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 September 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.

1,325,672,135 shares of $.01 par value Common Stock

Outstanding on October 26, 2016

THE CHARLES SCHWAB CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2016

Index

Part I - Financial Information			Page
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):
		Statements of Income	28
		Statements of Comprehensive Income	29
		Balance Sheets	30
		Statements of Cash Flows	31
		Notes	32-56
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1-25
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26-27
	Item 4.	Controls and Procedures	57
Part II - Other Information
	Item 1.	Legal Proceedings	58
	Item 1A.	Risk Factors	58
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 3.	Defaults Upon Senior Securities	59
	Item 4.	Mine Safety Disclosures	59
	Item 5.	Other Information	59
	Item 6.	Exhibits	60-61
Signature			62

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 (2015 Form 10-K).

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 expected impact of the final Department of Labor fiduciary 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”);

· 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”);

· 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”);

· 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

-  1  -

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 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:

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

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

· general market conditions, including the level of interest rates, equity valuations and trading activity;

· 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 level of client assets, including cash balances;

· competitive pressure on rates and fees;

· client sensitivity to interest rates;

· regulatory guidance;

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

· capital needs and management;

· the availability and terms of external financing;

· the company’s ability to manage expenses;

· the failure of another member of a securities clearing house or exchange to satisfy its obligations for which the Company has a guarantee obligation; and

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

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 2015 Form 10-K, and “Part II – Other Information – Item 1A – Risk Factors.”

-  2  -

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.

-  3  -

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 July2013 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.

-  4  -

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:The risk, including litigation, of inadequate or failed internal processes, people, systems or from external events and relationships impacting the Company and/or any of its key business partners and third parties.

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 Federal Deposit Insurance Corporation(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.

-  5  -

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 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 third quarters and first nine months of 2016 and 2015 are:

	Three Months Ended								Nine Months Ended
	September 30,						Percent		September 30,						Percent
	2016			2015			Change		2016			2015			Change
Client Metrics:
Net new client assets(in billions)	$	30.0		$	30.8		(3)	%	$	88.6		$	96.5		(8)	%
Core net new client assets (in billions) (1)	$	30.0		$	30.8		(3)	%	$	88.6		$	102.0		(13)	%
Client assets (in billions, at quarter end)	$	2,725.3		$	2,415.9		13	%
Average client assets (in billions)	$	2,699.5		$	2,513.5		7	%	$	2,576.8		$	2,532.7		2	%
New brokerage accounts (in thousands)		264			254		4	%		800			808		(1)	%
Active brokerage accounts (in thousands,
at quarter end)		10,046			9,691		4	%
Assets receiving ongoing advisory services
(in billions, at quarter end)	$	1,368.8		$	1,204.8		14	%
Client cash as a percentage of client assets
(at quarter end)		12.5	%		12.9	%
Company Financial Metrics:
Net revenues	$	1,914		$	1,597		20	%	$	5,506		$	4,689		17	%
Expenses excluding interest		1,120			1,014		10	%		3,337			3,055		9	%
Income before taxes on income		794			583		36	%		2,169			1,634		33	%
Taxes on income		291			207		41	%		802			603		33	%
Net income		503			376		34	%		1,367			1,031		33	%
Preferred stock dividends and other		33			11		200	%		99			45		120	%
Net income available to common stockholders	$	470		$	365		29	%	$	1,268		$	986		29	%
Earnings per common share – diluted	$	.35		$	.28		25	%	$	.95		$	.74		28	%
Net revenue growth from prior year		20	%		3	%				17	%		4	%
Pre-tax profit margin		41.5	%		36.5	%				39.4	%		34.9	%
Return on average common stockholders’ equity		14	%		13	%				13	%		12	%
Expenses excluding interest as a percentage of
average client assets (annualized)		0.17	%		0.16	%				0.17	%		0.16	%

(1) The nine months ended September 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 third quarter of 2016, the Company’s range of full-service investment capabilities continued to attract a broad spectrum of investors. Core net new assets totaled $30.0 billion and $88.6 billion for the third quarter and nine months ended September 30, 2016, respectively, sustaining a 5% annualized organic growth rate over year-end 2015 client assets. The Company ended the quarter serving 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. Total client assets reached $2.73 trillion at September 30, 2016, up 13% year-over-year, as investors continued to engage with the Company throughout the summer quarter. During the third quarter of 2016, the Company’s financial consultants held planning conversations with 34,000 clients, up 17% from the same quarter in 2015. For the nine months ended September 30, 2016, 101,000 clients have participated in such conversations, up 22% from September 30, 2015. Assets enrolled in some form of ongoing advisory service totaled $1.37 trillion at quarter-end, up 14% from a year ago.

-  6  -

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 20% and 17% in the third quarter and first nine months of 2016, respectively, compared to the same periods in 2015 primarily due to growth in client assets and higher short-term interest rates.

Expenses increased 10% and 9% in the third quarter and first nine months of 2016, respectively, compared to the same periods in 2015 consistent with management’s expectations for spending to support current and future growth in the business.

The pre-tax profit margin for the third quarter and first nine months of 2016 was 41.5% and 39.4%, respectively, compared to 36.5% and 34.9% for the same periods in 2015. Net income grew by 34% and 33%, respectively, for the third quarter and first nine months 2016 compared to the same periods in 2015.

Subsequent Event

On October 31, 2016, the Company issued and sold 600,000 depositary shares, each representing a 1/100th ownership interest in a share of fixed-to-floating rate non-cumulative perpetual preferred stock, Series E, $0.01 par value, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share) (Series E Preferred Stock). The Series E Preferred Stock has a fixed dividend rate of 4.625% through February 28, 2022, payable semi-annually, and thereafter at a floating rate of three-month LIBOR plus a fixed spread of 3.315%, payable quarterly. Net proceeds received from the sale were $591 million and are being used to support balance sheet growth, including the migration of certain client balances from sweep money market funds into Schwab Bank.

Current Regulatory Environment and Other Developments

In September 2016, the OCC issued final guidelines for recovery planning by national banks and federal savings banks with total consolidated assets of $50 billion or more. The guidelines establish enforceable standards requiring each bank to develop and maintain a recovery plan that describes how the bank will restore itself to financial health and viability in response to a wide range of external and internal financial and operational stress scenarios. The guidelines go into effect on January 1, 2017, and Schwab Bank will have until the end of 2017 to develop and prepare a recovery plan.

Effective July 1, 2016, the FDIC began imposing a surcharge on insured depository institutions with total consolidated assets of $10 billion or more at the same time that a scheduled reduction in the regular FDIC insurance assessment also went into effect. As a result, the Company is now subject to a 3 basis point regular assessment on its total assessment base (down from 5 basis points) and a new 4.5 basis point surcharge on the amount of its assessment base in excess of $10 billion. For the third quarter of 2016, the Company’s combined FDIC assessment rate, measured against its total assessment base, rose by a net of 2.2 basis points.

In May2016, 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 ended on August 5, 2016 and the impact to the Company cannot be assessed until the final rule is released.

In April2016, 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 October2015, the Federal Reserve issued a notice of proposed rulemaking that, among other things, 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.

-  7  -

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 third quarter and first nine months of 2016 compared to the same periods in 2015.

Net Revenues

Three Months Ended September 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)	32	%	$	486	25	%	$	369	23	%
Advice solutions	5	%		237	12	%		225	14	%
Other (1)	9	%		75	5	%		69	5	%
Asset management and administration fees	20	%		798	42	%		663	42	%
Net interest revenue
Interest revenue	33	%		891	46	%		669	42	%
Interest expense	35	%		(46)	(2)	%		(34)	(2)	%
Net interest revenue	33	%		845	44	%		635	40	%
Trading revenue
Commissions	(15)	%		181	10	%		214	13	%
Principal transactions	(36)	%		9	-			14	1	%
Trading revenue	(17)	%		190	10	%		228	14	%
Other	15	%		76	4	%		66	4	%
Provision for loan losses	-			5	-			5	-
Total net revenues	20	%	$	1,914	100	%	$	1,597	100	%

Nine Months Ended September 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)	24	%	$	1,362	25	%	$	1,102	24	%
Advice solutions	1	%		678	12	%		673	14	%
Other (1)	6	%		214	4	%		202	4	%
Asset management and administration fees	14	%		2,254	41	%		1,977	42	%
Net interest revenue
Interest revenue	32	%		2,541	46	%		1,931	41	%
Interest expense	31	%		(126)	(2)	%		(96)	(2)	%
Net interest revenue	32	%		2,415	44	%		1,835	39	%
Trading revenue
Commissions	(6)	%		586	10	%		623	13	%
Principal transactions	6	%		37	1	%		35	1	%
Trading revenue	(5)	%		623	11	%		658	14	%
Other	-			209	4	%		208	5	%
Provision for loan losses	(55)	%		5	-			11	-
Total net revenues	17	%	$	5,506	100	%	$	4,689	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.

-  8  -

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. Asset management and administration fees do not include securities lending revenues earned by proprietary mutual funds and ETFs as those amounts, net of program fees, are credited to the fund shareholders.

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.

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 September 30,		2016		2015		2016		2015		2016		2015
Balance at beginning of period	$	160,951	$	155,577	$	110,722	$	98,399	$	203,352	$	231,247
Net inflows (outflows)		(725)		6,221		3,297		2,457		(5,453)		(6,289)
Net market gains (losses) and other		26		9		4,435		(7,391)		8,184		(14,213)
Balance at end of period	$	160,252	$	161,807	$	118,454	$	93,465	$	206,083	$	210,745

		Schwab Money				Schwab Equity and				Mutual Fund
		Market Funds				Bond Funds and ETFs				OneSource®
Nine Months Ended September 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)		(5,968)		(6,285)		8,951		10,753		(14,632)		(15,164)
Net market gains (losses) and other		72		183		7,391		(5,738)		13,061		(8,472)
Balance at end of period	$	160,252	$	161,807	$	118,454	$	93,465	$	206,083	$	210,745

-  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 September 30,	2016					2015
	Average					Average
	Client				Average	Client				Average
	Assets		Revenue		Fee	Assets		Revenue		Fee
Schwab money market funds before fee waivers	$	161,904	$	239	0.59%	$	160,266	$	237	0.59%
Fee waivers				(41)					(166)
Schwab money market funds		161,904		198	0.49%		160,266		71	0.18%
Schwab equity and bond funds and ETFs		121,378		57	0.19%		102,898		55	0.21%
Mutual Fund OneSource®		203,589		175	0.34%		220,419		187	0.34%
Other third-party mutual funds and ETFs (1)		263,995		56	0.08%		251,245		56	0.09%
Total mutual funds and ETFs (2)	$	750,866		486	0.26%	$	734,828		369	0.20%
Advice solutions (2):
Fee-based	$	183,191		237	0.51%	$	170,211		225	0.52%
Intelligent Portfolios		8,249		-	-		3,714		-	-
Legacy Non-Fee		17,232		-	-		16,372		-	-
Total advice solutions	$	208,672		237	0.45%	$	190,297		225	0.47%
Other balance-based fees (3)		350,117		62	0.07%		328,461		57	0.07%
Other (4)				13					12
Total asset management and administration fees			$	798				$	663

Nine Months Ended September 30,	2016					2015
	Average					Average
	Client				Average	Client				Average
	Assets		Revenue		Fee	Assets		Revenue		Fee
Schwab money market funds before fee waivers	$	164,758	$	724	0.59%	$	161,029	$	706	0.59%
Fee waivers				(193)					(519)
Schwab money market funds		164,758		531	0.43%		161,029		187	0.16%
Schwab equity and bond funds and ETFs		112,528		160	0.19%		101,337		163	0.22%
Mutual Fund OneSource®		199,758		508	0.34%		229,660		582	0.34%
Other third-party mutual funds and ETFs (1)		251,211		163	0.09%		252,423		170	0.09%
Total mutual funds and ETFs (2)	$	728,255		1,362	0.25%	$	744,449		1,102	0.20%
Advice solutions (2):
Fee-based	$	175,210		678	0.52%	$	171,516		673	0.52%
Intelligent Portfolios		6,662		-	-		2,578		-	-
Legacy Non-Fee		16,901		-	-		16,573		-	-
Total advice solutions	$	198,773		678	0.46%	$	190,667		673	0.47%
Other balance-based fees (3)		335,555		176	0.07%		323,087		169	0.07%
Other (4)				38					33
Total asset management and administration fees			$	2,254				$	1,977

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 $135 million, or 20%, and $277 million, or 14%, in the third quarter and first nine months of 2016 compared to the same periods in 2015. The increase is primarily due to higher net yields on money market fund assets as short-term interest rates have risen in 2016, 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 client brokerage 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 borrowing and lendingactivities conducted by the Company’s broker-dealer subsidiaries on assets held in client brokerage accounts 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 certain 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 September 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	$	12,875	$	17	0.53	%	$	9,764	$	6	0.24	%
Cash and investments segregated		19,941		24	0.48	%		18,061		8	0.18	%
Broker-related receivables (1)		667		-	0.31	%		312		-	0.09	%
Receivables from brokerage clients		14,940		123	3.28	%		15,594		130	3.31	%
Securities available for sale (2)		74,064		227	1.22	%		63,916		159	0.99	%
Securities held to maturity		57,669		349	2.41	%		38,533		241	2.48	%
Bank loans		14,739		100	2.70	%		14,137		93	2.61	%
Total interest-earning assets		194,895		840	1.71	%		160,317		637	1.58	%
Other interest revenue				51						32
Total interest-earning assets	$	194,895	$	891	1.82	%	$	160,317	$	669	1.66	%
Funding sources:
Bank deposits	$	143,578	$	10	0.03	%	$	115,606	$	8	0.03	%
Payables to brokerage clients		26,204		1	0.01	%		25,585		1	0.01	%
Short-term borrowings (1,3)		2,952		4	0.54	%		36		-	0.15	%
Long-term debt (4)		2,876		26	3.60	%		2,888		24	3.30	%
Total interest-bearing liabilities (4)		175,610		41	0.09	%		144,115		33	0.09	%
Non-interest-bearing funding sources (3)		19,285						16,202
Other interest expense				5						1
Total funding sources	$	194,895	$	46	0.10	%	$	160,317	$	34	0.09	%
Net interest revenue			$	845	1.72	%			$	635	1.57	%

(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)	Certain prior period amounts have been reclassified to conform to the 2016 presentation.
(4)	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)

Nine Months Ended September 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	$	11,510	$	44	0.51	%	$	9,230	$	17	0.25	%
Cash and investments segregated		19,788		65	0.44	%		18,607		21	0.15	%
Broker-related receivables (1)		579		-	0.21	%		285		-	0.07	%
Receivables from brokerage clients		14,952		372	3.32	%		15,043		374	3.32	%
Securities available for sale (2)		71,230		636	1.19	%		60,866		454	1.00	%
Securities held to maturity		53,791		1,006	2.50	%		36,637		686	2.50	%
Bank loans		14,570		297	2.72	%		13,848		274	2.65	%
Total interest-earning assets		186,420		2,420	1.73	%		154,516		1,826	1.58	%
Other interest revenue				121						105
Total interest-earning assets	$	186,420	$	2,541	1.82	%	$	154,516	$	1,931	1.67	%
Funding sources:
Bank deposits	$	137,093	$	26	0.03	%	$	110,569	$	22	0.03	%
Payables to brokerage clients		26,079		2	0.01	%		25,596		2	0.01	%
Short-term borrowings (1,3)		1,674		6	0.48	%		23		-	0.15	%
Long-term debt (4)		2,876		78	3.62	%		2,642		67	3.39	%
Total interest-bearing liabilities (4)		167,722		112	0.09	%		138,830		91	0.09	%
Non-interest-bearing funding sources (3)		18,698						15,686
Other interest expense				14						5
Total funding sources	$	186,420	$	126	0.09	%	$	154,516	$	96	0.08	%
Net interest revenue			$	2,415	1.73	%			$	1,835	1.59	%

(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)	Certain prior period amounts have been reclassified to conform to the 2016 presentation.
(4)	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  $210 million, or 33%,and $580 million, or 32% in the third quarter and first nine months of 2016 compared to the same periods in 2015 due to higher interest-earning assets driven by growth in bank deposits.The Company has grown bank deposits through a combination of:

· gathering additional assetsfrom new and current clients;

· transferring uninvested cash balances in certain client brokerage accounts to Schwab Bank; and

· establishing the Schwab Bank sweep feature as the default investment option for uninvested cash balances within all new brokerage accounts as of June2016.

The Company has invested the cash from the growth in bank deposits and from recent short-term borrowings in investment securities. These incremental investments, coupled with an increase in short-term interest rates, have resulted in higher net interest revenue and higher net interest margins during the third quarter and first nine months of 2016.

-  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)

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.  

The following table presents trading revenue and the related drivers:

	Three Months Ended						Nine Months Ended
	September 30,				Percent		September 30,				Percent
	2016		2015		Change		2016		2015		Change
Daily average revenue trades (in thousands)		268		304	(12)	%		291		295	(1)	%
Clients’ daily average trades (in thousands)		543		537	1	%		558		537	4	%
Number of trading days		64.0		64.0	-			189.0		188.0	1	%
Average revenue per revenue trade	$	11.17	$	11.67	(4)	%	$	11.30	$	11.87	(5)	%
Trading revenue	$	190	$	228	(17)	%	$	623	$	658	(5)	%

Trading revenue decreased by $38 million, or 17%, and $35 million, or 5%, in the third quarter and first nine months of 2016 compared to the same periods in 2015, primarily due to a decrease in commission revenue as a result of lower daily average revenue trades related to equities and derivatives and lower commissions per revenue trade.

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 increased by $10 million, or 15%, in the third quarter of 2016 compared to the third quarter of 2015, primarily due to higher litigation proceeds in the third quarter of 2016 relating to the Company’s non-agency residential mortgage-backed securities portfolio. These proceeds conclude the last pending cases. Other revenue was $209 million and $208 million during the first nine months of 2016 and 2015, respectively.

Order flow revenue was $26 million and $78 million during the third quarters and first nine months of both 2016 and 2015, respectively.

-  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)

Expenses Excluding Interest

The following table shows a comparison of expenses excluding interest:

	Three Months Ended								Nine Months Ended
	September 30,						Percent		September 30,						Percent
	2016			2015			Change		2016			2015			Change
Compensation and benefits	$	609		$	548		11	%	$	1,837		$	1,669		10	%
Professional services		131			114		15	%		372			340		9	%
Occupancy and equipment		100			92		9	%		299			260		15	%
Advertising and market development		64			58		10	%		204			189		8	%
Communications		57			58		(2)	%		179			175		2	%
Depreciation and amortization		60			57		5	%		173			166		4	%
Other		99			87		14	%		273			256		7	%
Total expenses excluding interest	$	1,120		$	1,014		10	%	$	3,337		$	3,055		9	%
Expenses as a percentage of total net revenues:
Compensation and benefits		32	%		34	%				33	%		36	%
Advertising and market development		3	%		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.

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

	Three Months Ended						Nine Months Ended
	September 30,				Percent		September 30,				Percent
	2016		2015		Change		2016		2015		Change
Salaries and wages	$	343	$	313	10	%	$	1,018	$	943	8	%
Incentive compensation		170		152	12	%		509		453	12	%
Employee benefits and other		96		83	16	%		310		273	14	%
Total compensation and benefits expense	$	609	$	548	11	%	$	1,837	$	1,669	10	%
Full-time equivalent employees (in thousands)
At quarter end		16.1		15.4	5	%
Average		16.2		15.3	6	%		15.9		15.0	6	%

Salaries and wages increased in the third quarter and first nine months 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 third quarter and first nine months 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.

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

-  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)

Expenses Excluding Compensation and Benefits

Professional services expense increased in the third quarter and first nine months 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 third quarter and first nine months 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 growth in the Company’s geographic footprint.

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

Other expense increased in the third quarter and first nine months of 2016 compared to the same periods in 2015, primarily due to an increase in the Company’s FDIC assessments.  The FDIC assessments rose as a result of higher bank deposits and the effect of a new surcharge that commenced in the third quarter of 2016.

Taxes on Income

The Company’s effective income tax rate on income before taxes was 36.6% and 35.5% for the third quarters of 2016 and 2015, respectively. During the third quarter of 2015, the Company recognized $14 million of net tax benefits primarily for positions taken in tax years 2011 to 2014. The effective income tax rate on income before taxes was 37.0% and 36.9% for the first nine months of 2016 and 2015, respectively.

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 attributed 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.

