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10-Q – 2025-11-06 – zions-20250930.htm

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Noncustomer-related Noninterest Income
Noncustomer-related noninterest income increased $12 million, or 86%, compared with the prior year period. This growth was primarily driven by a $10 million increase in dividends and other income, mainly attributable to a $6 million gain on the sale of a bank-owned property and higher dividends received on FHLB stock.
For the nine months ended September 30, 2025, noncustomer-related noninterest income increased $21 million, or 48%, relative to the same prior year period. This increase was largely attributable to valuation adjustments in our Small Business Investment Company (“SBIC”) investment portfolio. Notably, in the second quarter of 2025, we recognized an $11 million unrealized gain following the successful initial public offering (“IPO”) of one of our SBIC investments, FatPipe, Inc. This investment will continue to be marked to market until our shares, which are subject to a minimum 180-day lock-up period from the IPO, are fully divested.
Noninterest Expense
The following schedule presents a comparison of the major components of noninterest expense:
NONINTEREST EXPENSE

Three Months Ended
September 30, Amount
change Percent
change Nine Months Ended
September 30, Amount
change Percent
change
(Dollar amounts in millions) 2025 2024 2025 2024

Salaries and employee benefits $ 337  $ 317  $ 20  6  % $ 1,015  $ 966  $ 49  5  %
Technology, telecom, and information processing 70  66  4  6  205  194  11  6 
Occupancy and equipment, net 42  40  2  5  123  119  4  3 
Professional and legal services 14  14  —  —  40  47  (7) (15)
Marketing and business development 11  12  (1) (8) 34  35  (1) (3)
Deposit insurance and regulatory expense 16  19  (3) (16) 58  74  (16) (22)
Credit-related expense 6  6  —  —  18  19  (1) (5)
Other real estate expense, net —  —  —  NM —  (1) 1  NM
Other 31  28  3  11  99  84  15  18 
Total noninterest expense
$ 527  $ 502  $ 25  5  $ 1,592  $ 1,537  $ 55  4 
Adjusted noninterest expense (non-GAAP)
$ 520  $ 499  $ 21  4  % $ 1,574  $ 1,516  $ 58  4  %

Noninterest expense increased $25 million, or 5%, relative to the prior year quarter. Salaries and employee benefits expense increased $20 million, primarily due to higher severance and base salaries, along with increased incentive compensation accruals reflecting improved profitability. Technology, telecom, and information processing expense increased $4 million, largely due to higher costs associated with application software, licensing, and maintenance.
Adjusted noninterest expense increased $21 million, or 4%. The efficiency ratio improved to 59.6%, compared with 62.5%, reflecting positive operating leverage as adjusted pre-provision net revenue increased $53 million, or 18%. For more information on non-GAAP financial measures, see page 41.
For the nine months ended September 30, 2025, noninterest expense increased $55 million, or 4%, relative to the same prior year period. Salaries and employee benefits expense increased $49 million, mainly due to the same factors previously noted. Other noninterest expense increased $15 million, driven by higher subscription costs, the impairment of certain long-lived assets, increased legal reserves, and a success fee accrual associated with the IPO of an SBIC investment. Technology, telecom, and information processing expense increased $11 million, reflecting the same drivers noted above. These increases were partially offset by a $16 million reduction in deposit insurance and regulatory expense, attributable to the Federal Deposit Insurance Corporation (“FDIC”) special assessment accrual in the same prior year period, and a $7 million decline in professional and legal services, mainly due to reduced technology-related consulting expenses.

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Technology Spend
We invest in technology initiatives designed to improve our products and services, increase our operational efficiency, and enable us to remain competitive. We report these investments as technology spend, which includes the following:
• Technology, telecom, and information processing expense — includes current period expenses presented on the consolidated statement of income related to application software licensing and maintenance, telecommunications, and data processing, less related amortization and depreciation of capitalized technology investments;
• Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and
• Technology investments — includes capitalized technology infrastructure equipment, hardware, and software (both purchased and internally developed).
The following schedule presents the composition of our technology spend:
TECHNOLOGY SPEND

Three Months Ended
September 30, Amount
change Percent
change Nine Months Ended
September 30, Amount
change Percent
change
(Dollar amounts in millions) 2025 2024 2025 2024

Technology, telecom, and information processing expense $ 70  $ 66  $ 4  6  % $ 205  $ 194  $ 11  6  %
Less: related amortization and depreciation (20) (19) (1) 5  (58) (59) 1  (2)
Other technology-related expense 64  62  2  3  186  188  (2) (1)
Capitalized technology investments 17  7  10  NM 46  26  20  77 
Total technology spend
$ 131  $ 116  $ 15  13  $ 379  $ 349  $ 30  9 

Total technology spend increased $15 million, or 13%, compared with the same prior year quarter. This increase was driven by higher capitalized technology investments associated with lending and customer-focused technology initiatives. In addition, technology, telecom, and information processing expense increased, largely reflecting the previously noted increases in application software, licensing, and maintenance costs.

Income Taxes
The following schedule summarizes the income tax expense and effective tax rates for the periods presented:
INCOME TAXES

Three Months Ended
September 30, Nine Months Ended
September 30,
(Dollar amounts in millions) 2025 2024 2025 2024

Income before income taxes $ 285  $ 277  $ 836  $ 742 
Income tax expense 63  63  200  174 
Effective tax rate 22.1  % 22.7  % 23.9  % 23.5  %

The effective tax rate was 22.1% and 22.7% for the three months ended September 30, 2025 and 2024, respectively. For more information about the factors that impacted the income tax rates, as well as details on deferred income tax assets and liabilities, see Note 12 of the Notes to Consolidated Financial Statements.
Preferred Stock Dividends
Preferred stock dividends totaled $1 million and $10 million for the third quarters of 2025 and 2024, respectively. The year-over-year decrease was due to the redemption of the outstanding shares of our Series G, I, and J preferred stock during the fourth quarter of 2024.

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BALANCE SHEET ANALYSIS
Interest-Earning Assets
Interest-earning assets—which include loans and leases, investment securities, and money market investments—carry associated interest rates or yields. We strive to maintain a high level of interest-earning assets relative to total assets. For more information regarding average balances, the associated revenue generated, and the corresponding yields of these assets, see the Average Balance Sheet on page 11.

Investment Securities Portfolio
We invest in securities primarily to provide balance sheet liquidity. The portfolio largely consists of securities that can be readily converted to cash or used to generate liquidity through secured borrowing agreements, without the need to sell the securities. Our investment securities portfolio also helps to balance the inherent interest rate mismatch between loans and deposits, thereby helping to preserve the economic value of shareholders’ equity. The estimated deposit duration at September 30, 2025 was assumed to be longer than the loan duration (including swaps). At September 30, 2025, the estimated duration of the investment securities portfolio, which measures price sensitivity to interest rate changes, was 3.7 years, compared with 3.4 years at December 31, 2024, primarily due to revised prepayment assumptions on certain securities.
For more information about our borrowing capacity associated with the investment securities portfolio and how we manage our liquidity risk, refer to the “Liquidity Risk Management” section on page 38. For more information on fair value measurements and the accounting for our investment securities portfolio, refer to Note 3 and Note 5 of the Notes to Consolidated Financial Statements.
The following schedule presents the major components of our investment securities portfolio:
INVESTMENT SECURITIES PORTFOLIO

September 30, 2025 December 31, 2024
(In millions) Par Value Amortized
cost Fair
value Par Value Amortized
cost Fair
value
Available-for-sale
U.S. Treasury securities $ 1,400  $ 1,401  $ 1,311  $ 780  $ 781  $ 662 
U.S. Government agencies and corporations:
Agency securities 353  349  332  446  441  415 
Agency guaranteed mortgage-backed securities 7,193  7,208  6,171  7,656  7,713  6,451 
Small Business Administration loan-backed securities 352  374  358  427  455  434 
Municipal securities 948  1,022  973  1,096  1,186  1,108 
Other debt securities 25  25  25  25  25  25 
Total available-for-sale 10,271  10,379  9,170  10,430  10,601  9,095 
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities 139  139  135  148  148  140 
Agency guaranteed mortgage-backed securities 10,248  8,643  8,704  10,983  9,202  8,941 
Municipal securities 277  277  267  319  319  301 
Total held-to-maturity 10,664  9,059  9,106  11,450  9,669  9,382 

Total investment securities $ 20,935  $ 19,438  $ 18,276  $ 21,880  $ 20,270  $ 18,477 

The amortized cost of total investment securities declined $832 million, or 4%, from December 31, 2024, primarily due to principal reductions, net of reinvestments. At both September 30, 2025 and December 31, 2024, approximately 7% of the portfolio consisted of floating-rate instruments. Additionally, at September 30, 2025, we had active pay-fixed interest rate swaps with an aggregate notional amount of $4.5 billion. These swaps are designated as fair value hedges of fixed-rate available-for-sale (“AFS”) securities and effectively convert the fixed interest income on the hedged portion of the securities to a floating rate.

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At September 30, 2025, our AFS investment securities portfolio included approximately $108 million in net premium, distributed across various security categories. Taxable-equivalent premium amortization for these investment securities totaled $12 million for the third quarter of 2025, compared with $14 million in the same prior year period.
For more information regarding our investment securities portfolio, swaps, and related unrealized gains and losses, refer to the “Interest Rate Risk Management” section on page 35, the “Capital Management” section on page 39, and Note 5 of the Notes to Consolidated Financial Statements.

Municipal Investments and Extensions of Credit
We support our communities by offering a range of financial products and services to state and local governments (“municipalities”), including deposit services, lending, and investment banking services. Additionally, we invest in securities issued by municipal entities. Our municipal lending portfolio generally includes obligations that are repaid from, or secured by, the general funds or pledged revenues of municipalities, as well as by real estate or equipment. It also includes loans extended to private commercial and 501(c)(3) not-for-profit organizations that utilize a pass-through municipal structure to benefit from favorable tax treatment.
The following schedule presents our total investments and extensions of credit to municipalities:
MUNICIPAL INVESTMENTS AND EXTENSIONS OF CREDIT

(In millions) September 30,
2025 December 31,
2024

Loans and leases $ 4,341  $ 4,364 
Unfunded lending commitments 398  524 
Available-for-sale securities 973  1,108 
Held-to-maturity securities 277  319 
Trading securities 134  35 
Total
$ 6,123  $ 6,350 

Our municipal loans and securities are primarily concentrated within our geographic footprint. At September 30, 2025, approximately $2 million of municipal loans and leases were on nonaccrual, compared with $11 million at December 31, 2024. These nonaccrual loans were extended to private commercial entities utilizing a pass-through municipal structure to obtain favorable tax treatment.
Municipal securities are internally risk-graded, using methodologies aligned with those applied to loans, with grading frameworks tailored to the size and nature of the credit exposure. These internal risk grades — Pass, Special Mention, and Substandard — are consistent with published regulatory risk classifications. At September 30, 2025, all municipal securities were rated as Pass. For additional information regarding the credit quality of our municipal loans and securities, see Notes 5 and 6 of the Notes to Consolidated Financial Statements.
Loan and Lease Portfolio
We provide a wide range of lending products to commercial customers, primarily small- and medium-sized businesses, as well as other products secured by commercial real estate. Additionally, we provide various retail banking products and services to consumers and small businesses.
The following schedule presents the composition of our loan and lease portfolio:

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LOAN AND LEASE PORTFOLIO

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total loans Amount % of
total loans
Commercial:
Commercial and industrial $ 17,222  28.6  % $ 16,891  28.4  %
Owner-occupied 9,267  15.4  9,333  15.7 
Municipal 4,341  7.2  4,364  7.4 
Leasing 349  0.6  377  0.6 
Total commercial 31,179  51.8  30,965  52.1 
Commercial real estate:
Term 11,008  18.2  10,703  18.0 
Construction and land development 2,469  4.1  2,774  4.7 
Total commercial real estate 13,477  22.3  13,477  22.7 
Consumer:
1-4 family residential 10,423  17.2  9,939  16.7 
Home equity credit line 3,848  6.4  3,641  6.1 
Construction and other consumer real estate 769  1.3  810  1.4 
Bankcard and other revolving plans 477  0.8  457  0.8 
Other 129  0.2  121  0.2 
Total consumer 15,646  25.9  14,968  25.2 
Total loans and leases $ 60,302  100.0  % $ 59,410  100.0  %

During the first nine months of 2025, the loan and lease portfolio increased $892 million, or 2%, to $60.3 billion at September 30, 2025. This growth was primarily driven by increases in the consumer 1-4 family residential mortgage, commercial and industrial, and term commercial real estate loan portfolios. The ratio of loans and leases to total assets was 68% at September 30, 2025, compared with 67% at December 31, 2024. Commercial and industrial loans remained the largest loan segment, representing 29% and 28% of total loans for the same respective periods.
Other Noninterest-Bearing Investments
Other noninterest-bearing investments consist of equity investments held primarily for capital appreciation, dividends, or to meet certain regulatory requirements. The following schedule presents our related investments.
OTHER NONINTEREST-BEARING INVESTMENTS

(Dollar amounts in millions) September 30,
2025 December 31,
2024 Amount change Percent change

Bank-owned life insurance $ 571  $ 562  $ 9  2  %
Federal Home Loan Bank stock 145  124  21  17 
Federal Reserve stock 54  65  (11) (17)
Farmer Mac stock 30  28  2  7 
SBIC investments 252  204  48  24 
Other 46  37  9  24 
Total other noninterest-bearing investments $ 1,098  $ 1,020  $ 78  8 

Other noninterest-bearing investments increased $78 million, or 8%, during the first nine months of 2025. This growth was primarily attributable to higher balances in our SBIC investment portfolio and increased holdings of FHLB stock.
The SBIC investment portfolio increased $48 million, largely driven by new investments and valuation adjustments on related investments. The increase in FHLB stock was due to higher FHLB borrowings. To maintain borrowing capacity, we are required to hold FHLB stock equivalent to approximately 4-5% of our outstanding FHLB borrowings.

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Premises, Equipment, and Software
In July 2024, we successfully completed the final phase of a multi-year project to replace our core loan and deposit banking systems. As a result, we transitioned substantially all commercial, commercial real estate, and non-mortgage consumer loans, as well as deposit accounts, to a modern, integrated core platform. We continue to invest in additional lending, deposit, and other customer-focused technology initiatives aimed at further modernizing our systems, improving customer experiences, and enhancing operational performance.
The following schedule summarizes the capitalized costs associated with the core system replacement project, which are amortized using a useful life of ten years:
CAPITALIZED COSTS ASSOCIATED WITH THE CORE SYSTEM REPLACEMENT PROJECT

September 30, 2025
(In millions) Phase 1 Phase 2 Phase 3 Total

Total amount of capitalized costs, less accumulated amortization $ 10  $ 29  $ 191  $ 230 
End of scheduled amortization period Q2 2027 Q1 2029 Q2 2033

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

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total
deposits Amount % of
total
deposits
Deposits by type
Noninterest-bearing demand $ 26,133  34.9  % $ 24,704  32.4  %
Interest-bearing:
Savings and money market 38,689  51.7  40,037  52.5 
Time 6,232  8.3  6,448  8.5 
Brokered 3,824  5.1  5,034  6.6 
Total interest-bearing 48,745  65.1  51,519  67.6 
Total deposits $ 74,878  100.0  % $ 76,223  100.0  %
Deposit-related metrics
Estimated amount of insured deposits $ 41,290  55  % $ 41,836  55  %
Estimated amount of uninsured deposits 33,588  45  34,387  45 
Estimated amount of collateralized deposits 1
2,686  4  3,199  4 
Loan-to-deposit ratio 81% 78%

1 Includes both insured and uninsured deposits.
Total deposits declined $1.3 billion, or 2%, from December 31, 2024. Interest-bearing deposits decreased $2.8 billion, primarily due to the migration of a consumer interest-bearing product into a new noninterest-bearing offering, as well as a reduction in brokered deposits. This decline was partially offset by a $1.4 billion increase in noninterest-bearing demand deposits, mainly driven by the aforementioned product migration. At September 30, 2025, customer deposits (excluding brokered deposits) totaled $71.1 billion, compared with $71.2 billion at December 31, 2024.
At September 30, 2025, the total estimated amount of uninsured deposits was $33.6 billion, or 45% of total deposits, compared with $34.4 billion, or 45%, at December 31, 2024. The loan-to-deposit ratio was 81%, compared with 78% for the same periods. For additional information on liquidity, including the ratio of available liquidity to uninsured deposits, see “Liquidity Risk Management” on page 38.

