain on securities available for sale			9
Balance at June 30, 2015		$	174
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			116
Other			1
Balance at June 30, 2016		$	(17)

13.Earnings Per Common Share

EPS is computed using the two-class method. Preferred stock dividends, and undistributed earnings and dividends allocated to participating securities are subtracted from net income in determining net income available to common stockholders. Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Dilutive potential common shares include, if dilutive, the effect of outstanding stock options and non-vested restricted stock awards and units. EPS under the basic and diluted computations is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net income	$	452	$	353	$	864	$	655
Preferred stock dividends and other (1)		(46)		(23)		(66)		(34)
Net income available to common stockholders	$	406	$	330	$	798	$	621
Weighted-average common shares outstanding — basic		1,322		1,314		1,322		1,313
Common stock equivalent shares related to stock incentive plans		11		12		9		12
Weighted-average common shares outstanding — diluted (2)		1,333		1,326		1,331		1,325
Basic EPS	$	.31	$	.25	$	.60	$	.47
Diluted EPS	$	.30	$	.25	$	.60	$	.47

(1)	Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.
(2)	Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled 19 million and 15 million shares for the second quarters of 2016 and 2015, respectively, and 22million and 16 million shares for the first halves of 2016 and 2015, respectively.

14.Regulatory Requirements

CSC is a savings and loan holding company and Schwab Bank, CSC’s depository institution subsidiary, is a federal savings bank. CSC is subject to examination, supervision, and regulation by the Federal Reserve. Schwab Bank is subject to examination, supervision, and regulation by the OCC, as its primary regulator, the FDIC, as its deposit insurer, and the CFPB. CSC is required to serve as a source of strength for Schwab Bank. On January 1, 2015, CSC became subject to regulatory capital requirements adopted by the Federal Reserve.

Schwab Bank is subject to various requirements and restrictions under federal and state laws, including regulatory capital requirements and requirements that restrict and govern the terms of affiliate transactions, such as extensions of credit to, or

-  52  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

asset purchases from CSC or its other subsidiaries by Schwab Bank. In addition, Schwab Bank is required to provide notice to and may be required to obtain approval of the OCC and the Federal Reserve to declare dividends to CSC. The federal banking agencies have broad powers to enforce these regulations, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver. Under the Federal Deposit Insurance Act, Schwab Bank could be subject to restrictive actions if it were to fall within one of the lowest three of five capital categories. CSC and Schwab Bank are required to maintain minimum capital levels as specified in federal banking regulations. Failure to meet the minimum levels could result in certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on CSC and Schwab Bank. At June 30, 2016, both CSC and Schwab Bank met all of their respective capital requirements. Certain events, such as growth in bank deposits and regulatory discretion, could adversely affect CSC’s or Schwab Bank’s ability to meet future capital requirements.

The regulatory capital and ratios for CSC and Schwab Bank are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	11,581	17.9	%		N/A			$	2,908	4.5	%
Tier 1 Risk-Based Capital		13,770	21.3	%		N/A				3,877	6.0	%
Total Risk-Based Capital		13,802	21.4	%		N/A				5,169	8.0	%
Tier 1 Leverage		13,770	7.2	%		N/A				7,620	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	10,564	18.9	%	$	3,638	6.5	%	$	2,518	4.5	%
Tier 1 Risk-Based Capital		10,564	18.9	%		4,477	8.0	%		3,358	6.0	%
Total Risk-Based Capital		10,595	18.9	%		5,596	10.0	%		4,477	8.0	%
Tier 1 Leverage		10,564	7.1	%		7,462	5.0	%		5,970	4.0	%
December 31, 2015
CSC
Common Equity Tier 1 Risk-Based Capital	$	10,851	18.2	%		N/A			$	2,681	4.5	%
Tier 1 Risk-Based Capital		12,310	20.7	%		N/A				3,575	6.0	%
Total Risk-Based Capital		12,342	20.7	%		N/A				4,766	8.0	%
Tier 1 Leverage		12,310	7.1	%		N/A				6,912	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	9,314	18.1	%	$	3,349	6.5	%	$	2,318	4.5	%
Tier 1 Risk-Based Capital		9,314	18.1	%		4,121	8.0	%		3,091	6.0	%
Total Risk-Based Capital		9,345	18.1	%		5,152	10.0	%		4,121	8.0	%
Tier 1 Leverage		9,314	7.1	%		6,594	5.0	%		5,275	4.0	%

N/A Not applicable.

Based on its regulatory capital ratios at June 30, 2016, Schwab Bank is considered well capitalized (the highest category) under their respective regulatory capital rules. There are no conditions or events since June 30, 2016 that management believes have changed Schwab Bank’s capital category.

Beginning on January 1, 2016, CSC and Schwab Bank became subject to a new capital conservation buffer requirement of .625% of risk-weighted assets, increasing each year by .625% until fully implemented at 2.5% of risk-weighted assets in January 2019. The capital conservation buffer is in addition to the minimum risk-based capital requirements described above. Failure to maintain the capital conservation buffer would limit an entity’s ability to make capital distributions and discretionary bonus payments to executive officers. At June 30, 2016, both CSC’s and Schwab Bank’s capital levels exceeded the fully implemented capital conservation buffer requirement.

CSC’s principal broker-dealers are Schwab and optionsXpress, Inc. Schwab and optionsXpress, Inc. are both subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule). Schwab and optionsXpress, Inc. compute net capital under the alternative method permitted by the Uniform Net Capital Rule. This method requires the

-  53  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).

Net capital and net capital requirements for Schwab and optionsXpress, Inc. are as follows:

							Net Capital
			Minimum		2% of		in Excess of
			Net Capital		Aggregate		Required
June 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,820	$	0.250	$	360	$	1,460
optionsXpress, Inc.		260		1		7		253
December 31, 2015
Schwab	$	1,746	$	0.250	$	358	$	1,388
optionsXpress, Inc.		244		1		7		237

15.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The Company evaluates the performance of its segments on a pre-tax basis, excluding items such as restructuring and other charges. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Financial information for the Company’s reportable segments is presented in the following tables:

	Investor Services (1)				Advisor Services (1)				Total
Three Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	514	$	465	$	243	$	205	$	757	$	670
Net interest revenue		628		524		170		88		798		612
Trading revenue		129		133		72		70		201		203
Other		51		57		19		22		70		79
Provision for loan losses		2		2		-		-		2		2
Total net revenues		1,324		1,181		504		385		1,828		1,566
Expenses Excluding Interest		834		760		274		239		1,108		999
Income before taxes on income	$	490	$	421	$	230	$	146	$	720	$	567

	Investor Services (1)				Advisor Services (1)				Total
Six Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	986	$	911	$	470	$	403	$	1,456	$	1,314
Net interest revenue		1,241		1,034		329		166		1,570		1,200
Trading revenue		272		280		161		150		433		430
Other		97		101		36		41		133		142
Provision for loan losses		-		6		-		-		-		6
Total net revenues		2,596		2,332		996		760		3,592		3,092
Expenses Excluding Interest		1,671		1,546		546		495		2,217		2,041
Income before taxes on income	$	925	$	786	$	450	$	265	$	1,375	$	1,051

(1) The Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment in the fourth quarter of 2015. Prior period information has been recast to reflect these changes.

-  55  -

THE CHARLES SCHWAB CORPORATION

Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures: The management of the Company, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2016. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2016.

Changes in internal control over financial reporting: No change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) was identified during the quarter ended June 30, 2016, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

-  56  -

THE CHARLES SCHWAB CORPORATION

PART  II  -  OTHER  INFORMATION

Item 1.Legal Proceedings

For a discussion of legal proceedings, see “Part I – Financial Information – Item 1 – Notes to Condensed Consolidated Financial Statements (Unaudited) –  8. Commitments and Contingencies.”

Item 1A.Risk Factors

During the first half of 2016, there have been no material changes to the risk factors in “Part I – Item 1A – Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

At June 30, 2016, approximately $596 million of future share repurchases are authorized under the Share Repurchase Program. There were no share repurchases during the second quarter of 2016. There were two authorizations under this program by CSC’s Board of Directors, each covering up to $500 million of common stock that were publicly announced by the Company on April 25, 2007, and March 13, 2008. The remaining authorizations do not have an expiration date.

The following table summarizes purchases made by or on behalf of CSC of its common stock for each calendar month in the second quarter of 2016:

	Total Number of		Average
	Shares Purchased		Price Paid
Month	(in thousands)		per Share
April:
Employee transactions (1)		8	$	28.62
May:
Employee transactions (1)		8	$	28.32
June:
Employee transactions (1)		5	$	30.06
Total:
Employee transactions (1)		21	$	28.85

(1) Includes restricted shares withheld (under the terms of grants under employee stock incentive plans) to offset tax withholding obligations that occur upon vesting and release of restricted shares. The Company may receive shares delivered or attested to pay the exercise price and/or to satisfy tax withholding obligations by employees who exercise stock options granted under employee stock incentive plans, which are commonly referred to as stock swap exercises.

-  57  -

THE CHARLES SCHWAB CORPORATION

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

-  58  -

THE CHARLES SCHWAB CORPORATION

Item 6.Exhibits

The following exhibits are filed as part of this Quarterly Report on Form 10-Q:

Exhibit Number	Exhibit
10.338	The Charles Schwab Corporation 2004 Stock Incentive Plan.	(1)
10.368	Credit Agreement (364 – Day Commitment) dated as of June 3, 2016, between the Registrant and financial institutions therein (supersedes Exhibit 10.366).
12.1	Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(2)
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(2)
101.INS	XBRL Instance Document	(3)
101.SCH	XBRL Taxonomy Extension Schema	(3)
101.CAL	XBRL Taxonomy Extension Calculation	(3)
101.DEF	XBRL Extension Definition	(3)
101.LAB	XBRL Taxonomy Extension Label	(3)
101.PRE	XBRL Taxonomy Extension Presentation	(3)
(1)	Management contract or compensatory plan.
(2)	Furnished as an exhibit to this Quarterly Report on Form 10-Q.
(3)	Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 are the following materials formatted in XBRL (Extensible Business Reporting Language) (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

-  59  -

THE CHARLES SCHWAB CORPORATION

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		THE CHARLES SCHWAB CORPORATION
		(Registrant)
Date:	August 5, 2016	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Senior Executive Vice President and
		Chief Financial Officer

-  60  -

EX-10.338

Exhibit 10.338

THE CHARLES SCHWAB CORPORATION

2004 STOCK INCENTIVE PLAN

(Adopted by the Board on March 10, 2004)

(Approved by Stockholders on May 17, 2004)

(Amended by the Board on March 14, 2007)

(Amendment Approved by Stockholders on May 17, 2007)

(Amended and Restated December 12, 2007)

(Amended and Restated December 10, 2009)

(Amended and Restated January 27, 2011)

(Amended and Restated May 5, 2011)

(Approved by Stockholders on May 17, 2011)

TABLE OF CONTENTS
			Page
SECTION 1. ESTABLISHMENT AND PURPOSE			1
SECTION 2. ADMINISTRATION			1
		(a) Committee Composition	1
		(b) Committee Administration	1
SECTION 3. PARTICIPANTS			2
		(a) General Rule	2
		(b) Non-Employee Directors	2
SECTION 4. STOCK SUBJECT TO PLAN			3
	(a) Basic Limitation		3
	(b) Share Usage		3
	(c) Participant Limits		4
	(d) Adjustments		4
SECTION 5. AWARDS			4
	(a) General		4
	(b) Stock Options		4
	(c) Stock Appreciation Rights		5
	(d) Restricted Stock and Restricted Stock Units		5
	(e) Performance Stock		6
	(f) Other Stock or Cash Awards		6
	(g) Performance Goals		6
SECTION 6. ADJUSTMENT OF SHARES			7
	(a) Adjustments		7

	(b) Corporate Transactions	8
	(c) Substitution and Assumption of Benefits	8
	(d) Reservation of Rights	8
SECTION 7. TERMS OF AWARDS		8
	(a) Transferability	8
	(b) Change in Control	8
	(c) Taxes	9
	(d) Effective Date, Amendment and Termination	10
	(e) Fair Market Value	10
	(f) Dividend Equivalents	10
	(g) Other Provisions	10
	(h) Non-U.S. Employees	10
	(i) Governing Law	11
	(j) Section 409A	11
SECTION 8. PAYMENT OF DIRECTORS’ FEES DEFERRALS IN SECURITIES		11
SECTION 9. DEFERRAL OF AWARDS		11
SECTION 10. DEFINED TERMS		12

THE CHARLES SCHWAB CORPORATION

2004 STOCK INCENTIVE PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Board of Directors on March 10, 2004, subject to stockholder approval, which was obtained on May 17, 2004 (the “Effective Date”). The purposes of The Charles Schwab Corporation 2004 Stock Incentive Plan (the “Plan”) are to promote the long-term success of The Charles Schwab Corporation (“Schwab” or the “Company”) and the creation of incremental stockholder value by (i) encouraging non-employee directors, employees and consultants to focus on long-range objectives, (ii) encouraging the attraction and retention of non-employee directors, employees and consultants with exceptional qualifications and (iii) linking non-employee directors, employees and consultants directly to stockholder interests by providing them stock options and other stock and cash incentives.

This Plan is a successor to The Charles Schwab Corporation 2001 Stock Incentive Plan, The Charles Schwab Corporation 1992 Stock Incentive Plan and The Charles Schwab Corporation Employee Stock Incentive Plan (the “Prior Plans”). As of the Effective Date, no further awards shall be made under the Prior Plans. However, unless a contrary rule is stated, the provisions of the Prior Plans shall continue to apply to awards granted to a participant under the Prior Plans prior to the Effective Date. In the event that this Plan is not approved by stockholders, awards shall continue to be made under the Prior Plans in accordance with their terms.

SECTION 2. ADMINISTRATION.

(a) Committee Composition. The Plan will be administered by a Committee (the “Committee”) of the Schwab Board of Directors (the “Board”) consisting of two or more directors as the Board may designate from time to time. The composition of the Committee shall satisfy such requirements as:

(i) the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 or its successor under the Securities Exchange Act of 1934 (the “Exchange Act”);

(ii) may be established by the stock exchange or stock market on which Schwab’s common stock may be listed pursuant to the rule-making authority of such stock exchange or stock market; and

(iii) the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

(b) Committee Administration. The Committee shall have discretionary authority to construe and interpret the Plan and any benefits granted under the Plan, to establish, interpret and amend rules for Plan administration, to change the terms and conditions of options and other benefits at or after grant, and to make all other determinations which it deems necessary or advisable for the administration of the Plan. The determinations of the Committee shall be made in accordance with its judgment as to the best interests of Schwab and its stockholders and in accordance with the purposes of the Plan, and shall be final and conclusive on all persons. A majority of the members of the Committee shall constitute a quorum, and all determinations of the Committee shall be made by a majority of its members in person or by telephone. Any determination of the Committee under the Plan may be made without notice or meeting of the Committee, and shall be made in writing signed by all the Committee members. The Committee may authorize one or more officers of the Company to select employees to participate in the Plan and to determine the number of option shares and other rights to be granted to such participants (other than to the officer making such determination), except with respect to awards to officers subject to section 16 of the Exchange Act or officers who are or may become “covered employees” within the meaning of section 162(m) of the Code (“Covered Employees”) and any reference in the Plan to the Committee shall include such officer or officers. Subject to the requirements of applicable law, the Committee may also authorize one or more officers of the Company to administer claims under the Plan. No member of the Committee shall be liable

1

for any action that such member has taken or failed to take in good faith with respect to the Plan or any award under the Plan.

SECTION 3. PARTICIPANTS.

(a) General Rule. Participants may consist of all employees and consultants of Schwab and its subsidiaries, non-employee directors of the Board of Directors of Schwab (“Non-Employee Directors”) and non-employee directors of any subsidiary as determined by the Committee. Any corporation or other entity in which a 50% or greater interest is at the time directly or indirectly owned by Schwab shall be a subsidiary for purposes of the Plan. Designation of a participant in any year shall not require the Committee to designate that person to receive a benefit in any other year or to receive the same type or amount of benefit as granted to the participant in any other year or as granted to any other participant in any year. The Committee shall consider all factors that it deems relevant in selecting participants and in determining the type and amount of their respective benefits.

(b) Non-Employee Directors. In addition to any awards that may be granted to them under Section 3(a), each Non-Employee Director shall receive an automatic equity grant, subject to the terms of subparagraph (iv) below, as follows:

(i) For each calendar year for which he or she serves as a Non-Employee Director following the year in which the Non-Employee Director begins service, each Non-Employee Director shall receive an equity grant with an aggregate value equal to $125,000, consisting of 50 percent Stock Options and 50 percent Restricted Stock Units covering shares of Schwab common stock. The number of Stock Options granted shall be determined by dividing $62,500 by the binomial value of a share of Schwab common stock on the date of grant and the number of Restricted Stock Units shall be determined by dividing $62,500 by the fair market value (defined as the average of the high and low price) of a share of Schwab common stock on the date of grant.

(ii) In the first calendar year upon joining the Board, each Non-Employee Director shall receive an automatic equity grant calculated in the manner specified in Section 3(b)(i), except that the value of the grant shall be equal to $125,000 multiplied by the number of months remaining in the calendar year during which the Non-Employee Director will first serve as a Non-Employee Director divided by twelve.

(iii) The awards described in subparagraph (i) for a particular calendar year will be granted to each Non-Employee Director on the second business day following each regular annual meeting of the Company’s stockholders, provided that the Non-Employee Director continues to serve as a Non-Employee Director through the date of such annual meeting. Otherwise, no award shall be granted with respect to such calendar year. The awards described in subparagraph (ii) for a particular calendar year will be granted to each Non-Employee Director either (A) on the second business day following the regular annual meeting of the Company’s stockholders for the calendar year in which the Non-Employee Director is first appointed or elected to the Board, if the Non-Employee Director is elected or appointed to the Board on or before the date of such annual meeting or (B) on the date of the first meeting of the Board following the date the Non-Employee Director is first appointed or elected to the Board, if the Non-Employee Director is elected or appointed to the Board after the date of the regular annual meeting of the Company’s stockholders.

(iv) Each stock option shall be subject to the following terms and conditions:

(A) Each stock option shall be designated as a non-qualified stock option that is not intended to meet the specific requirements set forth in section 422 of the Code (“Nonqualified Stock Option”);

(B) The term of each Nonqualified Stock Option shall be 10 years; provided, however, that any unexercised Nonqualified Stock Option shall expire on the earlier of (I) the date 10 years after the date of grant; or (II) three (3) months following the date that the participant ceases to be a Non-Employee Director or an employee for any reason other than retirement (as defined in subparagraph (v) below), death or disability. If a participant ceases to be a Non-Employee Director or employee on account of death or disability, any unexercised

2

Nonqualified Stock Option shall expire on the earlier of the date 10 years after the date of grant or one year after the date of death or disability of such director, and if a participant ceases to be a Non-Employee Director or employee on account of retirement, any unexercised Nonqualified Stock Option shall expire on the earlier of the date 10 years after the date of grant or two years after the date of retirement of such Non-Employee Director; and

(C) The exercise price under each Nonqualified Stock Option shall be equal to the fair market value on the date of grant as determined by the Committee.

(v) The awards described in subparagraphs (i) and (ii) shall become vested and exercisable in accordance with the following schedule

	Cumulative Vesting Percentage of Award
1st anniversary of grant date	25%
2nd anniversary of grant date	50%
3rd anniversary of grant date	100%

Notwithstanding the foregoing, the awards described in subparagraphs (i) and (ii) shall be fully vested on the Non-Employee Director’s death, disability (as such term is defined in the applicable award agreement) or retirement from the Board. For purposes of this Section 3(b), “retirement” shall mean a Non-Employee Director’s resignation or removal from the Board at any time after he or she has either attained age 70 or completed five years of service as a Non-Employee Director.

(vi) Each Restricted Stock Unit represents the right to receive a share of Schwab common stock subject to the conditions set forth in the applicable award agreement.  If Schwab pays cash dividends on shares of Schwab common stock, each Restricted Stock Unit shall receive a dividend equivalent payment equal to the dividend paid per share of Schwab common stock multiplied by the number of unvested Restricted Stock Units. Each such payment shall be made as soon as practicable following the payment of the actual dividend, but in no event beyond March 15th of the year following the year the actual dividend is paid.

SECTION 4. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. There is hereby reserved for issuance under the Plan an aggregate of:

(i) 90 million shares of Schwab common stock; plus

(ii) any shares of Schwab common stock subject to outstanding awards under the Prior Plans as of the Effective Date that on or after the Effective Date cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in shares); plus

(iii) any shares of Schwab common stock that were issued under the Prior Plans and are reacquired by Schwab after the Effective Date.

The aggregate maximum number of shares of Schwab common stock available under subparagraphs (ii) and (iii) is 150 million. To the extent an award is paid in cash, it shall not reduce the limits of this Section 4(a).

(b) Share Usage. If there is a lapse, expiration, termination or cancellation of any stock option issued under the Plan prior to the issuance of shares under the Plan or if shares of common stock are issued under the Plan and thereafter are reacquired by Schwab, the shares subject to those options and the reacquired shares shall be added to the shares available for benefits under the Plan. Shares covered by a benefit granted

3

under the Plan or a Prior Plan shall not be counted as issued unless and until they are actually issued and delivered to a participant. Any shares covered by a Stock Appreciation Right shall be counted as issued only to the extent shares are actually issued to the participant upon exercise of the right. In addition, any shares of common stock exchanged by a participant as full or partial payment to Schwab of the exercise price under any Stock Option exercised under the Plan or a Prior Plan, any shares retained by Schwab pursuant to a participant’s tax withholding election, and any shares covered by a benefit which is settled in cash shall be added to the shares available for benefits under the Plan. All shares issued under the Plan may be authorized and unissued shares, issued shares reacquired by Schwab or other shares that are treasury shares.   

(c) Participant Limits. Under the Plan, no participant may be granted in any fiscal year of the Company:

(i) Stock Options or SARs relating to more than 5 million shares of Schwab common stock in the aggregate, and

(ii) Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units denominated in shares of Schwab common stock, or Other Stock Awards that are subject to the attainment of Performance Criteria described in Section 5(g) relating to more than 1 million shares of Schwab common stock in the aggregate, and

(iii) Performance Units denominated in cash or Other Cash Awards that are subject to the attainment of Performance Criteria described in Section 5(g) that could entitle the participant to more than $10 million in the aggregate from that year’s awards (considering for this purpose the maximum that could be payable, including for above-target performance).

With respect to any Stock Option or SAR granted to a participant who is a Covered Employee that is canceled, the number of shares of Schwab common stock originally subject to such Stock Option or SAR shall continue to count against the limit specified in subparagraph (i) above in accordance with Section 162(m) of the Code.

(d) Adjustments. The shares reserved for issuance and the limitations set forth in this Section 4 shall be subject to adjustment in accordance with Section 6.

SECTION 5. AWARDS.

(a) General. Benefits under the Plan shall consist of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units, and Other Stock or Cash Awards, all as described below. Each award under the Plan shall be evidenced by a written award agreement in paper or electronic form approved by the Committee.  Such agreement shall be subject to and incorporate the express terms and conditions, if any, required under the Plan or as required by the Committee for the form of award granted and such other terms and conditions as the Committee may specify.

(b) Stock Options. Stock Options may be granted to participants at any time as determined by the Committee. The Committee shall determine the number of shares subject to each option and whether the option is an incentive stock option described in section 422(b) of the Code (an “Incentive Stock Option”); provided that only a common-law employee shall be eligible for the grant of an Incentive Stock Option. No participant may be granted Incentive Stock Options (under this Plan or any other Incentive Stock Option plan of the Company and its affiliates) which are first exercisable in any calendar year for shares of Schwab common stock having an aggregate fair market value (determined as of the date an option is granted) that exceeds $100,000; any Stock Option granted under the Plan that exceeds this limit shall be a Nonqualified Stock Option. The option price for each option shall be determined by the Committee but shall not be less than 100% of the fair market value of Schwab’s common stock on the date the option is granted (110% in the case of an Incentive Stock Option granted to an individual who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (a “10% Stockholder”). Each option shall expire at such time as the Committee shall determine at the time of

4

grant. Options shall be exercisable at such time and subject to such terms and conditions as the Committee shall determine; provided, however, that no option shall be exercisable later than the tenth anniversary of its grant (five years in the case of an Incentive Stock Option granted to a 10% Stockholder). The option price, upon exercise of any option, shall be payable to Schwab in full by:

(i) cash payment or its equivalent;

(ii) surrendering, or attesting to the ownership of, shares of Schwab stock that are already owned by the participant;

(iii) delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to Schwab the amount of sale proceeds from the option shares or loan proceeds to pay the exercise price and any withholding taxes due to Schwab; and

(iv) such other methods of payment as the Committee, at its discretion, deems appropriate; provided, however, that no method of payment will be permitted if it would result in a violation of applicable law, as determined by the Committee in its sole discretion.

In no event shall the Committee cancel any outstanding Stock Option for the purpose of reissuing the option to the participant at a lower exercise price or reduce the option price of an outstanding option.

Notwithstanding anything in this Section 5(b) to the contrary, Stock Options may be granted only to individuals who provide direct services on the date of grant of the Stock Option to the Company or another entity in a chain of entities in which the Company or another such entity has a controlling interest within the meaning of Treasury Regulation section 1.409A-1(b)(iii)(E) in each entity in the chain.

(c) Stock Appreciation Rights. Stock Appreciation Rights (“SARs”) may be granted to participants at any time as determined by the Committee. An SAR may be granted in tandem with a Stock Option granted under this Plan or on a free-standing basis. The Committee also may, in its discretion, substitute SARs for outstanding Stock Options. The grant price of a tandem or substitute SAR shall be equal to the option price of the related option. The grant price of a free-standing SAR shall be equal to the fair market value of Schwab’s common stock on the date of its grant. An SAR may be exercised upon such terms and conditions and for such term as the Committee in its sole discretion determines; provided, however, that the term shall not exceed the option term in the case of a tandem or substitute SAR or ten years in the case of a free-standing SAR and the terms and conditions applicable to a substitute SAR shall be substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of an SAR, the participant shall be entitled to receive payment from Schwab in an amount determined by multiplying the excess of the fair market value of a share of Schwab common stock on the date of exercise over the grant price of the SAR by the number of shares with respect to which the SAR is exercised. The payment may be made in cash or stock, at the discretion of the Committee. Notwithstanding anything in this Section 5(c) to the contrary, SARs may be granted only to individuals who provide direct services on the date of grant of the SAR to the Company or another entity in a chain of entities in which the Company or another such entity has a controlling interest within the meaning of Treasury Regulation section 1.409A-1(b)(iii)(E) in each entity in the chain.

(d) Restricted Stock and Restricted Stock Units. Restricted Stock and Restricted Stock Units may be awarded or sold to participants under such terms and conditions as shall be established by the Committee. Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee determines, including, without limitation, any of the following (i) a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period; or (ii) a requirement that the holder forfeit (or in the case of shares or units sold to the participant resell to Schwab at cost) such shares or units in the event of termination of employment during the period of restriction. All restrictions shall expire at such times as the Committee shall specify. Settlement of vested Restricted Stock Units may be made in the form of (a) cash, (b) shares of Schwab common stock or (c) any combination of both, as determined by the Committee. Restricted Stock Units may be settled in a lump sum or in installments as specified in the applicable award agreement. The distribution may occur or commence when all vesting conditions

5

applicable to the Restricted Stock Units have been satisfied or have lapsed, or it may be deferred to any later date in accordance with Section 9, as provided for in the applicable award agreement.

(e) Performance Stock. The Committee shall designate the participants to whom long-term performance stock (“Performance Stock”) or long-term performance units (“Performance Units”) are to be awarded and determine the number of shares or units, the length of the performance period and the other terms and conditions of each such award. Each award of Performance Stock or Performance Units shall entitle the participant to a payment in the form of shares of common stock or cash (as provided in the award agreement) upon the attainment of performance goals and other terms and conditions specified by the Committee pursuant to Section 5(g) below. The Committee may, in its discretion, make a cash payment equal to the fair market value of shares of common stock otherwise required to be issued to a participant pursuant to a Performance Stock award.

(f) Other Stock or Cash Awards. In addition to the incentives described in paragraphs (b) through (e) of this Section 5, the Committee may grant other incentives payable in cash or in common stock under the Plan as it determines to be in the best interests of Schwab and subject to such other terms and conditions as it deems appropriate.

(g) Performance Goals.  

(i) Awards of Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units and Other Stock or Cash Awards under the Plan may be made subject to the attainment of performance goals for a specified period of time (a “Performance Period”).  In the case of an award that is intended to satisfy the performance-based exception to the deductibility limitation of Section 162(m) of the Code (the “Performance-Based Exception”), the categories of permissible performance goals include: income; operating income; pre-tax income; after-tax income; profit;pre-tax operating profits; pre-tax reported profits; pre-tax operating profit margin; pre-tax reported profit margin; after-tax operating profit margin; after-tax reported profit margin; revenue;revenue growth; operating revenue growth;cash flow; stockholder return;  net income; client net new assets; levels of client assets or sales (of products, offers or services);earnings per share; return on stockholders’ equity; return on investment; earnings; earnings before interest and taxes (EBIT); earnings before interest, taxes, depreciation and amortization (EBITDA); consolidated pre-tax earnings; net earnings; operating cash flow; free cash flow; free cash flow per share; cash flow return; economic value added; market value added; total stockholder return; debt/capital ratio; return on total capital; market share of assets; return on assets; return on net assets; return on capital employed; cost control; Schwab common stock price; capital expenditures; price/earnings growth ratio; sales; sales volume; and book value per share;cost of capital; cost of equity; and changes between years or periods that are determined with respect to any of the above-listed performance criteria (“Performance Criteria”). The Committee may establish other performance measures for awards that are not intended to qualify under the Performance-Based Exception. A performance goal may be measured relative to the performance of the Company as a whole or any business unit, department, division region or function of the Company or any subsidiary in which the participant is employed and may be measured relative to a peer group or index. If more than one performance goal is specified by the Committee for a Performance Period, the Committee shall also specify, in writing, whether one, all or some other number of such performance goals must be attained in order for the performance goals to be satisfied for the applicable award. Notwithstanding satisfaction of any performance goals, the number of shares issued or amounts paid under awards may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine, subject to the provisions of Section 5(g)(ii)(B) below.

(ii) For an award that is intended to qualify for the Performance-Based Exception:

(A) Not later than the 90th day of the Performance Period (or, in the event that a Performance Period is expected to be less than 12 months, not later than the date when 25% of the Performance Period has elapsed), the Committee shall select the participants for such period and establish in writing (I) the objective performance goals for each participant for that period

6

based on one or more of the Performance Criteria, (II)  the definition of each applicable performance goal, (III) the maximum amount payable under the award for attainment of the performance goals and the threshold level of attainment below which no amount will be paid under the award, in all cases subject to the per-participant limits described in Section 4, (IV) the method by which such amounts will be calculated, and (V) how performance will be measured against a goal to reflect the impact of extraordinary items and any other unusual or non-recurring items as specified in Section 5(g)(iii) below.

(B) The Committee may not in any event increase the amount of compensation payable to a Covered Employee upon the attainment of a performance goal. The Committee shall determine and certify in writing, for each participant, the extent to which the performance goals have been met and the amount of the award, if any, to be made.  The Committee has the absolute and unrestricted discretion to reduce the amount of the award that otherwise would be payable in connection with the attainment of the performance goals applicable to the award.  It is expressly permissible to reduce the amount otherwise payable to zero. 

(iii) In determining whether any performance goals have been satisfied, the Committee may exclude any or all extraordinary items (as determined under U.S. generally accepted accounting principles), and any other unusual or non-recurring items, including but not limited to, charges or costs associated with restructurings of the Company, discontinued operations and the cumulative effects of accounting changes.  In addition, the Committee may adjust any performance goal for a year as it deems equitable to recognize unusual or non-recurring events affecting the Company, changes in tax laws or accounting procedures, mergers and acquisitions and any other factors as the Committee may determine.  In the case of an award that is intended to qualify for the Performance-Based Exception, such exclusions and adjustments may only apply to the extent the Committee specifies in writing (not later than the time the performance targets are required to be established) which exclusions and adjustment the Committee will apply to determine whether a performance goal has been satisfied, as well as an objective manner for applying them, or to the extent that the Committee determined that they may apply without adversely affecting the award’s qualification for the Performance-Based Exception.  To the extent that a performance goal is based on Schwab common stock, then in the event of any stock dividend, stock split, spin-off, split-off, spin-out, recapitalization or other change in the capital structure of the Company, merger, consolidation, reorganization, combination of shares, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities or any other corporate transaction having an effect similar to any of the foregoing, the Committee shall make or provide for such adjustments in performance goals as the Committee in its sole discretion may in good faith determine to be equitably required in order to prevent dilution or enlargement of the rights of participants.  In the case of an award intended to qualify for the Performance-Based Exception, this shall apply only to the extent the Committee determined it will not adversely affect such qualification.

SECTION 6. ADJUSTMENT OF SHARES.

(a) Adjustments. If Schwab shall at any time change the number of issued shares of common stock by stock dividend, stock split, spin-off, split-off, spin-out, recapitalization, or other change in the capital structure of the Company, merger, consolidation, reorganization, combination, exchange of shares, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities or any other corporate transaction having an effect similar to any of the foregoing, then, in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee shall equitably adjust, as it determines to be necessary and appropriate, the total number of shares reserved for issuance under the Plan, the maximum number of shares that may be made subject to an award in any fiscal year, and the number of shares covered by each outstanding award and the price therefor, if any. Any such adjustment to an Incentive Stock Option shall be made in a manner that permits the Incentive Stock Option to continue to meet the requirements of Section 422 of the Code.  The Committee shall also adjust the terms and conditions of, and the criteria included in, awards in recognition of unusual or nonrecurring events (including, without limitation,the

7

events described in the first sentence of this Section 6(a)) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are needed to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on all participants under the Plan.

(b) Corporate Transactions. In the event that the Schwab is a party to a merger or other reorganization, outstanding awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for (i) the continuation of the outstanding awards by Schwab, if Schwab is a surviving corporation, (ii) the assumption of the outstanding awards by the surviving corporation or its parent or subsidiary, (iii) the substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding awards under this Plan, (iv) full exercisability or vesting and accelerated expiration of the outstanding awards or (v) settlement of the full value of the outstanding awards in cash or cash equivalents followed by cancellation of such awards.

(c) Substitution and Assumption of Benefits. Without affecting the number of shares reserved or available hereunder, the Board or the Committee may authorize the issuance of benefits under this Plan in connection with the assumption of, or substitution for, outstanding benefits previously granted to individuals who become employees of Schwab or any subsidiary as a result of any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and conditions as the Committee may deem appropriate, including but not limited to a Stock Option exercise price or SAR grant price that is less than fair market value, so long as such exercise price or grant price is determined in a manner that complies with the applicable requirements of Section 409A and Section 424 of the Code.

(d) Reservation of Rights. Except as provided in this Section 6, a participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by Schwab of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, kind or exercise price of shares subject to a Stock Option or other award. The grant of an award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets (or to undertake any other corporate action described in Section 6(a) above).  

SECTION 7. TERMS OF AWARDS.

(a) Transferability. Except as otherwise determined by the Committee in the case of benefits other than Incentive Stock Options or SARs granted in tandem with Incentive Stock Options, each benefit granted under the Plan shall not be assigned, transferred, pledged or encumbered, either voluntarily or by operation of law, other than by will or the laws of descent and distribution and each Stock Option and SAR shall be exercisable during the participant’s lifetime only by the participant or, in the event of disability, by the participant’s personal representative. In the event of the death of a participant, the exercise of any benefit or payment with respect to any benefit shall be made only by or to the executor or administrator of the estate of the deceased participant or the person or persons to whom the deceased participant’s rights under the benefit shall pass by will or the laws of descent and distribution.

(b) Change in Control. The Committee (in its sole discretion) may determine at the time of (or at any time after) the grant of an award, that upon a Change in Control of Schwab, that any outstanding Stock Option or SAR shall become vested and exercisable; all restrictions on any Restricted Stock or Restricted Stock Unit shall lapse; all performance goals shall be deemed achieved at target levels and all other terms and conditions met; Performance Stock shall be delivered; a Performance Unit and Restricted Stock Unit shall be paid out as promptly as practicable; and any Other Stock or Cash Award shall be delivered or paid; provided, however, that this Section 7(b) shall not apply to awards pursuant to which a deferral election has been made in accordance with Section 9. A “Change in Control” shall mean the occurrence of any of the following events:

8

(i) Upon consummation of a reorganization, merger or consolidation (a “Business Combination”), in each case, unless, following such Business Combination:

(A) the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of Common Stock of the Company (the “Outstanding Common Stock”) and the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”) immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be; and

(B) no Person (as defined in subparagraph (iii) below) (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Company or such other corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership of Outstanding Common Stock or Outstanding Voting Securities existed prior to the Business Combination; and

(C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(ii) If individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of (A) an actual or threatened election contest with respect to the election or removal of directors; (B) an actual or threatened solicitation of proxies or consents; or (C) any other actual or threatened action by, or on behalf of, any Person other than the Board; or

(iii) Upon the acquisition after the Effective Date by any individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then Outstanding Common Stock or (B) the combined voting power of the Outstanding Voting Securities; provided, however, that the following acquisitions shall not be deemed to be covered by this subparagraph (iii): (x) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by the Company, (y) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any employee benefit plan (or related trust) sponsored or maintained by the Company or (z) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subparagraph (i) above; or

(iv) The consummation of the sale of all or substantially all of the assets of the Company or approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(c) Taxes. Schwab shall be entitled to withhold the amount of any tax attributable to any amounts payable or shares deliverable under the Plan, after giving the person entitled to receive such payment or delivery notice and Schwab may defer making payment or delivery as to any award, if any such tax is

9

payable until indemnified to its satisfaction. A participant may pay all or a portion of Schwab’s minimum statutory withholding obligation arising in connection with the exercise of a Stock Option or SAR or the receipt or vesting of shares hereunder by electing to have Schwab withhold shares of common stock having a fair market value equal to such amount. The Committee may permit a participant to pay the withholding obligation applicable to an award by delivery to the Company of shares of Schwab common stock owned by the participant having a fair market value equal to the amount of such taxes or permit cashless exercise. 