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 September 30,	Change		2016		2015		Change		2016		2015		Change		2016		2015
Net Revenues:
Asset management and
administration fees	19	%	$	550	$	461	23	%	$	248	$	202	20	%	$	798	$	663
Net interest revenue	22	%		654		534	89	%		191		101	33	%		845		635
Trading revenue	(17)	%		123		148	(16)	%		67		80	(17)	%		190		228
Other	24	%		56		45	(5)	%		20		21	15	%		76		66
Provision for loan losses	-			4		4	-			1		1	-			5		5
Total net revenues	16	%		1,387		1,192	30	%		527		405	20	%		1,914		1,597
Expenses Excluding Interest	11	%		847		762	8	%		273		252	10	%		1,120		1,014
Income before taxes on income	26	%	$	540	$	430	66	%	$	254	$	153	36	%	$	794	$	583

-  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)

	Investor Services (1)						Advisor Services (1)						Total
	Percent						Percent						Percent
Nine Months Ended September 30,	Change		2016		2015		Change		2016		2015		Change		2016		2015
Net Revenues:
Asset management and
administration fees	12	%	$	1,536	$	1,372	19	%	$	718	$	605	14	%	$	2,254	$	1,977
Net interest revenue	21	%		1,895		1,568	95	%		520		267	32	%		2,415		1,835
Trading revenue	(8)	%		395		428	(1)	%		228		230	(5)	%		623		658
Other	5	%		153		146	(10)	%		56		62	-			209		208
Provision for loan losses	(60)	%		4		10	-			1		1	(55)	%		5		11
Total net revenues	13	%		3,983		3,524	31	%		1,523		1,165	17	%		5,506		4,689
Expenses Excluding Interest	9	%		2,518		2,308	10	%		819		747	9	%		3,337		3,055
Income before taxes on income	20	%	$	1,465	$	1,216	68	%	$	704	$	418	33	%	$	2,169	$	1,634

(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 $195 million, or 16%, and $459 million, or 13%, in the third quarter and first nine months of 2016 compared to the same periods in 2015, primarily due to increases in net interest revenue and asset management and administration fees, partially offset by a decrease in trading revenue.  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®. Trading revenue decreased primarily due to lower daily average revenue trades related to equities and derivatives and lower commissions per revenue trade.

Expenses excluding interest increased by $85 million, or 11%,  and $210 million, or 9%,  in the third quarter and first nine months of 2016 compared to the same periods in 2015, primarily due to increases in compensation and benefits and depreciation and amortization 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.

Advisor Services

Net revenues increased by $122 million, or 30%,  and $358 million, or 31%, in the third quarter and first nine months 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. This growth was bolstered by the migration of 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.

Expenses excluding interest increased by $21 million, or 8%,  and $72 million, or 10%, in the third quarter and first nine months 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, and compliance 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.

-  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)

For a full discussion of the Company’s risk management program, see “Item 7 – Risk Management” in the 2015 Form 10-K.

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 loan 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, 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 originate or 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.

The Company’s bank loans include $7.8 billion of adjustable rate First Mortgage loans at September 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 37% of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 57% 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.

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
September 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		57	%		58	%
Weighted-average current LTV ratios		47	%		48	%

-  18  -

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

	September 30,			December 31,
	2016			2015
Loan delinquencies (1)		0.21	%		0.25	%
Nonaccrual loans (2)		0.19	%		0.19	%
Allowance for loan losses		0.17	%		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.

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:

September 30, 2016	Balance
Converted to an amortizing loan by period end	$	476
Within 1 year		136
> 1 year – 3 years		903
> 3 years – 5 years		231
> 5 years		726
Total	$	2,472

At September 30, 2016, $1.9 billion of the HELOC portfolio was 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. In addition to the credit monitoring activities described previously, the Company also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. AtSeptember 30, 2016, approximately 27% of the HELOC borrowers that had a balance only paid the minimum amount of interest due.

For more information on the Company’s credit quality indicators relating to its bank loans, 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 held to maturity securities portfolios 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 September 30, 2016, substantially 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.

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.

-  19  -

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 fair value of the Company’s investments in mortgage-backed securities totaled $101.0 billion at September 30, 2016. Of these, $99.9 billion were issued by U.S. agencies and $1.1 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 $21.5 billion at September 30, 2016. The Company holds $10.3 billion floating rate Federal Family Education Loan Program Asset-Backed Securities (FFELP ABS). Beginning in 2015, two Nationally Recognized Statistical Rating Organizations began placing a portion of FFELP ABS on review for downgrade. During the third quarter of 2016, ten of the Company’s FFELP ABS holdings were downgraded, including three securities that were downgraded to below investment grade. As of September 30, 2016, these three non-investment grade FFELP ABS had an aggregate fair value of $588 million, or 1%, of the total fair value of the Company’s available for sale portfolio, and were the only non-investment grade securities held by the Company. Subsequent to September 30, 2016, three additional FFELP ABS with an aggregate fair value of $1.1 billion were downgraded to below investment grade, while one of the original securities discussed above (fair value of $256 million) was restored to AAA rating after a maturity extension was executed. Both agencies have indicated that additional 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 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 $11.3 billion at September 30, 2016, with 46% 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 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.

The Company has indirect exposure to U.S. Government and agency securities held as collateral to secure its resale agreements. 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 $9.6 billion at September 30, 2016.

Foreign Holdings

At September 30, 2016, theCompany had exposure to non-sovereign financial and non-financial institutions in foreign countries of $7.1 billion, with the fair value of the top three exposures being to issuers and counterparties domiciled in France at $1.9 billion, Sweden at $1.3 billion and Australia at $1.1 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 September 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 September 30, 2016, the Company had $528 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 September 30, 2016, the Company had outstanding margin loans to foreign residents of $369 million, which are fully collateralized.

-  20  -

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)

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 2015 Form 10-K.

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 September 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 2015 Form 10‑K.

The Company’s primary source of funds is cash generated by client activity: bank deposits and cash balances in client brokerage accounts. Bank deposits swept from brokerage accounts were $127.9 billion at September 30, 2016 compared to $108.1 billion at December 31, 2015. These funds were used to purchase investment securities, thereby funding a significant portion of the 14% 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 of assets held in client brokerage accounts, 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.

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 nine months 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 September 30, 2016, the minimum level of stockholders’ equity required under this facility was $10.0 billion (CSC’s stockholders’ equity, excluding AOCI, at September 30, 2016 was $15.4 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 nine months of 2016. Schwab used such borrowings for one day during the first nine months of 2016 for $15 million, and there were no borrowings outstanding under these lines at September 30, 2016.

-  21  -

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)

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 $295 million at September 30, 2016. There were no funds drawn under any of these LOCs during the first nine months 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 September 30, 2016, $1.5 billion was available under this arrangement. Schwab Bank used such borrowings for one day during the first nine months of 2016 for $1 million and there were no borrowings outstanding under these lines at September 30, 2016.

Schwab Bank also maintains a secured credit facility with the Federal Home Loan Bank of San Francisco (FHLB). 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 September 30, 2016, $3.0 billion was outstanding under this facility with an additional $5.9 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 September 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 by Moody’s, A1 by Standard & Poor’s, and F1 by Fitch. CSC had no Commercial Paper Notes outstanding as of September 30, 2016.

CSC had long-term debt of $2.9 billion at September 30, 2016 and December 31, 2015, bearing a weighted-average interest rate of 3.37%. 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.

The following are details of CSC’s Senior and Medium-Term Notes:

	Par				Weighted Average		Standard
September 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.”

-  22  -

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)

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 2015 Form 10-K.

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 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 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 September 30, 2016, Schwab Bank is considered well capitalized.

-  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)

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

September 30, 2016		CSC			Schwab Bank
Total stockholders’ equity	$	15,470		$	11,175
Less:
Preferred Stock		2,192			-
Common Equity Tier 1 Capital before regulatory adjustments	$	13,278		$	11,175
Less:
Goodwill, net of associated deferred tax liabilities	$	1,180		$	11
Other intangible assets, net of associated deferred tax liabilities		51			-
Deferred tax assets, net of valuation allowances and deferred tax liabilities		1			-
AOCI adjustment (1)		31			22
Common Equity Tier 1 Capital	$	12,015		$	11,142
Tier 1 Capital	$	14,207		$	11,142
Total Capital		14,234			11,168
Risk-Weighted Assets		66,794			59,122
Common Equity Tier 1 Capital/Risk-Weighted Assets		18.0	%		18.8	%
Tier 1 Capital/Risk-Weighted Assets		21.3	%		18.8	%
Total Capital/Risk-Weighted Assets		21.3	%		18.9	%
Tier 1 Leverage Ratio		7.1	%		7.0	%

(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 September 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.

-  24  -

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 nine months of 2016 and 2015:

Nine Months Ended September 30,	2016				2015
				Per Share				Per Share
	Cash Paid		Amount		Cash Paid		Amount
Common Stock	$	266	$	0.20	$	238	$	0.18
Series A Preferred Stock (1)		28		70.00		28		70.00
Series B Preferred Stock (2)		22		45.00		22		45.00
Series C Preferred Stock (2)		27		45.00		-		-
Series D Preferred Stock (2,3)		22		28.77		-		-

(1)	Dividends paid semi-annually until February 1, 2022 and quarterly thereafter.
(2)	Dividends paid quarterly.
(3)	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. For information regarding our off-balance sheet arrangements, see the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q:  “4. Bank Loans and Related Allowance for Loan Losses, 5. Variable Interest Entities, 7. Borrowings, 8. Commitments and Contingencies,” and the Company’s 2015 Form 10-K, “Note 16. Financial Instruments Subject to Off-Balance Sheet Credit Risk or Concentration Risk.”

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 2015 Form 10-K. There have been no changes to these critical accounting estimates during the first nine months of 2016.

-  25  -

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.

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 interest 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 brokerage 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 nine months of 2016 or year ended December 31, 2015.

-  26  -

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 September 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.

	September 30,		December 31,
	2016		2015
Increase of 100 basis points	8.1	%	8.2	%
Decrease of 100 basis points	(11.1)	%	(9.5)	%

The change in net interest revenue sensitivities as of September30, 2016 reflects the moderate increase of short- to medium-term interest rates. 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. The increase of short-term interest rates positively impacts net interest revenue as yields on interest-earning assets rise faster than the cost of funding sources.

-  27  -

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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net Revenues
Asset management and administration fees (1)	$	798	$	663	$	2,254	$	1,977
Interest revenue		891		669		2,541		1,931
Interest expense		(46)		(34)		(126)		(96)
Net interest revenue		845		635		2,415		1,835
Trading revenue		190		228		623		658
Other		76		66		209		208
Provision for loan losses		5		5		5		11
Total net revenues		1,914		1,597		5,506		4,689
Expenses Excluding Interest
Compensation and benefits		609		548		1,837		1,669
Professional services		131		114		372		340
Occupancy and equipment		100		92		299		260
Advertising and market development		64		58		204		189
Communications		57		58		179		175
Depreciation and amortization		60		57		173		166
Other		99		87		273		256
Total expenses excluding interest		1,120		1,014		3,337		3,055
Income before taxes on income		794		583		2,169		1,634
Taxes on income		291		207		802		603
Net Income		503		376		1,367		1,031
Preferred stock dividends and other (2)		33		11		99		45
Net Income Available to Common Stockholders	$	470	$	365	$	1,268	$	986
Weighted-Average Common Shares Outstanding:
Basic		1,324		1,316		1,322		1,315
Diluted		1,334		1,328		1,332		1,326
Earnings Per Common Share:
Basic	$	.36	$	.28	$	.96	$	.75
Diluted	$	.35	$	.28	$	.95	$	.74
Dividends Declared Per Common Share	$	.07	$	.06	$	.20	$	.18

(1)	Includes fee waivers of $41and $166 during the third quarters of 2016 and 2015, respectively and $193 and $519 during the first nine months 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.

-  28  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net Income	$	503	$	376	$	1,367	$	1,031
Other comprehensive income (loss), before tax:
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)		77		(249)		266		(233)
Other reclassifications included in other revenue		-		-		(3)		-
Other		-		-		1		-
Other comprehensive income (loss), before tax		77		(249)		264		(233)
Income tax effect		(29)		94		(99)		87
Other comprehensive income (loss), net of tax		48		(155)		165		(146)
Comprehensive Income	$	551	$	221	$	1,532	$	885

See Notes to Condensed Consolidated Financial Statements.

-  29  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)

	September 30,		December 31,
	2016		2015 (1)
Assets
Cash and cash equivalents	$	10,431	$	11,978
Cash and investments segregated and on deposit for regulatory purposes
(including resale agreements of $9,425 at September 30, 2016 and $8,088
at December 31, 2015)		20,077		19,598
Receivables from brokers, dealers, and clearing organizations		947		582
Receivables from brokerage clients — net		16,380		17,313
Other securities owned — at fair value		858		533
Securities available for sale		75,791		65,646
Securities held to maturity (fair value — $67,843 at September 30, 2016 and
$50,088 at December 31, 2015)		66,056		50,007
Bank loans — net		14,858		14,334
Equipment, office facilities, and property — net		1,266		1,145
Goodwill		1,227		1,227
Intangible assets — net		154		181
Other assets		1,292		1,161
Total assets	$	209,337	$	183,705
Liabilities and Stockholders’ Equity
Bank deposits	$	149,630	$	129,502
Payables to brokers, dealers, and clearing organizations		3,497		2,588
Payables to brokerage clients		32,961		33,185
Accrued expenses and other liabilities		1,902		2,151
Short-term borrowings		3,001		-
Long-term debt		2,876		2,877
Total liabilities		193,867		170,303
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference
of$2,235 at September 30, 2016 and $1,485 at December 31, 2015		2,192		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		4,254		4,152
Retained earnings		12,261		11,253
Treasury stock, at cost — 163,516,791 shares at September 30, 2016 and
167,205,881 shares at December 31, 2015		(3,283)		(3,343)
Accumulated other comprehensive income		31		(134)
Total stockholders’ equity		15,470		13,402
Total liabilities and stockholders’ equity	$	209,337	$	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.

-  30  -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Millions)

(Unaudited)

	Nine Months Ended
	September 30,
	2016		2015
Cash Flows from Operating Activities
Net income	$	1,367	$	1,031
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses		(5)		(11)
Stock-based compensation		101		98
Depreciation and amortization		173		166
Premium amortization, net, on securities available for sale and securities held to maturity		181		119
Other		25		7
Net change in:
Cash and investments segregated and on deposit for regulatory purposes		(479)		3,538
Receivables from brokers, dealers, and clearing organizations		(370)		(110)
Receivables from brokerage clients		928		(1,426)
Other securities owned		(325)		46
Other assets		(61)		(59)
Payables to brokers, dealers, and clearing organizations		(111)		473
Payables to brokerage clients		(224)		(3,265)
Accrued expenses and other liabilities		(226)		(253)
Net cash provided by operating activities		974		354
Cash Flows from Investing Activities
Purchases of securities available for sale		(22,782)		(17,497)
Proceeds from sales of securities available for sale		4,645		599
Principal payments on securities available for sale		8,652		5,172
Purchases of securities held to maturity		(19,439)		(8,824)
Principal payments on securities held to maturity		3,841		2,709
Net increase in bank loans		(600)		(863)
Purchases of equipment, office facilities, and property		(272)		(204)
Purchases of Federal Home Loan Bank stock		(152)		-
Proceeds from sales of Federal Home Loan Bank stock		88		8
Other investing activities		(25)		(18)
Net cash used for investing activities		(26,044)		(18,918)
Cash Flows from Financing Activities
Net change in bank deposits		20,128		16,202
Proceeds from short-term borrowings		8,505		-
Repayment of short-term borrowings		(5,504)		-
Issuance of long-term debt		-		998
Repayment of long-term debt		(5)		(6)
Net proceeds from preferred stock offering		725		581
Dividends paid		(365)		(288)
Proceeds from stock options exercised and other		31		67
Other financing activities		8		13
Net cash provided by financing activities		23,523		17,567
Decrease in Cash and Cash Equivalents		(1,547)		(997)
Cash and Cash Equivalents at Beginning of Period		11,978		11,363
Cash and Cash Equivalents at End of Period	$	10,431	$	10,366
Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	141	$	107
Income taxes	$	757	$	598
Non-cash investing activity:
Securities purchased during the period but settled after period end	$	1,021	$	230

See Notes to Condensed Consolidated Financial Statements.

-  31  -

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 2015 Form 10-K.

The Company’s significant accounting policies are included in “Notes – 2. Summary of Significant Accounting Policies” in the 2015 Form 10-K. There have been no significant changes to these accounting policies during the first nine months 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.

-  32  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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.

-  33  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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.

-  34  -

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
September 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	33,195	$	219	$	44	$	33,370
Asset-backed securities		21,736		30		266		21,500
Corporate debt securities		10,067		54		2		10,119
U.S. Treasury securities		4,966		33		-		4,999
U.S. agency notes		2,206		-		1		2,205
Certificates of deposit		2,295		2		1		2,296
U.S. state and municipal securities		1,012		26		1		1,037
Commercial paper		214		-		-		214
Non-agency commercial mortgage-backed securities		51		-		-		51
Total securities available for sale	$	75,742	$	364	$	315	$	75,791
Securities held to maturity:
U.S. agency mortgage-backed securities	$	64,836	$	1,738	$	4	$	66,570
Non-agency commercial mortgage-backed securities		997		43		-		1,040
U.S. Treasury securities		223		10		-		233
Total securities held to maturity	$	66,056	$	1,791	$	4	$	67,843

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 atSeptember 30, 2016.

-  35  -

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
September 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	10,233	$	21	$	2,672	$	23	$	12,905	$	44
Asset-backed securities		1,235		14		10,504		252		11,739		266
Corporate debt securities		758		1		882		1		1,640		2
U.S. agency notes		499		1		-		-		499		1
Certificates of deposit		544		1		200		-		744		1
U.S. state and municipal securities		124		1		-		-		124		1
Total	$	13,393	$	39	$	14,258	$	276	$	27,651	$	315
Securities held to maturity:
U.S. agency mortgage-backed securities	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total securities with unrealized losses (1)	$	15,868	$	43	$	14,258	$	276	$	30,126	$	319

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 totaled339 for securities available for sale and 24 for securities held to maturity.
(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 2015 Form 10-K.

-  36  -

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
September 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	3,417	$	16,966	$	12,987	$	33,370
Asset-backed securities		-		9,125		4,150		8,225		21,500
Corporate debt securities		2,233		7,886		-		-		10,119
U.S. Treasury securities		200		4,592		207		-		4,999
U.S. agency notes		-		2,205		-		-		2,205
Certificates of deposit		876		1,420		-		-		2,296
U.S. state and municipal securities		-		-		51		986		1,037
Commercial paper		214		-		-		-		214
Non-agency commercial mortgage-backed
securities		-		-		-		51		51
Total fair value	$	3,523	$	28,645	$	21,374	$	22,249	$	75,791
Total amortized cost	$	3,517	$	28,473	$	21,386	$	22,366	$	75,742
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	4,201	$	22,947	$	39,422	$	66,570
Non-agency commercial mortgage-backed
securities (1)		-		-		376		664		1,040
U.S. Treasury securities		-		-		233		-		233
Total fair value	$	-	$	4,201	$	23,556	$	40,086	$	67,843
Total amortized cost	$	-	$	4,019	$	22,605	$	39,432	$	66,056

(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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Proceeds	$	571	$	5	$	4,645	$	599
Gross realized gains		-		-		3		1
Gross realized losses		-		-		-		1

-  37  -

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
September 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,660		$	8		$	4		$	15		$	27	$	8,687	$	15	$	8,672
Home equity loans and lines of credit		2,456			4			1			11			16		2,472		10		2,462
Pledged asset lines		3,644			-			-			2			2		3,646		-		3,646
Other		79			-			-			-			-		79		1		78
Total bank loans	$	14,839		$	12		$	5		$	28		$	45	$	14,884	$	26	$	14,858
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 $78 million and $80 million at September 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 $8.2 billion and $7.4 billion at September 30, 2016 and December 31, 2015, respectively. The Company had commitments to purchase First Mortgage loans of $898 million and $260 million at September 30, 2016 and December 31, 2015, respectively. All PALs were fully collateralized by securities with fair values in excess of borrowings at September 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 $858 million and $469 million during the third quarters of 2016 and 2015, respectively, and $2.1 billion and $1.5 billion during the first nine months of 2016 and 2015, respectively. Schwab purchased HELOCs with commitments of $93 million and $150 million during the third quarters of 2016 and 2015, respectively, and $315 million and $432 million during the first nine months of 2016 and 2015, respectively.

-  38  -

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	September 30, 2016									September 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		$	10	$	1	$	31	$	23		$	13	$	36
Charge-offs		-			-		-		-		-			-		-
Recoveries		-			-		-		-		1			-		1
Provision for loan losses		(5)			-		-		(5)		(4)			(2)		(6)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

Nine Months Ended	September 30, 2016									September 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		1			2		3
Provision for loan losses		(5)			(1)		1		(5)		(10)			(2)		(12)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

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

· year of origination;

· borrower FICO scores at origination (OriginationFICO);

· updated borrower FICO scores (Updated FICO);

· loan-to-value ratios at origination (Origination LTV); and

· estimated current LTV ratios (Estimated Current LTV).

Borrowers’ FICO scores are provided by an independent third-party credit reporting service and were last updated in September2016. 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 September 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.

-  39  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The credit quality indicators of the Company’s bank loan portfolio are detailed below.

