SCHWAB CHARLES CORP 8-K

What Happened
The Charles Schwab Corporation filed an 8‑K reporting the issuance of Series L 6.100% Fixed‑Rate Reset Non‑Cumulative Perpetual Preferred Stock and the sale of depositary shares representing interests in that series. On April 22, 2026 Schwab filed a Certificate of Designations establishing the terms of the Series L Preferred Stock. Schwab entered into an Underwriting Agreement dated April 20, 2026 with major underwriters (Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, TD Securities and Wells Fargo) to sell 1,500,000 depositary shares, each representing a 1/100th interest in a share of Series L Preferred Stock. A depositary agreement was entered with Equiniti Trust Company, LLC as depositary.

Key Details

• 1,500,000 depositary shares to be sold to the underwriters; each depositary share equals 1/100th of one share of Series L Preferred Stock.
• Series L terms: 6.100% fixed‑rate reset, non‑cumulative, perpetual preferred (as set out in the Certificate of Designations filed 4/22/2026).
• Dividend and capital‑action restrictions: if Schwab does not declare and either pay or set aside funds to pay dividends on Series L for the immediately preceding dividend period, Schwab’s ability to pay dividends on, or repurchase/redeem/acquire, its common stock, nonvoting common stock or preferred stock at parity or junior rank is subject to restrictions.
• Offering made pursuant to an underwriting agreement (4/20/2026) containing customary representations, indemnities and closing conditions; depositary agreement and legal opinion were filed as exhibits.

Why It Matters
This is a capital‑raising event that creates a new series of preferred stock and depositary shares that will carry a 6.100% coupon and priority over common equity for dividends and in liquidation. The dividend and repurchase restrictions tied to Series L mean that if Schwab fails to declare or provide for Series L dividends for a dividend period, the company’s flexibility to pay common dividends or buy back common shares could be limited — a material governance feature for common shareholders. For investors seeking income, the depositary shares offer a fixed coupon; for common shareholders, the new preferred may affect capital allocation priorities.