Zions Bancorporation, National Association: Form 10-Q for the period ended Mar 31, 2026

FORWARD-LOOKING INFORMATION

This quarterly report contains “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and assumptions regarding future events and outcomes. However, they are inherently subject to known and unknown risks, uncertainties, and other factors that could cause actual results, performance, achievements, industry developments, or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements may include, among others:

• Statements concerning the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, operating results, and performance of Zions Bancorporation, National Association, and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”); and
• Statements preceded or followed by, or that include, terminology such as “may,” “might,” “can,” “continue,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “forecast,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “project,” “will,” or similar words and expressions, including their negative forms.

Forward-looking statements are not guarantees and should not be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, key factors that may cause material differences include:

• The quality and composition of our loan portfolio, investment securities, and deposits;
• Changes in general industry, political, and economic conditions, including increases in the national debt, elevated or persistent inflation, economic slowdowns or recessions, and other macroeconomic challenges; changes in interest rates or reference rates, which could negatively impact our revenues and expenses, the valuation and performance of our assets and liabilities, and the availability and cost of capital and liquidity;
• Political developments, including government shutdowns and other significant disruptions and changes in the funding, size, scope, and effectiveness of the government and its agencies and services;
• The effects of newly enacted and proposed regulations affecting us and the banking industry, as well as changes and uncertainties in the interpretation, enforcement, and applicability of laws and fiscal, monetary, regulatory, trade, and tax policies;
• Actions taken by governments, agencies, central banks, and similar organizations, including those that result in decreases in revenue, increases in regulatory bank fees, insurance assessments, and capital standards; and other regulatory requirements;
• Evolving trade policies and disputes, including proposed and implemented tariffs, and the resulting economic uncertainty that may adversely affect supply chains, operating costs, and revenues for both us and our customers;
• Judicial, regulatory, and administrative inquiries, investigations, examinations or proceedings and the outcomes thereof that create uncertainty for, or are adverse to, us or the banking industry;
• Changes in our credit ratings;
• The growing presence of credit unions, financial technology companies (“fintechs”), and other emerging competitors within the financial services industry, including in the markets in which we operate;
• Our ability to innovate and address competitive pressures and other factors that may affect aspects of our business, such as pricing, the relevance of and demand for our products and services, and our ability to recruit and retain talent;
• The potential for both positive and disruptive impacts of emerging technologies, including stablecoins and other digital currencies, tokenized deposits, blockchain, artificial intelligence (“AI”), quantum computing, and related innovations affecting both us and the banking industry;
• Our ability to complete projects and initiatives and execute our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;
• Our ability to develop and maintain technology and information security systems, along with effective controls designed to guard against fraud, cybersecurity, and privacy risks and related incidents, particularly given the accelerating pace at which threat actors are developing and deploying increasingly sophisticated and targeted tactics against the financial services industry;
• The occurrence of fraud, theft, or other forms of misconduct perpetrated by external parties, including customers and business partners, or by our own employees;
• Our ability to provide adequate oversight of our suppliers to help us prevent or mitigate effects upon us and our customers of inadequate performance, systems failures, or cyber and other incidents by, or affecting, third parties upon whom we rely for the delivery of various products and services;
• The effects of wars, geopolitical conflicts, and other local, national, or international disasters, crises, or conflicts that may occur in the future;
• Natural disasters, pandemics, wildfires, catastrophic events, and other emergencies and incidents, and their impact on our operations, our customers’ business, and the communities we serve, including the increasing difficulty and expense of obtaining property, auto, business, and other insurance products;
• Diverging and evolving policy, legal, regulatory, and political developments—combined with differing stakeholder perspectives related to governance, environmental, and social matters—may subject us to conflicting requirements and expectations;
• Volatility in securities and capital markets behavior, including changes in market liquidity and our ability to access funding or raise capital on favorable terms;
• The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and shareholders’ equity;
• The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
• Adverse news and other expressions of negative public opinion—whether directed at us, other financial institutions, the banking industry, or the broader market—that may adversely affect our reputation and the industry more broadly.

Factors that could cause actual results or outcomes to differ materially from those expressed or implied in forward-looking statements are described in our 2025 Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”), available at www.zionsbancorporation.com (http://www.zionsbancorporation.com) and www.sec.gov (http://www.sec.gov).

We caution against placing undue reliance on forward-looking statements, as they reflect our views only as of the date they are issued. Except as required by law, we expressly disclaim any obligation to update any factors or publicly announce revisions to forward-looking statements to reflect future events or developments.

RESULTS OF OPERATIONS

Comparisons noted below are calculated for the current quarter versus the same prior year period, unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they typically reflect a low starting point.

First Quarter 2026 Financial Performance

Net Earnings Applicable to Common Shareholders (in millions) Diluted EPS Adjusted PPNR (in millions) 1 Efficiency Ratio 1

1 For information on non-GAAP financial measures, see page 37.

Executive Summary

Our financial performance in the first quarter of 2026 demonstrated strong year-over-year growth in net earnings applicable to common shareholders, diluted earnings per share (“EPS”), and adjusted pre-provision net revenue (“PPNR”). Diluted EPS increased to $1.56 from $1.13 in the first quarter of 2025, driven by higher net interest income and noninterest income, along with a lower provision for credit losses. These favorable factors were partially offset by higher noninterest expense. The efficiency ratio improved to 65.0% from 66.6% in the prior year quarter, reflecting positive operating leverage. The efficiency ratio was 62.3% in the prior quarter, primarily due to higher seasonal compensation costs.

• Net interest income increased $38 million, or 6%, compared with the prior year period, largely reflecting lower funding costs. This increase was further supported by an improved mix of average interest-earning assets, driven by growth in higher-yielding loans and a reduction in lower-yielding investment securities and money market investments. As a result, the net interest margin increased to 3.27%, up from 3.10%. The net interest margin declined from 3.31% in the prior quarter, mainly due to lower earning asset yields and a decrease in average demand deposits.
• Average interest-earning assets increased $399 million, or less than 1%, primarily due to an increase in average loans and leases. This increase was partially offset by declines in average investment securities and average money market investments.
• Average interest-bearing liabilities declined $2.7 billion, or 5%, largely due to decreases in average interest-bearing deposits and average borrowed funds, partially offset by an increase in average long-term debt, driven by recent issuances of senior notes.
• The provision for credit losses was negative $7 million, compared with positive $18 million in the prior year period, primarily due to lower reserves associated with commercial real estate (“CRE”) portfolio-specific risks.
• Customer-related noninterest income increased $14 million, or 9%, reflecting broad-based growth across multiple revenue streams, primarily driven by higher loan-related fees and income, as well as growth in retail and business banking fees and commercial account fees.
• Noncustomer-related noninterest income increased $2 million, or 15%, mainly due to valuation adjustments on servicing rights and gains on the sale of fixed assets, partially offset by lower securities gains.
• Noninterest expense increased $24 million, or 4%, primarily due to higher incentive compensation accruals reflecting improved profitability, as well as increased base salaries and employee benefits costs. Additional

increases in professional and legal services and in technology, telecom, and information processing expenses were partially offset by a decline in deposit insurance and regulatory expense.