			Weighted				Percent of
			Average		Utilization		Loans on
September 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,994		775	N/A			0.02	%
>70% – <90%		645		766	N/A			0.18	%
>90% – <100%		22		732	N/A			3.48	%
>100%		26		719	N/A			13.54	%
Total	$	8,687		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,146		772	36	%		0.15	%
>70% – <90%		270		758	49	%		0.55	%
>90% – <100%		33		750	60	%		1.66	%
>100%		23		737	65	%		3.05	%
Total	$	2,472		770	37	%		0.24	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,646		763	47	%		-

(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
September 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,100	$	1,766
2012		1,263		111
2013		1,950		206
2014		766		166
2015		1,599		155
2016		2,009		68
Total	$	8,687	$	2,472
Origination FICO
<620	$	8	$	-
620 – 679		91		14
680 – 739		1,378		451
>740		7,210		2,007
Total	$	8,687	$	2,472
Origination LTV
<70%	$	6,410	$	1,701
>70% – <90%		2,267		757
>90% – <100%		10		14
Total	$	8,687	$	2,472

-  40  -

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

-  41  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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 2015 Form 10-K, 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 September 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 September 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 $153 million and $104 million as of September 30, 2016 and December 31, 2015, respectively, which is included in other assets on the condensed consolidated balance sheets. Schwab Bank recorded liabilities of $110 million and $84 million for unfunded commitments related to LIHTC investments at September 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:

		September 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments	$	153	$	110	$	153	$	104	$	84	$	104
Other CRA investments (1)		55		-		65		57		-		66
Total	$	208	$	110	$	218	$	161	$	84	$	170

(1) 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 nine months ended September 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.

-  42  -

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:

	September 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	127,866	$	108,137
Checking		13,543		12,822
Savings and other		7,643		7,896
Total interest-bearing deposits		149,052		128,855
Non-interest-bearing deposits		578		647
Total bank deposits	$	149,630	$	129,502

7.Borrowings

Long-term debt was net of unamortized debt discounts/premiums and debt issuance costs of $25 million and $29 million at September 30, 2016 and December 31, 2015, respectively.

	September 30,		December 31,
	2016		2015
Senior Notes	$	2,556	$	2,553	(1)
Senior Medium-Term Notes		250		249	(1)
Finance lease obligation		70		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 September 30, 2016 are as follows:

2016	$	2
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,901
Unamortized discount, net		(14)
Debt issuance costs		(11)
Total long-term debt	$	2,876

Short-term borrowings: Schwab Bank maintains a secured credit facility with the FHLB. At September 30, 2016, $3.0 billion was outstanding under this facility with an additional $5.9 billion available based on the loans currently pledged there. As a condition of the borrowings, Schwab Bank purchased $152 million of FHLB stock, recorded at par, and sold $88 million of FHLB stock in the first nine months of 2016, with the net investment recorded in other assets on the condensed consolidated balance sheets. Schwab Bank sold $8 million of FHLB stock during the first nine months of 2015. 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.

-  43  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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 September 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 September 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 September 30, 2016, the aggregate face amount of these LOCs totaled $295million. There were no funds drawn under any of these LOCs at September 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, but 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. 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.

-  44  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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 its 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 optionsXpress, Inc. had violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered optionsXpress, Inc. and the customer to pay disgorgement and penalties in an amount that would not be material. The Company appealed to the SEC, and in a decision issued August18, 2016 and amended September13, 2016, the SEC dismissed all fraud charges but affirmed the violations of Regulation SHO and the financial sanctions imposed by its administrative law judge. This matter is now concluded.

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 September 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 $9.6 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 brokerage 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 $1.9 billion at September 30, 2016 and 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 brokerage clients and delivers cash to the lender in exchange for the securities. The fair value of these borrowed securities was $304 million at September 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. Therefore, the Company’s securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

-  45  -

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 September 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
September 30, 2016
Assets:
Resale agreements (1)	$	9,425	$	-	$	9,425	$	-	$	(9,425)	(2)	$	-
Securities borrowed (3)		632		-		632		(297)		(334)			1
Total	$	10,057	$	-	$	10,057	$	(297)	$	(9,759)		$	1
Liabilities:
Securities loaned (4,5)	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
Total	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
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 held in client brokerage accounts 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 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.

-  46  -

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

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 FHLB stock, whose carrying values approximate their fair values. FHLB stock is recorded at par, which approximates its 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.

-  47  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

For a description of the fair value hierarchy, see “Notes – 2. Summary of Significant Accounting Policies” in the 2015 Form 10-K. There were no significant changes in these policies and methodologies during the first nine months of 2016. The Company did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the nine months ended September 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 September 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
September 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	852		$	-		$	-		$	852
Commercial paper			-			959			-			959
Total cash equivalents			852			959			-			1,811
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,099			-			3,099
U.S. Government securities			-			3,512			-			3,512
Total investments segregated and on deposit for
regulatory purposes			-			6,611			-			6,611
Other securities owned:
Schwab Funds® money market funds			528			-			-			528
Equity and bond mutual funds			217			15			-			232
State and municipal debt obligations			-			55			-			55
Equity, U.S. Government and corporate debt, and
other securities			2			41			-			43
Total other securities owned			747			111			-			858
Securities available for sale:
U.S. agency mortgage-backed securities			-			33,370			-			33,370
Asset-backed securities			-			21,500			-			21,500
Corporate debt securities			-			10,119			-			10,119
U.S. Treasury securities			-			4,999			-			4,999
U.S. agency notes			-			2,205			-			2,205
Certificates of deposit			-			2,296			-			2,296
U.S. state and municipal securities			-			1,037			-			1,037
Commercial paper			-			214			-			214
Non-agency commercial mortgage-backed securities			-			51			-			51
Total securities available for sale			-			75,791			-			75,791
Total		$	1,599		$	83,472		$	-		$	85,071

-  48  -

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

-  49  -

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
September 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	8,620		$	-		$	8,620		$	-	$	8,620
Cash and investments segregated and
on deposit for regulatory purposes		13,461			-			13,461			-		13,461
Receivables from brokers, dealers, and
clearing organizations		947			-			947			-		947
Receivables from brokerage clients – net		16,377			-			16,377			-		16,377
Securities held to maturity:
U.S. agency mortgage-backed securities		64,836			-			66,570			-		66,570
Non-agency commercial mortgage-backed
securities		997			-			1,040			-		1,040
U.S. Treasury securities		223			-			233			-		233
Total securities held to maturity		66,056			-			67,843			-		67,843
Bank loans: (1)
Residential real estate mortgages		8,687			-			8,797			-		8,797
Home equity loans and lines of credit		2,472			-			2,614			-		2,614
Pledged asset lines		3,646			-			3,646			-		3,646
Other		79			-			79			-		79
Total bank loans		14,884			-			15,136			-		15,136
Other assets		291			-			291			-		291
Total	$	120,636		$	-		$	122,675		$	-	$	122,675
Liabilities:
Bank deposits	$	149,630		$	-		$	149,630		$	-	$	149,630
Payables to brokers, dealers, and clearing
organizations		3,497			-			3,497			-		3,497
Payables to brokerage clients		32,961			-			32,961			-		32,961
Accrued expenses and other liabilities		880			-			880			-		880
Short-term borrowings		3,001			-			3,001			-		3,001
Long-term debt		2,876			-			3,024			-		3,024
Total	$	192,845		$	-		$	192,993		$	-	$	192,993

(1) The carrying value of bank loans excludes the allowance for loan losses of $26 million at September 30, 2016.

-  50  -

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
December31, 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 nine months ended September 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%.

-  51  -

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:

	September 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		483	485		1,000		485		480
Series C	600		1,000		600		585	600		1,000		600		583
Series D	750		1,000		750		727	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,192	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 September 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)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)
Other reclassifications included in
other revenue		-		-		-		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		77		(29)		48		(249)		94		(155)
Other comprehensive income (loss)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)

Nine Months Ended September 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)	$	266	$	(100)	$	166	$	(233)	$	87	$	(146)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		263		(99)		164		(233)		87		(146)
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	264	$	(99)	$	165	$	(233)	$	87	$	(146)

-  52  -

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 loss on securities available for sale			(146)
Balance at September 30, 2015		$	19
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			164
Other			1
Balance at September 30, 2016		$	31

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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	503	$	376	$	1,367	$	1,031
Preferred stock dividends and other (1)		(33)		(11)		(99)		(45)
Net income available to common stockholders	$	470	$	365	$	1,268	$	986
Weighted-average common shares outstanding — basic		1,324		1,316		1,322		1,315
Common stock equivalent shares related to stock incentive plans		10		12		10		11
Weighted-average common shares outstanding — diluted (2)		1,334		1,328		1,332		1,326
Basic EPS	$	.36	$	.28	$	.96	$	.75
Diluted EPS	$	.35	$	.28	$	.95	$	.74

(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 totaled17 million and 14 million shares for the third quarters of 2016 and 2015, respectively, and 21million and 16 million shares for the first nine months of 2016 and 2015, respectively.

-  53  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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.

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 September 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
September 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	12,015	18.0	%		N/A			$	3,006	4.5	%
Tier 1 Risk-Based Capital		14,207	21.3	%		N/A				4,008	6.0	%
Total Risk-Based Capital		14,234	21.3	%		N/A				5,343	8.0	%
Tier 1 Leverage		14,207	7.1	%		N/A				7,996	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	11,142	18.8	%	$	3,843	6.5	%	$	2,660	4.5	%
Tier 1 Risk-Based Capital		11,142	18.8	%		4,730	8.0	%		3,547	6.0	%
Total Risk-Based Capital		11,168	18.9	%		5,912	10.0	%		4,730	8.0	%
Tier 1 Leverage		11,142	7.0	%		7,910	5.0	%		6,328	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.

-  54  -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Based on its regulatory capital ratios at September 30, 2016, Schwab Bank is considered well capitalized (the highest category) under their respective regulatory capital rules. There are no conditions or events since September 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 September 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
September 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,890	$	0.250	$	344	$	1,546
optionsXpress, Inc.		269		1		7		262
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 attributed 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. 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.

-  55  -

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 September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	550	$	461	$	248	$	202	$	798	$	663
Net interest revenue		654		534		191		101		845		635
Trading revenue		123		148		67		80		190		228
Other		56		45		20		21		76		66
Provision for loan losses		4		4		1		1		5		5
Total net revenues		1,387		1,192		527		405		1,914		1,597
Expenses Excluding Interest		847		762		273		252		1,120		1,014
Income before taxes on income	$	540	$	430	$	254	$	153	$	794	$	583

	Investor Services (1)				Advisor Services (1)				Total
Nine Months Ended September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	1,536	$	1,372	$	718	$	605	$	2,254	$	1,977
Net interest revenue		1,895		1,568		520		267		2,415		1,835
Trading revenue		395		428		228		230		623		658
Other		153		146		56		62		209		208
Provision for loan losses		4		10		1		1		5		11
Total net revenues		3,983		3,524		1,523		1,165		5,506		4,689
Expenses Excluding Interest		2,518		2,308		819		747		3,337		3,055
Income before taxes on income	$	1,465	$	1,216	$	704	$	418	$	2,169	$	1,634

(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.

16.Subsequent Event

On October 31, 2016, the Company issued and sold 600,000 depositary shares, each representing a 1/100th ownership interest in a share of fixed-to-floating rate non-cumulative perpetual preferred stock, Series E, $0.01 par value, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share). The Series E Preferred Stock has a fixed dividend rate of 4.625% through February 28, 2022, payable semi-annually, and thereafter at a floating rate of three-month LIBOR plus a fixed spread of 3.315%, payable quarterly. Net proceeds received from the sale were $591 million and are being used to support balance sheet growth, including the migration of certain client balances from sweep money market funds into Schwab Bank.

-  56  -

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 September 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 September 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 September 30, 2016, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

-  57  -

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 nine months of 2016, there have been no material changes to the risk factors in “Part I – Item 1A – Risk Factors” in the 2015 Form10-K.

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

Issuer Purchases of Equity Securities

At September 30, 2016, approximately $596 million of future share repurchases are authorized under the Share Repurchase Program. There were no share repurchases during the third 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 third quarter of 2016:

	Total Number of		Average
	Shares Purchased		Price Paid
Month	(in thousands)		per Share
July:
Employee transactions (1)		5	$	25.07
August:
Employee transactions (1)		4	$	28.30
September:
Employee transactions (1)		3	$	31.09
Total:
Employee transactions (1)		12	$	27.60

(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.

-  58  -

THE CHARLES SCHWAB CORPORATION

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

-  59  -

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
3.19	Certificate of Designations of 4.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E, of The Charles Schwab Corporation filed as Exhibit 3.1 to the Registrant’s Form 8-K dated October 31, 2016, and incorporated herein by reference.
10.369	Form of Notice and Performance-Based Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.353).	(1)
10.370	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.354).	(1)
10.371	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.355).	(1)
10.372	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.356).	(1)
10.373	Form of Notice and Retainer Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans (supersedes Exhibit 10.357).	(1)
10.374	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans (supersedes Exhibit 10.358).	(1)
10.375	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans (supersedes Exhibit 10.359).	(1)
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)

-  60  -

THE CHARLES SCHWAB CORPORATION

(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 September 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.

-  61  -

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:	November7, 2016	/s/ Joseph R. Martinetto
		Joseph R. Martinetto
		Senior Executive Vice President and
		Chief Financial Officer

-  62  -

EX-10.369

Exhibit 10.369

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF RESTRICTED STOCK UNIT GRANT

(PERFORMANCE-BASED VESTING)

You have been granted Restricted Stock Units.  A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”), under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Number of Target  Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Performance Period(s):	January 1, 2016 to December 31, 2018
Vesting Schedule:	So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement and certification of the achievement of the Performance Goal by Schwab’s Compensation Committee, this grant vests as follows: Number of Target Restricted Stock Units on Vesting Date: <vesting_schedule>

The Target Restricted Stock Units shall vest only if Schwab’s Compensation Committee certifies that as of the Vesting Date above, Schwab has satisfied the Performance Goal for the applicable performance period ending prior to such Vesting Date.  The Performance Goal shall be established by the Compensation Committee not later than the 90th day of the applicable 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 number of Shares payable pursuant to the Target Restricted Stock Units granted herein will be determined based on a formula established by the Compensation Committee not later than the 90th day of the applicable 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).

Except as otherwise provided in the Restricted Stock Unit Agreement, if the Performance Goal is not met, any unvested portion of the grant will be forfeited automatically and permanently on the date established by the Compensation Committee.

1

Restricted Stock Units are an unfunded and unsecured obligation of Schwab.  Any vested Restricted Stock Units will be paid in Shares as soon as administratively possible after vesting, but in no event beyond March 15th of the year following the year of vesting.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Restricted Stock Unit Agreement and the Plan carefully, as they explain the terms and conditions of this grant.  You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan, and you have no right whatsoever to change or negotiate such terms and conditions.

2

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

RESTRICTED STOCK UNIT AGREEMENT

(PERFORMANCE-BASED VESTING)

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving.  Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested as described in the Notice of Restricted Stock Unit Grant based on the achievement of the Performance Goal established by the Compensation Committee (the “Compensation Committee”) of the Board of Directors of Schwab, of which this Restricted Stock Unit Agreement is a part. Unvested units will be considered “Restricted Stock Units.”  If your service terminates for any reason, then your Restricted Stock Units will automatically and permanently be forfeited to the extent that they have not vested before the termination date and will not vest as a result of the termination, unless otherwise noted below.  This means that the Restricted Stock Units will immediately revert to Schwab.  You will receive no payment for Restricted Stock Units that are forfeited.  Schwab determines when your service terminates for this purpose.  For all purposes of this Agreement, “service” means continuous employment as a common-law employee of Schwab or a parent company or subsidiary of Schwab, and “subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”).
Accelerated Vesting	This grant, to the extent not already forfeited, will become fully vested and payable at target upon your death or disability.  If, prior to the date your service terminates, Schwab is subject to a “change in control”, as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”) , this grant, to the extent not already forfeited, will become fully vested and payable at target as of the date that the change in control occurs.
Continued Vesting	If your service terminates on account of your retirement as defined below, you will be treated as in service in good standing for purposes of determining further vesting of the

1

	grant. If you are entitled to severance benefits under The Charles Schwab Severance Pay Plan (or any successor plan) and have signed your Severance Agreement, then you may be treated as in service in good standing during your Severance Period for purposes of determining further vesting of the grant under the terms of that plan.
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.
Definition of Disability	For all purposes of this Agreement, “disability” means that you have a disability such that you have been determined to be eligible for benefits under Schwab’s long-term disability plan, or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	If you are an employee of Schwab and its subsidiaries, “retirement” means termination of service for any reason other than death at any time after you attain age 55, but only if, at the time of your termination, you have been credited with at least 10 years of service. The phrase “years of service” above has the same meaning given to it under The SchwabPlan Retirement Savings and Investment Plan (or any successor plan).
Payment of Shares	The Target Restricted Stock Units in the Notice of Restricted Stock Unit Grant will be used to determine the shares of common stock of The Charles Schwab Corporation (“Shares”) payable based on the Performance Goal and formula established by the Compensation Committee not later than the 90th day of the applicable 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 Shares payable are calculated following the end of the Performance Period based on the Performance Goal achieved and any adjustments provided for under the Plan and this Agreement. The Shares shall be paid as soon as administratively possible following vesting, but in

2

	no event beyond March 15th of the year following the year of vesting.
Restrictions on Restricted Stock Units	You may not sell, transfer, pledge, or otherwise dispose of any Restricted Stock Units without Schwab’s written consent.  Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Schwab may, in its sole discretion, allow you to transfer these Restricted Stock Units under a domestic relations order in settlement of marital or domestic property rights. In order to transfer these Restricted Stock Units, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee must follow the terms of this Agreement.
Delivery of Shares After Death	In the event of your death prior to the date your service terminates, your Shares will be delivered to your beneficiary or beneficiaries.  You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then, your Shares will be delivered to your estate.  The Compensation Committee, in its sole discretion, will determine the form and time of the distribution of Shares to your estate.  In no event will the payment be made beyond March 15th of the year following the year of death.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale.  This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
Cancellation of Restricted Stock Units	To the fullest extent permitted by applicable laws, these Restricted Stock Units will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment.  The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion, and will be entitled to deference

3

	upon any review.
Withholding Taxes	The Restricted Stock Units will not be paid in Shares unless you have made acceptable arrangements to pay any applicable withholding of income and employment taxes that may be due as a result of this grant.  These arrangements may include withholding Shares.  Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date required to satisfy such applicable withholding taxes.  Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings. Applicable withholding taxes due on the distribution of Shares subject to this award following termination of employment will be withheld as noted above, unless you have made acceptable arrangements to pay any applicable withholding taxes in cash. If you elect to pay applicable withholding taxes due on the distribution of Shares in cash, you are responsible for having sufficient funds in your Schwab brokerage account to cover the applicable withholding taxes at the time they are due.
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights.  You have no rights as a Schwab stockholder until your units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, each Restricted Stock Unit will accrue a dividend equivalent equal to the cash dividend paid per Share, subject to the same vesting and forfeiture provisions as the associated Restricted Stock Units, to be paid in cash without interest at the time the associated Restricted Stock Units vest and Shares are released.  In no event will the accumulated dividend equivalent be paid beyond March 15th of the year following the year in which the associated Restricted Stock Units vest.
No Right to Remain Employee	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker, or director of Schwab and its subsidiaries for any specific duration or at all.
Limitation on	If a payment from the Plan would constitute an excess

4

Payments parachute payment under section 280G of the Code or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will be reduced, as described below.  Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  For purposes of this section on “Limitation on Payments,” the term “Schwab” will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code. In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section. For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code. If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount.  You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals

5

the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan).  You will advise Schwab in writing of your election within 10 days of receipt of the notice.

If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount).  Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code.  The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable.

As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan and will promptly pay or transfer to or for your benefit in the future such amounts as become due to you under the Plan.

As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount.  In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code.  In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.

Notwithstanding the foregoing, in no event will a payment be made under this Section beyond March 15th of the year following the year in which the amount ceases to be subject to

6

	a substantial risk of forfeiture.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture shall be adjusted accordingly.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference.  This Agreement, the Notice of Restricted Stock Unit Grant and the Plan constitute the entire understanding between you and Schwab regarding this grant.  Any prior agreements, commitments or negotiations concerning this grant are superseded.  This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

BY ACCEPTING THIS GRANT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

7

EX-10.370

Exhibit 10.370

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NONQUALIFIED STOCK OPTION GRANT

You have been granted the following option to purchase common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  A stock option represents the right to purchase Shares at a fixed price, called the exercise price, within a certain period of time.  Your option is granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price Per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule:	So long as you remain employed in good standing by Schwab or its subsidiaries and subject to the terms of the Nonqualified Stock Option Agreement, you will acquire the right to exercise this option (become “vested” in this option) on the following dates and in the following amounts: Number of Shares on Vesting Date: <vesting_schedule>

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan and the Nonqualified Stock Option Agreement, both of which are made a part of this notice. Please review the Nonqualified Stock Option Agreement and the Plan carefully, as they explain the terms and conditions of this option. You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.

