For the fiscal year ended December 31, 2017
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Commission file number 1-9700
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Delaware
(State or other jurisdiction
of incorporation or organization)
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94-3025021
(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock – $.01 par value per share
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New York Stock Exchange
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Depositary Shares, each representing a 1/40
th
ownership interest in a
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share of 6.00% Non-Cumulative Preferred Stock, Series C
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New York Stock Exchange
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Depositary Shares, each representing a 1/40
th
ownership interest in a
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share of 5.95% Non-Cumulative Preferred Stock, Series D
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New York Stock Exchange
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐ (Do not check if a smaller reporting company)
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Smaller reporting company ☐
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Emerging growth company ☐
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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103
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Item 13.
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103
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Item 14.
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103
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Item 15.
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104
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105
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110
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Item 1.
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Business
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•
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Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer with over
345
domestic branch offices in
46
states, as well as a branch in the Commonwealth of Puerto Rico. In addition, Schwab serves clients in England, Hong Kong, Singapore, and Australia through various subsidiaries;
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•
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Charles Schwab Bank (Schwab Bank), a federal savings bank; and
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•
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Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds
®
) and Schwab’s exchange-traded funds (Schwab ETFs™).
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•
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Scale and Size of the Business – As one of the largest investment services firms in the United States (U.S.), we are able to spread operating costs, amortize new investments over a large base of clients, and have the resources to evolve capabilities to meet client needs.
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•
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Operating Efficiency – Coupled with scale, our operating efficiency and sharing of infrastructure across different businesses creates a cost advantage that enables us to competitively price products and services while profitably serving many different client channels.
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•
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Operating Structure – Adding bank and asset management capabilities to the broker-dealers helps serve a wider array of client needs, thereby deepening client relationships, enhancing the stability of client assets, and enabling diversified revenue streams.
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•
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Brand and Corporate Reputation – In an industry dependent on trust, Schwab’s reputation and brand across multiple constituents enables us to attract clients and employees while credibly introducing new products to the market.
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•
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Service Culture – Delivering a great client experience earns the trust and loyalty of clients and increases the likelihood that those clients will refer others.
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•
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Willingness to Disrupt – Management’s willingness to challenge the status quo to benefit clients fosters innovation and continuous improvement, which helps to attract more clients and assets.
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•
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Brokerage – an array of full-feature brokerage accounts with margin lending, options trading, and cash management capabilities including third-party certificates of deposit;
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•
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Mutual funds – third-party mutual funds through the Mutual Fund Marketplace
®
, including no-transaction fee mutual funds through the Mutual Fund OneSource
®
service, which also includes proprietary mutual funds, plus mutual fund trading and clearing services to broker-dealers;
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•
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Exchange-traded funds – an extensive offering of ETFs, including many proprietary and third-party ETFs available without a commission through Schwab ETF OneSource™;
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•
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Advice solutions – managed portfolios of both proprietary and third-party mutual funds and ETFs, separately managed accounts, customized personal advice for tailored portfolios, specialized planning, and full-time portfolio management;
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•
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Banking – checking and savings accounts, first lien residential real estate mortgage loans (First Mortgages), home equity lines of credit (HELOCs), and pledged asset lines (PALs); and
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•
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Trust – trust custody services, personal trust reporting services, and administrative trustee services.
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Item 1A.
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Risk Factors
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•
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Large positions in financial instruments collateralized by assets with similar economic characteristics or in securities of a single issuer or industry;
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•
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Mortgage loans and HELOCs to banking clients which are secured by properties in the same geographic region; and
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•
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Client margins, options or futures, pledged assets, and securities lending activities collateralized by or linked to securities of a single issuer, index, or industry.
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•
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Our exposure to changes in interest rates;
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•
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Speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, expense discipline, or strategic transactions;
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•
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The announcement of new products, services, acquisitions, or dispositions by us or our competitors; and
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•
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Increases or decreases in revenue or earnings, changes in earnings estimates by the investment community, and variations between estimated financial results and actual financial results.
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December 31, 2017
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Square Footage
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(amounts in thousands)
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Leased
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Owned
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Location
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Corporate headquarters:
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San Francisco, CA
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569
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—
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Service and other office space:
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Phoenix, AZ
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28
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720
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Denver, CO
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—
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731
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Austin, TX
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219
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191
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Dallas, TX
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188
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—
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Indianapolis, IN
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—
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161
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Orlando, FL
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148
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—
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Richfield, OH
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—
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117
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El Paso, TX
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—
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105
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Chicago, IL
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104
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—
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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December 31,
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2012
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2013
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2014
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2015
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2016
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2017
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||||||
The Charles Schwab Corporation
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$
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100
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$
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183
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$
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215
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$
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236
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$
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286
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$
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375
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Standard & Poor’s 500 Index
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$
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100
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$
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132
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$
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151
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$
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153
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$
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171
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$
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208
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Dow Jones U.S. Investment Services Index
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$
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100
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$
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162
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$
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185
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$
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184
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$
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233
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$
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290
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Month
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Total Number of Shares Purchased
(in thousands) |
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Average
Price Paid per Share |
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October:
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Employee transactions
(1)
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4
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$
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44.12
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November:
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Employee transactions
(1)
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779
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$
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44.70
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December:
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Employee transactions
(1)
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2
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$
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48.97
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Total:
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Employee transactions
(1)
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785
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$
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44.71
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Item 6.
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Selected Financial Data
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Selected Financial and Operating Data
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(In Millions, Except Per Share Amounts, Ratios, or as Noted)
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Growth Rates
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Compounded
4-Year
(1)
2013-2017
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Annual
1-Year 2016-2017 |
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2017
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2016
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2015
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2014
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2013
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Results of Operations
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Net revenues
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12%
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15%
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$
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8,618
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$
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7,478
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$
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6,380
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$
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6,058
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$
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5,435
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Expenses excluding interest
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7%
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11%
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$
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4,968
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$
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4,485
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$
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4,101
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$
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3,943
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$
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3,730
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Net income
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22%
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25%
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$
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2,354
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$
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1,889
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$
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1,447
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$
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1,321
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$
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1,071
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Net income available to common stockholders
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21%
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25%
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$
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2,180
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|
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$
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1,746
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$
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1,364
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$
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1,261
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$
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1,010
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Earnings per common share:
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||||||||||
Basic
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20%
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23%
|
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$
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1.63
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|
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$
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1.32
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$
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1.04
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$
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.96
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$
|
.78
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Diluted
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20%
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23%
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$
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1.61
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$
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1.31
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$
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1.03
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$
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.95
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$
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.78
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Dividends declared per common share
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$
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.32
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$
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.27
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$
|
.24
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$
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.24
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$
|
.24
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Weighted average common shares outstanding:
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||||||||||
Basic
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1%
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1%
|
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1,339
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1,324
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|
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1,315
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|
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1,303
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|
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1,285
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|||||
Diluted
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1%
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1%
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1,353
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|
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1,334
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|
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1,327
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1,315
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1,293
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|||||
Net interest revenue as a percentage of net revenues
|
|
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50
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%
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44
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%
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40
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%
|
|
38
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%
|
|
36
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%
|
|||||
Asset management and administration fees as a
percentage of net revenues |
|
|
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39
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%
|
|
41
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%
|
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41
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%
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|
42
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%
|
|
43
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%
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|||||
Trading revenue as a percentage of net revenues
|
|
|
|
|
8
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%
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11
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%
|
|
14
|
%
|
|
15
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%
|
|
17
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%
|
|||||
Effective income tax rate
|
|
|
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35.5
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%
|
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36.9
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%
|
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36.5
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%
|
|
37.5
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%
|
|
37.2
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%
|
|||||
Performance Measures
|
|
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|
||||||||||
Net revenue growth
|
|
|
|
|
15
|
%
|
|
17
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%
|
|
5
|
%
|
|
11
|
%
|
|
11
|
%
|
|||||
Pre-tax profit margin
|
|
|
|
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42.4
|
%
|
|
40.0
|
%
|
|
35.7
|
%
|
|
34.9
|
%
|
|
31.4
|
%
|
|||||
Return on average common stockholders’ equity
|
|
|
|
|
15
|
%
|
|
14
|
%
|
|
12
|
%
|
|
12
|
%
|
|
11
|
%
|
|||||
Financial Condition
(at year end)
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||||||
Total assets
|
14%
|
|
9%
|
|
$
|
243,274
|
|
|
$
|
223,383
|
|
|
$
|
183,705
|
|
|
$
|
154,635
|
|
|
$
|
143,633
|
|
Short-term borrowings
|
N/M
|
|
N/M
|
|
$
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Long-term debt
|
26%
|
|
65%
|
|
$
|
4,753
|
|
|
$
|
2,876
|
|
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$
|
2,877
|
|
|
$
|
1,892
|
|
|
$
|
1,894
|
|
Preferred stock
|
34%
|
|
—
|
|
$
|
2,793
|
|
|
$
|
2,783
|
|
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$
|
1,459
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|
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$
|
872
|
|
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$
|
869
|
|
Total stockholders’ equity
|
16%
|
|
13%
|
|
$
|
18,525
|
|
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$
|
16,421
|
|
|
$
|
13,402
|
|
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$
|
11,803
|
|
|
$
|
10,381
|
|
Assets to stockholders’ equity ratio
|
|
|
|
|
13
|
|
|
14
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|
|
14
|
|
|
13
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|
|
14
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|||||
Debt to total capital ratio
(2)
|
|
|
|
|
52
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%
|
|
15
|
%
|
|
18
|
%
|
|
14
|
%
|
|
15
|
%
|
|||||
Employee Information
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Full-time equivalent employees (in thousands,
at year end) |
6%
|
|
9%
|
|
17.6
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16.2
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15.3
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14.6
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13.8
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Item 7.
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Management’s Discussion and Analysis
of Financial Condition and Results of Operations
|
•
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Schwab seeking to maximize its market valuation and stockholder returns over time; the belief that developing trusted relationships will translate into more client assets which drives revenue and, along with expense discipline, generates earnings growth and builds stockholder value; and Schwab’s ability to pursue its business strategy and maintain its market leadership position; (see Business Strategy and Competitive Environment in Part I, Item 1);
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•
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The impact of legal proceedings and regulatory matters (see Legal Proceedings in Part I, Item 3 and Item 8 – Note 13);
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•
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The adjustment of rates paid on client-related liabilities; the stability, rate sensitivity, and duration of client-related liabilities; the opportunity to migrate non-rate sensitive cash in sweep money market funds to banking subsidiaries; increasing the duration of interest-earning assets; and Schwab’s positioning to benefit from an increase in interest rates and limit its exposure to falling rates; (see Net Interest Revenue in Part II, Item 7);
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•
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The estimated net reduction in Schwab’s effective income tax rate for 2018; (see Taxes on Income in Part II, Item 7);
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•
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Sources of liquidity, capital, and level of dividends (see Liquidity Risk in Part II, Item 7);
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•
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Capital ratios (see Regulatory Capital Requirements in Part II, Item 7);
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•
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The impact of changes in management’s estimates on Schwab’s results of operations (see Critical Accounting Estimates in Part II, Item 7);
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•
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The expected impact of new accounting standards not yet adopted (see Item 8 – Note 2); and
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•
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The impact of changes in the likelihood of indemnification and guarantee payment obligations on Schwab’s results of operations (see Item 8 – Note 13).
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•
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General market conditions, including the level of interest rates, equity valuations and trading activity;
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•
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Our ability to attract and retain clients, develop trusted relationships, and grow client assets;
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•
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Client use of our investment advisory services and other products and services;
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•
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The level of client assets, including cash balances;
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•
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Competitive pressure on pricing, including deposit rates;
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•
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Client sensitivity to interest rates;
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•
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Regulatory guidance;
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•
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Timing, amount, and impact of the migration of certain balances from sweep money market funds into Schwab Bank;
|
•
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Changes to tax deductions;
|
•
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Capital and liquidity needs and management;
|
•
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Our ability to manage expenses;
|
•
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The effect of adverse developments in litigation or regulatory matters and the extent of any related charges;
|
•
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The availability and terms of external financing;
|
•
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Potential breaches of contractual terms for which we have indemnification and guarantee obligations; and
|
•
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Our ability to develop and launch new products, services and capabilities in a timely and successful manner.
|
|
Growth Rate
1-Year 2016-2017 |
|
2017
|
|
2016
|
|
2015
|
||||||
Client Metrics:
|
|
|
|
|
|
|
|
||||||
Net new client assets (in billions)
|
86%
|
|
$
|
233.1
|
|
|
$
|
125.5
|
|
|
$
|
139.4
|
|
Core net new client assets (in billions)
(1)
|
58%
|
|
$
|
198.6
|
|
|
$
|
125.5
|
|
|
$
|
134.7
|
|
Client assets (in billions, at year end)
|
21%
|
|
$
|
3,361.8
|
|
|
$
|
2,779.5
|
|
|
$
|
2,513.8
|
|
Average client assets (in billions)
|
17%
|
|
$
|
3,060.2
|
|
|
$
|
2,614.7
|
|
|
$
|
2,531.8
|
|
New brokerage accounts (in thousands)
|
32%
|
|
1,441
|
|
|
1,093
|
|
|
1,070
|
|
|||
Active brokerage accounts (in thousands, at year end)
|
6%
|
|
10,755
|
|
|
10,155
|
|
|
9,769
|
|
|||
Assets receiving ongoing advisory services (in billions, at year end)
|
21%
|
|
$
|
1,699.8
|
|
|
$
|
1,401.4
|
|
|
$
|
1,253.7
|
|
Client cash as a percentage of client assets (at year end)
|
|
|
10.8
|
%
|
|
13.0
|
%
|
|
13.0
|
%
|
|||
Company Financial Metrics:
|
|
|
|
|
|
|
|
||||||
Total net revenues
|
15%
|
|
$
|
8,618
|
|
|
$
|
7,478
|
|
|
$
|
6,380
|
|
Total expenses excluding interest
|
11%
|
|
4,968
|
|
|
4,485
|
|
|
4,101
|
|
|||
Income before taxes on income
|
22%
|
|
3,650
|
|
|
2,993
|
|
|
2,279
|
|
|||
Taxes on income
|
17%
|
|
1,296
|
|
|
1,104
|
|
|
832
|
|
|||
Net income
|
25%
|
|
$
|
2,354
|
|
|
$
|
1,889
|
|
|
$
|
1,447
|
|
Preferred stock dividends and other
|
22%
|
|
174
|
|
|
143
|
|
|
83
|
|
|||
Net income available to common stockholders
|
25%
|
|
$
|
2,180
|
|
|
$
|
1,746
|
|
|
$
|
1,364
|
|
Earnings per common share
—
diluted
|
23%
|
|
$
|
1.61
|
|
|
$
|
1.31
|
|
|
$
|
1.03
|
|
Net revenue growth from prior year
|
|
|
15
|
%
|
|
17
|
%
|
|
5
|
%
|
|||
Pre-tax profit margin
|
|
|
42.4
|
%
|
|
40.0
|
%
|
|
35.7
|
%
|
|||
Return on average common stockholders’ equity
|
|
|
15
|
%
|
|
14
|
%
|
|
12
|
%
|
|||
Expenses excluding interest as a percentage of average client assets
|
|
|
0.16
|
%
|
|
0.17
|
%
|
|
0.16
|
%
|
|||
Consolidated Tier 1 Leverage Ratio (at year end)
|
|
|
7.6
|
%
|
|
7.2
|
%
|
|
7.1
|
%
|
Year Ended December 31,
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||
|
Growth Rate
2016-2017 |
|
Amount
|
% of
Total Net Revenues |
|
Amount
|
% of
Total Net Revenues |
|
Amount
|
% of
Total Net Revenues |
||||||||||
Net interest revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest revenue
|
32
|
%
|
|
$
|
4,624
|
|
54
|
%
|
|
$
|
3,493
|
|
46
|
%
|
|
$
|
2,657
|
|
42
|
%
|
Interest expense
|
100
|
%
|
|
(342
|
)
|
(4
|
)%
|
|
(171
|
)
|
(2
|
)%
|
|
(132
|
)
|
(2
|
)%
|
|||
Net interest revenue
|
29
|
%
|
|
4,282
|
|
50
|
%
|
|
3,322
|
|
44
|
%
|
|
2,525
|
|
40
|
%
|
|||
Asset management and administration fees
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mutual fund and ETF service fees
|
10
|
%
|
|
$
|
2,045
|
|
24
|
%
|
|
1,853
|
|
25
|
%
|
|
1,479
|
|
23
|
%
|
||
Advice solutions
|
14
|
%
|
|
1,043
|
|
12
|
%
|
|
915
|
|
12
|
%
|
|
898
|
|
14
|
%
|
|||
Other
|
6
|
%
|
|
304
|
|
3
|
%
|
|
287
|
|
4
|
%
|
|
273
|
|
4
|
%
|
|||
Asset management and administration fees
|
11
|
%
|
|
3,392
|
|
39
|
%
|
|
3,055
|
|
41
|
%
|
|
2,650
|
|
41
|
%
|
|||
Trading revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
(23
|
)%
|
|
600
|
|
7
|
%
|
|
779
|
|
10
|
%
|
|
822
|
|
13
|
%
|
|||
Principal transactions
|
17
|
%
|
|
54
|
|
1
|
%
|
|
46
|
|
1
|
%
|
|
44
|
|
1
|
%
|
|||
Trading revenue
|
(21
|
)%
|
|
654
|
|
8
|
%
|
|
825
|
|
11
|
%
|
|
866
|
|
14
|
%
|
|||
Other
|
7
|
%
|
|
290
|
|
3
|
%
|
|
271
|
|
4
|
%
|
|
328
|
|
5
|
%
|
|||
Provision for loan losses
|
(100
|
)%
|
|
—
|
|
—
|
|
|
5
|
|
—
|
|
|
11
|
|
—
|
|
|||
Total net revenues
|
15
|
%
|
|
$
|
8,618
|
|
100
|
%
|
|
$
|
7,478
|
|
100
|
%
|
|
$
|
6,380
|
|
100
|
%
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
|
Average
Balance |
|
Interest
Revenue/ Expense |
|
Average
Yield/ Rate |
|
Average
Balance |
|
Interest Revenue/
Expense |
|
Average
Yield/ Rate |
|
Average
Balance |
|
Interest Revenue/
Expense |
|
Average
Yield/ Rate |
|||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents
|
$
|
9,931
|
|
|
$
|
109
|
|
|
1.10
|
%
|
|
$
|
11,143
|
|
|
$
|
57
|
|
|
0.51
|
%
|
|
$
|
9,358
|
|
|
$
|
24
|
|
|
0.26
|
%
|
Cash and investments segregated
|
18,525
|
|
|
166
|
|
|
0.90
|
%
|
|
20,104
|
|
|
93
|
|
|
0.46
|
%
|
|
18,606
|
|
|
31
|
|
|
0.17
|
%
|
||||||
Broker-related receivables
(1)
|
430
|
|
|
3
|
|
|
0.70
|
%
|
|
558
|
|
|
1
|
|
|
0.22
|
%
|
|
274
|
|
|
—
|
|
|
0.07
|
%
|
||||||
Receivables from brokerage clients
|
16,269
|
|
|
575
|
|
|
3.53
|
%
|
|
15,001
|
|
|
497
|
|
|
3.31
|
%
|
|
15,212
|
|
|
502
|
|
|
3.30
|
%
|
||||||
Available for sale securities
(2)
|
53,040
|
|
|
815
|
|
|
1.54
|
%
|
|
72,586
|
|
|
883
|
|
|
1.22
|
%
|
|
62,249
|
|
|
629
|
|
|
1.01
|
%
|
||||||
Held to maturity securities
|
103,599
|
|
|
2,354
|
|
|
2.27
|
%
|
|
57,451
|
|
|
1,402
|
|
|
2.44
|
%
|
|
38,280
|
|
|
957
|
|
|
2.50
|
%
|
||||||
Bank loans
|
15,919
|
|
|
472
|
|
|
2.97
|
%
|
|
14,715
|
|
|
400
|
|
|
2.72
|
%
|
|
13,973
|
|
|
369
|
|
|
2.64
|
%
|
||||||
Total interest-earning assets
|
217,713
|
|
|
4,494
|
|
|
2.06
|
%
|
|
191,558
|
|
|
3,333
|
|
|
1.74
|
%
|
|
157,952
|
|
|
2,512
|
|
|
1.59
|
%
|
||||||
Other interest revenue
|
|
|
130
|
|
|
|
|
|
|
160
|
|
|
|
|
|
|
145
|
|
|
|
||||||||||||
Total interest-earning assets
|
$
|
217,713
|
|
|
$
|
4,624
|
|
|
2.12
|
%
|
|
$
|
191,558
|
|
|
$
|
3,493
|
|
|
1.82
|
%
|
|
$
|
157,952
|
|
|
$
|
2,657
|
|
|
1.68
|
%
|
Funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Bank deposits
|
$
|
163,998
|
|
|
$
|
148
|
|
|
0.09
|
%
|
|
$
|
141,432
|
|
|
$
|
37
|
|
|
0.03
|
%
|
|
$
|
113,464
|
|
|
$
|
29
|
|
|
0.03
|
%
|
Payables to brokerage clients
|
25,403
|
|
|
16
|
|
|
0.06
|
%
|
|
26,311
|
|
|
3
|
|
|
0.01
|
%
|
|
25,651
|
|
|
2
|
|
|
0.01
|
%
|
||||||
Short-term borrowings
(1)
|
3,503
|
|
|
41
|
|
|
1.17
|
%
|
|
1,864
|
|
|
9
|
|
|
0.48
|
%
|
|
21
|
|
|
—
|
|
|
0.27
|
%
|
||||||
Long-term debt
|
3,431
|
|
|
119
|
|
|
3.47
|
%
|
|
2,876
|
|
|
104
|
|
|
3.62
|
%
|
|
2,717
|
|
|
92
|
|
|
3.39
|
%
|
||||||
Total interest-bearing liabilities
|
196,335
|
|
|
324
|
|
|
0.17
|
%
|
|
172,483
|
|
|
153
|
|
|
0.09
|
%
|
|
141,853
|
|
|
123
|
|
|
0.09
|
%
|
||||||
Non-interest-bearing funding sources
|
21,378
|
|
|
|
|
|
|
19,075
|
|
|
|
|
|
|
16,099
|
|
|
|
|
|
||||||||||||
Other interest expense
|
|
|
18
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
9
|
|
|
|
||||||||||||
Total funding sources
|
$
|
217,713
|
|
|
$
|
342
|
|
|
0.15
|
%
|
|
$
|
191,558
|
|
|
$
|
171
|
|
|
0.09
|
%
|
|
$
|
157,952
|
|
|
$
|
132
|
|
|
0.08
|
%
|
Net interest revenue
|
|
|
$
|
4,282
|
|
|
1.97
|
%
|
|
|
|
$
|
3,322
|
|
|
1.73
|
%
|
|
|
|
$
|
2,525
|
|
|
1.60
|
%
|
•
|
Gathering additional assets from new and current clients;
|
•
|
Transferring uninvested cash balances in certain client brokerage accounts to the bank sweep feature; and
|
•
|
Establishing the bank sweep feature as the default investment option for uninvested cash balances within all new Investor and Advisor Services brokerage accounts during 2016.
