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,” “could,” “would,” “aim,” “maintain,” “continue,” “seek,” and other similar expressions. In addition, any statements that refer to expectations, strategy, objectives, projections, or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements, which reflect management’s expectations and objectives as of the date hereof, are based on the best judgment of Schwab’s senior management. These statements relate to, among other things: •Maximizing our market valuation and stockholder returns over time; and our belief that developing trusted relationships will translate into more client assets which drives revenue and, along with expense discipline and thoughtful capital management, generates earnings growth and builds stockholder value (see Introduction in Part I – Item 2); •Industry and competitive trends including artificial intelligence, digital assets, private company securities and other alternative investments; •The Company’s spot crypto trading offer (see Overview in Part I – Item 2); •The integration of Forge Global Holdings, Inc. and its private market capabilities (see Overview in Part I – Item 2); •Estimates of market opportunity (see Introduction in Part I – Item 2); •Growth of our client base and our business, strong client engagement, sustained demand for the Company’s offerings and solutions, and strategic initiatives (see Overview in Part I – Item 2); •Capital expenditures and expense management (see Results of Operations in Part I – Item 2); •SEC transaction fee increases (see Results of Operations in Part I – Item 2); •Net interest revenue, client cash allocation, and adjustment of rates paid on client-related liabilities (see Results of Operations in Part I – Item 2); •Wholesale funding and funding strategy (see Results of Operations in Part I – Item 2, and Liquidity Risk in Part I – Item 2); •Management of interest rate risk; modeling and assumptions, the impact of changes in interest rates on net interest margin and revenue, bank deposit account fee revenue, economic value of equity (EVE), and liability and asset duration (see Risk Management in Part I – Item 2); •Sources and uses of liquidity (see Liquidity Risk in Part I – Item 2); •Capital management; long-term operating objective; and uses of capital and return of excess capital to stockholders (see Capital Management in Part I – Item 2); •The expected impact of proposed and final rules (see Current Regulatory and Other Developments in Part I – Item 2); •The likelihood of indemnification and guarantee payment obligations and clients failing to fulfill contractual obligations (see Commitments and Contingencies in Part I – Item 1 – Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 11, and Financial Instruments Subject to Off-Balance Sheet Credit Risk in Item 1 – Note 13); and •The outcome and impact of legal proceedings and regulatory matters (see Legal Proceedings in Part II – Item 1, and Commitments and Contingencies in Item 1 – Note 11). Achievement of these expectations and objectives is subject to certain risks and uncertainties that could cause actual results to differ materially. 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: •General economic and market conditions, including the level of interest rates, equity market valuations and volatility; •The impact of new and emerging technologies; •Our ability to attract and retain clients, develop trusted relationships, and grow client assets; •Client use of our advisory and lending solutions and other products and services; •The level of client assets, including cash balances; •Client cash allocations and sensitivity to deposit rates; •Competitive pressure on pricing, including deposit rates; - 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) •The level and mix of client trading activity, including daily average trades (DATs), margin balances, and balance sheet cash; •Regulatory guidance and adverse impacts from new or changed legislation, rulemaking or regulatory expectations; •Capital and liquidity needs and management; •Our ability to manage expenses; •Our ability to attract and retain talent; •Our ability to develop and launch new and enhanced products, services, and capabilities, as well as enhance our infrastructure, in a timely and successful manner; •Our ability to support client activity levels; •Increased compensation and other costs; •Real estate and workforce decisions; •The timing and scope of technology projects; •Balance sheet positioning relative to changes in interest rates; •Interest-earning asset mix and growth; •Our ability to access funding sources and the cost of funding; •Prepayment levels for mortgage-backed securities; •Regulatory and legislative developments; •Adverse developments in litigation or regulatory matters and any related charges; and •Potential breaches of contractual terms for which we have indemnification and guarantee obligations. 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 2025 Form 10-K. - 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) OVERVIEW Management focuses on several client activity and financial metrics in evaluating Schwab’s financial position and operating performance. Results for the second quarter and first six months of 2026 and 2025 are as follows: Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Client Metrics Net new client assets (in billions) (1) $ 118.7 $ 73.6 61 % $ 258.6 $ 206.0 26 % Core net new client assets (in billions) $ 119.8 $ 80.3 49 % $ 259.8 $ 218.0 19 % Client assets (in billions, at quarter end) $ 13,084.9 $ 10,757.3 22 % Average client assets (in billions) $ 12,723.5 $ 10,108.5 26 % $ 12,386.9 $ 10,160.3 22 % New brokerage accounts (in thousands) 1,388 1,098 26 % 2,687 2,281 18 % Active brokerage accounts (in thousands, at quarter end) 39,802 37,476 6 % Assets receiving ongoing advisory services (in billions, at quarter end) $ 6,671.7 $ 5,425.0 23 % Client cash as a percentage of client assets (at quarter end) 9.0 % 9.9 % Company Financial Information and Metrics Total net revenues $ 7,072 $ 5,851 21 % $ 13,554 $ 11,450 18 % Total expenses excluding interest 3,403 3,048 12 % 6,697 6,192 8 % Income before taxes on income 3,669 2,803 31 % 6,857 5,258 30 % Taxes on income 869 677 28 % 1,578 1,223 29 % Net income 2,800 2,126 32 % 5,279 4,035 31 % Preferred stock dividends and other 119 149 (20) % 201 262 (23) % Net income available to common stockholders $ 2,681 $ 1,977 36 % $ 5,078 $ 3,773 35 % Earnings per common share (EPS) — diluted $ 1.54 $ 1.08 43 % $ 2.91 $ 2.07 41 % Net revenue change from prior year 21 % 25 % 18 % 21 % Pre-tax profit margin 51.9 % 47.9 % 50.6 % 45.9 % Return on average common stockholders’ equity (annualized) 25 % 19 % 23 % 18 % Expenses excluding interest as a percentage of average client assets (annualized) 0.11 % 0.12 % 0.11 % 0.12 % Consolidated Tier 1 Leverage Ratio (at quarter end) 8.7 % 9.8 % Non-GAAP Financial Measures (2) Adjusted total expenses $ 3,233 $ 2,920 $ 6,384 $ 5,934 Adjusted diluted EPS $ 1.62 $ 1.14 $ 3.05 $ 2.17 Return on tangible common equity (annualized) 44 % 35 % 41 % 34 % Adjusted Tier 1 Leverage Ratio (consolidated) 6.8 % 7.2 % (1) The second quarter and first six months of 2026 include net outflows of $1.1 billion and $1.2 billion, respectively, from off-platform brokered certificates of deposit (CDs) issued by CSB. The second quarter and first six months of 2025 include net outflows of $6.7 billion and $12.0 billion, respectively, from off-platform brokered CDs issued by CSB. (2) See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. The second quarter and first six months of 2026 was a changing but generally positive macroeconomic environment for clients. While equity markets declined amid elevated volatility in the first quarter of 2026, market returns rebounded strongly positive and volatility eased in the second quarter, as the Standard and Poor’s® 500 Index and NASDAQ Composite® rose 15% and 21%, respectively, in the second quarter, finishing the first half of the year up 10% and 13%, respectively. The Federal Reserve kept the target federal funds overnight rate unchanged throughout the first six months of 2026, while the 10-year U.S. Treasury yield rose 25 basis points to 4.44% at June 30. Supported by equity market growth and strong asset gathering, total client assets increased to $13.08 trillion at June 30, up 10% from year-end 2025. Schwab attracted core net new assets of $119.8 billion in the second quarter of 2026, up 49% from the same period in 2025, bringing the total for the first half of the year to $259.8 billion, up 19% from the first half of 2025. New brokerage accounts were 1.4 million and 2.7 million in the second quarter and first half of 2026, respectively, up 26% and 18% from the same prior-year periods, and active brokerage accounts reached 39.8 million at June 30, 2026, up 6% year-over-year. Clients continued to be highly engaged in the markets throughout the first half of 2026, with DATs reaching 11.9 million and 10.9 million in the second quarter and first six months of 2026, respectively, higher by 57% and 46% from the respective 2025 periods. - 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) Schwab’s financial results for the second quarter and first six months of 2026 reflected the growth of our client base, strong client engagement, and sustained demand for Schwab’s lending offerings and managed investing solutions. Net income increased to $2.8 billion and $5.3 billion in the second quarter and first six months of 2026, respectively, higher by 32% and 31% from the same periods in 2025. Diluted EPS was $1.54 and $2.91 in the second quarter and first six months of 2026, respectively, rising year-over-year 43% and 41%, respectively. Adjusted diluted EPS (1) was $1.62 and $3.05 in the second quarter and first six months of 2026, respectively, up 42% and 41% from the same prior-year periods. Total net revenues were $7.1 billion and $13.6 billion in the second quarter and first six months of 2026, respectively, growing 21% and 18% from the same periods in 2025. Net interest revenue was $3.4 billion and $6.5 billion in the second quarter and first six months of the year, respectively, higher by 19% and 18% from the same periods in 2025, reflecting growth in margin and bank lending solutions and lower average wholesale borrowings, partially offset by lower yields on floating-rate assets, lower available for sale (AFS) and held to maturity (HTM) securities, and lower segregated cash and investments. Asset management and administration fees totaled $1.8 billion and $3.6 billion in the second quarter and first six months of 2026, respectively, increasing 16% from both comparable periods in 2025, due primarily to higher average client assets driven by asset gathering, market appreciation, and growth in managed investing solutions. Trading revenue was $1.2 billion and $2.3 billion in the second quarter and first half of 2026, respectively, increasing 28% and 24% from the comparable periods in 2025, reflecting higher order flow revenue and commissions due to higher trading volume and mix of trading activity. Bank deposit account fee revenue was $333 million and $628 million in the second quarter and first six months of 2026, respectively, increasing 35% and 28% from the same periods in 2025, due primarily to higher net yields, partially offset by lower average bank deposit account balances (BDA balances). Total expenses excluding interest were $3.4 billion and $6.7 billion in the second quarter and first six months of 2026, respectively, up 12% and 8% from the same prior-year periods. For the second quarter and first six months of 2026, adjusted total expenses (1) were $3.2 billion and $6.4 billion, respectively, increasing 11% and 8% from the comparable periods in 2025. These increases in expenses were driven by strong client engagement and the inclusion of Forge Global Holdings, Inc. (Forge) beginning in March 2026, as well as continued investments in key strategic initiatives including supporting organic