(d) Effective Date, Amendment and Termination. The Plan is effective on the Effective Date and shall automatically terminate one day before the 10th anniversary of the date on which the Board adopted the Plan. The Board or the Committee may amend the Plan from time to time or terminate the Plan at any time. However, no such action shall reduce the amount of any existing award or change the terms and conditions thereof without the participant’s consent unless such action is necessary or desirable (i) for the continued validity of the Plan or its compliance with Rule 16b-3 of the Exchange Act or any other applicable law, rule or regulation or pronouncement, or (ii) to avoid any adverse consequences under Section 162(m) of the Code, Section 409A of the Code or any requirement of a securities exchange or association or regulation or self-regulatory body. Stockholder approval shall be obtained for any Plan amendment to the extent necessary or desirable to comply with applicable laws, regulations or rules.

(e) Fair Market Value. The fair market value of a share of Schwab common stock on a given determination date shall equal:

(i) The closing sales price of a share as reported on the New York Stock Exchange (NYSE) on the applicable determination date (except in the case of a share of Restricted Stock ora  Restricted Stock Unit, which shall be the average of the high and low price of a share as reported on NYSE on the applicable determination date), or

(ii) If no sales of shares are reported for such date, the mean between the bid and asked price of a share on NYSE at the close of the market on such date, or

(iii) In the event that the method for determining fair market value described in clauses (i) and (ii) is not practicable, as determined by the Committee in its discretion, the fair market value of a share determined in accordance with any other reasonable method as the Committee, in its discretion, may deem equitable, or as required by applicable law or regulation, which method shall be one that is deemed to constitute fair market value for purposes of Section 409A of the Code to the extent it is used with respect to a Stock Option or SAR.

(f) Dividend Equivalents. Any participant selected by the Committee, in its sole discretion, may be granted dividend equivalents based on the dividends declared on shares that are subject to any award, to be credited as of dividend payment dates, during the period between the date the award is granted and the date the award is exercised, vests or expires, as determined by the Committee. Such dividend equivalents shall be converted to cash or additional shares by such formula and at such time and subject to such limitations as may be determined by the Committee.  Notwithstanding the foregoing, no dividend equivalents will be paid contingent on the exercise of a Stock Option or SAR.

(g) Other Provisions. The award of any benefit under the Plan may also be subject to other provisions (whether or not applicable to the benefit awarded to any other participant) as the Committee determines appropriate, including provisions intended to comply with applicable securities laws and stock exchange or stock market requirements, understandings or conditions as to the participant’s employment, requirements or inducements for continued ownership of common stock after exercise or vesting of benefits, forfeiture of awards in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition or confidentiality agreements following termination of employment, or provisions permitting the deferral of the receipt of a benefit for such period and upon such terms as the Committee shall determine.

(h) Non-U.S. Employees. In the event any benefit under this Plan is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may, in its sole discretion, modify the provisions of the Plan as they pertain to such individuals to comply with applicable law, regulation or accounting rules.

10

(i) Governing Law. The Plan and any actions taken in connection herewith shall be governed by and construed in accordance with the laws of the state of Delaware (without regard to applicable Delaware principles of conflict of laws).

(j)  Section 409A. At all times, this Plan shall be interpreted and operated (i) with respect to awards subject to Section 409A of the Code (“Section 409A”), in accordance with the requirements of Section 409A and the regulatory guidance thereunder unless an exemption from Section 409A is available and applicable, (ii) to maintain the exemptions from Section 409A of Stock Options, SARs and Restricted Stock and any awards designed to meet the short-deferral exception under Section 409A, and (iii) to preserve the status of deferrals of compensation that were earned and vested prior to January 1, 2005 as exempt from Section 409A, i.e., to preserve the grandfathered status of such deferrals.  To the extent there is a conflict between the provisions of the Plan relating to compliance with Section 409A and the provisions of any award agreement issued under the Plan, the provisions of the Plan control. Moreover, any discretionary authority that the Committee may have pursuant to the Plan shall not be applicable to an award that is subject to Section 409A to the extent such discretionary authority would conflict with Section 409A. In addition, to the extent required to avoid a violation of the applicable rules under Section 409A by reason of Section 409A(a)(2)(B)(i), any payment under an award shall be delayed until the earliest date of payment that will result in compliance with the rules of Section 409A(a)(2)(B)(i) (regarding the required six-month delay for distributions to specified employees that are related to a separation from service).  In the event that any award shall be deemed not to comply with Section 409A, then neither the Company, the Board, the Committee nor its or their designees or agents, nor any of their affiliates, assigns or successors (each a “protected party”) shall be liable to any award recipient or other person for actions, inactions, decisions, indecisions or any other role in relation to the Plan by a protected party if made or undertaken in good faith or in reliance on the advice of counsel (who may be counsel for the Company), or made or undertaken by someone other than a protected party.

SECTION 8. PAYMENT OF DIRECTORS’ FEES DEFERRALS IN SECURITIES.

In the event a Non-Employee Director elects pursuant to and in accordance with the terms of Schwab’s Directors’ Deferred Compensation Plan II (or any predecessor or successor to such plan) to defer receipt of the payment of his or her annual cash retainer from Schwab in the form of Restricted Stock Units, Nonqualified Stock Options, Restricted Stock, Other Stock Awards or a combination thereof, such Nonqualified Stock Options, Restricted Stock Units, Restricted Stock, and Other Stock Awards shall be issued under this Plan. For purposes of this Section 8, the term “Non-Employee Director” shall also include a non-employee director of any Subsidiary, if the Committee has approved participation by such non-employee director in Schwab’s deferred compensation plan for directors. The number and form of each award to be granted to Non-Employee Directors pursuant to this Section 8 in connection with a deferral election under the Directors’ Deferred Compensation Plan II (or any predecessor or successor to such plan) shall be determined in accordance with the provisions of that plan, but the terms of each such award shall be determined by the Committee or its delegate in accordance with the provisions of this Plan.

SECTION 9. DEFERRAL OF AWARDS.

Subject to the requirements of Section 409A, the Committee (in its sole discretion) may permit or require a participant to have cash or shares that otherwise would be paid to such participant as a result of the settlement of a restricted stock unit or performance unit award credited to a deferred compensation account established for such participant by the Committee as an entry on Schwab’s books. A deferred compensation account may be credited with interest or other forms of investment return, as determined by the Committee. A participant for whom such an account is established shall have no rights other than those of a general creditor of Schwab. Such an account shall represent an unfunded and unsecured obligation of Schwab and shall be subject to the terms and conditions of the applicable agreement between such participant and Schwab. If the deferral or conversion of awards is permitted or required, the Committee (in its sole discretion) may, consistent with the requirements of Section 409A, establish rules, procedures and forms pertaining to such awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 9 and such rules and procedures shall be set forth in detail in the applicable stock award agreement or other deferral agreement.

11

SECTION 10. DEFINED TERMS.
“10% Stockholder”	5
“Board”	1
“Business Combination”	9
“Change in Control”	9
“Code”	1
“Committee”	1
“Company”	1
“Covered Employees”	2
“Effective Date”	1
“Exchange Act”	1
“Incentive Stock Option”	5
“Incumbent Board”	10
“Non-Employee Directors”	2
“Nonqualified Stock Option”	3
“Outstanding Common Stock”	9
“Outstanding Voting Securities”	9
“Performance Criteria”	7
“Performace Period”	6
“Performance Stock”	6
“Performance Units”	6
“Performance-Based Exception”	6
“Person”	10
“Plan”	1
“Prior Plans”	1
“SARs”	5
“Schwab”	1
“Section 409A”	11

12

EX-10.368

Exhibit 10.368

EXECUTION COPY

$750,000,000

CREDIT AGREEMENT

(364-DAY COMMITMENT)

dated as of June 3, 2016

Among

THE CHARLES SCHWAB CORPORATION

and

CITIBANK, N.A.

as Administrative Agent

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

and

THE BANK OF NEW YORK MELLON

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents

and

JPMORGAN CHASE BANK, N.A.

as Syndication Agent

and

CITIGROUP GLOBAL MARKETS INC.

and

JPMORGAN CHASE BANK, N.A.

as Joint Lead Arrangers and Bookrunners

NYDOCS02/1089152

1.	DEFINITIONS		1
2.	THE CREDIT FACILITY.		13
	2.1	The Revolving Credit Facility	13
	2.2	Term Loan Facility	14
	2.3	Evidence of Borrowing/Promissory Notes	14
	2.4	Making of Revolving Loans and Term Loans, Borrowings; Interest Periods; Notice.	15
	2.5	Conversion and Continuation Elections.	16
	2.6	Interest Periods	18
	2.7	Interest Rates	18
	2.8	Substitute Rates	19
	2.9	Fees	19
	2.10	Reduction of Credit	20
	2.11	Termination Date; Extensions	20
	2.12	Payments by the Lenders to the Agent	21
	2.13	Sharing of Payments, Etc.	22
	2.14	Computation of Fees and Interest	22
	2.15	Defaulting Lenders	23
3.	PAYMENT.		24
	3.1	Repayment	24
	3.2	Method of Payment	24
	3.3	Optional Prepayment	24
	3.4	Taxes/Net Payments	25
	3.5	Illegality	25
	3.6	Increased Costs and Reduction of Return	26
	3.7	Funding Losses	27
	3.8	Certificates of Lenders	27
	3.9	Substitution of Lenders	27
	3.10	Survival	28
4.	CONDITIONS.		28
	4.1	Conditions Precedent to the Effectiveness of this Agreement	28
	4.2	Conditions Precedent to Revolving Loans and Term Loans	29
5.	REPRESENTATIONS AND WARRANTIES.		30
	5.1	Organization and Good Standing	30
	5.2	Corporate Power and Authority	30
	5.3	Enforceability	30
	5.4	No Violation of Laws or Agreements	30
	5.5	No Consents	30

NYDOCS02/1089152 i

	5.6	Financial Statements	31
	5.7	Broker Subsidiary Licenses, Etc	31
	5.8	Broker Subsidiary/Broker Registration	31
	5.9	Broker Subsidiary/SIPC	31
	5.10	Taxes	31
	5.11	ERISA	31
	5.12	No Extension of Credit for Default Remedy/Hostile Acquisition	31
	5.13	Use of Proceeds/Margin Regulations	32
	5.14	Authorized Persons	32
	5.15	Material Contracts	32
	5.16	Litigation	32
	5.17	Investment Company	32
	5.18	Designated Persons	32
6.	AFFIRMATIVE COVENANTS.		32
	6.1	Notice of Events of Default	32
	6.2	Financial Statements	33
	6.3	Insurance	33
	6.4	Books and Records	33
	6.5	Change in Business	33
	6.6	Capital Requirements	33
	6.7	Anti-Corruption Laws and Sanctions	33
7.	NEGATIVE COVENANTS.		33
	7.1	Net Capital	34
	7.2	Minimum Stockholders' Equity	34
	7.3	Merger/Disposition of Assets	34
	7.4	Broker Subsidiary Indebtedness	34
	7.5	Indebtedness Secured by Subsidiary Stock	34
	7.6	Liens and Encumbrances	35
	7.7	Use of Proceeds	35
8.	EVENTS OF DEFAULT.		35
	8.1	Defaults	35
	8.2	Remedies	37
9.	THE AGENT.		37
	9.1	Appointment and Authorization	37
	9.2	Delegation of Duties	38
	9.3	Liability of Agent	38
	9.4	Reliance by Agent	38
	9.5	Notice of Default	39
	9.6	Credit Decision	39
	9.7	Indemnification of Agent	39

NYDOCS02/1089152 ii

	9.8	Agent in Individual Capacity	40
	9.9	Successor Agent	40
	9.10	Withholding Tax	40
	9.11	Co-Agents	42
10.	MISCELLANEOUS.		42
	10.1	Amendments and Waivers	42
	10.2	Notices	43
	10.3	No Waiver-Cumulative Remedies	44
	10.4	Costs and Expenses	44
	10.5	Borrower Indemnification	45
	10.6	Payments Set Aside	46
	10.7	Successors and Assigns	46
	10.8	Assignments, Participations Etc	46
	10.9	Confidentiality	49
	10.10	Notification of Addresses, Lending Offices, Etc	50
	10.11	Counterparts	50
	10.12	Severability	50
	10.13	No Third Parties Benefited	51
	10.14	Governing Law and Jurisdiction	51
	10.15	Waiver of Jury Trial	51
	10.16	Entire Agreement	53
	10.17	Headings	53
	10.18	USA Patriot Act	53
	10.19	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	53

NYDOCS02/1089152 iii

SCHEDULES:

Schedule 1 - Lenders’ Commitments

Schedule 2 - List of Borrowing Agreements

Schedule 6.2 – Compliance Certificate

Schedule 10.2 - Notices

EXHIBITS:

Exhibit A-1 - Revolving Note

Exhibit A-2 - Term Note

Exhibit B - Borrowing Advice

Exhibit C - Notice of Conversion/Continuation

Exhibit D - Commitment and Termination Date Extension Request

Exhibit E - Borrower’s Opinion of Counsel

Exhibit F - Form of Assignment and Acceptance

NYDOCS02/1089152 iv

CREDIT AGREEMENT(364-DAY COMMITMENT)

THIS CREDIT AGREEMENT (364-DAY COMMITMENT) ("this Agreement") is entered into as of June 3, 2016, among The Charles Schwab Corporation, a Delaware corporation (the "Borrower"), the several financial institutions from time to time party to this Agreement (collectively the "Lenders"; individually each a "Lender"), and Citibank, N.A., as administrative agent for the Lenders (the "Agent").

WHEREAS, the Lenders are willing to make from time to time Revolving Loans to the Borrower through June 2, 2017, and to make Term Loans to the Borrower on or before June 2, 2017 and maturing no later than June 1, 2018, upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants herein contained, the parties hereto agree as follows:

1.     DEFINITIONS.  The following terms have the following meanings:

Affiliate:	As to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract, or otherwise.
Agent:	Citibank in its capacity as administrative agent for the Lenders hereunder and any successor agent appointed under Section 9.9.
Agent-Related
Persons:	Citibank and any successor agent appointed under Section 9.9, together with Citibank’s Affiliate, the Arranger, and the officers, directors, employees, agents and attorney-in-fact of such Persons and Affiliate.
Agreement:	This Credit Agreement.
Agent’s
Payment Office:	The address for payments set forth on the signature page hereto in relation to the Agent, or such other address as the Agent may from time to time specify.
Anti-Corruption
Laws	The U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, each as may be amended, and any rules or regulations thereunder.

NYDOCS02/1089152

Applicable Margin:	(i)    with respect to Eurodollar Rate Loans, 0.875% per annum; and
	(ii)    with respect to Base Rate Loans, 0.00% per annum.
Arrangers:	Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A.
Assignee:	The meaning specified in Section 10.8.
Attorney Costs:	Without duplication, (1) all fees and disbursements of any law firm or other external counsel, and (2) the allocated cost of internal legal services and all disbursements of internal counsel.
Bail-In Action:	The meaning specified in Section 10.19.
Bank Subsidiary:	Any Federal savings association (as defined in 12 U.S.C. §1813(b)(2), any national member bank (as defined in 12 U.S.C. §1813(d)(1)) or state member bank (as defined in 12 U.S.C. §1813(d)(2)) that is a subsidiary (as defined in 12 U.S.C. §1841(d)) of the Borrower.
Bankruptcy Code:	The Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, etseq.), as amended.
Base Rate:	For any day, the highest of:  (a) 0.500% per annum above the Federal Funds Rate; (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank, N.A. as its "Base Rate" and (c) the ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) applicable to Dollars for a period of one month (“One Month LIBOR”) plus 1.00% (for the avoidance of doubt, the One Month LIBOR for any day shall be based on the rate appearing on Reuters LIBOR01 Page (or other commercially available source providing such quotations as designated by the Agent from time to time) at approximately 11:00 a.m. London time on such day); provided that, if One Month LIBOR shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.  The "Base Rate" described in clause (b) is a rate set by Citibank, N.A. based upon various factors including Citibank, N.A.'s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citibank, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change.

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Base Rate Loan:	A Revolving Loan or Term Loan that bears interest based on the Base Rate.
Borrowing:	A borrowing hereunder consisting of Revolving Loans or Term Loans of the same Type made to the Borrower on the same day by the Lenders under Section 2 and, other than in the case of a Base Rate Loan, having the same Interest Period.
Borrowing Advice:	A written request made by the Borrower with respect to any Loan substantially in the form of Exhibit B specifying the information required in Section 2.4 hereof and executed by the Borrower from time to time.
Borrowing
Agreements:	The credit agreement(s) between the Borrower and the lenders listed in Schedule 2.
Borrowing Date:	Any date on which a Borrowing occurs under Section 2.4.
Broker Subsidiary:	Charles Schwab & Co., Inc., a California corporation, and its successors and assigns.
Business Day:	A day other than a Saturday, Sunday or any other day on which commercial banks are authorized or required to close in California or New York and, if the applicable Business Day relates to a Eurodollar Rate Loan, such a day on which dealings are carried on in the applicable offshore dollar interbank market.
Capital Adequacy
Regulation:	Any guideline, directive or requirement of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.  For the avoidance of doubt, Capital Adequacy Regulation shall include all rules, guidelines or directives concerning capital adequacy (x) issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued.
Change in
Control:	The consummation of a reorganization, merger or consolidation by the Borrower or the sale or other disposition of all or substantially all of the assets of the Borrower (a "Business Combination"), unless, following such Business Combination, (i) no person or

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	entity (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Borrower or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation (except to the extent that such ownership existed prior to the Business Combination); and (ii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the board of directors of the Borrower as of the time of the action of the board of directors of the Borrower providing for such Business Combination.
Citibank:	Citibank, N.A., a national banking association.
Closing Date:	The date (not before June 3, 2016) on which all conditions precedent set forth in Section 4 are satisfied or waived by all Lenders or, in the case of subsection 4.1(g), waived by the person entitled to receive such payment.
Code:	The Internal Revenue Code of 1986, as amended, and Regulations promulgated thereunder.
Commitment:	The meaning specified in Section 2.1.
Commitment Fee:	The meaning specified in subsection 2.9(b).
Consolidated
Stockholders'Equity:	With respect to any Person, as of any date of determination, all amounts that would, in accordance with GAAP, be included under shareholders’ equity on a consolidated balance sheet of such Person as at such date, including any preferred stock, but excluding accumulated other comprehensive income (or loss).
Controlled
Subsidiary:	Any corporation 80% of whose voting stock (except for any qualifying shares) is owned directly or indirectly by the Borrower.
Conversion/
ContinuationDate:	Any date on which under Section 2.5, the Borrower (a) converts Loans of one Type to another Type, or (b) continues as Loans of the same Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.
Credit:	The aggregate amount of the Commitments of all Lenders to make Revolving Loans under the Revolving Credit Facility and Term Loans under the Term Loan Facility in an amount not to exceed

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	Seven Hundred Fifty Million and no/100 Dollars ($750,000,000.00), as the same may be reduced under Section 2.10.
Debtor Relief Laws:	The Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
Default:	Any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.
DefaultingLender:	Subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Agent or the Borrower, to confirm in writing to the Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or a Bail-In Action, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a

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	Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b)) upon delivery of written notice of such determination to the Borrower and each Lender.
Designated Person:	A Person named on (a) the list of Specially Designated Nationals and Blocked Persons issued by OFAC or any successor office or agency within the U.S. Department of the Treasury, or similar issuance by the U.S. Department of State, or (b) any similar list issued by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
Dollars,
dollars, and $:	Each mean lawful money of the United States.
EffectiveAmount:	With respect to any Revolving Loans and Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Revolving Loans and Term Loans occurring on such date.
EligibleAssignee:	(i) A commercial bank organized under the laws of the United States, or any state thereof, and having total equity capital of at least $1,000,000,000 and a senior debt rating of a least "A" by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc. or at least "A-2" by Moody’s Investors Service, Inc. or, if not rated by either of the foregoing organizations, an equivalent rating from a nationally recognized statistical rating organization; or (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the OECD), or a political subdivision of any such country, and having total equity capital of at least $1,000,000,000 and a senior debt rating of at least "A" by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc. or at least "A-2" by Moody’s Investors Service, Inc., or, if not rated by either of the foregoing organizations, an equivalent rating from a nationally

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	recognized statistical rating organization; provided that such bank is acting through a branch or agency located in the United States.
Eurodollar
Base Rate:	For any Interest Period:
	(a)    the rate per annum equal to the rate determined by the Agent to be the offered rate that appears on the page of the Reuters screen (or any successor thereto) that displays an average ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
	(b)    in the event the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Agent to be the offered rate on such other page or other service that displays an average ICE Benchmark Administration Interest Settlement Rate (or the successor thereto if the ICE Benchmark Administration is no longer making such a rate available) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period;
	provided that, if the Eurodollar Base shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
Eurodollar Rate:	The rate obtained by dividing (i) Eurodollar Base Rate by (ii) a percentage (expressed as a decimal) equal to 1.00 minus the Eurodollar Rate Reserve Percentage.
Eurodollar Rate
Loan:	A Revolving Loan or Term Loan that bears interest based on the Eurodollar Rate.
Eurodollar Rate
ReservePercentage:	For any Interest Period for any Loan for which the Eurodollar Rate has been selected or is applicable, the percentage (expressed as a decimal) as calculated by the Agent that is in effect on the first day of such Interest Period, as prescribed by the Board of Governors of the U.S. Federal Reserve System (or any successor), for determining reserve requirements to be maintained by the Agent

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	under Regulation D (or any successor regulation thereof) as amended to the date hereof (including such reserve requirements as become applicable to the Agent pursuant to phase-in or other similar requirements of Regulation D at any time subsequent to the date hereof) in respect of "Eurocurrency liabilities" (as defined in Regulation D).  The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Rate Reserve Percentage.
Event of Default:	Any of the events or circumstances specified in Section 8.1.
Exchange Act:	The Securities and Exchange Act of 1934, as amended, and regulations promulgated thereunder.
FATCA:	Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.
Federal Funds Rate:	For any day, the interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; provided that, if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
Fee Letters:	The meaning specified in subsection 2.9(a).
FRB:	The Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.
GAAP:	Generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

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Governmental
Authority:	Any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
Hedge Agreements:	Interest rate swap, interest rate cap or interest rate collar agreements.
Indebtedness:	As to any corporation, any obligation of, or guaranteed or assumed by, such corporation for (i) borrowed money evidenced by bonds, debentures, notes or other similar instruments, (ii) the deferred purchase price of property or services (excluding trade and other accounts payable), (iii) the leasing of tangible personal property under leases which, under any applicable Financial Accounting Standards Board Statement, have been or should be recorded as capitalized leases, (iv) direct or contingent obligations under letters of credit issued for the account of such corporation or (v) net obligations in respect of Hedge Agreements entered into with any counterparty.
Indemnified
Liabilities:	The meaning specified in Section 10.5.
Indemnified Person:	The meaning specified in Section 10.5.
Insolvency
Proceeding:	As to a debtor, (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors, undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.
Interest
Payment Date:	As to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and, as to any Base Rate Loan, the last Business Day of each calendar quarter, provided,  however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the date that falls three months after the

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	beginning of such Interest Period and after each Interest Payment Date thereafter is also an Interest Payment Date.
Interest Period:	Any period specified in accordance with Section 2.6 hereof.
Intermediate
Parent:	Schwab Holdings, Inc., a Delaware corporation and its successors and assigns.
Lender:	The meaning specified in the introductory clause hereto.
Lending Office:	As to any Lender, the office or offices of such Lender specified as its "Lending Office" or "Domestic Lending Office" or "Offshore Lending Office", as the case may be, on Schedule 10.2, or such other office or offices as such Lender may from time to time notify the Borrower and the Agent.
Loan:	An extension of credit by a Lender to the Borrower under Section 2 in the form of a Revolving Loan or Term Loan.
Loan Document:	This Agreement, any Notes, the Fee Letters, and all other documents delivered to the Agent or any Lender in connection herewith.
Minimum
Stockholders' Equity:	As of the Closing Date, and the last day of each fiscal quarter thereafter, the greater of:
	(a)    $9,500,000,000, or
	(b)    the sum of –
	(i)    $9,500,000,000, plus
	(ii)    50% of the sum of cumulative Net Earnings for each fiscal quarter commencing with the fiscal quarter ended June 30, 2016.
Net Capital Ratio:	As of the date of determination, that percentage of net capital to aggregate debit items of any entity subject to the Net Capital Rule 15c3-1 promulgated by the Securities Exchange Commission pursuant to the Securities Exchange Act of 1934 and any successor or replacement rule or regulation therefor.
Net Earnings:	With respect to any fiscal period, the consolidated net income of the Borrower and its Subsidiaries, after taking into account all extraordinary items, taxes and other proper charges and reserves

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	for the applicable period, determined in accordance with GAAP, consistently applied.
Non-Defaulting
Lender:	At any time, each Lender that is not a Defaulting Lender at such time.
Note:	A promissory note executed by the Borrower in favor of a Lender pursuant to Section 2.3 in substantially the form of Exhibits A-1 and A-2.
NoticeofConversion/
Continuation:	A notice in substantially the form of Exhibit C.
Obligations:	All borrowings, debts, liabilities, obligations, covenants and duties arising under any Loan Document owing by the Borrower to any Lender, the Agent, or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising.
OFAC:	The U.S. Department of the Treasury’s Office of Foreign Assets Control.
Person:	An individual, partnership, corporation, limited liability company, business trust, unincorporated association, trust, joint venture or other entity or Governmental Authority.
Pro Rata Share:	As to any Lender at any time, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender’s Commitment divided by the combined Commitments of all Lenders.
Reference Banks:	Citibank, N.A. and JPMorgan Chase Bank, N.A.
Replacement Lender:	The meaning specified in Section 3.9.
Required Lenders:	At any time at least two Lenders then holding in excess of 50% of the then aggregate unpaid principal amount of the Loans, or, if no such principal amount is then outstanding, at least two Lenders then having in excess of 50% of the Commitments.  The Loans owing to, and Commitments of, any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
Requirement of Law:	As to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or

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	any of its property or to which the Person or any of its property is subject.
Responsible Officer:	Any senior vice president or more senior officer of the Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer, executive vice president-finance, controller or the treasurer of the Borrower, or any other officer having substantially the same authority and responsibility.
Revolving Credit
Facility:	The revolving credit facility available to the Borrower pursuant to Section 2.1 hereof.
Revolving Loan:	The meaning specified in Section 2.1, and may be a Base Rate Loan or a Eurodollar Rate Loan (each a "Type" of Revolving Loan).
Revolving Note:	The meaning specified in Section 2.3.
Revolving
Termination Date:	The earlier to occur of:
	(a)    June 2, 2017; and
	(b)    the date on which the Commitments terminate in accordance with the provisions of this Agreement.
Sanctions:	Economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) OFAC or any successor office or agency within the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
SEC:	The Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

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Senior Medium-
Term Notes,
Series A:	Senior debt securities or senior subordinated debt securities issued by The Charles Schwab Corporation with a maturity between 9 months and 30 years in accordance with the Senior Indenture, as amended, and the Senior Subordinated Indenture, as amended, both dated as of July 15, 1993 by and between The Charles Schwab Corporation and The Bank of New York Mellon Trust Company, N.A. as successor trustee to The Chase Manhattan Bank.
Subsidiary:	Any corporation or other entity of which a sufficient number of voting securities or other interests having power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Borrower.
Term Commitment:	Seven Hundred Fifty Million and no/100 Dollars ($750,000,000.00), as the same may be reduced under Section 2.10.
Term Loan:	The meaning specified in Section 2.2 and may be a Base Rate Loan or Eurodollar Rate Loan (each a "Type" of Term Loan).
Term Loan Facility:	The term loan facility available to the Borrower pursuant to Section 2.2 hereof.
Term Loan Maturity
Date:	The meaning specified in Section 2.2.
Term Note:	The meaning specified in Section 2.3.
Term Out Fee:	The meaning specified in subsection 2.9(c).
Type:	The meaning specified in the definition of "Revolving Loan".

2.THE CREDIT FACILITY.

2.1The Revolving Credit Facility  Each Lender severally agrees, on the terms and conditions set forth herein, to make loans in Dollars to the Borrower (each such loan, a "Revolving Loan") from time to time on any Business Day during the period from the Closing Date to the Revolving Termination Date, in an aggregate amount not to exceed at any time outstanding, together with the principal amount of Term Loans outstanding in favor of such Lender at such time, the amount set forth next to such Lender's name on Schedule 1 (suchamount together with the Lender’s Pro Rata Shareof the TermCommitment, as the same may be reduced under Section 2.10 or as a result of one or more assignments under Section 10.8, the Lender’s "Commitment"); provided,  however, that, after giving effect to any Borrowing of

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Revolving Loans, the Effective Amount of all outstanding Revolving Loans shall not at any time exceed the combined Commitments; and providedfurther that the Effective Amount of the Revolving Loans, together with all Term Loans outstanding at such time, of any Lender shall not at any time exceed such Lender’s Commitment.  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section2.1, prepay under Section 3.3 and reborrow under this Section 2.1.

2.2Term Loan Facility.  Each Lender severally agrees, on the terms and conditions set forth herein, to make Loans to the Borrower during the period from the Closing Date to June 2, 2017, in an aggregate amount not to exceed such Lender’s Pro Rata Share of the Term Commitment.  The Borrower from time to time may borrow under the Term Loan Facility (and may reborrow any amount theretofore prepaid) until close of business on June 2, 2017, for a term not to exceed 364 days from the date of the Borrowing.  Each such loan under the Term Loan Facility (a "Term Loan") shall be in the minimum amount of $10,000,000 and shall become due and payable on the last day of the term selected by the Borrower for such Term Loan (the "Term Loan Maturity Date"), which shall in no event be later than 364 days from the date of such Term Loan.  The maximum availability under the Term Loan Facility shall be the amount of the Credit minus the aggregate outstanding principal amount of Revolving Loans and Term Loans made by the Lenders; provided,  however, that to the extent the proceeds of a Term Loan are used to repay an outstanding Revolving Loan (or a portion thereof), such Revolving Loan (or portion thereof) shall not be considered part of the aggregate principal amount of outstanding Revolving Loans made by the Lenders for purposes of this sentence (such maximum availability hereafter being referred to as the "Term Loan Availability").  Under no circumstances shall the aggregate outstanding principal amount of Term Loans and Revolving Loans made by the Lenders exceed the Credit, and under no circumstances shall any Lender be obligated (i) to make any Term Loan (nor may the Borrower reborrow any amount heretofore prepaid) after June 2, 2017, or (ii) to make any Term Loan in excess of the Term Loan Availability.  Each Term Loan made hereunder shall fully and finally mature and be due and payable in full on the Term Loan Maturity Date specified in the Borrowing Advice for such Term Loan; provided,  however, that to the extent the Borrowing Advice for any Term Loan selects an Interest Period that expires before the Term Loan Maturity Date specified in such Borrowing Advice, the Borrower may from time to time select additional interest rate options and Interest Periods (none of which shall extend beyond the Term Loan Maturity Date for such Term Loan) by delivering a Borrowing Advice or Notice of Conversion/Continuation, as applicable.

2.3Evidence of Borrowing/Promissory Notes.  The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loans.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender,within ten Business Days after such Lender becomes a party to this

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Agreement, made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) promissory notes of the Borrower (the "Revolving Note and the Term Note") in substantially the form attached hereto as Exhibits A-1 and A-2, with the blanks appropriately completed, payable to the order of such Lender in the principal amount of its Commitment, bearing interest as hereinafter specified, which shall evidence such Lender’s Revolving Loans and Term Loans, respectively, in addition to such accounts or records.  Each Revolving Note and Term Note requested at least five Business Days prior to the date hereof shall be dated the date hereof and shall be delivered in accordance with Section 4.1(a).  Each other Revolving Note and Term Note shall be dated, and shall be delivered to each requesting Lender, not later than ten Business Days after the request therefor is delivered to the Borrower; provided that any failure to timely deliver any Note shall not constitute a Default hereunder and shall not excuse any Lender from the performance of its funding obligations hereunder.  Each Lender shall, and is hereby authorized by the Borrower to,endorse on the schedule contained on the Revolving Note and Term Note, or on a continuation of such schedule attached thereto and made a part thereof, appropriate notations regarding the Revolving Loans and Term Loans evidenced by such Note as specifically provided therein and such Lender’s record shall be conclusive absent manifest error; provided,  however, that the failure to make, or error in making, any such notation shall not limit or otherwise affect the obligations of the Borrower hereunder or under the Revolving Note and Term Note.  The Agent, by notice to the Borrower (to be given not later than two Business Days prior to the initial Borrowing or Term Loan hereunder) may request that Revolving Loans or Term Loans made hereunder for which the interest calculation is to be based on the Eurodollar Rate be evidenced by separate Revolving Notes (in the case of Revolving Loans) and Term Notes (in the case of Term Loans), substantially in the form of Exhibit A-1 hereto (in the case of Revolving Loans) and Exhibit A-2 hereto (in the case of Term Loans), payable to the order of each Lender for the account of its office, branch or affiliate it may designate as its Lending Office.

2.4Making of Revolving Loans and Term Loans, Borrowings; Interest Periods; Notice.

(a)       Each Borrowing of Revolving Loans or Term Loans shall be made upon Borrower’s irrevocable written notice delivered to the Agent in the form of a Borrowing Advice (which notice must be received by the Agent prior to 10:00 a.m. San Francisco time for a Eurodollar Rate Loan, and prior to 11:00 a.m. San Francisco time for a Base Rate Loan) (i) the same Business Day as the requested Borrowing Date in the case of Base Rate Loans to be made on such Business Day, or (ii) three Business Days prior to the requested Borrowing Date in the case of Eurodollar Rate Loans, with each Borrowing Advice setting forth the following information:

(A)the requested Borrowing Date, which shall be a Business Day, on which such Revolving Loan or Term Loan is to be made;

(B)for a Eurodollar Rate Loan, the duration of the Interest Period selected in accordance with Section 2.6 hereof (if the Borrowing Advice fails to specify the duration of the Interest Period for any Borrowing comprised of a Eurodollar Rate Loan, such Interest Period shall be three months);

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(C)the Type of Loans comprising the Borrowing and the interest rate option selected in accordance with Section 2.7 hereof; and

(D)the aggregate principal amount of the Revolving Loan or Term Loan (which shall be in an aggregate minimum amount of $10,000,000) to which such Interest Period and interest rate shall apply.

(b)The Agent will promptly notify each Lender of its receipt of any Borrowing Advice and of the amount of such Lender’s Pro Rata Share of that Borrowing.

(c)Each Lender will make the amount of its Pro Rata Share of each Borrowing available to the Agent for the account of the Borrower at the Agent’s Payment Office by 1:00 p.m. San Francisco time on the Borrowing Date requested by the Borrower in funds immediately available to the Agent.  Each Loan to the Borrower under this Agreement shall be made by 1:30 p.m. (San Francisco time) on the date of the Requested Borrowing Date, and shall be in immediately available funds (in the aggregate amount made available to the Agent by the Lenders) wired to the Borrower’s account at Citibank, N.A. or such other account as may be designated by the Borrower in writing.

(d)After giving effect to any Borrowing, there may not be more than ten (10) different Interest Periods in effect.

With respect to any Borrowing having an Interest Period ending on or before June 2, 2017, if prior to the last day of the Interest Period for such Borrowing the Borrower fails timely to provide a Notice of Conversion/Continuation in accordance with Section 2.5, such Borrowing shall, on the last day of the then-existing Interest Period for such Borrowing, automatically convert into a Base Rate Loan.  In the event of any such automatic conversion, the Borrower on the date of such conversion shall be deemed to make a representation and warranty to the Lenders that, to the best of the Borrower’s knowledge, (i) neither the Borrower nor any Bank Subsidiary is in violation of the capital requirements as described in Section 6.6, (ii) the Broker Subsidiary is not in violation of minimum net capital requirements as described in Section 7.1, (iii) the Borrower’s Consolidated Stockholders' Equity is not below the Minimum Stockholders' Equity as described in Section 7.2, and (iv) no amount owing with respect to any Commitment Fee, any outstanding Borrowing, or any interest thereon, or any other amount hereunder, is due and unpaid.  If prior to the last day of the Interest Period applicable to any Term Loan the Borrower fails timely to provide a Notice of Conversion/Continuation in accordance with Section 2.5, such Term Loan shall, on the last day of the then-existing Interest Period for such Term Loan, automatically convert into a Base Rate Loan.

2.5Conversion and Continuation Elections.

(a)The Borrower may, upon irrevocable written notice to the Agent in accordance with this Section 2.5:

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(i)elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of any other Type of Loan, to convert any such Loan (or any part thereof in an amount not less than $10,000,000), into Loans of any other Type; or

(ii)elect as of the last day of the applicable Interest Period, to continue any Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $10,000,000);

provided, that if at any time the aggregate amount of Eurodollar Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $10,000,000, such Eurodollar Rate Loans shall automatically convert into Base Rate Loans.

