Columbia Banking (NASDAQ: COLB) H1 profit hits $400M on loan, credit shifts
Columbia Banking System generated higher earnings, with net income of $208 million for the quarter ended June 30, 2026, up from $152 million a year earlier, and $400 million for the first six months of 2026 versus $239 million in 2025. Net interest income rose to $589 million in the quarter and $1,183 million year-to-date, while non-interest income increased to $88 million for the quarter. Expenses also grew, particularly salaries, intangible amortization and merger and restructuring costs, yielding diluted EPS of $0.73 for the quarter and $1.38 year-to-date.
Total assets were $65.38 billion at June 30, 2026, down from $66.83 billion at year-end 2025, as loans and leases edged down to $47.17 billion and deposits declined to $52.06 billion, partly offset by higher borrowings of $4.25 billion. The allowance for credit losses was $475 million, slightly below $485 million, after a methodological shift from a discounted cash flow to a non‑DCF approach that added $34 million to quantitative reserves and reduced qualitative components by $30 million. Collateral-dependent loans increased to $237 million, and 0.30% of the portfolio consisted of loans modified for borrowers experiencing financial difficulty. An all-stock acquisition of Pacific Premier valued at $2.4 billion continues to contribute to results, alongside $27 million of acquisition-related expenses year-to-date.
Positive
- Net income for the first six months of 2026 rose to $400 million from $239 million a year earlier, and diluted EPS was $1.38 versus $1.14.
Negative
- None.
Key Figures
Net income Q2 2026: $208 million
Net income H1 2026: $400 million
Diluted EPS H1 2026: $1.38
+5 more
8 metrics
Net income Q2 2026
$208 million
Quarter ended June 30, 2026; up from $152 million in Q2 2025
Net income H1 2026
$400 million
Six months ended June 30, 2026 vs $239 million for the same period in 2025
Diluted EPS H1 2026
$1.38
Six months ended June 30, 2026; prior-year diluted EPS was $1.14
Total assets
65,380
In millions; total assets at June 30, 2026 vs 66,832 at December 31, 2025
Total deposits
52,056
In millions; deposits at June 30, 2026 vs 54,211 at December 31, 2025
Net loans and leases
46,708
In millions; net loans and leases at June 30, 2026
Allowance for credit losses
$475 million
Total ACL at June 30, 2026 vs $485 million at December 31, 2025
Pacific Premier acquisition value
$2.4 billion
All-stock acquisition of Pacific Premier completed August 31, 2025
Key Terms
Allowance for Credit Losses, Purchased with Credit Deterioration, collateral-dependent loans, Other comprehensive (loss) income, +1 more
5 terms
Allowance for Credit Losses financial
"The ACL represents management's estimate of expected lifetime credit losses for financial assets..."
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Purchased with Credit Deterioration financial
"Purchased loans that have experienced more-than-insignificant deterioration from origination are considered PCD loans."
collateral-dependent loans financial
"Loans and leases are classified as collateral-dependent when the borrower is experiencing financial difficulty..."
Other comprehensive (loss) income financial
"Other comprehensive (loss) income, net of tax, was reported alongside net income in the period."
Basel III financial
"Basel III | Basel Capital Framework (third accord) appears in the glossary of defined terms."
An international set of banking rules that tells banks how much high-quality capital and readily available cash they must hold and how to manage risk, like a safety checklist for lenders. Investors care because these rules influence how safely banks can absorb losses, how much they can lend, and therefore their profits, dividend capacity and the chance of government support in a crisis — think of it as requirements that trade some short-term profit potential for longer-term financial stability.
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FAQ
How did Columbia Banking System (COLB) perform financially in Q2 2026?
Columbia Banking System reported net income of $208 million for the quarter ended June 30, 2026, compared with $152 million a year earlier. Net interest income was $589 million, total non-interest income reached $88 million, and diluted earnings per share were $0.73.
What were Columbia Banking System's (COLB) results for the first half of 2026?
For the six months ended June 30, 2026, Columbia Banking System generated net income of $400 million, up from $239 million in 2025. Net interest income was $1,183 million versus $871 million, non-interest income totaled $171 million versus $131 million, and diluted EPS was $1.38 versus $1.14.
How did Columbia Banking System's (COLB) balance sheet change by June 30, 2026?
At June 30, 2026, total assets were $65.38 billion, down from $66.83 billion at December 31, 2025. Net loans and leases were $47.17 billion, deposits were $52.06 billion versus $54.21 billion, and borrowings increased to $4.25 billion from $3.20 billion.
What are key details of the Pacific Premier acquisition for COLB investors?
Columbia completed an all-stock acquisition of Pacific Premier on August 31, 2025, valued at $2.4 billion, exchanging each Pacific Premier share for 0.9150 Columbia share. Pro forma net income for the combined company was $217 million for Q2 2025 and $376 million for the first half of 2025.
What changes did COLB make to its allowance for credit losses in 2026?
In Q2 2026, Columbia shifted its ACL methodology from a discounted cash flow to a non‑DCF approach, increasing quantitative reserves by $34 million and reducing qualitative adjustments by $30 million. The total allowance for credit losses was $475 million at June 30, 2026, versus $485 million at year-end 2025.
What is the quality of Columbia Banking System's loan portfolio and troubled credits?
The allowance for credit losses was $475 million at June 30, 2026. Collateral-dependent loans totaled $237 million, non-accrual loans and leases were largely supported by guarantees, and loans modified for borrowers experiencing financial difficulty represented 0.30% of the portfolio, with $33 million subsequently defaulting within twelve months.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||
| for the quarterly period ended: | ||||||||
| or | ||||||||
| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||
for the transition period from to . | ||||||||
Commission File Number: 000-20288
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction | (I.R.S. Employer Identification Number) | ||||
| of Incorporation or Organization) | |||||
(Address of Principal Executive Offices)(Zip Code)
(253 ) 305-1900
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| TITLE OF EACH CLASS | TRADING SYMBOL | NAME OF EXCHANGE | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding for each of the issuer's classes of common stock, as of the latest practical date:
Common stock, no par value: 282,902,268 shares outstanding as of July 31, 2026.
Table of Contents
COLUMBIA BANKING SYSTEM, INC.
FORM 10-Q
Table of Contents
GLOSSARY | 3 | |||||||
PART I. FINANCIAL INFORMATION | 4 | |||||||
| Item 1. | Financial Statements (unaudited) | 4 | ||||||
Consolidated Balance Sheets (unaudited) | 4 | |||||||
Consolidated Statements of Income (unaudited) | 5 | |||||||
Consolidated Statements of Comprehensive Income (unaudited) | 6 | |||||||
Consolidated Statements of Changes in Shareholders' Equity (unaudited) | 7 | |||||||
Consolidated Statements of Cash Flows (unaudited) | 8 | |||||||
Notes to Consolidated Financial Statements | 9 | |||||||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 47 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 75 | ||||||
| Item 4. | Controls and Procedures | 76 | ||||||
Part II. OTHER INFORMATION | 77 | |||||||
| Item 1. | Legal Proceedings | 77 | ||||||
| Item 1A. | Risk Factors | 77 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 77 | ||||||
| Item 3. | Defaults Upon Senior Securities | 77 | ||||||
| Item 4. | Mine Safety Disclosures | 77 | ||||||
| Item 5. | Other Information | 78 | ||||||
| Item 6. | Exhibits | 79 | ||||||
SIGNATURES | 80 | |||||||
2
Table of Contents
| GLOSSARY OF DEFINED TERMS | ||||||||
| ACL | Allowance for Credit Losses | |||||||
| ACLLL | Allowance for Credit Losses on Loans and Leases | |||||||
| ASU | Accounting Standards Update | |||||||
| Bank | Columbia Bank | |||||||
| Basel III | Basel Capital Framework (third accord) | |||||||
| BOLI | Bank-Owned Life Insurance | |||||||
| CECL | Current Expected Credit Losses | |||||||
CODM | Chief Operating Decision Maker | |||||||
| Columbia | Columbia Banking System, Inc. | |||||||
| Company | Columbia Banking System, Inc. and its Subsidiaries | |||||||
| CRE | Commercial Real Estate | |||||||
| DCF | Discounted Cash Flow | |||||||
| EVE | Economic Value of Equity | |||||||
| ESPP | Employee Stock Purchase Plan | |||||||
| FASB | Financial Accounting Standards Board | |||||||
| FDIC | Federal Deposit Insurance Corporation | |||||||
| Federal Reserve | Board of Governors of the Federal Reserve System | |||||||
| FHLB | Federal Home Loan Bank of Des Moines | |||||||
| FinPac | Financial Pacific Leasing, Inc. | |||||||
| FOMC | Federal Open Market Committee | |||||||
| FRB | Federal Reserve Bank | |||||||
| GAAP | Generally Accepted Accounting Principles | |||||||
| GDP | Gross Domestic Product | |||||||
| GNMA | Government National Mortgage Association | |||||||
| HELOC | Home Equity Line of Credit | |||||||
HOA | Homeowners Association | |||||||
| LGD | Loss Given Default | |||||||
| LIHTC | Low Income Housing Tax Credit | |||||||
| MSR | Mortgage Servicing Rights | |||||||
| NOL | Net Operating Loss | |||||||
| NM | Not Meaningful | |||||||
| Pacific Premier | Pacific Premier Bancorp, Inc. | |||||||
| PCD | Purchased with Credit Deterioration | |||||||
| PD | Probability of Default | |||||||
| RUC | Reserve for Unfunded Commitments | |||||||
| SBA | Small Business Administration | |||||||
| SEC | Securities and Exchange Commission | |||||||
| SOFR | Secured Overnight Financing Rate | |||||||
| UHC | Umpqua Holdings Corporation | |||||||
3
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
COLUMBIA BANKING SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, shares in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
Cash and due from banks (restricted cash of $ | $ | $ | |||||||||
Interest-bearing cash and temporary investments (restricted cash of $ | |||||||||||
| Total cash and cash equivalents | |||||||||||
| Investment securities | |||||||||||
| Equity and other, at fair value | |||||||||||
| Available for sale, at fair value | |||||||||||
| Held to maturity, at amortized cost | |||||||||||
| Loans held for sale | |||||||||||
Loans and leases (at fair value: $ | |||||||||||
| Allowance for credit losses on loans and leases | ( | ( | |||||||||
| Net loans and leases | |||||||||||
| Restricted equity securities | |||||||||||
| Premises and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Bank-owned life insurance | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Deposits | |||||||||||
| Non-interest-bearing | $ | $ | |||||||||
| Interest-bearing | |||||||||||
| Total deposits | |||||||||||
| Securities sold under agreements to repurchase | |||||||||||
| Borrowings | |||||||||||
| Junior subordinated debentures, at fair value | |||||||||||
| Junior and other subordinated debentures, at amortized cost | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (Note 8) | |||||||||||
| SHAREHOLDERS' EQUITY | |||||||||||
Preferred stock, | |||||||||||
Common stock, | |||||||||||
Retained earnings (accumulated deficit) | ( | ||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total shareholders' equity | |||||||||||
| Total liabilities and shareholders' equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
4
Table of Contents
COLUMBIA BANKING SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| (in millions, except per share amounts, shares in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||||
| Interest and fees on loans and leases | $ | $ | $ | $ | |||||||||||||||||||||||||
| Interest and dividends on investment securities: | |||||||||||||||||||||||||||||
| Taxable | |||||||||||||||||||||||||||||
| Exempt from federal income tax | |||||||||||||||||||||||||||||
| Dividends | |||||||||||||||||||||||||||||
| Interest on temporary investments and interest-bearing deposits | |||||||||||||||||||||||||||||
| Total interest income | |||||||||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Interest on deposits | |||||||||||||||||||||||||||||
| Interest on securities sold under agreement to repurchase and federal funds purchased | |||||||||||||||||||||||||||||
| Interest on borrowings | |||||||||||||||||||||||||||||
| Interest on junior and other subordinated debentures | |||||||||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||||||||
| Net interest income | |||||||||||||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||
| NON-INTEREST INCOME | |||||||||||||||||||||||||||||
| Service charges on deposits | |||||||||||||||||||||||||||||
| Card-based fees | |||||||||||||||||||||||||||||
| Financial services and trust revenue | |||||||||||||||||||||||||||||
| Residential mortgage banking revenue, net | |||||||||||||||||||||||||||||
(Loss) gain on investment securities, net | ( | ( | |||||||||||||||||||||||||||
Gain on loan and lease sales, net | |||||||||||||||||||||||||||||
(Loss) gain on certain loans held for investment, at fair value | ( | ( | |||||||||||||||||||||||||||
| Bank-owned life insurance income | |||||||||||||||||||||||||||||
| Other income | |||||||||||||||||||||||||||||
| Total non-interest income | |||||||||||||||||||||||||||||
| NON-INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||
| Communications | |||||||||||||||||||||||||||||
| Marketing | |||||||||||||||||||||||||||||
| Services | |||||||||||||||||||||||||||||
| Deposit costs | |||||||||||||||||||||||||||||
| FDIC assessments | |||||||||||||||||||||||||||||
| Intangible amortization | |||||||||||||||||||||||||||||
| Merger and restructuring expense | |||||||||||||||||||||||||||||
| Legal settlement | |||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
5
Table of Contents
COLUMBIA BANKING SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| (in millions) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Available for sale securities: | |||||||||||||||||||||||||||||
Unrealized (losses) gains arising during the period | ( | ( | |||||||||||||||||||||||||||
Income tax benefit (expense) related to unrealized (losses) gains | ( | ( | |||||||||||||||||||||||||||
Net change in unrealized (losses) gains for available for sale securities | ( | ( | |||||||||||||||||||||||||||
| Junior subordinated debentures, at fair value: | |||||||||||||||||||||||||||||
Unrealized (losses) gains arising during the period | ( | ( | ( | ||||||||||||||||||||||||||
Income tax benefit (expense) related to unrealized gains | ( | ||||||||||||||||||||||||||||
Net change in unrealized (losses) gains for junior subordinated debentures, at fair value | ( | ( | ( | ||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
6
Table of Contents
COLUMBIA BANKING SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
| Common Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||
(in millions, shares in thousands) | Shares | Amount | Total | ||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | |||||||||||||||||||||||||||||
| Issuances of common stock under ESPP | $ | ||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | |||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | |||||||||||||||||||||||||||||
| Issuances of common stock under ESPP | |||||||||||||||||||||||||||||
| Stock issued in connection with acquisitions | $ | ||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | ( | ||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | |||||||||||||||||||||||||||||
| Issuances of common stock under ESPP | |||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Stock repurchased and retired | ( | ( | ( | ||||||||||||||||||||||||||
| Issuances of common stock under stock plans | |||||||||||||||||||||||||||||
Cash dividends on common stock ($ | ( | ( | |||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
7
Table of Contents
COLUMBIA BANKING SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||||||
| Six Months Ended | |||||||||||||||||
(in millions) | June 30, 2026 | June 30, 2025 | |||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
Net income | $ | $ | |||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Provision for credit losses | |||||||||||||||||
| Change in cash surrender value of bank-owned life insurance | ( | ( | |||||||||||||||
| Depreciation, amortization and accretion, net | |||||||||||||||||
Gain on sale of premises and equipment | ( | ( | |||||||||||||||
| Additions to residential mortgage servicing rights carried at fair value | ( | ( | |||||||||||||||
| Change in fair value of residential mortgage servicing rights carried at fair value | ( | ||||||||||||||||
| Stock-based compensation | |||||||||||||||||
Net change in fair value of equity and other investments | ( | ( | |||||||||||||||
Loss (gain) on investment securities, net | ( | ||||||||||||||||
Gain on sale of loans and leases, net | ( | ( | |||||||||||||||
| Change in fair value of loans held for sale | ( | ( | |||||||||||||||
| Origination of loans held for sale | ( | ( | |||||||||||||||
| Proceeds from sales of loans held for sale | |||||||||||||||||
| Change in other assets and liabilities: | |||||||||||||||||
Net decrease in other assets | |||||||||||||||||
Net decrease in other liabilities | ( | ( | |||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Purchases of investment securities available for sale | ( | ( | |||||||||||||||
| Proceeds from investment securities available for sale | |||||||||||||||||
| Purchases of restricted equity securities | ( | ( | |||||||||||||||
| Redemption of restricted equity securities | |||||||||||||||||
| Net change in loans and leases | ( | ||||||||||||||||
| Proceeds from sales of loans and leases | |||||||||||||||||
| Purchases of premises and equipment, net of proceeds from sales | ( | ( | |||||||||||||||
| Proceeds from bank-owned life insurance death benefits | |||||||||||||||||
| Purchase of bank-owned life insurance | ( | ||||||||||||||||
| Other | |||||||||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
Net (decrease) increase in deposit liabilities | ( | ||||||||||||||||
Net decrease in securities sold under agreements to repurchase | ( | ( | |||||||||||||||
| Proceeds from borrowings | |||||||||||||||||
| Repayment of borrowings | ( | ( | |||||||||||||||
Net proceeds from issuance of common stock under ESPP | |||||||||||||||||
| Dividends paid on common stock | ( | ( | |||||||||||||||
| Repurchase and retirement of common stock | ( | ( | |||||||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||||||||||||
| Cash paid during the period for: | |||||||||||||||||
| Interest | $ | $ | |||||||||||||||
| Income taxes | $ | $ | |||||||||||||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||||||
| Changes in unrealized gains and losses on investment securities available for sale, net of taxes | $ | ( | $ | ||||||||||||||
| Changes in unrealized gains and losses on junior subordinated debentures carried at fair value, net of taxes | $ | ( | $ | ||||||||||||||
| Transfer of loans held for sale to loans held for investment | $ | $ | |||||||||||||||
See accompanying notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Summary of Significant Accounting Policies
The accounting and financial reporting policies of Columbia Banking System, Inc. conform to accounting principles generally accepted in the United States of America and with prevailing practices within the banking and securities industries. All references in this report to "Columbia," "we," "our," or "us" or similar references mean the Company and its subsidiaries, including the wholly-owned banking subsidiary Columbia Bank (the "Bank"). FinPac is a commercial equipment leasing company and a wholly-owned subsidiary of the Bank. The accompanying interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and the Bank's wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated. The consolidated financial statements have not been audited. A more detailed description of the Company's accounting and financial reporting policies is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Basis of Presentation - In preparing these consolidated financial statements, the Company has evaluated events and transactions subsequent to June 30, 2026, for potential recognition or disclosure. In management's opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments include those that are normal and recurring in nature and considered necessary for a fair presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim period.
In 2025, management elected to change the presentation of the Company's financial statements and accompanying footnote disclosures from thousands to millions. The change in presentation had no material impact on previously reported financial information, but certain amounts reported for prior periods may differ by insignificant amounts due to the nature of rounding relative to the change in presentation. In addition, historical percentages and per share amounts presented may not add to their respective totals or recalculate due to rounding.
Change in Accounting Estimate - During the second quarter of 2026, the Company changed its methodology for estimating the ACL from a DCF approach to a non-DCF methodology. The revised methodology continues to incorporate PD and LGD assumptions in estimating expected credit losses. Management concluded that the impact of the change was not material to the Company's consolidated financial statements. The change was accounted for as a change in accounting estimate under ASC 250, Accounting Changes and Error Corrections, and was applied prospectively beginning in the second quarter of 2026. For additional information regarding this change in estimate, see Note 5 – Allowance for Credit Losses.
Application of New Accounting Guidance
| Standard | Description | Effective Date | Effect on the Financial Statements or Other Significant Matters | |||||||||||||||||
ASU No. 2025-05—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets | The amendments provide a practical expedient related to the estimation of expected credit losses for certain current accounts receivable and contract assets arising from transactions accounted for under ASC 606. | Annual and interim periods beginning after December 15, 2025. | The Company adopted the guidance on January 1, 2026, and it did not have a material impact on the Company's consolidated financial statements. | |||||||||||||||||
ASU No. 2024-04—Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments | The amendment clarifies the accounting for induced conversions of convertible debt instruments and associated disclosure requirements. | Annual and interim periods beginning after December 15, 2025. | The Company adopted the guidance on January 1, 2026, and it did not have a material impact on the Company's consolidated financial statements. | |||||||||||||||||
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Significant Accounting Standards Issued but Not Yet Adopted
| Standard | Description | Effective Date | Effect on the Financial Statements or Other Significant Matters | |||||||||||||||||
ASU Update 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements | The amendments improve hedge accounting under ASC 815 by expanding and simplifying hedge accounting by increasing eligibility for certain hedging strategies and instruments and improving alignment with entities’ risk management activities. | Fiscal years beginning after December 15, 2026, including interim periods within those annual reporting periods. Early adoption is permitted. | The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
ASU No. 2025-08 Financial Instruments—Credit Losses (Topic 326): Purchased Loans | The amendments update the accounting for purchased loans under ASC 326 by eliminating the distinction between purchased credit-deteriorated (PCD) and non-PCD loans and require recognition of an allowance for credit losses at acquisition under a single accounting model. | Fiscal years beginning after December 15, 2026, including interim periods within those annual reporting periods. Early adoption is permitted. | The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
ASU No. 2025-06 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | The amendments modernize the accounting for internal-use software by revising capitalization criteria, eliminating project stage guidance, and consolidating website development guidance into Topic 350‑40. | Fiscal years beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. | The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses | These amendments require enhanced disclosures disaggregating significant income statement expense categories. | Fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. | The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
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Note 2 – Business Combinations
Acquisition of Pacific Premier
On August 31, 2025, Columbia completed its acquisition of Pacific Premier, which was wholly acquired in an all-stock transaction valued at $2.4 billion. On September 1, 2025, Pacific Premier's wholly owned banking subsidiary, Pacific Premier Bank, National Association, merged with and into Columbia Bank. Pursuant to the acquisition agreement, each share of Pacific Premier common stock was exchanged for 0.9150 of a share of Columbia common stock.