growth, new products, and ongoing scale and efficiency efforts. These factors contributed to higher compensation and benefits expenses, reflecting growth in headcount, including financial consultants and wealth advisors, and higher incentive compensation, higher professional services and occupancy and equipment expenses, and, for the quarter-to-date period, higher industry fees within other expense. Return on average common stockholders’ equity was 25% and 23% for the second quarter and first six months of 2026, respectively, up from 19% and 18% from the same periods in 2025. These increases were due primarily to growth in net income, which more than offset higher average common stockholders’ equity. Return on tangible common equity (1) was 44% and 41% for the second quarter and first half of 2026, respectively, rising from 35% and 34% from the same 2025 periods, as growth in adjusted net income available to common stockholders (1) more than offset growth in average common stockholders’ equity. Average common stockholders’ equity increased as a result of growth in retained earnings and improved average accumulated other comprehensive income (AOCI), partially offset by higher treasury stock due to common stock repurchases in 2025 and the first half of 2026. The improvement in average AOCI resulted from amortization of losses on securities previously transferred from AFS to HTM and lower unrealized losses on AFS securities. Schwab continued to support our clients’ evolving needs through effective management of the balance sheet and financial resources, including sustained demand for margin and bank lending in the first half of 2026. Total balance sheet assets were $517.3 billion at June 30, increasing 5% from year-end 2025. Client demand for margin loans was strong, with receivables from brokerage clients reaching $122.8 billion at June 30, rising 16% during the second quarter and 17% year-to-date. Bank loans totaled $67.0 billion at June 30, 2026, rising 16% year-to-date and 10% during the second quarter, reflecting growth in pledged asset lines (PALs) and first lien residential real estate mortgage loans (First Mortgages). During the second quarter and first six months of 2026, the Company repurchased common stock of $1.0 billion and $3.4 billion, respectively, and also increased its common dividend by 19% to $.32 per share during the first quarter of the year. During the second quarter, the Company issued $1.5 billion of Series L preferred stock, and redeemed $2.1 billion of Series I preferred stock. Inclusive of both returns of capital and capital generation during the first half of 2026 from earnings, the Company’s consolidated Tier 1 Leverage Ratio at June 30, 2026 was 8.7%, down from 9.3% at year-end 2025. Our consolidated adjusted Tier 1 Leverage Ratio (1) was 6.8% at the end of the second quarter, down from 7.1% at year-end 2025, and within our long-term operating objective of 6.75% - 7.00%. (1) Adjusted diluted EPS, adjusted total expenses, return on tangible common equity, adjusted net income available to common stockholders, and adjusted Tier 1 Leverage Ratio are non-GAAP financial measures. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. - 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) Acquisition of Forge On March 2, 2026, Schwab completed its acquisition of Forge, an operator of a leading private market platform and trading marketplace, for $636 million of cash and other consideration. Integration work is progressing, and we anticipate that incorporating Forge’s private company investment capabilities will enhance our ability to meet the evolving needs of investors across our growing client base. Our condensed consolidated financial statements include the financial condition and results of operations for Forge beginning on March 2, 2026. See also Item 1 – Note 3. Crypto Trading Offer In May 2026, Schwab began a phased rollout to retail clients of Schwab CryptoTM, our spot crypto trading offer. The Company provides clients direct access to bitcoin and ether trading, combined with educational content and professional support with investment experience. Charles Schwab Premier Bank, SSB (CSPB), serves as the custodian of clients’ digital assets, responsible for safekeeping and record-keeping. CSPB has engaged Paxos Trust Company, NA (sub-custodian), a regulated blockchain infrastructure provider, to deliver sub-custody and trade execution services, and we may engage one or more additional sub-custodians in the future. Over time, CSPB plans to add additional cryptocurrencies to the platform, as well as transfer capabilities for in-kind deposits and withdrawals, allowing clients with existing digital asset investments to bring them to the Schwab platform alongside their other investments. CURRENT REGULATORY AND OTHER DEVELOPMENTS In March 2026, federal district courts reached final resolutions on pending litigation and formally vacated the U.S. Department of Labor’s April 2024 final rule to broaden the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974. Following the courts’ ruling, the U.S. Department of Labor’s Employee Benefits Security Administration removed the rule from the Code of Federal Regulations. In March 2026, the U.S. federal banking agencies issued a notice of proposed rulemaking regarding amendments to the regulatory capital rules. The March 2026 proposal would replace the banking agencies’ 2023 proposal, and, among other things would require us to include AOCI in regulatory capital under a revised standardized approach, subject to a five-year phase-in period. The comment period for the proposed rules ended on June 18, 2026. The Company’s capital management for consolidated CSC and our banking subsidiaries incorporates measures that are inclusive of AOCI, and we do not anticipate that the proposed rules will have a material impact to the Company’s business, financial condition, or results of operations. Refer to Part II – Item 7 – Current Regulatory and Other Developments in our 2025 Form 10-K for information regarding pending regulatory matters, including the U.S. federal banking agencies’ August 2023 proposed rulemaking on long-term debt requirements for certain large banking organizations. - 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) RESULTS OF OPERATIONS Total Net Revenues The following tables present a comparison of revenue by category: Three Months Ended June 30, 2026 2025 Percent Change Amount % of Total Net Revenues Amount % of Total Net Revenues Net interest revenue Interest revenue 9 % $ 4,146 59 % $ 3,787 65 % Interest expense (18) % (789) (12) % (965) (17) % Net interest revenue 19 % 3,357 47 % 2,822 48 % Asset management and administration fees Mutual funds, exchange-traded funds (ETFs), collective trust funds (CTFs), and alternatives (1) 14 % 1,020 14 % 898 15 % Managed investing solutions 20 % 707 10 % 589 10 % Other 18 % 98 2 % 83 2 % Asset management and administration fees 16 % 1,825 26 % 1,570 27 % Trading revenue Commissions 23 % 528 7 % 431 7 % Order flow revenue 34 % 624 9 % 466 8 % Principal transactions 15 % 63 1 % 55 1 % Trading revenue 28 % 1,215 17 % 952 16 % Bank deposit account fees 35 % 333 5 % 247 4 % Other 32 % 342 5 % 260 5 % Total net revenues 21 % $ 7,072 100 % $ 5,851 100 % Six Months Ended June 30, 2026 2025 Percent Change Amount % of Total Net Revenues Amount % of Total Net Revenues Net interest revenue Interest revenue 7 % $ 8,108 60 % $ 7,544 66 % Interest expense (20) % (1,607) (12) % (2,016) (18) % Net interest revenue 18 % 6,501 48 % 5,528 48 % Asset management and administration fees Mutual funds, ETFs, CTFs, and alternatives (1) 13 % 2,011 15 % 1,776 16 % Managed investing solutions 19 % 1,381 10 % 1,158 10 % Other 16 % 192 1 % 166 1 % Asset management and administration fees 16 % 3,584 26 % 3,100 27 % Trading revenue Commissions 18 % 1,017 8 % 862 7 % Order flow revenue 30 % 1,184 8 % 909 8 % Principal transactions 16 % 103 1 % 89 1 % Trading revenue 24 % 2,304 17 % 1,860 16 % Bank deposit account fees 28 % 628 5 % 492 5 % Other 14 % 537 4 % 470 4 % Total net revenues 18 % $ 13,554 100 % $ 11,450 100 % (1) Beginning in the first quarter of 2026, alternative investments revenue was moved from other asset management and administration fees to mutual funds, ETFs, CTFs, and alternatives. Prior period amounts have been reclassified to reflect this change. - 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) Net Interest Revenue Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates and spreads at the time of origination or purchase, changes in interest rates on cash and cash equivalents, floating-rate securities and loans, and changes in prepayment levels for mortgage-backed and other asset-backed securities and loans. Schwab establishes the rates paid on client-related liabilities, and management expects that it will generally adjust the rates paid on these liabilities at some fraction of any movement in short-term rates. Interest expense on long-term debt, Federal Home Loan Bank (FHLB) borrowings, other short-term borrowings, and other funding sources is impacted by market interest rates at the time of borrowing and changes in interest rates on floating-rate liabilities. Schwab’s use and the financial impacts of the Company’s various funding sources are dependent on a number of market and client activity factors. Net interest revenue reflects the impacts of derivatives used to manage interest rate risk. See also Risk Management – Market Risk and Item 1 – Note 12 for additional information. See also Risk Management – Liquidity Risk, Item 1 – Notes 9, 10, and 13, and Part II – Item 7 – Results of Operations – Net Interest Revenue in the 2025 Form 10-K for additional information on the Company’s funding sources. Schwab engages in securities lending and borrowing activities. Schwab temporarily loans client securities to other broker-dealers and clearinghouses and receives cash as collateral for securities loaned; liabilities for securities loaned are included in payables to brokers, dealers, and clearing organizations within funding sources in the presentation of net interest revenue. We may also borrow securities from other broker-dealers to fulfill short sales by clients and deliver cash to the lender in exchange for the securities, and receivables from securities borrowed are excluded from interest-earning assets. During the first half of 2026, the Federal Reserve held the upper bound of the target overnight rate unchanged at 3.75%. In 2025, the Federal Reserve maintained the upper bound of the target overnight rate at 4.50% before reducing the rate by 25 basis points in the third quarter and an additional 50 basis points across two cuts in the fourth quarter of 2025. Schwab’s average interest-earning assets increased 5% and 4% in the second quarter and first six months of 2026, respectively, from the same periods in 2025, primarily due to growth in margin lending, which was supported in part by wholesale funding, as well as increases in bank lending, partially offset by lower balances of AFS and HTM securities and cash and investments segregated. Client demand for margin and bank lending continued to grow in the second quarter and first six months of 2026. Receivables from brokerage clients, which are primarily comprised of margin loans, ended the second quarter at $122.8 billion, increasing 48% and 17% from June 30, 2025, and December 31, 2025, respectively. Total bank loans finished the second quarter of 2026 at $67.0 billion, higher by 33% and 16% from June 30, 2025 and December 31, 2025, respectively, due primarily to growth in PALs and First Mortgages. Client cash activity during the second quarter and first six months of 2026 reflected seasonality, organic growth from asset gathering, and client asset allocation decisions. Bank sweep deposits and payables to brokerage clients increased by a total of $42.7 billion, or 14%, from June 30, 2025 to the end of the second quarter of 2026 and $3.6 billion, or 1%, from December 31, 2025. Clients’ use of long/short