|
|
|
Schwab Money
|
|
Schwab Equity and
|
|
Mutual Fund OneSource
®
|
||||||||||||||||||||||||||||||
|
|
Market Funds
|
|
Bond Funds and ETFs
|
|
and Other NTF
(1)
Funds
|
||||||||||||||||||||||||||||||
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Balance at beginning of period
|
|
$
|
163,495
|
|
|
$
|
166,148
|
|
|
$
|
167,909
|
|
|
$
|
125,813
|
|
|
$
|
102,112
|
|
|
$
|
88,450
|
|
|
$
|
198,924
|
|
|
$
|
207,654
|
|
|
$
|
234,381
|
|
Net inflows (outflows)
|
|
(486
|
)
|
|
(2,765
|
)
|
|
(1,947
|
)
|
|
30,771
|
|
|
13,858
|
|
|
15,542
|
|
|
(27,485
|
)
|
|
(22,469
|
)
|
|
(23,014
|
)
|
|||||||||
Net market gains (losses) and other
(2)
|
|
641
|
|
|
112
|
|
|
186
|
|
|
25,024
|
|
|
9,843
|
|
|
(1,880
|
)
|
|
53,763
|
|
|
13,739
|
|
|
(3,713
|
)
|
|||||||||
Balance at end of period
|
|
$
|
163,650
|
|
|
$
|
163,495
|
|
|
$
|
166,148
|
|
|
$
|
181,608
|
|
|
$
|
125,813
|
|
|
$
|
102,112
|
|
|
$
|
225,202
|
|
|
$
|
198,924
|
|
|
$
|
207,654
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
|
Average
Client Assets |
|
Revenue
|
|
Average
Fee |
|
Average
Client Assets |
|
Revenue
|
|
Average
Fee |
|
Average
Client Assets |
|
Revenue
|
|
Average
Fee |
|||||||||||||||
Schwab money market funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
before fee waivers
|
$
|
160,735
|
|
|
$
|
875
|
|
|
0.54
|
%
|
|
$
|
164,120
|
|
|
$
|
962
|
|
|
0.59
|
%
|
|
$
|
161,381
|
|
|
$
|
947
|
|
|
0.59
|
%
|
Fee waivers
|
|
|
(10
|
)
|
|
|
|
|
|
(224
|
)
|
|
|
|
|
|
(672
|
)
|
|
|
||||||||||||
Schwab money market funds
|
160,735
|
|
|
865
|
|
|
0.54
|
%
|
|
164,120
|
|
|
738
|
|
|
0.45
|
%
|
|
161,381
|
|
|
275
|
|
|
0.17
|
%
|
||||||
Schwab equity and bond funds and ETFs
|
158,625
|
|
|
223
|
|
|
0.14
|
%
|
|
115,849
|
|
|
217
|
|
|
0.19
|
%
|
|
102,486
|
|
|
217
|
|
|
0.21
|
%
|
||||||
Mutual Fund OneSource
®
and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
NTF funds
|
215,333
|
|
|
706
|
|
|
0.33
|
%
|
|
199,389
|
|
|
676
|
|
|
0.34
|
%
|
|
225,347
|
|
|
764
|
|
|
0.34
|
%
|
||||||
Other third-party mutual funds and ETFs
(1)
|
286,111
|
|
|
251
|
|
|
0.09
|
%
|
|
254,584
|
|
|
222
|
|
|
0.09
|
%
|
|
251,491
|
|
|
223
|
|
|
0.09
|
%
|
||||||
Total mutual funds and ETFs
(2)
|
$
|
820,804
|
|
|
2,045
|
|
|
0.25
|
%
|
|
$
|
733,942
|
|
|
1,853
|
|
|
0.25
|
%
|
|
$
|
740,705
|
|
|
1,479
|
|
|
0.20
|
%
|
|||
Advice solutions
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fee-based
|
$
|
203,794
|
|
|
1,043
|
|
|
0.51
|
%
|
|
$
|
177,409
|
|
|
915
|
|
|
0.52
|
%
|
|
$
|
172,302
|
|
|
898
|
|
|
0.52
|
%
|
|||
Non-fee-based
|
48,936
|
|
|
—
|
|
|
—
|
|
|
35,262
|
|
|
—
|
|
|
—
|
|
|
29,118
|
|
|
—
|
|
|
—
|
|
||||||
Total advice solutions
|
$
|
252,730
|
|
|
1,043
|
|
|
0.41
|
%
|
|
$
|
212,671
|
|
|
915
|
|
|
0.43
|
%
|
|
$
|
201,420
|
|
|
898
|
|
|
0.45
|
%
|
|||
Other balance-based fees
(3)
|
417,659
|
|
|
258
|
|
|
0.06
|
%
|
|
339,071
|
|
|
235
|
|
|
0.07
|
%
|
|
324,701
|
|
|
226
|
|
|
0.07
|
%
|
||||||
Other
(4)
|
|
|
46
|
|
|
|
|
|
|
52
|
|
|
|
|
|
|
47
|
|
|
|
||||||||||||
Total asset management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
and administration fees
|
|
|
$
|
3,392
|
|
|
|
|
|
|
$
|
3,055
|
|
|
|
|
|
|
$
|
2,650
|
|
|
|
Year Ended December 31,
|
Growth Rate
2016-2017 |
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
DARTs (in thousands)
|
10
|
%
|
|
321.3
|
|
|
291.6
|
|
|
292.0
|
|
|||
Clients’ daily average trades (in thousands)
|
8
|
%
|
|
608.8
|
|
|
561.8
|
|
|
536.9
|
|
|||
Number of trading days
|
(1
|
)%
|
|
250.0
|
|
|
251.5
|
|
|
251.0
|
|
|||
Daily average revenue per revenue trade
|
(27
|
)%
|
|
$
|
8.20
|
|
|
$
|
11.23
|
|
|
$
|
11.83
|
|
Trading revenue
|
(21
|
)%
|
|
$
|
654
|
|
|
$
|
825
|
|
|
$
|
866
|
|
|
Growth Rate 2016-2017
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Compensation and benefits
|
|
|
|
|
|
|
|
|||||||
Salaries and wages
|
9
|
%
|
|
$
|
1,496
|
|
|
$
|
1,368
|
|
|
$
|
1,258
|
|
Incentive compensation
|
16
|
%
|
|
797
|
|
|
689
|
|
|
618
|
|
|||
Employee benefits and other
|
9
|
%
|
|
444
|
|
|
409
|
|
|
365
|
|
|||
Total compensation and benefits
|
11
|
%
|
|
$
|
2,737
|
|
|
$
|
2,466
|
|
|
$
|
2,241
|
|
Professional services
|
15
|
%
|
|
580
|
|
|
506
|
|
|
459
|
|
|||
Occupancy and equipment
|
10
|
%
|
|
436
|
|
|
398
|
|
|
353
|
|
|||
Advertising and market development
|
1
|
%
|
|
268
|
|
|
265
|
|
|
249
|
|
|||
Communications
|
(3
|
)%
|
|
231
|
|
|
237
|
|
|
233
|
|
|||
Depreciation and amortization
|
15
|
%
|
|
269
|
|
|
234
|
|
|
224
|
|
|||
Regulatory fees and assessments
|
24
|
%
|
|
179
|
|
|
144
|
|
|
107
|
|
|||
Other
|
14
|
%
|
|
268
|
|
|
235
|
|
|
235
|
|
|||
Total expenses excluding interest
|
11
|
%
|
|
$
|
4,968
|
|
|
$
|
4,485
|
|
|
$
|
4,101
|
|
Expenses as a percentage of total net revenues:
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits
|
|
|
32
|
%
|
|
33
|
%
|
|
35
|
%
|
||||
Advertising and market development
|
|
|
3
|
%
|
|
4
|
%
|
|
4
|
%
|
||||
Full-time equivalent employees (in thousands):
|
|
|
|
|
|
|
|
|||||||
At year end
|
9
|
%
|
|
17.6
|
|
|
16.2
|
|
|
15.3
|
|
|||
Average
|
6
|
%
|
|
16.9
|
|
|
15.9
|
|
|
15.1
|
|
|
|
Investor Services
|
|
Advisor Services
|
|
Total
|
|||||||||||||||||||||||||||||||||||||||
|
|
Growth Rate
2016-2017 |
|
2017
|
|
2016
|
|
2015
|
|
Growth Rate
2016-2017 |
|
2017
|
|
2016
|
|
2015
|
|
Growth Rate
2016-2017 |
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net interest revenue
|
|
25
|
%
|
|
$
|
3,231
|
|
|
$
|
2,591
|
|
|
$
|
2,133
|
|
|
44
|
%
|
|
$
|
1,051
|
|
|
$
|
731
|
|
|
$
|
392
|
|
|
29
|
%
|
|
$
|
4,282
|
|
|
$
|
3,322
|
|
|
$
|
2,525
|
|
Asset management and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
administration fees
|
|
12
|
%
|
|
2,344
|
|
|
2,093
|
|
|
1,837
|
|
|
9
|
%
|
|
1,048
|
|
|
962
|
|
|
813
|
|
|
11
|
%
|
|
3,392
|
|
|
3,055
|
|
|
2,650
|
|
|||||||||
Trading revenue
|
|
(22
|
)%
|
|
408
|
|
|
524
|
|
|
556
|
|
|
(18
|
)%
|
|
246
|
|
|
301
|
|
|
310
|
|
|
(21
|
)%
|
|
654
|
|
|
825
|
|
|
866
|
|
|||||||||
Other
|
|
9
|
%
|
|
217
|
|
|
199
|
|
|
234
|
|
|
1
|
%
|
|
73
|
|
|
72
|
|
|
94
|
|
|
7
|
%
|
|
290
|
|
|
271
|
|
|
328
|
|
|||||||||
Provision for loan losses
|
|
(100
|
)%
|
|
—
|
|
|
4
|
|
|
11
|
|
|
(100
|
)%
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(100
|
)%
|
|
—
|
|
|
5
|
|
|
11
|
|
|||||||||
Total net revenues
|
|
15
|
%
|
|
6,200
|
|
|
5,411
|
|
|
4,771
|
|
|
17
|
%
|
|
2,418
|
|
|
2,067
|
|
|
1,609
|
|
|
15
|
%
|
|
8,618
|
|
|
7,478
|
|
|
6,380
|
|
|||||||||
Expenses Excluding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Interest
|
|
10
|
%
|
|
3,725
|
|
|
3,380
|
|
|
3,090
|
|
|
12
|
%
|
|
1,243
|
|
|
1,105
|
|
|
1,011
|
|
|
11
|
%
|
|
4,968
|
|
|
4,485
|
|
|
4,101
|
|
|||||||||
Income before taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
on income
|
|
22
|
%
|
|
$
|
2,475
|
|
|
$
|
2,031
|
|
|
$
|
1,681
|
|
|
22
|
%
|
|
$
|
1,175
|
|
|
$
|
962
|
|
|
$
|
598
|
|
|
22
|
%
|
|
$
|
3,650
|
|
|
$
|
2,993
|
|
|
$
|
2,279
|
|
•
|
Compliance Risk Committee – provides oversight of compliance risk management programs and policies providing an aggregate view of compliance risk exposure;
|
•
|
Financial Risk Oversight Committee – provides oversight of and approves credit, liquidity, capital and market risk policies, limits, and exposures;
|
•
|
New Products and Services Risk Oversight Committee – provides oversight of, and approves corporate policy and procedures relating to the risk governance of new products and services; and
|
•
|
Operational Risk Oversight Committee – provides oversight of and approves operational risk management policies, risk tolerance levels, and operational risk governance processes, and includes sub-committees covering Fiduciary, Data, Information Security, Model Governance, and Third-Party risk.
|
December 31,
|
2017
|
|
2016
|
|
Increase of 100 basis points
|
3.3
|
%
|
6.5
|
%
|
Decrease of 100 basis points
|
(6.2
|
)%
|
(9.8
|
)%
|
Description
|
Borrower
|
Outstanding
|
Available
|
||||
Committed, unsecured credit facility with various external banks
(1)
|
CSC
|
$
|
—
|
|
$
|
750
|
|
Uncommitted, unsecured lines of credit with various external banks
|
CSC, CS&Co
|
—
|
|
1,199
|
|
||
Federal Reserve Bank discount window
(2)
|
Schwab Bank
|
—
|
|
2,458
|
|
||
Federal Home Loan Bank secured credit facility
(3)
|
Schwab Bank
|
15,000
|
|
17,301
|
|
||
Unsecured commercial paper
(4)
|
CSC
|
—
|
|
750
|
|
December 31, 2017
|
Par Outstanding
|
Maturity
|
Weighted Average
Interest Rate |
Moody’s
|
Standard
& Poor’s |
Fitch
|
||||
Senior Notes
|
$
|
4,731
|
|
2018 - 2028
|
3.01% fixed
|
A2
|
A
|
A
|
||
Short-term borrowings
|
$
|
15,000
|
|
2018
|
1.53% fixed
|
N/A
|
N/A
|
N/A
|
Issuance Date
|
Issuance Amount
|
Maturity Date
|
Interest Rate
|
||
March 2, 2017
|
$
|
650
|
|
2027
|
3.200%
|
December 7, 2017
|
$
|
700
|
|
2028
|
3.200%
|
December 7, 2017
|
$
|
800
|
|
2023
|
2.650%
|
|
Date Issued and Sold
|
Net Proceeds
|
||
Series D
|
March 7, 2016
|
$
|
725
|
|
Series E
|
October 31, 2016
|
$
|
591
|
|
Series F
|
October 31, 2017
|
$
|
492
|
|
December 31, 2017
|
Less than
1 Year |
|
1-3
Years |
|
3-5
Years |
|
More than
5 Years |
|
Total
|
||||||||||
Credit-related financial instruments
(1)
|
$
|
1,622
|
|
|
$
|
2,842
|
|
|
$
|
4,254
|
|
|
$
|
1,945
|
|
|
$
|
10,663
|
|
Long-term debt
(2)
|
1,022
|
|
|
954
|
|
|
192
|
|
|
3,429
|
|
|
5,597
|
|
|||||
Purchase obligations
(3)
|
305
|
|
|
219
|
|
|
48
|
|
|
181
|
|
|
753
|
|
|||||
Leases
(4)
|
127
|
|
|
194
|
|
|
120
|
|
|
289
|
|
|
730
|
|
|||||
Total
|
$
|
3,076
|
|
|
$
|
4,209
|
|
|
$
|
4,614
|
|
|
$
|
5,844
|
|
|
$
|
17,743
|
|
December 31,
|
2017
|
|
2016
|
||||||||||||
|
CSC
|
|
Schwab Bank
|
|
CSC
|
|
Schwab Bank
|
||||||||
Total stockholders’ equity
|
$
|
18,525
|
|
|
$
|
13,224
|
|
|
$
|
16,421
|
|
|
$
|
11,726
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Preferred Stock
|
2,793
|
|
|
—
|
|
|
2,783
|
|
|
—
|
|
||||
Common Equity Tier 1 Capital before regulatory adjustments
|
$
|
15,732
|
|
|
$
|
13,224
|
|
|
$
|
13,638
|
|
|
$
|
11,726
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Goodwill, net of associated deferred tax liabilities
|
$
|
1,191
|
|
|
$
|
13
|
|
|
$
|
1,175
|
|
|
$
|
11
|
|
Other intangible assets, net of associated deferred tax liabilities
|
61
|
|
|
—
|
|
|
52
|
|
|
—
|
|
||||
Deferred tax assets, net of valuation allowances and deferred tax liabilities
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
AOCI adjustment
(1)
|
(152
|
)
|
|
(144
|
)
|
|
(163
|
)
|
|
(163
|
)
|
||||
Common Equity Tier 1 Capital
|
$
|
14,630
|
|
|
$
|
13,355
|
|
|
$
|
12,574
|
|
|
$
|
11,878
|
|
Tier 1 Capital
|
$
|
17,423
|
|
|
$
|
13,355
|
|
|
$
|
15,357
|
|
|
$
|
11,878
|
|
Total Capital
|
17,452
|
|
|
13,382
|
|
|
15,384
|
|
|
11,904
|
|
||||
Risk-Weighted Assets
|
75,866
|
|
|
66,519
|
|
|
68,179
|
|
|
59,915
|
|
||||
Common Equity Tier 1 Capital/Risk-Weighted Assets
|
19.3
|
%
|
|
20.1
|
%
|
|
18.4
|
%
|
|
19.8
|
%
|
||||
Tier 1 Capital/Risk-Weighted Assets
|
23.0
|
%
|
|
20.1
|
%
|
|
22.5
|
%
|
|
19.8
|
%
|
||||
Total Capital/Risk-Weighted Assets
|
23.0
|
%
|
|
20.1
|
%
|
|
22.6
|
%
|
|
19.9
|
%
|
||||
Tier 1 Leverage Ratio
|
7.6
|
%
|
|
7.1
|
%
|
|
7.2
|
%
|
|
7.0
|
%
|
Year Ended December 31,
|
2017
|
|
2016
|
||||||||||
|
Cash Paid
|
Per Share
Amount |
|
Cash Paid
|
Per Share
Amount |
||||||||
Common Stock
|
$
|
431
|
|
$
|
0.32
|
|
|
$
|
360
|
|
$
|
0.27
|
|
Series A Preferred Stock
(1)
|
28
|
|
70.00
|
|
|
28
|
|
70.00
|
|
||||
Series B Preferred Stock
(2,6)
|
29
|
|
60.00
|
|
|
29
|
|
60.00
|
|
||||
Series C Preferred Stock
(2)
|
36
|
|
60.00
|
|
|
36
|
|
60.00
|
|
||||
Series D Preferred Stock
(2,3)
|
45
|
|
59.52
|
|
|
33
|
|
43.65
|
|
||||
Series E Preferred Stock
(4)
|
23
|
|
3,867.01
|
|
|
N/A
|
|
N/A
|
|
||||
Series F Preferred Stock
(5)
|
N/A
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
Note 1.