(b)The Borrower shall deliver a Notice of Conversion/Continuation to be received by the Agent not later than 10:00 a.m. San Francisco time for a Eurodollar Rate Loan, and not later than 11:00 a.m. San Francisco time for a Base Rate Loan, at least (i) three Business Days in advance of the Conversion/Continuation Date, as to any Loan that is to be converted into or continued as a Eurodollar Rate Loan; and (ii) the same Business Day as the Conversion/Continuation Date, as to any Loan that is to be converted into a Base Rate Loan, specifying:

(A)the proposed Conversion/Continuation Date;

(B)the aggregate amount of the Loan or Loans to be converted or renewed;

(C)the Type of Loan or Loans resulting from the proposed conversion or continuation; and

(D)other than in the case of conversions into Base Rate Loans, the duration of the requested Interest Period.

(c)If upon the expiration of any Interest Period applicable to Eurodollar Rate Loans, the Borrower has failed to select timely a new Interest Period to be applicable to such Eurodollar Rate Loans, or if any Default or Event of Default then exists, the Borrower shall be deemed to have elected to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.

(d)The Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Borrower, the Agent will promptly notify each Lender of the details of any automatic conversion.  All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given as held by each Lender.

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(e)Unless the Required Lenders otherwise agree, during the existence of a Default or Event of Default, the Borrower may not elect to have a Loan converted into or continued as a Eurodollar Rate Loan.

(f)After giving effect to any conversion or continuation of Loans, there may not be more than ten (10) different Interest Periods in effect.

2.6Interest Periods.  The Borrower may select for any Eurodollar Rate Loan the Interest Period (as defined in the next sentence) for each Borrowing, it being understood that the Borrower may request multiple Borrowings on the same day and may select a different Interest Period for each such Borrowing.  An Interest Period shall be each period, as selected by the Borrower in accordance with the terms of this Agreement, beginning on the Borrowing Date of any Eurodollar Rate Loan, or on the Conversion/Continuation Date on which any Loan is converted into or continued as a Eurodollar Rate Loan, and ending on the date specified by the Borrower that is one, two, three or six months thereafter; provided that whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month; and providedfurther that if the last day of an Interest Period would be a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such next succeeding Business Day is in a different calendar month, in which case such interest period shall end on the next preceding Business Day; but provided,  however, that (i) no Interest Period applicable to any Revolving Loan shall extend beyond the Revolving Termination Date; and (ii) no Interest Period applicable to any Term Loan shall extend beyond the Term Loan Maturity Date specified in the Borrowing Advice for such Term Loan, which in no event shall be later than June 1, 2018.

2.7Interest Rates.

(a)(i) Each Revolving Loan, while outstanding, shall bear interest from the applicable Borrowing Date at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be, (and subject to the Borrower’s right to convert to other Types of Loans under Section 2.5) plus the Applicable Margin.

(ii)  Each Term Loan, while outstanding, shall bear interest from the applicable Borrowing Date at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be, (and subject to the Borrower’s right to convert to other Types of Loans under Section 2.5) plus the Applicable Margin.

(b)Interest on each Revolving Loan and Term Loan shall be paid in arrears on each Interest Payment Date.  Interest shall also be paid on the date of any prepayment of Loans under Section 3.3 for the portion of the Loan so prepaid and upon payment (including prepayment) in full thereof, and, during the existence of any Event of Default interest shall be paid on demand of the Agent at the request or with the consent of the Required Lenders.

(c)After the principal amount of any Revolving Loan or Term Loan, accrued interest upon such Loan, the commitment fee, or any other amount hereunder shall have

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become due and payable by acceleration, or otherwise, it shall thereafter (until paid) bear interest, payable on demand, (i) until the end of the Interest Period with respect to such Loan at a rate per annum equal to 2% per annum in excess of the rate or rates in effect with respect to such Loan, and (ii) thereafter, at a rate per annum equal to 2% per annum in excess of the Base Rate.

2.8Substitute Rates.  If upon receipt by the Agent of a Borrowing Advice relating to any Borrowing or of a Notice of Conversion/Continuation:

(a)the Agent shall determine that by reason of changes affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the applicable Eurodollar Rate with respect to any Interest Period; or

(b)the Agent shall determine that by reason of any change since the date hereof in any applicable law or governmental regulation (other than any such change in the regulations described in the definition of Eurodollar Rate Reserve Percentage in Section 1 hereof), guideline or order (or any interpretation thereof), the adoption or enactment of any new law or governmental regulation or order or any other circumstance affecting the Lenders or the London interbank market, the Eurodollar Rate shall no longer represent the effective cost to the Lenders of U.S. dollar deposits in the relevant amount and for the relevant period; or

(c)Agent shall determine that, as a result of any change since the date hereof in any applicable law or governmental regulation or as a result of the adoption of any new applicable law or governmental regulation, the applicable Eurodollar Rate would be unlawful; or

(d)the applicable Reuters screen (or any successor page of such service, or any successor or substitute for such service, as provided in the definition herein for Eurodollar Base Rate) is unavailable and fewer than two Reference Banks furnish timely information to the Agent for determining the Eurodollar Base Rate for any Eurodollar Rate Loans, after the Agent has requested such information;

then, the Agent will promptly so notify the Borrower and each Lender, whereupon, the obligation of the Lenders to make or maintain Eurodollar Rate Loans hereunder shall be suspended until the Agent upon the instruction of the Required Lenders revokes such notice in writing.  Upon receipt of such notice, the Borrower may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it and, at its election, submit a Borrowing Advice or Notice of Conversion/Continuation selecting another Type of Loan.  If the Borrower does not revoke such Notice or give a Notice as provided herein, the Lenders shall make, convert or continue the Loans, as proposed by the Borrower in the amount specified in the applicable notice submitted by the Borrower, but such Loans shall be made, converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.

2.9Fees.

(a)Arrangement, Agency Fees.  The Borrower shall pay an arrangement fee to the Arrangers for their respective accounts, and shall pay an agency fee to the Agent for the Agent’s account, as required by the separate letter agreements ("Fee Letters")

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between the Borrower and each of the Arrangers and between the Borrower and the Agent, each dated May 3, 2016.

(b)Commitment Fee.  The Borrower shall pay to the Agent for the account of each Lender a commitment fee (the "Commitment Fee") on the actual daily unused portion of such Lender’s Commitment computed on a quarterly basis in arrears on the last Business Day of each quarter based upon the daily utilization for that quarter as calculated by the Agent, equal to seven one hundredths of one percent (0.07%) per annum.  For purposes of calculating utilization under this subsection, the Commitments shall be deemed used to the extent of the Effective Amount of Revolving Loans and Term Loans then outstanding.  Such Commitment Fee shall accrue from the Closing Date to the Revolving Termination Date and shall be due and payable quarterly in arrears on the last Business Day of each quarter commencing on the quarter ending June 30, 2016 through the Revolving Termination Date, with the final payment to be made on the Revolving Termination Date; provided that, in connection with any reduction or termination of Commitments under Section 2.10, the accrued commitment fee calculated for the period ending on such date shall also be paid on the date of such reduction or termination, with the following quarterly payment being calculated on the basis of the period from such reduction or termination date to such quarterly payment date.

(c)Term Loan Fee.  The Borrower shall pay to the Agent for the account of each Lender a term loan fee (the "Term Out Fee") equal to one percent (1.00%) of the aggregate principal amount of all Term Loans outstanding on June 2, 2017, payable on such date.

2.10Reduction of Credit.  The Borrower, from time to time, upon at least three (3) Business Days’ written notice to the Agent, may terminate the commitments, or permanently reduce the Commitments by an aggregate minimum amount of $10,000,000, without penalty or premium; unless after giving effect thereto and to any prepayments of Loans made on the effective date thereof, the Effective Amount of all Revolving Loans and Term Loans together would exceed the amount of the combined Commitments then in effect.  Once reduced in accordance with this Section, the Commitments may not be increased.  Any reduction of the Commitments shall be applied to each Lender’s Commitment according to its Pro Rata Share.  All accrued Commitment Fees to, but not including, the effective date of any reduction or termination of Commitments, shall be paid on the effective date of such reduction or termination.  During the continuation of the Credit, the computation of the Commitment Fee and the Lenders’ obligations to make Revolving Loans or Term Loans shall be based upon such reduced Commitments.  In the event the Credit shall be reduced to zero pursuant to this Section, the Credit shall be deemedterminated, and any Commitment Fee or any other amount payable hereunder then accrued shall become immediately payable.  Such termination of the Credit shall terminate the Borrower’s obligations with respect to the Commitment Fee to the extent not theretofore accrued and shall terminate the Lenders’ obligations to make any further Revolving Loans or Term Loans under this Agreement.

2.11Termination Date; Extensions.  The termination date of each Lender’s Commitment with respect to the Credit (the "Termination Date"), including both the Revolving Credit Facility under Section 2.1 hereof and the Term Loan Facility under Section 2.2 hereof, is initially June 2, 2017.  At any time no earlier than forty-five (45) days and no later than thirty

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(30) days prior to the Termination Date then in effect (whether the initial Termination Date of June 2, 2017 or any later Termination Date as extended under this Section 2.11), the Borrower may, by written notice to the Agent in the form attached as Exhibit D hereto, request that the Termination Date be extended for a period of 364 calendar days.  Such request shall be irrevocable and binding upon the Borrower.  In no event will any Lender agree to approve any extension more than thirty (30) days before the Termination Date then in effect.  Failure of any Lender to respond shall mean that such Lender has not approved such extension.  If each Lender (in its sole discretion) agrees to so extend its Commitment and the Termination Date (which agreement may be given or withheld in such Lender's sole and absolute discretion), the Agent shall evidence such agreement by executing and returning to the Borrower a copy of the Borrower’s written request no later than fifteen (15) days after the Agent’s receipt of the Borrower’s written request.  If the Agent fails to so respond to and accept the Borrower’s request for extension of the Termination Date then in effect, the Lenders’ Commitments shall be terminated on the Termination Date then in effect.  If, on the other hand, the Agent so responds to and accepts the Borrower’s request for extension of the Termination Date, then upon receipt by the Borrower of a copy of the Borrower’s written request countersigned by the Agent, (i) the Lenders’ Commitments then in effect and the Termination Date then in effect shall automatically be extended for the 364-day period specified in such written request, and (ii) each reference in this Agreement to "June 2, 2017", and "June 1, 2018" (and any prior extension thereof pursuant to this Section 2.11) also shall automatically be correspondingly extended for 364 days.

2.12Payments by the Lenders to the Agent.

(a)Unless the Agent receives notice from a Lender on or prior to the Closing Date or, with respect to any Borrowing after the Closing Date, at least one Business Day before the date of such Borrowing in the case of a Eurodollar Rate Loan, or, in the case of a Base Rate Loan, prior to noon (12:00) San Francisco time on the date of such Borrowing, that such Lender will not make available as and when required hereunder to the Agent for the account of the Company the amount of that Lender’s Pro Rata Share of the Borrowing, the Agent may assume that each Lender has made such amount available to the Agent in immediately available funds on the Borrowing Date and the Agent may (but shall not be so required), in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent any Lender shall not have made its full amount available to the Agent in immediately available funds and the Agent in such circumstances has made a corresponding amount available to the Borrower such Lender shall on the Business Day following such Borrowing Date make such amount available to the Agent, together with interest at the Federal Funds Rate for each day during such period.  A notice of the Agent submitted to any Lender with respect to amounts owing under this subsection (a) shall be conclusive, absent manifest error.  If such amount is so made available, such payment to the Agent shall constitute such Lender’s Loan on the date of Borrowing for all purposes of this Agreement.  If such amount is not made available to the Agent on the Business Day following the Borrowing Date, the Agent will notify the Borrower of such failure to fund and, upon demand by the Agent, the Borrower shall pay such amount to the Agent for the Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.

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(b)The failure of any Lender to make any Loan on any Borrowing Date shall not relieve any other Lender of any obligation hereunder to make a Loan on such Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date.

2.13Sharing of Payments, Etc..  If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share, such Lender shall immediately (a) notify the Agent of such fact, and (b) purchase from the other Lenders such participation in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment pro rata with each of them; provided,  however, (a) that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered and (b) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.5) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  The Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participation purchased under this Section and will in each case notify the Lenders following any such purchase or repayment.

2.14Computation of Fees and Interest.

(a)All computations of interest for Base Rate Loans when the Base Rate is determined by Citibank N.A.'s "Base Rate" shall be made on the basis of a year of 365 or 366days, as the case may be, and actual days elapsed.  All other computations of interest, and all computation of fees under subsection 2.9(b) and (c) shall be made on the basis of a 360-day year and actual days elapsed.  Interest and such fees shall accrue during each period during which interest or such fees are computed from and including the first day thereof to and excluding the last day thereof.

(b)Each Reference Bankmay, if requested by the Agent, furnish to the Agent timely information for the purpose of determining each Eurodollar Base Rate.  If any one or more of the Reference Banksshall not furnish such timely information to the Agent for the purpose of determining any such interest rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks, subject to the provisions of Section 2.8.  The Agent shall give prompt notice to the Borrower and the Lenders

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of the applicable interest rate determined by the Agent for purposes of Section 2.7(a) (it being understood that the Agent shall not be required to disclose to any party hereto (other than the Borrower) any information regarding any Reference Bankor any rate provided by such Reference Bankin accordance with this subsection, including, without limitation, whether a Reference Bankhas provided a rate or the rate provided by any individual Reference Bank).

2.15Defaulting Lenders.

(a)Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i)Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, as the Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; third, if so determined by the Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees.  No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender

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(and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(b)Defaulting Lender Cure.  If the Borrower and the Agent agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,  further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

3.PAYMENT.

3.1Repayment.

(a)The Term Credit.  The Borrower shall repay to the Agent for the account of the Lenders the aggregate principal amount of the Term Loans outstanding on each Term Loan Maturity Date, as applicable.

(b)The Revolving Credit.  The Borrower shall repay to the Agent, for the account of the Lenders, on the Revolving Termination Date the aggregate principal amount of Revolving Loans outstanding on such date.

3.2Method of Payment.  All payments hereunder and under any Revolving Note and Term Note shall be payable in lawful money of the United States of America and in immediately available funds not later than 12:00 noon (San Francisco time) on the date when due at the principal office of the Agent or at such other place as the Agent may, from time to time, designate in writing to the Borrower.

3.3Optional Prepayment.  Subject to Section 3.7, the Borrower shall be entitled at any time or from time to time, upon not less than one (1) Business Day irrevocable notice to the Agent, to ratably prepay Loans in whole or in part in minimum amounts of $10,000,000 without premium or penalty.  Each notice of payment shall specify the date and aggregate principal amount of any such prepayment and the Type(s) of Loans to be repaid.  The Agent will promptly notify each Lender of its receipt of any such Notice and of such Lender’s Pro Rata Share of such prepayment.  If such Notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount, specified in such Notice shall be due and payable on the date specified therein, together with all accrued interest to each such date on the amount prepaid, and any amounts required in accordance with Section 3.7 hereof as a result of such prepayment.

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3.4Taxes/Net Payments.  All payments by Borrower hereunder and under any Revolving Note and Term Note to the Agent or any Lender shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments, afterdeduction or withholding for or on account of any present or future taxes, levies, imposts, dutiesor other charges of whatsoever nature imposed by any Governmental Authority or taxing authority thereof (collectively, "Taxes"), shall not be less than the amounts otherwise specified to be paid under this Agreement. The Borrower shall pay all Taxes when due and shall promptly send to the Lender original tax receipts or copies thereof certified by the relevant taxing authority together with such other documentary evidence with respect to such payments as may be required from time to time by the Agent.  If the Borrower fails to pay any Taxes to the appropriate taxing authorities when due or fails to remit to the Agent or Lender any such original tax receipts or certified copies thereof as aforesaid or other required documentary evidence, the Borrower shall indemnify the Agent or Lender within thirty (30) days of demand by the Lender or Agent for any taxes, interest or penalties that may become payable by the Agent or Lender as a result of such failure.

Notwithstanding the foregoing, (i) the Borrower shall not be liable for the payment of any tax on or measured by the net income of any Lender pursuant to the laws of the jurisdiction where an office of such Lender making any loan hereunder is located or does business, and (ii) the foregoing obligation to gross up the payments to any Lender so as not to deduct or offset any withholding taxes or Taxes paid or payable by the Borrower with respect to any payments to such Lender shall not apply (x) to any payment to any Lender which is a "foreign corporation, partnership or trust" within the meaning of the Code if such Lender is not, on the date hereof (or on the date it becomes a Lender under this Agreement pursuant to the assignment terms of this Agreement), or on any date hereafter that it is a Lender under this Agreement, entitled to submit either a Form W-8BEN or any successor form thereto (relating to such Lender and entitling it to a complete exemption from withholding on all interest to be received by it hereunder in respect of the Loans) or Form W-8ECI or any successor form thereto (relating to all interest to be received by such Lender hereunder in respect of the Loans) of the U.S. Department of Treasury, (y) to any item referred to in the preceding sentence that would not have been imposed but for the failure by such Lender to comply with any applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections of such Lender with the United States if such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such item or (z) to any taxes imposed pursuant to FATCA.

3.5Illegality.

(a)If any Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make Eurodollar Rate Loans, then, on notice thereof by the Lender to the Borrower through the Agent, any obligation of that Lender to make Eurodollar Rate Loans shall be suspended until the Lender notifies the Agent and the Borrower that the circumstances giving rise to such determination no longer exist.

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(b)If a Lender determines that it is unlawful to maintain any Eurodollar Rate Loan, the Borrower shall, upon its receipt of notice of such fact and demand from such Lender (with a copy to the Agent), prepay in full such Eurodollar Rate Loans of that Lender then outstanding, together with interest accrued thereon and amounts required under Section 3.7, either on the last day of the Interest Period thereof, if the Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such Eurodollar Rate Loan.  If the Borrower is required to so prepay any Eurodollar Rate Loan, then concurrently with such prepayment, the Borrower shall borrow from the affected Lender, in the amount of such repayment, a Base Rate Loan.

(c)If the obligation of any Lender to make or maintain Eurodollar Rate Loans has been so terminated or suspended, the Borrower may elect, by giving notice to the Lender through the Agent that all Loans which would otherwise be made by the Lender as Eurodollar Rate Loans shall be instead Base Rate Loans.

(d)Before giving any notice to the Agent under this Section, the affected Lender shall designate a different Lending Office with respect to its Eurodollar Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.

3.6Increased Costs and Reduction of Return.

(a)If any Lender determines that, due to either (i) the introduction of or any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the Eurodollar Rate) in or in the interpretation of any law or regulation, or (ii) the compliance by that Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any Eurodollar Rate Loan, then the Borrower shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs.

(b)If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Lender (or its Lending Office) or any corporation controlling the Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital  or liquidity required or expected to be maintained by the Lender or any corporation controlling the Lender and determines that the amount of such capital or liquidity is increased as a consequence of its Commitment, Loans, credits or obligations under this Agreement then, upon demand of such Lender to the Borrower through the Agent, the Borrower shall pay to the Lender, from time to time as specified by the Lender, additional amounts sufficient to compensate the Lender for the cost of such increase.

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3.7Funding Losses.  The Borrower shall reimburse each Lender and hold each Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of:

(a)the failure of the Borrower to make on a timely basis any payment of principal of any Eurodollar Rate Loan;

(b)the failure of the Borrower to borrow, continue or convert a Loan after the Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;

(c)the failure of the Borrower to make any prepayment in accordance with any notice delivered under Section 3.3;

(d)the prepayment or other payment (including after acceleration thereof) of any Eurodollar Rate Loan on a day that is not the last day of the relevant Interest Period; or

(e)the automatic conversion under Section 2.5 of any Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period,

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Eurodollar Rate Loans or from fees payable to terminate the deposits from which such funds were obtained.  For purposes of calculating amounts payable by the Borrower to the Lenders under this Section and under subsection 3.6(a), each Eurodollar Rate Loan made by a Lender and each related reserve, special deposit or similar requirement shall be conclusively deemed to have been funded at the LIBO-based rate used in determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan is in fact so funded.

3.8Certificates of Lenders.  Any Lender claiming reimbursement or compensation under this Section 3 shall deliver to the Borrower (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable to the Lender hereunder and such certificate shall be conclusive and binding on the Borrower in the absence of manifest error.

3.9Substitution of Lenders.  Upon the receipt by the Borrower from any Lender (an "Affected Lender") of a claim for compensation under Section 3.6, or if any Lender is a Defaulting Lender (an Affected Lender or a Defaulting Lender is a “Replaceable Lender”), the Borrower may:  (i) request the Replaceable Lender to use its best efforts to obtain a replacement bank or financial institution satisfactory to the Borrower to acquire and assume all or a ratable part of all of such Replaceable Lender’s Loans and Commitment (a "Replacement Lender"); (ii) request one or more of the other Lenders to acquire and assume all or part of such Replaceable Lender’s Loans and Commitment (but no other Lender shall be required to do so); or (iii) designate a Replacement Lender.  Any such designation of a Replacement Lender under clause

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(ii) or (iii) shall be subject to the prior written consent of the Agent (which consent shall not be unreasonably withheld).

3.10Survival.  The agreements and obligations of the Borrower in this Section 3 shall survive the payment of all other Obligations.

4.CONDITIONS.

4.1Conditions Precedent to the Effectiveness of this Agreement.  The obligation of each Lender to make its initial extension of credit hereunder is subject to the condition that the Agent has received on or before the Closing Date all of the following in form and substance satisfactory to the Agent and each Lender;

(a)This Agreement and, to the extent requested by such Lender at least five Business Days prior to the date hereof, the Notes, in each case executed by each party thereto.

(b)A copy of a resolution or resolutions adopted by the Board of Directors or Executive Committee of the Borrower, certified by the Secretary or an Assistant Secretary of the Borrower as being in full force and effect on the date hereof, authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and a copy of the Certificate of Incorporation and the By-Laws of the Borrower, similarly certified.

(c)A certificate, signed by the Secretary or an Assistant Secretary of the Borrower and dated the date hereof, as to the incumbency of the person or persons authorized to execute and deliver this Agreement.

(d)A certificate signed by the Chief Financial Officer, Treasurer or Corporate Controller of the Borrower that, as of the date hereof, there has been no material adverse change in its consolidated financial condition since December 31, 2015 not reflected on its Quarterly Report on Form 10-Q filed with the SEC for the period ending March 31, 2016.

(e)A certificate, signed by the Secretary or an Assistant Secretary of the Borrower and dated the date hereof, as to the persons authorized to execute and deliver a Borrowing Advice, a Notice of Conversion/Continuation, and the Revolving Notes and the Term Notes.  The Agent and each Lender may rely on such certificate with respect to the Revolving Loans and Term Loans hereunder unless and until it shall have received an updated certificate and, after receipt of such updated certificate, similarly may rely thereon.

(f)A written opinion, dated the date hereof, of counsel for the Borrower, in the form of Exhibit E.

(g)Evidence of payment by the Borrower of all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with Attorney Costs of Citibank to the extent invoiced prior to or on the Closing Date, plus such

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additional amounts of Attorney Costs as shall constitute Citibank’s reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Borrower and Citibank); including any such costs, fees and expenses arising under or referenced in Sections 2.9 and 10.4.

(h)Written evidence that all of the Borrowing Agreements have been or concurrently herewith are being terminated.

(i)A certificate, signed by the Chief Financial Officer, Treasurer or an Assistant Treasurer of the Borrower and dated as of the date hereof, which confirms that after giving effect to this Agreement, the aggregate principal amount of credit available under all of the Borrower's committed unsecured revolving credit facilities combined will not exceed the amount authorized under the resolutions of the Borrower referenced in subsection 4.1(b).

4.2Conditions Precedent to Revolving Loans and Term Loans.  The obligation of each Lender to make any Revolving Loan or Term Loan to be made by it (including its initial Revolving Loan), or to continue or convert any Loan under Section 2.5 is subject to the satisfaction of the following conditions precedent on the relevant Borrowing Date or Conversion/Continuation Date:

The Agent shall have received a Borrowing Advice or a Notice of Conversion/Continuation, as applicable.  Each Borrowing Advice or Notice of Conversion/Continuation given by the Borrower shall be deemed to be a representation and warranty by the Borrower to each Lender, effective on and as of the date of such Notice and as ofsuch Borrowing Date for a Revolving Loan or Term Loan covered thereby, that (i) the representations and warranties set forth in Section 5 hereof are true and correct as of such date, and (ii) no Default or Event of Default has occurred and is continuing.  No Lender shall be required to make any Loan hereunder if:

(a)the Credit, the Revolving Credit Facility (in the case of a Revolving Loan) or the Term Loan Facility (in the case of a Term Loan) has been terminated; or

(b)any of the representations or warranties of the Borrower set forth in Section 5 hereof shall prove to have been untrue in any material respect when made, or when any Default or Event of Default as defined in Section 8, has occurred; or

(c)the Borrower or any Bank Subsidiary is in violation of the capital requirements as described in Section 6.6; or

(d)the Broker Subsidiary is in violation of minimum net capital requirements as described in Section 7.1; or

(e)the Borrower’s Consolidated Stockholders' Equity is below the Minimum Stockholders' Equity as described in Section 7.2; or

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(f)any amount owing with respect to any Commitment Fee or any outstanding Revolving Loan or Term Loan or any interest thereon or any other amount payable hereunder is due and unpaid.

5.REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and each Lender, as of the date of delivery of this Agreement and as of the date of any Revolving Loan or Term Loan, as follows:

5.1Organization and Good Standing.  The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and has full power, authority and legal right and has all governmental licenses, authorizations, qualifications and approvals required to own its property and assets and to transact the business in which it is engaged, except where the failure to have any such license, authorization, qualification or approval, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis; and all of the outstanding shares of capital stock of Borrower have been duly authorized and validly issued, are fully paid and non-assessable.

5.2Corporate Power and Authority.  The Borrower has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Agreement, and to borrow hereunder, and has taken all necessary corporate and legal action to authorize the borrowings hereunder on the terms and conditions of this Agreement and to authorize the execution and delivery of this Agreement, and the performance of the terms thereof.

5.3Enforceability.  This Agreement has been duly authorized and executed by the Borrower, and when delivered to the Lenders will be a legal, valid and binding agreement oftheBorrower, enforceable against the Borrower in accordance with its terms, except, in each case, as enforcement thereof may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors’ rights or by general equity principles.

5.4No Violation of Laws or Agreements.  The execution and delivery of this Agreement by the Borrower and the performance of the terms hereof will not violate (i) any provision of any law or regulation or any judgment, order or determination of any court or governmental authority or of the charter or by-laws of the Borrower, or (ii) any securities issued by the Borrower or any provision of any mortgage, indenture, loan or security agreement, or other instrument, to which the Borrower is a party or which purports to be binding upon it or any of its assets, in each case in this clause (ii), in any respect that reasonably could be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis; nor will the execution and the delivery of this Agreement by the Borrower and the performance of the terms hereof result in the creation of any lien or security interest on any assets of the Borrower pursuant to the provisions of any of the foregoing.

5.5No Consents.  Except as disclosed in writing by Borrower, no consents of others (including, without limitation, stockholders and creditors of the Borrower) nor any consents or authorizations of, exemptions by, or registrations, filings or declarations with, any Governmental

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Authority are required to be obtained by the Borrower in connection with the execution and delivery of this Agreement and the performance of the terms thereof.

5.6Financial Statements.  The consolidated financial statements of the Borrower contained in the documents previously delivered to each Lender have been prepared in accordance with U.S. generally accepted accounting principles and present fairly the consolidated financial position of the Borrower.

5.7Broker Subsidiary Licenses, Etc.  The Broker Subsidiary possesses all material licenses, permits and approvals necessary for the conduct of its business as now conducted and as presently proposed to be conducted as are required by law or the applicable rules of the SEC and the Financial Industry Regulatory Authority.

5.8Broker Subsidiary/Broker Registration.  The Broker Subsidiary is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended.

5.9Broker Subsidiary/SIPC.  The Broker Subsidiary is not in arrears with respect to any assessment made upon it by the Securities Investor Protection Corporation, except for any assessment being contested by the Broker Subsidiary in good faith by appropriate proceedings and with respect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles.

5.10Taxes.  The Borrower has paid and discharged or caused to be paid and discharged all taxes, assessments, and governmental charges prior to the date on which the same would have become delinquent, except to the extent that such taxes, assessments or charges are being contested in good faith and by appropriate proceedings by or on behalf of the Borrower andwithrespect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles.

5.11ERISA.  The Borrower is in all material respects in compliance with the provisions of and regulations under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the Code applicable to any pension or other employee benefit plan established or maintained by the Borrower or to which contributions are made by the Borrower (the "Plans").  The Borrower has met all of the funding standards applicable to each of its Plans, and there exists no event or condition that would permit the institution of proceedings to terminate any of the Plans under Section 4042 of ERISA.  The estimated current value of the benefits vested under each of the Plans does not, and upon termination of any of the Plans will not, exceed the estimated current value of any such Plan’s assets.  The Borrower has not, with respect to any of the Plans, engaged in a prohibited transaction set forth in Section 406 of ERISA or Section 4975(c) of the Code that could be expected to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole on a consolidated basis.

5.12No Extension of Credit for Default Remedy/Hostile Acquisition.  The Borrower will not use any amounts borrowed by it under this Agreement to remedy a default under any mortgage, indenture, agreement or instrument under which there may be issued any Indebtedness of the Borrower to any bank or bank holding company, or their respective assignees, for

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borrowed money.  Further, the Borrower will not use any amounts advanced to it under this Agreement for the immediate purpose of acquiring a company where the Board of Directors or other governing body of the entity being acquired has made (and not rescinded) a public statement opposing such acquisition.

5.13Use of Proceeds/Margin Regulations.  The Borrower will use the proceeds for general corporate purposes.  The Borrower will not use the proceeds of any loan provided hereby in such a manner as to result in a violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

5.14Authorized Persons.  The persons named for such purpose in the certificates delivered pursuant to subsection 4.1(e) hereof are authorized to execute Borrowing Advices.

5.15Material Contracts.  Borrower is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note or lease to which the Borrower is a party or by which it may be bound.

5.16Litigation.  Except for any matter disclosed in the Form 10-Q filed by the Borrower with the SEC on May 6, 2016, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower, threatened against or affecting, the Borrower or any of its Subsidiaries before any court, arbitrator, governmental body, agency or official in which there is a significant probability of an adverse decision which could have a material adverse effect on the business or the financial condition of the Borrower.

5.17Investment Company.  The Borrower is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

5.18Designated Persons.  None of the Borrower, the Broker Subsidiary or any Bank Subsidiary, nor, to the knowledge of the Borrower, any of their respective directors or officers, is a Designated Person.  No Borrowing or the use of proceeds thereof by the Borrower or any Subsidiary will, directly or, to the knowledge of the Borrower, indirectly, violate Anti-Corruption Laws or Sanctions.

6.AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees that so long as any Lender shall have a Commitment hereunder or any Loan or other obligation hereunder shall remain outstanding, unpaid or unsatisfied and until full payment of all amounts due to the Lenders hereunder, it will, unless and to the extent the Required Lenders waive compliance in writing:

6.1Notice of Events of Default.  Give prompt notice to the Agent and each Lender, no later than three Business Days after becoming aware thereof, of any Default or Event of Default.

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6.2Financial Statements.  Deliver to the Agent, in form and detail satisfactory to the Agent and the Required Lenders with sufficient copies for each Lender, within ten Business Days of the filing thereof with the SEC, a copy of (i) each registration statement filed under the Securities Act of 1933, (ii) each Form 10-Q and Form 10-K (in each case including exhibits) filed by the Borrower with the SEC under the Securities Exchange Act of 1934, as amended, accompanied by a compliance certificate with an attached schedule of calculations (in the form attached hereto as Schedule 6.2) demonstrating compliance with the Section 7.1 and 7.2 financial covenants, and (iii) each Form 8-K (with exhibits) and proxy statement filed by the Borrower with the SEC under the Securities Exchange Act of 1934, as amended; and, in the event the Borrower requests an extension of any such filing from the SEC, promptly (but not later than the second Business Day following the filing of such request) deliver a copy of such request to the Agent.

6.3Insurance.  Maintain and keep in force in adequate amounts such insurance as is usual in the business carried on by the Borrower and cause the Broker Subsidiary to maintain and keep in force in adequate amounts such insurance as is usual in the business carried on by the Broker Subsidiary.

6.4Books and Records.  Maintain adequate books, accounts and records and prepare all financial statements required hereunder in accordance with U.S. generally accepted accounting principles and practices and in compliance with the regulations of any governmental regulatory body having jurisdiction thereof.

6.5Change in Business.  Advise the Agent and each Lender, in a timely manner, of material changes to the nature of business of the Borrower or the Broker Subsidiary as at present conducted.  The Broker Subsidiary is at present engaged in the business of providing financial services, primarily to individual investors and/or their advisors.

6.6Capital Requirements.  The Borrower will maintain, and cause each Bank Subsidiary to maintain, at all times such amount of capital as may be prescribed by such entity’s prudential supervisor, from time to time, whether by regulation, agreement or order.  The Borrower shall at all times ensure that all Bank Subsidiaries shall be "well capitalized" within the meaning of 12 U.S.C. §1831(o), as amended, reenacted or redesignated from time to time.

6.7Anti-Corruption Laws and Sanctions.  The Borrower has implemented and will maintain in effect policies and procedures reasonably designed to ensure compliance with Anti-Corruption Laws and Sanctions.

7.NEGATIVE COVENANTS.

The Borrower covenants and agrees that so long as any Lender shall have any Commitment hereunder, or any Loan or other obligation, shall remain outstanding, unpaid or unsatisfied and until full payment of all amounts due to the Lenders hereunder, unless and to the extent the Required Lenders waive compliance in writing:

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7.1Net Capital.  The Borrower will not permit the Broker Subsidiary to allow any month-end Net Capital Ratio to be less than 5%.

7.2Minimum Stockholders' Equity.  The Borrower will not allow its Consolidated Stockholders' Equity to fall below the Minimum Stockholders' Equity.

7.3Merger/Disposition of Assets.  The Borrower will not (i) permit either Broker Subsidiary or Intermediate Parent to (a) merge or consolidate, unless the surviving company is a Controlled Subsidiary, or (b) convey or transfer its properties and assets substantially as an entirety except to one or more Controlled Subsidiaries; or (ii) except as permitted by subsection 7.3(i) sell, transfer or otherwise dispose of any voting stock of Broker Subsidiary or Intermediate Parent, or permit either Broker Subsidiary or Intermediate Parent to issue, sell or otherwise dispose of any of its voting stock, unless, after giving effect to any such transaction, Broker Subsidiary or Intermediate Parent, as the case may be, remains a Controlled Subsidiary.

7.4Broker Subsidiary Indebtedness.  The Borrower will not permit the Broker Subsidiary to create, incur or assume any Indebtedness other than:

(a)(i)Indebtedness to customers, other brokers or dealers, securities exchanges or securities markets, self-regulatory organizations, clearing houses and like institutions (including, without limitation, letters of credit or similar credit support devices issued for the account of Broker Subsidiary and for the benefit of any of the foregoing in order to comply with any margin, collateral or similar requirements imposed by or for the benefit of any of the foregoing), (ii) "broker call" credit, (iii) indebtedness consisting of borrowings secured solely by margin loans made by Broker Subsidiary, together with any underlying collateral of Broker Subsidiary, (iv) stock loans, (v) obligations to banks for disbursement accounts, (vi) Indebtedness incurred for the purchase of tangible personal property on a non-recourse basis or for the leasing of tangible personal property under a capitalized lease, (vii) Indebtedness incurred for the purchase, installation or servicing of computer equipment and software, and (viii) Indebtedness incurred in the ordinary course of the Broker Subsidiary’s business, to the extent not already included in the foregoing clauses (i) through (vii);

(b)intercompany Indebtedness; and

(c)other Indebtedness in the aggregate not exceeding $100,000,000.

7.5Indebtedness Secured by Subsidiary Stock.  The Borrower will not, and will not permit any Subsidiary at any time directly or indirectly to create, assume, incur or permit to existany Indebtedness secured by a pledge, lien or other encumbrance (hereinafter referred to as a "lien") on the voting stock of any Subsidiary without making effective provision whereby the obligations of the Borrower hereunder and under the Notes, if any, shall be secured equally and ratably with such secured Indebtedness so long as other Indebtedness shall be so secured; provided,  however, that the foregoing covenant shall not be applicable to any liens permitted pursuant to subsections (a) through (d) in Section 7.6 below.

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7.6Liens and Encumbrances.  The Borrower will not create, incur, assume or suffer to exist any lien or encumbrance upon or with respect to any of its properties, whether now owned or hereafter acquired, except the following:

(a)liens securing taxes, assessments or governmental charges or levies, or in connection with workers’ compensation, unemployment insurance or social security obligations, or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons not yet delinquent or which are being contested in good faith by appropriate proceedings with respect to which adequate reserves or other provisions are being maintained to the extent required by U.S. generally accepted accounting principles;

(b)liens not for borrowed money incidental to the conduct of its business or the ownership of property that do not materially detract from the value of any item of property;

(c)attachment, judgment or other similar liens arising in the connection with court proceedings that do not, in the aggregate, materially detract from the value of its property, materially impair the use thereof in the operation of its businesses and (i) that are discharged or stayed within sixty (60) days of attachment or levy, or (ii) payment of which is covered in full (subject to customary and reasonable deductibles) by insurance or surety bonds;

(d)liens existing at Closing Date provided that the obligations secured thereby are not increased; and

(e)liens in respect of Hedge Agreements securing net payment obligations in an aggregate amount not to exceed $500,000,000 at any time outstanding.

