Zions Bancorporation (NASDAQ: ZION) lifts Q2 EPS to $3.05 on gains
Rhea-AI Filing Summary
Zions Bancorporation, N.A. reported stronger second-quarter 2026 results, with diluted EPS of $3.05 versus $1.63 a year earlier. The increase was driven by $252 million of pre-tax net gains, including a $215 million sale of Visa Class B-1 shares and $37 million of SBIC investment gains, plus higher net interest income.
Net interest income rose 4% to $677 million as net interest margin improved to 3.27% from 3.17%, helped by growth in higher-yielding loans, runoff of lower-yielding securities, and lower funding costs. Customer-related noninterest income grew 11% to $182 million, while total noninterest income reached $460 million. Noninterest expense increased 5% to $551 million, keeping the efficiency ratio at 62.2%.
Credit metrics remained stable. The allowance for credit losses was $707 million, equal to 1.13% of total loans and leases, and nonperforming assets were $298 million, or 0.48% of loans and leases and other real estate owned. Loans and leases totaled $62,481 million and deposits $76,608 million at June 30, 2026. After quarter-end, Zions completed the acquisition of Basis Multifamily Finance I, LLC, adding an agency multifamily lending platform and related mortgage servicing rights.
Positive
- Diluted EPS nearly doubled to $3.05 from $1.63 year-over-year, supported by $252 million of pre-tax gains and higher net interest income, reflecting substantially stronger quarterly profitability.
Negative
- None.
Filing Explained
At June 30, 2026, Zions disclosed $2.5 billion of NDFI loans and concentrated commercial-real-estate maturities within 12 months.
Zions Bancorporation reports its unaudited interim financial position for the quarter ended
The filing defines these borrowers as financial entities providing banking-like services that generally do not accept public deposits and are not subject to federal banking regulation. The increase from
A dated balance-sheet watch item is refinancing timing: approximately
Key Figures
Diluted EPS: $3.05 per share
Net interest income: $677 million
Noninterest income: $460 million
+5 more
8 metrics
Diluted EPS
$3.05 per share
Second quarter 2026 diluted earnings per share vs $1.63 in second quarter 2025
Net interest income
$677 million
Net interest income in Q2 2026, up $29 million or 4% year-over-year
Noninterest income
$460 million
Total noninterest income in Q2 2026, an increase of $270 million from Q2 2025
Net interest margin
3.27%
Net interest margin for Q2 2026 vs 3.17% in the prior-year quarter
Allowance for credit losses
$707 million
Allowance for credit losses at June 30, 2026, equal to 1.13% of total loans and leases
Nonperforming assets ratio
0.48%
Nonperforming assets as a share of loans and leases and other real estate owned at June 30, 2026
Total loans and leases
$62,481 million
Total loans and leases outstanding at June 30, 2026
Total deposits
$76,608 million
Total deposits at June 30, 2026; loan-to-deposit ratio 82%
Key Terms
pre-provision net revenue (PPNR), nonperforming assets, Allowance for credit losses (ACL), Earnings at Risk (EaR), +2 more
6 terms
pre-provision net revenue (PPNR) financial
"improvement in net earnings applicable to common shareholders, diluted EPS, and adjusted pre-provision net revenue (“PPNR”)."
Pre-provision net revenue (PPNR) measures a bank’s core income after operating costs but before setting aside money for expected loan losses, taxes or extraordinary items. It shows how much cash the business generates from normal activities — like a household’s take-home income before putting money into an emergency fund — and matters to investors because higher PPNR means a bigger cushion to absorb loan losses and support future profits or dividend payments.
nonperforming assets financial
"Nonperforming assets totaled $298 million, or 0.48% of total loans and leases and other real estate owned."
Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.
Allowance for credit losses (ACL) financial
"The ACL was $707 million at June 30, 2026, compared with $732 million at June 30, 2025."
Allowance for credit losses (ACL) is an accounting reserve banks and lenders set aside to cover loans and other receivables that may not be repaid. Think of it as a cushion or rainy-day fund that reduces reported assets to reflect expected losses; when the cushion grows, it can signal rising borrower trouble or more conservative accounting, and when it shrinks, it may boost reported profits and capital. Investors watch ACL to judge a lender’s risk exposure, earnings quality, and capital strength.
Earnings at Risk (EaR) financial
"Earnings at Risk (EaR) represents the percentage change in projected 12-month net interest income."
Economic Value of Equity (EVE) financial
"the following schedule presents our earnings at risk (“EaR”) and estimated changes in EVE."
nondepository financial institutions (NDFIs) financial
"At June 30, 2026, loans to NDFIs totaled $2.5 billion, representing 8% of total commercial loans."
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Zions Bancorporation (ZION) perform financially in Q2 2026?
Zions Bancorporation reported diluted EPS of $3.05 in Q2 2026, up from $1.63 a year earlier. Results were supported by $677 million of net interest income and $252 million of pre-tax gains, including a Visa share sale and SBIC investment gains.
What drove the earnings increase for Zions Bancorporation (ZION) in Q2 2026?
Earnings rose mainly due to $252 million of pre-tax net gains, led by a $215 million sale of Visa Class B-1 shares and SBIC gains, plus a 4% increase in net interest income as margin and funding mix improved.
How did net interest income and margin trend for ZION in Q2 2026?
Net interest income reached $677 million, up $29 million or 4% year-over-year. Net interest margin improved to 3.27% from 3.17%, helped by growth in higher-yielding loans, reduced lower-yielding securities, and lower funding costs.
What were credit quality and reserves like for Zions Bancorporation (ZION) at June 30, 2026?
The allowance for credit losses was $707 million, equal to 1.13% of total loans and leases. Nonperforming assets totaled $298 million, or 0.48% of loans and leases and other real estate owned, indicating stable overall credit metrics.
How large were Zions Bancorporation’s (ZION) loans and deposits at June 30, 2026?
Total loans and leases were $62,481 million, while total deposits were $76,608 million. The loan-to-deposit ratio was 82%, and customer deposits excluding brokered balances totaled $72,673 million, with estimated uninsured deposits at 45% of total deposits.
What significant strategic action did Zions Bancorporation (ZION) take around Q2 2026?
