schwab revenue and net income - last 10 years

I'll look up Schwab's revenue and net income for the last 10 years. Let me load the data.

I have the data. Let me filter to annual values and present a clean table.

Here's Schwab's (SCHW) annual revenue and net income for the last 10 fiscal years (FY16–FY25):

Key takeaways: - Revenue grew ~3.6x over the decade, from $7.6B to $27.7B, with a major step-up in 2021 (+57% YoY) following the TD Ameritrade acquisition. - Net income grew ~4.7x, reaching a record $8.85B in 2025. - The 2023 net income dip to $5.07B (vs. $7.18B in 2022) reflects the well-known deposit-beta and cash-sorting headwinds that pressured net interest margins that year.

can you give me a PE ratio chart. only chart neeed (with daily data) - same time period

I'll get the daily price data and diluted shares/EPS for the same period, then compute the P/E ratio.

Now I'll compute a rolling TTM EPS and merge it with the daily price to produce a daily P/E ratio.

Here's the daily Trailing P/E chart for SCHW over the same FY16–FY25 period. The series uses adjusted close divided by rolling TTM EPS (sum of last 4 quarters' net income ÷ diluted shares). A few observations from the shape:

• Started around ~25x in early 2017 (the first fully-formed TTM window)
• Compressed to ~13–15x during the 2020 COVID-era earnings surge
• Spiked to ~30x+ in early 2023 when net income troughed on NIM pressure (denominator effect)
• Has since normalized back into the high-teens / low-20s as earnings recovered to record levels in 2025

can you show any segment data rporeted by company

I'll search Schwab's 10-K filings for segment / business line disclosures.

Yes — Schwab reports two reportable segments. Here's the data I pulled directly from their 10-K segment notes (Note 24/25), with all amounts in $M.

Segment Pre-Tax Income (FY21–FY24)

FY24 Segment Revenue Mix ($M) — from Note 25

Key observations

• Investor Services is the dominant segment — ~79% of FY24 net revenue and ~82% of pre-tax income. It serves individual investors directly (brokerage, banking, retirement).
• Advisor Services serves independent RIAs and serves custody/trading to them — smaller (~21% of revenue) but a stickier, fee-rich business mix.
• Net interest revenue is the single largest line in both segments but the mix differs: Investor Services leans more on NIM-driven revenue; Advisor Services has a higher share of asset-based fees relative to NIM.
• The 2023 pre-tax income dip was concentrated in both segments but was steeper in Advisor Services (-47% YoY) due to BDA/IDA fee compression (down 50% companywide as average IDA balances fell from $147B to $104B).
• Goodwill is also allocated to these two segments: $8.08B Investor Services / $3.87B Advisor Services as of 12/31/24.

Note: Schwab recently adopted ASU 2023-07 segment reporting standards but still reports the same two-segment structure. Want me to also pull the segment-level balance/intensity metrics (e.g., average client assets, expenses as % of assets) tracked in MD&A?

is it correct that schwab interest income is given for loans that are 100% safe? or does it have delinquincy rate

Good question. Let me check Schwab's 10-K disclosures on credit quality and loan delinquencies.

No, that's not correct — Schwab's bank loan portfolio is not 100% safe. However, credit quality is exceptionally strong. Here's what the 10-K shows (Note 7 — Bank Loans and Related Allowance for Credit Losses, FY2024):

Bank Loan Portfolio Delinquency ($M, as of 12/31/2024)

Key credit ratios

So the portfolio does have delinquencies — but they're de minimis (only $86M past due on a $45B book, or 0.19%).

Important context: not all of this is "interest income" risk

• First Mortgages & HELOCs (~62% of book) — true credit risk. Mitigated by: underwriting standards (max LTV, min FICO, no negative-amortization, no subprime), 42% California concentration, and being mostly first-lien residential. Credit losses are still possible (e.g., in a housing downturn); 2022 was the high-water mark for provisioning when the Fed was hiking.
• Pledged Asset Lines (PALs) (~38% of book) — these are non-purpose revolving lines secured by marketable securities held in a separate pledged brokerage account, over-collateralized, with daily mark-to-market and automatic liquidation triggers. The 10-K explicitly says "the credit loss inherent within this portfolio is limited." Functionally near-risk-free in normal conditions, but not literally 100% safe in a crisis where collateral values gap down.
• Investment securities portfolio (~$220B) — heavily U.S. agency MBS, U.S. Treasuries, and investment-grade corporates; 10-K notes "substantially all" rated investment grade. U.S. agency MBS carry zero expected credit loss by accounting policy.