strategies is presented on a net basis on the condensed consolidated balance sheet. While timing differences can arise between long and short positions, these strategies typically result in limited direct increases to assets and liabilities due to netting in the clients’ accounts. - 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) The following tables present net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheets: Three Months Ended June 30, 2026 2025 Average Balance Interest Revenue/Expense Average Yield/Rate Average Balance Interest Revenue/Expense Average Yield/Rate Interest-earning assets Cash and cash equivalents $ 30,707 $ 278 3.58 % $ 28,000 $ 305 4.30% Cash and investments segregated 41,326 374 3.58 % 47,574 506 4.20% Receivables from brokerage clients (1) 112,136 1,609 5.68 % 78,732 1,321 6.64% Available for sale securities (2) 65,864 358 2.17 % 77,750 405 2.08% Held to maturity securities (2) 131,126 570 1.73 % 141,098 602 1.70% Bank loans 63,823 693 4.35 % 48,691 518 4.27% Total interest-earning assets 444,982 3,882 3.47 % 421,845 3,657 3.45% Securities lending revenue 178 96 Other interest revenue (1,3) 86 34 Total interest-earning assets $ 444,982 $ 4,146 3.70 % $ 421,845 $ 3,787 3.57% Funding sources Bank deposits $ 246,346 $ 114 0.19 % $ 237,645 $ 326 0.55% Payables to brokers, dealers, and clearing organizations 31,693 276 3.45 % 16,657 167 3.97% Payables to brokerage clients (1) 108,840 59 0.22 % 92,425 60 0.26% Other short-term borrowings 11,082 111 3.98 % 7,644 87 4.55% Federal Home Loan Bank borrowings 126 1 3.79 % 9,753 110 4.48% Long-term debt 21,324 228 4.23 % 20,624 206 3.94% Total interest-bearing liabilities 419,411 789 0.75 % 384,748 956 0.99% Non-interest-bearing funding sources 25,571 37,097 Other interest expense (1,3) — 9 Total funding sources $ 444,982 $ 789 0.70 % $ 421,845 $ 965 0.91% Net interest revenue $ 3,357 3.00 % $ 2,822 2.66% Six Months Ended June 30, 2026 2025 Average Balance Interest Revenue/Expense Average Yield/Rate Average Balance Interest Revenue/Expense Average Yield/Rate Interest-earning assets Cash and cash equivalents $ 31,587 $ 566 3.57 % $ 29,236 $ 633 4.30 % Cash and investments segregated 42,629 771 3.60 % 43,117 918 4.23 % Receivables from brokerage clients (1) 108,349 3,108 5.71 % 80,805 2,700 6.64 % Available for sale securities (2) 65,561 684 2.09 % 81,151 838 2.06 % Held to maturity securities (2) 131,656 1,137 1.73 % 142,740 1,224 1.71 % Bank loans 61,567 1,320 4.31 % 47,374 1,011 4.29 % Total interest-earning assets 441,349 7,586 3.43 % 424,423 7,324 3.44 % Securities lending revenue 269 156 Other interest revenue (1,3) 253 64 Total interest-earning assets $ 441,349 $ 8,108 3.54 % $ 424,423 $ 7,544 3.54 % Funding sources Bank deposits $ 244,522 $ 232 0.19 % $ 241,660 $ 762 0.64 % Payables to brokers, dealers, and clearing organizations 28,617 493 3.43 % 15,424 304 3.93 % Payables to brokerage clients (1) 106,978 115 0.22 % 91,305 109 0.24 % Other short-term borrowings 10,098 203 4.02 % 7,172 169 4.74 % Federal Home Loan Bank borrowings 699 13 3.85 % 10,236 243 4.72 % Long-term debt 21,512 429 3.97 % 21,448 418 3.87 % Total interest-bearing liabilities 412,426 1,485 0.72 % 387,245 2,005 1.04 % Non-interest-bearing funding sources 28,923 37,178 Other interest expense (1,3) 122 11 Total funding sources $ 441,349 $ 1,607 0.60 % $ 424,423 $ 2,016 0.95 % Net interest revenue $ 6,501 2.94 % $ 5,528 2.59 % (1) Beginning in the fourth quarter of 2025, margin loans and short credits related to client long/short strategies from which the Company earns a fixed net yield are excluded from interest-earning assets and funding sources. Also beginning in the fourth quarter of 2025, related interest revenue and expense were moved from receivables from brokerage clients and payables to brokerage clients, respectively, to other interest revenue and other interest expense, respectively. Amounts and average yields have been reclassified and recalculated for 2025 periods to reflect these changes. Average margin loans related to these client strategies totaled $33.1 billion and $23.7 billion for the three and six months ended June 30, 2026, respectively, compared to $884 million and $562 million for the same periods in 2025. Average short credits related to these client strategies totaled $34.3 billion and $24.5 billion for the three and six months ended June 30, 2026, respectively, compared to $898 billion and $569 million for the same periods in 2025. (2) Amounts have been calculated based on amortized cost. Interest revenue on investment securities is presented net of related premium amortization. (3) Beginning in the second quarter of 2026, the net fixed yield earned on client long/short strategies is presented in other interest revenue; amounts for periods prior to the three months ended June 30, 2026 have not been recast as the impact of this change was not material. - 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) Net interest revenue increased $535 million, or 19%, and $973 million, or 18%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. These increases were primarily due to growth in margin and bank lending, lower average wholesale borrowings, and lower yields on most funding sources, partially offset by lower yields on floating-rate assets due to lower market rates, and lower balances of AFS and HTM securities and cash and investments segregated. Securities lending revenue increased in the second quarter and first six months of 2026, reflecting growth in fees received for securities borrowed transactions to facilitate certain client short sales related to long/short strategies, partially supported by growth in securities loaned. Net interest margin increased to 3.00% and 2.94% in the second quarter and first six months of 2026, respectively, compared to 2.66% and 2.59% during the same periods in 2025, primarily due to the growth in margin and bank lending, along with the reduced aggregate use of wholesale funding and lower rates paid on most funding sources, which more than offset lower yields on floating-rate assets due to lower market interest rates. Asset Management and Administration Fees The following table presents asset management and administration fees, average client assets, and average fee yields: Three Months Ended June 30, 2026 2025 Average Client Assets Revenue Average Fee Average Client Assets Revenue Average Fee Schwab money market funds $ 692,896 $ 473 0.27 % $ 644,811 $ 442 0.27 % Schwab equity and bond funds, ETFs, and CTFs 882,538 157 0.07 % 661,793 122 0.07 % Mutual Fund OneSource and other no-transaction-fee (NTF) funds (1) 484,076 273 0.23 % 350,487 218 0.25 % Other third-party mutual funds, ETFs, and alternatives (1,2) 677,708 117 0.07 % 623,167 116 0.07 % Total mutual funds, ETFs, CTFs, and alternatives (2,3) $ 2,737,218 $ 1,020 0.15 % $ 2,280,258 $ 898 0.16 % Managed investing solutions (3) Fee-based $ 763,716 $ 707 0.37 % $ 595,203 $ 589 0.40 % Non-fee-based 159,255 — — 120,726 — — Total managed investing solutions $ 922,971 $ 707 0.31 % $ 715,929 $ 589 0.33 % Other balance-based fees (2,4) 991,946 70 0.03 % 826,894 61 0.03 % Other (5) 28 22 Total asset management and administration fees $ 1,825 $ 1,570 Six Months Ended June 30, Schwab money market funds $ 694,727 $ 941 0.27 % $ 633,143 $ 860 0.27 % Schwab equity and bond funds, ETFs, and CTFs 850,427 303 0.07 % 660,191 244 0.07 % Mutual Fund OneSource and other NTF funds (1) 476,089 535 0.23 % 355,092 440 0.25 % Other third-party mutual funds, ETFs, and alternatives (1,2) 671,797 232 0.07 % 633,008 232 0.07 % Total mutual funds, ETFs, CTFs, and alternatives (2,3) $ 2,693,040 $ 2,011 0.15 % $ 2,281,434 $ 1,776 0.16 % Managed investing solutions (3) Fee-based $ 745,799 $ 1,381 0.37 % $ 592,843 $ 1,158 0.39 % Non-fee-based 152,442 — — 120,584 — — Total managed investing solutions $ 898,241 $ 1,381 0.31 % $ 713,427 $ 1,158 0.33 % Other balance-based fees (2,4) 977,724 139 0.03 % 824,621 125 0.03 % Other (5) 53 41 Total asset management and administration fees $ 3,584 $ 3,100 (1) The second quarter and first six months of 2025 include transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource and other NTF funds. (2) Beginning in the first quarter of 2026, alternative investments and related revenue were moved from other balance-based fees to other third-party mutual funds, ETFs, and alternatives. Prior period amounts and average fees have been reclassified and recalculated to reflect this change. (3) Average client assets for managed investing solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. (4) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees. (5) Includes miscellaneous service and transaction fees, including fees relating to mutual funds and ETFs that are not balance-based. Asset management and administration fees increased by $255 million, or 16%, and $484 million, or 16%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. These increases were primarily a result of continued growth in fee-based managed investing solutions and Mutual Fund OneSource®, as well as growth in Schwab money market funds, and Schwab equity and bond funds, ETFs, and CTFs. This growth was driven primarily by higher client asset - 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) balances, reflecting year-over-year equity market appreciation, the Company’s asset gathering, and net flows into managed investing solutions. The following table presents a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource® and other NTF funds. These funds generated 49% and 50% of the asset management and administration fees earned in the second quarter and first six months of 2026, respectively, compared with 50% in both the second quarter and first six months of 2025: Schwab Money Market Funds Schwab Equity and Bond Funds, ETFs, and CTFs Mutual Fund OneSource and Other NTF funds Three Months Ended June 30, 2026 2025 2026 2025 2026 2025 Balance at beginning of period $ 700,754 $ 641,532 $ 784,352 $ 625,224 $ 443,261 $ 340,280 Net inflows (outflows) (16,240) 5,433 20,343 16,115 (9,041) (7,804) Net market gains (losses) and other (1) 5,939 6,508 90,225 48,016 51,453 121,443 Balance at end of period $ 690,453 $ 653,473 $ 894,920 $ 689,355 $ 485,673 $ 453,919 Six Months Ended June 30, Balance at beginning of period $ 693,815 $ 596,531 $ 772,686 $ 627,166 $ 454,207 $ 347,798 Net inflows (outflows) (15,582) 43,910 39,219 25,203 (18,111) (14,850) Net market gains (losses) and other (1) 12,220 13,032 83,015 36,986 49,577 120,971 Balance at end of period $ 690,453 $ 653,473 $ 894,920 $ 689,355 $ 485,673 $ 453,919 (1) Includes $63.3 billion of transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource and other NTF Funds for the three and six months ended June 30, 2025. Trading Revenue The following tables present trading revenue, client trading activity, and related information: Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Commissions $ 528 $ 431 23 % $ 1,017 $ 862 18 % Order flow revenue Options 434 268 62 % 797 538 48 % Equities 190 198 (4) % 387 371 4 % Total order flow revenue 624 466 34 % 1,184 909 30 % Principal transactions 63 55 15 % 103 89 16 % Total trading revenue $ 1,215 $ 952 28 % $ 2,304 $ 1,860 24 % Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 DATs (in thousands) 11,920 7,571 57 % 10,918 7,482 46 % Product as a percentage of DATs Equities 61 % 54 % 57 % 55 % Derivatives 19 % 20 % 20 % 20 % ETFs 16 % 20 % 18 % 19 % Mutual funds 3 % 5 % 4 % 5 % Fixed income 1 % 1 % 1 % 1 % Number of trading days 62.0 62.0 — 123.0 122.0 1 % Revenue per trade (1) $ 1.64 $ 2.03 (19) % $ 1.72 $ 2.04 (16) % (1) Revenue per trade is calculated as trading revenue divided by the product of DATs and the number of trading days. Trading revenue increased $263 million, or 28%, and $444 million, or 24%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025, driven by an increase in order flow revenue reflecting higher rates and volume, as well as changes in the mix of client trading activity. Commissions revenue increased during the second