|
|
||
Note 2.
|
|
||
Note 3.
|
64
|
|
|
Note 4.
|
|
||
Note 5.
|
65
|
|
|
Note 6.
|
69
|
|
|
Note 7.
|
|
||
Note 8.
|
74
|
|
|
Note 9.
|
75
|
|
|
Note 10.
|
|
||
Note 11.
|
76
|
|
|
Note 12.
|
|
||
Note 13.
|
|
||
Note 14.
|
|
||
Note 15.
|
|
||
Note 16.
|
86
|
|
|
Note 17.
|
87
|
|
|
Note 18.
|
88
|
|
|
Note 19.
|
|
||
Note 20.
|
|
||
Note 21.
|
|
||
Note 22.
|
|
||
Note 23.
|
97
|
|
|
Note 24.
|
99
|
|
|
Note 25.
|
|
||
|
|||
|
Consolidated Statements of Income
|
|
|
|
|
|
||||||
(In Millions, Except Per Share Amounts)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Net Revenues
|
|
|
|
|
|
||||||
Interest revenue
|
$
|
4,624
|
|
|
$
|
3,493
|
|
|
$
|
2,657
|
|
Interest expense
|
(342
|
)
|
|
(171
|
)
|
|
(132
|
)
|
|||
Net interest revenue
|
4,282
|
|
|
3,322
|
|
|
2,525
|
|
|||
Asset management and administration fees
(1)
|
3,392
|
|
|
3,055
|
|
|
2,650
|
|
|||
Trading revenue
|
654
|
|
|
825
|
|
|
866
|
|
|||
Other
|
290
|
|
|
271
|
|
|
328
|
|
|||
Provision for loan losses
|
—
|
|
|
5
|
|
|
11
|
|
|||
Total net revenues
|
8,618
|
|
|
7,478
|
|
|
6,380
|
|
|||
Expenses Excluding Interest
|
|
|
|
|
|
|
|||||
Compensation and benefits
|
2,737
|
|
|
2,466
|
|
|
2,241
|
|
|||
Professional services
|
580
|
|
|
506
|
|
|
459
|
|
|||
Occupancy and equipment
|
436
|
|
|
398
|
|
|
353
|
|
|||
Advertising and market development
|
268
|
|
|
265
|
|
|
249
|
|
|||
Communications
|
231
|
|
|
237
|
|
|
233
|
|
|||
Depreciation and amortization
|
269
|
|
|
234
|
|
|
224
|
|
|||
Regulatory fees and assessments
|
179
|
|
|
144
|
|
|
107
|
|
|||
Other
|
268
|
|
|
235
|
|
|
235
|
|
|||
Total expenses excluding interest
|
4,968
|
|
|
4,485
|
|
|
4,101
|
|
|||
Income before taxes on income
|
3,650
|
|
|
2,993
|
|
|
2,279
|
|
|||
Taxes on income
(2)
|
1,296
|
|
|
1,104
|
|
|
832
|
|
|||
Net Income
|
2,354
|
|
|
1,889
|
|
|
1,447
|
|
|||
Preferred stock dividends and other
(3)
|
174
|
|
|
143
|
|
|
83
|
|
|||
Net Income Available to Common Stockholders
|
$
|
2,180
|
|
|
$
|
1,746
|
|
|
$
|
1,364
|
|
Weighted-Average Common Shares Outstanding:
|
|
|
|
|
|
|
|||||
Basic
|
1,339
|
|
|
1,324
|
|
|
1,315
|
|
|||
Diluted
|
1,353
|
|
|
1,334
|
|
|
1,327
|
|
|||
Earnings Per Common Share:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
1.63
|
|
|
$
|
1.32
|
|
|
$
|
1.04
|
|
Diluted
|
$
|
1.61
|
|
|
$
|
1.31
|
|
|
$
|
1.03
|
|
Dividends Declared Per Common Share
|
$
|
.32
|
|
|
$
|
.27
|
|
|
$
|
.24
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|||||||
(In Millions)
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||||||
Net income
|
$
|
2,354
|
|
|
$
|
1,889
|
|
|
$
|
1,447
|
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|||||||
Change in net unrealized gain (loss) on available for sale securities:
|
|
|
|
|
|
|||||||
Net unrealized gain (loss)
|
13
|
|
|
(44
|
)
|
|
(477
|
)
|
||||
Reclassification of net unrealized loss transferred to held to maturity
|
227
|
|
|
—
|
|
|
—
|
|
||||
Other reclassifications included in other revenue
|
(12
|
)
|
|
(4
|
)
|
—
|
|
—
|
|
|||
Change in net unrealized gain (loss) on held to maturity securities:
|
|
|
|
|
|
|||||||
Reclassification of net unrealized loss transferred from available for sale
|
(227
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of amounts previously recorded upon transfer from available for sale
|
31
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(11
|
)
|
|
1
|
|
|
—
|
|
||||
Other comprehensive income (loss), before tax
|
21
|
|
|
(47
|
)
|
|
(477
|
)
|
||||
Income tax effect
|
(10
|
)
|
|
18
|
|
|
178
|
|
||||
Other comprehensive income (loss), net of tax
|
11
|
|
|
(29
|
)
|
|
(299
|
)
|
||||
Comprehensive Income
|
$
|
2,365
|
|
|
$
|
1,860
|
|
|
$
|
1,148
|
|
Consolidated Balance Sheets
|
|
|
|
||||
(In Millions, Except Per Share and Share Amounts)
|
|
|
|
||||
|
|
|
|
||||
December 31,
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,217
|
|
|
$
|
10,828
|
|
Cash and investments segregated and on deposit for regulatory purposes
|
|
|
|
||||
(including resale agreements of $6,596 and $9,547 at December 31, 2017
|
|
|
|
||||
and 2016, respectively)
|
15,139
|
|
|
22,174
|
|
||
Receivables from brokers, dealers, and clearing organizations
|
649
|
|
|
728
|
|
||
Receivables from brokerage clients — net
|
20,576
|
|
|
17,155
|
|
||
Other securities owned — at fair value
|
539
|
|
|
449
|
|
||
Available for sale securities
|
49,995
|
|
|
77,365
|
|
||
Held to maturity securities (fair value —
$120,373
and $74,444 at December 31,
|
|
|
|
||||
2017 and 2016, respectively)
|
120,926
|
|
|
75,203
|
|
||
Bank loans — net
|
16,478
|
|
|
15,403
|
|
||
Equipment, office facilities, and property — net
|
1,471
|
|
|
1,299
|
|
||
Goodwill
|
1,227
|
|
|
1,227
|
|
||
Intangible assets — net
|
108
|
|
|
144
|
|
||
Other assets
|
1,949
|
|
|
1,408
|
|
||
Total assets
|
$
|
243,274
|
|
|
$
|
223,383
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Bank deposits
|
$
|
169,656
|
|
|
$
|
163,454
|
|
Payables to brokers, dealers, and clearing organizations
|
1,287
|
|
|
2,407
|
|
||
Payables to brokerage clients
|
31,243
|
|
|
35,894
|
|
||
Accrued expenses and other liabilities
|
2,810
|
|
|
2,331
|
|
||
Short-term borrowings
|
15,000
|
|
|
—
|
|
||
Long-term debt
|
4,753
|
|
|
2,876
|
|
||
Total liabilities
|
224,749
|
|
|
206,962
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock — $.01 par value per share; aggregate liquidation preference
|
|
|
|
||||
of
$2,850 and $2,835 at December 31, 2017 and 2016, respectively
|
2,793
|
|
|
2,783
|
|
||
Common stock — 3 billion shares authorized; $.01 par value per share;
|
|
|
|
||||
1,487,543,446 shares issued
|
15
|
|
|
15
|
|
||
Additional paid-in capital
|
4,353
|
|
|
4,267
|
|
||
Retained earnings
|
14,408
|
|
|
12,649
|
|
||
Treasury stock, at cost — 142,210,890 and 154,793,560 shares
|
|
|
|
||||
at December 31, 2017 and 2016, respectively
|
(2,892
|
)
|
|
(3,130
|
)
|
||
Accumulated other comprehensive income
|
(152
|
)
|
|
(163
|
)
|
||
Total stockholders’ equity
|
18,525
|
|
|
16,421
|
|
||
Total liabilities and stockholders’ equity
|
$
|
243,274
|
|
|
$
|
223,383
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
||||||
(In Millions)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,354
|
|
|
$
|
1,889
|
|
|
$
|
1,447
|
|
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
|
|
|
|
|
|
||||||
Provision for loan losses
|
—
|
|
|
(5
|
)
|
|
(11
|
)
|
|||
Share-based compensation
|
153
|
|
|
141
|
|
|
135
|
|
|||
Depreciation and amortization
|
269
|
|
|
234
|
|
|
224
|
|
|||
Provision (Benefit) for deferred income taxes
|
58
|
|
|
15
|
|
|
(7
|
)
|
|||
Premium amortization, net, on available for sale and held to maturity securities
|
342
|
|
|
266
|
|
|
162
|
|
|||
Other
|
51
|
|
|
9
|
|
|
(4
|
)
|
|||
Net change in:
|
|
|
|
|
|
||||||
Cash and investments segregated and on deposit for regulatory purposes
|
7,035
|
|
|
(2,576
|
)
|
|
1,183
|
|
|||
Receivables from brokers, dealers, and clearing organizations
|
74
|
|
|
(147
|
)
|
|
(108
|
)
|
|||
Receivables from brokerage clients
|
(3,428
|
)
|
|
150
|
|
|
(1,652
|
)
|
|||
Other securities owned
|
(90
|
)
|
|
84
|
|
|
(17
|
)
|
|||
Other assets
|
(177
|
)
|
|
(93
|
)
|
|
(98
|
)
|
|||
Payables to brokers, dealers, and clearing organizations
|
(1,148
|
)
|
|
(181
|
)
|
|
808
|
|
|||
Payables to brokerage clients
|
(4,651
|
)
|
|
2,709
|
|
|
(1,120
|
)
|
|||
Accrued expenses and other liabilities
|
421
|
|
|
167
|
|
|
304
|
|
|||
Net cash provided by operating activities
|
1,263
|
|
|
2,662
|
|
|
1,246
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Purchases of available for sale securities
|
(15,033
|
)
|
|
(29,248
|
)
|
|
(21,351
|
)
|
|||
Proceeds from sales of available for sale securities
|
8,617
|
|
|
5,537
|
|
|
2,424
|
|
|||
Principal payments on available for sale securities
|
9,095
|
|
|
11,903
|
|
|
7,340
|
|
|||
Purchases of held to maturity securities
|
(32,925
|
)
|
|
(31,162
|
)
|
|
(19,303
|
)
|
|||
Principal payments on held to maturity securities
|
11,627
|
|
|
5,747
|
|
|
3,540
|
|
|||
Net increase in bank loans
|
(1,071
|
)
|
|
(1,103
|
)
|
|
(980
|
)
|
|||
Purchase of equipment, office facilities, and property
|
(400
|
)
|
|
(346
|
)
|
|
(266
|
)
|
|||
Purchases of Federal Home Loan Bank stock
|
(430
|
)
|
|
(152
|
)
|
|
—
|
|
|||
Proceeds from sales of Federal Home Loan Bank stock
|
106
|
|
|
88
|
|
|
8
|
|
|||
Other investing activities
|
(59
|
)
|
|
(39
|
)
|
|
(35
|
)
|
|||
Net cash used for investing activities
|
(20,473
|
)
|
|
(38,775
|
)
|
|
(28,623
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Net change in bank deposits
|
6,186
|
|
|
33,952
|
|
|
26,687
|
|
|||
Net proceeds from short-term borrowings
|
15,000
|
|
|
—
|
|
|
—
|
|
|||
Issuance of long-term debt
|
2,129
|
|
|
—
|
|
|
1,346
|
|
|||
Repayment of long-term debt
|
(257
|
)
|
|
(7
|
)
|
|
(357
|
)
|
|||
Net proceeds from preferred stock offerings
|
492
|
|
|
1,316
|
|
|
581
|
|
|||
Redemption of preferred stock
|
(485
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(592
|
)
|
|
(486
|
)
|
|
(387
|
)
|
|||
Proceeds from stock options exercised and other
|
171
|
|
|
144
|
|
|
90
|
|
|||
Other financing activities
|
(45
|
)
|
|
44
|
|
|
32
|
|
|||
Net cash provided by financing activities
|
22,599
|
|
|
34,963
|
|
|
27,992
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
3,389
|
|
|
(1,150
|
)
|
|
615
|
|
|||
Cash and Cash Equivalents at Beginning of Year
|
10,828
|
|
|
11,978
|
|
|
11,363
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
14,217
|
|
|
$
|
10,828
|
|
|
$
|
11,978
|
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
327
|
|
|
$
|
160
|
|
|
$
|
121
|
|
Income taxes
|
$
|
1,212
|
|
|
$
|
991
|
|
|
$
|
810
|
|
Non-cash investing activity:
|
|
|
|
|
|
||||||
Securities purchased during the year but settled after year end
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Consolidated Statements of Stockholders’ Equity
|
||||||||||||||||||||||||||||||
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
Additional
Paid-In Capital |
|
|
|
|
|
Accumulated Other Comprehensive
Income (Loss) |
|
|
|||||||||||||||||
|
Preferred
Stock |
|
Common Stock
|
|
|
Retained
Earnings |
|
Treasury Stock,
at cost |
|
|
|
|||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
||||||||||||||||||||
Balance at December 31, 2014
|
$
|
872
|
|
|
1,488
|
|
|
$
|
15
|
|
|
$
|
4,050
|
|
|
$
|
10,198
|
|
|
$
|
(3,497
|
)
|
|
$
|
165
|
|
|
$
|
11,803
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,447
|
|
|
—
|
|
|
—
|
|
|
1,447
|
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(299
|
)
|
|
(299
|
)
|
|||||||
Issuance of preferred stock, net
|
587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
587
|
|
|||||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|||||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(318
|
)
|
|
—
|
|
|
—
|
|
|
(318
|
)
|
|||||||
Stock option exercises and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(87
|
)
|
|
—
|
|
|
177
|
|
|
—
|
|
|
90
|
|
|||||||
Share-based compensation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
related tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
(5
|
)
|
|
(23
|
)
|
|
—
|
|
|
(11
|
)
|
|||||||
Balance at December 31, 2015
|
1,459
|
|
|
1,488
|
|
|
15
|
|
|
4,152
|
|
|
11,253
|
|
|
(3,343
|
)
|
|
(134
|
)
|
|
13,402
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,889
|
|
|
—
|
|
|
—
|
|
|
1,889
|
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
|||||||
Issuance of preferred stock, net
|
1,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,324
|
|
|||||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|||||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|||||||
Stock option exercises and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
224
|
|
|
—
|
|
|
144
|
|
|||||||
Share-based compensation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
related tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(7
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2016
|
2,783
|
|
|
1,488
|
|
|
15
|
|
|
4,267
|
|
|
12,649
|
|
|
(3,130
|
)
|
|
(163
|
)
|
|
16,421
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,354
|
|
|
—
|
|
|
—
|
|
|
2,354
|
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|||||||
Issuance of preferred stock, net
|
492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
492
|
|
|||||||
Redemption of preferred stock
|
(482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(485
|
)
|
|||||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|||||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(431
|
)
|
|
—
|
|
|
—
|
|
|
(431
|
)
|
|||||||
Stock option exercises and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
259
|
|
|
—
|
|
|
171
|
|
|||||||
Share-based compensation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
related tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
9
|
|
|||||||
Balance at December 31, 2017
|
$
|
2,793
|
|
|
1,488
|
|
|
$
|
15
|
|
|
$
|
4,353
|
|
|
$
|
14,408
|
|
|
$
|
(2,892
|
)
|
|
$
|
(152
|
)
|
|
$
|
18,525
|
|
1.
|
Introduction and Basis of Presentation
|
2.
|
Summary of Significant Accounting Policies
|
•
|
Level 1 inputs are quoted prices in active markets as of the measurement date for identical assets or liabilities that the Company has the ability to access.
|
•
|
Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates, benchmark yields, issuer spreads, new issue data, and collateral performance.
|
•
|
Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
|
•
|
Cash and cash equivalents
are short-term in nature and accordingly are recorded at amounts that approximate fair value.
|
•
|
Cash and investments segregated and on deposit for regulatory purposes
include cash and securities purchased under resale agreements. Securities purchased under resale agreements are short-term in nature and are backed by collateral that both exceeds the carrying value of the resale agreement and is highly liquid in nature. Accordingly, the carrying values of these financial instruments approximate their fair values.
|
•
|
Receivables from/payables to brokers, dealers, and clearing organizations
are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.
|
•
|
Receivables from/payables to brokerage clients
—
net
are short-term in nature, recorded at contractual amounts and historically have been settled at those values. Accordingly, the carrying values of these financial instruments approximate their fair values.
|
•
|
HTM securities
– The fair values of HTM securities are obtained using an independent third-party pricing service similar to investment assets recorded at fair value as discussed above.
|
•
|
Bank loans
– The fair values of First Mortgages and HELOCs are estimated based on prices of mortgage-backed securities collateralized by similar types of loans. PALs are non-purpose revolving lines of credit secured by eligible assets; accordingly, the carrying values of these loans approximate their fair values.
|
•
|
Financial instruments included in other assets
primarily consist of LIHTC investments, cost method investments and FHLB stock, whose carrying values approximate their fair values. FHLB stock is recorded at par, which approximates its fair value.
|
•
|
Bank deposits
– Substantially all bank deposits have no stated maturity and are recorded at the amount payable on demand as of the balance sheet date. The carrying values of these deposits approximate their fair values.
|
•
|
Financial instruments included in accrued expenses and other liabilities
consist of drafts payable and certain amounts due under contractual obligations, including unfunded LIHTC commitments. The carrying values of these instruments approximate their fair values.
|
•
|
Short-term borrowings
consist of commercial paper, borrowings on Schwab’s uncommitted, unsecured bank credit lines, and funds drawn on Schwab Bank’s secured credit facility with the Federal Home Loan Bank of San Francisco. Due to the short-term nature of these borrowings, carrying value approximates fair value.
|
•
|
Long-term debt
– Except for the finance lease obligation, the fair values of long-term debt are estimated using indicative, non-binding quotes from independent brokers. The Company validates indicative prices for its debt through comparison to other independent non-binding quotes. The finance lease obligation is recorded at carrying value, which approximates fair value.
|
•
|
Firm commitments to extend credit
– Schwab extends credit to banking clients through HELOCs and PALs. The Company considers the fair value of these unused commitments to not be material because the interest rates earned on these balances are based on floating interest rates that reset monthly.
|
Standard
|
Description
|
Required Date of Adoption
|
Effects on the Financial Statements or Other Significant Matters
|
ASU 2016-09, “Stock Compensation - Improvements to Employee Share-Based Payment Accounting (Topic 718)”
|
Requires entities to recognize the income tax effects for the difference between GAAP and federal income tax treatment (i.e., excess tax benefit or deficiency) of share-based awards in the income statement when the awards vest or are settled, rather than recording such effects in additional paid-in capital.
Provides entities with an accounting policy election to account for the impact of forfeitures of awards on compensation expense as they occur or continue with the current practice of estimating forfeitures at the grant date to determine the number of awards expected to vest and adjusting that estimate as necessary.
|
January 1, 2017
|
The Company’s taxes on income were reduced by approximately $87 million in 2017. Future effects will depend on the Company’s share price, restricted stock vesting, and the volume of equity incentive options exercised.
The Company made an accounting policy election to continue its current practice of estimating forfeitures. |
Standard
|
Description
|
Required Date of Adoption
|
Effects on the Financial Statements or Other Significant Matters
|
ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and related ASUs
|
Clarifies that revenue from contracts with clients should be recognized in a manner that depicts the timing of the related transfer of goods or performance of services at an amount that reflects the expected consideration.
