The Charles Schwab Corporation (SCHW) 10-Q 5 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Income Securities

Statement Of Income Securities Based Income (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net Revenues
Asset management and administration fees	$451	$596	$1,439	$1,827
Interest revenue	356	497	1,063	1,485
Interest expense	(62)	(50)	(161)	(192)
Net interest revenue	294	447	902	1,293
Trading revenue	241	252	772	728
Other	36	0	132	62
Total other-than-temporary impairment losses	(52)	(44)	(239)	(44)
Noncredit portion of loss recognized in other comprehensive income	41	0	201	0
Net impairment losses on securities	(11)	(44)	(38)	(44)
Total net revenues	1,011	1,251	3,207	3,866
Expenses Excluding Interest
Compensation and benefits	371	390	1,173	1,265
Professional services	70	86	194	254
Occupancy and equipment	67	75	245	221
Advertising and market development	34	47	141	181
Communications	48	51	155	155
Depreciation and amortization	38	38	121	113
Other	63	65	168	156
Total expenses excluding interest	691	752	2,197	2,345
Income from continuing operations before taxes on income	320	499	1,010	1,521
Taxes on income	(120)	(195)	(387)	(599)
Income from continuing operations	200	304	623	922
Loss from discontinued operations, net of tax	0	0	0	(18)
Net Income	$200	$304	$623	$904
Weighted-Average Common Shares Outstanding - Diluted	1,163	1,158	1,160	1,157
Earnings Per Share - Basic
Income from continuing operations	0.17	0.26	0.54	0.8
Loss from discontinued operations, net of tax	$0	$0	$0	-0.01
Net income	0.17	0.26	0.54	0.79
Earnings Per Share - Diluted
Income from continuing operations	0.17	0.26	0.54	0.8
Loss from discontinued operations, net of tax	$0	$0	$0	-0.02
Net income	0.17	0.26	0.54	0.78
Dividends Declared Per Common Share	0.06	0.06	0.18	0.16

Statement Of Financial Position

Statement Of Financial Position Unclassified - Securities Based Operations (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
Assets
Cash and cash equivalents	$8,116	$5,442
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $8,112 at September 30, 2009 and $6,701 at December 31, 2008)	17,439	14,685
Receivables from brokers, dealers, and clearing organizations	572	759
Receivables from brokerage clients - net	7,877	7,129
Other securities owned - at fair value	665	626
Securities available for sale	21,300	14,446
Securities held to maturity (fair value - $3,049 at September 30, 2009 and $244 at December 31, 2008)	2,979	243
Loans to banking clients - net	6,913	6,044
Loans held for sale	66	41
Equipment, office facilities, and property - net	646	661
Goodwill	528	528
Other assets	883	1,071
Total assets	67,984	51,675
Liabilities and Stockholders' Equity
Deposits from banking clients	35,500	23,841
Payables to brokers, dealers, and clearing organizations	1,245	1,100
Payables to brokerage clients	23,443	20,256
Accrued expenses and other liabilities	1,377	1,534
Long-term debt	1,516	883
Total liabilities	63,081	47,614
Stockholders' equity:
Preferred stock - 9,940,000 shares authorized; $.01 par value per share; none issued	0	0
Common stock - 3 billion shares authorized; $.01 par value per share; 1,392,091,544 shares issued	14	14
Additional paid-in capital	2,278	2,214
Retained earnings	7,149	6,735
Treasury stock, at cost - 230,052,516 shares at September 30, 2009 and 234,991,565 shares at December 31, 2008	(4,292)	(4,349)
Accumulated other comprehensive loss	(246)	(553)
Total stockholders' equity	4,903	4,061
Total liabilities and stockholders' equity	$67,984	$51,675

1_Statement Of Financial Positi

Statement Of Financial Position Unclassified - Securities Based Operations (Parenthetical) (USD $)
In Millions, except Share data	Sep. 30, 2009	Dec. 31, 2008
Cash and investments segregated and on deposit for regulatory purposes, resale agreements	$8,112	$6,701
Securities held to maturity, fair value	$3,049	$244
Preferred stock, shares authorized	9,940,000	9,940,000
Preferred stock, par value	0.01	0.01
Preferred stock, issued	0	0
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, par value	0.01	0.01
Common stock, shares issued	1,392,091,544	1,392,091,544
Treasury stock, shares	230,052,516	234,991,565

