Percent of loans with interest-only payments

  
THE CHARLES SCHWAB CORPORATIONNotes to Consolidated Financial Statements(Tabular Amounts in Millions, Except Per Share Data, Option Price Amounts, Ratios, or as Noted)  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | First Mortgages Amortized Cost Basis by Origination Year |  |  |  |  |
| December 31, 2020 | 2020 | 2019 | 2018 | 2017 | pre-2017 | Total First Mortgages | Revolving HELOCs amortized cost basis | HELOCs converted to term loans | Total HELOCs |
| Origination FICO |  |  |  |  |  |  |  |  |  |
| <620 | $ | 1  |  | $ | —  |  | $ | —  |  | $ | —  |  | $ | 2  |  | $ | 3  |  | $ | —  |  | $ | —  |  | $ | —  |  |
| 620 – 679 | 29  |  | 13  |  | 3  |  | 8  |  | 31  |  | 84  |  | 1  |  | 3  |  | 4  |  |
| 680 – 739 | 794  |  | 355  |  | 105  |  | 181  |  | 419  |  | 1,854  |  | 82  |  | 80  |  | 162  |  |
| ≥740 | 7,150  |  | 2,452  |  | 449  |  | 858  |  | 2,054  |  | 12,963  |  | 380  |  | 296  |  | 676  |  |
| Total | $ | 7,974  |  | $ | 2,820  |  | $ | 557  |  | $ | 1,047  |  | $ | 2,506  |  | $ | 14,904  |  | $ | 463  |  | $ | 379  |  | $ | 842  |  |
| Origination LTV |  |  |  |  |  |  |  |  |  |
| ≤70% | $ | 6,653  |  | $ | 2,211  |  | $ | 396  |  | $ | 793  |  | $ | 1,935  |  | $ | 11,988  |  | $ | 351  |  | $ | 269  |  | $ | 620  |  |
| >70% – ≤90% | 1,321  |  | 609  |  | 161  |  | 254  |  | 568  |  | 2,913  |  | 112  |  | 107  |  | 219  |  |
| >90% – ≤100% | —  |  | —  |  | —  |  | —  |  | 3  |  | 3  |  | —  |  | 3  |  | 3  |  |
| Total | $ | 7,974  |  | $ | 2,820  |  | $ | 557  |  | $ | 1,047  |  | $ | 2,506  |  | $ | 14,904  |  | $ | 463  |  | $ | 379  |  | $ | 842  |  |
| Weighted Average   Updated FICO |  |  |  |  |  |  |  |  |  |
| <620 | $ | 5  |  | $ | 2  |  | $ | 1  |  | $ | 4  |  | $ | 19  |  | $ | 31  |  | $ | 3  |  | $ | 9  |  | $ | 12  |  |
| 620 – 679 | 67  |  | 34  |  | 16  |  | 21  |  | 60  |  | 198  |  | 12  |  | 20  |  | 32  |  |
| 680 – 739 | 784  |  | 252  |  | 66  |  | 121  |  | 281  |  | 1,504  |  | 58  |  | 55  |  | 113  |  |
| ≥740 | 7,118  |  | 2,532  |  | 474  |  | 901  |  | 2,146  |  | 13,171  |  | 390  |  | 295  |  | 685  |  |
| Total | $ | 7,974  |  | $ | 2,820  |  | $ | 557  |  | $ | 1,047  |  | $ | 2,506  |  | $ | 14,904  |  | $ | 463  |  | $ | 379  |  | $ | 842  |  |
| Estimated Current LTV (1) |  |  |  |  |  |  |  |  |  |
| ≤70% | $ | 6,999  |  | $ | 2,582  |  | $ | 533  |  | $ | 1,034  |  | $ | 2,490  |  | $ | 13,638  |  | $ | 452  |  | $ | 368  |  | $ | 820  |  |
| >70% – ≤90% | 975  |  | 238  |  | 24  |  | 13  |  | 16  |  | 1,266  |  | 11  |  | 9  |  | 20  |  |
| >90% – ≤100% | —  |  | —  |  | —  |  | —  |  | —  |  | —  |  | —  |  | 1  |  | 1  |  |
| >100% | —  |  | —  |  | —  |  | —  |  | —  |  | —  |  | —  |  | 1  |  | 1  |  |
| Total | $ | 7,974  |  | $ | 2,820  |  | $ | 557  |  | $ | 1,047  |  | $ | 2,506  |  | $ | 14,904  |  | $ | 463  |  | $ | 379  |  | $ | 842  |  |
| Percent of Loans on  Nonaccrual Status | 0.09  | % | 0.38  | % | 1.02  | % | 0.87  | % | 1.57  | % | 0.48  | % | 1.37  | % | 2.80  | % | 2.02  | % |

(1) Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.  
At December 31, 2021, First Mortgage loans of $17.0 billion had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that adjust annually thereafter. Approximately 28% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 89% of the balance of these interest-only loans are not scheduled to reset for three or more years. Schwab’s mortgage loans do not include interest terms described as temporary introductory rates below current market rates.  
At December 31, 2021 and 2020, Schwab had $57 million and $43 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the consolidated balance sheets.  
The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating rate based on the prime rate plus a margin.   
The following table presents HELOCs converted to amortizing loans during each period presented:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
| December 31, | 2021 |  | 2020 |
| HELOCs converted to amortizing loans | $ | 19  |  |  | $ | 26  |  |

  
- 87 -