1

THE CHARLES SCHWAB CORPORATION
[2013 STOCK INCENTIVE PLAN]
NONQUALIFIED STOCK OPTION AGREEMENT

Tax Treatment	This option is a nonqualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	Subject to the provisions of this Nonqualified Stock Option Agreement (“Agreement”), this option becomes vested in installments as described in the Notice of Nonqualified Stock Option Grant.
Accelerated Vesting	This option will become fully exercisable if your service with The Charles Schwab Corporation (“Schwab”) and its subsidiaries terminates on account of your death or disability. This option will become fully exercisable if your service with Schwab and its subsidiaries terminates on account of your retirement as defined below. If, prior to the date your service terminates, Schwab is subject to a “change in control” (as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”) document), this option will become fully exercisable immediately preceding the change in control. If the Compensation Committee (or its delegate) (the “Compensation Committee”) of the Board of Directors of Schwab determines that a change in control is likely to occur, Schwab will advise you and this option will become fully exercisable as of the date 10 days prior to the anticipated date of the change in control.
Definition of Disability	For all purposes of this Agreement, “disability” means that you have a disability such that you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, “retirement” will mean any termination of employment with Schwab and its subsidiaries for any reason other than death at any time after you attain age 55, but only if, at the time of your termination, you have been credited with at least 10 years of service. The phrase “years of service” above has the same meaning given to it under the SchwabPlan Retirement Savings and Investment Plan (or

1

	any successor plan).
Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by Schwab.  If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative’s right to exercise this option.  After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must paythe option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
		Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding. (This exercise method is sometimes referred to as “Exercise and Hold.”)
		Shares surrendered to Schwab. These Shares will be valued at their fair market value on the date when the new Shares are purchased.  (This exercise method is sometimes referred to as a “Stock Swap.”)
		By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price.  (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the Expiration Date specified in the Notice of Nonqualified Stock Option Grant but may expire earlier upon your termination of service, as described below.
Termination of Service	This option will expire on the date three months following the date of your termination of employment with Schwab and its subsidiaries for any reason other than on account of death, disability or retirement. The terms “disability” and “retirement” are defined above. If you cease to be an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability. If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 10 years of service, then this option will expire on the fifth anniversary of the date of your termination.  If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 15 years of service, then this option will expire

2

	on the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.
Effect of Entitlement to Severance	If you are entitled to severance benefits under The Charles Schwab Severance Pay Plan (or any successor plan) and have signed your Severance Agreement, then vesting of this option shall be determined under the terms of that plan.
Cancellation of Options	To the fullest extent permitted by applicable laws, this option will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment.  The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion.
Withholding Taxes and Stock Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to Schwab to pay any applicable withholding of income and employment taxes that may be due as a result of the option exercise.  These arrangements may include without limitation withholding Shares that otherwise would be issued to you when you exercise this option.
Restrictions on Exercise and Issuance or Transfer of Shares	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any applicable law, regulation, or rule.  Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations, or rules.
No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to Schwab and paying the exercise price.  No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
No Right to Employment	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, consultant, or director of Schwab and its subsidiaries for any specific duration or at all.
Transfer of Option	In general, only you may exercise this option prior to your death.  You may not transfer or assign this option, except as provided below.  For instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things, this option will immediately become invalid. You may dispose of this option in your will or in a beneficiary designation.  You may designate one or more beneficiaries by filing a

3

	beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. Schwab may, in its sole discretion, allow you to transfer this option under a domestic relations order in settlement of marital or domestic property rights. In order to transfer this option, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment or if there have been certain securities law violations, then your grant may be reduced or cancelled and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under the Internal Revenue Code of 1986, as amended (the “Code”), such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  For purposes of this section on “Limitation on Payments,” the term “Schwab” will include affiliated corporations to the extent determined by the Auditors (as defined below) in accordance with section 280G(d)(5) of the Code.
	In the event that the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section. For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

4

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount.  You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan).  You will advise Schwab in writing of your election within 10 days of receipt of the notice.  If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount).  Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code.  The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan and will promptly pay or transfer to or for your benefit in the future such amounts as become due to you under the Plan. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount.  In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment will be treated for all purposes as a loan to you that you will repay to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code. However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code.  In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.

Plan Administration

The Plan administrator has discretionary authority to make all determinations related to this option and to construe the terms of the Plan, the Notice of Nonqualified Stock Option Grant, and this Agreement. The Plan administrator’s determinations are conclusive

5

	and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the Compensation Committee, in its discretion, may adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Notice of Nonqualified Stock Option Grant and the Plan constitute the entire understanding between you and Schwab regarding this option.  Any prior agreements, commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by another written agreement approved by the Compensation Committee and signed by both parties.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.  Nothing in this Agreement gives you the ability to negotiate or change the key terms and conditions described above, in the Notice of Nonqualified Stock Option Grant, or in the Plan.

By ACCEPTING THIS OPTION GRANT,

you agree to all of the terms and conditions

described above and in the Plan.

6

EX-10.371

Exhibit 10.371

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units.  A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Vesting Schedule:	So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement, the Restricted Stock Units subject to this grant will become vested and distributable on the following dates and in the following amounts, subject to the restrictions below: Number of Restricted Stock Units on Vesting Date: <vesting_schedule>

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Any vested Restricted Stock Units will be paid in Sharesas provided in the Restricted Stock Unit Agreement.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Restricted Stock Unit Agreement and the Plan carefully, as they explain the terms and conditions of this grant.  You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan, and you have no right whatsoever to change or negotiate such terms and conditions.

1

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

RESTRICTED STOCK UNIT AGREEMENT

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested and distributable as of the earliest of the following:
	(1)	The applicable Vesting Date for the Restricted Stock Unit indicated in the Notice of Restricted Stock Unit Grant.
	(2)	Your death.
	(3)	Your disability.
	(4)	Your separation from service, if the separation qualifies as a retirement or a severance eligible termination (provided that vesting shall occur upon a severance eligible termination only to the extent provided in The Charles Schwab Severance Pay Plan (or any successor plan)).
	(5)	A change in control.
	Unvested units will be considered “Restricted Stock Units.”  If your service terminates for any reason, then your Restricted Stock Units will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination. This means that the Restricted Stock Units will immediately revert to Schwab. You will receive no payment for Restricted Stock Units that are forfeited.  Schwab determines when your service terminates for this purpose. For all purposes of this Agreement, “service” means continuous employment as a common-law employee of Schwab or a parent corporation or subsidiary of Schwab, and “subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”).
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.

1

Definition of Disability	For all purposes of this Agreement, “disability” means that you have a disability that qualifies as such under section 409A of the Code and due to which you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	If you are an employee of Schwab and its subsidiaries, “retirement” means a separation from service for any reason other than death at any time after you attain age 55, but only if, at the time of your separation, you have been credited with at least 10 years of service. The phrase “years of service” above has the same meaning given to it under The SchwabPlan Retirement Savings and Investment Plan (or any successor plan).
Definition of Severance Eligible Termination	For all purposes of this Agreement, “severance eligible termination” means a separation from service entitling you to severance benefits when you have signed your Severance Agreement under The Charles Schwab Severance Pay Plan (or any successor plan).
Definition of Change in Control	For all purposes of this Agreement, “change in control” means an event that qualifies as a change in control event under section 409A of the Code and as a change in control as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).
Definition of Separation From Service	For all purposes of this Agreement, “separation from service” means a separation from service as defined under section 409A of the Code.
Payment of Shares	Any vested Restricted Stock Units will be paid in shares of common stock of Schwab (“Shares”) as provided herein.  Shares that have become vested and distributable under this Agreement shall be distributed as follows:
	(1)	Shares that vest and become distributable on a Vesting Date shall be distributed within 30 days of the Vesting

2

		Date.
	(2)	Shares that vest and become distributable on death, disability or a change in control, shall be distributable within 90 days of such event.
	(3)	Shares that vest and become distributable on a separation from service (either a retirement or a severance eligible termination) shall be distributed within 90 days of the separation from service. Generally, for severance eligible terminations, the distribution date shall be the “termination date” specified in the notice under The Charles Schwab Severance Pay Plan. Notwithstanding the foregoing, if at the time of your separation from service, you are a “specified employee”, you will receive your Shares six months after your separation from service. “Specified Employee” means a “specified employee” within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.
Restrictions on Restricted Stock Units	You may not sell, transfer, pledge, or otherwise dispose of any Restricted Stock Units without Schwab’s written consent. Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Schwab may, in its sole discretion, allow you to transfer these Restricted Stock Units under a domestic relations order in settlement of marital or domestic property rights. In order to transfer these Restricted Stock Units, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary

3

	predeceases you, then your Shares will be delivered to your estate.
Cancellation of Restricted Stock Units	To the fullest extent permitted by applicable laws, these Restricted Stock Units will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment. The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion, and will be entitled to deference upon any review.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale.  This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
Withholding Taxes	Shares will not be distributed unless you have made acceptable arrangements to pay any applicable withholding taxes that may be due as a result of the vesting and or the distribution of the Shares.  These arrangements may include withholding Shares.  Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date, required to satisfy such applicable withholding taxes.  Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings. Applicable withholding taxes due on the distribution of Shares subject to this award following termination of employment will be withheld as noted above, unless you have made acceptable arrangements to pay any applicable withholding taxes in cash. If you elect to pay applicable withholding taxes due upon the distribution of Shares in cash, you are responsible for having sufficient funds in your Schwab brokerage account to cover the applicable withholding taxes at the time they are due. Any withholding taxes due prior to distribution of Shares (e.g., under section 3121(v)(2) of the Code upon retirement

4

	eligibility) shall be paid by accelerating the vesting of and withholding of Shares payable in connection with such Restricted Stock Units for participants other than executive officers of Schwab (i.e., individuals holding the office of Executive Vice President or above), who shall pay such withholding taxes in cash upon Schwab’s request.  Prior to the distribution of Shares, the number of Shares accelerated and withheld for withholding taxes will be rounded down to the next whole Share, and any amounts of less than the fair market value of a Share will be deducted from your pay to cover the applicable withholding taxes due prior to distribution of Shares.  Participants may not make any election as to the payment of withholding taxes due prior to the distribution of Shares (e.g., under section 3121(v)(2) of the Code upon retirement eligibility).
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights.  You have no rights as a Schwab stockholder until your Restricted Stock Units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, you will receive cash equal to the dividend per Share 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 15 of the year following the year the actual dividend is paid.
No Right to Remain Employee	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker, or director of Schwab and its subsidiaries for any specific duration or at all.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment under section 280G of the Code or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will

5

be reduced, as described below.  Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  For purposes of this section on “Limitation on Payments,” the term “Schwab" will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code.

In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee (the “Compensation Committee”) of the Board of Directors of Schwab may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.

For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount.  The Auditors will determine which and how much of the Payments will be eliminated or reduced (such that the aggregate present value of the Payments equals the Reduced Amount and is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan).  Schwab will notify you promptly of the Auditor's determination.  Present value will be determined in accordance with section 280G(d)(4) of the Code. The Auditors’ determinations will be binding upon you and

6

	Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount.  In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code.  In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, provided that no such Underpayment related to Shares distributable under this Agreement shall be paid beyond the deadline for making such payments under section 409A of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture will be adjusted accordingly.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

7

Applicable Law

This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.

The Plan and Other Agreements

The text of the Plan is incorporated in this Agreement by reference.  This Agreement, the Notice of Restricted Stock Unit Grant, and the Plan constitute the entire understanding between you and Schwab regarding this grant.  Any prior agreements, commitments or negotiations concerning this grant are superseded.  This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

By accepting this grant, you agree to all of the terms and conditions described above and in the Plan.

8

EX-10.372

Exhibit 10.372

The Charles Schwab Corporation

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

RETAINER STOCK OPTION GRANT

You have been granted the following option to purchase common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”):

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule:	So long as you continue as a non‑employee director or an employee of Schwab or its subsidiaries and subject to the terms of the Stock Option Agreement, you will acquire the right to exercise this option (become "vested" in this option) on the following dates and in the following amounts: Number of Options on Vesting Date: <vesting_schedule>

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan and the Stock Option Agreement, both of which are made a part of this notice.  Please review the Stock Option Agreement carefully, as it explains the terms and conditions of this option.  You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.  Unless you provide written objection to Schwab within 30 days of your receipt of this notice, you agree to all of the terms and conditions of this notice, the Stock Option Agreement and the Plan.

1

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR RETAINERSTOCK OPTION AGREEMENT

Tax Treatment	This option is a non-qualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	This option becomes vested in installments as described in the Notice of Non-Employee Director Retainer Stock Option Grant.  If you become a common-law employee of The Charles Schwab Corporation (“Schwab”) Schwab or its subsidiaries, then this option will continue to vest as described in the Notice of Non-Employee Director Retainer Stock Option Grant so long as you continue as either a non-employee director or an employee of Schwab or its subsidiaries.
Accelerated Vesting	This option will become fully exercisable if your service as a non‑employee director terminates on account of your death, disability or retirement.  If, prior to the date your service terminates, Schwab is subject to a “change in control” (as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”) document), this option will become fully exercisable immediately preceding the change in control. If the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Schwab determines that a change in control is likely to occur, Schwab will advise you and this option will become fully exercisable as of the date 10 days prior to the anticipated date of the change in control.
Definition of Disability	For all purposes of this Agreement, “disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, “retirement” means your resignation or removal from the Board at any time after you have attained age 70 or completed 5 years of service as a non‑employee director.
Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by Schwab.  If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative's right to exercise this option.  After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
		Cash in your Schwab brokerage account in an amount sufficient to

1

		cover the option exercise price of the Shares and the required tax withholding (this exercise method is sometimes referred to as “Exercise and Hold”).
		Shares surrendered to Schwab.  These Shares will be valued at their fair market value on the date when the new Shares are purchased.  (This exercise method is sometimes referred to as a “Stock Swap.”)
		By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price.  (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the 10th anniversary of the Grant Date but may expire earlier upon your termination of service, as described below.
Termination of Service as a Non‑Employee Director	This option will expire on the date three months following the date of your termination of service as a non-employee director if such service terminates for any reason other than on account of becoming a common‑law employee of Schwab or its subsidiaries, death, disability or retirement.  The terms “disability” and “retirement” are defined above. If you become an employee of Schwab or its subsidiaries, this option will expire on the date three months following the date you cease to be an employee of Schwab and its subsidiaries (other than by reason of disability, death or retirement). If you cease to be a non-employee director or an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability.  If you cease to be a non‑employee director by reason of your retirement, then this option will expire on the 10th anniversary of the Grant Date.
Restrictions on Exercise and Issuance or Transfer of Shares	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any applicable law, regulation, or rule.  Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations, or rules.
No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to the Company and paying the exercise price.  No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.

2

No Right to Remain Director or Employee	Nothing in this Agreement will be construed as giving you the right to be retained as a director or an employee of Schwab and its subsidiaries.
Transfer of Option	In general, only you may exercise this option prior to your death.  You may not transfer or assign this option, except as provided below.  For instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things, this option will immediately become invalid.  You may dispose of this option in your will or in a beneficiary designation.  You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. Schwab may, in its sole discretion, allow you to transfer this option under a domestic relations order in settlement of marital or domestic property rights. In order to transfer this option, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement.
Limitation on Payments	If a payment from the Plan would constitute an excess parachute payment or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant.  If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), such payment will be reduced, as described below. Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  For purposes of this section on “Limitation on Payments,” the term “Schwab” will include affiliated corporations to the extent determined by the Auditors (as defined below) in accordance with section 280G(d)(5) of the Code.
	In the event that the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may

3

specify in writing that the grant will not be so reduced and will not be subject to reduction under this section.

For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.

If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount.  You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals the Reduced Amount).  You will advise Schwab in writing of your election within 10 days of receipt of the notice.  If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan).  Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code.  The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable.

As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan and will promptly pay or transfer to or for your benefit in the future such amounts as become due to you under the Plan.

As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount. In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment will be treated for all purposes as a loan to you that you will repay to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in

4

	section 7872(f)(2) of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Shares, the Compensation Committee shall adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan constitute the entire understanding between you and Schwab regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement, signed by both parties.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

By ACCEPTING THIS OPTION GRANT,

you agree to all of the terms and conditions

described above and in the Plan.

5

EX-10.373

Exhibit 10.373

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

RETAINER RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units.  A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (a “Share”) of The Charles Schwab Corporation (“Schwab”), under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:	<first_name> <last_name>
Total Number of Restricted Stock Units Granted:	<shares_awarded>
Grant Date:	<award_date>
Vesting Schedule:	So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement, the Restricted Stock Units subject to this grant will become vested and distributable on the following dates and in the following amounts, subject to the restrictions below: Number of Restricted Stock Units on Vesting Date: <vesting_schedule>

Restricted Stock Units are an unfunded and unsecured obligation of Schwab. Any vested Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that this grant is issued under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please review the Restricted Stock Unit Agreement and the Plan carefully, as they explain the terms and conditions of this grant. You agree that Schwab may deliver electronically all documents relating to the Plan or this grant (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this grant, you agree to all of the terms and conditions described above, in the Restricted Stock Unit Agreement and in the Plan.

1

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR

RETAINER RESTRICTED STOCK UNIT AGREEMENT

Payment for Units	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of The Charles Schwab Corporation (“Schwab”).
Vesting	Subject to the provisions of this Restricted Stock Unit Agreement (“Agreement”), a Restricted Stock Unit becomes vested and distributable as of the earliest of the following:
	(1)	The applicable Vesting Date for the Restricted Stock Unit indicated in the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant.
	(2)	Your death.
	(3)	Your disability.
	(4)	Your separation from service, if the separation qualifies as a retirement.
	(5)	A  change in control.
	If you become a common-law employee of Schwab or a subsidiary of Schwab (“subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”)), then the Restricted Stock Units will continue to vest as described in the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant so long as you continue as either a non‑employee director or an employee of Schwab or its subsidiaries. Unvested units will be considered “Restricted Stock Units.”  If your service terminates for any reason, then your Restricted Stock Units will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination.  This means that the Restricted Stock Units will immediately revert to Schwab.  You will receive no payment for Restricted Stock Units that are forfeited.  Schwab determines when your service terminates for this purpose.
Definition of Fair Market Value	“Fair market value” means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination date.
Definition of Disability	For all purposes of this Agreement, “disability” means that you have a disability that qualifies as such under section 409A of the Code.

1

Definition of Retirement	For all purposes of this Agreement, “retirement” means your resignation or removal from the Board of Directors (the “Board”) of Schwab or a subsidiary of Schwab at any time after you have attained age 70 or completed 5 years of service as a non‑employee director.
Definition of Change in Control	For all purposes of this Agreement, “change in control” means an event that qualifies as a change in control event under section 409A of the Code and as a change in control as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).
Definition of Separation From Service	For all purposes of this Agreement, “separation from service” means a separation from service as defined under section 409A of the Code.
Payment of Shares	Any vested Restricted Stock Units will be paid in shares of common stock of Schwab (“Shares”) as provided herein.  Shares that have become vested and distributable under this Agreement shall be distributed as follows:
	(1)	Shares that vest and become distributable on a Vesting Date shall be distributed within 30 days of the Vesting Date.
	(2)	Shares that vest and become distributable on death, disability or a change in control shall be distributable within 90 days of such event.
	(3)	Shares that vest and become distributable on a separation from service that qualifies as a retirement shall be distributed within 90 days of the separation from service. Notwithstanding the foregoing, if at the time of your separation from service, you are a “specified employee”, you will receive your Shares six months after your separation from service.  "Specified Employee" means a "specified employee" within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.

2

Restrictions on Restricted Stock Units	You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units without Schwab’s written consent.  Schwab will deliver Shares to you only after the Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied. Schwab may, in its sole discretion, allow you to transfer these Restricted Stock Units under a domestic relations order in settlement of marital or domestic property rights. In order to transfer these Restricted Stock Units, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries.  You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Restrictions on Resale	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies, or an agreement between Schwab and its underwriters prohibit a sale.  This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
No Stockholder Rights	Your Restricted Stock Units carry no voting or other stockholder rights.  You have no rights as a Schwab stockholder until your Restricted Stock Units are settled by issuing Shares.
Contribution of Par Value	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
Dividend Equivalent Rights	If Schwab pays cash dividends on Shares, you will receive cash equal to the dividend per Share 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 15 of the year following the year the actual dividend is paid.
No Right to Remain Employee or Director	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker or director of Schwab and its subsidiaries for any specific duration or at all.
Limitation on	If a payment from the Plan would constitute an excess parachute

3

Payments payment under section 280G of the Code or if there have been certain securities law violations, then your grant may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your grant. If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under section 280G of the Code, such payment will be reduced, as described below.  Generally, someone is a “disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  For purposes of this section on “Limitation on Payments,” the term “Schwab " will include affiliated corporations to the extent determined by the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code. In the event that the Auditors determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee (the “Compensation Committee”) of the Board of Schwab may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section. For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code. If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation of the Reduced Amount.  The Auditors will determine which and how much of the Payments will be eliminated or reduced (such that the aggregate present value of the Payments equals the Reduced Amount).  Schwab will notify you promptly of the Auditor's determination.  Present value will

4

	be determined in accordance with section 280G(d)(4) of the Code.  The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount.  In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success, determine that an Overpayment has been made, the amount of such Overpayment will be paid by you to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code.  In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, provided that no such Underpayment related to Shares distributable under this Agreement shall be paid beyond the deadline for making such payments under section 409A of the Code.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant, and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the number of Restricted Stock Units that remain subject to forfeiture will be adjusted accordingly.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and

5

performed in Delaware.