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. Fair value measurements were based on significant estimates and assumptions in effect as of the acquisition date and may be subject to adjustment during the measurement period. As of June 30, 2026, the initial accounting for deferred taxes remains preliminary, as the tax returns have not yet been finalized. Accordingly, the deferred tax amounts recognized in the consolidated financial statements are provisional and subject to adjustment during the measurement period, which will not exceed one year from the acquisition date, with any such adjustment recorded to goodwill. Additional information regarding valuation methodologies, as well as the fair values and unpaid principal loan balances acquired, is included in Note 2 – Business Combinations of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
The Company's consolidated results for the three and six months ended June 30, 2026 include the operating results of Pacific Premier's operations subsequent to the August 31, 2025 acquisition date. Separate operating results for Pacific Premier are not presented, as they are not practicable to determine following the integration of operations.
During the three and six months ended June 30, 2026, the Company incurred $7 million and $27 million, respectively, of acquisition-related expenses associated with the acquisition of Pacific Premier. These costs were expensed as incurred and primarily included in non-interest expense.
The following unaudited pro forma financial information presents the Company’s results as if the acquisition of Pacific Premier had occurred on January 1, 2024. This information is provided for illustrative purposes only and is not necessarily indicative of actual results. Pro forma adjustments primarily reflect estimated interest income and expense adjustments and amortization of core deposit intangibles and do not reflect anticipated operating cost savings, synergies, or other integration benefits.
| Three Months Ended | Six Months Ended | ||||||||||
| (in millions) | June 30, 2025 | June 30, 2025 | |||||||||
| Net interest income | $ | $ | |||||||||
| Non-interest income | $ | $ | |||||||||
Net income (1) | $ | $ | |||||||||
(1) Pro forma net income for the three and six months ended June 30, 2025 excludes $11 million and $25 million, respectively, of acquisition-related costs assumed to have been incurred in the first quarter of 2024.
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Note 3 – Debt Securities
The following tables present the amortized cost, gross unrealized gains and losses, and estimated fair values of debt securities as of the dates presented:
| June 30, 2026 | |||||||||||||||||||||||
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| Available for sale: | |||||||||||||||||||||||
| U.S. Treasury and agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
| Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | ||||||||||||||||||||||
| Total available for sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
| Held to maturity: | |||||||||||||||||||||||
Corporate and other securities | $ | $ | $ | $ | |||||||||||||||||||
| Total held to maturity securities | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
(in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| Available for sale: | |||||||||||||||||||||||
| U.S. Treasury and agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
| Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | ||||||||||||||||||||||
| Total available for sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
| Held to maturity: | |||||||||||||||||||||||
Corporate and other securities | $ | $ | $ | $ | |||||||||||||||||||
| Total held to maturity securities | $ | $ | $ | $ | |||||||||||||||||||
The Company elected to exclude accrued interest receivable from the amortized cost basis of debt securities disclosed throughout this note. Accrued interest on investment securities totaled $45 million and $46 million as of June 30, 2026 and December 31, 2025, respectively, and is included in other assets on the Consolidated Balance Sheets. There were no
The following tables present debt securities that were in an unrealized loss position as of the dates presented, categorized by the length of time individual securities have been in an unrealized loss position:
| June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
(in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| Available for sale: | |||||||||||||||||||||||||||||||||||
| U.S. Treasury and agencies | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
(in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| Available for sale: | |||||||||||||||||||||||||||||||||||
| U.S. Treasury and agencies | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | |||||||||||||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
The number of individual debt securities in an unrealized loss position in the tables above increased to 814 as of June 30, 2026, as compared to 592 at December 31, 2025. The unrealized losses in the Company's debt securities portfolio are primarily attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, rather than deterioration in the credit quality of the issuers. Management actively monitors the published credit ratings of the issuers of the debt securities for any material changes in rating or outlooks. As the decline in fair value of the debt securities is attributable to interest rate movements and market spread volatility and not credit related factors, no ACL has been recorded on these debt securities as of June 30, 2026.
The following table presents the contractual maturities of the Company's debt securities as of June 30, 2026. Actual maturities may differ from contractual maturities due to the potential for early calls, prepayments, or principal repayments, with or without call or prepayment penalties.
| Available For Sale | Held To Maturity | ||||||||||||||||||||||
(in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due within one year | $ | $ | $ | $ | |||||||||||||||||||
| Due after one year through five years | |||||||||||||||||||||||
| Due after five years through ten years | |||||||||||||||||||||||
| Due after ten years | |||||||||||||||||||||||
| Total debt securities | $ | $ | $ | $ | |||||||||||||||||||
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Note 4 – Loans and Leases
The following table presents the major types of loans and leases, net of deferred fees and costs, as of the dates presented:
| (in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Commercial real estate | |||||||||||
| Non-owner occupied term | $ | $ | |||||||||
| Owner occupied term | |||||||||||
| Multifamily | |||||||||||
| Construction & development | |||||||||||
| Residential development | |||||||||||
| Commercial | |||||||||||
| Term | |||||||||||
| Lines of credit & other | |||||||||||
| Leases & equipment finance | |||||||||||
| Residential | |||||||||||
| Mortgage | |||||||||||
| Home equity loans & lines | |||||||||||
| Consumer & other | |||||||||||
| Total loans and leases, net of deferred fees and costs | $ | $ | |||||||||
The Company elected to exclude accrued interest receivable from the amortized cost basis of loans and leases disclosed throughout this note. Interest accrued on loans and leases totaled $181 million and $186 million as of June 30, 2026 and December 31, 2025, respectively, and is included in other assets on the Consolidated Balance Sheets. As of June 30, 2026, loans totaling $29.9 billion were pledged to secure borrowings and available lines of credit, compared to $30.6 billion as of December 31, 2025.
As of June 30, 2026 and December 31, 2025, the net deferred fees and costs were $57 million and $54 million, respectively. Originated loans and leases are reported at the principal amount outstanding, net of deferred fees and costs, partial charge-offs, and interest applied to principal. Total loans and leases also include discounts on acquired loans of $622 million and $707 million as of June 30, 2026 and December 31, 2025, respectively.
Purchased loans are recorded at fair value at the date of purchase. The Company evaluates purchased loans to determine whether they have experienced more-than-insignificant deterioration since origination. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered PCD loans. All other purchased loans are considered non-PCD loans. The outstanding contractual unpaid principal balance of PCD loans, excluding acquisition accounting adjustments, was $428 million and $473 million as of June 30, 2026 and December 31, 2025, respectively. The carrying balance of PCD loans was $372 million and $416 million as of June 30, 2026 and December 31, 2025, respectively.
The Bank, through its commercial equipment leasing subsidiary, FinPac, is a provider of commercial equipment leasing and financing. Direct finance leases are included within the leases and equipment finance segment within the loans and leases, net line item. These direct financing leases typically have terms of three years to five years . Interest income recognized on these leases was $5 million and $11 million for the three and six months ended June 30, 2026, respectively, as compared to $6 million and $11 million for the three and six months ended June 30, 2025, respectively.
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Note 5 – Allowance for Credit Losses
The ACL represents management's estimate of expected lifetime credit losses for financial assets measured at amortized costs, including loans and leases and unfunded commitments. For a description of the Company's ACL methodology and significant assumptions, refer to Note 1 – Summary of Significant Accounting Policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the discussion below.
As of June 30, 2026, the ACL was $475 million, a decrease of $10 million from the December 31, 2025 balance of $485 million. The change in the ACL primarily reflects credit migration trends and changes in the economic assumptions incorporated into the Company's credit loss models. The Company estimates expected credit losses using internally developed models that project PD and LGD for loans and leases, incorporating forecasted economic conditions and relevant macroeconomic variables. Management evaluates multiple economic scenarios at each measurement date and selects the scenario determined to be most probable based on current economic conditions. Forecast assumptions are updated periodically and incorporated into the ACL calculation. Changes in projected macroeconomic variables over the forecast period may materially impact the ACL, with uncertainty increasing over longer projection horizons.
During the second quarter of 2026, the Company modified its ACL estimation methodology by transitioning from a DCF methodology to a non-DCF methodology across substantially all loan segments. The methodology change increased the quantitative ACL by $34 million at June 30, 2026. Additionally, the Company revised certain components of its qualitative adjustments, resulting in a $30 million reduction in the ACL. The impact of these updates was a net increase in the total ACL of $4 million as of June 30, 2026. The change in ACL methodology was accounted for prospectively as a change in estimate. The Company's ACL methodology is described in its Annual Report on Form 10-K for the year ended December 31, 2025. Refer to Note 5 – Allowance for Credit Losses for a discussion of the methodology changes implemented during the second quarter of 2026 and the Company's current ACL estimation approach.
The Bank opted to use Moody's Analytics' May 2026 consensus economic forecast for estimating the ACL as of June 30, 2026. The forecast used to calculate the ACL as of June 30, 2026 is projecting higher GDP growth, higher unemployment rates, and average federal funds rates trending lower. This is compared to the December 31, 2025 ACL calculation, which used Moody’s Analytics’ November 2025 consensus economic forecast to forecast the variables used in the models.
In the consensus scenario, the probability that the economy will perform better than this consensus is equal to the probability that it will perform worse and includes the following variables:
| 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||||
| U.S. real GDP average annualized growth | % | % | % | % | |||||||||||||||||||||||||
| U.S. unemployment rate average | % | % | % | % | |||||||||||||||||||||||||
| Forecasted average federal funds rate | % | % | % | % | |||||||||||||||||||||||||
The Bank uses an additional scenario with the same economic variables, but with varying severity, to assess ACL sensitivity and inform qualitative adjustments. For this analysis, the Bank selected Moody's Analytics' May 2026 S2 scenario (the "S2 Scenario"), which predicts a 75% probability of better economic performance and a 25% probability of worse performance. The S2 Scenario includes the following variables:
| 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||||
| U.S. real GDP average annualized growth | % | % | % | % | |||||||||||||||||||||||||
| U.S. unemployment rate average | % | % | % | % | |||||||||||||||||||||||||
| Forecasted average federal funds rate | % | % | % | % | |||||||||||||||||||||||||
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Management reviewed the results derived from the economic scenarios and sensitivity analyses of changes in macroeconomic variables and considered these factors in evaluating qualitative adjustments. Along with the quantitative results produced by the models, management also considers prepayment speeds and other qualitative factors when determining the ACL. Qualitative adjustments are applied to address risks and uncertainties that may not be fully reflected in the modeled estimate, including changes in economic conditions, portfolio trends, concentrations of credit risk, and other internal and external factors that could affect expected credit losses. This approach helps ensure that the allowance remains appropriately resilient and responsive to emerging risks, thereby supporting the resilience of the Bank's credit portfolio. These qualitative adjustments supplement the modeled estimate and reflect management's assessment of risks and uncertainties that may not be fully captured by the quantitative analysis. As of June 30, 2026, the Company evaluated qualitative factors and applied a net upward adjustment to the quantitative results for the ACL as set forth above, reflecting risks and uncertainties similar to those considered as of December 31, 2025.
Management believes the ACL was adequate as of June 30, 2026. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ACL and could possibly result in additional charges to the provision for credit losses.
The following tables summarize activity related to the ACL by portfolio segment for the periods indicated:
| Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| (in millions) | Commercial Real Estate | Commercial | Residential | Consumer & Other | Total | |||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Provision (recapture) for credit losses on loans and leases | ( | |||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Net charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Recapture of credit losses on unfunded commitments | ( | ( | ||||||||||||||||||||||||||||||
| Balance, end of period | ||||||||||||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| (in millions) | Commercial Real Estate | Commercial | Residential | Consumer & Other | Total | |||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Provision (recapture) for credit losses on loans and leases | ( | ( | ||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Net charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| (Recapture) provision for credit losses on unfunded commitments | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance, end of period | ||||||||||||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
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| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| (in millions) | Commercial Real Estate | Commercial | Residential | Consumer & Other | Total | |||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| (Recapture) provision for credit losses on loans and leases | ( | |||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | |||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Net charge-offs | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Provision for credit losses on unfunded commitments | ||||||||||||||||||||||||||||||||
| Balance, end of period | ||||||||||||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| (in millions) | Commercial Real Estate | Commercial | Residential | Consumer & Other | Total | |||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| (Recapture) provision for credit losses on loans and leases | ( | |||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Net charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Provision (recapture) for credit losses on unfunded commitments | ( | |||||||||||||||||||||||||||||||
| Balance, end of period | ||||||||||||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Asset Quality and Non-Performing Loans and Leases
The Bank actively manages asset quality and controls credit risk through diversification of the loan and lease portfolio and the application of policies designed to promote sound underwriting and loan and lease monitoring practices. The Bank's Credit Quality Administration department is charged with monitoring asset quality, establishing credit policies and procedures, and enforcing the consistent application of these policies and procedures across the Bank. The Bank conducts ongoing reviews of non-performing, past due loans and leases and larger credits, designed to identify potential charges to the ACL, and to determine the adequacy of the ACL. These reviews incorporate a variety of factors, including the financial strength of borrowers, collateral valuations, loan and lease loss experience, estimated loan and lease losses, growth in the loan and lease portfolio, prevailing economic conditions, and other relevant factors.
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Table of Contents
Loans and Leases Past Due and Non-Accrual Loans and Leases
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. As of June 30, 2026, there were no non-accrual loans and leases without a related ACL, compared to $2 million as of December 31, 2025. This excludes collateral-dependent loans and leases that had been written down to net realizable value, and therefore did not require an associated ACL, which totaled $91 million and $67 million, at June 30, 2026 and December 31, 2025, respectively. The remaining non-accrual loan balances were substantially covered by government guarantees. The Company recognized no
The following tables present the carrying value of the loans and leases past due, by loan and lease class, as of the dates presented:
| June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (in millions) | Greater than 30 to 59 Days Past Due | 60 to 89 Days Past Due | 90 Days or More and Accruing (2) | Total Past Due | Non-Accrual (2) | Current and Other | Total Loans and Leases | ||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Owner occupied term | |||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||
| Construction & development | |||||||||||||||||||||||||||||||||||||||||
| Residential development | |||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | |||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | |||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||
Mortgage (1) | |||||||||||||||||||||||||||||||||||||||||
| Home equity loans & lines | |||||||||||||||||||||||||||||||||||||||||
| Consumer & other | |||||||||||||||||||||||||||||||||||||||||
| Total, net of deferred fees and costs | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
(1) Includes government guaranteed mortgage loans that the Bank has the right but not the obligation to repurchase that are past due 90 days or more, totaling $4 million at June 30, 2026.
(2) Includes government guaranteed portion of $41 million and $37 million for 90 days or more and non-accrual loans, respectively.
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Table of Contents
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Greater than 30 to 59 Days Past Due | 60 to 89 Days Past Due | 90 Days or More and Accruing (2) | Total Past Due | Non-Accrual (2) | Current and Other | Total Loans and Leases | ||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Owner occupied term | |||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||
| Construction & development | |||||||||||||||||||||||||||||||||||||||||
| Residential development | |||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | |||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | |||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||
Mortgage (1) | |||||||||||||||||||||||||||||||||||||||||
| Home equity loans & lines | |||||||||||||||||||||||||||||||||||||||||
| Consumer & other | |||||||||||||||||||||||||||||||||||||||||
| Total, net of deferred fees and costs | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
(1) Includes government guaranteed mortgage loans the Bank has the right but not the obligation to repurchase that are past due 90 days or more, totaling $3 million at December 31, 2025.
(2) Includes government guaranteed portion of $41 million and $38 million for 90 days or more and non-accrual loans, respectively.
Collateral-Dependent Loans and Leases
Loans and leases are classified as collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following tables summarize the amortized cost basis of the collateral-dependent loans and leases by the type of collateral securing the assets as of the periods indicated:
June 30, 2026 | ||||||||||||||||||||||||||||||||
| (in millions) | Residential Real Estate | Commercial Real Estate | General Business Assets | Total | ||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||
| Home equity loans & lines | ||||||||||||||||||||||||||||||||
| Total, net of deferred fees and costs | $ | $ | $ | $ | ||||||||||||||||||||||||||||
19
Table of Contents
December 31, 2025 | ||||||||||||||||||||||||||||||||
| (in millions) | Residential Real Estate | Commercial Real Estate | General Business Assets | Total | ||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||||||||||||||
| Multifamily | ||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||
| Home equity loans & lines | ||||||||||||||||||||||||||||||||
| Total, net of deferred fees and costs | $ | $ | $ | $ | ||||||||||||||||||||||||||||
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Table of Contents
Loan and Lease Modifications Made to Borrowers Experiencing Financial Difficulty
The ACL on modified loans or leases is measured using the same credit loss estimation methods used to determine the ACL for all other loans and leases held for investment. These methods incorporate the post-modification loan or lease terms, as well as defaults and charge-offs associated with the modified loans and leases.
The following tables present the amortized cost basis of loans and leases that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2026 and 2025, by class and type of modification. The percentage of the amortized cost basis of loans and leases to borrowers in financial distress that were modified as compared to the amortized cost basis of each class of financing receivable is also presented below.
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Term Extension | Other -Than-Insignificant Payment Delay | Combo - Term Extension and Other-than-Insignificant Payment Delay | Total | % of Total Class of Financing Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total modified loans and leases experiencing financial difficulty | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Other -Than-Insignificant Payment Delay | Combo - Term Extension and Other-Than- Insignificant Payment Delay | Total | % of Total Class of Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total modified loans and leases experiencing financial difficulty | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Table of Contents
| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Term Extension | Other -Than-Insignificant Payment Delay | Combination - Interest Rate Reduction and Term Extension | Combination - Term Extension and Other-than-Insignificant Payment Delay | Total | % of Total Class of Financing Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total modified loans and leases experiencing financial difficulty | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Other -Than-Insignificant Payment Delay | Combination - Interest Rate Reduction and Term Extension | Combo - Term Extension and Other-Than-Insignificant Payment Delay | Total | % of Total Class of Financing Receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total modified loans and leases experiencing financial difficulty | $ | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Table of Contents
The following tables present the financial effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented:
| Three Months Ended June 30, 2026 | ||||||||||||||||||||
| Term Extension | Other-Than-Insignificant Payment Delay | |||||||||||||||||||
(in millions) | Weighted-Average Term Extension | Deferral Amount | ||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||
| Non-owner occupied term | ||||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
Mortgage | $ | |||||||||||||||||||
| Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Interest Rate Modification | Term Extension | Other-Than-Insignificant Payment Delay | ||||||||||||||||||
(in millions) | Weighted-Average Interest Rate Reduction | Weighted-Average Term Extension | Deferral Amount | |||||||||||||||||
| Commercial real estate | ||||||||||||||||||||
| Non-owner occupied term | % | |||||||||||||||||||
| Owner occupied term | — | — | $ | |||||||||||||||||
| Construction & development | — | |||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Term | % | |||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
Mortgage | $ | |||||||||||||||||||
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Table of Contents
| Three Months Ended June 30, 2025 | ||||||||||||||||||||
| Interest Rate Modification | Term Extension | Other-Than-Insignificant Payment Delay | ||||||||||||||||||
| (in millions) | Weighted-Average Interest Rate Reduction | Weighted-Average Term Extension | Deferral Amount | |||||||||||||||||
| Commercial real estate | ||||||||||||||||||||
| Non-owner occupied term | % | |||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||
| Construction & development | % | |||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Term | % | |||||||||||||||||||
| Lines of credit & other | $ | |||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
Mortgage | % | $ | ||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||
| Interest Rate Modification | Term Extension | Other-Than-Insignificant Payment Delay | ||||||||||||||||||
(in millions) | Weighted-Average Interest Rate Reduction | Weighted-Average Term Extension | Deferral Amount | |||||||||||||||||
| Commercial real estate | ||||||||||||||||||||
Non-owner occupied term | % | — | ||||||||||||||||||
| Owner occupied term | $ | |||||||||||||||||||
| Construction & development | % | |||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Term | % | |||||||||||||||||||
| Lines of credit & other | % | $ | ||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
Mortgage | % | $ | ||||||||||||||||||
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Table of Contents
The Company closely monitors the performance of loans and leases to borrowers experiencing financial difficulty that are modified to understand the effectiveness of its modification efforts. Loans and leases are considered to be in payment default at 90 or more days past due. The following tables present the amortized cost basis of modified loans that, within twelve months of the modification date, experienced a subsequent default during the periods presented:
Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Other-Than-Insignificant Payment Delay | Combination - Term Extension and Other-than-Insignificant Payment Delay | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases experiencing financial difficulty with a subsequent default | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Other-Than-Insignificant Payment Delay | Combo - Term Extension and Other-than-Insignificant Payment Delay | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases experiencing financial difficulty with a subsequent default | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025, all modified loans and leases were current and there were no loan or lease modifications made to borrowers experiencing financial difficulty that subsequently defaulted.
Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Term Extension | Other-Than-Insignificant Payment Delay | Combination - Term Extension and Other-than-Insignificant Payment Delay | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases experiencing financial difficulty with a subsequent default | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Table of Contents
The following tables present an age analysis of loans and leases as of June 30, 2026 and 2025 that have been modified within the prior twelve months:
June 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Current | Greater than 30 to 59 Days Past Due | 60 to 89 Days Past Due | 90 Days or Greater Past Due | Nonaccrual | Total | ||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||||||||||||||||||||
| Construction & development | ||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||||||||
| Total loans and leases modified | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Current | Greater than 30 to 59 Days Past Due | 60 to 89 Days Past Due | 90 Days or Greater Past Due | Nonaccrual | Total | ||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||||||||||||||||||||
| Construction & development | ||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||||||||
Mortgage | ||||||||||||||||||||||||||||||||||||||
Total loans and leases modified | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Credit Quality Indicators
Management regularly reviews loans and leases in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading. The Bank separates its loans and lease portfolios into homogeneous and non-homogeneous categories. Homogeneous loans are rated based on past due status and may enter a higher risk rating scale if modified, requiring six months of timely payments to return to the lower risk rating scale. Non-homogeneous loans use a dual risk rating approach: the PD scale measures the likelihood of default, and the LGD scale measures potential loss if a default occurs. The product of PD and LGD gives the expected loss, providing a common language of credit risk across different loans. For more information about the Company's credit quality indicators, refer to Note 6 – Allowance for Credit Losses included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
26
Table of Contents
The following tables present the amortized cost basis of the loans and leases by credit classification and vintage year by loan and lease class of financing receivable, as well as gross charge-offs for the dates presented:
| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total non-owner occupied term | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total owner occupied term | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total multifamily | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total construction & development | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential development | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
27
Table of Contents
| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total term | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total lines of credit & other | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total leases & equipment finance | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
28
Table of Contents
| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity loans & lines | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total home equity loans & lines | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer & other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer & other | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
29
Table of Contents
| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total non-owner occupied term | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied term | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total owner occupied term | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total multifamily | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total construction & development | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential development | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential development | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
30
Table of Contents
| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total term | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Lines of credit & other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total lines of credit & other | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases & equipment finance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total leases & equipment finance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
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| (in millions) | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | Revolving to Non-Revolving Loans Amortized Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity loans & lines | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total home equity loans & lines | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer & other: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit quality indicator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass/Watch | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer & other | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Year End period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Note 6 – Goodwill and Other Intangible Assets
The Company had $1.5 billion in goodwill as of June 30, 2026 and December 31, 2025, which represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of fair value of liabilities assumed in connection with mergers and acquisitions. The goodwill balance includes $453 million recorded in connection with the acquisition of Pacific Premier in 2025.
The Company performed its annual impairment assessment as of October 31, 2025 and concluded that there was no impairment. As of June 30, 2026, it was determined there were no events or circumstances which would more likely than not reduce the fair value of our reporting unit below its carrying amount.
Core deposit intangibles were determined based on the present value of the expected cost savings attributable to the core deposit funding relative to an alternative source of funding. Intangible assets are being amortized on an accelerated basis over a period of 10 years. No
The following table summarizes other intangible assets as of the dates presented:
| (in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
June 30, 2026 | $ | $ | ( | $ | |||||||||||||
| December 31, 2025 | $ | $ | ( | $ | |||||||||||||
Amortization expense recognized on intangible assets was $38 million and $79 million for the three and six months ended June 30, 2026, respectively, and $26 million and $54 million for the three and six months ended June 30, 2025, respectively.
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The table below presents the forecasted amortization expense for intangible assets as of June 30, 2026:
| (in millions) | |||||
| Year | Expected Amortization | ||||
Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total intangible assets | $ | ||||
Note 7 – Borrowings
The Bank's FHLB advances were $4.3 billion as of June 30, 2026, as compared to $3.2 billion at December 31, 2025. These advances have fixed interest rates ranging from 3.83 % to 4.02 % and all mature in 2026. The FHLB requires the Bank to maintain a specified level of investment in FHLB stock and to pledge sufficient eligible collateral to support secured borrowings. Refer to Note 4 – Loans and Leases for additional information on loans pledged as collateral.
Note 8 – Commitments and Contingencies
Financial Instruments with Off-Balance-Sheet Risk — The Company's financial statements do not reflect certain commitments and contingent liabilities that arise in the normal course of the Bank's business and may expose the Bank to varying degrees of credit, liquidity, and interest rate risk.
The following table presents a summary of the Bank's commitments and contingent liabilities:
(in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Commitments to extend credit | $ | $ | |||||||||
| Forward sales commitments | $ | $ | |||||||||
| Commitments to originate residential mortgage loans held for sale | $ | $ | |||||||||
| Standby letters of credit | $ | $ | |||||||||
The Bank enters into financial instruments with off-balance sheet credit risk in the normal course of business to meet the financing needs of its customers. These instruments primarily consist of commitments to extend credit and standby letters of credit. Such instruments involve credit and interest-rate risk similar to those associated with the Bank's on-balance sheet lending activities. The contractual or notional amounts of these instruments represent the maximum potential exposure to credit loss in each category.
The Bank's exposure to credit loss in the event of non-performance by the counterparty for commitments to extend credit, standby letters of credit, and other financial guarantees is limited to the contractual notional amount of these instruments. The Bank uses the same credit approval, risk management, and monitoring policies for these off-balance sheet instruments as it does for on-balance sheet financial instruments.
Standby letters of credit and written financial guarantees are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including international trade finance, commercial paper, bond financing, and similar transactions. The credit risk associated with issuing letters of credit is substantially similar to the credit risk associated with extending loan facilities to customers. The Bank may require collateral to support these commitments when deemed appropriate, which can include cash, marketable securities, or real estate. There were no 424 million of standby letters of credit were scheduled to expire within one year, with an additional $14 million expiring thereafter.
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Residential mortgage loans sold into the secondary market are generally sold with limited recourse to the Company. Under these arrangements, the Company may be obligated to repurchase the loan or otherwise reimburse the investor for losses incurred if a loan experiences an early payment default, fails to meet applicable underwriting or investor guidelines, or is determined to include borrower misrepresentations made prior to closing.
Legal Proceedings and Regulatory Matters—The Company is subject to litigation in court and arbitral proceedings, as well as proceedings, investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies. The Company is party to various pending and threatened claims and legal proceedings arising in the normal course of business activities, some of which involve claims for substantial or uncertain amounts.
In September 2023, 34 related real estate investment entities (the "iCap Entities") that maintained their primary deposit accounts with the Bank filed jointly-administered Chapter 11 bankruptcies in the United States Bankruptcy Court for the Eastern District of Washington. In pleadings filed in the Bankruptcy Court for the Eastern District of Washington on behalf of investors who claimed losses of approximately $290 million, the Bank was identified as a party against which claims may be brought in connection with the iCap Entities' alleged operation of a Ponzi scheme prior to the bankruptcy proceedings described above. On September 26, 2025, the co-trustees of the iCap Trust, a liquidating trust created by the Second Modified Second Amended Joint Chapter 11 Plan of Liquidation of the iCap Entities, filed suit in the United States District Court for the Western District of Washington alleging aiding and abetting claims against the Bank associated with the provision of banking services to the bankrupt iCap Entities. The suit was filed on behalf of investors alleging losses in connection with the iCap Entities. On June 9, 2026, the United States District Court for the Western District of Washington denied the Bank's motion to dismiss, and the Bank subsequently filed a motion for reconsideration of that ruling. Remaining investors may pursue their claims separately. The Bank intends to continue to vigorously defend against any and all claims.
As previously disclosed, in 2023 the Bank was informed by one of its technology service providers (the "Vendor") that a widely reported security incident involving MOVEit, a file sharing software used globally by government agencies, enterprise corporations, and financial institutions, resulted in the unauthorized acquisition by a third party of the names and social security numbers or tax identification numbers of certain of the Bank's consumer and small business customers (the "Vendor Incident"). On behalf of the Bank, the Vendor notified affected customers (approximately 429,000), and the Bank and Vendor notified applicable federal and state regulators regarding the Vendor Incident. Subsequently, the Bank was named in a number of putative class action lawsuits related to the Vendor Incident. The lawsuits collectively allege claims for negligence, negligence per se, breach of contract, breach of implied contract, breach of third-party beneficiary contract, breach of fiduciary duty, invasion of privacy, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of certain state statutes. Given the large number of federal cases throughout the United States (including those involving the Bank), on October 4, 2023 the United States Judicial Panel on Multidistrict Litigation initiated a multidistrict litigation ("MDL") to consolidate such cases – In Re: MOVEit Customer Data Security Breach Litigation, MDL No. 3083 – in the United States District Court for the District of Massachusetts (MDL No. 1:23-md-03083-ADB-PGL). The Bank has engaged defense counsel and intends to vigorously defend against these lawsuits and any similar or related lawsuits or claims. The Bank has notified relevant insurance carriers and business counterparties and continues to reserve all of its relevant rights to indemnity, defense, contribution, and other relief in connection with these matters.
At least quarterly, liabilities and contingencies are assessed in connection with all outstanding or new legal matters, utilizing the most recent information available. If it is determined that a loss from a matter is probable and that the amount of the loss can be reasonably estimated, an accrual for the loss is established. Once established, each accrual is adjusted as appropriate to reflect any subsequent developments in the specific legal matter. It is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Actual losses may be in excess of any established accrual or the range of reasonably possible loss. Management's estimate will change from time to time. For matters where a loss is not probable, or the amount of the loss cannot be estimated, no accrual is established.
The resolution and the outcome of legal claims are unpredictable, exacerbated by factors including the following: damages sought are unsubstantiated or indeterminate; it is unclear whether a case brought as a class action will be allowed to proceed on that basis; discovery or motion practice is not complete; the proceeding is not yet in its final stages; the matters present legal uncertainties; there are significant facts in dispute; there are a large number of parties, including multiple defendants; or there is a wide range of potential results. Any estimate or determination relating to the future resolution of legal and regulatory matters is uncertain and involves significant judgment. The Company is usually unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely or probable, or to estimate the amount or range of a probable or reasonably likely loss until relatively late in the process.
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Although there can be no assurance as to the ultimate outcome of a specific legal matter, the Company believes it has meritorious defenses to the claims asserted against us in our currently outstanding legal matters, and the Company intends to continue to vigorously defend ourselves. The Company will consider settlement of legal matters when, in management's judgment, it is in the best interests of the Company and its shareholders.
Based on information currently available, advice of counsel, available insurance coverage, and established reserves, the Company believes that the eventual outcome of the actions against us will not have a material adverse effect on the Company's consolidated financial statements. However, it is possible that the ultimate resolution of a matter, if unfavorable, may be material to the Company's results of operations for any particular reporting period.
Concentrations of Credit Risk—The Bank extends real estate mortgage, real estate construction, commercial, agricultural and installment loans and leases to customers primarily located in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington. Based on management's judgment, a concentration of credit risks exists in real estate-related loans, which represented approximately 75 % and 76 % of the Bank's loan and lease portfolio as of June 30, 2026 and December 31, 2025, respectively. CRE concentrations are actively managed to promote geographic and business diversification, primarily within the Bank's footprint. The multifamily portfolio, including construction loans, represented approximately 24 8
The Bank also recognizes the credit risks inherent with transactions involving other depository institutions. To mitigate these risks, the Bank has established standards for the selection of correspondent banks and internal limits on exposure to any single correspondent. In addition, the Bank maintains an investment policy that sets forth limitations that apply to all investments with respect to credit rating and concentrations with an issuer.
Note 9 – Derivatives
The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities as well as the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio. These derivative financial instruments are not designated as accounting hedges and are recorded at fair value, with changes recognized in earnings.
Interest Rate Swaps
The Company’s primary derivative activity consists of interest rate swaps executed with commercial borrowers to facilitate their risk management strategies. These swaps are economically hedged through offsetting swaps with third parties, minimizing net exposure. As of June 30, 2026, the Company had interest rate swap assets with notional amounts of $4.4 billion and interest rate swap liabilities with notional amounts of $4.5 billion related to this program, compared with notional amounts of $4.5 92 million and $93 million at June 30, 2026 and December 31, 2025, respectively. Centrally cleared swaps are cleared through the Chicago Mercantile Exchange and London Clearing House, with variation margin treated as settlement of mark-to-market exposure. Variation margin netting adjustments were $108 million and $98 million at June 30, 2026 and December 31, 2025, respectively. The Company also enters into bilateral Term SOFR swaps that are not clearable; these require daily cash collateral exchanges but no initial margin.
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Forward Delivery Contracts
To hedge interest rate risk on mortgage loans held for sale and interest rate lock commitments, the Company enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities at specified prices and dates. Credit risk is limited to the replacement cost of contracts in a gain position, and no 62 million and $39 million, respectively, and forward sales commitments totaled $74 million for both June 30, 2026 and December 31, 2025.
Other Derivative Contracts
The Company uses interest rate futures and forward-settling mortgage-backed securities to hedge interest rate risk on mortgage servicing rights. As of June 30, 2026, the Company had $297 million notional of interest rate futures contracts and $26 million of mortgage-backed securities, compared to $211 million and $34 million, respectively, as of December 31, 2025. The Company also provides foreign currency hedging services to customers, offsetting these positions with third-party banks to limit risk exposure.
The Company's derivatives are included in other assets or other liabilities on the Consolidated Balance Sheets and measured at fair value. The following table summarizes the types of derivatives, separately by assets and liabilities, and the fair values of such derivatives as of the dates presented:
(in millions) | Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||
| Derivatives not designated as hedging instrument | June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Interest rate futures | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest rate swaps | ||||||||||||||||||||||||||
| Total derivative assets and liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
The gains and losses on the Company's interest rate futures and forward sales commitment derivatives are included in residential mortgage banking revenue. The gains and losses on the Company's interest rate swaps and foreign currency derivatives are included in other income. The following table summarizes the types of derivatives and the gains (losses) recorded for the periods indicated:
(in millions) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instrument | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||
| Interest rate futures | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Interest rate forward sales commitments | ( | ( | ||||||||||||||||||||||||||||||
| Interest rate swaps | ( | ( | ||||||||||||||||||||||||||||||
| Total derivative (losses) gains | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
The Company is party to interest rate swap contracts that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.
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The following table shows the gross interest rate swaps in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts are limited to the outstanding balances of the related asset or liability. Therefore, instances of over collateralization are not shown.
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
| (in millions) | Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | Financial Instruments | Collateral Received/Posted | Net Amount | |||||||||||||||||||||||||||||
June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Derivative Assets | |||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Derivative Assets | |||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Note 10 – Earnings Per Common Share and Shareholders' Equity
The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, net income is allocated between common stock and participating securities based on their respective dividend rights and participation in undistributed earnings. In connection with the Pacific Premier acquisition, the Company issued certain restricted stock awards under share-based compensation plans that qualify as participating securities.
Basic EPS is calculated by dividing net income attributable to common shareholders by the weighted‑average number of common shares outstanding, excluding participating securities. Diluted EPS reflects the weighted‑average number of common shares outstanding adjusted for the effect of potentially dilutive securities, excluding participating securities and any instruments that are anti‑dilutive.
The following table presents the computation of basic and diluted earnings per common share for the periods indicated:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(in millions, except per share amounts, shares in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Less: dividends and undistributed earnings allocated to participating securities | ( | ||||||||||||||||||||||||||||
| Net income allocated to common shares | $ | $ | $ | $ | |||||||||||||||||||||||||
Weighted average number of common shares outstanding - basic | |||||||||||||||||||||||||||||
Dilutive effect of share-based compensation | |||||||||||||||||||||||||||||
Weighted average number of common shares outstanding - diluted | |||||||||||||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
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The following table presents the weighted average outstanding restricted stock awards and restricted stock units excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive for the periods indicated:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(shares in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Restricted stock awards and units | |||||||||||||||||||||||||||||
Share Repurchase Program
On October 29, 2025, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $700 million of the Company's common stock through November 30, 2026. During the three months ended June 30, 2026, the Company repurchased 6.6 million shares for an aggregate purchase price of $199 million, at an average price of $29.93 per share under this program. During the six months ended June 30, 2026, the Company repurchased 13.1 million shares for an aggregate purchase price of $398 million, at an average price of $30.33 per share under this program. There were no share repurchases during the three and six months ended June 30, 2025.
Note 11 – Fair Value Measurement
The following table presents estimated fair values of the Company's financial instruments as of the dates presented, whether or not recognized or recorded at fair value on a recurring basis in the Consolidated Balance Sheets:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
(in millions) | Level | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
Equity and other investment securities (1) | 1 | ||||||||||||||||||||||||||||
| Investment securities available for sale | 1,2 | ||||||||||||||||||||||||||||
| Investment securities held to maturity | 3 | ||||||||||||||||||||||||||||
| Loans held for sale | 2 | ||||||||||||||||||||||||||||
Loans and leases, net (2) | 2,3 | ||||||||||||||||||||||||||||
| Residential mortgage servicing rights | 3 | ||||||||||||||||||||||||||||
| Derivatives | 1,2 | ||||||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Deposits | 2 | ||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 2 | ||||||||||||||||||||||||||||
| Borrowings | 2 | ||||||||||||||||||||||||||||
| Junior subordinated debentures, at fair value | 3 | ||||||||||||||||||||||||||||
| Junior and other subordinated debentures, at amortized cost | 3 | ||||||||||||||||||||||||||||
| Derivatives | 2 | ||||||||||||||||||||||||||||
(1) Excludes equity investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient of $43 million as of June 30, 2026 and $31 million as of December 31, 2025, respectively.
(2) Loans and leases, net are classified as level 3, with the exception of loans originated as held for sale and transferred into loans held for investment of $70 million and $78 million as of June 30, 2026 and December 31, 2025, respectively, which are classified as level 2.
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Fair Value of Assets and Liabilities Measured on a Recurring Basis
The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of the periods presented:
(in millions) | June 30, 2026 | ||||||||||||||||||||||
| Description | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Equity and other investment securities | |||||||||||||||||||||||
| Investments in mutual funds and other securities | $ | $ | $ | $ | |||||||||||||||||||
| Equity securities held in rabbi trusts | |||||||||||||||||||||||
| Investment securities available for sale | |||||||||||||||||||||||
| U.S. Treasury and agencies | |||||||||||||||||||||||
| Obligations of states and political subdivisions | |||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
| Loans held for sale, at fair value | |||||||||||||||||||||||
| Loans and leases, at fair value | |||||||||||||||||||||||
| Residential mortgage servicing rights, at fair value | |||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Interest rate futures | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Junior subordinated debentures, at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
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| (in millions) | December 31, 2025 | ||||||||||||||||||||||
| Description | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Equity and other investment securities | |||||||||||||||||||||||
| Investments in mutual funds and other securities | $ | $ | $ | $ | |||||||||||||||||||
Equity securities held in rabbi trusts | |||||||||||||||||||||||
| Investment securities available for sale | |||||||||||||||||||||||
| U.S. Treasury and agencies | |||||||||||||||||||||||
| Obligations of states and political subdivisions | |||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
| Loans held for sale, at fair value | |||||||||||||||||||||||
| Loans and leases, at fair value | |||||||||||||||||||||||
| Residential mortgage servicing rights, at fair value | |||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Junior subordinated debentures, at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
The following methods were used to estimate the fair value of each class of financial instrument that is carried at fair value in the tables above:
Securities— Fair values for investment securities are based on quoted market prices when available or through the use of alternative approaches, such as matrix or model pricing, or broker indicative bids, when market quotes are not readily accessible or available. Management periodically reviews the pricing information received from the third-party pricing service and compares it to a secondary pricing service, evaluating significant price variances between services to determine an appropriate estimate of fair value to report.
Loans Held for Sale— Fair value for residential mortgage loans originated as held for sale is determined based on quoted secondary market prices for similar loans, including the implicit fair value of embedded servicing rights. For loans not originated as held for sale, these loans are accounted for at lower of cost or market, with the fair value estimated based on the expected sales price.
Loans and leases— Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including commercial, real estate, and consumer loans. Each loan category is further segregated by fixed and adjustable-rate loans. The fair value of loans is calculated by discounting expected cash flows at rates at which similar loans are currently being made. This model is periodically validated by an independent model validation group. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio. For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans.
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Residential Mortgage Servicing Rights— The fair value of MSR is estimated using a DCF model. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income net of servicing costs. This model is periodically validated by an independent model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Management believes the significant inputs utilized are indicative of those that would be used by market participants. The amount of contractually specified servicing fees, late fees, and ancillary fees earned, which is recorded in residential mortgage banking revenue, was $5 million and $11 million for the three and six months ended June 30, 2026, respectively, as compared to $6 million and $12 million for the three and six months ended June 30, 2025, respectively.