Bottom line: Schwab's net interest revenue is dominated by (1) investment securities yield (very low credit risk) and (2) PAL/mortgage interest (very low historical credit losses). It is not literally 100% safe — but the realized credit cost has been ~0 bps of average loans in both 2023 and 2024, and total allowance for credit losses on the $45B bank loan book is only $21M (0.05%). The real risk to NII is rate/mix risk (deposit beta, cash sorting, asset duration) — which is exactly what hurt earnings in 2023 — not loan losses.

why does schwba hold rela estate? does it give loans like - im referring to first mortgatges and HELCs?

Great question — yes, that's exactly what they do. Let me pull the specifics on the mortgage program so I can give you a precise answer.

Yes, exactly right — Schwab's principal banking subsidiary, Charles Schwab Bank, SSB (CSB), originates and holds first-lien residential mortgages and HELOCs as part of its broader strategy. Here's how the model works based on the 10-K:

1. Why Schwab holds residential real estate loans

The 10-K explicitly lists "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)" as part of its product offering alongside brokerage/investing. The strategic logic is the classic "client cash → bank balance sheet → earning assets" flywheel:

• CSB takes in ~$259B of client deposits (and gets additional funding via brokered CDs, FHLB, etc.)
• It deploys those deposits into interest-earning assets: investment securities (~$220B, mostly agency MBS/Treasuries), margin loans, and bank loans
• Mortgages and HELOCs are one of those earning-asset buckets — they generate NIM and, importantly, anchor the client relationship (a client with their mortgage at Schwab is stickier across brokerage, retirement, and advisory products)

So mortgages aren't really a "stand-alone real estate business" — they're a balance-sheet deployment of client deposits, used to retain and deepen client relationships.

2. How loans actually get on the books

Schwab does not run a retail mortgage origination operation. Per Note 15:

"CSB provides a co-branded loan origination program for CSB clients (the Program) with Rocket Mortgage, LLC. Pursuant to the Program, Rocket Mortgage, LLC originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Rocket Mortgage."

• 2024 purchases: $4.2B of First Mortgages, $157M of HELOC commitments from Rocket
• 2023 purchases: $2.9B of First Mortgages, $181M of HELOC commitments

So the flow is: Schwab client applies → Rocket underwrites and originates → CSB buys the loan (Rocket keeps servicing). CSB also has direct-originated PALs but appears to source mortgages primarily through the Rocket partnership.

3. Underwriting standards — what makes the book "safe"

Per MD&A: "Our residential loan underwriting guidelines include maximum LTV ratios, cash-out limits, and minimum FICO credit scores. ... Schwab does not originate or purchase residential loans that allow for negative amortization and does not originate or purchase subprime loans (generally defined as extensions of credit to borrowers with a FICO score of less than 620 at origination), unless the borrower has compensating credit factors."

The FY24 credit-quality breakdown (Note 7) shows just how prime the book is:

First Mortgages + HELOCs by Origination FICO ($M, 12/31/2024)

By Origination LTV

So ~88% of the book is prime FICO (≥740) and ~79% is at ≤70% LTV. That's an exceptionally low-risk residential book by industry standards.