The Plan and Other Agreements

The text of the Plan is incorporated in this Agreement by reference.  This Agreement, the Notice of Non-Employee Director Retainer Restricted Stock Unit Grant and the Plan constitute the entire understanding between you and Schwab regarding this grant.  Any prior agreements, commitments or negotiations concerning this grant are superseded.  This Agreement may be amended only by another written agreement, signed by both parties and approved by the Compensation Committee.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

By accepting this grant, you agree to all of the terms and conditions described above and in the Plan.

6

EX-10.374

Exhibit 10.374

The Charles Schwab Corporation

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

Deferred compensation STOCK OPTION GRANT

You have been granted the following option to purchase common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”):

Name of Recipient:	<first_name> <last_name>
Total Number of Shares Granted:	<shares_awarded>
Exercise Price per Share:	<award_price>
Grant Date:	<award_date>
Expiration Date:	<expire_date>
Vesting Schedule:	This option is fully vested and non-forfeitable at all times.

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan,  The Charles Schwab Corporation Directors' Deferred Compensation Plan II and the Stock Option Agreement, which are made a part of this notice.  Please review the Stock Option Agreement carefully, as it explains the terms and conditions of this option.  You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.  Unless you provide written objection to Schwab within 30 days of your receipt of this notice, you agree to all of the terms and conditions of this notice, the Stock Option Agreement and the Plan.

1

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR

Deferred compensation STOCK OPTION AGREEMENT

Tax Treatment	This option is a non-qualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.
Vesting	This option has been issued under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”)  pursuant to your deferral election under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II (the “Deferred Compensation Plan”) and is fully vested and non-forfeitable at all times.
Exercise Procedures	You or your representative may exercise this option by following the procedures prescribed by The Charles Schwab Corporation (“Schwab”). If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative's right to exercise this option.  After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.
Forms of Payment	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing. Payment may be made in one of the following forms:
		Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding (this exercise method is sometimes referred to as “Exercise and Hold”).
		Shares are surrendered to Schwab. These shares will be valued at their fair market value on the date when the new Shares are purchased. (This exercise method is sometimes referred to as a “Stock Swap.”)
		By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price.  (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)
Term	This option expires no later than the 10th anniversary of the Grant Date but may expire earlier upon your termination of service, as described below.

1

Termination of Service as a Non‑Employee Director	This option will expire on the date three months following the date of your termination of service as a non-employee director if such service terminates for any reason other than on account of becoming a common‑law employee of Schwab or its subsidiaries, death, disability or retirement.  The terms “disability” and “retirement” are defined below. If you become an employee of Schwab or its subsidiaries, this option will expire on the date three months following the date you cease to be an employee of Schwab and its subsidiaries (other than by reason of disability, death or retirement). If you cease to be a non-employee director or an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability.  If you cease to be a non‑employee director by reason of your retirement, then this option will expire on the 10th anniversary of the Grant Date.
Definition of Disability	For all purposes of this Agreement, “disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.
Definition of Retirement	For all purposes of this Agreement, “retirement” means your resignation or removal from the Board of Directors (“Board”) of Schwab at any time after you have attained age 70 or completed 5 years of service as a non‑employee director.
Restrictions on Exercise and Issuance or Transfer of Shares	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any applicable law, regulation or rule.  Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations, or rules.
No Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to the Company and paying the exercise price.  No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
No Right to Remain Director or Employee	Nothing in this Agreement will be construed as giving you the right to be retained as a director or an employee of Schwab and its subsidiaries.

2

Transfer of Option	In general, only you may exercise this option prior to your death.  You may not transfer or assign this option, except as provided below.  For instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things, this option will immediately become invalid.  You may dispose of this option in your will or in a beneficiary designation.  You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. Schwab may, in its sole discretion, allow you to transfer this option under a domestic relations order in settlement of marital or domestic property rights. In order to transfer this option, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Shares, the Compensation Committee of the Board shall adjust the number of Shares covered by this option and the exercise price per Share.
Severability	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan constitute the entire understanding between you and Schwab regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement, signed by both parties.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

3

By ACCEPTING THIS OPTION GRANT,

you agree to all of the terms and conditions

described above and in the PlanS.

4

EX-10.375

Exhibit 10.375

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NOTICE OF NON-EMPLOYEE DIRECTOR

Deferred compensation RESTRICTED STOCK UNIT GRANT

You have been granted Restricted Stock Units.  A Restricted Stock Unit represents the right to receive, subject to certain conditions, a share of common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”), under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  Your Restricted Stock Units are granted subject to the following terms:

Name of Recipient:
Total Number of Restricted Stock Units Granted:
Grant Date:
Vesting Schedule:	These Restricted Stock Units are fully vested and non-forfeitable at all times.

Restricted Stock Units are an unfunded and unsecured obligation of Schwab.  Restricted Stock Units will be paid in Shares as provided in the Restricted Stock Unit Agreement.

You and Schwab agree that these units are granted under and governed by the terms and conditions of the Plan, The Charles Schwab Corporation Directors' Deferred Compensation Plan II and the Restricted Stock Unit Agreement, which are made a part of this notice.  Please review the Restricted Stock Unit Agreement carefully, as it explains the terms and conditions of these units.  You agree that Schwab may deliver electronically all documents relating to the Plan or these units (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.  Unless you provide written objection to Schwab within 30 days of your receipt of this notice, you agree to all of the terms and conditions of this notice, the restricted stock unit agreement and the Plan.

1

THE CHARLES SCHWAB CORPORATION

[2013 STOCK INCENTIVE PLAN]

NON-EMPLOYEE DIRECTOR

Deferred compensation RESTRICTED STOCK UNIT AGREEMENT

Vesting	These restricted stock units have been issued under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”) pursuant to your deferral election under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II (the “Deferred Compensation Plan”) and are fully vested and non-forfeitable at all times.
Nature of Units	Your units are mere bookkeeping entries. They represent only The Charles Schwab Corporation’s (“Schwab’s”) unfunded and unsecured promise to issue shares of Schwab common stock (“Shares”) on a future date. As a holder of units, you have no rights other than the rights of a general creditor of Schwab.
Voting Rights and Dividend Rights	Your units carry no voting rights.  Any dividends paid on Shares shall be credited to you as additional Restricted Stock Units.  Otherwise, you have no rights as a Schwab stockholder until your units are settled by issuing Shares.
Settlement of Units	Your units will be settled in accordance with the terms of the Deferred Compensation Plan. At the time of settlement, you will receive one Share for each unit.
Other Terms and Conditions	Your units will be governed by all of the applicable terms and conditions of the Deferred Compensation Plan, which are made part of this Restricted Stock Unit Agreement (“Agreement”).
Restrictions on Restricted Stock Units	You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units.  Schwab will deliver Shares to you in accordance with the terms of the Deferred Compensation Plan. Schwab may, in its sole discretion, allow you to transfer these Restricted Stock Units under a domestic relations order in settlement of marital or domestic property rights. In order to transfer these Restricted Stock Units, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee must follow the terms of this Agreement.
Delivery of Shares After Death	In the event that Shares are distributable upon your death, the Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more beneficiaries by filing a beneficiary designation form with

1

	Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your Shares will be delivered to your estate.
Restrictions on Resale	You agree not to sell any shares at a time when applicable laws, Schwab policies, or an agreement between Schwab and its underwriters prohibit a sale. This restriction will apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
Plan Administration	The Plan administrator has discretionary authority to make all determinations related to this grant and to construe the terms of the Plan, the Notice of Non-Employee Director Deferred Compensation Restricted Stock Unit Grant and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Shares, the number of your units will be adjusted accordingly, as Schwab may determine pursuant to the Plan.
The Plan and Other Agreements	The text of the Plan and the Deferred Compensation Plan (the “Plans”) are incorporated in this Agreement by reference.  This Agreement and the Plans constitute the entire understanding between you and Schwab regarding these units.  Any prior agreements, commitments or negotiations concerning these units are superseded.  This Agreement may be amended only by another written agreement, signed by both parties.  If there is any inconsistency or conflict between any provision of this Agreement and the Plans, the terms of the Plans will control.

BY ACCEPTING THIS GRANT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLANS.

2

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)

	Nine Months
	Ended
	September 30, 2016				2015		2014		2013		2012		2011
Earnings before taxes on earnings		$	2,169	$	2,279	$	2,115	$	1,705	$	1,450	$	1,392
Fixed charges
Interest expense:
Bank deposits			26		29		30		31		42		62
Payables to brokerage clients			2		2		2		3		3		3
Short-term borrowings			6		-		-		-		-		-
Long-term debt			78		92		73		69		103		108
Other			14		9		(3)		2		2		2
Total			126		132		102		105		150		175
Interest portion of rental expense			65		77		71		69		68		62
Total fixed charges (A)			191		209		173		174		218		237
Earnings before taxes on earnings and fixed charges (B)		$	2,360	$	2,488	$	2,288	$	1,879	$	1,668	$	1,629
Ratio of earnings to fixed charges (B) ÷ (A) (1)			12.4		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)			14.3		13.8		16.0		13.2		9.4		9.1
Total fixed charges		$	191	$	209	$	173	$	174	$	218	$	237
Preferred stock dividends and other (3)			157		131		96		97		70		-
Total fixed charges and preferred stock dividends
and other (C)		$	348	$	340	$	269	$	271	$	288	$	237
Ratio of earnings to fixed charges and preferred
stock dividends and other (B) ÷ (C) (1)			6.8		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)			7.3		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:	November 7, 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:	November 7, 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 September 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:	November 7, 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 September 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:	November 7, 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	9 Months Ended
	Sep. 30, 2016	Oct. 26, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
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		1,325,672,135

XML

Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Revenues:
Asset management and administration fees	[1]	$ 798	$ 663	$ 2,254	$ 1,977
Interest revenue		891	669	2,541	1,931
Interest expense		(46)	(34)	(126)	(96)
Net interest revenue		845	635	2,415	1,835
Trading revenue		190	228	623	658
Other		76	66	209	208
Provision for loan losses		5	5	5	11
Total net revenues		1,914	1,597	5,506	4,689
Expenses Excluding Interest
Compensation and benefits		609	548	1,837	1,669
Professional services		131	114	372	340
Occupancy and equipment		100	92	299	260
Advertising and market development		64	58	204	189
Communications		57	58	179	175
Depreciation and amortization		60	57	173	166
Other		99	87	273	256
Total expenses excluding interest		1,120	1,014	3,337	3,055
Income before taxes on income		794	583	2,169	1,634
Taxes on income		291	207	802	603
Net Income		503	376	1,367	1,031
Preferred stock dividends and other	[2]	33	11	99	45
Net Income Available to Common Stockholders		$ 470	$ 365	$ 1,268	$ 986
Weighted-Average Common Shares Outstanding: Basic		1,324	1,316	1,322	1,315
Weighted-Average Common Shares Outstanding: Diluted		1,334	1,328	1,332	1,326
Earnings Per Common Share: Basic		$ 0.36	$ 0.28	$ 0.96	$ 0.75
Earnings Per Common Share: Diluted		0.35	0.28	0.95	0.74
Dividends Declared Per Common Share		$ 0.07	$ 0.06	$ 0.20	$ 0.18

[1] Includes fee waivers of $41 and $166 during the third quarters of 2016 and 2015, respectively and $193 and $519 during the first nine months 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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Schwab Funds money market funds [Member]
Fee waivers	$ 41	$ 166	$ 193	$ 519

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 503	$ 376	$ 1,367	$ 1,031
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	77	(249)	266	(233)
Other reclassifications included in other revenue			(3)
Other			1
Other comprehensive income (loss), before tax	77	(249)	264	(233)
Income tax effect	(29)	94	(99)	87
Other comprehensive income (loss), net of tax	48	(155)	165	(146)
Comprehensive Income	$ 551	$ 221	$ 1,532	$ 885

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015	[1]
Assets
Cash and cash equivalents	$ 10,431	$ 11,978
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $9,425 at September 30, 2016 and $8,088 at December 31, 2015)	20,077	19,598
Receivables from brokers, dealers, and clearing organizations	947	582
Receivables from brokerage clients — net	16,380	17,313
Other securities owned — at fair value	858	533
Securities available for sale	75,791	65,646
Securities held to maturity (fair value — $67,843 at September 30, 2016 and $50,088 at December 31, 2015)	66,056	50,007
Bank loans — net	14,858	14,334
Equipment, office facilities, and property — net	1,266	1,145
Goodwill	1,227	1,227
Intangible assets — net	154	181
Other assets	1,292	1,161
Total assets	209,337	183,705
Liabilities and Stockholders' Equity
Bank deposits	149,630	129,502
Payables to brokers, dealers, and clearing organizations	3,497	2,588
Payables to brokerage clients	32,961	33,185
Accrued expenses and other liabilities	1,902	2,151
Short-term borrowings	3,001
Long-term debt	2,876	2,877
Total liabilities	193,867	170,303
Stockholders' equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $2,235 at September 30, 2016 and $1,485 at December 31, 2015	2,192	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	4,254	4,152
Retained earnings	12,261	11,253
Treasury stock, at cost — 163,516,791 shares at September 30, 2016 and 167,205,881 shares at December 31, 2015	(3,283)	(3,343)
Accumulated other comprehensive income	31	(134)
Total stockholders' equity	15,470	13,402
Total liabilities and stockholders' equity	$ 209,337	$ 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	Sep. 30, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$ 9,425	$ 8,088
Securities held to maturity, Fair Value	$ 67,843	$ 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	163,516,791	167,205,881

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016		Sep. 30, 2015
Cash Flows from Operating Activities
Net income	$ 1,367		$ 1,031
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for loan losses	(5)		(11)
Stock-based compensation	101		98
Depreciation and amortization	173		166
Premium amortization, net, on securities available for sale and securities held to maturity	181		119
Other	25		7
Net change in:
Cash and investments segregated and on deposit for regulatory purposes	(479)		3,538
Receivables from brokers, dealers, and clearing organizations	(370)		(110)
Receivables from brokerage clients	928		(1,426)
Other securities owned	(325)		46
Other assets	(61)		(59)
Payables to brokers, dealers, and clearing organizations	(111)		473
Payables to brokerage clients	(224)		(3,265)
Accrued expenses and other liabilities	(226)		(253)
Net cash provided by operating activities	974		354
Cash Flows from Investing Activities
Purchases of securities available for sale	(22,782)		(17,497)
Proceeds from sales of securities available for sale	4,645		599
Principal payments on securities available for sale	8,652		5,172
Purchases of securities held to maturity	(19,439)		(8,824)
Principal payments on securities held to maturity	3,841		2,709
Net increase in bank loans	(600)		(863)
Purchase of equipment, office facilities, and property	(272)		(204)
Purchases of Federal Home Loan Bank stock	(152)
Proceeds from sales of Federal Home Loan Bank stock	88		8
Other investing activities	(25)		(18)
Net cash used for investing activities	(26,044)		(18,918)
Cash Flows from Financing Activities
Net change in bank deposits	20,128		16,202
Proceeds from short-term borrowings	8,505
Repayment of short-term borrowings	(5,504)
Issuance of long-term debt			998
Repayment of long-term debt	(5)		(6)
Net proceeds from preferred stock offerings	725		581
Dividends paid	(365)		(288)
Proceeds from stock options exercised and other	31		67
Other financing activities	8		13
Net cash provided by financing activities	23,523		17,567
Decrease in Cash and Cash Equivalents	(1,547)		(997)
Cash and Cash Equivalents at Beginning of Period	11,978	[1]	11,363
Cash and Cash Equivalents at End of Period	10,431		10,366
Cash paid during the period for:
Interest	141		107
Income taxes	757		598
Non-cash investing activity:
Securities purchased during the period but settled after period end	$ 1,021		$ 230

[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

9 Months Ended

Sep. 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 2015 Form 10-K.

The Company’s significant accounting policies are included in “Notes – 2. Summary of Significant Accounting Policies” in the 2015 Form 10-K. There have been no significant changes to these accounting policies during the first nine months 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

9 Months Ended

Sep. 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.

XML

Securities Available for Sale and Securities Held to Maturity

9 Months Ended

Sep. 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
September 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	33,195	$	219	$	44	$	33,370
Asset-backed securities		21,736		30		266		21,500
Corporate debt securities		10,067		54		2		10,119
U.S. Treasury securities		4,966		33		-		4,999
U.S. agency notes		2,206		-		1		2,205
Certificates of deposit		2,295		2		1		2,296
U.S. state and municipal securities		1,012		26		1		1,037
Commercial paper		214		-		-		214
Non-agency commercial mortgage-backed securities		51		-		-		51
Total securities available for sale	$	75,742	$	364	$	315	$	75,791
Securities held to maturity:
U.S. agency mortgage-backed securities	$	64,836	$	1,738	$	4	$	66,570
Non-agency commercial mortgage-backed securities		997		43		-		1,040
U.S. Treasury securities		223		10		-		233
Total securities held to maturity	$	66,056	$	1,791	$	4	$	67,843

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 atSeptember 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
September 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	10,233	$	21	$	2,672	$	23	$	12,905	$	44
Asset-backed securities		1,235		14		10,504		252		11,739		266
Corporate debt securities		758		1		882		1		1,640		2
U.S. agency notes		499		1		-		-		499		1
Certificates of deposit		544		1		200		-		744		1
U.S. state and municipal securities		124		1		-		-		124		1
Total	$	13,393	$	39	$	14,258	$	276	$	27,651	$	315
Securities held to maturity:
U.S. agency mortgage-backed securities	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total securities with unrealized losses (1)	$	15,868	$	43	$	14,258	$	276	$	30,126	$	319

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 totaled339 for securities available for sale and 24 for securities held to maturity.
(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 2015 Form 10-K.

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
September 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	3,417	$	16,966	$	12,987	$	33,370
Asset-backed securities		-		9,125		4,150		8,225		21,500
Corporate debt securities		2,233		7,886		-		-		10,119
U.S. Treasury securities		200		4,592		207		-		4,999
U.S. agency notes		-		2,205		-		-		2,205
Certificates of deposit		876		1,420		-		-		2,296
U.S. state and municipal securities		-		-		51		986		1,037
Commercial paper		214		-		-		-		214
Non-agency commercial mortgage-backed
securities		-		-		-		51		51
Total fair value	$	3,523	$	28,645	$	21,374	$	22,249	$	75,791
Total amortized cost	$	3,517	$	28,473	$	21,386	$	22,366	$	75,742
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	4,201	$	22,947	$	39,422	$	66,570
Non-agency commercial mortgage-backed
securities (1)		-		-		376		664		1,040
U.S. Treasury securities		-		-		233		-		233
Total fair value	$	-	$	4,201	$	23,556	$	40,086	$	67,843
Total amortized cost	$	-	$	4,019	$	22,605	$	39,432	$	66,056

(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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Proceeds	$	571	$	5	$	4,645	$	599
Gross realized gains		-		-		3		1
Gross realized losses		-		-		-		1

XML

Bank Loans and Related Allowance for Loan Losses

9 Months Ended

Sep. 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
September 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,660		$	8		$	4		$	15		$	27	$	8,687	$	15	$	8,672
Home equity loans and lines of credit		2,456			4			1			11			16		2,472		10		2,462
Pledged asset lines		3,644			-			-			2			2		3,646		-		3,646
Other		79			-			-			-			-		79		1		78
Total bank loans	$	14,839		$	12		$	5		$	28		$	45	$	14,884	$	26	$	14,858
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 $78 million and $80 million at September 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 $8.2 billion and$7.4 billion at September 30, 2016 and December 31, 2015, respectively. The Company had commitments to purchase First Mortgage loans of $898 million and $260 million at September 30, 2016 and December 31, 2015, respectively. All PALs were fully collateralized by securities with fair values in excess of borrowings at September 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$858 million and$469 million during the third quarters of 2016 and 2015, respectively, and $2.1 billion and $1.5 billion during the first nine months of 2016 and 2015, respectively. Schwab purchased HELOCs with commitments of $93 million and $150 million during the third quarters of 2016 and 2015, respectively, and $315 million and $432 million during the first nine months of 2016 and 2015, respectively.

Credit Quality

Changes in the allowance for loan losses were as follows:

Three Months Ended	September 30, 2016									September 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		$	10	$	1	$	31	$	23		$	13	$	36
Charge-offs		-			-		-		-		-			-		-
Recoveries		-			-		-		-		1			-		1
Provision for loan losses		(5)			-		-		(5)		(4)			(2)		(6)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

Nine Months Ended	September 30, 2016									September 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		1			2		3
Provision for loan losses		(5)			(1)		1		(5)		(10)			(2)		(12)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

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

· year of origination;

· borrower FICO scores at origination (OriginationFICO);

· updated borrower FICO scores (Updated FICO);

· loan-to-value ratios at origination (Origination LTV); and

· estimated current LTV ratios (Estimated Current LTV).