Junior Subordinated Debentures— The fair value of junior subordinated debentures is estimated using an income approach valuation technique. The significant unobservable input utilized in the estimation of fair value of these instruments is the credit risk adjusted spread. The credit risk adjusted spread represents the non-performance risk of the liability, contemplating the inherent risk of the obligation. The Company periodically utilizes a valuation firm to determine or validate the reasonableness of inputs and factors that are used to determine the fair value. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction among market participants. Due to credit concerns in the capital markets and inactivity in the trust preferred markets that have limited the observability of market spreads, the Company has classified this as a Level 3 fair value measurement.
Derivative Instruments— Derivatives include interest rate swaps, forward sales commitments, foreign currency derivatives, interest rate futures, and interest rate lock commitments. The fair values of these instruments generally fluctuate with changes in market interest rates. Interest rate swaps, forward sales commitments, and foreign currency derivatives are valued using dealer quotes and secondary market sources and are classified as Level 2 fair value measurements. Interest rate futures are exchange-traded derivatives, valued at fair value using quoted settlement prices from the exchange, and are classified as Level 1. Interest rate lock commitments use a pull-through rate that is considered an unobservable input, so these are classified as Level 3 fair value measurements.
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)
The following table provides a description of the valuation technique, significant unobservable inputs, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis as of the dates presented:
| Financial Instrument | Fair Value (in millions) | Valuation Technique | Unobservable Input | Range of Inputs | Weighted Average | |||||||||||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Residential mortgage servicing rights | $ | Discounted cash flow | Constant prepayment rate | |||||||||||||||||||||||||||||
| Discount rate | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures | $ | Discounted cash flow | Credit spread | |||||||||||||||||||||||||||||
| Financial Instrument | Fair Value (in millions) | Valuation Technique | Unobservable Input | Range of Inputs | Weighted Average | |||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Residential mortgage servicing rights | $ | Discounted cash flow | Constant prepayment rate | |||||||||||||||||||||||||||||
| Discount rate | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures | $ | Discounted cash flow | Credit spread | |||||||||||||||||||||||||||||
Generally, increases in the constant prepayment rate or the discount rate utilized in the fair value measurement of the residential mortgage servicing rights will result in a decrease in fair value. Conversely, decreases in the constant prepayment rate or the discount rate will result in an increase in fair value.
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Management believes that the credit risk adjusted spread utilized in the fair value measurement of the junior subordinated debentures carried at fair value is indicative of the non-performance risk premium a willing market participant would require under current market conditions, which is an inactive market. Generally, an increase in the credit spread will result in a decrease in the estimated fair value. Conversely, a decrease in the credit spread will result in an increase in the estimated fair value.
The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis for the periods indicated:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Residential Mortgage Servicing Rights | Junior Subordinated Debentures, at Fair Value | Residential Mortgage Servicing Rights | Junior Subordinated Debentures, at Fair Value | |||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Change included in earnings | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Change in fair values included in comprehensive income/loss | ( | ( | |||||||||||||||||||||||||||||||||
| Purchases and issuances | |||||||||||||||||||||||||||||||||||
| Sales and settlements | ( | ||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets and liabilities held at end of period | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in other comprehensive income for assets and liabilities held at end of period | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Residential Mortgage Servicing Rights | Junior Subordinated Debentures, at Fair Value | Residential Mortgage Servicing Rights | Junior Subordinated Debentures, at Fair Value | |||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Change included in earnings | ( | ( | |||||||||||||||||||||||||||||||||
| Change in fair values included in comprehensive income/loss | ( | ||||||||||||||||||||||||||||||||||
| Purchases and issuances | |||||||||||||||||||||||||||||||||||
| Sales and settlements | ( | ||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets held at end of period | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in other comprehensive income for assets held at end of period | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
Changes in residential mortgage servicing rights carried at fair value are recorded in residential mortgage banking revenue within non-interest income.
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The contractual interest expense on the junior subordinated debentures is recorded on an accrual basis as interest on junior subordinated debentures within interest expense. Settlements related to the junior subordinated debentures represent the payment of accrued interest that is embedded in the fair value of these liabilities. The change in fair value of junior subordinated debentures is attributable to the change in the instrument specific credit risk. Accordingly, the unrealized losses of $5 million and $1 million were recorded net of tax as other comprehensive losses of $4 million and $1 million for the three and six months ended June 30, 2026, respectively. Comparatively, unrealized losses of $2 million and unrealized gains of $8 million were recorded net of tax as other comprehensive losses of $2 million and gains of $6 million for the three and six months ended June 30, 2025, respectively. The change recorded for the three and six months ended June 30, 2026 was driven by higher implied forward rates and narrower credit spreads, partially offset by higher market interest rates.
Fair Value of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
From time to time, certain assets are measured at fair value on a nonrecurring basis. These adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment, typically on collateral-dependent loans. The following tables present information about the Company's assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value was recorded during the reporting period. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon.
June 30, 2026 | |||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Loans and leases | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Loans and leases | $ | $ | $ | $ | |||||||||||||||||||
The following table presents the losses resulting from nonrecurring fair value adjustments for the periods indicated:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(in millions) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Loans and leases | $ | $ | $ | $ | |||||||||||||||||||||||||
The following provides a description of the valuation technique and inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis. Unobservable inputs and qualitative information about the unobservable inputs are not presented as the fair value is determined by third-party information for loans and leases.
The loans and leases amounts above represent collateral-dependent loans and leases that have been adjusted to fair value. When a loan or non-homogeneous lease is identified as collateral-dependent, the Bank measures the impairment using the current fair value of the collateral, less estimated selling costs. Depending on the characteristics of a loan or lease, the fair value of collateral is generally estimated by obtaining external appraisals, but in some cases the value of the collateral may be estimated as having little to no value. When a homogeneous lease or equipment finance agreement becomes 181 days past due, it is determined that the collateral has little to no value. If it is determined that the value of the collateral-dependent loan or lease is less than its recorded investment, the Bank recognizes this impairment and adjusts the carrying value of the loan or lease to fair value, less costs to sell, through the ACL. The loss represents charge-offs on collateral-dependent loans and leases for fair value adjustments based on the fair value of collateral.
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Fair Value Option
The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale and loans held for investment accounted for under the fair value option as of the dates presented:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Fair Value | Aggregate Unpaid Principal Balance | Fair Value Less Aggregate Unpaid Principal Balance | Fair Value | Aggregate Unpaid Principal Balance | Fair Value Less Aggregate Unpaid Principal Balance | |||||||||||||||||||||||||||||
| Loans held for sale | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
| Loans held for investment | $ | $ | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||
The Bank elected to measure certain residential mortgage loans held for sale under the fair value option, with interest income on these loans held for sale reported in interest and fees on loans and leases on the Consolidated Statements of Income. This reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Residential mortgage loans held for sale accounted for under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings. Gains and losses from changes in fair value are reported as a component of residential mortgage banking revenue. For the three months ended June 30, 2026, the Company recorded no material net change in fair value, and a net increase in fair value of $15 million for the six months ended June 30, 2026. This compares to no material change in fair value for the three months ended June 30, 2025 and a net increase in fair value of $1 million for the six months ended June 30, 2025.
Management's intent to sell certain residential mortgage loans classified as held for sale may change over time due to factors including changes in overall market liquidity or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified as loans held for investment and maintained in the Bank's loan portfolio. In the event that loans currently classified as held for sale are reclassified as loans held for investment, the loans will continue to be measured at fair value. Gains and losses from changes in fair value for these loans are reported in earnings as a component of other income and interest income on these loans are reported in interest and fees on loans and leases on the Consolidated Statements of Income. The Company recorded a net decrease in fair value of $1 million and $3 million for the three and six months ended June 30, 2026, respectively. This compares to no net change in fair value for the three months ended June 30, 2025 and a net increase in fair value of $7 million for the six months ended June 30, 2025, respectively.
The Company selected the fair value measurement option for certain junior subordinated debentures originally issued by UHC prior to its merger with Columbia (the Umpqua Statutory Trusts) and for junior subordinated debentures acquired by UHC from Sterling Financial Corporation prior to UHC's merger with Columbia, with changes in fair value recognized as a component of other comprehensive income. The remaining junior subordinated debentures were acquired through business combinations and were measured at fair value at the time of acquisition and subsequently measured at amortized cost.
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Note 12 – Income Taxes and Investment Tax Credits
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in most states. The Company believes it is more likely than not that it will be able to fully realize the benefit of its federal and state NOL and tax carryforwards and has not provided a valuation allowance against its deferred tax assets.
As of June 30, 2026, the Company had a net deferred tax asset of $376 million, which is included in other assets on the Consolidated Balance Sheets and includes $5 million of federal and state NOL carry-forwards that will begin to expire in 2027.
The Company recorded income tax expense of $130 million and $88 million for the six months ended June 30, 2026 and 2025, respectively, representing effective tax rates of 24.5 % and 27.0 %, respectively. The effective tax rates differed from the statutory federal income tax rate primarily due to the impact of state income taxes, non-deductible compensation, non-deductible FDIC assessments, and income on tax-exempt investment securities and loans. The change to the effective tax rate for the six months ended June 30, 2026, as compared to the corresponding period in the prior year, was primarily attributable to a decrease in non-deductible compensation, including severance-related items incurred in the prior-year period.
Investment Tax Credits
The Company is involved in various entities that are considered to be variable interest entities, which are primarily related to investments promoting affordable housing and trust preferred securities. The Company is not required to consolidate variable interest entities, in which it has concluded it does not have a controlling financial interest, and thus not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities' most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity. The maximum exposure to loss in the LIHTC is the amount of equity invested, and credit extended by the Company.
Affordable Housing Tax Credit Investments
The Company makes certain equity investments in various limited partnerships that sponsor affordable housing projects; the purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants.
The Company's investments in these entities generate a return primarily through the realization of federal income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction to income tax expense.
The Company records the investments in affordable housing partnerships of $340 million and $344 million as of June 30, 2026 and December 31, 2025, respectively, as a component of other assets on the Consolidated Balance Sheets and uses the proportional amortization method to account for the investments. The Company's unfunded capital commitments to these investments were $120 million and $140 million as of June 30, 2026 and December 31, 2025, respectively, which are recorded as a component of other liabilities on the Consolidated Balance Sheets. Amortization related to these investments is recorded as a component of the provision for income taxes on the Consolidated Statements of Income.
Note 13 – Segment Reporting
The Company has one
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The Company's CODM is the Chief Executive Officer. The CODM evaluates performance and makes decisions regarding the allocation of operating and capital based on consolidated net income, as reported on the Consolidated Statements of Income. The CODM also reviews total consolidated assets, as reported on the Consolidated Balance Sheets, as a measure of segment assets.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These statements may include statements that expressly or implicitly predict future results, performance, or events. Statements other than statements of historical fact are forward-looking statements. You can find many of these statements by looking for words such as "anticipates," "expects," "believes," "estimates," "intends," "forecast," and words or phrases of similar meaning.
We make forward-looking statements including, but not limited to, statements about derivatives and hedging; the results and performance of models and economic assumptions used in our calculation of the ACL; projected sources of funds and the Company's liquidity position and deposit level and types; our securities portfolio; loan sales; adequacy of our ACL, including the RUC; provision for credit losses; non-performing loans and future losses; our CRE portfolio, its collectability and subsequent charge-offs; resolution of non-accrual loans; mortgage volumes and the impact of rate changes; the economic environment; inflation and interest rates generally; litigation; dividends; junior subordinated debentures; fair values of certain assets and liabilities, including MSR values and sensitivity analyses; tax rates; deposit pricing; and the effect of accounting pronouncements and changes in accounting methodology.
Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. There are many factors that could cause actual results to differ materially from those contemplated by these forward-looking statements. Risks and uncertainties include those set forth in our filings with the Securities and Exchange Commission and the following factors that, among others, could cause actual results to differ materially from the anticipated results expressed or implied by forward-looking statements:
•changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically;
•deterioration in economic conditions that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans;
•uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve or the effects of any declines in housing and CRE prices, high or increasing unemployment rates, renewed or sustained inflation, or any recession or slowdown in economic growth particularly in the western United States;
•volatility and disruptions in global capital and credit markets;
•risks related to the acquisition of Pacific Premier including, among others, any revenue synergies from the acquisition may not be fully realized or may take longer than anticipated to be realized, and the risk that deposit attrition may result from the transaction;
•the impact of proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers;
•the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
•changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds;
•competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services;
•the competitive and other impacts on our business of emerging technologies, including stablecoins and other digital currencies, tokenized deposits, blockchain, artificial intelligence, quantum computing and related innovations affecting both us and the banking industry generally;
•continued consolidation in the financial services industry resulting in the creation of larger financial institutions that have greater resources;
•our ability to successfully, including on time and on budget, implement and sustain information technology product and system enhancements and operational initiatives;
•our ability to attract new deposits and loans and leases;
•our ability to retain deposits;
•our ability to achieve the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions, infrastructure, and technology;
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•the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital;
•demand for financial services in our market areas;
•stability, cost, and continued availability of borrowings and other funding sources, such as brokered and public deposits;
•changes in legal or regulatory requirements or the results of regulatory examinations that could increase expenses or restrict growth;
•changes in the scope and cost of FDIC insurance and other coverage;
•our ability to manage climate change concerns, related regulations, and potential impacts on the creditworthiness of our customers;
•our ability to recruit and retain key management and staff;
•our ability to raise capital or incur debt on reasonable terms;
•regulatory limits on the Bank's ability to pay dividends to the Company that could impact the timing and amount of dividends to shareholders;
•financial services reform and the impact of legislation and implementing regulations on our business operations, including our compliance costs, interest expense, and revenue;
•a breach or failure of our operational or security systems, or those of our third-party vendors, including as a result of cyber-attacks;
•success, impact, and timing of our business strategies, including market acceptance of any new products or services;
•the outcome of legal proceedings;
•our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk, and regulatory and compliance risk;
•the possibility that the anticipated benefits from ongoing initiatives to improve operational performance and efficiency are not realized in the amounts or when expected if at all;
•economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that exceeds current consensus estimates;
•the effect of geopolitical instability, including wars, conflicts, and terrorist attacks;
•natural disasters, including earthquakes, tsunamis, flooding, fires, pandemics, and other similarly unexpected events outside of our control;
•our ability to effectively manage problem credits;
•our ability to successfully negotiate with landlords or reconfigure facilities; and
•the effects of any damage to our reputation resulting from developments related to any of the items identified above.
There are many factors that could cause actual results to differ materially from those contemplated by these forward-looking statements. Forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under federal securities laws. Readers should consider any forward-looking statements in light of this explanation, and we caution readers about relying on forward-looking statements.
General
Columbia Banking System, Inc. (referred to in this Quarterly Report on Form 10-Q as "we," "our," "the Company" and "Columbia") is a registered financial holding company, which wholly owns the Bank. FinPac, a commercial equipment leasing company, is a subsidiary of Columbia Bank.
Columbia Bank is an award-winning preeminent regional bank with offices in Arizona, California, Colorado, Idaho, Nevada, Oregon, Texas, Utah, and Washington. Columbia Bank combines the resources, sophistication, and expertise of a national bank with a commitment to deliver superior, personalized service. The bank supports consumers and businesses through a full suite of services, including retail and commercial banking, Small Business Administration lending, institutional and corporate banking, and equipment leasing. Columbia Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Management.
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Along with its subsidiaries, the Company is subject to the regulations of state and federal agencies and undergoes regular examinations by these regulatory agencies.
Executive Overview
Financial Performance
Comparison of current quarter to prior quarter
•Earnings per diluted common share was $0.73 for the three months ended June 30, 2026, as compared to $0.66 for the three months ended March 31, 2026. The increase was primarily attributable to lower non-interest expense and higher non-interest income, partially offset by lower net interest income and higher provision for income tax. Non-interest expense benefited from lower merger and restructuring expense, and the continued realization of cost savings associated with the Pacific Premier acquisition. The decrease in net interest income primarily reflects lower average interest-earning asset balances and lower yields on taxable securities, partially offset by lower interest expense as lower deposit costs offset the impact of higher average borrowings balances. Lower weighted-average diluted common shares outstanding for the three months ended June 30, 2026, as compared to the three months ended March 31, 2026, also contributed to the increase in earnings per diluted common share between periods, as Columbia repurchased 2.3% of its common shares outstanding during the second quarter.
•Net interest margin, on a tax-equivalent basis, was 3.93% for the three months ended June 30, 2026, as compared to 3.96% for the three months ended March 31, 2026. The 3 basis point decrease was driven primarily by interest income reversals recorded during the three months ended June 30, 2026. Otherwise, net interest income was relatively consistent between periods as a lower yield on taxable securities was offset by lower deposit costs and continued improvement in the Company's funding mix, including a lower proportion of higher-cost brokered deposits. The average cost of interest-bearing deposits declined by 8 basis points to 1.96%, while the cost of interest-bearing liabilities declined 3 basis points to 2.21%. The decline in the yield on taxable securities between periods was driven by changes in prepayment speed expectations.
•Non-interest income was $88 million for the three months ended June 30, 2026, as compared to $83 million for the three months ended March 31, 2026. Interest rate movements resulted in a net fair value loss of $3 million related to fair value adjustments and mortgage servicing rights hedging activity during the second quarter of 2026, as compared to a net fair value gain of $2 million during the first quarter of 2026. Excluding these impacts, the increase in non-interest income primarily reflects higher customer fee income, including service charges on deposits, card-based fees, and other income. Other income also benefited from $3 million of BOLI death benefit proceeds from a single policy, while trading, international banking, syndication, and swap-related revenue increased from the seasonally lower levels typically experienced during the first quarter.
•Non-interest expense was $375 million for the three months ended June 30, 2026, a decrease of $19 million as compared to the three months ended March 31, 2026. The decrease was primarily due to a $15 million reduction in merger and restructuring expense following the systems conversion completed during the first quarter, as well as the continued realization of cost savings associated with the Pacific Premier acquisition.
Comparison of current year-to-date to prior year period
•Earnings per diluted common share was $1.38 for the six months ended June 30, 2026, as compared to $1.14 for the six months ended June 30, 2025. The increase primarily reflects the acquisition of Pacific Premier and continued balance sheet optimization, including the replacement of lower-yielding transactional loans with relationship-based commercial loans and a reduced reliance on higher-cost wholesale funding sources, as well as growth in recurring fee income streams. These benefits were partially offset by an increase in weighted-average diluted common shares outstanding following the issuance of shares in connection with the acquisition.
•Net interest margin, on a tax-equivalent basis, was 3.94% for the six months ended June 30, 2026, as compared to 3.67% for the six months ended June 30, 2025. The increase was primarily attributable to lower funding costs and a favorable balance sheet mix shift toward lower-cost customer deposits and away from higher-cost wholesale funding sources, including borrowings and brokered deposits. These benefits were partially offset by lower earning-asset yields resulting from the lower rate environment.
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•Non-interest income was $171 million for the six months ended June 30, 2026, as compared to $131 million for the six months ended June 30, 2025. The increase was primarily driven by higher financial services and trust revenue reflecting the combined operations following the acquisition of Pacific Premier, including the addition of Pacific Premier's custodial trust business, as well as growth in customer-related fee income. These increases were partially offset by unfavorable fair value adjustments and hedging activity, resulting in a net fair value loss of $1 million for the six months ended June 30, 2026, as compared to a net fair value gain of $9 million for the prior-year period.
•Non-interest expense was $769 million for the six months ended June 30, 2026, as compared to $618 million for the six months ended June 30, 2025. The increase primarily reflects the combined operations following the Pacific Premier acquisition, including higher salaries and employee benefits, occupancy and software costs, intangible amortization, and merger and restructuring expense. The prior-year period included a $55 million legal settlement that did not occur in 2026.
Comparison of current period end to prior year end
•Total loans and leases were $47.2 billion as of June 30, 2026, a decrease of $610 million as compared to December 31, 2025. The decrease primarily reflects ongoing balance sheet optimization efforts, including continued runoff of below-market-rate transactional loans, partially offset by growth in relationship-based commercial lending.
•Total deposits were $52.1 billion as of June 30, 2026, a decrease of $2.2 billion as compared to December 31, 2025. The decrease primarily reflects a deliberate reduction in brokered deposits as part of the Company's funding optimization strategy, which targets the replacement of wholesale funding sources with relationship-based customer deposits over time. Seasonal tax payments in the early part of the second quarter also reduced deposits between periods.
•Total consolidated assets were $65.4 billion as of June 30, 2026, as compared to $66.8 billion as of December 31, 2025. The decrease primarily reflects the continued execution of the Company's balance sheet optimization strategy, including lower cash and transactional real estate loan balances and a reduction in wholesale funding.
Credit Quality
•Non-performing assets were $273 million, or 0.42% of total assets, as of June 30, 2026, as compared to $200 million, or 0.30% of total assets, as of December 31, 2025. Non-performing loans and leases were $268 million, or 0.57% of total loans and leases, as of June 30, 2026, compared to $198 million, or 0.41% of total loans and leases, as of December 31, 2025. As of June 30, 2026, non-performing loans included $78 million in government guaranteed balances. The increases in non-performing assets and loans primarily reflect adverse performance in a single agricultural industry relationship and are not indicative of broader portfolio deterioration.