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RISK MANAGEMENT
Risk management is a core component to our operations and a critical factor in achieving our strategic objectives. We employ various strategies to prudently manage the risks inherent in our business, including credit risk, market and interest rate risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. Oversight of these risks is conducted through various management committees, with the Enterprise Risk Management Committee serving as the focal point. For a more comprehensive discussion of these risks, see “Risk Factors” in our 2024 Form 10-K.
Credit Risk Management
Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. Credit risk arises primarily from our lending activities and off-balance sheet credit instruments.
Our credit policies, credit risk management, and credit examination functions collectively support the oversight of credit risk. We emphasize strong underwriting standards and the early detection of potential problem credits to develop and implement timely action plans, thereby minimizing potential losses. These formal credit policies and procedures provide a framework for consistent underwriting and sound credit decisions at the local banking affiliate level. Our policies include standards for sensitivity and scenario analysis to assess the resilience of borrowers, especially during periods of uncertain or adverse economic conditions. Additionally, we require borrowers to provide evidence of insurance for properties used as collateral, with coverage and levels appropriate to the specific credit.
Our business activity is conducted primarily within the geographic footprint of our banking affiliates. We strive to avoid the risk of undue concentrations of credit in any particular industry, collateral type, location, or with any individual customer or counterparty. For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our 2024 Form 10-K.
U.S. Government Agency Guaranteed Loans
We participate in various guaranteed lending programs sponsored by United States (“U.S.”) government agencies, including the U.S. Small Business Administration (“SBA”), Federal Housing Authority, U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At September 30, 2025, $613 million of related loans were guaranteed, primarily by the SBA.
The following schedule presents the composition of our U.S. government agency guaranteed loans:
U.S. GOVERNMENT AGENCY GUARANTEED LOANS

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount Percent
guaranteed Amount Percent
guaranteed

Commercial $ 761  77  % $ 687  78  %
Commercial real estate 31  74  25  76 
Consumer 4  100  4  100 
Total loans $ 796  77  $ 716  78 

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Commercial Lending
The following schedule presents the composition of our commercial lending portfolio:
COMMERCIAL LENDING PORTFOLIO

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of total 
commercial loans Amount % of total 
commercial loans Amount change Percent change
Commercial:
Commercial and industrial $ 17,222  55.3  % $ 16,891  54.6  % $ 331  2.0  %
Owner-occupied 9,267  29.7  9,333  30.1  (66) (0.7)
Municipal 4,341  13.9  4,364  14.1  (23) (0.5)
Leasing 349  1.1  377  1.2  (28) (7.4)
Total commercial $ 31,179  100.0  % $ 30,965  100.0  % $ 214  0.7 

Our commercial loans encompass a diverse range of industries and generally mature within one to five years, with amortization schedules determined by the underlying collateral and guarantees. These loans are typically structured as seasonal, term, working capital, or bridge loans, and are offered as revolving and non-revolving lines of credit, amortizing term loans, guidance facilities, and single-payment loans. They include covenants that require borrowers to provide regular financial reporting to monitor business performance and assess leverage, debt service coverage, and liquidity.
The underwriting process for commercial loans primarily involves analyzing management, financial performance, industry, sponsorship (if applicable), and transaction structure. Credit enhancements are generally provided by collateral and guarantees from the owners or sponsors. Prospective cash flows are subjected to various downside scenario analyses, including revenue decline, margin compression, and interest rate fluctuations.
The following schedule presents the geographic distribution of our commercial lending portfolio, with geographies based on the location of the primary borrower:
COMMERCIAL LENDING BY GEOGRAPHY

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans

Commercial:
Arizona $ 2,250  7.2  % $ 4  $ 2,202  7.1  % $ 5 
California 6,215  19.9  73  6,190  20.0  58 
Colorado 1,727  5.5  5  1,892  6.1  17 
Nevada 1,366  4.4  3  1,336  4.3  11 
Texas 7,574  24.3  33  7,367  23.8  47 
Utah/Idaho 6,503  20.9  24  6,309  20.4  6 
Washington/Oregon 1,429  4.6  9  1,338  4.3  10 
Other 1
4,115  13.2  2  4,331  14.0  4 
Total commercial $ 31,179  100.0  % $ 153  $ 30,965  100.0  % $ 158 

1 No other geography exceeds 2.0% and 2.6% for September 30, 2025 and December 31, 2024, respectively.

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

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans

Real estate, rental, and leasing $ 3,346  10.7  % $ 36  $ 3,083  10.0  % $ 7 
Retail trade 2,889  9.3  2  2,873  9.3  7 
Manufacturing 2,392  7.7  20  2,322  7.5  7 
Finance and insurance 2,374  7.6  11  2,762  8.9  1 
Healthcare and social assistance 2,334  7.5  7  2,541  8.2  34 
Wholesale trade 2,159  6.9  1  1,909  6.2  2 
Public administration 1,954  6.3  —  2,106  6.8  — 
Hospitality and food services 1,535  4.9  3  1,352  4.4  2 
Transportation and warehousing 1,508  4.8  7  1,589  5.1  7 
Utilities 1
1,491  4.8  3  1,389  4.5  2 
Construction 1,446  4.6  12  1,335  4.3  26 
Educational services 1,293  4.2  —  1,292  4.2  — 
Other Services (except Public administration) 1,160  3.7  2  1,069  3.4  3 
Mining, quarrying, and oil and gas extraction 1,093  3.5  —  1,178  3.8  — 
Professional, scientific, and technical services 1,061  3.4  3  1,057  3.4  25 
Other 2
3,144  10.1  46  3,108  10.0  35 
Total $ 31,179  100.0  % $ 153  $ 30,965  100.0  % $ 158 

1 Includes primarily utilities, power, and renewable energy.
2 No other industry group exceeds 3.1% and 3.4% for September 30, 2025 and December 31, 2024, respectively.
As previously noted, our commercial lending portfolio is well-diversified across both geographic regions and industry sectors. In light of increased investor interest in loans extended to nondepository financial institutions (“NDFIs”), we provide the following information regarding these exposures within our commercial lending portfolio.
Loans to Nondepository Financial Institutions (NDFIs)
NDFIs encompass a wide range of financial entities that provide services similar to those of traditional banking institutions, but do not accept public deposits and are not generally subject to oversight by federal banking regulators. We provide financing to NDFIs, including mortgage intermediaries, business development companies (“BDCs”), private equity funds, consumer credit platforms, and other financial entities.
We regularly monitor NDFI exposures through borrower-level hold limits, perform stress testing of underlying portfolios, verify compliance with applicable regulatory requirements, review portfolio quality, and assess liquidity and capital adequacy.
Our NDFI portfolio is diversified across various lending segments and asset classes, including:
• Mortgage credit intermediaries — Loans to mortgage companies engaged in residential or commercial mortgage origination and servicing; special purpose entities supporting mortgage-related securitization activities, such as real estate investment trusts (“REITs”) and collateralized debt obligations.
• Business credit intermediaries — Loans to finance companies, direct lenders, private debt funds, equipment leasing companies, BDCs, SBICs, senior loan funds, and other nonbank business lenders.
• Private equity funds — Capital call commitment and subscription-based facilities extended to private equity, venture capital, and other general partnership funds.

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• Consumer credit intermediaries — Loans to nonbank consumer secured and unsecured lending platforms, as well as special purposes entities, finance companies, direct lenders, private debt funds, equipment leasing companies, or other financial intermediaries whose underlying assets primarily consist of consumer loans.
• Other — Loans to insurance companies, investment banks, broker-dealers, publicly-listed investment funds, hedge funds, family offices, and other investment firms and financial vehicles.
At September 30, 2025, total loans to NDFIs amounted to approximately $2.0 billion, representing 6.5% of total commercial loans and 3.4% of total loans. This compares with $2.4 billion, or 7.6% of total commercial loans and 4.0% of total loans, at December 31, 2024.
The following schedule presents the composition of our NDFI lending portfolio:
NDFI LENDING PORTFOLIO

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans

Mortgage credit intermediaries $ 389  19.1  % $ 10  $ 559  23.8  % $ — 
Business credit intermediaries 556  27.3  —  489  20.8  1 
Private equity funds 133  6.5  —  189  8.0  — 
Consumer credit intermediaries 345  17.0  —  349  14.8  — 
Other financial institutions 614  30.1  —  767  32.6  — 
Total NDFI portfolio $ 2,037  100.0  % $ 10  $ 2,353  100.0  % $ 1 

The following schedule presents NDFI loan credit quality metrics:
NDFI LOAN CREDIT QUALITY

(Dollar amounts in millions) September 30, 2025 December 31, 2024

Credit quality metrics
Criticized loan ratio 1.0  % 5.5  %
Classified loan ratio 1.0  % 5.5  %
Nonaccrual loan ratio 0.5  % —  %
Delinquency ratio —  % —  %
Annualized ratio of NDFI net charge-offs 1 (recoveries) to average loans
9.1  % —  %
Ratio of allowance for credit losses to NDFI loans, at period end 1.23  % 0.64  %

1 Total NDFI net charge-offs for the third quarter of 2025 included only the previously discussed $50 million charge-off associated with the revolving lines of credit extended to two related commercial borrowers to finance the origination and purchase of commercial and residential mortgages.

Commercial Real Estate Lending
The following schedule presents the composition of our commercial real estate lending portfolio:
COMMERCIAL REAL ESTATE LENDING PORTFOLIO

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of total 
CRE loans Amount % of total 
CRE loans Amount change Percent change
Commercial real estate:
Term $ 11,008  81.7  % $ 10,703  79.4  % $ 305  2.8  %
Construction and land development 2,469  18.3  2,774  20.6  (305) (11.0)
Total commercial real estate $ 13,477  100.0  % $ 13,477  100.0  % $ —  — 

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Term CRE loans typically mature within three to seven years and may include full, partial, and non-recourse guarantee structures. Standard term CRE loan structures feature annually tested operating covenants that require loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value (“LTV”) ratios. Construction and land development loans generally mature in 18 to 36 months and contain full or partial recourse guarantee structures, with one- to five-year extension options or roll-to-permanent options that often convert into term loans.
Underwriting for commercial properties primarily focuses on the economic viability of the project, with significant consideration given to the creditworthiness and experience of the sponsor. We generally require that the owner’s equity be invested prior to any advances. Loan agreements often include remargining requirements (equity infusions required upon a decline in the value or cash flow of the collateral) and sponsor guarantees.
As part of our disciplined underwriting and collateral evaluation practices, real estate appraisals are typically obtained when extending credit secured by commercial real estate. In some instances, automated valuation services or internal evaluations may be used. Appraisals are ordered and reviewed prior to loan closing, and new appraisals or evaluations are generally initiated when market conditions suggest a potential decline in collateral value, or when a loan is modified, renewed, or demonstrates signs of credit deterioration. CRE LTV ratios are calculated by dividing the outstanding loan balance by the estimated collateral value based on the most recent appraisal. At September 30, 2025, the weighted average LTV ratio for our term CRE portfolio was less than 60%.
For a more comprehensive discussion of CRE loans and our underwriting, see “Commercial Real Estate Loans” in our 2024 Form 10-K.
The following schedule presents the geographic distribution of our commercial real estate lending portfolio, based on the location of the primary collateral.
COMMERCIAL REAL ESTATE LENDING BY GEOGRAPHY

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans
Commercial real estate:
Arizona $ 1,652  12.3  % $ —  $ 1,801  13.4  % $ — 
California 3,615  26.8  45  3,569  26.5  50 
Colorado 728  5.4  16  666  4.9  — 
Nevada 1,059  7.9  —  1,104  8.2  — 
Texas 2,619  19.4  9  2,596  19.2  8 
Utah/Idaho 2,342  17.4  —  2,170  16.1  — 
Washington/Oregon 1,117  8.3  —  1,090  8.1  — 
Other 345  2.5  —  481  3.6  1 
Total commercial real estate $ 13,477  100.0  % $ 70  $ 13,477  100.0  % $ 59 

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

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COMMERCIAL REAL ESTATE LENDING BY COLLATERAL TYPE

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans
Commercial property
Multifamily $ 3,889  28.9  % $ —  $ 4,007  29.7  % $ 1 
Industrial 3,034  22.5  —  2,954  21.9  — 
Office 1,708  12.7  61  1,812  13.5  50 
Retail 1,603  11.9  —  1,533  11.4  — 
Hospitality 660  4.9  9  625  4.6  8 
Land 253  1.9  —  261  1.9  — 
Other 1
1,547  11.5  —  1,644  12.2  — 
Residential property 2

Single family 394  2.9  —  330  2.5  — 
Land 100  0.7  —  110  0.8  — 
Condo/Townhome 22  0.2  —  17  0.1  — 
Other 1
267  1.9  —  184  1.4  — 
Total $ 13,477  100.0  % $ 70  $ 13,477  100.0  % $ 59 

1 Included in the total amount of the “Other” commercial and residential categories was approximately $378 million and $342 million of unsecured loans at September 30, 2025 and December 31, 2024, respectively.
2 Residential property consists primarily of loans provided to commercial homebuilders for land, lot, and single-family housing developments.
As previously discussed, our commercial real estate lending portfolio is diversified across geography and collateral type, with the largest concentration in multifamily properties. Given investor interest in multifamily, industrial, and office collateral types, we provide additional analysis of these segments of our CRE portfolio below.
Multifamily CRE
At September 30, 2025 and December 31, 2024, our multifamily CRE loan portfolio totaled $3.9 billion and $4.0 billion, representing 29% and 30% of the total CRE loan portfolio, respectively. Approximately 38% of our multifamily CRE loan portfolio is scheduled to mature within the next 12 months. We believe that substantially all of these borrowers will be able to refinance at maturity through the Bank or other lenders, due to the cash flows from the properties, acceptable LTVs, equity levels, and guarantor support.
The following schedule presents the composition of our multifamily CRE loan portfolio and other related credit quality metrics:
MULTIFAMILY CRE LOAN PORTFOLIO

(Dollar amounts in millions) September 30,
2025 December 31, 2024
Multifamily CRE
Term $ 2,932  $ 2,918 
Construction and land development 957  1,089 
Total multifamily CRE $ 3,889  $ 4,007 
Credit quality metrics
Criticized loan ratio 16.7  % 21.5  %
Classified loan ratio 13.0  % 18.8  %
Nonaccrual loan ratio —  % —  %
Delinquency ratio —  % —  %
Annualized ratio of multifamily CRE net charge-offs (recoveries) to average loans —  % —  %
Ratio of allowance for credit losses to multifamily CRE loans, at period end 2.06  % 2.55  %
Weighted average LTV for multifamily term CRE loans 54  % 57  %

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The following schedules present our multifamily CRE loan portfolio, categorized by collateral location for the periods presented:
MULTIFAMILY CRE LOAN PORTFOLIO BY COLLATERAL LOCATION

September 30, 2025
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Multifamily CRE
Arizona $ 225  $ 111  $ 336  8.6  % $ — 
California 802  176  978  25.2  — 
Colorado 93  132  225  5.8  — 
Nevada 198  36  234  6.0  — 
Texas 903  210  1,113  28.6  — 
Utah/Idaho 410  202  612  15.7  — 
Washington/Oregon 240  90  330  8.5  — 
Other 1
61  —  61  1.6  — 
Total multifamily CRE $ 2,932  $ 957  $ 3,889  100.0  % $ — 

December 31, 2024
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Multifamily CRE
Arizona $ 364  $ 142  $ 506  12.6  % $ — 
California 850  172  1,022  25.5  1 
Colorado 91  101  192  4.8  — 
Nevada 188  99  287  7.2  — 
Texas 808  310  1,118  27.9  — 
Utah/Idaho 320  134  454  11.3  — 
Washington/Oregon 234  130  364  9.1  — 
Other 1
63  1  64  1.6  — 
Total multifamily CRE $ 2,918  $ 1,089  $ 4,007  100.0  % $ 1 

1 Other included $55 million of multifamily loans with collateral located in New Mexico at both September 30, 2025 and December 31, 2024.
Industrial CRE
At both September 30, 2025 and December 31, 2024, our industrial CRE loan portfolio totaled $3.0 billion, representing 23% and 22% of the total CRE loan portfolio, respectively. Approximately 35% of the industrial CRE loan portfolio is scheduled to mature within the next 12 months. We believe that substantially all of these borrowers will be able to refinance at maturity through the Bank or other lenders, due to the cash flows from the properties, acceptable LTVs, equity levels, and guarantor support.
The following schedule presents the composition of our industrial CRE loan portfolio and other related credit quality metrics:

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INDUSTRIAL CRE LOAN PORTFOLIO

(Dollar amounts in millions) September 30, 2025 December 31, 2024
Industrial CRE
Term $ 2,667  $ 2,462 
Construction and land development 367  492 
Total industrial CRE $ 3,034  $ 2,954 
Credit quality metrics
Criticized loan ratio 13.7  % 14.6  %
Classified loan ratio 13.2  % 12.8  %
Nonaccrual loan ratio —  % —  %
Delinquency ratio 0.6  % —  %
Annualized ratio of industrial CRE net charge-offs (recoveries) to average loans —  % —  %
Ratio of allowance for credit losses to industrial CRE loans, at period end 1.35  % 2.30  %
Weighted average LTV for industrial term CRE loans 52  % 53  %

The following schedules present our industrial CRE loan portfolio, categorized by collateral location for the periods presented:
INDUSTRIAL CRE LOAN PORTFOLIO BY COLLATERAL LOCATION

September 30, 2025
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Industrial CRE

Arizona $ 418  $ 20  $ 438  14.4  % $ — 
California 860  67  927  30.6  — 
Colorado 78  10  88  2.9  — 
Nevada 233  57  290  9.6  — 
Texas 447  43  490  16.2  — 
Utah/Idaho 358  120  478  15.7  — 
Washington/Oregon 221  50  271  8.9  — 
Other 1
52  —  52  1.7  — 
Total industrial CRE $ 2,667  $ 367  $ 3,034  100.0  % $ — 

December 31, 2024
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Industrial CRE

Arizona $ 374  $ 33  $ 407  13.8  % $ — 
California 730  189  919  31.1  — 
Colorado 58  1  59  2.0  — 
Nevada 241  108  349  11.8  — 
Texas 453  42  495  16.8  — 
Utah/Idaho 350  83  433  14.7  — 
Washington/Oregon 201  36  237  8.0  — 
Other 1
55  —  55  1.8  — 
Total industrial CRE $ 2,462  $ 492  $ 2,954  100.0  % $ — 

1 Other included $31 million of industrial loans with collateral located in Virginia at both September 30, 2025 and December 31, 2024.

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Office CRE
At September 30, 2025 and December 31, 2024, our office CRE loan portfolio totaled $1.7 billion and $1.8 billion, respectively, representing 13% of the total CRE loan portfolio for both periods. Approximately 28% of the office CRE loan portfolio is scheduled to mature in the next 12 months. We believe that substantially all of these borrowers will be able to refinance at maturity through the Bank or other lenders, due to the cash flows from the properties, acceptable LTVs, equity levels, and guarantor support.
The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:
OFFICE CRE LOAN PORTFOLIO

(Dollar amounts in millions) September 30, 2025 December 31, 2024
Office CRE
Term $ 1,689  $ 1,697 
Construction and land development 19  115 
Total office CRE $ 1,708  $ 1,812 
Credit quality metrics
Criticized loan ratio 13.6  % 14.5  %
Classified loan ratio 13.5  % 12.8  %
Nonaccrual loan ratio 3.6  % 2.8  %
Delinquency ratio 2.3  % 1.4  %
Annualized ratio of office CRE net charge-offs (recoveries) to average loans 0.6  % 0.3  %

Ratio of allowance for credit losses to office CRE loans, at period end 3.22  % 3.92  %
Weighted average LTV for office term CRE loans 58  % 56  %

The following schedules present our office CRE loan portfolio, categorized by collateral location for the periods presented:
OFFICE CRE LOAN PORTFOLIO BY COLLATERAL LOCATION

September 30, 2025
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Office CRE
Arizona $ 263  $ —  $ 263  15.4  % $ — 
California 297  5  302  17.7  45 
Colorado 57  —  57  3.3  16 
Nevada 87  —  87  5.1  — 
Texas 173  —  173  10.1  — 
Utah/Idaho 477  14  491  28.8  — 
Washington/Oregon 325  —  325  19.0  — 
Other 10  —  10  0.6  — 
Total office CRE $ 1,689  $ 19  $ 1,708  100.0  % $ 61 

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December 31, 2024
Loan Type
(Dollar amounts in millions) Term Construction and land development Total % of
total Nonaccrual loans
Office CRE
Arizona $ 255  $ —  $ 255  14.1  % $ — 
California 328  38  366  20.2  49 
Colorado 58  —  58  3.2  — 
Nevada 77  11  88  4.9  — 
Texas 186  7  193  10.6  1 
Utah/Idaho 482  34  516  28.5  — 
Washington/Oregon 283  25  308  17.0  — 
Other 28  —  28  1.5  — 
Total office CRE $ 1,697  $ 115  $ 1,812  100.0  % $ 50 

Consumer Lending
The following schedule presents the composition of our consumer lending portfolio:
CONSUMER LENDING PORTFOLIO

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of total 
consumer loans Amount % of total 
consumer loans Amount change Percent change
Consumer:
1-4 family residential $ 10,423  66.6  % $ 9,939  66.4  % $ 484  4.9  %
Home equity credit line 3,848  24.6  3,641  24.3  207  5.7 
Construction and other consumer real estate 769  4.9  810  5.4  (41) (5.1)
Bankcard and other revolving plans 477  3.0  457  3.1  20  4.4 
Other 129  0.9  121  0.8  8  6.6 
Total consumer $ 15,646  100.0  % $ 14,968  100.0  % $ 678  4.5 

1-4 Family Residential Mortgages
We originate first-lien residential home mortgage loans considered to be of prime quality. At September 30, 2025, our 1-4 family residential mortgage loan portfolio totaled $10.4 billion, representing 67% of our total consumer loan portfolio, compared with $9.9 billion, or 66%, at December 31, 2024. The increase was partly due to the acquisition of consumer loans associated with the purchase of four FirstBank Coachella Valley, California branches in late March 2025.
At September 30, 2025 and December 31, 2024, approximately 89% and 90%, respectively, of our 1-4 family residential mortgage loan portfolio consisted of variable-rate loans. We generally retain variable-rate loans in our loan portfolio and sell conforming fixed-rate loans to third parties, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. In connection with these sales, we provide customary representations and warranties affirming that the loans satisfy specified underwriting standards and collateral documentation requirements.
Home Equity Credit Lines
We also originate home equity credit lines (“HECLs”). At September 30, 2025 and December 31, 2024, our HECL portfolio totaled $3.8 billion and $3.6 billion, respectively. Approximately 34% and 37% of our HECLs were secured by first liens for the same respective time periods.
At September 30, 2025, loans representing less than 1% of the outstanding balance in the HECL portfolio were estimated to have combined loan-to-value (“CLTV”) ratios above 100%. An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with a Fair Isaac Corporation (“FICO”) credit score greater than 700.