Borrowers’ FICO scores are provided by an independent third-party credit reporting service and were last updated in September2016. 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 September 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.

The credit quality indicators of the Company’s bank loan portfolio are detailed below.

			Weighted				Percent of
			Average		Utilization		Loans on
September 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,994		775	N/A			0.02	%
>70% – <90%		645		766	N/A			0.18	%
>90% – <100%		22		732	N/A			3.48	%
>100%		26		719	N/A			13.54	%
Total	$	8,687		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,146		772	36	%		0.15	%
>70% – <90%		270		758	49	%		0.55	%
>90% – <100%		33		750	60	%		1.66	%
>100%		23		737	65	%		3.05	%
Total	$	2,472		770	37	%		0.24	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,646		763	47	%		-

(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
September 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,100	$	1,766
2012		1,263		111
2013		1,950		206
2014		766		166
2015		1,599		155
2016		2,009		68
Total	$	8,687	$	2,472
Origination FICO
<620	$	8	$	-
620 – 679		91		14
680 – 739		1,378		451
>740		7,210		2,007
Total	$	8,687	$	2,472
Origination LTV
<70%	$	6,410	$	1,701
>70% – <90%		2,267		757
>90% – <100%		10		14
Total	$	8,687	$	2,472

			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

XML

Variable Interest Entities

9 Months Ended

Sep. 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 2015 Form 10-K, 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 September 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 September 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 $153 million and $104 million as of September 30, 2016 and December 31, 2015, respectively, which is included in other assets on the condensed consolidated balance sheets. Schwab Bank recorded liabilities of $110 million and $84 million for unfunded commitments related to LIHTC investments at September 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:

		September 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments	$	153	$	110	$	153	$	104	$	84	$	104
Other CRA investments (1)		55		-		65		57		-		66
Total	$	208	$	110	$	218	$	161	$	84	$	170

(1) 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 nine months ended September 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.

XML

Bank Deposits

9 Months Ended

Sep. 30, 2016

Bank Deposits [Abstract]

Bank Deposits

6.Bank Deposits

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

	September 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	127,866	$	108,137
Checking		13,543		12,822
Savings and other		7,643		7,896
Total interest-bearing deposits		149,052		128,855
Non-interest-bearing deposits		578		647
Total bank deposits	$	149,630	$	129,502

XML

Borrowings

9 Months Ended

Sep. 30, 2016

Borrowings [Abstract]

Borrowings

7.Borrowings

Long-term debt was net of unamortized debt discounts/premiums and debt issuance costs of $25 million and $29 million at September 30, 2016 and December 31, 2015, respectively.

	September 30,		December 31,
	2016		2015
Senior Notes	$	2,556	$	2,553	(1)
Senior Medium-Term Notes		250		249	(1)
Finance lease obligation		70		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 September 30, 2016 are as follows:

2016	$	2
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,901
Unamortized discount, net		(14)
Debt issuance costs		(11)
Total long-term debt	$	2,876

Short-term borrowings: Schwab Bank maintains a secured credit facility with the FHLB. At September 30, 2016,  $3.0 billion was outstanding under this facility with an additional $5.9 billion available based on the loans currently pledged there. As a condition of the borrowings, Schwab Bank purchased $152 million of FHLB stock, recorded at par, and sold $88 million of FHLB stock in the first nine months of 2016, with the net investment recorded in other assets on the condensed consolidated balance sheets. Schwab Bank sold $8 million of FHLB stock during the first nine months of 2015. 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 September 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 September 30, 2016 and December 31, 2015.

XML

Commitments and Contingencies

9 Months Ended

Sep. 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 September 30, 2016, the aggregate face amount of these LOCs totaled $295million. There were no funds drawn under any of these LOCs at September 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, but 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. 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 its 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 optionsXpress, Inc. had violated Regulation SHO and aided and abetted fraudulent trading activity by its customer, and ordered optionsXpress, Inc. and the customer to pay disgorgement and penalties in an amount that would not be material. The Company appealed to the SEC, and in a decision issued August18, 2016 and amended September13, 2016, the SEC dismissed all fraud charges but affirmed the violations of Regulation SHO and the financial sanctions imposed by its administrative law judge. This matter is now concluded.

XML

Offsetting Assets and Liabilities

9 Months Ended

Sep. 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 September 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 $9.6 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 brokerage 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 $1.9 billion at September 30, 2016 and 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 brokerage clients and delivers cash to the lender in exchange for the securities. The fair value of these borrowed securities was $304 million at September 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. 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 September 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
September 30, 2016
Assets:
Resale agreements (1)	$	9,425	$	-	$	9,425	$	-	$	(9,425)	(2)	$	-
Securities borrowed (3)		632		-		632		(297)		(334)			1
Total	$	10,057	$	-	$	10,057	$	(297)	$	(9,759)		$	1
Liabilities:
Securities loaned (4,5)	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
Total	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
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 held in client brokerage accounts with overnight and continuous remaining contractual maturities.

XML

Fair Values of Assets and Liabilities

9 Months Ended

Sep. 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 FHLB stock, whose carrying values approximate their fair values. FHLB stock is recorded at par, which approximates its 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 2015 Form 10-K. There were no significant changes in these policies and methodologies during the first nine months of 2016. The Company did not transfer any assets or liabilities between Level 1, Level 2, or Level 3 during the nine months ended September 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 September 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
September 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	852		$	-		$	-		$	852
Commercial paper			-			959			-			959
Total cash equivalents			852			959			-			1,811
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,099			-			3,099
U.S. Government securities			-			3,512			-			3,512
Total investments segregated and on deposit for
regulatory purposes			-			6,611			-			6,611
Other securities owned:
Schwab Funds® money market funds			528			-			-			528
Equity and bond mutual funds			217			15			-			232
State and municipal debt obligations			-			55			-			55
Equity, U.S. Government and corporate debt, and
other securities			2			41			-			43
Total other securities owned			747			111			-			858
Securities available for sale:
U.S. agency mortgage-backed securities			-			33,370			-			33,370
Asset-backed securities			-			21,500			-			21,500
Corporate debt securities			-			10,119			-			10,119
U.S. Treasury securities			-			4,999			-			4,999
U.S. agency notes			-			2,205			-			2,205
Certificates of deposit			-			2,296			-			2,296
U.S. state and municipal securities			-			1,037			-			1,037
Commercial paper			-			214			-			214
Non-agency commercial mortgage-backed securities			-			51			-			51
Total securities available for sale			-			75,791			-			75,791
Total		$	1,599		$	83,472		$	-		$	85,071

	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
September 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	8,620		$	-		$	8,620		$	-	$	8,620
Cash and investments segregated and
on deposit for regulatory purposes		13,461			-			13,461			-		13,461
Receivables from brokers, dealers, and
clearing organizations		947			-			947			-		947
Receivables from brokerage clients – net		16,377			-			16,377			-		16,377
Securities held to maturity:
U.S. agency mortgage-backed securities		64,836			-			66,570			-		66,570
Non-agency commercial mortgage-backed
securities		997			-			1,040			-		1,040
U.S. Treasury securities		223			-			233			-		233
Total securities held to maturity		66,056			-			67,843			-		67,843
Bank loans: (1)
Residential real estate mortgages		8,687			-			8,797			-		8,797
Home equity loans and lines of credit		2,472			-			2,614			-		2,614
Pledged asset lines		3,646			-			3,646			-		3,646
Other		79			-			79			-		79
Total bank loans		14,884			-			15,136			-		15,136
Other assets		291			-			291			-		291
Total	$	120,636		$	-		$	122,675		$	-	$	122,675
Liabilities:
Bank deposits	$	149,630		$	-		$	149,630		$	-	$	149,630
Payables to brokers, dealers, and clearing
organizations		3,497			-			3,497			-		3,497
Payables to brokerage clients		32,961			-			32,961			-		32,961
Accrued expenses and other liabilities		880			-			880			-		880
Short-term borrowings		3,001			-			3,001			-		3,001
Long-term debt		2,876			-			3,024			-		3,024
Total	$	192,845		$	-		$	192,993		$	-	$	192,993

(1) The carrying value of bank loans excludes the allowance for loan losses of $26 million at September 30, 2016.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December31, 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.

XML

Stockholders' Equity

9 Months Ended

Sep. 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 nine months ended September 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:

	September 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		483	485		1,000		485		480
Series C	600		1,000		600		585	600		1,000		600		583
Series D	750		1,000		750		727	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,192	1,485			$	1,485	$	1,459

XML

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 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 September 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)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)
Other reclassifications included in
other revenue		-		-		-		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		77		(29)		48		(249)		94		(155)
Other comprehensive income (loss)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)

Nine Months Ended September 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)	$	266	$	(100)	$	166	$	(233)	$	87	$	(146)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		263		(99)		164		(233)		87		(146)
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	264	$	(99)	$	165	$	(233)	$	87	$	(146)

Accumulated other comprehensive income balances are as follows:

	Total
	Accumulated Other
	Comprehensive Income
Balance at December 31, 2014		$	165
Net unrealized loss on securities available for sale			(146)
Balance at September 30, 2015		$	19
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			164
Other			1
Balance at September 30, 2016		$	31

XML

Earnings Per Common Share

9 Months Ended

Sep. 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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	503	$	376	$	1,367	$	1,031
Preferred stock dividends and other (1)		(33)		(11)		(99)		(45)
Net income available to common stockholders	$	470	$	365	$	1,268	$	986
Weighted-average common shares outstanding — basic		1,324		1,316		1,322		1,315
Common stock equivalent shares related to stock incentive plans		10		12		10		11
Weighted-average common shares outstanding — diluted (2)		1,334		1,328		1,332		1,326
Basic EPS	$	.36	$	.28	$	.96	$	.75
Diluted EPS	$	.35	$	.28	$	.95	$	.74

(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 totaled17 million and 14 million shares for the third quarters of 2016 and 2015, respectively, and 21million and 16 million shares for the first nine months of 2016 and 2015, respectively.

XML

Regulatory Requirements

9 Months Ended

Sep. 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.

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 September 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
September 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	12,015	18.0	%		N/A			$	3,006	4.5	%
Tier 1 Risk-Based Capital		14,207	21.3	%		N/A				4,008	6.0	%
Total Risk-Based Capital		14,234	21.3	%		N/A				5,343	8.0	%
Tier 1 Leverage		14,207	7.1	%		N/A				7,996	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	11,142	18.8	%	$	3,843	6.5	%	$	2,660	4.5	%
Tier 1 Risk-Based Capital		11,142	18.8	%		4,730	8.0	%		3,547	6.0	%
Total Risk-Based Capital		11,168	18.9	%		5,912	10.0	%		4,730	8.0	%
Tier 1 Leverage		11,142	7.0	%		7,910	5.0	%		6,328	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 September 30, 2016, Schwab Bank is considered well capitalized (the highest category) under their respective regulatory capital rules. There are no conditions or events since September 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 September 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
September 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,890	$	0.250	$	344	$	1,546
optionsXpress, Inc.		269		1		7		262
December 31, 2015
Schwab	$	1,746	$	0.250	$	358	$	1,388
optionsXpress, Inc.		244		1		7		237

XML

Segment Information

9 Months Ended

Sep. 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 attributed 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. 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 September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	550	$	461	$	248	$	202	$	798	$	663
Net interest revenue		654		534		191		101		845		635
Trading revenue		123		148		67		80		190		228
Other		56		45		20		21		76		66
Provision for loan losses		4		4		1		1		5		5
Total net revenues		1,387		1,192		527		405		1,914		1,597
Expenses Excluding Interest		847		762		273		252		1,120		1,014
Income before taxes on income	$	540	$	430	$	254	$	153	$	794	$	583

	Investor Services (1)				Advisor Services (1)				Total
Nine Months Ended September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	1,536	$	1,372	$	718	$	605	$	2,254	$	1,977
Net interest revenue		1,895		1,568		520		267		2,415		1,835
Trading revenue		395		428		228		230		623		658
Other		153		146		56		62		209		208
Provision for loan losses		4		10		1		1		5		11
Total net revenues		3,983		3,524		1,523		1,165		5,506		4,689
Expenses Excluding Interest		2,518		2,308		819		747		3,337		3,055
Income before taxes on income	$	1,465	$	1,216	$	704	$	418	$	2,169	$	1,634

(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.

XML

Subsequent Event

9 Months Ended

Sep. 30, 2016

Subsequent Event [Abstract]

Subsequent Event

16.Subsequent Event

On October 31, 2016, the Company issued and sold 600,000 depositary shares, each representing a 1/100th ownership interest in a share of fixed-to-floating rate non-cumulative perpetual preferred stock, Series E, $0.01 par value, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share). The Series E Preferred Stock has a fixed dividend rate of 4.625% through February 28, 2022, payable semi-annually, and thereafter at a floating rate of three-month LIBOR plus a fixed spread of 3.315%, payable quarterly. Net proceeds received from the sale were $591 million and are being used to support balance sheet growth, including the migration of certain client balances from sweep money market funds into Schwab Bank.

XML

New Accounting Standards (Policy)

9 Months Ended

Sep. 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.

XML

Securities Available for Sale and Securities Held to Maturity (Tables)

9 Months Ended

Sep. 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
September 30, 2016	Cost		Gains		Losses		Value
Securities available for sale:
U.S. agency mortgage-backed securities	$	33,195	$	219	$	44	$	33,370
Asset-backed securities		21,736		30		266		21,500
Corporate debt securities		10,067		54		2		10,119
U.S. Treasury securities		4,966		33		-		4,999
U.S. agency notes		2,206		-		1		2,205
Certificates of deposit		2,295		2		1		2,296
U.S. state and municipal securities		1,012		26		1		1,037
Commercial paper		214		-		-		214
Non-agency commercial mortgage-backed securities		51		-		-		51
Total securities available for sale	$	75,742	$	364	$	315	$	75,791
Securities held to maturity:
U.S. agency mortgage-backed securities	$	64,836	$	1,738	$	4	$	66,570
Non-agency commercial mortgage-backed securities		997		43		-		1,040
U.S. Treasury securities		223		10		-		233
Total securities held to maturity	$	66,056	$	1,791	$	4	$	67,843

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
September 30, 2016	Value		Losses		Value		Losses		Value		Losses
Securities available for sale:
U.S. agency mortgage-backed securities	$	10,233	$	21	$	2,672	$	23	$	12,905	$	44
Asset-backed securities		1,235		14		10,504		252		11,739		266
Corporate debt securities		758		1		882		1		1,640		2
U.S. agency notes		499		1		-		-		499		1
Certificates of deposit		544		1		200		-		744		1
U.S. state and municipal securities		124		1		-		-		124		1
Total	$	13,393	$	39	$	14,258	$	276	$	27,651	$	315
Securities held to maturity:
U.S. agency mortgage-backed securities	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total	$	2,475	$	4	$	-	$	-	$	2,475	$	4
Total securities with unrealized losses (1)	$	15,868	$	43	$	14,258	$	276	$	30,126	$	319

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 totaled339 for securities available for sale and 24 for securities held to maturity.
(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
September 30, 2016	1 year		5 years		10 years		10 years		Total
Securities available for sale:
U.S. agency mortgage-backed securities (1)	$	-	$	3,417	$	16,966	$	12,987	$	33,370
Asset-backed securities		-		9,125		4,150		8,225		21,500
Corporate debt securities		2,233		7,886		-		-		10,119
U.S. Treasury securities		200		4,592		207		-		4,999
U.S. agency notes		-		2,205		-		-		2,205
Certificates of deposit		876		1,420		-		-		2,296
U.S. state and municipal securities		-		-		51		986		1,037
Commercial paper		214		-		-		-		214
Non-agency commercial mortgage-backed
securities		-		-		-		51		51
Total fair value	$	3,523	$	28,645	$	21,374	$	22,249	$	75,791
Total amortized cost	$	3,517	$	28,473	$	21,386	$	22,366	$	75,742
Securities held to maturity:
U.S. agency mortgage-backed securities (1)	$	-	$	4,201	$	22,947	$	39,422	$	66,570
Non-agency commercial mortgage-backed
securities (1)		-		-		376		664		1,040
U.S. Treasury securities		-		-		233		-		233
Total fair value	$	-	$	4,201	$	23,556	$	40,086	$	67,843
Total amortized cost	$	-	$	4,019	$	22,605	$	39,432	$	66,056

(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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Proceeds	$	571	$	5	$	4,645	$	599
Gross realized gains		-		-		3		1
Gross realized losses		-		-		-		1

XML

Bank Loans and Related Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 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
September 30, 2016	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans		losses		loans - net
Residential real estate mortgages	$	8,660		$	8		$	4		$	15		$	27	$	8,687	$	15	$	8,672
Home equity loans and lines of credit		2,456			4			1			11			16		2,472		10		2,462
Pledged asset lines		3,644			-			-			2			2		3,646		-		3,646
Other		79			-			-			-			-		79		1		78
Total bank loans	$	14,839		$	12		$	5		$	28		$	45	$	14,884	$	26	$	14,858
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	September 30, 2016									September 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		$	10	$	1	$	31	$	23		$	13	$	36
Charge-offs		-			-		-		-		-			-		-
Recoveries		-			-		-		-		1			-		1
Provision for loan losses		(5)			-		-		(5)		(4)			(2)		(6)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

Nine Months Ended	September 30, 2016									September 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		1			2		3
Provision for loan losses		(5)			(1)		1		(5)		(10)			(2)		(12)
Balance at end of period	$	15		$	10	$	1	$	26	$	20		$	11	$	31

Credit Quality Indicators of Bank Loan Portfolio

			Weighted				Percent of
			Average		Utilization		Loans on
September 30, 2016	Balance		Updated FICO		Rate(1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,994		775	N/A			0.02	%
>70% – <90%		645		766	N/A			0.18	%
>90% – <100%		22		732	N/A			3.48	%
>100%		26		719	N/A			13.54	%
Total	$	8,687		774	N/A			0.08	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,146		772	36	%		0.15	%
>70% – <90%		270		758	49	%		0.55	%
>90% – <100%		33		750	60	%		1.66	%
>100%		23		737	65	%		3.05	%
Total	$	2,472		770	37	%		0.24	%
Pledged asset lines:
Weighted-Average LTV
=70%	$	3,646		763	47	%		-

(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
September 30, 2016	mortgages		lines of credit
Year of origination
Pre-2012	$	1,100	$	1,766
2012		1,263		111
2013		1,950		206
2014		766		166
2015		1,599		155
2016		2,009		68
Total	$	8,687	$	2,472
Origination FICO
<620	$	8	$	-
620 – 679		91		14
680 – 739		1,378		451
>740		7,210		2,007
Total	$	8,687	$	2,472
Origination LTV
<70%	$	6,410	$	1,701
>70% – <90%		2,267		757
>90% – <100%		10		14
Total	$	8,687	$	2,472

			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

XML

Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2016

Variable Interest Entities [Abstract]

Aggregate Assets, Liabilities and Maximum Exposure to Loss

		September 30, 2016						December 31, 2015
						Maximum						Maximum
		Aggregate		Aggregate		exposure		Aggregate		Aggregate		exposure
		assets		liabilities		to loss		assets		liabilities		to loss
LIHTC investments	$	153	$	110	$	153	$	104	$	84	$	104
Other CRA investments (1)		55		-		65		57		-		66
Total	$	208	$	110	$	218	$	161	$	84	$	170

(1) 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.

XML

Bank Deposits (Tables)

9 Months Ended

Sep. 30, 2016

Bank Deposits [Abstract]

Deposits from Banking Clients Consisting of Interest Bearing and Noninterest Bearing Deposits

	September 30,		December 31,
	2016		2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	127,866	$	108,137
Checking		13,543		12,822
Savings and other		7,643		7,896
Total interest-bearing deposits		149,052		128,855
Non-interest-bearing deposits		578		647
Total bank deposits	$	149,630	$	129,502

XML

Borrowings (Tables)

9 Months Ended

Sep. 30, 2016

Borrowings [Abstract]

Long-term Debt Including Unamortized Debt Discounts and Premiums

	September 30,		December 31,
	2016		2015
Senior Notes	$	2,556	$	2,553	(1)
Senior Medium-Term Notes		250		249	(1)
Finance lease obligation		70		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	$	2
2017		258
2018		908
2019		8
2020		709
Thereafter		1,016
Total maturities		2,901
Unamortized discount, net		(14)
Debt issuance costs		(11)
Total long-term debt	$	2,876

XML

Offsetting Assets and Liabilities (Tables)

9 Months Ended

Sep. 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
September 30, 2016
Assets:
Resale agreements (1)	$	9,425	$	-	$	9,425	$	-	$	(9,425)	(2)	$	-
Securities borrowed (3)		632		-		632		(297)		(334)			1
Total	$	10,057	$	-	$	10,057	$	(297)	$	(9,759)		$	1
Liabilities:
Securities loaned (4,5)	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
Total	$	2,371	$	-	$	2,371	$	(297)	$	(1,961)		$	113
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 held in client brokerage accounts with overnight and continuous remaining contractual maturities.

