SCHW, Schwab Charles Corp
The Charles Schwab Corporation is a savings and loan holding company.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is led by Asset management and administration fees (27%) and Trading revenue (16%), with 8 more lines behind.
- What moves the needle
- Net interest margin, loan losses, and book value. A lender is read on the quality of its balance sheet, not on an earnings multiple.
- Is it a good business?
- Return on equity has hovered around the cost of equity (median 12%, above 12% in 7 of 10 years). It runs at a 106% efficiency ratio, on the heavy side. A bank that earns above its cost of equity through the cycle compounds book value; whether this one did it by underwriting discipline or by reaching for risk is what the 10-K, and the worst years in the record, will tell you.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Investor Services is 79% of revenue, so this is largely a single-segment business.
- Investor Services79%$19.0B
- Advisor Services21%$4.9B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $7.5B | $8.6B | $10.1B | $10.7B | $11.7B | $18.5B | $20.8B | $18.8B | $19.6B | $23.9B | $24.8B |
| Net interest incomeNet int. | $3.3B | $4.3B | $5.8B | $6.5B | $6.1B | $8.0B | $10.7B | $9.4B | $9.1B | $11.8B | $12.2B |
| Net incomeNet inc. | $1.9B | $2.4B | $3.5B | $3.7B | $3.3B | $5.9B | $7.2B | $5.1B | $5.9B | $8.9B | $9.4B |
| EPS (diluted)EPS | $1.42 | $1.74 | $2.58 | $2.81 | $2.30 | $3.09 | $3.79 | $2.77 | $3.24 | $4.89 | $5.38 |
| Return on equityROE | 12% | 13% | 17% | 17% | 6% | 10% | 20% | 12% | 12% | 18% | 19% |
| Return on tangible equityROTCE | 13% | 14% | 18% | 18% | 10% | 17% | 45% | 24% | 21% | 29% | 32% |
| Efficiency ratioEffic. | 135% | 116% | 96% | 90% | 121% | 135% | 106% | 132% | 130% | 106% | 103% |
| DepositsDeposits | $163.5B | $169.7B | $231.4B | $220.1B | $358.0B | $443.8B | $366.7B | $290.0B | $259.1B | $255.7B | $253.0B |
| Book value / shareBVPS | $12.31 | $13.69 | $15.19 | $16.47 | $39.07 | $29.66 | $19.33 | $22.37 | $26.38 | $27.32 | $28.10 |
| Tangible book / shareTBVPS | $11.28 | $12.71 | $14.17 | $15.45 | $23.77 | $18.41 | $8.38 | $11.33 | $15.64 | $16.72 | $16.85 |
| Dividends / shareDiv/sh | $0.36 | $0.44 | $0.58 | $0.80 | $0.89 | $0.96 | $1.11 | $1.24 | $1.24 | $1.29 | — |
Owner’s Scorecard
Is it a good business?
- Return on equity 18%ExceptionalNet income $8.9B ÷ equity $49.4B
The bank's north star, what it earns on shareholders' capital. Cost of equity is roughly 10%, so a return durably above that builds value and below it destroys it. One year is noisy; the durability across a full credit cycle is what counts.
- ExceptionalNet income ÷ (equity − goodwill $12.0B − intangibles $7.2B)
The cleaner return, stripping out the goodwill paid for past acquisitions. This is the number a buyer of the whole bank actually earns on the hard capital.
- Efficiency ratio 106%BloatedNoninterest expense $12.5B ÷ (net interest income + fees)
The share of revenue eaten by running costs; lower is better, and below about 60% marks a genuinely efficient operation. A low ratio held for years is the operational side of a moat.
Is it sound?
- Capital (equity / assets) 10.1%Well capitalizedEquity $49.4B ÷ assets $491.0B
A plain-English leverage read: how much of the balance sheet is the owners' own money. This is a rough proxy; the regulatory figure is the CET1 ratio, which is risk-weighted and reported in the filing. The point is the same, how much loss the bank can absorb before depositors are at risk.
- Deposit funding 52%Mostly deposit-fundedDeposits $255.7B ÷ assets $491.0B
Low-cost, sticky deposits are a bank's real moat, the cheap raw material it lends out at a spread. A bank funded mostly by deposits earns more durably than one that rents its money in the wholesale market.