7.7Use of Proceeds.  The Borrower will not request any Borrowing, and shall not use the proceeds of any Borrowing, in any manner that, directly or, to the knowledge of the Borrower, indirectly, would result in the violation of any Anti-Corruption Laws or Sanctions.

8.EVENTS OF DEFAULT.

8.1Defaults.  The occurrence of any of the following events shall constitute an "Event of Default":

(a)The Borrower shall fail to pay any interest with respect to the Revolving Loans or the Term Loans or any Commitment Fee or Term Out Fee in accordance with the terms hereof within 10 days after such payment is due.

(b)The Borrower shall fail to pay any principal with respect to the Revolving Loans or the Term Loans in accordance with the terms thereof on the date when due.

(c)Any representation or warranty made by the Borrower herein or hereunder or in any certificate or other document furnished by the Borrower hereunder shall

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prove to have been incorrect when made (or deemed made) in any respect that is materially adverse to the interests of the Lenders or their rights and remedies hereunder.

(d)Except as specified in (a) and (b) above, the Borrower shall default in the performance of, or breach, any covenant of the Borrower with respect to this Agreement, and such default or breach shall continue for a period of thirty days after there has been given, by registered or certified mail, to the Borrower by the Agent a written notice specifying such default or breach and requiring it to be remedied.

(e)An event of default as defined in any mortgage, indenture, agreement or instrument under which there is issued, or by which there is secured or evidenced, any Indebtedness (other than in respect of Hedge Agreements) of the Borrower in a principal amount not less than $100,000,000 shall have occurred and shall result in such Indebtedness becoming or being declared due and payable prior to the date on which it otherwise would become due and payable, or an event of default or a termination event as defined in any Hedge Agreement shall have occurred and shall result in a net payment obligation of the Borrower thereunder of not less than $100,000,000 in aggregate for all such Hedge Agreements; provided,  however, that if such event of default shall be remedied or cured by the Borrower, or waived by the holders of such Indebtedness, within twenty days after the Borrower has received written notice of such event of default and acceleration, then the Event of Default hereunder by reason thereof shall be deemed likewise to have thereupon been remedied, cured or waived without further action upon the part of either the Borrower or the Agent and Lenders.

(f)Any involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief against the Borrower or the Broker Subsidiary, or against all or a substantial part of the property of either of them, under Title 11 of the United States Code or any other federal, state or foreign bankruptcy, insolvency, reorganization or similar law, (ii) the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Borrower or the Broker Subsidiary or for all or a substantial part of the property of either of them, or (iii) the winding-up or liquidation of the Borrower or the Broker Subsidiary; and, in any such case, such involuntary proceeding or involuntary petition shall continue undismissed for 60 days, or, before such 60-day period has elapsed, there shall be entered an order or decree ordering the relief requested in such involuntary proceeding or involuntary petition.

(g)The Borrower or the Broker Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case under such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Borrower or Broker Subsidiary or for any substantial part of its respective properties, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its respective debts as they become due or shall take any corporate action in furtherance of any of the foregoing.

(h)A final judgment or judgments for the payment of money in excess of $100,000,000 in the aggregate shall be entered against the Borrower by a court or courts of

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competent jurisdiction, and the same shall not be discharged (or provisions shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Borrower shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal.

(i)At any time after a Change in Control, the Borrower fails to maintain at least one of the following credit ratings for its Senior Medium-Term Notes, Series A:  (a) BBB- (or better) by Standard & Poor’s Ratings Service, a Division of The McGraw-Hill Companies, Inc., or (b) Baa3 (or better) by Moody’s Investors Service, Inc.

8.2Remedies.  If an Event of Default occurs and is continuing, then and in every such case the Agent shall, at the request of, or may, with the consent of, the Required Lenders (i) declare the Commitment of each Lender to make Loans to be terminated whereupon such Commitments and obligation shall be terminated, and (ii) declare the unpaid principal of all outstanding Loans, any and all accrued and unpaid interest, any accrued and unpaid Commitment Fees, or any other amounts owing or payable under the Notes, if any, to be immediately due and payable, by a notice in writing to the Borrower, and upon such declaration such principal, interest, Commitment Fees, or other amounts payable hereunder and accrued thereon shall become immediately due and payable, together with any funding losses that may result as a consequence of such declaration, without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower; provided,  however, that in the case of any of the Events of Default specified in subsection (f) or (g) of Section 8.1, automatically without any notice to the Borrower or any other act by the Agent, the Credit and the obligations of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans, any accrued and unpaid interest, any accrued and unpaid Commitment Fees or any other amounts payable hereunder shall become immediately due and payable, together with any funding losses that may result as a consequence thereof, without further act of the Agent or any Lender and without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower.

9.THE AGENT.

9.1Appointment and Authorization.  Each Lender hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes the Agent to take such action on its behalf underthe provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any duties or responsibilities except those expressly set forth, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent.

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9.2Delegation of Duties.  The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

9.3Liability of Agent.  None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Borrower or any of the Borrower’s Subsidiaries or Affiliates.

9.4Reliance by Agent.

(a)The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Agent.  The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of takingor continuing to take any such action.  The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

(b)For purposes of determining compliance with the conditions specified in Section 4.1, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender.

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9.5Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Lenders, unless the Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default".  The Agent will notify the Lenders of its receipt of any such notice.  The Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 8;  provided,  however, that unless and until the Agent has received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.

9.6Credit Decision.  Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Borrower and its Subsidiaries, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender.  Each Lender represents to the Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and its Subsidiaries, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower.  Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower which may come into the possession of any of the Agent-Related Persons.

9.7Indemnification of Agent.  Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), pro rata, from and against any and all Indemnified Liabilities; provided,  however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Liabilities resulting solely from any such Person's gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender shall reimburse the Agentupon demand for its ratable share, of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein to

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the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of the Agent.

9.8Agent in Individual Capacity.  Citibank and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower and its Subsidiaries and Affiliates as though Citibank were not the Agent hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, Citibank or its Affiliates may receive information regarding the Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Subsidiary) and acknowledge that the Agent shall be under no obligation to provide such information to them.  With respect to its Loans, Citibank shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent.

9.9Successor Agent.  The Agent may, and at the request of the Required Lenders shall, resign as Agent upon 30 days' notice to the Lenders and Borrower.  If the Agent resigns under this Agreement, the Required Lenders, with the consent of the Borrower, which consent shall not be unreasonably withheld, shall appoint from among the Lenders a successor agent for the Lenders which successor agent shall be approved by the Borrower.  If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent with the consent of the Borrower, which consent shall not be unreasonably withheld, may appoint, after consulting with the Lenders and the Borrower, a successor agent from among the Lenders.  Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated.  After any retiring Agent's resignation hereunder as Agent, the provisions of this Section 9 and Sections10.4 and 10.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  The retiring Agent shallrefund to Borrower that portion of any agency fee paid to such Agent as is not earned due to such Agent’s resignation, prorated to the date of such Agent’s resignation.

9.10Withholding Tax.

(a)If any Lender is a "foreign corporation, partnership or trust" within the meaning of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding tax under Section 1441 or 1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver to the Agent:

(i)if such Lender claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, properly completed IRS Form W-8BEN before

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the payment of any interest in the first calendar year and before the payment of any interest in any subsequent calendar year during which the Form W-8BEN (or any successor thereto) then in effect expires;

(ii)if such Lender claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, two properly completed copies of IRS Form W-8ECI or any successor form thereto before the payment of any interest is due in the first taxable year of such Lender and before the payment of any interest in any subsequent calendar year during which the Form W-8ECI (or any successor thereto) then in effect expires; and

(iii)such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.

Such Lender agrees to promptly notify the Agent of any change in circumstances which would render invalid any claimed exemption or reduction.

(b)If any Lender claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to notify the Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of the Company to such Lender.  To the extent of such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN or any successor form thereto as no longer valid.

(c)If any Lender claiming exemption from United States withholding tax by filing IRS Form W-8ECI or any successor form thereto with the Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

(d)If any Lender is entitled to a reduction in the applicable withholding tax, the Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable withholding tax after taking into account such reduction.  If the forms or other documentation required by subsection (a) of this Section are not delivered to the Agent or if any Lender which is a "foreign corporation, partnership or trust" within the meaning of the Code is not entitled to claim exemption from or a reduction of U.S. withholding tax under Section 1441 or 1442 of the Code, then the Agent shall withhold from any interest payment to such Lender not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

(e)If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Agent of a

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change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason other than the Agent’s gross negligence or willful misconduct) such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, together with all costs and expenses (including Attorney Costs).  The obligation of the Lenders under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Agent.

9.11Co-Agents.  None of the Lenders identified on the facing page or signature pages of this Agreement as a "co-agent", "managing agent", "syndication agent" or "documentation agent" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders so identified as a "co-agent", "syndication agent" or "documentation agent" shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

10.MISCELLANEOUS.

10.1Amendments and Waivers.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Borrower or any applicable Subsidiary therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by the Agent at the written request of the Required Lenders) and the Borrower and acknowledged by the Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided,  however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders and the Borrower and acknowledged by the Agent, do any of the following:

(a)increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.2);

(b)postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document;

(c)reduce the principal of, or the rate of interest specified herein on any Loan, or (subject to clause (ii) below) any fees or other amounts payable hereunder or under any other Loan Document;

(d)change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which is required for the Lenders or any of them to take any action hereunder; or

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(e)amend this Section, or Section 2.13, or any provision herein providing for consent or other action by all Lenders;

and, providedfurther, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Loan Document, and (ii) the respective Fee Letters may be amended or rights or privileges thereunder waived, in a writing executed by the parties thereto.

10.2Notices.

(a)All notices, requests and other communications shall be either (i) in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Borrower by facsimile shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 10.2) or (ii) as and to the extent set forth in clause (d) below, by electronic mail.

(b)All such notices, requests and communications shall, when transmitted by overnight delivery, faxed or e-mailed, be effective when delivered for overnight (next-day) delivery, transmitted in legible form by facsimile machine (provided that the sender has retained its facsimile machine-generated confirmation of the receipt of such fax by the recipient's facsimile machine) or transmitted by e-mail (provided that the e-mail was sent to the e-mail address provided by the recipient and that the e-mail was not returned to the sender as undeliverable), respectively, or if mailed, upon the third Business Day after the date deposited into the U.S. mail, or if delivered, upon delivery; except that notices pursuant to Section 2 or 9 shall not be effective until actually received by the Agent.

(c)The agreement of the Agent and the Lenders herein to receive certain notices by telephone, facsimile or e-mail is solely for the convenience of the Borrower, the Agent and the Lenders.  The Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person who is named in the then-current certificate delivered pursuant to subsection 4.1(e) hereof as authorized to execute Borrowing Advices (each an "Authorized Person") and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Agent or the Lenders in reliance upon such telephonic, facsimile or e-mail notice, provided the Agent and the Lenders reasonably believe such Person to be an Authorized Person.  The obligation of the Borrower to repay the Loans shall not be affected in any way to any extent by any failure by the Agent and the Lenders to receive written confirmation of any telephonic, facsimile or e-mail notice or the receipt by the Agent and the Lenders of a confirmation which is at variance with the terms understood by the Agent and the Lenders to be contained in the telephonic, facsimile or e-mail notice.

(d)The compliance certificate described in Section 6.2 shall be delivered to the Agent by the Borrower by mail or overnight delivery.  Except for the compliance certificate described in Section 6.2, materials required to be delivered pursuant to Section 6.2 shall be delivered to the Agent in an electronic medium format reasonably acceptable to the Agent by e-mail at oploanswebadmin@citi.com.  The Borrower agrees that the Agent may make such materials (collectively, the "Communications") available to the Lenders by posting such

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materials on Debt Domain or a substantially similar electronic transmission system (collectively, the "Platform").  In addition, to the extent the Borrower in its sole discretion so elects and confirms in writing or by e-mail to the Agent, any other written information, documents, instruments or other material relating to the Borrower, any of its Subsidiaries or any other materials or matters relating to this Agreement, the Notes, if any, or any of the transactions contemplated hereby and supplied by the Borrower to the Agent (other than any such communication that (i) relates to a request for a new, or a conversion of an existing, Borrowing (including any election of an interest rate or Interest Period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent set forth in Section 4.1 or Section 4.2), shall, to the extent of such election and confirmation by the Borrower, constitute materials that are "Communications" for purposes of this subparagraph (d).  The Borrower and each of the Lenders acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided "as is" and "as available" and (iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform (provided, as to such disclaimer, that the Agent and its Affiliates have not been grossly negligent or engaged in any willful misconduct in respect of the Platform).  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in connection with the Platform.

(e)Each Lender agrees that notice to it (as provided in the next sentence) (a "Notice") specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender for purposes of this Agreement.  Each Lender agrees (i) to notify the Agent in writing of such Lender's e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.

(f)The Agent agrees to give to each Lender prompt notice of all materials delivered by the Borrower pursuant to Section 6.2.

10.3No Waiver-Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

10.4Costs and Expenses.  The Borrower shall:

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(a)whether or not the transactions contemplated hereby are consummated, pay or reimburse Citibank including in its capacity as Agent and Lender within five Business Days after demand, subject to subsection 4.1(g) for all reasonable costs and expenses incurred by Citibank including in its capacity as Agent and Lender in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Attorney Costs incurred by Citibank (including in its capacity as Agent and Lender with respect thereto); and

(b)pay or reimburse the Agent, the Arranger and each Lender within five Business Days after demand (subject to subsection 4.1(g)) for all reasonable costs and expenses (including reasonable Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding).  In connection with any claim, demand, action or cause of action relating to the enforcement, preservation or exercise of any rights or remedies covered by this Section 10.4 against the Borrower, all Lenders shall be represented by the same legal counsel selected by such Lenders; provided, that if such legal counsel determines in good faith that representing all such Lenders would or could result in a conflict of interest under laws or ethical principles applicable to such legal counsel or that a claim is available to a Lender that is not available to all such Lenders, then to the extent reasonably necessary to avoid such a conflict of interest or to permit an unqualified assertion of such a claim, each Lender shall be entitled to separate representation by legal counsel selected by that Lender, with all such legal counsel using reasonable efforts to avoid unnecessary duplication of effort by counsel for all Lenders.

10.5Borrower Indemnification.  Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold the Agent-Related Persons, andeach Lender and each of its respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and against any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Loans and the termination, resignation or replacement of theAgent or replacement of any Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any Insolvency Proceeding or appellate proceeding) related to or arising out of this Agreement or the Loans or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided, that the Borrower shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting from the gross negligence or willful misconduct of such Indemnified Person.  If any claim, demand,

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action or cause of action is asserted against any Indemnified Person, such Indemnified Person shall promptly notify Borrower, but the failure to so promptly notify Borrower shall not affect Borrower’s obligations under this Section unless such failure materially prejudices Borrower’s right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided.  If requested by Borrower in writing, such Indemnified Person shall in good faith contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Borrower to participate in such contest.  Any Indemnified Person that proposes to settle or compromise any claim or proceeding for which Borrower may be liable for payment of indemnity hereunder shall give Borrower written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Borrower’s prior consent.  In connection with any claim, demand, action or cause of action covered by this Section 10.5 against more than one Indemnified Person, all such Indemnified Persons shall be represented by the same legal counsel selected by the Indemnified Persons and reasonably acceptable to Borrower; provided, that if such legal counsel determines in good faith that representing all such Indemnified Persons would or could result in a conflict of interest under laws or ethical principles applicable to such legal counsel or that a defense or counterclaim is available to an Indemnified Person that is not available to all such Indemnified Persons, then to the extent reasonably necessary to avoid such a conflict of interest or to permit unqualified assertion of such a defense or counterclaim, each Indemnified Person shall be entitled to separate representation by legal counsel selected by that Indemnified Person and reasonably acceptable to Borrower, with all such legal counsel using reasonable efforts to avoid unnecessary duplication of effort by counsel for all Indemnified Persons.  The agreements in this Section shall survive payment of all other Obligations.

10.6Payments Set Aside.  To the extent that the Borrower makes a payment to the Agent or the Lenders, or the Agent or the Lenders exercise any right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of suchrecovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had notoccurred, and (b) each Lender severally agrees to pay to the Agent upon demand its pro rata share of any amount so recovered from or repaid by the Agent.

10.7Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Agent and each Lender.

10.8Assignments, Participations Etc.

(a)(i)Any Lender may, with the written consent of the Agent and the Borrower, which consent shall not be unreasonably withheld or delayed (except Borrower’s consent shall not be required if a Default or an Event of Default exists and is continuing), at any time assign and delegate to one or more Eligible Assignees (provided that no written consent of

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the Agent shall be required in connection with any assignment and delegation by a Lender to an Eligible Assignee that is an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all, of the Loans, the Commitments, and the other rights and obligations of such Lender hereunder, in a minimum amount of $10,000,000; provided,  however, that (x) the Borrower and, the Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (A) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to the Borrower and the Agent by such Lender and the Assignee; (B) such Lender and its Assignee shall have delivered to the Borrower and the Agent an Assignment and Acceptance in the form of Exhibit F ("Assignment and Acceptance") together with any Note or Notes subject to such assignment; and (C) the assignor Lender or Assignee has paid to the Agent a processing fee in the amount of $3,500 and (y) no such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender.

(ii)Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations, or other compensating actions, including funding, with the consent of the Borrower and the Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent, and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans in accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(b)From and after the date that the Agent notifies the assignor Lender and the Borrower that it has received (and the Borrower and the Agent have provided their consent with respect to) an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents.

(c)If requested by the Assignee and/or the Assignor, within five Business Days after its receipt of notice by the Agent that it has received an executed Assignment and Acceptance and payment of the processing fee (and provided that it consents to such assignment in accordance with subsection 10.8(a)), the Borrower shall execute and deliver

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to the Agent, new Notes evidencing such Assignee's assigned Loans and Commitment and, if the assignor Lender has retained a portion of its Loans and its Commitment, replacement Notes in the principal amount of the Commitment retained by the assignor Lender (such Notes to be in exchange for, but not in payment of, any Notes held by such Lender).  Immediately upon each Assignee's making its processing fee payment under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assignee shall reduce such Commitments of the assignor Lender protanto.

(d)Any Lender may at any time sell to one or more commercial banks or other Persons not Affiliates of the Borrower (a "Participant") participating interests in any Loans, the Commitment of that Lender and the other interests of that Lender (the "originating Lender") hereunder and under the other Loan Documents; provided,  however, that (i) the originating Lender's obligations under this Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrower, and the Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender's rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which the Participant has rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document.  Any Lender that sells a participation to any Person that is a "foreign corporation, partnership or trust" within the meaning of the Code shall include in its participation agreement with such Person a covenant by such Person that such Person will comply with the provisions of Section 9.10 as if such Person were a Lender and provide that the Agent and the Borrower shall be third party beneficiaries of such covenant.

(e)Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and any Note held by it in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

(f)Any Lender (a "Granting Lender") may, with notice to the Agent, grant to a special purpose funding vehicle (an "SPC") the option to fund all or any part of any Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Agreement.  The funding of a Loan by an SPC hereunder shall utilize the Revolving Credit Commitment of the Granting Lender to the same extent, and as if, such Loan were funded by such Granting Lender.  Each party hereto hereby agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes such payment.  Notwithstanding anything to the contrary contained in the foregoing or anywhere else in this Agreement, (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to fund all or any part of such Loan, the Granting Lender shall be obligated to fund such Loan pursuant to the terms hereof, and (iii)

NYDOCS02/1089152 48

the Borrower and Agent shall continue to deal exclusively with the Granting Lender and any funding by an SPC hereunder shall not constitute an assignment, assumption or participation of any rights or obligations of the Granting Lender.  Any SPC may disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or guarantee to such SPC, provided, as a condition precedent to such disclosure, (A) such agency, dealer or provider has delivered to such Granting Lender for the benefit of Borrower a written confidentiality agreement substantially similar to Section 10.9, and (B) simultaneous with or prior to such disclosure, such Granting Lender has given written notice to Borrower of the agency, dealer or provider to which such disclosure is being made and the contents of such disclosure.  This Section may not be amended without the prior written consent of each Granting Lender, all or any part of whose Loan is being funded by an SPC at the time of such amendment.

10.9Confidentiality.  Each Lender agrees to hold any confidential information that it may receive from Borrower or from the Agent on such Borrower’s behalf, pursuant to this Agreement in confidence, except for disclosure:  (a) to legal counsel and accountants for Borrower or any Lender; (b) to other professional advisors to Borrower or any Lender, provided that the recipient has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9; (c) to regulatory officials having jurisdiction over any Lender; (d) as required by applicable law or legal process or in connection with any legal proceeding in which any Lender and Borrower are adverse parties; (e) to Affiliates or agents of such Lender to the extent the Affiliate or agent is involved in the administration of the credit facilities extended to Borrower and its Subsidiaries hereunder, provided, however, that (i) as to any such Affiliate, such Affiliate has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9, and (ii) as to any such agent, such agent has been informed by such Lender of the confidential nature of such confidential information and has been instructed by such Lender to maintain the confidentiality of such confidential information; and (f) to another financial institution in connection with a disposition or proposed disposition to that financial institution of all or part of any Lender’s interests hereunder or a participation interest in the Revolving Loans and/or the Term Loans, each in accordance with Section 10.8 hereof, provided that the recipient has delivered to such Lender a written confidentiality agreement substantially similar to this Section 10.9.  Each Lender further agrees that it will not use such confidential information in any activity or for any purpose other than the administration of credit facilities extended to Borrower and its Subsidiaries and, without limitation, will take such steps as are reasonably appropriate to preclude access to any such confidential information to be obtained by any Person employed by any Lender, or by an affiliate of any Lender, who is not involved in the administration of credit facilities extended to Borrower and its Subsidiaries.  For purposes of the foregoing, "confidential information" shall mean any information respecting Borrower or its Subsidiaries reasonably specified by Borrower as confidential, other than (i) information filed with any governmental agency and available to the public, and (ii) information disclosed by Borrower to any Person not associated with Borrower without a written confidentiality agreement substantially similar to this Section 10.9.  Certain of the confidential information pursuant to this Agreement is or may be valuable proprietary information that constitutes a trade secret of Borrower or its Subsidiaries; neither the provision of such confidential information to any Lender or the limited disclosures thereof permitted by this Section 10.9 shall affect the status of any such confidential information as a trade secret of Borrower and its Subsidiaries.  Each

NYDOCS02/1089152 49

Lender, and each other Person who agrees to be bound by this Section 10.9, acknowledges that any breach of the agreements contained in this Section 10.9 would result in losses that could not be reasonably or adequately compensated by money damages.  Accordingly, if any Lender or any other person breaches its obligations hereunder, such Lender or such other Person recognizes and consents to the right of Borrower, Intermediate Parent, and/or Broker Subsidiary to seek injunctive relief to compel such Lender or other Person to abide by the terms of this Section 10.9.

The Agent agrees to provide to the Borrower, upon the Borrower’s request, each interest rate that is furnished by any Reference Bankto the Agent pursuant to Section 2.14(b) (each, a “Reference BankRate”), which information is to be treated by the Borrower as confidential except (i) the Borrower may disclose any actual interest rate payable under this Agreement, and (ii) the Borrower may disclose any Reference BankRate (a) to legal counsel and accountants for Borrower; (b) to other professional advisors to Borrower, provided that the recipient has delivered to the Borrower a written confidentiality agreement substantially similar to this Section 10.9; (c) to regulatory officials having jurisdiction over the Borrower; (d) as required by applicable law,  legal process,the New York Stock Exchange or any similar self-regulatory exchange of which Borrower is a member, or in connection with any legal proceeding in which any Lender and Borrower are adverse parties; (e) to Affiliates or agents of the Borrower to the extent the Affiliate or agent is involved in the administration of the credit facilities extended to the Borrower and its Subsidiaries hereunder, provided, however, that (i) as to any such Affiliate, such Affiliate has delivered to the Borrower a written confidentiality agreement substantially similar to this Section 10.9, and (ii) as to any such agent, such agent has been informed by the Borrower of the confidential nature of such confidential information and has been instructed by the Borrower to maintain the confidentiality of such Reference BankRate.  The Borrower further agrees that it will not use such confidential information in any activity or for any purpose other than the administration of this Agreement and, without limitation, will take such steps as are reasonably appropriate to preclude access to any such confidential information to be obtained by any Person employed by the Borrower, or by an affiliate of the Borrower, who is not involved in the administration of this Agreement.

10.10Notification of Addresses, Lending Offices, Etc.  Each Lender shall notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request.

10.11Counterparts.  This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument.

10.12Severability.  The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair thelegality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

NYDOCS02/1089152 50

10.13No Third Parties Benefited.  This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Lenders, the Agent and the Arranger, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents.

10.14Governing Law and Jurisdiction.

(a)THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b)EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST ANY OTHER PARTY HERETO OR ANY AGENT-RELATED PARTY IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF CALIFORNIA THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF CALIFORNIA OR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH  COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA OR NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.

10.15Waiver of Jury Trial.

(a)TO THE FULL EXTENT PERMITTED BY LAW, THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT

NYDOCS02/1089152 51

CLAIMS, TORT CLAIMS, OR OTHERWISE.  TO THE FULL EXTENT PERMITTED BY LAW, THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT AJURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANYSUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

(b)WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT IMMEDIATELY ABOVE TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if such waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between the Borrower, on the one hand, and any one or more of the other parties to this Agreement, on the other, arising out of this Agreement at any time shall be decided by a reference to a private judge, mutually selected by the parties to such dispute (or, if they cannot agree, by the Presiding Judge of the California Superior Court in and for the County of San Francisco) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in San Francisco County, California; and the parties hereby submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential, and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the California Superior Court in and for the County of San Francisco for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral (if any), or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

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10.16Entire Agreement.  This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the Borrower, the Lenders and the Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof.

10.17Headings.  Articles and Section headings in this Agreement are included herein for the convenience of reference only.

10.18USA Patriot Act.  Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies each borrower, guarantor or grantor (the "Loan Parties"), which information includes the name and address of each Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.

10.19Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)the application of any Write-Down andConversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or  a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

The following terms have the following meanings:

NYDOCS02/1089152 53

Bail-In Action:	The exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
Bail-In Legislation:	With respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
EEA Financial
Institution:	(a) Any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
EEA Member
Country:	Any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution
Authority:	Any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
EU Bail-In Legislation
Schedule:	The EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
Loan Market
Association:	The London trade association, which is the self-described authoritative voice of the syndicated loan markets in Europe, the Middle East and Africa.
Write-Down and
Conversion Powers:	With respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(SIGNATURE PAGE FOLLOWS)

NYDOCS02/1089152 54

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the date first above written.

Borrower:
THE CHARLES SCHWAB CORPORATION
By:	/s/ William F. Quinn
Name:	William F. Quinn
Title:	Senior Vice President and Treasurer

Lenders:
CITIBANK, N.A., as Agent and
individually as Lender
By:	/s/ Lisa Huang
Name:	Lisa Huang
Title:	Vice President
JPMORGAN CHASE BANK, N.A.
By:	/s/ Leo Lai
Name:	Leo Lai
Title:	Executive Director
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
By:	/s/ Doreen Barr
Name:	Doreen Barr
Title:	Authorized Signatory
By:	/s/ Lorenz Meier
Name:	Lorenz Meier
Title:	Authorized Signatory
THE BANK OF NEW YORK MELLON
By:	/s/ Stephen Manners
Name:	Stephen Manners
Title:	Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/ Karen Hanke
Name:	Karen Hanke
Title:	Managing Director

BANK OF AMERICA, N.A.
By:	/s/ Maryanne Fitzmaurice
Name:	Maryanne Fitzmaurice
Title:	Director
GOLDMAN SACHS BANK USA
By:	/s/ Rebecca Kratz
Name:	Rebecca Kratz
Title:	Authorized Signatory
HSBC BANK USA, NATIONAL ASSOCIATION
By:	/s/ Stephen J. Contino
Name:	Stephen J. Contino
Title:	Vice President
LLOYDS BANK PLC
By:	/s/ Daven Popat
Name:	Daven Popat
Title:	Senior Vice President
By:	/s/ Veronica Cranny
Name:	Veronica Cranny
Title:	Manager, Banking Operations
MORGAN STANLEY BANK, N.A.
By:	/s/ Michael King
Name:	Michael King
Title:	Authorized Signatory
STATE STREET BANK AND TRUST COMPANY
By:	/s/ Andrei Bourdine
Name:	Andrei Bourdine
Title:	Vice President

U.S. BANK NATIONAL ASSOCIATION
By:	/s/ Charles Howes
Name:	Charles Howes
Title:	Vice President

Schedule 1

LENDERS’ COMMITMENTS

The Charles Schwab Corporation $750,000,000 Credit Agreement (364-Day Commitment) dated as of June 3, 2016.

		Lender Commitment Amount
1.	Citibank, N.A.		1.	$77,500,000
2.	JPMorgan Chase Bank, N.A.		2.	$77,500,000
3.	Credit Suisse AG, Cayman Islands Branch		3.	$70,000,000
4.	The Bank of New York Mellon		4.	$70,000,000
5.	Wells Fargo Bank, National Association		5.	$70,000,000
6.	Bank of America, N.A.		6.	$55,000,000
7.	Goldman Sachs Bank USA		7.	$55,000,000
8.	HSBC Bank USA, National Association		8.	$55,000,000
9.	Lloyds Bank plc		9.	$55,000,000
10.	Morgan Stanley Bank, N.A.		10.	$55,000,000
11.	State Street Bank and Trust Company		11.	$55,000,000
12.	U.S. Bank National Association		12.	$55,000,000
		Total		$750,000,000

Schedule 2

LIST OF BORROWING AGREEMENTS

1.$750,000,000 Credit Agreement (364-Day Commitment) dated as of June 5, 2015 among the Borrower, the lenders party thereto, and Citibank, N.A., as administrative agent for such lenders.

Schedule 6.2

COMPLIANCE CERTIFICATE

I, ____________________, certify that I am the _______________________ of The Charles Schwab Corporation (the "Borrower"), and that as such I am authorized to execute this Compliance Certificate on behalf of the Borrower, and do hereby further certify on behalf of the Borrower that:

1.I have reviewed the terms of that certain Credit Agreement (364-Day Commitment) dated as of June 3, 2016 among the Borrower, the financial institutions named therein (the "Lenders") and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement"), and I have made, or have caused to be made by employees or agents under my supervision, a detailed review of the transactions and conditions of the Borrower during the accounting period covered by the attached financial statements dated ______________, 20___.

2.The examination described in paragraph 1 did not disclose, and I have no knowledge of the existence of any condition or event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below.

3.Schedule I attached hereto sets forth financial data and computations evidencing compliance with the covenants set forth in Sections 7.1 and 7.2 of the Credit Agreement, all of which data and computations are true, complete and correct.  Capitalized terms not otherwise defined herein are defined in the Credit Agreement.

4.Described below are the exceptions, if any, to paragraph 2 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event.

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Compliance Certificate in support hereof, are made and delivered this ___ day of _____________ 20___.

By:

Name:

Title:

The Charles Schwab Corporation

Credit Agreement (364-Day Commitment)

Dated as of June 3, 2016

Schedule I

to

Compliance Certificate

(Dollars in Thousands)

1.Net Capital Ratio of the Broker Subsidiary.

Requirement:  Broker Subsidiary - month-end ratio not less than 5%.

Net Capital Ratio for Broker Subsidiary

Month Month-end Ratio

2.Minimum Stockholders' Equity of Borrower.

Requirement:  As of _____________, 20____, required Minimum Stockholders' Equity isthe greater of (a) $9,500,000,000 or (b) $9,500,000,000 plus 50% of the sum of cumulative Net Earnings for each fiscal quarter commencing with the fiscal quarter ended June 30, 2016.

Schedule 10.2

NOTICES

If to the Borrower:

If by U.S. mail:	The Charles Schwab Corporation
	Treasury Department
	Attn:  William F. Quinn or Successor
	211 Main Street (Mail Stop SF215FMT-04-100)
	San Francisco, CA 94105

If by hand delivery (including courier and overnight messenger service):	The Charles Schwab Corporation
	Treasury Department
	Attn:  William F. Quinn or Successor
	215 Fremont Street, 4th Floor
	San Francisco, CA 94105
Telephone:	(415) 667-7337
Facsimile:	(415) 667-8565

If to the Agent:

See information under Citibank, N.A. in table below pertaining to Lenders.

If to the Lenders:

Credit Contact	Operations Contact	Lending Office	Payment Instructions
Bank of America, N.A. One Bryant Park, 18th Floor New York, NY 10036 Attention: Maryanne Fitzmaurice                  Director (646) 556-0343 Fax:  704 683-9184	Bank of America, N.A. 901 S. Main St. Dallas, TX  75202 Attention:  Tammi Reddy (415) 436-3685 ext. 65843 Fax: (312) 453-5129	Bank of America, N.A. 2001 Clayton Road Concord, California 94520	Bank of America, N.A. ABA #:  026009593 Charlotte, NC Acct #:  4426457864 Attention:  Bilateral Clearing Account Ref:  Charles Schwab Corporation
The Bank of New York Mellon 225 Liberty Street New York, NY 10281 Attention:  Steve Manners                   Vice President (212) 635-6316 Fax:  (212) 635-4717	The Bank of New York Mellon 6023 Airport Road Oriskany, NY 13424 Attention:  Richard Scalice (315)765-4192 Fax:  (315) 765-4783	The Bank of New York Mellon 225 Liberty Street New York, NY 10281	The Bank of New York ABA #: 021-000-018 Acct #: GLA111-231 Acct name:  Broker Services Attn:  Bradley Fike Ref:  Charles Schwab Corporation

Credit Contact	Operations Contact	Lending Office	Payment Instructions
Citibank, N.A. 388 Greenwich Street New York, NY 10013 Attention: Dane Graham                  Director (212) 816-8219 Fax:  (212) 816-1212	Citibank, N.A. 1615 Brett Road, Bldg #3 New Castle, DE 19720 Attention:  Investor Relations (302) 894-6010 Fax: (212) 994-0961	Citibank, N.A. 399 Park Avenue New York, NY 10043	Citibank NA ABA #:  021-000-089 New York, NY Acct #:  36852248 Acct Name:  Agency/Medium Term Finance Ref:  The Charles Schwab Corporation
Credit Suisse AG, Cayman Islands Branch Eleven Madison Avenue New York, NY 10010 Attention: Doreen Barr /                 Alex Verdone Phone:     (212) 325-9914 /                  (212) 325- 0703 Fax:         (212) 743-2737 /	Credit Suisse AG, Cayman Islands Branch One Madison Avenue New York, NY 10010 Attention:  Jason Golz                  Loan Closers /                  Cecelia Harrison                  Administrator Phone:     (919) 994-6378 /                  (919) 994-6359 Fax:         (866) 469-3871	Credit Suisse AG, Cayman Islands Branch Eleven Madison Avenue New York, NY 10010	Credit Suisse ABA #:  021-000-018 New York, NY Acct #:  890-0492-627 Acct Name:  CS Agency Cayman Ref:  The Charles Schwab Corporation
Goldman Sachs Bank USA Michelle Latzoni c/o Goldman, Sachs & Co. 30 Hudson Street, 5th Floor Jersey City, NJ 07302 Email: gsd.link@gs.com Tel: (212)934-3921	Goldman Sachs Bank USA c/o Goldman, Sachs & Co. 30 Hudson Street, 5th Floor Jersey City, NJ 07302 gs-sbd-admin-contacts@ny.email.gs.com Tel: (212)902-1099 Fax: (917)977-3966	Goldman Sachs Bank USA 200 West Street New York, NY 10282	Goldman Sachs Bank USA Swift Code: CITIUS33 Aba: 021000089 Bank Name: Citibank N.A. City: New York A/C #: 30627664 Entity Name: Goldman Sachs Bank USA
HSBC Bank USA, National Association 452 Fifth Avenue New York, NY 10018 Attention: Jeffrey Roth /                 Stephen J. Contino Phone:     (212) 525-4341 /                  (212) 525- 7054	HSBC Bank USA, New York 452 Fifth Avenue New York, NY 10018 Attention: CTLA Lan Admin Phone:       (212) 525-1529 / Fax:           (847) 793- 3415	HSBC Bank USA, National Association 452 fifth Avenue New York, NY 10018	HSBC Bank USA, National Association ABA #:  021-000-1088 Acct #:  713011777 Acct Name:  NY Loan Agency Attn:  CTLA Laon Admin Ref:  The Charles Schwab Corporation
JPMorgan Chase Bank, N.A. 383 Madison Avenue, Floor 23 New York, NY 10179 Attention: Catherine Grossman                   Vice President / (212) 270-1153 Fax:  (212) 270-1511	JPMorgan Chase Bank, N.A. JPM-Bangalore Loan Operations Prestige Tech Park, Floor 4 Sarjapur outer Ring Rd, Vathur Hobli Bangalore, India 560 087 91 80 66761709 Fax:  (201) 244-3885	JPMorgan Chase Bank, N.A. 500 Stanton Christiana Road, Ops 2, Floor 3 Newark, DE 19713-2107	JPMorgan Chase Bank, N.A. New York, NY ABA #:  021000021 Acct #:  9008113381H2832 Acct Name: LS2 Incoming Account Attn: Loan & Agency Ref:  Charles Schwab
Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036 Attention: Sammy Asoli                  Vice President (212) 284-0418 Fax:  (212) 930-5098	Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036 Attention:  Indira Girisankar /                   Ramona Rojas (212) 930-5051/8978 Fax:  (212) 930-5098	Lloyds Bank plc 1095 Avenue of the Americas, 34th Floor New York , NY 10036	Bank of America International, New York New York, NY ABA #:  026-009-593 Acct #: 655-010-1938 Acct Name: Lloyds Bank plc, New York Ref:  Charles Schwab

NYDOCS02/1089152 2

Credit Contact	Operations Contact	Lending Office	Payment Instructions
Morgan Stanley Bank, N.A. 750 Seventh Avenue New York, NY 10019 Attention:  Joan Cho (212) 762-1190	Morgan Stanley Loan Servicing 1300 Thames Street Wharf, 4th Floor Baltimore, MD 21231 443-627-4355 Fax:  718-233-2140	Morgan Stanley Bank, N.A. One Utah Center 201 South Main Street, 5th Floor Salt Lake, City, UT 84111	MS BANK NA USD Citibank, N.A. New York, NY 10043 ABA #:  021-000-089 Acct #:  3044-0947 Acct Name:  Morgan Stanley Bank, N.A. Ref:  The Charles Schwab Corporation Attn:  Morgan Stanley Loan Servicing
State Street Bank and Trust Company Box 5303 Boston, MA 02206 Attention:  Andrei Bourdine                   Vice President /                   Charlie Garrity                   Vice President (617) 662-8616 / 8827 Fax:  (617) 662-8664	State Street Bank and Trust Company Mail Code: CPH0427, 100 Huntington Avenue, Tower 2, 4th Floor Boston, MA 02116 Attention:  Peter Connolly (617) 662-8588 Fax:  (617) 988-6677	State Street Bank and Trust Company 100 Huntington Ave., Tower 2, Floor 4 Boston, MA  02206	State Street Bank and Trust Company, Boston, MA ABA#:  011-000-028 Acct #:  0006-332-1 Acct. Name:  IS Loan Operations / CSU Internal Ref: The Charles Schwab Corporation Attn:  Peter Connolly, ext 2-8588
U.S. Bank National Association 461 Fifth Avenue, 7th Floor New York, NY 10017-6234 Attention:  Angela (Zhanglan) Cheng, Portfolio Manager (917) 326-3101 Angela.cheng@usbank.com	U.S. Bank National Association 400 City Center Oshkosh, WI  54901 CLS Syndication Services Team – East (920) 237-7601 Fax:  (920) 237-7993	U.S. Bank National Association 800 Nicollet Mall Minneapolis, MN  55402	U.S. Bank National Association ABA#:  091000022 Acct. #:  0068542160600 Account Name:  CLS Syndication Services GL Acct. Ref.:  Charles Schwab Corporation (Type of pymt) Attn:  CLS Syndication Team
Wells Fargo Bank, National Association 301 S. College St. 14th Floor MAC D1053-144 Charlotte, NC 28202 Attention: Karen Hanke Managing Director / (704) 410-0855 (Fax:  (704) 410-0331	Wells Fargo Bank, National Association 1700 Lincoln Street, 5th Floor MAC C7300-059 Denver, CO 80203-4500 Attention:  Dorothy Cardenas                    Loan Servicing Spec. (303) 863-5917 Fax:  (303) 863-2729	Wells Fargo Bank, National Association 90 South 7th Street, 7th Floor MAC N9305-075 Minneapolis, MN 55402-3903	Wells Fargo Bank, National Association ABA #:  121000248 Acct #: 00029694050720 Account Name:  WLS Denver Attn:  Dorothy Cardenas Ref: Charles Schwab

NYDOCS02/1089152 3

EXHIBIT A-1

REVOLVING NOTE

$____________________ (Amount of Commitment) Date:  June 3, 2016

For Value Received, The Charles Schwab Corporation ("Schwab") hereby promises to pay to the order of ________________ (the "Lender") to Citibank, N.A., as Agent, at Agent’s office located at 388 Greenwich Street, New York, New York  10013, for the account of the applicable Lending Office of the Lender, the principal amount of ____________________ ($___________) or the aggregate amount of all Revolving Loans made to Schwab by the Lender, whichever is less, on June 2, 2017.  The undersigned also promises to pay interest on the unpaid principal amount of each Borrowing from the date of such Borrowing until such principal amount is paid, at the rates per annum, and payable at such times, as are specified in the Credit Agreement.  This Note shall be subject to the terms of the Credit Agreement, and all principal and interest payable hereunder shall be due and payable in accordance with the terms of the Credit Agreement.