On July 31, 2026, Zions completed the acquisition of Basis Multifamily Finance I, LLC. The deal adds an agency multifamily lending platform, participation in Fannie Mae DUS and Freddie Mac Optigo programs, and associated mortgage servicing rights, expanding multifamily capabilities.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
COMMISSION FILE NUMBER 001-12307
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (801 ) 844-7637
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | ||||||
| Depositary Shares each representing a 1/40th ownership interest in a share of: | ||||||||
•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 ý 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 ý No ¨
•Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
•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 ý
•Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Number of common shares outstanding at July 31, 2026: 145,953,355 shares
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Table of Contents
| Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements (Unaudited) | 41 | ||||||
Consolidated Balance Sheets | 41 | |||||||
Consolidated Statements of Income | 42 | |||||||
Consolidated Statements of Comprehensive Income (Loss) | 43 | |||||||
Consolidated Statements of Changes in Shareholders’ Equity | 43 | |||||||
Consolidated Statements of Cash Flows | 45 | |||||||
Notes to Consolidated Financial Statements | 46 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 87 | ||||||
| Item 4. | Controls and Procedures | 87 | ||||||
PART II. OTHER INFORMATION | ||||||||
| Item 1. | Legal Proceedings | 87 | ||||||
| Item 1A. | Risk Factors | 87 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 88 | ||||||
| Item 5. | Other Information | 88 | ||||||
| Item 6. | Exhibits | 88 | ||||||
Signatures | 89 | |||||||
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GLOSSARY OF ACRONYMS AND ABBREVIATIONS
| ACL | Allowance for Credit Losses | HECL | Home Equity Credit Line | ||||||||
| AFS | Available-for-Sale | HTM | Held-to-Maturity | ||||||||
| AI | Artificial Intelligence | IPO | Initial Public Offering | ||||||||
| ALLL | Allowance for Loan and Lease Losses | LTV | Loan-to-Value | ||||||||
| Amegy | Amegy Bank, a division of Zions Bancorporation, National Association | NASDAQ | National Association of Securities Dealers Automated Quotations | ||||||||
| AOCI | Accumulated Other Comprehensive Income or Loss | NBAZ | National Bank of Arizona, a division of Zions Bancorporation, National Association | ||||||||
| ASC | Accounting Standards Codification | NDFI | Nondepository Financial Institution | ||||||||
| ASU | Accounting Standards Update | NM | Not Meaningful | ||||||||
| Board | Board of Directors | NSB | Nevada State Bank, a division of Zions Bancorporation, National Association | ||||||||
| bps | Basis Points | OCC | Office of the Comptroller of the Currency | ||||||||
| CB&T | California Bank & Trust, a division of Zions Bancorporation, National Association | OREO | Other Real Estate Owned | ||||||||
| CET1 | Common Equity Tier 1 | PCD | Purchase Credit Deteriorated | ||||||||
| CODM | Chief Operating Decision Maker | PEI | Private Equity Investment | ||||||||
| CRE | Commercial Real Estate | PPNR | Pre-provision Net Revenue | ||||||||
| CVA | Credit Valuation Adjustment | REIT | Real Estate Investment Trust | ||||||||
| DTA | Deferred Tax Asset | ROU | Right-of-Use | ||||||||
| DTL | Deferred Tax Liability | RULC | Reserve for Unfunded Lending Commitments | ||||||||
| EaR | Earnings at Risk | S&P | Standard & Poor's | ||||||||
| EPS | Earnings per Share | SBA | U.S. Small Business Administration | ||||||||
| EVE | Economic Value of Equity | SBIC | Small Business Investment Company | ||||||||
| FDIC | Federal Deposit Insurance Corporation | SEC | Securities and Exchange Commission | ||||||||
| FHLB | Federal Home Loan Bank | TCBNW | The Commerce Bank Northwest, a division of Zions Bancorporation, National Association | ||||||||
| FRB | Federal Reserve Board | U.S. | United States | ||||||||
| FTP | Funds Transfer Pricing | Vectra | Vectra Bank Colorado, a division of Zions Bancorporation, National Association | ||||||||
| GAAP | Generally Accepted Accounting Principles | Zions Bank | Zions Bank, a division of Zions Bancorporation, National Association | ||||||||
| GCF | General Collateral Finance | ||||||||||
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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
This quarterly report contains “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and assumptions regarding future events and outcomes. However, they are inherently subject to known and unknown risks, uncertainties, and other factors that could cause actual results, performance, achievements, industry developments, or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements may include, among others:
•Statements concerning the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, operating results, and performance of Zions Bancorporation, National Association, and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”); and
•Statements preceded or followed by, or that include, terminology such as “may,” “might,” “can,” “continue,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “forecast,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “project,” “will,” or similar words and expressions, including their negative forms.
Forward-looking statements are not guarantees and should not be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those expressed or implied. Factors that could cause such differences include, but are not limited to:
•Changes in the quality, composition, and concentrations of our loan and investment securities portfolios;
•Changes in economic, political, and market conditions nationally and within our key markets in the Western United States, including changes in interest rates, inflation, monetary policy, fiscal, trade, and tax policies, government actions, and other macroeconomic factors that affect our financial results, customer activity, credit demand, and borrower performance;
•Changes in deposit levels and composition, access to wholesale funding, and the availability and cost of liquidity sources;
•Changes in our credit ratings;
•Competition from traditional and nonbank financial service providers, including credit unions, financial technology companies (“fintechs”), private credit funds, special-purpose charters, and other new and evolving industry participants;
•Our ability to execute strategic initiatives, manage expenses, attract and retain talent, and achieve our business objectives;
•Geopolitical developments, including wars, global conflicts, and environmental or catastrophic events, such as fires, natural disasters, pandemics, and other disruptions that may affect our operations and customers;
•Increased demand for and risks associated with the adoption and integration of emerging technologies and products, including tokenized deposits, stablecoins, blockchain, and artificial intelligence (“AI”);
•The occurrence of fraud, theft, or other forms of misconduct perpetrated by external parties, including customers and business partners, or by our own employees;
•Our ability to develop, maintain, and secure resilient technology systems and effective controls to detect and respond to fraud, cybersecurity threats, data breaches, and other operational disruptions, including increasingly sophisticated AI-enabled attacks;
•Our ability to effectively oversee third party providers and mitigate risks arising from supplier performance failures, cybersecurity incidents, technology disruptions, data breaches, or other operational deficiencies;
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•Changes in accounting standards, asset valuations and impairments, and our ability to access capital and funding markets on favorable terms;
•The impact of existing and proposed laws and regulations, supervisory expectations, and the outcome of legal or regulatory proceedings;
•Adverse developments affecting the banking industry that may negatively impact depositor, investor, or market confidence and public opinion; and
•Other assumptions, risks, and uncertainties described in this quarterly report and our other SEC filings.
Factors that could cause actual results or outcomes to differ materially from those expressed or implied in forward-looking statements are described in our 2025 Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”), available at www.zionsbancorporation.com and www.sec.gov.
We caution against placing undue reliance on forward-looking statements, as they reflect our views only as of the date they are issued. Except as required by law, we expressly disclaim any obligation to update any factors or publicly announce revisions to forward-looking statements to reflect future events or developments.
RESULTS OF OPERATIONS
Comparisons discussed below are based on the current quarter relative to the same prior year period, unless otherwise noted. Explanations for changes in the current year-to-date period compared with the same prior year period are generally consistent with the quarter-to-date discussion, unless otherwise indicated. Growth rates of 100% or greater are considered not meaningful (“NM”), as they typically reflect a low starting point.
Second Quarter 2026 Financial Performance
| Net Earnings Applicable to Common Shareholders (in millions) | Diluted EPS | Adjusted PPNR (in millions) 1 | Efficiency Ratio 1 | |||||||||||||||||
1 For information on non-GAAP financial measures, see page 39.
Executive Summary
Our financial performance in the second quarter of 2026 reflected meaningful year-over-year improvement in net earnings applicable to common shareholders, diluted earnings per share (“EPS”), and adjusted pre-provision net revenue (“PPNR”). Diluted EPS increased to $3.05 from $1.63 in the second quarter of 2025, primarily driven by continued growth in noninterest income, including two notable gains, as well as higher net interest income.
Noninterest income benefited from $252 million of pre-tax net gains, which contributed approximately $1.31 per diluted share (after-tax) and resulted in reported diluted EPS of $3.05. These gains included a $215 million gain from the sale of Visa Class B-1 shares and $37 million of net unrealized gains from Small Business Investment Company (“SBIC”) investments.
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In the prior year quarter, noninterest income included $9 million of net unrealized gains from SBIC investments, which contributed approximately $0.05 per diluted share (after-tax) and resulted in reported diluted EPS of $1.63. These favorable items were partially offset by higher noninterest expense. The efficiency ratio remained stable at 62.2%, unchanged from the prior year quarter, and improved from 65.0% in the preceding quarter.
