FULLTEXT DEL 2 AV 3
10-Q – 2025-11-07 – fcnca-20250930.htm
September 30, 2025 Days Past Due: Term Loans by Origination Year Revolving Converted to Term Loans dollars in millions 2025 2024 2023 2022 2021 2020 & Prior Revolving Total Residential mortgage Current $ 1,558 $ 2,219 $ 2,671 $ 4,912 $ 4,815 $ 6,574 $ 5 $ — $ 22,754 30-59 days 1 5 15 18 14 81 — — 134 60-89 days 1 2 2 7 4 39 — — 55 90 days or greater — 1 5 8 8 71 — — 93 Total residential mortgage 1,560 2,227 2,693 4,945 4,841 6,765 5 — 23,036 Revolving mortgage Current — — — — — — 2,629 125 2,754 30-59 days — — — — — — 11 9 20 60-89 days — — — — — — 1 5 6 90 days or greater — — — — — — 3 11 14 Total revolving mortgage — — — — — — 2,644 150 2,794 Consumer auto Current 422 454 248 183 94 45 — — 1,446 30-59 days 1 3 3 3 1 1 — — 12 60-89 days — 1 1 1 — — — — 3 90 days or greater — 1 1 — — — — — 2 Total consumer auto 423 459 253 187 95 46 — — 1,463 Consumer other Current 89 112 92 55 18 8 655 — 1,029 30-59 days — — — — — — 3 — 3 60-89 days — — — — — — 2 — 2 90 days or greater — — — — — — 3 — 3 Total consumer other 89 112 92 55 18 8 663 — 1,037 Total consumer $ 2,072 $ 2,798 $ 3,038 $ 5,187 $ 4,954 $ 6,819 $ 3,312 $ 150 $ 28,330 22 The following tables represent current credit quality indicators by origination year as of December 31, 2024: Commercial Loans - Risk Classifications by Class December 31, 2024 Risk Classification: Term Loans by Origination Year Revolving Converted to Term Loans dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total Commercial construction Pass $ 1,095 $ 1,854 $ 1,276 $ 287 $ 152 $ 52 $ 148 $ — $ 4,864 Special Mention — 80 35 — 7 24 — — 146 Substandard — 8 47 20 7 17 — — 99 Doubtful — — — — — — — — — Ungraded — — — — — — — — — Total commercial construction 1,095 1,942 1,358 307 166 93 148 — 5,109 Owner occupied commercial mortgage Pass 2,721 2,445 2,747 2,581 2,199 2,988 223 29 15,933 Special Mention 22 46 70 58 32 61 9 — 298 Substandard 30 34 136 82 73 245 10 1 611 Doubtful — — — — — — — — — Ungraded — — — — — — — — — Total owner occupied commercial mortgage 2,773 2,525 2,953 2,721 2,304 3,294 242 30 16,842 Non-owner occupied commercial mortgage Pass 2,879 3,082 2,744 2,041 1,598 2,134 119 3 14,600 Special Mention — 66 293 43 4 86 — — 492 Substandard 12 15 171 39 116 653 — — 1,006 Doubtful — — — — 20 76 — — 96 Ungraded — — — — — — — — — Total non-owner occupied commercial mortgage 2,891 3,163 3,208 2,123 1,738 2,949 119 3 16,194 Commercial and industrial Pass 11,813 6,295 4,622 2,389 1,221 1,408 9,033 67 36,848 Special Mention 145 236 255 302 29 69 203 — 1,239 Substandard 155 347 614 332 195 207 454 4 2,308 Doubtful 5 23 42 15 1 18 103 — 207 Ungraded — — — — — — 135 — 135 Total commercial and industrial 12,118 6,901 5,533 3,038 1,446 1,702 9,928 71 40,737 Leases Pass 739 506 300 147 96 46 — — 1,834 Special Mention 13 17 29 5 4 — — — 68 Substandard 21 29 23 13 9 8 — — 103 Doubtful 1 3 2 2 1 — — — 9 Ungraded — — — — — — — — — Total leases 774 555 354 167 110 54 — — 2,014 Global fund banking Pass 892 179 147 20 14 12 26,588 36 27,888 Special Mention — — — — — — — — — Substandard — — 5 8 2 — 1 — 16 Doubtful — — — — — — — — — Ungraded — — — — — — — — — Total global fund banking 892 179 152 28 16 12 26,589 36 27,904 Investor dependent Pass 1,135 640 352 37 — — 315 3 2,482 Special Mention 17 28 6 — — — 26 — 77 Substandard 122 173 164 31 1 — 61 — 552 Doubtful 26 19 28 5 — — 4 — 82 Ungraded — — — — — — — — — Total investor dependent 1,300 860 550 73 1 — 406 3 3,193 Total commercial $ 21,843 $ 16,125 $ 14,108 $ 8,457 $ 5,781 $ 8,104 $ 37,432 $ 143 $ 111,993 23 Consumer Loans - Delinquency Status by Class December 31, 2024 Days Past Due: Term Loans by Origination Year Revolving Converted to Term Loans dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total Residential mortgage Current $ 2,178 $ 2,968 $ 5,264 $ 5,148 $ 2,913 $ 4,353 $ 4 $ — $ 22,828 30-59 days 3 13 19 23 31 95 — — 184 60-89 days 1 3 5 2 2 28 — — 41 90 days or greater — 4 6 7 9 73 — — 99 Total residential mortgage 2,182 2,988 5,294 5,180 2,955 4,549 4 — 23,152 Revolving mortgage Current — — — — — — 2,420 108 2,528 30-59 days — — — — — — 16 6 22 60-89 days — — — — — — 1 5 6 90 days or greater — — — — — — 3 8 11 Total revolving mortgage — — — — — — 2,440 127 2,567 Consumer auto Current 617 358 277 155 68 27 — — 1,502 30-59 days 3 3 3 2 1 1 — — 13 60-89 days 1 1 1 1 — — — — 4 90 days or greater 1 1 1 1 — — — — 4 Total consumer auto 622 363 282 159 69 28 — — 1,523 Consumer other Current 147 144 99 30 6 18 531 — 975 30-59 days 1 — — — — 1 3 — 5 60-89 days — — 1 — — — 2 — 3 90 days or greater — — — — — 1 2 — 3 Total consumer other 148 144 100 30 6 20 538 — 986 Total consumer $ 2,952 $ 3,495 $ 5,676 $ 5,369 $ 3,030 $ 4,597 $ 2,982 $ 127 $ 28,228 24 Gross Charge-offs Gross charge-off disclosures by origination year and loan class are summarized in the following tables: Nine Months Ended September 30, 2025 Term Loans by Origination Year Revolving Converted to Term Loans dollars in millions 2025 2024 2023 2022 2021 2020 & Prior Revolving Total Commercial Commercial construction $ — $ — $ — $ 1 $ — $ — $ — $ — $ 1 Owner occupied commercial mortgage — 2 — — — 1 — — 3 Non-owner occupied commercial mortgage 4 23 3 20 — 32 — — 82 Commercial and industrial 28 20 51 44 9 3 191 1 347 Leases 2 3 3 3 1 3 — — 15 Investor dependent — 14 30 28 7 4 9 — 92 Total commercial 34 62 87 96 17 43 200 1 540 Consumer Residential mortgage — — — — — 6 — — 6 Consumer auto — 2 2 1 1 — — — 6 Consumer other — 1 1 1 — — 12 — 15 Total consumer — 3 3 2 1 6 12 — 27 Total loans and leases $ 34 $ 65 $ 90 $ 98 $ 18 $ 49 $ 212 $ 1 $ 567 Nine Months Ended September 30, 2024 Term Loans by Origination Year Revolving Converted to Term Loans dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total Commercial Owner occupied commercial mortgage $ — $ — $ — $ — $ — $ 8 $ — $ — $ 8 Non-owner occupied commercial mortgage — — — — 19 70 — — 89 Commercial and industrial 8 35 65 15 4 10 50 1 188 Leases 1 4 4 4 2 2 — — 17 Investor dependent — 37 63 27 3 4 7 — 141 Total commercial 9 76 132 46 28 94 57 1 443 Consumer Residential mortgage — — — — — 1 — — 1 Consumer auto — 2 1 1 — — — — 4 Consumer other — 1 1 1 — 1 12 — 16 Total consumer — 3 2 2 — 2 12 — 21 Total loans and leases $ 9 $ 79 $ 134 $ 48 $ 28 $ 96 $ 69 $ 1 $ 464 25 Loan Modifications for Borrowers Experiencing Financial Difficulties As part of BancShares’ ongoing credit risk management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with the borrowers’ current ability to repay. BancShares’ modifications granted to debtors experiencing financial difficulties typically take the form of term extensions, interest rate reductions, payment delays, principal forgiveness, or a combination thereof. Modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance. The following tables present the amortized cost of loan modifications made to debtors experiencing financial difficulty, disaggregated by class and type of loan modification. The tables also provide financial effects by type of such loan modifications for the respective loan class. Loan modifications for principal forgiveness round to less than $ 1 million for all loan classes in all periods presented and are not presented in the following tables. Amortized Cost of Loans Modified during the three months ended September 30, 2025 dollars in millions Term Extension (1) Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction Term Extension (1) and Payment Delay Other Combinations (2) Total Percent of Total Loan Class Commercial Commercial construction $ 8 $ — $ — $ — $ 7 $ — $ 15 0.24 % Owner occupied commercial mortgage 8 3 — — — — 11 0.07 Non-owner occupied commercial mortgage 61 9 — 45 — — 115 0.74 Commercial and industrial 233 48 — 14 4 1 300 0.73 Investor dependent 9 40 — — 4 — 53 1.92 Total commercial 319 100 — 59 15 1 494 0.42 Consumer Residential mortgage 7 — 1 — 2 — 10 0.04 Total consumer 7 — 1 — 2 — 10 0.04 Total loans and leases $ 326 $ 100 $ 1 $ 59 $ 17 $ 1 $ 504 0.35 % (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. (2) Consists of $ 1 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction. Amortized Cost of Loans Modified during the three months ended September 30, 2024 dollars in millions Term Extension (1) Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction Term Extension (1) and Payment Delay Total Percent of Total Loan Class Commercial Owner occupied commercial mortgage $ 15 $ 1 $ — $ 8 $ — $ 24 0.15 % Non-owner occupied commercial mortgage 30 6 — — — 36 0.22 Commercial and industrial 140 — — 3 1 144 0.36 Investor dependent 6 34 — — 8 48 1.37 Total commercial 191 41 — 11 9 252 0.23 Consumer Residential mortgage 1 — — 1 — 2 0.01 Revolving mortgage 1 — — — — 1 0.05 Total consumer 2 — — 1 — 3 0.01 Total loans and leases $ 193 $ 41 $ — $ 12 $ 9 $ 255 0.18 % (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. 26 Financial Effects of Loan Modifications made during the three months ended September 30, 2025 dollars in millions Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) Commercial Commercial construction 8 — % 7 Owner occupied commercial mortgage 13 — 6 Non-owner occupied commercial mortgage 9 0.52 36 Commercial and industrial 15 1.05 12 Leases 60 — — Investor dependent 11 — 6 Total commercial 13 0.65 11 Consumer Residential mortgage 21 1.52 8 Revolving mortgage 58 4.36 — Consumer auto 18 — — Consumer other 60 11.41 — Total consumer 24 3.01 8 Total loans and leases 13 0.71 % 11 Financial Effects of Loan Modifications made during the three months ended September 30, 2024 dollars in millions Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) Commercial Commercial construction 36 0.60 % — Owner occupied commercial mortgage 17 1.82 6 Non-owner occupied commercial mortgage 7 — 6 Commercial and industrial 15 2.61 6 Leases 11 — — Investor dependent 9 — 6 Total commercial 14 2.03 6 Consumer Residential mortgage 47 2.07 11 Revolving mortgage 60 5.42 — Consumer auto 31 — — Consumer other 60 10.54 — Total consumer 52 3.29 11 Total loans and leases 14 2.19 % 6 Note: The financial effects of loan modifications for certain loan classes reported in the tables above were not reported in the preceding tables as the total amortized cost of loans modified during the period for such loan classes rounded to less than $ 1 million. 27 Amortized Cost of Loans Modified during the nine months ended September 30, 2025 dollars in millions Term Extension (1) Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction Term Extension (1) and Payment Delay Other Combinations (2) Total Percent of Total Loan Class Commercial Commercial construction $ 8 $ — $ — $ — $ 15 $ — $ 23 0.38 % Owner occupied commercial mortgage 11 5 — 29 22 — 67 0.39 Non-owner occupied commercial mortgage 120 9 — 109 23 — 261 1.67 Commercial and industrial 267 124 — 16 13 6 426 1.03 Investor dependent 15 59 — — 10 — 84 3.04 Total commercial 421 197 — 154 83 6 861 0.74 Consumer Residential mortgage 15 — 1 2 25 — 43 0.18 Revolving mortgage 1 — — 1 — — 2 0.07 Total consumer 16 — 1 3 25 — 45 0.16 Total loans and leases $ 437 $ 197 $ 1 $ 157 $ 108 $ 6 $ 906 0.63 % (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. (2) Consists of $ 6 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction. Amortized Cost of Loans Modified during the nine months ended September 30, 2024 dollars in millions Term Extension (1) Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction Term Extension (1) and Payment Delay Other Combinations (2) Total Percent of Total Loan Class Commercial Commercial construction $ 3 $ — $ — $ — $ — $ — $ 3 0.06 % Owner occupied commercial mortgage 36 1 4 9 9 — 59 0.36 Non-owner occupied commercial mortgage 108 6 — — 26 — 140 0.88 Commercial and industrial 191 91 31 12 1 — 326 0.81 Investor dependent 7 78 — — 33 1 119 3.32 Total commercial 345 176 35 21 69 1 647 0.59 Consumer Residential mortgage 7 — — 1 — — 8 0.04 Revolving mortgage 4 — — 1 — — 5 0.20 Total consumer 11 — — 2 — — 13 0.05 Total loans and leases $ 356 $ 176 $ 35 $ 23 $ 69 $ 1 $ 660 0.48 % (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. (2) Consists of $ 1 million of investor dependent loans modified with a term extension, interest rate reduction, and payment delay. 28 Financial Effects of Loan Modifications made during the nine months ended September 30, 2025 Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) Commercial Commercial construction 7 — % 6 Owner occupied commercial mortgage 11 1.93 5 Non-owner occupied commercial mortgage 17 0.56 14 Commercial and industrial 14 1.31 12 Leases 60 — — Investor dependent 9 — 7 Total commercial 15 0.91 10 Consumer Residential mortgage 14 1.21 6 Revolving mortgage 48 4.04 5 Consumer auto 19 — — Consumer other 60 9.93 — Total consumer 16 2.39 6 Total loans and leases 15 0.95 % 10 Financial Effects of Loan Modifications made during the nine months ended September 30, 2024 Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) Commercial Commercial construction 15 0.60 % — Owner occupied commercial mortgage 28 1.67 18 Non-owner occupied commercial mortgage 20 — 40 Commercial and industrial 15 0.71 12 Leases 11 — 6 Investor dependent 11 2.75 8 Total commercial 18 0.96 14 Consumer Residential mortgage 70 2.09 11 Revolving mortgage 60 4.73 — Consumer auto 29 0.26 — Consumer other 57 9.65 — Total consumer 66 3.41 11 Total loans and leases 19 1.07 % 14 Note: The financial effects of loan modifications for certain loan classes reported in the tables above were not reported in the preceding tables as the total amortized cost of loans modified during the period for such loan classes rounded to less than $ 1 million. Borrowers experiencing financial difficulties are typically identified in our credit risk management process before loan modifications occur. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a modification. Since the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ALLL because of the measurement methodologies used to estimate the ALLL, a change to the ALLL is generally not recorded upon modification. Upon BancShares’ determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. At September 30, 2025, there were $ 113 million of loans modified in the twelve months ended September 30, 2025, which defaulted subsequent to modification. 29 The following tables present the amortized cost and performance of loans to borrowers experiencing financial difficulties for which the terms of the loan were modified during the referenced periods. The period of delinquency is based on the number of days the scheduled payment is contractually past due. Modified Loans Payment Status (twelve months ended September 30, 2025) dollars in millions Current 30–59 Days Past Due 60–89 Days Past Due 90 Days or Greater Past Due Total Commercial Commercial construction $ 22 $ 1 $ — $ — $ 23 Owner occupied commercial mortgage 74 1 — 9 84 Non-owner occupied commercial mortgage 241 4 1 60 306 Commercial and industrial 404 2 1 24 431 Investor dependent 90 — — 1 91 Total commercial 831 8 2 94 935 Consumer Residential mortgage 35 3 3 6 47 Revolving mortgage 7 — — — 7 Total consumer 42 3 3 6 54 Total loans and leases $ 873 $ 11 $ 5 $ 100 $ 989 Modified Loans Payment Status (twelve months ended September 30, 2024) dollars in millions Current 30–59 Days Past Due 60–89 Days Past Due 90 Days or Greater Past Due Total Commercial Commercial construction $ 3 $ — $ — $ — $ 3 Owner occupied commercial mortgage 50 — 9 2 61 Non-owner occupied commercial mortgage 156 1 — 16 173 Commercial and industrial 346 1 — 2 349 Investor dependent 127 — — 1 128 Total commercial 682 2 9 21 714 Consumer Residential mortgage 9 1 2 4 16 Revolving mortgage 6 — — — 6 Total consumer 15 1 2 4 22 Total loans and leases $ 697 $ 3 $ 11 $ 25 $ 736 At September 30, 2025, there were $ 17 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the nine months ended September 30, 2025. At December 31, 2024, there were $ 55 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the year ended December 31, 2024 . 30 Loans Pledged The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta, the Federal Reserve Bank (“FRB”) and FDIC. Loans Pledged dollars in millions September 30, 2025 December 31, 2024 FHLB of Atlanta Lendable collateral value of pledged non-PCD loans $ 19,472 $ 17,873 Less: advances — — Less: letters of credit 1,450 1,450 Available borrowing capacity $ 18,022 $ 16,423 Pledged non-PCD loans $ 31,945 $ 30,421 FRB Lendable collateral value of pledged non-PCD loans $ 13,328 $ 5,475 Less: advances — — Available borrowing capacity $ 13,328 $ 5,475 Pledged non-PCD loans $ 13,804 $ 6,309 FDIC Lendable collateral value of pledged loans $ 36,228 $ 41,282 Less: advances — — Less: Purchase Money Note 35,991 35,991 Available borrowing capacity (1) $ — $ 5,291 Pledged loans (1) $ 34,860 $ 41,040 (1) The draw period ended on March 27, 2025, therefore there is no available borrowing capacity at September 30, 2025. Loans remain pledged as collateral for the Purchase Money Note. As a member of the FHLB, FCB can access financing based on an evaluation of its creditworthiness, statement of financial position, size and eligibility of collateral. FCB may at any time grant a security interest in, sell, convey or otherwise dispose of any of the assets used for collateral, provided that FCB is in compliance with the collateral maintenance requirement immediately following such disposition. There were no outstanding advances from the FHLB at September 30, 2025 or December 31, 2024. Under borrowing arrangements with the FRB, BancShares has access to the FRB Discount Window on a secured basis. There were no outstanding borrowings with the FRB Discount Window at September 30, 2025 or December 31, 2024. In connection with the SVBB Acquisition, FCB and the FDIC entered into financing agreements, including the five-year Purchase Money Note, and the Advance Facility Agreement, which allowed for advances through March 27, 2025. There were no amounts outstanding at the end of the draw period of the facility on March 27, 2025. Refer to Note 2—Business Combinations for further discussion of these agreements and Note 9—Borrowings for the outstanding carrying value of the Purchase Money Note. 31 NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale, if any, is reported in the Consolidated Statements of Income as provision or benefit for credit losses. The ALLL activity for loans and leases is summarized in the following table: Allowance for Loan and Lease Losses dollars in millions Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Commercial Consumer Total Commercial Consumer Total Balance at beginning of period $ 1,512 $ 160 $ 1,672 $ 1,547 $ 153 $ 1,700 Provision (benefit) for loan and lease losses 238 ( 24 ) 214 123 — 123 Charge-offs ( 244 ) ( 12 ) ( 256 ) ( 169 ) ( 8 ) ( 177 ) Recoveries 18 4 22 27 5 32 Balance at end of period $ 1,524 $ 128 $ 1,652 $ 1,528 $ 150 $ 1,678 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Commercial Consumer Total Commercial Consumer Total Balance at beginning of period $ 1,518 $ 158 $ 1,676 $ 1,581 $ 166 $ 1,747 Provision (benefit) for loan and lease losses 487 ( 14 ) 473 316 ( 5 ) 311 Charge-offs ( 540 ) ( 27 ) ( 567 ) ( 443 ) ( 21 ) ( 464 ) Recoveries 59 11 70 74 10 84 Balance at end of period $ 1,524 $ 128 $ 1,652 $ 1,528 $ 150 $ 1,678 The decrease of $ 20 million in the ALLL at September 30, 2025 compared to June 30, 2025 primarily reflects improvements in the economic outlook and other changes, including the elimination of reserves related to Hurricane Helene, partially offset by higher specific reserves for individually evaluated loans, and growth in global fund banking loans which have a lower loss rate relative to our other portfolios. Also, during the three months ended September 30, 2025, we updated our PD, LGD, and exposure at default methodology for certain portfolios which contributed to changes in the ALLL compared to prior periods. The decrease of $ 24 million in the ALLL at September 30, 2025 compared to December 31, 2024 was also mainly due to the changes discussed above. The following table presents the components of the provision for credit losses: Provision for Credit Losses dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Provision for loan and lease losses $ 214 $ 123 $ 473 $ 311 Benefit for off-balance sheet credit exposure ( 23 ) ( 6 ) ( 13 ) ( 35 ) Provision for credit losses $ 191 $ 117 $ 460 $ 276 32 NOTE 6 — LEASES Lessee BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our operating lease liabilities relate to United States real estate leases. Our finance lease liabilities relate to equipment leases, including the lease of certain ATMs. Our real estate leases have remaining lease terms of up to 32 years. Our lease terms may include options to extend or terminate the lease, and our operating leases have renewal terms that can extend from 1 to 25 years. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised. The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates: Supplemental Lease Information dollars in millions Classification September 30, 2025 December 31, 2024 Lease assets: Operating lease ROU assets Other assets $ 305 $ 316 Finance leases Premises and equipment 67 15 Total lease assets $ 372 $ 331 Lease liabilities: Operating leases Other liabilities $ 342 $ 357 Finance leases Other borrowings 67 15 Total lease liabilities $ 409 $ 372 Weighted-average remaining lease terms: Operating leases 7.3 years 7.4 years Finance leases 8.1 years 11.7 years Weighted-average discount rate: Operating leases 3.10 % 2.94 % Finance leases 4.20 3.96 As of September 30, 2025, there were no leases that have not yet commenced that would have a material impact on BancShares’ consolidated financial statements. The following table presents components of lease cost: Components of Net Lease Cost dollars in millions Three Months Ended September 30, Nine Months Ended September 30, Classification 2025 2024 2025 2024 Operating lease cost Occupancy expense $ 18 $ 19 $ 54 $ 56 Finance lease ROU asset amortization Equipment expense 3 — 6 1 Interest on lease liabilities Interest expense - other borrowings 1 — 2 — Variable lease cost (1) Occupancy expense 4 7 16 22 Sublease income Occupancy expense ( 1 ) ( 1 ) ( 4 ) ( 4 ) Net lease cost (1) $ 25 $ 25 $ 74 $ 75 (1) Includes short-term lease cost. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term. For finance leases, the right of use (“ROU”) asset is amortized straight-line over the lease term as equipment expense and interest on the lease liability is recognized separately. Variable lease cost includes common area maintenance, property taxes, utilities, and other operating expenses related to leased premises recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments adjusted periodically for inflation. While lease liabilities are not remeasured because of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred. Sublease income results from leasing excess building space that BancShares is no longer utilizing under operating leases, which have remaining lease terms of up to 11 years. 33 The following table presents supplemental cash flow information related to leases: Supplemental Cash Flow Information dollars in millions Nine Months Ended September 30, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 58 $ 57 Operating cash flows from finance leases 2 — Financing cash flows from finance leases 5 1 ROU assets obtained in exchange for new operating lease liabilities 44 26 ROU assets obtained in exchange for new finance lease liabilities 55 — Lessor BancShares leases equipment to commercial end-users under operating lease and finance lease arrangements. The majority of operating lease equipment is long-lived rail equipment, which is typically leased several times over its life. We also lease technology and office equipment, and large and small industrial, medical, and transportation equipment under both operating leases and finance leases. Our Rail operating leases typically do not include purchase options. Many of our finance leases, and other equipment operating leases, offer the lessee the option to purchase the equipment at fair market value or for a nominal fixed purchase option. Many of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond the initial contractual term. Our leases typically do not include early termination options. Continued rent payments are due if leased equipment is not returned at the end of the lease. The table that follows presents lease income related to BancShares’ operating and finance leases: Lease Income dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Lease income – operating leases $ 261 $ 236 $ 772 $ 714 Variable lease income – operating leases (1) 12 26 43 62 Rental income on operating leases 273 262 815 776 Interest income – sales type and direct financing leases 44 44 131 131 Variable lease income included in other noninterest income (2) 14 15 44 46 Interest income – leveraged leases 1 1 3 3 Total lease income $ 332 $ 322 $ 993 $ 956 (1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis. (2) Includes revenue related to insurance coverage on leased equipment and leased equipment property tax reimbursements due from customers. NOTE 7 — GOODWILL AND CORE DEPOSIT INTANGIBLES Goodwill BancShares had goodwill of $ 346 million at September 30, 2025 and December 31, 2024. There was no goodwill impairment during the nine months ended September 30, 2025 or 2024. Goodwill relates to the General Bank reporting segment. Core Deposit Intangibles Core deposit intangibles represent the estimated fair value of core deposits and other customer relationships acquired. Core deposit intangibles are being amortized over their estimated useful lives. The following tables summarize the activity for core deposit intangibles: Core Deposit Intangibles Nine Months Ended September 30, dollars in millions 2025 Balance at beginning of period, net of accumulated amortization $ 249 Less: amortization for the period 41 Balance at end of period, net of accumulated amortization $ 208 34 The following table summarizes the accumulated amortization balance for core deposit intangibles: Core Deposit Intangible Accumulated Amortization dollars in millions September 30, 2025 December 31, 2024 Gross balance $ 501 $ 501 Less: accumulated amortization 293 252 Balance, net of accumulated amortization $ 208 $ 249 The following table summarizes the expected amortization expense as of September 30, 2025 in subsequent periods for core deposit intangibles: Core Deposit Intangible Expected Amortization dollars in millions Remainder 2025 $ 13 2026 46 2027 39 2028 34 2029 30 2030 28 Thereafter 18 Balance, net of accumulated amortization $ 208 NOTE 8 — VARIABLE INTEREST ENTITIES Unconsolidated VIEs Unconsolidated VIEs include limited partnership interests and joint ventures where BancShares’ involvement is limited to an investor interest and BancShares does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The table below provides a summary of the assets and liabilities included on the Consolidated Balance Sheets associated with unconsolidated VIEs. The table also presents our maximum exposure to loss which consists of outstanding book basis and unfunded commitments for future investments, and represents potential losses that would be incurred under hypothetical circumstances, such that the value of BancShares’ interests and any associated collateral declines to zero and assuming no recovery. BancShares believes the possibility is remote under this hypothetical scenario; accordingly, this disclosure is not an indication of expected loss. Unconsolidated VIEs Carrying Value dollars in millions September 30, 2025 December 31, 2024 Affordable housing tax credit investments $ 2,631 $ 2,357 Other tax credit equity investments 41 2 Total tax credit equity investments $ 2,672 $ 2,359 Other unconsolidated investments 159 157 Total affordable housing tax credit and other unconsolidated investments (maximum loss exposure) (1) $ 2,831 $ 2,516 Liabilities for commitments to fund tax credit investments (2) $ 1,295 $ 1,214 (1) Included in other assets. (2) Represents commitments to invest in qualified affordable housing investments and other investments qualifying for community reinvestment tax credits. These commitments are payable on demand and included in other liabilities. We have investments in qualified affordable housing projects, primarily to support our Community Reinvestment Act (“CRA”) initiatives and obtain tax credits. These investments are accounted for using the PAM and provide tax benefits in the form of tax deductions from operating losses and tax credits. Under the PAM, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received, and the net investment performance is recognized on the Consolidated Statements of Income as a component of income tax expense. 35 The table below summarizes the amortization of our affordable housing tax credit investments and the related tax credits and other tax benefits that are recognized in income tax expense on the Consolidated Statements of Income. Tax Credit Investments Recognized in Income Tax Expense dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Amortization of affordable housing tax credit investments (1) $ 63 $ 58 $ 197 $ 176 Tax credits from affordable housing tax credit investments ( 66 ) ( 58 ) ( 201 ) ( 173 ) Other tax benefits from affordable housing tax credit investments ( 15 ) ( 8 ) ( 38 ) ( 29 ) Net income tax benefit from affordable housing tax credit investments (2) $ ( 18 ) $ ( 8 ) $ ( 42 ) $ ( 26 ) (1) Amortization is included in depreciation, amortization, and accretion, net as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. (2) Net income tax benefit impact is included in net income in cash flows from operating activities on the Consolidated Statements of Cash Flows. Changes in income taxes payable are reported in the net change in other liabilities as an adjustment to reconcile net income to net cash provided by operating activities. NOTE 9 — BORROWINGS Short-term Borrowings Securities Sold under Agreements to Repurchase BancShares held $ 423 million and $ 367 million at September 30, 2025 and December 31, 2024, respectively, of securities sold under agreements to repurchase that have overnight contractual maturities and are collateralized by government agency securities. The weighted average interest rate for securities sold under agreements to repurchase was 0.47 % and 0.59 % at September 30, 2025 and December 31, 2024, respectively. BancShares utilizes securities sold under agreements to repurchase to facilitate the needs for collateralization of commercial customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates BancShares to repurchase the security at an agreed upon date, repurchase price and interest rate. These agreements are recorded at the amount of cash received in connection with the transactions and are reflected as securities sold under customer repurchase agreements. BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents. The carrying value of investment securities pledged as collateral under repurchase agreements was $ 500 million and $ 435 million at September 30, 2025 and December 31, 2024, respectively. 36 Long-term Borrowings On September 5, 2025, the Parent Company issued and sold $ 600 million aggregate principal amount of its 5.600 % Fixed Rate Reset Subordinated Notes due in 2035 in a public offering. On March 12, 2025, the Parent Company issued and sold $ 500 million aggregate principal amount of its 5.231 % Fixed-to-Floating Rate Senior Notes due in 2031 and $ 750 million aggregate principal amount of its 6.254 % Fixed-to-Fixed Rate Subordinated Notes due in 2040 in a public offering. On June 15, 2025, the Parent Company redeemed all $ 350 million aggregate principal amount of its 3.375 % Fixed-to-Floating Rate Subordinated Notes due in 2030. The following table presents long-term borrowings, net of the respective unamortized purchase accounting adjustments and issuance costs: Long-term Borrowings dollars in millions Maturity September 30, 2025 December 31, 2024 Parent Company: Senior: Fixed-to-Floating Senior Notes at 5.231 % (1) March 2031 $ 497 $ — Subordinated: Fixed-to-Floating Subordinated Notes at 3.375 % (2) March 2030 — 350 Fixed Rate Reset Subordinated Notes at 5.600 % (3) September 2035 597 — Fixed-to-Fixed Subordinated Notes at 6.254 % (4) March 2040 745 — Subsidiaries: Senior: Fixed Senior Unsecured Notes at 6.000 % April 2036 58 58 Subordinated: Fixed Subordinated Notes at 6.125 % March 2028 434 445 Secured: Purchase Money Note to FDIC fixed at 3.500 % (5) March 2028 35,854 35,816 Capital lease obligations Maturities through May 2057 67 15 Total long-term borrowings $ 38,252 $ 36,684 (1) The fixed rate period will end March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded Secured Overnight Financing Rate (“SOFR”) Index Rate plus 141 basis points (“bps”) per annum until the maturity date (or date of earlier redemption). (2) The fixed rate period ended on March 15, 2025, and the notes converted to a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum. The notes included a callable feature and were redeemed on June 15, 2025. (3) The interest rate will reset on September 5, 2030, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 185 bps per annum until the maturity date (or date of earlier redemption). (4) The interest rate will reset on March 12, 2035, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 197 bps per annum until the maturity date (or date of earlier redemption). (5) Refer to Note 2—Business Combinations and Note 4—Loans and Leases. Pledged Assets Refer to the “Loans Pledged” section in Note 4—Loans and Leases for information on loans pledged as collateral to secure borrowings. Additionally, interest-earning deposits at banks included $ 212 million and $ 211 million at September 30, 2025 and December 31, 2024, respectively, that were required minimum deposits under the Purchase Money Note. NOTE 10 — DERIVATIVE FINANCIAL INSTRUMENTS Our derivatives designated as hedging instruments include interest rate swap contracts utilized to manage our interest rate exposure for items on our Consolidated Balance Sheets. This includes floating-rate loan portfolio cash flow hedges and fair value hedges of our fixed-rate borrowings and deposits. Our derivatives not designated as hedging instruments mainly include interest rate and foreign exchange contracts that our customers utilized for their risk management needs. We typically manage our exposure to these customer derivatives by entering into offsetting or “back-to-back” interest rate and foreign exchange contracts with third-party dealers. Derivative instruments that are cleared through certain central counterparty clearing houses are settled-to-market and reported net of collateral positions. Refer to Note 11—Fair Value for further information on derivatives. 37 The following table presents notional amounts and fair values of derivative financial instruments: Notional Amount and Fair Value of Derivative Financial Instruments dollars in millions September 30, 2025 December 31, 2024 Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value Derivatives designated as hedging instruments (Qualifying hedges) Fair Value Hedges Interest rate contracts hedging time deposits $ 134 $ — $ — $ 334 $ — $ — Interest rate contracts hedging long-term borrowings 200 — — 750 — — Total fair value hedges (1) (2) 334 — — 1,084 — — Cash Flow Hedges Interest rate contracts hedging loans (1) (2) 2,500 — — 3,500 1 — Total derivatives designated as hedging instruments $ 2,834 $ — $ — $ 4,584 $ 1 $ — Derivatives not designated as hedging instruments (Non-qualifying hedges) Interest rate contracts (1) (2) $ 28,290 $ 403 $ ( 383 ) $ 26,235 $ 491 $ ( 516 ) Foreign exchange contracts (3) 7,969 145 ( 136 ) 7,843 152 ( 108 ) Other contracts (4) 1,497 22 ( 1 ) 1,316 16 ( 1 ) Total derivatives not designated as hedging instruments $ 37,756 $ 570 $ ( 520 ) $ 35,394 $ 659 $ ( 625 ) Gross derivatives fair values presented in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) Less: gross amounts offset in the Consolidated Balance Sheets — — — — Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) (1) Fair value balances include accrued interest. (2) BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information. (3) The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $ 566 million and $ 0 million, respectively, as of September 30, 2025, and $ 177 million and $ 0 million, respectively, as of December 31, 2024. (4) Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants. The following table presents the impact of variation margin netting (form of collateral payment when the underlying fair value changes) on derivative assets and liabilities: Variation Margin Payments dollars in millions September 30, 2025 December 31, 2024 Asset Fair Value Liability Fair Value Asset Fair Value Liability Fair Value Derivatives designated as hedging instruments (Qualifying hedges) Gross fair value $ 18 $ — $ 15 $ — Cleared trades, variation margin netting ( 18 ) — ( 14 ) — Total derivatives designated as hedging instruments $ — $ — $ 1 $ — Derivatives not designated as hedging instruments (Non-qualifying hedges) Gross fair value $ 625 $ ( 563 ) $ 742 $ ( 647 ) Cleared trades, variation margin netting ( 55 ) 43 ( 83 ) 22 Total derivatives not designated as hedging instruments $ 570 $ ( 520 ) $ 659 $ ( 625 ) Gross derivatives fair values presented in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) Amounts subject to master netting agreements (1) ( 116 ) 116 ( 48 ) 48 Cash collateral pledged (received) subject to master netting agreements (2) ( 218 ) 75 ( 539 ) 2 Total net derivative fair value $ 236 $ ( 329 ) $ 73 $ ( 575 ) (1) BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure. (2) In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively. 