10-K: Schwab Reports Strong 2025 Growth, Boosts Dividends

The Charles Schwab Corporation reported significant financial and client growth in 2025, driven by strong asset gathering, client engagement, and strategic capital management.

Summary

• Net income for 2025 reached $8.9 billion, a 49% increase from 2024.
• Diluted Earnings Per Share (EPS) rose to $4.65 in 2025, up 56% year-over-year.
• Total net revenues increased 22% to $23.9 billion in 2025.
• Client assets grew 18% to $11.90 trillion at December 31, 2025.
• Core net new assets for 2025 totaled $519.4 billion, a 42% increase from the prior year, representing an annualized organic growth rate of 5.1%.
• The company opened 4.7 million new brokerage accounts in 2025, up 13% from 2024, bringing active brokerage accounts to 38.5 million.
• Net interest revenue increased 28% to $11.8 billion, primarily due to lower interest expense from reduced bank supplemental funding and growth in margin and bank lending.
• Asset management and administration fees rose 14% to $6.5 billion, driven by higher client asset balances and growth in managed investing solutions.
• Trading revenue increased 20% to $3.9 billion, reflecting higher client trading volume.
• Bank deposit account fee revenue increased 34% to $977 million, mainly due to higher net yields.
• Total expenses excluding interest increased 5% to $12.5 billion, reflecting ongoing investments and higher compensation, partially offset by lower regulatory fees.
• The company reduced bank supplemental funding by $44.8 billion (90%) to $5.1 billion at year-end 2025.
• Margin loan balances increased 34% to $112.3 billion, and bank loans grew 28% to $58.0 billion.
• A new share repurchase authorization of up to $20.0 billion was approved on July 24, 2025, replacing the previous $15.0 billion authorization.
• The company repurchased $7.3 billion of common stock in 2025 and redeemed Series G preferred stock for $2.5 billion.
• The quarterly common dividend was increased by 8% to $0.27 per share in Q1 2025, and further increased by 19% to $0.32 per share in January 2026.
• The acquisition of Forge Global Holdings, Inc. for approximately $660 million was announced on November 6, 2025, and is expected to close in March 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a very positive report, reflecting strong financial performance, robust client growth, and proactive capital management. The significant increases in net income, EPS, and client assets, coupled with strategic initiatives like the Forge acquisition and increased shareholder returns, indicate a healthy and growing business, despite ongoing regulatory considerations.

Positives

• Net income increased by 49% to $8.9 billion in 2025, demonstrating strong profitability.
• Diluted EPS grew by 56% to $4.65, indicating enhanced shareholder value.
• Total net revenues increased by 22% to $23.9 billion, reflecting broad-based business strength.
• Client assets reached $11.90 trillion, an 18% increase, showcasing robust client acquisition and retention.
• Core net new assets surged by 42% to $519.4 billion, indicating strong organic growth.
• New brokerage accounts increased by 13% to 4.7 million, expanding the client base.
• Net interest revenue grew 28% due to lower funding costs and increased lending activity.
• Asset management and administration fees increased 14%, driven by market appreciation and managed solutions growth.
• Trading revenue increased 20%, reflecting high client engagement and market activity.
• Bank deposit account fee revenue increased 34% due to improved net yields.
• Significant reduction in higher-cost bank supplemental funding by 90% ($44.8 billion) to $5.1 billion.
• Strong client demand for margin loans (up 34% to $112.3 billion) and bank loans (up 28% to $58.0 billion).
• Increased common stock dividend by 8% in Q1 2025 and an additional 19% in January 2026.
• Approved a new $20.0 billion share repurchase authorization, demonstrating commitment to returning capital to shareholders.
• Successful completion of the Ameritrade integration as of December 31, 2024, realizing $2.0 billion in annualized run-rate cost synergies and an additional $500 million in incremental cost savings from restructuring.

Negatives

• The consolidated Tier 1 Leverage Ratio decreased to 9.3% at December 31, 2025, from 9.9% at year-end 2024, primarily due to returns of excess capital and higher total company assets.
• Average BDA balances decreased by 8% in 2025, partially offsetting the increase in bank deposit account fees.
• The company extensively utilized higher-cost funding sources in 2022 and 2023 due to rapid increases in short-term interest rates, negatively impacting net income in those periods.
• Increased unrealized losses on investment securities portfolios in 2022 and 2023 due to rapid increases in market interest rates, which could reduce market or client confidence if not managed effectively.