•The ACL was $475 million as of June 30, 2026, a decrease of $10 million from December 31, 2025. The change reflects the combined effect of lower loan portfolio balances, updated economic assumptions, portfolio activity and credit migration, and changes to the Company's ACL estimation methodology and qualitative adjustments. For additional information regarding this change in estimate, see Note 5 – Allowance for Credit Losses.
•Provision for credit losses was $27 million and $55 million for the three and six months ended June 30, 2026, as compared to $28 million for the three months ended March 31, 2026 and $57 million for the six months ended June 30, 2025. The provision reflects changes in variables that influence changes in the ACL between periods, as mentioned above.
Liquidity
•Total cash and cash equivalents were $1.8 billion as of June 30, 2026, a decrease of $611 million from December 31, 2025. The decline primarily reflects a reduction in interest-bearing cash balances as the Company optimized on balance-sheet liquidity levels during the six months ended June 30, 2026, consistent with improved liquidity risk metrics compared to the prior year. The Company manages its cash position with a comprehensive liquidity framework designed to maintain a high-quality liquid asset base, fund lending and investment activity, and reduce debt and other non-deposit liabilities when market conditions are favorable.
•Including secured off-balance sheet lines of credit, total available liquidity was $25.6 billion as of June 30, 2026, representing 39% of total assets, 49% of total deposits, and 125% of estimated uninsured deposits.
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Capital
•The Company's total risk-based capital ratio was 13.5% and its common equity tier 1 ("CET1") capital ratio was 11.7% as of June 30, 2026. As of December 31, 2025, the Company's total risk-based capital ratio was 13.6% and its CET1 capital ratio was 11.8%. The modest decline in regulatory capital ratios primarily reflects capital actions during the six months ended June 30, 2026, including common share repurchases, while remaining well in excess of regulatory well-capitalized standards.
•Columbia declared a quarterly cash dividend of $0.37 per common share, which was paid to shareholders on June 15, 2026.
•On October 29, 2025, Columbia's Board of Directors authorized the repurchase of up to $700 million of the Company's common stock under a repurchase program, which is scheduled to expire on November 30, 2026. Under this program, during the three and six months ended June 30, 2026, the Company repurchased 6.6 million and 13.1 million shares of common stock, respectively, for $199 million and $398 million, respectively. The timing and amount of common share repurchases remain subject to senior management discretion and subject to various factors, including, without limitation, Columbia’s capital position, financial performance, market conditions, and regulatory considerations. As of June 30, 2026, $202 million remained available under the repurchase authorization.
Critical Accounting Estimates
Our critical accounting estimates are described in detail in the Critical Accounting Estimates section of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. The consolidated financial statements are prepared in conformity with GAAP and follow general practices within the financial services industry in which the Company operates. This preparation requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. Certain estimates inherently have a greater reliance on the use of assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Management believes that the estimate for the ACL and business combinations are important to the portrayal of the Company's financial condition and results of operations and require difficult, subjective, or complex judgments. There have been no material changes in the methodology of these estimates during the six months ended June 30, 2026.
Results of Operations
Columbia's financial results for periods ended prior to August 31, 2025, the acquisition date of Pacific Premier, reflect Columbia's results only on a standalone basis. Accordingly, Columbia's reported financial results for the first eight months of 2025 include only Columbia's financial results through the closing of the acquisition. As a result, Columbia's financial results for the six months ended June 30, 2026, may not be directly comparable to results reported for periods prior to the acquisition or to future periods that fully reflect the combined operations.
Comparison of current quarter to prior quarter
The Company reported net income of $208 million for the three months ended June 30, 2026, compared to $192 million for the three months ended March 31, 2026. The increase was primarily attributable to a $19 million decrease in non-interest expense, reflecting lower merger and restructuring expense and the continued realization of previously disclosed cost savings associated with the Pacific Premier acquisition, as well as a $5 million increase in non-interest income. These favorable impacts were partially offset by a $5 million decrease in net interest income and a $4 million increase in provision for income taxes. The decrease in net interest income primarily reflects lower average interest-earning asset balances and lower yields on taxable investment securities, partially offset by interest expense, as lower deposit costs offset the impact of higher average borrowing balances.
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Comparison of current year-to-date to prior year period
For the six months ended June 30, 2026, the Company reported net income of $400 million, compared to $239 million for the same period in 2025. The increase primarily reflects higher net interest income and non-interest income of $312 million and $40 million, respectively. These increases largely reflect the impact of the Pacific Premier acquisition, which did not contribute to the Company's results during the comparable prior-year period, as well as our continued balance sheet optimization efforts, including the replacement of transactional loans and wholesale funding sources with relationship-based commercial lending and customer deposits, as well as growth in recurring fee income streams, which improved profitability. These increases were partially offset by higher non-interest expense of $151 million and income tax expense of $42 million. The increase in FHLB advances was driven by a shift in the Bank's funding mix during 2026, as FHLB advance rates were more favorable than alternative wholesale funding sources, including brokered deposits. The increase in non-interest expense reflects increased salaries and employee benefits, occupancy, deposit costs, and higher merger and restructuring expense associated with the Pacific Premier acquisition, partially offset by a $55 million accrual for a legal settlement recognized in the prior-year period that did not recur. The increase in income tax expense primarily reflects higher pre-tax income resulting from the acquisition.
The following table presents the return on average assets (GAAP), average common shareholders' equity (GAAP), and average tangible common shareholders' equity (non-GAAP) for the periods indicated. For each period presented, the table includes the calculated ratios based on reported net income. To the extent return on average common shareholders' equity is used to compare our performance with other financial institutions that do not have merger and acquisition-related intangible assets, management believes it is also meaningful to consider return on average tangible common shareholders' equity. This measure is useful for evaluating performance as it reflects returns available to common shareholders excluding the impact of intangible assets and their related amortization. Return on average tangible common shareholders' equity is calculated by dividing net income by average shareholders' common equity less average goodwill and other intangible assets, net (excluding MSR). This measure is considered a non-GAAP financial measure and should be viewed in conjunction with the return on average common shareholders' equity. Return on average tangible common shareholders' equity is also used as a performance metric in the Company's executive incentive compensation program.
Return on Average Assets, Common Shareholders' Equity and Tangible Common Shareholders' Equity
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions) | June 30, 2026 | March 31, 2026 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Return on average assets | 1.27 | % | 1.18 | % | 1.22 | % | 0.94 | % | |||||||||||||||
| Return on average common shareholders' equity | 10.99 | % | 10.00 | % | 10.49 | % | 9.18 | % | |||||||||||||||
| Return on average tangible common shareholders' equity | 15.29 | % | 13.88 | % | 14.58 | % | 12.80 | % | |||||||||||||||
| Calculation of average common tangible shareholders' equity: | |||||||||||||||||||||||
| Average common shareholders' equity | $ | 7,594 | $ | 7,786 | $ | 7,689 | $ | 5,252 | |||||||||||||||
| Less: average goodwill and other intangible assets, net | 2,136 | 2,175 | 2,156 | 1,487 | |||||||||||||||||||
| Average tangible common shareholders' equity | $ | 5,458 | $ | 5,611 | $ | 5,533 | $ | 3,765 | |||||||||||||||
In addition, management believes tangible common equity and the tangible common equity ratio are meaningful measures of the Company's capital adequacy. Management believes that excluding certain intangible assets from the calculation of tangible common equity and the tangible common equity ratio provides a meaningful basis for period-to-period and company-to-company comparisons and assists investors in evaluating the Company's operating performance and capital position. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSR). Tangible assets are calculated as total assets less goodwill and other intangible assets, net (excluding MSR). The tangible common equity ratio is calculated as tangible common shareholders' equity divided by tangible assets. Tangible common equity and the tangible common equity ratio are considered non-GAAP financial measures and should be viewed in conjunction with total shareholders' equity and the total shareholders' equity ratio.
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The following table provides a reconciliation of ending shareholders' equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP) as of the dates presented:
(in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Total shareholders' equity | $ | 7,552 | $ | 7,840 | |||||||
| Less: Goodwill | 1,482 | 1,482 | |||||||||
| Less: Other intangible assets, net | 633 | 712 | |||||||||
| Tangible common shareholders' equity | $ | 5,437 | $ | 5,646 | |||||||
| Total assets | $ | 65,380 | $ | 66,832 | |||||||
| Less: Goodwill | 1,482 | 1,482 | |||||||||
| Less: Other intangible assets, net | 633 | 712 | |||||||||
| Tangible assets | $ | 63,265 | $ | 64,638 | |||||||
| Total shareholders' equity to total assets ratio | 11.55 | % | 11.73 | % | |||||||
| Tangible common equity to tangible assets ratio | 8.59 | % | 8.73 | % | |||||||
Non-GAAP financial measures have inherent limitations, are not determined in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies. In addition, these measures are not audited or reviewed. While management believes that non-GAAP financial measures are useful to investors and other stakeholders in evaluating the Company's performance, they should not be considered in isolation or as a substitute for results reported in accordance with GAAP.
Net Interest Income
Comparison of current quarter to prior quarter
Net interest income for the three months ended June 30, 2026 was $589 million, a decrease of $5 million compared to the three months ended March 31, 2026, primarily driven by a $6 million decrease in interest income due to $4 million of interest income reversals as well as lower average interest-earning asset balances and lower yields on taxable securities. The decrease in interest income was partially offset by a $1 million decrease in interest expense, reflecting lower rates paid on interest-bearing deposits and changes in funding composition, including lower balances of higher-cost brokered deposits, partially offset by higher average borrowings balances.
Net interest margin, calculated as net interest income as a percentage of average interest-earning assets on a fully tax-equivalent basis, was 3.93% for the three months ended June 30, 2026, as compared to 3.96% for the three months ended March 31, 2026. The 3 basis point decrease was driven primarily by interest income reversals during the three months ended June 30, 2026. Net interest margin was otherwise consistent between periods, as a lower yield on taxable securities was offset by lower funding costs resulting from reduced balances of higher-cost brokered deposits and lower deposit pricing.
The cost of interest-bearing deposits for the three months ended June 30, 2026 was 1.96%, a decrease of 8 basis points compared to the three months ended March 31, 2026, reflecting lower deposit pricing and reduced balances of higher-cost brokered deposits. The cost of interest-bearing liabilities for the three months ended June 30, 2026 was 2.21%, a decrease of 3 basis points compared to the three months ended March 31, 2026. The decrease reflects the same underlying drivers as interest-bearing deposits, partially offset by higher average borrowings.
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Comparison of current year-to-date to prior year period
Net interest income for the six months ended June 30, 2026 was $1.2 billion, an increase of $312 million compared to the six months ended June 30, 2025. The increase was primarily driven by an additional $308 million of interest income resulting from higher average balances of loans and leases and investment securities acquired in the Pacific Premier acquisition, as well as Columbia's balance sheet optimization activity. Acquired balances were recorded at fair value as of August 31, 2025.
Net interest margin, calculated on a fully tax-equivalent basis, was 3.94% for the six months ended June 30, 2026, as compared to 3.67% for the six months ended June 30, 2025. The increase was primarily attributable to lower funding costs and a favorable balance sheet mix shift toward lower-cost customer deposits and away from higher-cost wholesale funding sources, which include borrowings and brokered deposits. The cost of interest-bearing liabilities was 2.23% for the six months ended June 30, 2026, compared to 2.79% for the six months ended June 30, 2025, a decrease of 56 basis points. The decrease was driven primarily by reductions in the federal funds rate, continued optimization of the Company's funding mix, and lower balances of higher-cost funding sources. These benefits were partially offset by lower earning-asset yields. The yield on earning assets was 5.42% for the six months ended June 30, 2026, compared to 5.56% for the six months ended June 30, 2025, a decrease of 14 basis points. The yield on loans and leases was 5.78% for the six months ended June 30, 2026, as compared to 5.96% for the six months ended June 30, 2025, a decrease of 18 basis points, reflecting the declining rate environment during 2025, partially offset by the replacement of lower-yielding transactional loans with relationship-based commercial loans. An increase in the yield on investment securities reflects higher-yielding new purchases, including acquired securities recorded at fair value in connection with the Pacific Premier acquisition, replacing principal paydowns from lower-yielding securities, partially offsetting the decrease in the yield on loans and leases.
During 2025, the Federal Reserve reduced the target range for the federal funds rate by an aggregate of 0.75% through a series of 0.25% reductions primarily implemented in the fourth quarter. The target range remained unchanged during the first six months of 2026. As of June 30, 2026, the balance sheet remains modestly liability sensitive. Management expects customer deposit balance trends, replacement of wholesale funding sources with relationship-based deposits, and continued optimization of the funding mix to be key drivers of net interest margin performance as the Company continues to target a lower reliance on brokered deposits and FHLB advances.
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The following tables present condensed average balance sheet information, including interest income and yields on average interest-earning assets, as well as interest expense and rates paid on average interest-bearing liabilities, for the periods presented:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Average Balance | Interest Income or Expense | Average Yields or Rates | Average Balance | Interest Income or Expense | Average Yields or Rates | |||||||||||||||||||||||||||||||||||||||||||||||
| INTEREST-EARNING ASSETS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | $ | 66 | $ | — | 6.86 | % | $ | 189 | $ | 3 | 5.17 | % | |||||||||||||||||||||||||||||||||||||||||
Loans and leases (1) | 47,419 | 683 | 5.77 | % | 47,714 | 681 | 5.78 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Taxable securities | 10,173 | 102 | 3.97 | % | 10,097 | 106 | 4.22 | % | |||||||||||||||||||||||||||||||||||||||||||||
Non-taxable securities (2) | 1,219 | 15 | 4.63 | % | 1,253 | 14 | 4.51 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Temporary investments and interest-bearing cash | 1,402 | 13 | 3.71 | % | 1,578 | 14 | 3.65 | % | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets (1), (2) | 60,279 | $ | 813 | 5.40 | % | 60,831 | $ | 818 | 5.44 | % | |||||||||||||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets | 2,136 | 2,175 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | 3,217 | 3,209 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 65,632 | $ | 66,215 | |||||||||||||||||||||||||||||||||||||||||||||||||
| INTEREST-BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 11,002 | $ | 45 | 1.65 | % | $ | 10,780 | $ | 43 | 1.60 | % | |||||||||||||||||||||||||||||||||||||||||
| Money market deposits | 16,658 | 87 | 2.10 | % | 16,848 | 88 | 2.12 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Savings deposits | 2,413 | 1 | 0.14 | % | 2,443 | 1 | 0.12 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 5,205 | 40 | 3.03 | % | 6,414 | 52 | 3.32 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 35,278 | 173 | 1.96 | % | 36,485 | 184 | 2.04 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Repurchase agreements and federal funds purchased | 163 | 1 | 1.65 | % | 187 | 1 | 1.86 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 4,050 | 39 | 3.90 | % | 3,071 | 30 | 3.96 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Junior and other subordinated debentures | 431 | 8 | 7.07 | % | 435 | 7 | 7.03 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 39,922 | $ | 221 | 2.21 | % | 40,178 | $ | 222 | 2.24 | % | |||||||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing deposits | 17,301 | 17,378 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 815 | 873 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 58,038 | 58,429 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common equity | 7,594 | 7,786 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 65,632 | $ | 66,215 | |||||||||||||||||||||||||||||||||||||||||||||||||
NET INTEREST INCOME (2) | $ | 592 | $ | 596 | |||||||||||||||||||||||||||||||||||||||||||||||||
NET INTEREST SPREAD (2) | 3.19 | % | 3.20 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.93 | % | 3.96 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
(1)Non-accrual loans and leases are included in the average balance. (2)Tax-exempt investment security income was adjusted to a tax-equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of $3 million for the three months ended June 30, 2026, as compared to $2 million for the three months ended March 31, 2026. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Average Balance | Interest Income or Expense | Average Yields or Rates | Average Balance | Interest Income or Expense | Average Yields or Rates | |||||||||||||||||||||||||||||
| INTEREST-EARNING ASSETS: | |||||||||||||||||||||||||||||||||||
| Loans held for sale | $ | 127 | $ | 3 | 5.62 | % | $ | 63 | $ | 2 | 6.49 | % | |||||||||||||||||||||||
Loans and leases (1) | 47,565 | 1,364 | 5.78 | % | 37,663 | 1,115 | 5.96 | % | |||||||||||||||||||||||||||
| Taxable securities | 10,135 | 208 | 4.09 | % | 7,815 | 155 | 3.97 | % | |||||||||||||||||||||||||||
Non-taxable securities (2) | 1,236 | 29 | 4.57 | % | 808 | 16 | 3.91 | % | |||||||||||||||||||||||||||
| Temporary investments and interest-bearing cash | 1,490 | 27 | 3.67 | % | 1,457 | 32 | 4.46 | % | |||||||||||||||||||||||||||
Total interest-earning assets (1), (2) | 60,553 | $ | 1,631 | 5.42 | % | 47,806 | $ | 1,320 | 5.56 | % | |||||||||||||||||||||||||
| Goodwill and other intangible assets | 2,156 | 1,487 | |||||||||||||||||||||||||||||||||
| Other assets | 3,213 | 2,210 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 65,922 | $ | 51,503 | |||||||||||||||||||||||||||||||
| INTEREST-BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 10,892 | $ | 88 | 1.63 | % | $ | 8,426 | $ | 95 | 2.27 | % | |||||||||||||||||||||||
| Money market deposits | 16,753 | 175 | 2.11 | % | 11,694 | 141 | 2.43 | % | |||||||||||||||||||||||||||
| Savings deposits | 2,428 | 2 | 0.13 | % | 2,319 | 1 | 0.12 | % | |||||||||||||||||||||||||||
| Time deposits | 5,806 | 92 | 3.19 | % | 6,131 | 120 | 3.93 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 35,879 | 357 | 2.00 | % | 28,570 | 357 | 2.52 | % | |||||||||||||||||||||||||||
| Repurchase agreements and federal funds purchased | 175 | 2 | 1.76 | % | 201 | 2 | 1.94 | % | |||||||||||||||||||||||||||
| Borrowings | 3,563 | 69 | 3.93 | % | 3,048 | 71 | 4.67 | % | |||||||||||||||||||||||||||
| Junior and other subordinated debentures | 433 | 15 | 7.05 | % | 433 | 17 | 7.99 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 40,050 | $ | 443 | 2.23 | % | 32,252 | $ | 447 | 2.79 | % | |||||||||||||||||||||||||
| Non-interest-bearing deposits | 17,339 | 13,180 | |||||||||||||||||||||||||||||||||
| Other liabilities | 844 | 819 | |||||||||||||||||||||||||||||||||
| Total liabilities | 58,233 | 46,251 | |||||||||||||||||||||||||||||||||
| Common equity | 7,689 | 5,252 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 65,922 | $ | 51,503 | |||||||||||||||||||||||||||||||
NET INTEREST INCOME (2) | $ | 1,188 | $ | 873 | |||||||||||||||||||||||||||||||
NET INTEREST SPREAD (2) | 3.19 | % | 2.77 | % | |||||||||||||||||||||||||||||||
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.94 | % | 3.67 | % | |||||||||||||||||||||||||||||||
(1)Non-accrual loans and leases are included in the average balance. (2)Tax-exempt investment security income was adjusted to a tax-equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $5 million for the six months ended June 30, 2026, as compared to approximately $2 million for the same period in 2025. | |||||||||||||||||||||||||||||||||||
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The following table presents a summary of the changes in tax equivalent net interest income due to changes in average balances (volume) and changes in average rates (rate) for the periods presented. Changes in tax equivalent interest income and expense that are not specifically attributable to either volume or rate are allocated proportionately between the two components.