38 Fair Value Hedges The following table presents the impact of fair value hedges recorded in interest expense on the Consolidated Statements of Income: Recognized Gains (Losses) on Fair Value Hedges dollars in millions Three Months Ended September 30, Nine Months Ended September 30, Interest Expense 2025 2024 2025 2024 Gain (loss) on hedging instruments - time deposits Deposits $ — $ 2 $ — $ 1 Gain (loss) on hedging instruments - borrowings Borrowings — 4 — ( 2 ) Gain (loss) on hedged item - time deposits Deposits 1 ( 3 ) 1 ( 2 ) Gain (loss) on hedged item - borrowings Borrowings — ( 5 ) 2 — Net gain on fair value hedges Total interest expense $ 1 $ ( 2 ) $ 3 $ ( 3 ) The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges: Carrying Value of Hedged Items dollars in millions Cumulative Fair Value Hedging Adjustment Included in the Carrying Value of Hedged Items Carrying Value of Hedged Items Currently Designated No Longer Designated September 30, 2025 Long-term borrowings $ 217 $ — $ — Deposits 134 — — December 31, 2024 Long-term borrowings 795 2 — Deposits 335 1 — Cash Flow Hedges The following table presents the pretax unrealized gain on hedging instruments in cash flow hedges, which are reported in other comprehensive income, and the pretax amount reclassified from accumulated other comprehensive income (“AOCI”) to earnings: Unrealized Gain on Cash Flow Hedges dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Other comprehensive income on cash flow hedge derivatives before reclassifications $ ( 2 ) $ 14 $ 10 $ 17 Amounts reclassified from AOCI to earnings — 2 ( 4 ) 2 Other comprehensive income on cash flow hedge derivatives $ ( 2 ) $ 16 $ 6 $ 19 The following table presents other information for cash flow hedges: Other Information for Cash Flow Hedges dollars in millions September 30, 2025 December 31, 2024 Unrealized gain on cash flow hedge derivatives reported in AOCI, net of income taxes $ 13 $ 8 Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1) $ 7 $ 7 Maximum number of months over which forecasted cash flows are hedged 22 24 (1) Reclassified amounts could differ from amounts actually recognized due to factors such as changes in interest rates, hedge de-designations and the addition of other hedges. 39 Non-Qualifying Hedges The following table presents gains on non-qualifying hedges recognized on the Consolidated Statements of Income: Gains (Losses) on Non-Qualifying Hedges dollars in millions Three Months Ended September 30, Nine Months Ended September 30, Amounts Recognized 2025 2024 2025 2024 Interest rate contracts Other noninterest income $ 4 $ ( 5 ) $ 10 $ 6 Foreign currency forward contracts (1) Other noninterest income 12 ( 20 ) ( 52 ) 3 Other contracts Other noninterest income 1 2 3 1 Total non-qualifying hedges - income statement impact $ 17 $ ( 23 ) $ ( 39 ) $ 10 (1) This is primarily related to economic hedges of foreign currency risks arising from loans and other assets denominated in foreign currency. There is an offsetting impact within noninterest income for the foreign exchange revaluation of the associated assets denominated in foreign currency. NOTE 11 — FAIR VALUE Fair Value Hierarchy BancShares measures certain financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the lowest level of input significant to the fair value measurement with Level 1 inputs considered highest and Level 3 inputs considered lowest. A brief description of each input level follows: • Level 1 inputs are quoted prices in active markets for identical assets and liabilities. • Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices observable for the assets or liabilities and market corroborated inputs. • Level 3 inputs are unobservable inputs for the asset or liability. These unobservable inputs and assumptions reflect the estimates market participants would use in pricing the asset or liability. 40 Assets and Liabilities Measured at Fair Value - Recurring Basis The following table presents assets and liabilities measured at fair value on a recurring basis: Assets and Liabilities Measured at Fair Value - Recurring Basis dollars in millions September 30, 2025 Total Level 1 Level 2 Level 3 Assets Investment securities available for sale U.S. Treasury $ 13,781 $ — $ 13,781 $ — Government agency 52 — 52 — Residential mortgage-backed securities 17,435 — 17,435 — Commercial mortgage-backed securities 3,428 — 3,428 — Corporate bonds 250 — 141 109 Municipal bonds 17 — 17 — Total investment securities available for sale $ 34,963 $ — $ 34,854 $ 109 Marketable equity securities 110 46 64 — Loans held for sale 80 — 80 — Loans 22 — 22 — Derivative assets (1) Total qualifying hedge assets $ — $ — $ — $ — Interest rate contracts — non-qualifying hedges $ 403 $ — $ 400 $ 3 Foreign exchange contracts — non-qualifying hedges 145 — 145 — Other derivative contracts — non-qualifying hedges 22 — — 22 Total non-qualifying hedge assets $ 570 $ — $ 545 $ 25 Total derivative assets $ 570 $ — $ 545 $ 25 Liabilities Derivative liabilities (1) Interest rate contracts — qualifying hedges $ — $ — $ — $ — Interest rate contracts — non-qualifying hedges $ 383 $ — $ 383 $ — Foreign exchange contracts — non-qualifying hedges 136 — 136 — Other derivative contracts — non-qualifying hedges 1 — — 1 Total non-qualifying hedge liabilities $ 520 $ — $ 519 $ 1 Total derivative liabilities $ 520 $ — $ 519 $ 1 (1) Derivative fair values include accrued interest. 41 dollars in millions December 31, 2024 Total Level 1 Level 2 Level 3 Assets Investment securities available for sale U.S. Treasury $ 13,903 $ — $ 13,903 $ — Government agency 77 — 77 — Residential mortgage-backed securities 15,620 — 15,620 — Commercial mortgage-backed securities 3,666 — 3,666 — Corporate bonds 467 — 299 168 Municipal bonds 17 — 17 — Total investment securities available for sale $ 33,750 $ — $ 33,582 $ 168 Marketable equity securities 101 48 53 — Loans held for sale 55 — 55 — Derivative assets (1) Total qualifying hedge assets $ 1 $ — $ 1 $ — Interest rate contracts — non-qualifying hedges $ 491 $ — $ 490 $ 1 Foreign exchange contracts — non-qualifying hedges 152 — 152 — Other derivative contracts — non-qualifying hedges 16 — — 16 Total non-qualifying hedge assets $ 659 $ — $ 642 $ 17 Total derivative assets $ 660 $ — $ 643 $ 17 Liabilities Derivative liabilities (1) Interest rate contracts — qualifying hedges $ — $ — $ — $ — Interest rate contracts — non-qualifying hedges $ 516 $ — $ 516 $ — Foreign exchange contracts — non-qualifying hedges 108 — 108 — Other derivative contracts — non-qualifying hedges 1 — — 1 Total non-qualifying hedge liabilities $ 625 $ — $ 624 $ 1 Total derivative liabilities $ 625 $ — $ 624 $ 1 (1) Derivative fair values include accrued interest. The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a recurring basis are as follows: Investment securities available for sale . The fair value of U.S. Treasury, government agency, mortgage-backed securities, municipal bonds, and a portion of the corporate bonds are generally estimated using a third-party pricing service. To obtain an understanding of the processes and methodologies used, management reviews correspondence from the third-party pricing service. Management also performs a price variance analysis process to corroborate the reasonableness of prices. The third-party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models which use a variety of inputs, such as benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. The remaining corporate bonds held are generally measured at fair value based on indicative bids from broker-dealers using inputs that are not directly observable. These securities are classified as Level 3. Marketable equity securities. Equity securities are measured at fair value using observable closing prices. The valuation also considers the amount of market activity by examining trade volume. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market. Loans and Loans held for sale. Certain residential real estate loans originated for sale to investors are carried at fair value based on quoted market prices for similar types of loans, which are considered Level 2 inputs. In instances when loans are not sold and subsequently transferred to portfolio, accounting at fair value is continued. Derivative Assets and Liabilities. Derivatives were valued using models that incorporate inputs depending on the type of derivative. Other than the fair value of equity warrants and credit derivatives, which were estimated using Level 3 inputs, most derivative instruments were valued using Level 2 inputs based on observed pricing for similar assets and liabilities and model-based valuation techniques for which all significant assumptions are observable in the market. Refer to Note 10—Derivative Financial Instruments for notional amounts and fair values. 42 The following tables summarize information about significant unobservable inputs related to BancShares’ categories of Level 3 financial assets and liabilities measured on a recurring basis: Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis dollars in millions Financial Instrument Estimated Fair Value Valuation Technique Significant Unobservable Inputs September 30, 2025 December 31, 2024 Assets Corporate bonds $ 109 $ 168 Indicative bid provided by broker Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer. Interest rate & other derivative — non-qualifying hedges $ 25 $ 17 Internal valuation model Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument. Liabilities Interest rate & other derivative — non-qualifying hedges $ 1 $ 1 Internal valuation model Not material The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3): Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis dollars in millions Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Corporate Bonds Other Derivative Assets — Non-Qualifying Other Derivative Liabilities — Non-Qualifying Corporate Bonds Other Derivative Assets — Non-Qualifying Other Derivative Liabilities — Non-Qualifying Beginning balance $ 168 $ 17 $ 1 $ 157 $ 7 $ 1 Purchases — 6 — — 7 — Changes in fair value included in earnings — 4 — ( 1 ) 1 — Changes in fair value included in comprehensive income 9 — — 8 — — Maturity and settlements ( 68 ) ( 2 ) — — — — Ending balance $ 109 $ 25 $ 1 $ 164 $ 15 $ 1 Fair Value Option The following table summarizes the difference between the aggregate fair value and the unpaid principal balance (“UPB”) for residential mortgage loans originated for sale measured at fair value: Aggregate Fair Value and UPB - Residential Mortgage Loans dollars in millions September 30, 2025 December 31, 2024 Fair Value Unpaid Principal Balance Difference Fair Value Unpaid Principal Balance Difference Originated loans held for sale (1) $ 102 $ 102 $ — $ 55 $ 54 $ 1 (1) Originated loans held for sale include loans held for sale and loans originated for sale but transferred to portfolio and held for investment. BancShares has elected the fair value option for residential mortgage loans originated for sale. This election reduces certain timing differences in the Consolidated Statements of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value that were recorded as a component of other noninterest income were insignificant for the three and nine months ended September 30, 2025 and 2024. Interest earned on originated loans held for sale is recorded within interest income on loans and leases in the Consolidated Statements of Income. No originated loans held for sale were 90 or more days past due or on nonaccrual status as of September 30, 2025 or December 31, 2024. 43 Assets Measured at Estimated Fair Value on a Non-recurring Basis Certain assets or liabilities are required to be measured at estimated fair value on a non-recurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower of cost or fair value (“LOCOM”) or other impairment accounting. The following table presents carrying value of assets measured at estimated fair value on a non-recurring basis for which gains and losses have been recorded in the periods. The gains and losses reflect amounts recorded for the respective periods, regardless of whether the asset is still held at period end. Assets Measured at Fair Value - Non-recurring Basis dollars in millions Fair Value Measurements Total Level 1 Level 2 Level 3 Total Gains (Losses) September 30, 2025 Assets held for sale - loans $ 2 $ — $ — $ 2 $ ( 4 ) Loans - collateral dependent loans 181 — — 181 ( 141 ) Other real estate owned 76 — — 76 ( 1 ) Total $ 259 $ — $ — $ 259 $ ( 146 ) December 31, 2024 Assets held for sale - loans $ 13 $ — $ — $ 13 $ ( 7 ) Loans - collateral dependent loans 388 — — 388 ( 171 ) Other real estate owned 16 — — 16 6 Total $ 417 $ — $ — $ 417 $ ( 172 ) Certain other assets are adjusted to their fair value on a non-recurring basis, including certain loans, OREO, and goodwill, which are periodically tested for impairment. Most loans held for investment, deposits, and borrowings are not reported at fair value. The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a non-recurring basis are as follows: Assets held for sale - loans. Loans held for investment subsequently transferred to held for sale are carried at the LOCOM. When available, the fair values for the transferred loans are based on quoted prices from the purchase commitments for the individual loans being transferred and are considered Level 1 inputs. The fair value of Level 2 assets was primarily estimated based on prices of recent trades of similar assets. For other loans held for sale, the fair value of Level 3 assets was primarily measured under the income approach using the discounted cash flow model based on Level 3 inputs including discount rate or the price of committed trades. Gains and losses are recorded in noninterest income. Loans - collateral dependent loans. The population of Level 3 loans measured at fair value that are experiencing financial difficulty and measured on a non-recurring basis includes collateral-dependent loans evaluated individually. Collateral values are determined using appraisals or other third-party value estimates of the subject property discounted based on estimated selling costs, and adjustments for other external factors that may impact the marketability of the collateral. Gains and losses generally reflect the required net provision and charge-offs specific to the loans included in the population for the respective periods and are recorded in the provision for credit losses. Other real estate owned. OREO is carried at LOCOM. OREO asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts, generally between 7 % and 10 %, applied for estimated selling costs and other external factors that may impact the marketability of the property. At September 30, 2025 and December 31, 2024, the weighted average discount applied was 9.66 % and 9.45 %, respectively. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals are ordered to ensure the reported values reflect the most current information. 44 Financial Instruments Fair Value The table below presents the carrying values and estimated fair values for financial instruments, excluding leases and certain other assets and liabilities for which these disclosures are not required. Carrying Values and Fair Values of Financial Assets and Liabilities dollars in millions September 30, 2025 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets Cash and due from banks $ 874 $ 874 $ — $ — $ 874 Interest-earning deposits at banks 24,798 24,798 — — 24,798 Securities purchased under agreements to resell 83 — 83 — 83 Investment in marketable equity securities 110 46 64 — 110 Investment securities available for sale 34,963 — 34,854 109 34,963 Investment securities held to maturity 10,051 — 8,838 — 8,838 Loans held for sale 110 — 80 30 110 Net loans 141,074 — 1,618 140,306 141,924 Accrued interest receivable 945 — 945 — 945 Federal Home Loan Bank stock 20 — 20 — 20 Mortgage servicing rights 30 — — 48 48 Derivative assets - non-qualifying hedges 570 — 545 25 570 Financial Liabilities Deposits with no stated maturity 152,116 — 152,116 — 152,116 Time deposits 11,074 — 11,058 — 11,058 Credit balances of factoring clients 1,326 — — 1,326 1,326 Securities sold under customer repurchase agreements 423 — 423 — 423 Long-term borrowings 38,185 — 38,211 — 38,211 Accrued interest payable 105 — 105 — 105 Derivative liabilities - non-qualifying hedges 520 — 519 1 520 December 31, 2024 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets Cash and due from banks $ 814 $ 814 $ — $ — $ 814 Interest-earning deposits at banks 21,364 21,364 — — 21,364 Securities purchased under agreements to resell 158 — 158 — 158 Investment in marketable equity securities 101 48 53 — 101 Investment securities available for sale 33,750 — 33,582 168 33,750 Investment securities held to maturity 10,239 — 8,702 — 8,702 Loans held for sale 82 — 55 27 82 Net loans 136,567 — 1,463 133,409 134,872 Accrued interest receivable 902 — 902 — 902 Federal Home Loan Bank stock 20 — 20 — 20 Mortgage servicing rights 27 — — 47 47 Derivative assets - qualifying hedges 1 — 1 — 1 Derivative assets - non-qualifying hedges 659 — 642 17 659 Financial Liabilities Deposits with no stated maturity 141,976 — 141,976 — 141,976 Time deposits 13,253 — 13,247 — 13,247 Credit balances of factoring clients 1,016 — — 1,016 1,016 Securities sold under customer repurchase agreements 367 — 367 — 367 Long-term borrowings 36,669 — 36,220 — 36,220 Accrued interest payable 134 — 134 — 134 Derivative liabilities - non-qualifying hedges 625 — 624 1 625 45 The methods and assumptions used to estimate the fair value of each class of financial instruments not discussed elsewhere are as follows: Interest-earning Deposits at Banks. The carrying value of interest-earning deposits at banks approximates its fair value due to its short-term nature and is classified on the fair value hierarchy as Level 1. The balances at September 30, 2025 and December 31, 2024 included $ 212 million and $ 211 million, respectively, as a required minimum deposit under the Purchase Money Note. Net loans. The carrying value of net loans is net of the ALLL. Loans are generally valued by discounting expected cash flows using market inputs with adjustments based on cohort level assumptions for certain loan types as well as internally developed estimates at a business segment level. Due to the significance of the unobservable market inputs and assumptions, as well as the absence of a liquid secondary market for most loans, these loans are classified as Level 3. Certain loans are measured based on observable market prices sourced from external data providers and classified as Level 2. Nonaccrual loans are written down and reported at their estimated recovery value, which approximates their fair value, and classified as Level 3. Securities Purchased Under Agreements to Resell. The fair value of securities purchased under agreements to resell equal the carrying value due to the short term nature, generally overnight, and therefore present an insignificant risk of change in fair value due to changes in market interest rate, and classified as Level 2. Investment securities held to maturity. BancShares’ portfolio of debt securities held to maturity consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. We primarily use prices obtained from pricing services to determine the fair value of securities, which are Level 2 inputs. FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value, as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs. Mortgage servicing rights. The fair value of mortgage servicing rights (“MSRs”) is determined using a pooling methodology. Similar loans are pooled together and a model which relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for MSRs are considered Level 3 inputs. Deposits. The estimated fair value of deposits with no stated maturity, such as demand deposit accounts, money market accounts, and savings accounts was the amount payable on demand at the reporting date. The fair value of time deposits was estimated based on a discounted cash flow technique using Level 2 inputs appropriate to the contractual maturity. Credit balances of factoring clients. The impact of the time value of money from the unobservable discount rate for credit balances of factoring clients is inconsequential due to the short term nature of these balances, therefore, the fair value approximated carrying value, and the credit balances are classified as Level 3. Short-term borrowed funds. The fair value of short-term borrowed funds, which includes repurchase agreements, approximates carrying value and are classified as Level 2. Long-term borrowings. For certain long-term senior and subordinated unsecured borrowings, the fair values are sourced from a third-party pricing service. The fair values of other long-term borrowings are determined by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, senior and subordinated debentures, and other borrowings are classified as Level 2. For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of September 30, 2025 and December 31, 2024. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short-term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified as Level 1. Accrued interest receivable and accrued interest payable are classified as Level 2. 46 NOTE 12 — STOCKHOLDERS' EQUITY A roll forward of common stock activity is presented in the following table: Number of Shares of Common Stock September 30, 2025 Common Stock Outstanding Class A Class B Common stock - June 30, 2025 12,070,794 1,005,185 Shares repurchased under authorized repurchase plan ( 457,350 ) — Common stock - September 30, 2025 11,613,444 1,005,185 Common stock - December 31, 2024 12,712,436 1,005,185 Shares purchased under authorized repurchase plan ( 1,098,992 ) — Common stock - September 30, 2025 11,613,444 1,005,185 Common Stock The Parent Company has Class A common stock and Class B common stock, each with a par value of $ 1 . Class A common stockholders have one vote per share while Class B common stockholders have 16 votes per share. Non-Cumulative Perpetual Preferred Stock The following table summarizes BancShares’ non-cumulative perpetual preferred stock: Preferred Stock dollars in millions, except per share and par value data Preferred Stock Issuance Date Earliest Redemption Date Par Value Shares Authorized, Issued and Outstanding Liquidation Preference Per Share Total Liquidation Preference Dividend Series A March 12, 2020 March 15, 2025 $ 0.01 345,000 $ 1,000 $ 345 5.375 % Series B (1) January 3, 2022 January 4, 2027 0.01 325,000 1,000 325 SOFR + 3.972 % Series C January 3, 2022 January 4, 2027 0.01 8,000,000 25 200 5.625 % (1) Upon conversion to SOFR in 2023, BancShares began paying a credit spread adjustment in addition to the stated dividend. Dividends on BancShares Series A, B, and C preferred stock (together, “BancShares Preferred Stock”) will be paid when, as, and if declared by the Board of Directors of the Parent Company, or a duly authorized committee thereof, to the extent that the Parent Company has lawfully available funds to pay dividends. If declared, dividends with respect to the BancShares Preferred Stock will accrue and be payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. Dividends on the BancShares Preferred Stock will not be cumulative. For further description of BancShares Preferred Stock, refer to Note 16—Stockholders’ Equity in the Notes to the Consolidated Financial Statements included in the 2024 Form 10-K. 47 NOTE 13 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table details the components of AOCI: Components of Accumulated Other Comprehensive Loss dollars in millions September 30, 2025 December 31, 2024 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes Unrealized loss on securities available for sale $ ( 224 ) $ 40 $ ( 184 ) $ ( 762 ) $ 178 $ ( 584 ) Unrealized loss on securities available for sale transferred to held to maturity ( 5 ) 1 ( 4 ) ( 6 ) 2 ( 4 ) Defined benefit pension items 177 ( 46 ) 131 182 ( 47 ) 135 Unrealized gain on cash flow hedge derivatives 17 ( 4 ) 13 11 ( 3 ) 8 Total accumulated other comprehensive loss $ ( 35 ) $ ( 9 ) $ ( 44 ) $ ( 575 ) $ 130 $ ( 445 ) The following table details the changes in the components of AOCI, net of income taxes: Changes in Accumulated Other Comprehensive (Loss) Income by Component dollars in millions Unrealized loss on securities available for sale Unrealized loss on securities available for sale transferred to held to maturity Defined benefit pension items Unrealized gain on cash flow hedge derivatives Total accumulated other comprehensive loss Balance as of December 31, 2024 $ ( 584 ) $ ( 4 ) $ 135 $ 8 $ ( 445 ) AOCI activity before reclassifications 400 — ( 4 ) 8 404 Amounts reclassified from AOCI to earnings — — — ( 3 ) ( 3 ) Other comprehensive income (loss) for the period 400 — ( 4 ) 5 401 Balance as of September 30, 2025 $ ( 184 ) $ ( 4 ) $ 131 $ 13 $ ( 44 ) Balance as of December 31, 2023 $ ( 577 ) $ ( 5 ) $ 91 $ — $ ( 491 ) AOCI activity before reclassifications 325 — ( 8 ) 12 329 Amounts reclassified from AOCI to earnings — 1 — 2 3 Other comprehensive loss (income) for the period 325 1 ( 8 ) 14 332 Balance as of September 30, 2024 $ ( 252 ) $ ( 4 ) $ 83 $ 14 $ ( 159 ) 48 Other Comprehensive Income The amounts included in the Consolidated Statements of Comprehensive Income are net of income taxes. The following table presents the pretax and after tax components of other comprehensive income: Other Comprehensive Income (Loss) by Component dollars in millions Three Months Ended September 30, 2025 2024 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes Income Statement Line Items Unrealized loss on securities available for sale: Other comprehensive income on securities available for sale $ 97 $ ( 25 ) $ 72 $ 594 $ ( 156 ) $ 438 Unrealized loss on securities available for sale transferred to held to maturity: Amounts reclassified from AOCI to earnings $ 1 $ ( 1 ) $ — $ 1 $ — $ 1 Interest on investment securities Defined benefit pension items: Other comprehensive loss for defined benefit pension items $ ( 1 ) $ — $ ( 1 ) $ — $ — $ — Unrealized gain on cash flow hedge derivatives: AOCI activity before reclassifications $ ( 2 ) $ 1 $ ( 1 ) $ 14 $ ( 4 ) $ 10 Amounts reclassified from AOCI to earnings — — — 2 — 2 Interest and fees on loans Other comprehensive (loss) income on cash flow hedge derivatives $ ( 2 ) $ 1 $ ( 1 ) $ 16 $ ( 4 ) $ 12 Total other comprehensive income $ 95 $ ( 25 ) $ 70 $ 611 $ ( 160 ) $ 451 dollars in millions Nine Months Ended September 30, 2025 2024 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes Income Statement Line Items Unrealized loss on securities available for sale: Other comprehensive income on securities available for sale $ 538 $ ( 138 ) $ 400 $ 440 $ ( 115 ) $ 325 Unrealized loss on securities available for sale transferred to held to maturity: Amounts reclassified from AOCI to earnings $ 1 $ ( 1 ) $ — $ 1 $ — $ 1 Interest on investment securities Defined benefit pension items: Other comprehensive loss for defined benefit pension items $ ( 5 ) $ 1 $ ( 4 ) $ ( 10 ) $ 2 $ ( 8 ) Unrealized gain on cash flow hedge derivatives: AOCI activity before reclassifications $ 10 $ ( 2 ) $ 8 $ 17 $ ( 5 ) $ 12 Amounts reclassified from AOCI to earnings ( 4 ) 1 ( 3 ) 2 — 2 Interest and fees on loans Other comprehensive income on cash flow hedge derivatives $ 6 $ ( 1 ) $ 5 $ 19 $ ( 5 ) $ 14 Total other comprehensive income $ 540 $ ( 139 ) $ 401 $ 450 $ ( 118 ) $ 332 49 NOTE 14 — EARNINGS PER COMMON SHARE The following table sets forth the computation of the basic and diluted earnings per common share: Earnings per Common Share dollars in millions, except per share data Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 568 $ 639 $ 1,626 $ 2,077 Preferred stock dividends 14 15 43 46 Net income available to common stockholders $ 554 $ 624 $ 1,583 $ 2,031 Weighted average common shares outstanding Basic shares outstanding 12,849,339 14,375,974 13,217,940 14,480,874 Stock-based awards — — — 1,045 Diluted shares outstanding 12,849,339 14,375,974 13,217,940 14,481,919 Earnings per common share Basic $ 43.08 $ 43.42 $ 119.70 $ 140.27 Diluted $ 43.08 $ 43.42 $ 119.70 $ 140.26 NOTE 15 — INCOME TAXES BancShares’ global effective income tax rates (“ETRs”) were 24.4 % and 26.8 % for the three months ended September 30, 2025 and 2024, respectively, and 24.7 % and 27.3 % for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the ETR for the three and nine months ended September 30, 2025 compared to 2024 was primarily due to an increase in tax credits and a reduction in the state and local income tax rate. The quarterly income tax expense is based on a projection of BancShares’ annual ETR. This annual ETR is applied to the year-to-date consolidated pretax income to determine the interim provision for income taxes before discrete items. The ETR each period is also impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to the valuation allowances, and discrete items. The currently forecasted ETR may vary from the actual year-end 2025 ETR due to the changes in these factors. On July 4, 2025, President Trump signed into law H.R. 1, referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains several provisions that impact corporate taxation. The enactment of the OBBBA did not have a material impact on the tax rate or results of operations. Uncertain Tax Benefits BancShares’ recognizes tax benefits when it is more likely than not that the position will prevail, based solely on the technical merits under the tax law of the relevant jurisdiction. BancShares will recognize the tax benefit if the position meets this recognition threshold determined based on the largest amount of the benefit that is more than likely to be realized. Deferred Tax Assets and Valuation Adjustments BancShares’ ability to recognize deferred tax assets (“DTAs”) is evaluated on a quarterly basis to determine if there are any significant events that would affect our ability to utilize existing DTAs. If events are identified that affect our ability to utilize our DTAs, adjustments to the valuation allowance adjustments may be required. 50 NOTE 16 — EMPLOYEE BENEFIT PLANS BancShares sponsors non-contributory defined benefit pension plans for its qualifying employees. The service cost component of net periodic benefit cost is included in salaries and wages, while all other non-service cost components are included in other noninterest expense. The components of net periodic benefit cost are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Service cost $ 2 $ 2 $ 6 $ 7 Interest cost 16 15 48 45 Expected return on assets ( 24 ) ( 23 ) ( 71 ) ( 69 ) Net periodic benefit $ ( 6 ) $ ( 6 ) $ ( 17 ) $ ( 17 ) NOTE 17 — SEGMENT INFORMATION Effective January 1, 2025, we made changes to the composition of our reportable segments as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation, and the segment disclosures below for 2024 were recast to conform with those segment composition changes. BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We do not aggregate multiple operating segments into a reportable segment. Therefore, each of our operating segments are reportable segments. Under our segment expense allocation methodology, allocated expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below includes the effect of allocated expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate. General Bank The General Bank segment delivers products and services to consumer and small business clients through our extensive network of branches, various digital channels and a dedicated Private Bank. We offer a full suite of deposit products, loans (primarily residential mortgages and business and commercial loans), cash management, private banking and wealth management, payment services, and treasury services. We offer conforming and jumbo residential mortgage loans throughout the United States that are primarily originated through branches and retail referrals, employee referrals, internet leads, direct marketing and a correspondent lending channel, as well as through our private banking service. Private banking and wealth management offers a customized suite of products and services to individuals and institutional clients, as well as private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. The General Bank segment offers brokerage, investment advisory, private stock loans, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, family office, financial planning, tax planning and trust services. The General Bank segment also includes a community association bank channel that supports deposit, cash management and lending to homeowner associations and property management companies. Revenue is primarily generated from interest earned on loans. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of BancShares’ income related to deposit fees and service charges, cardholder services, along with essentially all of the wealth management services income. We primarily originate loans by utilizing our branch network and industry referrals, as well as direct digital marketing efforts. We derive our SBA loans through a network of SBA originators. We periodically purchase loans on a whole-loan basis. We also invest in community development that supports the construction of affordable housing in our communities in line with our CRA initiatives. 51 Commercial Bank The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily tailored to commercial and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, asset-backed lending, capital finance, maritime, aerospace and defense, and sponsor finance. Loans offered are primarily senior secured loans collateralized by accounts receivable, inventory, machinery and equipment, transportation equipment, and/or intangibles, and are often used for working capital, plant expansion, acquisitions, or recapitalizations. These loans include revolving lines of credit and term loans and, depending on the nature of the collateral, may be referred to as collateral-backed loans, asset-based loans or cash flow loans. We provide senior secured loans to developers and other commercial real estate (“CRE”) professionals. Additionally, we provide business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process. We provide factoring, receivable management and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. Factoring entails the assumption of credit risk with respect to trade accounts receivable arising from the sale of goods from our factoring clients to their customers that have been factored (i.e., sold or assigned to the factor). Our factoring clients, which are generally manufacturers or importers of goods, are the counterparties on factoring, financing or receivables purchasing agreements to sell trade receivables to us. Our factoring clients’ customers, which are generally retailers, are the account debtors and obligors on trade accounts receivable that have been factored. Revenue is primarily generated from interest and fees on loans. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of BancShares’ capital market fees, and other revenue from banking services. Rental income is generally influenced by the size of the operating lease portfolio. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive most of our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors. We also utilize referrals as a source for commercial lending business. We may periodically buy participations or syndications of loans and lines of credit and purchase loans on a whole-loan basis. Rental income and depreciation expense on operating lease equipment is related to small and large ticket equipment we own and lease to others. Operating lease equipment is subject to depreciation expense over the useful life of the small and large ticket equipment, which is generally 3 - 10 years. SVB Commercial The SVB Commercial segment offers products and services to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. The SVB Commercial segment provides solutions to the financial needs of commercial clients. Loan products consist of capital call lines of credit, investor dependent loans, and commercial and industrial loans made primarily to technology, life science and healthcare companies. Revenue is primarily generated from interest earned on loans. Noninterest income is mostly generated from fees, including essentially all of client investment fees and most of the international fees, and other revenue from lending-related activities and banking services. Deposit products include business and analysis checking accounts, money market accounts, multi-currency accounts, bank accounts, sweep accounts, and positive pay services. Services are provided through online and mobile banking platforms as well as branch locations. 52 Rail The Rail segment offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers throughout North America. Railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. Revenue is generated primarily from rental income on operating lease equipment, which is included in noninterest income, and to a lesser extent, gains on sale of leasing equipment. Rental income is generally influenced by the size of the operating lease portfolio, utilization of the railcars, re-pricing of equipment renewed upon lease maturities, and pricing on new leases. Re-pricing refers to the rental rate in the renewed equipment contract compared to the prior contract. Operating lease equipment is subject to depreciation expense over the useful life of the rail equipment, which is generally longer in duration, 40 - 50 years. The Rail segment leases railcars, primarily pursuant to full-service lease contracts under which we, as lessor, are responsible for railcar maintenance and repair. Maintenance and other operating lease expenses relate to equipment ownership and leasing costs associated with the railcar portfolio and tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition. Corporate All other financial information not included in the segments is reported in Corporate. Corporate contains BancShares’ centralized treasury function, which manages the investment security portfolio, interest-earning deposits at banks and corporate/wholesale funding (e.g., borrowings, Direct Bank deposits and brokered deposits). Corporate deposits are primarily comprised of Direct Bank deposits. Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations. Noninterest income includes gains or losses on sales of investment securities, fair value adjustments on marketable equity securities, and income from bank owned life insurance. Personnel cost in Corporate includes the personnel costs not allocated to the operating segments. Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, Day 2 Provision for Credit Losses and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of Allocated Expenses as discussed above. 