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect Securities Based Operations (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Flows from Operating Activities
Net income	$623	$904
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Loss from discontinued operations, net of tax	0	18
Depreciation and amortization expense	121	113
Stock-based compensation expense	54	49
Excess tax benefits from stock-based compensation	(7)	(47)
Net impairment losses on securities	38	44
Other	(19)	20
Originations of loans held for sale	(2,279)	(1,316)
Proceeds from sales of loans held for sale	2,264	1,305
Net change in:
Cash and investments segregated and on deposit for regulatory purposes	(2,754)	(4,951)
Other securities owned	(39)	(319)
Receivables from brokers, dealers, and clearing organizations	189	(310)
Receivables from brokerage clients	(751)	1,701
Other assets	11	7
Payables to brokers, dealers, and clearing organizations	195	524
Payables to brokerage clients	3,187	1,224
Accrued expenses and other liabilities	(133)	322
Net cash provided by (used for) operating activities	700	(712)
Cash Flows from Investing Activities
Purchases of securities available for sale	(11,144)	(7,566)
Proceeds from sales of securities available for sale	107	0
Principal payments on securities available for sale	4,613	1,335
Purchases of securities held to maturity	(2,808)	0
Principal payments on securities held to maturity	73	0
Net increase in loans to banking clients	(921)	(2,111)
Purchase of equipment, office facilities, and property	(108)	(128)
Other investing activities	0	(5)
Net cash used for investing activities	(10,188)	(8,475)
Cash Flows from Financing Activities
Net change in deposits from banking clients	11,659	8,137
Issuance of long-term debt	747	0
Repayment of long-term debt	(79)	(19)
Excess tax benefits from stock-based compensation	7	47
Dividends paid	(209)	(185)
Purchase of treasury stock	0	(350)
Proceeds from stock options exercised and other	46	116
Other financing activities	(9)	0
Net cash provided by financing activities	12,162	7,746
Increase (decrease) in Cash and Cash Equivalents	2,674	(1,441)
Cash and Cash Equivalents at Beginning of Period	5,442	6,764
Cash and Cash Equivalents at End of Period	8,116	5,323
Cash paid during the period for:
Interest	111	184
Income taxes	$350	$626

1. Basis of Presentation

1. Basis of Presentation
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. Basis of Presentation	1. Basis of Presentation The Charles Schwab Corporation (CSC) is a savings and loan holding company engaged, through its subsidiaries, in securities brokerage, banking, and related financial services. Charles Schwab Co., Inc. (Schwab) is a securities broker-dealer with 304 domestic branch offices in 45 states, as well as a branch in each of the Commonwealth of Puerto Rico and London, U.K. In addition, Schwab serves clients in Hong Kong through one of CSCs subsidiaries. Other subsidiaries include Charles Schwab Bank (Schwab Bank), a federal savings bank, and Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwabs proprietary mutual funds, which are referred to as the Schwab Funds. The accompanying unaudited condensed consolidated financial statements include CSC and its majority-owned subsidiaries (collectively referred to as the Company). All material intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP), which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements. Certain estimates include other-than-temporary impairment of securities available for sale and securities held to maturity, the valuation of goodwill, the allowance for credit losses, and legal reserves. Actual results could differ from those estimates. These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the periods presented. These adjustments are of a normal recurring nature. Certain prior-year amounts have been reclassified to conform to the 2009 presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys Annual Report on Form10-K for the year ended December31, 2008. The Companys results for any interim period are not necessarily indicative of results for a full year or any other interim period. Management has evaluated subsequent events through the date the condensed consolidated financial statements were issued, which was November5, 2009.