4. The HELOC product structure

• 30-year loan, 10-year initial draw period, then converts to a 20-year amortizing term loan
• Floating rate (Prime + margin) during both periods
• 61% of borrowers are paying only the minimum (interest-only) — typical for revolving HELOCs
• 79% ($336M) are second-lien positions, which the 10-K flags as "a higher degree of credit risk given the subordination to the first lien holder"

5. Why HELOCs are tiny relative to mortgages

The HELOC book is only $424M vs. $27.4B in First Mortgages. Two reasons: - HELOC demand from Schwab's affluent client base is structurally low (most use margin loans or PALs instead, which are secured by marketable securities and don't touch the house) - The Rocket partnership has originated only $157M / $181M of HELOCs in 2024 / 2023

Bottom line: Schwab holds real estate loans because (a) it's a low-risk way to deploy its massive deposit base, and (b) mortgages anchor the relationship and drive cross-sell into brokerage/RIA/cash products. The "origination" is mostly a purchase arrangement with Rocket Mortgage, and the underwriting is conservative enough that the realized loss experience is essentially zero.

but what does this have to do with brokerage/investment business? where in customers buy securitie sfrom scheba?

Great question — the connection is subtle and easy to miss. Let me pull the specific mechanism from the 10-K.

Excellent — this is the key. The connection between mortgages/loans and the brokerage business is client cash, not client securities. Here's the model.

The brokerage → banking → loans pipeline

When a client opens a Schwab brokerage account and trades stocks/funds/ETFs, the cash leg of that relationship is captured by the bank. From the 10-K:

"Schwab's primary funding source for interest-earning assets is uninvested client cash balances held on our balance sheet as part of clients' overall relationship with the Company. ... Cash awaiting investment may be used to extend margin loans to clients or be swept to our banking subsidiaries and those bank deposits are then used to extend loans to clients and purchase investment securities."

The flow is:

Client buys $50K of VTI in brokerage account
        ↓
$2K sits as "uninvested cash" (sweep) while $48K is invested
        ↓
That $2K gets swept from broker-dealer (CS&Co) to bank (CSB)
        ↓
CSB now has a $2K deposit
        ↓
CSB lends out that $2K (or similar) into:
   • Investment securities (~$220B, mostly agency MBS/Treasuries)
   • Margin loans (~$84B, secured by client stock)
   • Bank loans — First Mortgages, HELOCs, PALs (~$45B)
   • Securities lending / resale agreements

So First Mortgages and HELOCs are one of four things CSB does with the deposit dollars that flowed in because of the brokerage relationship. The bank is essentially a balance-sheet engine that monetizes the float generated by the brokerage business.

Two sweep mechanisms, one purpose

The 10-K describes two routes for uninvested cash:

1. Sweep to CSB (Schwab's own bank) — the default for most client cash. Becomes bank deposits → deployed into earning assets (which includes mortgages). FY24: $259B in bank deposits.

2. Sweep to TD Depository Institutions via the IDA agreement — the legacy Ameritrade sweep program, inherited from the TD Ameritrade acquisition. This cash sits at TD Bank (not Schwab's balance sheet), and Schwab earns "bank deposit account fees" for recordkeeping. FY24: $87.6B in BDA balances, generating $729M of fees.

Both serve the same purpose — capture client cash, deploy it profitably, and create stickiness.

The strategic logic — why this is core, not a side business

The 10-K is unusually explicit about why this matters:

"We rely heavily on client cash balances to generate revenue. ... A significant reduction in our clients' allocation to cash, a change in the allocation of that cash, or a transfer of cash away from the Company, would likely reduce our income."

The 2023 NII crisis is a perfect illustration. When the Fed hiked rates to 5%, clients moved $126B out of bank sweep deposits and into higher-yielding Schwab money market funds and Treasuries. The result: net interest revenue dropped 12%, net income fell 29%, and the stock got hammered because: - Less cash stayed on Schwab's balance sheet to earn NIM - Schwab had to replace that funding with expensive FHLB borrowings and brokered CDs (peak $79.6B in supplemental funding) - The episode even triggered the brief bank-stock panic in March 2023 (SVB contagion)

The interest-rate feedback loop

Client decisions on cash allocation are driven by the rate differential between: - The default cash sweep yield (low — basically a money market rate paid to clients) - The yield on alternative money market funds, Treasuries, or CDs available at Schwab

When short rates are low, the gap is small and clients leave cash sitting on Schwab's balance sheet. When short rates are high and the gap widens, clients move cash within Schwab to higher-yielding products, and Schwab loses the NIM economics.