Adoption allows either full or modified retrospective transition. Full retrospective transition will require a cumulative effect adjustment to retained earnings as of the earliest comparative period presented. Modified retrospective transition will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance.
|
January 1, 2018
|
The guidance does not apply to revenue earned from the Company’s loans and securities. Accordingly, net interest revenue will not be impacted. The primary impact for the Company will be the capitalization of sales commissions paid to employees for obtaining new contracts with clients on the consolidated balance sheets. These capitalized costs will result in an asset of $219 million and a related deferred tax liability of $51 million upon adoption. The asset will subsequently be amortized to expense over time as the related revenues are recognized. The Company does not expect this guidance will have a material impact on its EPS.
The Company adopted the revenue recognition guidance as of January 1, 2018 using the modified retrospective method. The Company’s implementation work is now substantially complete. |
|
|
|
|
|
|
|
|
|
|
|
|
Standard
|
Description
|
Required Date of Adoption
|
Effects on the Financial Statements or Other Significant Matters
|
ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10)”
|
Requires: (i) equity investments to be measured at fair value, with changes in fair value recognized in net income, unless the equity method is applied or the equity investments do not have readily determinable fair values in which case a practical alternative may be elected; (ii) use of an exit price when measuring the fair value of financial instruments for disclosures; (iii) separate presentation of financial assets and liabilities by measurement category and form of instrument on the balance sheet or in the accompanying notes.
Adoption requires a cumulative effect adjustment to the balance sheet as of the beginning of the year of initial application, except for certain changes that require prospective adoption. |
January 1, 2018
|
The Company does not expect this guidance will have a material impact on its financial statements, including EPS.
|
ASU 2016-02, “Leases (Topic 842)”
|
Amends the accounting for leases by lessees and lessors. The primary change from the new guidance is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases. Additional changes include accounting for lease origination and executory costs, required lessee reassessments during the lease term due to changes in circumstances, and expanded lease disclosures.
Adoption requires modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements in which the entity first applies the new standard. Certain transition relief is permitted if elected by the entity. |
January 1, 2019
|
The Company does not expect this guidance will have a material impact on its EPS, but it will result in a gross up of the consolidated balance sheets due to recognition of right-of-use assets and lease liabilities based on the present value of remaining operating lease payments (see Note 13 for the undiscounted rental commitments for operating leases).
The Company is evaluating its adoption method due to a recently proposed ASU that provides an alternative adoption method. The Company is refining its methodology to estimate the right of use assets and lease liabilities and working on system updates to apply the lease accounting changes. The full population of contracts that may be subject to balance sheet recognition is still being evaluated, but is nearly complete. The Company has further work to perform related to disclosures.
|
|
|
|
|
|
|
|
|
Standard
|
Description
|
Required Date of Adoption
|
Effects on the Financial Statements or Other Significant Matters
|
ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”
|
Provides guidance for recognizing impairment of most debt instruments measured at amortized cost, including loans and HTM debt securities. Requires estimating current expected credit losses (CECL) over the remaining life of an instrument or a portfolio of instruments with similar risk characteristics based on relevant information about past events, current conditions, and reasonable forecasts. The initial estimate of, and the subsequent changes in, CECL will be recognized as credit loss expense through current earnings and will be reflected as an allowance for credit losses offsetting the carrying value of the financial instrument(s) on the balance sheet. Amends the OTTI model for AFS debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security, and eliminating consideration of the length of time such security has been in an unrealized loss position as a factor in concluding whether a credit loss exists.
Adoption requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the entity applies the new guidance except that a prospective transition is required for AFS debt securities for which an OTTI has been recognized prior to the effective date. |
January 1, 2020 (early adoption permitted)
|
The Company is currently evaluating the impact of this guidance on its financial statements, including EPS. Initial implementation work performed to date has focused on evaluating the Company’s impacted assets, including loans and investment securities. The Company has also been evaluating its current data and system capabilities and considering additional data sources and system enhancements. Additional work to be completed includes an in-depth analysis for each impacted asset type, selection of methods, and changes to policies and procedures.
|
ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”
|
Shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature with a fixed price on a preset date. ASU 2017-08 does not impact the accounting for callable debt securities held at a discount.
Adoption requires modified retrospective transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. |
January 1, 2019 (early adoption permitted)
|
The Company is currently evaluating the impact of adopting this guidance on its financial statements, including EPS.
|
3.
|
Receivables from and Payables to Brokerage Clients
|
December 31,
|
2017
|
|
2016
|
||||
Receivables
|
|
|
|
||||
Margin loans, net of allowance for doubtful accounts
|
$
|
18,331
|
|
|
$
|
15,257
|
|
Other brokerage receivables
|
2,245
|
|
|
1,898
|
|
||
Receivables from brokerage clients
—
net
|
$
|
20,576
|
|
|
$
|
17,155
|
|
|
|
|
|
||||
Payables
|
|
|
|
||||
Interest-bearing payables
|
$
|
22,840
|
|
|
$
|
28,336
|
|
Non-interest-bearing payables
|
8,403
|
|
|
7,558
|
|
||
Payables to brokerage clients
|
$
|
31,243
|
|
|
$
|
35,894
|
|
4.
|
Other Securities Owned
|
December 31,
|
2017
|
|
2016
|
||||
Equity and bond mutual funds
|
$
|
318
|
|
|
$
|
272
|
|
Schwab Funds
®
money market funds
|
135
|
|
|
108
|
|
||
State and municipal debt obligations
|
52
|
|
|
41
|
|
||
Equity, U.S. Government and corporate debt, and other securities
|
34
|
|
|
28
|
|
||
Total other securities owned
|
$
|
539
|
|
|
$
|
449
|
|
December 31, 2017
|
Amortized
Cost |
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Fair
Value |
||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency mortgage-backed securities
|
$
|
20,915
|
|
|
$
|
53
|
|
|
$
|
39
|
|
|
$
|
20,929
|
|
U.S. Treasury securities
|
9,583
|
|
|
—
|
|
|
83
|
|
|
9,500
|
|
||||
Asset-backed securities
(1)
|
9,019
|
|
|
34
|
|
|
6
|
|
|
9,047
|
|
||||
Corporate debt securities
(2)
|
6,154
|
|
|
16
|
|
|
1
|
|
|
6,169
|
|
||||
Certificates of deposit
|
2,040
|
|
|
2
|
|
|
1
|
|
|
2,041
|
|
||||
U.S. agency notes
|
1,914
|
|
|
—
|
|
|
8
|
|
|
1,906
|
|
||||
Commercial paper
(2)
|
313
|
|
|
—
|
|
|
—
|
|
|
313
|
|
||||
Foreign government agency securities
|
51
|
|
|
—
|
|
|
1
|
|
|
50
|
|
||||
Non-agency commercial mortgage-backed securities
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
Total available for sale securities
|
$
|
50,029
|
|
|
$
|
105
|
|
|
$
|
139
|
|
|
$
|
49,995
|
|
Held to maturity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency mortgage-backed securities
|
$
|
101,197
|
|
|
$
|
290
|
|
|
$
|
1,034
|
|
|
$
|
100,453
|
|
Asset-backed securities
(1)
|
12,937
|
|
|
127
|
|
|
2
|
|
|
13,062
|
|
||||
Corporate debt securities
(2)
|
4,078
|
|
|
13
|
|
|
5
|
|
|
4,086
|
|
||||
U.S. state and municipal securities
|
1,247
|
|
|
57
|
|
|
—
|
|
|
1,304
|
|
||||
Non-agency commercial mortgage-backed securities
|
994
|
|
|
10
|
|
|
5
|
|
|
999
|
|
||||
U.S. Treasury securities
|
223
|
|
|
—
|
|
|
3
|
|
|
220
|
|
||||
Certificates of deposit
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
Foreign government agency securities
|
50
|
|
|
—
|
|
|
1
|
|
|
49
|
|
||||
Total held to maturity securities
|
$
|
120,926
|
|
|
$
|
497
|
|
|
$
|
1,050
|
|
|
$
|
120,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. agency mortgage-backed securities
|
$
|
33,167
|
|
|
$
|
120
|
|
|
$
|
92
|
|
|
$
|
33,195
|
|
U.S. Treasury securities
|
8,679
|
|
|
3
|
|
|
59
|
|
|
8,623
|
|
||||
Asset-backed securities
(1)
|
20,520
|
|
|
29
|
|
|
214
|
|
|
20,335
|
|
||||
Corporate debt securities
(2)
|
9,850
|
|
|
20
|
|
|
18
|
|
|
9,852
|
|
||||
Certificates of deposit
|
2,070
|
|
|
2
|
|
|
1
|
|
|
2,071
|
|
||||
U.S. agency notes
|
1,915
|
|
|
—
|
|
|
8
|
|
|
1,907
|
|
||||
Commercial paper
(2)
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
||||
Non-agency commercial mortgage-backed securities
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
U.S. state and municipal securities
|
1,167
|
|
|
2
|
|
|
46
|
|
|
1,123
|
|
||||
Total available for sale securities
|
$
|
77,627
|
|
|
$
|
176
|
|
|
$
|
438
|
|
|
$
|
77,365
|
|
Held to maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. agency mortgage-backed securities
|
$
|
72,439
|
|
|
$
|
324
|
|
|
$
|
1,086
|
|
|
$
|
71,677
|
|
Asset-backed securities
(1)
|
941
|
|
|
—
|
|
|
—
|
|
|
941
|
|
||||
Corporate debt securities
(2)
|
436
|
|
|
—
|
|
|
—
|
|
|
436
|
|
||||
U.S. state and municipal securities
|
68
|
|
|
1
|
|
|
1
|
|
|
68
|
|
||||
Non-agency commercial mortgage-backed securities
|
997
|
|
|
11
|
|
|
4
|
|
|
1,004
|
|
||||
U.S. Treasury securities
|
223
|
|
|
—
|
|
|
4
|
|
|
219
|
|
||||
Commercial paper
(2)
|
99
|
|
|
—
|
|
|
—
|
|
|
99
|
|
||||
Total held to maturity securities
|
$
|
75,203
|
|
|
$
|
336
|
|
|
$
|
1,095
|
|
|
$
|
74,444
|
|
|
Less than
12 months |
|
12 months
or longer |
|
Total
|
|||||||||||||||||
December 31, 2017
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
Unrealized
Losses |
||||||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency mortgage-backed securities
|
$
|
5,696
|
|
|
$
|
21
|
|
|
$
|
2,548
|
|
|
$
|
18
|
|
|
$
|
8,244
|
|
$
|
39
|
|
U.S. Treasury securities
|
4,625
|
|
|
11
|
|
|
4,875
|
|
|
72
|
|
|
9,500
|
|
83
|
|
||||||
Asset-backed securities
|
904
|
|
|
3
|
|
|
424
|
|
|
3
|
|
|
1,328
|
|
6
|
|
||||||
Corporate debt securities
|
736
|
|
|
1
|
|
|
120
|
|
|
—
|
|
|
856
|
|
1
|
|
||||||
Certificates of deposit
|
799
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
799
|
|
1
|
|
||||||
U.S. agency notes
|
99
|
|
|
—
|
|
|
1,807
|
|
|
8
|
|
|
1,906
|
|
8
|
|
||||||
Foreign government agency securities
|
50
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
50
|
|
1
|
|
||||||
Total
|
$
|
12,909
|
|
|
$
|
38
|
|
|
$
|
9,774
|
|
|
$
|
101
|
|
|
$
|
22,683
|
|
$
|
139
|
|
Held to maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. agency mortgage-backed securities
|
$
|
42,102
|
|
|
$
|
310
|
|
|
$
|
24,753
|
|
|
$
|
724
|
|
|
$
|
66,855
|
|
$
|
1,034
|
|
Asset-backed securities
|
1,124
|
|
|
2
|
|
|
72
|
|
|
—
|
|
|
1,196
|
|
2
|
|
||||||
Corporate debt securities
|
1,078
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
1,078
|
|
5
|
|
||||||
Non-agency commercial mortgage-backed securities
|
607
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
607
|
|
5
|
|
||||||
U.S. Treasury securities
|
220
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
220
|
|
3
|
|
||||||
Foreign government agency securities
|
49
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
49
|
|
1
|
|
||||||
Total
|
$
|
45,180
|
|
|
$
|
326
|
|
|
$
|
24,825
|
|
|
$
|
724
|
|
|
$
|
70,005
|
|
$
|
1,050
|
|
Total securities with unrealized losses
(1)
|
$
|
58,089
|
|
|
$
|
364
|
|
|
$
|
34,599
|
|
|
$
|
825
|
|
|
$
|
92,688
|
|
$
|
1,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. agency mortgage-backed securities
|
$
|
14,816
|
|
|
$
|
69
|
|
|
$
|
2,931
|
|
|
$
|
23
|
|
|
$
|
17,747
|
|
$
|
92
|
|
U.S. Treasury securities
|
6,926
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
6,926
|
|
59
|
|
||||||
Asset-backed securities
|
1,670
|
|
|
13
|
|
|
9,237
|
|
|
201
|
|
|
10,907
|
|
214
|
|
||||||
Corporate debt securities
|
2,407
|
|
|
17
|
|
|
653
|
|
|
1
|
|
|
3,060
|
|
18
|
|
||||||
Certificates of deposit
|
474
|
|
|
—
|
|
|
100
|
|
|
1
|
|
|
574
|
|
1
|
|
||||||
U.S. agency notes
|
1,907
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
1,907
|
|
8
|
|
||||||
U.S. state and municipal securities
|
956
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
956
|
|
46
|
|
||||||
Total
|
$
|
29,156
|
|
|
$
|
212
|
|
|
$
|
12,921
|
|
|
$
|
226
|
|
|
$
|
42,077
|
|
$
|
438
|
|
Held to maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. agency mortgage-backed securities
|
$
|
51,361
|
|
|
$
|
1,086
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,361
|
|
$
|
1,086
|
|
Non-agency commercial mortgage-backed securities
|
591
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
591
|
|
4
|
|
||||||
U.S. Treasury securities
|
219
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
219
|
|
4
|
|
||||||
U.S. state and municipal securities
|
14
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
14
|
|
1
|
|
||||||
Total
|
$
|
52,185
|
|
|
$
|
1,095
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,185
|
|
$
|
1,095
|
|
Total securities with unrealized losses
(2)
|
$
|
81,341
|
|
|
$
|
1,307
|
|
|
$
|
12,921
|
|
|
$
|
226
|
|
|
$
|
94,262
|
|
$
|
1,533
|
|
December 31, 2017
|
Within
1 year |
|
After 1 year through
5 years |
|
After 5 years through
10 years |
|
After
10 years |
|
Total
|
||||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. agency mortgage-backed securities
(1)
|
$
|
61
|
|
|
$
|
2,253
|
|
|
$
|
8,282
|
|
|
$
|
10,333
|
|
|
$
|
20,929
|
|
U.S. Treasury securities
|
2,515
|
|
|
6,985
|
|
|
—
|
|
|
—
|
|
|
9,500
|
|
|||||
Asset-backed securities
|
251
|
|
|
6,924
|
|
|
1,261
|
|
|
611
|
|
|
9,047
|
|
|||||
Corporate debt securities
|
3,135
|
|
|
3,034
|
|
|
—
|
|
|
—
|
|
|
6,169
|
|
|||||
Certificates of deposit
|
575
|
|
|
1,466
|
|
|
—
|
|
|
—
|
|
|
2,041
|
|
|||||
U.S. agency notes
|
1,658
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
1,906
|
|
|||||
Commercial paper
|
313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|||||
Foreign government agency securities
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||
Non-agency commercial mortgage-backed securities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
|||||
Total fair value
|
$
|
8,508
|
|
|
$
|
20,960
|
|
|
$
|
9,543
|
|
|
$
|
10,984
|
|
|
$
|
49,995
|
|
Total amortized cost
|
$
|
8,517
|
|
|
$
|
20,999
|
|
|
$
|
9,546
|
|
|
$
|
10,967
|
|
|
$
|
50,029
|
|
Weighted-average yield
(2)
|
1.53
|
%
|
|
1.63
|
%
|
|
1.72
|
%
|
|
1.79
|
%
|
|
1.66
|
%
|
|||||
Held to maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. agency mortgage-backed securities
(1)
|
$
|
441
|
|
|
$
|
12,680
|
|
|
$
|
29,511
|
|
|
$
|
57,821
|
|
|
$
|
100,453
|
|
Asset-backed securities
|
—
|
|
|
1,003
|
|
|
6,245
|
|
|
5,814
|
|
|
13,062
|
|
|||||
Corporate debt securities
|
351
|
|
|
3,206
|
|
|
454
|
|
|
75
|
|
|
4,086
|
|
|||||
U.S. state and municipal securities
|
—
|
|
|
—
|
|
|
121
|
|
|
1,183
|
|
|
1,304
|
|
|||||
Non-agency commercial mortgage-backed securities
(1)
|
—
|
|
|
362
|
|
|
—
|
|
|
637
|
|
|
999
|
|
|||||
U.S. Treasury securities
|
—
|
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
|||||
Certificates of deposit
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|||||
Foreign government agency securities
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|||||
Total fair value
|
$
|
792
|
|
|
$
|
17,500
|
|
|
$
|
36,551
|
|
|
$
|
65,530
|
|
|
$
|
120,373
|
|
Total amortized cost
|
$
|
792
|
|
|
$
|
17,486
|
|
|
$
|
36,544
|
|
|
$
|
66,104
|
|
|
$
|
120,926
|
|
Weighted-average yield
(2)
|
1.97
|
%
|
|
2.45
|
%
|
|
2.35
|
%
|
|
2.16
|
%
|
|
2.26
|
%
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Proceeds
|
$
|
8,617
|
|
|
$
|
5,537
|
|
|
$
|
2,424
|
|
Gross realized gains
|
12
|
|
|
4
|
|
|
1
|
|
|||
Gross realized losses
|
—
|
|
|
—
|
|
|
1
|
|
6.
|
Bank Loans and Related Allowance for Loan Losses
|
December 31, 2017
|
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 loan
losses |
|
Total
bank loans - net |
||||||||||||||||
First Mortgages
(1,2)
|
$
|
9,983
|
|
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
17
|
|
|
$
|
33
|
|
|
$
|
10,016
|
|
|
$
|
16
|
|
|
$
|
10,000
|
|
HELOCs
(1,2)
|
1,928
|
|
|
—
|
|
|
3
|
|
|
12
|
|
|
15
|
|
|
1,943
|
|
|
8
|
|
|
1,935
|
|
||||||||
Pledged asset lines
|
4,361
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|
4,369
|
|
|
—
|
|
|
4,369
|
|
||||||||
Other
|
176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
2
|
|
|
174
|
|
||||||||
Total bank loans
|
$
|
16,448
|
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
29
|
|
|
$
|
56
|
|
|
$
|
16,504
|
|
|
$
|
26
|
|
|
$
|
16,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
First Mortgages
(1,2)
|
$
|
9,100
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
34
|
|
|
$
|
9,134
|
|
|
$
|
17
|
|
|
$
|
9,117
|
|
HELOCs
(1,2)
|
2,336
|
|
|
2
|
|
|
2
|
|
|
10
|
|
|
14
|
|
|
2,350
|
|
|
8
|
|
|
2,342
|
|
||||||||
Pledged asset lines
|
3,846
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
3,851
|
|
|
—
|
|
|
3,851
|
|
||||||||
Other
|
94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
1
|
|
|
93
|
|
||||||||
Total bank loans
|
$
|
15,376
|
|
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
26
|
|
|
$
|
53
|
|
|
$
|
15,429
|
|
|
$
|
26
|
|
|
$
|
15,403
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||||||||||||
|
First Mortgages
|
|
HELOCs
|
|
Other
|
|
Total
(1)
|
|
First Mortgages
|
|
HELOCs
|
|
Other
|
|
Total
(1)
|
|
First Mortgages
|
|
HELOCs
|
|
Total
(1)
|
||||||||||||||||||||||
Balance at beginning of year
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
26
|
|
|
$
|
20
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
29
|
|
|
$
|
13
|
|
|
$
|
42
|
|
Charge-offs
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||||||||||
Recoveries
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|||||||||||
Provision for loan losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
1
|
|
|
(5
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|||||||||||
Balance at end of year
|
$
|
16
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
26
|
|
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
26
|
|
|
$
|
20
|
|
|
$
|
11
|
|
|
$
|
31
|
|
December 31,
|
2017
|
|
2016
|
||||
Nonaccrual loans
(1)
|
$
|
28
|
|
|
$
|
26
|
|
Other real estate owned
(2)
|
3
|
|
|
5
|
|
||
Total nonperforming assets
|
31
|
|
|
31
|
|
||
Troubled debt restructurings
|
11
|
|
|
14
|
|
||
Total impaired assets
|
$
|
42
|
|
|
$
|
45
|
|
•
|
Year of origination;
|
•
|
Borrower FICO scores at origination (Origination FICO);
|
•
|
Updated borrower FICO scores (Updated FICO);
|
•
|
Loan-to-value ratios at origination (Origination LTV); and
|
•
|
Estimated current LTV.
