v3.26.1
Bank Loans and Related Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Bank Loans and Related Allowance for Credit Losses
The composition of bank loans and delinquency analysis by portfolio segment and class of financing receivable is as follows:
June 30, 2026Current30-59 days
past due		60-89 days
past due
>90 days past
due and other
nonaccrual loans (3)
Total past due
and other
nonaccrual loans		Total
loans		Allowance
for credit
losses		Total
bank
loans — net
Residential real estate:
First Mortgages (1,2)
$32,655 $111 $2 $14 $127 $32,782 $30 $32,752 
HELOCs (1,2)
420 1 — 2 3 423 1 422 
Total residential real estate33,075 112 2 16 130 33,205 31 33,174 
Pledged asset lines33,396 10 — 10 20 33,416 — 33,416 
Other411 1 — — 1 412 6 406 
Total bank loans$66,882 $123 $2 $26 $151 $67,033 $37 $66,996 
December 31, 2025
Residential real estate:
First Mortgages (1,2)
$30,429 $13 $5 $37 $55 $30,484 $28 $30,456 
HELOCs (1,2)
423 1 — 3 4 427 1 426 
Total residential real estate30,852 14 5 40 59 30,911 29 30,882 
Pledged asset lines26,570 20 10 3 33 26,603 — 26,603 
Other477 — — — — 477 7 470 
Total bank loans$57,899 $34 $15 $43 $92 $57,991 $36 $57,955 
(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $144 million and $131 million at June 30, 2026 and December 31, 2025, respectively.
(2) At June 30, 2026 and December 31, 2025, 40% and 41%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.
(3) There were no loans accruing interest that were contractually 90 days or more past due at June 30, 2026 or December 31, 2025. Bank-loan related nonperforming assets consisted of the nonaccrual loans presented here and loan modifications to borrowers experiencing financial difficulty were not material at both June 30, 2026 and December 31, 2025.

At June 30, 2026, CSB had pledged the full balance of First Mortgages and HELOCs pursuant to a blanket lien status collateral arrangement to secure borrowing capacity on a secured credit facility with the FHLB (see Note 10).
Changes in the allowance for credit losses on bank loans were as follows:
First MortgagesHELOCsTotal residential real estatePledged asset linesOtherTotal
Balance at March 31, 2025$14 $1 $15 $— $6 $21 
Charge-offs— — — — — — 
Recoveries— — — — — — 
Provision for credit losses1 — 1 — — 1 
Balance at June 30, 2025$15 $1 $16 $— $6 $22 
Balance at March 31, 2026$29 $1 $30 $— $6 $36 
Charge-offs— — — — — — 
Recoveries— — — — — — 
Provision for credit losses1 — 1 — — 1 
Balance at June 30, 2026$30 $1 $31 $— $6 $37 
Balance at December 31, 2024$14 $1 $15 $— $6 $21 
Charge-offs— — — — — — 
Recoveries— — — — — — 
Provision for credit losses1 — 1 — — 1 
Balance at June 30, 2025$15 $1 $16 $— $6 $22 
Balance at December 31, 2025$28 $1 $29 $— $7 $36 
Charge-offs— — — — — — 
Recoveries— — — — — — 
Provision for credit losses2 — 2 — (1)1 
Balance at June 30, 2026$30 $1 $31 $— $6 $37 

Consistent with Schwab’s loan charge-off policy for PALs as disclosed in Item 8 – Note 2 of the 2025 Form 10-K, the Company charges off any unsecured balances no later than 90 days past due. As of June 30, 2026, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 Financial Instruments — Credit Losses. All PALs were fully collateralized by securities with fair values in excess of borrowings as of June 30, 2026 and December 31, 2025, and no allowance for credit losses for PALs as of those dates was required.

The U.S. economy experienced soft hiring and elevated core inflation at the end of the second quarter of 2026. Geopolitical unrest persists amid a backdrop of elevated uncertainty due to economic impacts of developing trade policy and a constrained energy supply. Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market. Though higher mortgage rates are easing demand and reducing borrower affordability, we expect constrained housing supply to keep home prices relatively stable. Furthermore, credit quality metrics in the Company’s bank loans portfolio remain strong. As a result of these factors, we held projected loss rates constant at June 30, 2026, as compared to December 31, 2025.