This is also why the mortgage portfolio, while small (~$28B), is a stable portion of the earning-asset mix — fixed-rate mortgages locked in at ~3-4% during the 2020-2021 low-rate era are a great asset when funding costs are low but hurt when funding costs spike. That mismatch is what hurt Schwab in 2022-2023.

Bottom line

The brokerage business is the distribution and customer-acquisition engine. The bank (CSB) is the balance-sheet engine that takes the cash float those brokerage relationships generate and turns it into ~$9B/year of net interest revenue. Mortgages, HELOCs, and PALs are simply one of the asset categories CSB uses to put that cash to work. Without the brokerage business, CSB would have no cheap, sticky deposit base; without CSB, the brokerage business would lose a major profit center. That's why Schwab is structured as a hybrid — and why it has $48B of total equity supporting a $480B balance sheet and ~$10T of client assets.

that seems illegal - schwab is doing trading with client's cash money? and buys real estate? My question is spcecic to link between mortgages and brokerage clients. is there any link

You're asking a really important question, and I want to be careful and precise because "doing trading with client's cash" and "buys real estate" are two different claims that need to be addressed separately.

Let me pull the actual legal/regulatory framing and the specific mortgage-vs-client link.

You're right to push back. Let me give you the straight answer, separating the two concerns clearly because they are quite different.

1. "Schwab is doing trading with client's cash money" — not in the way the word "trading" suggests

When you buy a stock at Schwab, here's what happens to your money (per the 10-K Note 2):

"Pursuant to the Customer Protection Rule and other applicable regulations, Schwab maintains cash or qualified securities in segregated reserve accounts *for the exclusive benefit of clients*."

This is SEC Rule 15c3-3 (Customer Protection Rule), one of the most important broker-dealer regulations in existence. It says:

• Client securities must be segregated — they cannot be co-mingled with the firm's own assets or pledged as collateral for the firm's borrowings
• Client free credit balances (cash in your brokerage account not yet invested or swept) must be either (a) segregated, (b) used to fund margin loans to other clients, or (c) swept to a money market fund or bank deposit account — but in all cases, the client's beneficial interest is protected
• The broker-dealer subsidiary (CS&Co, not the holding company) carries separate net capital of $11.1B as of 12/31/24 specifically to ensure it can meet client obligations even if the firm fails

So when Schwab executes your trade, it does not take your cash, pool it with firm money, and use it to trade for its own account. That's the textbook definition of fraud and a felony. Schwab doesn't do that.

What Schwab DOES do (legally) is "trade" with the cash in two narrow, regulated senses:

• Securities lending — using fully paid client securities held in margin accounts as collateral to lend to short sellers. This is industry-standard, fully collateralized (typically 102%+), and disclosed. Revenue: $330M in 2024.
• Order flow — getting paid by market makers (Citadel, Virtu, etc.) to route your retail equity and option orders to them. This is fully disclosed and the practice is widespread across the industry. Revenue: $1.48B in 2024.
• Principal transactions in fixed income — acting as a dealer (not trading against you, but standing ready to buy from you or sell to you from Schwab's inventory, especially in less liquid bonds). Revenue: $196M in 2024.

All of this is disclosed in the 10-K and regulated. This is not the same thing as "trading with your money."

2. "Buys real estate" — yes, with the bank's deposits, not your brokerage cash

This is the more nuanced part, and where I may have been unclear. The link is:

This is legal because you agreed to it. When you open a Schwab brokerage account, you sign a cash sweep disclosure that says your uninvested cash will be automatically deposited into a deposit account at Charles Schwab Bank, SSB (or into the IDA at TD Bank, post-Ameritrade). You become a depositor of the bank, with FDIC insurance up to $250K (and 80%+ of bank deposits are FDIC-insured per the 10-K).

The 10-K says explicitly: "Our clients' bank deposits and brokerage cash balances primarily originate from our 36.5 million active brokerage accounts."

3. The specific mortgage↔brokerage link

Now to your actual question — is there a direct link between a brokerage client and a mortgage on Schwab's balance sheet?