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At September 30, 2025, approximately 93% of our HECL portfolio was still in the draw period, and about 22% of those loans were scheduled to begin amortizing within the next five years. We believe the risk of loss and borrower default in the event of a loan becoming fully amortizing and the effect of significant interest rate changes is low, given the rate shock analysis performed at origination. The ratio of HECL net charge-offs (recoveries) for the trailing twelve months to average balances at September 30, 2025 and December 31, 2024, was 0.01% and 0.00%, respectively. For additional information on the credit quality of our HECL portfolio, see Note 6 of the Notes to Consolidated Financial Statements.
The following schedule presents the geographic distribution of our consumer lending portfolio, based on the location of the primary borrower.
CONSUMER LENDING BY GEOGRAPHY

September 30, 2025 December 31, 2024
(Dollar amounts in millions) Amount % of
total Nonaccrual loans Amount % of
total Nonaccrual loans
Consumer
Arizona $ 1,433  9.2  % $ 7  $ 1,365  9.1  % $ 5 
California 3,563  22.8  15  3,159  21.1  14 
Colorado 1,393  8.9  12  1,353  9.1  7 
Nevada 1,349  8.6  12  1,328  8.9  10 
Texas 3,655  23.4  25  3,657  24.4  25 
Utah/Idaho 3,521  22.5  17  3,430  22.9  14 
Washington/Oregon 297  1.9  4  237  1.6  — 
Other 435  2.7  3  439  2.9  5 
Total consumer $ 15,646  100.0  % $ 95  $ 14,968  100.0  % $ 80 

Credit Quality
We monitor credit quality by analyzing various factors, including nonperforming status, internal risk grades, and net charge-offs, all of which are used in our overall evaluation of the adequacy of our ACL. For more information on these factors and the ACL, see Note 6 of the Notes to Consolidated Financial Statements.
Nonperforming Assets
Nonperforming assets include nonaccrual loans and other real estate owned (“OREO”), or foreclosed properties. The following schedule presents the composition of our nonperforming assets:
NONPERFORMING ASSETS

(Dollar amounts in millions) September 30,
2025 December 31,
2024

Nonaccrual loans 1
$ 319  $ 297 
Other real estate owned 2
5  1 
Total nonperforming assets $ 324  $ 298 
Ratio of nonperforming assets to net loans and leases 1 and other real estate owned 2
0.54  % 0.50  %
Accruing loans past due 90 days or more $ 5  $ 18 
Ratio of accruing loans past due 90 days or more to loans and leases 1
0.01  % 0.03  %
Nonaccrual loans 1 and accruing loans past due 90 days or more
$ 324  $ 315 
Ratio of nonperforming assets 1 and accruing loans past due 90 days or more to loans and leases 1 and other real estate owned 2
0.54  % 0.53  %
Accruing loans past due 30-89 days $ 69  $ 57 

Ratio of nonaccrual loans 1 current as to principal and interest payments
54.2  % 61.7  %

1 Includes loans held for sale.
2 Does not include banking premises held for sale.

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Nonperforming assets totaled $324 million, or 0.54% of total loans and leases and other real estate owned at September 30, 2025, compared with $298 million, or 0.50%, at December 31, 2024. For more information about nonaccrual loans, see Note 6 of the Notes to Consolidated Financial Statements.
Classified Loans
Classified loans are considered loans with well-defined weaknesses and are assigned using our internal risk grade definitions of substandard and doubtful, which are consistent with regulatory risk classifications. The following schedule presents our classified loans by loan segment:
CLASSIFIED LOANS

(Dollar amounts in millions) September 30,
2025 December 31,
2024

Commercial
$ 971  $ 1,130 
Commercial real estate 1,337  1,651 
Consumer 107  89 
Total classified loans $ 2,415  $ 2,870 
Ratio of classified loans to total loans and leases 4.00  % 4.83  %

Classified loans totaled $2.4 billion and decreased $455 million when compared with December 31, 2024. Approximately 55% of our classified loans are in the CRE loan portfolio. The loss content of our CRE loan portfolio continues to be mitigated by strong underwriting, supported by significant borrower equity and guarantor support, resulting in relatively stable CRE nonperforming assets and low net loan charge-offs.
Allowance for Credit Losses
The ACL, which consists of the ALLL and the RULC, represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date.
We estimate current expected credit losses by incorporating historical credit loss experience, prevailing economic conditions, and economic forecasts, which collectively inform the quantitative component of our ACL. Additionally, we consider qualitative and environmental factors that may indicate actual losses could differ from levels estimated by our quantitative models. The impact of these factors on our ACL may vary from quarter to quarter. Because economic forecasts may not always align with observed credit quality trends, changes in the ACL may not necessarily correspond directionally with changes in credit quality.
During the first nine months of 2025, the qualitative portion of the ACL decreased primarily due to a reduction in CRE portfolio-specific risks. This led us to assign lesser weight to stressed economic assumptions for the CRE portfolio.
For additional information on the ACL and credit trends experienced in each portfolio segment, see “The Allowance and Provision for Credit Losses” section on page 13 and Note 6 of the Notes to Consolidated Financial Statements.

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The following schedule presents the components of the ACL and credit-related balances and metrics:
ACL AND CREDIT-RELATED BALANCES AND METRICS

(Dollar amounts in millions) Nine Months Ended
September 30, 2025 Twelve Months Ended
December 31, 2024 Nine Months Ended
September 30, 2024

Loans and leases outstanding $ 60,302  $ 59,410  $ 58,884 
Average loans and leases outstanding:
Commercial 31,327  30,671  30,553 
Commercial real estate 13,593  13,532  13,538 
Consumer 15,378  14,344  14,198 
Total average loans and leases outstanding $ 60,298  $ 58,547  $ 58,289 
Allowance for loan and lease losses:
Balance at beginning of period $ 696  $ 684  $ 684 
Provision for loan losses 65  72  34 
Charge-offs:
Commercial 92  68  30 
Commercial real estate 4  11  11 
Consumer 11  12  9 
Total 107  91  50 
Recoveries:
Commercial 21  23  19 
Commercial real estate 1  3  3 
Consumer 3  5  4 
Total 25  31  26 
Net loan and lease charge-offs 82  60  24 
Balance at end of period $ 679  $ 696  $ 694 
Reserve for unfunded lending commitments:
Balance at beginning of period $ 45  $ 45  $ 45 
Provision for unfunded lending commitments 1  —  (3)
Balance at end of period $ 46  $ 45  $ 42 
Total allowance for credit losses:
Allowance for loan and lease losses $ 679  $ 696  $ 694 
Reserve for unfunded lending commitments 46  45  42 
Total allowance for credit losses $ 725  $ 741  $ 736 

Ratio of allowance for credit losses to net loans and leases, at period end 1.20  % 1.25  % 1.25  %
Ratio of allowance for credit losses to nonaccrual loans, at period end 227  % 249  % 203  %
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end 224  % 235  % 199  %
Ratio of total net charge-offs to average loans and leases 1
0.18  % 0.10  % 0.05  %
Ratio of commercial net charge-offs to average commercial loans 1
0.30  % 0.15  % 0.05  %
Ratio of commercial real estate net charge-offs to average commercial real estate loans 1
0.03  % 0.06  % 0.08  %
Ratio of consumer net charge-offs to average consumer loans 1
0.07  % 0.05  % 0.05  %

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

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Interest Rate and Market Risk Management
Interest rate and market risk refer to the potential for adverse impacts on current or future earnings and capital arising from changes in interest rates and other market conditions. Given our involvement in transactions with a broad range of financial instruments, we are inherently exposed to these risks. For more information regarding our interest rate and market risk management practices, see “Interest Rate and Market Risk Management” in our 2024 Form 10-K.
We actively manage our exposure to interest rate fluctuations by positioning the balance sheet to reduce volatility in both net interest income and the economic value of equity (“EVE”). Given that a significant portion of our balance sheet funding is derived from non-maturity deposit products, we rely on behavioral models and assumptions to forecast the sensitivity of earnings to interest rate movements. These models and assumptions are subject to ongoing performance monitoring.
When observed deposit behavior diverges from model expectations, the models are updated accordingly, with greater emphasis placed on recently observed behavior. All model changes are independently reviewed by our Model Risk Management function.
Our deposit-behavior models incorporate assumptions about the correlation between the rates paid on interest-bearing deposits and fluctuations in average benchmark interest rates. This is commonly referred to as “deposit beta.” Certificates of deposit are typically modeled with a higher degree of correlation, whereas interest-bearing checking accounts are assumed to exhibit a lower sensitivity to rate changes.
Many consumer and business deposit accounts have historically demonstrated stability and limited sensitivity to rate changes, resulting in a longer duration relative to our loan portfolio. As a result, our balance sheet has typically been “asset-sensitive,” meaning that assets are expected to reprice more quickly or more significantly than our liabilities. Measures of asset sensitivity are particularly influenced by changes in deposit modeling assumptions.
To manage interest rate risk, we regularly employ a combination of interest rate swaps, investments in fixed-rate securities, and funding strategies. Collectively, these tools help moderate the expected sensitivity of net interest income and EVE to changes in interest rates.
The following schedule presents deposit duration assumptions discussed previously:
DEPOSIT ASSUMPTIONS

September 30, 2025 December 31, 2024
Product Effective duration
(-200 bps) Effective duration (unchanged) Effective duration
(+200 bps) Effective duration
(-200 bps) Effective duration (unchanged) Effective duration
(+200 bps)

Demand deposits 4.5% 3.8% 3.3% 4.2% 3.5% 2.9%
Money market 2.1% 1.6% 1.4% 1.9% 1.6% 1.4%
Savings and interest-bearing checking 2.2% 1.8% 1.7% 2.1% 1.8% 1.6%

As previously discussed, we utilize derivative instruments to manage interest rate risk. The following schedule presents derivatives designated in qualifying hedging relationships at September 30, 2025. It includes the average outstanding derivative notional amounts for each reporting period presented and the weighted-average fixed rates paid or received across cash flow and fair value hedge categories. For more information regarding our hedge accounting strategies and the impact of these hedging relationships on interest income and expense, see Note 7 of the Notes to Consolidated Financial Statements.

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DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS

2025 2026 2027 4Q27 - 3Q28 4Q28 - 3Q29
(Dollar amounts in millions) Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter
Cash flow hedges
Cash flow hedges of assets 1

Average outstanding notional $ 1,199 $ 1,034 $ 1,000 $ 1,000 $ 1,000 $ 934 $ 778 $ 598 $ 342 $ 145
Weighted-average fixed-rate received 3.04  % 3.10  % 3.15  % 3.15  % 3.15  % 3.25  % 3.28  % 3.21  % 3.83  % 3.82  %

2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Fair value hedges
Fair value hedges of debt 2

Average outstanding notional $ 1,000 $ 1,000 $ 814 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 441
Weighted-average fixed-rate received 2.30  % 2.30  % 2.72  % 3.93  % 3.93  % 3.93  % 3.93  % 3.93  % 3.93  % 3.93  %
Fair value hedges of assets 3

Average outstanding notional $ 5,478 $ 5,471 $ 5,455 $ 4,625 $ 3,393 $ 2,224 $ 1,796 $ 1,644 $ 1,517 $ 1,338
Weighted-average fixed-rate paid 3.76  % 3.76  % 3.61  % 3.26  % 3.10  % 2.90  % 2.76  % 2.70  % 2.65  % 2.75  %

1 Cash flow hedges of assets consist of receive-fixed swaps hedging pools of floating-rate loans.
2 Fair value debt hedges consist of receive-fixed swaps that hedge fixed-rate subordinated and senior debts.
3 Fair value asset hedges consist of pay-fixed swaps that hedge fixed-rate AFS securities and fixed-rate commercial loans.
At September 30, 2025, we had $48 million of net losses deferred in accumulated other comprehensive income (“AOCI”) related to terminated cash flow hedges. These deferred amounts are amortized into interest income on a straight-line basis over the original maturity periods of the respective hedges, provided the forecasted transactions are expected to occur. For more information regarding amounts deferred in AOCI from terminated cash flow hedges, see “Interest Rate and Market Risk Management” in our 2024 Form 10-K.
Earnings at Risk (EaR) and Economic Value of Equity (EVE)
Incorporating our deposit assumptions and the impact of derivatives designated in qualifying hedging relationships, the following schedule presents our earnings at risk (“EaR”), defined as the percentage change in projected 12-month net interest income, and the estimated percentage change in EVE. Both EaR and EVE are based on a static balance sheet and reflect instantaneous, parallel shifts in interest rates ranging from -200 to +200 bps. These metrics are intended to illustrate the sensitivity of net interest income and equity value to changes in interest rates across a range of scenarios and should not be interpreted as forecasts of expected net interest income.
INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY

September 30, 2025 December 31, 2024
Parallel shift in rates (in bps)
Parallel shift in rates (in bps)

Repricing scenario -200 -100 0 +100 +200 -200 -100 0 +100 +200

Earnings at Risk
(EaR)
(9.7) % (4.9) % —  % 4.9  % 9.7  % (8.9) % (4.5) % —  % 4.4  % 8.7  %
Economic Value of Equity
(EVE)
(1.2) % (0.2) % —  % (0.8) % (2.1) % 0.1  % 0.6  % —  % (1.7) % (3.6) %

Asset sensitivity, as measured by EaR, increased during the first nine months of 2025, primarily due to shifts in the composition of deposit balances. Under current deposit assumptions, interest rate risk remains within established policy limits. For interest-bearing deposits with indeterminable maturities, the weighted average modeled beta was 50%.

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Prepayment assumptions play a critical role in the management of interest rate risk. Certain assets within our portfolio, such as 1-4 family residential mortgages and mortgage-backed securities, are subject to borrower-driven prepayments, which can significantly affect projected cash flows. At September 30, 2025 and December 31, 2024, estimated lifetime prepayment speeds for loans were 15.2% and 13.7%, respectively, reflecting a decline in mortgage rates. For mortgage-backed securities, estimated prepayment speeds were 7.1% and 7.0% for the same respective periods.
Our EaR analysis primarily evaluates the impact of parallel rate shocks across the term structure of benchmark interest rates. Additionally, we perform non-parallel rate shock scenarios to identify potential risks that may not be captured under parallel rate assumptions. In these non-parallel rate scenarios, the most significant effects on EaR typically stem from movements in short-term interest rates.
EaR has inherent limitations in capturing anticipated changes in net interest income in changing interest rate environments, primarily due to timing mismatches in the repricing behavior of assets and liabilities. To address this, we provide measures of “latent” and “emergent” interest rate sensitivity, which compare current-quarter net interest income with projected net interest income for the same quarter one year forward. Unlike EaR, which assesses net interest income variability over a 12-month horizon, latent and emergent sensitivity metrics provide additional insight into near-term earnings dynamics amid changing rate conditions. As previously noted, these measures are intended to illustrate the sensitivity of net interest income and equity value to changes in interest rates across a range of scenarios and should not be interpreted as forecasts of expected net interest income.
Latent interest rate sensitivity captures anticipated changes in net interest income driven by prior interest rate movements that have not yet been fully reflected in current revenue but are expected to materialize in the near term assuming no changes in interest rates and a static balance sheet. Latent sensitivity is projected to increase net interest income by approximately 8.0% in the third quarter of 2026, compared with the third quarter of 2025.
Emergent interest rate sensitivity reflects the projected incremental changes in net interest income resulting from future interest rate movements, measured relative to the latent level of net interest income. Assuming interest rates follow the forward curve as of September 30, 2025, emergent sensitivity is modeled to reduce net interest income by approximately 6.6% from the latent level, yielding a cumulative increase of 1.4% in net interest income in the third quarter of 2026, relative to the third quarter of 2025. Under a parallel interest rate shock of +/- 100 bps to the implied forward rate path, cumulative net interest income sensitivity is projected to range between -1.9% and 4.7%.
Our strategic focus on business banking plays a significant role in our asset-liability management approach. At September 30, 2025, $28.8 billion of commercial and CRE loans were scheduled to reprice within the next six months. To manage the interest rate exposure associated with these variable-rate loans, we had $1.3 billion in notional of receive-fixed swaps designated as cash flow hedges. Additionally, at September 30, 2025, $4.4 billion in variable-rate consumer loans were also scheduled to reprice within the same period. The impact of interest rate floors on asset sensitivity for both commercial and consumer loan portfolios is currently insignificant in the higher interest rate environment. For additional information regarding derivative instruments, see Notes 3 and 7 of the Notes to Consolidated Financial Statements.
Fixed Income
We are subject to market risk arising from fluctuations in the fair value of financial instruments, including trading securities and interest rate swaps used to hedge interest rate exposure. Our underwriting activities include municipal and corporate securities, and we actively trade in municipal, agency, and U.S. Treasury securities. These activities expose us to potential losses resulting from adverse price movements in fixed-income markets.
Changes in the fair value of AFS securities and interest rate swaps that qualify as cash flow hedges are recognized in AOCI each reporting period. For additional information on investment securities and AOCI, refer to the “Capital Management” section on page 39. For more information on the accounting treatment of investment securities, see Note 5 of the Notes to Consolidated Financial Statements.