Schwab hereby authorizes the Lender to endorse on the Schedule attached to this Note the amount and Type of Revolving Loans made to Schwab by the Lender and all renewals, conversions, and payments of principal amounts in respect of such Revolving Loans, which endorsements shall, in the absence of manifest error, be conclusive as to the outstanding principal amount of all such Revolving Loans, provided,  however, that the failure to make such notation with respect to any Revolving Loans or payments shall not limit or otherwise affect the obligation of Schwab under the Credit Agreement or this Note.

This Note is the Revolving Note referred to in the Credit Agreement (364-Day Commitment), dated as of June 3, 2016 among Schwab, the Lender, certain other Lenders party thereto, and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement").  Terms defined in the Credit Agreement are used herein with the same meanings.  The Credit Agreement, among other things, contains provisions for acceleration of the maturity of this Note, upon the happening of certain stated events and also for prepayments on account of the principal of this Note prior to the maturity of this Note upon the terms and conditions specified in the Credit Agreement.

Principal and interest payments shall be in money of the United States of America, lawful at such times for the satisfaction of public and private debts, and shall be in immediately available funds.

Schwab promises to pay the costs of collection, including reasonable attorney’s fees, if default is made in the payment of this Note.

The terms and provisions of this Note shall be governed by the applicable laws of the State of California.

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its officers thereunto duly authorized and directed by appropriate corporate authority.

The Charles Schwab Corporation

By:

Name:

Title:

NYDOCS02/1089152 2

EXHIBIT A-1

SCHEDULE TO REVOLVING NOTE

Date
Made,
Continued,
Converted,
or Paid


Type of
Loan


Amount
of Loan Amount of
Principal
Continued,
Converted,
or Paid Unpaid
Principal
Balance of
Revolving
Note
Name of
Person
Making
Notation

NYDOCS02/1089152 3

EXHIBIT A-2

TERM NOTE

Date:  June 3, 2016

FOR VALUE RECEIVED, the undersigned, The Charles Schwab Corporation ("Schwab") hereby promises to pay to the order of ___________________ (the "Lender") to Citibank, N.A., as Agent, at the Agent's office located at 388 Greenwich Street, New York, New York 10013, for the account of the applicable Lending Office of the Lender, the principal amount of each Term Loan made by the Lender to Schwab pursuant to the terms of the Credit Agreement (364-Day Commitment), dated as of June 3, 2016, as amended, among Schwab, the Lender, certain other Lenders party thereto, and Citibank, N.A., as Agent for the Lenders (the "Credit Agreement"), as shown in the schedule attached hereto and any continuation thereof,  in lawful money of the United States and in immediately available funds on the Term Loan Maturity Date for such Term Loan.  The undersigned also promises to pay interest on the unpaid principal amount of each Term Loan from the date of such Term Loan until such principal amount is paid, in like money, at said office for the account of the Lender’s applicable Lending Office, at the rates per annum, and payable at such times as are specified in the Credit Agreement.  This Term Note shall be subject to the terms of the Credit Agreement and all principal and interest payable hereunder should be due and payable in accordance with the terms of the Credit Agreement.  Terms defined in the Credit Agreement are used herein with the same meanings.

This Term Note is one of the Term Notes referred to in, and is entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things, contains provisions for acceleration of the maturity of this Term Note upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity of the Term Note upon the terms and conditions specified in the Credit Agreement. 

Schwab promises to pay costs of collection, including reasonable attorney's fees, if default is made in the payment of this Note.

The terms and provisions of this Term Note shall be governed by the applicable laws of the State of California.

IN WITNESS WHEREOF, the undersigned has caused this Term Note to be executed by its officer thereunto duly authorized and directed by appropriate corporate authority.

The Charles Schwab Corporation

By:

Name:

Title:

EXHIBIT A-2

SCHEDULE TO TERM NOTE

Date
Made,
Continued,
Converted,
or Paid

Type of
Loan

Amount
of Loan

Term Loan
Maturity Date Amount of
Principal
Continued,
Converted,
or Paid Unpaid
Principal
Balance of
Term Note
Name of
Person
Making
Notation

NYDOCS02/1089152 2

EXHIBIT B

BORROWING ADVICE

1.This Borrowing Advice is executed and delivered by The Charles Schwab Corporation ("Borrower") to you pursuant to that certain Credit Agreement dated as of June 3, 2016 (the "Credit Agreement"), entered into by Borrower, Citibank, N.A. ("Citibank") and certain other Lenders parties thereto, collectively with Citibank (the "Lenders") and Citibank as Agent for the Lenders (herein "Agent").  Terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement.

2.Borrower hereby requests that the Lenders make a Revolving [or Term Loan] for the account of Borrower (at _______________, Account No. ________________) pursuant to Section 2.4 of the Credit Agreement as follows:

(a)Amount of Revolving [or Term Loan]:________________________.

(b)Borrowing Date of Revolving [or Term Loan]: _________________.

(c)[If a Revolving Loan] Type of Revolving Loan (check one only):

________ Eurodollar Rate with ________- day Interest Period

________ Base Rate

(d)[If a Term Loan] Type of Term Loan (check one only):

________ Eurodollar Rate with initial ________- day Interest Period

________ Base Rate

(e)[If a Term Loan] Maturity Date of Term Loan:__________________.

3.Following this request for a Revolving Loan [or Term Loan], the aggregate outstanding amount of all Revolving Loans and Term Loans will not exceed the aggregate amount of the Commitments.

4.This Borrowing Advice is executed on ______________ by the Borrower.

BORROWER:

THE CHARLES SCHWAB CORPORATION,

a Delaware Corporation

By:

Name:

Title:

NYDOCS02/1089152 2

EXHIBIT C

NOTICE OF CONVERSION/CONTINUATION

Dated as of: _________________

Citibank, N.A., as Agent

___________________________

___________________________

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Continuation (this "Notice") is delivered to you under the Credit Agreement (364-Day Commitment) dated as of June 3, 2016 (as amended, restated or otherwise modified, the "Credit Agreement") by and among The Charles Schwab Corporation, a Delaware corporation (the "Company") (herein "Borrower"); and Citibank, N.A., a Delaware corporation (herein "Citibank") and the other Lenders signatory thereto (together with Citibank, collectively "Lenders"), and Citibank as agent for the Lenders (herein "Agent").

1.This Notice is submitted for the purpose of:

(check one and complete applicable information in accordance with the Credit Agreement)

[__]Converting or[__] continuing all or a portion of the following type of Loan:

(a)(check, as applicable)

Base Rate Loan ____________________;

Eurodollar Rate Loan ________________.

(b)The aggregate outstanding principal balance of the above Loan is $_________________.

(c)As applicable, the last day of the current Interest Period for such Loan is __________________.

(d)The principal amount of such Loan to be [converted or continued] is $_________________.

(e)Such principal amount should be converted/continued into the following type of Loan:

Base Rate Loan ____________________;

Eurodollar Rate Loan ________________.

(f)The requested effective date of the [conversion/continuation] of such Loan is _____________________.

(g)As applicable, the requested Interest Period applicable to the new Loan is _____________________.

2.No Default or Event of Default under the Credit Agreement has occurred and is continuing or will be caused by the advance requested hereby.

3.The representations and warranties set forth in Section 5 of the Credit Agreement are true and correct as if made on the date hereof (except for such representations and warranties as expressly relate to a prior date).

Capitalized terms used herein which are not defined herein shall have the respective meanings set forth in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned officer of the Company has executed this Notice of Conversion/Continuation this ___ day of __________, _____.

THE CHARLES SCHWAB CORPORATION,
By:
Name:
Title:
	[must be signed by an Authorized Officer]

NYDOCS02/1089152 2

EXHIBIT D

COMMITMENT AND TERMINATION DATE EXTENSION REQUEST

[Bank name and address] [Date]

Reference is made to that certain Credit Agreement (364-Day Commitment) dated as of June 3, 2016 ("Credit Agreement") entered into by The Charles Schwab Corporation ("Borrower"), Citibank, N.A., as Agent and Lenders party thereto.  Terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement.

Pursuant to Section 2.11 of the Credit Agreement, Borrower hereby requests Agent to obtain each Lender’s agreement to the extension of such Lender’s Commitment presently in effect, in the amount of $[specify amount of existing Commitment], and the Termination Date presently in effect, for an additional 364 days.

Agent’s execution of a copy of this letter in the space provided below and the transmission of such executed copy to Borrower shall constitute all Lenders’ acceptance of Borrower’s request and all Lenders’ agreement to the 364-day extension sought herein.  More specifically, upon the execution of a copy of this letter by Agent on behalf of Lenders and the transmission thereof to Borrower within 15 days after Agent’s receipt of this letter, (1) the Termination Date as defined in Section 2.11 of the Credit Agreement shall be extended 364 days and deemed changed to ___________________, and (2) all other dates appearing in the Credit Agreement that are referred to in Section 2.11 of the Credit Agreement shall correspondingly be extended 364 days.

This Commitment and Termination Date Extension Request is executed by Borrower on ________________.

BORROWER:

THE CHARLES SCHWAB CORPORATION,

a Delaware Corporation

By:

Name:

Title:

ACCEPTED AND AGREED:

Agent, on Behalf of Lenders

By:

Name:

Title:

EXHIBIT E

BORROWER’S OPINION OF COUNSEL

[Arnold & Porter LLP Letterhead]

[Date]

Citibank, N.A., as Agent

___________________________

___________________________

Re: Credit Agreement (364-Day Commitment), dated June 3, 2016, among The Charles Schwab Corporation, Citibank, N.A., as Agent and the Lenders party thereto

Ladies and Gentlemen:

This opinion is delivered at the request of The Charles Schwab Corporation to you in your capacity as Agent, on behalf of the Lenders, under the Credit Agreement (364-Day Commitment) dated as of June 3, 2016 (the "Credit Agreement") among The Charles Schwab Corporation, a Delaware corporation ("Borrower"), Citibank, N.A., as the Administrative Agent and the Lenders signatories thereto (each a "Lender" and collectively, the "Lenders").  This opinion letter speaks as of close of business on June 3, 2016 (hereafter the "operative date").

We have acted as special counsel to Borrower in connection with the Credit Agreement.  In such capacity we have examined originals, or copies represented to us by Borrower to be true copies, of the Credit Agreement; and we have obtained such certificates of such responsible officials of Borrower and of public officials as we have deemed necessary for purposes of this opinion.  We have assumed without investigation the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as photostatic copies of originals, and the accuracy and completeness of all corporate records certified to us by the Borrower to be accurate and complete.  We have further assumed that the Credit Agreement is binding upon and enforceable against the Agent and the Lenders.  As to factual matters, we have relied upon the representations and warranties contained in and made pursuant to the Credit Agreement.

Capitalized terms not otherwise defined herein have the meanings given for such terms in the Credit Agreement.  For the purpose of this opinion, "Loan Documents" as used herein means the Credit Agreement and the Notes.

Based upon the foregoing and in reliance thereon, and subject to the exceptions and qualifications set forth herein, we are of the opinion that:

1.Borrower is a corporation duly formed, validly existing, and in good standing under the laws of Delaware.

2.Borrower has all requisite corporate power and authority to execute, deliver and perform all of its obligations under the Loan Documents.

3.Each Loan Document has been duly authorized, executed and delivered by Borrower.  Each Loan Document constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such validity, binding nature or enforceability may be limited by:

(a)the effect of applicable federal or state bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other similar laws and court decisions relating to or affecting creditors’ rights generally;

(b)the effect of legal and equitable principles upon the availability of creditors’ remedies, regardless of whether considered in a proceeding in equity or at law;

(c)the effect of California judicial decisions involving statutes or principles of equity which have held that certain covenants or other provisions of agreements, including without limitation those providing for the acceleration of indebtedness due under debt instruments upon the occurrence of events therein described, are unenforceable under circumstances where it cannot be demonstrated that the enforcement of such provisions is reasonably necessary for the protection of the lender, has been undertaken in good faith under the circumstances then existing, and is commercially reasonable;

(d)the effect of Section 1670.5 of the California Civil Code, which provides that a court may refuse to enforce a contract or may limit the application thereof or any clause thereof which the court finds as a matter of law to have been unconscionable at the time it was made;

(e)the unenforceability, under certain circumstances, of provisions purporting to require the award of attorneys’ fees, expenses, or costs, where such provisions do not satisfy the requirements of California Civil Code Section 1717 etseq., or in any action where the lender is not the prevailing party;

(f)the unenforceability, under certain circumstances, of provisions waiving stated rights or unknown future rights and waiving defenses to obligations, where such waivers are contrary to applicable law or against public policy;

(g)the unenforceability, under certain circumstances, of provisions which provide for penalties, late charges, additional interest in the event of a default by the borrower or fees or costs related to such charges;

(h)the unenforceability, under certain circumstances, of provisions to the effect that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy, or that the election of some particular remedy or remedies does not preclude recourse to one or another remedy;

(i)the unenforceability of provisions prohibiting waivers of provisions of either of the Loan Documents otherwise than in writing to the extent that Section 1698 of the California Civil Code permits oral modifications that have been executed;

NYDOCS02/1089152 2

(j)limitations on the enforceability of release, contribution, exculpatory, or nonliability provisions, under federal or state securities laws, Sections 1542 and 1543 of the California Civil Code, and any other applicable statute or court decisions;

(k)limitations on the enforceability of any indemnity obligations imposed upon or undertaken by the borrower to the extent that such obligations do not satisfy the requirements of Sections 2772 etseq. of the California Civil Code and any judicial decisions thereunder; provided that the limitations and qualifications set forth in the immediately preceding sub-paragraphs (b) through (k) do not, in our opinion, render the remedies available to the Lenders under the Loan Documents inadequate for the practical realization of the primary rights and benefits reasonably expected by an institutional lender in a comparable unsecured credit facility transaction governed by California law; and

(l)the effect of Grafton Partners L.P. v. Superior Court, 36 Cal. 4th 944, 2005 WL 1831995 (Cal. 2005), in which the California Supreme Court held that predispute contractual waivers of trial by jury are invalid, as well as the effect of Section 631(d) of the California Code of Civil Procedure, which provides that a court may, in its discretion upon just terms, allow a trial by jury although there may have been a waiver of trial by jury.

The foregoing opinions are subject to the following exceptions and qualifications:

a.We have not been requested to verify and have not verified the validity, accuracy, or reasonableness of any of the factual representations contained in either or both of the Loan Documents, and we express no opinion with respect to any of such matters.

b.We are members of the bar of the State of California.  We are opining herein only concerning matters governed by the Federal laws of the United States of America, the substantive laws of the State of California, and the General Corporation Law of the State of Delaware, and only with respect to Borrower.  We express no opinion concerning the applicability to either or both of the Loan Documents, or the effect thereon, of the laws of any other jurisdiction.  Furthermore, we express no opinion with respect to choice of law or conflicts of law, and none of the opinions stated herein shall be deemed to include or refer to choice of law or conflict of law.

c.We express no opinion on any Federal or state securities laws as they may relate to either or both of the Loan Documents.

d.We express no opinion as to compliance with the usury laws of any jurisdiction.

The opinions set forth herein are given as of the operative date.  We disclaim any obligation to notify you or any other person or entity after the operative date if any change in fact and/or law should change our opinion with respect to any matters set forth herein.  This opinion letter is rendered to you in your capacity as the Agent on behalf of the Lenders under the Credit Agreement and may not be relied upon, circulated or quoted, in whole or in part, by any other person or entity (other than the Lenders and a person or entity who becomes an assignee or successor in interest of any Lender or acquires a participation from any Lender consistent with the terms of the Loan Documents) and shall not be referred to in any report or document furnished to any other person or entity without our prior written consent; provided,  however, that the foregoing shall not preclude any Lender from describing or otherwise disclosing the

NYDOCS02/1089152 3

existence or contents of this letter to (i) any bank regulatory authority having jurisdiction over such Lender, as required by such authority, (ii) a person or entity who, in good-faith discussions between such Lender and such person or entity, is proposed to become an assignee or successor in interest of such Lender or to acquire a participation from the Bank consistent with the terms of the Loan Documents, and (iii) counsel to the Agent and the Lenders.

Very truly yours,

ARNOLD & PORTER LLP

By:

NYDOCS02/1089152 4

EXHIBIT F

FORM OF ASSIGNMENT AND ACCEPTANCE

To:CITIBANK, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement (364-Day Commitment) dated as of June 3, 2016 between THE CHARLES SCHWAB CORPORATION, a Delaware corporation ("Borrower"), Lenders from time to time party thereto, and CITIBANK, N.A., as Administrative Agent (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement", the terms defined therein being used herein as therein defined).

1.We hereby give you notice of, and request your consent to, the assignment by _______________________ (the "Assignor") to __________________ (the "Assignee") of _________% of the right, title and interest of the Assignor in and to the Loan Documents, including, without limitation, the right, title and interest of the Assignor in and to the Commitment of the Assignor, and all outstanding Loans made by the Assignor.  Before giving effect to such assignment:

(a)the aggregate amount of the Assignor's Commitment is $_______________.

(b)the aggregate principal amount of its outstanding Loans is $_____________.

2.The Assignee hereby represents and warrants that it has complied with the requirements of Section 10.8 of the Agreement in connection with this assignment and acknowledges and agrees that:  (a) other than the representation and warranty that it is the legal and beneficial owner of the Pro Rata Share being assigned hereby free and clear of any adverse claim, the Assignor has made no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the execution, legality, validity, enforceability, genuineness or sufficiency of the Agreement of any other Loan Document; (b) the Assignor had made no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance by Borrower of the Obligations; (c) it has received a copy of the Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.2 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (d) it will independently and without reliance upon Administrative Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; (e) it appoints and authorizes Administrative Agent to take such action and to exercise such powers under the Agreement and the other Loan Documents as are delegated to Administrative Agent by the Agreement and such other Loan Documents; and (f) it will perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Lender.

3.The Assignee agrees that, upon receiving your consent to such assignment and form and after _______________, the Assignee will be bound by the terms of the Loan Documents, with respect to the interest in the Loan Documents assigned to it as specified above, as fully and to the same extent as if the Assignee were a Lender originally holding such interest in the Loan Documents.

4.The following administrative details apply to the Assignee:

(a)Credit Contact:

Assignee name:

Address:

Attention:

Telephone:

Telecopier:

(b)Operations Contract:

Assignee name:

Address:

Attention:

Telephone:

Telecopier:

(c)Lending Office:

Assignee name:

Address:

(d)Payment Instructions:

Assignee name:

ABA No.:

Account No.:

Attention:

Reference:

NYDOCS02/1089152 2

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance to be executed by their respective duly authorized officials, officers or agents as of the date first above mentioned.

Very truly yours,

[ASSIGNOR]

By:

Name:

Title:

[ASSIGNEE]

By:

Name:

Title:

We hereby consent to the

foregoing assignment.

THE CHARLES SCHWAB CORPORATION,

as Borrower

By:

Name:

Title:

CITIBANK, N.A.,

as Administrative Agent

By:

Name:

Title:

NYDOCS02/1089152 3

EX-12.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 12.1

Computation of Ratio of Earnings to Fixed Charges and

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends and Other

(Dollar Amounts in Millions)

(Unaudited)

	Six Months
	Ended
	June 30, 2016				2015		2014		2013		2012		2011
Earnings before taxes on earnings		$	1,375	$	2,279	$	2,115	$	1,705	$	1,450	$	1,392
Fixed charges
Interest expense:
Bank deposits			16		29		30		31		42		62
Payables to brokerage clients			1		2		2		3		3		3
Short-term borrowings			2		-		-		-		-		-
Long-term debt			52		92		73		69		103		108
Other			9		9		(3)		2		2		2
Total			80		132		102		105		150		175
Interest portion of rental expense			43		77		71		69		68		62
Total fixed charges (A)			123		209		173		174		218		237
Earnings before taxes on earnings and fixed charges (B)		$	1,498	$	2,488	$	2,288	$	1,879	$	1,668	$	1,629
Ratio of earnings to fixed charges (B) ÷ (A) (1)			12.2		11.9		13.2		10.8		7.7		6.9
Ratio of earnings to fixed charges, excluding
bank deposits and payables to brokerage
clients interest expense(2)			14.0		13.8		16.0		13.2		9.4		9.1
Total fixed charges		$	123	$	209	$	173	$	174	$	218	$	237
Preferred stock dividends and other (3)			105		131		96		97		70		-
Total fixed charges and preferred stock dividends
and other (C)		$	228	$	340	$	269	$	271	$	288	$	237
Ratio of earnings to fixed charges and preferred
stock dividends and other (B) ÷ (C) (1)			6.6		7.3		8.5		6.9		5.8		6.9
Ratio of earnings to fixed charges and preferred stock
dividends and other, excluding bank deposits and
payables to brokerage clients interest expense (2)			7.0		8.0		9.5		7.8		6.7		9.1

(1)	The ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends and other are calculated in accordance with SEC requirements. For such purposes, “earnings” consist of earnings before taxes on earnings and fixed charges. “Fixed charges” consist of interest expense as listed above, and one-third of property, equipment and software rental expense, which is estimated to be representative of the interest factor.
(2)	Because interest expense incurred in connection with both bank deposits and payables to brokerage clients is completely offset by interest revenue on related investments and loans, the Company considers such interest to be an operating expense. Accordingly, the ratio of earnings to fixed charges, excluding bank deposits and payables to brokerage clients interest expense, and the ratio of earnings to fixed charges and preferred stock dividends and other, excluding bank deposits and payables to brokerage clients interest expense, reflect the elimination of such interest expense as a fixed charge.
(3)	The preferred stock dividend and other amounts represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock and undistributed earnings and dividends allocated to non-vested restricted stock units.

EX-31.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a‑14(a)/15d‑14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter W. Bettinger II, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2016	/s/ Walter W. Bettinger II
		Walter W. Bettinger II
		President and Chief Executive Officer

EX-31.2

THE CHARLES SCHWAB CORPORATION

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a‑14(a)/15d‑14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph R. Martinetto, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2016	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Senior Executive Vice President and Chief Financial Officer

EX-32.1

THE CHARLES SCHWAB CORPORATION

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2016(the Report), I, Walter W. Bettinger II, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

/s/ Walter W. Bettinger II	Date:	August 5, 2016
Walter W. Bettinger II
President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

THE CHARLES SCHWAB CORPORATION

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2016(the Report), I, Joseph R. Martinetto, Senior Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

/s/ Joseph R. Martinetto	Date:	August 5, 2016
Joseph R. Martinetto
Senior Executive Vice President and
Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 27, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	SCHW
Entity Registrant Name	SCHWAB CHARLES CORP
Entity Central Index Key	0000316709
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,323,003,955

XML

Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Revenues
Asset management and administration fees	[1]	$ 757	$ 670	$ 1,456	$ 1,314
Interest revenue		840	645	1,650	1,262
Interest expense		(42)	(33)	(80)	(62)
Net interest revenue		798	612	1,570	1,200
Trading revenue		201	203	433	430
Other		70	79	133	142
Provision for loan losses		2	2		6
Total net revenues		1,828	1,566	3,592	3,092
Expenses Excluding Interest
Compensation and benefits		602	540	1,228	1,121
Professional services		125	112	241	226
Occupancy and equipment		101	85	199	168
Advertising and market development		70	62	140	131
Communications		62	59	122	117
Depreciation and amortization		57	55	113	109
Other		91	86	174	169
Total expenses excluding interest		1,108	999	2,217	2,041
Income before taxes on income		720	567	1,375	1,051
Taxes on income		268	214	511	396
Net Income		452	353	864	655
Preferred stock dividends and other	[2]	46	23	66	34
Net Income Available to Common Stockholders		$ 406	$ 330	$ 798	$ 621
Weighted-Average Common Shares Outstanding: Basic		1,322	1,314	1,322	1,313
Weighted-Average Common Shares Outstanding: Diluted		1,333	1,326	1,331	1,325
Earnings Per Common Share: Basic		$ 0.31	$ 0.25	$ 0.60	$ 0.47
Earnings Per Common Share: Diluted		0.30	0.25	0.60	0.47
Dividends Declared Per Common Share		$ 0.07	$ 0.06	$ 0.13	$ 0.12

[1] Includes fee waivers of $55 and $168 during the second quarters of 2016 and 2015, respectively and $152 and $353 during the first halves of 2016 and 2015, respectively, relating to Schwab-sponsored money market funds.

[2] Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

XML

Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schwab Funds money market funds [Member]
Fee waivers	$ 55	$ 168	$ 152	$ 353

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 452	$ 353	$ 864	$ 655
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	168	(91)	189	16
Other reclassifications included in other revenue	(3)		(3)
Other			1
Other comprehensive income (loss), before tax	165	(91)	187	16
Income tax effect	(62)	34	(70)	(7)
Other comprehensive income (loss), net of tax	103	(57)	117	9
Comprehensive Income	$ 555	$ 296	$ 981	$ 664

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	[1]
Assets
Cash and cash equivalents	$ 12,976	$ 11,978
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $7,270 at June 30, 2016 and $8,088 at December 31, 2015)	18,593	19,598
Receivables from brokers, dealers, and clearing organizations	1,008	582
Receivables from brokerage clients — net	16,822	17,313
Other securities owned — at fair value	525	533
Securities available for sale	74,228	65,646
Securities held to maturity (fair value — $57,195 at June 30, 2016 and $50,088 at December 31, 2015)	55,307	50,007
Bank loans — net	14,670	14,334
Equipment, office facilities, and property — net	1,242	1,145
Goodwill	1,227	1,227
Intangible assets — net	163	181
Other assets	1,291	1,161
Total assets	198,052	183,705
Liabilities and Stockholders' Equity
Bank deposits	137,295	129,502
Payables to brokers, dealers, and clearing organizations	3,392	2,588
Payables to brokerage clients	32,679	33,185
Accrued expenses and other liabilities	1,820	2,151
Short-term borrowings	5,000
Long-term debt	2,876	2,877
Total liabilities	183,062	170,303
Stockholders' equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $2,235 at June 30, 2016 and $1,485 at December 31, 2015	2,189	1,459
Common stock — 3 billion shares authorized; $.01 par value per share; 1,487,543,446 shares issued	15	15
Additional paid-in capital	4,223	4,152
Retained earnings	11,882	11,253
Treasury stock, at cost — 164,670,326 shares at June 30, 2016 and 167,205,881 shares at December 31, 2015	(3,302)	(3,343)
Accumulated other comprehensive income	(17)	(134)
Total stockholders' equity	14,990	13,402
Total liabilities and stockholders' equity	$ 198,052	$ 183,705

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$ 7,270	$ 8,088
Securities held to maturity, Fair Value	$ 57,195	$ 50,088
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, aggregate liquidation preference	$ 2,235	$ 1,485
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	1,487,543,446	1,487,543,446
Treasury stock, shares	164,670,326	167,205,881

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016		Jun. 30, 2015
Cash Flows from Operating Activities
Net income	$ 864		$ 655
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses			(6)
Stock-based compensation	75		69
Depreciation and amortization	113		109
Premium amortization, net, on securities available for sale and securities held to maturity	107		77
Other	17		3
Net change in:
Cash and investments segregated and on deposit for regulatory purposes	1,005		2,897
Receivables from brokers, dealers, and clearing organizations	(431)		(445)
Receivables from brokerage clients	486		(954)
Other securities owned	8		(95)
Other assets	(37)		(33)
Payables to brokers, dealers, and clearing organizations	153		269
Payables to brokerage clients	(506)		(2,825)
Accrued expenses and other liabilities	(331)		(458)
Net cash provided by (used for) operating activities	1,523		(737)
Cash Flows from Investing Activities
Purchases of securities available for sale	(16,598)		(12,423)
Proceeds from sales of securities available for sale	4,074		594
Principal payments on securities available for sale	4,763		3,404
Purchases of securities held to maturity	(7,582)		(5,070)
Principal payments on securities held to maturity	2,198		1,688
Net increase in bank loans	(362)		(632)
Purchase of equipment, office facilities, and property	(195)		(125)
Other investing activities	(132)		(4)
Net cash used for investing activities	(13,834)		(12,568)
Cash Flows from Financing Activities
Net change in bank deposits	7,793		10,096
Proceeds from short-term borrowings	5,000
Issuance of long-term debt			998
Repayment of long-term debt	(3)		(4)
Net proceeds from preferred stock offerings	725
Dividends paid	(230)		(188)
Proceeds from stock options exercised and other	19		50
Other financing activities	5		7
Net cash provided by financing activities	13,309		10,959
Increase (Decrease) in Cash and Cash Equivalents	998		(2,346)
Cash and Cash Equivalents at Beginning of Period	11,978	[1]	11,363
Cash and Cash Equivalents at End of Period	12,976		9,017
Cash paid during the period for:
Interest	74		53
Income taxes	505		386
Non-cash investing activity:
Securities purchased during the period but settled after period end	$ 651		$ 245

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Introduction and Basis of Presentation

6 Months Ended

Jun. 30, 2016

Introduction and Basis of Presentation [Abstract]

Introduction and Basis of Presentation

1.Introduction and Basis of Presentation

CSC is a savings and loan holding company engaged, through its subsidiaries, in wealth management, securities brokerage, banking, money management, custody, and financial advisory services. Schwab is a securities broker-dealer with over 330 domestic branch offices in 46 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, England. In addition, Schwab serves clients in Hong Kong through one of CSC’s subsidiaries. Other subsidiaries include Schwab Bank, a federal savings bank, and CSIM, the investment advisor for Schwab’s proprietary mutual funds, which are referred to as the Schwab Funds®, and for Schwab’s exchange-traded funds, which are referred to as the Schwab ETFs™.

The accompanying unaudited condensed consolidated financial statements include CSC and its majority-owned subsidiaries (collectively referred to as the Company). Intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements. Certain estimates relate to other-than-temporary impairment (OTTI) of securities available for sale and securities held to maturity, valuation of goodwill, allowance for loan losses, and legal and regulatory reserves. Actual results may differ from those estimates.

These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These adjustments are of a normal recurring nature. The Company’s results for any interim period are not necessarily indicative of results for a full year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The Company’s significant accounting policies are included in “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There have been no significant changes to these accounting policies during the first half of 2016.

Principles of Consolidation

The Company evaluates for consolidation all entities in which it has financial interests, except for money market funds which are specifically excluded from consolidation guidance. For an entity subject to consolidation, the Company evaluates whether the Company’s interest in the entity constitutes a controlling financial interest under either the variable interest entity (VIE) model or a voting interest entity (VOE) model. Based upon the Company’s assessments, the Company is not deemed to have a controlling financial interest in and, therefore, is not required to consolidate any VIEs. See “Notes – 5. Variable Interest Entities” for further information about VIEs. The Company consolidates all VOEs in which it has majority voting interests.

For investments in entities in which the Company does not have a controlling financial interest, the Company accounts for those investments under the equity method of accounting when the Company has the ability to exercise significant influence over operating and financing decisions of the entity. Investments in entities for which the Company does not have the ability to exercise significant influence are generally carried at cost. Both equity method and cost method investments are included in other assets on the condensed consolidated balance sheets.

XML

New Accounting Standards

6 Months Ended

Jun. 30, 2016

New Accounting Standards [Abstract]

New Accounting Standards

2.New Accounting Standards

Adoption of New Accounting Standards

On January 1, 2016, the Company adopted ASU 2015-02, “Consolidation (Topic 810),” which amends the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new guidance is applicable to all entities but provides an exception for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 did not have an impact on the Company’s consolidated financial statements or EPS as the new guidance did not change any existing consolidation conclusions reached in accordance with the previous guidance.

On January 1, 2016, the Company adopted ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30).” ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Previously, debt issuance costs were presented as a separate asset on the balance sheet. The guidance in ASU 2015-03 has been applied on a retrospective basis which requires the adjustment of all prior period consolidated balance sheets. The effect of the adoption on the Company’s December 31, 2015 consolidated balance sheet was to decrease other assets and total assets by $13 million and to decrease long-term debt and total liabilities by $13 million. A similar amount was also reclassified in the prior year. The Company considers the reclassifications immaterial.

On January 1, 2016, the Company also adopted ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40),” which provides new guidance that clarifies customer’s accounting for fees paid in a cloud computing arrangement. Under the new guidance, if a cloud computing arrangement includes a software license, the customer shall account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the cloud computing arrangement does not include a software license, the customer shall account for the arrangement as a service contract. The guidance applies to all new arrangements entered into after January 1, 2016. The adoption of ASU 2015-05 did not have an impact on the Company’s financial statements or EPS.

New Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which provides new guidance on revenue recognition. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts the timing of the related transfer of goods or performance of services at an amount that reflects the expected consideration. The new guidance will become effective January 1, 2018, with early adoption permitted as of January 1, 2017. Entities may elect either full or modified retrospective transition. Full retrospective transition will require a cumulative effect adjustment to retained earnings as of the earliest comparative period presented. Modified retrospective transition will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10),” which will become effective January 1, 2018. This new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions of the guidance include (i) most equity investments are to be measured at fair value with changes in fair value recognized in net income, except for those accounted for under the equity method or those that do not have readily determinable fair values for which a practical expedient can be elected, (ii) requires the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial instrument on the balance sheet or in the accompanying notes. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” which amends the accounting for leases by lessees and lessors. The primary change as a result of the new standard is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances and expanded lease disclosures. ASU 2016-02 will become effective January 1, 2019, with early adoption permitted, and requires entities to apply the new guidance using a modified retrospective transition. Modified retrospective transition requires entities to apply the new guidance as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard. Certain transition reliefs are permitted if elected by the entity. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In March 2016, the FASB issued ASU 2016-09, “Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)” which amends certain aspects of how an entity accounts for share-based payments to employees. The new guidance requires entities to recognize the income tax effects of share-based awards in the income statement when the awards vest or are settled, rather than recording such effects in additional paid-in capital. Entities will also be permitted to elect to account for forfeitures of share-based payments as they occur or continue with current practice which requires estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change. ASU 2016-09 will become effective January 1, 2017, with early adoption permitted. The change in recognition of income tax effects of share-based awards will be applied prospectively. If an entity elects to account for forfeitures of share-based payments as they occur, such change will be applied using a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which provides new guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and held to maturity debt securities. The new guidance will require estimating expected credit losses (ECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions and reasonable forecasts. The initial estimate of and the subsequent changes in ECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. The new guidance also amends the OTTI model for available for sale debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. ASU 2016-13 will become effective January 1, 2020, with early adoption permitted as of January 1, 2019. The new guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for available for sale debt securities for which an OTTI had been recognized before the effective date. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

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Securities Available for Sale and Securities Held to Maturity

6 Months Ended

Jun. 30, 2016

Securities Available for Sale and Securities Held to Maturity [Abstract]

Securities Available for Sale and Securities Held to Maturity

3.Securities Available for Sale and Securities Held to Maturity

The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale and securities held to maturity are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
June 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	30,942	$	251	$	60	$	31,133
Asset-backed securities		22,117		11		372		21,756
Corporate debt securities		10,095		60		8		10,147
U.S. Treasury securities		4,966		52		-		5,018
U.S. agency notes		2,972		1		-		2,973
Certificates of deposit		2,180		1		3		2,178
U.S. state and municipal securities		613		38		-		651
Commercial paper		213		-		-		213
Non-agency commercial mortgage-backed securities		158		1		-		159
Total securities available for sale	$	74,256	$	415	$	443	$	74,228
Securities held to maturity:
U.S. agency mortgage-backed securities	$	54,087	$	1,829	$	-	$	55,916
Non-agency commercial mortgage-backed securities		998		46		-		1,044
U.S. Treasury securities		222		13		-		235
Total securities held to maturity	$	55,307	$	1,888	$	-	$	57,195

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	22,014	$	183	$	48	$	22,149
Asset-backed securities		21,784		7		306		21,485
Corporate debt securities		10,764		14		31		10,747
U.S. Treasury securities		5,719		2		17		5,704
U.S. agency notes		3,177		-		27		3,150
Certificates of deposit		1,685		1		3		1,683
U.S. state and municipal securities		414		10		-		424
Non-agency commercial mortgage-backed securities		298		1		-		299
Other securities		5		-		-		5
Total securities available for sale	$	65,860	$	218	$	432	$	65,646
Securities held to maturity:
U.S. agency mortgage-backed securities	$	48,785	$	391	$	293	$	48,883
Non-agency commercial mortgage-backed securities		999		6		20		985
U.S. Treasury securities		223		-		3		220
Total securities held to maturity	$	50,007	$	397	$	316	$	50,088

Schwab Bank pledges securities issued by federal agencies to secure certain trust deposits. The fair value of these pledged securities was $170 million atJune 30, 2016.

A summary of securities with unrealized losses, aggregated by category and period of continuous unrealized loss, is as follows:

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,613	$	52	$	1,420	$	8	$	10,033	$	60
Asset-backed securities		10,733		261		3,789		111		14,522		372
Corporate debt securities		1,452		3		1,471		5		2,923		8
Certificates of deposit		843		3		299		-		1,142		3
Total securities with unrealized losses (1)	$	21,641	$	319	$	6,979	$	124	$	28,620	$	443

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,541	$	47	$	813	$	1	$	9,354	$	48
Asset-backed securities		17,127		240		2,743		66		19,870		306
Corporate debt securities		5,433		25		942		6		6,375		31
U.S. Treasury securities		5,010		17		-		-		5,010		17
U.S. agency notes		1,281		10		1,547		17		2,828		27
Certificates of deposit		773		2		599		1		1,372		3
Total	$	38,165	$	341	$	6,644	$	91	$	44,809	$	432
Securities held to maturity:
U.S. agency mortgage-backed securities	$	24,219	$	253	$	1,842	$	40	$	26,061	$	293
Non-agency commercial mortgage-backed
securities		729		20		-		-		729		20
U.S. Treasury securities		220		3		-		-		220		3
Total	$	25,168	$	276	$	1,842	$	40	$	27,010	$	316
Total securities with unrealized losses (2)	$	63,333	$	617	$	8,486	$	131	$	71,819	$	748

(1)	The number of investment positions with unrealized losses totaled322 for securities available for sale.
(2)	The number of investment positions with unrealized losses totaled 409 for securities available for sale and286 for securities held to maturity.

Management evaluates whether securities available for sale and securities held to maturity are OTTI on a quarterly basis as described in “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The maturities of securities available for sale and securities held to maturity are as follows:

			After 1 year		After 5 years
	Within		through		through		After
June 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	3	$	3,072	$	15,661	$	12,397	$	31,133
Asset-backed securities		-		8,787		4,176		8,793		21,756
Corporate debt securities		2,601		7,546		-		-		10,147
U.S. Treasury securities		-		4,809		209		-		5,018
U.S. agency notes		-		2,973		-		-		2,973
Certificates of deposit		786		1,392		-		-		2,178
U.S. state and municipal securities		-		-		29		622		651
Commercial paper		213		-		-		-		213
Non-agency commercial mortgage-backed
securities		-		-		-		159		159
Total fair value	$	3,603	$	28,579	$	20,075	$	21,971	$	74,228
Total amortized cost	$	3,596	$	28,417	$	20,106	$	22,137	$	74,256
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	3,399	$	21,564	$	30,953	$	55,916
Non-agency commercial mortgage-backed
securities (1)		-		-		378		666		1,044
U.S. Treasury securities		-		-		235		-		235
Total fair value	$	-	$	3,399	$	22,177	$	31,619	$	57,195
Total amortized cost	$	-	$	3,232	$	21,116	$	30,959	$	55,307

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and gross realized gains and losses from sales of securities available for sale are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Proceeds	$	3,774	$	444	$	4,074	$	594
Gross realized gains		3		1		3		1
Gross realized losses		-		1		-		1

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Bank Loans and Related Allowance for Loan Losses

6 Months Ended

Jun. 30, 2016

Bank Loans and Related Allowance for Loan Losses [Abstract]

Bank Loans and Related Allowance for Loan Losses

4.Bank Loans and Related Allowance for Loan Losses

The composition of bank loans and delinquency analysis by loan segment is as follows:

									>90 days past			Total past due					Allowance		Total
			30-59 days			60-89 days			due and other			and other			Total		for loan		bank
June 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,472		$	13		$	1		$	16		$	30	$	8,502	$	20	$	8,482
Home equity loans and lines of credit		2,564			5			1			12			18		2,582		10		2,572
Pledged asset lines		3,530			-			1			-			1		3,531		-		3,531
Other		86			-			-			-			-		86		1		85
Total bank loans	$	14,652		$	18		$	3		$	28		$	49	$	14,701	$	31	$	14,670
December 31, 2015
Residential real estate mortgages	$	8,304		$	11		$	1		$	18		$	30	$	8,334	$	20	$	8,314
Home equity loans and lines of credit		2,720			4			1			10			15		2,735		11		2,724
Pledged asset lines		3,228			3			1			-			4		3,232		-		3,232
Other		64			-			-			-			-		64		-		64
Total bank loans	$	14,316		$	18		$	3		$	28		$	49	$	14,365	$	31	$	14,334

First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $79 million and $80 million at June 30, 2016 and December 31, 2015, respectively. The Company had commitments to extend credit related to unused HELOCs, PALs, and other lines of credit, which totaled $7.8 billion and$7.4 billion at June 30, 2016 and December 31, 2015, respectively. The Company had commitments to purchase First Mortgage loans of $569 million and $260 million at June 30, 2016 and December 31, 2015, respectively. All PALs were fully collateralized by securities with fair values in excess of borrowings at June 30, 2016 and December 31, 2015.

Schwab Bank provides a co-branded loan origination program for Schwab Bank clients (the Program) with Quicken Loans, Inc. (Quicken Loans®). Pursuant to the Program, Quicken Loans originates and services First Mortgages and HELOCs for Schwab Bank clients. Under the Program, Schwab Bank purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. Schwab Bank purchased First Mortgages of$691 million and$542 million during the second quarters of 2016 and 2015, respectively, and $1.2 billion and $982 million during the first halves of 2016 and 2015, respectively. Schwab purchased HELOCs with commitments of $112 million and $165 million during the second quarters of 2016 and 2015, respectively, and $222 million and $282 million during the first halves of 2016 and 2015, respectively.

Credit Quality

Changes in the allowance for loan losses were as follows:

Three Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit			Total
Balance at beginning of period	$	21		$	11	$	1	$	33	$	26		$	12	$	38
Charge-offs		-			-		-		-		-			(1)		(1)
Recoveries		-			-		-		-		-			1		1
Provision for loan losses		(1)			(1)		-		(2)		(3)			1		(2)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Six Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit				Total
Balance at beginning of period	$	20		$	11	$	-	$	31	$	29		$	13	$	42
Charge-offs		(1)			-		-		(1)		-			(2)		(2)
Recoveries		1			-		-		1		-			2		2
Provision for loan losses		-			(1)		1		-		(6)			-		(6)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Substantially allof the bank loans were collectively evaluated for impairment at June 30, 2016 and December 31, 2015. There were no loans accruing interest that were contractually 90 days or more past due at June 30, 2016 or December 31, 2015. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $35 million and $36 million at June 30, 2016 and December 31, 2015, respectively. Impaired assets, which include nonaccrual loans, other real estate owned and troubled debt restructurings, totaled $48 million and $50 million at June 30, 2016 and December 31, 2015, respectively. Troubled debt restructurings were  not material at June 30, 2016 or December 31, 2015.

In addition to monitoring delinquency, the Company monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the year of origination, borrower Origination FICO, Updated FICO, Origination LTV, and Estimated Current LTV. Borrowers’ FICO scores are provided by an independent third-party credit reporting service and were last updated in June 2016. The Origination LTV and Estimated Current LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is estimated by reference to a home price appreciation index.

As of June 30, 2016 and December 31, 2015,48% of the Company’s HELOC and First Mortgage portfolio was concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

			Weighted				Percent of
			Average		Utilization		Loans on
June 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,740		776	N/A			0.03	%
>70% – <90%		703		766	N/A			0.23	%
>90% – <100%		35		743	N/A			1.40	%
>100%		24		708	N/A			12.44	%
Total	$	8,502		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,187		773	36	%		0.13	%
>70% – <90%		318		759	49	%		0.30	%
>90% – <100%		44		753	57	%		1.01	%
>100%		33		738	68	%		2.01	%
Total	$	2,582		770	38	%		0.19	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,531		762	48	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
June 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,171	$	1,875
2012		1,385		114
2013		2,126		212
2014		874		174
2015		1,744		159
2016		1,202		48
Total	$	8,502	$	2,582
Origination FICO
<620	$	9	$	1
620 – 679		84		14
680 – 739		1,391		470
>740		7,018		2,097
Total	$	8,502	$	2,582
Origination LTV
<70%	$	6,178	$	1,771
>70% – <90%		2,312		796
>90% – <100%		12		15
Total	$	8,502	$	2,582

			Weighted				Percent of
			Average		Utilization		Loans on
December 31, 2015	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,508		774	N/A			0.03	%
>70% – <90%		759		764	N/A			0.31	%
>90% – <100%		37		736	N/A			5.54	%
>100%		30		713	N/A			7.72	%
Total	$	8,334		773	N/A			0.11	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,277		772	37	%		0.09	%
>70% – <90%		373		760	50	%		0.48	%
>90% – <100%		48		748	63	%		1.02	%
>100%		37		739	67	%		1.79	%
Total	$	2,735		770	39	%		0.18	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,232		764	49	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
December 31, 2015	mortgages		lines of credit
Year of origination
Pre-2012	$	1,306	$	2,048
2012		1,644		125
2013		2,450		232
2014		1,021		188
2015		1,913		142
Total	$	8,334	$	2,735
Origination FICO
<620	$	10	$	-
620 – 679		88		16
680 – 739		1,381		498
>740		6,855		2,221
Total	$	8,334	$	2,735
Origination LTV
<70%	$	5,913	$	1,858
>70% – <90%		2,408		860
>90% – <100%		13		17
Total	$	8,334	$	2,735

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Variable Interest Entities

6 Months Ended

Jun. 30, 2016

Variable Interest Entities [Abstract]

Variable Interest Entities

5.Variable Interest Entities

A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates all entities in which it has a financial interest to determine if the entity is a VIE and if so, whether the Company is the primary beneficiary. See the “Principles of Consolidation” section of “Notes – 1. Introduction and Basis of Presentation” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for discussion of the Company’s evaluations of VIEs and whether it is deemed to be the primary beneficiary of any VIEs in which it holds an interest. The Company was not the primary beneficiary of, and therefore, not required to consolidate any VIEs at June 30, 2016 and December 31, 2015.

Community Reinvestment Act investments

Schwab Bank is subject to the Community Reinvestment Act (CRA). The CRA is intended to encourage banks to help meet the credit needs of the communities in which they operate, including low and moderate income neighborhoods, consistent with safe and sound banking operations. As part of Schwab Bank’s community reinvestment initiatives, Schwab Bank invests with other institutional investors in funds that make equity investments in multifamily affordable housing properties. Schwab Bank receives tax credits and other tax benefits for these investments. Schwab Bank’s Low-Income Housing Tax Credit (LIHTC) investments are accounted for using the proportional amortization method. Amortization, tax credits, and other tax benefits recognized in relation to LIHTC investments are included in taxes on income on the condensed consolidated statements of income. As of June 30, 2016 and December 31, 2015, the majority of the Company’s VIEs related to Schwab Bank’s LIHTC investments.

The carrying value of the LIHTC investments was $138 million and $104 million as of June 30, 2016 and December 31, 2015, respectively, which is included in other assets on the condensed consolidated balance sheets. Schwab Bank recorded liabilities of $106 million and $84 million for unfunded commitments related to LIHTC investments at June 30, 2016 and December 31, 2015, respectively, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. Schwab Bank’s funding of these remaining commitments is dependent upon the occurrence of certain conditions and Schwab Bank expects to pay substantially all of these commitments between 2016 and 2019.

Aggregate assets, liabilities and maximum exposure to loss

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

		June 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments (1)	$	138	$	106	$	138	$	104	$	84	$	104
Other CRA investments (2)		57		-		65		57		-		66
Total	$	195	$	106	$	203	$	161	$	84	$	170

(1)	LIHTC investments are recorded using the proportional amortization method.
(2)	Other CRA investments are recorded using either the cost method or the equity method. Aggregate assets are included in either other assets or bank loans – net on the condensed consolidated balance sheets.

The Company’s maximum exposure to loss would result from the loss of the investments, including any committed amounts. During the six months ended June 30, 2016 and 2015, the Company did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

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Bank Deposits

6 Months Ended

Jun. 30, 2016

Bank Deposits [Abstract]

Bank Deposits

6.Bank Deposits

Bank deposits consist of interest-bearing and non-interest-bearing deposits as follows:

	June 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	116,024	$	108,137
Checking		12,685		12,822
Savings and other		8,052		7,896
Total interest-bearing deposits		136,761		128,855
Non-interest-bearing deposits		534		647
Total bank deposits	$	137,295	$	129,502

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Borrowings

6 Months Ended

Jun. 30, 2016

Borrowings [Abstract]

Borrowings

7.Borrowings

Long-term debt, including unamortized debt discounts and premiums, and debt issuance costs, where applicable, consists of the following:

	June 30,		December 31,
	2016		2015
Senior Notes (1)	$	2,555	$	2,553
Senior Medium-Term Notes (1)		249		249
Finance lease obligation		72		75
Total long-term debt	$	2,876	$	2,877

(1) Balances as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

Annual maturities on long-term debt outstanding at June 30, 2016 are as follows:

2016	$	4
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,903
Unamortized discount, net		(15)
Debt issuance costs		(12)
Total long-term debt	$	2,876

Short-term borrowings: Schwab Bank maintains a secured credit facility with the Federal Home Loan Bank of San Francisco. At June 30, 2016, $5.0 billion was outstanding under this facility with an additional $3.9 billion available based on the loans currently pledged there. As a condition of the borrowings, Schwab Bank purchased $118 million of FHLB stock, recorded at par, in the first half of 2016, with the investment recorded in other assets on the condensed consolidated balance sheets.No funds were drawn under this facility as of December 31, 2015. Amounts outstanding under this facility are included in short-term borrowings on the condensed consolidated balance sheets.

CSC has authorization from its Board of Directors to issue Commercial Paper Notes not to exceed $1.5 billion. Management has set a current limit for the commercial paper program not to exceed the amount of the committed, unsecured credit facility, which was $750 million at June 30, 2016. The maturities of the Commercial Paper Notes may vary, but are not to exceed 270 days from the date of issue. The commercial paper is not redeemable prior to maturity and cannot be voluntarily prepaid. The proceeds of the commercial paper program are to be used for general corporate purposes. CSC had no borrowings of Commercial Paper Notes outstanding at June 30, 2016 and December 31, 2015.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies [Abstract]

Commitments and Contingencies

8.Commitments and Contingencies

Guarantees and indemnifications: The Company has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. The Company partially satisfies the margin requirements by arranging unsecured standby LOCs, in favor of the Options Clearing Corporation, which are issued by several banks. At June 30, 2016, the aggregate face amount of these LOCs totaled $310million. There were no funds drawn under any of these LOCs at June 30, 2016. In connection with its securities lending activities, the Company is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees.

Legal contingencies: The Company is subject to claims and lawsuits in the ordinary course of business, including arbitrations, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies.

The Company believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are certain matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter.

With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results or cash flows of the Company. However, predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; potential opportunities for settlement and the status of any settlement discussions; and potential insurance coverage and indemnification. Itmay not be possible to reasonably estimate potential liability, if any, or a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Total Bond Market Fund Litigation: On August 28, 2008, a class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of investors in the Schwab Total Bond Market Fund™. The lawsuit, which alleged violations of state law and federal securities law in connection with the fund’s investment policy, named CSIM, Schwab Investments (registrant and issuer of the fund’s shares) and certain current and former fund trustees as defendants. Allegations include that the fund improperly deviated from its stated investment objectives by investing in collateralized mortgage obligations (CMOs) and investing more than 25% of fund assets in CMOs and mortgage-backed securities without obtaining a shareholder vote. Plaintiff seeks unspecified compensatory and rescission damages, unspecified equitable and injunctive relief, costs and attorneys’ fees. Plaintiff’s federal securities law claim and certain of plaintiff’s state law claims were dismissed. On August 8, 2011, the court dismissed plaintiff’s remaining claims with prejudice. Plaintiff appealed to the Ninth Circuit, which issued a ruling on March 9, 2015 reversing the district court’s dismissal of the case and remanding the case for further proceedings. Plaintiff filed a fourth amended complaint on June 25, 2015, and in decisions issued October 6, 2015 and February 23, 2016, the court dismissed all claims with prejudice. Plaintiff has appealed to the Ninth Circuit, where the case is again pending.

Regulatory Matters: On April16, 2012, optionsXpress, Inc. was charged by the SEC in an administrative proceeding alleging violations of the firm’s close-out obligations under Regulation SHO (short sale delivery rules) in connection with certain customer trading activity. Following trial, in a decision issued June 7, 2013, the judge held that the firm had violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered the firm and the customer to pay disgorgement and penalties in an amount that would not be material. The Company continues to dispute the allegations and is appealing the decision.

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Offsetting Assets and Liabilities

6 Months Ended

Jun. 30, 2016

Offsetting Assets and Liabilities [Abstract]

Offsetting Assets and Liabilities

9.Offsetting Assets and Liabilities

Resale and repurchase agreements: Schwab enters into collateralized resale agreements principally with other broker-dealers, which could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. To mitigate this risk, Schwab requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of 102% of the resale price. Schwab also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. At June 30, 2016 and December 31, 2015, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $7.4 billion and $8.2 billion, respectively. Schwab utilizes the collateral provided under these resale agreements to meet obligations under broker-dealer client protection rules, which place limitations on its ability to access such segregated securities. For Schwab to repledge or sell this collateral, it would be required to deposit cash and/or securities of an equal amount into its segregated reserve bank accounts in order to meet its segregated cash and investment requirement. The Company’s resale agreements are not subject to master netting arrangements.

Securities lending: The Company loans client securities temporarily to other brokers in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities or provide additional cash collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its client obligations. The Company mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. The fair value of client securities pledged in securities lending transactions to other broker-dealers was $2.1 billion at June 30, 2016 and $1.9 billion at December 31, 2015. The Company has also pledged a portion of its securities owned in connection with securities lending transactions to other broker-dealers. Additionally, the Company borrows securities from other broker-dealers to fulfill short sales by clients and delivers cash to the lender in exchange for the securities. The fair value of these borrowed securities was $442 million at June 30, 2016 and $72 million at December 31, 2015. All of the Company’s securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers. However, the Company does not net securities lending transactions and therefore, the Company’s securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

The following table presents information about the Company’s resale agreements and securities lending activity to enable the users of the Company’s financial statements to evaluate the potential effect of rights of setoff between these recognized assets and recognized liabilities at June 30, 2016 and December 31, 2015.

			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Condensed Consolidated
		Gross		Condensed		Condensed	Balance Sheets
		Assets/	Consolidated		Consolidated		Counterparty						Net
		Liabilities	Balance Sheets		Balance Sheets		Offsetting		Collateral				Amount
June 30, 2016
Assets:
Resale agreements (1)	$	7,270	$	-	$	7,270	$	-	$	(7,270)	(2)	$	-
Securities borrowed (3)		643		-		643		(436)		(206)			1
Total	$	7,913	$	-	$	7,913	$	(436)	$	(7,476)		$	1
Liabilities:
Securities loaned (4,5)	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
Total	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
December 31, 2015
Assets:
Resale agreements (1)	$	8,088	$	-	$	8,088	$	-	$	(8,088)	(2)	$	-
Securities borrowed (3)		198		-		198		(70)		(127)			1
Total	$	8,286	$	-	$	8,286	$	(70)	$	(8,215)		$	1
Liabilities:
Securities loaned (4,5)	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173
Total	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173

(1)	Included in cash and investments segregated and on deposit for regulatory purposes in the Company’s condensed consolidated balance sheets.
(2)	Actual collateral was greater than or equal to 102% of the related assets.
(3)	Included in receivables from brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(4)	Included in payables to brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(5)	Securities loaned are predominantly comprised of equity securities with overnight and continuous remaining contractual maturities.

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Fair Values of Assets and Liabilities

6 Months Ended

Jun. 30, 2016

Fair Values of Assets and Liabilities [Abstract]

Fair Values of Assets and Liabilities

10.Fair Values of Assets and Liabilities

Assets and liabilities measured at fair value on a recurring basis

The Company’s assets and liabilities measured at fair value on a recurring basis include certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, other securities owned, and securities available for sale. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. The Company generally obtains prices from at least three independent pricing sources for assets recorded at fair value.

The Company’s primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar “to-be-issued” securities. The Company compares the prices obtained from its primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. The Company does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts.

Fair value of other financial instruments

Descriptions of the valuation methodologies and assumptions used to estimate the fair value of other financial instruments are described below. The Company’s financial instruments not recorded at fair value but for which fair value can be approximated and disclosed include:

· Cash and cash equivalents are short-term in nature and accordingly are recorded at amounts that approximate fair value.

· Cash and investments segregated and on deposit for regulatory purposes include cash and securities purchased under resale agreements. Securities purchased under resale agreements are short-term in nature and are backed by collateral that both exceeds the carrying value of the resale agreement and is highly liquid in nature. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Receivables from/payables to brokers, dealers, and clearing organizations are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Receivables from/payables to brokerage clients — net are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.

· Securities held to maturity – The fair values of securities held to maturity are obtained using an independent third-party pricing service similar to investment assets recorded at fair value as discussed above.

· Bank loans – The fair values of the Company’s First Mortgages and HELOCs are estimated based on prices of mortgage-backed securities collateralized by similar types of loans. PALs are non-purpose revolving lines of credit secured by eligible assets; accordingly, the carrying values of these loans approximate their fair values.

· Financial instruments included in other assets primarily consist of LIHTC investments, cost method investments and Federal Home Loan Bank (FHLB) stock, whose carrying values approximate their fair values. FHLB stock is recorded at par, which approximates fair value.

· Bank deposits have no stated maturity and are recorded at the amount payable on demand as of the balance sheet date. The Company considers the carrying values of these deposits to approximate their fair values.

· Financial instruments included in accrued expenses and other liabilities consist of drafts payable and certain amounts due under contractual obligations, including unfunded LIHTC commitments. The carrying values of these instruments approximate their fair values.

· Short-term borrowings consist of commercial paper and funds drawn on Schwab Bank’s secured credit facility with the Federal Home Loan Bank of San Francisco. Due to the short-term nature of these borrowings, carrying value approximates fair value.

· Long-term debt – Except for the finance lease obligation, the fair values of long-term debt are estimated using indicative, non-binding quotes from independent brokers. The Company validates indicative prices for its debt through comparison to other independent non-binding quotes. The finance lease obligation is recorded at carrying value, which approximates fair value.

· Firm commitments to extend credit – The Company extends credit to banking clients through HELOCs and PALs. The Company considers the fair value of these unused commitments to not be material because the interest rates earned on these balances are based on floating interest rates that reset monthly.

For a description of the fair value hierarchy, see “Notes – 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. There were no significant changes in these policies and methodologies during the first six months of 2016. The Company did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the six months ended June 30, 2016, or the year ended December 31, 2015. In addition, the Company did not adjust prices received from the primary independent third-party pricing service at June 30, 2016 or December 31, 2015.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the fair value hierarchy for assets measured at fair value on a recurring basis. Liabilities recorded at fair value were not material, and therefore are not included in the following tables:

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
June 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	2,350		$	-		$	-		$	2,350
Commercial paper			-			567			-			567
Total cash equivalents			2,350			567			-			2,917
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,151			-			3,151
U.S. Government securities			-			4,150			-			4,150
Total investments segregated and on deposit for
regulatory purposes			-			7,301			-			7,301
Other securities owned:
Schwab Funds® money market funds			162			-			-			162
Equity and bond mutual funds			241			10			-			251
State and municipal debt obligations			-			64			-			64
Equity, U.S. Government and corporate debt, and
other securities			2			46			-			48
Total other securities owned			405			120			-			525
Securities available for sale:
U.S. agency mortgage-backed securities			-			31,133			-			31,133
Asset-backed securities			-			21,756			-			21,756
Corporate debt securities			-			10,147			-			10,147
U.S. Treasury securities			-			5,018			-			5,018
U.S. agency notes			-			2,973			-			2,973
Certificates of deposit			-			2,178			-			2,178
U.S. state and municipal securities			-			651			-			651
Commercial paper			-			213			-			213
Non-agency commercial mortgage-backed securities			-			159			-			159
Total securities available for sale			-			74,228			-			74,228
Total		$	2,755		$	82,216		$	-		$	84,971

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2015	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,968		$	-		$	-		$	1,968
Commercial paper			-			360			-			360
Total cash equivalents			1,968			360			-			2,328
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,430			-			3,430
U.S. Government securities			-			4,517			-			4,517
Total investments segregated and on deposit for
regulatory purposes			-			7,947			-			7,947
Other securities owned:
Schwab Funds® money market funds			261			-			-			261
Equity and bond mutual funds			205			-			-			205
State and municipal debt obligations			-			50			-			50
Equity, U.S. Government and corporate debt, and
other securities			1			16			-			17
Total other securities owned			467			66			-			533
Securities available for sale:
U.S. agency mortgage-backed securities			-			22,149			-			22,149
Asset-backed securities			-			21,485			-			21,485
Corporate debt securities			-			10,747			-			10,747
U.S. Treasury securities			-			5,704			-			5,704
U.S. agency notes			-			3,150			-			3,150
Certificates of deposit			-			1,683			-			1,683
U.S. state and municipal securities			-			424			-			424
Non-agency commercial mortgage-backed securities			-			299			-			299
Other securities			-			5			-			5
Total securities available for sale			-			65,646			-			65,646
Total		$	2,435		$	74,019		$	-		$	76,454

Fair Value of Other Financial Instruments

The following tables present the fair value hierarchy for other financial instruments:

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
June 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	10,059		$	-		$	10,059		$	-	$	10,059
Cash and investments segregated and
on deposit for regulatory purposes		11,287			-			11,287			-		11,287
Receivables from brokers, dealers, and
clearing organizations		1,008			-			1,008			-		1,008
Receivables from brokerage clients – net		16,819			-			16,819			-		16,819
Securities held to maturity:
U.S. agency mortgage-backed securities		54,087			-			55,916			-		55,916
Non-agency commercial mortgage-backed
securities		998			-			1,044			-		1,044
U.S. Treasury securities		222			-			235			-		235
Total securities held to maturity		55,307			-			57,195			-		57,195
Bank loans: (1)
Residential real estate mortgages		8,502			-			8,632			-		8,632
Home equity loans and lines of credit		2,582			-			2,718			-		2,718
Pledged asset lines		3,531			-			3,531			-		3,531
Other		86			-			86			-		86
Total bank loans		14,701			-			14,967			-		14,967
Other assets		333			-			333			-		333
Total	$	109,514		$	-		$	111,668		$	-	$	111,668
Liabilities:
Bank deposits	$	137,295		$	-		$	137,295		$	-	$	137,295
Payables to brokers, dealers, and clearing
organizations		3,392			-			3,392			-		3,392
Payables to brokerage clients		32,679			-			32,679			-		32,679
Accrued expenses and other liabilities		835			-			835			-		835
Short-term borrowings		5,000			-			5,000			-		5,000
Long-term debt		2,876			-			3,033			-		3,033
Total	$	182,077		$	-		$	182,234		$	-	$	182,234

(1) The carrying value of bank loans excludes the allowance for loan losses of $31 million at June 30, 2016.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2015	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	9,650		$	-		$	9,650		$	-	$	9,650
Cash and investments segregated and
on deposit for regulatory purposes		11,647			-			11,647			-		11,647
Receivables from brokers, dealers, and
clearing organizations		582			-			582			-		582
Receivables from brokerage clients – net		17,310			-			17,310			-		17,310
Securities held to maturity:
U.S. agency mortgage-backed securities		48,785			-			48,883			-		48,883
Non-agency commercial mortgage-backed
securities		999			-			985			-		985
U.S. Treasury securities		223			-			220			-		220
Total securities held to maturity		50,007			-			50,088			-		50,088
Bank loans: (1)
Residential real estate mortgages		8,334			-			8,347			-		8,347
Home equity loans and lines of credit		2,735			-			2,857			-		2,857
Pledged asset lines		3,232			-			3,232			-		3,232
Other		64			-			64			-		64
Total bank loans		14,365			-			14,500			-		14,500
Other assets		184			-			184			-		184
Total	$	103,745		$	-		$	103,961		$	-	$	103,961
Liabilities:
Bank deposits	$	129,502		$	-		$	129,502		$	-	$	129,502
Payables to brokers, dealers, and clearing
organizations		2,588			-			2,588			-		2,588
Payables to brokerage clients		33,185			-			33,185			-		33,185
Accrued expenses and other liabilities		1,115			-			1,115			-		1,115
Long-term debt (2)		2,877			-			2,967			-		2,967
Total	$	169,267		$	-		$	169,357		$	-	$	169,357

(1)	The carrying value of bank loans excludes the allowance for loan losses of $31 million at December 31, 2015.
(2)	The amounts as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Stockholders' Equity [Abstract]

Stockholders' Equity

11.Stockholders’ Equity

There have been no significant changes to the Company’s stockholders’ equity with the exception of the issuance disclosed below. The Company did not issue any shares of common stock during the six months ended June 30, 2016, or the year ended December 31, 2015.

On March 7, 2016, the Company issued and sold 30 million depositary shares, each representing a 1/40th ownership interest in a share of 5.95% non-cumulative perpetual preferred stock, Series D, $0.01 par value, with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). The Series D Preferred Stock has a fixed dividend rate of 5.95%.  

Including the Series D issuance discussed above, the Company’s preferred stock issued and outstanding is as follows:

	June 30, 2016							December 31, 2015
	Shares							Shares
	Issued and	Liquidation						Issued and	Liquidation
	Outstanding	Preference		Liquidation		Carrying		Outstanding	Preference		Liquidation		Carrying
	(In thousands)	Per Share		Preference		Value		(In thousands)	Per Share		Preference		Value
Series A	400	$	1,000	$	400	$	397	400	$	1,000	$	400	$	396
Series B	485		1,000		485		482	485		1,000		485		480
Series C	600		1,000		600		584	600		1,000		600		583
Series D	750		1,000		750		726	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,189	1,485			$	1,485	$	1,459

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2016

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

12.Accumulated Other Comprehensive Income

Accumulated other comprehensive income represents cumulative gains and losses that are not reflected in earnings. The components of other comprehensive income are as follows:

Three Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	168	$	(63)	$	105	$	(91)	$	34	$	(57)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		165		(62)		103		(91)		34		(57)
Other comprehensive income (loss)	$	165	$	(62)	$	103	$	(91)	$	34	$	(57)

Six Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	189	$	(71)	$	118	$	16	$	(7)	$	9
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		186		(70)		116		16		(7)		9
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	187	$	(70)	$	117	$	16	$	(7)	$	9

Accumulated other comprehensive income balances are as follows:

	Total
	Accumulated Other
	Comprehensive Income
Balance at December 31, 2014		$	165
Net unrealized gain on securities available for sale			9
Balance at June 30, 2015		$	174
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			116
Other			1
Balance at June 30, 2016		$	(17)

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Common Share [Abstract]

Earnings Per Common Share

13.Earnings Per Common Share

EPS is computed using the two-class method. Preferred stock dividends, and undistributed earnings and dividends allocated to participating securities are subtracted from net income in determining net income available to common stockholders. Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Dilutive potential common shares include, if dilutive, the effect of outstanding stock options and non-vested restricted stock awards and units. EPS under the basic and diluted computations is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net income	$	452	$	353	$	864	$	655
Preferred stock dividends and other (1)		(46)		(23)		(66)		(34)
Net income available to common stockholders	$	406	$	330	$	798	$	621
Weighted-average common shares outstanding — basic		1,322		1,314		1,322		1,313
Common stock equivalent shares related to stock incentive plans		11		12		9		12
Weighted-average common shares outstanding — diluted (2)		1,333		1,326		1,331		1,325
Basic EPS	$	.31	$	.25	$	.60	$	.47
Diluted EPS	$	.30	$	.25	$	.60	$	.47

(1)	Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.
(2)	Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled19 million and 15 million shares for the second quarters of 2016 and 2015, respectively, and 22million and 16 million shares for the first halves of 2016 and 2015, respectively.

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Regulatory Requirements

6 Months Ended

Jun. 30, 2016

Regulatory Requirements [Abstract]

Regulatory Requirements

14.Regulatory Requirements

CSC is a savings and loan holding company and Schwab Bank, CSC’s depository institution subsidiary, is a federal savings bank. CSC is subject to examination, supervision, and regulation by the Federal Reserve. Schwab Bank is subject to examination, supervision, and regulation by the OCC, as its primary regulator, the FDIC, as its deposit insurer, and the CFPB. CSC is required to serve as a source of strength for Schwab Bank. On January 1, 2015, CSC became subject to regulatory capital requirements adopted by the Federal Reserve.

Schwab Bank is subject to various requirements and restrictions under federal and state laws, including regulatory capital requirements and requirements that restrict and govern the terms of affiliate transactions, such as extensions of credit to, or asset purchases from CSC or its other subsidiaries by Schwab Bank. In addition, Schwab Bank is required to provide notice to and may be required to obtain approval of the OCC and the Federal Reserve to declare dividends to CSC. The federal banking agencies have broad powers to enforce these regulations, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver. Under the Federal Deposit Insurance Act, Schwab Bank could be subject to restrictive actions if it were to fall within one of the lowest three of five capital categories. CSC and Schwab Bank are required to maintain minimum capital levels as specified in federal banking regulations. Failure to meet the minimum levels could result in certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on CSC and Schwab Bank. At June 30, 2016, both CSC and Schwab Bank met all of their respective capital requirements. Certain events, such as growth in bank deposits and regulatory discretion, could adversely affect CSC’s or Schwab Bank’s ability to meet future capital requirements.

The regulatory capital and ratios for CSC and Schwab Bank are as follows:

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	11,581	17.9	%		N/A			$	2,908	4.5	%
Tier 1 Risk-Based Capital		13,770	21.3	%		N/A				3,877	6.0	%
Total Risk-Based Capital		13,802	21.4	%		N/A				5,169	8.0	%
Tier 1 Leverage		13,770	7.2	%		N/A				7,620	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	10,564	18.9	%	$	3,638	6.5	%	$	2,518	4.5	%
Tier 1 Risk-Based Capital		10,564	18.9	%		4,477	8.0	%		3,358	6.0	%
Total Risk-Based Capital		10,595	18.9	%		5,596	10.0	%		4,477	8.0	%
Tier 1 Leverage		10,564	7.1	%		7,462	5.0	%		5,970	4.0	%
December 31, 2015
CSC
Common Equity Tier 1 Risk-Based Capital	$	10,851	18.2	%		N/A			$	2,681	4.5	%
Tier 1 Risk-Based Capital		12,310	20.7	%		N/A				3,575	6.0	%
Total Risk-Based Capital		12,342	20.7	%		N/A				4,766	8.0	%
Tier 1 Leverage		12,310	7.1	%		N/A				6,912	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	9,314	18.1	%	$	3,349	6.5	%	$	2,318	4.5	%
Tier 1 Risk-Based Capital		9,314	18.1	%		4,121	8.0	%		3,091	6.0	%
Total Risk-Based Capital		9,345	18.1	%		5,152	10.0	%		4,121	8.0	%
Tier 1 Leverage		9,314	7.1	%		6,594	5.0	%		5,275	4.0	%

N/A Not applicable.