•Net interest income increased $29 million, or 4%, compared with the prior year period, primarily driven by lower funding costs. This growth also benefited from an improved mix of average interest-earning assets, reflecting growth in higher-yielding loans and a decline in lower-yielding investment securities. As a result, the net interest margin increased to 3.27%, up from 3.17% in the prior year period, and remained unchanged from the previous quarter.
◦Average interest-earning assets increased $788 million, or 1%, compared with the prior year period. This was driven by a $1.4 billion increase in average loans and leases, partially offset by a $708 million decline in average investment securities.
◦Average interest-bearing liabilities declined $2.1 billion, or 4%, compared with the prior year period. This decline was primarily attributable to a $2.7 billion reduction in average borrowed funds, largely reflecting lower short-term borrowings. The decrease was partially offset by an increase in average long-term debt, resulting from senior note issuances over the past year, as well as a $571 million increase in average interest-bearing deposits.
•The provision for credit losses was $3 million, compared with negative $1 million in the prior year period.
•Customer-related noninterest income increased $18 million, or 11%, reflecting broad-based growth across multiple revenue streams. This increase was largely due to higher capital markets fees and income, as well as growth in loan-related fees and income and commercial account fees.
•Noncustomer-related noninterest income increased $252 million, primarily driven by the aforementioned notable gains.
•Noninterest expense increased $24 million, or 5%, primarily due to higher professional and legal services expense, increased salary and employee benefit costs reflecting higher incentive compensation, and increased technology, telecom, and information processing expenses. Additional increases in credit-related and occupancy and equipment costs were partially offset by a decline in deposit insurance and regulatory expense, reflecting a lower Federal Deposit Insurance Corporation (“FDIC”) special assessment estimate and higher prior-year costs.
•Total loans and leases increased $1.7 billion, or 3%, resulting from growth in the commercial and industrial portfolio and the term commercial real estate portfolio.
◦Net loan and lease charge-offs totaled $9 million, or 0.06% of average loans and leases annualized, compared with $10 million, or 0.07%, in the prior year quarter.
◦Nonperforming assets totaled $298 million, or 0.48% of total loans and leases and other real estate owned, compared with $313 million, or 0.51%. The decrease was primarily attributable to improvement in the term commercial real estate loan portfolio. Classified loans totaled $2.3 billion, or 3.72% of total loans and leases, compared with $2.7 billion, or 4.43%, in the prior year quarter.
•Total deposits increased $2.8 billion, or 4%, compared with the prior year quarter, primarily driven by a $2.0 billion increase in interest-bearing deposits, largely reflecting the impact of focused deposit growth initiatives. Customer deposits, excluding brokered deposits, totaled $72.7 billion, compared with $69.9 billion.
•Total borrowed funds decreased $3.6 billion, or 53%, compared with the prior year quarter, primarily reflecting a $4.6 billion reduction in short-term borrowings, driven by a decrease in short-term Federal Home Loan Bank (“FHLB”) advances. This decline was partially offset by increases in federal funds purchased, security repurchase agreements, and $1.0 billion of senior notes issued over the past year.
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On July 31, 2026, we completed our previously disclosed acquisition of Basis Multifamily Finance I, LLC, the agency lending platform and subsidiary of Basis Investment Group. The acquisition includes the platform’s experienced team, capabilities, and associated mortgage servicing rights. This transaction expands our product suite through participation in the Fannie Mae DUS® program and the Freddie Mac Optigo® Conventional and Small Balance Loan programs, enhancing our ability to meet the financing needs of multifamily owners, operators, and developers nationwide, and further strengthens our commercial real estate and capital markets businesses.
Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN
| Three Months Ended June 30, | Amount change | Percent change | Six Months Ended June 30, | Amount change | Percent change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
Interest and fees on loans 1 | $ | 859 | $ | 875 | $ | (16) | (2) | % | $ | 1,700 | $ | 1,725 | $ | (25) | (1) | % | |||||||||||||||||||||||||||||||
| Interest on money market investments | 43 | 50 | (7) | (14) | 82 | 103 | (21) | (20) | |||||||||||||||||||||||||||||||||||||||
| Interest on securities | 117 | 126 | (9) | (7) | 233 | 251 | (18) | (7) | |||||||||||||||||||||||||||||||||||||||
Total interest income | 1,019 | 1,051 | (32) | (3) | 2,015 | 2,079 | (64) | (3) | |||||||||||||||||||||||||||||||||||||||
| Interest on deposits | 281 | 312 | (31) | (10) | 556 | 638 | (82) | (13) | |||||||||||||||||||||||||||||||||||||||
| Interest on short- and long-term borrowings | 61 | 91 | (30) | (33) | 120 | 169 | (49) | (29) | |||||||||||||||||||||||||||||||||||||||
Total interest expense | 342 | 403 | (61) | (15) | 676 | 807 | (131) | (16) | |||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 677 | $ | 648 | $ | 29 | 4 | $ | 1,339 | $ | 1,272 | $ | 67 | 5 | |||||||||||||||||||||||||||||||||
| Average interest-earning assets | $ | 84,354 | $ | 83,566 | $ | 788 | 1 | % | $ | 83,874 | $ | 83,286 | $ | 588 | 1 | % | |||||||||||||||||||||||||||||||
| Average interest-bearing liabilities | $ | 55,179 | $ | 57,305 | $ | (2,126) | (4) | $ | 54,854 | $ | 57,313 | $ | (2,459) | (4) | |||||||||||||||||||||||||||||||||
| bps | bps | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin 2 | 3.27% | 3.17% | 10 | 3.27% | 3.14% | 13 | |||||||||||||||||||||||||||||||||||||||||
1 Includes interest income recoveries of less than $1 million and $2 million for the three months ended, and $1 million and $6 million for the six months ended June 30, 2026, and 2025, respectively.
2 Taxable-equivalent rates used where applicable.
Net interest income accounted for 60% of net revenue (defined as the sum of net interest income and noninterest income) in the second quarter of 2026, compared with 77% in the second quarter of 2025. The decline primarily reflects the impact of previously noted pre-tax net gains.
Net interest income increased $29 million, or 4%, compared with the prior year period, primarily driven by lower funding costs. This growth was further supported by an improved mix of average interest-earning assets, reflecting growth in higher-yielding loans and a reduction in lower-yielding investment securities. As a result, the net interest margin increased to 3.27%, up from 3.17% in the prior year period, and was unchanged from the previous quarter.
Yields on Interest-earning Assets
The following chart presents the changes in yields on average interest-earning assets:
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The yield on average interest-earning assets, net of hedging activity, declined 21 basis points (“bps”) in the second quarter of 2026, compared with the prior year period, reflecting the impact of lower interest rates. The net yield on average loans and leases decreased 25 bps, while the net yield on average investment securities declined 12 bps. Additionally, the yield on average money market investments decreased 65 bps, as the short-term nature of these assets resulted in quicker repricing in the declining interest rate environment.
Rates Paid on Interest-bearing Liabilities
The following chart presents the changes in rates paid on average interest-bearing liabilities:
The total cost of deposits declined 20 bps, while the average rate paid on total deposits and interest-bearing liabilities decreased 28 bps during the second quarter of 2026, compared with the prior year period, reflecting the lower interest rate environment. Rates paid on interest-bearing deposits declined 27 bps, while rates paid on total borrowed funds increased 13 bps.
