Charles Schwab Corporation filed SEC Form 8-K: Regulation FD Disclosure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 10, 2025

The Charles Schwab Corporation

(Exact name of registrant as specified in its charter)

Commission File Number: 1-9700

3000 Schwab Way, Westlake, TX 76262

(Address of principal executive offices, including zip code)

(817) 859-5000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

The information being furnished pursuant to this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that section. Further, the information being furnished pursuant to this Item 7.01 shall not be deemed to be incorporated by reference into the filings of The Charles Schwab Corporation (“CSC” or “the Company”) under the Securities Act of 1933 (“the Securities Act”) or the Exchange Act.

Secondary Offering

On February 10, 2025, the Company issued a press release announcing the commencement of a secondary offering of its common stock through which TD Group US Holdings LLC (the “selling stockholder”), an affiliate of The Toronto-Dominion Bank, intends to exit its full investment in the Company (the “offering”). A copy of the press release is furnished as Exhibit 99.1 to this report.

Share Repurchase

On February 9, 2025, the Company entered into a stock repurchase agreement with the selling stockholder pursuant to which the Company agreed to repurchase $1.5 billion of the Company’s nonvoting common stock directly from the selling stockholder, in a private transaction, at the price per share at which the shares of common stock are sold to the public in the offering, less the underwriting discount per share (the “repurchase”). Closing of the repurchase is conditioned on, and is expected to occur immediately after, the completion of the offering. Any shares bought in the repurchase will be retained as treasury shares or canceled.

Estimated Tier 1 Leverage and Adjusted Tier 1 Leverage Ratios

In conjunction with the offering, the Company provided the following preliminary estimates of the effect of the repurchase on its Tier 1 Leverage and Adjusted Tier 1 Leverage Ratios. This information is, by necessity, preliminary in nature and based only upon preliminary information available to the Company as of the date of this report. The Company cannot assure you that this information will not change. Additional adjustments relevant to these metrics may be identified, and any such adjustments may be material.

The Company uses Adjusted Tier 1 Leverage Ratio in managing capital, including its use of the measure as its long-term operating objective. Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company, adjusted to reflect the inclusion of accumulated other comprehensive income (AOCI) in the ratio. Inclusion of the impacts of AOCI in the Company’s Tier 1 Leverage Ratio provides additional information regarding the Company’s current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company’s capital levels.

Preliminary Estimates of January 2025 Monthly Metrics

In conjunction with the offering, the Company is providing preliminary estimates regarding certain January 2025 business and financial metrics. This information is, by necessity, preliminary in nature and based only upon preliminary information available to the Company as of the date of this report. The Company cannot assure you that this information will not change. In finalizing these business and financial metrics, additional adjustments to the preliminary estimated business and financial metrics presented below may be identified, and any such adjustments may be material:

For more information regarding core net new assets, client sweep cash balances and bank supplemental funding, see Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview, Results of Operations, and Risk Management – Liquidity Risk in Part I – Item 2 of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. See also the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information.

The Company currently expects to make available its January 2025 Monthly Activity Report on Friday, February 14, 2025.

-2-

Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “prioritize,” “will,” “may,” “estimate,” “appear,” “could,” “would,” “maintain,” “continue,” “seek,” and other similar expressions. In addition, any statements that refer to expectations, strategy, objectives, projections, or other characterizations of future events or circumstances are forward-looking statements. These statements, which may be expressed in a variety of ways, including the use of future or present tense language, refer to future events.

These forward-looking statements, which reflect management’s beliefs, objectives, and expectations as of the date hereof, or in the case of any documents incorporated by reference, as of the date of those documents, are estimates based on the best judgment of the Company’s senior management. These statements relate to, among other things:

Achievement of the expressed beliefs, objectives, and expectations described in these statements is subject to certain risks and uncertainties that could cause actual results to differ materially from the expressed beliefs, objectives, and expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 8-K or, in the case of documents incorporated by reference, as of the date of those documents.

-3-

Important factors that may cause actual results to differ include, but are not limited to:

-4-

You should refer to the “Risk Factors” section of the Company’s periodic and current reports filed with the SEC for specific risks which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. In particular, certain of these factors, as well as general risk factors affecting the Company and its subsidiaries, are discussed in greater detail in “Item 1A.—Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2023, as such discussion may be amended or updated in other reports filed by the Company with the SEC.

-5-

(d) Exhibits

-6-

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

-7-