The answer is: only through the cash sweep mechanism described above, and only on an aggregate, not client-by-client, basis.

• A specific brokerage client's cash (say, $5,000 sitting in their account) is not identifiable as funding a specific mortgage
• But the aggregate of all client cash sweep deposits (~$259B as of 12/31/24) funds the aggregate of bank loans (~$45B in mortgages + HELOCs + PALs)
• The mortgages are originated by Rocket Mortgage (per Note 15) to Schwab clients who choose to apply — i.e., a brokerage client can apply for a Schwab mortgage through the Rocket co-brand program, and the loan ends up on CSB's balance sheet. So the same household can have both a brokerage account and a Schwab mortgage, but there's no legal co-mingling of the brokerage cash with the mortgage loan
• From the bank's perspective, the mortgage borrower and the deposit account holder are two different legal relationships, even if they're the same person

4. What is NOT happening

• Schwab is not using your brokerage securities to fund mortgages
• Schwab is not pledging your stock portfolio as collateral for its loan book
• Schwab is not paying itself interest on your uninvested cash (the bank pays you a sweep yield — low, but a yield)
• The 15c3-3 segregation rules specifically prohibit using client securities for proprietary purposes

5. What is happening, and where the legitimate criticisms live

• The sweep yield is very low — often well below what you'd get in a high-yield savings account or Treasury money market fund. This is the real consumer-protection issue with the model, and it's what drove the 2022-2023 cash-sorting episode.
• Conflict of interest in product design — Schwab has historically designed the default sweep to favor CSB deposits (and BDA at TD Bank) over higher-yielding money market funds, because the deposits are more profitable for Schwab. SEC and FINRA have looked at this in past industry cycles. Schwab has gradually moved clients to higher-yielding sweeps, but the economics still favor deposit sweeps when rates are low.
• Cross-subsidy transparency — the 10-K is unusually candid that the mortgage and bank-loan business is funded by cheap, sticky, low-yielding client deposits, and that's a structural advantage. Whether that advantage is "earned" or "extracted" is the legitimate debate.

Bottom line

Schwab is not illegally trading with your cash. Client securities are segregated under 15c3-3, and client cash sweeps to a regulated bank where the client becomes a depositor. The mortgage book is funded by those bank deposits, which originated from brokerage clients — but the link is legal, disclosed, and aggregate rather than client-specific. The real economic story is the sweep yield is too low, which is a consumer-protection / business-model question, not a fraud question.

so the mortage part os the bank/TD ameritrade?

No, that's a separate thing. Let me untangle the three relationships that often get confused:

1. Mortgages — Schwab Bank (CSB), not TD Ameritrade

The mortgage program is a Schwab-only product. Per Note 15 of the 2024 10-K:

"CSB provides a co-branded loan origination program for CSB clients (the Program) with *Rocket Mortgage, LLC. Pursuant to the Program, Rocket Mortgage, LLC originates and services First Mortgages and HELOCs for CSB clients. Under the Program, **CSB purchases certain First Mortgages and HELOCs that are originated by Rocket Mortgage."*

• Who lends the money: Charles Schwab Bank, SSB (CSB)
• Who originates the loan: Rocket Mortgage (the plumbing)
• Who services the loan: Rocket Mortgage
• Whose balance sheet the loan sits on: CSB's — that's why it's part of Schwab's $45B bank loan book
• TD Ameritrade's role: None. This is a legacy Schwab program that predates the TD Ameritrade acquisition.

2. TD Ameritrade's role in the current Schwab — IDA agreement only

The TD connection is not about mortgages at all. It's about the cash sweep program that TD Ameritrade had before Schwab acquired them in 2020. Per the 10-K:

"On May 4, 2023, the Company executed the 2023 IDA agreement with the TD Depository Institutions ... Pursuant to the 2023 IDA agreement, uninvested cash within eligible brokerage client accounts is swept *off-balance sheet to deposit accounts at the TD Depository Institutions*. Schwab provides recordkeeping and support services to the TD Depository Institutions for bank deposit account fees."