|
December 31, 2017
|
Balance
|
|
Weighted Average
Updated FICO |
|
Utilization
Rate (1) |
|
Percent of Loans that are on
Nonaccrual Status |
|||||
First Mortgages:
|
|
|
|
|
|
|
|
|||||
Estimated Current LTV
|
|
|
|
|
|
|
|
|||||
<
70%
|
$
|
9,046
|
|
|
775
|
|
|
N/A
|
|
|
0.09
|
%
|
>70% –
<
90%
|
961
|
|
|
769
|
|
|
N/A
|
|
|
0.46
|
%
|
|
>90% –
<
100%
|
5
|
|
|
714
|
|
|
N/A
|
|
|
10.49
|
%
|
|
>100%
|
4
|
|
|
713
|
|
|
N/A
|
|
|
6.23
|
%
|
|
Total
|
$
|
10,016
|
|
|
775
|
|
|
N/A
|
|
|
0.14
|
%
|
HELOCs:
|
|
|
|
|
|
|
|
|||||
Estimated Current LTV
(2)
|
|
|
|
|
|
|
|
|||||
<
70%
|
$
|
1,773
|
|
|
772
|
|
|
32
|
%
|
|
0.18
|
%
|
>70% –
<
90%
|
148
|
|
|
755
|
|
|
47
|
%
|
|
0.84
|
%
|
|
>90% –
<
100%
|
14
|
|
|
742
|
|
|
64
|
%
|
|
2.85
|
%
|
|
>100%
|
8
|
|
|
718
|
|
|
72
|
%
|
|
4.91
|
%
|
|
Total
|
$
|
1,943
|
|
|
770
|
|
|
33
|
%
|
|
0.27
|
%
|
Pledged asset lines:
|
|
|
|
|
|
|
|
|||||
Weighted Average LTV
(2)
|
|
|
|
|
|
|
|
|
|
|||
= 70%
|
$
|
4,369
|
|
|
765
|
|
|
41
|
%
|
|
—
|
|
December 31, 2016
|
Balance
|
|
Weighted Average
Updated FICO |
|
Utilization
Rate (1) |
|
Percent of Loans that are on
Nonaccrual Status |
|||||
First Mortgages:
|
|
|
|
|
|
|
|
|||||
Estimated Current LTV
|
|
|
|
|
|
|
|
|||||
<
70%
|
$
|
8,350
|
|
|
774
|
|
|
N/A
|
|
|
0.04
|
%
|
>70% –
<
90%
|
743
|
|
|
768
|
|
|
N/A
|
|
|
0.35
|
%
|
|
>90% –
<
100%
|
21
|
|
|
747
|
|
|
N/A
|
|
|
2.08
|
%
|
|
>100%
|
20
|
|
|
709
|
|
|
N/A
|
|
|
14.50
|
%
|
|
Total
|
$
|
9,134
|
|
|
773
|
|
|
N/A
|
|
|
0.10
|
%
|
HELOCs:
|
|
|
|
|
|
|
|
|||||
Estimated Current LTV
(2)
|
|
|
|
|
|
|
|
|||||
<
70%
|
$
|
2,070
|
|
|
771
|
|
|
35
|
%
|
|
0.12
|
%
|
>70% –
<
90%
|
234
|
|
|
757
|
|
|
50
|
%
|
|
0.40
|
%
|
|
>90% –
<
100%
|
29
|
|
|
747
|
|
|
66
|
%
|
|
1.74
|
%
|
|
>100%
|
17
|
|
|
728
|
|
|
70
|
%
|
|
3.73
|
%
|
|
Total
|
$
|
2,350
|
|
|
769
|
|
|
36
|
%
|
|
0.20
|
%
|
Pledged asset lines:
|
|
|
|
|
|
|
|
|||||
Weighted Average LTV
(2)
|
|
|
|
|
|
|
|
|
|
|||
= 70%
|
$
|
3,851
|
|
|
763
|
|
|
46
|
%
|
|
—
|
|
December 31, 2017
|
First Mortgages
|
|
HELOCs
|
||||
Year of origination
|
|
|
|
|
|||
Pre-2013
|
$
|
1,478
|
|
|
$
|
1,349
|
|
2013
|
1,326
|
|
|
147
|
|
||
2014
|
530
|
|
|
116
|
|
||
2015
|
1,218
|
|
|
128
|
|
||
2016
|
2,886
|
|
|
111
|
|
||
2017
|
2,578
|
|
|
92
|
|
||
Total
|
$
|
10,016
|
|
|
$
|
1,943
|
|
Origination FICO
|
|
|
|
|
|
||
<620
|
$
|
6
|
|
|
$
|
1
|
|
620 – 679
|
89
|
|
|
10
|
|
||
680 – 739
|
1,569
|
|
|
365
|
|
||
>
740
|
8,352
|
|
|
1,567
|
|
||
Total
|
$
|
10,016
|
|
|
$
|
1,943
|
|
Origination LTV
|
|
|
|
||||
<
70%
|
$
|
7,569
|
|
|
$
|
1,360
|
|
>70% –
<
90%
|
2,441
|
|
|
574
|
|
||
>90% –
<
100%
|
6
|
|
|
9
|
|
||
Total
|
$
|
10,016
|
|
|
$
|
1,943
|
|
December 31, 2016
|
First Mortgages
|
|
HELOCs
|
||||
Year of origination
|
|
|
|
|
|||
Pre-2013
|
$
|
2,136
|
|
|
$
|
1,765
|
|
2013
|
1,746
|
|
|
193
|
|
||
2014
|
685
|
|
|
152
|
|
||
2015
|
1,458
|
|
|
146
|
|
||
2016
|
3,109
|
|
|
94
|
|
||
Total
|
$
|
9,134
|
|
|
$
|
2,350
|
|
Origination FICO
|
|
|
|
|
|
||
<620
|
$
|
8
|
|
|
$
|
—
|
|
620 – 679
|
92
|
|
|
13
|
|
||
680 – 739
|
1,427
|
|
|
432
|
|
||
>
740
|
7,607
|
|
|
1,905
|
|
||
Total
|
$
|
9,134
|
|
|
$
|
2,350
|
|
Origination LTV
|
|
|
|
|
|
||
<
70%
|
$
|
6,865
|
|
|
$
|
1,628
|
|
>70% –
<
90%
|
2,260
|
|
|
709
|
|
||
>90% –
<
100%
|
9
|
|
|
13
|
|
||
Total
|
$
|
9,134
|
|
|
$
|
2,350
|
|
December 31, 2017
|
Balance
|
||
Converted to amortizing loan by period end
|
$
|
437
|
|
Within 1 year
|
559
|
|
|
> 1 year – 3 years
|
204
|
|
|
> 3 years – 5 years
|
149
|
|
|
> 5 years
|
594
|
|
|
Total
|
$
|
1,943
|
|
7.
|
Equipment, Office Facilities, and Property
|
December 31,
|
2017
|
|
|
2016
|
|
||
Software
|
$
|
1,490
|
|
|
$
|
1,335
|
|
Buildings
|
810
|
|
|
807
|
|
||
Leasehold improvements
|
357
|
|
|
342
|
|
||
Information technology equipment
|
326
|
|
|
299
|
|
||
Furniture and equipment
|
193
|
|
|
190
|
|
||
Land
|
167
|
|
|
168
|
|
||
Construction in progress
|
142
|
|
|
26
|
|
||
Telecommunications equipment
|
66
|
|
|
67
|
|
||
Total equipment, office facilities, and property
|
3,551
|
|
|
3,234
|
|
||
Accumulated depreciation and amortization
|
(2,080
|
)
|
|
(1,935
|
)
|
||
Total equipment, office facilities, and property — net
|
$
|
1,471
|
|
|
$
|
1,299
|
|
8.
|
Intangible Assets and Goodwill
|
|
December 31, 2017
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Carrying
Value |
|
Accumulated
Amortization |
|
Net Carrying
Value |
Gross Carrying
Value |
|
Accumulated
Amortization |
|
Net Carrying
Value |
||||||||||||
Client relationships
|
$
|
274
|
|
|
$
|
189
|
|
|
$
|
85
|
|
$
|
274
|
|
|
$
|
169
|
|
|
$
|
105
|
|
Technology
|
89
|
|
|
66
|
|
|
23
|
|
89
|
|
|
56
|
|
|
33
|
|
||||||
Trade name
|
15
|
|
|
15
|
|
|
—
|
|
16
|
|
|
10
|
|
|
6
|
|
||||||
Total intangible assets
|
$
|
378
|
|
|
$
|
270
|
|
|
$
|
108
|
|
$
|
379
|
|
|
$
|
235
|
|
|
$
|
144
|
|
2018
|
$
|
30
|
|
2019
|
27
|
|
|
2020
|
22
|
|
|
2021
|
15
|
|
|
2022
|
11
|
|
|
Thereafter
|
2
|
|
|
Total
|
$
|
107
|
|
|
Investor
Services |
|
Advisor
Services |
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
1,096
|
|
|
$
|
131
|
|
|
$
|
1,227
|
|
Goodwill acquired and other changes during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31, 2016
|
1,096
|
|
|
131
|
|
|
1,227
|
|
|||
Goodwill acquired and other changes during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31, 2017
|
$
|
1,096
|
|
|
$
|
131
|
|
|
$
|
1,227
|
|
December 31,
|
2017
|
|
2016
|
||||
Accounts receivable
(1)
|
$
|
461
|
|
|
$
|
451
|
|
Interest and dividends receivable
|
413
|
|
|
325
|
|
||
FHLB stock
(2)
|
405
|
|
|
81
|
|
||
Other investments
(3)
|
376
|
|
|
243
|
|
||
Prepaid expenses
|
126
|
|
|
90
|
|
||
Deferred tax asset — net
|
76
|
|
|
143
|
|
||
Other
|
92
|
|
|
75
|
|
||
Total other assets
|
$
|
1,949
|
|
|
$
|
1,408
|
|
10.
|
Variable Interest Entities
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Aggregate
assets |
|
Aggregate
liabilities |
|
Maximum exposure
to loss |
|
Aggregate
assets |
|
Aggregate
liabilities |
|
Maximum exposure to loss
|
||||||||||||
LIHTC Investments
(1)
|
$
|
304
|
|
|
$
|
203
|
|
|
$
|
304
|
|
|
$
|
189
|
|
|
$
|
135
|
|
|
$
|
189
|
|
Other CRA Investments
(2)
|
69
|
|
|
—
|
|
|
125
|
|
|
60
|
|
|
—
|
|
|
80
|
|
||||||
Total
|
$
|
373
|
|
|
$
|
203
|
|
|
$
|
429
|
|
|
$
|
249
|
|
|
$
|
135
|
|
|
$
|
269
|
|
11.
|
Bank Deposits
|
December 31,
|
2017
|
|
2016
|
||||
Interest-bearing deposits:
|
|
|
|
||||
Deposits swept from brokerage accounts
|
$
|
148,212
|
|
|
$
|
141,146
|
|
Checking
|
13,388
|
|
|
13,842
|
|
||
Savings and other
|
7,264
|
|
|
7,792
|
|
||
Total interest-bearing deposits
|
168,864
|
|
|
162,780
|
|
||
Non-interest-bearing deposits
|
792
|
|
|
674
|
|
||
Total bank deposits
|
$
|
169,656
|
|
|
$
|
163,454
|
|
|
Date of
|
|
Principal Amount Outstanding
|
||||||
|
Issuance
|
|
2017
|
|
2016
|
||||
Fixed-Rate Senior Notes:
|
|
|
|
|
|
||||
1.500% due March 10, 2018
(1)
|
03/10/15
|
|
$
|
625
|
|
|
$
|
625
|
|
2.200% due July 25, 2018
|
07/25/13
|
|
275
|
|
|
275
|
|
||
4.450% due July 22, 2020
|
07/22/10
|
|
700
|
|
|
700
|
|
||
3.225% due September 1, 2022
|
08/29/12
|
|
256
|
|
|
256
|
|
||
2.650% due January 25, 2023
|
12/07/17
|
|
800
|
|
|
—
|
|
||
3.000% due March 10, 2025
|
03/10/15
|
|
375
|
|
|
375
|
|
||
3.450% due February 13, 2026
|
11/13/15
|
|
350
|
|
|
350
|
|
||
3.200% due March 2, 2027
|
03/02/17
|
|
650
|
|
|
—
|
|
||
3.200% due January 25, 2028
|
12/07/17
|
|
700
|
|
|
—
|
|
||
Total fixed-rate senior notes
|
|
|
4,731
|
|
|
2,581
|
|
||
6.375% Medium-Term Notes
|
|
|
—
|
|
|
250
|
|
||
5.450% Finance lease obligation
(2)
|
06/04/04
|
|
61
|
|
|
68
|
|
||
Unamortized discount, net
|
|
|
(14
|
)
|
|
(13
|
)
|
||
Debt issuance costs
|
|
|
(25
|
)
|
|
(10
|
)
|
||
Total long-term debt
|
|
|
$
|
4,753
|
|
|
$
|
2,876
|
|
2018
|
$
|
908
|
|
2019
|
8
|
|
|
2020
|
709
|
|
|
2021
|
9
|
|
|
2022
|
266
|
|
|
Thereafter
|
2,892
|
|
|
Total maturities
|
4,792
|
|
|
Unamortized discount, net
|
(14
|
)
|
|
Debt issuance costs
|
(25
|
)
|
|
Total long-term debt
|
$
|
4,753
|
|
13.
|
Commitments and Contingencies
|
December 31,
|
2017
|
2016
|
||||
Commitments to extend credit related to unused HELOCs, PALs, and other lines of credit
|
$
|
10,060
|
|
$
|
8,445
|
|
Commitments to purchase First Mortgage loans
|
308
|
|
466
|
|
||
Total
|
$
|
10,368
|
|
$
|
8,911
|
|
December 31, 2017
|
Operating
Leases |
Subleases
|
Net
|
||||||
2018
|
$
|
137
|
|
$
|
6
|
|
$
|
131
|
|
2019
|
119
|
|
4
|
|
115
|
|
|||
2020
|
109
|
|
4
|
|
105
|
|
|||
2021
|
86
|
|
4
|
|
82
|
|
|||
2022
|
68
|
|
2
|
|
66
|
|
|||
Thereafter
|
310
|
|
1
|
|
309
|
|
|||
Total
|
$
|
829
|
|
$
|
21
|
|
$
|
808
|
|
14.
|
Financial Instruments Subject to Off-Balance Sheet Credit Risk
|
|
|
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheets |
|
||||||||||||||
|
Gross
Assets/ Liabilities |
Gross Amounts Offset in the Consolidated
Balance Sheets |
Net Amounts Presented in the Consolidated
Balance Sheets |
Counterparty
Offsetting |
Collateral
|
Net
Amount |
|||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||||||
Resale agreements
(1)
|
$
|
6,596
|
|
$
|
—
|
|
$
|
6,596
|
|
$
|
—
|
|
$
|
(6,596
|
)
|
(2)
|
$
|
—
|
|
Securities borrowed
(3)
|
222
|
|
—
|
|
222
|
|
(199
|
)
|
(22
|
)
|
|
1
|
|
||||||
Total
|
$
|
6,818
|
|
$
|
—
|
|
$
|
6,818
|
|
$
|
(199
|
)
|
$
|
(6,618
|
)
|
|
$
|
1
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||||
Securities loaned
(4,5)
|
$
|
966
|
|
$
|
—
|
|
$
|
966
|
|
$
|
(199
|
)
|
$
|
(670
|
)
|
|
$
|
97
|
|
Total
|
$
|
966
|
|
$
|
—
|
|
$
|
966
|
|
$
|
(199
|
)
|
$
|
(670
|
)
|
|
$
|
97
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||||||
Resale agreements
(1)
|
$
|
9,547
|
|
$
|
—
|
|
$
|
9,547
|
|
$
|
—
|
|
$
|
(9,547
|
)
|
(2)
|
$
|
—
|
|
Securities borrowed
(3)
|
393
|
|
—
|
|
393
|
|
(200
|
)
|
(189
|
)
|
|
4
|
|
||||||
Total
|
$
|
9,940
|
|
$
|
—
|
|
$
|
9,940
|
|
$
|
(200
|
)
|
$
|
(9,736
|
)
|
|
$
|
4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||||||
Securities loaned
(4,5)
|
$
|
1,996
|
|
$
|
—
|
|
$
|
1,996
|
|
$
|
(200
|
)
|
$
|
(1,660
|
)
|
|
$
|
136
|
|
Total
|
$
|
1,996
|
|
$
|
—
|
|
$
|
1,996
|
|
$
|
(200
|
)
|
$
|
(1,660
|
)
|
|
$
|
136
|
|
December 31,
|
2017
|
2016
|
||||
Fair value of client securities available to be pledged
|
$
|
25,905
|
|
$
|
21,516
|
|
Fair value of client securities pledged for:
|
|
|
||||
Fulfillment of requirements with the Options Clearing Corporation
(1)
|
2,280
|
|
1,519
|
|
||
Fulfillment of client short sales
|
2,011
|
|
2,048
|
|
||
Securities lending to other broker-dealers
|
784
|
|
1,626
|
|
||
Total collateral pledged
|
$
|
5,075
|
|
$
|
5,193
|
|
(1)
|
Client securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation.