quarter and - 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) first six months of 2026 compared to the same periods in 2025 due to higher volume, partially offset by changes in the mix of client trading activity. Bank Deposit Account Fees The Company earns bank deposit account fee revenue from TD Bank USA, National Association and TD Bank, National Association (together, the TD Depository Institutions), in accordance with the Second Amended and Restated Insured Deposit Account Agreement (2023 IDA agreement). Bank deposit account fee revenue is presented net of interest paid to clients, and other applicable fees, and is affected by changes in interest rates and the composition of balances designated as fixed- and floating-rate obligation amounts. See Item 1 – Note 11 for additional information. The following table presents bank deposit account fee revenue and related information: Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Bank deposit account fees $ 333 $ 247 35 % $ 628 $ 492 28 % Average bank deposit account balances $ 71,899 $ 82,265 (13) % $ 72,246 $ 83,220 (13) % Average net yield 1.83 % 1.19 % 1.73 % 1.18 % Percentage of average BDA balances designated as: Fixed-rate balances 83 % 78 % 82 % 78 % Floating-rate balances 17 % 22 % 18 % 22 % Bank deposit account fees increased $86 million, or 35%, and $136 million, or 28%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025, primarily due to an increase in average net yield and decreases in the amount paid to clients as a result of lower interest rates and in other applicable fees paid. This was partially offset by lower average BDA balances, which reduced the base on which bank deposit account fees are earned. The decrease in average BDA balances in the second quarter and first six months of 2026 compared to the same periods in 2025 was primarily due to the transfer of $3.0 billion of BDA balances to Schwab’s balance sheet during the first six months of 2026 and $6.7 billion of BDA balances transferred in the prior year after September 10, 2025, as well as client cash allocation decisions. Transfers of BDA balances to Schwab’s balance sheet result in lower balances upon which bank deposit account fee revenue is earned but provide a source of funding to invest in interest-earning assets or reduce reliance on borrowings to increase net interest revenue. Average net yield increased in the second quarter and first six months of 2026 compared to the same periods in 2025 due to an increase in the average net yield on fixed-rate BDA balances, partially offset by decreases in the average amount of and net yield on floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of June 30, 2026 were 85% and 15%, respectively. Other Revenue Other revenue includes industry fees, certain service fees, other gains and losses, and the provision for credit losses on bank loans. Other revenue increased $82 million, or 32%, and $67 million, or 14%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. The increase in the second quarter of 2026 compared to the same period in 2025 was largely driven by higher industry fees. Effective April 4, 2026, the SEC increased the fee rate applicable to most securities transactions from zero, which had been in effect since May 14, 2025. This change will result in higher industry fees in other revenue and a corresponding increase in other expense after the effective date, resulting in no impact to net income. The timing of the increase in the fee rate resulted in only an incremental net increase in industry fees in the first six months of 2026 compared to the same period in 2025. Additionally, the increases in both the second quarter and first six months of 2026 compared to the same periods in 2025 were driven by gains recognized on certain equity investments, higher other service fees, and lower losses on sales of AFS securities in 2026. - 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) Total Expenses Excluding Interest The following table presents a comparison of expenses excluding interest: Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Compensation and benefits Salaries and wages $ 1,005 $ 927 8 % $ 2,006 $ 1,850 8 % Incentive compensation 489 351 39 % 942 763 23 % Employee benefits and other 296 258 15 % 654 595 10 % Total compensation and benefits $ 1,790 $ 1,536 17 % $ 3,602 $ 3,208 12 % Professional services 307 291 5 % 610 560 9 % Occupancy and equipment 301 270 11 % 586 544 8 % Advertising and market development 111 108 3 % 212 204 4 % Communications 198 176 13 % 361 329 10 % Depreciation and amortization 198 215 (8) % 399 432 (8) % Amortization of acquired intangible assets 142 128 11 % 274 258 6 % Regulatory fees and assessments 63 77 (18) % 138 166 (17) % Other 293 247 19 % 515 491 5 % Total expenses excluding interest $ 3,403 $ 3,048 12 % $ 6,697 $ 6,192 8 % Expenses as a percentage of total net revenues Compensation and benefits 25 % 26 % 27 % 28 % Advertising and market development 2 % 2 % 2 % 2 % Full-time equivalent employees (in thousands) At quarter end 33.7 32.6 3 % Average 33.4 32.3 3 % 33.3 32.2 3 % Expenses excluding interest increased $355 million, or 12%, and $505 million, or 8%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. Adjusted total expenses, which excludes acquisition and integration-related costs and amortization of acquired intangible assets, increased 11% and 8% in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. The Company’s second quarter and first six months of 2026 results include expenses related to Forge subsequent to our March 2, 2026 acquisition (see also Item 1 – Note 3). Acquisition and integration-related costs related to Forge totaled $28 million and $39 million in the second quarter and first six months of 2026, respectively. While underlying 2026 expense growth remains in-line with expectations communicated earlier in the year (see Part II – Item 7 – Results of Operations in the 2025 10-K), the Company now expects total expenses excluding interest for full-year 2026 will increase approximately 10% to 11%, inclusive of volume-related expenses to support strong business performance and trading activity, and expenses related to the operations and integration of Forge. Total compensation and benefits expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to annual merit increases and growth in headcount, including growth in financial consultants and wealth advisors and the acquisition of Forge, higher incentive compensation driven by the Company’s financial performance, and higher other employee-related costs. Compensation and benefits included acquisition and integration-related costs of $26 million in the second quarter and first six months of 2026. Professional services expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, reflecting overall growth of the business and increased utilization of other professional services. Professional services included acquisition and integration-related costs of $2 million and $13 million in the second quarter and first six months of 2026, respectively. Occupancy and equipment expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily driven by higher software subscription costs and building expenses related to growth of the business, coupled with an increase in property tax expense. - 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) Advertising and market development expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily driven by higher client promotional spending. Communications expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to higher proxy-related and postage expenses. Depreciation and amortization expense decreased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to lower amortization on internally developed software and lower depreciation on information technology equipment, partially offset by higher amortization on term software. Amortization of acquired intangible assets increased in the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to amortization on intangible assets from the Forge acquisition. Regulatory fees and assessments decreased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to certain lower regulatory fees, including Federal Deposit Insurance Corporation (FDIC) deposit insurance assessments in the year-to-date period driven by lower assessment rates due to a decrease in brokered CDs. Other expense increased in the second quarter and first six months of 2026 compared to the same periods in 2025. In the second quarter of 2026, the increase was primarily driven by higher industry fees due to higher average fee rates coupled with higher trading volumes. Effective April 4, 2026, the SEC increased the fee rate applicable to most securities transactions from zero, which had been in effect since May 14, 2025. This change will result in higher industry fees in other revenue and a corresponding increase in other expense after the effective date, resulting in no impact to net income. Other expense increased in the first six months of 2026 primarily due to certain higher costs resulting from growth of the business and increased trading volume, partially offset by lower industry fees driven by lower average fee rates compared to the same period in 2025. Capital expenditures were $792 million and $136 million in the second quarter of 2026 and 2025, respectively, and $965 million and $292 million in the first six months of 2026 and 2025, respectively. Capital expenditures increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to a $633 million multi-year software license agreement which was recognized with a corresponding liability in long-term debt in accordance with Accounting Standards Codification 350 Intangibles — Goodwill and Other (see also Item 1 – Note 10). The increase in capital expenditures was additionally due to higher telecommunications equipment, leasehold improvement and building expenses related to certain office expansions. As a result of higher year-to-date spending and total net revenues, we now estimate capital expenditures for full-year 2026 will be slightly higher than our previously disclosed expected range of approximately 3-5% of total net revenues. Taxes on Income Taxes on income were $869 million and $677 million for the second quarter of 2026 and 2025, respectively, resulting in effective tax rates of 23.7% and 24.2%, respectively. Taxes on income were $1.6 billion and $1.2 billion for the first six months of 2026 and 2025, respectively, resulting in effective tax rates of 23.0% and 23.3%, respectively. The decreases in the effective tax rates in the second quarter and first six months of 2026 compared to the same periods in 2025 were primarily due to decreases in state tax expense and decreases in non-deductible FDIC deposit insurance assessments, partially offset by decreases in certain tax credits, increases in state tax reserves, and decreases in equity compensation tax deduction benefits. - 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) Segment Information Financial information for our segments is presented in the following table: Investor Services Advisor Services Total Three Months Ended June 30, Percent Change 2026 2025 Percent Change 2026 2025 Percent Change 2026 2025 Net Revenues Net interest revenue 15 % $ 2,575 $ 2,244 35 % $ 782 $ 578 19 % $ 3,357 $ 2,822 Asset management and administration fees 18 % 1,349 1,144 12 % 476 426 16 % 1,825 1,570 Trading revenue 28 % 1,087 852 28 % 128 100 28 % 1,215 952 Bank deposit account fees 32 % 257 194 43 % 76 53 35 % 333 247 Other 29 % 260 201 39 % 82 59 32 % 342 260 Total net revenues 19 % 5,528 4,635 27 % 1,544 1,216 21 % 7,072 5,851 Expenses Excluding Interest Compensation and benefits 17 % $ 1,399 $ 1,191 13 % $ 391 $ 345 17 % $ 1,790 $ 1,536 Professional services 8 % 249 231 (3) % 58 60 5 % 307 291 Occupancy and equipment 12 % 237 212 10 % 64 58 11 % 301 270 Advertising and market development 23 % 86 70 (34) % 25 38 3 % 111 108 Communications 8 % 130 120 21 % 68 56 13 % 198 176 Depreciation and amortization (7) % 150 162 (9) % 48 53 (8) % 198 215 