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Bank Loans and Related Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
Bank Loans and Related Allowance for Credit Losses | Bank Loans and Related Allowance for Credit Losses The composition of bank loans and delinquency analysis by portfolio segment and class of financing receivable is as follows:
September 30, 2025 |  | Current |  | 30-59 days past due |  | 60-89 days past due |  | >90 days past due and other nonaccrual loans (3) |  | Total past due and other nonaccrual loans |  | Total loans |  | Allowance for credit losses |  | Total bank loans – net
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
First Mortgages (1,2) |  | $ | 29,304 |  |  | $ | 18 |  |  | $ | 6 |  |  | $ | 33 |  |  | $ | 57 |  |  | $ | 29,361 |  |  | $ | 15 |  |  | $ | 29,346 |
HELOCs (1,2) |  | 417 |  |  | 1 |  |  | — |  |  | 3 |  |  | 4 |  |  | 421 |  |  | 1 |  |  | 420 |
Total residential real estate |  | 29,721 |  |  | 19 |  |  | 6 |  |  | 36 |  |  | 61 |  |  | 29,782 |  |  | 16 |  |  | 29,766 |
Pledged asset lines |  | 23,380 |  |  | 4 |  |  | 3 |  |  | 3 |  |  | 10 |  |  | 23,390 |  |  | — |  |  | 23,390 |
Other |  | 419 |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 420 |  |  | 6 |  |  | 414 |
Total bank loans |  | $ | 53,520 |  |  | $ | 23 |  |  | $ | 9 |  |  | $ | 40 |  |  | $ | 72 |  |  | $ | 53,592 |  |  | $ | 22 |  |  | $ | 53,570 |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
First Mortgages (1,2) |  | $ | 27,321 |  |  | $ | 37 |  |  | $ | 6 |  |  | $ | 25 |  |  | $ | 68 |  |  | $ | 27,389 |  |  | $ | 14 |  |  | $ | 27,375 |
HELOCs (1,2) |  | 421 |  |  | — |  |  | — |  |  | 3 |  |  | 3 |  |  | 424 |  |  | 1 |  |  | 423 |
Total residential real estate |  | 27,742 |  |  | 37 |  |  | 6 |  |  | 28 |  |  | 71 |  |  | 27,813 |  |  | 15 |  |  | 27,798 |
Pledged asset lines |  | 17,010 |  |  | 8 |  |  | — |  |  | 6 |  |  | 14 |  |  | 17,024 |  |  | — |  |  | 17,024 |
Other |  | 398 |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 399 |  |  | 6 |  |  | 393 |
Total bank loans |  | $ | 45,150 |  |  | $ | 45 |  |  | $ | 6 |  |  | $ | 35 |  |  | $ | 86 |  |  | $ | 45,236 |  |  | $ | 21 |  |  | $ | 45,215 |
(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $125 million and $112 million at September 30, 2025 and December 31, 2024, respectively. (2) At September 30, 2025 and December 31, 2024, 41% and 42%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole. (3) There were no loans accruing interest that were contractually 90 days or more past due at September 30, 2025 or December 31, 2024. At September 30, 2025, CSB had pledged the full balance of First Mortgages and HELOCs pursuant to a blanket lien status collateral arrangement to secure borrowing capacity on a secured credit facility with the FHLB (see Note 9). Changes in the allowance for credit losses on bank loans were as follows:
| First Mortgages |  | HELOCs |  | Total residential real estate | Pledged asset lines | Other |  | Total
Balance at June 30, 2024 | $ | 14 |  |  | $ | 1 |  |  | $ | 15 |  | $ | — |  | $ | 5 |  |  | $ | 20 |
Charge-offs | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Recoveries | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Provision for credit losses | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Balance at September 30, 2024 | $ | 14 |  |  | $ | 1 |  |  | $ | 15 |  | $ | — |  | $ | 5 |  |  | $ | 20 |