• Total loans and leases increased $1.4 billion, or 2%, primarily driven by growth in the commercial and industrial loan portfolio and the consumer home equity credit line (“HECL”) portfolio.
• Net loan and lease charge-offs totaled $4 million, or 0.03% of average loans and leases annualized, compared with $16 million, or 0.11%, in the prior year quarter.
• Nonperforming assets totaled $292 million, or 0.48% of total loans and leases and other real estate owned, compared with $307 million, or 0.51%. The decrease was primarily attributable to improvement in the commercial and industrial loan portfolio. Classified loans totaled $2.3 billion, or 3.80% of total loans and leases, compared with $2.9 billion, or 4.82%, in the prior year quarter.
• Total deposits increased $1.2 billion, or 2%. Noninterest-bearing demand deposits increased primarily reflecting the migration of a consumer interest-bearing product into a new noninterest-bearing offering. This increase was partially offset by a decline in interest-bearing deposits, largely driven by a reduction in brokered deposits. Customer deposits, excluding brokered deposits, totaled $73.1 billion, compared with $70.9 billion.
• Total borrowed funds decreased $1.8 billion, or 44%, compared with the prior year quarter. The decrease was driven by a reduction in short-term Federal Home Loan Bank (“FHLB”) advances, partially offset by recent issuances of senior notes.

During the first quarter of 2026, we entered into an agreement to acquire the agency lending business of Basis Multifamily Finance I, LLC, a subsidiary of Basis Investment Group, subject to customary closing conditions and regulatory approvals. This acquisition will expand our ability to deliver permanent financing solutions to multifamily housing clients through our enhanced capabilities as an originator, underwriter, and servicer of government-sponsored agency loans, including the Fannie Mae DUS® program and the Freddie Mac Optigo® Conventional and Small Balance Loan programs. The transaction is expected to strengthen our capital markets franchise and further enhance our ability to serve commercial real estate clients across the Western United States and other key markets.

Net Interest Income and Net Interest Margin

NET INTEREST INCOME AND NET INTEREST MARGIN

(Dollar amounts in millions)

1 Includes interest income recoveries of $1 million and $4 million for the three months ended March 31, 2026, and 2025, respectively.

2 Taxable-equivalent rates used where applicable.

Net interest income accounted for 78% of our net revenue (the sum of net interest income and noninterest income) in both the first quarters of 2026 and 2025. It increased $38 million, or 6%, during the three months ended March 31, 2026, compared with the same prior year period. This increase was further supported by an improved mix of average interest-earning assets, driven by growth in higher-yielding loans and a reduction in lower-yielding investment securities and money market investments. As a result, the net interest margin increased to 3.27%, compared with 3.10%.

Yields on Interest-earning Assets and Rates Paid on Interest-bearing Liabilities

The following chart presents the changes in yields on average interest-earning assets:

The yield on average interest-earning assets, net of hedging activity, declined 18 basis points (“bps”) in the first quarter of 2026, compared with the prior year period, reflecting lower interest rates. The net yield on average loans and leases decreased 22 bps, while the net yield on average investment securities declined 12 bps. Additionally, the yield on average money market investments decreased 72 bps, as the short-term nature of these assets resulted in quicker repricing in the declining interest rate environment.

The following chart presents the changes in rates paid on average interest-bearing liabilities:

The total cost of deposits decreased 28 bps, and the rate paid on total deposits and interest-bearing liabilities decreased 33 bps during the first quarter of 2026, compared with the prior year period, reflecting the lower interest rate environment. The rates paid on interest-bearing deposits and total borrowed funds decreased 35 bps and 26 bps, respectively.

Interest-earning Assets

Average interest-earning assets increased $399 million, or less than 1%, from the prior year quarter, as an increase in average loans and leases was partially offset by declines in average investment securities and average money market investments.

Average loans and leases increased $1.5 billion, or 3%, to $61.1 billion, primarily due to growth in average commercial and consumer loans.

Average investment securities decreased $666 million, or 4%, to $18.0 billion, largely due to principal reductions, net of reinvestments. The continued paydown of lower-yielding securities—consistent with the portfolio runoff that began in 2023—has improved the overall asset mix and contributed to a higher net interest margin.

Interest-bearing Liabilities

Average interest-bearing liabilities decreased $2.7 billion, or 5%, from the prior year quarter, as declines in average interest-bearing deposits and average borrowed funds were partially offset by an increase in average long-term debt.

Average deposits increased $540 million, or 1%, to $75.5 billion. Average noninterest-bearing deposits increased $2.0 billion, or 8%, primarily reflecting the migration of a consumer interest-bearing product into a new noninterest-bearing offering. As a result, noninterest-bearing deposits accounted for 35% of total deposits during the quarter, compared with 32% in the same prior year period. This increase was partially offset by a $1.4 billion, or 3%, decline in average interest-bearing deposits, largely driven by lower brokered deposits and the aforementioned product migration.

Average borrowed funds decreased $1.3 billion, or 19%, to $5.4 billion. This decline was primarily driven by a $2.1 billion, or 36%, reduction in average short-term borrowings, partially offset by a $798 million, or 84%, increase in average long-term debt. The increase in long-term debt reflected the issuance of $500 million of 4.48% Fixed-to-Floating Senior Notes in February 2026 and $500 million of 4.70% Fixed-to-Floating Senior Notes in August 2025.

For more information regarding our investment securities portfolio and borrowed funds, as well as our approach to managing liquidity risk, refer to the “Investment Securities Portfolio” section on page 16 and the “Liquidity Risk Management” section on page 32. For a further discussion of the impacts of market rates on net interest income and our interest rate risk management practices, see the “Interest Rate and Market Risk Management” section on page 30.

The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing liabilities:

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Unaudited)

(Dollar amounts in millions)

1 Taxable-equivalent rates used where applicable.

2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.

The Allowance and Provision for Credit Losses

The allowance for credit losses (“ACL”) comprises both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recognized as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.

The ACL was $713 million at March 31, 2026, compared with $743 million at March 31, 2025. The year-over-year decrease in the ACL primarily reflects lower reserves associated with CRE portfolio-specific risks and changes in loan portfolio composition, partially offset by more adverse economic forecasts and increased lending activity. The ratio of ACL to total loans and leases was 1.16% at March 31, 2026, compared with 1.24% at March 31, 2025.

The following schedule illustrates the primary drivers of changes in the ACL compared with the prior year period:

Our ACL estimate is derived using econometric loss models that incorporate multiple economic scenarios, including optimistic, baseline, and stressed conditions. These scenarios are weighted to determine the overall credit loss estimate, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts. The schedule above summarizes the key drivers of the year-over-year change in the ACL, reflecting the combined effect of economic forecasts, credit quality trends and portfolio-specific risks, and portfolio composition.

The second bar reflects the impact of changes in economic forecasts and current economic conditions, incorporating management’s judgment in determining the scenario weightings for the current period. These changes resulted in a $91 million increase in the ACL compared with the prior year, primarily driven by the increased weighting assigned to more adverse economic scenarios.

The third bar captures changes in credit quality factors, including risk grade migration, portfolio-specific risks, and specific reserves on loans. Collectively, these factors contributed to a $59 million decrease in the ACL, largely driven by reduced CRE portfolio-specific risks.

The fourth bar represents the effect of changes in the composition of the loan portfolio, including shifts in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. These changes resulted in a $62 million decrease in the ACL, primarily driven by changes in the loan portfolio mix, partially offset by $1.4 billion in period-end loan growth.