2. New Accounting Standards

2. New Accounting Standards
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2. New Accounting Standards	2. New Accounting Standards Adoption of New Accounting Standards Statement of Financial Accounting Standards (SFAS) No.168 The Financial Accounting Standards Board (FASB) Accounting Standards Codification and the Hierarchy of GAAP, was effective for interim and annual reporting periods ending after September15, 2009. This standard establishes the FASB Accounting Standards Codification (ASC or the Codification) as the source of authoritative accounting principles in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. New accounting standards will be issued as Accounting Standards Updates which will serve to update the Codification. The adoption of the Codification changed the Companys references to GAAP standards but did not have an impact on the Companys financial position, results of operations, earnings per share (EPS), or cash flows. This standard is part of ASC105 GAAP. SFAS No.141R Business Combinations (ASC805 Business Combinations), was effective beginning January1, 2009. This standard generally requires an acquirer to recognize the assets acquired, the liabilities assumed, contingent purchase consideration, and any noncontrolling interest in the acquiree, at fair value on the date of acquisition. This standard also requires an acquirer to expense most transaction and restructuring costs as incurred, and not include such items in the cost of the acquired entity. This standard applies to any business acquisition with an acquisition date on or after January1, 2009. SFAS No.160 Noncontrolling Interests in Consolidated Financial Statements (ASC810 Consolidation), was effective beginning January1, 2009. This standard amends financial statement presentation and disclosure requirements for reporting noncontrolling ownership interests. This standard also establishes consistent accounting methods for changes in ownership interest and for the valuation of retained noncontrolling investments upon deconsolidation. The adoption of this standard did not have a material impact on the Companys financial position, results of operations, EPS, or cash flows. SFAS No.161 Disclosures about Derivative Instruments and Hedging Activities (ASC815 Derivatives and Hedging), was effective beginning January1, 2009. This standard amends the disclosure requirements for qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair values and gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative agreements. This standard does not require any new derivative or hedging measurements. The adoption of this standard did not have a material impact to the Companys disclosures about derivative instruments and hedging activities. SFAS No.165 Subsequent Events (ASC855 Subsequent Events), was effective for interim and annual reporting periods ending after June15, 2009. This standard establishes the accounting for and disclosure of subsequen

3. Securities Available for Sal

3. Securities Available for Sale and Securities Held to Maturity
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3. Securities Available for Sale and Securities Held to Maturity	3. Securities Available for Sale and Securities Held to Maturity The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale and securities held to maturity are as follows: September30, 2009 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities available for sale: U.S. agency residential mortgage-backed securities $ 10,487 $ 205 $ 56 $ 10,636 U.S. agency notes 3,645 7 1 3,651 Corporate debt securities 2,519 16 1 2,534 Non-agency residential mortgage-backed securities 2,461 585 1,876 Certificates of deposit 1,425 2 1,427 Asset-backed securities 1,164 12 1,176 Total securities available for sale $ 21,701 $ 242 $ 643 $ 21,300 Securities held to maturity: Asset-backed securities $ 1,425 $ 30 $ $ 1,455 U.S. agency residential mortgage-backed securities 1,229 34 1,263 Corporate debt securities 325 6 331 Total securities held to maturity $ 2,979 $ 70 $ $ 3,049 December31, 2008 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities available for sale: U.S. agency residential mortgage-backed securities $ 8,203 $ 108 $ 82 $ 8,229 U.S. agency notes 515 2 517 Corporate debt securities 1,762 2 31 1,733 Non-agency residential mortgage-backed securities 3,085 862 2,223 Certificates of deposit 925 3 922 Asset-backed securities 866 44 822 Total securities available for sale $ 15,356 $ 112 $ 1,022 $ 14,446 Securities held to maturity: Asset-backed securities $ 243 $ 1 $ $ 244 Total securities held to maturity $ 243 $ 1 $ $ 244 A summary of securities with unrealized losses, aggregated by category and period of continuous unrealized loss, is as follows: Less than 12 months 12 months or longer Total September30, 2009 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Securities available for sale: U.S. agency residential mortgage-backed securities $ 2,085 $ 24 $ 2,099 $ 32 $ 4,184 $ 56 U.S. agency notes 399 1 399 1 Corporate debt securities 274 1 274 1 Non-agency residential mortgage-backed securities 1,862 585 1,862 585 Total securities with unrealized losses (1) $ 2,758 $ 26 $ 3,961 $ 617 $ 6,719 $ 643