Balance at June 30, 2025 | $ | 15 |  |  | $ | 1 |  |  | $ | 16 |  | $ | — |  | $ | 6 |  |  | $ | 22 |
Charge-offs | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Recoveries | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Provision for credit losses | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Balance at September 30, 2025 | $ | 15 |  |  | $ | 1 |  |  | $ | 16 |  | $ | — |  | $ | 6 |  |  | $ | 22 |
Balance at December 31, 2023 | $ | 32 |  |  | $ | 2 |  |  | $ | 34 |  | $ | — |  | $ | 4 |  |  | $ | 38 |
Charge-offs | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Recoveries | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Provision for credit losses | (18) |  |  | (1) |  |  | (19) |  | — |  | 1 |  |  | (18) |
Balance at September 30, 2024 | $ | 14 |  |  | $ | 1 |  |  | $ | 15 |  | $ | — |  | $ | 5 |  |  | $ | 20 |
Balance at December 31, 2024 | $ | 14 |  |  | $ | 1 |  |  | $ | 15 |  | $ | — |  | $ | 6 |  |  | $ | 21 |
Charge-offs | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Recoveries | — |  |  | — |  |  | — |  | — |  | — |  |  | — |
Provision for credit losses | 1 |  |  | — |  |  | 1 |  | — |  | — |  |  | 1 |
Balance at September 30, 2025 | $ | 15 |  |  | $ | 1 |  |  | $ | 16 |  | $ | — |  | $ | 6 |  |  | $ | 22 |
Consistent with Schwab’s loan charge-off policy for PALs as disclosed in Item 8 – Note 2 of the 2024 Form 10-K, the Company charges off any unsecured balances no later than 90 days past due. As of September 30, 2025, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 Financial Instruments — Credit Losses. All PALs were fully collateralized by securities with fair values in excess of borrowings as of September 30, 2025 and December 31, 2024, and no allowance for credit losses for PALs as of those dates was required. The U.S. economy saw lower hiring, a modest inflation gain at the end of the third quarter of 2025, and continued to face a moderately restrictive monetary policy and geopolitical unrest amid a backdrop of elevated uncertainty relating to economic impacts of emerging trade policy. Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market and modest home price appreciation. Though higher mortgage rates are easing demand and reducing borrower affordability, we expect constrained housing supply to keep home prices relatively stable. Furthermore, credit quality metrics in the Company’s bank loans portfolio remain very strong. As a result of these factors, we held projected loss rates constant at September 30, 2025, as compared to December 31, 2024. Bank loan-related nonperforming assets consisted of nonaccrual loans of $40 million and $35 million at September 30, 2025 and December 31, 2024, respectively. Nonaccrual loans include nonaccrual troubled debt restructurings recorded prior to the adoption of ASU 2022-02, “Financial Instruments — Credit Losses: Troubled Debt Restructurings and Vintage Disclosures” on January 1, 2023. At both September 30, 2025 and December 31, 2024, loan modifications to borrowers experiencing financial difficulty were not material. Credit Quality In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following: •Year of origination; •Borrower Fair Isaac Corporation (FICO) scores at origination (Origination FICO); •Updated borrower