The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, was negative $7 million in the first quarter of 2026, compared with positive $18 million in the first quarter of 2025. The provision for securities losses was less than $1 million during both the first quarters of 2026 and 2025.

For more information regarding the methodology used to determine the appropriate levels of the ALLL and RULC, see “Credit Risk Management” on page 19 and Note 6 in our 2025 Form 10-K.

Noninterest Income

Noninterest income is comprised of revenue generated from products and services that typically do not bear an associated interest rate or yield. It is categorized as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, and insurance-related income.

Noninterest income accounted for 22% of total net revenue (the sum of net interest income and noninterest income) in both the first quarters of 2026 and 2025. In the first quarter of 2026, noninterest income increased $16 million, or 9%, relative to the same prior year period.

The following schedule presents a comparison of the major components of noninterest income:

NONINTEREST INCOME

(Dollar amounts in millions)

1 Net of credit valuation adjustment (“CVA”). For information on non-GAAP financial measures, see page 37.

Customer-related Noninterest Income

Customer-related noninterest income increased $14 million, or 9%, compared with the prior year period, reflecting broad-based growth across multiple revenue streams. The increase was primarily driven by a $6 million increase in loan-related fees and income, largely attributable to higher residential mortgage loan sales activity. Retail and business banking fees increased $3 million, primarily due to an increase in overdraft fee income, while commercial account fees increased $3 million, mainly driven by higher account analysis fees.

Noncustomer-related Noninterest Income

Noncustomer-related noninterest income increased $2 million, or 15%, compared with the prior year period, primarily due to valuation adjustments on servicing rights and gains on the sale of fixed assets. These increases were partially offset by lower securities gains in our Small Business Investment Company (“SBIC”) investment portfolio relative to the prior year quarter.

Noninterest Expense

The following schedule presents a comparison of the major components of noninterest expense:

NONINTEREST EXPENSE

(Dollar amounts in millions)

14

Noninterest expense increased $24 million, or 4%, compared with the prior year quarter. Salaries and employee benefits expense increased $19 million, primarily due to higher incentive compensation accruals reflecting improved profitability, as well as increased base salaries and employee benefits costs. Professional and legal services expense increased $7 million, largely reflecting higher outsourced services. Technology, telecom, and information processing expense increased $4 million, mainly due to higher application software, licensing, and maintenance costs. These increases were partially offset by a $7 million decrease in deposit insurance and regulatory expense, primarily due to higher Federal Deposit Insurance Corporation (“FDIC”) assessments related to increased classified loans in the prior year quarter.

Adjusted noninterest expense increased $25 million, or 5%, primarily due to the same factors previously discussed. The efficiency ratio improved to 65.0% from 66.6% in the prior year quarter, as adjusted taxable-equivalent revenue rose 7.4% and adjusted operating expenses increased 4.7%, resulting in positive operating leverage of 2.7%. For more information regarding non-GAAP financial measures, see page 37.

Technology Spend

We invest in technology initiatives designed to improve our products and services, increase our operational efficiency, and enable us to remain competitive. We report these investments as technology spend, which includes the following:

• Technology, telecom, and information processing expense — includes current period expenses presented on the consolidated statement of income related to application software licensing and maintenance, telecommunications, and data processing, less related amortization and depreciation of capitalized technology investments;
• Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and
• Technology investments — includes capitalized technology infrastructure equipment, hardware, and software (both purchased and internally developed).

The following schedule presents the composition of our technology spend:

TECHNOLOGY SPEND

(Dollar amounts in millions)

Total technology spend increased $12 million, or 10%, compared with the same prior year quarter. The increase was primarily due to higher technology-related expense, driven by increased professional and outsourced services, as well as higher technology, telecom, and information processing expense, largely reflecting previously noted increases in application software, licensing, and maintenance costs. In addition, technology spend increased due to higher capitalized technology investments supporting ongoing lending and customer-focused technology initiatives.

Income Taxes

The following schedule summarizes the income tax expense and effective tax rates for the periods presented:

INCOME TAXES

(Dollar amounts in millions)

The effective tax rate was 20.7% and 28.9% for the three months ended March 31, 2026 and 2025, respectively. The year-over-year decrease was primarily attributable to new Utah state tax legislation enacted in the first quarter of 2025 related to our investment securities and trading assets, which required a revaluation of our net deferred tax asset (“DTA”)and resulted in additional tax expense in the prior year quarter.

For more information about the factors affecting our effective tax rates, as well as details on deferred income tax assets and liabilities, see Note 11 of the Notes to Consolidated Financial Statements.

BALANCE SHEET ANALYSIS

Investment Securities Portfolio

Investment securities are classified as either available-for-sale (“AFS”) or held-to-maturity (“HTM”), and are primarily used to provide balance sheet liquidity. The portfolio largely consists of securities that can be readily converted to cash or used to generate liquidity through secured borrowing agreements, without the need to sell the securities. Our investment securities portfolio also helps to balance the inherent interest rate mismatch between loans and deposits, thereby helping to preserve the economic value of shareholders’ equity. The estimated deposit duration at March 31, 2026 was assumed to be longer than the loan duration (including swaps). At March 31, 2026, the estimated duration of the investment securities portfolio, which measures price sensitivity to interest rate changes, was 3.7 years, compared with 3.8 years at December 31, 2025, primarily due to revised prepayment assumptions on certain securities.

For more information about our borrowing capacity associated with the investment securities portfolio and our approach to managing liquidity risk, refer to the “Liquidity Risk Management” section on page 32. For more information on fair value measurements and the accounting for our investment securities portfolio, refer to Note 3 and Note 5 of the Notes to Consolidated Financial Statements.

The following schedule presents the major components of our investment securities portfolio:

INVESTMENT SECURITIES PORTFOLIO

(In millions)

16

The amortized cost of total investment securities decreased $149 million, or 1%, from December 31, 2025, primarily due to principal reductions, net of reinvestments. At both March 31, 2026 and December 31, 2025, approximately 6% of the portfolio consisted of floating-rate instruments. At March 31, 2026, we maintained active pay-fixed interest rate swaps with an aggregate notional amount of $4.6 billion that are designated as fair value hedges of fixed-rate AFS securities and effectively convert the fixed interest income on the hedged portion of the securities to a floating rate.

At March 31, 2026, the AFS investment securities portfolio included approximately $71 million in net premium, distributed across various security categories. Taxable-equivalent premium amortization for these investment securities totaled $11 million for the first quarter of 2026, compared with $12 million in the same prior year period.

For more information regarding our investment securities portfolio, swaps, and related unrealized gains and losses, refer to the “Interest Rate Risk Management” section on page 30, the “Capital Management” section on page 34, and Note 5 of the Notes to Consolidated Financial Statements.

Municipal Investments and Extensions of Credit

We support our communities by offering a range of financial products and services to state and local governments (“municipalities”), including deposit services, lending solutions, and investment banking services. Additionally, we invest in securities issued by municipal entities. Our municipal lending portfolio generally includes obligations that are repaid from, or secured by, the general funds or pledged revenues of municipalities, as well as by real estate or equipment. We also extend credit to private commercial and 501(c)(3) not-for-profit organizations that utilize a pass-through municipal structure to benefit from favorable tax treatment.