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Interest-earning Assets
Average interest-earning assets increased $788 million, or 1%, compared with the prior year period. This was driven by a $1.4 billion increase in average loans and leases, partially offset by a $708 million decline in average investment securities.
Average loans and leases increased $1.4 billion, or 2%, to $61.9 billion, primarily due to growth in average commercial loans.
Average investment securities decreased $708 million, or 4%, to $17.7 billion, primarily due to principal reductions, net of reinvestments. The ongoing runoff of lower-yielding securities improved the earning asset mix and was a meaningful contributor to year-over-year net interest margin expansion.
Interest-bearing Liabilities
Average interest-bearing liabilities decreased $2.1 billion, or 4%, from the prior year quarter, reflecting lower average borrowed funds, partially offset by increases in average long-term debt and interest-bearing deposits.
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Average deposits increased $2.0 billion, or 3%, to $76.2 billion. Average noninterest-bearing deposits grew $1.4 billion, or 6%, primarily reflecting the migration of a consumer interest-bearing product into a new noninterest-bearing offering. As a result, noninterest-bearing deposits represented 34% of total deposits during the quarter, compared with 33% in the same prior year period. Average interest-bearing deposits increased $571 million, or 1%, largely driven by focused deposit growth initiatives.
Average borrowed funds decreased $2.7 billion, or 35%, to $5.1 billion, primarily due to a $3.7 billion, or 54%, reduction in average short-term borrowings. This decrease was partially offset by a $991 million, or 103%, increase in average long-term debt, reflecting the issuance of $500 million of 4.48% Fixed-to-Floating Senior Notes in February 2026 and $500 million of 4.70% Fixed-to-Floating Senior Notes in August 2025.
For more information regarding our investment securities portfolio and borrowed funds, as well as our approach to managing liquidity risk, refer to the “Investment Securities Portfolio” section on page 17 and the “Liquidity Risk Management” section on page 34. For a further discussion of the impacts of market rates on net interest income and our interest rate risk management practices, see the “Interest Rate and Market Risk Management” section on page 32.
Average Balance Sheets, Yields, and Rates
The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing liabilities.
Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis. The average balance of other short-term borrowings is presented net of derivative cash collateral received of $429 million and $327 million for the three and six months ended June 30, 2026, respectively, while the related interest expense is recorded on a gross basis. As a result, the calculated yield on this line item increased by approximately 66 bps and 47 bps for the three and six months ended June 30, 2026, respectively. There was no impact on average balances from such netting for the three and six months ended June 30, 2025.
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CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS, AND RATES
| (Unaudited) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Average balance | Interest | Yield/ Rate 1 | Average balance | Interest | Yield/ Rate 1 | |||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
| Money market investments: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 1,939 | $ | 19 | 4.03 | % | $ | 1,543 | $ | 17 | 4.50 | % | |||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 2,368 | 24 | 4.03 | 2,757 | 33 | 4.77 | |||||||||||||||||||||||||||||
| Total money market investments | 4,307 | 43 | 4.03 | 4,300 | 50 | 4.68 | |||||||||||||||||||||||||||||
| Trading securities | 273 | 3 | 4.84 | 244 | 3 | 4.77 | |||||||||||||||||||||||||||||
| Investment securities: | |||||||||||||||||||||||||||||||||||
| Available-for-sale | 9,181 | 69 | 3.02 | 9,093 | 73 | 3.27 | |||||||||||||||||||||||||||||
| Held-to-maturity | 8,555 | 47 | 2.19 | 9,351 | 52 | 2.22 | |||||||||||||||||||||||||||||
Total investment securities | 17,736 | 116 | 2.62 | 18,444 | 125 | 2.74 | |||||||||||||||||||||||||||||
| Loans held for sale | 180 | 3 | NM | 118 | 1 | NM | |||||||||||||||||||||||||||||
Loans and leases, net of unearned income and fees | |||||||||||||||||||||||||||||||||||
| Commercial | 32,230 | 453 | 5.64 | 31,383 | 461 | 5.89 | |||||||||||||||||||||||||||||
| Commercial real estate | 13,839 | 212 | 6.14 | 13,612 | 226 | 6.64 | |||||||||||||||||||||||||||||
| Consumer | 15,789 | 200 | 5.10 | 15,465 | 198 | 5.14 | |||||||||||||||||||||||||||||
| Total loans and leases | 61,858 | 865 | 5.61 | 60,460 | 885 | 5.86 | |||||||||||||||||||||||||||||
| Total interest-earning assets | 84,354 | 1,030 | 4.90 | 83,566 | 1,064 | 5.11 | |||||||||||||||||||||||||||||
| Cash and due from banks | 671 | 703 | |||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and debt securities | (665) | (694) | |||||||||||||||||||||||||||||||||
| Goodwill and intangibles | 1,088 | 1,097 | |||||||||||||||||||||||||||||||||
| Other assets | 4,817 | 5,313 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 90,265 | $ | 89,985 | |||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Savings and money market | $ | 40,452 | $ | 200 | 1.99 | % | $ | 38,877 | $ | 208 | 2.15 | % | |||||||||||||||||||||||
| Time | 9,655 | 81 | 3.36 | 10,659 | 104 | 3.90 | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 50,107 | 281 | 2.25 | 49,536 | 312 | 2.52 | |||||||||||||||||||||||||||||
| Borrowed funds: | |||||||||||||||||||||||||||||||||||
Federal funds and security repurchase agreements | 585 | 5 | 3.66 | 1,463 | 15 | 4.36 | |||||||||||||||||||||||||||||
Other short-term borrowings 2 | 2,530 | 29 | 4.57 | 5,340 | 60 | 4.48 | |||||||||||||||||||||||||||||
| Long-term debt | 1,957 | 27 | 5.52 | 966 | 16 | 6.41 | |||||||||||||||||||||||||||||
| Total borrowed funds | 5,072 | 61 | 4.83 | 7,769 | 91 | 4.70 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 55,179 | 342 | 2.49 | 57,305 | 403 | 2.82 | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 26,131 | 24,730 | |||||||||||||||||||||||||||||||||
| Other liabilities | 1,432 | 1,527 | |||||||||||||||||||||||||||||||||
| Total liabilities | 82,742 | 83,562 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity: | |||||||||||||||||||||||||||||||||||
| Preferred equity | 66 | 66 | |||||||||||||||||||||||||||||||||
| Common equity | 7,457 | 6,357 | |||||||||||||||||||||||||||||||||
| Total shareholders’ equity | 7,523 | 6,423 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 90,265 | $ | 89,985 | |||||||||||||||||||||||||||||||
| Spread on average interest-bearing funds | 2.41 | % | 2.29 | % | |||||||||||||||||||||||||||||||
| Net impact of noninterest-bearing sources of funds | 0.86 | % | 0.88 | % | |||||||||||||||||||||||||||||||
Net interest margin | $ | 688 | 3.27 | % | $ | 661 | 3.17 | % | |||||||||||||||||||||||||||
Memo: total cost of deposits | $ | 76,238 | 281 | 1.48 | % | $ | 74,266 | 312 | 1.68 | % | |||||||||||||||||||||||||
| Memo: total deposits and interest-bearing liabilities | $ | 81,310 | 342 | 1.69 | % | $ | 82,035 | 403 | 1.97 | % | |||||||||||||||||||||||||
1 Taxable-equivalent rates used where applicable.
2 Derivative netting increased the calculated yield by approximately 66 bps for the three months ended June 30, 2026; there was no comparable impact in 2025. See discussion above for more information.