53 Segment Results and Select Period End Balances The following tables present the condensed income statements by segment and include the significant segment expenses and measure of segment profit or loss. dollars in millions Three Months Ended September 30, 2025 General Bank Commercial Bank SVB Commercial Rail Corporate (1) BancShares (2) Net interest income (expense) $ 846 $ 303 $ 493 $ ( 55 ) $ 147 $ 1,734 Rental income on operating lease equipment — 54 — 219 — 273 All other noninterest income 166 101 135 2 22 426 Total noninterest income 166 155 135 221 22 699 Total revenue 1,012 458 628 166 169 2,433 Depreciation on operating lease equipment — 43 — 55 — 98 Maintenance and other operating lease expenses — — — 67 — 67 Personnel cost 213 74 106 6 418 817 Acquisition-related expenses — — — — 28 28 All other noninterest expense (3) 369 149 267 16 ( 320 ) 481 Total noninterest expense 582 266 373 144 126 1,491 Provision for credit losses 1 168 22 — — 191 Income before income taxes 429 24 233 22 43 751 Income tax expense 109 6 58 5 5 183 Net income $ 320 $ 18 $ 175 $ 17 $ 38 $ 568 Select Period End Balances Loans and leases $ 65,225 $ 38,841 $ 40,629 $ 63 $ — $ 144,758 Operating lease equipment, net — 737 — 8,709 — 9,446 Deposits 74,596 2,978 39,891 2 45,723 163,190 Three Months Ended September 30, 2024 General Bank Commercial Bank SVB Commercial Rail Corporate (1) BancShares (2) Net interest income (expense) $ 760 $ 305 $ 560 $ ( 48 ) $ 219 $ 1,796 Rental income on operating lease equipment — 57 — 205 — 262 All other noninterest income 149 79 137 2 21 388 Total noninterest income 149 136 137 207 21 650 Total revenue 909 441 697 159 240 2,446 Depreciation on operating lease equipment — 47 — 52 — 99 Maintenance and other operating lease expenses — — — 59 — 59 Personnel cost 212 68 112 6 390 788 Acquisition-related expenses — — — — 46 46 All other noninterest expense (3) 341 150 272 14 ( 313 ) 464 Total noninterest expense 553 265 384 131 123 1,456 Provision for credit losses 55 11 51 — — 117 Income before income taxes 301 165 262 28 117 873 Income tax expense 99 41 75 8 11 234 Net income $ 202 $ 124 $ 187 $ 20 $ 106 $ 639 Select Period End Balances Loans and leases $ 64,254 $ 37,281 $ 37,098 $ 62 $ — $ 138,695 Operating lease equipment, net — 767 — 8,419 — 9,186 Deposits 71,898 3,126 35,844 14 40,692 151,574 (1) Corporate includes all other financial information that is not included in the reportable segments. (2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate. (3) All other noninterest expense represents “other segment items” under Accounting Standards Codification (“ASC”) 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above. 54 dollars in millions Nine Months Ended September 30, 2025 General Bank Commercial Bank SVB Commercial Rail Corporate (1) BancShares (2) Net interest income (expense) $ 2,458 $ 895 $ 1,476 $ ( 160 ) $ 423 $ 5,092 Rental income on operating lease equipment — 164 — 651 — 815 All other noninterest income 494 268 397 7 31 1,197 Total noninterest income 494 432 397 658 31 2,012 Total revenue 2,952 1,327 1,873 498 454 7,104 Depreciation on operating lease equipment — 131 — 165 — 296 Maintenance and other operating lease expenses — — — 180 — 180 Personnel cost 637 215 330 20 1,243 2,445 Acquisition-related expenses — — — — 108 108 All other noninterest expense (3) 1,090 462 804 56 ( 957 ) 1,455 Total noninterest expense 1,727 808 1,134 421 394 4,484 Provision for credit losses 60 300 100 — — 460 Income before income taxes 1,165 219 639 77 60 2,160 Income tax expense (benefit) 298 56 162 19 ( 1 ) 534 Net income $ 867 $ 163 $ 477 $ 58 $ 61 $ 1,626 Nine Months Ended September 30, 2024 General Bank Commercial Bank SVB Commercial Rail Corporate (1) BancShares (2) Net interest income (expense) $ 2,174 $ 916 $ 1,636 $ ( 136 ) $ 844 $ 5,434 Rental income on operating lease equipment — 172 — 604 — 776 All other noninterest income 446 239 405 8 42 1,140 Total noninterest income 446 411 405 612 42 1,916 Total revenue 2,620 1,327 2,041 476 886 7,350 Depreciation on operating lease equipment — 141 — 152 — 293 Maintenance and other operating lease expenses — — — 164 — 164 Personnel cost 604 205 354 20 1,094 2,277 Acquisition-related expenses — — — — 148 148 All other noninterest expense (3) 978 425 765 43 ( 875 ) 1,336 Total noninterest expense 1,582 771 1,119 379 367 4,218 Provision for credit losses 113 70 93 — — 276 Income before income taxes 925 486 829 97 519 2,856 Income tax expense 270 127 235 27 120 779 Net income $ 655 $ 359 $ 594 $ 70 $ 399 $ 2,077 (1) Corporate includes all other financial information that is not included in the reportable segments. (2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate. (3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above. 55 NOTE 18 — COMMITMENTS AND CONTINGENCIES Commitments To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments involve elements of credit, interest rate or liquidity risk and include commitments to extend credit and standby letters of credit. The accompanying table summarizes credit-related commitments and other purchase and funding commitments: dollars in millions September 30, 2025 December 31, 2024 Financing Commitments Financing assets (excluding leases) $ 51,935 $ 53,250 Letters of Credit Standby letters of credit 2,478 2,188 Other letters of credit 158 103 Deferred Purchase Agreements 1,870 1,802 Purchase and Funding Commitments (1) 232 178 (1) BancShares’ purchase and funding commitments relate to the equipment leasing businesses’ commitments to fund Rail’s railcar manufacturer purchase and upgrade commitments. Financing Commitments Commitments to extend credit are legally binding agreements to lend to customers. These commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires collateral be pledged to secure the commitment, including cash deposits, securities and other assets. Financing commitments, referred to as net unfunded loan commitments or lines of credit, primarily reflect BancShares’ agreements to lend to its customers, subject to the customers’ compliance with contractual obligations. At September 30, 2025 and December 31, 2024, substantially all undrawn financing commitments were senior facilities. Financing commitments also include $ 340 million and $ 79 million at September 30, 2025 and December 31, 2024, respectively, related to off-balance sheet commitments to fund equity investments. Commitments to fund equity investments are contingent on events that have yet to occur and may be subject to change. As financing commitments may not be fully drawn, may expire unused, may be reduced or canceled at the customer’s request, and may require the customer to be in compliance with certain conditions, commitment amounts do not necessarily reflect actual future cash flow requirements. The table above excludes uncommitted revolving credit facilities extended by Commercial Services to its clients for working capital purposes. In connection with these facilities, Commercial Services has the sole discretion throughout the duration of these facilities to determine the amount of credit that may be made available to its clients at any time and whether to honor any specific advance requests made by its clients under these credit facilities. Letters of Credit Standby letters of credit are commitments to pay the beneficiary thereof if drawn upon by the beneficiary upon satisfaction of the terms of the letter of credit. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as in extending loans to clients and, therefore, these letters of credit are collateralized when necessary. These financial instruments generate fees and involve, to varying degrees, elements of credit risk in excess of amounts recognized in the Consolidated Balance Sheets. Deferred Purchase Agreements A deferred purchase agreement (“DPA”) is provided in conjunction with factoring, whereby a client is provided with credit protection for trade receivables without purchasing the receivables. The trade receivables terms generally require payment in 90 days or less. If the client’s customer is unable to pay an undisputed receivable solely as the result of credit risk, BancShares is then required to purchase the receivable from the client, less any borrowings for such client based on such defaulted receivable. The outstanding amount in the table above, less $ 241 million and $ 166 million at September 30, 2025 and December 31, 2024, respectively, of borrowings for such clients, is the maximum amount that BancShares would be required to pay under all DPAs. This maximum amount would only occur if all receivables subject to DPAs default in the manner described above, thereby requiring BancShares to purchase all such receivables from the DPA clients. 56 The table above includes $ 1.83 billion and $ 1.74 billion of DPA exposures at September 30, 2025 and December 31, 2024, respectively, related to receivables on which BancShares has assumed the credit risk. The table also includes $ 37 million and $ 59 million available under DPA credit line agreements provided at September 30, 2025 and December 31, 2024, respectively. The DPA credit line agreements specify a contractually committed amount of DPA credit protection and are cancellable by us only after a notice period, which is typically 90 days or less. Litigation and Other Contingencies The Parent Company and certain of its subsidiaries have been named as a defendant in legal actions arising from its normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed. BancShares is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory, and arbitration proceedings as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. These matters arise in connection with the ordinary conduct of BancShares’ business. At any given time, BancShares may also be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters (all of the foregoing collectively being referred to as “Litigation”). While most Litigation relates to individual claims, BancShares may be subject to putative class action claims and similar broader claims and indemnification obligations. In light of the inherent difficulty of predicting the outcome of Litigation matters and indemnification obligations, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, BancShares cannot state with confidence what the eventual outcome of the pending Litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines, or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, BancShares’ establishes reserves for Litigation when those matters present loss contingencies as to which it is both probable that a loss will occur and the amount of such loss can reasonably be estimated. Based on currently available information, BancShares does not believe that the outcome of Litigation that is currently pending will have a material impact on BancShares’ consolidated financial statements. The actual results of resolving such matters may be substantially higher than the amounts reserved. For certain Litigation matters in which BancShares is involved, BancShares is able to estimate a range of reasonably possible losses in excess of established reserves and insurance. For other matters for which a loss is probable or reasonably possible, such an estimate cannot be determined. For litigation and other matters where losses are reasonably possible and estimable, management currently estimates an aggregate range of reasonably possible losses to be up to approximately $ 20 million in excess of any established reserves and any insurance we reasonably believe we will collect related to those matters. This estimate represents reasonably possible losses (in excess of established reserves and insurance) over the life of such Litigation, which may span a currently indeterminable number of years, and is based on information currently available as of September 30, 2025. The Litigation matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those Litigation matters for which an estimate is not reasonably possible or as to which a loss does not appear to be reasonably possible, based on current information, are not included within this estimated range and, therefore, this estimated range does not represent BancShares’ maximum loss exposure. The foregoing statements about BancShares’ Litigation are based on BancShares’ judgments, assumptions, and estimates and are necessarily subjective and uncertain. In the event of unexpected future developments, it is possible that the ultimate resolution of these cases, matters, and proceedings, if unfavorable, may be material to BancShares’ consolidated financial position in a particular period. 57 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s discussion and analysis (“MD&A”) of earnings and related financial data is presented to assist in understanding the financial condition and results of operations of First Citizens BancShares, Inc. (the “Parent Company” and, when including all of its subsidiaries on a consolidated basis, “we,” “us,” “our,” or “BancShares”) and its banking subsidiary, First-Citizens Bank & Trust Company (“FCB”). Unless otherwise noted, the terms “we,” “us,” “our,” and “BancShares” in this section refer to the consolidated financial position and consolidated results of operations for BancShares. This MD&A is expected to provide our investors with a view of our financial condition and results of operations from our management’s perspective. This MD&A should be read in conjunction with the unaudited consolidated financial statements and related notes presented within this Quarterly Report on Form 10-Q (this “Form 10-Q”), along with our consolidated financial statements and related MD&A of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Throughout this MD&A, references to a specific “Note” refer to Notes to the Unaudited Consolidated Financial Statements in Item 1. Financial Statements. Intercompany accounts and transactions have been eliminated. Although certain amounts for prior years have been reclassified to conform with financial statement presentations for 2025, the reclassifications had no effect on stockholders’ equity or net income as previously reported. Refer to Note 1—Significant Accounting Policies and Basis of Presentation. Management uses certain financial measures that are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in its analysis of the financial condition and results of operations of BancShares. Refer to the "Non-GAAP Financial Measurements" section of this MD&A for a reconciliation of these financial measures to the most directly comparable financial measures in accordance with GAAP. EXECUTIVE OVERVIEW The Parent Company is a bank holding company (“BHC”) and financial holding company. The Parent Company is regulated by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the U.S. Bank Holding Company Act of 1956, as amended. The Parent Company is also registered under the BHC laws of North Carolina and is subject to supervision, regulation and examination by the North Carolina Office of the Commissioner of Banks (the “NCCOB”). BancShares conducts its banking operations through its wholly owned subsidiary, FCB, a state-chartered bank organized under the laws of the state of North Carolina. FCB is regulated by the NCCOB. In addition, FCB, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation (the “FDIC”). BancShares provides financial services for a wide range of consumer and commercial clients. This includes retail and mortgage banking, wealth management, small and middle market banking, factoring and leasing. BancShares provides commercial factoring, receivables management and secured financing services to businesses (generally manufacturers or importers of goods) that operate in various industries, including apparel, textile, furniture, home furnishings and consumer electronics. BancShares also provides deposit, cash management and lending to homeowner associations and property management companies. BancShares also owns a fleet of railcars and locomotives that are leased to railroads and shippers. BancShares delivers banking products and services to its customers through an extensive branch network and additionally operates a nationwide digital banking platform that delivers deposit products to consumers (the “Direct Bank”). Services offered at most branches include accepting deposits, cashing checks and providing for consumer and commercial cash needs. Consumer and business customers may also conduct banking transactions through various digital channels and a dedicated Private Bank. In addition to our banking operations, we provide various investment products and services through FCB’s wholly owned subsidiaries, including First Citizens Investor Services, Inc. (“FCIS”) and First Citizens Asset Management, Inc. (“FCAM”), and a non-bank subsidiary First Citizens Capital Securities, LLC (“FCCS”). As a registered broker-dealer, FCIS provides a full range of investment products, including annuities, brokerage services and third-party mutual funds. As registered investment advisers, FCIS and FCAM provide investment management services and advice. FCCS is a broker-dealer that also provides underwriting and private placement services. We also have other wholly owned subsidiaries, including SVB Wealth LLC, SVB Asset Management, and First Citizens Institutional Asset Management, LLC, which are active investment advisers. Refer to Note 17—Segment Information for further information regarding the products and services we provide. Refer to the 2024 Form 10-K for a discussion of our strategy. 58 Recent Events Branch Acquisition On October 16, 2025, FCB announced that it had entered into an agreement to consummate the acquisition of 138 branches from BMO Bank N.A. (“BMO Bank”) located throughout the Midwest, Great Plains and West regions of the U.S. (the “BMO Branch Acquisition”). In connection with the BMO Branch Acquisition, FCB expects to assume approximately $5.7 billion in deposit liabilities and acquire approximately $1.1 billion in loans. We expect the transaction to close in mid-2026, subject to customary closing terms and conditions and regulatory approvals. Debt Transactions On September 5, 2025, the Parent Company issued and sold $600 million aggregate principal amount of its 5.600% Fixed Rate Reset Subordinated Notes due in 2035 in a public offering (the “Current Quarter Debt Issuance”). On March 12, 2025, the Parent Company issued and sold $500 million aggregate principal amount of its 5.231% Fixed-to-Floating Rate Senior Notes due in 2031 and $750 million aggregate principal amount of its 6.254% Fixed-to-Fixed Rate Subordinated Notes due in 2040 in a public offering (together with the Current Quarter Debt Issuance, the “2025 Debt Issuances”). On June 15, 2025, the Parent Company executed a callable feature and redeemed all $350 million aggregate principal amount of its 3.375% Fixed-to-Floating Rate Subordinated Notes due in 2030 (the “Linked Quarter Debt Redemption”). Share Repurchase Programs On July 25, 2025, BancShares announced that the Board of Directors (the “Board”) authorized a new share repurchase program (the “2025 SRP”), which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $4.0 billion through December 31, 2026. Repurchases under the 2025 SRP commenced in September 2025 upon the completion of the $3.5 billion share repurchase program announced in July 2024 (the “2024 SRP”). The total capacity remaining under the 2025 SRP was $3.7 billion as of September 30, 2025 and $3.4 billion as of October 31, 2025. During the third quarter of 2025, we repurchased 457,350 shares of our Class A common stock for approximately $900 million. Shares repurchased during the third quarter of 2025 represented 3.79% of Class A common shares and 3.50% of total Class A and Class B common shares outstanding at June 30, 2025. From inception of the 2024 SRP through September 30, 2025, we have repurchased 1,913,633 shares of our Class A common stock for approximately $3.79 billion, representing 14.15% of Class A common shares and 13.17% of total Class A and Class B common shares outstanding as of June 30, 2024. Subsequent to September 30, 2025, BancShares purchased an additional 183,077 shares of Class A common stock through October 31, 2025 under the 2025 SRP. Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding monthly repurchase activity during the third quarter of 2025. 2025 Loan Class Changes During the second quarter of 2025, the loan classes which were reported in the Silicon Valley Bank (“SVB”) portfolio in the 2024 Form 10-K were recast to the Commercial portfolio (the “2025 Loan Class Changes”) as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation. Loan and lease and allowance for loan and lease losses (“ALLL”) disclosures for all periods presented in this Form 10-Q were recast to reflect the 2025 Loan Class Changes. Loan disclosures in the “Results by Segment” section of this MD&A were not recast as a result of the 2025 Loan Class Changes because the composition of reportable segments is separate and distinct from the identification of loan classes. 59 Termination of the Shared-Loss Agreement with the FDIC On April 7, 2025, FCB and the FDIC entered into an agreement (the “Shared-Loss Termination Agreement”) to terminate the Shared-Loss Agreement (as defined in Note 2—Business Combinations). As a result of entering into the Shared-Loss Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the date of the Shared-Loss Termination Agreement, including FCB’s reporting covenants and obligations related to FDIC Loss Sharing and FCB reimbursement (each as defined in Note 2—Business Combinations in our 2024 Form 10-K). The decision to enter into the Shared-Loss Termination Agreement was motivated, in part, by FCB’s determination that the likelihood of reaching the $5 billion loss threshold during the five-year period covered by the Shared-Loss Agreement was remote. Additionally, the Shared-Loss Termination Agreement eliminated the reporting responsibilities associated with the Shared-Loss Agreement. There was no impact to our consolidated balance sheets or statements of income resulting from the Shared-Loss Termination Agreement because there was no loss indemnification asset or true-up liability associated with the Shared-Loss Agreement, primarily based on evaluation of historical loss experience and the credit quality of the Covered Assets (as defined in Note 2—Business Combinations in our 2024 Form 10-K). The risk-based capital ratio impacts resulting from the Shared-Loss Termination Agreement are discussed in the “Capital” section of this MD&A. Changes to the Composition of Reportable Segments We updated our segment reporting during the first quarter of 2025 as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation. We transferred certain components from the SVB Commercial and General Bank segments to the Commercial Bank segment and modified our segment expense allocation methodology. Segment disclosures for 2024 periods included in this Form 10-Q were recast to reflect the segment reporting updates. Refer to Note 17—Segment Information for descriptions of segment products and services and the “Results by Segment” section of this MD&A. Recent Economic, Industry and Regulatory Developments Entering 2025, the Federal Open Market Committee (“FOMC”) had reduced the benchmark federal funds rate to a range between 4.25% - 4.50% and maintained this level until its September meeting. During its September meeting, the FOMC reduced the benchmark federal funds rate by a quarter-point, to a range between 4.00% - 4.25%. On October 29, the FOMC again lowered the benchmark federal funds rate by a quarter-point, to a range between 3.75% - 4.00%. The Trump administration has imposed, modified and paused tariffs multiple times since the beginning of 2025. Actual and threatened changes to U.S. trade policies have resulted in some countries enacting retaliatory measures. The imposition of increased tariffs and trade restrictions has contributed to uncertainty and volatility in the global financial markets. The current tariff environment is dynamic, and we are closely monitoring both the impact and potential impact of such measures on our business, our customers and on overall economic conditions in the United States. On July 4, 2025, President Trump signed into law H.R. 1, referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains several provisions that impact corporate taxation. The enactment of the OBBBA did not have a material impact on the tax rate or results of operations. Financial Performance Summary The following tables in this MD&A include financial data for the three months ended September 30, 2025 (the “current quarter”), June 30, 2025 (the “linked quarter”) and September 30, 2024 (the “Prior Year Quarter”), along with the nine months ended September 30, 2025 (“current YTD”), and the nine months ended September 30, 2024 (“prior YTD”). In accordance with Item 303(c) of Regulation S-K, we focus our discussion of quarterly results of operations on changes compared to the linked quarter for the narrative discussion and analysis as we believe this provides investors and other users of our data with the most relevant information. We focus the discussion of our financial position by comparing balances as of September 30, 2025 to December 31, 2024, however the tables also provide the linked quarter balances. 60 Table 1 Selected Financial Data dollars in millions, except share data Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Results of Operations: Interest income $ 2,998 $ 2,945 $ 3,138 $ 8,838 $ 9,352 Interest expense 1,264 1,250 1,342 3,746 3,918 Net interest income 1,734 1,695 1,796 5,092 5,434 Provision for credit losses 191 115 117 460 276 Net interest income after provision for credit losses 1,543 1,580 1,679 4,632 5,158 Noninterest income 699 678 650 2,012 1,916 Noninterest expense 1,491 1,500 1,456 4,484 4,218 Income before income taxes 751 758 873 2,160 2,856 Income tax expense 183 183 234 534 779 Net income 568 575 639 1,626 2,077 Preferred stock dividends 14 14 15 43 46 Net income available to common stockholders $ 554 $ 561 $ 624 $ 1,583 $ 2,031 Per Common Share Information: Weighted average common shares outstanding (diluted) 12,849,339 13,237,226 14,375,974 13,217,940 14,481,919 Diluted earnings per common share $ 43.08 $ 42.36 $ 43.42 $ 119.70 $ 140.26 Key Performance Metrics: Return on average assets 0.98 % 1.01 % 1.15 % 0.95 % 1.27 % Net interest margin (1) 3.26 3.26 3.53 3.26 3.62 Net interest margin, excluding purchase accounting accretion or amortization (1) (2) 3.15 3.14 3.33 3.13 3.35 Select Average Balances: Investment securities $ 44,827 $ 43,935 $ 38,189 $ 44,110 $ 35,769 Total loans and leases (3) 142,960 141,952 139,115 141,940 136,804 Operating lease equipment, net 9,463 9,419 9,028 9,412 8,908 Total assets 230,529 227,552 220,466 227,862 218,487 Total deposits 160,624 157,664 151,472 158,237 149,817 Total borrowings 38,258 38,379 37,448 38,015 37,502 Total stockholders’ equity 22,291 22,488 22,851 22,411 22,197 As of the Period Ending September 30, 2025 June 30, 2025 September 30, 2024 December 31, 2024 Select Ending Balances: Investment securities $ 45,124 $ 43,346 $ 38,663 $ 44,090 Total loans and leases 144,758 141,269 138,695 140,221 Operating lease equipment, net 9,446 9,466 9,186 9,323 Total assets 233,488 229,653 220,567 223,720 Total deposits 163,190 159,935 151,574 155,229 Total borrowings 38,675 38,112 37,161 37,051 Total stockholders’ equity 21,986 22,296 22,828 22,228 Loan to deposit ratio 88.71 % 88.33 % 91.50 % 90.33 % Noninterest-bearing deposits to total deposits 26.20 25.56 25.99 24.89 Capital Ratios: Total risk-based capital 14.05 % 14.25 % 15.36 % 15.04 % Tier 1 risk-based capital 12.15 12.63 13.78 13.53 Common equity Tier 1 11.65 12.12 13.24 12.99 Tier 1 leverage 9.34 9.62 10.17 9.90 Select Asset Quality Metrics: Ratio of nonaccrual loans to total loans 0.97 % 0.93 % 0.90 % 0.84 % Allowance for loan and lease losses to loans ratio 1.14 1.18 1.21 1.20 (1) Calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables. (2) Net interest margin (“NIM”), excluding purchase accounting accretion or amortization (“PAA”), is a non-GAAP financial measure. Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure. (3) Average loan balances include loans held for sale and nonaccrual loans. 61 Financial highlights are summarized below. Further details are discussed in the “Results of Operations” and “Balance Sheet Analysis” sections of this MD&A. Third Quarter Income Statement Highlights • Net income for the current quarter was $568 million , a decrease of $7 million or 1% from $575 million for the linked quarter. Net income available to common stockholders for the current quarter was $554 million, a decrease of $7 million or 1% from $561 million for the linked quarter. Earnings per basic and diluted common share for the current quarter was $43.08, an increase from $42.36 for the linked quarter. The decrease in net income available to common stockholders was due to higher provision for credit losses, partially offset by increases in net interest income (“NII”) and noninterest income, and lower noninterest expense as further discussed below. • NII for the current quarter was $1.73 billion, an increase of $39 million or 2% from $1.70 billion for the linked quarter, largely due to increases in interest income on loans, investment securities and interest-earning deposits at banks, partially offset by an increase in interest expense on interest-bearing deposits. PAA for the current quarter was $61 million, a decrease of $5 million from $66 million for the linked quarter. • NIM was 3.26% in both the current quarter and linked quarter as the decrease in yield on average interest-earning assets was offset by the decrease in rate paid on interest-bearing liabilities. NIM, excluding PAA (1) was 3.15% for the current quarter, an increase of 1 basis point (“bp”) over the linked quarter. • Noninterest income for the current quarter was $699 million , an increase of $21 million or 3% from $678 million for the linked quarter, largely due to an increase in other noninterest income of $9 million, mainly attributable to gains on the sale of other assets, as well as an increase of $6 million in client investment fees. • Noninterest expense for the current quarter was $1.49 billion, a decrease of $9 million or 1% from $1.50 billion for the linked quarter , mainly due to decreases in other noninterest expense of $20 million and acquisition-related expenses of $10 million, partially offset by increases in maintenance and other operating lease expenses of $12 million, personnel cost of $7 million, and equipment expense of $6 million. The decrease of $20 million in other noninterest expense was mainly due to the linked quarter including $15 million resulting from a vendor dispute and an increase in litigation reserves. • Provision for credit losses for the current quarter was $191 million, an increase of $76 million from $115 million for the linked quarter . The current quarter provision for credit losses included a provision for loan and lease losses of $214 million, partially offset by a benefit for off-balance sheet credit exposure of $23 million. ◦ The provision for loan and lease losses for the current quarter was $214 million compared to $111 million for the linked quarter. The $103 million increase in the provision for loan and lease losses was mainly attributable to an increase in net charge-offs of $115 million, as well as the impact of a $20 million reserve release in the current quarter, compared to an $8 million reserve release in the linked quarter. ▪ The $115 million increase in net charge-offs was mainly due to an $82 million charge-off on a single supply chain finance client in the Commercial Bank segment. Changes in the ALLL are discussed in the “Provision for Credit Losses” section of this MD&A. ◦ The benefit for off-balance sheet credit exposure for the current quarter was $23 million compared to a provision for the linked quarter of $4 million, resulting in a decrease in provision of $27 million, largely due to lower available balances. • Return on average assets for the current quarter was 0.98%, a decrease of 3 bps from 1.01% for the linked quarter due to the items discussed above . (1) NIM, excluding PAA is a non-GAAP measure. Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further discussion. 62 Year-to-Date Income Statement Highlights • Net income for the current YTD was $1.63 billion, a decrease of $451 million or 22% from $2.08 billion for the prior YTD. Net income available to common stockholders for the current YTD was $1.58 billion, a decrease of 22% from $2.03 billion for the prior YTD. Earnings per diluted common share for the current YTD was $119.70, a decrease from $140.26 for the prior YTD. The decrease in net income available to common stockholders was due to lower NII, higher noninterest expense and higher provision for credit losses, partially offset by lower income tax expense and higher noninterest income as further discussed below. • NII for the current YTD was $5.09 billion, a decrease of $342 million or 6% from $5.43 billion for the prior YTD. NIM for the current YTD was 3.26%, a decrease of 36 bps from 3.62% for the prior YTD. The decreases in NII and NIM were mainly due to lower yields on loans and interest-earning deposits at banks, a mix shift from interest-earning deposits at banks to investment securities, a higher average balance of interest-bearing deposits, and a higher average balance and rate paid for borrowings, partially offset by a decline in the rate paid on interest-bearing deposits and a higher average balance of loans. ◦ PAA for the current YTD was $202 million, a decrease of $197 million from $399 million for the prior YTD. NIM, excluding PAA, (1) for the current YTD was 3.13%, a decrease of 22 bps from 3.35% for the prior YTD. • Noninterest income for the current YTD was $2.01 billion, an increase of $96 million from $1.92 billion for the prior YTD, mostly due to increases in rental income on operating lease equipment of $39 million, lending-related fees of $13 million, international fees of $13 million, and wealth management services of $11 million, other noninterest income of $9 million and a favorable change of $7 million in the fair value of marketable equity securities. • Noninterest expense for the current YTD was $4.48 billion, an increase of $266 million or 6% from $4.22 billion for the prior YTD, mostly due to increases in personnel cost of $168 million, marketing expense of $45 million, equipment expense of $36 million, other noninterest expense of $30 million and third-party processing fees of $20 million, partially offset by a decrease in acquisition-related expenses of $40 million. • Provision for credit losses for the current YTD was $460 million, an increase of $184 million from $276 million for the prior YTD. The current YTD provision for credit losses included a provision for loan and lease losses of $473 million, partially offset by a benefit for off-balance sheet credit exposure of $13 million. ◦ The provision for loan and lease losses for the current YTD was $473 million, an increase of $162 million from $311 million for the prior YTD, mainly attributable to an increase in net charge-offs of $117 million, which included a charge-off of $82 million for a single client as discussed above, and a $45 million decline in the ALLL reserve release for the current YTD. Changes in the ALLL are discussed in the “Provision for Credit Losses” section of this MD&A. ◦ The benefit for off-balance sheet credit exposure for the current YTD was $13 million, compared to $35 million for the prior YTD. The decrease in the benefit of $22 million was mostly due to trends in the volume of unfunded commitments, partially offset by a modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A. • Income tax expense for the current YTD was $534 million, a decrease of $245 million from $779 million for the prior YTD, primarily due to lower income before income taxes and a lower effective income tax rate (“ETR”). • Return on average assets for the current YTD was 0.95% compared to 1.27% for the prior YTD due to the decrease in net income explained above . (1) NIM, excluding PAA is a non-GAAP measure. Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further discussion. 63 Balance Sheet Highlights • Loans and leases at September 30, 2025 were $144.76 billion, an increase of $4.54 billion or 3% from $140.22 billion at December 31, 2024. Loan growth of $3.26 billion in the SVB Commercial segment was concentrated in Global Fund Banking, partially offset by a decline in Tech and Healthcare. Loan growth in the Commercial Bank segment of $943 million was mainly in our industry verticals, primarily TMT and Healthcare, as well as Equipment Finance and Working Capital Solutions, which includes our factoring business. Loan growth of $338 million in the General Bank segment was primarily in Wealth. • Investment securities at September 30, 2025 were $45.12 billion, an increase of $1.03 billion or 2% from $44.09 billion at December 31, 2024, as the purchase of short duration available for sale U.S. treasury and agency mortgage-backed securities were partially offset by maturities and paydowns. • Deposits at September 30, 2025 were $163.19 billion, an increase of $7.96 billion or 5% from $155.23 billion at December 31, 2024. As shown in Table 3 below, the increase from December 31, 2024 was mainly attributable to deposit growth in Corporate of $3.49 billion (which primarily includes the Direct Bank), the SVB Commercial segment of $3.37 billion, and the General Bank segment of $1.64 billion, partially offset by a decline of $524 million in the Commercial Bank segment. Noninterest-bearing deposits grew by $4.12 billion or 10.7% compared to December 31, 2024 and represented 26.2% of total deposits as of September 30, 2025, compared to 24.9% at December 31, 2024. • Borrowings at September 30, 2025 were $38.68 billion, an increase of $1.62 billion or 4% from $37.05 billion at December 31, 2024, primarily due to the 2025 Debt Issuances with aggregate principal amounts totaling $1.85 billion, partially offset by the $350 million Linked Quarter Debt Redemption. • The ALLL at September 30, 2025 was $1.65 billion, a decrease of $24 million from $1.68 billion at December 31, 2024, as discussed above in the “Year-to-Date Income Statement Highlights.” The ALLL as a percentage of loans was 1.14% at September 30, 2025, a decrease of 6 bps from 1.20% at December 31, 2024. • At September 30, 2025, BancShares remained well capitalized with a total risk-based capital ratio of 14.05%, a Tier 1 risk-based capital ratio of 12.15%, a common equity Tier 1 (“CET1”) ratio of 11.65% and a Tier 1 leverage ratio of 9.34%. Funding, Liquidity and Capital Overview Deposit Composition and Trends We fund our business primarily through deposits. Deposits represented approximately 81% of total funding at September 30, 2025. The following table summarizes the composition, average size and uninsured percentages of our deposits: Table 2 Select Deposit Data Deposits as of September 30, 2025 Ending Balance (in millions) Average Size (in thousands) Uninsured % General Bank segment $ 74,596 $ 37 36 % Commercial Bank segment 2,978 624 82 SVB Commercial segment 39,891 562 68 Corporate and Rail segment (1) 45,725 59 8 Total $ 163,190 57 37 (1) The average size is reflective of the Direct Bank deposits and excludes brokered deposits and rail. The General Bank segment mainly includes deposits in our Branch Network, which deploys a relationship-based approach to deposit gathering. The Commercial Bank segment includes deposits of commercial customers, and the SVB Commercial segment includes deposits related to its commercial customer base. Deposits in Corporate mainly included $45.15 billion in our Direct Bank, with the remainder including brokered and other deposits. As displayed in the table above, the average size of deposits varies across our business segments. The uninsured percentage is the percentage of uninsured deposits to total deposits at period end for the respective segments and Corporate. Total uninsured deposits were approximately $59.75 billion or 37% of total deposits at September 30, 2025 and $59.51 billion or 38% at December 31, 2024. 