Based on its regulatory capital ratios at June 30, 2016, Schwab Bank is considered well capitalized (the highest category) under their respective regulatory capital rules. There are no conditions or events since June 30, 2016 that management believes have changed Schwab Bank’s capital category.

Beginning on January 1, 2016, CSC and Schwab Bank became subject to a new capital conservation buffer requirement of .625% of risk-weighted assets, increasing each year by .625% until fully implemented at 2.5% of risk-weighted assets in January 2019. The capital conservation buffer is in addition to the minimum risk-based capital requirements described above. Failure to maintain the capital conservation buffer would limit an entity’s ability to make capital distributions and discretionary bonus payments to executive officers. At June 30, 2016, both CSC’s and Schwab Bank’s capital levels exceeded the fully implemented capital conservation buffer requirement.

CSC’s principal broker-dealers are Schwab and optionsXpress, Inc. Schwab and optionsXpress, Inc. are both subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule). Schwab and optionsXpress, Inc. compute net capital under the alternative method permitted by the Uniform Net Capital Rule. This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).

Net capital and net capital requirements for Schwab and optionsXpress, Inc. are as follows:

							Net Capital
			Minimum		2% of		in Excess of
			Net Capital		Aggregate		Required
June 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,820	$	0.250	$	360	$	1,460
optionsXpress, Inc.		260		1		7		253
December 31, 2015
Schwab	$	1,746	$	0.250	$	358	$	1,388
optionsXpress, Inc.		244		1		7		237

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Information [Abstract]

Segment Information

15.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The Company evaluates the performance of its segments on a pre-tax basis, excluding items such as restructuring and other charges. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

Financial information for the Company’s reportable segments is presented in the following tables:

	Investor Services (1)				Advisor Services (1)				Total
Three Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	514	$	465	$	243	$	205	$	757	$	670
Net interest revenue		628		524		170		88		798		612
Trading revenue		129		133		72		70		201		203
Other		51		57		19		22		70		79
Provision for loan losses		2		2		-		-		2		2
Total net revenues		1,324		1,181		504		385		1,828		1,566
Expenses Excluding Interest		834		760		274		239		1,108		999
Income before taxes on income	$	490	$	421	$	230	$	146	$	720	$	567

	Investor Services (1)				Advisor Services (1)				Total
Six Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	986	$	911	$	470	$	403	$	1,456	$	1,314
Net interest revenue		1,241		1,034		329		166		1,570		1,200
Trading revenue		272		280		161		150		433		430
Other		97		101		36		41		133		142
Provision for loan losses		-		6		-		-		-		6
Total net revenues		2,596		2,332		996		760		3,592		3,092
Expenses Excluding Interest		1,671		1,546		546		495		2,217		2,041
Income before taxes on income	$	925	$	786	$	450	$	265	$	1,375	$	1,051

(1) The Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment in the fourth quarter of 2015. Prior period information has been recast to reflect these changes.

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New Accounting Standards (Policy)

6 Months Ended

Jun. 30, 2016

New Accounting Standards [Abstract]

Adoption of New Accounting Standards

Adoption of New Accounting Standards

On January 1, 2016, the Company adopted ASU 2015-02, “Consolidation (Topic 810),” which amends the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new guidance is applicable to all entities but provides an exception for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 did not have an impact on the Company’s consolidated financial statements or EPS as the new guidance did not change any existing consolidation conclusions reached in accordance with the previous guidance.

On January 1, 2016, the Company adopted ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30).” ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Previously, debt issuance costs were presented as a separate asset on the balance sheet. The guidance in ASU 2015-03 has been applied on a retrospective basis which requires the adjustment of all prior period consolidated balance sheets. The effect of the adoption on the Company’s December 31, 2015 consolidated balance sheet was to decrease other assets and total assets by $13 million and to decrease long-term debt and total liabilities by $13 million. A similar amount was also reclassified in the prior year. The Company considers the reclassifications immaterial.

On January 1, 2016, the Company also adopted ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40),” which provides new guidance that clarifies customer’s accounting for fees paid in a cloud computing arrangement. Under the new guidance, if a cloud computing arrangement includes a software license, the customer shall account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the cloud computing arrangement does not include a software license, the customer shall account for the arrangement as a service contract. The guidance applies to all new arrangements entered into after January 1, 2016. The adoption of ASU 2015-05 did not have an impact on the Company’s financial statements or EPS.

New Accounting Standards Not Yet Adopted

New Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which provides new guidance on revenue recognition. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts the timing of the related transfer of goods or performance of services at an amount that reflects the expected consideration. The new guidance will become effective January 1, 2018, with early adoption permitted as of January 1, 2017. Entities may elect either full or modified retrospective transition. Full retrospective transition will require a cumulative effect adjustment to retained earnings as of the earliest comparative period presented. Modified retrospective transition will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10),” which will become effective January 1, 2018. This new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions of the guidance include (i) most equity investments are to be measured at fair value with changes in fair value recognized in net income, except for those accounted for under the equity method or those that do not have readily determinable fair values for which a practical expedient can be elected, (ii) requires the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial instrument on the balance sheet or in the accompanying notes. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” which amends the accounting for leases by lessees and lessors. The primary change as a result of the new standard is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances and expanded lease disclosures. ASU 2016-02 will become effective January 1, 2019, with early adoption permitted, and requires entities to apply the new guidance using a modified retrospective transition. Modified retrospective transition requires entities to apply the new guidance as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard. Certain transition reliefs are permitted if elected by the entity. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In March 2016, the FASB issued ASU 2016-09, “Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)” which amends certain aspects of how an entity accounts for share-based payments to employees. The new guidance requires entities to recognize the income tax effects of share-based awards in the income statement when the awards vest or are settled, rather than recording such effects in additional paid-in capital. Entities will also be permitted to elect to account for forfeitures of share-based payments as they occur or continue with current practice which requires estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change. ASU 2016-09 will become effective January 1, 2017, with early adoption permitted. The change in recognition of income tax effects of share-based awards will be applied prospectively. If an entity elects to account for forfeitures of share-based payments as they occur, such change will be applied using a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which provides new guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and held to maturity debt securities. The new guidance will require estimating expected credit losses (ECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions and reasonable forecasts. The initial estimate of and the subsequent changes in ECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. The new guidance also amends the OTTI model for available for sale debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. ASU 2016-13 will become effective January 1, 2020, with early adoption permitted as of January 1, 2019. The new guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for available for sale debt securities for which an OTTI had been recognized before the effective date. The Company is currently evaluating the impact of this new guidance on its financial statements and EPS.

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Securities Available for Sale and Securities Held to Maturity (Tables)

6 Months Ended

Jun. 30, 2016

Securities Available for Sale and Securities Held to Maturity [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Available for Sale and Securities Held to Maturity

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
June 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	30,942	$	251	$	60	$	31,133
Asset-backed securities		22,117		11		372		21,756
Corporate debt securities		10,095		60		8		10,147
U.S. Treasury securities		4,966		52		-		5,018
U.S. agency notes		2,972		1		-		2,973
Certificates of deposit		2,180		1		3		2,178
U.S. state and municipal securities		613		38		-		651
Commercial paper		213		-		-		213
Non-agency commercial mortgage-backed securities		158		1		-		159
Total securities available for sale	$	74,256	$	415	$	443	$	74,228
Securities held to maturity:
U.S. agency mortgage-backed securities	$	54,087	$	1,829	$	-	$	55,916
Non-agency commercial mortgage-backed securities		998		46		-		1,044
U.S. Treasury securities		222		13		-		235
Total securities held to maturity	$	55,307	$	1,888	$	-	$	57,195

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	22,014	$	183	$	48	$	22,149
Asset-backed securities		21,784		7		306		21,485
Corporate debt securities		10,764		14		31		10,747
U.S. Treasury securities		5,719		2		17		5,704
U.S. agency notes		3,177		-		27		3,150
Certificates of deposit		1,685		1		3		1,683
U.S. state and municipal securities		414		10		-		424
Non-agency commercial mortgage-backed securities		298		1		-		299
Other securities		5		-		-		5
Total securities available for sale	$	65,860	$	218	$	432	$	65,646
Securities held to maturity:
U.S. agency mortgage-backed securities	$	48,785	$	391	$	293	$	48,883
Non-agency commercial mortgage-backed securities		999		6		20		985
U.S. Treasury securities		223		-		3		220
Total securities held to maturity	$	50,007	$	397	$	316	$	50,088

Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss

	Less than				12 months
	12 months				or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,613	$	52	$	1,420	$	8	$	10,033	$	60
Asset-backed securities		10,733		261		3,789		111		14,522		372
Corporate debt securities		1,452		3		1,471		5		2,923		8
Certificates of deposit		843		3		299		-		1,142		3
Total securities with unrealized losses (1)	$	21,641	$	319	$	6,979	$	124	$	28,620	$	443

December 31, 2015
Securities available for sale:
U.S. agency mortgage-backed securities	$	8,541	$	47	$	813	$	1	$	9,354	$	48
Asset-backed securities		17,127		240		2,743		66		19,870		306
Corporate debt securities		5,433		25		942		6		6,375		31
U.S. Treasury securities		5,010		17		-		-		5,010		17
U.S. agency notes		1,281		10		1,547		17		2,828		27
Certificates of deposit		773		2		599		1		1,372		3
Total	$	38,165	$	341	$	6,644	$	91	$	44,809	$	432
Securities held to maturity:
U.S. agency mortgage-backed securities	$	24,219	$	253	$	1,842	$	40	$	26,061	$	293
Non-agency commercial mortgage-backed
securities		729		20		-		-		729		20
U.S. Treasury securities		220		3		-		-		220		3
Total	$	25,168	$	276	$	1,842	$	40	$	27,010	$	316
Total securities with unrealized losses (2)	$	63,333	$	617	$	8,486	$	131	$	71,819	$	748

(1)	The number of investment positions with unrealized losses totaled322 for securities available for sale.
(2)	The number of investment positions with unrealized losses totaled 409 for securities available for sale and286 for securities held to maturity.

Maturities of Securities Available for Sale and Securities Held to Maturity

			After 1 year		After 5 years
	Within		through		through		After
June 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	3	$	3,072	$	15,661	$	12,397	$	31,133
Asset-backed securities		-		8,787		4,176		8,793		21,756
Corporate debt securities		2,601		7,546		-		-		10,147
U.S. Treasury securities		-		4,809		209		-		5,018
U.S. agency notes		-		2,973		-		-		2,973
Certificates of deposit		786		1,392		-		-		2,178
U.S. state and municipal securities		-		-		29		622		651
Commercial paper		213		-		-		-		213
Non-agency commercial mortgage-backed
securities		-		-		-		159		159
Total fair value	$	3,603	$	28,579	$	20,075	$	21,971	$	74,228
Total amortized cost	$	3,596	$	28,417	$	20,106	$	22,137	$	74,256
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	3,399	$	21,564	$	30,953	$	55,916
Non-agency commercial mortgage-backed
securities (1)		-		-		378		666		1,044
U.S. Treasury securities		-		-		235		-		235
Total fair value	$	-	$	3,399	$	22,177	$	31,619	$	57,195
Total amortized cost	$	-	$	3,232	$	21,116	$	30,959	$	55,307

(1) Mortgage-backed securities have been allocated to maturity groupings based on final contractual maturities. Actual maturities will differ from final contractual maturities because borrowers on a certain portion of loans underlying these securities have the right to prepay their obligations.

Proceeds and Gross Realized Gains And Losses from Sales of Securities Available for Sale

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Proceeds	$	3,774	$	444	$	4,074	$	594
Gross realized gains		3		1		3		1
Gross realized losses		-		1		-		1

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Bank Loans and Related Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2016

Bank Loans and Related Allowance for Loan Losses [Abstract]

Composition of Bank Loans and Delinquency Analysis by Loan Segment

									>90 days past			Total past due					Allowance		Total
			30-59 days			60-89 days			due and other			and other			Total		for loan		bank
June 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,472		$	13		$	1		$	16		$	30	$	8,502	$	20	$	8,482
Home equity loans and lines of credit		2,564			5			1			12			18		2,582		10		2,572
Pledged asset lines		3,530			-			1			-			1		3,531		-		3,531
Other		86			-			-			-			-		86		1		85
Total bank loans	$	14,652		$	18		$	3		$	28		$	49	$	14,701	$	31	$	14,670
December 31, 2015
Residential real estate mortgages	$	8,304		$	11		$	1		$	18		$	30	$	8,334	$	20	$	8,314
Home equity loans and lines of credit		2,720			4			1			10			15		2,735		11		2,724
Pledged asset lines		3,228			3			1			-			4		3,232		-		3,232
Other		64			-			-			-			-		64		-		64
Total bank loans	$	14,316		$	18		$	3		$	28		$	49	$	14,365	$	31	$	14,334

Changes in Allowance for Loan Losses

Three Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit			Total
Balance at beginning of period	$	21		$	11	$	1	$	33	$	26		$	12	$	38
Charge-offs		-			-		-		-		-			(1)		(1)
Recoveries		-			-		-		-		-			1		1
Provision for loan losses		(1)			(1)		-		(2)		(3)			1		(2)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Six Months Ended	June 30, 2016									June 30, 2015
	Residential		Home equity							Residential		Home equity
	real estate		loans and							real estate		loans and
	mortgages		lines of credit			Other		Total		mortgages		lines of credit				Total
Balance at beginning of period	$	20		$	11	$	-	$	31	$	29		$	13	$	42
Charge-offs		(1)			-		-		(1)		-			(2)		(2)
Recoveries		1			-		-		1		-			2		2
Provision for loan losses		-			(1)		1		-		(6)			-		(6)
Balance at end of period	$	20		$	10	$	1	$	31	$	23		$	13	$	36

Credit Quality of Residential Real Estate Mortgages and HELOCs by Reviewing FICO Scores at Origination, Current FICO Scores, Loan-To-Value Ratio

			Weighted				Percent of
			Average		Utilization		Loans on
June 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,740		776	N/A			0.03	%
>70% – <90%		703		766	N/A			0.23	%
>90% – <100%		35		743	N/A			1.40	%
>100%		24		708	N/A			12.44	%
Total	$	8,502		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,187		773	36	%		0.13	%
>70% – <90%		318		759	49	%		0.30	%
>90% – <100%		44		753	57	%		1.01	%
>100%		33		738	68	%		2.01	%
Total	$	2,582		770	38	%		0.19	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,531		762	48	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
June 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,171	$	1,875
2012		1,385		114
2013		2,126		212
2014		874		174
2015		1,744		159
2016		1,202		48
Total	$	8,502	$	2,582
Origination FICO
<620	$	9	$	1
620 – 679		84		14
680 – 739		1,391		470
>740		7,018		2,097
Total	$	8,502	$	2,582
Origination LTV
<70%	$	6,178	$	1,771
>70% – <90%		2,312		796
>90% – <100%		12		15
Total	$	8,502	$	2,582

			Weighted				Percent of
			Average		Utilization		Loans on
December 31, 2015	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,508		774	N/A			0.03	%
>70% – <90%		759		764	N/A			0.31	%
>90% – <100%		37		736	N/A			5.54	%
>100%		30		713	N/A			7.72	%
Total	$	8,334		773	N/A			0.11	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,277		772	37	%		0.09	%
>70% – <90%		373		760	50	%		0.48	%
>90% – <100%		48		748	63	%		1.02	%
>100%		37		739	67	%		1.79	%
Total	$	2,735		770	39	%		0.18	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,232		764	49	%		-

(1) The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

N/A Not applicable.

	Residential		Home equity
	real estate		loans and
December 31, 2015	mortgages		lines of credit
Year of origination
Pre-2012	$	1,306	$	2,048
2012		1,644		125
2013		2,450		232
2014		1,021		188
2015		1,913		142
Total	$	8,334	$	2,735
Origination FICO
<620	$	10	$	-
620 – 679		88		16
680 – 739		1,381		498
>740		6,855		2,221
Total	$	8,334	$	2,735
Origination LTV
<70%	$	5,913	$	1,858
>70% – <90%		2,408		860
>90% – <100%		13		17
Total	$	8,334	$	2,735

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2016

Variable Interest Entities [Abstract]

Aggregate Assets, Liabilities and Maximum Exposure to Loss

		June 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments (1)	$	138	$	106	$	138	$	104	$	84	$	104
Other CRA investments (2)		57		-		65		57		-		66
Total	$	195	$	106	$	203	$	161	$	84	$	170

(1)	LIHTC investments are recorded using the proportional amortization method.
(2)	Other CRA investments are recorded using either the cost method or the equity method. Aggregate assets are included in either other assets or bank loans – net on the condensed consolidated balance sheets.

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Bank Deposits (Tables)

6 Months Ended

Jun. 30, 2016

Bank Deposits [Abstract]

Deposits from Banking Clients Consisting of Interest Bearing and Noninterest Bearing Deposits

	June 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	116,024	$	108,137
Checking		12,685		12,822
Savings and other		8,052		7,896
Total interest-bearing deposits		136,761		128,855
Non-interest-bearing deposits		534		647
Total bank deposits	$	137,295	$	129,502

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2016

Borrowings [Abstract]

Long-term Debt Including Unamortized Debt Discounts and Premiums

	June 30,		December 31,
	2016		2015
Senior Notes (1)	$	2,555	$	2,553
Senior Medium-Term Notes (1)		249		249
Finance lease obligation		72		75
Total long-term debt	$	2,876	$	2,877

(1) Balances as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

Annual Maturities on Long-term Debt Outstanding

2016	$	4
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,903
Unamortized discount, net		(15)
Debt issuance costs		(12)
Total long-term debt	$	2,876

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Offsetting Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Offsetting Assets and Liabilities [Abstract]

Offsetting Assets and Liabilities

			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Condensed Consolidated
		Gross		Condensed		Condensed	Balance Sheets
		Assets/	Consolidated		Consolidated		Counterparty						Net
		Liabilities	Balance Sheets		Balance Sheets		Offsetting		Collateral				Amount
June 30, 2016
Assets:
Resale agreements (1)	$	7,270	$	-	$	7,270	$	-	$	(7,270)	(2)	$	-
Securities borrowed (3)		643		-		643		(436)		(206)			1
Total	$	7,913	$	-	$	7,913	$	(436)	$	(7,476)		$	1
Liabilities:
Securities loaned (4,5)	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
Total	$	2,461	$	-	$	2,461	$	(436)	$	(1,890)		$	135
December 31, 2015
Assets:
Resale agreements (1)	$	8,088	$	-	$	8,088	$	-	$	(8,088)	(2)	$	-
Securities borrowed (3)		198		-		198		(70)		(127)			1
Total	$	8,286	$	-	$	8,286	$	(70)	$	(8,215)		$	1
Liabilities:
Securities loaned (4,5)	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173
Total	$	2,233	$	-	$	2,233	$	(70)	$	(1,990)		$	173

(1)	Included in cash and investments segregated and on deposit for regulatory purposes in the Company’s condensed consolidated balance sheets.
(2)	Actual collateral was greater than or equal to 102% of the related assets.
(3)	Included in receivables from brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(4)	Included in payables to brokers, dealers, and clearing organizations in the Company’s condensed consolidated balance sheets.
(5)	Securities loaned are predominantly comprised of equity securities with overnight and continuous remaining contractual maturities.

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Fair Values of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Fair Values of Assets and Liabilities [Abstract]

Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
June 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	2,350		$	-		$	-		$	2,350
Commercial paper			-			567			-			567
Total cash equivalents			2,350			567			-			2,917
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,151			-			3,151
U.S. Government securities			-			4,150			-			4,150
Total investments segregated and on deposit for
regulatory purposes			-			7,301			-			7,301
Other securities owned:
Schwab Funds® money market funds			162			-			-			162
Equity and bond mutual funds			241			10			-			251
State and municipal debt obligations			-			64			-			64
Equity, U.S. Government and corporate debt, and
other securities			2			46			-			48
Total other securities owned			405			120			-			525
Securities available for sale:
U.S. agency mortgage-backed securities			-			31,133			-			31,133
Asset-backed securities			-			21,756			-			21,756
Corporate debt securities			-			10,147			-			10,147
U.S. Treasury securities			-			5,018			-			5,018
U.S. agency notes			-			2,973			-			2,973
Certificates of deposit			-			2,178			-			2,178
U.S. state and municipal securities			-			651			-			651
Commercial paper			-			213			-			213
Non-agency commercial mortgage-backed securities			-			159			-			159
Total securities available for sale			-			74,228			-			74,228
Total		$	2,755		$	82,216		$	-		$	84,971

	Quoted Prices
	in Active Markets			Significant			Significant
	for Identical			Other Observable			Unobservable
	Assets			Inputs			Inputs			Balance at
December 31, 2015	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	1,968		$	-		$	-		$	1,968
Commercial paper			-			360			-			360
Total cash equivalents			1,968			360			-			2,328
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,430			-			3,430
U.S. Government securities			-			4,517			-			4,517
Total investments segregated and on deposit for
regulatory purposes			-			7,947			-			7,947
Other securities owned:
Schwab Funds® money market funds			261			-			-			261
Equity and bond mutual funds			205			-			-			205
State and municipal debt obligations			-			50			-			50
Equity, U.S. Government and corporate debt, and
other securities			1			16			-			17
Total other securities owned			467			66			-			533
Securities available for sale:
U.S. agency mortgage-backed securities			-			22,149			-			22,149
Asset-backed securities			-			21,485			-			21,485
Corporate debt securities			-			10,747			-			10,747
U.S. Treasury securities			-			5,704			-			5,704
U.S. agency notes			-			3,150			-			3,150
Certificates of deposit			-			1,683			-			1,683
U.S. state and municipal securities			-			424			-			424
Non-agency commercial mortgage-backed securities			-			299			-			299
Other securities			-			5			-			5
Total securities available for sale			-			65,646			-			65,646
Total		$	2,435		$	74,019		$	-		$	76,454

Fair Value of Other Financial Instruments

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
June 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	10,059		$	-		$	10,059		$	-	$	10,059
Cash and investments segregated and
on deposit for regulatory purposes		11,287			-			11,287			-		11,287
Receivables from brokers, dealers, and
clearing organizations		1,008			-			1,008			-		1,008
Receivables from brokerage clients – net		16,819			-			16,819			-		16,819
Securities held to maturity:
U.S. agency mortgage-backed securities		54,087			-			55,916			-		55,916
Non-agency commercial mortgage-backed
securities		998			-			1,044			-		1,044
U.S. Treasury securities		222			-			235			-		235
Total securities held to maturity		55,307			-			57,195			-		57,195
Bank loans: (1)
Residential real estate mortgages		8,502			-			8,632			-		8,632
Home equity loans and lines of credit		2,582			-			2,718			-		2,718
Pledged asset lines		3,531			-			3,531			-		3,531
Other		86			-			86			-		86
Total bank loans		14,701			-			14,967			-		14,967
Other assets		333			-			333			-		333
Total	$	109,514		$	-		$	111,668		$	-	$	111,668
Liabilities:
Bank deposits	$	137,295		$	-		$	137,295		$	-	$	137,295
Payables to brokers, dealers, and clearing
organizations		3,392			-			3,392			-		3,392
Payables to brokerage clients		32,679			-			32,679			-		32,679
Accrued expenses and other liabilities		835			-			835			-		835
Short-term borrowings		5,000			-			5,000			-		5,000
Long-term debt		2,876			-			3,033			-		3,033
Total	$	182,077		$	-		$	182,234		$	-	$	182,234

(1) The carrying value of bank loans excludes the allowance for loan losses of $31 million at June 30, 2016.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December 31, 2015	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	9,650		$	-		$	9,650		$	-	$	9,650
Cash and investments segregated and
on deposit for regulatory purposes		11,647			-			11,647			-		11,647
Receivables from brokers, dealers, and
clearing organizations		582			-			582			-		582
Receivables from brokerage clients – net		17,310			-			17,310			-		17,310
Securities held to maturity:
U.S. agency mortgage-backed securities		48,785			-			48,883			-		48,883
Non-agency commercial mortgage-backed
securities		999			-			985			-		985
U.S. Treasury securities		223			-			220			-		220
Total securities held to maturity		50,007			-			50,088			-		50,088
Bank loans: (1)
Residential real estate mortgages		8,334			-			8,347			-		8,347
Home equity loans and lines of credit		2,735			-			2,857			-		2,857
Pledged asset lines		3,232			-			3,232			-		3,232
Other		64			-			64			-		64
Total bank loans		14,365			-			14,500			-		14,500
Other assets		184			-			184			-		184
Total	$	103,745		$	-		$	103,961		$	-	$	103,961
Liabilities:
Bank deposits	$	129,502		$	-		$	129,502		$	-	$	129,502
Payables to brokers, dealers, and clearing
organizations		2,588			-			2,588			-		2,588
Payables to brokerage clients		33,185			-			33,185			-		33,185
Accrued expenses and other liabilities		1,115			-			1,115			-		1,115
Long-term debt (2)		2,877			-			2,967			-		2,967
Total	$	169,267		$	-		$	169,357		$	-	$	169,357

(1)	The carrying value of bank loans excludes the allowance for loan losses of $31 million at December 31, 2015.
(2)	The amounts as of December 31, 2015 have been recast as a result of the adoption of ASU 2015-03, to present debt issuance costs of $13 million as a direct deduction from the carrying amount of the associated debt liability, consistent with the recording of debt discounts.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Stockholders' Equity [Abstract]

Preferred Stock Issued and Outstanding

	June 30, 2016							December 31, 2015
	Shares							Shares
	Issued and	Liquidation						Issued and	Liquidation
	Outstanding	Preference		Liquidation		Carrying		Outstanding	Preference		Liquidation		Carrying
	(In thousands)	Per Share		Preference		Value		(In thousands)	Per Share		Preference		Value
Series A	400	$	1,000	$	400	$	397	400	$	1,000	$	400	$	396
Series B	485		1,000		485		482	485		1,000		485		480
Series C	600		1,000		600		584	600		1,000		600		583
Series D	750		1,000		750		726	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,189	1,485			$	1,485	$	1,459

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2016

Accumulated Other Comprehensive Income [Abstract]

Components of Other Comprehensive Income (Loss)

Three Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	168	$	(63)	$	105	$	(91)	$	34	$	(57)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		165		(62)		103		(91)		34		(57)
Other comprehensive income (loss)	$	165	$	(62)	$	103	$	(91)	$	34	$	(57)

Six Months Ended June 30,			2016						2015
	Before		Tax			Net of	Before		Tax			Net of
	Tax		Effect			Tax	Tax		Effect			Tax
Change in net unrealized gain on
securities available for sale:
Net unrealized gain (loss)	$	189	$	(71)	$	118	$	16	$	(7)	$	9
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		186		(70)		116		16		(7)		9
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	187	$	(70)	$	117	$	16	$	(7)	$	9

Accumulated Other Comprehensive Income Balances

	Total
	Accumulated Other
	Comprehensive Income
Balance at December 31, 2014		$	165
Net unrealized gain on securities available for sale			9
Balance at June 30, 2015		$	174
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			116
Other			1
Balance at June 30, 2016		$	(17)

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Common Share [Abstract]

EPS under Basic and Diluted Computations

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Net income	$	452	$	353	$	864	$	655
Preferred stock dividends and other (1)		(46)		(23)		(66)		(34)
Net income available to common stockholders	$	406	$	330	$	798	$	621
Weighted-average common shares outstanding — basic		1,322		1,314		1,322		1,313
Common stock equivalent shares related to stock incentive plans		11		12		9		12
Weighted-average common shares outstanding — diluted (2)		1,333		1,326		1,331		1,325
Basic EPS	$	.31	$	.25	$	.60	$	.47
Diluted EPS	$	.30	$	.25	$	.60	$	.47

(1)	Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.
(2)	Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS totaled19 million and 15 million shares for the second quarters of 2016 and 2015, respectively, and 22million and 16 million shares for the first halves of 2016 and 2015, respectively.

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Regulatory Requirements (Tables)

6 Months Ended

Jun. 30, 2016

Regulatory Requirements [Abstract]

Regulatory Capital and Ratios

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	11,581	17.9	%		N/A			$	2,908	4.5	%
Tier 1 Risk-Based Capital		13,770	21.3	%		N/A				3,877	6.0	%
Total Risk-Based Capital		13,802	21.4	%		N/A				5,169	8.0	%
Tier 1 Leverage		13,770	7.2	%		N/A				7,620	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	10,564	18.9	%	$	3,638	6.5	%	$	2,518	4.5	%
Tier 1 Risk-Based Capital		10,564	18.9	%		4,477	8.0	%		3,358	6.0	%
Total Risk-Based Capital		10,595	18.9	%		5,596	10.0	%		4,477	8.0	%
Tier 1 Leverage		10,564	7.1	%		7,462	5.0	%		5,970	4.0	%
December 31, 2015
CSC
Common Equity Tier 1 Risk-Based Capital	$	10,851	18.2	%		N/A			$	2,681	4.5	%
Tier 1 Risk-Based Capital		12,310	20.7	%		N/A				3,575	6.0	%
Total Risk-Based Capital		12,342	20.7	%		N/A				4,766	8.0	%
Tier 1 Leverage		12,310	7.1	%		N/A				6,912	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	9,314	18.1	%	$	3,349	6.5	%	$	2,318	4.5	%
Tier 1 Risk-Based Capital		9,314	18.1	%		4,121	8.0	%		3,091	6.0	%
Total Risk-Based Capital		9,345	18.1	%		5,152	10.0	%		4,121	8.0	%
Tier 1 Leverage		9,314	7.1	%		6,594	5.0	%		5,275	4.0	%

N/A Not applicable.

Net Capital and Net Capital Requirements for Schwab and optionsXpress, Inc.

							Net Capital
			Minimum		2% of		in Excess of
			Net Capital		Aggregate		Required
June 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,820	$	0.250	$	360	$	1,460
optionsXpress, Inc.		260		1		7		253
December 31, 2015
Schwab	$	1,746	$	0.250	$	358	$	1,388
optionsXpress, Inc.		244		1		7		237

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Information [Abstract]

Financial Information for Reportable Segments

	Investor Services (1)				Advisor Services (1)				Total
Three Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	514	$	465	$	243	$	205	$	757	$	670
Net interest revenue		628		524		170		88		798		612
Trading revenue		129		133		72		70		201		203
Other		51		57		19		22		70		79
Provision for loan losses		2		2		-		-		2		2
Total net revenues		1,324		1,181		504		385		1,828		1,566
Expenses Excluding Interest		834		760		274		239		1,108		999
Income before taxes on income	$	490	$	421	$	230	$	146	$	720	$	567

	Investor Services (1)				Advisor Services (1)				Total
Six Months Ended June 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	986	$	911	$	470	$	403	$	1,456	$	1,314
Net interest revenue		1,241		1,034		329		166		1,570		1,200
Trading revenue		272		280		161		150		433		430
Other		97		101		36		41		133		142
Provision for loan losses		-		6		-		-		-		6
Total net revenues		2,596		2,332		996		760		3,592		3,092
Expenses Excluding Interest		1,671		1,546		546		495		2,217		2,041
Income before taxes on income	$	925	$	786	$	450	$	265	$	1,375	$	1,051

(1) The Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment in the fourth quarter of 2015. Prior period information has been recast to reflect these changes.

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Introduction and Basis of Presentation (Details)	Jun. 30, 2016 state item
Introduction and Basis of Presentation [Abstract]
Minimum number of domestic branch offices | item	330
States with domestic branch offices | state	46

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New Accounting Standards (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets	$ 1,291	$ 1,161	[1]
Total assets	198,052	183,705	[1]
Long-term debt	2,876	2,877	[1]
Total liabilities	$ 183,062	170,303	[1]
Accounting Standards Update 2015-03 [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets		(13)
Total assets		(13)
Long-term debt		(13)
Total liabilities		$ (13)

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Securities Available for Sale and Securities Held to Maturity (Narrative) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Securities Available for Sale and Securities Held to Maturity [Abstract]
Fair value of pledged securities	$ 170

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Securities Available for Sale and Securities Held to Maturity (Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Available for Sale) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	$ 74,256	$ 65,860
Securities available for sale Gross Unrealized Gains	415	218
Securities available for sale Gross Unrealized Losses	443	432
Securities available for sale, Fair Value	74,228	65,646	[1]
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	30,942	22,014
Securities available for sale Gross Unrealized Gains	251	183
Securities available for sale Gross Unrealized Losses	60	48
Securities available for sale, Fair Value	31,133	22,149
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	22,117	21,784
Securities available for sale Gross Unrealized Gains	11	7
Securities available for sale Gross Unrealized Losses	372	306
Securities available for sale, Fair Value	21,756	21,485
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	10,095	10,764
Securities available for sale Gross Unrealized Gains	60	14
Securities available for sale Gross Unrealized Losses	8	31
Securities available for sale, Fair Value	10,147	10,747
U.S. Treasury securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	4,966	5,719
Securities available for sale Gross Unrealized Gains	52	2
Securities available for sale Gross Unrealized Losses		17
Securities available for sale, Fair Value	5,018	5,704
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	2,972	3,177
Securities available for sale Gross Unrealized Gains	1
Securities available for sale Gross Unrealized Losses		27
Securities available for sale, Fair Value	2,973	3,150
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	2,180	1,685
Securities available for sale Gross Unrealized Gains	1	1
Securities available for sale Gross Unrealized Losses	3	3
Securities available for sale, Fair Value	2,178	1,683
U.S. state and municipal securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	613	414
Securities available for sale Gross Unrealized Gains	38	10
Securities available for sale, Fair Value	651	424
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	213
Securities available for sale, Fair Value	213
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	158	298
Securities available for sale Gross Unrealized Gains	1	1
Securities available for sale, Fair Value	$ 159	299
Other securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost		5
Securities available for sale, Fair Value		$ 5

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Securities Available for Sale and Securities Held to Maturity (Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Securities Held to Maturity) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	$ 55,307	$ 50,007	[1]
Securities held to maturity, Gross Unrealized Gains	1,888	397
Securities held to maturity, Gross Unrealized Losses		316
Securities held to maturity, Fair Value	57,195	50,088
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	54,087	48,785
Securities held to maturity, Gross Unrealized Gains	1,829	391
Securities held to maturity, Gross Unrealized Losses		293
Securities held to maturity, Fair Value	55,916	48,883
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	998	999
Securities held to maturity, Gross Unrealized Gains	46	6
Securities held to maturity, Gross Unrealized Losses		20
Securities held to maturity, Fair Value	1,044	985
U.S. Treasury securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	222	223
Securities held to maturity, Gross Unrealized Gains	13
Securities held to maturity, Gross Unrealized Losses		3
Securities held to maturity, Fair Value	$ 235	$ 220

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Securities Available for Sale and Securities Held to Maturity (Available For Sale Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) $ in Millions	Jun. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value		$ 38,165
Securities available for sale Less than 12 months Unrealized Losses		341
Securities available for sale 12 months or longer Fair Value		6,644
Securities available for sale 12 months or longer Unrealized Losses		91
Total Securities available for sale with unrealized losses Total Fair Value		44,809
Total Securities available for sale with unrealized losses Total Unrealized Losses		$ 432
Number of available for sale securities in unrealized loss positions | security	322	409
U.S. agency mortgage-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	$ 8,613	$ 8,541
Securities available for sale Less than 12 months Unrealized Losses	52	47
Securities available for sale 12 months or longer Fair Value	1,420	813
Securities available for sale 12 months or longer Unrealized Losses	8	1
Total Securities available for sale with unrealized losses Total Fair Value	10,033	9,354
Total Securities available for sale with unrealized losses Total Unrealized Losses	60	48
Asset-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	10,733	17,127
Securities available for sale Less than 12 months Unrealized Losses	261	240
Securities available for sale 12 months or longer Fair Value	3,789	2,743
Securities available for sale 12 months or longer Unrealized Losses	111	66
Total Securities available for sale with unrealized losses Total Fair Value	14,522	19,870
Total Securities available for sale with unrealized losses Total Unrealized Losses	372	306
Corporate debt securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	1,452	5,433
Securities available for sale Less than 12 months Unrealized Losses	3	25
Securities available for sale 12 months or longer Fair Value	1,471	942
Securities available for sale 12 months or longer Unrealized Losses	5	6
Total Securities available for sale with unrealized losses Total Fair Value	2,923	6,375
Total Securities available for sale with unrealized losses Total Unrealized Losses	8	31
U.S. Treasury securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value		5,010
Securities available for sale Less than 12 months Unrealized Losses		17
Total Securities available for sale with unrealized losses Total Fair Value		5,010
Total Securities available for sale with unrealized losses Total Unrealized Losses		17
U.S. agency notes [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value		1,281
Securities available for sale Less than 12 months Unrealized Losses		10
Securities available for sale 12 months or longer Fair Value		1,547
Securities available for sale 12 months or longer Unrealized Losses		17
Total Securities available for sale with unrealized losses Total Fair Value		2,828
Total Securities available for sale with unrealized losses Total Unrealized Losses		27
Certificates of deposit [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	843	773
Securities available for sale Less than 12 months Unrealized Losses	3	2
Securities available for sale 12 months or longer Fair Value	299	599
Securities available for sale 12 months or longer Unrealized Losses		1
Total Securities available for sale with unrealized losses Total Fair Value	1,142	1,372
Total Securities available for sale with unrealized losses Total Unrealized Losses	$ 3	$ 3