The following schedule presents our total investments and extensions of credit to municipalities:

MUNICIPAL INVESTMENTS AND EXTENSIONS OF CREDIT

(In millions)

Our municipal loans and securities are primarily concentrated within our geographic footprint. At both March 31, 2026 and December 31, 2025, approximately $2 million of municipal loans and leases were classified as nonaccrual. These nonaccrual loans relate to private commercial entities utilizing a pass-through municipal structure.

Municipal securities are internally risk-graded, using methodologies aligned with those applied to loans, with grading frameworks tailored to the size and nature of the credit exposure. These internal risk grades—Pass, Special Mention, and Substandard—are consistent with published regulatory risk classifications. At March 31, 2026, all municipal securities were rated as Pass. For additional information regarding the credit quality of our municipal loans and securities, see Notes 5 and 6 of the Notes to Consolidated Financial Statements.

Loan and Lease Portfolio

We offer a wide range of lending products to commercial customers, primarily small- and medium-sized businesses, as well as other products secured by CRE. Additionally, we provide various retail banking products and services to consumers and small businesses. The following schedule presents the composition of our loan and lease portfolio:

LOAN AND LEASE PORTFOLIO

(Dollar amounts in millions)

During the first quarter of 2026, the loan and lease portfolio increased $412 million, or 1%, to $61.3 billion at March 31, 2026. This growth was primarily driven by increases in the term CRE, commercial and industrial, and construction and land development loan portfolios. The ratio of loans and leases to total assets was 70% at March 31, 2026, compared with 68% at December 31, 2025. Commercial and industrial loans continued to represent the largest loan segment, comprising 30% for both periods.

Other Noninterest-Bearing Investments

Other noninterest-bearing investments consist of equity investments held primarily for capital appreciation, dividends, or to meet certain regulatory requirements. The following schedule presents our related investments.

OTHER NONINTEREST-BEARING INVESTMENTS

(Dollar amounts in millions)

Other noninterest-bearing investments decreased $82 million, or 8%, during the first three months of 2026. The decline was primarily attributable to lower balances of FHLB stock, reflecting a significant reduction in FHLB borrowings. To maintain borrowing capacity, we are required to hold FHLB stock equal to approximately 4-5% of outstanding FHLB borrowings.

Premises, Equipment, and Software

We continue to invest in lending, deposit, and other customer-focused technology initiatives to further modernize our systems, enhance the customer experience, and improve operational efficiency. For additional information regarding related assets, capitalized costs, and their accounting treatment, see “Premises, Equipment, and Software” in MD&A and Note 9 of the Notes to Consolidated Financial Statements in our 2025 Form 10-K.

Deposits

Deposits are our primary funding source. The following schedule presents the composition of our deposit portfolio:

DEPOSIT PORTFOLIO

(Dollar amounts in millions)

1 Includes both insured and uninsured deposits.

Total deposits increased $1.3 billion, or 2%, from December 31, 2025, driven by higher noninterest-bearing demand deposits. The increase was primarily attributable to seasonal large commercial deposits, complemented by continued growth in more granular depositor balances.

At March 31, 2026, customer deposits, excluding brokered deposits, totaled $73.1 billion, up from $71.8 billion at December 31, 2025. These balances included approximately $6.6 billion and $6.8 billion of reciprocal deposits, respectively.

At March 31, 2026, the total estimated amount of uninsured deposits was $35.0 billion, or 46% of total deposits, compared with $34.4 billion, or 45%, at December 31, 2025. The loan-to-deposit ratio was 80%, compared with 81% for the same periods. For additional information on liquidity, including the ratio of available liquidity to uninsured deposits, see “Liquidity Risk Management” on page 32.

RISK MANAGEMENT

We are exposed to a broad range of risks, including credit risk, interest rate and market risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. Oversight of these risks is conducted through various management committees, with the Enterprise Risk Management Committee serving as the primary coordinating body. To address these risks, we employ comprehensive risk management practices designed to promote prudent risk-taking and effective oversight. Risk management is embedded in our operations and functions as a critical driver of overall performance, closely aligned with our key strategic objectives. For a more comprehensive discussion of these risks, see “Risk Factors” in our 2025 Form 10-K.

Credit Risk Management

Credit risk represents the potential for loss resulting from the failure of a borrower, guarantor, or other obligor to perform in accordance with the terms of a credit-related agreement. This risk arises primarily from our lending activities and from off-balance sheet credit instruments.

Our approach to credit risk management is supported by formal credit policies and standards, risk management practices, and independent credit examination functions that together establish a consistent framework for sound underwriting and credit decision-making across our local banking affiliates. We emphasize strong underwriting standards and the early identification of potential problem credits to facilitate timely corrective actions and mitigate potential losses. For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our 2025 Form 10-K.

U.S. Government Agency Guaranteed Loans

We participate in several guaranteed lending programs sponsored by United States (“U.S.”) government agencies, including the U.S. Small Business Administration (“SBA”), Federal Housing Authority, U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At March 31, 2026, approximately $637 million in loans were guaranteed, primarily by the SBA.

The following schedule presents the composition of our U.S. government agency guaranteed loans:

U.S. GOVERNMENT AGENCY GUARANTEED LOANS

(Dollar amounts in millions)

Commercial Lending

The following schedule presents the composition of our commercial lending portfolio:

COMMERCIAL LENDING PORTFOLIO

(Dollar amounts in millions)

1 Effective March 31, 2026, balances previously reported as “Leasing” are now included in the “Commercial and industrial” loan segment. Prior period amounts have been reclassified to conform to the current presentation. At March 31, 2026 and December 31, 2025, the leasing portfolio totaled $374 million and $367 million, respectively.

Our commercial loan portfolio spans a broad range of industries and generally carries maturities of one to five years, with amortization schedules determined by the nature of the underlying collateral and guarantees. These loans are typically structured to meet diverse financing needs and may take the form of seasonal, term, working capital, or bridge loans, offered as revolving and non-revolving lines of credit, amortizing term loans, guidance facilities, or single-payment loans. Loan agreements typically include covenants requiring borrowers to provide periodic financial statements, enabling ongoing monitoring of business performance, leverage, debt service coverage, and liquidity.

The underwriting process for commercial loans focuses on a comprehensive evaluation of management quality, financial performance, industry dynamics, sponsorship (where applicable), and transaction structure. Credit enhancements are generally secured through collateral and guarantees from the owners or sponsors. Prospective cash flows are stress-tested under various downside scenarios, including revenue decline, margin compression, and interest rate volatility.

The following schedule presents the geographic distribution of our commercial lending portfolio, based on the location of the primary borrower:

COMMERCIAL LENDING BY GEOGRAPHY

(Dollar amounts in millions)

1 No other geography exceeded 2.0% and 2.1% for March 31, 2026 and December 31, 2025, respectively.

The following schedule presents the industry distribution of our commercial lending portfolio, classified based on the North American Industry Classification System:

COMMERCIAL LENDING BY INDUSTRY

(Dollar amounts in millions)

1 Includes primarily utilities, power, and renewable energy.

2 No other industry group exceeded 3.0% and 3.2% for March 31, 2026 and December 31, 2025, respectively.

As previously noted, our commercial lending portfolio is well-diversified across both geographic regions and industry sectors. In light of increased investor interest in loans extended to nondepository financial institutions (“NDFIs”), we provide the following information regarding these exposures within our commercial lending portfolio.

