Past CFO Commentary

As you saw in our press release today, we’ve purchased approximately 15 million shares of Schwab nonvoting common stock directly from TD Bank Group (“TD Bank”) for $1 billion. Given this is our first repurchase activity in some time, I thought it might be helpful to provide a bit more perspective on the transaction.

At our Business Update last Thursday, I mentioned that with our Tier 1 Leverage ratio entering the mid-6 percent zone, we were nearing a point at which we could accelerate capital return. As you have heard us say before, we generally approach share buybacks opportunistically, not mechanistically, meaning that we look for opportunities to acquire shares at levels that represent an attractive value. With that in mind, when we recently learned that TD Bank planned to sell a modest portion of its SCHW position, we decided it was in the best interest of our stockholders to participate. By stepping in, we were able to acquire a significant number of shares at a discount to the prevailing market price, as well as help potentially mitigate any market disruptions that might arise from transactions of this nature.

I should note that this buyback does not necessarily indicate that we’re ready to begin open market repurchases of our stock. Our current thinking is that it most likely represents a bring-forward of activity that might have otherwise occurred later this year. Looking ahead, while supporting Schwab’s long-term growth and maintaining appropriate regulatory ratios remain our prime objectives, the combination of our expanding earnings power and increasing capital levels has us clearly on a path towards a compelling growth plus capital return story.

Forward-Looking Statements

This commentary contains forward-looking statements relating to capital returns; repurchases; long-term growth; earnings; and capital levels that reflect management’s expectations as of the date hereof. Achievement of these expectations is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; manage expenses; and monetize client assets. Other important factors include client use of the company’s advisory solutions and other products and services; general market conditions, including equity valuations and the level of interest rates; the level and mix of client trading activity; market volatility; margin loan balances; securities lending; client cash sorting; client sensitivity to rates; level of client assets, including cash balances; capital and liquidity needs and management; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the migration of bank deposit account balances; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.