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
June 30, 2026 compared to March 31, 2026 | June 30, 2026 compared to June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Increase (decrease) in interest income and expense due to changes in | Increase (decrease) in interest income and expense due to changes in | ||||||||||||||||||||||||||||||||||
(in millions) | Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||||||||||||
| INTEREST-EARNING ASSETS: | |||||||||||||||||||||||||||||||||||
| Loans held for sale | $ | (2) | $ | (1) | $ | (3) | $ | 2 | $ | (1) | $ | 1 | |||||||||||||||||||||||
| Loans and leases | 1 | 1 | 2 | 293 | (44) | 249 | |||||||||||||||||||||||||||||
| Taxable securities | 1 | (5) | (4) | 46 | 7 | 53 | |||||||||||||||||||||||||||||
Non-taxable securities (1) | — | 1 | 1 | 9 | 4 | 13 | |||||||||||||||||||||||||||||
| Temporary investments and interest-bearing cash | (1) | — | (1) | 1 | (6) | (5) | |||||||||||||||||||||||||||||
Total interest-earning assets (1) | (1) | (4) | (5) | 351 | (40) | 311 | |||||||||||||||||||||||||||||
| INTEREST-BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | 1 | 1 | 2 | 28 | (35) | (7) | |||||||||||||||||||||||||||||
| Money market deposits | (1) | — | (1) | 61 | (27) | 34 | |||||||||||||||||||||||||||||
| Savings deposits | — | — | — | — | 1 | 1 | |||||||||||||||||||||||||||||
| Time deposits | (9) | (3) | (12) | (7) | (21) | (28) | |||||||||||||||||||||||||||||
| Borrowings | 9 | — | 9 | 12 | (14) | (2) | |||||||||||||||||||||||||||||
| Junior and other subordinated debentures | 1 | — | 1 | — | (2) | (2) | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1 | (2) | (1) | 94 | (98) | (4) | |||||||||||||||||||||||||||||
Net increase in net interest income (1) | $ | (2) | $ | (2) | $ | (4) | $ | 257 | $ | 58 | $ | 315 | |||||||||||||||||||||||
(1) Tax-exempt investment security income was adjusted to a tax-equivalent basis at a 21% tax rate. | |||||||||||||||||||||||||||||||||||
Provision for Credit Losses
Comparison of current quarter to prior quarter
The Company had a $27 million provision for credit losses for the three months ended June 30, 2026, as compared to a $28 million provision for the three months ended March 31, 2026. The provision remained relatively stable quarter over quarter, reflecting the combined effect of lower loan portfolio balances, updated economic assumptions, portfolio activity and credit migration, and changes to the Company's ACL estimation methodology and qualitative adjustments. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the three months ended June 30, 2026 was 0.23%, as compared to 0.24% for the three months ended March 31, 2026.
For the three months ended June 30, 2026 and March 31, 2026, net charge-offs were $30 million and $35 million, respectively. As an annualized percentage of average outstanding loans and leases, net charge-offs for the three months ended June 30, 2026 were 0.25%, as compared to 0.30% for the three months ended March 31, 2026. Net charge-offs within the FinPac portfolio were $15 million for the three months ended June 30, 2026, as compared to $14 million three months ended March 31, 2026. Excluding the FinPac portfolio, net charge-offs were $15 million, as compared to $21 million for the prior quarter, reflecting improved charge-off performance across the remainder of the loan portfolio.
Comparison of current year-to-date to prior year period
The Company had a $55 million provision for credit losses for the six months ended June 30, 2026, as compared to $57 million for the six months ended June 30, 2025. The decrease in the provision reflects changes in loan portfolio balances, economic assumptions, portfolio activity and credit migration, and changes to the Company's ACL estimation methodology and qualitative adjustments. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the six months ended June 30, 2026 was 0.23%, as compared to 0.30% for the six months ended June 30, 2025.
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For the six months ended June 30, 2026, net charge-offs were $65 million, as compared to $59 million for the six months ended June 30, 2025. As an annualized percentage of average outstanding loans and leases, net charge-offs for the six months ended June 30, 2026 were 0.28%, as compared to 0.31% for the six months ended June 30, 2025. Net charge-offs within the FinPac portfolio were $29 million for the six months ended June 30, 2026, as compared to $31 million for the six months ended June 30, 2025, reflecting continued improvement in the FinPac lease portfolio. Excluding the FinPac portfolio, net charge-offs were $36 million and $28 million for the six months ended June 30, 2026 and 2025, respectively, with the variance driven primarily by commercial loan charge-offs.
Non-accrual leases and equipment finance agreements totaled $16 million at June 30, 2026 and carried a related ACL of $14 million. Under the Company's CECL methodology, homogeneous leases and equipment finance agreements continue to carry an ACL until charged off at 181 days past due. Management does not expect additional material losses on these balances absent further deterioration in collateral values.
Non-Interest Income
The following table presents the key components of non-interest income and the related dollar and percentage change from period to period:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | June 30, 2026 | March 31, 2026 | Change Amount | Change Percent | June 30, 2026 | June 30, 2025 | Change Amount | Change Percent | |||||||||||||||||||||||||||||||||||||||
| Service charges on deposits | $ | 23 | $ | 20 | $ | 3 | 15 | % | $ | 43 | $ | 39 | $ | 4 | 10 | % | |||||||||||||||||||||||||||||||
| Card-based fees | 17 | 15 | 2 | 13 | % | 32 | 27 | 5 | 19 | % | |||||||||||||||||||||||||||||||||||||
| Financial services and trust revenue | 15 | 15 | — | — | % | 30 | 11 | 19 | 173 | % | |||||||||||||||||||||||||||||||||||||
| Residential mortgage banking revenue, net | 7 | 12 | (5) | (42) | % | 19 | 17 | 2 | 12 | % | |||||||||||||||||||||||||||||||||||||
| (Loss) gain on investment securities, net | (1) | — | (1) | nm | (1) | 2 | (3) | (150) | % | ||||||||||||||||||||||||||||||||||||||
| Gain on loan and lease sales, net | — | 1 | (1) | (100) | % | 1 | — | 1 | nm | ||||||||||||||||||||||||||||||||||||||
| (Loss) gain on certain loans held for investment, at fair value | (1) | (2) | 1 | (50) | % | (3) | 7 | (10) | (143) | % | |||||||||||||||||||||||||||||||||||||
| Bank-owned life insurance income | 9 | 9 | — | — | % | 18 | 10 | 8 | 80 | % | |||||||||||||||||||||||||||||||||||||
| Other income | 19 | 13 | 6 | 46 | % | 32 | 18 | 14 | 78 | % | |||||||||||||||||||||||||||||||||||||
| Total non-interest income | $ | 88 | $ | 83 | $ | 5 | 6 | % | $ | 171 | $ | 131 | $ | 40 | 31 | % | |||||||||||||||||||||||||||||||
Comparison of current quarter to prior quarter
Customer fee income increased during the three months ended June 30, 2026, reflecting higher service charges on deposits and card-based fees. Other income also increased, driven in part by $3 million of BOLI death benefit proceeds from a single policy. Customer activity increased during the second quarter across several fee-based businesses compared to the seasonally slower first quarter.
Residential mortgage banking revenue decreased during the three months ended June 30, 2026. The decrease was primarily driven by a lower gain on the fair value of the MSR asset related to changes in valuation inputs and assumptions, with a $1 million gain recognized during the three months ended June 30, 2026, compared to a gain of $6 million for the three months ended March 31, 2026.
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Comparison of current year-to-date to prior year period
Financial services and trust revenue increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase reflects the combined operations following the acquisition of Pacific Premier, which contributed to higher transaction volumes and an expanded client base. In addition, the Pacific Premier acquisition significantly expanded the Company's wealth management platform through the addition of Pacific Premier's custodial trust business, resulting in a 173% increase in financial services and trust revenue compared to the prior-year period.
Gain (loss) on certain loans held for investment, at fair value, resulted in a loss of $3 million for the six months ended June 30, 2026, compared to a gain of $7 million for the six months ended June 30, 2025. The variance was primarily driven by changes in market interest rates and related fair value adjustments between periods.
Other income increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to $3 million of BOLI death benefit proceeds from a single policy, as well as increased miscellaneous income, swap related income, loan related fees, and a reduction in swap derivative loss, resulting in a net increase of $13 million between periods.
Non-Interest Expense
The following table presents the key elements of non-interest expense and the related dollar and percentage change from period to period:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | June 30, 2026 | March 31, 2026 | Change Amount | Change Percent | June 30, 2026 | June 30, 2025 | Change Amount | Change Percent | |||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 196 | $ | 196 | $ | — | — | % | $ | 392 | $ | 300 | $ | 92 | 31 | % | |||||||||||||||||||||||||||||||
| Occupancy and equipment, net | 65 | 66 | (1) | (2) | % | 131 | 95 | 36 | 38 | % | |||||||||||||||||||||||||||||||||||||
| Communications | 5 | 4 | 1 | 25 | % | 9 | 7 | 2 | 29 | % | |||||||||||||||||||||||||||||||||||||
| Marketing | 5 | 5 | — | — | % | 10 | 6 | 4 | 67 | % | |||||||||||||||||||||||||||||||||||||
| Services | 16 | 15 | 1 | 7 | % | 31 | 27 | 4 | 15 | % | |||||||||||||||||||||||||||||||||||||
| Deposit costs | 14 | 14 | — | — | % | 28 | 4 | 24 | nm | ||||||||||||||||||||||||||||||||||||||
| FDIC assessments | 9 | 9 | — | — | % | 18 | 16 | 2 | 13 | % | |||||||||||||||||||||||||||||||||||||
| Intangible amortization | 38 | 41 | (3) | (7) | % | 79 | 54 | 25 | 46 | % | |||||||||||||||||||||||||||||||||||||
| Merger and restructuring expense | 9 | 24 | (15) | (63) | % | 33 | 23 | 10 | 43 | % | |||||||||||||||||||||||||||||||||||||
| Legal settlement | — | — | — | nm | — | 55 | (55) | (100) | % | ||||||||||||||||||||||||||||||||||||||
| Other expenses | 18 | 20 | (2) | (10) | % | 38 | 31 | 7 | 23 | % | |||||||||||||||||||||||||||||||||||||
| Total non-interest expense | $ | 375 | $ | 394 | $ | (19) | (5) | % | $ | 769 | $ | 618 | $ | 151 | 24 | % | |||||||||||||||||||||||||||||||
Comparison of current quarter to prior quarter
Merger and restructuring expense decreased during the three months ended June 30, 2026, as compared to the three months ended March 31, 2026, reflecting lower personnel-related costs, legal and professional fees, and occupancy and benefit expense, as integration activities associated with the Pacific Premier acquisition continued to wind down.
During the six months ended June 30, 2026, the Company completed the Pacific Premier systems conversion and consolidated nine branches as part of the integration process. Integration activities continued throughout the period, and all previously disclosed acquisition-related cost savings were realized as of June 30, 2026. These cost savings contributed to lower underlying non-interest expense and are expected to benefit future operating results.
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Comparison of current year-to-date to prior year period
Salaries and employee benefits increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the addition of Pacific Premier employees following the acquisition.
Occupancy and equipment, net increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the expanded branch network and additional technology and software costs resulting from the acquisition of Pacific Premier.
Deposit costs increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily driven by higher HOA-related fees associated with the growth in the Company's HOA banking business as part of the acquisition of Pacific Premier.
Intangible amortization increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, reflecting the ongoing amortization of the core deposit intangibles recognized in the acquisition of Pacific Premier. Refer to Note 6 – Goodwill and Other Intangible Assets for additional information regarding expected amortization expense.
Merger and restructuring expense increased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to costs incurred in connection with the Pacific Premier acquisition. These costs consisted primarily of severance and retention payments, professional service fees, systems conversion and integration activities, contract termination costs, branch consolidation activities, and other acquisition-related expenses incurred to integrate operations and realize acquisition synergies.
Legal settlement decreased during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, reflecting a $55 million accrual recorded in the first quarter of 2025 related to a legal settlement, which was not repeated in the current period.
The Company maintains a disciplined approach to expense management while continuing to invest in customer-facing technology, relationship banking talent, and strategic market expansion. Management believes these investments support long-term operating efficiency, strengthen the customer experience, and enhance revenue growth opportunities in support of its Business Bank of Choice strategy.
Income Taxes
The Company's effective tax rate for the three and six months ended June 30, 2026 was 24.4% and 24.5%, respectively, as compared to 24.7% for the three months ended March 31, 2026 and 27.0% for the six months ended June 30, 2025. The effective tax rates differed from the statutory federal income tax rate primarily due to the impact of state income taxes, non-deductible compensation, non-deductible FDIC assessments, and income from tax-exempt investment securities and loans. The change in the effective tax rate for the six months ended June 30, 2026, as compared to the corresponding period in the prior year, was primarily attributable to reduced non-deductible compensation, as the prior year included elevated severance that did not repeat.
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FINANCIAL CONDITION
Cash and Cash Equivalents
Cash and cash equivalents were $1.8 billion as of June 30, 2026 compared to $2.4 billion as of December 31, 2025. The decrease in interest-bearing cash was due to a decision to decrease on balance sheet liquidity as a result of lower liquidity risk as compared to the prior year. The Company manages its cash position within the broader liquidity framework designed to maintain a high-quality liquid asset base, support balance sheet flexibility, fund growth across lending and investment activities, and reduce debt and other non-deposit liabilities when market conditions are favorable.
Debt Securities
Investment debt securities classified as available for sale were $11.1 billion as of both June 30, 2026 and December 31, 2025. The change was primarily due to $671 million investment securities purchases, partially offset by paydowns, amortization and accretion, and redemptions of $548 million and a $104 million decline in the fair value of available for sale investment securities, reflecting higher interest rates during the period. The overall portfolio remained relatively stable during the period as purchase activity and other portfolio movements largely offset principal runoff and the decline in fair value.
The following tables present the par value, amortized cost, and fair values of investment debt securities as available for sale and held to maturity by major type as of the dates presented:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Current Par | Amortized Cost | Fair Value | % of Portfolio | Current Par | Amortized Cost | Fair Value | % of Portfolio | |||||||||||||||||||||||||||||||||||||||
| Available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and agencies | $ | 1,264 | $ | 1,272 | $ | 1,231 | 11 | % | $ | 1,322 | $ | 1,332 | $ | 1,300 | 12 | % | |||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | 1,836 | 1,563 | 1,594 | 14 | % | 1,875 | 1,597 | 1,629 | 15 | % | |||||||||||||||||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | 9,222 | 8,664 | 8,306 | 75 | % | 9,051 | 8,447 | 8,183 | 73 | % | |||||||||||||||||||||||||||||||||||||
| Total available for sale securities | $ | 12,322 | $ | 11,499 | $ | 11,131 | 100 | % | $ | 12,248 | $ | 11,376 | $ | 11,112 | 100 | % | |||||||||||||||||||||||||||||||
| Held to maturity: | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and other securities | $ | 18 | $ | 17 | $ | 18 | 100 | % | $ | 19 | $ | 18 | $ | 19 | 100 | % | |||||||||||||||||||||||||||||||
| Total held to maturity securities | $ | 18 | $ | 17 | $ | 18 | 100 | % | $ | 19 | $ | 18 | $ | 19 | 100 | % | |||||||||||||||||||||||||||||||
We evaluate our investment securities on an ongoing basis for potential impairment, considering current market conditions, the relationship of fair value to amortized cost, the magnitude and duration of unrealized losses, changes in issuer credit ratings or credit trends, and other relevant factors. We also assess whether we intend to sell a security or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, which may occur at maturity.
As of June 30, 2026, the available for sale investment portfolio had gross unrealized losses of $433 million, including $374 million of unrealized losses on mortgage-backed securities and collateralized mortgage obligations. The unrealized losses were primarily attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, not deterioration in credit quality. In the opinion of management, no ACL was considered necessary on these debt securities as of June 30, 2026.
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Loans and Leases
Total loans and leases outstanding as of June 30, 2026 were $47.2 billion, a decrease of $610 million as compared to December 31, 2025. The decrease primarily reflects continued runoff in below-market-rate transactional loans and lower balances in non-owner occupied commercial real estate given elevated payoffs, due in part to competitive pricing pressure, partially offset by growth in commercial loans. Management expects the loan portfolio to continue shifting toward relationship-based lending opportunities, consistent with the Company's balance sheet optimization strategy. The loan-to-deposit ratio was 91% and 88% as of June 30, 2026 and December 31, 2025, respectively.
The following table presents the concentration distribution of the loan and lease portfolio as of the dates presented:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
(in millions) | Amount | % | Amount | % | |||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||
| Non-owner occupied term | $ | 7,584 | 16 | % | $ | 8,206 | 17 | % | |||||||||||||||
| Owner occupied term | 7,405 | 16 | % | 7,314 | 15 | % | |||||||||||||||||
| Multifamily | 10,122 | 22 | % | 10,281 | 22 | % | |||||||||||||||||
| Construction & development | 1,529 | 3 | % | 1,707 | 4 | % | |||||||||||||||||
| Residential development | 369 | 1 | % | 362 | 1 | % | |||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Term | 7,004 | 15 | % | 6,713 | 14 | % | |||||||||||||||||
| Lines of credit & other | 3,794 | 8 | % | 3,643 | 8 | % | |||||||||||||||||
| Leases & equipment finance | 1,617 | 3 | % | 1,599 | 3 | % | |||||||||||||||||
| Residential | |||||||||||||||||||||||
Mortgage | 5,402 | 11 | % | 5,624 | 12 | % | |||||||||||||||||
| Home equity loans & lines | 2,176 | 5 | % | 2,149 | 4 | % | |||||||||||||||||
| Consumer & other | 164 | — | % | 178 | — | % | |||||||||||||||||
| Total, net of deferred fees and costs | $ | 47,166 | 100 | % | $ | 47,776 | 100 | % | |||||||||||||||
Loan Origination/Risk Management
The Bank has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies, and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.
The Bank maintains an independent loan review department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management and the appropriate committees of our Board of Directors. The loan review process evaluates that the risk identification and assessment decisions made by lenders and credit personnel are in line with our policies and procedures.
For a more comprehensive discussion of our loan and lease underwriting criteria, refer to discussion in the "Loans and Leases" section of Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Commercial Real Estate and Commercial Loans
CRE and commercial loan portfolios are the largest classifications within earning assets, representing 45% and 20%, respectively, of average earning assets at June 30, 2026 and 43% and 20%, respectively, at December 31, 2025. Delinquency and non-accrual loan movements during the period reflect an anticipated move toward a normalized credit environment following a phase of exceptionally high credit quality. Non-performing loans in the CRE and commercial portfolios include $37 million in government guarantees, which partially offsets our credit exposure in those portfolios.
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Commercial Real Estate Loans
The CRE portfolio includes loans to developers and institutional sponsors supporting income-producing or for-sale CRE properties. We mitigate our risk on these loans by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement. In addition, management tracks the level of owner-occupied CRE loans versus non-owner occupied loans. Owner-occupied real estate loans are based on cash flows from ongoing operations, and the borrower must generally occupy more than 50% of rentable space or pay more than 50% of rents. As of June 30, 2026, approximately 27% of the outstanding principal balance of our CRE loan portfolio were secured by owner-occupied properties.
As of June 30, 2026, the CRE loan portfolio was $27.0 billion, a decrease of $861 million compared to December 31, 2025, driven in part by the intentional runoff in below-market rate transactional loans as part of the Company's balance sheet optimization strategy and elevated payoffs in the non-owner occupied commercial real estate portfolio. CRE concentrations are managed with a goal of optimizing relationship-driven commercial loans, as well as geographic and business diversity, primarily in our footprint.
The following table provides detail of CRE loans by property type:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| (in millions) | Outstanding | Non-Accrual (1) | % of Non-Accrual to Total CRE | Outstanding | Non-Accrual (1) | % of Non-Accrual to Total CRE | ||||||||||||||||||||||||||||||||
| CRE by property type: | ||||||||||||||||||||||||||||||||||||||
| Multifamily | $ | 11,154 | $ | — | — | % | $ | 11,448 | $ | — | — | % | ||||||||||||||||||||||||||
| Industrial | 3,854 | 11 | 0.04 | % | 3,975 | 4 | 0.01 | % | ||||||||||||||||||||||||||||||
| Office | 3,559 | 30 | 0.11 | % | 3,619 | 15 | 0.05 | % | ||||||||||||||||||||||||||||||
| Retail | 2,514 | 10 | 0.04 | % | 2,634 | 12 | 0.04 | % | ||||||||||||||||||||||||||||||
| Special Purpose | 1,915 | 5 | 0.02 | % | 1,958 | 5 | 0.02 | % | ||||||||||||||||||||||||||||||
| Hotel/Motel | 918 | 2 | 0.01 | % | 988 | 5 | 0.02 | % | ||||||||||||||||||||||||||||||
| Other | 3,095 | 38 | 0.14 | % | 3,248 | 9 | 0.02 | % | ||||||||||||||||||||||||||||||
| Total CRE loans | $ | 27,009 | $ | 96 | 0.36 | % | $ | 27,870 | $ | 50 | 0.18 | % | ||||||||||||||||||||||||||
(1) CRE non-accrual loans are inclusive of government guarantees of $19 million and $21 million as of June 30, 2026 and December 31, 2025, respectively.
The following table provides detail on the geographic distribution of our CRE portfolio as of the periods indicated:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in millions) | Amount | % of Total | Amount | % of Total | |||||||||||||||||||
| Southern California | $ | 8,789 | 33 | % | $ | 9,147 | 32 | % | |||||||||||||||
| Puget Sound | 3,895 | 14 | % | 4,049 | 15 | % | |||||||||||||||||
| Portland Metro | 2,934 | 11 | % | 3,013 | 11 | % | |||||||||||||||||
| Oregon Other | 2,928 | 11 | % | 2,952 | 11 | % | |||||||||||||||||
| Northern California (excluding the Bay Area) | 2,079 | 8 | % | 2,165 | 8 | % | |||||||||||||||||
| Bay Area | 1,740 | 6 | % | 1,847 | 7 | % | |||||||||||||||||
| Washington Other | 1,396 | 5 | % | 1,456 | 5 | % | |||||||||||||||||
| Other | 3,248 | 12 | % | 3,241 | 11 | % | |||||||||||||||||
| Total CRE loans | $ | 27,009 | 100 | % | $ | 27,870 | 100 | % | |||||||||||||||
Loans secured by multifamily properties, including construction, represented 24% of the total loan portfolio as of both June 30, 2026 and December 31, 2025. These assets continue to perform well due to demand for rental properties in our geographic footprint. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax and rent control policies, tightening credit or refinancing markets, or a decline in real estate values in the Bank's primary geographic footprint in particular, could have an adverse impact on the repayment of these loans.