FICO scores (Updated FICO); •Loan-to-value (LTV) ratios at origination (Origination LTV); and •Estimated Current LTV ratios (Estimated Current LTV). Borrowers’ FICO scores are provided by an independent third-party credit reporting service and are generally updated quarterly. The Origination LTV and Estimated Current LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is updated on a monthly basis by reference to a home price appreciation index. The credit quality indicators of the Company’s First Mortgages and HELOCs are detailed below:
| First Mortgages Amortized Cost Basis by Origination Year |  |  |  |
September 30, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | pre-2021 | Total First Mortgages | Revolving HELOCs amortized cost basis | HELOCs converted to term loans | Total HELOCs
Origination FICO |  |  |  |  |  |  |  |  |  |
<620 | $ | — |  | $ | — |  | $ | — |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 5 |  | $ | — |  | $ | — |  | $ | — |
620 – 679 | 19 |  | 23 |  | 4 |  | 24 |  | 28 |  | 22 |  | 120 |  | — |  | 1 |  | 1 |
680 – 739 | 363 |  | 306 |  | 230 |  | 680 |  | 1,032 |  | 513 |  | 3,124 |  | 50 |  | 25 |  | 75 |
≥740 | 3,716 |  | 2,777 |  | 1,667 |  | 4,631 |  | 9,274 |  | 4,047 |  | 26,112 |  | 251 |  | 94 |  | 345 |
Total | $ | 4,098 |  | $ | 3,106 |  | $ | 1,901 |  | $ | 5,338 |  | $ | 10,335 |  | $ | 4,583 |  | $ | 29,361 |  | $ | 301 |  | $ | 120 |  | $ | 421 |
Origination LTV |  |  |  |  |  |  |  |  |  |
≤70% | $ | 2,738 |  | $ | 2,130 |  | $ | 1,286 |  | $ | 3,960 |  | $ | 8,990 |  | $ | 3,753 |  | $ | 22,857 |  | $ | 284 |  | $ | 84 |  | $ | 368 |
>70% – ≤90% | 1,360 |  | 976 |  | 615 |  | 1,378 |  | 1,345 |  | 829 |  | 6,503 |  | 17 |  | 35 |  | 52 |
>90% – ≤100% | — |  | — |  | — |  | — |  | — |  | 1 |  | 1 |  | — |  | 1 |  | 1 |
Total | $ | 4,098 |  | $ | 3,106 |  | $ | 1,901 |  | $ | 5,338 |  | $ | 10,335 |  | $ | 4,583 |  | $ | 29,361 |  | $ | 301 |  | $ | 120 |  | $ | 421 |
Updated FICO |  |  |  |  |  |  |  |  |  |
<620 | $ | 3 |  | $ | 4 |  | $ | 5 |  | $ | 26 |  | $ | 28 |  | $ | 23 |  | $ | 89 |  | $ | 3 |  | $ | 4 |  | $ | 7 |
620 – 679 | 36 |  | 34 |  | 34 |  | 64 |  | 103 |  | 64 |  | 335 |  | 6 |  | 6 |  | 12 |
680 – 739 | 355 |  | 248 |  | 167 |  | 491 |  | 790 |  | 352 |  | 2,403 |  | 41 |  | 20 |  | 61 |
≥740 | 3,704 |  | 2,820 |  | 1,695 |  | 4,757 |  | 9,414 |  | 4,144 |  | 26,534 |  | 251 |  | 90 |  | 341 |
Total | $ | 4,098 |  | $ | 3,106 |  | $ | 1,901 |  | $ | 5,338 |  | $ | 10,335 |  | $ | 4,583 |  | $ | 29,361 |  | $ | 301 |  | $ | 120 |  | $ | 421 |
Estimated Current LTV (1) |  |  |  |  |  |  |  |  |
≤70% | $ | 2,567 |  | $ | 2,205 |  | $ | 1,552 |  | $ | 4,796 |  | $ | 10,225 |  | $ | 4,570 |  | $ | 25,915 |  | $ | 298 |  | $ | 120 |  | $ | 418 |
>70% – ≤90% | 1,527 |  | 901 |  | 345 |  | 534 |  | 109 |  | 13 |  | 3,429 |  | 3 |  | — |  | 3 |
>90% – ≤100% | 4 |  | — |  | 4 |  | 8 |  | 1 |  | — |  | 17 |  | — |  | — |  | — |
Total | $ | 4,098 |  | $ | 3,106 |  | $ | 1,901 |  | $ | 5,338 |  | $ | 10,335 |  | $ | 4,583 |  | $ | 29,361 |  | $ | 301 |  | $ | 120 |  | $ | 421 |
Gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Percent of Loans on Nonaccrual Status | 0.01 | % | 0.05 | % | 0.11 | % | 0.14 | % | 0.11 | % | 0.24 | % | 0.11 | % | 0.06 | % | 2.01 | % | 0.71 | %
(1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.