XML

Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 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
September 30, 2016	(Level 1)			(Level 2)			(Level 3)			Fair Value
Cash equivalents:
Money market funds		$	852		$	-		$	-		$	852
Commercial paper			-			959			-			959
Total cash equivalents			852			959			-			1,811
Investments segregated and on deposit for regulatory
purposes:
Certificates of deposit			-			3,099			-			3,099
U.S. Government securities			-			3,512			-			3,512
Total investments segregated and on deposit for
regulatory purposes			-			6,611			-			6,611
Other securities owned:
Schwab Funds® money market funds			528			-			-			528
Equity and bond mutual funds			217			15			-			232
State and municipal debt obligations			-			55			-			55
Equity, U.S. Government and corporate debt, and
other securities			2			41			-			43
Total other securities owned			747			111			-			858
Securities available for sale:
U.S. agency mortgage-backed securities			-			33,370			-			33,370
Asset-backed securities			-			21,500			-			21,500
Corporate debt securities			-			10,119			-			10,119
U.S. Treasury securities			-			4,999			-			4,999
U.S. agency notes			-			2,205			-			2,205
Certificates of deposit			-			2,296			-			2,296
U.S. state and municipal securities			-			1,037			-			1,037
Commercial paper			-			214			-			214
Non-agency commercial mortgage-backed securities			-			51			-			51
Total securities available for sale			-			75,791			-			75,791
Total		$	1,599		$	83,472		$	-		$	85,071

	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
September 30, 2016	Amount		(Level 1)			(Level 2)			(Level 3)			Fair Value
Assets:
Cash and cash equivalents	$	8,620		$	-		$	8,620		$	-	$	8,620
Cash and investments segregated and
on deposit for regulatory purposes		13,461			-			13,461			-		13,461
Receivables from brokers, dealers, and
clearing organizations		947			-			947			-		947
Receivables from brokerage clients – net		16,377			-			16,377			-		16,377
Securities held to maturity:
U.S. agency mortgage-backed securities		64,836			-			66,570			-		66,570
Non-agency commercial mortgage-backed
securities		997			-			1,040			-		1,040
U.S. Treasury securities		223			-			233			-		233
Total securities held to maturity		66,056			-			67,843			-		67,843
Bank loans: (1)
Residential real estate mortgages		8,687			-			8,797			-		8,797
Home equity loans and lines of credit		2,472			-			2,614			-		2,614
Pledged asset lines		3,646			-			3,646			-		3,646
Other		79			-			79			-		79
Total bank loans		14,884			-			15,136			-		15,136
Other assets		291			-			291			-		291
Total	$	120,636		$	-		$	122,675		$	-	$	122,675
Liabilities:
Bank deposits	$	149,630		$	-		$	149,630		$	-	$	149,630
Payables to brokers, dealers, and clearing
organizations		3,497			-			3,497			-		3,497
Payables to brokerage clients		32,961			-			32,961			-		32,961
Accrued expenses and other liabilities		880			-			880			-		880
Short-term borrowings		3,001			-			3,001			-		3,001
Long-term debt		2,876			-			3,024			-		3,024
Total	$	192,845		$	-		$	192,993		$	-	$	192,993

(1) The carrying value of bank loans excludes the allowance for loan losses of $26 million at September 30, 2016.

			Quoted Prices
			in Active Markets			Significant			Significant
			for Identical			Other Observable			Unobservable
	Carrying		Assets			Inputs			Inputs			Balance at
December31, 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.

XML

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2016

Stockholders' Equity [Abstract]

Preferred Stock Issued and Outstanding

	September 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		483	485		1,000		485		480
Series C	600		1,000		600		585	600		1,000		600		583
Series D	750		1,000		750		727	-		-		-		-
Total Preferred Stock	2,235			$	2,235	$	2,192	1,485			$	1,485	$	1,459

XML

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2016

Accumulated Other Comprehensive Income [Abstract]

Components of Other Comprehensive Income (Loss)

Three Months Ended September 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)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)
Other reclassifications included in
other revenue		-		-		-		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		77		(29)		48		(249)		94		(155)
Other comprehensive income (loss)	$	77	$	(29)	$	48	$	(249)	$	94	$	(155)

Nine Months Ended September 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)	$	266	$	(100)	$	166	$	(233)	$	87	$	(146)
Other reclassifications included in
other revenue		(3)		1		(2)		-		-		-
Change in net unrealized gain (loss) on
securities available for sale		263		(99)		164		(233)		87		(146)
Other		1		-		1		-		-		-
Other comprehensive income (loss)	$	264	$	(99)	$	165	$	(233)	$	87	$	(146)

Accumulated Other Comprehensive Income Balances

	Total
	Accumulated Other
	Comprehensive Income
Balance at December 31, 2014		$	165
Net unrealized loss on securities available for sale			(146)
Balance at September 30, 2015		$	19
Balance at December 31, 2015		$	(134)
Net unrealized gain on securities available for sale			164
Other			1
Balance at September 30, 2016		$	31

XML

Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Common Share [Abstract]

EPS under Basic and Diluted Computations

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	503	$	376	$	1,367	$	1,031
Preferred stock dividends and other (1)		(33)		(11)		(99)		(45)
Net income available to common stockholders	$	470	$	365	$	1,268	$	986
Weighted-average common shares outstanding — basic		1,324		1,316		1,322		1,315
Common stock equivalent shares related to stock incentive plans		10		12		10		11
Weighted-average common shares outstanding — diluted (2)		1,334		1,328		1,332		1,326
Basic EPS	$	.36	$	.28	$	.96	$	.75
Diluted EPS	$	.35	$	.28	$	.95	$	.74

(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 totaled17 million and 14 million shares for the third quarters of 2016 and 2015, respectively, and 21million and 16 million shares for the first nine months of 2016 and 2015, respectively.

XML

Regulatory Requirements (Tables)

9 Months Ended

Sep. 30, 2016

Regulatory Requirements [Abstract]

Regulatory Capital and Ratios

					Minimum to be				Minimum Capital
	Actual				Well Capitalized				Requirement
September 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
CSC
Common Equity Tier 1 Risk-Based Capital	$	12,015	18.0	%		N/A			$	3,006	4.5	%
Tier 1 Risk-Based Capital		14,207	21.3	%		N/A				4,008	6.0	%
Total Risk-Based Capital		14,234	21.3	%		N/A				5,343	8.0	%
Tier 1 Leverage		14,207	7.1	%		N/A				7,996	4.0	%
Schwab Bank
Common Equity Tier 1 Risk-Based Capital	$	11,142	18.8	%	$	3,843	6.5	%	$	2,660	4.5	%
Tier 1 Risk-Based Capital		11,142	18.8	%		4,730	8.0	%		3,547	6.0	%
Total Risk-Based Capital		11,168	18.9	%		5,912	10.0	%		4,730	8.0	%
Tier 1 Leverage		11,142	7.0	%		7,910	5.0	%		6,328	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
September 30, 2016	Net Capital		Required		Debit Balances		Net Capital
Schwab	$	1,890	$	0.250	$	344	$	1,546
optionsXpress, Inc.		269		1		7		262
December 31, 2015
Schwab	$	1,746	$	0.250	$	358	$	1,388
optionsXpress, Inc.		244		1		7		237

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Information [Abstract]

Financial Information for Reportable Segments

	Investor Services (1)				Advisor Services (1)				Total
Three Months Ended September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	550	$	461	$	248	$	202	$	798	$	663
Net interest revenue		654		534		191		101		845		635
Trading revenue		123		148		67		80		190		228
Other		56		45		20		21		76		66
Provision for loan losses		4		4		1		1		5		5
Total net revenues		1,387		1,192		527		405		1,914		1,597
Expenses Excluding Interest		847		762		273		252		1,120		1,014
Income before taxes on income	$	540	$	430	$	254	$	153	$	794	$	583

	Investor Services (1)				Advisor Services (1)				Total
Nine Months Ended September 30,	2016		2015		2016		2015		2016		2015
Net Revenues:
Asset management and administration fees	$	1,536	$	1,372	$	718	$	605	$	2,254	$	1,977
Net interest revenue		1,895		1,568		520		267		2,415		1,835
Trading revenue		395		428		228		230		623		658
Other		153		146		56		62		209		208
Provision for loan losses		4		10		1		1		5		11
Total net revenues		3,983		3,524		1,523		1,165		5,506		4,689
Expenses Excluding Interest		2,518		2,308		819		747		3,337		3,055
Income before taxes on income	$	1,465	$	1,216	$	704	$	418	$	2,169	$	1,634

(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.

XML

Introduction and Basis of Presentation (Details)	Sep. 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

XML

New Accounting Standards (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets	$ 1,292	$ 1,161	[1]
Total assets	209,337	183,705	[1]
Long-term debt	2,876	2,877	[1]
Total liabilities	$ 193,867	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.

XML

Securities Available for Sale and Securities Held to Maturity (Narrative) (Details) $ in Millions	Sep. 30, 2016 USD ($)
Securities Available for Sale and Securities Held to Maturity [Abstract]
Fair value of pledged securities	$ 170

XML

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	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	$ 75,742	$ 65,860
Securities available for sale Gross Unrealized Gains	364	218
Securities available for sale Gross Unrealized Losses	315	432
Securities available for sale, Fair Value	75,791	65,646	[1]
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	33,195	22,014
Securities available for sale Gross Unrealized Gains	219	183
Securities available for sale Gross Unrealized Losses	44	48
Securities available for sale, Fair Value	33,370	22,149
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	21,736	21,784
Securities available for sale Gross Unrealized Gains	30	7
Securities available for sale Gross Unrealized Losses	266	306
Securities available for sale, Fair Value	21,500	21,485
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	10,067	10,764
Securities available for sale Gross Unrealized Gains	54	14
Securities available for sale Gross Unrealized Losses	2	31
Securities available for sale, Fair Value	10,119	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	33	2
Securities available for sale Gross Unrealized Losses		17
Securities available for sale, Fair Value	4,999	5,704
U.S. agency notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	2,206	3,177
Securities available for sale Gross Unrealized Losses	1	27
Securities available for sale, Fair Value	2,205	3,150
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	2,295	1,685
Securities available for sale Gross Unrealized Gains	2	1
Securities available for sale Gross Unrealized Losses	1	3
Securities available for sale, Fair Value	2,296	1,683
U.S. state and municipal securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	1,012	414
Securities available for sale Gross Unrealized Gains	26	10
Securities available for sale Gross Unrealized Losses	1
Securities available for sale, Fair Value	1,037	424
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	214
Securities available for sale, Fair Value	214
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Amortized Cost	51	298
Securities available for sale Gross Unrealized Gains		1
Securities available for sale, Fair Value	$ 51	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.

XML

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	Sep. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	$ 66,056	$ 50,007	[1]
Securities held to maturity, Gross Unrealized Gains	1,791	397
Securities held to maturity, Gross Unrealized Losses	4	316
Securities held to maturity, Fair Value	67,843	50,088
U.S. agency mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	64,836	48,785
Securities held to maturity, Gross Unrealized Gains	1,738	391
Securities held to maturity, Gross Unrealized Losses	4	293
Securities held to maturity, Fair Value	66,570	48,883
Non-agency commercial mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	997	999
Securities held to maturity, Gross Unrealized Gains	43	6
Securities held to maturity, Gross Unrealized Losses		20
Securities held to maturity, Fair Value	1,040	985
U.S. Treasury securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, Amortized Cost	223	223
Securities held to maturity, Gross Unrealized Gains	10
Securities held to maturity, Gross Unrealized Losses		3
Securities held to maturity, Fair Value	$ 233	$ 220

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

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	Sep. 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	$ 13,393	$ 38,165
Securities available for sale Less than 12 months Unrealized Losses	39	341
Securities available for sale 12 months or longer Fair Value	14,258	6,644
Securities available for sale 12 months or longer Unrealized Losses	276	91
Total Securities available for sale with unrealized losses Total Fair Value	27,651	44,809
Total Securities available for sale with unrealized losses Total Unrealized Losses	$ 315	$ 432
Number of available for sale securities in unrealized loss positions | security	339	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	$ 10,233	$ 8,541
Securities available for sale Less than 12 months Unrealized Losses	21	47
Securities available for sale 12 months or longer Fair Value	2,672	813
Securities available for sale 12 months or longer Unrealized Losses	23	1
Total Securities available for sale with unrealized losses Total Fair Value	12,905	9,354
Total Securities available for sale with unrealized losses Total Unrealized Losses	44	48
Asset-backed securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	1,235	17,127
Securities available for sale Less than 12 months Unrealized Losses	14	240
Securities available for sale 12 months or longer Fair Value	10,504	2,743
Securities available for sale 12 months or longer Unrealized Losses	252	66
Total Securities available for sale with unrealized losses Total Fair Value	11,739	19,870
Total Securities available for sale with unrealized losses Total Unrealized Losses	266	306
Corporate debt securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	758	5,433
Securities available for sale Less than 12 months Unrealized Losses	1	25
Securities available for sale 12 months or longer Fair Value	882	942
Securities available for sale 12 months or longer Unrealized Losses	1	6
Total Securities available for sale with unrealized losses Total Fair Value	1,640	6,375
Total Securities available for sale with unrealized losses Total Unrealized Losses	2	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	499	1,281
Securities available for sale Less than 12 months Unrealized Losses	1	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	499	2,828
Total Securities available for sale with unrealized losses Total Unrealized Losses	1	27
Certificates of deposit [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	544	773
Securities available for sale Less than 12 months Unrealized Losses	1	2
Securities available for sale 12 months or longer Fair Value	200	599
Securities available for sale 12 months or longer Unrealized Losses		1
Total Securities available for sale with unrealized losses Total Fair Value	744	1,372
Total Securities available for sale with unrealized losses Total Unrealized Losses	1	$ 3
U.S. state and municipal securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Securities available for sale Less than 12 months Fair Value	124
Securities available for sale Less than 12 months Unrealized Losses	1
Total Securities available for sale with unrealized losses Total Fair Value	124
Total Securities available for sale with unrealized losses Total Unrealized Losses	$ 1

XML

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	Sep. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity Less than 12 months Fair Value	$ 2,475	$ 25,168
Securities held to maturity Less than 12 months Unrealized Losses	4	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	2,475	27,010
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 4	$ 316
Number of held to maturity securities in unrealized loss positions | security	24	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	$ 2,475	$ 24,219
Securities held to maturity Less than 12 months Unrealized Losses	4	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	2,475	26,061
Total Securities held to maturity with unrealized losses Total Unrealized Losses	$ 4	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

XML

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	Sep. 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	$ 13,393	$ 38,165
Securities available for sale Less than 12 months Unrealized Losses	39	341
Securities available for sale 12 months or longer Fair Value	14,258	6,644
Securities available for sale 12 months or longer Unrealized Losses	276	91
Total Securities available for sale with unrealized losses Total Fair Value	27,651	44,809
Total Securities available for sale with unrealized losses Total Unrealized Losses	315	432
Securities held to maturity Less than 12 months Fair Value	2,475	25,168
Securities held to maturity Less than 12 months Unrealized Losses	4	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	2,475	27,010
Total Securities held to maturity with unrealized losses Total Unrealized Losses	4	316
Securities Less than 12 months Fair Value	15,868	63,333
Securities Less than 12 months Unrealized Losses	43	617
Securities 12 months or longer Fair Value	14,258	8,486
Securities 12 months or longer Unrealized Losses	276	131
Total securities with unrealized losses Total Fair Value	30,126	71,819
Total securities with unrealized losses Total Unrealized Losses	$ 319	$ 748

XML

Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Available for Sale) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	$ 3,523
Securities available for sale, After 1 year through 5 years	28,645
Securities available for sale, After 5 years through 10 years	21,374
Securities available for sale, After 10 years	22,249
Securities available for sale, Fair Value	75,791	$ 65,646	[1]
Securities available for sale, Within 1 year amortized cost	3,517
Securities available for sale, After 1 year through 5 years amortized cost	28,473
Securities available for sale, After 5 years through 10 years amortized cost	21,386
Securities available for sale, After 10 years amortized cost	22,366
Securities available for sale, Amortized Cost	75,742	65,860
U.S. agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 1 year through 5 years	3,417
Securities available for sale, After 5 years through 10 years	16,966
Securities available for sale, After 10 years	12,987
Securities available for sale, Fair Value	33,370	22,149
Securities available for sale, Amortized Cost	33,195	22,014
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 1 year through 5 years	9,125
Securities available for sale, After 5 years through 10 years	4,150
Securities available for sale, After 10 years	8,225
Securities available for sale, Fair Value	21,500	21,485
Securities available for sale, Amortized Cost	21,736	21,784
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	2,233
Securities available for sale, After 1 year through 5 years	7,886
Securities available for sale, Fair Value	10,119	10,747
Securities available for sale, Amortized Cost	10,067	10,764
U.S. Treasury securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	200
Securities available for sale, After 1 year through 5 years	4,592
Securities available for sale, After 5 years through 10 years	207
Securities available for sale, Fair Value	4,999	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	2,205
Securities available for sale, Fair Value	2,205	3,150
Securities available for sale, Amortized Cost	2,206	3,177
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	876
Securities available for sale, After 1 year through 5 years	1,420
Securities available for sale, Fair Value	2,296	1,683
Securities available for sale, Amortized Cost	2,295	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	51
Securities available for sale, After 10 years	986
Securities available for sale, Fair Value	1,037	424
Securities available for sale, Amortized Cost	1,012	414
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, Within 1 year	214
Securities available for sale, Fair Value	214
Securities available for sale, Amortized Cost	214
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, After 10 years	51
Securities available for sale, Fair Value	51	299
Securities available for sale, Amortized Cost	$ 51	$ 298

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Securities Available for Sale and Securities Held to Maturity (Maturities of Securities Held to Maturity) (Details) - USD ($) $ in Millions	Sep. 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	4,201
Securities held to maturity, After 5 years through 10 years	23,556
Securities held to maturity, After 10 years	40,086
Securities held to maturity, Fair Value	67,843	$ 50,088
Securities held to maturity, Within 1 year amortized cost
Securities held to maturity, After 1 year through 5 years amortized cost	4,019
Securities held to maturity, After 5 years through 10 years amortized cost	22,605
Securities held to maturity, After 10 years amortized cost	39,432
Securities held to maturity, Amortized Cost	66,056	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	4,201
Securities held to maturity, After 5 years through 10 years	22,947
Securities held to maturity, After 10 years	39,422
Securities held to maturity, Fair Value	66,570	48,883
Securities held to maturity, Amortized Cost	64,836	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	376
Securities held to maturity, After 10 years	664
Securities held to maturity, Fair Value	1,040	985
Securities held to maturity, Amortized Cost	997	999
U.S. Treasury securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held to maturity, After 5 years through 10 years	233
Securities held to maturity, Fair Value	233	220
Securities held to maturity, Amortized Cost	$ 223	$ 223

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Securities Available for Sale and Securities Held to Maturity [Abstract]
Proceeds	$ 571	$ 5	$ 4,645	$ 599
Gross realized gains			$ 3	1
Gross realized losses				$ 1

XML

Bank Loans and Related Allowance for Loan Losses (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) loan
Loans Receivable [Line Items]
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit	$ 8,200		$ 8,200		$ 7,400
Commitments to purchase First Mortgage loans			$ 898		$ 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	858	$ 469	2,100	$ 1,500
Home equity loans and lines of credit [Member]
Loans Receivable [Line Items]
Purchased first mortgages and HELOCs	93	$ 150	315	$ 432
First Mortgage and Home Equity Loans and Lines of Credit [Member]
Loans Receivable [Line Items]
Unamortized premiums and discounts and direct origination costs	$ 78		$ 78		$ 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%