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Loans secured by office properties, which are predominantly located in suburban markets, represented approximately 8% of our total loan portfolio at both June 30, 2026 and December 31, 2025, and were comprised of 50% non-owner occupied, 47% owner occupied, and 3% construction loans at June 30, 2026, compared to 53% non-owner occupied, 45% owner occupied, and 2% construction loans at December 31, 2025.
The following table provides details on the geographic distribution of our CRE secured by office properties:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in millions) | Amount | % of Total | Amount | % of Total | |||||||||||||||||||
| Southern California | $ | 1,112 | 31 | % | $ | 1,135 | 31 | % | |||||||||||||||
| Puget Sound | 542 | 15 | % | 551 | 15 | % | |||||||||||||||||
| Oregon Other | 478 | 13 | % | 467 | 13 | % | |||||||||||||||||
| Portland Metro | 377 | 11 | % | 386 | 11 | % | |||||||||||||||||
| Northern California (excluding the Bay Area) | 274 | 8 | % | 308 | 9 | % | |||||||||||||||||
| Washington Other | 148 | 4 | % | 151 | 4 | % | |||||||||||||||||
| Bay Area | 146 | 4 | % | 179 | 5 | % | |||||||||||||||||
| Other | 482 | 14 | % | 442 | 12 | % | |||||||||||||||||
| Total CRE loans secured by office properties | $ | 3,559 | 100 | % | $ | 3,619 | 100 | % | |||||||||||||||
Commercial Loans and Leases
Commercial loans are made to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or other projects. The Bank focuses on borrowers doing business within our geographic markets. Commercial loans are generally underwritten individually and secured with the assets of the company and/or the personal guarantee of the business owners. Lease and equipment financing products are designed to address the diverse financing needs of small to large companies, primarily for the acquisition of equipment. As of June 30, 2026, commercial loans held in our loan portfolio were $12.4 billion, an increase of $460 million, or 8% on an annualized basis, compared to December 31, 2025, driven primarily by relationship-based loan originations.
The leases and equipment finance portfolio represented 13% of the commercial portfolio and 3% of the total loan portfolio as of both June 30, 2026 and December 31, 2025. Net charge-offs in the FinPac lease portfolio were $15 million and $29 million for the three and six months ended June 30, 2026, compared to $14 million for the three months ended March 31, 2026 and $31 million for the six months ended June 30, 2025. Net charge-offs in the remaining commercial portfolio were $15 million and $36 million for the three and six months ended June 30, 2026, compared to $21 million for the three months ended March 31, 2026 and $28 million for the six months ended June 30, 2025.
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The following table provides details on commercial loans and leases by industry type:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | Outstanding | Non-Accrual (1) | % of Non-Accrual to Total Commercial | Outstanding | Non-Accrual (1) | % of Non-Accrual to Total Commercial | |||||||||||||||||||||||||||||||||||
| Commercial loans and leases by industry type: | |||||||||||||||||||||||||||||||||||||||||
| Agriculture | $ | 1,069 | $ | 38 | 0.31 | % | $ | 1,016 | $ | 22 | 0.18 | % | |||||||||||||||||||||||||||||
| Contractors | 1,013 | 5 | 0.04 | % | 973 | 6 | 0.05 | % | |||||||||||||||||||||||||||||||||
| Dentist | 607 | 3 | 0.02 | % | 629 | — | — | % | |||||||||||||||||||||||||||||||||
| Finance/insurance | 994 | — | — | % | 990 | — | — | % | |||||||||||||||||||||||||||||||||
| Franchise/quick-service restaurants | 405 | — | — | % | 331 | — | — | % | |||||||||||||||||||||||||||||||||
| Gaming | 537 | — | — | % | 877 | — | — | % | |||||||||||||||||||||||||||||||||
| Healthcare | 566 | 4 | 0.03 | % | 545 | 2 | 0.02 | % | |||||||||||||||||||||||||||||||||
| Manufacturing | 954 | 5 | 0.04 | % | 1,054 | 8 | 0.07 | % | |||||||||||||||||||||||||||||||||
| Professional | 461 | 1 | 0.01 | % | 432 | 2 | 0.02 | % | |||||||||||||||||||||||||||||||||
| Public admin | 689 | — | — | % | 692 | — | — | % | |||||||||||||||||||||||||||||||||
| Rental and leasing | 750 | — | — | % | 688 | — | — | % | |||||||||||||||||||||||||||||||||
| Retail | 459 | 7 | 0.06 | % | 397 | 9 | 0.08 | % | |||||||||||||||||||||||||||||||||
| Support services | 546 | 5 | 0.04 | % | 501 | 1 | 0.01 | % | |||||||||||||||||||||||||||||||||
| Transportation/warehousing | 884 | 7 | 0.06 | % | 765 | 8 | 0.07 | % | |||||||||||||||||||||||||||||||||
| Wholesale | 796 | 3 | 0.02 | % | 909 | 3 | 0.03 | % | |||||||||||||||||||||||||||||||||
| Other | 1,685 | 6 | 0.05 | % | 1,156 | 5 | 0.05 | % | |||||||||||||||||||||||||||||||||
| Total commercial portfolio | $ | 12,415 | $ | 84 | 0.68 | % | $ | 11,955 | $ | 66 | 0.55 | % | |||||||||||||||||||||||||||||
(1) Commercial non-accrual loans and leases are inclusive of government guarantees of $18 million and $17 million as of June 30, 2026 and December 31, 2025, respectively.
Residential Real Estate Loans
Residential real estate loans represent mortgage loans and lines of credit to consumers for the purchase or refinance of a residence. As of June 30, 2026, residential real estate loans held in our loan portfolio were $7.6 billion, a decrease of $195 million as compared to December 31, 2025. Residential real estate loan balances declined during the quarter, primarily reflecting continued runoff driven by prior‑period actions to scale the residential lending platform and which have resulted in origination levels that are intentionally below those necessary to fully offset normal loan repayments and paydowns. The decline also reflects the intentional reduction of exposure within the transactional residential mortgage portfolio, consistent with the Company’s balance sheet optimization strategy.
Consumer Loans
Consumer loans, including secured and unsecured personal loans, personal lines of credit, and motor vehicle loans, decreased $14 million to $164 million as of June 30, 2026, as compared to December 31, 2025. The change was due to normal business activity.
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Asset Quality and Non-Performing Assets
The Bank manages asset quality and controls credit risk primarily through diversification of its loan and lease portfolio and the consistent application of credit policies designed to support sound underwriting and loan and lease monitoring practices. The Bank's Credit Quality Administration department is charged with monitoring asset quality, establishing credit policies and procedures, and enforcing the consistent application of these policies and procedures across the Bank. The Bank conducts ongoing reviews of non-performing, past due loans and leases, and larger credits, designed to identify potential charges to the ACL, and to determine the adequacy of the ACL. These reviews consider such factors as the financial strength of borrowers, the value of the applicable collateral, loan and lease loss experience, estimated loan and lease losses, growth in the loan and lease portfolio, prevailing economic conditions, and other factors.
The following table summarizes the Bank's non-performing assets, the ACL, and asset quality ratios as of the dates presented:
(in millions) | June 30, 2026 | December 31, 2025 | ||||||||||||
Non-performing assets: (1) | ||||||||||||||
| Loans and leases on non-accrual status | ||||||||||||||
| Commercial real estate | $ | 96 | $ | 50 | ||||||||||
| Commercial | 84 | 66 | ||||||||||||
| Total loans and leases on non-accrual status | 180 | 116 | ||||||||||||
Loans and leases past due 90 days or more and accruing (2) | ||||||||||||||
| Commercial real estate | 4 | 2 | ||||||||||||
| Commercial | 4 | 8 | ||||||||||||
Residential (2) | 80 | 72 | ||||||||||||
Total loans and leases past due 90 days or more and accruing (2) | 88 | 82 | ||||||||||||
Total non-performing loans and leases (1), (2) | 268 | 198 | ||||||||||||
| Other real estate owned | 5 | 2 | ||||||||||||
Total non-performing assets (1), (2) | $ | 273 | $ | 200 | ||||||||||
| ACLLL | $ | 458 | $ | 466 | ||||||||||
| Reserve for unfunded commitments | 17 | 19 | ||||||||||||
| ACL | $ | 475 | $ | 485 | ||||||||||
| Asset quality ratios: | ||||||||||||||
Non-performing assets to total assets (1), (2) | 0.42 | % | 0.30 | % | ||||||||||
Non-performing loans and leases to total loans and leases (1), (2) | 0.57 | % | 0.41 | % | ||||||||||
Non-accrual loans and leases to total loans and leases (2) | 0.38 | % | 0.24 | % | ||||||||||
| ACLLL to total loans and leases | 0.97 | % | 0.98 | % | ||||||||||
| ACL to total loans and leases | 1.01 | % | 1.02 | % | ||||||||||
| ACL to non-accrual loans and leases | 264 | % | 418 | % | ||||||||||
| ACL to total non-performing loans and leases | 177 | % | 245 | % | ||||||||||
(1) Non-accrual and 90+ days past due loans include government guarantees of $37 million and $41 million, respectively, as of June 30, 2026. As of December 31, 2025, non-accrual and 90+ days past due loans include government guarantees of $38 million and $41 million, respectively.
(2) Excludes certain mortgage loans that carry a government guarantee, which the Company has a unilateral right to repurchase but has not exercised that right. Such loans totaled $4 million as of June 30, 2026 and $3 million at December 31, 2025.
As of June 30, 2026, loans modified for borrowers experiencing financial difficulties totaled $142 million or 0.30% of total loans, compared to $193 million or 0.40% as of December 31, 2025. A decline in economic conditions and other factors could adversely impact individual borrowers or the loan portfolio as a whole. Accordingly, there can be no assurance that additional loans will not become 90 days or more past due, be placed on non-accrual status, be restructured, or be transferred to other real estate owned in the future.
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ALLOWANCE FOR CREDIT LOSSES
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL totaled $475 million as of June 30, 2026, a decrease of $10 million from $485 million as of December 31, 2025. The change in the ACL estimate during the three and six months ended June 30, 2026 reflects the combined effect of updated economic assumptions, portfolio activity and credit migration, and changes to the Company's ACL estimation methodology and qualitative adjustments.
The following table shows the activity in the ACL for the periods indicated:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
(in millions) | June 30, 2026 | March 31, 2026 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||
| Allowance for credit losses on loans and leases | ||||||||||||||||||||||||||
| Balance, beginning of period | $ | 459 | $ | 466 | $ | 466 | $ | 425 | ||||||||||||||||||
| Provision for credit losses on loans and leases | 29 | 28 | 57 | 55 | ||||||||||||||||||||||
| Charge-offs: | ||||||||||||||||||||||||||
| Commercial real estate | (1) | — | (1) | — | ||||||||||||||||||||||
| Commercial | (32) | (39) | (71) | (66) | ||||||||||||||||||||||
| Residential | — | — | — | (1) | ||||||||||||||||||||||
| Consumer & other | (2) | (1) | (3) | (2) | ||||||||||||||||||||||
| Total charge-offs | (35) | (40) | (75) | (69) | ||||||||||||||||||||||
| Recoveries: | ||||||||||||||||||||||||||
| Commercial | 4 | 4 | 8 | 9 | ||||||||||||||||||||||
| Consumer & other | 1 | 1 | 2 | 1 | ||||||||||||||||||||||
| Total recoveries | 5 | 5 | 10 | 10 | ||||||||||||||||||||||
| Net (charge-offs) recoveries: | ||||||||||||||||||||||||||
| Commercial real estate | (1) | — | (1) | — | ||||||||||||||||||||||
| Commercial | (28) | (35) | (63) | (57) | ||||||||||||||||||||||
| Residential | — | — | — | (1) | ||||||||||||||||||||||
| Consumer & other | (1) | — | (1) | (1) | ||||||||||||||||||||||
| Total net charge-offs | (30) | (35) | (65) | (59) | ||||||||||||||||||||||
| Balance, end of period | $ | 458 | $ | 459 | $ | 458 | $ | 421 | ||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||
| Balance, beginning of period | $ | 19 | $ | 19 | $ | 19 | $ | 16 | ||||||||||||||||||
| (Recapture) provision for credit losses on unfunded commitments | (2) | — | (2) | 2 | ||||||||||||||||||||||
| Balance, end of period | 17 | 19 | 17 | 18 | ||||||||||||||||||||||
| Total allowance for credit losses | $ | 475 | $ | 478 | $ | 475 | $ | 439 | ||||||||||||||||||
| As a percentage of average loans and leases (annualized): | ||||||||||||||||||||||||||
| Net charge-offs | 0.25 | % | 0.30 | % | 0.28 | % | 0.31 | % | ||||||||||||||||||
| Provision for credit losses | 0.23 | % | 0.24 | % | 0.23 | % | 0.30 | % | ||||||||||||||||||
| Recoveries as a percentage of charge-offs | 14.29 | % | 12.50 | % | 13.33 | % | 14.62 | % | ||||||||||||||||||
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The following table shows the change in the ACL from March 31, 2026 to June 30, 2026:
| (in millions) | March 31, 2026 | Q2 2026 Net (Charge-Offs) | Reserve (Release) Build | June 30, 2026 | % of Loans and Leases Outstanding | |||||||||||||||||||||||||||
| Commercial real estate | $ | 223 | $ | (1) | $ | 4 | $ | 226 | 0.84 | % | ||||||||||||||||||||||
| Commercial | 214 | (28) | 34 | 220 | 1.77 | % | ||||||||||||||||||||||||||
| Residential | 34 | — | (12) | 22 | 0.29 | % | ||||||||||||||||||||||||||
| Consumer & other | 7 | (1) | 1 | 7 | 4.27 | % | ||||||||||||||||||||||||||
| Total ACL | $ | 478 | $ | (30) | $ | 27 | $ | 475 | 1.01 | % | ||||||||||||||||||||||
| % of loans and leases outstanding | 1.00 | % | 1.01 | % | ||||||||||||||||||||||||||||
The ACL reflects management's estimate of expected credit losses over the contractual life of the loan and lease portfolio and is influenced by portfolio composition, credit quality trends, economic conditions, and reasonable and supportable forecasts. The Company's CECL model incorporates macroeconomic forecasts relevant to each loan and lease portfolio, supplemented by qualitative adjustments to address risks and uncertainties that may not be fully captured in the quantitative analysis. In estimating the ACL at June 30, 2026, the Company utilized Moody's Analytics' May 2026 consensus economic forecast. Relative to the economic assumptions used in the December 31, 2025 ACL estimate, the May 2026 forecast reflected marginally improved projected GDP growth, partially offset by higher expected unemployment rates. In addition, during the second quarter of 2026, the Company modified its ACL estimation methodology by transitioning from a DCF methodology to a non-DCF methodology for substantially all loan segments. Refer to Note 1 – Summary of Significant Accounting Policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for a description of the ACL methodology and to Note 5 – Allowance for Credit Losses above for information regarding the methodology changes implemented during the quarter.
The ACL models are sensitive to changes in economic assumptions, and changes in those assumptions may result in volatility in the ACL over time. Management believes the ACL as of June 30, 2026 is sufficient to absorb losses inherent in the loan and lease portfolio and in credit commitments outstanding as of that date based on the information available. If the economic conditions decline, the Bank may need additional provisions for credit losses in future periods.
The following table sets forth the allocation of the ACLLL and percent of loans and leases in each category to total loans and leases as of the date presented:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
(in millions) | Amount | % | Amount | % | |||||||||||||||||||
| Commercial real estate | $ | 217 | 58 | % | $ | 198 | 59 | % | |||||||||||||||
| Commercial | 214 | 26 | % | 226 | 25 | % | |||||||||||||||||
| Residential | 21 | 16 | % | 34 | 16 | % | |||||||||||||||||
| Consumer & other | 6 | — | % | 8 | — | % | |||||||||||||||||
| Total ACLLL | $ | 458 | 100 | % | $ | 466 | 100 | % | |||||||||||||||
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Residential Mortgage Servicing Rights
The Company measures its MSR asset at fair value with changes in fair value reported in residential mortgage banking revenue, net. The following table presents the changes in our residential MSR portfolio for the periods indicated:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in millions) | June 30, 2026 | March 31, 2026 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Balance, beginning of period | $ | 105 | $ | 99 | $ | 99 | $ | 108 | |||||||||||||||
| Additions for new MSR capitalized | 2 | 3 | 5 | 4 | |||||||||||||||||||
| Changes in fair value: | |||||||||||||||||||||||
| Changes due to collection/realization of expected cash flows over time | (3) | (3) | (6) | (6) | |||||||||||||||||||
Changes due to valuation inputs or assumptions (1) | 1 | 6 | 7 | (3) | |||||||||||||||||||
| Balance, end of period | $ | 105 | $ | 105 | $ | 105 | $ | 103 | |||||||||||||||
(1) The changes in valuation inputs and assumptions principally reflect changes in discount rates and prepayment speeds, which are primarily affected by changes in interest rates.
The following table presents information related to our residential serviced loan portfolio as of the dates presented:
(in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Balance of loans serviced for others | $ | 7,734 | $ | 7,755 | |||||||
| MSR as a percentage of serviced loans | 1.36 | % | 1.28 | % | |||||||
Residential MSR are adjusted to fair value each quarter, with change in fair value recorded in residential mortgage banking revenue in the Consolidated Statements of Income. MSR assets are recorded in other assets on the Consolidated Balance Sheets. The fair value of servicing rights can fluctuate based on changes in interest rates and other market factors. Generally, declining interest rates increase borrower refinancing activity and prepayment speeds, which reduce the expected life of servicing assets and lowers their fair value as anticipated future servicing fee collections decline. Conversely, increases in market interest rates generally result in lower prepayment expectations and an increase in the fair value of residential MSR.
Goodwill and Other Intangible Assets
Goodwill was $1.5 billion as of June 30, 2026 and December 31, 2025. Goodwill is recorded in connection with business combinations and represents the excess of the purchase price over the estimated fair value of the net assets acquired.
As of June 30, 2026, we had other intangible assets of $633 million, as compared to $712 million at December 31, 2025. As part of a business acquisition, the fair value of identifiable intangible assets such as core deposits, which includes all deposits except certificates of deposit, was recognized at the acquisition date. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives. Core deposit intangibles are amortized on an accelerated basis over a period of 10 years using the sum-of-the-years-digits method. Refer to Note 6 – Goodwill and Other Intangible Assets, for forecasted amortization expense for intangible assets as of June 30, 2026. Intangible assets are evaluated for impairment if events and circumstances indicate a possible impairment. No impairment losses have been recognized in the periods presented.
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Deposits
Total deposits were $52.1 billion as of June 30, 2026, a decrease of $2.2 billion as compared to December 31, 2025. The decrease was primarily due to an intentional reduction in brokered deposits and wholesale public deposits. Seasonal tax payments in the early part of the second quarter also reduced deposits between periods.
The following table presents deposit balances by category as of the dates presented:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in millions) | Amount | % | Amount | % | |||||||||||||||||||
| By type: | |||||||||||||||||||||||
| Non-interest-bearing demand | $ | 17,218 | 33 | % | $ | 17,419 | 32 | % | |||||||||||||||
| Interest-bearing demand | 11,093 | 21 | % | 10,763 | 20 | % | |||||||||||||||||
| Money market | 16,415 | 32 | % | 17,013 | 31 | % | |||||||||||||||||
| Savings | 2,392 | 5 | % | 2,442 | 5 | % | |||||||||||||||||
| Time, $250,000 or less | 3,347 | 6 | % | 4,893 | 9 | % | |||||||||||||||||
| Time, greater than $250,000 | 1,591 | 3 | % | 1,681 | 3 | % | |||||||||||||||||
| Total deposits | $ | 52,056 | 100 | % | $ | 54,211 | 100 | % | |||||||||||||||
| Total deposits (insured/uninsured): | |||||||||||||||||||||||
| Insured deposits | $ | 31,464 | 60 | % | $ | 34,428 | 64 | % | |||||||||||||||
Uninsured deposits (1) | 20,592 | 40 | % | 19,783 | 36 | % | |||||||||||||||||
| Total deposits | $ | 52,056 | 100 | % | $ | 54,211 | 100 | % | |||||||||||||||
(1) Represents estimated uninsured deposits as calculated using the methodologies and assumptions applied in the Bank's Call Report, which is prepared at the bank level.