Amortization of acquired intangible assets 14 % 119 104 (4) % 23 24 11 % 142 128 Regulatory fees and assessments (24) % 47 62 7 % 16 15 (18) % 63 77 Other 18 % 246 209 24 % 47 38 19 % 293 247 Total expenses excluding interest 13 % 2,663 2,361 8 % 740 687 12 % 3,403 3,048 Income before taxes on income 26 % $ 2,865 $ 2,274 52 % $ 804 $ 529 31 % $ 3,669 $ 2,803 Net New Client Assets (in billions) (1) 23 % $ 38.5 $ 31.2 89 % $ 80.2 $ 42.4 61 % $ 118.7 $ 73.6 Six Months Ended June 30, Net Revenues Net interest revenue 14 % $ 5,000 $ 4,402 33 % $ 1,501 $ 1,126 18 % $ 6,501 $ 5,528 Asset management and administration fees 17 % 2,643 2,258 12 % 941 842 16 % 3,584 3,100 Trading revenue 25 % 2,067 1,657 17 % 237 203 24 % 2,304 1,860 Bank deposit account fees 25 % 483 385 36 % 145 107 28 % 628 492 Other 9 % 412 378 36 % 125 92 14 % 537 470 Total net revenues 17 % 10,605 9,080 24 % 2,949 2,370 18 % 13,554 11,450 Expenses Excluding Interest Compensation and benefits 13 % $ 2,798 $ 2,476 10 % $ 804 $ 732 12 % $ 3,602 $ 3,208 Professional services 12 % 498 445 (3) % 112 115 9 % 610 560 Occupancy and equipment 8 % 460 427 8 % 126 117 8 % 586 544 Advertising and market development 23 % 165 134 (33) % 47 70 4 % 212 204 Communications 4 % 243 233 23 % 118 96 10 % 361 329 Depreciation and amortization (7) % 303 327 (9) % 96 105 (8) % 399 432 Amortization of acquired intangible assets 9 % 228 210 (4) % 46 48 6 % 274 258 Regulatory fees and assessments (20) % 106 132 (6) % 32 34 (17) % 138 166 Other 5 % 430 411 6 % 85 80 5 % 515 491 Total expenses excluding interest 9 % 5,231 4,795 5 % 1,466 1,397 8 % 6,697 6,192 Income before taxes on income 25 % $ 5,374 $ 4,285 52 % $ 1,483 $ 973 30 % $ 6,857 $ 5,258 Net New Client Assets (in billions) (1) (8) % $ 92.6 $ 100.7 58 % $ 166.0 $ 105.3 26 % $ 258.6 $ 206.0 (1) In the second quarter and first six months of 2026, Investor Services includes net outflows of $1.1 billion and $1.2 billion, respectively, from off-platform brokered CDs issued by CSB. In the second quarter and first six months of 2025, Investor Services includes net outflows of $6.7 billion and $12.0 billion, respectively, from off-platform brokered CDs issued by CSB. - 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) Segment Net Revenues Investor Services and Advisor Services total net revenues increased by 19% and 27%, respectively, in the second quarter of 2026 and 17% and 24%, respectively, in the first six months of 2026 compared to the same periods in 2025. Increases in Schwab’s net revenues were similar for both segments in the second quarter and first six months of 2026 compared to the same periods in 2025. Net interest revenue increased for both segments primarily due to growth of margin and bank lending balances, lower aggregate wholesale borrowings, and lower average rates paid on most funding sources, partially offset by lower yields on interest-earning assets. Asset management and administration fees increased for both segments primarily as a result of higher balances in managed investing services for Investor Services, coupled with higher balances in Schwab equity and bond funds, ETFs, and CTFs, Mutual Fund OneSource®, and money market funds for both Investor Services and Advisor Services. Trading revenue increased for both segments primarily due to higher order flow revenue and higher commission revenue reflecting higher volume and changes in mix of trading activity. Bank deposit account fees increased for both segments primarily due to improved net yields partially offset by lower average BDA balances. Investor Services other revenue increased primarily due to higher industry fees, gains recognized from certain equity investments, and lower losses recognized on the sale of AFS securities, partially offset by lower other service fees. Advisor Services other revenue increased primarily due to higher other service fees, gains from equity investments, lower losses on the sale of AFS securities, and in the second quarter of 2026, higher industry fees. Segment Expenses Excluding Interest Investor Services and Advisor Services total expenses excluding interest increased by 13% and 8%, respectively, in the second quarter of 2026, and 9% and 5%, respectively, in the first six months of 2026 compared to the same periods in 2025. Most expenses changed similarly in the two segments in the second quarter and first six months of 2026 compared to the same periods in 2025. Compensation and benefits expense increased for both segments primarily due to higher incentive compensation, annual merit increases and growth in headcount, and higher other employee-related costs. Professional services expense was largely flat for Advisor Services and increased for Investor Services due to overall growth of the business and increased utilization of other professional services. Occupancy and equipment expense increased for both segments primarily due to higher software subscription costs and building expenses related to growth of the business, coupled with an increase in property tax expense. Communications expense increased for both segments primarily due to higher proxy-related and postage expenses. Regulatory fees and assessments decreased for both segments in the second quarter and first six months of 2026 primarily due to certain lower regulatory fees, including lower FDIC assessments in the year-to-date period driven by lower assessment rates due to a decrease in brokered CDs. RISK MANAGEMENT Schwab’s business activities expose it to a variety of risks, including operational, compliance, credit, market, and liquidity risks. The Company has a comprehensive risk management program to identify and manage these risks and their associated potential for financial and reputational impact. For a discussion of our risk management programs, see Part II – Item 7 – Risk Management in the 2025 Form 10-K. Market Risk Market risk is the potential for changes in earnings or the value of financial instruments held by Schwab as a result of fluctuations in interest rates, equity prices, or market conditions. Schwab is exposed to market risk primarily from changes in interest rates within our interest-earning assets relative to changes in the costs of funding sources that finance these assets. To manage interest rate risk, we have established policies and procedures, which include setting limits on net interest revenue risk and EVE risk. To remain within these limits, we manage the maturity, repricing, and cash flow characteristics of the investment portfolios, loan portfolios, and liabilities. Management monitors established guidelines to stay within the Company’s risk appetite. The Company utilizes interest rate swap derivative instruments to assist with managing interest rate risk, the effects of which are incorporated into the Company’s net interest revenue and EVE analyses. For further information on our interest rate risk management strategies utilizing interest rate swaps, see Item 1 – Note 12. Our measurement of interest rate risk involves assumptions that are inherently uncertain and, as a result, cannot precisely estimate the impact of changes in interest rates on net interest revenue, bank deposit account fees, or EVE. Actual results may differ from simulated results due to balance growth or decline and the timing, magnitude, and frequency of interest rate - 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) changes, as well as changes in market conditions and management strategies, including changes in asset and liability mix. Financial instruments are also subject to the risk that valuations will be negatively affected by changes in demand and the underlying market for a financial instrument. We are 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 used in securities lending and similar activities. Equity market valuations may also affect the level of brokerage client trading activity, margin borrowing, and overall client engagement with Schwab. Additionally, we earn 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 we earn. Our market risk related to financial instruments held for trading is not material. Net Interest Revenue Simulation For our net interest revenue sensitivity analysis, we use net interest revenue simulation modeling techniques to evaluate and manage the effect of changing interest rates. The simulations include all balance sheet interest rate-sensitive assets and liabilities, and include derivative instruments. Key assumptions include the projection of interest rate scenarios with rate floors, rates and balances of non-maturity client cash held on the balance sheet, prepayment speeds of mortgage-related investments, repricing of financial instruments, and reinvestment of matured or paid-down securities and loans. We use both proprietary and independent third-party models to simulate net interest revenue sensitivity and related analyses. Fixed income analytical vendors provide term structure models, prepayment speed models for mortgage-backed securities and mortgage loans, and cash flow projections based on interest income, contractual maturities, and prepayments. The Company’s net interest revenue sensitivity analyses utilize instantaneous parallel increases/decreases in interest rates over a twelve-month period, though we also regularly simulate the effects of non-parallel shifts and gradual shifts of interest rates on net interest revenue. 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 include investment securities, margin loans, bank loans, cash and investments segregated, and cash and cash equivalents. 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 we establish the rates paid on certain brokerage client cash balances and bank deposits and the rates charged on certain margin and bank loans, control the composition of our investment securities, and utilize derivative hedging instruments, we are able to take certain actions to manage our net interest spread, depending on competitive factors and market conditions. When liquidity needs exceed our primary sources of funding, the Company will utilize higher-cost funding sources, which can reduce net interest margin and net interest revenue. Higher prevailing short-term interest rates generally improve yields on shorter duration interest-earning assets. During periods of rapidly rising interest rates, clients tend to reallocate cash out of sweep products into higher-yielding, off-balance sheet, fixed income investments and money market funds within Schwab’s product offerings. This can result in lower interest-earning assets and/or may require increased use of higher-cost funding sources, which therefore tend to constrain net interest revenue when interest rates are moving rapidly higher. A decline in short-term interest rates could negatively impact the yield on the Company’s investment and loan portfolios to a greater degree than any offsetting reduction in interest expense from funding sources, compressing net interest margin. The Company’s net interest revenue sensitivity analyses assume both statically and dynamically-sized balance sheet composition. Statically-sized balance sheet modeling assumes the asset and liability structure of the consolidated balance sheet would not be changed as a result of the simulated changes in interest rates. While this approach is useful to isolate the impact of changes in interest rates on a statically-sized asset and liability structure, it does not capture changes to client cash allocations. We therefore also conduct dynamically-sized balance sheet compositions as a function of interest rates. Dynamic net interest revenue simulations assume runoff of bank deposit and payables to brokerage client balances is supplemented with wholesale borrowing when needed to fund assets through the simulation horizon. We also conduct similar simulations on EVE to capture the impact of client cash allocation changes on our balance sheet. As we actively manage the consolidated balance sheet and interest rate exposure, we have taken and would typically seek to take steps to manage