| First Mortgages Amortized Cost Basis by Origination Year |  |  |  |
December 31, 2024 | 2024 | 2023 | 2022 | 2021 | pre-2021 | Total First Mortgages | Revolving HELOCs amortized cost basis | HELOCs converted to term loans | Total HELOCs
Origination FICO |  |  |  |  |  |  |  |  |
<620 | $ | 1 |  | $ | — |  | $ | 2 |  | $ | 1 |  | $ | 2 |  | $ | 6 |  | $ | — |  | $ | — |  | $ | — |
620 – 679 | 24 |  | 4 |  | 26 |  | 29 |  | 28 |  | 111 |  | — |  | 1 |  | 1 |
680 – 739 | 361 |  | 249 |  | 724 |  | 1,091 |  | 576 |  | 3,001 |  | 47 |  | 30 |  | 77 |
≥740 | 3,203 |  | 1,895 |  | 4,902 |  | 9,796 |  | 4,475 |  | 24,271 |  | 241 |  | 105 |  | 346 |
Total | $ | 3,589 |  | $ | 2,148 |  | $ | 5,654 |  | $ | 10,917 |  | $ | 5,081 |  | $ | 27,389 |  | $ | 288 |  | $ | 136 |  | $ | 424 |
Origination LTV |  |  |  |  |  |  |  |  |
≤70% | $ | 2,471 |  | $ | 1,445 |  | $ | 4,197 |  | $ | 9,479 |  | $ | 4,159 |  | $ | 21,751 |  | $ | 267 |  | $ | 95 |  | $ | 362 |
>70% – ≤90% | 1,118 |  | 703 |  | 1,457 |  | 1,438 |  | 920 |  | 5,636 |  | 21 |  | 40 |  | 61 |
>90% – ≤100% | — |  | — |  | — |  | — |  | 2 |  | 2 |  | — |  | 1 |  | 1 |
Total | $ | 3,589 |  | $ | 2,148 |  | $ | 5,654 |  | $ | 10,917 |  | $ | 5,081 |  | $ | 27,389 |  | $ | 288 |  | $ | 136 |  | $ | 424 |
Updated FICO |  |  |  |  |  |  |  |  |
<620 | $ | — |  | $ | 3 |  | $ | 25 |  | $ | 15 |  | $ | 21 |  | $ | 64 |  | $ | 1 |  | $ | 5 |  | $ | 6 |
620 – 679 | 34 |  | 31 |  | 74 |  | 97 |  | 74 |  | 310 |  | 6 |  | 7 |  | 13 |
680 – 739 | 339 |  | 191 |  | 574 |  | 871 |  | 435 |  | 2,410 |  | 48 |  | 24 |  | 72 |
≥740 | 3,216 |  | 1,923 |  | 4,981 |  | 9,934 |  | 4,551 |  | 24,605 |  | 233 |  | 100 |  | 333 |
Total | $ | 3,589 |  | $ | 2,148 |  | $ | 5,654 |  | $ | 10,917 |  | $ | 5,081 |  | $ | 27,389 |  | $ | 288 |  | $ | 136 |  | $ | 424 |
Estimated Current LTV (1) |  |  |  |  |  |  |  |
≤70% | $ | 2,402 |  | $ | 1,660 |  | $ | 4,942 |  | $ | 10,747 |  | $ | 5,057 |  | $ | 24,808 |  | $ | 285 |  | $ | 136 |  | $ | 421 |
>70% – ≤90% | 1,187 |  | 487 |  | 693 |  | 166 |  | 20 |  | 2,553 |  | 3 |  | — |  | 3 |
>90% – ≤100% | — |  | 1 |  | 17 |  | 3 |  | 4 |  | 25 |  | — |  | — |  | — |
>100% | — |  | — |  | 2 |  | 1 |  | — |  | 3 |  | — |  | — |  | — |
Total | $ | 3,589 |  | $ | 2,148 |  | $ | 5,654 |  | $ | 10,917 |  | $ | 5,081 |  | $ | 27,389 |  | $ | 288 |  | $ | 136 |  | $ | 424 |
Gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Percent of Loans on Nonaccrual Status | 0.01 | % | 0.12 | % | 0.16 | % | 0.04 | % | 0.18 | % | 0.09 | % | 0.07 | % | 2.33 | % | 0.71 | %
(1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs. At September 30, 2025, $25.1 billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter. Approximately 24% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 71% of the balance of these interest-only loans are not scheduled to reset for three or more years. At September 30, 2025 and December 31, 2024, Schwab had $211 million and $171 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the condensed consolidated balance sheets. The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating-rate based on the prime rate plus a margin. The following table presents when current outstanding HELOCs will convert to amortizing loans:
September 30, 2025 | Balance
Converted to an amortizing loan by period end (1) | $ | 120 |
Within 1 year | 15 |
> 1 year – 3 years | 38 |
> 3 years – 5 years | 48 |
> 5 years | 200 |
Total | $ | 421 |
(1) Includes $3 million and $11 million of HELOCs converted to amortizing loans during the three and nine months ended September 30, 2025, respectively. At September 30, 2025, $328 million of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At September 30, 2025, the borrowers on approximately 64% of HELOC loan balances outstanding only paid the minimum amount due.

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