The following table presents total deposit balances by the categories shown as of the dates presented:
June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
(in millions) | Amount | % | Amount | % | ||||||||||||||||||||||
| Customer deposits | $ | 48,229 | 93 | % | $ | 48,758 | 90 | % | ||||||||||||||||||
| Public and administrative deposits | 2,849 | 5 | % | 3,098 | 6 | % | ||||||||||||||||||||
| Brokered deposits | 978 | 2 | % | 2,355 | 4 | % | ||||||||||||||||||||
| Total deposits | $ | 52,056 | 100 | % | $ | 54,211 | 100 | % | ||||||||||||||||||
The Company's total core deposits, defined as total deposits excluding time deposits greater than $250,000 and all brokered deposits, totaled $49.5 billion as of June 30, 2026, compared to $50.2 billion as of December 31, 2025. The Company's total brokered deposits were $978 million or 2% of total deposits as of June 30, 2026, compared to $2.4 billion or 4% of total deposits as of December 31, 2025. Management's funding strategy emphasizes a higher proportion of customer deposits and a reduced reliance on wholesale funding sources, including brokered deposits and FHLB advances, as well as the optimization of wholesale funding. Consistent with this strategy, the Company replaced $650 million in brokered deposits with advances from the FHLB, which provided a more favorable effective cost of funds after considering the associated dividend, as detailed in the following section. Excess cash also was used to reduce brokered deposits as of June 30, 2026.
Borrowings
As of June 30, 2026, the Bank had outstanding securities sold under agreements to repurchase of $189 million, a decrease of $18 million from December 31, 2025. The Bank also had outstanding borrowings consisting of advances from the FHLB of $4.3 billion as of June 30, 2026 and $3.2 billion as of December 31, 2025. The increase primarily reflects changes in the Company's funding mix, including the replacement of brokered deposits with FHLB advances, which provided a more favorable effective cost of funds. FHLB advances have fixed interest rates ranging from 3.83% to 4.02% and all mature in 2026. Advances from the FHLB are secured by loans collateralized by real estate.
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Junior and Other Subordinated Debentures
The Company had junior and other subordinated debentures with carrying values of $436 million and $435 million as of June 30, 2026 and December 31, 2025, respectively. The change in fair value was driven by higher implied forward rates and narrower credit spreads, partially offset by higher market interest rates. As of June 30, 2026, substantially all of the Company's junior subordinated debentures had interest at variable rates that reset on a quarterly basis based on a spread over three-month term SOFR. The junior subordinated debentures are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indentures. The Company has the right to redeem them in whole on or after specific dates, at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date.
Liquidity and Cash Flow
The principal objective of the Bank's liquidity management program is to ensure liquidity to meet the day-to-day cash flow needs of customers, including deposit withdrawals and draws on credit facilities. The Bank's liquidity strategy includes maintaining sufficient on-balance sheet liquidity to support balance sheet flexibility, fund growth in the loan and investment portfolios, and reduce reliance on non-deposit funding sources as economic conditions permit. Management believes that the Company maintains sufficient cash balances and access to borrowings to operate effectively in the current economic environment and to meet its working capital and other liquidity needs. The Company will continue to prudently manage and evaluate its liquidity positions, including its capacity to fund future loan growth and manage borrowings.
The Bank regularly conducts liquidity stress testing to assess its ability to withstand adverse market conditions and unexpected funding needs. These stress tests consider a range of scenarios, including rapid deposit outflows, changes in collateral requirements for public deposits, and limited access to wholesale funding markets. The results of these analyses inform contingency funding plans and help ensure that sufficient liquidity is maintained under both normal and stressed conditions. The Bank maintains a liquidity buffer and identifiable contingent sources that are designed to support obligations independent of bank dividends under adverse scenarios. Management believes that the Company's diversified funding sources and available liquidity position provide resilience against potential market disruptions.
The Bank actively monitors its sources and uses of funds on a daily basis to maintain an appropriate liquidity position. Public deposits represent one source of funding, and individual state laws generally require banks to collateralize public deposits in excess of FDIC insurance coverage. Public deposits represented 5% of total deposits as of both June 30, 2026 and December 31, 2025. Collateral requirements vary by state and in certain cases, by institution based on regulatory assessments. Changes in collateral requirements for uninsured public deposits may require the pledging of additional collateral, the use of other funding sources to support collateral needs, or could lead to the withdrawal of certain public deposits.
The Bank's diversified deposit base provides a significant source of stable, low-cost funding, and reduces reliance on wholesale funding markets. Total core deposits were $49.5 billion as of June 30, 2026, as compared to $50.2 billion at December 31, 2025. In addition, the Bank maintains liquidity supported by excess bond collateral of $5.0 billion, further strengthening its liquidity position. In addition to liquidity from core deposits and the repayments and maturities of loans and investment securities, the Bank has the ability to generate liquidity through securities sold under agreements to repurchase, the issuance of brokered certificates of deposit, and the utilization of off-balance sheet funding sources.
The Bank also maintains substantial liquidity through off-balance sheet funding sources. These sources include borrowing capacity under uncommitted lines of credit, advances from the FHLB, and access to the Federal Reserve Bank's Discount Window. Availability under the uncommitted lines of credit is subject to federal funds balances and continued counterparty eligibility, and such facilities are generally intended to support short-term liquidity needs and may limit consecutive day usage.
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The following table presents total off-balance sheet liquidity as of the date presented:
| June 30, 2026 | ||||||||||||||||||||
| (in millions) | Gross Availability | Utilization | Net Availability | |||||||||||||||||
| FHLB lines | $ | 16,808 | $ | 4,429 | $ | 12,379 | ||||||||||||||
| Federal Reserve Discount Window | 5,943 | — | 5,943 | |||||||||||||||||
| Uncommitted lines of credit | 700 | — | 700 | |||||||||||||||||
| Total off-balance sheet liquidity | $ | 23,451 | $ | 4,429 | $ | 19,022 | ||||||||||||||
The following table presents total available liquidity as of the date presented:
| (in millions) | June 30, 2026 | ||||||||||
| Total off-balance sheet liquidity | $ | 19,022 | |||||||||
| Cash and cash equivalents, less reserve requirements | 1,582 | ||||||||||
| Excess bond collateral | 5,044 | ||||||||||
| Total available liquidity | $ | 25,648 | |||||||||
The Company is a separate legal entity from the Bank and is required to maintain its own liquidity. Substantially all of the Company's cash flows are derived from dividends declared and paid by the Bank. During the six months ended June 30, 2026, there were $250 million of dividends paid by the Bank to the Company. There are statutory and regulatory provisions that limit the ability of the Bank to pay dividends to the Company. FDIC and Oregon Division of Financial Regulation approval is required for quarterly dividends from the Bank to the Company. In addition to dividends, the Company may utilize other capital management actions to support parent‑level liquidity and capital objectives, as appropriate.
Looking ahead, management expects the liquidity positions of both the Bank and the Company to remain satisfactory through 2026, with possible fluctuations in deposit balances due to pricing pressure or customers' behavior in the current economic environment. To support liquidity, the Bank may adjust deposit pricing, which could increase interest expense, or utilize more costly borrowings and other funding sources. Management will continue to closely monitor liquidity levels, conduct regular stress testing, and maintain contingency plans to address potential risks, including regulatory changes and market volatility.
Commitments and Other Contractual Obligations - The Company participates in many different contractual arrangements which may or may not be recorded on its balance sheet, under which the Company has an obligation to pay certain amounts, provide credit or liquidity enhancements, or provide market risk support. Our material contractual obligations are primarily for time deposits and borrowings. As of June 30, 2026, time deposits totaled $4.9 billion, of which $4.8 billion mature in a year or less. Total FHLB advances as of June 30, 2026 were $4.3 billion, all of which mature within one year. These arrangements also include off-balance sheet commitments to extend credit, letters of credit, and various forms of guarantees. Total junior subordinated borrowings were $436 million as of June 30, 2026, maturing in 2031 through 2037. As of June 30, 2026, our loan commitments were $12.3 billion, and letter of credit commitments were $438 million. A portion of the commitments will eventually result in funded loans and increase our profitability through net interest income when drawn and unused commitment fees prior to being drawn. Refer to Note 8 – Commitments and Contingencies for further information. Financing commitments, letters of credit, and deferred purchase commitments are presented at contractual amounts and do not necessarily reflect future cash outflows as many are expected to expire unused or partially used.
Off-Balance-Sheet Arrangements
Information regarding Off-Balance-Sheet Arrangements is included in Note 8 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.
Concentrations of Credit Risk
Information regarding Concentrations of Credit Risk is included in Note 8 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.
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Capital Resources
Shareholders' equity as of June 30, 2026 was $7.6 billion, a decrease of $288 million from December 31, 2025. The decrease was primarily driven by $418 million of common stock repurchased and retired, $214 million of cash dividends, and $77 million of other comprehensive loss, partially offset by net income of $400 million.
The Company's dividend policy considers a number of factors, including earnings, regulatory capital requirements, the overall payout ratio, and expected asset growth, in determining the amount of dividends, if any, to be declared on a quarterly basis. There can be no assurance that future cash dividends on common shares will be declared or increased. Management cannot predict the impact of changes in economic conditions that could result in reduced or insufficient earnings, regulatory restrictions or limitations, changes to capital requirements, or a determination to retain earnings to strengthen capital, any of which could limit or eliminate the Company's ability to pay dividends at historical levels, or at all.
On May 15, 2026, the Company declared a cash dividend of $0.37 per common share related to first quarter 2026 performance, which was paid on June 15, 2026.
The following table presents cash dividends declared and the related dividend payout ratios (dividends declared per common share divided by basic earnings per common share) for the periods presented:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||
Dividend declared per common share | $ | 0.37 | $ | 0.37 | $ | 0.74 | $ | 0.72 | ||||||||||||||||||
| Dividend payout ratio | 51 | % | 56 | % | 53 | % | 63 | % | ||||||||||||||||||
As of June 30, 2026, the Company has authorization from its Board to repurchase up to $700 million of shares of common stock. Authorization for such share repurchase program will expire on November 30, 2026. As of June 30, 2026, $202 million remained available to repurchase shares under this program. During the three and six months ended June 30, 2026, the Company repurchased 6.6 million and 13.1 million shares under this program, respectively. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, our capital plan, and bank or bank holding company regulatory approvals.
As part of the Company's capital management strategy, and in support of Columbia’s authorized share repurchase program, the Bank upstreams capital through the repurchase of Bank common stock rather than through dividends. This approach allows capital to be transferred to the parent while avoiding reductions to Bank retained earnings. During the three and six months ended June 30, 2026, the Bank repurchased $200 million and $400 million of its common stock, respectively. These transactions are accounted for as reductions to Bank common stock, represent intercompany equity transactions, and do not impact consolidated capital, results of operations, or regulatory capital ratios. Bank stock repurchases are distinct from dividends and are executed subject to applicable state and federal regulatory approvals.
The Company is committed to managing capital to maintain strong protection for depositors and creditors and for maximum shareholder benefit. The Company also manages its capital to exceed regulatory capital requirements for banking organizations. Regulatory capital requirements applicable to the Company are based on Basel III and require the Company to calculate capital adequacy as a percentage of risk-weighted assets under the standardized approach. All regulatory ratios exceeded regulatory "well-capitalized" requirements.
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The following table shows the Company's consolidated and the Bank's capital adequacy ratios compared to the regulatory minimum capital ratio and the regulatory minimum capital ratio needed to qualify as a "well-capitalized" institution, as calculated under regulatory guidelines of the Basel III at the dates presented:
| Actual | For Capital Adequacy Purposes | To be Well-Capitalized | |||||||||||||||||||||||||||||||||
(in millions) | Amount | Ratio | Ratio | Ratio | |||||||||||||||||||||||||||||||
| June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 6,870 | 13.52 | % | 8.00 | % | 10.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,669 | 13.13 | % | 8.00 | % | 10.00 | % | |||||||||||||||||||||||||||
| Tier I Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 5,940 | 11.69 | % | 6.00 | % | 8.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,200 | 12.21 | % | 6.00 | % | 8.00 | % | |||||||||||||||||||||||||||
| Tier I Common (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 5,940 | 11.69 | % | 4.50 | % | 6.50 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,200 | 12.21 | % | 4.50 | % | 6.50 | % | |||||||||||||||||||||||||||
| Tier I Capital (to Average Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 5,940 | 9.28 | % | 4.00 | % | 5.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,200 | 9.68 | % | 4.00 | % | 5.00 | % | |||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 7,012 | 13.63 | % | 8.00 | % | 10.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,819 | 13.26 | % | 8.00 | % | 10.00 | % | |||||||||||||||||||||||||||
| Tier I Capital (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 6,070 | 11.80 | % | 6.00 | % | 8.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,339 | 12.32 | % | 6.00 | % | 8.00 | % | |||||||||||||||||||||||||||
| Tier I Common (to Risk Weighted Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 6,070 | 11.80 | % | 4.50 | % | 6.50 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,339 | 12.32 | % | 4.50 | % | 6.50 | % | |||||||||||||||||||||||||||
| Tier I Capital (to Average Assets) | |||||||||||||||||||||||||||||||||||
| Consolidated | $ | 6,070 | 9.29 | % | 4.00 | % | 5.00 | % | |||||||||||||||||||||||||||
| Bank | $ | 6,339 | 9.70 | % | 4.00 | % | 5.00 | % | |||||||||||||||||||||||||||
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our assessment of market risk as of June 30, 2026 indicates there are no material changes in the qualitative disclosures from those in our Annual Report on Form 10-K for the year ended December 31, 2025.
Interest Rate Simulation Impact on Net Interest Income
For the scenarios shown, the interest rate simulation assumes a parallel and sustained shift in market interest rates over a twelve-month period and no change in the composition or size of the balance sheet.
The scenarios are as of the dates presented:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Year 1 | Year 2 | Year 1 | Year 2 | |||||||||||||||||||||||||||||||||||
| Up 300 basis points | 0.0 | % | 5.1 | % | 0.0 | % | 5.0 | % | ||||||||||||||||||||||||||||||
| Up 200 basis points | 0.0 | % | 3.4 | % | 0.0 | % | 3.4 | % | ||||||||||||||||||||||||||||||
| Up 100 basis points | 0.0 | % | 1.7 | % | 0.0 | % | 1.6 | % | ||||||||||||||||||||||||||||||
| Down 100 basis points | 0.2 | % | (1.5) | % | 0.3 | % | (1.4) | % | ||||||||||||||||||||||||||||||
| Down 200 basis points | 1.5 | % | (2.1) | % | 2.2 | % | (1.6) | % | ||||||||||||||||||||||||||||||
| Down 300 basis points | 4.1 | % | (2.0) | % | 5.3 | % | (1.5) | % | ||||||||||||||||||||||||||||||
An interest rate simulation model is used to estimate the sensitivity of net interest income to changes in market interest rates. The simulation model does not take into account any future actions management could undertake to mitigate the impact of interest rate changes or the impact a change in interest rates may have on our credit risk profile, loan prepayment estimates, and spread relationships, which can change regularly. Actions we could undertake include, but are not limited to, growing or contracting the balance sheet, changing the composition of the balance sheet, or changing our pricing strategies for loans or deposits.
Simulation results indicate limited exposure to interest rate risk in an increasing rate environment, with increasing net interest income in a declining interest rate environment.
The short-term interest rate environment is primarily a function of the monetary policy of the Federal Reserve Board. The target federal funds rate, the basis for overnight funding and driver of the short end of the yield curve, remained in the 3.50-3.75% range during the second quarter of 2026. Longer maturities are influenced by the market's expectations for economic growth and inflation but can also be influenced by Federal Reserve purchases and sales and expectations of monetary policy going forward.
Based on the FOMC Members' median expectations for the federal funds target rate, the federal funds rate is projected to remain stable in the 3.50-3.75% target range for the next quarter with a projected 25 basis points increase in the fourth quarter of 2026.
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Economic Value of Equity
Another interest rate sensitivity measure we utilize is the quantification of economic value changes for all financial assets and liabilities, given an increase or decrease in market interest rates. This approach provides a longer-term view of interest rate risk, capturing all future expected cash flows.
The table below illustrates the effects of various instantaneous rate changes on the fair values of financial assets and liabilities compared to the corresponding carrying values and fair values as of the dates presented:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||
| Up 300 basis points | (7.0) | % | (10.1) | % | ||||||||||||||||
| Up 200 basis points | (4.5) | % | (6.5) | % | ||||||||||||||||
| Up 100 basis points | (2.1) | % | (3.3) | % | ||||||||||||||||
| Down 100 basis points | 1.9 | % | 3.2 | % | ||||||||||||||||
| Down 200 basis points | 2.8 | % | 5.3 | % | ||||||||||||||||
| Down 300 basis points | 1.4 | % | 4.6 | % | ||||||||||||||||
Our EVE analysis indicates a liability sensitive profile in increasing interest rate scenarios. This suggests a sudden or sustained increase in market interest rates would result in a decrease in our estimated EVE, as the decrease in the economic value of our interest-earning assets exceeds the economic value change of interest-bearing liabilities. In declining interest rate scenarios, our EVE increases. This occurs as the increase in the economic value of interest-earning assets exceeds the decline in economic value of interest-bearing liabilities, including core deposit intangibles. As of June 30, 2026, our estimated EVE (fair value of financial assets and liabilities) was above our book value of equity primarily due to the economic value of the core deposit intangibles.
Item 4. Controls and Procedures
Our management, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, has concluded that our disclosure controls and procedures are effective in timely alerting them to information relating to us that is required to be included in our periodic filings with the SEC. The disclosure controls and procedures were last evaluated by management as of June 30, 2026.
No change in internal control over financial reporting occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this item is set forth in Part I, Item 1 under Note 8 – Commitments and Contingencies—Legal Proceedings and Regulatory Matters, and incorporated herein by reference.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors relating to the Company's business discussed under "Part I—Item 1A—Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025. These factors could materially and adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company believes that there has been no material change in its risk factors as previously disclosed in the Company's Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)Not applicable
(b)Not applicable
(c)The following table provides information regarding repurchases of the Company's common stock during the quarter ended June 30, 2026:
| Period | Total number of Common Shares Purchased (in thousands) (1) | Average Price Paid per Common Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (in thousands) (2) | Maximum Dollar Value of Shares that May be Purchased at Period End under the Plan (in millions) (2) | ||||||||||||||||||||||
04/01/26 - 04/30/26 | 23 | $ | 28.05 | — | $ | 401 | ||||||||||||||||||||
05/01/26 - 05/31/26 | 3,373 | $ | 29.46 | 3,306 | $ | 303 | ||||||||||||||||||||
06/01/26 - 06/30/26 | 3,337 | $ | 30.40 | 3,336 | $ | 202 | ||||||||||||||||||||
| Total for quarter | 6,733 | $ | 29.92 | 6,642 | ||||||||||||||||||||||
(1)Common shares repurchased by the Company during the three months ended June 30, 2026 included the cancellation of 91,075 shares that otherwise would have been issued upon vesting of restricted stock units and awards to satisfy withholding tax obligations.
(2)On October 29, 2025, Columbia's Board of Directors authorized a new share repurchase program for up to $700 million of the Company's common stock, The authorization is effective through November 30, 2026. During the three months ended June 30, 2026, the Company repurchased 6.6 million shares for an aggregate purchase price of $199 million under this program. As of June 30, 2026, $202 million remained available for future share repurchases under this program. The timing and amount of future repurchases will depend upon a number of factors, including the market price for the Company's common stock, applicable laws and regulations, asset growth, earnings, the Company's capital plan, and required bank and bank holding company regulatory approvals.
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Mine Safety Disclosures
Not applicable
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Item 5. Other Information
Rule 10b5-1 or Non-Rule 10b5-1 Trading Arrangements
During the second quarter of 2026, none of our directors or officers adopted terminated
Certain of our officers have made, and may from time to time make, elections to (i) have shares of Columbia common stock withheld to cover withholding taxes, (ii) have dividends from Columbia common stock reinvested into Columbia common stock, (iii) participate in our 401(k) and profit sharing plan, which includes Columbia common stock as an investment option, and have a portion of their 401k account contributions used to purchase Columbia common stock, or (iv) participate in the ESPP, which may be intended to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).
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Item 6. Exhibits
| Exhibit # | Description | Location | ||||||
| 3.1 | Restated Articles of Incorporation | Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 | ||||||
| 3.2 | Amended and Restated Bylaws | Incorporated by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 | ||||||
| 4.1 | Specimen Common Stock Certificate | Incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-3 filed on December 19, 2008 | ||||||
| 4.2 | Pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt and preferred securities are not filed. The Company agrees to furnish a copy thereof to the Securities and Exchange Commission upon request. | |||||||
| 31.1 | Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||
| 31.2 | Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||
| 31.3 | Certification of Principal Accounting Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||
| 32 | Certification of Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||
| 101.INS | Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included in Exhibit 101) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COLUMBIA BANKING SYSTEM, INC. | ||||||||
| (Registrant) | ||||||||
| Dated | August 4, 2026 | /s/ Clint E. Stein | ||||||
Clint E. Stein Chair, Chief Executive Officer and President | ||||||||
| Dated | August 4, 2026 | /s/ Ivan A. Seda | ||||||
| Ivan A. Seda Executive Vice President, Chief Financial Officer and Principal Financial Officer | ||||||||
| Dated | August 4, 2026 | /s/ Brock M. Lakely | ||||||
Brock M. Lakely Executive Vice President, Chief Accounting Officer and Principal Accounting Officer | ||||||||
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