Risks

• Economic and market conditions, including interest rate fluctuations, equity market valuations, and geopolitical developments, can adversely affect client asset valuations, trading activity, and revenue.
• A significant change in client cash allocations or a transfer of cash away from the company could reduce income, as client cash balances are a primary funding source.
• Problems encountered by other financial institutions could lead to market disruption, reduced liquidity, higher borrowing costs, and reputational harm for Schwab.
• Security breaches of systems, or those of clients or third parties, may subject the company to significant liability, regulatory actions, and reputational damage.
• Technology and operational failures or errors, including those of third-party service providers and cloud technologies, could lead to losses, litigation, regulatory actions, and reputational damage.
• Fraud and financial crime, including sophisticated cyber attacks and insider misconduct, pose a risk of financial loss, reputational damage, and client confidence erosion.
• Credit risk from margin lending, options and futures trading, securities lending, and mortgage lending could result in significant losses if clients or counterparties default.
• Extensive regulatory supervision may subject the company to significant penalties or limitations on business activities, with increasing costs and scrutiny.
• New legislation, rules, regulations, or changes in interpretation, particularly concerning digital assets, capital requirements, and market structure, could negatively affect business and financial results.
• Failure to meet capital adequacy and liquidity guidelines could affect financial condition, limit growth, and restrict capital returns to stockholders.
• Litigation and regulatory investigations and proceedings, including class actions and intellectual property claims, could result in substantial damages, fines, or reputational harm.
• Potential strategic transactions, such as the Forge acquisition, could have a material impact on financial position, divert management attention, and result in unforeseen expenditures or integration risks.
• Offering direct access to digital assets exposes the company to new and uncertain financial, operational, legal, and regulatory risks, including custody, trading, settlement, and fraud risks.
• The highly competitive financial services industry, characterized by aggressive price competition, could impact results of operations and financial condition.
• Fluctuations in the company's stock price can be affected by financial results, business metrics, competitive announcements, and general market activity.
• Return of capital to stockholders depends on capital position, financial results, market conditions, and legal restrictions, and the company may not complete its full share repurchase authorization.

Future Outlook

The company anticipates total expenses excluding interest in full-year 2026 will increase approximately 5.5% to 6.5% from 2025, with additional costs related to the Forge acquisition. Capital expenditures for 2026 are expected to be within the longer-term expectation of 3-5% of total net revenues. Schwab plans to provide expanded client access to trading in digital assets, including select cryptocurrencies, beginning in 2026. The acquisition of Forge Global Holdings, Inc. is expected to close in March 2026, subject to customary closing conditions and regulatory approvals. The company continues to evaluate the impact of proposed regulatory changes, including those related to capital rules and long-term debt requirements.

Management Comments

• Schwab delivered growth in 2025 across multiple client metrics and in our financial results, and we continued to innovate to help our clients achieve their financial goals, guided by our Through Clients Eyes strategy.
• Our clients were highly engaged with the markets in 2025; clients DATs were 7.7 million for full-year 2025 and 8.3 million in the fourth quarter, increasing 31% over both the prior year-to-date and fourth-quarter periods.
• Schwab supported strong client demand for margin and bank lending in 2025, while significantly reducing bank supplemental funding to within a range generally consistent with our diversified funding strategy.
• The company anticipates that incorporating Forge's private company investment capabilities will enhance Schwab's ability to meet the evolving needs of investors across our growing client base.
• We do not expect proposed changes to stress test models to materially impact our stress test capital requirements.

Industry Context

StockSavvy.ai notes that The Charles Schwab Corporation's strong 2025 performance, characterized by significant client asset growth and increased trading activity, aligns with a generally supportive equity market environment. The company's strategic focus on 'Through Clients Eyes' and its 'no trade-offs' approach to service and pricing positions it well against competitors in the brokerage, wealth management, and asset management sectors. The planned expansion into digital assets and the acquisition of Forge Global Holdings, Inc. reflect a proactive stance in evolving market trends and client demands for alternative investments. The reduction in higher-cost funding sources and disciplined expense management demonstrate effective navigation of interest rate dynamics, a key challenge for many financial institutions in recent years. However, the ongoing regulatory scrutiny and proposed capital rule changes, particularly regarding AOCI and long-term debt, represent a broader industry challenge that Schwab, as a large banking organization, must continue to manage.

Comparison to Industry Standards

• Schwab's 18% growth in client assets to $11.90 trillion at year-end 2025 positions it as one of the largest investment services firms in the U.S., indicating strong competitive standing against major players like Fidelity, Vanguard, and other large banks.
• The 42% increase in core net new assets to $519.4 billion and an annualized organic growth rate of 5.1% suggest a robust ability to attract and retain clients, potentially outperforming some peers in a competitive environment.
• The 56% increase in diluted EPS to $4.65 and 49% increase in net income to $8.9 billion demonstrate superior profitability compared to many financial institutions, especially given the dynamic interest rate environment.
• The reduction of bank supplemental funding by 90% to $5.1 billion indicates effective balance sheet management and reduced reliance on more expensive funding, which is a positive differentiator in the banking sector.
• The acquisition of Forge Global Holdings, Inc. for private market capabilities positions Schwab to compete with alternative investment platforms and cater to sophisticated investor needs, similar to offerings from larger investment banks or specialized fintech firms.
• The increase in common dividends and the new $20.0 billion share repurchase authorization signal strong capital generation and a commitment to shareholder returns, which is competitive with other well-capitalized financial services companies.