additional interest rate exposure that could result from changes in the interest rate environment. - 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) As the Company’s balance sheet has continued to evolve, we have increasingly utilized dynamically-sized balance sheet modeling as a primary framework for managing interest rate risk. Dynamically-sized balance sheet modeling provides another perspective of the Company’s interest rate risk profile and risk management strategy, incorporating certain expected changes in balance sheet composition and size that may result from changes in interest rates. Accordingly, beginning with the second quarter of 2026, the Company’s simulation results reflect a dynamically-sized balance sheet modeling approach. The below table shows simulated changes to net interest revenue over the next twelve months beginning June 30, 2026 and December 31, 2025 of an instantaneous increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period: June 30, 2026 December 31, 2025 Increase of 200 basis points 3.8% 5.4% Increase of 100 basis points 3.6% 2.0% Increase of 50 basis points 1.7% 1.0% Decrease of 50 basis points (0.7)% (2.2)% Decrease of 100 basis points (1.6)% (5.3)% Decrease of 200 basis points (5.3)% (15.0)% The Company’s simulated incremental increases and decreases in market interest rates had an overall smaller impact on net interest revenue as of June 30, 2026 compared to December 31, 2025. These changes were primarily due to 2026 hedging activity and changes in balance sheet composition at June 30, 2026 relative to December 31, 2025, which included seasonal cash inflows near year-end. Effective Duration Effective duration measures price sensitivity relative to a change in prevailing interest rates, taking account of amortizing cash flows and prepayment optionality for mortgage-related securities and loans. While expressed in years, duration represents the approximate percentage change in market value for a given change in interest rates. We seek to manage the Company’s asset duration in relation to management’s estimate of the Company’s liability duration. The Company’s liability duration is impacted by the composition of funding sources and typically decreases in periods of rising market interest rates and increases in periods of declining market interest rates. The Company also utilizes derivative hedging instruments such as interest rate swaps in managing its asset and liability duration. - 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 the Company’s estimated effective durations, which reflect anticipated future payments, by category: June 30, 2026 December 31, 2025 In years Estimated effective duration, exclusive of derivatives: Consolidated total assets 1.6 1.8 Margin loans (1) — — AFS investment securities portfolio 2.3 2.4 AFS and HTM investment securities portfolios 3.6 3.9 Pledged asset lines 0.1 0.1 Long-term debt CSC Senior Notes 3.3 3.0 Estimated effective duration, inclusive of derivatives (2): Consolidated total assets 1.8 1.9 Margin loans (1) 0.3 — AFS investment securities portfolio 1.9 2.0 AFS and HTM investment securities portfolios 3.5 3.7 Pledged asset lines 1.7 1.2 Long-term debt CSC Senior Notes 0.8 1.9 (1) The duration of margin loans exclusive of derivatives was less than 0.1 years at both June 30, 2026 and December 31, 2025. (2) See Item 1 – Note 12 for additional discussion of the Company’s derivatives. Economic Value of Equity Simulation Management also uses EVE simulations to measure interest rate risk. EVE sensitivity measures the long-term impact of interest rate changes on the net present value of assets and liabilities, and includes the impact of derivative instruments. While EVE does not have a direct accounting relationship, the measure aims to capture a theoretical value of assets and liabilities under a variety of interest rate environments. EVE sensitivity is calculated by subjecting the balance sheet to hypothetical instantaneous shifts in the level of interest rates. This analysis is highly dependent upon asset and liability assumptions based on historical and certain expected behaviors. Key assumptions in our EVE calculation include projection of interest rate scenarios with rate floors, prepayment speeds of mortgage-related investments, term structure models of interest rates, behavior of non-maturity client cash held on the balance sheet, and pricing assumptions. We use both proprietary and independent third-party models to simulate EVE sensitivity and related analyses. We develop and maintain client credits and deposits run-off models internally based on historical experience and prevailing client cash realignment behaviors. We rely on third-party models for interest rate term structure modeling, prepayment speed modeling for mortgage-backed securities and mortgage loans, and cash flow projections based on interest income, and contractual maturities. Schwab’s EVE profile is characterized by a more stable asset duration relative to liabilities in both higher and lower interest rate environments. Currently, the EVE exposure to rates increasing or decreasing in a similar magnitude shows that there is greater exposure to rates decreasing. Bank Deposit Account Fees Simulation Consistent with the presentation on the consolidated statement of income, the sensitivity of bank deposit account fee revenue to interest rate changes is assessed separately from the net interest revenue simulation described above. As of June 30, 2026 and December 31, 2025, simulated changes in bank deposit account fee revenue from gradual changes in market interest rates relative to prevailing market rates, under the interest rate scenarios described above for net interest revenue, did not have a significant impact on the Company’s total net revenues. Our net interest revenue, EVE, and bank deposit account fee revenue simulations reflect the assumption of non-negative investment yields. Liquidity Risk Liquidity risk is the potential that Schwab will be unable to meet cash flow obligations when they come due without incurring unacceptable losses. Due to its role as a source of financial strength, CSC’s liquidity needs are primarily driven by: the liquidity and capital needs of CS&Co, our principal broker-dealer subsidiary; the capital needs of the banking subsidiaries; principal and interest due on - 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) corporate debt; and dividend payments on CSC’s preferred and common stock. The liquidity needs of our broker-dealer subsidiary are primarily driven by client activity, including trading and margin lending activities, and capital expenditures. The capital needs of the banking subsidiaries are primarily driven by client deposit levels and other borrowings. We have established liquidity policies to support the successful execution of business strategies, while ensuring ongoing and sufficient liquidity to meet operational needs and satisfy applicable regulatory requirements under both normal and stressed conditions. We seek to maintain client confidence in the balance sheet and the safety of client assets by maintaining liquidity and diversity of funding sources to allow the Company to meet its obligations. To this end, we have established limits and contingency funding plans to support liquidity levels during both business as usual and stressed conditions. We employ a variety of metrics to monitor and manage liquidity. We conduct regular liquidity stress testing to develop a view of liquidity risk exposures and to ensure our ability to maintain sufficient liquidity during market-related or company-specific liquidity stress events. Liquidity sources are also tested periodically and results are reported to the Financial Risk Oversight Committee. A number of early warning indicators are monitored to help identify emerging liquidity stresses in the market or within the organization and are reviewed with management periodically. Funding Sources Schwab’s primary source of funds is cash generated by client activity which includes bank deposits and cash balances in client brokerage accounts. These funds are used to purchase investment securities and extend loans to clients. 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, FHLB borrowings, borrowings under repurchase agreements with external financial institutions and the Fixed Income Clearing Corporation (FICC), issuance of CDs, cash provided by securities issuances by CSC in the capital markets, and other facilities described below. To meet daily funding needs, we maintain liquidity in the form of overnight cash deposits and short-term investments. For unanticipated liquidity needs, we also maintain a buffer of highly liquid investments, including U.S. Treasury securities. Our clients’ bank deposits and brokerage cash balances primarily originate from our 39.8 million active brokerage accounts. More than 80% of our bank deposits qualified for FDIC insurance as of June 30, 2026. Our clients’ allocation of cash held on our balance sheet as bank deposits or payables to brokerage clients is sensitive to interest rate levels, with clients typically increasing their utilization of investment cash solutions, such as purchased money market funds and certain fixed income products when those yields are higher than those of cash sweep features. As a participant in the financial services industry, Schwab relies on access to external financing in the normal course of business. Schwab’s use of external debt facilities may arise from timing differences between cash flow requirements, such as client cash outflows, cash flows from operations, payments on interest-earning assets, movements of cash to meet regulatory brokerage client cash segregation requirements, and general corporate purposes. Rollover risk is the risk that we will not be able to refinance or payoff borrowings as they mature. We maintain policies and procedures necessary to access funding and test borrowing procedures on a periodic basis. We manage rollover risk on borrowings, taking into account expected principal paydowns on our investment and loan portfolios along with expected deposit flows. - 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) The following table describes certain external debt facilities available at June 30, 2026: Description Borrower Outstanding Available Maturity of Amounts Outstanding Weighted-Average Interest Rate on Amounts Outstanding FHLB secured credit facilities Banking subsidiaries $ 500 $ 32,836 (1) July 2026 3.79% Federal Reserve discount window Banking subsidiaries — 27,967 (1) N/A — Repurchase agreements Banking subsidiaries, CSC, CS&Co 7,810 — (2) July 2026-October 2026 (3) 3.89% Unsecured uncommitted lines of credit with various external banks CSC, CS&Co — 1,892 N/A — Unsecured commercial paper CSC, CS&Co 7,399 7,601 (4) July 2026-March 2027 3.94% Secured uncommitted lines of credit with various external banks CS&Co 2,300 — (5) August 2026- September 2026 4.03% (1) Amounts shown as available from the FHLB and Federal Reserve facilities represent remaining capacity based on assets pledged as of June 30, 2026. Incremental borrowing capacity may be made available by pledging additional assets, subject to applicable facility terms. See below and Item 1 – Note 10 for additional information. (2) Secured borrowing capacity is made available based on our borrower’s ability to provide collateral deemed acceptable by each respective counterparty. See below and Item 1 – Note 13 for additional information. (3) Repurchase agreements outstanding as of June 30, 2026 at CS&Co maintain continuous contractual maturities of 35-125 days and are included in payables to brokers, dealers, and clearing organizations on the condensed consolidated balance sheets. (4) Outstanding balance of unsecured commercial paper as of June 30, 2026 represents the gross par value before discount of $64 million. (5) Secured borrowing capacity is made available based on CS&Co’s ability to provide acceptable collateral to the lenders as determined by the credit