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| (Unaudited) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Average balance | Interest | Yield/ Rate 1 | Average balance | Interest | Yield/ Rate 1 | |||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
| Money market investments: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 1,906 | $ | 37 | 3.91 | % | $ | 1,587 | $ | 36 | 4.55 | % | |||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 2,274 | 45 | 4.06 | 2,863 | 67 | 4.74 | |||||||||||||||||||||||||||||
| Total money market investments | 4,180 | 82 | 3.99 | 4,450 | 103 | 4.67 | |||||||||||||||||||||||||||||
| Trading securities | 165 | 4 | 4.77 | 135 | 3 | 4.70 | |||||||||||||||||||||||||||||
| Investment securities: | |||||||||||||||||||||||||||||||||||
| Available-for-sale | 9,207 | 138 | 3.02 | 9,097 | 147 | 3.27 | |||||||||||||||||||||||||||||
| Held-to-maturity | 8,656 | 94 | 2.21 | 9,453 | 105 | 2.24 | |||||||||||||||||||||||||||||
Total investment securities | 17,863 | 232 | 2.62 | 18,550 | 252 | 2.74 | |||||||||||||||||||||||||||||
| Loans held for sale | 171 | 6 | NM | 101 | 2 | NM | |||||||||||||||||||||||||||||
Loans and leases, net of unearned income and fees | |||||||||||||||||||||||||||||||||||
| Commercial | 32,011 | 895 | 5.64 | 31,209 | 909 | 5.87 | |||||||||||||||||||||||||||||
| Commercial real estate | 13,687 | 418 | 6.16 | 13,585 | 446 | 6.62 | |||||||||||||||||||||||||||||
| Consumer | 15,797 | 400 | 5.11 | 15,256 | 388 | 5.13 | |||||||||||||||||||||||||||||
| Total loans and leases | 61,495 | 1,713 | 5.62 | 60,050 | 1,743 | 5.85 | |||||||||||||||||||||||||||||
| Total interest-earning assets | 83,874 | 2,037 | 4.90 | 83,286 | 2,103 | 5.09 | |||||||||||||||||||||||||||||
| Cash and due from banks | 708 | 704 | |||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and debt securities | (671) | (693) | |||||||||||||||||||||||||||||||||
| Goodwill and intangibles | 1,089 | 1,075 | |||||||||||||||||||||||||||||||||
| Other assets | 4,871 | 5,344 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 89,871 | $ | 89,716 | |||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Savings and money market | $ | 40,000 | $ | 391 | 1.97 | % | $ | 39,259 | $ | 421 | 2.16 | % | |||||||||||||||||||||||
| Time | 9,690 | 165 | 3.43 | 10,840 | 217 | 4.03 | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 49,690 | 556 | 2.26 | 50,099 | 638 | 2.57 | |||||||||||||||||||||||||||||
| Borrowed funds: | |||||||||||||||||||||||||||||||||||
Federal funds and security repurchase agreements | 586 | 10 | 3.63 | 1,591 | 34 | 4.36 | |||||||||||||||||||||||||||||
Other short-term borrowings 2 | 2,722 | 59 | 4.37 | 4,662 | 104 | 4.50 | |||||||||||||||||||||||||||||
| Long-term debt | 1,856 | 51 | 5.54 | 961 | 31 | 6.39 | |||||||||||||||||||||||||||||
| Total borrowed funds | 5,164 | 120 | 4.71 | 7,214 | 169 | 4.72 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 54,854 | 676 | 2.49 | 57,313 | 807 | 2.84 | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 26,161 | 24,491 | |||||||||||||||||||||||||||||||||
| Other liabilities | 1,464 | 1,576 | |||||||||||||||||||||||||||||||||
| Total liabilities | 82,479 | 83,380 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity: | |||||||||||||||||||||||||||||||||||
| Preferred equity | 66 | 66 | |||||||||||||||||||||||||||||||||
| Common equity | 7,326 | 6,270 | |||||||||||||||||||||||||||||||||
| Total shareholders’ equity | 7,392 | 6,336 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 89,871 | $ | 89,716 | |||||||||||||||||||||||||||||||
| Spread on average interest-bearing funds | 2.41 | % | 2.25 | % | |||||||||||||||||||||||||||||||
| Net impact of noninterest-bearing sources of funds | 0.86 | % | 0.89 | % | |||||||||||||||||||||||||||||||
Net interest margin | $ | 1,361 | 3.27 | % | $ | 1,296 | 3.14 | % | |||||||||||||||||||||||||||
Memo: total cost of deposits | $ | 75,851 | 556 | 1.48 | % | $ | 74,590 | 638 | 1.72 | % | |||||||||||||||||||||||||
| Memo: total deposits and interest-bearing liabilities | $ | 81,015 | 676 | 1.68 | % | $ | 81,804 | 807 | 1.98 | % | |||||||||||||||||||||||||
1 Taxable-equivalent rates used where applicable.
2 Derivative netting increased the calculated yield by approximately 47 bps for the six months ended June 30, 2026; there was no comparable impact in 2025. See discussion above for more information.
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The Allowance and Provision for Credit Losses
The allowance for credit losses (“ACL”) comprises both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recognized as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
The ACL was $707 million at June 30, 2026, compared with $732 million at June 30, 2025. The year-over-year decrease in the ACL primarily reflects changes in loan portfolio composition and lower reserves associated with commercial real estate (“CRE”) portfolio-specific risks, partially offset by more adverse economic forecasts and increased lending activity. The ratio of ACL to total loans and leases was 1.13% at June 30, 2026, compared with 1.20% at June 30, 2025.
The following schedule illustrates the primary drivers of changes in the ACL compared with the prior year period:
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Our ACL estimate is derived using econometric loss models that incorporate multiple economic scenarios, including optimistic, baseline, and stressed conditions. These scenarios are weighted to determine the overall credit loss estimate, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts. The previous schedule summarizes the key drivers of the year-over-year change in the ACL, reflecting the combined effect of economic forecasts, credit quality trends and portfolio-specific risks, and portfolio composition.
The second bar reflects the impact of changes in economic forecasts and current economic conditions, incorporating management’s judgment in determining the scenario weightings for the current period. These changes resulted in a $30 million increase in the ACL compared with the prior year, primarily driven by the increased weighting assigned to more adverse economic scenarios.
The third bar captures changes in credit quality factors, including risk grade migration, portfolio-specific risks, and specific reserves on loans. Collectively, these factors contributed to a $20 million decrease in the ACL, largely driven by reduced CRE portfolio-specific risks.
The fourth bar represents the effect of changes in the composition of the loan portfolio, including shifts in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. These changes resulted in a $35 million decrease in the ACL, largely driven by changes in the loan portfolio mix, partially offset by $1.7 billion in period-end loan growth.
The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, was $3 million in the second quarter of 2026, compared with negative $1 million in the second quarter of 2025. The provision for securities losses was less than $1 million during both the second quarters of 2026 and 2025.
For more information regarding the methodology used to determine the appropriate levels of the ALLL and RULC, see “Credit Risk Management” on page 21 and Note 6 in our 2025 Form 10-K.
Noninterest Income
Noninterest income is comprised of revenue generated from products and services that typically do not bear an associated interest rate or yield. It is categorized as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, and insurance-related income.
Noninterest income accounted for 40% of total net revenue (defined as the sum of net interest income and noninterest income) in the second quarter of 2026, compared with 23% in the second quarter of 2025. Noninterest income increased $270 million, or 142%, from the prior year period, primarily driven by the previously discussed pre-tax net gains.