Management Changes

Corporate Governance

Legal Proceedings

• Corrente Antitrust Litigation: On June 6, 2022, CSC was sued in the U.S. District Court for the Eastern District of Texas on behalf of a putative class of customers alleging anticompetitive market practices due to the Ameritrade acquisition. A motion to dismiss was denied on February 24, 2023. A proposed class settlement was filed on December 12, 2024, involving non-monetary undertakings and immaterial attorneys' fees. The court granted final approval on November 24, 2025, but certain objectors have appealed to the Fifth Circuit Court of Appeals.

Related Party Transactions

• On February 12, 2025, TD Group US Holdings LLC, an affiliate of TD Bank, completed a secondary public offering of 133.8 million shares of common stock and 31.7 million shares of nonvoting common stock (which converted to common stock) for an aggregate of $13.1 billion. The company did not receive any proceeds from this sale.
• Concurrent with the secondary offering, the company repurchased its remaining 19.2 million shares of nonvoting common stock from TD Group US Holdings LLC at $77.982 per share for $1.5 billion, which settled on February 12, 2025. This completed TD Bank's disposal of all its common shares of CSC, and the company now has no remaining nonvoting common stock outstanding.
• The 2023 IDA agreement with TD Depository Institutions specifies responsibilities and contingent obligations, where uninvested client cash is swept off-balance sheet to deposit accounts at TD Depository Institutions, for which Schwab receives a monthly fee of 15 basis points. After September 10, 2025, Schwab has broader discretion to withdraw balances, subject to maintaining IDA balances between $60 billion and $90 billion. Schwab moved $6.7 billion of BDA balances to its balance sheet after this date.

Stakeholder Impact

• Shareholders: Benefit from strong financial performance, increased common stock dividends (8% in Q1 2025, 19% in Jan 2026), and a new $20.0 billion share repurchase authorization, indicating a commitment to returning capital. The redemption of Series G preferred stock also impacts preferred shareholders.
• Clients: Benefit from expanded product offerings, including anticipated access to digital assets and private market investment capabilities through the Forge acquisition. The 'Through Clients Eyes' strategy aims to provide superior service and affordable products.
• Employees: Impacted by changes in executive compensation plans (Corporate Executive Bonus Plan) and severance benefits (Severance Pay Plan), effective January 1, 2026. Ongoing investments in business growth and client-serving capabilities suggest continued employment opportunities and development.
• Regulatory Authorities: The company remains subject to extensive regulation and ongoing scrutiny, with discussions around proposed capital rules and long-term debt requirements. Compliance with these regulations is a continuous focus.
• Suppliers/Vendors: Reliance on outsourced service providers and financial intermediaries means their performance and stability are critical to Schwab's operations and could impact service delivery.

Next Steps

• Close the acquisition of Forge Global Holdings, Inc. in March 2026, subject to regulatory approvals.
• Begin offering expanded client access to trading in digital assets, including select cryptocurrencies, in 2026.
• Manage total expenses excluding interest, which are anticipated to increase approximately 5.5% to 6.5% in full-year 2026, plus costs related to the Forge acquisition.
• Maintain capital expenditures within the longer-term expectation of 3-5% of total net revenues for 2026.
• Continue to evaluate and respond to proposed regulatory changes regarding capital rules, long-term debt requirements, and other industry regulations.
• Hold the annual meeting of stockholders on May 21, 2026.

Key Dates

Recommendation

The Charles Schwab Corporation's 2025 results demonstrate exceptional financial health and operational momentum. Net income and diluted EPS saw substantial year-over-year growth (49% and 56% respectively), driven by robust client asset gathering, increased trading activity, and effective cost management. The company's strategic initiatives, including the acquisition of Forge Global Holdings to expand into private markets and the planned offering of digital assets, position it for continued growth in evolving financial landscapes. Furthermore, the significant increase in common dividends and the new $20.0 billion share repurchase authorization underscore a strong commitment to shareholder returns. While regulatory changes and market risks are ongoing, Schwab's proactive risk management and strong capital position (Tier 1 Leverage Ratio of 9.3%) suggest resilience. The successful integration of Ameritrade and realized synergies further strengthen its competitive advantage. These factors collectively indicate a compelling investment opportunity.

Keywords

Wealth Management, Brokerage, Banking, Asset Management, SEC Filing, Financial Performance, Client Assets, Net Income, EPS, Revenue Growth, Capital Management, Share Repurchase, Dividends, Regulatory Compliance, Risk Management, Digital Assets, Acquisition, Forge Global Holdings, Interest Rates, Liquidity, Cybersecurity