- Credit cost (provision / NII) -0%Net reserve releaseProvision for credit losses ($5M) ÷ net interest income $11.8B
What the bank set aside this year against loans going bad, as a share of its lending income. This swings hard with the cycle, low in good years and spiking in recessions, so read it across the record, not in one year. Disciplined underwriting shows up as low, stable provisions through a downturn.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio143:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$317M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What the price implies
price / tangible bookA bank is worth a multiple of its tangible book value, and the multiple it deserves is set by the return it earns on that book. Type today’s price; we show what you would be paying against what Schwab Charles Corp’s record justifies. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
The justified multiple is (return on tangible equity − growth) ÷ (cost of equity − growth). A bank earning exactly its cost of equity is worth about one times tangible book; every point of durable excess return above that is worth paying up for. Raise the cost of equity and the justified multiple falls: that is interest-rate gravity on a bank.
Tangible book $29.5B on 1752M shares, a 18% normalized return on it. This is a lens, not a target. It assumes the bank keeps earning that return; a credit cycle, a rate shock or a bad acquisition changes it, which is what the record and the 10-K are for.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationBusiness
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“Under this framework, the FDIC established a "25 percent" business relationship designated exception where a broker-dealer or other third-party may qualify for the primary purpose exception by filing a notice with the FDIC indicating that less than 25 percent of its customer assets under administrat…”
From the recordRevenue exposed (TTM)$24.8B - Pricing power & competitionRisk Factors
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“We operate in a highly competitive environment with a broad array of competitors from large integrated banks to venture-capital-backed private companies.”
From the recordOperating margin77.0% (TTM), near a 10-yr high - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“These decreases reflected a net reduction of bank supplemental funding balances of $29.7 billion and maturities of long-term debt of $3.7 billion.”
From the recordBalance sheet (TTM)+$23.8B net cash · interest covered 2.7× - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“In July 2024, in two separate industry lawsuits seeking to vacate the rule, federal district court judges stayed effectiveness of the rule pending resolution of litigation.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandBusiness
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“Capital requirements for Category III banking organizations include the generally applicable risk-based capital and Tier 1 leverage ratio requirements (the "standardized approach" framework), the minimum 3.0% supplementary leverage ratio, the stress capital buffer (CSC), the capital conservation buf…”
From the recordWorst year on record39.2% operating margin (FY2024) - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“Partially offsetting the decrease in bank deposits and repayment of borrowings, net investing cash inflows from our AFS and HTM securities totaled $40.9 billion in 2024 and net cash inflows from operations totaled $2.7 billion.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Other revenue was largely flat for Investor Services and increased for Advisor Services, due to higher other service fees and gains recognized on certain equity investments, partially - 40 - THE CHARLES SCHWAB CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Ope…”
- “This decrease was primarily due to lower average balances in AFS and HTM securities, as cash inflows from investment securities were used to pay down bank supplemental funding, largely offset by higher balances of cash and investments segregated, growth in margin lending which was supported by highe…”
- “The year-over-year changes in expenses were primarily attributable to higher compensation and benefits and higher professional services expense, due largely to growth in the business and volume-related costs, including higher incentive compensation driven by the Company's financial performance, part…”
- “The increase was partially offset by a charge recognized in the second quarter of 2024 for the SEC's industry-wide review of off-channel communications, and lower industry fees in 2025 compared to 2024 due to lower average fee rates stemming from the SEC decreasing the fee rate applicable to most se…”
- “Increasing sophistication in artificial intelligence and broad public availability of such technologies, including to organizations and individuals seeking to commit fraud, has resulted in increased risk of external fraud by enhanced or novel techniques, including those involving impersonation to ga…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Capital markets
The same industry, side by side on the bank lens, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | ROE | ROTCE | Efficiency | Net int. margin |
|---|---|---|---|---|---|
| MSMorgan Stanley | $34.3B | 15% | 19% | 68% | 0.7% |
| BLKBlackrock, Inc. | $24.2B | 10% | — | — | — |
| SCHWSchwab Charles Corp | $23.9B | 18% | 29% | 106% | 2.4% |
| RJFRaymond James Financial Inc | $15.9B | 17% | 20% | 81% | 2.4% |
| HOODRobinhood Markets, Inc. | $4.5B | 21% | 22% | — | 4.0% |
| GSThe Goldman Sachs Group, Inc. | — | 14% | 15% | 64% | 0.7% |