Loans to Nondepository Financial Institutions (NDFIs)

NDFIs encompass a broad range of financial entities that provide services similar to traditional banking institutions but do not accept public deposits and are generally not subject to federal banking regulation. We provide financing to NDFIs and actively manage these exposures through borrower-level concentration limits, portfolio stress testing, compliance monitoring, and ongoing assessments of portfolio quality, liquidity, and capital adequacy.

Our NDFI portfolio is diversified across various lending segments and asset classes, including:

• Mortgage credit intermediaries — Loans to mortgage companies engaged in residential or commercial mortgage origination and servicing; special purpose entities supporting mortgage-related securitization activities, such as real estate investment trusts (“REITs”) and collateralized debt obligations.
• Business credit intermediaries — Loans to finance companies, direct lenders, private debt funds, equipment leasing companies, business development companies (“BDCs”), SBICs, senior loan funds, and other nonbank business lenders.
• Private equity funds — Capital call commitment and subscription-based facilities extended to private equity, venture capital, and other general partnership funds.
• Consumer credit intermediaries — Loans to nonbank consumer secured and unsecured lending platforms, as well as special purposes entities, finance companies, direct lenders, private debt funds, equipment leasing companies, or other financial intermediaries whose underlying assets primarily consist of consumer loans.
• Other — Loans to insurance companies, investment banks, broker-dealers, publicly listed investment funds, hedge funds, family offices, and other investment firms and financial vehicles.

At March 31, 2026, loans to NDFIs totaled approximately $2.0 billion, representing 6.4% of total commercial loans and 3.3% of total loans. At December 31, 2025, loans to NDFIs were also $2.0 billion and represented 6.3% of total commercial loans and 3.3% of total loans.

The following schedule presents the composition of our NDFI lending portfolio:

NDFI LENDING PORTFOLIO

(Dollar amounts in millions)

The following schedule presents NDFI credit quality metrics:

NDFI CREDIT QUALITY

(Dollar amounts in millions)

1 Total NDFI net charge-offs for December 31, 2025 included a $50 million charge-off associated with revolving lines of credit extended to two related commercial borrowers to finance the origination and purchase of commercial and residential mortgages.

Commercial Real Estate Lending

The following schedule presents the composition of our CRE lending portfolio:

COMMERCIAL REAL ESTATE LENDING PORTFOLIO

(Dollar amounts in millions)

Term CRE loans typically have maturities ranging from three to seven years and may incorporate full, partial, or non-recourse guarantee structures. Standard term CRE loan arrangements generally include annually tested operating covenants, requiring loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value (“LTV”) ratios.

Construction and land development loans generally mature within 18 to 36 months and may involve full or partial recourse guarantees. These loans often include one- to five-year extension options or roll-to-permanent features, which commonly convert into term loans upon completion.

Underwriting for commercial properties primarily emphasizes the economic viability of the project, while also giving considerable weight to the sponsor's creditworthiness and experience. Owners are generally required to contribute their equity prior to any loan advances. Loan agreements frequently include remargining provisions—requiring additional equity infusions if the collateral's value or cash flow declines—as well as sponsor guarantees.

At March 31, 2026, the weighted average LTV ratio for our term CRE portfolio was below 60%. For CRE loans, LTV is calculated as the loan amount divided by the most recent appraised value of the underlying collateral. For a more comprehensive discussion of our CRE loan portfolio, see “Commercial Real Estate Loans” in our 2025 Form 10-K. The following schedule presents the geographic distribution of our commercial real estate lending portfolio, based on the location of the primary collateral:

COMMERCIAL REAL ESTATE LENDING BY GEOGRAPHY

(Dollar amounts in millions)

The following schedule presents our commercial real estate lending portfolio by the type of collateral:

COMMERCIAL REAL ESTATE LENDING BY COLLATERAL TYPE

(Dollar amounts in millions)

1 Included in the total amount of the “Other” commercial and residential categories was approximately $294 million and $232 million of unsecured loans at March 31, 2026 and December 31, 2025, respectively.

2 Residential property consists primarily of loans provided to commercial homebuilders for land, lot, and single-family housing developments.

As previously noted, our CRE lending portfolio is diversified by both geography and collateral type, with the largest concentration in multifamily properties. In light of continued investor interest in multifamily, industrial, and office collateral types, we provide additional analysis of these segments within our CRE portfolio below. Across CRE loan portfolios with near-term maturities, we generally expect that substantially all borrowers to successfully refinance at maturity—either with the Bank or other lenders—supported by strong property cash flows, appropriate LTVs, sufficient borrower equity, and guarantor support.

Multifamily CRE

At March 31, 2026 and December 31, 2025, our multifamily CRE loan portfolio totaled $4.1 billion and $4.0 billion, respectively, representing 30% of the total CRE loan portfolio at each period end. Approximately 46% of the multifamily CRE loan portfolio is scheduled to mature within the next 12 months.

During the first quarter of 2026, we entered into an agreement to acquire the agency lending business of Basis Multifamily Finance I, LLC that will expand our ability to deliver permanent financing solutions to multifamily housing clients through our enhanced capabilities as an originator, underwriter, and servicer of government-sponsored agency loans. For more information, see “Executive Summary” on page 6.

The following schedule presents the composition of our multifamily CRE loan portfolio, along with related credit quality metrics:

MULTIFAMILY CRE LOAN PORTFOLIO

(Dollar amounts in millions)

Industrial CRE

At March 31, 2026 and December 31, 2025, our industrial CRE loan portfolio totaled $3.1 billion and $3.0 billion, respectively, representing 23% of the total CRE loan portfolio at each period end. Approximately 35% of the industrial CRE loan portfolio is scheduled to mature within the next 12 months.

The following schedule presents the composition of our industrial CRE loan portfolio and other related credit quality metrics:

INDUSTRIAL CRE LOAN PORTFOLIO

(Dollar amounts in millions)

Office CRE

At March 31, 2026 and December 31, 2025, our office CRE loan portfolio totaled $1.6 billion and $1.7 billion, respectively, representing 12% and 13% of the total CRE loan portfolio. Approximately 31% of the office CRE loan portfolio is scheduled to mature within the next 12 months.

The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:

OFFICE CRE LOAN PORTFOLIO

(Dollar amounts in millions)

Consumer Lending

The following schedule presents the composition of our consumer lending portfolio:

CONSUMER LENDING PORTFOLIO

(Dollar amounts in millions)

The following schedule presents the geographic distribution of our consumer lending portfolio, based on the location of the primary borrower:

CONSUMER LENDING BY GEOGRAPHY

(Dollar amounts in millions)

26

1-4 Family Residential Mortgages

We originate first-lien residential home mortgage loans considered to be of prime quality. At March 31, 2026, our 1-4 family residential mortgage loan portfolio totaled $10.4 billion, representing 66% of our total consumer loan portfolio, compared with $10.5 billion, or 66%, at December 31, 2025.

At both March 31, 2026 and December 31, 2025, approximately 90% of the portfolio consisted of variable-rate loans. During the first quarter of 2026, we sold $519 million of fixed- and variable-rate residential mortgage loans to third parties. In connection with these sales, we provided customary representations and warranties that the loans met specified underwriting standards and collateral documentation requirements.

