Charles Schwab Discloses Results of the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review

The Charles Schwab Corporation (CSC or Schwab) announced today that it has received the results of the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review (CCAR). These results included the Federal Reserve’s estimate of Schwab’s minimum capital ratios under the supervisory severely adverse scenario for the nine-quarter horizon beginning December 31, 2021 and ending March 31, 2024. Based on these results, Schwab’s calculated stress capital buffer (SCB) was well below the 2.5% minimum, resulting in an SCB at that floor.

This 2.5% SCB will be applicable to Schwab for the four-quarter period beginning October 1, 2022. Schwab’s Common Equity Tier 1 (CET1) ratio of 18.9% as of March 31, 2022 was well in excess of the regulatory minimum of 4.5% combined with the SCB of 2.5% due to the relatively low risk nature of our balance sheet assets.

Schwab ended the first quarter of 2022 with a consolidated Tier 1 Leverage Ratio of 6.1%, down slightly from 6.2% at year-end 2021. Though the consolidated Tier 1 Leverage Ratio is below the long-term operating objective for CSC, this ratio is well above the regulatory minimum. The pace of return to Schwab’s long-term operating objective over time depends on a number of factors including the overall size of the consolidated balance sheet, earnings, and capital issuance and deployment.

CFO Peter Crawford commented, “Schwab’s inaugural CCAR stress test results highlight our thoughtful approach to capital, and overall risk management. The strength of our ratios accentuates the durability of our all-weather model and reinforces our confidence that we are well positioned to serve our clients across a wide range of challenging macroeconomic environments. While there are no changes to our dividend or other capital actions to report today, we’ll provide updates going forward as conditions and our plans change. As always, we expect to manage our capital position in a manner consistent with supporting long-term business growth and enhancing stockholder value, using an effective combination of earnings, dividends, and other appropriate means of returning excess capital.”

Forward-looking Statements

This press release contains forward-looking statements relating to the company’s capital ratios; balance sheet assets; Tier 1 Leverage Ratio operating objective; all-weather model; positioning; dividend and other capital actions; capital management to support business growth and enhance stockholder value; and capital returns. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations, beliefs, and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.