Fitch Affirms Charles Schwab's IDR at 'A'; Places U.S. Trust on Watch Positive.

NEW YORK -- Fitch affirms the long-term Issuer Default Rating (IDR) of Charles Schwab Corp. (Nasdaq: SCHW) at 'A'. The Rating Outlook is Stable. The ratings are affirmed following the announcement that Schwab intends to sell U.S. Trust Corp. to Bank of America Corporation ('AA-', Positive Outlook by Fitch). A complete list of ratings follows below.

Fitch has also placed the long-term IDRs of U.S. Trust Corp. (UST) and U.S. Trust Company of New York on Rating Watch Positive. Ratings will be aligned with those of the acquirer if the US Trust entities remain separate legal entities of its parent. Otherwise, these ratings will be subsequently withdrawn.

SCHW's ratings are based on the company's strong franchise in online brokerage, modest leverage and overall sound financial position. Fitch believes the sale of UST does not materially affect the ratings of SCHW because of UST's differing business model compared with SCHW's. Since UST's acquisition in 2000, SCHW has been unable to realize the desired synergies from the expanded franchise. Moreover, the high-touch advisory aspect of UST's business model resulted in disparate cost structures.

The sale results in a smaller balance sheet for SCHW, mostly attributed to UST's loan portfolio. Goodwill will also shrink by $390 million. Financial leverage at Charles Schwab is prudent with sufficient cash flows at the parent supporting outstanding long-term debt of $441 million as of Sept. 30, 2006.

Fitch does not believe the transaction is material to Bank of America Corporation. Accordingly, that company's ratings are unaffected.

Fitch places the following ratings on Rating Watch Positive:

U.S. Trust Corp.

--IDR 'A';

--Short-term 'F1';

--Individual 'B/C'.

U.S. Trust Capital Trust A

--Preferred Stock 'A-'.

U.S. Trust Co. of New York

--IDR 'A';

--Short-term 'F1';

--Individual 'B/C';

--Long-term deposit 'A+';

--Short-term deposit 'F1'.

Fitch affirms the following ratings:

The Charles Schwab Corporation

--IDR 'A';

--Senior unsecured debt 'A';

--Short-term issuer 'F1';

--Short-term debt `F1';

--Individual 'B/C';

--Support '5';

--Rating Outlook Stable

U.S. Trust Corp.

--Support '1';

U.S. Trust Co. of New York

--Support '1'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.