agreements. N/A Not applicable. Available borrowing capacity from the FHLB and Federal Reserve facilities maintained by our banking subsidiaries is dependent on the value of assets pledged and the terms of the borrowing arrangements. As of June 30, 2026, the Company had additional investment securities with a par value of approximately $148 billion, or a fair value of approximately $135 billion, available to be pledged to obtain additional capacity. Additional details regarding these facilities is described below. Amounts available under secured credit facilities with the FHLB are dependent on the value of our First Mortgages, home equity lines of credit (HELOCs), and the value of certain of our investment securities that are pledged as collateral. These credit facilities are also available as backup financing in the event the outflow of client cash from the banking subsidiaries’ respective balance sheets is greater than maturities and paydowns on investment securities and bank loans. CSC’s banking subsidiaries must each maintain positive tangible capital, as defined by the Federal Housing Finance Agency, in order to place new draws upon these credit facilities, and the Company manages capital with consideration of minimum tangible capital ratios at our banking subsidiaries. Tangible capital pursuant to the requirements of the FHLB borrowing facilities for our banking subsidiaries is common equity less goodwill and intangible assets. Our banking subsidiaries also have access to short-term secured funding through the Federal Reserve discount window and are counterparties to the Standing Repo with the Federal Reserve Bank of New York. Amounts available under the Federal Reserve discount window are dependent on the value of certain investment securities that are pledged as collateral. Our banking subsidiaries may also engage with external financial institutions and the FICC in repurchase agreements and resale agreements collateralized by investment securities as another source of short-term liquidity and to monetize certain balance sheet assets. CSC maintains standing bilateral repurchase agreements with external banks. CSC’s ratings for Commercial Paper Notes were P1 by Moody’s, A2 by Standard & Poor’s, and F1 by Fitch at June 30, 2026. CSC has a universal automatic shelf registration statement on file with the SEC, which enables it to issue debt, equity, and other securities. CS&Co has a variety of external debt facilities available. CS&Co maintains unsecured uncommitted bank credit lines with a group of banks as a source of short-term liquidity, which can also be accessed by CSC. CS&Co also maintains secured uncommitted lines of credit, under which CS&Co may borrow on a short-term basis and pledge either client margin securities or firm securities as collateral, based on the terms of the agreements. At the end of the first quarter of 2026, CS&Co’s Board of Directors authorized the issuance of unsecured Commercial Paper Notes in an aggregate amount of up to $10.0 billion. CS&Co commenced issuances under the program in the second quarter and $4.9 billion was outstanding as of June 30, 2026. CS&Co’s ratings for Commercial Paper Notes were P1 by Moody’s and A1 by Standard & Poor’s at June 30, 2026. CS&Co also engages with external financial institutions in repurchase agreements collateralized by client margin securities as a source of liquidity. - 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) Additionally, CS&Co is able to lend eligible securities held in client brokerage accounts in exchange for cash collateral as a source of short-term liquidity. As of June 30, 2026, liabilities for securities loaned totaled $38.7 billion and are included in payables to brokers, dealers, and clearing organizations on the condensed consolidated balance sheets. As of June 30, 2026, $27.2 billion of securities loaned had overnight and continuous remaining contractual maturities; $11.5 billion of securities loaned had contractual maturities of 35-95 days and had a weighted-average interest rate of 3.94%. See Item 1 – Note 13 for additional information on securities lending activities. CSB issues brokered CDs as a source of funding. As of June 30, 2026, there were $283 million brokered CDs issued by CSB outstanding, maturing in July 2026 with a weighted-average interest rate of 3.90%. Cash Flow Activity The Company’s cash and cash equivalents, including amounts restricted, decreased $459 million from year-end 2025 to $69.2 billion at June 30, 2026, as net cash outflows for investing and financing activities were largely offset by net cash inflows from operating activities during the first six months of 2026. Net operating cash inflows were $11.6 billion, driven primarily by net income and the net impact of changes in brokerage client-related balances and receivables from and payables to brokers, dealers, and clearing organizations, reflecting growth in securities borrowed and loaned activity. Net investing cash outflows were $6.4 billion, due primarily to outflows of $9.1 billion from strong growth in bank loans, partially offset by net inflows of $3.9 billion from our AFS and HTM securities. Net financing outflows were $5.7 billion, primarily driven by a net decrease of $6.1 billion in bank deposits, outflows of $4.7 billion for common stock repurchases and dividends paid, and net paydowns of FHLB borrowings of $1.4 billion, partially offset by net proceeds of $6.9 billion from other short-term borrowings. Liquidity Coverage Ratio Schwab is subject to the full LCR rule, which requires the Company to hold high quality liquid assets (HQLA) in an amount equal to at least 100% of the Company’s projected net cash outflows over a prospective 30-calendar-day period of acute liquidity stress, calculated on each business day. See Part I – Item 1 – Business – Regulation in the 2025 Form 10-K for additional information. The Company was in compliance with the LCR rule at June 30, 2026, and the table below presents information about our average daily LCR: Average for the Three Months Ended June 30, 2026 March 31, 2026 Total eligible HQLA $ 51,927 $ 52,475 Net cash outflows 38,534 38,895 LCR 135 % 135 % To support growth in margin loan balances at our broker-dealer subsidiary while meeting our LCR requirements, the Company may utilize wholesale funding sources, such as issuing commercial paper, drawing on secured lines of credit, borrowing under repurchase agreements, or engaging in securities lending, in addition to capital markets issuances. In managing compliance with our LCR requirements, the broker-dealer subsidiary may also retain client cash balances rather than sweeping such balances to our banking subsidiaries. Net Stable Funding Ratio Schwab is subject to disclosure requirements under the NSFR rule, which requires the semi-annual public disclosure of its NSFR levels. The NSFR rule stipulates that the Company’s available stable funding (ASF) must be at least 100% of the Company’s required stable funding (RSF). ASF is calculated by assessing the stability of the Company’s funding sources and RSF is calculated by evaluating the characteristics of the Company’s assets, derivatives, and off-balance-sheet exposures. For the three months ended June 30, 2026 and March 31, 2026, Schwab was in compliance with the 100% minimum requirement of the rule. Long-Term Borrowings The Company’s long-term debt is primarily comprised of Senior Notes and totaled $22.7 billion and $22.2 billion at June 30, 2026 and December 31, 2025, respectively. - 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) The following table provides information about our Senior Notes outstanding at June 30, 2026: June 30, 2026 Par Outstanding Maturity Weighted-AverageInterest Rate (1) Moody’s Standard & Poor’s Fitch CSC Senior Notes $ 22,269 2026 - 2037 4.17% A2 A- A Ameritrade Holding LLC Senior Notes 81 2027 - 2029 3.13% A2 A- — (1) Weighted-average interest rates presented here exclude the impact of derivatives. See Item 1 – Note 12 for information on the Company’s hedging of Senior Notes. New Debt Issuances The long-term debt issuances below in 2026 were senior unsecured obligations issued by CSC. Additional details are as follows: Issuance Date Issuance Amount Maturity Date Interest Rate Interest Payable May 21, 2026 $ 1,000 05/21/2030 4.744 % (1) Semi-annually May 21, 2026 $ 1,250 05/21/2037 5.493 % (1) Semi-annually June 25, 2026 $ 1,000 07/27/2029 4.603 % (1) Semi-annually (1) Interest rates presented are those in effect at June 30, 2026. For additional information regarding future interest rates on fixed-to-floating rate Senior Notes, see Item 1 – Note 10. Equity Issuances and Redemptions CSC’s preferred stock issued and net proceeds for the first six months of 2026 are as follows: Date Issued and Sold Net Proceeds Series L April 22, 2026 $ 1,480 On June 1, 2026, the Company redeemed all of its Series I preferred stock and corresponding depositary shares. For further discussion see Item 1 – Note 15 for equity outstanding balances, issuances, and redemptions. Additional information regarding our sources and uses of liquidity and management of liquidity risk is included in Part II – Item 7 – Risk Management – Liquidity Risk in our 2025 Form 10-K. See also Item 1 – Condensed Consolidated Statements of Cash Flows, Item 1 – Note 9 for the Company’s bank deposits, Item 1 – Note 10 for the Company’s debt and borrowing facilities, Item 1 – Note 13 for the Company’s securities lending and collateralized financing activities, and Item 1 – Note 15 for the Company’s equity outstanding balances and activity. Schwab also enters into guarantees and other similar arrangements in the ordinary course of business. For information on these arrangements, see Item 1 – Notes 7, 8, 10, 11, and 13. Pursuant to the 2023 IDA agreement, certain brokerage accounts are required to be swept off-balance sheet to the TD Depository Institutions. See Item 1 – Note 11 for additional information. CAPITAL MANAGEMENT Schwab seeks to manage capital to a level and composition sufficient to support execution of our business strategy, inclusive of balance sheet growth, financial support to our subsidiaries, sustained access to the capital markets, and regulatory capital requirements. Schwab also seeks to return excess capital to stockholders. We may return excess capital through dividends, repurchases of common shares, preferred stock redemptions, and repurchases of our preferred stock represented by depositary shares. Schwab’s primary sources of capital are funds generated by the operations of subsidiaries and securities issuances by CSC in the capital markets. To ensure that Schwab has sufficient capital to absorb unanticipated losses, balance sheet growth, or declines in asset values, we have adopted a policy to remain well capitalized even in stressed scenarios. Regulatory Capital Requirements CSC and certain subsidiaries, including our banking and broker-dealer subsidiaries, are subject to various capital requirements set by regulatory agencies as discussed in further detail in Part II – Item 7 – Capital Management of the 2025 Form 10-K and in Item 1 – Note 18. As of June 30, 2026, CSC and our banking subsidiaries are considered well capitalized, and CS&Co is in compliance with its net capital requirements. - 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) As a supplemental measure of capital, the Company utilizes an adjusted Tier 1 Leverage Ratio, which is a non-GAAP financial measure that includes AOCI in the ratio. The primary component of AOCI for Schwab is unrealized gains and losses on our AFS investment securities portfolio and on securities transferred from AFS to the HTM category. The Company maintains a long-term operating objective for its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00% (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results). The following table details the capital ratios for CSC (consolidated) and CSB: June 30, 2026 December 31, 2025 CSC CSB CSC CSB Total stockholders’ equity $ 50,147 $ 18,096 $ 49,425 $ 18,658 