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Equity Investments
Through our equity investment activities, we hold both publicly traded equity securities and non-marketable equity securities in governmental entities and institutions, such as the FRB and the FHLB. For more information regarding our equity investments, see “Interest Rate and Market Risk Management” in our 2024 Form 10-K.
We hold investments primarily in pre-public companies, largely through a variety of SBIC funds. This investment strategy is designed to support the financing, growth, and expansion of diverse businesses, generally within our geographic footprint. At September 30, 2025 and December 31, 2024, our equity exposure to these investments totaled approximately $252 million and $204 million, respectively.
From time to time, companies within our SBIC portfolio may complete an IPO, which introduces additional market risk due to post-IPO lock-up restrictions. During the second quarter of 2025, one of our SBIC investments, FatPipe, Inc., successfully completed an IPO. This investment will be marked-to-market until our shares, which are subject to a minimum 180-day lock-up period from the IPO, are fully divested. For more information regarding the valuation of our SBIC investments, see Note 3 of the Notes to Consolidated Financial Statements.

Liquidity Risk Management
Liquidity refers to our ability to meet cash, contractual, and collateral obligations while effectively managing both anticipated and unanticipated cash flow requirements without negatively impacting our operations or financial strength. We manage liquidity to provide funding for customer credit needs, financial and contractual commitments, and other corporate activities. Our primary sources of liquidity include deposits, borrowings, equity, and the repayment or sale of assets such as loans and investment securities. Investment securities are primarily held as a source of contingent liquidity and are generally comprised of instruments that can be readily converted to cash through secured borrowing arrangements, with the securities pledged as collateral. For more information on our liquidity risk management practices, see “Liquidity Risk Management” in our 2024 Form 10-K.
For the first nine months of 2025, the primary sources of cash included a decrease in investment securities, a decrease in money market investments, and net cash provided by operating activities. The primary uses of cash during the same period included a decrease in deposits, an increase in loans and leases, and dividends paid on common and preferred stock. Cash payments for interest, reflected in operating expenses, totaled $1.2 billion and $1.4 billion for the first nine months of 2025 and 2024, respectively.
The FHLB and FRB continue to serve as key sources of contingent liquidity and funding. As a member of the FHLB of Des Moines, we have the ability to borrow against eligible loans and securities to meet liquidity and funding requirements. To maintain our borrowing capacity, we are required to maintain investments in both FHLB and FRB stock. At September 30, 2025, our total investment in FHLB and FRB stock was $145 million and $54 million, respectively, compared with $124 million and $65 million at December 31, 2024.
At September 30, 2025, loans with a carrying value of $25.0 billion and $17.6 billion were pledged at the FHLB and FRB, respectively, as collateral for current and potential borrowings, compared with $23.4 billion and $17.0 billion at December 31, 2024.
At September 30, 2025 and December 31, 2024, investment securities with carrying values of $17.4 billion and $17.9 billion, respectively, were pledged as collateral to support potential borrowings. These pledged securities included $8.5 billion and $8.7 billion, respectively, designated for available use through the Fixed Income Clearing Corporation's General Collateral Finance (“GCF”) program and other repo programs; $4.5 billion and $4.7 billion pledged to the FRB and FHLB; and $4.4 billion and $4.5 billion pledged to secure public and trust deposits, advances, and other collateralized obligations.
A significant portion of these pledged assets are unencumbered, but are pledged to provide immediate access to contingency sources of funds. The following schedule presents our total available liquidity, including unused collateralized borrowing capacity:

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AVAILABLE LIQUIDITY

September 30, 2025 December 31, 2024
(Dollar amounts in billions) FHLB FRB 1
GCF 2
Total FHLB FRB 1
GCF 2
Total

Total borrowing capacity $ 15.5  $ 18.1  $ 8.6  $ 42.2  $ 14.6  $ 17.7  $ 8.6  $ 40.9 
Borrowings outstanding 3.0  —  —  3.0  2.6  —  0.3  2.9 
Remaining capacity, at period end $ 12.5  $ 18.1  $ 8.6  $ 39.2  $ 12.0  $ 17.7  $ 8.3  $ 38.0 

Cash and due from banks $ 0.8  $ 0.7 
Interest-bearing deposits 3
2.4  2.9 
Total available liquidity $ 42.4  $ 41.6 
Ratio of available liquidity to uninsured deposits 126% 121%

1 Represents borrowing capacity and borrowings outstanding at the Federal Reserve Bank discount window.
2 Includes $852 million and $915 million pledged for available use through other repo programs for the periods presented.
3 Represents funds deposited by the Bank primarily at the Federal Reserve Bank.
At September 30, 2025, our total available liquidity was $42.4 billion, compared with $41.6 billion at December 31, 2024. At September 30, 2025, our sources of liquidity exceeded the estimated amount of uninsured deposits of $33.6 billion without the need to sell any investment securities.
Credit Ratings
General financial market and economic conditions affect our access to, and the cost of, external financing. Our ability to access funding markets is also directly influenced by the credit ratings assigned to us by various rating agencies. These ratings not only impact the costs associated with borrowings, but also influence the sources from which we can borrow. All credit rating agencies currently rate our debt at an investment-grade level.
The following schedule presents our credit ratings:

CREDIT RATINGS
as of October 31, 2025:
Rating agency Outlook  Long-term issuer/senior
debt rating Subordinated debt rating Short-term debt rating

Kroll Stable A- BBB+ K2
S&P Negative BBB+ BBB NR
Fitch Stable BBB+ BBB F2
Moody's Stable Baa2 NR P2

Capital Management
A strong capital position is essential to achieve our key corporate objectives, ensure continued profitability, and foster depositor and investor confidence. We strive to (1) maintain sufficient capital to support the current needs and growth of our businesses, consistent with our assessment of their potential to create value for shareholders, and (2) fulfill our responsibilities to depositors and bondholders while managing capital distributions to shareholders through dividends and common stock repurchases.
We utilize stress testing as an important tool to inform our decisions on the appropriate level of capital to maintain, based on hypothetically stressed economic conditions, including the FRB’s supervisory severely adverse scenario. The timing and amount of capital actions depend on various factors, including our financial performance, business needs, prevailing and anticipated economic conditions, and the results of our internal stress testing, as well as approval from the Board of Directors (“Board”) and the Office of the Comptroller of the Currency (“OCC”). Shares may be repurchased occasionally in the open market or through privately negotiated transactions. For a more comprehensive discussion of our capital risk management, see “Capital Management” in our 2024 Form 10-K.

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SHAREHOLDERS' EQUITY

(Dollar amounts in millions) September 30,
2025 December 31,
2024 Amount change Percent change
Shareholders’ equity:
Preferred stock
$ 66  $ 66  $ —  —  %
Common stock and additional paid-in capital
1,721  1,737  (16) (1)
Retained earnings
7,134  6,701  433  6 
Accumulated other comprehensive loss (2,056) (2,380) 324  14 
Total shareholders' equity $ 6,865  $ 6,124  $ 741  12 

Total shareholders’ equity increased $741 million, or 12%, to $6.9 billion at September 30, 2025, compared with $6.1 billion at December 31, 2024. Common stock and additional paid-in capital decreased $16 million, primarily due to common stock repurchases. During the first quarter of 2025, we repurchased 0.8 million common shares outstanding for $41 million, which includes common shares acquired through our publicly announced plans and those acquired in connection with our stock compensation plan.
At September 30, 2025, the AOCI balance reflected a net loss of $2.1 billion, primarily attributable to a decline in the fair value of fixed-rate AFS securities driven by changes in interest rates. This amount includes $1.7 billion ($1.2 billion after tax) of unrealized losses associated with securities previously transferred from AFS to held-to-maturity (“HTM”). Compared with December 31, 2024, AOCI improved $324 million, primarily due to $142 million related to paydowns on AFS securities, and $137 million in unrealized loss amortization associated with the securities transferred from AFS to HTM. Additionally, AOCI was impacted by a $45 million decrease in unrealized losses and other adjustments associated with derivative instruments used for risk management purposes. The improvement in AOCI had a positive impact on our tangible book value per common share. We use pay-fixed, receive-floating interest rate swaps designated as hedges of our AFS securities to reduce the volatility of our AOCI balance. For more information about these swaps, see Note 7 of the Notes to Consolidated Financial Statements.
Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities with unrealized losses. Although changes in AOCI are reflected in shareholders’ equity, they are currently excluded from regulatory capital, and therefore do not impact our regulatory ratios. For more information on our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.
CAPITAL DISTRIBUTIONS

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except share amounts) 2025 2024 2025 2024
Capital distributions:
Preferred dividends paid $ 1 $ 10 $ 3 $ 31

Total capital distributed to preferred shareholders 1 10 3 31
Common dividends paid 67 61 196 184
Bank common stock repurchased 1
— — 41 35
Total capital distributed to common shareholders 67 61 237 219
Total capital distributed to preferred and common shareholders $ 68 $ 71 $ 240 $ 250
Weighted average diluted common shares outstanding (in thousands)
147,125  147,150  147,175  147,202 
Common shares outstanding, at period end (in thousands) 147,640  147,699  147,640  147,699 

1 Includes amounts related to common shares acquired through our publicly announced plans and those acquired in connection with our stock compensation plan. These shares were acquired from employees to cover their payroll taxes and stock option exercise costs upon the exercise of stock options.
Pursuant to the OCC’s “Earnings Limitation Rule,” dividend payments are limited to the sum of net income for the current fiscal year and retained earnings for the two preceding years, unless prior approval is obtained from the

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OCC to exceed this threshold. As of October 1, 2025, we had $1.3 billion in retained net profits available for distribution.
During the third quarter of 2025, we paid $1 million in dividends on preferred stock, compared with $10 million during the same prior year period. The decrease was due to the full redemption of the outstanding shares of our Series G, I, and J preferred stock in the fourth quarter of 2024.
During the third quarter of 2025, we paid $67 million in dividends on common stock, or $0.45 per share, compared with $61 million, or $0.41 per share, during the third quarter of 2024. In October 2025, the Board declared a quarterly dividend of $0.45 per common share, payable on November 20, 2025 to shareholders of record at the close of business on November 13, 2025. For additional information about our capital management actions, see Note 9 of the Notes to Consolidated Financial Statements.
Basel III
We are subject to Basel III capital requirements, which include certain minimum regulatory capital ratios. At September 30, 2025, we exceeded all capital adequacy requirements under the Basel III capital rules. Based on our internal stress testing and other assessments of capital adequacy, we believe our capital levels sufficiently exceed both internal and regulatory requirements for well-capitalized banks. For more information about our compliance with the Basel III capital requirements, see “Supervision and Regulation” and Note 15 of our 2024 Form 10-K.
The following schedule presents our capital amounts, capital ratios, and other selected performance ratios:
CAPITAL AMOUNTS AND RATIOS

(Dollar amounts in millions) September 30,
2025 December 31,
2024 September 30,
2024
Basel III risk-based capital amounts:

Common equity tier 1 capital $ 7,734  $ 7,363  $ 7,206 
Tier 1 risk-based 7,800  7,430  7,646 
Total risk-based 9,404  9,026  8,890 
Risk-weighted assets 68,648  67,685  67,305 
Basel III risk-based capital ratios:
Common equity tier 1 capital ratio 11.3  % 10.9  % 10.7  %
Tier 1 risk-based ratio 11.4  % 11.0  % 11.4  %
Total risk-based ratio 13.7  % 13.3  % 13.2  %
Tier 1 leverage ratio 8.8  % 8.3  % 8.6  %
Other ratios:
Average equity to average assets (three months ended) 7.5  % 7.2  % 6.9  %
Return on average common equity (three months ended) 13.3  % 13.2  % 14.1  %
Return on average tangible common equity (three months ended) 1
16.0  % 16.0  % 17.4  %
Tangible equity ratio 1
6.6  % 5.8  % 6.2  %
Tangible common equity ratio 1
6.5  % 5.7  % 5.7  %

1 See “Non-GAAP Financial Measures” on page 41 for more information regarding these ratios.
At September 30, 2025, our common equity tier 1 (“CET1”) capital totaled $7.7 billion, an increase of 7%, compared with $7.2 billion in the prior year period. The CET1 capital ratio improved to 11.3%, compared with 10.7%. Tangible book value per common share increased $5.52, or 17%, to $38.64, mainly due to an increase in retained earnings and reduced unrealized losses in AOCI. See the section below for more information regarding non-GAAP financial measures.

NON-GAAP FINANCIAL MEASURES
This Form 10-Q presents non-GAAP financial measures, in addition to generally accepted accounting principles (“GAAP”) financial measures. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful basis for period-to-period comparisons. We use

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these non-GAAP financial measures to assess our performance and financial position. We believe that presenting these non-GAAP financial measures allows investors to assess our performance on the same basis as that applied by our management and the financial services industry.
Non-GAAP financial measures have inherent limitations and are not necessarily comparable to similar financial measures that may be presented by other financial services companies. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
Tangible Common Equity and Related Measures
Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets and their related amortization. We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)

Three Months Ended
(Dollar amounts in millions) September 30,
2025 June 30,
2025 September 30,
2024

Net earnings applicable to common shareholders (GAAP)
$ 221  $ 243  $ 204 
Adjustment, net of tax:
Amortization of core deposit and other intangibles 2  2  1 
Net earnings applicable to common shareholders, net of tax
(a) $ 223  $ 245  $ 205 
Average common equity (GAAP) $ 6,616  $ 6,357  $ 5,738 
Average goodwill and intangibles (1,095) (1,097) (1,054)

Average tangible common equity (non-GAAP) (b) $ 5,521  $ 5,260  $ 4,684 
Number of days in quarter (c) 92  91  92 
Number of days in year (d) 365  365  366 
Return on average tangible common equity (non-GAAP) 1
(a/b/c)*d 16.0  % 18.7  % 17.4  %

1 Excluding the effect of AOCI from average tangible common equity would result in associated returns of 11.5%, 13.1%, and 11.4% for the periods presented, respectively.
TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)

(Dollar amounts in millions, except shares and per share amounts) September 30,
2025 June 30,
2025 September 30,
2024

Total shareholders’ equity (GAAP) $ 6,865  $ 6,596  $ 6,385 
Goodwill and intangibles (1,094) (1,096) (1,053)

Tangible equity (non-GAAP) (a) 5,771  5,500  5,332 
Preferred stock (66) (66) (440)
Tangible common equity (non-GAAP) (b) $ 5,705  $ 5,434  $ 4,892 
Total assets (GAAP) $ 88,533  $ 88,893  $ 87,032 
Goodwill and intangibles (1,094) (1,096) (1,053)

Tangible assets (non-GAAP) (c) $ 87,439  $ 87,797  $ 85,979 
Common shares outstanding (in thousands) (d) 147,640  147,603  147,699 
Tangible equity ratio (non-GAAP) (a/c) 6.6  % 6.3  % 6.2  %
Tangible common equity ratio (non-GAAP) (b/c) 6.5  % 6.2  % 5.7  %
Tangible book value per common share (non-GAAP) (b/d) $ 38.64  $ 36.81  $ 33.12 

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Efficiency Ratio and Adjusted Pre-Provision Net Revenue
The efficiency ratio is a measure of operating expense relative to revenue. We believe the efficiency ratio provides useful information regarding the cost of generating revenue. We make adjustments to exclude certain items that are not generally expected to recur frequently, as identified in the subsequent schedule. We believe these adjustments allow for more consistent comparability across periods. Adjusted noninterest expense provides a measure as to how we are managing our expenses. Adjusted pre-provision net revenue enables management and others to assess our ability to generate capital. Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources.
EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)

Three Months Ended Nine Months Ended Year Ended
(Dollar amounts in millions) September 30,
2025 June 30,
2025 September 30,
2024 September 30,
2025 September 30,
2024 December 31,
2024

Noninterest expense (GAAP) (a) $ 527  $ 527  $ 502  $ 1,592  $ 1,537  $ 2,046 
Adjustments:
Severance costs
6  2  1  11  2  3 
Other real estate expense, net
—  —  —  —  (1) (1)
Amortization of core deposit and other intangibles
2  2  2  6  5  7 

SBIC investment success fee accrual 1  2  —  3  1  1 
FDIC special assessment (2) —  —  (2) 14  11 
Total adjustments
(b) 7  6  3  18  21  21 
Adjusted noninterest expense (non-GAAP)
(c)=(a-b) $ 520  $ 521  $ 499  $ 1,574  $ 1,516  $ 2,025 
Net interest income (GAAP) (d) $ 672  $ 648  $ 620  $ 1,944  $ 1,803  $ 2,430 
Fully taxable-equivalent adjustments
(e) 11  13  12  35  33  45 
Taxable-equivalent net interest income (non-GAAP)
(f)=(d+e) 683  661  632  1,979  1,836  2,475 
Customer-related noninterest income (non-GAAP) (g) 163  164  158  485  463  639 
Net credit valuation adjustment (CVA) 1
(h) (11) —  (3) (11) (3) — 
Adjusted customer-related noninterest income (non-GAAP)
(i)=(g-h) 174  164  161  496  466  639 
Noncustomer-related noninterest income (GAAP)
(j) 26  26  14  65  44  61 
Securities gains (losses), net
(k) 11  14  9  31  11  19 
Adjusted noncustomer-related noninterest income (non-GAAP)
(l)=(j-k) 15  12  5  34  33  42 
Combined income (non-GAAP) (m)=
(f+g+j) $ 872  $ 851  $ 804  $ 2,529  $ 2,343  $ 3,175 
Adjusted taxable-equivalent revenue (non-GAAP)
(n)=
(f+i+l) 872  837  798  2,509  2,335  3,156 
Pre-provision net revenue (non-GAAP)
(m)-(a) $ 345  $ 324  $ 302  $ 937  $ 806  $ 1,129 
Adjusted PPNR (non-GAAP) (n)-(c) 352  316  299  935  819  1,131 
Efficiency ratio (non-GAAP) (c/n) 59.6  % 62.2  % 62.5  % 62.7  % 64.9  % 64.2  %

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

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ITEM 1.    FINANCIAL STATEMENTS (Unaudited)

CONSOLIDATED BALANCE SHEETS

(In millions, shares in thousands) September 30,
2025 December 31,
2024
(Unaudited)
ASSETS
Cash and due from banks $ 771   $ 651  
Money market investments:
Interest-bearing deposits 2,395   2,850  
Federal funds sold and securities purchased under agreements to resell 1,008   1,453  
Trading securities, at fair value 134   35  
Investment securities:
Available-for-sale, at fair value 9,170   9,095  
Held-to-maturity, at amortized cost (fair value: $ 9,106 and $ 9,382 )
9,059   9,669  

Total investment securities 18,229   18,764  
Loans held for sale (includes $ 126 and $ 25 of loans carried at fair value)
215   74  
Loans and leases, net of unearned income and fees 60,302   59,410  
Allowance for loan and lease losses 679   696  
Loans held for investment, net of allowance 59,623   58,714  
Other noninterest-bearing investments 1,098   1,020  
Premises, equipment and software, net 1,358   1,366  
Goodwill and intangibles 1,094   1,052  
Other real estate owned 5   1  
Other assets 2,603   2,795  
Total assets $ 88,533   $ 88,775  
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand $ 26,133   $ 24,704  
Interest-bearing:
Savings and money market 38,689   40,037  
Time 10,056   11,482  