The following schedule presents a comparison of the major components of noninterest income:
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NONINTEREST INCOME
| Three Months Ended June 30, | Amount change | Percent change | Six Months Ended June 30, | Amount change | Percent change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
Commercial account fees | $ | 49 | $ | 46 | $ | 3 | 7 | % | $ | 97 | $ | 91 | $ | 6 | 7 | % | |||||||||||||||||||||||||||||||
Card fees | 24 | 24 | — | — | 46 | 47 | (1) | (2) | |||||||||||||||||||||||||||||||||||||||
| Retail and business banking fees | 20 | 19 | 1 | 5 | 40 | 36 | 4 | 11 | |||||||||||||||||||||||||||||||||||||||
| Loan-related fees and income | 22 | 19 | 3 | 16 | 45 | 36 | 9 | 25 | |||||||||||||||||||||||||||||||||||||||
| Capital markets fees and income | 36 | 28 | 8 | 29 | 64 | 55 | 9 | 16 | |||||||||||||||||||||||||||||||||||||||
| Wealth management fees | 15 | 14 | 1 | 7 | 31 | 29 | 2 | 7 | |||||||||||||||||||||||||||||||||||||||
| Other customer-related fees | 16 | 14 | 2 | 14 | 31 | 28 | 3 | 11 | |||||||||||||||||||||||||||||||||||||||
Customer-related noninterest income | 182 | 164 | 18 | 11 | 354 | 322 | 32 | 10 | |||||||||||||||||||||||||||||||||||||||
| Dividends and other income | 9 | 12 | (3) | (25) | 21 | 19 | 2 | 11 | |||||||||||||||||||||||||||||||||||||||
| Securities gains (losses), net | 269 | 14 | 255 | NM | 272 | 20 | 252 | NM | |||||||||||||||||||||||||||||||||||||||
| Noncustomer-related noninterest income | 278 | 26 | 252 | NM | 293 | 39 | 254 | NM | |||||||||||||||||||||||||||||||||||||||
Total noninterest income | $ | 460 | $ | 190 | $ | 270 | NM | $ | 647 | $ | 361 | $ | 286 | 79 | |||||||||||||||||||||||||||||||||
Adjusted customer-related noninterest income 1 | $ | 181 | $ | 164 | $ | 17 | 10 | % | $ | 355 | $ | 322 | $ | 33 | 10 | % | |||||||||||||||||||||||||||||||
1 Net of credit valuation adjustment (“CVA”). For information on non-GAAP financial measures, see page 39.
Customer-related Noninterest Income
Customer-related noninterest income increased $18 million, or 11%, compared with the prior year period, reflecting broad-based growth across nearly all revenue streams. Capital markets fees and income increased $8 million, largely attributable to higher real estate capital markets activity and increased investment banking advisory fees. Loan-related fees and income increased $3 million, supported by higher residential mortgage loan sales activity, while the $3 million increase in commercial account fees was mainly due to growth in account analysis fees.
Noncustomer-related Noninterest Income
Noncustomer-related noninterest income increased $252 million, compared with the prior year period, primarily driven by a $215 million gain on the sale of Class B-1 shares of Visa, Inc., as well as $44 million in unrealized gains within the SBIC investment portfolio. In the prior year period, we recognized an $11 million unrealized gain related to the successful completion of the initial public offering of one of our SBIC investments.
Noninterest Expense
The following schedule presents a comparison of the major components of noninterest expense:
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NONINTEREST EXPENSE
| Three Months Ended June 30, | Amount change | Percent change | Six Months Ended June 30, | Amount change | Percent change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 344 | $ | 336 | $ | 8 | 2 | % | $ | 705 | $ | 678 | $ | 27 | 4 | % | |||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | 72 | 65 | 7 | 11 | 146 | 135 | 11 | 8 | |||||||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | 44 | 40 | 4 | 10 | 85 | 81 | 4 | 5 | |||||||||||||||||||||||||||||||||||||||
| Professional and legal services | 22 | 13 | 9 | 69 | 42 | 26 | 16 | 62 | |||||||||||||||||||||||||||||||||||||||
| Marketing and business development | 14 | 12 | 2 | 17 | 27 | 23 | 4 | 17 | |||||||||||||||||||||||||||||||||||||||
| Deposit insurance and regulatory expense | 7 | 20 | (13) | (65) | 22 | 42 | (20) | (48) | |||||||||||||||||||||||||||||||||||||||
| Credit-related expense | 10 | 6 | 4 | 67 | 15 | 12 | 3 | 25 | |||||||||||||||||||||||||||||||||||||||
| Other real estate expense, net | 1 | — | 1 | NM | 1 | — | 1 | NM | |||||||||||||||||||||||||||||||||||||||
| Other | 37 | 35 | 2 | 6 | 70 | 68 | 2 | 3 | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 551 | $ | 527 | $ | 24 | 5 | $ | 1,113 | $ | 1,065 | $ | 48 | 5 | |||||||||||||||||||||||||||||||||
Adjusted noninterest expense (non-GAAP) | $ | 546 | $ | 521 | $ | 25 | 5 | % | $ | 1,104 | $ | 1,054 | $ | 50 | 5 | % | |||||||||||||||||||||||||||||||
Noninterest expense increased $24 million, or 5%, compared with the prior year quarter. Professional and legal services expense increased $9 million, primarily reflecting higher outsourced services and technology consulting costs. Salaries and employee benefits expense increased $8 million, largely due to higher incentive compensation accruals aligned with improved profitability, as well as increased employee benefits costs.
Technology, telecom, and information processing expense increased $7 million, driven by higher application software, licensing, and maintenance costs. Credit-related expense rose $4 million, primarily due to increased loan-related legal costs, while occupancy and equipment expense increased $4 million, mainly reflecting higher rental and building maintenance costs. Other noninterest expense increased $2 million, largely due to a higher success fee accrual associated with SBIC investments and higher legal reserves in the prior year quarter, partially offset by reductions in other miscellaneous expenses.
These increases were partially offset by a $13 million decline in deposit insurance and regulatory expense, driven by a $6 million decrease from an updated estimate of the FDIC special assessment, as well as higher FDIC assessment costs in the prior year quarter associated with the level of classified loans.
Adjusted noninterest expense increased $25 million, or 5%, primarily due to the same factors discussed above. The efficiency ratio remained stable at 62.2%, consistent with the prior year quarter, and improved from 65.0% in the preceding quarter. For more information regarding non-GAAP financial measures, see page 39.
Technology Spend
We invest in technology initiatives designed to improve our products and services, increase our operational efficiency, and enable us to remain competitive. We report these investments as technology spend, which includes the following:
•Technology, telecom, and information processing expense — includes current period expenses presented on the consolidated statement of income related to application software licensing and maintenance, telecommunications, and data processing, less related amortization and depreciation of capitalized technology investments;
•Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and
•Technology investments — includes capitalized technology infrastructure equipment, hardware, and software (both purchased and internally developed).