4. Loans to Banking Clients and

4. Loans to Banking Clients and Related Allowance for Credit Losses
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4. Loans to Banking Clients and Related Allowance for Credit Losses	4. Loans to Banking Clients and Related Allowance for Credit Losses The composition of the loan portfolio is as follows: September30, 2009 December31, 2008 Residential real estate mortgages $ 3,450 $ 3,195 Home equity lines of credit 3,209 2,662 Secured personal loans 274 187 Other 24 20 Total loans to banking clients 6,957 6,064 Allowance for credit losses (44 ) (20 ) Total loans to banking clients net $ 6,913 $ 6,044 Included in the loan portfolio are nonaccrual loans totaling $26million and $8million at September30, 2009 and December31, 2008, respectively. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $28million and $9million at September30, 2009 and December31, 2008, respectively. There were no loans accruing interest that were contractually 90 days or more past due at September30, 2009 or December31, 2008. The amount of interest revenue that would have been earned on non-accrual loans, versus interest revenue recognized on these loans, was not material to the Companys results of operations for the first nine months of 2009 or 2008. Changes in the allowance for credit losses were as follows: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Balance at beginning of period $ 41 $ 12 $ 20 $ 7 Charge-offs (4 ) (1 ) (9 ) (2 ) Recoveries Provision for credit losses 7 5 33 11 Balance at end of period $ 44 $ 16 $ 44 $ 16

5. Long-term Debt

5. Long-term Debt
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5. Long-term Debt	5. Long-term Debt Long-term debt net of unamortized debt discounts, where applicable, consists of the following: September30, 2009 December31, 2008 Senior Notes $ 747 $ Senior Medium-Term Notes, Series A 450 458 Junior Subordinated Notes 202 300 Finance lease obligation 113 116 Fair value adjustment 4 9 Total long-term debt $ 1,516 $ 883 In June2009, the Company issued $750million of Senior Notes that mature in2014. The Senior Notes have a fixed interest rate of4.950% with interest payable semiannually. In the first nine months of2009, the Company repurchased $98million of trust preferred securities related to its Junior Subordinated Notes for a cash payment of $67million. The repurchase of the trust preferred securities was accounted for as an extinguishment of a portion of the Junior Subordinated Notes and resulted in a gain of $31million.

6. Commitments and Contingent L

6. Commitments and Contingent Liabilities
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6. Commitments and Contingent Liabilities	6. Commitments and Contingent Liabilities The Company has clients that sell (i.e., write) listed option contracts that are cleared by various clearing houses. The clearing houses establish margin requirements on these transactions. The Company satisfies the margin requirements by arranging unsecured standby letter of credit agreements (LOCs), in favor of the clearing houses, which are issued by multiple banks. At September30, 2009, the aggregate face amount of these LOCs totaled $445million. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. Schwab satisfies the collateral requirements by arranging LOCs, in favor of these brokerage clients, which are issued by multiple banks. At September30, 2009, the aggregate face amount of these LOCs totaled $31million. There were no funds drawn under any of these LOCs at September30, 2009. The Company also provides guarantees to securities clearing houses and exchanges under their standard membership agreement, which requires members to guarantee the performance of other members. Under the agreement, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Companys liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these transactions. Legal contingencies: The Company is subject to claims and lawsuits in the ordinary course of business, including arbitrations, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. In addition, the Company is responding to certain litigation claims brought against former subsidiaries pursuant to indemnities it has provided to purchasers of those entities. Certain of these matters are described below. The Company believes it has strong defenses in all significant matters currently pending and is contesting liability and the damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions, or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Based on current information and consultation with counsel, management believes that the resolution of matters currently pending will not have a material impact on the financial condition or cash flows of the Company, but could be material to the Companys operating results for a particular future period, depending on results for that period. However, predicting the outcome of a matter is inherently difficult, particularly where claims are brought on behalf of various classes of claimants, claimants seek substantial or unspecified damages, or when investigations or legal proceedings are at an early stage, and in many cases, includi