Total deposits 74,878   76,223  
Federal funds and other short-term borrowings 3,757   3,832  
Long-term debt 1,473   950  
Reserve for unfunded lending commitments 46   45  
Other liabilities 1,514   1,601  
Total liabilities 81,668   82,651  
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares
66   66  
Common stock ($ 0.001 par value; authorized 350,000 shares; issued and outstanding 147,640 and 147,871 shares) and additional paid-in capital
1,721   1,737  
Retained earnings 7,134   6,701  
Accumulated other comprehensive income (loss) ( 2,056 ) ( 2,380 )

Total shareholders’ equity 6,865   6,124  
Total liabilities and shareholders’ equity $ 88,533   $ 88,775  

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except shares and per share amounts) 2025 2024 2025 2024
Interest income:
Interest and fees on loans $ 898   $ 899   $ 2,623   $ 2,641  
Interest on money market investments 41   67   144   170  
Interest on securities 125   138   376   420  
Total interest income 1,064   1,104   3,143   3,231  
Interest expense:
Interest on deposits 313   403   951   1,169  
Interest on short- and long-term borrowings 79   81   248   259  
Total interest expense 392   484   1,199   1,428  
Net interest income 672   620   1,944   1,803  
Provision for credit losses:
Provision for loan and lease losses 45   1   65   34  
Provision for unfunded lending commitments 4   12   1   ( 3 )

Total provision for credit losses 49   13   66   31  
Net interest income after provision for credit losses 623   607   1,878   1,772  
Noninterest income:
Commercial account fees 47   46   138   135  
Card fees 24   24   71   72  
Retail and business banking fees 19   18   55   50  
Loan-related fees and income 20   17   56   50  
Capital markets fees and income 24   25   79   70  
Wealth management fees 14   14   43   44  
Other customer-related fees 15   14   43   42  
Customer-related noninterest income 163   158   485   463  
Dividends and other income 15   5   34   33  
Securities gains (losses), net 11   9   31   11  
Total noninterest income 189   172   550   507  
Noninterest expense:
Salaries and employee benefits 337   317   1,015   966  
Technology, telecom, and information processing 70   66   205   194  
Occupancy and equipment, net 42   40   123   119  
Professional and legal services 14   14   40   47  
Marketing and business development 11   12   34   35  
Deposit insurance and regulatory expense 16   19   58   74  
Credit-related expense 6   6   18   19  
Other real estate expense, net —   —   —   ( 1 )
Other 31   28   99   84  
Total noninterest expense 527   502   1,592   1,537  
Income before income taxes 285   277   836   742  
Income taxes 63   63   200   174  
Net income 222   214   636   568  

Preferred stock dividends ( 1 ) ( 10 ) ( 3 ) ( 31 )

Net earnings applicable to common shareholders $ 221   $ 204   $ 633   $ 537  
Weighted average common shares outstanding during the period:
Basic shares (in thousands) 147,045   147,138   147,136   147,197  
Diluted shares (in thousands) 147,125   147,150   147,175   147,202  
Net earnings per common share:
Basic $ 1.48   $ 1.37   $ 4.25   $ 3.61  
Diluted 1.48   1.37   4.25   3.61  

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2025 2024 2025 2024

Net income for the period $ 222   $ 214   $ 636   $ 568  
Other comprehensive income, net of tax:
Net change in unrealized gains on investment securities 50   139   142   137  
Unrealized loss amortization associated with the securities transferred from AFS to HTM 47   51   137   147  
Net change in cash flow hedge derivatives 11   23   45   71  
Net change in other —   —   —   1  
Other comprehensive income, net of tax 108   213   324   356  
Comprehensive income $ 330   $ 427   $ 960   $ 924  

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(In millions, except shares
and per share amounts) Preferred
stock Common stock shares
  (in thousands)
Accumulated paid-in capital Retained earnings Accumulated other
comprehensive income (loss) Total
shareholders’ equity

Balance at June 30, 2025 $ 66   147,603   $ 1,713   $ 6,981   $ ( 2,164 ) $ 6,596  
Net income for the period —  —  —  222   —  222  
Other comprehensive income, net of tax
—  —  —  —  108   108  
Bank common stock repurchased
—  ( 2 ) —  —  —  — 
Net activity under employee plans and related tax benefits
—  39   8   —  —  8  
Dividends on preferred stock —  —  —  ( 1 ) —  ( 1 )
Dividends on common stock, $ 0.45 per share
—  —  —  ( 67 ) —  ( 67 )
Change in deferred compensation —  —  —  ( 1 ) —  ( 1 )
Balance at September 30, 2025 $ 66   147,640   $ 1,721   $ 7,134   $ ( 2,056 ) $ 6,865  

Balance at June 30, 2024 $ 440   147,684   $ 1,713   $ 6,421   $ ( 2,549 ) $ 6,025  
Net income for the period —  —  —  214   —  214  
Other comprehensive income, net of tax
—  —  —  —  213   213  

Bank common stock repurchased
—  ( 3 ) —  —  —  — 
Net activity under employee plans and related tax benefits
—  18   4   —  —  4  
Dividends on preferred stock —  —  —  ( 10 ) —  ( 10 )
Dividends on common stock, $ 0.41 per share
—  —  —  ( 61 ) —  ( 61 )

Balance at September 30, 2024 $ 440   147,699   $ 1,717   $ 6,564   $ ( 2,336 ) $ 6,385  

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(In millions, except shares
and per share amounts) Preferred
stock Common stock shares
  (in thousands)
Accumulated paid-in capital Retained earnings Accumulated other
comprehensive income (loss) Total
shareholders’ equity

Balance at December 31, 2024 $ 66   147,871   $ 1,737   $ 6,701   $ ( 2,380 ) $ 6,124  
Net income for the period —  —  —  636   —  636  
Other comprehensive income, net of tax
—  —  —  —  324   324  

Bank common stock repurchased
—  ( 773 ) ( 41 ) —  —  ( 41 )
Net activity under employee plans and related tax benefits
—  542 25   —  —  25  
Dividends on preferred stock —  —  —  ( 3 ) —  ( 3 )
Dividends on common stock, $ 1.31 per share
—  —  —  ( 196 ) —  ( 196 )
Change in deferred compensation —  —  —  ( 4 ) —  ( 4 )
Balance at September 30, 2025 $ 66   147,640   $ 1,721   $ 7,134   $ ( 2,056 ) $ 6,865  

Balance at December 31, 2023 $ 440   148,153   $ 1,731   $ 6,212   $ ( 2,692 ) $ 5,691  
Net income for the period —  —  —  568   —  568  
Other comprehensive income, net of tax
—  —  —  —  356   356  

Bank common stock repurchased
—  ( 893 ) ( 35 ) —  —  ( 35 )
Net activity under employee plans and related tax benefits
—  439   21   —  —  21  
Dividends on preferred stock —  —  —  ( 31 ) —  ( 31 )
Dividends on common stock, $ 1.23 per share
—  —  —  ( 184 ) —  ( 184 )
Change in deferred compensation —  —  —  ( 1 ) —  ( 1 )
Balance at September 30, 2024 $ 440   147,699   $ 1,717   $ 6,564   $ ( 2,336 ) $ 6,385  

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(In millions) Nine Months Ended
September 30,
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period $ 636   $ 568  
Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses
66   31  
Depreciation and amortization
87   95  
Share-based compensation
29   28  
Deferred income tax expense
40   3  
Net increase in trading securities
( 99 ) ( 20 )
Net decrease (increase) in loans held for sale
( 79 ) 2  
Change in other liabilities
( 114 ) ( 188 )
Change in other assets
46   136  
Other, net
( 57 ) ( 24 )
Net cash provided by operating activities 555   631  
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in money market investments 900   186  
Proceeds from maturities and paydowns of investment securities held-to-maturity 814   776  
Purchases of investment securities held-to-maturity ( 27 ) ( 62 )
Proceeds from sales, maturities, and paydowns of investment securities available-for-sale 1,279   1,527  
Purchases of investment securities available-for-sale ( 1,082 ) ( 528 )
Net change in loans and leases ( 555 ) ( 1,130 )
Purchases and sales of other noninterest-bearing investments ( 36 ) 21  
Purchases of premises and equipment ( 83 ) ( 69 )
Acquisition of California branches, net of cash acquired 191   —  
Other, net
( 12 ) 5  
Net cash provided by investing activities 1,389   726  
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits ( 2,003 ) 757  
Net change in short-term borrowed funds ( 75 ) ( 1,460 )

Proceeds from the issuance of long-term debt 498   —  

Proceeds from the issuance of common stock 6   1  
Dividends paid on common and preferred stock ( 199 ) ( 215 )
Bank common stock repurchased ( 41 ) ( 35 )
Other, net ( 10 ) ( 7 )
Net cash used in financing activities ( 1,824 ) ( 959 )
Net increase in cash and due from banks 120   398  
Cash and due from banks at beginning of period 651   716  
Cash and due from banks at end of period $ 771   $ 1,114  
Cash paid for interest $ 1,202   $ 1,423  
Net cash paid for income taxes 173   131  
Noncash activities:

Loans held for investment reclassified to loans held for sale, net 106   144  
Deposits acquired in purchase of California branches (at time of purchase) 657   —  
Loans acquired in purchase of California branches, net (at time of purchase) 423   —  

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2025

1. BASIS OF PRESENTATION
Zions Bancorporation, National Association (“Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) is a bank headquartered in Salt Lake City, Utah. We provide a wide range of banking products and related services in 11 Western and Southwestern states through seven separately managed affiliates: Zions Bank in Utah, Idaho, and Wyoming; California Bank & Trust (“CB&T”); Amegy Bank (“Amegy”) in Texas; National Bank of Arizona (“NBAZ”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”) in Colorado and New Mexico; and The Commerce Bank of Washington (“TCBW”), which operates under that name in Washington and under The Commerce Bank of Oregon in Oregon.
The consolidated financial statements include our accounts and those of our majority-owned, consolidated subsidiaries. This also includes our wholly-owned subsidiaries, such as ZMFU II, Inc., which is utilized for our municipal lending business, and Zions Direct, Inc., a registered broker-dealer under the Exchange Act, among other subsidiaries.
Investments in which we have the ability to exercise significant influence over the operating and financial policies of the investee are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Assets held in an agency or fiduciary capacity are excluded from the consolidated financial statements.
The accompanying unaudited consolidated financial statements of Zions Bancorporation, N.A., and its majority-owned subsidiaries have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation have been included. References to GAAP, including standards promulgated by the Financial Accounting Standards Board (“FASB”), are made according to sections of the Accounting Standards Codification.
The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results that may be expected in future periods. In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying Notes. Actual results could differ from those estimates. For further information, refer to the consolidated financial statements and accompanying Notes included in our 2024 Form 10-K.
We evaluated events that occurred between September 30, 2025 and the date the consolidated financial statements were issued, and determined that there were no material events requiring adjustments to our consolidated financial statements or significant disclosure in the accompanying Notes.

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2. RECENT ACCOUNTING PRONOUNCEMENTS

Standard
Description
Effective date Effect on the financial statements or other significant matters

Standards not yet adopted by the Bank as of September 30, 2025

ASU 2024-03,
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)
This accounting standards update (“ASU”) requires additional disclosures of certain costs and expenses in both interim and annual reporting periods, including:
• Amounts of employee compensation, depreciation, and intangible asset amortization included in certain expense lines presented on the face of the income statement within continuing operations.
• A qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
• The Bank's definition and amount of selling costs.
Annual periods beginning January 1, 2027; Interim periods beginning January 1, 2028 The overall effect of this standard is not expected to have a material impact on our consolidated financial statements.
ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software
(Subtopic 350-40)
This ASU modernizes the accounting treatment for internal-use software to better reflect current development practices, including agile and iterative approaches. Key provisions include:
• Elimination of Prescriptive Project Stages: The guidance no longer requires classification of costs by development phase, thereby removing rigid stage-based criteria.
• Capitalization Criteria: Capitalization of eligible software development costs commences once management has both authorized and committed to funding the project, and it is probable that the project will be completed. This assessment must consider any significant development uncertainties, such as the inclusion of novel or unproven functionalities and whether performance requirements are subject to substantial revision.
• Updated Disclosure Requirements: Disclosure obligations are now aligned with those outlined in Subtopic 360-10, Property, Plant, and Equipment . Requirements under Subtopic 350-30 are no longer applicable.
Annual and interim periods beginning after December 15, 2027.
The overall effect of this standard is not expected to have a material impact on our consolidated financial statements.
Standards adopted by the Bank during 2025

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
This ASU requires additional detailed information to improve the usefulness of income tax disclosures. This includes providing detailed annual disclosures on rate reconciliation and income taxes paid for specific categories and when certain quantitative thresholds are met. Annual periods beginning January 1, 2025 The overall effect of this standard is not expected to have a material impact on our consolidated financial statements.

3. FAIR VALUE
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value, as well as the fair value hierarchy, see Note 3 of our 2024 Form 10-K.

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Fair Value Hierarchy
The following schedule presents assets and liabilities measured at fair value on a recurring basis:

(In millions) September 30, 2025
Level 1 Level 2 Level 3 Total
ASSETS
Trading securities $ —   $ 134   $ —   $ 134  
Available-for-sale securities:

U.S. Treasury, agencies, and corporations 1,311   6,861   —   8,172  
Municipal securities —   973   —   973  
Other debt securities —   25   —   25  
Total available-for-sale 1,311   7,859   —   9,170  
Loans held for sale —   126   —   126  
Other noninterest-bearing investments:
Bank-owned life insurance —   571   —   571  
Private equity investments 1
11   —   135   146  
Other assets:
Agriculture loan servicing —   —   19   19  
Deferred compensation plan assets 152   —   —   152  
Derivatives —   353   —   353  
Total assets $ 1,474   $ 9,043   $ 154   $ 10,671  
LIABILITIES
Fed funds and other short-term borrowings:
Securities sold, not yet purchased $ 252   $ —   $ —   $ 252  
Other liabilities:
Derivatives —   257   —   257  
Total liabilities $ 252   $ 257   $ —   $ 509  

(In millions) December 31, 2024
Level 1 Level 2 Level 3 Total
ASSETS
Trading securities $ —   $ 35   $ —   $ 35  
Available-for-sale securities:

U.S. Treasury, agencies, and corporations 662   7,300   —   7,962  
Municipal securities —   1,108   —   1,108  
Other debt securities —   25   —   25  
Total available-for-sale 662   8,433   —   9,095  
Loans held for sale —   25   —   25  
Other noninterest-bearing investments:
Bank-owned life insurance —   562   —   562  
Private equity investments 1
3   —   105   108  
Other assets:
Agriculture loan servicing —   —   20   20  
Deferred compensation plan assets 149   —   —   149  
Derivatives —   446   —   446  
Total assets $ 814   $ 9,501   $ 125   $ 10,440  
LIABILITIES
Fed funds and other short-term borrowings:
Securities sold, not yet purchased $ 21   $ —   $ —   $ 21  
Other liabilities:
Derivatives —   350   —   350  
Total liabilities $ 21   $ 350   $ —   $ 371  

1 The Level 1 private equity investments (“PEIs”) generally relate to the portion of our Small Business Investment Company (“SBIC”) investments and other similar investments that are publicly traded.

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Fair Value Option for Certain Loans Held for Sale
We have elected to apply the fair value option to certain commercial real estate (“CRE”) loans designated for sale to third-party conduits for securitization and hedged with derivative instruments. This election reduces accounting volatility that would otherwise arise from the mismatch between measuring loans held for sale at the lower of cost or fair value and derivatives at fair value, without requiring the application of hedge accounting. These loans are included in “Loans held for sale” on the consolidated balance sheet. Associated fair value gains and losses are included in “Capital markets fees and income” on the consolidated statement of income, while accrued interest is included in “Interest and fees on loans.”
At September 30, 2025 and December 31, 2024, we had $ 126 million and $ 25 million, respectively, of loans measured at fair value, with corresponding unpaid principal balance of $ 124 million and $ 26 million. During the first nine months of 2025 and 2024, we recognized approximately $ 6 million and $ 10 million, respectively, in net gains from loan sales and valuation adjustments related to loans measured at fair value and the associated derivatives.
Level 3 Valuations
Our Level 3 financial instruments include PEIs and agriculture loan servicing. For additional information regarding our Level 3 financial instruments, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our 2024 Form 10-K.
Roll-forward of Level 3 Fair Value Measurements
The following schedule presents a roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:

Level 3 Instruments
Three Months Ended
September 30, 2025 Three Months Ended
September 30, 2024 Nine Months Ended
September 30, 2025 Nine Months Ended
September 30, 2024
(In millions) Private equity investments Ag loan servicing Private equity investments Ag loan servicing Private equity investments Ag loan servicing Private equity investments Ag loan servicing

Balance at beginning of period
$ 116   $ 20   $ 101   $ 20   $ 105   $ 20   $ 92   $ 19  
Unrealized securities gains, net 12   —   5   —   36   —   7   —  
Other noninterest income —   ( 1 ) —   ( 1 ) —   ( 1 ) —   —  
Purchases 7   —   1   —   12   —   10   —  
Cost of investments sold —   —   ( 2 ) —   ( 6 ) —   ( 4 ) —  

Transfers out —   —   —   —   ( 12 ) —   —   —  
Balance at end of period
$ 135   $ 19   $ 105   $ 19   $ 135   $ 19   $ 105   $ 19  

The roll-forward of Level 3 instruments includes the following realized gains and losses recognized in “Securities gains (losses), net” on the consolidated statement of income for the periods presented:

(In millions) Three Months Ended Nine Months Ended
September 30,
2025 September 30,
2024 September 30,
2025 September 30,
2024

Securities gains (losses), net $ —   $ ( 2 ) $ ( 5 ) $ ( 1 )

Nonrecurring Fair Value Measurements
Certain assets and liabilities may be measured at fair value on a nonrecurring basis. These include impaired loans measured at the fair value of the underlying collateral, other real estate owned (“OREO”), and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally arise from observable price changes for such equity investments, write-downs of individual assets, or the application of lower of cost or fair value accounting. At September 30, 2025, we had $ 22 million in collateral-dependent loans measured at fair value. During the third quarter of 2025, we recognized $ 6 million in losses related to fair value changes for these loans.

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For additional information on assets and liabilities measured at fair value on a nonrecurring basis, see Note 3 of our 2024 Form 10-K.

Fair Value of Certain Financial Instruments
The following schedule presents the carrying values and estimated fair values of certain financial instruments:

  September 30, 2025 December 31, 2024
(In millions) Carrying
value
Fair value Level Carrying
value Fair value Level
Financial assets:
Held-to-maturity investment securities $ 9,059   $ 9,106   2 $ 9,669   $ 9,382   2
Loans and leases (including loans held for sale), net of allowance
59,838   58,075   3 58,788   57,130   3
Financial liabilities:
Time deposits 10,056   9,985   2 11,482   11,468   2

Long-term debt 1,473   1,506   2 950   950   2

The preceding schedule excludes certain financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which the carrying value approximates fair value. For additional information regarding the financial instruments included within the scope of this disclosure, along with the valuation methodologies and significant assumptions used in estimating their fair values, see Note 3 of our 2024 Form 10-K.