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The following schedule presents the composition of our technology spend:
TECHNOLOGY SPEND
| Three Months Ended June 30, | Amount change | Percent change | Six Months Ended June 30, | Amount change | Percent change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing expense | $ | 72 | $ | 65 | $ | 7 | 11 | % | $ | 146 | $ | 135 | $ | 11 | 8 | % | |||||||||||||||||||||||||||||||
| Less: related amortization and depreciation | (18) | (19) | 1 | (5) | (37) | (38) | 1 | (3) | |||||||||||||||||||||||||||||||||||||||
| Other technology-related expense | 67 | 62 | 5 | 8 | 132 | 122 | 10 | 8 | |||||||||||||||||||||||||||||||||||||||
| Capitalized technology investments | 10 | 17 | (7) | (41) | 25 | 29 | (4) | (14) | |||||||||||||||||||||||||||||||||||||||
Total technology spend | $ | 131 | $ | 125 | $ | 6 | 5 | $ | 266 | $ | 248 | $ | 18 | 7 | |||||||||||||||||||||||||||||||||
Total technology spend increased $6 million, or 5%, compared with the prior year quarter. The increase was primarily due to higher technology, telecom, and information processing expenses, reflecting previously noted increases in application software, licensing, and maintenance costs, as well as higher technology-related expense associated with expanded professional and outsourced technology services. These increases were partially offset by a decline in capitalized technology investments, primarily due to higher investment levels in the prior year.
Income Taxes
The following schedule summarizes the income tax expense and effective tax rates for the periods presented:
INCOME TAXES
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (Dollar amounts in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Income before income taxes | $ | 583 | $ | 312 | $ | 877 | $ | 551 | |||||||||||||||
| Income tax expense | 130 | 68 | 191 | 137 | |||||||||||||||||||
| Effective tax rate | 22.3 | % | 21.8 | % | 21.8 | % | 24.9 | % | |||||||||||||||
The effective tax rate was 22.3% and 21.8% for the three months ended June 30, 2026 and 2025, respectively, and 21.8% and 24.9% for the six months ended June 30, 2026 and 2025, respectively. The year-over-year decrease in the six-month rate was primarily due to Utah tax legislation enacted in the first quarter of 2025, which required remeasurement of the net deferred tax asset (“DTA”) and resulted in additional tax expense in the prior year period.
For more information about the factors affecting our effective tax rates, as well as details on deferred income tax assets and liabilities, see Note 11 of the Notes to Consolidated Financial Statements.
BALANCE SHEET ANALYSIS
Investment Securities Portfolio
Investment securities are classified as either available-for-sale (“AFS”) or held-to-maturity (“HTM”), and are primarily used to provide balance sheet liquidity. The portfolio largely consists of securities that can be readily converted to cash or used to generate liquidity through secured borrowing agreements, without the need to sell the securities. Our investment securities portfolio also helps to balance the inherent interest rate mismatch between loans and deposits, thereby helping to preserve the economic value of shareholders’ equity. The estimated deposit duration at June 30, 2026 was assumed to be longer than the loan duration (including swaps). At June 30, 2026, the investment securities portfolio had an estimated duration of 3.6 years, compared with 3.8 years at December 31, 2025. The duration, which measures price sensitivity to changes in interest rates, declined modestly during the period, primarily reflecting the natural aging of the portfolio.
For more information about our borrowing capacity associated with the investment securities portfolio and our approach to managing liquidity risk, refer to the “Liquidity Risk Management” section on page 34. For more
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information on fair value measurements and the accounting for our investment securities portfolio, refer to Note 3 and Note 5 of the Notes to Consolidated Financial Statements.
The following schedule presents the major components of our investment securities portfolio:
INVESTMENT SECURITIES PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Par Value | Amortized cost | Fair value | Par Value | Amortized cost | Fair value | |||||||||||||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | 2,100 | $ | 2,097 | $ | 1,978 | $ | 1,500 | $ | 1,500 | $ | 1,411 | |||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||
| Agency securities | 286 | 282 | 267 | 317 | 313 | 298 | |||||||||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | 6,834 | 6,826 | 5,830 | 7,213 | 7,207 | 6,223 | |||||||||||||||||||||||||||||
| Small Business Administration loan-backed securities | 284 | 301 | 288 | 334 | 355 | 341 | |||||||||||||||||||||||||||||
| Municipal securities | 835 | 895 | 851 | 884 | 953 | 909 | |||||||||||||||||||||||||||||
| Other debt securities | 25 | 25 | 25 | 25 | 25 | 25 | |||||||||||||||||||||||||||||
| Total available-for-sale | 10,364 | 10,426 | 9,239 | 10,273 | 10,353 | 9,207 | |||||||||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||
| Agency securities | 132 | 132 | 128 | 137 | 137 | 134 | |||||||||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | 9,544 | 8,103 | 8,079 | 10,008 | 8,459 | 8,545 | |||||||||||||||||||||||||||||
| Municipal securities | 242 | 242 | 233 | 271 | 271 | 261 | |||||||||||||||||||||||||||||
| Total held-to-maturity | 9,918 | 8,477 | 8,440 | 10,416 | 8,867 | 8,940 | |||||||||||||||||||||||||||||
| Total investment securities | $ | 20,282 | $ | 18,903 | $ | 17,679 | $ | 20,689 | $ | 19,220 | $ | 18,147 | |||||||||||||||||||||||
The amortized cost of total investment securities decreased $317 million, or 2%, from December 31, 2025, primarily due to principal reductions, net of reinvestments. At both June 30, 2026 and December 31, 2025, approximately 6% of the portfolio consisted of floating-rate instruments. At June 30, 2026, we maintained active pay-fixed interest rate swaps with an aggregate notional amount of $4.6 billion that are designated as fair value hedges of fixed-rate AFS securities and effectively convert the fixed interest income on the hedged portion of the securities to a floating rate.
At June 30, 2026, the AFS investment securities portfolio included approximately $62 million in net premium, distributed across various security categories. Taxable-equivalent premium amortization for these investment securities totaled $11 million for the second quarter of 2026, compared with $12 million in the same prior year period.
For more information regarding our investment securities portfolio, swaps, and related unrealized gains and losses, refer to the “Interest Rate Risk Management” section on page 32, the “Capital Management” section on page 36, and Note 5 of the Notes to Consolidated Financial Statements.
Municipal Investments and Extensions of Credit
We support our communities by offering a range of financial products and services to state and local governments (“municipalities”), including deposit services, lending solutions, and investment banking services. Additionally, we invest in securities issued by municipal entities. Our municipal lending portfolio generally includes obligations that are repaid from, or secured by, the general funds or pledged revenues of municipalities, as well as by real estate or equipment. We also extend credit to private commercial and 501(c)(3) not-for-profit organizations that utilize a pass-through municipal structure to benefit from favorable tax treatment.
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The following schedule presents our total investments and extensions of credit to municipalities:
MUNICIPAL INVESTMENTS AND EXTENSIONS OF CREDIT
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Loans and leases | $ | 4,173 | $ | 4,294 | |||||||
| Unfunded lending commitments | 388 | 384 | |||||||||
| Available-for-sale securities | 851 | 909 | |||||||||
| Held-to-maturity securities | 242 | 271 | |||||||||
| Trading securities | 319 | 64 | |||||||||
Total | $ | 5,973 | $ | 5,922 | |||||||
Our municipal loans and securities are primarily concentrated within our geographic footprint. Municipal securities are internally risk-graded using methodologies consistent with those applied to loans, with risk-grading frameworks tailored to the size and characteristics of the underlying credit exposure. Internal risk ratings—Pass, Special Mention, and Substandard—align with regulatory risk classifications. At June 30, 2026, all municipal securities were classified as Pass.
For additional information regarding the credit quality of our municipal loans and securities, see Notes 5 and 6 of the Notes to Consolidated Financial Statements.