64 Table 3 Deposit Trends dollars in millions Deposit Balance September 30, 2025 June 30, 2025 December 31, 2024 General Bank segment $ 74,596 $ 73,499 $ 72,956 Commercial Bank segment 2,978 2,899 3,502 SVB Commercial segment 39,891 37,798 36,524 Corporate and Rail segment 45,725 45,739 42,247 Total deposits $ 163,190 $ 159,935 $ 155,229 Deposit trends for the segments and Corporate at September 30, 2025 compared to December 31, 2024 are discussed below: • Corporate deposit growth of $3.49 billion was mainly in the Direct Bank, which consists primarily of savings accounts. • SVB Commercial segment deposits increased $3.37 billion, despite the strategic decision to move $2.4 billion in select cash sweep deposits to off-balance sheet client funds during the first quarter of 2025. Deposit growth was mainly in noninterest-bearing deposits. • General Bank segment deposit growth of $1.64 billion was primarily in the Branch Network, largely in money market and noninterest-bearing deposits. • Commercial Bank segment deposit decline of $524 million was mostly in noninterest-bearing deposits. Refer to the “Results by Segment” for a discussion of deposits at September 30, 2025 compared to June 30, 2025. Liquidity Position We strive to maintain a strong liquidity position and our risk appetite for liquidity is low. At September 30, 2025, we had $61.92 billion in high-quality liquid assets consisting of $23.92 billion in cash and interest-earning deposits at banks (primarily held at the Federal Reserve Bank (“FRB”)) and $38.01 billion in high-quality liquid securities (“HQLS”). HQLS are mainly comprised of U.S. agency mortgage-backed and U.S. Treasury investment securities. Additionally, we have unused borrowing capacity with the Federal Home Loan Bank (“FHLB”) and FRB of $18.02 billion and $13.33 billion, respectively. In connection with the SVBB Acquisition (as defined and described in Note 2—Business Combinations), FCB and the FDIC, as lender and as collateral agent, entered into the Advance Facility Agreement (as defined and described in Note 2—Business Combinations). The draw period under the Advance Facility Agreement ended March 27, 2025, as of which date, FCB had no outstanding amounts under the facility. Subsequently, we increased our borrowing capacity under agreements with the FRB through expansion of the eligible loan population to targeted loans historically not pledged to the FRB. Refer to the “Liquidity Risk” section of this MD&A for further discussion. Also in connection with the SVBB Acquisition, FCB issued a five-year, 3.50% fixed rate Purchase Money Note (as defined in Note 2—Business Combinations), which had a carrying value of $35.85 billion at September 30, 2025. While scheduled principal payments are not required until maturity in March 2028, FCB may voluntarily prepay principal without a premium or penalty. We will continue to monitor the interest rate environment and assess whether any voluntary prepayments are prudent considering the fixed rate of 3.50%. Potential sources that could fund voluntary prepayments or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, and issuance of unsecured debt or other borrowings. At the time of voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of repayment could be higher than the 3.50% rate. 65 Investment Securities Duration At September 30, 2025, our investment securities portfolio primarily consisted of debt securities available for sale and held to maturity as summarized below. We manage debt security market risk by monitoring the average duration of our investment securities portfolio. The duration of our investment securities was approximately 2.5 years at September 30, 2025. The investment securities available for sale portfolio had an average duration of 2.1 years and the held to maturity portfolio had an average duration of 4.2 years. Refer to the “Interest-earning Assets—Investment Securities” section of this MD&A and Note 3—Investment Securities for further information. Table 4 Investment Securities Summary dollars in millions September 30, 2025 Composition (1) Amortized Cost Fair Value Fair Value to Amortized Cost Total investment securities available for sale 79.6 % $ 35,187 $ 34,963 99.4 % Total investment securities held to maturity 20.1 10,051 8,838 87.9 Investment in marketable equity securities 0.3 78 110 141.5 Total investment securities 100 % $ 45,316 $ 43,911 (1) Calculated as a percentage of the total fair value of investment securities. Capital Position At September 30, 2025, all regulatory capital ratios for BancShares and FCB exceeded the Prompt Corrective Action (“PCA”) well capitalized thresholds and Basel III requirements as further discussed in the “Capital” section of this MD&A. RESULTS OF OPERATIONS Net Interest Income and Net Interest Margin NII is affected by changes in interest rates and changes in the amount and composition of interest-earning assets and interest-bearing liabilities. Interest income and expense and the respective yields and rates include amortization of premiums, accretion of discounts, and impacts from hedging activities. The following tables present the average balances of interest-earning assets and interest-bearing liabilities with the associated yields and rates, interest income and expense, and changes therein due to changes in volume and yields or rates. Changes in interest income and expense due to changes in (i) volume (average balances of interest-earning assets and interest-bearing liabilities) and (ii) yields or rates are based on the following: • The change in NII due to volume is calculated as the change in average balance multiplied by the yield or rate from the prior period. • The change in NII due to yield or rate is calculated as the change in yield or rate multiplied by the average balance from the prior period. • The change in NII due to changes in both volume and yield or rate (i.e., portfolio mix) is calculated as the change in rate multiplied by the change in volume. This component is allocated between the changes due to volume and yield or rate based on the ratio each component bears to the absolute dollar amounts of their total. • Tax equivalent NII was not materially different from NII, therefore we present NII in our analysis. 66 Table 5 Average Balances, Yields and Rates, NII, and NIM (Current Quarter to Linked Quarter) dollars in millions Average Balance Yield / Rate Interest Income / Expense Three Months Ended Increase (Decrease) Three Months Ended Three Months Ended Increase (Decrease) due to: Sep 30, 2025 Jun 30, 2025 Sep 30, 2025 Jun 30, 2025 Increase (decrease) bps Sep 30, 2025 Jun 30, 2025 Increase (Decrease) Volume (1) Yield /Rate (1) Loans and leases (1) (2) $ 141,785 $ 140,699 $ 1,086 1 % 6.44 % 6.47 % (3) $ 2,300 $ 2,270 $ 30 $ 32 $ (2) Investment securities 44,827 43,935 892 2 3.83 3.79 4 430 416 14 10 4 Securities purchased under agreements to resell 284 237 47 20 4.32 4.34 (2) 3 3 — — — Interest-earning deposits at banks 24,146 23,304 842 4 4.36 4.40 (4) 265 256 9 11 (2) Total interest-earning assets (2) $ 211,042 $ 208,175 $ 2,867 1 5.64 5.67 (3) $ 2,998 $ 2,945 $ 53 $ 53 $ — Noninterest-earning assets 19,487 19,377 110 1 Total assets $ 230,529 $ 227,552 $ 2,977 1 Interest-bearing deposits Checking with interest $ 23,028 $ 22,929 $ 99 — % 1.70 % 1.69 % 1 $ 99 $ 97 $ 2 $ — $ 2 Money market 39,396 37,980 1,416 4 2.82 2.84 (2) 280 269 11 12 (1) Savings 47,005 46,163 842 2 3.66 3.72 (6) 435 428 7 11 (4) Time deposits 11,146 11,510 (364) (3) 3.45 3.48 (3) 97 100 (3) (2) (1) Total interest-bearing deposits 120,575 118,582 1,993 2 3.00 3.02 (2) 911 894 17 21 (4) Borrowings: Securities sold under customer repurchase agreements 442 471 (29) (6) 0.51 0.57 (6) 1 — 1 1 — Senior unsecured borrowings 555 555 — — 5.27 5.27 — 7 8 (1) (1) — Subordinated debt 1,350 1,473 (123) (8) 5.02 5.23 (21) 17 19 (2) (1) (1) Other borrowings 35,911 35,880 31 — 3.66 3.66 — 328 329 (1) — (1) Long-term borrowings 37,816 37,908 (92) — 3.73 3.74 (1) 352 356 (4) (2) (2) Total borrowings 38,258 38,379 (121) — 3.70 3.71 (1) 353 356 (3) (1) (2) Total interest-bearing liabilities $ 158,833 $ 156,961 $ 1,872 1 3.16 3.19 (3) $ 1,264 $ 1,250 $ 14 $ 20 $ (6) Noninterest-bearing liabilities $ 49,405 $ 48,103 $ 1,302 3 Stockholders' equity 22,291 22,488 (197) (1) Total liabilities and stockholders’ equity $ 230,529 $ 227,552 $ 2,977 1 Net interest spread (2) 2.48 % 2.48 % — Net interest margin and net interest income (2) 3.26 % 3.26 % — $ 1,734 $ 1,695 $ 39 (1) Loans and leases include nonaccrual loans and loans held for sale. Interest income on loans and leases includes accretion income and loan fees. (2) The average balances and yields for loans and leases are calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables. 67 NII and NIM (Current Quarter Compared to Linked Quarter) The table above quantifies the increases or decreases for the current quarter compared to the linked quarter for NII and NIM, as well as average balances of interest-earning assets and interest-bearing liabilities, and the respective yields earned and rates paid. The main reasons for the increases and decreases are explained below: • NII for the current quarter was $1.73 billion, an increase of $39 million or 2%, from $1.70 billion for the linked quarter. NII, excluding PAA, (1) was $1.67 billion for the current quarter, an increase of $44 million from $1.63 billion, for the linked quarter. The main reasons for the increases in NII and NII, excluding PAA, (1) are explained below: ◦ Interest and fees on loans for the current quarter was $2.30 billion, an increase of $30 million or 1%, from $2.27 billion for the linked quarter. The increase was mainly due to a higher day count and a higher average balance, partially offset by a modest decline in yield. ▪ Interest and fees on loans, excluding loan PAA, (1) were $2.23 billion for the current quarter, an increase of $34 million, from $2.20 billion for the linked quarter . ▪ Loan PAA was $71 million for the current quarter, a decrease of $4 million, from $75 million for the linked quarter . ◦ Interest income on investment securities (including securities purchased under agreements to resell) for the current quarter was $433 million, an increase of $14 million or 4%, from $419 million for the linked quarter, due to increases in the average balance, yield and day count. ◦ Interest income on interest-earning deposits at banks for the current quarter was $265 million, an increase of $9 million or 4%, from $256 million for the linked quarter, due to a higher average balance and a higher day count, partially offset by a slight decline in yield. ◦ Interest expense on borrowings for the current quarter was $353 million, a decrease of $3 million or 1%, from $356 million for the linked quarter, due to a modest decline in the average balance and rate paid as the Linked Quarter Debt Redemption impacted the average balance and rate for the entire current quarter, partially offset by the Current Quarter Debt Issuance. We expect interest expense on borrowings to increase in the fourth quarter of 2025 as the Current Quarter Debt Issuance will impact the average balance and rate for the entire quarter. Refer to the “Recent Events” section of this MD&A for further discussion. ◦ Interest expense on interest-bearing deposits for the current quarter was $911 million, an increase of $17 million, from $894 million for the linked quarter, as the impacts of a higher average balance and a higher day count were partially offset by a lower rate paid. • NIM was 3.26% in both the current quarter and linked quarter as the decrease in yield on average interest-earning assets was offset by the decrease in rate paid on interest-bearing liabilities. NIM, excluding PAA, (1) was 3.15% for the current quarter, an increase of 1 bps, from 3.14% for the linked quarter . ◦ The yield on average interest-earning assets for the current quarter was 5.64%, a decrease of 3 bps, from 5.67% for the linked quarter, mainly due to a lower loan yield and a decline in loan PAA. ◦ The rate paid on average interest-bearing liabilities for the current quarter was 3.16%, a decrease of 3 bps, from 3.19% for the linked quarter, primarily due to a lower rate paid on interest-bearing deposits, partially offset by the impact of a higher average balance of interest-bearing deposits. Refer to the “Financial Performance Summary—Balance Sheet Highlights,” “Interest-earning Assets,” and “Interest-bearing Liabilities” sections of this MD&A for discussions of balance sheet trends that impact average interest-earning assets, average interest-bearing liabilities, and the related yields earned and rates paid. (1) Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further information. 68 Table 6 Average Balances, Yields and Rates, NII, and NIM (Current Quarter to Prior Year Quarter) dollars in millions Average Balance Yield / Rate Interest Income / Expense Three Months Ended Increase (Decrease) from Prior Year Quarter Three Months Ended Three Months Ended Increase (Decrease) due to: Sep 30, 2025 Sep 30, 2024 Sep 30, 2025 Sep 30, 2024 Increase (decrease) bps Sep 30, 2025 Sep 30, 2024 Increase (Decrease) Volume (1) Yield /Rate (1) Loans and leases (1) (2) $ 141,785 $ 137,602 $ 4,183 3 % 6.44 % 7.03 % (59) $ 2,300 $ 2,430 $ (130) $ 75 $ (205) Investment securities 44,827 38,189 6,638 17 3.83 3.70 13 430 354 76 64 12 Securities purchased under agreements to resell 284 241 43 18 4.32 5.34 (102) 3 4 (1) — (1) Interest-earning deposits at banks 24,146 26,167 (2,021) (8) 4.36 5.33 (97) 265 350 (85) (25) (60) Total interest-earning assets (2) $ 211,042 $ 202,199 $ 8,843 4 5.64 6.18 (54) $ 2,998 $ 3,138 $ (140) $ 114 $ (254) Noninterest-earning assets 19,487 18,267 1,220 7 Total assets $ 230,529 $ 220,466 $ 10,063 5 Interest-bearing deposits Checking with interest $ 23,028 $ 23,946 $ (918) (4) % 1.70 % 2.23 % (53) $ 99 $ 134 $ (35) $ (5) $ (30) Money market 39,396 34,132 5,264 15 2.82 3.24 (42) 280 278 2 40 (38) Savings 47,005 39,939 7,066 18 3.66 4.34 (68) 435 436 (1) 72 (73) Time deposits 11,146 14,429 (3,283) (23) 3.45 4.29 (84) 97 156 (59) (32) (27) Total interest-bearing deposits 120,575 112,446 8,129 7 3.00 3.55 (55) 911 1,004 (93) 75 (168) Borrowings: Securities sold under customer repurchase agreements 442 384 58 15 0.51 0.55 (4) 1 — 1 1 — Senior unsecured borrowings 555 361 194 54 5.27 2.59 268 7 2 5 2 3 Subordinated debt 1,350 900 450 50 5.02 3.34 168 17 8 9 4 5 Other borrowings 35,911 35,803 108 — 3.66 3.66 — 328 328 — — — Long-term borrowings 37,816 37,064 752 2 3.73 3.64 9 352 338 14 6 8 Total borrowings 38,258 37,448 810 2 3.70 3.61 9 353 338 15 7 8 Total interest-bearing liabilities $ 158,833 $ 149,894 $ 8,939 6 3.16 3.57 (41) $ 1,264 $ 1,342 $ (78) $ 82 $ (160) Noninterest-bearing liabilities $ 49,405 $ 47,721 $ 1,684 4 Stockholders' equity 22,291 22,851 (560) (3) Total liabilities and stockholders’ equity $ 230,529 $ 220,466 $ 10,063 5 Net interest spread (2) 2.48 % 2.61 % (13) Net interest margin and net interest income (2) 3.26 % 3.53 % (27) $ 1,734 $ 1,796 $ (62) (1) Loans and leases include nonaccrual loans and loans held for sale. Interest income on loans and leases includes accretion income and loan fees. (2) The average balances and yields for loans and leases are calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables. 69 Table 7 Average Balances, Yields and Rates, NII, and NIM (Current YTD to Prior Year YTD) dollars in millions Average Balance Yield / Rate Interest Income / Expense Nine Months Ended Increase (Decrease) from Prior Year Quarter Nine Months Ended Nine Months Ended Increase (Decrease) due to: Sep 30, 2025 Sep 30, 2024 Sep 30, 2025 Sep 30, 2024 Increase (decrease) bps Sep 30, 2025 Sep 30, 2024 Increase (Decrease) Volume (1) Yield /Rate (1) Loans and leases (1) (2) $ 140,668 $ 135,302 $ 5,366 4 % 6.46 % 7.11 % (65) $ 6,806 $ 7,206 $ (400) $ 275 $ (675) Investment securities 44,110 35,769 8,341 23 3.80 3.58 22 1,257 960 297 235 62 Securities purchased under agreements to resell 268 240 28 12 4.34 5.37 (103) 9 10 (1) 1 (2) Interest-earning deposits at banks 23,386 29,192 (5,806) (20) 4.38 5.38 (100) 766 1,176 (410) (212) (198) Total interest-earning assets (2) $ 208,432 $ 200,503 $ 7,929 4 5.66 6.22 (56) $ 8,838 $ 9,352 $ (514) $ 299 $ (813) Noninterest-earning assets 19,430 17,984 1,446 8 Total assets $ 227,862 $ 218,487 $ 9,375 4 Interest-bearing deposits Checking with interest $ 23,292 $ 24,112 $ (820) (3) % 1.72 % 2.22 % (50) $ 300 $ 401 $ (101) $ (13) $ (88) Money market 38,055 32,364 5,691 18 2.83 3.14 (31) 806 760 46 125 (79) Savings 45,707 38,290 7,417 19 3.74 4.33 (59) 1,280 1,242 38 221 (183) Time deposits 11,752 15,712 (3,960) (25) 3.55 4.28 (73) 312 504 (192) (115) (77) Total interest-bearing deposits 118,806 110,478 8,328 8 3.04 3.51 (47) 2,698 2,907 (209) 218 (427) Borrowings: Securities sold under customer repurchase agreements 447 398 49 12 0.53 0.49 4 2 1 1 1 — Senior unsecured borrowings 428 371 57 16 5.20 2.53 267 17 7 10 1 9 Subordinated debt 1,262 904 358 40 4.68 3.32 136 44 23 21 10 11 Other borrowings 35,878 35,829 49 — 3.66 3.65 1 985 980 5 1 4 Long-term borrowings 37,568 37,104 464 1 3.71 3.63 8 1,046 1,010 36 12 24 Total borrowings 38,015 37,502 513 1 3.67 3.59 8 1,048 1,011 37 13 24 Total interest-bearing liabilities $ 156,821 $ 147,980 $ 8,841 6 3.19 3.53 (34) $ 3,746 $ 3,918 $ (172) $ 231 $ (403) Noninterest-bearing liabilities $ 48,630 $ 48,310 $ 320 1 Stockholders' equity 22,411 22,197 214 1 Total liabilities and stockholders’ equity $ 227,862 $ 218,487 $ 9,375 4 Net interest spread (2) 2.47 % 2.69 % (22) Net interest margin and net interest income (2) 3.26 % 3.62 % (36) $ 5,092 $ 5,434 $ (342) (1) Loans and leases include nonaccrual loans and loans held for sale. Interest income on loans and leases includes accretion income and loan fees. (2) The average balances and yields for loans and leases are calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables. 