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Securities Available for Sale and Securities Held to Maturity (Held To Maturity Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) $ in Millions	Dec. 31, 2015 USD ($) security
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	$ 25,168
Securities held to maturity Less than 12 months Unrealized Losses	276
Securities held to maturity 12 months or longer Fair Value	1,842
Securities held to maturity 12 months or longer Unrealized Losses	40
Total Securities held to maturity with unrealized losses Total Fair Value	27,010
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 316
Number of held to maturity securities in unrealized loss positions | security	286
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	$ 24,219
Securities held to maturity Less than 12 months Unrealized Losses	253
Securities held to maturity 12 months or longer Fair Value	1,842
Securities held to maturity 12 months or longer Unrealized Losses	40
Total Securities held to maturity with unrealized losses Total Fair Value	26,061
Total Securities held to maturity with unrealized losses Total Unrealized Losses	293
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	729
Securities held to maturity Less than 12 months Unrealized Losses	20
Total Securities held to maturity with unrealized losses Total Fair Value	729
Total Securities held to maturity with unrealized losses Total Unrealized Losses	20
U.S. Treasury securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	220
Securities held to maturity Less than 12 months Unrealized Losses	3
Total Securities held to maturity with unrealized losses Total Fair Value	220
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 3

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Securities Available for Sale and Securities Held to Maturity (Securities with Unrealized Losses, Aggregated by Category and Period of Continuous Unrealized Loss) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Securities Available for Sale and Securities Held to Maturity [Abstract]
Securities available for sale Less than 12 months Fair Value		$ 38,165
Securities available for sale Less than 12 months Unrealized Losses		341
Securities available for sale 12 months or longer Fair Value		6,644
Securities available for sale 12 months or longer Unrealized Losses		91
Total Securities available for sale with unrealized losses Total Fair Value		44,809
Total Securities available for sale with unrealized losses Total Unrealized Losses		432
Securities held to maturity Less than 12 months Fair Value		25,168
Securities held to maturity Less than 12 months Unrealized Losses		276
Securities held to maturity 12 months or longer Fair Value		1,842
Securities held to maturity 12 months or longer Unrealized Losses		40
Total Securities held to maturity with unrealized losses Total Fair Value		27,010
Total Securities held to maturity with unrealized losses Total Unrealized Losses		316
Securities Less than 12 months Fair Value	$ 21,641	63,333
Securities Less than 12 months Unrealized Losses	319	617
Securities 12 months or longer Fair Value	6,979	8,486
Securities 12 months or longer Unrealized Losses	124	131
Total securities with unrealized losses Total Fair Value	28,620	71,819
Total securities with unrealized losses Total Unrealized Losses	$ 443	$ 748

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Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Available for Sale) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	$ 3,603
Securities available for sale, After 1 year through 5 years	28,579
Securities available for sale, After 5 years through 10 years	20,075
Securities available for sale, After 10 years	21,971
Securities available for sale, Fair Value	74,228	$ 65,646	[1]
Securities available for sale, Within 1 year amortized cost	3,596
Securities available for sale, After 1 year through 5 years amortized cost	28,417
Securities available for sale, After 5 years through 10 years amortized cost	20,106
Securities available for sale, After 10 years amortized cost	22,137
Securities available for sale, Amortized Cost	74,256	65,860
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	3
Securities available for sale, After 1 year through 5 years	3,072
Securities available for sale, After 5 years through 10 years	15,661
Securities available for sale, After 10 years	12,397
Securities available for sale, Fair Value	31,133	22,149
Securities available for sale, Amortized Cost	30,942	22,014
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 1 year through 5 years	8,787
Securities available for sale, After 5 years through 10 years	4,176
Securities available for sale, After 10 years	8,793
Securities available for sale, Fair Value	21,756	21,485
Securities available for sale, Amortized Cost	22,117	21,784
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	2,601
Securities available for sale, After 1 year through 5 years	7,546
Securities available for sale, Fair Value	10,147	10,747
Securities available for sale, Amortized Cost	10,095	10,764
U.S. Treasury securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 1 year through 5 years	4,809
Securities available for sale, After 5 years through 10 years	209
Securities available for sale, Fair Value	5,018	5,704
Securities available for sale, Amortized Cost	4,966	5,719
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 1 year through 5 years	2,973
Securities available for sale, Fair Value	2,973	3,150
Securities available for sale, Amortized Cost	2,972	3,177
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	786
Securities available for sale, After 1 year through 5 years	1,392
Securities available for sale, Fair Value	2,178	1,683
Securities available for sale, Amortized Cost	2,180	1,685
U.S. state and municipal securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 5 years through 10 years	29
Securities available for sale, After 10 years	622
Securities available for sale, Fair Value	651	424
Securities available for sale, Amortized Cost	613	414
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	213
Securities available for sale, Fair Value	213
Securities available for sale, Amortized Cost	213
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 10 years	159
Securities available for sale, Fair Value	159	299
Securities available for sale, Amortized Cost	$ 158	$ 298

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Held to Maturity) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Within 1 year
Securities held to maturity, After 1 year through 5 years	3,399
Securities held to maturity, After 5 years through 10 years	22,177
Securities held to maturity, After 10 years	31,619
Securities held to maturity, Fair Value	57,195	$ 50,088
Securities held to maturity, Within 1 year amortized cost
Securities held to maturity, After 1 year through 5 years amortized cost	3,232
Securities held to maturity, After 5 years through 10 years amortized cost	21,116
Securities held to maturity, After 10 years amortized cost	30,959
Securities held to maturity, Amortized Cost	55,307	50,007	[1]
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Within 1 year
Securities held to maturity, After 1 year through 5 years	3,399
Securities held to maturity, After 5 years through 10 years	21,564
Securities held to maturity, After 10 years	30,953
Securities held to maturity, Fair Value	55,916	48,883
Securities held to maturity, Amortized Cost	54,087	48,785
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, After 5 years through 10 years	378
Securities held to maturity, After 10 years	666
Securities held to maturity, Fair Value	1,044	985
Securities held to maturity, Amortized Cost	998	999
U.S. Treasury securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, After 5 years through 10 years	235
Securities held to maturity, Fair Value	235	220
Securities held to maturity, Amortized Cost	$ 222	$ 223

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Securities Available for Sale and Securities Held to Maturity (Proceeds and Gross Realized Gains And Losses from Sales of Securities Available for Sale) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Securities Available for Sale and Securities Held to Maturity [Abstract]
Proceeds	$ 3,774	$ 444	$ 4,074	$ 594
Gross realized gains	$ 3	1	$ 3	1
Gross realized losses		$ 1		$ 1

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Bank Loans and Related Allowance for Loan Losses (Narrative) (Details) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016 USD ($) loan	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) loan	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) loan
Loans Receivable [Line Items]
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$ 7,800		$ 7,800		$ 7,400
Commitments to purchase First Mortgage loans			$ 569		$ 260
Number of loans accruing interest contractually 90 days or more past due | loan	0		0		0
Nonperforming assets, including nonaccrual loans and other real estate owned	$ 35		$ 35		$ 36
Impaired assets, which include nonaccrual loans, other real estate owned and troubled debt restructurings	48		48		50
First Mortgage [Member]
Loans Receivable [Line Items]
Purchased first mortgages and HELOCs	691	$ 542	1,200	$ 982
Home equity loans and lines of credit [Member]
Loans Receivable [Line Items]
Purchased first mortgages and HELOCs	112	$ 165	222	$ 282
First Mortgage and Home Equity Loans and Lines of Credit [Member]
Loans Receivable [Line Items]
Unamortized premiums and discounts and direct origination costs	$ 79		$ 79		$ 80
First Mortgage and Home Equity Loans and Lines of Credit [Member] | California [Member] | Loans, Geographic Area [Member]
Loans Receivable [Line Items]
Concentration risk percentage			48.00%		48.00%

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Bank Loans and Related Allowance for Loan Losses (Composition of Bank Loans and Delinquency Analysis by Loan Segment) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015		Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 14,652		$ 14,316
Past due and other nonaccrual loans	49		49
Total loans	14,701		14,365
Allowance for loan losses	31	$ 33	31		$ 36	$ 38	$ 42
Total bank loans — net	14,670		14,334	[1]
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	18		18
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	3		3
>90 Days Past Due And Other Nonaccrual Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	28		28
Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	8,472		8,304
Past due and other nonaccrual loans	30		30
Total loans	8,502		8,334
Allowance for loan losses	20	21	20		23	26	29
Total bank loans — net	8,482		8,314
Residential real estate mortgages [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	13		11
Residential real estate mortgages [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	1		1
Residential real estate mortgages [Member] | >90 Days Past Due And Other Nonaccrual Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	16		18
Home equity loans and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,564		2,720
Past due and other nonaccrual loans	18		15
Total loans	2,582		2,735
Allowance for loan losses	10	11	11		$ 13	$ 12	$ 13
Total bank loans — net	2,572		2,724
Home equity loans and lines of credit [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	5		4
Home equity loans and lines of credit [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	1		1
Home equity loans and lines of credit [Member] | >90 Days Past Due And Other Nonaccrual Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	12		10
Pledged asset lines [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,530		3,228
Past due and other nonaccrual loans	1		4
Total loans	3,531		3,232
Total bank loans — net	3,531		3,232
Pledged asset lines [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans			3
Pledged asset lines [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	1		1
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	86		64
Total loans	86		64
Allowance for loan losses	1	$ 1
Total bank loans — net	$ 85		$ 64

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Bank Loans and Related Allowance for Loan Losses (Changes in Allowance for Loan Losses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	$ 33	$ 38	$ 31	$ 42
Charge-offs		(1)	(1)	(2)
Recoveries		1	1	2
Provision for loan losses	(2)	(2)		(6)
Balance at end of period	31	36	31	36
Residential real estate mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	21	26	20	29
Charge-offs			(1)
Recoveries			1
Provision for loan losses	(1)	(3)		(6)
Balance at end of period	20	23	20	23
Home equity loans and lines of credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	11	12	11	13
Charge-offs		(1)		(2)
Recoveries		1		2
Provision for loan losses	(1)	1	(1)
Balance at end of period	10	$ 13	10	$ 13
Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	1
Charge-offs
Recoveries
Provision for loan losses			1
Balance at end of period	$ 1		$ 1

XML

Bank Loans and Related Allowance for Loan Losses (Credit Quality of Residential Real Estate Mortgages and HELOCs by Reviewing FICO Scores at Origination, Current FICO Scores, Loan-To-Value Ratio) (Details) $ in Millions	Jun. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 14,701	$ 14,365
Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 8,502	$ 8,334
Weighted Average Updated FICO | item	774	773
Percent of Loans on Nonaccrual Status	0.08%	0.11%
Residential real estate mortgages [Member] | Origination FICO Score Below 620 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 9	$ 10
Residential real estate mortgages [Member] | Origination FICO Score 620 Through 679 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	84	88
Residential real estate mortgages [Member] | Origination FICO Score 680 Through 739 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,391	1,381
Residential real estate mortgages [Member] | Origination FICO Score 740 And Above [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	7,018	6,855
Residential real estate mortgages [Member] | Year of origination Pre 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,171	1,306
Residential real estate mortgages [Member] | Year of origination 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,385	1,644
Residential real estate mortgages [Member] | Year of origination 2013 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	2,126	2,450
Residential real estate mortgages [Member] | Year of origination 2014 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	874	1,021
Residential real estate mortgages [Member] | Year of origination 2015 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,744	1,913
Residential real estate mortgages [Member] | Year of origination 2016 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,202
Residential real estate mortgages [Member] | Estimated Current LTV 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 7,740	$ 7,508
Weighted Average Updated FICO | item	776	774
Percent of Loans on Nonaccrual Status	0.03%	0.03%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 70% through 90% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 703	$ 759
Weighted Average Updated FICO | item	766	764
Percent of Loans on Nonaccrual Status	0.23%	0.31%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 90% through 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 35	$ 37
Weighted Average Updated FICO | item	743	736
Percent of Loans on Nonaccrual Status	1.40%	5.54%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 24	$ 30
Weighted Average Updated FICO | item	708	713
Percent of Loans on Nonaccrual Status	12.44%	7.72%
Residential real estate mortgages [Member] | Origination Loan To Value Ratio 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 6,178	$ 5,913
Residential real estate mortgages [Member] | Origination Loan to Value Ratio Greater Than 70% Through 90% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	2,312	2,408
Residential real estate mortgages [Member] | Origination Loan to Value Ratio Greater Than 90% Through 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	12	13
Home equity loans and lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 2,582	$ 2,735
Weighted Average Updated FICO | item	770	770
Utilization Rate	38.00%	39.00%
Percent of Loans on Nonaccrual Status	0.19%	0.18%
Home equity loans and lines of credit [Member] | Origination FICO Score Below 620 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 1
Home equity loans and lines of credit [Member] | Origination FICO Score 620 Through 679 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	14	$ 16
Home equity loans and lines of credit [Member] | Origination FICO Score 680 Through 739 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	470	498
Home equity loans and lines of credit [Member] | Origination FICO Score 740 And Above [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	2,097	2,221
Home equity loans and lines of credit [Member] | Year of origination Pre 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,875	2,048
Home equity loans and lines of credit [Member] | Year of origination 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	114	125
Home equity loans and lines of credit [Member] | Year of origination 2013 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	212	232
Home equity loans and lines of credit [Member] | Year of origination 2014 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	174	188
Home equity loans and lines of credit [Member] | Year of origination 2015 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	159	142
Home equity loans and lines of credit [Member] | Year of origination 2016 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	48
Home equity loans and lines of credit [Member] | Estimated Current LTV 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 2,187	$ 2,277
Weighted Average Updated FICO | item	773	772
Utilization Rate	36.00%	37.00%
Percent of Loans on Nonaccrual Status	0.13%	0.09%
Home equity loans and lines of credit [Member] | Estimated Current LTV Greater Than 70% through 90% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 318	$ 373
Weighted Average Updated FICO | item	759	760
Utilization Rate	49.00%	50.00%
Percent of Loans on Nonaccrual Status	0.30%	0.48%
Home equity loans and lines of credit [Member] | Estimated Current LTV Greater Than 90% through 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 44	$ 48
Weighted Average Updated FICO | item	753	748
Utilization Rate	57.00%	63.00%
Percent of Loans on Nonaccrual Status	1.01%	1.02%
Home equity loans and lines of credit [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 33	$ 37
Weighted Average Updated FICO | item	738	739
Utilization Rate	68.00%	67.00%
Percent of Loans on Nonaccrual Status	2.01%	1.79%
Home equity loans and lines of credit [Member] | Origination Loan To Value Ratio 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 1,771	$ 1,858
Home equity loans and lines of credit [Member] | Origination Loan to Value Ratio Greater Than 70% Through 90% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	796	860
Home equity loans and lines of credit [Member] | Origination Loan to Value Ratio Greater Than 90% Through 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	15	17
Pledged asset lines [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	3,531	3,232
Pledged asset lines [Member] | Weighted Average Loan to Value Ratio =70% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 3,531	$ 3,232
Weighted Average Updated FICO | item	762	764
Utilization Rate	48.00%	49.00%

XML

Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity [Line Items]
Accrued expenses and other liabilities	$ 1,820	$ 2,151	[1]
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Investment carrying value	138	104
Accrued expenses and other liabilities	$ 106	$ 84
LIHTC Investments [Member] | Minimum [Member]
Variable Interest Entity [Line Items]
Commitment, expected payment date	2016
LIHTC Investments [Member] | Maximum [Member]
Variable Interest Entity [Line Items]
Commitment, expected payment date	2019

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Variable Interest Entities (Aggregate Assets, Liabilities and Maximum Exposure to Loss) (Details) - Variable Interest Entity, Not Primary Beneficiary [Member] - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity [Line Items]
Aggregate assets	$ 195	$ 161
Aggregate liabilities	106	84
Maximum exposure to loss	203	170
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	138	104
Aggregate liabilities	106	84
Maximum exposure to loss	138	104
Other CRA Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	57	57
Maximum exposure to loss	$ 65	$ 66

XML

Bank Deposits (Deposits from Banking Clients Consisting of Interest Bearing and Noninterest Bearing Deposits) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$ 116,024	$ 108,137
Checking	12,685	12,822
Savings and other	8,052	7,896
Total interest-bearing deposits	136,761	128,855
Non-interest-bearing deposits	534	647
Total bank deposits	$ 137,295	$ 129,502	[1]

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Borrowings (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Secured Credit Facility [Member]
Debt Instrument [Line Items]
Funds drawn under LOC's	$ 5,000,000,000	$ 0
Line of credit facility, remaining borrowing capacity	3,900,000,000
Commercial paper [Member]
Debt Instrument [Line Items]
Funds drawn under LOC's	0	$ 0
Line of credit facility, maximum borrowing capacity	1,500,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 750,000,000
Maximum [Member] | Commercial paper [Member]
Debt Instrument [Line Items]
Line of credit facility, expiration period	270 days
Schwab Bank [Member]
Debt Instrument [Line Items]
Purchase of FHLB stock	$ 118,000,000

XML

Borrowings (Long-term Debt Including Unamortized Debt Discounts and Premiums) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Borrowings [Abstract]
Senior Notes (1)	$ 2,555	$ 2,553
Senior Medium-Term Notes (1)	249	249
Finance lease obligation	72	75
Total long-term debt	2,876	2,877	[1]
Debt issuance costs	$ 12	$ 13

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Borrowings (Annual Maturities on Long-term Debt Outstanding) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Borrowings [Abstract]
2016	$ 4
2017	258
2018	908
2019	8
2020	709
Thereafter	1,016
Total maturities	2,903
Unamortized discount, net	(15)
Debt issuance costs	(12)	$ (13)
Total long-term debt	$ 2,876	$ 2,877	[1]

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Aug. 28, 2008
Standby letters of credit [Member]
Commitments and Contingencies Disclosure [Line Items]
Aggregate face amount of letter of credit agreements	$ 310
Performance Guarantee [Member]
Commitments and Contingencies Disclosure [Line Items]
Liability for guarantees	0
Bond Market Fund Litigation [Member]
Commitments and Contingencies Disclosure [Line Items]
Alleged minimum percentage of fund assets invested in CMOs and mortgage-backed securities without obtaining shareholder vote		25.00%
Margin Requirements [Member]
Commitments and Contingencies Disclosure [Line Items]
Funds drawn under LOC's	$ 0

XML

Offsetting Assets and Liabilities (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Percentage of collateral to related assets	102.00%
Resale And Repurchase Agreements [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Fair value of Schwab's client securities that can be pledged	$ 7,400	$ 8,200
Securities Financing Transaction, Fair Value [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Fair value of client securities pledged in securities lending transactions to other broker-dealers	2,100	1,900
Fair value of borrowed securities from other broker-dealers to fulfill short sales by clients	$ 442	$ 72

XML

Offsetting Assets and Liabilities (Offsetting Assets) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Offsetting Assets and Liabilities [Abstract]
Resale agreements, Gross Asset	$ 7,270	$ 8,088
Resale agreements, Net Amounts Presented in the Consolidated Balance Sheet	7,270	8,088
Resale agreements, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(7,270)	(8,088)
Resale agreements, Net Amount	0	0
Securities borrowed, Gross Asset	643	198
Securities borrowed, Net Amounts Presented in the Consolidated Balance Sheet	643	198
Securities borrowed, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(436)	(70)
Securities borrowed, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(206)	(127)
Securities borrowed, Net Amount	1	1
Total Gross Assets	7,913	8,286
Total Assets, Net Amounts Presented in the Consolidated Balance Sheet	7,913	8,286
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(436)	(70)
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(7,476)	(8,215)
Total Assets, Net Amount	$ 1	$ 1

XML

Offsetting Assets and Liabilities (Offsetting Liabilities) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Offsetting Assets and Liabilities [Abstract]
Securities loaned, Gross Liabilities	$ 2,461	$ 2,233
Securities loaned, Net Amounts Presented in the Consolidated Balance Sheet	2,461	2,233
Securities loaned, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(436)	(70)
Securities loaned, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(1,890)	(1,990)
Securities loaned, Net Amount	135	173
Total Gross Liabilities	2,461	2,233
Total Liabilities, Net Amounts Presented in the Consolidated Balance Sheet	2,461	2,233
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(436)	(70)
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(1,890)	(1,990)
Total Liabilities, Net Amount	$ 135	$ 173
Percentage of collateral to related assets	102.00%

XML

Fair Values of Assets and Liabilities (Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	$ 525	$ 533	[1]
Securities available for sale	74,228	65,646	[1]
Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	2,917	2,328
Investments segregated and on deposit for regulatory purposes	7,301	7,947
Other securities owned	525	533
Securities available for sale	74,228	65,646
Total	84,971	76,454
Fair Value, Measurements, Recurring [Member] | Money market funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	2,350	1,968
Fair Value, Measurements, Recurring [Member] | Commercial paper [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	567	360
Securities available for sale	213
Fair Value, Measurements, Recurring [Member] | Certificates of deposit [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	3,151	3,430
Securities available for sale	2,178	1,683
Fair Value, Measurements, Recurring [Member] | U.S. Government securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	4,150	4,517
Fair Value, Measurements, Recurring [Member] | Schwab Funds money market funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	162	261
Fair Value, Measurements, Recurring [Member] | Equity and bond mutual funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	251	205
Fair Value, Measurements, Recurring [Member] | State and municipal debt obligations [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	64	50
Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	48	17
Fair Value, Measurements, Recurring [Member] | U.S. agency mortgage-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	31,133	22,149
Fair Value, Measurements, Recurring [Member] | Asset-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	21,756	21,485
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	10,147	10,747
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	5,018	5,704
Fair Value, Measurements, Recurring [Member] | U.S. agency notes [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	2,973	3,150
Fair Value, Measurements, Recurring [Member] | U.S. state and municipal securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	651	424
Fair Value, Measurements, Recurring [Member] | Non-agency commercial mortgage-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	159	299
Fair Value, Measurements, Recurring [Member] | Other securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale		5
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	2,350	1,968
Other securities owned	405	467
Total	2,755	2,435
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Money market funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	2,350	1,968
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Schwab Funds money market funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	162	261
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity and bond mutual funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	241	205
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	2	1
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	567	360
Investments segregated and on deposit for regulatory purposes	7,301	7,947
Other securities owned	120	66
Securities available for sale	74,228	65,646
Total	82,216	74,019
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Commercial paper [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	567	360
Securities available for sale	213
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Certificates of deposit [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	3,151	3,430
Securities available for sale	2,178	1,683
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Government securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Investments segregated and on deposit for regulatory purposes	4,150	4,517
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity and bond mutual funds [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	10
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | State and municipal debt obligations [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	64	50
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity, U.S. Government and corporate debt, and other securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	46	16
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency mortgage-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	31,133	22,149
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Asset-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	21,756	21,485
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	10,147	10,747
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	5,018	5,704
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency notes [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	2,973	3,150
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. state and municipal securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	651	424
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Non-agency commercial mortgage-backed securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 159	299
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Other securities [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale		$ 5

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Fair Values of Assets and Liabilities (Fair Value of Other Financial Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Assets:
Securities held to maturity	$ 57,195		$ 50,088
Liabilities:
Allowance for loan losses	31	$ 33	31	$ 36	$ 38	$ 42
Debt issuance costs	12		13
Residential real estate mortgages [Member]
Liabilities:
Allowance for loan losses	20	21	20	23	26	29
Home equity loans and lines of credit [Member]
Liabilities:
Allowance for loan losses	10	11	11	$ 13	$ 12	$ 13
Other [Member]
Liabilities:
Allowance for loan losses	1	$ 1
Carrying Amount, Portion at Other than Fair Value Measurement [Member]
Assets:
Cash and cash equivalents	10,059		9,650
Cash and investments segregated and on deposit for regulatory purposes	11,287		11,647
Receivables from brokers, dealers, and clearing organizations	1,008		582
Receivables from brokerage clients - net	16,819		17,310
Securities held to maturity	55,307		50,007
Bank loans	14,701		14,365
Other assets	333		184
Total	109,514		103,745
Liabilities:
Bank deposits	137,295		129,502
Payables to brokers, dealers, and clearing organizations	3,392		2,588
Payables to brokerage clients	32,679		33,185
Accrued expenses and other liabilities	835		1,115
Short-term borrowings	5,000
Long-term debt	2,876		2,877
Total	182,077		169,267
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Residential real estate mortgages [Member]
Assets:
Bank loans	8,502		8,334
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Home equity loans and lines of credit [Member]
Assets:
Bank loans	2,582		2,735
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,531		3,232
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	54,087		48,785
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	998		999
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | U.S. Treasury securities [Member]
Assets:
Securities held to maturity	222		223
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	86		64
Portion at Other than Fair Value Measurement [Member]
Assets:
Cash and cash equivalents	10,059		9,650
Cash and investments segregated and on deposit for regulatory purposes	11,287		11,647
Receivables from brokers, dealers, and clearing organizations	1,008		582
Receivables from brokerage clients - net	16,819		17,310
Securities held to maturity	57,195		50,088
Bank loans	14,967		14,500
Other assets	333		184
Total	111,668		103,961
Liabilities:
Bank deposits	137,295		129,502
Payables to brokers, dealers, and clearing organizations	3,392		2,588
Payables to brokerage clients	32,679		33,185
Accrued expenses and other liabilities	835		1,115
Short-term borrowings	5,000
Long-term debt	3,033		2,967
Total	182,234		169,357
Portion at Other than Fair Value Measurement [Member] | Residential real estate mortgages [Member]
Assets:
Bank loans	8,632		8,347
Portion at Other than Fair Value Measurement [Member] | Home equity loans and lines of credit [Member]
Assets:
Bank loans	2,718		2,857
Portion at Other than Fair Value Measurement [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,531		3,232
Portion at Other than Fair Value Measurement [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	55,916		48,883
Portion at Other than Fair Value Measurement [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	1,044		985
Portion at Other than Fair Value Measurement [Member] | U.S. Treasury securities [Member]
Assets:
Securities held to maturity	235		220
Portion at Other than Fair Value Measurement [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	86		64
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets:
Cash and cash equivalents	10,059		9,650
Cash and investments segregated and on deposit for regulatory purposes	11,287		11,647
Receivables from brokers, dealers, and clearing organizations	1,008		582
Receivables from brokerage clients - net	16,819		17,310
Securities held to maturity	57,195		50,088
Bank loans	14,967		14,500
Other assets	333		184
Total	111,668		103,961
Liabilities:
Bank deposits	137,295		129,502
Payables to brokers, dealers, and clearing organizations	3,392		2,588
Payables to brokerage clients	32,679		33,185
Accrued expenses and other liabilities	835		1,115
Short-term borrowings	5,000
Long-term debt	3,033		2,967
Total	182,234		169,357
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Residential real estate mortgages [Member]
Assets:
Bank loans	8,632		8,347
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Home equity loans and lines of credit [Member]
Assets:
Bank loans	2,718		2,857
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,531		3,232
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	55,916		48,883
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	1,044		985
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Treasury securities [Member]
Assets:
Securities held to maturity	235		220
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	$ 86		$ 64

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Stockholders' Equity (Narrative) (Details) - $ / shares		6 Months Ended	12 Months Ended
	Mar. 07, 2016	Jun. 30, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Preferred stock, par value		$ 0.01	$ 0.01
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Depositary shares issued	30,000,000
Depositary shares preferred stock ownership interest (per share)	2.50%
Fixed dividend rate on preferred stock	5.95%
Preferred stock, par value	$ 0.01
Preferred stock liquidation preference (per share)	1,000	$ 1,000
Depositary share, liquidation preference equivalent (per share)	$ 25
Common Stock [Member]
Class of Stock [Line Items]
Shares issued		0	0
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock liquidation preference (per share)		$ 1,000	$ 1,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock liquidation preference (per share)		1,000	1,000
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock liquidation preference (per share)		$ 1,000	$ 1,000

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Stockholders' Equity (Preferred Stock Issued and Outstanding) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	Jun. 30, 2016	Mar. 07, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Shares Issued and Outstanding	2,235		1,485
Liquidation Preference	$ 2,235		$ 1,485
Carrying Value	$ 2,189		$ 1,459	[1]
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	400		400
Preferred stock liquidation preference (per share)	$ 1,000		$ 1,000
Liquidation Preference	$ 400		$ 400
Carrying Value	$ 397		$ 396
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	485		485
Preferred stock liquidation preference (per share)	$ 1,000		$ 1,000
Liquidation Preference	$ 485		$ 485
Carrying Value	$ 482		$ 480
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	600		600
Preferred stock liquidation preference (per share)	$ 1,000		$ 1,000
Liquidation Preference	$ 600		$ 600
Carrying Value	$ 584		$ 583
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Shares Issued and Outstanding	750
Preferred stock liquidation preference (per share)	$ 1,000	$ 1,000
Liquidation Preference	$ 750
Carrying Value	$ 726

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Accumulated Other Comprehensive Income (Components of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	$ 168	$ (91)	$ 189	$ 16
Other reclassifications included in other revenue	(3)		(3)
Change in net unrealized gain on securities available for sale	165	(91)	186	16
Other			1
Other comprehensive income (loss), before tax	165	(91)	187	16
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	(63)	34	(71)	(7)
Other reclassifications included in other revenue	1		1
Change in net unrealized gain on securities available for sale	(62)	34	(70)	(7)
Other
Other comprehensive (loss) income, tax effect	(62)	34	(70)	(7)
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	105	(57)	118	9
Other reclassifications included in other revenue	(2)		(2)
Change in net unrealized gain on securities available for sale	103	(57)	116	9
Other			1
Other comprehensive income (loss), net of tax	$ 103	$ (57)	$ 117	$ 9

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Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Balances) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016		Jun. 30, 2015
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance			$ (134)	[1]	$ 165
Other net changes	$ 103	$ (57)	117		9
Ending Balance	$ (17)	$ 174	(17)		174
Net Unrealized Gain On Securities Available For Sale [Member]
Accumulated Other Comprehensive Income [Line Items]
Other net changes			116		$ 9
Other [Member]
Accumulated Other Comprehensive Income [Line Items]
Other net changes			$ 1

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

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Earnings Per Common Share (EPS under Basic and Diluted Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Common Share [Abstract]
Net income		$ 452	$ 353	$ 864	$ 655
Preferred stock dividends and other	[1]	(46)	(23)	(66)	(34)
Net income available to common stockholders		$ 406	$ 330	$ 798	$ 621
Weighted Average Common Shares Outstanding - Basic		1,322	1,314	1,322	1,313
Common stock equivalent shares related to stock incentive plans		11	12	9	12
Weighted-average common shares outstanding — diluted		1,333	1,326	1,331	1,325
Basic EPS		$ 0.31	$ 0.25	$ 0.60	$ 0.47
Diluted EPS		$ 0.30	$ 0.25	$ 0.60	$ 0.47
Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS		19	15	22	16

[1] Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

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Regulatory Requirements (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jan. 31, 2019	Jan. 01, 2016	Dec. 31, 2015
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Required capital conservation buffer of risk-weighted assets			0.625%
Capital convservation buffer of risk-weighted assets annual increase			0.625%
Percentage of aggregate debit balances required as minimum net capital	2.00%
Net capital under the alternative method permitted by the Uniform Net Capital Rule	This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement ($250,000), which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.
Percentage of net capital to aggregate debit balances required for a broker-dealer to repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees	5.00%
Percentage of net capital to the Company's minimum dollar requirement required for a broker-dealer to repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent company or employees	120.00%
Description of Net Capital Requirements under Commodity Exchange Act	optionsXpress, Inc. is also subject to Commodity Futures Trading Commission Regulation 1.17 (Reg. 1.17) under the Commodity Exchange Act, which also requires the maintenance of minimum net capital. optionsXpress, Inc., as a futures commission merchant, is required to maintain minimum net capital equal to the greater of its net capital requirement under Reg. 1.17 ($1 million), or the sum of 8% of the total risk margin requirements for all positions carried in client accounts and 8% of the total risk margin requirements for all positions carried in non-client accounts (as defined in Reg. 1.17).
Net capital required for optionsXpress, Inc. under Reg 1.17 of the Commodity Exchange Act	$ 1,000
Minimum percentage of the total risk margin requirements for all positions carried in customer accounts to be added to the minimum percentage of the total risk margin requirements for all positions carried in non-customer accounts for optionsXpress, Inc. minimum net capital calculation	8.00%
Minimum percentage of the total risk margin requirements for all positions carried in non-customer accounts to be added to the minimum percentage of the total risk margin requirements for all positions carried in customer accounts for optionsXpress, Inc. minimum net capital calculation	8.00%
Scenario, Forecast [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Required capital conservation buffer of risk-weighted assets		2.50%
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Minimum capital requirement	$ 250			$ 250

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Regulatory Requirements (Regulatory Capital and Ratios) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
CSC [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 11,581	$ 10,851
Minimum Capital Requirement	$ 2,908	$ 2,681
Actual Ratio	17.90%	18.20%
Minimum Capital Requirement Ratio	4.50%	4.50%
Tier 1 Risk-Based Capital
Actual Amount	$ 13,770	$ 12,310
Minimum Capital Requirement Amount	$ 3,877	$ 3,575
Actual Ratio	21.30%	20.70%
Minimum Capital Requirement Ratio	6.00%	6.00%
Total Risk-Based Capital
Actual Amount	$ 13,802	$ 12,342
Minimum Capital Requirement Amount	$ 5,169	$ 4,766
Actual Ratio	21.40%	20.70%
Minimum Capital Requirement Ratio	8.00%	8.00%
Tier 1 Leverage
Actual Amount	$ 13,770	$ 12,310
Minimum Capital Requirement Amount	$ 7,620	$ 6,912
Actual Ratio	7.20%	7.10%
Minimum Capital Requirement Ratio	4.00%	4.00%
Schwab Bank [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 10,564	$ 9,314
Minimum to be Well Capitalized	3,638	3,349
Minimum Capital Requirement	$ 2,518	$ 2,318
Actual Ratio	18.90%	18.10%
Minimum to be Well Capitalized Ratio	6.50%	6.50%
Minimum Capital Requirement Ratio	4.50%	4.50%
Tier 1 Risk-Based Capital
Actual Amount	$ 10,564	$ 9,314
Minimum to be Well Capitalized Amount	4,477	4,121
Minimum Capital Requirement Amount	$ 3,358	$ 3,091
Actual Ratio	18.90%	18.10%
Minimum to be Well Capitalized Ratio	8.00%	8.00%
Minimum Capital Requirement Ratio	6.00%	6.00%
Total Risk-Based Capital
Actual Amount	$ 10,595	$ 9,345
Minimum to be Well Capitalized Amount	5,596	5,152
Minimum Capital Requirement Amount	$ 4,477	$ 4,121
Actual Ratio	18.90%	18.10%
Minimum to be Well Capitalized Ratio	10.00%	10.00%
Minimum Capital Requirement Ratio	8.00%	8.00%
Tier 1 Leverage
Actual Amount	$ 10,564	$ 9,314
Minimum to be Well Capitalized Amount	7,462	6,594
Minimum Capital Requirement Amount	$ 5,970	$ 5,275
Actual Ratio	7.10%	7.10%
Minimum to be Well Capitalized Ratio	5.00%	5.00%
Minimum Capital Requirement Ratio	4.00%	4.00%

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Regulatory Requirements (Net Capital and Net Capital Requirements for Schwab and optionsXpress, Inc) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	$ 1,820,000	$ 1,746,000
Minimum Net Capital Required	250	250
2% of Aggregate Debit Balances	360,000	358,000
Net Capital in Excess of Required Net Capital	1,460,000	1,388,000
OptionsXpress, Inc. [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	260,000	244,000
Minimum Net Capital Required	1,000	1,000
2% of Aggregate Debit Balances	7,000	7,000
Net Capital in Excess of Required Net Capital	$ 253,000	$ 237,000

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Segment Information (Narrative) (Details)	6 Months Ended
	Jun. 30, 2016 segment
Segment Information [Abstract]
Number of reportable segments	2

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Segment Information (Financial Information for Reportable Segments) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Revenues
Asset management and administration fees	[1]	$ 757	$ 670	$ 1,456	$ 1,314
Net interest revenue		798	612	1,570	1,200
Trading revenue		201	203	433	430
Other		70	79	133	142
Provision for loan losses		2	2		6
Total net revenues		1,828	1,566	3,592	3,092
Expenses Excluding Interest		1,108	999	2,217	2,041
Income before taxes on income		720	567	1,375	1,051
Investor Services [Member]
Net Revenues
Asset management and administration fees		514	465	986	911
Net interest revenue		628	524	1,241	1,034
Trading revenue		129	133	272	280
Other		51	57	97	101
Provision for loan losses		2	2		6
Total net revenues		1,324	1,181	2,596	2,332
Expenses Excluding Interest		834	760	1,671	1,546
Income before taxes on income		490	421	925	786
Advisor Services [Member]
Net Revenues
Asset management and administration fees		243	205	470	403
Net interest revenue		170	88	329	166
Trading revenue		72	70	161	150
Other		19	22	36	41
Total net revenues		504	385	996	760
Expenses Excluding Interest		274	239	546	495
Income before taxes on income		$ 230	$ 146	$ 450	$ 265

[1] Includes fee waivers of $55 and $168 during the second quarters of 2016 and 2015, respectively and $152 and $353 during the first halves of 2016 and 2015, respectively, relating to Schwab-sponsored money market funds.