7. Fair Values of Assets and Li

7. Fair Values of Assets and Liabilities
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7. Fair Values of Assets and Liabilities	7. Fair Values of Assets and Liabilities SFAS No.157 Fair Value Measurements (ASC 820 Fair Value Measurements and Disclosures) defines fair value as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard also establishes a hierarchy for disclosing assets and liabilities measured at fair value based on the inputs used to value them. The fair value hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are based on market pricing data obtained from sources independent of the Company. A quoted price in an active market provides the most reliable evidence of fair value and is generally used to measure fair value whenever available. Unobservable inputs reflect managements judgment about the assumptions market participants would use in pricing the asset or liability. Where inputs used to measure fair value of an asset or liability are from different levels of the hierarchy, the asset or liability is categorized based on the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input requires judgment. The fair value hierarchy includes three levels based on the objectivity of the inputs as follows: Level1 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. This category includes active exchange-traded money market funds, mutual funds, and equity securities. Level2 inputs are inputs other than quoted prices included in Level1 that are observable for the asset or liability, either directly or indirectly. Level2 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. This category includes residential mortgage-backed securities, asset-backed securities, corporate debt securities, certificates of deposit, commercial paper, U.S. agency and municipal debt securities, U.S. Treasury securities, and derivative contracts. Level3 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. The Company did not have any financial assets or liabilities utilizing Level3 inputs as of September30, 2009 or December31, 2008. Assets and Liabilities Recorded at Fair Value The Companys assets recorded at fair value include certain investments segregated and on deposit for regulatory purposes, other securities owned, and securities available for sale. The Company uses prices obtained from an independent third-party pricing service to measure the fair value of certain investment securities. The Company validates prices received from the pricing service using various methods including comparison to prices received from additional pricing services, comparison to quot

8. Comprehensive Income and Acc

8. Comprehensive Income and Accumulated Other Comprehensive Loss
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8. Comprehensive Income and Accumulated Other Comprehensive Loss	8. Comprehensive Income and Accumulated Other Comprehensive Loss The components of comprehensive income are as follows: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Net income $ 200 $ 304 $ 623 $ 904 Other comprehensive income (loss): Change in net unrealized gain (loss) on securities available for sale: Unrealized gain (loss) on Non-OTTI securities 241 (306 ) 585 (513 ) Unrealized loss on OTTI securities (64 ) (116 ) OTTI charges recognized in earnings 11 44 38 44 Reclassification of realized loss included in earnings 3 29 3 29 Income tax effect (75 ) 91 (203 ) 173 Net 116 (142 ) 307 (267 ) Foreign currency translation adjustment (1 ) (1 ) Total other comprehensive income (loss) 116 (143 ) 307 (268 ) Comprehensive income $ 316 $ 161 $ 930 $ 636 Accumulated other comprehensive loss represents cumulative gains and losses that are not reflected in earnings. Accumulated other comprehensive loss balances were: Net unrealized loss onsecuritiesavailableforsale Portion of unrealizedloss on Non-OTTI securities Portion of unrealizedloss onOTTI securities Foreign currency translation adjustment Totalaccumulated other comprehensive loss Balance at December31, 2007 $ (18 ) $ $ 1 $ (17 ) Net change (267 ) (1 ) (268 ) Balance at September30, 2008 $ (285 ) $ $ $ (285 ) Balance at December31, 2008 $ (553 ) $ $ $ (553 ) Reclassification of OTTI securities 121 (121 ) Other net changes 307 307 Balance at September30, 2009 $ (125 ) $ (121 ) $ $ (246 )

9. Earnings Per Share

9. Earnings Per Share
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9. Earnings Per Share	9. Earnings Per Share Basic EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Dilutive potential common shares are determined using the treasury stock method, and include outstanding stock options and unvested restricted stock awards. EPS under the basic and diluted computations are as follows: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Net income available to common shareholders (1) $ 200 $ 304 $ 623 $ 904 Weighted-average common shares outstanding basic 1,157 1,148 1,155 1,147 Common stock equivalent shares related to stock incentive plans 6 10 5 10 Weighted-average common shares outstanding diluted (2) 1,163 1,158 1,160 1,157 Basic EPS: Income from continuing operations $ .17 $ .26 $ .54 $ .80 Loss from discontinued operations, net of tax $ $ $ $ (.01 ) Net income $ .17 $ .26 $ .54 $ .79 Diluted EPS: Income from continuing operations $ .17 $ .26 $ .54 $ .80 Loss from discontinued operations, net of tax $ $ $ $ (.02 ) Net income $ .17 $ .26 $ .54 $ .78 (1) Net income available to participating securities (unvested restricted shares) was not material for the third quarters and first nine months of 2009 or 2008. (2) Total antidilutive stock options and restricted stock awards excluded from the calculation of diluted EPS were 28million and 19million shares for the third quarters of 2009 and 2008, respectively, and 35million and 22million shares for the first nine months of 2009 and 2008, respectively.