Home Equity Credit Lines

We also originate home equity credit lines (“HECLs”). The HECL portfolio totaled $4.0 billion at both March 31, 2026 and December 31, 2025, with approximately 34% of the portfolio secured by first lien positions during each period. There were no material changes in credit quality, underwriting standards, portfolio composition, or risk characteristics of the HECL portfolio since December 31, 2025.

For additional information regarding our HECL portfolio, including underwriting standards, collateral characteristics, and credit quality, see “Home Equity Credit Lines” in our 2025 Form 10-K and Note 6 of the Notes to Consolidated Financial Statements.

Credit Quality

We monitor credit quality by assessing multiple factors, including nonperforming status, internal risk grades, and net charge-offs. These metrics are integral to our overall evaluation of the adequacy of the ACL. For more information on these factors and the ACL, see Note 6 of the Notes to Consolidated Financial Statements.

Nonperforming Assets

Nonperforming assets include nonaccrual loans and other real estate owned (“OREO”), or foreclosed properties. The following schedule presents the composition of our nonperforming assets:

NONPERFORMING ASSETS

(Dollar amounts in millions)

1 Includes loans held for sale.

2 Does not include banking premises held for sale.

Nonperforming assets totaled $292 million, or 0.48% of total loans and leases and other real estate owned at March 31, 2026, compared with $320 million, or 0.52%, at December 31, 2025. Nonperforming assets decreased primarily within the term CRE loan portfolio. For more information about nonaccrual loans, see Note 6 of the Notes to Consolidated Financial Statements.

Classified Loans

Classified loans are considered loans with well-defined weaknesses and are assigned using our internal risk grade definitions of substandard and doubtful, which are consistent with regulatory risk classifications. The following schedule presents our classified loans by loan segment:

CLASSIFIED LOANS

(Dollar amounts in millions)

Classified loans totaled $2.3 billion, or 3.80% of total loans and leases, at March 31, 2026, compared with $2.4 billion, or 3.91%, at December 31, 2025. The decline was primarily driven by reductions in classified CRE exposures, largely attributable to loan payoffs. The loss content of our CRE loan portfolio continues to be mitigated by strong underwriting, supported by significant borrower equity and guarantor support. As a result, our CRE nonperforming assets and net charge-offs have remained relatively low.

Allowance for Credit Losses

The ACL comprises both the ALLL and the RULC and represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date.

We estimate current expected credit losses using econometric loss models that incorporate historical credit loss experience, prevailing economic conditions, and multiple forward-looking economic scenarios. These scenarios—including optimistic, baseline, and stressed conditions—are weighted to produce the quantitative component of the ACL, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts. Because economic forecasts may not always align with observed credit quality trends, changes in the ACL may not necessarily correspond directionally with changes in credit quality.

Additionally, we consider qualitative and environmental factors that may indicate actual losses could differ from amounts estimated by the quantitative models. The influence of these factors on the ACL may vary from quarter to quarter.

During the first three months of 2026, the qualitative portion of the ACL decreased mainly due to loss model enhancements and lower qualitative reserves in the CRE portfolio, partially offset by increased weighting of recessionary economic scenarios.

For additional information on the ACL and credit trends by portfolio segment, see “The Allowance and Provision for Credit Losses” section on page 12 and Note 6 of the Notes to Consolidated Financial Statements.

The following schedule presents the components of the ACL and credit-related balances and metrics:

ACL AND CREDIT-RELATED BALANCES AND METRICS

(Dollar amounts in millions)

1 Ratios are annualized for the periods presented, except for the period representing the full twelve months.

Interest Rate and Market Risk Management

Interest rate and market risk refer to the potential for adverse impacts on current or future earnings and capital arising from changes in interest rates and other market conditions. Given our involvement in transactions with a broad range of financial instruments, we are inherently exposed to these risks. For more information on our approach to managing interest rate and market risk, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.

We actively manage our exposure to interest rate fluctuations by positioning the balance sheet to reduce volatility in both net interest income and the economic value of equity (“EVE”). Given that a significant portion of our balance sheet funding is derived from non-maturity deposit products, we rely on behavioral models and assumptions to forecast the sensitivity of earnings to interest rate movements. These models and assumptions are subject to ongoing performance monitoring and refinement.

When observed deposit behavior diverges from model expectations, the models are updated accordingly, with greater emphasis placed on recently observed behavior. All model changes are independently reviewed by our Model Risk Management function.

Our deposit-behavior models incorporate assumptions about the correlation between the rates paid on interest-bearing deposits and fluctuations in average benchmark interest rates. This is commonly referred to as “deposit beta.” Certificates of deposit are typically modeled with a higher degree of correlation, whereas interest-bearing checking accounts are assumed to exhibit a lower sensitivity to rate changes.

Many consumer and business deposit accounts have historically demonstrated stability and limited sensitivity to rate changes, resulting in a longer duration relative to our loan portfolio. As a result, our balance sheet has typically been “asset-sensitive,” meaning that assets are expected to reprice more quickly or more significantly than our liabilities. Measures of asset sensitivity are particularly influenced by changes in deposit modeling assumptions.

To manage interest rate risk, we regularly employ a combination of interest rate derivatives, investments in fixed-rate securities, and funding strategies. Collectively, these tools help moderate the expected sensitivity of net interest income and EVE to changes in interest rates.

The following schedule presents deposit duration assumptions discussed previously:

DEPOSIT ASSUMPTIONS

As previously discussed, we utilize derivative instruments to manage interest rate risk. The following schedule presents derivatives designated in qualifying hedging relationships, as well as certain derivatives used as economic hedges that are not designated as accounting hedges, at March 31, 2026. It includes the average outstanding derivative notional amounts for each reporting period presented and the weighted-average fixed rates paid or received across cash flow and fair value hedge categories. For more information regarding our hedge accounting strategies and the impact of these hedging relationships on interest income and expense, see Note 4 of the Notes to Consolidated Financial Statements.

DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS AND CERTAIN ECONOMIC HEDGES

(Dollar amounts in millions)

1 Cash flow hedges of assets consist of receive-fixed interest rate swaps and purchased three-month SOFR futures that are used to hedge pools of floating-rate loans.

2 Notional amounts for forward-starting derivatives are excluded until the trades become effective.

3 Fair value hedges of debt consist of receive-fixed swaps that hedge fixed-rate subordinated and senior notes.

4 Fair value hedges of assets consist of pay-fixed swaps that hedge fixed-rate AFS securities and fixed-rate commercial loans.

At March 31, 2026, we had $27 million of net losses deferred in accumulated other comprehensive income (“AOCI”) related to terminated cash flow hedges. These deferred amounts are amortized into interest income on a straight-line basis over the original maturity periods of the respective hedges, provided the forecasted transactions are expected to occur. For more information regarding amounts deferred in AOCI from terminated cash flow hedges, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.

Earnings at Risk (EaR) and Economic Value of Equity (EVE)

Incorporating deposit assumptions, the effects of derivatives designated in qualifying hedging relationships, and certain short-dated economic hedges, the following schedule presents our earnings at risk (“EaR”) and estimated changes in EVE. EaR represents the percentage change in projected 12-month net interest income. Both EaR and EVE are based on a static balance sheet and reflect instantaneous, parallel shifts in interest rates ranging from -200 to +200 bps. These measures are intended to illustrate the sensitivity of net interest income and equity value to changes in interest rates across a range of scenarios and should not be interpreted as forecasts of expected net interest income.

INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY

1 Assumes rates do not decline below zero in the negative rate shifts.

Asset sensitivity, as measured by EaR, decreased during the first three months of 2026, primarily due to increased hedging activity, partially offset by shifts in funding mix. Based on current deposit assumptions, interest rate risk remained within established policy limits. For interest-bearing deposits with indeterminable maturities, the weighted average modeled beta was 48%.

Prepayment assumptions are a key factor in the management of interest rate risk. Certain assets within our portfolio, including 1-4 family residential mortgages and mortgage-backed securities, are subject to borrower-driven prepayments that can significantly affect projected cash flows. At March 31, 2026 and December 31, 2025, estimated lifetime prepayment speeds for loans were 15.3% and 14.8%, respectively, reflecting the aging of the portfolio, as loans become more seasoned and borrowers are more likely to refinance or repay their loans early over time. Estimated prepayment speeds for mortgage-backed securities were 7.0% for both periods.

Our EaR analysis primarily evaluates the impact of parallel rate shocks across the term structure of benchmark interest rates. Additionally, we perform non-parallel rate shock scenarios to identify potential risks not captured under parallel rate assumptions. In these scenarios, the most significant effects on EaR typically result from movements in short-term interest rates.

Our strategic focus on business banking is a key component of our asset-liability management approach. At March 31, 2026, $30.2 billion of commercial and CRE loans were scheduled to reprice within the subsequent six months. To manage the interest rate risk associated with these variable-rate exposures, we maintained $8.3 billion in aggregate notional of active interest rate derivatives, including swaps and certain short-dated interest rate futures designated as cash flow hedges. In addition, $4.7 billion of variable-rate consumer loans were also scheduled to reprice during the same period. For further information on derivative instruments, see Notes 3 and 4 of the Notes to Consolidated Financial Statements.

Fixed Income

We are subject to market risk arising from fluctuations in the fair value of financial instruments, including trading securities and interest rate swaps used to hedge interest rate exposure. Our underwriting activities include municipal and corporate securities, and we actively trade in municipal, agency, and U.S. Treasury securities. These activities expose us to potential losses resulting from adverse price movements in fixed-income markets. Changes in the fair value of AFS securities and interest rate swaps that qualify as cash flow hedges are recognized in AOCI each reporting period. For additional information on investment securities and AOCI, refer to the “Capital Management” section on page 34. For more information on the accounting treatment of investment securities, see Note 5 of the Notes to Consolidated Financial Statements.

Equity Investments

Through our equity investment activities, we hold both publicly traded equity securities and non-marketable equity securities in governmental entities and institutions, such as the Federal Reserve Board (“FRB”) and the FHLB. For more information regarding our equity investments, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.

We hold investments primarily in pre-public companies, largely through a variety of SBIC funds. This investment strategy is intended to support the financing, growth, and expansion of diverse businesses, generally within our geographic footprint. At March 31, 2026 and December 31, 2025, our equity exposure to these investments totaled approximately $273 million and $271 million, respectively.

Occasionally, companies within our SBIC portfolio may complete an initial public offering (“IPO”), which introduces additional market risk due to post-IPO lock-up restrictions. For more information regarding the valuation of our SBIC investments, see Note 3 of the Notes to Consolidated Financial Statements.

Liquidity Risk Management

Liquidity represents our ability to meet cash, contractual, and collateral obligations while effectively managing both anticipated and unanticipated cash flow needs without adversely affecting our operations or financial condition. We manage liquidity to provide sufficient funding for customer credit requirements, financial and contractual commitments, and other corporate activities. Our primary sources of contingent liquidity include secured borrowings through repurchase agreements backed by investment securities, as well as other collateral prepositioned with the FHLB and the FRB. In addition, we maintain the capacity to issue brokered certificates of deposit and unsecured debt. For more information regarding our approach to managing liquidity risk, see “Liquidity Risk Management” in our 2025 Form 10-K.

For the first three months of 2026, the primary sources of cash were increased deposits, a reduction in money market investments, proceeds from the issuance of long-term debt, and net cash provided by operating activities. The primary uses of cash during the same period included a reduction in short-term borrowings, increased loans and leases, common stock repurchases, and dividends paid on common and preferred stock. Cash payments for interest, reflected in operating expenses, totaled $333 million and $423 million for the first three months of 2026 and 2025, respectively.

The FHLB and FRB continue to serve as important sources of contingent liquidity and funding. As a member of the FHLB of Des Moines, we have the ability to borrow against eligible loans and securities to support liquidity and funding needs. To maintain this borrowing capacity, we are required to hold investments in both FHLB and FRB stock. At March 31, 2026, our total investment in FHLB and FRB stock totaled $10 million and $54 million, respectively, compared with $100 million and $54 million, respectively, at December 31, 2025. The decline in FHLB stock holdings was due to a significant reduction in FHLB borrowings.

At March 31, 2026, loans with a carrying value of $25.1 billion and $18.3 billion were pledged at the FHLB and FRB, respectively, as collateral for current and potential borrowings, compared with $25.2 billion and $18.0 billion at December 31, 2025.

At March 31, 2026 and December 31, 2025, investment securities with carrying values of $17.2 billion and $17.5 billion, respectively, were pledged as collateral to support potential borrowings. These pledged securities included:

• $8.5 billion and $7.9 billion, respectively, designated for available use through the Fixed Income Clearing Corporation's General Collateral Finance (“GCF”) program and other repo programs;
• $4.4 billion and $4.5 billion, respectively, pledged to the FRB and FHLB in total; and
• $4.3 billion and $5.1 billion, respectively, pledged to secure public and trust deposits, advances, and other collateralized obligations.

A significant portion of these pledged assets is unencumbered, but remains pledged to provide immediate access to contingency funding sources. The following schedule presents our total available liquidity, including unused collateralized borrowing capacity:

AVAILABLE LIQUIDITY

(Dollar amounts in billions)

1 Represents borrowing capacity and borrowings outstanding at the Federal Reserve Bank discount window.

2 Includes $778 million and $3.1 billion pledged for available use through other repo programs for the periods presented.

3 Represents funds deposited by the Bank primarily at the Federal Reserve Bank.

At March 31, 2026, our total available liquidity was $46.9 billion, compared with $44.6 billion at December 31, 2025. At March 31, 2026, our sources of liquidity exceeded the estimated amount of uninsured deposits of $35.0 billion without the need to sell any investment securities.

Credit Ratings

General financial market and economic conditions affect our access to, and the cost of, external financing. Our ability to access funding markets is also directly influenced by the credit ratings assigned to us by various rating agencies. These ratings not only impact the costs associated with borrowings, but also influence the sources from which we can borrow. All credit rating agencies currently rate our debt at an investment-grade level.

The following schedule presents our credit ratings:

We may periodically issue or redeem preferred stock, senior or subordinated notes, or other capital or debt instruments based on our capital requirements, funding needs, asset-liability management objectives, and prevailing market conditions. Certain issuances may be subject to regulatory approval. In February 2026, we issued $500 million of 4.48% Fixed-to-Floating Senior Notes. In August 2025, we issued $500 million of 4.70% Fixed-to-Floating Senior Notes.

For additional information regarding our capital actions, see “Capital Management” below and in our 2025 Form 10-K.