4. OFFSETTING ASSETS AND LIABILITIES
The following schedule presents gross and net information for selected financial instruments on the balance sheet:
September 30, 2025
Gross amounts not offset on the balance sheet
(In millions) Gross amounts recognized Gross amounts offset on the balance sheet Net amounts presented on the balance sheet Financial instruments Cash collateral received/pledged Net amount
Assets:
Federal funds sold and securities purchased under agreements to resell
$ 1,008   $ —   $ 1,008   $ —   $ —   $ 1,008  
Derivatives (included in Other assets) 353   —   353   ( 58 ) ( 209 ) 86  
Total assets $ 1,361   $ —   $ 1,361   $ ( 58 ) $ ( 209 ) $ 1,094  
Liabilities:
Federal funds and other short-term borrowings
$ 3,757   $ —   $ 3,757   $ —   $ —   $ 3,757  
Derivatives (included in Other liabilities)
257   —   257   ( 58 ) ( 24 ) 175  
Total liabilities $ 4,014   $ —   $ 4,014   $ ( 58 ) $ ( 24 ) $ 3,932  

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December 31, 2024
Gross amounts not offset on the balance sheet
(In millions) Gross amounts recognized Gross amounts offset on the balance sheet Net amounts presented on the balance sheet Financial instruments Cash collateral received/pledged Net amount
Assets:
Federal funds sold and securities purchased under agreements to resell
$ 1,453   $ —   $ 1,453   $ —   $ —   $ 1,453  
Derivatives (included in Other assets) 446   —   446   ( 19 ) ( 404 ) 23  
Total assets $ 1,899   $ —   $ 1,899   $ ( 19 ) $ ( 404 ) $ 1,476  
Liabilities:
Federal funds and other short-term borrowings
$ 3,832   $ —   $ 3,832   $ —   $ —   $ 3,832  
Derivatives (included in Other liabilities)
350   —   350   ( 19 ) ( 3 ) 328  
Total liabilities $ 4,182   $ —   $ 4,182   $ ( 19 ) $ ( 3 ) $ 4,160  

Security repurchase and reverse repurchase agreements are offset on the consolidated balance sheet according to master netting agreements, when applicable. Security repurchase agreements are included in “Federal funds and other short-term borrowings” on the consolidated balance sheet. Derivative instruments may also be offset under their master netting agreements; however, for accounting purposes, they are presented on a gross basis on the consolidated balance sheet. For more information regarding derivative instruments, see Note 7.

5. INVESTMENT SECURITIES
Investment Securities
We classify our investment securities as either available-for-sale (“AFS”) or held-to-maturity (“HTM”). AFS securities, which primarily consist of debt securities used to manage liquidity and interest rate risk and to generate interest income, are measured at fair value. Unrealized gains and losses from AFS securities, net of applicable taxes, are recorded in other comprehensive income. HTM securities are those that management has both the intent and ability to hold until maturity and are carried at amortized cost. This amount reflects the original investment cost, adjusted for the amortization or accretion of any purchase premiums or discounts, as well as any impairment losses, including credit-related impairment. Gains or losses on the sale of investment securities are recognized in noninterest income using the specific identification method.
The carrying values of our investment securities exclude accrued interest receivables of $ 57 million and $ 60 million at September 30, 2025 and December 31, 2024, respectively. These receivables are included in “Other assets” on the consolidated balance sheet.
Investment securities with a carrying value of $ 17.4 billion and $ 17.9 billion were pledged as collateral for potential borrowings at September 30, 2025 and December 31, 2024, respectively.
When a security is transferred from AFS to HTM, the difference between its amortized cost basis and fair value at the date of transfer is amortized as a yield adjustment through interest income. The fair value at the date of transfer results in either a premium or discount to the amortized cost basis of the HTM securities. The amortization of unrealized gains or losses reported in accumulated other comprehensive income (“AOCI”) will offset the effect of the amortization of the premium or discount in interest income created by the transfer. The discount associated with securities previously transferred from AFS to HTM was $ 1.7 billion ( $ 1.2 billion after tax) at September 30, 2025, compared with $ 1.8  billion ($ 1.4  billion after tax) at December 31, 2024.
For additional information regarding our fair value estimation process and the accounting treatment of our investment securities, see Notes 3 and 5, respectively, of our 2024 Form 10-K.

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The following schedule presents the amortized cost and estimated fair values of our AFS and HTM securities:

September 30, 2025
(In millions) Amortized
cost Gross unrealized gains 1
Gross unrealized losses Estimated
fair value
Available-for-sale
U.S. Treasury securities $ 1,401   $ 15   $ 105   $ 1,311  
U.S. Government agencies and corporations:
Agency securities 349   —   17   332  
Agency guaranteed mortgage-backed securities 7,208   4   1,041   6,171  
Small Business Administration loan-backed securities 374   —   16   358  
Municipal securities 1,022   —   49   973  
Other debt securities 25   —   —   25  
Total available-for-sale 10,379   19   1,228   9,170  
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities 139   —   4   135  
Agency guaranteed mortgage-backed securities 8,643   89   28   8,704  
Municipal securities 277   —   10   267  
Total held-to-maturity 9,059   89   42   9,106  
Total investment securities $ 19,438   $ 108   $ 1,270   $ 18,276  

December 31, 2024
(In millions) Amortized
cost Gross unrealized gains 1
Gross unrealized losses Estimated
fair value
Available-for-sale
U.S. Treasury securities $ 781   $ —   $ 119   $ 662  
U.S. Government agencies and corporations:
Agency securities 441   —   26   415  
Agency guaranteed mortgage-backed securities 7,713   1   1,263   6,451  
Small Business Administration loan-backed securities 455   —   21   434  
Municipal securities 1,186   —   78   1,108  
Other debt securities 25   —   —   25  
Total available-for-sale 10,601   1   1,507   9,095  
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities 148   —   8   140  
Agency guaranteed mortgage-backed securities 9,202   2   263   8,941  
Municipal securities 319   —   18   301  
Total held-to-maturity 9,669   2   289   9,382  
Total investment securities $ 20,270   $ 3   $ 1,796   $ 18,477  

1 Gross unrealized gains for the respective AFS security categories without values were individually less than $ 1  million.

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The following schedule presents gross unrealized losses for AFS securities and the estimated fair value, categorized by the length of time the securities have been in an unrealized loss position:

September 30, 2025
Less than 12 months 12 months or more Total
(In millions) Gross
unrealized
losses Estimated
fair
value Gross
unrealized
losses Estimated
fair
value Gross
unrealized
losses Estimated
fair
value

Available-for-sale
U.S. Treasury securities $ —   $ —   $ 105   $ 296   $ 105   $ 296  
U.S. Government agencies and corporations:
Agency securities —   7   17   320   17   327  
Agency guaranteed mortgage-backed securities —   6   1,041   5,846   1,041   5,852  
Small Business Administration loan-backed securities —   32   16   321   16   353  
Municipal securities —   86   49   813   49   899  

Total available-for-sale investment securities $ —   $ 131   $ 1,228   $ 7,596   $ 1,228   $ 7,727  

December 31, 2024
Less than 12 months 12 months or more Total
(In millions) Gross
unrealized
losses Estimated
 fair
 value Gross
unrealized
losses Estimated
 fair
 value Gross
unrealized
losses Estimated
 fair
 value

Available-for-sale
U.S. Treasury securities $ 3   $ 198   $ 116   $ 285   $ 119   $ 483  
U.S. Government agencies and corporations:
Agency securities —   3   26   403   26   406  
Agency guaranteed mortgage-backed securities —   86   1,263   6,171   1,263   6,257  
Small Business Administration loan-backed securities —   35   21   387   21   422  
Municipal securities —   68   78   984   78   1,052  

Total available-for-sale investment securities $ 3   $ 390   $ 1,504   $ 8,230   $ 1,507   $ 8,620  

At September 30, 2025 and December 31, 2024, the number of AFS investment securities in an unrealized loss position was 2,135 and 2,534 , respectively.
There were no gross realized gains or losses from sales of AFS investment securities for the three and nine months ended September 30, 2025 and 2024.

The following schedule presents interest income categorized by investment security type:

Three Months Ended September 30,
2025 2024
(In millions) Taxable Nontaxable Total Taxable Nontaxable Total

Available-for-sale $ 66   $ 7   $ 73   $ 75   $ 8   $ 83  
Held-to-maturity 49   2   51   54   1   55  
Total investment securities $ 115   $ 9   $ 124   $ 129   $ 9   $ 138  

Nine Months Ended September 30,
2025 2024
(In millions) Taxable Nontaxable Total Taxable Nontaxable Total

Available-for-sale $ 196   $ 21   $ 217   $ 227   $ 24   $ 251  
Held-to-maturity 151   4   155   165   3   168  
Total investment securities $ 347   $ 25   $ 372   $ 392   $ 27   $ 419  

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Maturities
The following schedule presents the amortized cost and weighted average yields of debt securities, categorized by the remaining contractual maturity of principal payments at September 30, 2025. The schedule does not reflect the impact of interest rate resets or fair value hedges. Additionally, the remaining contractual principal maturities presented do not represent the portfolio's duration, as they do not incorporate expected prepayments or amortization, which generally result in measured durations that are shorter than contractual maturities.

September 30, 2025
Total
debt securities Due in one year or less Due after one year through five years Due after five years through ten years Due after ten years
(Dollar amounts in millions) Amortized cost Average yield Amortized cost Average yield Amortized cost Average yield Amortized cost Average yield Amortized cost Average yield
Available-for-sale
U.S. Treasury securities $ 1,401   3.69   % $ 100   4.04   % $ 201   3.99   % $ 699   4.33   % $ 401   2.35   %
U.S. Government agencies and corporations:
Agency securities 349   3.18   32   2.78   55   3.91   163   2.96   99   3.28  
Agency guaranteed mortgage-backed securities 7,208   2.04   7   1.27   96   2.00   1,478   2.02   5,627   2.05  
Small Business Administration loan-backed securities 374   4.58   —   —   10   5.94   110   3.81   254   4.87  
Municipal securities 1
1,022   2.14   117   3.17   309   2.16   580   1.91   16   2.43  
Other debt securities 25   8.15   —   —   10   9.51   —   —   15   7.25  
Total available-for-sale securities
10,379   2.42   256   3.41   681   2.98   3,030   2.65   6,412   2.21  
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities 139   4.15   —   —   —   —   77   3.46   62   5.01  
Agency guaranteed mortgage-backed securities
8,643   1.84   —   —   28   1.46   11   2.70   8,604   1.84  
Municipal securities 1
277   3.26   27   2.47   131   2.90   112   3.71   7   5.93  
Total held-to-maturity securities 9,059   1.92   27   2.47   159   2.65   200   3.56   8,673   1.86  
Total investment securities $ 19,438   2.18   $ 283   3.32   $ 840   2.92   $ 3,230   2.71   $ 15,085   2.01  

1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.
Impairment
On a quarterly basis, we review our investment securities portfolio to assess potential impairment on an individual security level. For additional information regarding our impairment assessment methodology and related accounting policies applicable to investment securities, see Note 5 of our 2024 Form 10-K.
AFS Impairment
No impairment losses were recognized on our AFS investment securities portfolio during the first nine months of either 2025 or 2024. The unrealized losses primarily reflect the impact of higher interest rates following the purchase of the securities and are not attributable to credit-related factors. Accordingly, absent any future sales, we expect to recover the full principal value of these securities upon maturity. At September 30, 2025, we did not intend to sell any securities in an unrealized loss position, nor do we believe it is more likely than not that we would be required to sell such securities prior to recovering their amortized cost basis.

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HTM Impairment
For HTM securities, the allowance for credit losses (“ACL”) is evaluated using the same methodology applied to loans and leases measured at amortized cost, as described in Note 6. At September 30, 2025, the ACL for HTM securities was less than $ 1 million. All HTM securities were assigned a credit quality rating of “ Pass, ” with none classified as past due.

6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES
Loans, Leases, and Loans Held for Sale
The following schedule presents our loan and lease portfolio according to major portfolio segment and specific class:

(In millions) September 30,
2025 December 31,
2024

Loans held for sale $ 215   $ 74  
Commercial:
Commercial and industrial $ 17,222   $ 16,891  
Owner-occupied 9,267   9,333  
Municipal 4,341   4,364  
Leasing 349   377  
Total commercial 31,179   30,965  
Commercial real estate:
Term 11,008   10,703  
Construction and land development 2,469   2,774  
Total commercial real estate 13,477   13,477  
Consumer:
1-4 family residential 10,423   9,939  
Home equity credit line 3,848   3,641  
Construction and other consumer real estate 769   810  
Bankcard and other revolving plans 477   457  
Other 129   121  
Total consumer 15,646   14,968  

Total loans and leases
$ 60,302   $ 59,410  

Loans and leases classified as held for investment are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $ 56 million and $ 43 million at September 30, 2025 and December 31, 2024, respectively. The amortized cost basis of the loans does not include accrued interest receivables of $ 278 million and $ 281 million at September 30, 2025 and December 31, 2024, respectively. These receivables are included in “ Other assets ” on the consolidated balance sheet.
Municipal loans typically consist of obligations that are repaid from, or secured by, the general funds or pledged revenues of municipalities, as well as by real estate or equipment. This portfolio also includes loans extended to private commercial and 501(c)(3) not-for-profit organizations that utilize a pass-through municipal structure to benefit from favorable tax treatment.
Land acquisition and development loans included in the construction and land development loan portfolio were $ 234 million at September 30, 2025 and $ 260 million at December 31, 2024.
Loans with a carrying value of $ 42.6 billion at September 30, 2025 and $ 40.4 billion at December 31, 2024 have been pledged at the Federal Reserve (“FRB”) and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.
Loans held for sale are measured individually at fair value or the lower of cost or fair value and primarily consist of CRE loans sold into securitization entities, and conforming residential mortgages generally sold to U.S. government

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agencies. The following schedule presents loans added to, or sold from, the held for sale category during the periods presented:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2025 2024 2025 2024

Loans added to held for sale $ 267   $ 289   $ 715   $ 688  
Loans sold from held for sale 222   304   572   644  

Occasionally, we have continuing involvement in sold loans through retained servicing rights or guarantees. At September 30, 2025 and December 31, 2024, the principal balance of sold loans for which we retained servicing rights was approximately $ 702 million and $ 615 million, respectively. Income generated from sold loans, excluding servicing, totaled $ 4 million and $ 9 million for the three and nine months ended September 30, 2025, respectively, and $ 2 million and $ 5 million for the corresponding periods in 2024.
Allowance for Credit Losses
The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our 2024 Form 10-K.
The ACL on AFS and HTM debt securities is estimated independently from the ACL on loans. For HTM securities, the ACL is evaluated using the same methodology applied to loans and leases measured at amortized cost. For more information regarding our methodology used to estimate the ACL on AFS and HTM debt securities, see Note 5 of our 2024 Form 10-K.
Changes in the ACL are summarized as follows:

Three Months Ended September 30, 2025
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 361   $ 230   $ 99   $ 690  
Provision for loan losses 57   ( 11 ) ( 1 ) 45  
Gross loan and lease charge-offs 61   3   3   67  
Recoveries 9   1   1   11  
Net loan and lease charge-offs (recoveries) 52   2   2   56  
Balance at end of period $ 366   $ 217   $ 96   $ 679  
Reserve for unfunded lending commitments

Balance at beginning of period $ 22   $ 12   $ 8   $ 42  
Provision for unfunded lending commitments 1   4   ( 1 ) 4  
Balance at end of period $ 23   $ 16   $ 7   $ 46  
Total allowance for credit losses at end of period
Allowance for loan losses $ 366   $ 217   $ 96   $ 679  
Reserve for unfunded lending commitments 23   16   7   46  
Total allowance for credit losses $ 389   $ 233   $ 103   $ 725  

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Nine Months Ended September 30, 2025
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 308   $ 300   $ 88   $ 696  
Provision for loan losses 129   ( 80 ) 16   65  
Gross loan and lease charge-offs 92   4   11   107  
Recoveries 21   1   3   25  
Net loan and lease charge-offs (recoveries) 71   3   8   82  
Balance at end of period $ 366   $ 217   $ 96   $ 679  
Reserve for unfunded lending commitments
Balance at beginning of period $ 26   $ 11   $ 8   $ 45  
Provision for unfunded lending commitments ( 3 ) 5   ( 1 ) 1  
Balance at end of period $ 23   $ 16   $ 7   $ 46  
Total allowance for credit losses at end of period
Allowance for loan losses $ 366   $ 217   $ 96   $ 679  
Reserve for unfunded lending commitments 23   16   7   46  
Total allowance for credit losses $ 389   $ 233   $ 103   $ 725  

Three Months Ended September 30, 2024
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 302   $ 300   $ 94   $ 696  
Provision for loan losses 7   ( 13 ) 7   1  
Gross loan and lease charge-offs 12   —   3   15  
Recoveries 9   2   1   12  
Net loan and lease charge-offs (recoveries) 3   ( 2 ) 2   3  
Balance at end of period $ 306   $ 289   $ 99   $ 694  
Reserve for unfunded lending commitments

Balance at beginning of period $ 16   $ 7   $ 7   $ 30  
Provision for unfunded lending commitments 4   5   3   12  
Balance at end of period $ 20   $ 12   $ 10   $ 42  
Total allowance for credit losses at end of period
Allowance for loan losses $ 306   $ 289   $ 99   $ 694  
Reserve for unfunded lending commitments 20   12   10   42  
Total allowance for credit losses $ 326   $ 301   $ 109   $ 736  

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Nine Months Ended September 30, 2024
(In millions) Commercial Commercial real estate Consumer Total
Allowance for loan losses
Balance at beginning of period $ 302   $ 241   $ 141   $ 684  
Provision for loan losses 15   56   ( 37 ) 34  
Gross loan and lease charge-offs 30   11   9   50  
Recoveries 19   3   4   26  
Net loan and lease charge-offs (recoveries) 11   8   5   24  
Balance at end of period $ 306   $ 289   $ 99   $ 694  
Reserve for unfunded lending commitments
Balance at beginning of period $ 19   $ 17   $ 9   $ 45  
Provision for unfunded lending commitments 1   ( 5 ) 1   ( 3 )
Balance at end of period $ 20   $ 12   $ 10   $ 42  
Total allowance for credit losses at end of period
Allowance for loan losses $ 306   $ 289   $ 99   $ 694  
Reserve for unfunded lending commitments 20   12   10   42  
Total allowance for credit losses $ 326   $ 301   $ 109   $ 736  

