Charles Schwab Discloses Results of the Federal Reserve’s 2023 Comprehensive Capital Analysis and Review

The Charles Schwab Corporation (CSC or Schwab) announced today that it has received the results of the Federal Reserve’s 2023 Comprehensive Capital Analysis and Review (CCAR). These results included the Federal Reserve’s estimate of Schwab’s minimum capital ratios under the supervisory severely adverse scenario for the nine-quarter horizon beginning December 31, 2022 and ending March 31, 2025. Based on these results, Schwab’s calculated stress capital buffer (SCB) remains well below the 2.5% minimum, resulting in a SCB at that floor.

This 2.5% SCB will continue to be applicable to Schwab for the four-quarter period beginning October 1, 2023. Schwab’s Common Equity Tier 1 (CET1) ratio of 21.4% as of March 31, 2023 was well in excess of the regulatory minimum of 4.5% combined with the SCB of 2.5% due to the relatively low risk nature of our balance sheet assets.

Schwab ended the first quarter of 2023 with a consolidated Tier 1 Leverage Ratio of 7.1%, down slightly from 7.2% at year-end 2022. This consolidated Tier 1 Leverage Ratio is above the long-term operating objective for CSC.

CFO Peter Crawford commented, “Schwab’s CCAR stress test results reinforce that we remain well positioned to serve our clients across a range of environments. Given the anticipated changes to regulatory expectations and capital requirements, we’ll provide updates going forward regarding our capital planning and capital management priorities as conditions and requirements evolve. Going forward, we expect to continue managing our capital position in a manner that prioritizes long-term business growth, while also supporting our common stock dividend target and overall stockholder value.”

Forward-looking Statements

This press release contains forward-looking statements relating to the company’s capital ratios; balance sheet assets; Tier 1 Leverage Ratio operating objective; positioning; regulatory changes; and capital management to support business growth, dividends, and stockholder value. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations, beliefs, and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, general market conditions, including the level of interest rates and equity valuations; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; client cash allocation decisions; client sensitivity to rates; level of client assets, including cash balances; competitive pressures on pricing; capital and liquidity needs and management; the level and mix of client trading activity; market volatility; securities lending; margin loan balances; new or changed legislation, regulation or regulatory expectations; and client use of the company’s advisory solutions and other products and services. Other important factors include the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; monetize client assets; manage expenses; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 34.3 million active brokerage accounts, 2.4 million corporate retirement plan participants, 1.8 million banking accounts, and $7.65 trillion in client assets as of May 31, 2023. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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