10. Regulatory Requirements

10. Regulatory Requirements
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10. Regulatory Requirements	10. Regulatory Requirements CSC is a savings and loan holding company and Schwab Bank, CSCs depository institution subsidiary, is a federal savings bank. CSC and Schwab Bank are both subject to supervision and regulation by the Office of Thrift Supervision. As a savings and loan holding company, CSC is not subject to specific statutory capital requirements. However, CSC is required to maintain capital that is sufficient to support the holding company and its subsidiaries business activities, and the risks inherent in those activities. Schwab Bank is required to maintain a capital level that at least equals minimum capital levels specified in federal banking laws and regulations. Failure to meet the minimum levels will result in certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on Schwab Bank. At September30, 2009, CSC and Schwab Bank met the capital level requirements. The regulatory capital and ratios for Schwab Bank at September30, 2009, are as follows: Actual MinimumCapital Requirement Minimum to be WellCapitalized Amount Ratio Amount Ratio Amount Ratio Tier 1 Capital $ 2,454 17.0 % $ 578 4.0 % $ 868 6.0 % Total Capital $ 2,498 17.3 % $ 1,157 8.0 % $ 1,446 10.0 % Leverage $ 2,454 6.4 % $ 1,538 4.0 % $ 1,922 5.0 % Tangible Equity $ 2,454 6.4 % $ 769 2.0 % N/A N/A Not applicable. Based on its regulatory capital ratios at September30, 2009, Schwab Bank is considered well capitalized (the highest category) pursuant to banking regulatory guidelines. There are no conditions or events since September30, 2009, that management believes have changed Schwab Banks capital category. Schwab is subject to Rule15c3-1 under the Securities Exchange Act of 1934 (the Uniform Net Capital Rule). Schwab computes net capital under the alternative method permitted by the Uniform Net Capital Rule. This method requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement, which is based on the type of business conducted by the broker-dealer. At September30, 2009, 2% of aggregate debits was $182million, which exceeded the minimum dollar requirement for Schwab of $250,000. At September30, 2009, Schwabs net capital was $1.1billion (12% of aggregate debit balances), which was $897million in excess of its minimum required net capital and $624million in excess of 5% of aggregate debit balances. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans to its parent or employees if such payment would result in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

11. Segment Information

11. Segment Information
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11. Segment Information	11. Segment Information The Company structures its segments according to its various types of clients and the services provided to those clients. The Companys two reportable segments are Investor Services and Institutional Services. As a result of organizational and related business changes in the first quarter of 2009, the segments formerly reported as Advisor Services and Corporate and Retirement Services were combined into a single segment called Institutional Services. Previously-reported segment information has been revised to reflect this change. The Company evaluates the performance of its segments on a pre-tax basis excluding items such as impairment charges on non-financial assets, discontinued operations, extraordinary items, and other significant restructuring charges. Segment assets and liabilities are not disclosed because the balances are not used for evaluating segment performance and deciding how to allocate resources to segments. There are no revenues from transactions with other segments within the Company. Financial information for the Companys reportable segments is presented in the following table: Three Months Ended September30, Nine Months Ended September30, 2009 2008 2009 2008 Net revenues: Investor Services $ 658 $ 820 $ 2,069 $ 2,557 Institutional Services 353 428 1,138 1,299 Unallocated 3 10 Total net revenues $ 1,011 $ 1,251 $ 3,207 $ 3,866 Income from continuing operations before taxes on income: Investor Services $ 196 $ 315 $ 654 $ 969 Institutional Services 125 185 443 552 Unallocated (1 ) (1 ) (87 ) Income from continuing operations before taxes on income 320 499 1,010 1,521 Taxes on income (120 ) (195 ) (387 ) (599 ) Loss from discontinued operations, net of tax (18 ) Net income $ 200 $ 304 $ 623 $ 904

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 23, 2009
Entity [Text Block]
Trading Symbol	SCHW
Entity Registrant Name	SCHWAB CHARLES CORP
Entity Central Index Key	0000316709
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,162,131,202