Credit Quality

In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following:
•Year of origination;
•Borrower Fair Isaac Corporation (FICO) scores at origination (Origination FICO);
•Refreshed borrower FICO scores (Refreshed FICO);
•Loan-to-value (LTV) ratios at origination (Origination LTV); and
•Estimated Refreshed LTV ratios (Estimated Refreshed LTV).
Borrowers’ FICO scores are provided by an independent third-party credit reporting service and are generally updated quarterly. The Origination LTV and Estimated Refreshed LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Refreshed LTV for each loan is updated on a monthly basis by reference to a home price appreciation index.
The credit quality indicators of the Company’s First Mortgages and HELOCs are detailed below:
First Mortgages Amortized Cost Basis by Origination Year
June 30, 202620262025202420232022pre-2022Total First MortgagesRevolving HELOCs amortized cost basisHELOCs converted to term loansTotal HELOCs
Origination FICO
<620$1 $— $1 $— $2 $2 $6 $— $— $— 
620 – 67930 18 12 3 22 44 129 2 1 3 
680 – 739362 496 242 194 639 1,424 3,357 51 23 74 
≥7404,068 4,945 2,139 1,389 4,370 12,379 29,290 265 81 346 
Total$4,461 $5,459 $2,394 $1,586 $5,033 $13,849 $32,782 $318 $105 $423 
Origination LTV
≤70%$3,166 $3,715 $1,615 $1,082 $3,747 $11,853 $25,178 $304 $74 $378 
>70% – ≤90%1,295 1,744 779 504 1,286 1,995 7,603 14 30 44 
>90% – ≤100%— — — — — 1 1 — 1 1 
Total$4,461 $5,459 $2,394 $1,586 $5,033 $13,849 $32,782 $318 $105 $423 
Refreshed FICO
<620$1 $5 $3 $5 $24 $42 $80 $2 $4 $6 
620 – 67932 58 22 25 61 167 365 9 7 16 
680 – 739384 475 216 142 453 1,091 2,761 43 15 58 
≥7404,044 4,921 2,153 1,414 4,495 12,549 29,576 264 79 343 
Total$4,461 $5,459 $2,394 $1,586 $5,033 $13,849 $32,782 $318 $105 $423 
Estimated Refreshed LTV (1)
≤70%$3,167 $3,855 $1,825 $1,380 $4,652 $13,783 $28,662 $316 $105 $421 
>70% – ≤90%1,294 1,601 566 201 352 64 4,078 2 — 2 
>90% – ≤100%— 3 3 5 29 2 42 — — — 
Total$4,461 $5,459 $2,394 $1,586 $5,033 $13,849 $32,782 $318 $105 $423 
Gross charge-offs$— $— $— $— $— $— $— $— $— $— 
Percent of Loans on
  Nonaccrual Status		0.01%0.01%0.10%0.01%0.06%0.05%0.04%—2.12%0.47%
(1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.
First Mortgages Amortized Cost Basis by Origination Year
December 31, 20252025202420232022pre-2022Total First MortgagesRevolving HELOCs amortized cost basisHELOCs converted to term loansTotal HELOCs
Origination FICO
<620$— $1 $— $3 $2 $6 $— $— $— 
620 – 67923 16 4 23 49 115 — 1 1 
680 – 739526 272 219 667 1,508 3,192 52 24 76 
≥7405,480 2,534 1,573 4,546 13,038 27,171 260 90 350 
Total$6,029 $2,823 $1,796 $5,239 $14,597 $30,484 $312 $115 $427 
Origination LTV
≤70%$4,105 $1,925 $1,216 $3,891 $12,473 $23,610 $296 $80 $376 
>70% – ≤90%1,924 898 580 1,348 2,123 6,873 16 34 50 
>90% – ≤100%— — — — 1 1 — 1 1 
Total$6,029 $2,823 $1,796 $5,239 $14,597 $30,484 $312 $115 $427 
Refreshed FICO
<620$8 $4 $3 $36 $55 $106 $3 $3 $6 
620 – 67959 31 25 61 140 316 5 6 11 
680 – 739570 227 153 483 1,157 2,590 48 20 68 
≥7405,392 2,561 1,615 4,659 13,245 27,472 256 86 342 
Total$6,029 $2,823 $1,796 $5,239 $14,597 $30,484 $312 $115 $427 
Estimated Refreshed LTV (1)
≤70%$3,877 $1,989 $1,450 $4,696 $14,483 $26,495 $310 $115 $425 
>70% – ≤90%2,148 829 342 537 114 3,970 2 — 2 
>90% – ≤100%4 5 4 6 — 19 — — — 
Total$6,029 $2,823 $1,796 $5,239 $14,597 $30,484 $312 $115 $427 
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Percent of Loans on
  Nonaccrual Status		0.01%0.01%0.11%0.10%0.20%0.12%0.16%1.80%0.70%
(1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.

At June 30, 2026, $28.5 billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter. Approximately 22% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 62% of the balance of these interest-only loans are not scheduled to reset for three or more years.

At June 30, 2026 and December 31, 2025, Schwab had $255 million and $223 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the condensed consolidated balance sheets.

The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating-rate based on the prime rate plus a margin.
The following table presents when current outstanding HELOCs will convert to amortizing loans:
June 30, 2026Balance
Converted to an amortizing loan by period end (1)
$105 
Within 1 year18 
> 1 year – 3 years31 
> 3 years – 5 years63 
> 5 years206 
Total$423 
(1) Includes $2 million and $5 million of HELOCs converted to amortizing loans during the three and six months ended June 30, 2026, respectively.

At June 30, 2026, $324 million of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At June 30, 2026, the borrowers on approximately 61% of HELOC loan balances outstanding only paid the minimum amount due.