Capital Management

We believe that maintaining a strong capital position is critical to achieving our key strategic objectives, sustaining long-term profitability, and reinforcing confidence among depositors, creditors, and investors. We focus on: (1) maintaining sufficient capital to support the current needs and growth of our businesses, aligned with our assessment of their potential to deliver shareholder value, and (2) meeting our obligations to depositors and bondholders while prudently managing capital distributions to shareholders through dividends and common stock repurchases.

We utilize stress testing as an important tool to inform our decisions on the appropriate level of capital to maintain, based on hypothetically stressed economic conditions, including the FRB’s supervisory severely adverse scenario. The timing and magnitude of capital actions are influenced by various factors, such as financial performance, business needs, prevailing and anticipated economic conditions, internal stress testing results, and approvals from both the Board of Directors (“Board”) and the Office of the Comptroller of the Currency (“OCC”). Share repurchases may occur periodically in the open market or through privately negotiated transactions.

For a more comprehensive discussion of our capital risk management, see “Capital Management” in our 2025 Form 10-K.

SHAREHOLDERS' EQUITY

(Dollar amounts in millions)

Total shareholders’ equity increased $116 million, or 2%, to $7.3 billion at March 31, 2026, compared with $7.2 billion at December 31, 2025. Common stock and additional paid-in capital decreased $57 million, primarily due to common stock repurchases. During the first quarter of 2026, we repurchased 1.3 million common shares outstanding for $77 million, which includes common shares acquired through our publicly announced plans and those acquired in connection with our stock compensation plan. In May 2026, we publicly announced a plan to repurchase up to $225 million of our common shares outstanding for the remainder of 2026.

At March 31, 2026, the AOCI balance reflected a net loss of $1.9 billion, primarily attributable to a decline in the fair value of fixed-rate AFS securities driven by changes in interest rates. This amount includes $1.5 billion ($1.2 billion after tax) of unrealized losses associated with securities previously transferred from AFS to HTM.

Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities in an unrealized loss position, nor do we believe it is more likely than not that we would be required to sell such securities prior to recovering their amortized cost basis. Although changes in AOCI are reflected in shareholders’ equity, they are currently excluded from regulatory capital and therefore do not impact our regulatory ratios. For more information on our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.

CAPITAL DISTRIBUTIONS

(In millions, except share amounts)

1 Includes amounts related to common shares acquired through our publicly announced plans and those acquired in connection with our stock compensation plan. These shares were acquired from employees to cover their payroll taxes and stock option exercise costs upon the exercise of stock options.

Pursuant to the OCC’s “Earnings Limitation Rule,” dividend payments are limited to the sum of net income for the current fiscal year and retained earnings for the two preceding years, unless prior approval is obtained from the OCC to exceed this threshold. As of April 1, 2026, we had $1.3 billion in retained net profits available for distribution.

In the first quarters of 2026 and 2025, dividends paid on preferred stock totaled $1 million in each period. Dividends paid on common stock totaled $67 million, or $0.45 per share, during the first quarter of 2026, compared with $65 million, or $0.43 per share, during the first quarter of 2025. In May 2026, the Board declared a quarterly common stock dividend of $0.45 per share, payable on May 21, 2026 to shareholders of record on May 14, 2026. For additional information regarding capital actions, see Note 8 of the Notes to Consolidated Financial Statements.

Basel III

We are subject to the Basel III capital requirements, which include specific minimum regulatory capital ratios. At March 31, 2026, we exceeded all capital adequacy requirements under the Basel III framework. Based on our internal stress testing and other capital adequacy assessments, we believe our capital levels sufficiently exceed both internal and regulatory requirements for well-capitalized institutions. For more information regarding our compliance with the Basel III capital requirements, see the “Supervision and Regulation” section and Note 15 of our 2025 Form 10-K.

In March 2026, the federal banking agencies issued notices of proposed rulemaking related to the Basel III Endgame framework that would revise aspects of the U.S. regulatory capital requirements, including risk‑weighted asset calculations and the treatment of AOCI. Under the proposals, most components of AOCI would be included in regulatory capital. The proposals are subject to ongoing regulatory review and potential modification, and while their potential impact remains uncertain, we are evaluating the proposals and expect to remain well capitalized as we continue to manage our capital position in light of evolving regulatory and supervisory requirements.

The following schedule presents our capital amounts, capital ratios, and other selected performance ratios:

CAPITAL AMOUNTS AND RATIOS

(Dollar amounts in millions, except per share amounts)

1 See “Non-GAAP Financial Measures” on page 37 for more information regarding these ratios.

At March 31, 2026, our common equity tier 1 (“CET1”) capital was $8.1 billion, an increase of 9%, compared with $7.4 billion in the prior year period. The CET1 capital ratio improved to 11.6%, compared with 10.8%. Tangible book value per common share increased 19% to $41.75, mainly due to higher retained earnings and reduced unrealized losses in AOCI. See the section below for more information regarding non-GAAP financial measures.

NON-GAAP FINANCIAL MEASURES

This Form 10-Q includes certain non-GAAP financial measures in addition to those prepared in accordance with generally accepted accounting principles (“GAAP”). Reconciliations of the non-GAAP measures to the most directly comparable GAAP measures are included in the accompanying schedules. Management uses these non-GAAP measures to evaluate financial results and believes they provide useful supplemental information for period-to-period comparisons.

Non-GAAP financial measures have limitations and may not be directly comparable to similar measures reported by other financial institutions. These measures should not be considered in isolation and should be evaluated in conjunction with the corresponding GAAP measures and related reconciliations. Investors are encouraged to consider GAAP results as the primary basis for assessing our financial condition and results of operations.

Tangible Common Equity and Related Measures

Tangible common equity and related metrics are non-GAAP financial measures that exclude the impact of intangible assets and the related amortization. Management believes these measures provide useful supplemental information in evaluating the use of shareholders’ equity and assessing performance across both acquired and internally developed businesses.

RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)

(Dollar amounts in millions)

1 Excluding the effect of AOCI from average tangible common equity would result in associated returns of 11.8%, 13.3%, and 9.2% for the periods presented, respectively.

TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)

(Dollar amounts in millions, except shares and per share amounts)

37

Efficiency Ratio and Adjusted Pre-Provision Net Revenue

The efficiency ratio measures operating expenses relative to revenue and is useful to assess the cost of generating revenue. The adjusted efficiency ratio excludes certain items not generally expected to recur frequently, as described in the accompanying schedule, and is intended to enhance comparability across reporting periods. Adjusted noninterest expense reflects management's effectiveness in managing operating costs, while adjusted pre-provision net revenue is used to evaluate our capacity to generate capital. Taxable-equivalent net interest income is presented to facilitate comparability between revenue earned from taxable and tax-exempt sources.

EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)

(Dollar amounts in millions)

1 Effective in the first quarter of 2025, capital markets fees and income includes the net CVA, which was previously disclosed under noncustomer-related noninterest income as fair value and nonhedge derivative income.

Our most significant risks include interest rate and market risk, which are actively monitored by management, as previously discussed. For more information regarding interest rate and market risk, see the “Interest Rate and Market Risk Management” section of this Form 10-Q.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.

There were no changes in our internal control over financial reporting that occurred during the first quarter of 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A. Risk Factors in our 2025 Form 10-K.