|
December 31, 2017
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs
(Level 3) |
Balance at
Fair Value |
||||||||
Cash equivalents:
|
|
|
|
|
||||||||
Money market funds
|
$
|
2,727
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,727
|
|
Total cash equivalents
|
2,727
|
|
—
|
|
—
|
|
2,727
|
|
||||
Investments segregated and on deposit for regulatory purposes:
|
|
|
|
|
|
|
|
|||||
Certificates of deposit
|
—
|
|
2,198
|
|
—
|
|
2,198
|
|
||||
U.S. Government securities
|
—
|
|
3,658
|
|
—
|
|
3,658
|
|
||||
Total investments segregated and on deposit for regulatory purposes
|
—
|
|
5,856
|
|
—
|
|
5,856
|
|
||||
Other securities owned:
|
|
|
|
|
|
|
|
|||||
Equity and bond mutual funds
|
318
|
|
—
|
|
—
|
|
318
|
|
||||
Schwab Funds
®
money market funds
|
135
|
|
—
|
|
—
|
|
135
|
|
||||
State and municipal debt obligations
|
—
|
|
52
|
|
—
|
|
52
|
|
||||
Equity, U.S. Government and corporate debt, and other securities
|
2
|
|
32
|
|
—
|
|
34
|
|
||||
Total other securities owned
|
455
|
|
84
|
|
—
|
|
539
|
|
||||
Available for sale securities:
|
|
|
|
|
|
|
|
|||||
U.S. agency mortgage-backed securities
|
—
|
|
20,929
|
|
—
|
|
20,929
|
|
||||
U.S. Treasury securities
|
—
|
|
9,500
|
|
—
|
|
9,500
|
|
||||
Asset-backed securities
|
—
|
|
9,047
|
|
—
|
|
9,047
|
|
||||
Corporate debt securities
|
—
|
|
6,169
|
|
—
|
|
6,169
|
|
||||
Certificates of deposit
|
—
|
|
2,041
|
|
—
|
|
2,041
|
|
||||
U.S. agency notes
|
—
|
|
1,906
|
|
—
|
|
1,906
|
|
||||
Commercial paper
|
—
|
|
313
|
|
—
|
|
313
|
|
||||
Foreign government agency securities
|
—
|
|
50
|
|
—
|
|
50
|
|
||||
Non-agency commercial mortgage-backed securities
|
—
|
|
40
|
|
—
|
|
40
|
|
||||
Total available for sale securities
|
—
|
|
49,995
|
|
—
|
|
49,995
|
|
||||
Total
|
$
|
3,182
|
|
$
|
55,935
|
|
$
|
—
|
|
$
|
59,117
|
|
December 31, 2016
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs
(Level 3) |
Balance at
Fair Value |
||||||||
Cash equivalents:
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,514
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,514
|
|
Total cash equivalents
|
1,514
|
|
—
|
|
—
|
|
1,514
|
|
||||
Investments segregated and on deposit for regulatory purposes:
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
2,525
|
|
—
|
|
2,525
|
|
||||
U.S. Government securities
|
—
|
|
6,111
|
|
—
|
|
6,111
|
|
||||
Total investments segregated and on deposit for regulatory purposes
|
—
|
|
8,636
|
|
—
|
|
8,636
|
|
||||
Other securities owned:
|
|
|
|
|
|
|||||||
Equity and bond mutual funds
|
272
|
|
—
|
|
—
|
|
272
|
|
||||
Schwab Funds
®
money market funds
|
108
|
|
—
|
|
—
|
|
108
|
|
||||
State and municipal debt obligations
|
—
|
|
41
|
|
—
|
|
41
|
|
||||
Equity, U.S. Government and corporate debt, and other securities
|
2
|
|
26
|
|
—
|
|
28
|
|
||||
Total other securities owned
|
382
|
|
67
|
|
—
|
|
449
|
|
||||
Available for sale securities:
|
|
|
|
|
||||||||
U.S. agency mortgage-backed securities
|
—
|
|
33,195
|
|
—
|
|
33,195
|
|
||||
U.S. Treasury securities
|
—
|
|
8,623
|
|
—
|
|
8,623
|
|
||||
Asset-backed securities
|
—
|
|
20,335
|
|
—
|
|
20,335
|
|
||||
Corporate debt securities
|
—
|
|
9,852
|
|
—
|
|
9,852
|
|
||||
Certificates of deposit
|
—
|
|
2,071
|
|
—
|
|
2,071
|
|
||||
U.S. agency notes
|
—
|
|
1,907
|
|
—
|
|
1,907
|
|
||||
Commercial paper
|
—
|
|
214
|
|
—
|
|
214
|
|
||||
U.S. state and municipal securities
|
—
|
|
1,123
|
|
—
|
|
1,123
|
|
||||
Non-agency commercial mortgage-backed securities
|
—
|
|
45
|
|
—
|
|
45
|
|
||||
Total available for sale securities
|
—
|
|
77,365
|
|
—
|
|
77,365
|
|
||||
Total
|
$
|
1,896
|
|
$
|
86,068
|
|
$
|
—
|
|
$
|
87,964
|
|
December 31, 2017
|
Carrying
Amount |
Quoted Prices in Active Markets
for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs
(Level 3) |
Balance at
Fair Value |
||||||||||
Assets:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
11,490
|
|
$
|
—
|
|
$
|
11,490
|
|
$
|
—
|
|
$
|
11,490
|
|
Cash and investments segregated and on deposit for regulatory purposes
|
9,277
|
|
—
|
|
9,277
|
|
—
|
|
9,277
|
|
|||||
Receivables from brokers, dealers, and clearing organizations
|
649
|
|
—
|
|
649
|
|
—
|
|
649
|
|
|||||
Receivables from brokerage clients — net
|
20,568
|
|
—
|
|
20,568
|
|
—
|
|
20,568
|
|
|||||
Held to maturity securities:
|
|
|
|
|
|
||||||||||
U.S. agency mortgage-backed securities
|
101,197
|
|
—
|
|
100,453
|
|
—
|
|
100,453
|
|
|||||
Asset-backed securities
|
12,937
|
|
—
|
|
13,062
|
|
—
|
|
13,062
|
|
|||||
Corporate debt securities
|
4,078
|
|
—
|
|
4,086
|
|
—
|
|
4,086
|
|
|||||
U.S. state and municipal securities
|
1,247
|
|
—
|
|
1,304
|
|
—
|
|
1,304
|
|
|||||
Non-agency commercial mortgage-backed securities
|
994
|
|
—
|
|
999
|
|
—
|
|
999
|
|
|||||
U.S. Treasury securities
|
223
|
|
—
|
|
220
|
|
—
|
|
220
|
|
|||||
Certificates of deposit
|
200
|
|
—
|
|
200
|
|
—
|
|
200
|
|
|||||
Foreign government agency securities
|
50
|
|
—
|
|
49
|
|
—
|
|
49
|
|
|||||
Total held to maturity securities
|
120,926
|
|
—
|
|
120,373
|
|
—
|
|
120,373
|
|
|||||
Bank loans
—
net:
|
|
|
|
|
|
||||||||||
First Mortgages
|
10,000
|
|
—
|
|
9,917
|
|
—
|
|
9,917
|
|
|||||
HELOCs
|
1,935
|
|
—
|
|
2,025
|
|
—
|
|
2,025
|
|
|||||
Pledged asset lines
|
4,369
|
|
—
|
|
4,369
|
|
—
|
|
4,369
|
|
|||||
Other
|
174
|
|
—
|
|
174
|
|
—
|
|
174
|
|
|||||
Total bank loans
—
net
|
16,478
|
|
—
|
|
16,485
|
|
—
|
|
16,485
|
|
|||||
Other assets
|
781
|
|
—
|
|
781
|
|
—
|
|
781
|
|
|||||
Total
|
$
|
180,169
|
|
$
|
—
|
|
$
|
179,623
|
|
$
|
—
|
|
$
|
179,623
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Bank deposits
|
$
|
169,656
|
|
$
|
—
|
|
$
|
169,656
|
|
$
|
—
|
|
$
|
169,656
|
|
Payables to brokers, dealers, and clearing organizations
|
1,287
|
|
—
|
|
1,287
|
|
—
|
|
1,287
|
|
|||||
Payables to brokerage clients
|
31,243
|
|
—
|
|
31,243
|
|
—
|
|
31,243
|
|
|||||
Accrued expenses and other liabilities
|
1,463
|
|
—
|
|
1,463
|
|
—
|
|
1,463
|
|
|||||
Short-term borrowings
|
15,000
|
|
—
|
|
15,000
|
|
—
|
|
15,000
|
|
|||||
Long-term debt
|
4,753
|
|
—
|
|
4,811
|
|
—
|
|
4,811
|
|
|||||
Total
|
$
|
223,402
|
|
$
|
—
|
|
$
|
223,460
|
|
$
|
—
|
|
$
|
223,460
|
|
December 31, 2016
|
Carrying
Amount |
Quoted Prices in Active Markets
for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs
(Level 3) |
Balance at
Fair Value |
||||||||||
Assets:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
9,314
|
|
$
|
—
|
|
$
|
9,314
|
|
$
|
—
|
|
$
|
9,314
|
|
Cash and investments segregated and on deposit for regulatory purposes
|
13,533
|
|
—
|
|
13,533
|
|
—
|
|
13,533
|
|
|||||
Receivables from brokers, dealers, and clearing organizations
|
728
|
|
—
|
|
728
|
|
—
|
|
728
|
|
|||||
Receivables from brokerage clients — net
|
17,151
|
|
—
|
|
17,151
|
|
—
|
|
17,151
|
|
|||||
Held to maturity securities:
|
|
|
|
|
|
||||||||||
U.S. agency mortgage-backed securities
|
72,439
|
|
—
|
|
71,677
|
|
—
|
|
71,677
|
|
|||||
Asset-backed securities
|
941
|
|
—
|
|
941
|
|
—
|
|
941
|
|
|||||
Corporate debt securities
|
436
|
|
—
|
|
436
|
|
—
|
|
436
|
|
|||||
U.S. state and municipal securities
|
68
|
|
—
|
|
68
|
|
—
|
|
68
|
|
|||||
Non-agency commercial mortgage-backed securities
|
997
|
|
—
|
|
1,004
|
|
—
|
|
1,004
|
|
|||||
U.S. Treasury securities
|
223
|
|
—
|
|
219
|
|
—
|
|
219
|
|
|||||
Commercial paper
|
99
|
|
—
|
|
99
|
|
—
|
|
99
|
|
|||||
Total held to maturity securities
|
75,203
|
|
—
|
|
74,444
|
|
—
|
|
74,444
|
|
|||||
Bank loans
—
net:
|
|
|
|
|
|
||||||||||
First Mortgages
|
9,117
|
|
—
|
|
9,064
|
|
—
|
|
9,064
|
|
|||||
HELOCs
|
2,342
|
|
—
|
|
2,458
|
|
—
|
|
2,458
|
|
|||||
Pledged asset lines
|
3,851
|
|
—
|
|
3,851
|
|
—
|
|
3,851
|
|
|||||
Other
|
93
|
|
—
|
|
94
|
|
—
|
|
94
|
|
|||||
Total bank loans
—
net
|
15,403
|
|
—
|
|
15,467
|
|
—
|
|
15,467
|
|
|||||
Other assets
|
328
|
|
—
|
|
328
|
|
—
|
|
328
|
|
|||||
Total
|
$
|
131,660
|
|
$
|
—
|
|
$
|
130,965
|
|
$
|
—
|
|
$
|
130,965
|
|
Liabilities:
|
|
|
|
|
|
||||||||||
Bank deposits
|
$
|
163,454
|
|
$
|
—
|
|
$
|
163,454
|
|
$
|
—
|
|
$
|
163,454
|
|
Payables to brokers, dealers, and clearing organizations
|
2,407
|
|
—
|
|
2,407
|
|
—
|
|
2,407
|
|
|||||
Payables to brokerage clients
|
35,894
|
|
—
|
|
35,894
|
|
—
|
|
35,894
|
|
|||||
Accrued expenses and other liabilities
|
1,169
|
|
—
|
|
1,169
|
|
—
|
|
1,169
|
|
|||||
Long-term debt
|
2,876
|
|
—
|
|
2,941
|
|
—
|
|
2,941
|
|
|||||
Total
|
$
|
205,800
|
|
$
|
—
|
|
$
|
205,865
|
|
$
|
—
|
|
$
|
205,865
|
|
|
|
|
Dividend Rate in Effect at December 31, 2017
|
|
|
Date at Which Dividend Rate Becomes Floating
|
|
Floating Annual Rate of Three-month LIBOR plus:
|
|||||||||||||||||
|
Shares Issued and Outstanding (In thousands) at December 31,
(1)
|
Liquidation Preference Per Share
|
Carrying Value at December 31,
|
|
|
Earliest Redemption Date
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Issue Date
|
|
||||||||||||||||
Fixed-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Series B
(2)
|
—
|
|
|
485
|
|
|
1,000
|
|
$
|
—
|
|
|
$
|
482
|
|
06/06/12
|
—
|
|
|
—
|
|
N/A
|
|
N/A
|
|
Series C
|
600
|
|
|
600
|
|
|
1,000
|
|
585
|
|
|
585
|
|
08/03/15
|
6.000
|
%
|
|
12/01/20
|
|
N/A
|
|
N/A
|
|
||
Series D
|
750
|
|
|
750
|
|
|
1,000
|
|
728
|
|
|
728
|
|
03/07/16
|
5.950
|
%
|
|
06/01/21
|
|
N/A
|
|
N/A
|
|
||
Fixed-to-floating-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Series A
|
400
|
|
|
400
|
|
|
1,000
|
|
397
|
|
|
397
|
|
01/26/12
|
7.000
|
%
|
|
02/01/22
|
|
02/01/22
|
|
4.820
|
%
|
||
Series E
|
6
|
|
|
6
|
|
|
100,000
|
|
591
|
|
|
591
|
|
10/31/16
|
4.625
|
%
|
|
03/01/22
|
|
03/01/22
|
|
3.315
|
%
|
||
Series F
|
5
|
|
|
—
|
|
|
100,000
|
|
492
|
|
|
—
|
|
10/31/17
|
5.000
|
%
|
|
12/01/27
|
|
12/01/27
|
|
2.575
|
%
|
||
Total Preferred Stock
|
1,761
|
|
|
2,241
|
|
|
|
|
$
|
2,793
|
|
|
$
|
2,783
|
|
|
|
|
|
|
|
|
17.
|
Accumulated Other Comprehensive Income
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||
|
Before
tax |
|
Tax
effect |
|
Net of
tax |
|
Before
tax |
|
Tax
effect |
|
Net of
tax |
|
Before
tax |
|
Tax
effect |
|
Net of
tax |
||||||||||||||||||
Change in net unrealized gain (loss) on available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net unrealized gain (loss)
|
$
|
13
|
|
|
$
|
(7
|
)
|
|
$
|
6
|
|
|
$
|
(44
|
)
|
|
$
|
16
|
|
|
$
|
(28
|
)
|
|
$
|
(477
|
)
|
|
$
|
178
|
|
|
$
|
(299
|
)
|
Reclassification of net unrealized loss on securities transferred to held to maturity
(1)
|
227
|
|
|
(85
|
)
|
|
142
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other reclassifications included in other revenue
|
(12
|
)
|
|
4
|
|
|
(8
|
)
|
|
(4
|
)
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Change in net unrealized gain (loss) on held to maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reclassification of net unrealized loss on securities transferred from available for sale
(1)
|
(227
|
)
|
|
85
|
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of amounts previously recorded upon transfer from available for sale
|
31
|
|
|
(11
|
)
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other
|
(11
|
)
|
|
4
|
|
|
(7
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other comprehensive income (loss)
|
$
|
21
|
|
|
$
|
(10
|
)
|
|
$
|
11
|
|
|
$
|
(47
|
)
|
|
$
|
18
|
|
|
$
|
(29
|
)
|
|
$
|
(477
|
)
|
|
$
|
178
|
|
|
$
|
(299
|
)
|
|
Total
Accumulated Other Comprehensive Income |
||
Balance at December 31, 2014
|
$
|
165
|
|
Net unrealized gain (loss) on available for sale securities
|
(299
|
)
|
|
Balance at December 31, 2015
|
$
|
(134
|
)
|
Net unrealized gain (loss) on available for sale securities
|
(30
|
)
|
|
Other
|
$
|
1
|
|
Balance at December 31, 2016
|
$
|
(163
|
)
|
Available for sale securities:
|
|
||
Net unrealized gain (loss)
|
6
|
|
|
Reclassification of net unrealized loss on securities transferred to held to maturity
|
142
|
|
|
Other reclassifications included in other revenue
|
(8
|
)
|
|
Held to maturity securities:
|
|
||
Reclassification of net unrealized loss on securities transferred from available for sale
|
(142
|
)
|
|
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale
|
20
|
|
|
Other
|
(7
|
)
|
|
Balance at December 31, 2017
|
$
|
(152
|
)
|
18.
|
Employee Incentive, Retirement, Deferred Compensation, and Career Achievement Plans
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Stock option expense
|
$
|
50
|
|
|
$
|
45
|
|
|
$
|
46
|
|
Restricted stock unit expense
|
94
|
|
|
89
|
|
|
83
|
|
|||
Employee stock purchase plan expense
|
9
|
|
|
7
|
|
|
6
|
|
|||
Total share-based compensation expense
|
$
|
153
|
|
|
$
|
141
|
|
|
$
|
135
|
|
Income tax benefit on share-based compensation expense
(1)
|
$
|
(57
|
)
|
|
$
|
(53
|
)
|
|
$
|
(51
|
)
|
|
Number
of Options (In millions) |
|
Weighted- Average Exercise Price
per Share |
|
Weighted- Average Remaining Contractual
Life (in years) |
|
Aggregate Intrinsic
Value |
|||||
Outstanding at December 31, 2016
|
37
|
|
|
$
|
22.12
|
|
|
6.50
|
|
$
|
649
|
|
Granted
|
4
|
|
|
43.71
|
|
|
|
|
|
|||
Exercised
|
(9
|
)
|
|
18.20
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
31.02
|
|
|
|
|
|
|||
Expired
|
—
|
|
|
24.82
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
32
|
|
|
$
|
26.16
|
|
|
6.38
|
|
$
|
814
|
|
Vested and expected to vest at December 31, 2017
|
31
|
|
|
$
|
26.02
|
|
|
6.35
|
|
$
|
811
|
|
Vested and exercisable at December 31, 2017
|
20
|
|
|
$
|
20.82
|
|
|
5.02
|
|
$
|
612
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted-average fair value of options granted per share
|
$
|
13.04
|
|
|
$
|
8.73
|
|
|
$
|
8.56
|
|
Cash received from options exercised
|
171
|
|
|
144
|
|
|
90
|
|
|||
Tax benefit realized on options exercised
|
70
|
|
|
38
|
|
|
22
|
|
|||
Aggregate intrinsic value of options exercised
|
241
|
|
|
149
|
|
|
90
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||
Weighted-average expected dividend yield
|
1.06
|
%
|
|
1.22
|
%
|
|
1.22
|
%
|
Weighted-average expected volatility
|
34
|
%
|
|
30
|
%
|
|
28
|
%
|
Weighted-average risk-free interest rate
|
2.1
|
%
|
|
1.8
|
%
|
|
2.2
|
%
|
Expected life (in years)
|
4.1 - 5.3
|
|
|
4.7 - 7.3
|
|
|
4.7 - 7.5
|
|
|
Number
of Units (In millions) |
|
Weighted- Average Grant Date Fair Value
per Unit |
|||
Outstanding at December 31, 2016
|
8
|
|
|
$
|
29.41
|
|
Granted
|
2
|
|
|
44.23
|
|
|
Vested
|
(3
|
)
|
|
28.15
|
|
|
Forfeited
|
—
|
|
|
30.86
|
|
|
Outstanding at December 31, 2017
|
7
|
|
|
$
|
35.16
|
|
December 31,
|
2017
|
|
2016
|
||||
Projected benefit obligation at beginning of year
|
$
|
26
|
|
|
$
|
17
|
|
Benefit cost
|
9
|
|
|
7
|
|
||
Actuarial (gain)/loss
|
9
|
|
|
2
|
|
||
Projected benefit obligation at end of year
(1)
|
$
|
44
|
|
|
$
|
26
|
|
December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
8
|
|
Interest cost
|
1
|
|
|
1
|
|
|
—
|
|
|||
Net benefit cost
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
|
|
|
|
|
||||||
Assumptions used to determine net benefit cost:
|
|
|
|
|
|
||||||
Discount rate
|
3.71
|
%
|
|
4.62
|
%
|
|
4.19
|
%
|
|||
Rate of compensation increase
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|||
Investment crediting rate for notional account balances
|
6.50
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
December 31,
|
2017
|
|
2016
|
||||
Change in AOCI:
|
|
|
|
||||
Beginning balance
|
$
|
1
|
|
|
$
|
—
|
|
Actuarial gain/(loss)
|
(11
|
)
|
|
1
|
|
||
Ending balance
|
$
|
(10
|
)
|
|
$
|
1
|
|
December 31,
|
2017
|
|
2016
|
||||
Components in AOCI:
|
|
|
|
||||
Net gain/(loss)
|
$
|
(10
|
)
|
|
$
|
1
|
|
Amount recognized in AOCI
|
$
|
(10
|
)
|
|
$
|
1
|
|
Tax effect
|
$
|
4
|
|
|
$
|
—
|
|
Net amount recognized in AOCI
|
$
|
(6
|
)
|
|
$
|
1
|
|
19.
|
Taxes on Income
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,132
|
|
|
$
|
980
|
|
|
$
|
740
|
|
State
|
106
|
|
|
109
|
|
|
99
|
|
|||
Total current
|
1,238
|
|
|
1,089
|
|
|
839
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
58
|
|
|
13
|
|
|
(6
|
)
|
|||
State
|
—
|
|
|
2
|
|
|
(1
|
)
|
|||
Total deferred
|
58
|
|
|
15
|
|
|
(7
|
)
|
|||
Taxes on income
|
$
|
1,296
|
|
|
$
|
1,104
|
|
|
$
|
832
|
|
December 31,
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee compensation, severance, and benefits
|
$
|
133
|
|
|
$
|
216
|
|
Net unrealized loss on available for sale securities
|
57
|
|
|
97
|
|
||
Reserves and allowances
|
15
|
|
|
25
|
|
||
Facilities lease commitments
|
14
|
|
|
25
|
|
||
State and local taxes
|
12
|
|
|
17
|
|
||
Net operating loss carryforwards
|
5
|
|
|
5
|
|
||
Other
|
3
|
|
|
—
|
|
||
Total deferred tax assets
|
239
|
|
|
385
|
|
||
Valuation allowance
|
(2
|
)
|
|
(3
|
)
|
||
Deferred tax assets
—
net of valuation allowance
|
237
|
|
|
382
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Capitalized internal-use software development costs
|
(89
|
)
|
|
(118
|
)
|
||
Depreciation and amortization
|
(72
|
)
|
|
(114
|
)
|
||
Other
|
—
|
|
|
(7
|
)
|
||
Total deferred tax liabilities
|
(161
|
)
|
|
(239
|
)
|
||
Deferred tax asset
—
net
(1)
|
$
|
76
|
|
|
$
|
143
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal tax benefit
|
2.2
|
|
|
2.4
|
|
|
2.6
|
|
Equity compensation benefit
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
Other
(1)
|
0.7
|
|
|
(0.5
|
)
|
|
(1.1
|
)
|
Effective income tax rate
|
35.5
|
%
|
|
36.9
|
%
|
|
36.5
|
%
|
December 31,
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
$
|
93
|
|
|
$
|
48
|
|
Additions for tax positions related to the current year
|
22
|
|
|
16
|
|
||
Additions for tax positions related to prior years
|
15
|
|
|
32
|
|
||
Reductions for tax positions related to prior years
|
(2
|
)
|
|
(2
|
)
|
||
Reductions due to lapse of statute of limitations
|
—
|
|
|
—
|
|
||
Reductions for settlements with tax authorities
|
(17
|
)
|
|
(1
|
)
|
||
Balance at end of year
|
$
|
111
|
|
|
$
|
93
|
|
20.
