Schwab's Financial Strength

The Charles Schwab Corporation is one of the nation’s leading providers of financial services. Through our operating subsidiaries, we provide securities brokerage, banking, money management, and financial advisory services to individual investors, independent investment advisors, and corporate and retirement plan sponsors and participants.

The Charles Schwab Corporation is financially strong, and we are committed to our continued financial health. Our capital structure and liquidity are sound, and our internal controls and business standards are designed to keep client assets safe. We maintain a disciplined focus on risk management and operate the firm conservatively to minimize investment risks. We know that our success ultimately depends on how well we serve all our clients and their confidence in us.

Key financial data as of June 30, 2010

For The Charles Schwab Corporation:

• $5.9 billion in equity capital¹
• Approximately $764 million of freely available cash²
• Long-term debt-to-equity ratio of 22.2%¹
• Net income of $205 million over the prior three months³
• $1.4 trillion in client assets⁴
• $14 billion in net new assets over the prior three months (excluding net outflows of $51.5 billion in the second quarter of 2010 related to the planned deconversion of a mutual fund clearing services client)⁴
• Strong credit ratings from Moody's (A2), S&P (A) and Fitch (A)⁵
• A diversified investment portfolio⁶
• The Corporation maintains an $800 million committed, unsecured credit facility.⁵  Additionally, the Corporation has direct access to $706 million in uncommitted, unsecured bank credit lines.⁵ 

While The Charles Schwab Corporation is not subject to specific statutory capital requirements, it is required to maintain capital that is sufficient to support the holding company and its subsidiaries’ business activities. Charles Schwab Bank is subject to specific capital requirements specified by federal banking laws and regulations. Charles Schwab Bank is considered well capitalized (the highest category) with a Tier 1 Capital Ratio of 24.0%, a Total Capital Ratio of 24.3%, and a Leverage Ratio of 7.6%.⁷

For Charles Schwab & Co., Inc. (the brokerage subsidiary of The Charles Schwab Corporation):

• Net capital of $1.2 billion (11% of aggregate debit balances), which was $986 million in excess of the regulatory minimum⁸

For Charles Schwab Bank (the banking subsidiary of The Charles Schwab Corporation):

• $49.8 billion in assets, including $7.4 billion in outstanding mortgages and home equity lines of credit (HELOCs).⁹
• Strong credit quality of the bank's portfolio of mortgages and HELOCs, with credit scores and loan-to-value ratios significantly better than industry averages, reflecting our solid underwriting discipline.¹⁰
• Payment delinquencies representing a very small fraction of outstanding loan balances (approximately 0.85%)¹¹ for mortgages and HELOCs combined, substantially less than the national average delinquency rate of  11.5% for mortgages and 5.1% for HELOCs.¹⁰
• High-quality investment portfolio with no subprime securities or collateralized debt obligations (CDOs).

Our Commitment to Our Clients

Ongoing developments in the market highlight the importance of choosing wisely among financial services firms. That’s just one of the reasons our clients should continue to feel good about doing business with Schwab. We are highly focused on maintaining our financial health. We deeply appreciate and value the trust our clients have placed in us and look forward to continuing to help them achieve their financial goals.

Financial results and more information about The Charles Schwab Corporation’s business and financial condition can be viewed at any time at www.aboutschwab.com.