Nonaccrual Loans
Loans are generally placed on nonaccrual status when the full collection of principal and interest is not expected, or when the loan is 90 days or more past due with respect to principal or interest, unless it is both well-secured and in the process of collection. We consider several factors when placing a loan on nonaccrual status, including delinquency status, collateral valuation, borrower or guarantor financial condition, bankruptcy status, and other indicators that suggest uncertainty regarding the full and timely recovery of principal and interest.
A nonaccrual loan may be returned to accrual status when the following conditions are met: (1) all delinquent principal and interest have been brought current in accordance with the loan agreement; (2) the loan, if secured, is well secured; (3) the borrower has made timely payments under the contractual terms for a minimum of six months; and (4) a credit analysis indicates reasonable assurance of the borrower's ability and willingness to continue making payments.
The following schedule presents the amortized cost basis of loans on nonaccrual:

September 30, 2025
Amortized cost basis Total amortized cost basis
(In millions) with no allowance with allowance Related allowance

Commercial:
Commercial and industrial $ 50   $ 57   $ 107   $ 22  
Owner-occupied 13   27   40   2  
Municipal —   2   2   —  
Leasing —   4   4   1  
Total commercial 63   90   153   25  
Commercial real estate:
Term 1   69   70   3  

Total commercial real estate 1   69   70   3  
Consumer:
1-4 family residential 11   52   63   4  
Home equity credit line —   32   32   7  

Bankcard and other revolving plans —   1   1   1  

Total consumer 11   85   96   12  
Total $ 75   $ 244   $ 319   $ 40  

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December 31, 2024
Amortized cost basis Total amortized cost basis
(In millions) with no allowance with allowance Related allowance

Commercial:
Commercial and industrial $ 45   $ 69   $ 114   $ 19  
Owner-occupied 18   13   31   1  
Municipal 5   6   11   2  
Leasing —   2   2   1  
Total commercial 68   90   158   23  
Commercial real estate:
Term 27   32   59   4  

Total commercial real estate 27   32   59   4  
Consumer:
1-4 family residential 12   37   49   4  
Home equity credit line 5   25   30   5  

Bankcard and other revolving plans —   1   1   1  

Total consumer 17   63   80   10  
Total $ 112   $ 185   $ 297   $ 37  

For accruing loans, interest is accrued, and interest payments are recognized as interest income in accordance with the contractual terms of the loan agreement. For nonaccruing loans, the accrual of interest is discontinued, and any previously accrued but uncollected interest is promptly reversed from interest income, generally within one month. Payments received on nonaccrual loans are not recognized as interest income, but are applied to reduce the outstanding principal balance. However, when the collectability of the amortized cost basis of a nonaccrual loan is no longer in doubt, interest payments may be recognized as interest income on a cash basis. For the three and nine months ended September 30, 2025 and 2024, no interest income was recognized on a cash basis for nonaccrual loans.
The following schedule presents the amount of accrued interest receivables reversed from interest income, categorized by loan portfolio segment during the periods presented:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2025 2024 2025 2024

Commercial $ 4   $ 5   $ 5   $ 10  
Commercial real estate 1   1   4   4  
Consumer 1   1   3   3  
Total $ 6   $ 7   $ 12   $ 17  

Past Due Loans
Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

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Past due loans (accruing and nonaccruing) are summarized as follows:

September 30, 2025
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due Nonaccrual
loans
that are
current 1

Commercial:
Commercial and industrial $ 17,188   $ 18   $ 16   $ 34   $ 17,222   $ 3   $ 92  
Owner-occupied 9,231   17   19   36   9,267   —   15  
Municipal 4,341   —   —   —   4,341   —   2  
Leasing 347   1   1   2   349   —   2  
Total commercial 31,107   36   36   72   31,179   3   111  
Commercial real estate:
Term
10,941   35   32   67   11,008   1   23  
Construction and land development 2,469   —   —   —   2,469   —   —  
Total commercial real estate 13,410   35   32   67   13,477   1   23  
Consumer:
1-4 family residential 10,374   12   37   49   10,423   —   23  
Home equity credit line 3,820   16   12   28   3,848   —   15  
Construction and other consumer real estate
768   1   —   1   769   —   —  
Bankcard and other revolving plans
473   3   1   4   477   1   —  
Other 129   —   —   —   129   —   1  
Total consumer 15,564   32   50   82   15,646   1   39  
Total $ 60,081   $ 103   $ 118   $ 221   $ 60,302   $ 5   $ 173  

December 31, 2024
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
loans Accruing
loans
90+ days
past due Nonaccrual
loans
that are
current 1

Commercial:
Commercial and industrial $ 16,857   $ 20   $ 14   $ 34   $ 16,891   $ 1   $ 98  
Owner-occupied 9,309   10   14   24   9,333   3   16  
Municipal 4,348   6   10   16   4,364   10   11  
Leasing 377   —   —   —   377   —   2  
Total commercial 30,891   36   38   74   30,965   14   127  
Commercial real estate:
Term
10,667   2   34   36   10,703   3   28  
Construction and land development 2,774   —   —   —   2,774   —   —  
Total commercial real estate 13,441   2   34   36   13,477   3   28  
Consumer:
1-4 family residential 9,896   16   27   43   9,939   —   15  
Home equity credit line 3,609   20   12   32   3,641   —   13  
Construction and other consumer real estate
810   —   —   —   810   —   —  
Bankcard and other revolving plans
453   2   2   4   457   1   —  
Other 121   —   —   —   121   —   —  
Total consumer 14,889   38   41   79   14,968   1   28  
Total $ 59,221   $ 76   $ 113   $ 189   $ 59,410   $ 18   $ 183  

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is not expected.

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Credit Quality Indicators
In addition to the nonaccrual and past due criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades assigned to loans follow our definition of Pass, Special Mention, Substandard, and Doubtful, which align with published regulatory risk classifications.
Definitions of Pass, Special Mention, Substandard, and Doubtful are summarized as follows:
• Pass — A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.
• Special Mention — A Special Mention asset has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or our credit position at some future date.
• Substandard — A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as Substandard have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.
• Doubtful — A Doubtful asset has all the weaknesses inherent in a Substandard asset, with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.
The amount of loans classified as Doubtful totaled $ 10 million at September 30, 2025, compared with $ 14 million at December 31, 2024, and are included in the nonaccrual balances in the schedule below.
For commercial and CRE loans with commitments greater than $ 1  million, we assign one of multiple grades within the Pass classification or one of the previously described risk classifications. We assess our internal risk grades quarterly, or as soon as we identify information that affects the credit risk of the loan.
For consumer loans and for commercial and CRE loans with commitments of $ 1  million or less, we generally assign internal risk grades similar to those previously described based on automated rules that consider refreshed credit scores, payment performance, and other risk indicators. These loans are generally assigned either a Pass, Special Mention, or Substandard grade, and are reviewed as we identify information that might warrant a grade change.
The following schedule presents the amortized cost basis of loans and leases categorized by year of origination and by credit quality classification as monitored by management. Loans that have been modified resulting in substantially different terms than the original loan are included in the period in which the modification occurred.

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September 30, 2025
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2025
2024
2023
2022
2021
Prior Total
Commercial:
Commercial and industrial
Pass $ 2,491   $ 2,136   $ 1,453   $ 1,014   $ 434   $ 749   $ 8,082   $ 149   $ 16,508  
Special Mention 10   58   7   2   11   14   87   5   194  
Accruing Substandard 1   60   59   70   19   31   162   11   413  
Nonaccrual 4   4   3   39   3   6   21   27   107  
Total commercial and industrial 2,506   2,258   1,522   1,125   467   800   8,352   192   17,222  
Owner-occupied
Pass 809   1,323   757   1,457   1,506   2,651   237   50   8,790  
Special Mention 2   2   —   11   12   24   —   1   52  
Accruing Substandard 11   24   17   112   93   101   24   3   385  
Nonaccrual 6   7   2   6   2   15   2   —   40  
Total owner-occupied 828   1,356   776   1,586   1,613   2,791   263   54   9,267  
Municipal
Pass 350   624   422   869   886   1,124   2   41   4,318  
Special Mention —   3   —   —   —   —   —   —   3  
Accruing Substandard —   —   —   —   —   18   —   —   18  
Nonaccrual —   —   —   —   2   —   —   —   2  
Total municipal 350   627   422   869   888   1,142   2   41   4,341  
Leasing
Pass 46   95   63   78   18   30   —   —   330  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   1   2   10   1   1   —   —   15  
Nonaccrual —   1   1   2   —   —   —   —   4  
Total leasing 46   97   66   90   19   31   —   —   349  
Total commercial 3,730   4,338   2,786   3,670   2,987   4,764   8,617   287   31,179  
Commercial real estate:
Term
Pass 1,954   1,301   1,174   1,788   1,102   1,951   268   154   9,692  
Special Mention 9   13   10   99   —   1   —   —   132  
Accruing Substandard 270   101   135   388   78   61   27   54   1,114  
Nonaccrual 22   —   16   22   —   10   —   —   70  
Total term 2,255   1,415   1,335   2,297   1,180   2,023   295   208   11,008  
Construction and land development
Pass 293   530   513   127   1   2   739   41   2,246  
Special Mention —   1   36   32   —   —   —   —   69  
Accruing Substandard 51   8   47   48   —   —   —   —   154  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total construction and land development 344   539   596   207   1   2   739   41   2,469  
Total commercial real estate 2,599   1,954   1,931   2,504   1,181   2,025   1,034   249   13,477  

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September 30, 2025
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2025
2024
2023
2022
2021
Prior Total

Consumer:
1-4 family residential
Pass $ 595   $ 966   $ 921   $ 3,135   $ 1,844   $ 2,898   $ —   $ —   $ 10,359  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   1   —   —   1  
Nonaccrual 1   2   5   13   14   28   —   —   63  
Total 1-4 family residential 596   968   926   3,148   1,858   2,927   —   —   10,423  
Home equity credit line
Pass —   —   —   —   —   —   3,702   106   3,808  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   8   —   8  
Nonaccrual —   —   —   —   —   —   28   4   32  
Total home equity credit line —   —   —   —   —   —   3,738   110   3,848  
Construction and other consumer real estate
Pass 147   336   108   170   6   2   —   —   769  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   —   —   —  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total construction and other consumer real estate 147   336   108   170   6   2   —   —   769  
Bankcard and other revolving plans
Pass —   —   —   —   —   —   474   —   474  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   2   —   2  
Nonaccrual —   —   —   —   —   —   1   —   1  
Total bankcard and other revolving plans —   —   —   —   —   —   477   —   477  
Other consumer
Pass 58   30   22   13   4   2   —   —   129  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   —   —   —  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total other consumer 58   30   22   13   4   2   —   —   129  
Total consumer 801   1,334   1,056   3,331   1,868   2,931   4,215   110   15,646  
Total loans $ 7,130   $ 7,626   $ 5,773   $ 9,505   $ 6,036   $ 9,720   $ 13,866   $ 646   $ 60,302  

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December 31, 2024
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2024
2023
2022
2021
2020 Prior Total
Commercial:
Commercial and industrial
Pass $ 2,479   $ 1,951   $ 1,504   $ 759   $ 387   $ 679   $ 8,043   $ 150   $ 15,952  
Special Mention 37   24   47   8   2   34   85   5   242  
Accruing Substandard 53   43   200   26   28   21   200   12   583  
Nonaccrual 7   13   31   17   1   4   38   3   114  
Total commercial and industrial 2,576   2,031   1,782   810   418   738   8,366   170   16,891  
Owner-occupied
Pass 1,346   907   1,606   1,657   900   2,097   234   47   8,794  
Special Mention 38   —   38   31   2   18   18   1   146  
Accruing Substandard 23   28   75   66   25   133   7   5   362  
Nonaccrual 5   1   4   1   —   15   5   —   31  
Total owner-occupied 1,412   936   1,723   1,755   927   2,263   264   53   9,333  
Municipal
Pass 604   498   939   960   553   753   —   29   4,336  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard 10   4   —   —   —   3   —   —   17  
Nonaccrual 3   —   —   5   —   3   —   —   11  
Total municipal 617   502   939   965   553   759   —   29   4,364  
Leasing
Pass 109   79   94   26   12   36   —   —   356  
Special Mention —   —   2   —   —   —   —   —   2  
Accruing Substandard 1   3   10   2   1   —   —   —   17  
Nonaccrual —   1   1   —   —   —   —   —   2  
Total leasing 110   83   107   28   13   36   —   —   377  
Total commercial 4,715   3,552   4,551   3,558   1,911   3,796   8,630   252   30,965  
Commercial real estate:
Term
Pass 1,687   1,198   2,093   1,278   1,053   1,608   254   175   9,346  
Special Mention 48   —   87   —   —   5   —   —   140  
Accruing Substandard 298   105   443   144   13   102   27   26   1,158  
Nonaccrual —   —   23   —   —   10   —   26   59  
Total term 2,033   1,303   2,646   1,422   1,066   1,725   281   227   10,703  
Construction and land development
Pass 361   701   445   4   1   9   680   52   2,253  
Special Mention —   22   21   17   —   —   —   25   85  
Accruing Substandard 57   52   249   78   —   —   —   —   436  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total construction and land development 418   775   715   99   1   9   680   77   2,774  
Total commercial real estate 2,451   2,078   3,361   1,521   1,067   1,734   961   304   13,477  

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December 31, 2024
Term loans Revolving loans amortized cost basis Revolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions) 2024
2023
2022
2021
2020 Prior Total

Consumer:
1-4 family residential
Pass $ 1,062   $ 870   $ 2,959   $ 1,877   $ 925   $ 2,197   $ —   $ —   $ 9,890  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   —   —   —  
Nonaccrual —   3   8   9   2   27   —   —   49  
Total 1-4 family residential 1,062   873   2,967   1,886   927   2,224   —   —   9,939  
Home equity credit line
Pass —   —   —   —   —   —   3,506   99   3,605  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   6   —   6  
Nonaccrual —   —   —   —   —   —   22   8   30  
Total home equity credit line —   —   —   —   —   —   3,534   107   3,641  
Construction and other consumer real estate
Pass 157   191   420   34   5   3   —   —   810  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   —   —   —  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total construction and other consumer real estate 157   191   420   34   5   3   —   —   810  
Bankcard and other revolving plans
Pass —   —   —   —   —   —   453   1   454  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   2   —   2  
Nonaccrual —   —   —   —   —   —   1   —   1  
Total bankcard and other revolving plans —   —   —   —   —   —   456   1   457  
Other consumer
Pass 52   35   22   8   2   2   —   —   121  
Special Mention —   —   —   —   —   —   —   —   —  
Accruing Substandard —   —   —   —   —   —   —   —   —  
Nonaccrual —   —   —   —   —   —   —   —   —  
Total other consumer 52   35   22   8   2   2   —   —   121  
Total consumer 1,271   1,099   3,409   1,928   934   2,229   3,990   108   14,968  
Total loans $ 8,437   $ 6,729   $ 11,321   $ 7,007   $ 3,912   $ 7,759   $ 13,581   $ 664   $ 59,410  

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The following schedules present gross charge-offs by year of loan origination for the periods presented.

Three Months Ended September 30, 2025
Term loans Revolving loans
gross charge-offs Revolving loans converted to term loans gross charge-offs
Gross charge-offs by year of loan origination
(In millions) 2025 2024 2023 2022 2021 Prior Total
Commercial:
Commercial and industrial $ —   $ 1   $ —   $ 1   $ —   $ 1   $ 55   $ —   $ 58  

Municipal —   —   —   —   3   —   —   —   3  

Total commercial —   1   —   1   3   1   55   —   61  
Commercial real estate:
Term —   —   3   —   —   —   —   —   3  

Consumer:

Bankcard and other revolving plans —   —   —   —   —   —   2   —   2  
Other —   —   —   —   —   1   —   —   1  
Total consumer —   —   —   —   —   1   2   —   3  
Total gross charge-offs $ —   $ 1   $ 3   $ 1   $ 3   $ 2   $ 57   $ —   $ 67  

Nine Months Ended September 30, 2025
Term loans Revolving loans
gross charge-offs Revolving loans converted to term loans gross charge-offs
Gross charge-offs by year of loan origination
(In millions) 2025 2024 2023 2022 2021 Prior Total
Commercial:
Commercial and industrial $ —   $ 2   $ 2   $ 2   $ 3   $ 12   $ 68   $ —   $ 89  

Municipal —   —   —   —   3   —   —   —   3  
Leasing —   —   —   —   —   —   —   —   —  
Total commercial —   2   2   2   6   12   68   —   92  
Commercial real estate:
Term 1   —   3   —   —   —   —   —   4  

Consumer:
1-4 family residential —   —   —   —   1   2   —   —   3  
Home equity credit line —   —   —   —   —   —   1   —   1  

Bankcard and other revolving plans —   —   —   —   —   —   6   —   6  
Other —   —   —   —   —   1   —   —   1  
Total consumer —   —   —   —   1   3   7   —   11  
Total gross charge-offs $ 1   $ 2   $ 5   $ 2   $ 7   $ 15   $ 75   $ —   $ 107  

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Three Months Ended September 30, 2024
Term loans Revolving loans
gross charge-offs Revolving loans converted to term loans gross charge-offs
Gross charge-offs by year of loan origination
(In millions) 2024 2023 2022 2021 2020 Prior Total
Commercial:
Commercial and industrial $ —   $ 1   $ 4   $ —   $ —   $ 1   $ 4   $ 1   $ 11  
Owner-occupied —   —   1   —   —   —   —   —   1  

Total commercial —   1   5   —   —   1   4   1   12  

Consumer:

Home equity credit line —   —   —   —   —   —   1   —   1  

Bankcard and other revolving plans —   —   —   —   —   —   2   —   2  

Total consumer —   —   —   —   —   —   3   —   3  
Total gross charge-offs $ —   $ 1   $ 5   $ —   $ —   $ 1   $ 7   $ 1   $ 15  

Nine Months Ended September 30, 2024
Term loans Revolving loans
gross charge-offs Revolving loans converted to term loans gross charge-offs
Gross charge-offs by year of loan origination
(In millions) 2024 2023 2022 2021 2020 Prior Total
Commercial:
Commercial and industrial $ —   $ 3   $ 8   $ 2   $ —   $ 4   $ 10   $ 2   $ 29  
Owner occupied —   —   1   —   —   —   —   —   1  

Total commercial —   3   9   2   —   4   10   2   30  
Commercial real estate:
Term —   7   4   —   —   —   —   —   11  

Consumer:
1-4 family residential —   —   —   —   —   1   —   —   1  
Home equity credit line —   —   —   —   —   —   1   —   1  

Bankcard and other revolving plans —   —   —   —   —   —   6   —   6  
Other —   —   —   —   —   1   —   —   1  
Total consumer —   —   —   —   —   2   7   —   9  
Total gross charge-offs $ —   $ 10   $ 13   $ 2   $ —   $ 6   $ 17   $ 2   $ 50  

Loan Modifications
Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. For loans that have been modified with a borrower experiencing financial difficulty, we use the same credit loss estimation methods that we use for the rest of the loan portfolio. These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historical modified loans. All nonaccruing loans more than $ 1  million are evaluated individually, regardless of modification.
We consider many factors in determining whether to agree to a loan modification and we seek a solution that will both minimize potential loss to us and attempt to help the borrower. We evaluate borrowers’ current and forecasted future cash flows, their ability and willingness to make current contractual or proposed modified payments, the value of the underlying collateral (if applicable), the possibility of obtaining additional security or guarantees, and the potential costs related to a repossession or foreclosure and the subsequent sale of the collateral.