Less: Preferred stock 6,213 — 6,763 — Common Equity Tier 1 Capital before regulatory adjustments $ 43,934 $ 18,096 $ 42,662 $ 18,658 Less: Goodwill, net of associated deferred tax liabilities $ 12,033 $ 13 $ 11,711 $ 13 Other intangible assets, net of associated deferred tax liabilities 5,833 — 5,811 — Deferred tax assets, net of valuation allowances and deferred tax liabilities 99 43 38 43 AOCI adjustment (1) (10,569) (9,045) (10,979) (9,524) Common Equity Tier 1 Capital $ 36,538 $ 27,085 $ 36,081 $ 28,126 Tier 1 Capital $ 42,751 $ 27,085 $ 42,844 $ 28,126 Total Capital 42,792 27,124 42,894 28,163 Risk-Weighted Assets 150,030 89,849 118,782 78,281 Average Assets with regulatory adjustments 489,718 254,224 462,473 252,828 Total Leverage Exposure 495,063 256,985 465,794 254,975 Common Equity Tier 1 Capital/Risk-Weighted Assets 24.4 % 30.1 % 30.4 % 35.9 % Tier 1 Capital/Risk-Weighted Assets 28.5 % 30.1 % 36.1 % 35.9 % Total Capital/Risk-Weighted Assets 28.5 % 30.2 % 36.1 % 36.0 % Tier 1 Leverage Ratio 8.7 % 10.7 % 9.3 % 11.1 % Supplementary Leverage Ratio 8.6 % 10.5 % 9.2 % 11.0 % (1) Changes in market interest rates can result in unrealized gains or losses on AFS securities, which are included in AOCI. As a Category III banking organization, CSC has elected to exclude most components of AOCI from regulatory capital. The Company’s consolidated Tier 1 Leverage Ratio was 8.7% at June 30, 2026, down from 9.3% at year-end 2025. This decrease reflects returns of excess capital and higher total Company assets, partially offset by growth from net income. CSB’s Tier 1 Leverage Ratio decreased from 11.1% at year-end 2025, ending the second quarter of 2026 at 10.7%, primarily as a result of dividends paid to CSC, partially offset by growth from net income. As of June 30, 2026, our adjusted Tier 1 Leverage Ratio (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results) was 6.8% for CSC (consolidated), decreasing from 7.1% as of year-end 2025 as a result of returns of excess capital and higher total Company assets, partially offset by growth from net income. CSB’s adjusted Tier 1 Leverage Ratio (see Non-GAAP Financial Measures) was 7.4%, down slightly from 7.6% as of year-end 2025 due to dividends paid to CSC, largely offset by growth from net income. - 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 January 29, 2026, the Board of Directors of the Company declared a five cent, or 19%, increase in the quarterly cash dividend to $.32 per common share. Cash dividends paid and per share amounts for the first six months of 2026 and 2025 are as follows: Six Months Ended June 30, 2026 2025 Cash Paid Per Share Amount Cash Paid Per Share Amount Common Stock $ 1,123 $ .64 $ 985 $ .54 Preferred Stock: Series D (1) 22 29.76 22 29.76 Series F (2) 12 2,500.00 12 2,500.00 Series G (3) — — 66 2,687.50 Series H (1) 45 2,000.00 45 2,000.00 Series I (4) 41 2,000.00 41 2,000.00 Series J (1) 13 22.26 13 22.26 Series K (1) 19 2,500.00 19 2,500.00 Series L (5) — — N/A N/A (1) Dividends are paid quarterly. (2) Dividends are paid semi-annually until December 1, 2027 and quarterly thereafter. (3) Series G was redeemed on June 2, 2025. Prior to redemption, dividends were paid quarterly. The final dividend was paid on June 2, 2025. (4) Series I was redeemed on June 1, 2026. Prior to redemption, dividends were paid quarterly. The final divided was paid on June 1, 2026. (5) Series L was issued on April 22, 2026. Dividends are paid quarterly. The first dividend payment will be on September 1, 2026. N/A Not applicable. Share Repurchases During the three and six months ended June 30, 2026, CSC repurchased 11.2 million and 35.5 million shares, respectively, of its common stock under its $20.0 billion share repurchase authorization for $1.0 billion and $3.4 billion, respectively. As of June 30, 2026, approximately $11.1 billion remained on the $20.0 billion authorization. On February 12, 2025, TD Group US Holdings LLC, an affiliate of TD Bank, completed a secondary public offering of the Company’s common shares through which TD Group US Holdings LLC sold 133.8 million shares of the Company’s common stock and 31.7 million shares of the Company’s nonvoting common stock, which automatically converted into common stock, for an aggregate amount of $13.1 billion. The Company did not receive any of the proceeds from the sale of shares. Concurrent with the completion of the secondary offering, and pursuant to a repurchase agreement dated February 9, 2025, the Company repurchased directly from TD Group US Holdings LLC its remaining 19.2 million shares of nonvoting common stock at a price of $77.982 per share for an aggregate repurchase amount of $1.5 billion, which settled on February 12, 2025. The shares of nonvoting common stock automatically converted into common stock upon repurchase and transferred to treasury stock, reducing the number of shares outstanding. These shares were purchased under CSC’s previous $15.0 billion share repurchase authorization. Through the completion of the secondary offering and the Company’s repurchase of nonvoting common stock, TD Bank disposed of all of its common shares of CSC and the Company has no remaining nonvoting common stock outstanding. CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025 under its previous $15.0 billion authorization. Common stock repurchases, net of issuances, are subject to a nondeductible 1% excise tax which is recognized as a direct and incremental cost associated with these transactions. The tax is recorded as part of the cost basis of the treasury stock repurchased, resulting in no impact to the condensed consolidated statements of income. See Item 1 – Note 15 for additional information. - 25 - 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) OTHER Foreign Exposure At June 30, 2026, Schwab had exposure to non-sovereign financial and non-financial institutions in foreign countries. At June 30, 2026, the fair value of these holdings totaled $8.5 billion, with the top three exposures being to issuers and counterparties domiciled in France at $5.2 billion, the United Kingdom at $1.6 billion, and Japan at $600 million. At December 31, 2025, the fair value of these holdings totaled $10.5 billion, with the top three exposures being to issuers and counterparties domiciled in France at $7.4 billion, the United Kingdom at $1.9 billion, and Japan at $600 million. In addition, Schwab had outstanding margin loans to foreign residents of $6.6 billion and $4.8 billion at June 30, 2026 and December 31, 2025, respectively. CRITICAL ACCOUNTING ESTIMATES Certain of our accounting policies that involve a higher degree of judgment and complexity are discussed in Part II – Item 7 – Critical Accounting Estimates in the 2025 Form 10-K. There have been no changes to critical accounting estimates during the first six months of 2026. NON-GAAP FINANCIAL MEASURES In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Management’s Discussion and Analysis of Financial Condition and Results of Operations contain references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab’s results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies. Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below. Non-GAAP Adjustment or Measure Definition Usefulness to Investors and Uses by Management Acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs Schwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company’s acquisitions, amortization of acquired intangible assets, restructuring costs, and, where applicable, the income tax effect of these expenses. Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company’s revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives. We exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab’s ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods. Costs related to acquisition and integration or restructuring fluctuate based on the timing of acquisitions, integration and restructuring activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company’s ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company’s underlying operating performance. Return on tangible common equity Return on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets — net, and related deferred tax liabilities. Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab’s balance sheet. Adjusted Tier 1 Leverage Ratio Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for CSB, adjusted to reflect the inclusion of AOCI in the ratio. Inclusion of the impacts of AOCI in the Company’s Tier 1 Leverage Ratio provides additional information regarding the Company’s current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company’s capital levels. - 26 - THE CHARLES SCHWAB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Millions, Except Ratios, or as Noted) The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC’s Board of Directors maintains discretion in evaluating performance against these criteria. Additionally, the Company uses adjusted Tier 1 Leverage Ratio in managing capital, including its use of the measure as its long-term operating objective. The following tables present reconciliations of GAAP measures to non-GAAP measures: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total expenses excluding interest (GAAP) $ 3,403 $ 3,048 $ 6,697 $ 6,192 Amortization of acquired intangible assets (142) (128) (274) (258) Acquisition and integration-related costs (1) (28) — (39) — Adjusted total expenses (non-GAAP) $ 3,233 $ 2,920 $ 6,384 $ 5,934 (1) Acquisition and integration-related costs for the three months ended June 30, 2026 primarily consist of compensation and benefits. Acquisition and integration-related costs for the six months ended June 30, 2026 consist of $26 million of compensation and benefits and $13 million of professional services. There were no acquisition and integration-related costs for the three and six months ended June 30, 2025. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Net income available to common stockholders (GAAP), Earnings per common share — diluted (GAAP) $ 2,681 $ 1.54 $ 1,977 $ 1.08 $ 5,078 $ 2.91 $ 3,773 $ 2.07 Amortization of acquired intangible assets 142 .08 128 .07 274 .16 258 .14 Acquisition and integration-related costs 28 .02 — — 39 .02 — — Income tax effects (1) (40) (.02) (32) (.01) (74) (.04) (63) (.04) Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP) $ 2,811 $ 1.62 $ 2,073 $ 1.14 $ 5,317 $ 3.05 $ 3,968 $ 2.17 (1) The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs on an after-tax basis. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Return on average common stockholders’ equity — annualized (GAAP) 25 % 19 % 23 % 18 % Average common stockholders’ equity $ 43,203 $ 41,504 $ 43,298 $ 40,936 Less: Average goodwill (12,294) (11,951) (12,121) (11,951) Less: Average acquired intangible assets — net (7,348) (7,551) (7,258) (7,615) Plus: Average deferred tax liabilities related to goodwill and acquired intangible assets — net 1,742 1,710 1,714 1,716 Average tangible common equity $ 25,303 $ 23,712 $ 25,633 $ 23,086 Adjusted net income available to common stockholders (1) $ 2,811 $ 2,073 $ 5,317 $ 3,968 Return on tangible common equity — annualized (non-GAAP) 44 % 35 % 41 % 34 % (1) See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP). - 27 - 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) June 30, 2026 December 31, 2025 June 30, 2025 CSC CSB CSC CSB CSC CSB Tier 1 Leverage Ratio (GAAP) 8.7 % 10.7 % 9.3 % 11.1 % 9.8 % 12.2 % Tier 1 Capital $ 42,751 $ 27,085 $ 42,844 $ 28,126 $ 44,267 $ 32,114 Plus: AOCI adjustment (10,225) (8,899) (11,017) (9,562) (12,589) (10,932) Adjusted Tier 1 Capital 32,526 18,186 31,827 18,564 31,678 21,182 Average assets with regulatory adjustments 489,718 254,224 462,473 252,828 451,314 264,107 Plus: AOCI adjustment (10,249) (9,022) (11,333) (9,875) (13,231) (11,623) Adjusted average assets with regulatory adjustments $ 479,469 $ 245,202 $ 451,140 $ 242,953 $ 438,083 $ 252,484 Adjusted Tier 1 Leverage Ratio (non-GAAP) 6.8 % 7.4 % 7.1 % 7.6 % 7.2 % 8.4 %