|
Earnings Per Common Share
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
2,354
|
|
|
$
|
1,889
|
|
|
$
|
1,447
|
|
Preferred stock dividends and other
(1)
|
(174
|
)
|
|
(143
|
)
|
|
(83
|
)
|
|||
Net income available to common stockholders
|
$
|
2,180
|
|
|
$
|
1,746
|
|
|
$
|
1,364
|
|
Weighted-average common shares outstanding — basic
|
1,339
|
|
|
1,324
|
|
|
1,315
|
|
|||
Common stock equivalent shares related to stock incentive plans
|
14
|
|
|
10
|
|
|
12
|
|
|||
Weighted-average common shares outstanding — diluted
(2)
|
1,353
|
|
|
1,334
|
|
|
1,327
|
|
|||
Basic EPS
|
$
|
1.63
|
|
|
$
|
1.32
|
|
|
$
|
1.04
|
|
Diluted EPS
|
$
|
1.61
|
|
|
$
|
1.31
|
|
|
$
|
1.03
|
|
|
Actual
|
|
Minimum to be
Well Capitalized |
|
Minimum Capital
Requirement |
|||||||||||||||
December 31, 2017
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
CSC
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Common Equity Tier 1 Risk-Based Capital
|
$
|
14,630
|
|
|
19.3
|
%
|
|
N/A
|
|
|
|
$
|
3,414
|
|
|
4.5
|
%
|
|||
Tier 1 Risk-Based Capital
|
17,423
|
|
|
23.0
|
%
|
|
N/A
|
|
|
|
4,552
|
|
|
6.0
|
%
|
|||||
Total Risk-Based Capital
|
17,452
|
|
|
23.0
|
%
|
|
N/A
|
|
|
|
6,069
|
|
|
8.0
|
%
|
|||||
Tier 1 Leverage
|
17,423
|
|
|
7.6
|
%
|
|
N/A
|
|
|
|
9,218
|
|
|
4.0
|
%
|
|||||
Schwab Bank
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Common Equity Tier 1 Risk-Based Capital
|
$
|
13,355
|
|
|
20.1
|
%
|
|
$
|
4,324
|
|
|
6.5
|
%
|
|
$
|
2,993
|
|
|
4.5
|
%
|
Tier 1 Risk-Based Capital
|
13,355
|
|
|
20.1
|
%
|
|
5,321
|
|
|
8.0
|
%
|
|
3,991
|
|
|
6.0
|
%
|
|||
Total Risk-Based Capital
|
13,382
|
|
|
20.1
|
%
|
|
6,652
|
|
|
10.0
|
%
|
|
5,321
|
|
|
8.0
|
%
|
|||
Tier 1 Leverage
|
13,355
|
|
|
7.1
|
%
|
|
9,462
|
|
|
5.0
|
%
|
|
7,569
|
|
|
4.0
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CSC
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Common Equity Tier 1 Risk-Based Capital
|
$
|
12,574
|
|
|
18.4
|
%
|
|
N/A
|
|
|
|
$
|
3,068
|
|
|
4.5
|
%
|
|||
Tier 1 Risk-Based Capital
|
15,357
|
|
|
22.5
|
%
|
|
N/A
|
|
|
|
4,091
|
|
|
6.0
|
%
|
|||||
Total Risk-Based Capital
|
15,384
|
|
|
22.6
|
%
|
|
N/A
|
|
|
|
5,454
|
|
|
8.0
|
%
|
|||||
Tier 1 Leverage
|
15,357
|
|
|
7.2
|
%
|
|
N/A
|
|
|
|
8,516
|
|
|
4.0
|
%
|
|||||
Schwab Bank
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Common Equity Tier 1 Risk-Based Capital
|
$
|
11,878
|
|
|
19.8
|
%
|
|
$
|
3,894
|
|
|
6.5
|
%
|
|
$
|
2,696
|
|
|
4.5
|
%
|
Tier 1 Risk-Based Capital
|
11,878
|
|
|
19.8
|
%
|
|
4,793
|
|
|
8.0
|
%
|
|
3,595
|
|
|
6.0
|
%
|
|||
Total Risk-Based Capital
|
11,904
|
|
|
19.9
|
%
|
|
5,992
|
|
|
10.0
|
%
|
|
4,793
|
|
|
8.0
|
%
|
|||
Tier 1 Leverage
|
11,878
|
|
|
7.0
|
%
|
|
8,456
|
|
|
5.0
|
%
|
|
6,765
|
|
|
4.0
|
%
|
December 31,
|
2017
|
|
2016
|
||||
Net capital
|
$
|
2,118
|
|
|
$
|
1,846
|
|
Minimum net capital required
|
0.250
|
|
|
0.250
|
|
||
2% of aggregate debit balances
|
435
|
|
|
355
|
|
||
Net capital in excess of required net capital
|
1,683
|
|
|
1,491
|
|
22.
|
Segment Information
|
|
Investor Services
|
|
Advisor Services
|
|
Total
|
||||||||||||||||||||||||||||||
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net interest revenue
|
$
|
3,231
|
|
|
$
|
2,591
|
|
|
$
|
2,133
|
|
|
$
|
1,051
|
|
|
$
|
731
|
|
|
$
|
392
|
|
|
$
|
4,282
|
|
|
$
|
3,322
|
|
|
$
|
2,525
|
|
Asset management and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
administration fees
|
2,344
|
|
|
2,093
|
|
|
1,837
|
|
|
1,048
|
|
|
962
|
|
|
813
|
|
|
3,392
|
|
|
3,055
|
|
|
2,650
|
|
|||||||||
Trading revenue
|
408
|
|
|
524
|
|
|
556
|
|
|
246
|
|
|
301
|
|
|
310
|
|
|
654
|
|
|
825
|
|
|
866
|
|
|||||||||
Other
|
217
|
|
|
199
|
|
|
234
|
|
|
73
|
|
|
72
|
|
|
94
|
|
|
290
|
|
|
271
|
|
|
328
|
|
|||||||||
Provision for loan losses
|
—
|
|
|
4
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
11
|
|
|||||||||
Total net revenues
|
6,200
|
|
|
5,411
|
|
|
4,771
|
|
|
2,418
|
|
|
2,067
|
|
|
1,609
|
|
|
8,618
|
|
|
7,478
|
|
|
6,380
|
|
|||||||||
Expenses Excluding Interest
|
3,725
|
|
|
3,380
|
|
|
3,090
|
|
|
1,243
|
|
|
1,105
|
|
|
1,011
|
|
|
4,968
|
|
|
4,485
|
|
|
4,101
|
|
|||||||||
Income before taxes on income
|
$
|
2,475
|
|
|
$
|
2,031
|
|
|
$
|
1,681
|
|
|
$
|
1,175
|
|
|
$
|
962
|
|
|
$
|
598
|
|
|
$
|
3,650
|
|
|
$
|
2,993
|
|
|
$
|
2,279
|
|
Capital expenditures
|
$
|
265
|
|
|
$
|
234
|
|
|
$
|
195
|
|
|
$
|
147
|
|
|
$
|
119
|
|
|
$
|
90
|
|
|
$
|
412
|
|
|
$
|
353
|
|
|
$
|
285
|
|
Depreciation and amortization
|
$
|
203
|
|
|
$
|
180
|
|
|
$
|
171
|
|
|
$
|
66
|
|
|
$
|
54
|
|
|
$
|
53
|
|
|
$
|
269
|
|
|
$
|
234
|
|
|
$
|
224
|
|
23.
|
The Charles Schwab Corporation – Parent Company Only Financial Statements
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Interest revenue
|
$
|
33
|
|
|
$
|
22
|
|
|
$
|
12
|
|
Interest expense
|
(114
|
)
|
|
(100
|
)
|
|
(86
|
)
|
|||
Net interest expense
|
(81
|
)
|
|
(78
|
)
|
|
(74
|
)
|
|||
Other
|
3
|
|
|
1
|
|
|
4
|
|
|||
Expenses excluding interest
|
(32
|
)
|
|
(21
|
)
|
|
(27
|
)
|
|||
Loss before income tax benefit and equity in net income of subsidiaries
|
(110
|
)
|
|
(98
|
)
|
|
(97
|
)
|
|||
Income tax benefit
|
27
|
|
|
34
|
|
|
41
|
|
|||
Loss before equity in net income of subsidiaries
|
(83
|
)
|
|
(64
|
)
|
|
(56
|
)
|
|||
Equity in net income of subsidiaries:
|
|
|
|
|
|
||||||
Equity in undistributed net income of subsidiaries
|
1,479
|
|
|
1,690
|
|
|
1,287
|
|
|||
Dividends from bank subsidiary
|
625
|
|
|
—
|
|
|
—
|
|
|||
Dividends from non-bank subsidiaries
|
333
|
|
|
263
|
|
|
216
|
|
|||
Net Income
|
2,354
|
|
|
1,889
|
|
|
1,447
|
|
|||
Preferred stock dividends and other
(1)
|
174
|
|
|
143
|
|
|
83
|
|
|||
Net Income Available to Common Stockholders
|
$
|
2,180
|
|
|
$
|
1,746
|
|
|
$
|
1,364
|
|
December 31,
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,825
|
|
|
$
|
1,189
|
|
Receivables from subsidiaries
|
571
|
|
|
503
|
|
||
Available for sale securities
|
573
|
|
|
569
|
|
||
Held to maturity securities
|
223
|
|
|
223
|
|
||
Other securities owned — at fair value
|
76
|
|
|
75
|
|
||
Loans to non-bank subsidiaries
|
448
|
|
|
—
|
|
||
Investment in non-bank subsidiaries
|
5,393
|
|
|
5,044
|
|
||
Investment in bank subsidiary
|
13,224
|
|
|
11,726
|
|
||
Other assets
|
160
|
|
|
124
|
|
||
Total assets
|
$
|
23,493
|
|
|
$
|
19,453
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Accrued expenses and other liabilities
|
$
|
276
|
|
|
$
|
219
|
|
Payables to subsidiaries
|
—
|
|
|
6
|
|
||
Long-term debt
|
4,692
|
|
|
2,807
|
|
||
Total liabilities
|
4,968
|
|
|
3,032
|
|
||
Stockholders’ equity
|
18,525
|
|
|
16,421
|
|
||
Total liabilities and stockholders’ equity
|
$
|
23,493
|
|
|
$
|
19,453
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,354
|
|
|
$
|
1,889
|
|
|
$
|
1,447
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
|
||||||
operating activities:
|
|
|
|
|
|
||||||
Equity in undistributed earnings of subsidiaries
|
(1,479
|
)
|
|
(1,690
|
)
|
|
(1,287
|
)
|
|||
Other
|
5
|
|
|
(37
|
)
|
|
(31
|
)
|
|||
Net change in:
|
|
|
|
|
|
||||||
Other securities owned
|
(1
|
)
|
|
(10
|
)
|
|
9
|
|
|||
Other assets
|
(26
|
)
|
|
(27
|
)
|
|
(32
|
)
|
|||
Accrued expenses and other liabilities
|
44
|
|
|
30
|
|
|
4
|
|
|||
Net cash provided by (used for) operating activities
|
897
|
|
|
155
|
|
|
110
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Due from (to) subsidiaries — net
|
(374
|
)
|
|
95
|
|
|
93
|
|
|||
Increase in investments in subsidiaries
|
(342
|
)
|
|
(1,547
|
)
|
|
(611
|
)
|
|||
Repayments (Advances) of subordinated loan to CS&Co
|
—
|
|
|
465
|
|
|
(150
|
)
|
|||
Purchases of available for sale securities
|
(201
|
)
|
|
(2
|
)
|
|
(842
|
)
|
|||
Proceeds from sales of available for sale securities
|
197
|
|
|
2
|
|
|
200
|
|
|||
Principal payments on available for sale securities
|
—
|
|
|
—
|
|
|
75
|
|
|||
Purchases of held to maturity securities
|
—
|
|
|
—
|
|
|
(223
|
)
|
|||
Other investing activities
|
(6
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Net cash provided by (used for) investing activities
|
(726
|
)
|
|
(991
|
)
|
|
(1,458
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Issuance of long-term debt
|
2,129
|
|
|
—
|
|
|
1,346
|
|
|||
Repayment of long-term debt
|
(250
|
)
|
|
—
|
|
|
(350
|
)
|
|||
Net proceeds from preferred stock offerings
|
492
|
|
|
1,316
|
|
|
581
|
|
|||
Redemption of preferred stock
|
(485
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(592
|
)
|
|
(486
|
)
|
|
(387
|
)
|
|||
Proceeds from stock options exercised and other
|
171
|
|
|
144
|
|
|
90
|
|
|||
Other financing activities
|
—
|
|
|
44
|
|
|
32
|
|
|||
Net cash provided by (used for) financing activities
|
1,465
|
|
|
1,018
|
|
|
1,312
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
1,636
|
|
|
182
|
|
|
(36
|
)
|
|||
Cash and Cash Equivalents at Beginning of Year
|
1,189
|
|
|
1,007
|
|
|
1,043
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
2,825
|
|
|
$
|
1,189
|
|
|
$
|
1,007
|
|
|
Fourth
Quarter |
|
Third
Quarter |
|
Second
Quarter |
|
First
Quarter |
||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Total Net Revenues
|
$
|
2,242
|
|
|
$
|
2,165
|
|
|
$
|
2,130
|
|
|
$
|
2,081
|
|
Total Expenses Excluding Interest
|
$
|
1,289
|
|
|
$
|
1,220
|
|
|
$
|
1,221
|
|
|
$
|
1,238
|
|
Net Income
|
$
|
597
|
|
|
$
|
618
|
|
|
$
|
575
|
|
|
$
|
564
|
|
Net Income Available to Common Stockholders
|
$
|
550
|
|
|
$
|
575
|
|
|
$
|
530
|
|
|
$
|
525
|
|
Weighted-Average Common Shares Outstanding — Basic
|
1,343
|
|
|
1,339
|
|
|
1,338
|
|
|
1,336
|
|
||||
Weighted-Average Common Shares Outstanding — Diluted
|
1,358
|
|
|
1,353
|
|
|
1,351
|
|
|
1,351
|
|
||||
Earnings Per Common Share — Basic
|
$
|
.41
|
|
|
$
|
.43
|
|
|
$
|
.40
|
|
|
$
|
.39
|
|
Earnings Per Common Share — Diluted
|
$
|
.41
|
|
|
$
|
.42
|
|
|
$
|
.39
|
|
|
$
|
.39
|
|
Dividends Declared Per Common Share
|
$
|
.08
|
|
|
$
|
.08
|
|
|
$
|
.08
|
|
|
$
|
.08
|
|
Range of Common Stock Price Per Share:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
52.52
|
|
|
$
|
44.35
|
|
|
$
|
44.10
|
|
|
$
|
43.65
|
|
Low
|
$
|
42.20
|
|
|
$
|
38.06
|
|
|
$
|
37.16
|
|
|
$
|
37.62
|
|
Range of Price/Earnings Ratio
(1)
:
|
|
|
|
|
|
|
|
||||||||
High
|
33
|
|
|
28
|
|
|
30
|
|
|
31
|
|
||||
Low
|
26
|
|
|
24
|
|
|
25
|
|
|
27
|
|
||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Total Net Revenues
|
$
|
1,972
|
|
|
$
|
1,914
|
|
|
$
|
1,828
|
|
|
$
|
1,764
|
|
Total Expenses Excluding Interest
|
$
|
1,148
|
|
|
$
|
1,120
|
|
|
$
|
1,108
|
|
|
$
|
1,109
|
|
Net Income
|
$
|
522
|
|
|
$
|
503
|
|
|
$
|
452
|
|
|
$
|
412
|
|
Net Income Available to Common Stockholders
|
$
|
478
|
|
|
$
|
470
|
|
|
$
|
406
|
|
|
$
|
392
|
|
Weighted-Average Common Shares Outstanding — Basic
|
1,329
|
|
|
1,324
|
|
|
1,322
|
|
|
1,321
|
|
||||
Weighted-Average Common Shares Outstanding — Diluted
|
1,341
|
|
|
1,334
|
|
|
1,333
|
|
|
1,330
|
|
||||
Earnings Per Common Share — Basic
|
$
|
.36
|
|
|
$
|
.36
|
|
|
$
|
.31
|
|
|
$
|
.30
|
|
Earnings Per Common Share — Diluted
|
$
|
.36
|
|
|
$
|
.35
|
|
|
$
|
.30
|
|
|
$
|
.29
|
|
Dividends Declared Per Common Share
|
$
|
.07
|
|
|
$
|
.07
|
|
|
$
|
.07
|
|
|
$
|
.06
|
|
Range of Common Stock Price Per Share:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
40.58
|
|
|
$
|
31.87
|
|
|
$
|
31.07
|
|
|
$
|
32.23
|
|
Low
|
$
|
30.66
|
|
|
$
|
23.83
|
|
|
$
|
24.02
|
|
|
$
|
21.51
|
|
Range of Price/Earnings Ratio
(1)
:
|
|
|
|
|
|
|
|
||||||||
High
|
31
|
|
|
26
|
|
|
27
|
|
|
29
|
|
||||
Low
|
24
|
|
|
20
|
|
|
21
|
|
|
20
|
|
/s/ DELOITTE & TOUCHE LLP
|
|
Item 10.
|
Directors, Executive Officers, and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
Exhibit
Number
|
Exhibit
|
|
|
|
|
3.11
|
|
|
|
|
|
3.14
|
|
|
|
|
|
3.15
|
|
|
|
|
|
3.16
|
|
|
|
|
|
3.17
|
|
|
|
|
|
3.18
|
|
|
|
|
|
3.19
|
|
|
|
|
|
3.20
|
|
|
|
|
|
3.21
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
Exhibit
Number
|
Exhibit
|
|
4.6
|
Neither the Registrant nor its subsidiaries are parties to any instrument with respect to long-term debt for which securities authorized thereunder exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. Copies of instruments with respect to long-term debt of lesser amounts will be provided to the SEC upon request.
|
|
|
|
|
10.4
|
Form of Release Agreement dated as of March 31, 1987 among BAC, Registrant, Schwab Holdings, Inc., Charles Schwab & Co., Inc., and former shareholders of Schwab Holdings, Inc., filed as the identically-numbered exhibit to Registrant’s Registration Statement No. 33-16192 on Form S-1 and incorporated herein by reference.
|
|
|
|
|
10.57
|
Registration Rights and Stock Restriction Agreement, dated as of March 31, 1987, between the Registrant and the holders of the Common Stock, filed as Exhibit 4.23 to Registrant’s Registration Statement No. 33-16192 on Form S-1 and incorporated herein by reference.