In plain English: - When you open a (formerly Ameritrade) Schwab account, your uninvested cash doesn't sweep to CSB — it sweeps to TD Bank, N.A. and TD Bank USA, N.A. - That cash sits on TD's balance sheet, not Schwab's - Schwab doesn't earn net interest on it — Schwab earns a fee ($729M in 2024) for recordkeeping - TD Bank, in turn, uses the deposits to fund its own lending (commercial real estate, C&I loans, etc. — not Schwab mortgages)

So the IDA money never becomes a mortgage on Schwab's books. It goes to TD Bank's loan portfolio, which is a completely different bank with a completely different loan book.

3. Where TD Ameritrade actually shows up in Schwab's structure today

After the 2020 acquisition, TD Ameritrade as a brand/entity has been fully absorbed. Per the 10-K: "In May 2024, the Company completed the final client account conversions to CS&Co from the Ameritrade broker-dealers, TD Ameritrade, Inc. and TDAC. Accordingly, these entities are no longer principal business subsidiaries."

The remaining TD relationships are: - 2023 IDA agreement — the cash sweep to TD Bank (above) - Insured by FDIC through TD's banks — the IDA balances are technically deposits at TD Bank, so they get FDIC insurance through TD, not through CSB - Schwab continues to earn fee revenue on those balances (~$730M/year) but with constraints — there's a minimum ($60B after Sept 2025) and maximum ($90B) on the IDA balance

Why the two systems coexist

The IDA program is essentially a transition artifact. When Schwab bought TD Ameritrade, the Ameritrade clients had a long-standing contractual sweep to TD Bank (originally a TD Bank product) that Schwab couldn't just terminate. So Schwab: 1. Kept the IDA in place (now renegotiated as the 2023 IDA) 2. Earns a fee, not NIM, on that cash 3. Gradually has the right to migrate some of those balances to CSB if it has the capital to absorb them

Summary table

So to your direct question: No, the mortgage part is not TD Ameritrade. It's Schwab Bank (CSB) originating through Rocket Mortgage, with the loans staying on CSB's balance sheet. TD's only role is as the recipient of a separate cash sweep from legacy Ameritrade accounts, and that money funds TD's own loans, not Schwab's.

so mortages have nothing to do with the brokerage company?

Right — at the legal entity level, mortgages and the brokerage are completely separate.

• Charles Schwab & Co., Inc. (CS&Co) = the broker-dealer. This is the entity that holds your brokerage account, executes your trades, custody your stocks, and is regulated by the SEC and FINRA. It does not make mortgages.
• Charles Schwab Bank, SSB (CSB) = the bank. This is the entity that holds your deposits, makes mortgages and HELOCs, and is regulated by the Fed, FDIC, and Texas banking regulators. It does not execute trades.

These are two different subsidiaries of the same parent company (The Charles Schwab Corporation, CSC). They have separate boards, separate regulators, separate capital requirements, and separate customer relationships. The brokerage and the bank are linked only through normal intercompany arrangements (the cash sweep from CS&Co to CSB) that any bank-broker hybrid would have.

So at the legal entity level, you are correct: a Schwab First Mortgage has nothing to do with Charles Schwab & Co., the brokerage. Your mortgage is with Charles Schwab Bank, not with the broker-dealer.

But at the holding-company / business-strategy level, they are very much connected, and this is the part that matters for understanding Schwab:

1. Same client. Most of CSB's mortgage borrowers are also CS&Co brokerage clients. The mortgage is sold to them through the same login, the same app, often by the same Schwab representative who handles their brokerage account. From the client's perspective, it's all "Schwab."

2. Same marketing pitch. Schwab explicitly uses the brokerage relationship to acquire mortgage customers and vice versa. The 10-K says one of the bank's goals is to "leverage our multiple distribution channels" — i.e., use the brokerage's 36.5M active accounts as the distribution channel for mortgages.

3. Same balance sheet economics at the parent level. When the parent CSC reports consolidated financials, the bank's mortgage interest income and the broker-dealer's trading revenue are both "Schwab" — they support the same dividend, the same stock, the same CEO. The mortgage business is profitable because CSB has a $259B deposit base, and that deposit base exists because CS&Co's brokerage clients sweep cash to the bank.