XML

Bank Loans and Related Allowance for Loan Losses (Composition of Bank Loans and Delinquency Analysis by Loan Segment) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015		Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 14,839		$ 14,316
Past due and other nonaccrual loans	45		49
Total loans	14,884		14,365
Allowance for loan losses	26	$ 31	31		$ 31	$ 36	$ 42
Total bank loans — net	14,858		14,334	[1]
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	12		18
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	5		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	8,660		8,304
Past due and other nonaccrual loans	27		30
Total loans	8,687		8,334
Allowance for loan losses	15	20	20		20	23	29
Total bank loans — net	8,672		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	8		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	4		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	15		18
Home equity loans and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,456		2,720
Past due and other nonaccrual loans	16		15
Total loans	2,472		2,735
Allowance for loan losses	10	10	11		$ 11	$ 13	$ 13
Total bank loans — net	2,462		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	4		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	11		10
Pledged asset lines [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,644		3,228
Past due and other nonaccrual loans	2		4
Total loans	3,646		3,232
Total bank loans — net	3,646		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
Pledged asset lines [Member] | >90 Days Past Due And Other Nonaccrual Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due and other nonaccrual loans	2
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	79		64
Total loans	79		64
Allowance for loan losses	1	$ 1
Total bank loans — net	$ 78		$ 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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	$ 31	$ 36	$ 31	$ 42
Charge-offs			(1)	(2)
Recoveries		1	1	3
Provision for loan losses	(5)	(6)	(5)	(12)
Balance at end of period	26	31	26	31
Residential real estate mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	20	23	20	29
Charge-offs			(1)
Recoveries		1	1	1
Provision for loan losses	(5)	(4)	(5)	(10)
Balance at end of period	15	20	15	20
Home equity loans and lines of credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at beginning of period	10	13	11	13
Charge-offs				(2)
Recoveries				2
Provision for loan losses		(2)	(1)	(2)
Balance at end of period	10	$ 11	10	$ 11
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 Indicators of Bank Loan Portfolio) (Details) $ in Millions	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 14,884	$ 14,365
Residential real estate mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 8,687	$ 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	$ 8	$ 10
Residential real estate mortgages [Member] | Origination FICO Score 620 Through 679 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	91	88
Residential real estate mortgages [Member] | Origination FICO Score 680 Through 739 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,378	1,381
Residential real estate mortgages [Member] | Origination FICO Score 740 And Above [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	7,210	6,855
Residential real estate mortgages [Member] | Year of origination Pre 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,100	1,306
Residential real estate mortgages [Member] | Year of origination 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,263	1,644
Residential real estate mortgages [Member] | Year of origination 2013 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,950	2,450
Residential real estate mortgages [Member] | Year of origination 2014 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	766	1,021
Residential real estate mortgages [Member] | Year of origination 2015 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,599	1,913
Residential real estate mortgages [Member] | Year of origination 2016 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	2,009
Residential real estate mortgages [Member] | Estimated Current LTV 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 7,994	$ 7,508
Weighted Average Updated FICO | item	775	774
Percent of Loans on Nonaccrual Status	0.02%	0.03%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 70% through 90% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 645	$ 759
Weighted Average Updated FICO | item	766	764
Percent of Loans on Nonaccrual Status	0.18%	0.31%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 90% through 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 22	$ 37
Weighted Average Updated FICO | item	732	736
Percent of Loans on Nonaccrual Status	3.48%	5.54%
Residential real estate mortgages [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 26	$ 30
Weighted Average Updated FICO | item	719	713
Percent of Loans on Nonaccrual Status	13.54%	7.72%
Residential real estate mortgages [Member] | Origination Loan To Value Ratio 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 6,410	$ 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	2,267	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	10	13
Home equity loans and lines of credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 2,472	$ 2,735
Weighted Average Updated FICO | item	770	770
Utilization Rate	37.00%	39.00%
Percent of Loans on Nonaccrual Status	0.24%	0.18%
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	451	498
Home equity loans and lines of credit [Member] | Origination FICO Score 740 And Above [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	2,007	2,221
Home equity loans and lines of credit [Member] | Year of origination Pre 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	1,766	2,048
Home equity loans and lines of credit [Member] | Year of origination 2012 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	111	125
Home equity loans and lines of credit [Member] | Year of origination 2013 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	206	232
Home equity loans and lines of credit [Member] | Year of origination 2014 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	166	188
Home equity loans and lines of credit [Member] | Year of origination 2015 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	155	142
Home equity loans and lines of credit [Member] | Year of origination 2016 [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	68
Home equity loans and lines of credit [Member] | Estimated Current LTV 70% And Below [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 2,146	$ 2,277
Weighted Average Updated FICO | item	772	772
Utilization Rate	36.00%	37.00%
Percent of Loans on Nonaccrual Status	0.15%	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	$ 270	$ 373
Weighted Average Updated FICO | item	758	760
Utilization Rate	49.00%	50.00%
Percent of Loans on Nonaccrual Status	0.55%	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	$ 33	$ 48
Weighted Average Updated FICO | item	750	748
Utilization Rate	60.00%	63.00%
Percent of Loans on Nonaccrual Status	1.66%	1.02%
Home equity loans and lines of credit [Member] | Estimated Current LTV Greater Than 100% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 23	$ 37
Weighted Average Updated FICO | item	737	739
Utilization Rate	65.00%	67.00%
Percent of Loans on Nonaccrual Status	3.05%	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	$ 1,701	$ 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	757	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	14	17
Pledged asset lines [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	3,646	3,232
Pledged asset lines [Member] | Weighted Average Loan to Value Ratio =70% [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance	$ 3,646	$ 3,232
Weighted Average Updated FICO | item	763	764
Utilization Rate	47.00%	49.00%

XML

Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Variable Interest Entity [Line Items]
Accrued expenses and other liabilities	$ 1,902	$ 2,151	[1]
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Investment carrying value	153	104
Accrued expenses and other liabilities	$ 110	$ 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	Sep. 30, 2016	Dec. 31, 2015
Variable Interest Entity [Line Items]
Aggregate assets	$ 208	$ 161
Aggregate liabilities	110	84
Maximum exposure to loss	218	170
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	153	104
Aggregate liabilities	110	84
Maximum exposure to loss	153	104
Other CRA Investments [Member]
Variable Interest Entity [Line Items]
Aggregate assets	55	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	Sep. 30, 2016	Dec. 31, 2015
Interest-bearing deposits:
Deposits swept from brokerage accounts	$ 127,866	$ 108,137
Checking	13,543	12,822
Savings and other	7,643	7,896
Total interest-bearing deposits	149,052	128,855
Non-interest-bearing deposits	578	647
Total bank deposits	$ 149,630	$ 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 ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Unamortized debt discounts/premiums and debt issuance costs	$ 25,000,000		$ 29,000,000
Purchase of FHLB stock	152,000,000
FHLB stock sold	88,000,000	$ 8,000,000
Secured Credit Facility [Member]
Debt Instrument [Line Items]
Funds drawn under LOC's	3,000,000,000		0
Line of credit facility, remaining borrowing capacity	5,900,000,000
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	$ 152,000,000
FHLB stock sold	$ 88,000,000	$ 8,000,000

XML

Borrowings (Long-term Debt Including Unamortized Debt Discounts and Premiums) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Borrowings [Abstract]
Senior Notes	$ 2,556	$ 2,553
Senior Medium-Term Notes	250	249
Finance lease obligation	70	75
Total long-term debt	2,876	2,877	[1]
Debt issuance costs	$ 11	$ 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	Sep. 30, 2016	Dec. 31, 2015
Borrowings [Abstract]
2016	$ 2
2017	258
2018	908
2019	8
2020	709
Thereafter	1,016
Total maturities	2,901
Unamortized discount, net	(14)
Debt issuance costs	(11)	$ (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	Sep. 30, 2016	Aug. 28, 2008
Standby letters of credit [Member]
Commitments and Contingencies Disclosure [Line Items]
Aggregate face amount of letter of credit agreements	$ 295
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	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Resale And Repurchase Agreements [Member]
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Percentage of collateral to related assets	102.00%
Fair value of Schwab's client securities that can be pledged	$ 9,600	$ 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	1,900	1,900
Fair value of borrowed securities from other broker-dealers to fulfill short sales by clients	$ 304	$ 72

XML

Offsetting Assets and Liabilities (Offsetting Assets) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Offsetting Assets and Liabilities [Abstract]
Resale agreements, Gross Asset	$ 9,425	$ 8,088
Resale agreements, Net Amounts Presented in the Consolidated Balance Sheet	9,425	8,088
Resale agreements, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(9,425)	(8,088)
Resale agreements, Net Amount	0	0
Securities borrowed, Gross Asset	632	198
Securities borrowed, Net Amounts Presented in the Consolidated Balance Sheet	632	198
Securities borrowed, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(297)	(70)
Securities borrowed, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(334)	(127)
Securities borrowed, Net Amount	1	1
Total Gross Assets	10,057	8,286
Total Assets, Net Amounts Presented in the Consolidated Balance Sheet	10,057	8,286
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(297)	(70)
Total Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(9,759)	(8,215)
Total Assets, Net Amount	$ 1	$ 1

XML

Offsetting Assets and Liabilities (Offsetting Liabilities) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Offsetting Liabilities [Line Items]
Securities loaned, Gross Liabilities	$ 2,371	$ 2,233
Securities loaned, Net Amounts Presented in the Consolidated Balance Sheet	2,371	2,233
Securities loaned, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(297)	(70)
Securities loaned, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(1,961)	(1,990)
Securities loaned, Net Amount	113	173
Total Gross Liabilities	2,371	2,233
Total Liabilities, Net Amounts Presented in the Consolidated Balance Sheet	2,371	2,233
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Counterparty Offsetting	(297)	(70)
Total Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet, Collateral	(1,961)	(1,990)
Total Liabilities, Net Amount	$ 113	$ 173
Resale And Repurchase Agreements [Member]
Offsetting Liabilities [Line Items]
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	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Other securities owned	$ 858	$ 533	[1]
Securities available for sale	75,791	65,646	[1]
Fair Value, Measurements, Recurring [Member] | Fair Value [Member]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,811	2,328
Investments segregated and on deposit for regulatory purposes	6,611	7,947
Other securities owned	858	533
Securities available for sale	75,791	65,646
Total	85,071	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	852	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	959	360
Securities available for sale	214
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	3,099	3,430
Securities available for sale	2,296	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	3,512	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	528	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	232	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	55	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	43	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	33,370	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	21,500	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	10,119	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	4,999	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	2,205	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	1,037	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	51	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	852	1,968
Other securities owned	747	467
Total	1,599	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	852	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	528	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	217	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	959	360
Investments segregated and on deposit for regulatory purposes	6,611	7,947
Other securities owned	111	66
Securities available for sale	75,791	65,646
Total	83,472	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	959	360
Securities available for sale	214
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	3,099	3,430
Securities available for sale	2,296	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	3,512	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	15
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	55	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	41	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	33,370	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	21,500	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	10,119	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	4,999	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	2,205	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	1,037	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	$ 51	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	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Assets:
Securities held to maturity	$ 67,843		$ 50,088
Liabilities:
Allowance for loan losses	26	$ 31	31	$ 31	$ 36	$ 42
Debt issuance costs	11		13
Residential real estate mortgages [Member]
Liabilities:
Allowance for loan losses	15	20	20	20	23	29
Home equity loans and lines of credit [Member]
Liabilities:
Allowance for loan losses	10	10	11	$ 11	$ 13	$ 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	8,620		9,650
Cash and investments segregated and on deposit for regulatory purposes	13,461		11,647
Receivables from brokers, dealers, and clearing organizations	947		582
Receivables from brokerage clients - net	16,377		17,310
Securities held to maturity	66,056		50,007
Bank loans	14,884		14,365
Other assets	291		184
Total	120,636		103,745
Liabilities:
Bank deposits	149,630		129,502
Payables to brokers, dealers, and clearing organizations	3,497		2,588
Payables to brokerage clients.	32,961		33,185
Accrued expenses and other liabilities	880		1,115
Short-term borrowings	3,001
Long-term debt	2,876		2,877
Total	192,845		169,267
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Residential real estate mortgages [Member]
Assets:
Bank loans	8,687		8,334
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Home equity loans and lines of credit [Member]
Assets:
Bank loans	2,472		2,735
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,646		3,232
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	64,836		48,785
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	997		999
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | U.S. Treasury securities [Member]
Assets:
Securities held to maturity	223		223
Carrying Amount, Portion at Other than Fair Value Measurement [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	79		64
Portion at Other than Fair Value Measurement [Member]
Assets:
Cash and cash equivalents	8,620		9,650
Cash and investments segregated and on deposit for regulatory purposes	13,461		11,647
Receivables from brokers, dealers, and clearing organizations	947		582
Receivables from brokerage clients - net	16,377		17,310
Securities held to maturity	67,843		50,088
Bank loans	15,136		14,500
Other assets	291		184
Total	122,675		103,961
Liabilities:
Bank deposits	149,630		129,502
Payables to brokers, dealers, and clearing organizations	3,497		2,588
Payables to brokerage clients.	32,961		33,185
Accrued expenses and other liabilities	880		1,115
Short-term borrowings	3,001
Long-term debt	3,024		2,967
Total	192,993		169,357
Portion at Other than Fair Value Measurement [Member] | Residential real estate mortgages [Member]
Assets:
Bank loans	8,797		8,347
Portion at Other than Fair Value Measurement [Member] | Home equity loans and lines of credit [Member]
Assets:
Bank loans	2,614		2,857
Portion at Other than Fair Value Measurement [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,646		3,232
Portion at Other than Fair Value Measurement [Member] | U.S. agency mortgage-backed securities [Member]
Assets:
Securities held to maturity	66,570		48,883
Portion at Other than Fair Value Measurement [Member] | Non-agency commercial mortgage-backed securities [Member]
Assets:
Securities held to maturity	1,040		985
Portion at Other than Fair Value Measurement [Member] | U.S. Treasury securities [Member]
Assets:
Securities held to maturity	233		220
Portion at Other than Fair Value Measurement [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	79		64
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets:
Cash and cash equivalents	8,620		9,650
Cash and investments segregated and on deposit for regulatory purposes	13,461		11,647
Receivables from brokers, dealers, and clearing organizations	947		582
Receivables from brokerage clients - net	16,377		17,310
Securities held to maturity	67,843		50,088
Bank loans	15,136		14,500
Other assets	291		184
Total	122,675		103,961
Liabilities:
Bank deposits	149,630		129,502
Payables to brokers, dealers, and clearing organizations	3,497		2,588
Payables to brokerage clients.	32,961		33,185
Accrued expenses and other liabilities	880		1,115
Short-term borrowings	3,001
Long-term debt	3,024		2,967
Total	192,993		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	8,797		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	2,614		2,857
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Pledged asset lines [Member]
Assets:
Bank loans	3,646		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	66,570		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	1,040		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	233		220
Portion at Other than Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other securities [Member] | Other [Member]
Assets:
Bank loans	$ 79		$ 64

XML

Stockholders' Equity (Narrative) (Details) - $ / shares		9 Months Ended	12 Months Ended
	Mar. 07, 2016	Sep. 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

XML

Stockholders' Equity (Preferred Stock Issued and Outstanding) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	Sep. 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	$ 2,192		$ 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	$ 483		$ 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	$ 585		$ 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	$ 727

[1] Adjusted for the retrospective adoption of ASU 2015-03. See "Notes - 2. New Accounting Standards" for additional information.

XML

Accumulated Other Comprehensive Income (Components of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	$ 77	$ (249)	$ 266	$ (233)
Other reclassifications included in other revenue			(3)
Change in net unrealized gain (loss) on securities available for sale	77	(249)	263	(233)
Other			1
Other comprehensive income (loss), before tax	77	(249)	264	(233)
Change in net unrealized gain (loss) on securities available for sale:
Net unrealized gain (loss)	(29)	94	(100)	87
Other reclassifications included in other revenue			1
Change in net unrealized gain on securities available for sale	(29)	94	(99)	87
Other
Other comprehensive (loss) income, tax effect	(29)	94	(99)	87
Change in net unrealized gain on securities available for sale:
Net unrealized gain (loss)	48	(155)	166	(146)
Other reclassifications included in other revenue			(2)
Change in net unrealized gain on securities available for sale	48	(155)	164	(146)
Other			1
Other comprehensive income (loss), net of tax	$ 48	$ (155)	$ 165	$ (146)

XML

Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Balances) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016		Sep. 30, 2015
Accumulated Other Comprehensive Income [Line Items]
Beginning Balance			$ (134)	[1]	$ 165
Other net changes	$ 48	$ (155)	165		(146)
Ending Balance	$ 31	$ 19	31		19
Net Unrealized Gain On Securities Available For Sale [Member]
Accumulated Other Comprehensive Income [Line Items]
Other net changes			164		$ (146)
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.

XML

Earnings Per Common Share (EPS under Basic and Diluted Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Common Share [Abstract]
Net income		$ 503	$ 376	$ 1,367	$ 1,031
Preferred stock dividends and other	[1]	(33)	(11)	(99)	(45)
Net income available to common stockholders		$ 470	$ 365	$ 1,268	$ 986
Weighted Average Common Shares Outstanding - Basic		1,324	1,316	1,322	1,315
Common stock equivalent shares related to stock incentive plans		10	12	10	11
Weighted-average common shares outstanding — diluted		1,334	1,328	1,332	1,326
Basic EPS		$ 0.36	$ 0.28	$ 0.96	$ 0.75
Diluted EPS		$ 0.35	$ 0.28	$ 0.95	$ 0.74
Antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS		17	14	21	16

[1] Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

XML

Regulatory Requirements (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 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

XML

Regulatory Requirements (Regulatory Capital and Ratios) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
CSC [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 12,015	$ 10,851
Minimum Capital Requirement	$ 3,006	$ 2,681
Actual Ratio	18.00%	18.20%
Minimum Capital Requirement Ratio	4.50%	4.50%
Tier 1 Risk-Based Capital
Actual Amount	$ 14,207	$ 12,310
Minimum Capital Requirement Amount	$ 4,008	$ 3,575
Actual Ratio	21.30%	20.70%
Minimum Capital Requirement Ratio	6.00%	6.00%
Total Risk-Based Capital
Actual Amount	$ 14,234	$ 12,342
Minimum Capital Requirement Amount	$ 5,343	$ 4,766
Actual Ratio	21.30%	20.70%
Minimum Capital Requirement Ratio	8.00%	8.00%
Tier 1 Leverage
Actual Amount	$ 14,207	$ 12,310
Minimum Capital Requirement Amount	$ 7,996	$ 6,912
Actual Ratio	7.10%	7.10%
Minimum Capital Requirement Ratio	4.00%	4.00%
Schwab Bank [Member]
Common Equity Tier 1 Risk-Based Capital
Actual Amount	$ 11,142	$ 9,314
Minimum to be Well Capitalized	3,843	3,349
Minimum Capital Requirement	$ 2,660	$ 2,318
Actual Ratio	18.80%	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	$ 11,142	$ 9,314
Minimum to be Well Capitalized Amount	4,730	4,121
Minimum Capital Requirement Amount	$ 3,547	$ 3,091
Actual Ratio	18.80%	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	$ 11,168	$ 9,345
Minimum to be Well Capitalized Amount	5,912	5,152
Minimum Capital Requirement Amount	$ 4,730	$ 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	$ 11,142	$ 9,314
Minimum to be Well Capitalized Amount	7,910	6,594
Minimum Capital Requirement Amount	$ 6,328	$ 5,275
Actual Ratio	7.00%	7.10%
Minimum to be Well Capitalized Ratio	5.00%	5.00%
Minimum Capital Requirement Ratio	4.00%	4.00%

XML

Regulatory Requirements (Net Capital and Net Capital Requirements for Schwab and optionsXpress, Inc) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schwab [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	$ 1,890,000	$ 1,746,000
Minimum Net Capital Required	250	250
2% of Aggregate Debit Balances	344,000	358,000
Net Capital in Excess of Required Net Capital	1,546,000	1,388,000
OptionsXpress, Inc. [Member]
Compliance with Regulatory Capital Requirements for Broker Dealers [Line Items]
Net Capital	269,000	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	$ 262,000	$ 237,000

XML

Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 segment
Segment Information [Abstract]
Number of reportable segments	2

XML

Segment Information (Financial Information for Reportable Segments) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Revenues:
Asset management and administration fees	[1]	$ 798	$ 663	$ 2,254	$ 1,977
Net interest revenue		845	635	2,415	1,835
Trading revenue		190	228	623	658
Other		76	66	209	208
Provision for loan losses		5	5	5	11
Total net revenues		1,914	1,597	5,506	4,689
Expenses Excluding Interest		1,120	1,014	3,337	3,055
Income before taxes on income		794	583	2,169	1,634
Investor Services [Member]
Net Revenues:
Asset management and administration fees		550	461	1,536	1,372
Net interest revenue		654	534	1,895	1,568
Trading revenue		123	148	395	428
Other		56	45	153	146
Provision for loan losses		4	4	4	10
Total net revenues		1,387	1,192	3,983	3,524
Expenses Excluding Interest		847	762	2,518	2,308
Income before taxes on income		540	430	1,465	1,216
Advisor Services [Member]
Net Revenues:
Asset management and administration fees		248	202	718	605
Net interest revenue		191	101	520	267
Trading revenue		67	80	228	230
Other		20	21	56	62
Provision for loan losses		1	1	1	1
Total net revenues		527	405	1,523	1,165
Expenses Excluding Interest		273	252	819	747
Income before taxes on income		$ 254	$ 153	$ 704	$ 418

[1] Includes fee waivers of $41 and $166 during the third quarters of 2016 and 2015, respectively and $193 and $519 during the first nine months of 2016 and 2015, respectively, relating to Schwab-sponsored money market funds.

XML

Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
	Oct. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Subsequent Event [Line Items]
Preferred stock, par value		$ 0.01		$ 0.01
Net proceeds from issuance of preferred stock offerings		$ 725	$ 581
Subsequent Event [Member] | Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock dividend rate	4.625%
Preferred stock, par value	$ 0.01
Preferred stock liquidation preference (per share)	100,000
Depositary share, liquidation preference equivalent (per share)	$ 1,000
Fixed dividend rate on preferred stock	4.625%
Net proceeds from issuance of preferred stock offerings	$ 591
Subsequent Event [Member] | LIBOR [Member] | Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Floating rate on 3-month LIBOR plus	3.315%
Depositary Shares [Member] | Subsequent Event [Member] | Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Shares issued	600,000
Depositary shares preferred stock ownership interest (per share)	1.00%