|
|
|
|
|
10.72
|
|
|
|
|
|
10.271
|
(2)
|
|
|
|
|
10.272
|
(2)
|
|
|
|
|
10.314
|
(2)
|
|
|
|
|
10.322
|
(2)
|
|
|
|
|
10.338
|
(2)
|
|
|
|
|
10.349
|
(2)
|
|
|
|
|
10.352
|
(2)
|
|
|
|
|
10.360
|
(2)
|
|
|
|
|
10.362
|
(2)
|
|
|
|
|
10.365
|
(2)
|
|
|
|
|
10.367
|
(2)
|
|
|
|
|
10.368
|
|
|
|
|
|
Exhibit
Number
|
Exhibit
|
|
10.369
|
(2)
|
|
|
|
|
10.370
|
(2)
|
|
|
|
|
10.371
|
(2)
|
|
|
|
|
10.372
|
(2)
|
|
10.373
|
(2)
|
|
|
|
|
10.374
|
(2)
|
|
|
|
|
10.375
|
(2)
|
|
|
|
|
10.376
|
(2)
|
|
|
|
|
10.377
|
(2)
|
|
|
|
|
10.378
|
(2)
|
|
|
|
|
10.379
|
(2)
|
|
|
|
|
10.380
|
(2)
|
|
|
|
|
10.381
|
(2)
|
|
|
|
|
Exhibit
Number
|
Exhibit
|
|
10.382
|
(2)
|
|
|
|
|
10.383
|
(2)
|
|
|
|
|
10.384
|
(2)
|
|
|
|
|
10.385
|
(1),(2)
|
|
|
|
|
10.386
|
(1),(2)
|
|
|
|
|
10.387
|
(1),(2)
|
|
|
|
|
10.388
|
(1),(2)
|
|
|
|
|
10.389
|
(1),(2)
|
|
|
|
|
10.390
|
(1),(2)
|
|
|
|
|
12.1
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
(1)
|
|
|
|
|
32.2
|
(1)
|
|
101.INS
|
XBRL Instance Document
|
(3)
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
(3)
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation
|
(3)
|
|
|
|
101.DEF
|
XBRL Extension Definition
|
(3)
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label
|
(3)
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation
|
(3)
|
|
|
|
Exhibit
Number
|
Exhibit
|
|
(1)
|
Furnished as an exhibit to this annual report on Form 10-K.
|
|
|
|
|
(2)
|
Management contract or compensatory plan.
|
|
|
|
|
(3)
|
Attached as Exhibit 101 to this Annual Report on Form 10-K for the annual period ended December 31, 2017, are the following materials formatted in XBRL (Extensible Business Reporting Language) (i) the Consolidated Statements of Income,(ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Consolidated Financial Statements.
|
|
|
THE CHARLES SCHWAB CORPORATION
|
|
|
(Registrant)
|
|
|
|
|
|
BY:
|
/s/ Walter W. Bettinger II
|
|
|
Walter W. Bettinger II
|
|
|
President and Chief Executive Officer
|
Signature / Title
|
|
Signature / Title
|
|
|
|
/s/ Walter W. Bettinger II
|
|
/s/ Peter Crawford
|
Walter W. Bettinger II,
|
|
Peter Crawford,
|
President and Chief Executive Officer
and Director
|
|
Executive Vice President
and Chief Financial Officer
(principal financial and accounting officer)
|
|
|
|
/s/ Charles R. Schwab
|
|
/s/ John K. Adams, Jr.
|
Charles R. Schwab, Chairman of the Board
|
|
John K. Adams, Jr., Director
|
|
|
|
/s/ C. Preston Butcher
|
|
/s/ Joan T. Dea
|
C. Preston Butcher, Director
|
|
Joan T. Dea, Director
|
|
|
|
/s/ Christopher V. Dodds
|
|
/s/ Stephen A. Ellis
|
Christopher V. Dodds, Director
|
|
Stephen A. Ellis, Director
|
|
|
|
/s/ Mark A. Goldfarb
|
|
/s/ William S. Haraf
|
Mark A. Goldfarb, Director
|
|
William S. Haraf, Director
|
|
|
|
/s/ Frank C. Herringer
|
|
/s/ Stephen T. McLin
|
Frank C. Herringer, Director
|
|
Stephen T. McLin, Director
|
|
|
|
/s/ Arun Sarin
|
|
/s/ Paula A. Sneed
|
Arun Sarin, Director
|
|
Paula A. Sneed, Director
|
|
|
|
/s/ Roger O. Walther
|
|
/s/ Robert N. Wilson
|
Roger O. Walther, Director
|
|
Robert N. Wilson, Director
|
|
|
|
|
|
|
|
|
|
STATISTICAL DISCLOSURE BY BANK HOLDING COMPANIES
|
||
|
||
The following table outlines the information required by the SEC’s Industry Guide 3, “Statistical Disclosure by Bank Holding Companies.” Beginning in 2017, these disclosures are presented at the consolidated holding company level. Comparative prior period amounts are also presented at a consolidated level.
|
||
|
|
|
|
|
|
Required Disclosure
|
Page
|
|
Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential
|
F-2 – F-3
|
|
Investment Portfolio
|
F-4
|
|
Risk Elements – Cross-border Holdings
|
F-5
|
|
Loan Portfolio
|
F-6 – F-7
|
|
Summary of Loan Loss Experience
|
F-7
|
|
Deposits
|
F-7
|
|
Return on Equity and Assets
|
F-7
|
|
|
|
|
|
|
|
|
|
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
1.
|
Three-year Net Interest Revenue and Average Balances
|
For the Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|||||||||||||||
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents
|
$
|
9,931
|
|
|
$
|
109
|
|
|
1.10
|
%
|
|
$
|
11,143
|
|
|
$
|
57
|
|
|
0.51
|
%
|
|
$
|
9,358
|
|
|
$
|
24
|
|
|
0.26
|
%
|
Cash and investments segregated
|
18,525
|
|
|
166
|
|
|
0.90
|
%
|
|
20,104
|
|
|
93
|
|
|
0.46
|
%
|
|
18,606
|
|
|
31
|
|
|
0.17
|
%
|
||||||
Broker-related receivables
(1)
|
430
|
|
|
3
|
|
|
0.70
|
%
|
|
558
|
|
|
1
|
|
|
0.22
|
%
|
|
274
|
|
|
—
|
|
|
0.07
|
%
|
||||||
Receivables from brokerage clients
|
16,269
|
|
|
575
|
|
|
3.53
|
%
|
|
15,001
|
|
|
497
|
|
|
3.31
|
%
|
|
15,212
|
|
|
502
|
|
|
3.30
|
%
|
||||||
Available for sale securities
(2)
|
53,040
|
|
|
815
|
|
|
1.54
|
%
|
|
72,586
|
|
|
883
|
|
|
1.22
|
%
|
|
62,249
|
|
|
629
|
|
|
1.01
|
%
|
||||||
Held to maturity securities
|
103,599
|
|
|
2,354
|
|
|
2.27
|
%
|
|
57,451
|
|
|
1,402
|
|
|
2.44
|
%
|
|
38,280
|
|
|
957
|
|
|
2.50
|
%
|
||||||
Bank loans
(6)
|
15,919
|
|
|
472
|
|
|
2.97
|
%
|
|
14,715
|
|
|
400
|
|
|
2.72
|
%
|
|
13,973
|
|
|
369
|
|
|
2.64
|
%
|
||||||
Total interest-earning assets
|
217,713
|
|
|
4,494
|
|
|
2.06
|
%
|
|
191,558
|
|
|
3,333
|
|
|
1.74
|
%
|
|
157,952
|
|
|
2,512
|
|
|
1.59
|
%
|
||||||
Other interest revenue
|
|
|
|
130
|
|
|
|
|
|
|
|
|
160
|
|
|
|
|
|
|
|
|
145
|
|
|
|
|
||||||
Total interest-earning assets
|
217,713
|
|
|
4,624
|
|
|
2.12
|
%
|
|
191,558
|
|
|
3,493
|
|
|
1.82
|
%
|
|
157,952
|
|
|
2,657
|
|
|
1.68
|
%
|
||||||
Noninterest-earning assets
(3,4)
|
9,968
|
|
|
|
|
|
|
|
|
9,354
|
|
|
|
|
|
|
|
|
8,061
|
|
|
|
|
|
|
|
||||||
Total assets
|
$
|
227,681
|
|
|
|
|
|
|
|
|
$
|
200,912
|
|
|
|
|
|
|
|
|
$
|
166,013
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and Stockholders
’
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Bank deposits
|
$
|
163,998
|
|
|
$
|
148
|
|
|
0.09
|
%
|
|
$
|
141,432
|
|
|
$
|
37
|
|
|
0.03
|
%
|
|
$
|
113,464
|
|
|
$
|
29
|
|
|
0.03
|
%
|
Payables to brokerage clients
|
25,403
|
|
|
16
|
|
|
0.06
|
%
|
|
26,311
|
|
|
3
|
|
|
0.01
|
%
|
|
25,651
|
|
|
2
|
|
|
0.01
|
%
|
||||||
Short-term borrowings
(1)
|
3,503
|
|
|
41
|
|
|
1.17
|
%
|
|
1,864
|
|
|
9
|
|
|
0.48
|
%
|
|
21
|
|
|
—
|
|
|
0.27
|
%
|
||||||
Long-term debt
|
3,431
|
|
|
119
|
|
|
3.47
|
%
|
|
2,876
|
|
|
104
|
|
|
3.62
|
%
|
|
2,717
|
|
|
92
|
|
|
3.39
|
%
|
||||||
Total interest-bearing liabilities
|
196,335
|
|
|
324
|
|
|
0.17
|
%
|
|
172,483
|
|
|
153
|
|
|
0.09
|
%
|
|
141,853
|
|
|
123
|
|
|
0.09
|
%
|
||||||
Other interest expense
|
|
|
18
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
9
|
|
|
|
||||||||||||
Noninterest-bearing liabilities
(3,5)
|
13,787
|
|
|
|
|
|
|
|
|
13,375
|
|
|
|
|
|
|
|
|
11,529
|
|
|
|
|
|
|
|
||||||
Total liabilities
(7)
|
210,122
|
|
|
342
|
|
|
0.15
|
%
|
|
185,858
|
|
|
171
|
|
|
0.09
|
%
|
|
153,382
|
|
|
132
|
|
|
0.08
|
%
|
||||||
Stockholders
’
equity
(3)
|
17,559
|
|
|
|
|
|
|
|
|
15,054
|
|
|
|
|
|
|
|
|
12,631
|
|
|
|
|
|
|
|
||||||
Total liabilities and stockholders
’
equity
|
$
|
227,681
|
|
|
|
|
|
|
|
$
|
200,912
|
|
|
|
|
|
|
|
$
|
166,013
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest revenue
|
|
|
$
|
4,282
|
|
|
|
|
|
|
$
|
3,322
|
|
|
|
|
|
|
$
|
2,525
|
|
|
|
|||||||||
Net yield on interest-earning assets
|
|
|
|
|
1.97
|
%
|
|
|
|
|
|
1.73
|
%
|
|
|
|
|
|
1.60
|
%
|
2.
|
Analysis of Change in Net Interest Revenue
|
|
2017 Compared to 2016
Increase (Decrease) Due to Change in: |
|
2016 Compared to 2015
Increase (Decrease) Due to Change in: |
||||||||||||||||||||
|
Average
Volume |
|
Average
Rate |
|
Total
|
|
Average
Volume |
|
Average
Rate |
|
Total
|
||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
(1)
|
$
|
(6
|
)
|
|
$
|
58
|
|
|
$
|
52
|
|
|
$
|
5
|
|
|
$
|
28
|
|
|
$
|
33
|
|
Cash and investments segregated
|
(7
|
)
|
|
80
|
|
|
73
|
|
|
3
|
|
|
59
|
|
|
62
|
|
||||||
Broker-related receivables
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Receivables from brokerage clients
|
42
|
|
|
36
|
|
|
78
|
|
|
(7
|
)
|
|
2
|
|
|
(5
|
)
|
||||||
Available for sale securities
(2)
|
(238
|
)
|
|
170
|
|
|
(68
|
)
|
|
104
|
|
|
150
|
|
|
254
|
|
||||||
Held to maturity securities
|
1,126
|
|
|
(174
|
)
|
|
952
|
|
|
479
|
|
|
(34
|
)
|
|
445
|
|
||||||
Bank loans
(3)
|
33
|
|
|
39
|
|
|
72
|
|
|
20
|
|
|
11
|
|
|
31
|
|
||||||
Other interest revenue
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||
Total interest-earning assets
|
$
|
950
|
|
|
$
|
181
|
|
|
$
|
1,131
|
|
|
$
|
604
|
|
|
$
|
232
|
|
|
$
|
836
|
|
Interest-bearing sources of funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bank deposits
|
$
|
7
|
|
|
$
|
104
|
|
|
$
|
111
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Payables to brokerage clients
|
—
|
|
|
13
|
|
|
13
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Short-term borrowings
|
8
|
|
|
24
|
|
|
32
|
|
|
5
|
|
|
4
|
|
|
9
|
|
||||||
Long-term debt
|
20
|
|
|
(5
|
)
|
|
15
|
|
|
5
|
|
|
7
|
|
|
12
|
|
||||||
Other interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||
Total sources on which interest is paid
|
35
|
|
|
136
|
|
|
171
|
|
|
18
|
|
|
21
|
|
|
39
|
|
||||||
Change in net interest revenue
|
$
|
915
|
|
|
$
|
45
|
|
|
$
|
960
|
|
|
$
|
586
|
|
|
$
|
211
|
|
|
$
|
797
|
|
3.
|
Investment
Securities
|
December 31, 2015
|
Amortized
Cost |
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Fair
Value |
||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency mortgage-backed securities
|
$
|
22,014
|
|
|
$
|
183
|
|
|
$
|
48
|
|
|
$
|
22,149
|
|
U.S. Treasury securities
|
5,719
|
|
|
2
|
|
|
17
|
|
|
5,704
|
|
||||
Asset-backed securities
|
21,784
|
|
|
7
|
|
|
306
|
|
|
21,485
|
|
||||
Corporate debt securities
|
10,764
|
|
|
14
|
|
|
31
|
|
|
10,747
|
|
||||
Certificates of deposit
|
1,685
|
|
|
1
|
|
|
3
|
|
|
1,683
|
|
||||
U.S. agency notes
|
3,177
|
|
|
—
|
|
|
27
|
|
|
3,150
|
|
||||
U.S. state and municipal securities
|
414
|
|
|
10
|
|
|
—
|
|
|
424
|
|
||||
Non-agency commercial mortgage-backed securities
|
298
|
|
|
1
|
|
|
—
|
|
|
299
|
|
||||
Other securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total available for sale securities
|
$
|
65,860
|
|
|
$
|
218
|
|
|
$
|
432
|
|
|
$
|
65,646
|
|
Held to maturity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency mortgage-backed securities
|
$
|
48,785
|
|
|
$
|
391
|
|
|
$
|
293
|
|
|
$
|
48,883
|
|
Non-agency commercial mortgage-backed securities
|
999
|
|
|
6
|
|
|
20
|
|
|
985
|
|
||||
U.S. Treasury securities
|
223
|
|
|
—
|
|
|
3
|
|
|
220
|
|
||||
Total held to maturity securities
|
$
|
50,007
|
|
|
$
|
397
|
|
|
$
|
316
|
|
|
$
|
50,088
|
|
Issuer
|
Aggregate Amortized Cost
|
|
Aggregate Fair Value
|
||||
Citibank Credit Card Issuance Trust
(1)
|
$
|
1,850
|
|
|
$
|
1,863
|
|
4.
|
Cross-border Holdings
|
December 31, 2016
|
Banks and other
financial institutions |
|
Commercial and
industrial institutions |
|
Total
|
Exposure as a %
of total assets |
|||||||
Country:
|
|
|
|
|
|
|
|||||||
France
|
$
|
1,784
|
|
|
$
|
110
|
|
|
$
|
1,894
|
|
0.8
|
%
|
Total
|
$
|
1,784
|
|
|
$
|
110
|
|
|
$
|
1,894
|
|
|
December 31, 2015
|
Banks and other
financial institutions |
|
Commercial and
industrial institutions |
|
Total
|
Exposure as a %
of total assets |
|||||||
Country:
|
|
|
|
|
|
|
|||||||
Canada
|
$
|
1,499
|
|
|
$
|
—
|
|
|
$
|
1,499
|
|
0.8
|
%
|
Australia
|
1,376
|
|
|
60
|
|
|
1,436
|
|
0.8
|
%
|
|||
Total
|
$
|
2,875
|
|
|
$
|
60
|
|
|
$
|
2,935
|
|
|
5.
|
Bank Loans and Related Allowance for Loan Losses
|
December 31,
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
First Mortgages
|
$
|
10,016
|
|
|
$
|
9,134
|
|
|
$
|
8,334
|
|
|
$
|
8,127
|
|
|
$
|
8,006
|
|
HELOCs
|
1,943
|
|
|
2,350
|
|
|
2,735
|
|
|
2,955
|
|
|
3,041
|
|
|||||
Pledged asset lines
|
4,369
|
|
|
3,851
|
|
|
3,232
|
|
|
2,320
|
|
|
1,384
|
|
|||||
Other
|
176
|
|
|
94
|
|
|
64
|
|
|
39
|
|
|
36
|
|
|||||
Total bank loans
|
$
|
16,504
|
|
|
$
|
15,429
|
|
|
$
|
14,365
|
|
|
$
|
13,441
|
|
|
$
|
12,467
|
|
December 31,
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Nonaccrual loans
|
$
|
28
|
|
|
$
|
26
|
|
|
$
|
28
|
|
|
$
|
35
|
|
|
$
|
48
|
|
Average nonaccrual loans
|
$
|
27
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
39
|
|
|
$
|
43
|
|
December 31,
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Balance at beginning of year
|
$
|
26
|
|
|
$
|
31
|
|
|
$
|
42
|
|
|
$
|
48
|
|
|
$
|
56
|
|
Charge-offs
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(11
|
)
|
|||||
Recoveries
|
3
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|||||
Provision for loan losses
|
—
|
|
|
(5
|
)
|
|
(11
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|||||
Balance at end of year
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
31
|
|
|
$
|
42
|
|
|
$
|
48
|
|
December 31, 2017
|
Within
1 year |
|
After 1 year
through 5 years |
|
After
5 years |
|
Total
|
||||||||
First Mortgages
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,016
|
|
|
$
|
10,016
|
|
HELOCs
(2)
|
980
|
|
|
365
|
|
|
598
|
|
|
1,943
|
|
||||
Pledged asset lines
|
341
|
|
|
4,024
|
|
|
4
|
|
|
4,369
|
|
||||
Other
|
10
|
|
|
162
|
|
|
4
|
|
|
176
|
|
||||
Total
|
$
|
1,331
|
|
|
$
|
4,551
|
|
|
$
|
10,622
|
|
|
$
|
16,504
|
|
December 31, 2017
|
After
1 year |
||
Loans with floating or adjustable interest rates
|
$
|
14,086
|
|
Loans with predetermined interest rates
|
1,087
|
|
|
Total
|
$
|
15,173
|
|
6.
|
Summary of Loan Loss on Banking Loans Experience
|
December 31,
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Average loans
|
$
|
15,919
|
|
|
$
|
14,715
|
|
|
$
|
13,973
|
|
|
$
|
12,906
|
|
|
$
|
11,758
|
|
Allowance to year end loans
|
.16
|
%
|
|
.17
|
%
|
|
.21
|
%
|
|
.31
|
%
|
|
.39
|
%
|
|||||
Allowance to nonperforming loans
|
93
|
%
|
|
101
|
%
|
|
110
|
%
|
|
120
|
%
|
|
100
|
%
|
|||||
Nonperforming assets to average loans
|
|
|
|
|
|
|
|
|
|
||||||||||
and real estate owned
|
.20
|
%
|
|
.21
|
%
|
|
.26
|
%
|
|
.31
|
%
|
|
.45
|
%
|
7.
|
Bank Deposits
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|
Amount
|
Rate
|
|||||||||
Analysis of average daily deposits:
|
|
|
|
|
|
|
|
|
|||||||||
Money market and other savings deposits
|
$
|
148,679
|
|
0.09
|
%
|
|
$
|
126,719
|
|
0.02
|
%
|
|
$
|
99,881
|
|
0.02
|
%
|
Interest-bearing demand deposits
|
15,319
|
|
0.14
|
%
|
|
14,713
|
|
0.07
|
%
|
|
13,583
|
|
0.07
|
%
|
|||
Total
|
$
|
163,998
|
|
|
|
$
|
141,432
|
|
|
|
$
|
113,464
|
|
|
8.
|
Ratios
|
December 31,
|
2017
|
2016
|
2015
|
|||
Return on average total stockholders’ equity
|
13.41
|
%
|
12.55
|
%
|
11.45
|
%
|
Return on average total assets
|
1.03
|
%
|
0.94
|
%
|
0.87
|
%
|
Average total stockholders’ equity as a percentage of average total assets
|
7.71
|
%
|
7.49
|
%
|
7.61
|
%
|
Dividend payout ratio
(1)
|
19.88
|
%
|
20.61
|
%
|
23.30
|
%
|
(1)
|
Dividends declared per common share divided by diluted EPS.
|