70 NII and NIM (Current YTD Compared to Prior YTD) The table above quantifies the increases or decreases for the current YTD compared to the prior YTD for NII and NIM, as well as average balances of interest-earning assets and interest-bearing liabilities, and the respective yields earned and rates paid. The main reasons for the increases and decreases are explained below: • NII for the current YTD was $5.09 billion, a decrease of $342 million or 6%, from $5.43 billion for the prior YTD. NII, excluding PAA, (1) was $4.89 billion for the current YTD, a decrease of $145 million, from $5.04 billion for the prior YTD. The main reasons for the decreases in NII and NII, excluding PAA, (1) are explained below: ◦ Interest income on interest-earning deposits at banks for the current YTD was $766 million, a decrease of $410 million or 35%, from $1.18 billion for the prior YTD, due to a lower average balance and a decline in the federal funds rate. ◦ Interest and fees on loans for the current YTD was $6.81 billion, a decrease of $400 million or 6%, from $7.21 billion for the prior YTD, mainly due to a lower yield and lower loan PAA, partially offset by the impact of a higher average balance. • Interest and fees on loans, excluding loan PAA, (1) was $6.58 billion for the current YTD, a decrease of $215 million, from $6.79 billion for the prior YTD . • Loan PAA was $230 million in the current YTD, a decrease of $185 million, from $415 million for the prior YTD. ◦ Interest expense on borrowings for the current YTD was $1.05 billion, an increase of $37 million or 4%, from $1.01 billion for the prior YTD, primarily due to a higher rate paid and a higher average, reflecting the 2025 Debt Issuances. ◦ Interest income on investment securities (including securities purchased under agreements to resell) for the current YTD was $1.27 billion, an increase of $296 million or 31%, from $970 million for the prior YTD, mainly due to a higher average balance and a higher yield. ◦ Interest expense on interest-bearing deposits for the current YTD was $2.70 billion, a decrease of $209 million or 7%, from $2.91 billion for the prior YTD, as a lower rate paid was partially offset by the impact of a higher average balance. • NIM for the current YTD was 3.26%, a decrease of 36 bps, from 3.62% for the prior YTD. The decline in NIM was mainly due to the impacts of lower yields on loans and interest-earning deposits at banks, a mix shift from interest-earning deposits at banks to investment securities, a higher average balance of interest-bearing deposits, lower PAA, and a higher average balance and rate paid on borrowings, partially offset by the impacts of a decline in the rate paid on interest-bearing deposits and a higher average balance of loans. NIM, excluding PAA, (1) was 3.13% for the current YTD, a decrease of 22 bps, from 3.35% for the prior YTD. ◦ The yield on average interest-earning assets for the current YTD was 5.66%, a decrease of 56 bps, from 6.22% for the prior YTD, mainly due to a decline in yield on loans and interest-earning deposits at banks, as well as lower loan PAA, partially offset by a higher yield on investment securities. ◦ The rate paid on average interest-bearing liabilities for the current YTD was 3.19%, a decrease of 34 bps, from 3.53% for the prior YTD, primarily due to a lower rate paid on interest-bearing deposits, partially offset by the impacts of a higher average balance of interest-bearing deposits, and a higher average balance and rate paid for borrowings as a result of the 2025 Debt Issuances. Refer to the “Financial Performance Summary—Balance Sheet Highlights,” “Interest-earning Assets,” and “Interest-bearing Liabilities” sections of this MD&A for discussions of balance sheet trends that impact average interest-earning assets, average interest-bearing liabilities, and the related yields and rates paid. (1) Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further information. The following table shows the types of average interest-earning assets as a percentage of total average interest-earning assets. Table 8 Average Interest-earning Asset Mix Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Loans and leases 67 % 68 % 68 % 68 % 67 % Investment securities 21 21 19 21 18 Interest-earning deposits at banks 12 11 13 11 15 Total interest-earning assets 100 % 100 % 100 % 100 % 100 % 71 The following table shows the types of average interest-bearing liabilities as a percentage of total average interest-bearing liabilities. Table 9 Average Interest-bearing Liability Mix Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Total interest-bearing deposits 76 % 76 % 75 % 76 % 75 % Long-term borrowings 24 24 25 24 25 Total interest-bearing liabilities 100 % 100 % 100 % 100 % 100 % Provision for Credit Losses Table 10 Provision for Credit Losses dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease) Year to Date September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Provision for loan and lease losses $ 214 $ 111 $ 123 $ 103 94 % $ 473 $ 311 $ 162 52 % Provision (benefit) for off-balance sheet credit exposure (23) 4 (6) (27) (614) (13) (35) 22 63 Provision for credit losses $ 191 $ 115 $ 117 $ 76 66 % $ 460 $ 276 $ 184 67 % The provision for credit losses for the current quarter was $191 million, an increase of $76 million, from $115 million for the linked quarter . The current quarter provision for credit losses included a provision for loan and lease losses of $214 million, partially offset by a benefit for off-balance sheet credit exposure of $23 million. • The provision for loan and lease losses for the current quarter was $214 million, an increase of $103 million, from $111 million for the linked quarter, mainly attributable to an increase in net charge-offs of $115 million, as well as the impact of a $20 million reserve release in the current quarter, compared to a $8 million reserve release in the linked quarter. ◦ The $115 million increase in net charge-offs was mainly due to an $82 million charge-off on a single supply chain finance client in the Commercial Bank segment. ◦ The decrease of $20 million in the ALLL at September 30, 2025, compared to June 30, 2025, primarily reflected improvements in the economic outlook and other changes, including the elimination of reserves related to Hurricane Helene, partially offset by higher specific reserves for individually evaluated loans, and growth in global fund banking loans which have a lower loss rate relative to our other portfolios. • The benefit for off-balance sheet credit exposure for the current quarter was $23 million compared to a provision for the linked quarter of $4 million, resulting in a decrease in provision of $27 million, largely due to lower available balances. The provision for credit losses for the current YTD was $460 million, an increase of $184 million, from $276 million for the prior YTD. The current YTD provision for credit losses included a provision for loan and lease losses of $473 million, partially offset by a benefit for off-balance sheet credit exposure of $13 million. • The provision for loan and lease losses for the current YTD was $473 million, an increase of $162 million, from $311 million for the prior YTD, mainly attributable to an increase in net charge-offs of $117 million, which included a charge-off of $82 million for a single client as discussed above, and a decline in the ALLL reserve release in the current YTD of $45 million as a result of a $24 million reserve release in the current YTD compared to a $69 million reserve release in the prior YTD. ◦ The decrease of $24 million in the ALLL at September 30, 2025, compared to December 31, 2024, reflected the changes discussed above in the linked quarter comparison, and a modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A, partially offset by the impact of loan growth. • The benefit for off-balance sheet credit exposure for the current YTD was $13 million, a decrease of $22 million, compared to $35 million for the prior YTD. The lower benefit of $22 million was mostly due to trends in the volume of unfunded commitments, partially offset by a modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A. The ALLL and net charge-offs are further discussed in the “Risk Management—Credit Risk” section of this MD&A and in Note 5—Allowance for Loan and Lease Losses. 72 Noninterest Income The primary sources of noninterest income consist of rental income on operating lease equipment, lending-related fees, deposit fees and service charges, client investment fees, wealth management services, international fees, factoring commissions, cardholder and merchant services, and insurance commissions. Table 11 Noninterest Income dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease) Year to Date September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Rental income on operating lease equipment $ 273 $ 272 $ 262 $ 1 — % $ 815 $ 776 $ 39 5 % Lending-related fees 67 69 67 (2) (3) 202 189 13 7 Deposit fees and service charges 61 59 57 2 3 178 172 6 4 Client investment fees 58 52 55 6 13 163 159 4 2 Wealth management services 57 55 54 2 3 168 157 11 7 International fees 34 33 29 1 4 99 86 13 15 Factoring commissions 18 18 19 — — 53 55 (2) (3) Cardholder services, net 39 41 42 (2) (6) 121 122 (1) (1) Merchant services, net 12 13 12 (1) (6) 39 36 3 7 Insurance commissions 13 14 14 (1) (9) 41 42 (1) (2) Realized gain on sale of investment securities, net — — 4 — — — 4 (4) (100) Fair value adjustment on marketable equity securities, net 13 2 9 11 470 10 3 7 264 Gain on sale of leasing equipment, net 3 8 5 (5) (65) 16 19 (3) (15) Loss on extinguishment of debt — — — — — — (2) 2 100 Other noninterest income 51 42 21 9 20 107 98 9 8 Total noninterest income $ 699 $ 678 $ 650 $ 21 3 % $ 2,012 $ 1,916 $ 96 5 % Noninterest income for the current quarter was $699 million, an increase of $21 million or 3%, from $678 million for the linked quarter, primarily due to the following: • The favorable change of $11 million in the fair value of marketable equity securities was due to higher market prices for the underlying securities. • The increase in other noninterest income of $9 million was mainly attributable to gains on the sale of other assets. • The increase of $6 million in client investment fees was mostly due to a higher average balance of client funds. • The decrease of $5 million in gain on sale of leasing equipment was primarily the result of lower rail equipment sale margin, due to the railcar types sold. Noninterest income for the current YTD was $2.01 billion, an increase of $96 million or 5%, from $1.92 billion for the prior YTD as further discussed below: • The increase in rental income on operating lease equipment of $39 million was mainly the result of growth in the railcar portfolio. • The increase in lending-related fees of $13 million was mostly in syndication fees. • The increase in international fees of $13 million reflected higher volumes and commissions on foreign currency exchange transactions. • The increase in wealth management services of $11 million was due to growth in assets under management. • The increase in other noninterest income of $9 million was largely due a higher favorable change in the fair value of non-marketable equity securities and customer derivative positions, partially offset by a write-down of a held for sale asset in the current YTD. • The favorable change of $7 million in the fair value of marketable equity securities was due to higher market prices for the underlying securities. 73 Noninterest Expense Table 12 Noninterest Expenses dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease) Year to Date September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Depreciation on operating lease equipment $ 98 $ 100 $ 99 $ (2) (1) % $ 296 $ 293 $ 3 1 % Maintenance and other operating lease expenses 67 55 59 12 20 180 164 16 10 Personnel cost 817 810 788 7 1 2,445 2,277 168 7 Net occupancy expense 58 61 62 (3) (6) 177 182 (5) (3) Equipment expense 137 131 128 6 4 404 368 36 10 Professional fees 26 30 42 (4) (12) 81 91 (10) (10) Third-party processing fees 67 63 55 4 6 193 173 20 12 FDIC insurance expense 38 38 31 — — 114 105 9 8 Marketing expense 33 32 20 1 2 97 52 45 86 Acquisition-related expenses 28 38 46 (10) (27) 108 148 (40) (27) Intangible asset amortization 13 13 15 — — 41 47 (6) (14) Other noninterest expense 109 129 111 (20) (15) 348 318 30 9 Total noninterest expense $ 1,491 $ 1,500 $ 1,456 $ (9) (1) % $ 4,484 $ 4,218 $ 266 6 % Noninterest expense for the current quarter was $1.49 billion, a decrease of $9 million or 1%, from $1.50 billion for the linked quarter as further discussed below: • The decrease in other noninterest expense of $20 million was mainly due to the linked quarter including accruals for $15 million resulting from a vendor dispute and an increase in litigation reserves. • The decrease in acquisition-related expenses of $10 million is summarized in Table 13 below. • The increase in maintenance and other operating lease expenses of $12 million is discussed in the “Results by Segment—Rail” section of this MD&A. • The increase in personnel cost of $7 million was due to an additional payroll day and net staff additions partially offset by a decline in temporary contractor costs. • The increase in equipment expense of $6 million was mainly due to higher software-related costs. Noninterest expense for the current YTD was $4.48 billion, an increase of $266 million or 6%, from $4.22 billion for the prior YTD as further discussed below: • The increase in personnel cost of $168 million was mainly due to net staff additions, annual merit increases, and promotions. • The increase in marketing expense of $45 million was primarily due to marketing for Direct Bank deposits. • The increase in equipment expense of $36 million was mostly due to higher software-related costs, including accelerated depreciation. • The increase in other noninterest expense of $30 million was largely due to the linked quarter accruals of $15 million discussed above. • The increase of $20 million in third-party processing fees was due to higher transaction volume and additional services. • The increase of $16 million in maintenance and other operating lease expenses are discussed in the “Results by Segment—Rail” section of this MD&A. • The decrease in acquisition-related expenses of $40 million is summarized in Table 13 below. • The decrease of $10 million in professional fees was due to lower consulting services and legal fees. 74 Table 13 Acquisition-related Expenses dollars in millions Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Personnel cost $ 12 $ 15 $ 16 $ 42 $ 57 Professional fees 15 20 28 61 77 Other acquisition-related expense 1 3 2 5 14 Total acquisition-related expense $ 28 $ 38 $ 46 $ 108 $ 148 Acquisition-related personnel cost primarily includes severance and retention costs for employees associated with business combinations. These amounts are recognized over the requisite service period, if any. Acquisition-related professional fees mainly include consulting, legal and accounting costs associated with business combinations and the related integration, optimization, and business process reengineering, including enhancements to technology. These amounts are expensed as incurred. Income Taxes Table 14 Income Tax Data dollars in millions Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Income before income taxes $ 751 $ 758 $ 873 $ 2,160 $ 2,856 Income tax expense $ 183 $ 183 $ 234 $ 534 $ 779 Effective income tax rate 24.4 % 24.1 % 26.8 % 24.7 % 27.3 % The ETR was 24.4% for the current quarter compared to 24.1% for the linked quarter. The modestly higher ETR for the current quarter was mostly due to the revaluation of the deferred tax liability as a result of a change in state law enacted in the linked quarter. The ETR was 24.7% for the current YTD compared to 27.3% for the prior YTD. The decrease for the current YTD ETR compared to the prior YTD was primarily due to increased tax credits and a reduction in the state and local income tax rate. The ETR is impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to valuation allowances, and discrete items. The ETR in future periods may vary from the current quarter ETR due to changes in these factors. BancShares monitors and evaluates the potential impact of current events on the estimates used to establish income tax expense and income tax liabilities. On a periodic basis, we evaluate our income tax positions based on current tax law and positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors. Refer to Note 15—Income Taxes for additional information. Refer to the “Executive Overview—Recent Events” for a brief discussion on tax reform legislation enacted on July 4, 2025. RESULTS BY SEGMENT We made changes to the composition of our reportable segments during the first quarter of 2025 as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation and briefly summarized in the “Recent Events” section earlier in this MD&A. Segment disclosures for 2024 periods included in this Form 10-Q were recast to reflect the changes. BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. Under our segment expense allocation methodology, allocated expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below includes the effect of allocated expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate. Refer to Note 17—Segment Information for descriptions of segment products and services. 75 General Bank Table 15 General Bank: Financial Data dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease) Year to Date Earnings Summary September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Net interest income $ 846 $ 824 $ 760 $ 22 3 % $ 2,458 $ 2,174 $ 284 13 % Total noninterest income 166 164 149 2 1 494 446 48 11 Total revenue 1,012 988 909 24 2 2,952 2,620 332 13 Personnel cost 213 210 212 3 1 637 604 33 5 All other noninterest expense 369 370 341 (1) — 1,090 978 112 11 Total noninterest expense 582 580 553 2 — 1,727 1,582 145 9 Provision for credit losses 1 13 55 (12) (90) 60 113 (53) (47) Income before income taxes 429 395 301 34 8 1,165 925 240 26 Income tax expense 109 101 99 8 7 298 270 28 10 Net income $ 320 $ 294 $ 202 $ 26 9 $ 867 $ 655 $ 212 32 Pre-provision net revenue (“PPNR”) (1) $ 430 $ 408 $ 356 $ 22 5 % $ 1,225 $ 1,038 $ 187 18 % Select Period End Balances Loans and leases $ 65,225 $ 64,987 $ 64,254 $ 238 — % $ 65,225 $ 64,254 $ 971 2 % Deposits 74,596 73,499 71,898 1,097 1 74,596 71,898 2,698 4 (1) PPNR is a non-GAAP measure. Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure. General Bank segment net income for the current quarter increased $26 million compared to the linked quarter, primarily due to higher NII and lower provision for credit losses . • The $22 million increase in NII was largely due to a lower rate paid on interest-bearing deposits, along with a higher loan yield, and the impact of loan growth. • The $12 million decrease in provision for credit losses reflected a reserve release, largely in residential mortgage and credit card loans. General Bank segment loans were $65.23 billion at September 30, 2025, an increase of $238 million compared to $64.99 billion at June 30, 2025, as growth was spread amongst various portfolios. General Bank segment deposits were $74.60 billion at September 30, 2025, an increase of $1.10 billion compared to $73.50 billion at June 30, 2025, as growth was primarily concentrated in our Branch Network and Wealth. Deposit growth was in money market and noninterest-bearing checking, partially offset by lower time deposits.