4. Same risk profile at the parent level. If CSB takes big mortgage losses (it doesn't, but hypothetically), that hurts CSC's consolidated earnings and the stock price — even though CS&Co the broker-dealer is fine. Conversely, the 2023 NII crisis (mortgage-related, but more about investment securities and deposits) hurt the brokerage business's reputation and client confidence, even though CS&Co the broker-dealer was never in trouble.

5. Same regulatory umbrella, loosely. CSC as the parent has to manage capital, liquidity, and risk across both. The Fed regulates CSC as a savings & loan holding company because of CSB; that gives the Fed indirect influence over CS&Co even though CS&Co is primarily an SEC-regulated entity.

So the precise answer to your question is:

• Legally / structurally / regulatorily: The mortgage is a CSB product, the brokerage is a CS&Co product, and they are separate subsidiaries with separate regulators. A Schwab mortgage is not held by the brokerage company.
• Commercially / strategically / economically: They are deeply intertwined — same parent, same clients, same brand, and the bank's mortgage business is funded by the deposits that come from the brokerage's clients. The mortgage would not exist at this scale without the brokerage, and the brokerage would not be as profitable without the bank's NIM from those deposits.

If you are a Schwab client and you want a clean mental model: think of CSC as a holding company that owns a brokerage (where you trade stocks) and a bank (where you get a mortgage). The two are run as one business in practice, but they are legally separate entities with separate regulators. The "link" is the corporate parent and the shared client, not a commingling of brokerage cash with mortgage loans.

is there a split of earnings through non-risky brokerage busienss vs lending against loan book? i would include the margin for securities in brokerage.

Good question. Let me think about what we have:

• Segment data (Investor Services vs Advisor Services) — but this is by client channel, not by risk profile
• Revenue line items (NII, asset mgmt fees, trading, BDA fees) — but not split by underlying asset risk

Let me see if there's anything in the 10-K that gets at this.

Now I can build a clean split. The 10-K provides average balances and yields by asset category, which is exactly what's needed. Let me compute it.

Let me just present the calculation directly:

The split you're asking for — by underlying risk profile, 2024 ($B)

I built this from the 10-K's "Net interest revenue" table (Note 3) which discloses average balances and yields by asset category:

Add securities lending ($330M) + other ($136M) for total interest revenue of $15.5B, less interest expense of $6.4B = net interest revenue of $9.1B.

The clean split you're asking for

If you want to be even more granular on the "lending" side: - Margin lending alone: $5.42B (60% of NII) — secured by client stock, daily mark-to-market - Bank loans (real estate-secured): $1.87B (20% of NII) — mortgages, HELOCs, PALs

But that only tells half the story. Adding the non-NII revenue:

So the "truly risky lending" piece of Schwab is small: - Bank loans: $1.87B / $19.6B = 9.5% of total net revenue is from First Mortgages, HELOCs, and PALs - Margin lending: $5.42B / $19.6B = 27.7% is from margin loans (secured by marketable securities) - Pure fee-based / non-risky revenue: $9.7B = ~50% of total net revenue (asset mgmt fees, trading revenue, BDA fees, most of "other")

And on the balance sheet ($480B in assets, 12/31/24):

The bottom line you're looking for

• ~9% of total net revenue comes from real-estate-secured lending (mortgages, HELOCs, PALs)
• ~28% comes from margin lending (secured by client marketable securities)
• ~60% comes from non-risky fee businesses + low-risk interest earnings on cash, agency MBS, and Treasuries

Schwab is far more a "fee + agency-MBS spread + secured margin" business than a "mortgage lender" business. The bank-loan piece is small and conservative; the credit risk in the business is overwhelmingly duration/rate risk on the investment securities portfolio, not loan default risk. The 2023 earnings collapse was a rate risk event (asset yields didn't reprice fast enough vs. deposit costs), not a credit risk event.

So if you were trying to assess what kind of risk you're taking on as a Schwab equity holder, the answer is: very little credit risk, meaningful rate risk, and a $9B+ recurring fee business (asset mgmt + trading) that's largely immune to both.