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A modified loan on nonaccrual will generally remain on nonaccrual until the borrower has proven the ability to perform under the modified structure for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual.
On an ongoing basis, we monitor the performance of all modified loans in accordance with their modified terms. For the three and nine months ended September 30, 2025, the amortized cost of modified loans that experienced a payment default within 12 months of modification and remained in default at period end was approximately $ 2  million and $ 4  million, respectively. For the three and nine months ended September 30, 2024, the corresponding amounts were $ 5  million for both periods.
The amortized cost of loans to borrowers experiencing financial difficulty that were modified during the period, by loan class and modification type, is summarized in the following schedule:

Three Months Ended September 30, 2025
Amortized cost associated with
the following modification types:
(Dollar amounts in millions) Interest
rate reduction Maturity
or term
extension Principal
forgiveness Payment
deferral Multiple modification types 1
Total 2
Percentage of total loans 3

Commercial:
Commercial and industrial $ —   $ 58   $ —   $ —   $ —   $ 58   0.3   %
Owner-occupied —   23   —   —   —   23   0.2  

Total commercial —   81   —   —   —   81   0.3  
Commercial real estate:
Term
—   128   —   —   —   128   1.2  
Construction and land development
—   1   —   —   —   1   —  
Total commercial real estate —   129   —   —   —   129   1.0  
Consumer:
1-4 family residential —   —   2   —   4   6   0.1  

Total $ —   $ 210   $ 2   $ —   $ 4   $ 216   0.4  

Nine Months Ended September 30, 2025
Amortized cost associated with
the following modification types:
(Dollar amounts in millions) Interest
rate reduction Maturity
or term
extension Principal
forgiveness Payment
deferral Multiple modification types 1
Total 2
Percentage of total loans 3

Commercial:
Commercial and industrial $ —   $ 106   $ —   $ —   $ —   $ 106   0.6   %
Owner-occupied —   25   —   —   —   25   0.3  

Total commercial —   131   —   —   —   131   0.4  
Commercial real estate:
Term
—   322   —   8   7   337   3.1  
Construction and land development
—   26   —   —   —   26   1.1  
Total commercial real estate —   348   —   8   7   363   2.7  
Consumer:
1-4 family residential —   —   2   —   7   9   0.1  
Home equity credit line —   —   —   —   1   1   —  

Total consumer —   —   2   —   8   10   0.1  
Total $ —   $ 479   $ 2   $ 8   $ 15   $ 504   0.8  

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Three Months Ended September 30, 2024
Amortized cost associated with
the following modification types:
(Dollar amounts in millions) Interest
rate reduction Maturity
or term
extension Principal
forgiveness Payment
deferral Multiple modification types 1
Total 2
Percentage of total loans 3

Commercial:
Commercial and industrial $ 9   $ 11   $ —   $ 1   $ 13   $ 34   0.2   %

Commercial real estate:
Term
—   33   —   —   36   69   0.6  
Construction and land development
—   5   —   —   —   5   0.2  
Total commercial real estate —   38   —   —   36   74   0.5  

Total $ 9   $ 49   $ —   $ 1   $ 49   $ 108   0.2  

Nine Months Ended September 30, 2024
Amortized cost associated with
the following modification types:
(Dollar amounts in millions) Interest
rate reduction Maturity
or term
extension Principal
forgiveness Payment
deferral Multiple modification types 1
Total 2
Percentage of total loans 3

Commercial:
Commercial and industrial $ 9   $ 44   $ —   $ 2   $ 22   $ 77   0.5   %
Owner-occupied —   1   —   —   —   1   —  
Municipal —   3   —   —   —   3   0.1  
Total commercial 9   48   —   2   22   81   0.3  
Commercial real estate:
Term
—   110   —   —   36   146   1.4  
Construction and land development
—   7   —   —   —   7   0.2  
Total commercial real estate —   117   —   —   36   153   1.1  
Consumer:
1-4 family residential —   —   2   —   2   4   —  
Home equity credit line —   —   —   —   1   1   —  

Other —   1   —   —   —   1   0.8  
Total consumer —   1   2   —   3   6   —  
Total $ 9   $ 166   $ 2   $ 2   $ 61   $ 240   0.4  

1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications.
2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 29 million and $ 8 million at September 30, 2025 and September 30, 2024, respectively.
3 Amounts less than 0.05% are rounded to zero.

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The financial impact of loan modifications to borrowers experiencing financial difficulty is summarized in the following schedules:

Three Months Ended
September 30, 2025 Nine Months Ended
September 30, 2025
Weighted-average interest rate reduction (in percentage points) Weighted-average term extension
(in months) Weighted-average interest rate reduction (in percentage points) Weighted-average term extension
(in months)
Commercial:
Commercial and industrial —   % 8 —   % 10
Owner-occupied —   3 —   19

Total commercial —   7 —   11
Commercial real estate:
Term
—   8 0.1   12
Construction and land development —   3 —   8
Total commercial real estate —   8 0.1   12
Consumer: 1

1-4 family residential —   11 0.9   7
Home equity credit line —   0 2.8   43

Total consumer —   11 2.4   9
Total weighted average financial impact —   7 0.3   11

Three Months Ended
September 30, 2024 Nine Months Ended
September 30, 2024
Weighted-average interest rate reduction (in percentage points) Weighted-average term extension
(in months) Weighted-average interest rate reduction (in percentage points) Weighted-average term extension
(in months)
Commercial:
Commercial and industrial 0.3   % 5 0.4   % 7
Owner-occupied —   0 —   3
Municipal —   0 —   61

Total commercial 0.3   5 0.4   9
Commercial real estate:
Term
0.2   3 0.2   10
Construction and land development —   8 —   1
Total commercial real estate 0.2   8 0.2   10
Consumer: 1

1-4 family residential —   0 1.3   78
Home equity credit line —   0 6.8   44

Other —   0 —   71
Total consumer —   0 8.0   67
Total weighted average financial impact 0.3   7 0.4   11

1 Primarily relates to a small number of loans within each consumer loan class.
For the three and nine months ended September 30, 2025, loan modifications granted to borrowers experiencing financial difficulty resulted in approximately $ 2  million in principal forgiveness across the total loan portfolio, compared with less than $ 1  million during the corresponding periods in 2024.

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The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after October 1, 2024 through September 30, 2025, presented by portfolio segment and loan class:

September 30, 2025
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
amortized cost of loans

Commercial:
Commercial and industrial $ 104   $ 2   $ —   $ 2   $ 106  
Owner-occupied 32   —   1   1   33  

Total commercial 136   2   1   3   139  
Commercial real estate:
Term 352   18   10   28   380  
Construction and land development 26   —   —   —   26  
Total commercial real estate 378   18   10   28   406  
Consumer:
1-4 family residential 10   1   1   2   12  
Home equity credit line 1   1   —   1   2  

Total consumer 11   2   1   3   14  
Total $ 525   $ 22   $ 12   $ 34   $ 559  

The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after October 1, 2023 through September 30, 2024, presented by portfolio segment and loan class:

September 30, 2024
(In millions) Current 30-89 days
past due 90+ days
past due Total
past due Total
amortized cost of loans

Commercial:
Commercial and industrial $ 76   $ 4   $ 3   $ 7   $ 83  
Owner-occupied 6   —   —   —   6  
Municipal 3   8   —   8   11  

Total commercial 85   12   3   15   100  
Commercial real estate:
Term 170   —   5   5   175  
Construction and land development 24   —   2   2   26  
Total commercial real estate 194   —   7   7   201  
Consumer:
1-4 family residential 4   —   —   —   4  
Home equity credit line 1   —   —   —   1  

Other 1   —   —   —   1  
Total consumer 6   —   —   —   6  
Total $ 285   $ 12   $ 10   $ 22   $ 307  

Collateral-Dependent Loans
When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on (1) the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, (2) the observable market price of the loan, or (3) the fair value of the loan’s underlying collateral.
Select information on loans for which the borrower is experiencing financial difficulties and repayment is expected to be provided substantially through the operation or sale of the underlying collateral, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:

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September 30, 2025
(Dollar amounts in millions) Amortized cost Major types of collateral Weighted average LTV 1

Commercial:
Commercial and industrial $ 3   Single family residential 75 %
Owner-occupied 11   Industrial building 69 %
Municipal 2   Multifamily apartments 97 %

Commercial real estate:
Term 61   Office building 98 %

Consumer:
1-4 family residential 3   Single family residential 42 %

Total $ 80  

December 31, 2024
(Dollar amounts in millions) Amortized cost Major types of collateral Weighted average LTV 1

Commercial:

Owner occupied $ 6   Retail facility 64 %
Municipal 5   Multifamily apartments 174 %

Commercial real estate:
Term 49   Office building 98 %

Consumer:
1-4 family residential 3   Single family residential 38 %
Home equity credit line 3   Single family residential 29 %

Total $ 66  

1 The fair value is based on the most recent appraisal or other collateral evaluation.
Foreclosed Residential Real Estate
The balance of foreclosed residential real estate property was $ 1 million at September 30, 2025, compared with less than $ 1 million at December 31, 2024. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure was $ 21 million and $ 14 million for the same periods, respectively.

7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Accounting
Our primary objective in utilizing derivative instruments is to manage interest rate risk. Derivatives serve as a strategic tool to mitigate volatility in interest income, interest expense, earnings, and capital by adjusting our sensitivity to various market risks. Specifically, we employ derivatives to stabilize forecasted interest income from variable-rate assets and to modify the coupon or duration of fixed-rate financial assets or liabilities when appropriate. Additionally, we offer derivative solutions to assist customers in managing their own risk exposures.
We designate certain derivatives under U.S. GAAP as hedging instruments for specific risks and are subject to documentation and effectiveness testing requirements. However, not all derivatives used in our risk management activities qualify for hedge accounting. Those not designated as accounting hedges are primarily utilized to economically manage exposure to certain market risks, including interest rate and foreign exchange movements. These instruments are not used for speculative purposes and either do not require hedge accounting to reflect their economic impact appropriately in our financial statements or do not meet the criteria for hedge accounting. For more information about our use of and accounting policies for derivative instruments, see Note 7 of our 2024 Form 10-K.
Collateral and Credit Risk
Credit risk associated with derivatives arises from the potential for counterparty nonperformance. To date, we have not experienced significant losses due to counterparty default. For more information on how counterparty credit risk

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is incorporated into derivative valuations, see Note 3 of our 2024 Form 10-K. For additional discussion on collateral and related credit risk for derivative contracts, see Note 7 of our 2024 Form 10-K.
Certain derivative contracts may require us to pledge collateral for derivatives in a net liability position at a given balance sheet date. These contracts include credit risk-related contingent features, such as maintaining a minimum debt credit rating. If such a feature is triggered, e.g., a downgrade of our credit rating, we may be required to pledge additional collateral. Historically, counterparties have not always exercised their contractual right to demand additional collateral.
At September 30, 2025, the fair value of our derivative liabilities was $ 257 million. To satisfy variation margin requirements, we pledged $ 24 million in cash collateral in the ordinary course of business. Additionally, we pledged $ 200 million in U.S. Treasuries to meet initial margin requirements with certain dealer counterparties and central clearing houses. A one-notch downgrade in our credit rating by either Standard & Poor’s (“S&P”) or Moody’s at September 30, 2025 would likely not result in a requirement to pledge additional collateral. Centrally cleared derivatives do not contain credit risk-related features that would require additional collateral in the event of a credit rating downgrade.
We assess counterparty credit risk through the calculation of a credit valuation adjustment (“CVA”), which reflects the value of nonperformance risk for both our counterparties and the Bank. The fair value of derivatives includes a net CVA, which reduced the fair value of derivative assets by $ 3 million at September 30, 2025, and reduced the fair value of derivative liabilities by $ 9 million at December 31, 2024. The net CVA is included in “Capital markets fees and income” on the consolidated statement of income.
Derivative Amounts
The following schedule presents derivative notional amounts and recorded gross fair values at September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024
Notional
amount Fair value Notional
amount Fair value
(In millions) Other
assets Other
liabilities Other
assets Other
liabilities
Derivatives designated as accounting hedges:
Cash flow hedges:

Hedges of floating-rate assets
$ 1,250   $ 7   $ —   $ 550   $ —   $ 2  
Hedges of floating-rate liabilities —   —   —   500   —   —  
Fair value hedges:
Hedges of fixed-rate assets 1
7,479   77   —   4,668   93   —  
Hedges of fixed-rate liabilities 1,000   —   —   500   —   —  
Total derivatives designated as accounting hedges 9,729   84   —   6,218   93   2  
Derivatives not designated as accounting hedges: 2

Customer interest rate derivatives 19,067   263   255   16,833   348   346  
Customer commodity derivatives 205   1   1   —   —   —  
Other interest rate derivatives 1,259   2   —   1,105   1   —  
Foreign exchange derivatives 3
579   3   1   373   4   2  
Purchased credit derivatives 60   —   —   24   —   —  
Total derivatives not designated as accounting hedges
21,170   269   257   18,335   353   348  
Total derivatives $ 30,899   $ 353   $ 257   $ 24,553   $ 446   $ 350  

1 Includes forward-starting swaps that are not yet effective.
2 We provide certain borrowers with access to over-the-counter derivatives. To manage the associated exposures, we typically enter into offsetting derivative transactions with dealers or central clearing houses, which include terms that closely mirror those of the original borrower transactions. Notional amounts for derivatives that are not designated as accounting hedges include both customer-facing derivatives and offsetting dealer-facing derivatives.
3 Includes both spot and forward FX trades.

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The following schedules present the gains and losses from derivative instruments designated as cash flow and fair value hedges, either deferred in AOCI or recognized in earnings for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024
(In millions) Effective portion of derivative gain (loss) deferred in AOCI Amount of gain (loss) reclassified from AOCI into income Interest on fair value hedges Effective portion of derivative gain (loss) deferred in AOCI Amount of gain (loss) reclassified from AOCI into income Interest on fair value hedges
Cash flow hedges: 1

Hedges of floating-rate assets $ —   $ ( 15 ) $ —   $ 5   $ ( 30 ) $ —  
Hedges of floating-rate liabilities —   —   —   ( 2 ) 2   —  
Fair value hedges: 2

Hedges of fixed-rate assets —   —   15   —   —   24  
Hedges of fixed-rate liabilities —   —   ( 3 ) —   —   ( 2 )

Total derivatives designated as accounting hedges
$ —   $ ( 15 ) $ 12   $ 3   $ ( 28 ) $ 22  

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
(In millions) Effective portion of derivative gain (loss) deferred in AOCI Amount of gain (loss) reclassified from AOCI into income Interest on fair value hedges Effective portion of derivative gain (loss) deferred in AOCI Amount of gain (loss) reclassified from AOCI into income Interest on fair value hedges
Cash flow hedges: 1

Hedges of floating-rate assets $ 8   $ ( 53 ) $ —   $ ( 2 ) $ ( 99 ) $ —  

Hedges of floating-rate liabilities —   1   —   3   6   —  
Fair value hedges: 2

Hedges of fixed-rate assets —   —   42   —   —   70  

Hedges of fixed-rate liabilities —   —   ( 8 ) —   —   ( 5 )

Total derivatives designated as accounting hedges
$ 8   $ ( 52 ) $ 34   $ 1   $ ( 93 ) $ 65  

1 For the 12-month period following September 30, 2025, we estimate that approximately $ 37 million in net losses from both active and terminated cash flow hedges will be reclassified from AOCI into interest income. At September 30, 2025, approximately $ 48  million in losses related to terminated cash flow hedges remained deferred in AOCI. These deferred losses are expected to be fully reclassified into earnings by October 2027.
2 At September 30, 2025 and 2024, we recorded cumulative unamortized basis adjustments from terminated fair value hedges of debt totaling $ 34  million and $ 41  million, respectively. Additionally, we maintained $ 3 million in cumulative unamortized basis adjustments from terminated fair value hedges of assets at both reporting dates. The interest amounts associated with fair value hedges, as presented above, include the amortization of these remaining unamortized basis adjustments.
The following schedule presents the amount of gains (losses) recognized from derivatives not designated as
accounting hedges:

Other Noninterest Income/(Expense)
(In millions) Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024
Derivatives not designated as accounting hedges:

Customer-facing interest rate derivatives
$ ( 2 ) $ 16   $ 4   $ 17  

Other interest rate derivatives 1   1   ( 2 ) ( 1 )
Foreign exchange derivatives 8   22   8   22  
Purchased credit derivatives —   ( 1 ) —   —  
Total derivatives not designated as accounting hedges
$ 7   $ 38   $ 10   $ 38  

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The following schedule presents derivatives used in fair value hedge accounting relationships, including the pre-tax gains and losses recognized on both the derivatives and the corresponding hedged items for the periods presented:

Gains (losses) recorded in income
Three Months Ended September 30, 2025 Three Months Ended September 30, 2024
(In millions) Derivatives
Hedged items Total income statement impact Derivatives
Hedged items Total income statement impact

Hedges of fixed-rate assets 1, 2
$ ( 15 ) $ 15   $ —   $ ( 166 ) $ 166   $ —  
Hedges of fixed-rate liabilities 1, 2
3   ( 3 ) —   —   —   —  

Gains (losses) recorded in income
Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
(In millions) Derivatives
Hedged items Total income statement impact Derivatives
Hedged items Total income statement impact

Hedges of fixed-rate assets 1, 2
$ ( 130 ) $ 130   $ —   $ ( 47 ) $ 47   $ —  
Hedges of fixed-rate liabilities 1, 2
19   ( 19 ) —   —   —   —  

1 Includes hedges of benchmark interest rate risk for fixed-rate long-term debt, AFS securities, and commercial loans. Gains and losses were recorded in interest income or expense, consistent with the hedged items.
2 The income/expense for derivatives does not reflect interest income/expense from periodic accruals and payments to be consistent with the presentation of the gains (losses) on the hedged items.
The following schedule presents information regarding basis adjustments for hedged items in fair value hedging relationships:

Par value of hedged items Carrying amount of the hedged items 1
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
(In millions) September 30,
2025 December 31, 2024 September 30,
2025 December 31, 2024 September 30,
2025 December 31, 2024

Hedges of fixed-rate assets 1, 2
$ 11,494   $ 11,388   $ 11,333   $ 11,099   $ ( 161 ) $ ( 289 )
Hedges of fixed-rate liabilities 1
( 1,000 ) ( 500 ) ( 1,012 ) ( 493 ) ( 12 ) 7