Loan and Lease Portfolio
We offer a wide range of lending products to commercial customers, primarily small- and medium-sized businesses, as well as other products secured by CRE. Additionally, we provide various retail banking products and services to consumers and small businesses. The following schedule presents the composition of our loan and lease portfolio:
LOAN AND LEASE PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total loans | Amount | % of total loans | |||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | $ | 19,131 | 30.6 | % | $ | 18,111 | 29.7 | % | |||||||||||||||
| Owner-occupied | 9,336 | 14.9 | 9,274 | 15.2 | |||||||||||||||||||
| Municipal | 4,173 | 6.7 | 4,294 | 7.1 | |||||||||||||||||||
| Total commercial | 32,640 | 52.2 | 31,679 | 52.0 | |||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
| Term | 11,850 | 19.0 | 11,234 | 18.4 | |||||||||||||||||||
| Construction and land development | 2,213 | 3.5 | 2,162 | 3.6 | |||||||||||||||||||
| Total commercial real estate | 14,063 | 22.5 | 13,396 | 22.0 | |||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| 1-4 family residential | 10,293 | 16.5 | 10,462 | 17.2 | |||||||||||||||||||
| Home equity credit line | 4,077 | 6.5 | 3,950 | 6.5 | |||||||||||||||||||
| Construction and other consumer real estate | 757 | 1.2 | 782 | 1.3 | |||||||||||||||||||
| Bankcard and other revolving plans | 537 | 0.9 | 515 | 0.8 | |||||||||||||||||||
| Other | 114 | 0.2 | 116 | 0.2 | |||||||||||||||||||
| Total consumer | 15,778 | 25.3 | 15,825 | 26.0 | |||||||||||||||||||
| Total loans and leases | $ | 62,481 | 100.0 | % | $ | 60,900 | 100.0 | % | |||||||||||||||
For the first six months of 2026, loans and leases increased $1.6 billion, or 3%, to $62.5 billion at June 30, 2026, from $60.9 billion at December 31, 2025, primarily driven by growth in commercial and industrial and term commercial real estate loans. As a result, the ratio of loans and leases to total assets increased to 70% from 69% at December 31, 2025. Commercial and industrial loans remained the largest loan segment, representing 31% of total loans at June 30, 2026, compared with 30% at December 31, 2025.
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Other Noninterest-Bearing Investments
Other noninterest-bearing investments consist of equity investments held primarily for capital appreciation, dividends, or to meet certain regulatory requirements. The following schedule presents our related investments.
OTHER NONINTEREST-BEARING INVESTMENTS
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | Amount change | Percent change | |||||||||||||||||||
| Bank-owned life insurance | $ | 579 | $ | 573 | $ | 6 | 1 | % | |||||||||||||||
| Federal Home Loan Bank stock | 10 | 100 | (90) | (90) | |||||||||||||||||||
| Federal Reserve stock | 52 | 54 | (2) | (4) | |||||||||||||||||||
| Farmer Mac stock | 33 | 31 | 2 | 6 | |||||||||||||||||||
| SBIC investments | 330 | 271 | 59 | 22 | |||||||||||||||||||
| Other | 57 | 47 | 10 | 21 | |||||||||||||||||||
| Total other noninterest-bearing investments | $ | 1,061 | $ | 1,076 | $ | (15) | (1) | ||||||||||||||||
Other noninterest-bearing investments decreased $15 million, or 1%, during the first six months of 2026. The decrease was primarily driven by lower holdings of FHLB stock, reflecting a significant reduction in FHLB borrowings. To maintain borrowing capacity, we are required to hold FHLB stock equal to 4% to 5% of outstanding FHLB borrowings. This decrease was partially offset by growth in the SBIC investment portfolio, primarily resulting from valuation adjustments on related investments.
Premises, Equipment, and Software
We continue to invest in lending, deposit, and other customer-focused technology initiatives to further modernize our systems, enhance the customer experience, and improve operational efficiency. For additional information regarding related assets, capitalized costs, and their accounting treatment, see “Premises, Equipment, and Software” in MD&A and Note 9 of the Notes to Consolidated Financial Statements in our 2025 Form 10-K.
Deposits
Deposits are our primary funding source. The following schedule presents the composition of our deposit portfolio:
DEPOSIT PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total deposits | Amount | % of total deposits | |||||||||||||||||||
| Deposits by type | |||||||||||||||||||||||
| Noninterest-bearing demand | $ | 26,233 | 34.2 | % | $ | 25,823 | 34.1 | % | |||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||
| Savings and money market | 40,657 | 53.1 | 39,914 | 52.8 | |||||||||||||||||||
| Time | 5,783 | 7.6 | 6,070 | 8.0 | |||||||||||||||||||
| Brokered | 3,935 | 5.1 | 3,837 | 5.1 | |||||||||||||||||||
| Total interest-bearing | 50,375 | 65.8 | 49,821 | 65.9 | |||||||||||||||||||
| Total deposits | $ | 76,608 | 100.0 | % | $ | 75,644 | 100.0 | % | |||||||||||||||
| Customer deposits (excludes brokered deposits) | $ | 72,673 | $ | 71,807 | |||||||||||||||||||
| Deposit-related metrics | |||||||||||||||||||||||
| Estimated amount of insured deposits | $ | 42,207 | 55 | % | $ | 41,228 | 55 | % | |||||||||||||||
| Estimated amount of uninsured deposits | 34,401 | 45 | 34,416 | 45 | |||||||||||||||||||
Estimated amount of collateralized deposits 1 | 2,728 | 4 | 3,212 | 4 | |||||||||||||||||||
| Loan-to-deposit ratio | 82% | 81% | |||||||||||||||||||||
1 Includes both insured and uninsured deposits.
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Total deposits increased $1.0 billion, or 1%, from December 31, 2025, reflecting growth in both interest-bearing and noninterest-bearing deposits. Growth in interest-bearing deposits was driven by focused deposit-gathering initiatives, while noninterest-bearing demand deposits increased due to continued growth in more granular depositor balances.
At June 30, 2026, customer deposits, excluding brokered deposits, totaled $72.7 billion, up from $71.8 billion at December 31, 2025. These balances included approximately $6.7 billion and $6.8 billion of reciprocal deposits, respectively.
At June 30, 2026, the estimated amount of uninsured deposits totaled $34.4 billion, or 45% of total deposits, unchanged from December 31, 2025. The loan-to-deposit ratio was 82% at June 30, 2026, compared with 81% at December 31, 2025. For additional information regarding liquidity, including the ratio of available liquidity to uninsured deposits, see “Liquidity Risk Management” on page 34.
RISK MANAGEMENT
We are exposed to a broad range of risks, including credit risk, interest rate and market risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. Oversight of these risks is conducted through various management committees, with the Enterprise Risk Management Committee serving as the primary coordinating body. To address these risks, we employ comprehensive risk management practices designed to promote prudent risk-taking and effective oversight. Risk management is embedded in our operations and functions as a critical driver of overall performance, closely aligned with our key strategic objectives. For a more comprehensive discussion of these risks, see “Risk Factors” in our 2025 Form 10-K.
Credit Risk Management
Credit risk represents the potential for loss resulting from the failure of a borrower, guarantor, or other obligor to perform in accordance with the terms of a credit-related agreement. This risk arises primarily from our lending activities and from off-balance sheet credit instruments.
Our approach to credit risk management is supported by formal credit policies and standards, risk management practices, and independent credit examination functions that together establish a consistent framework for sound underwriting and credit decision-making across our local banking affiliates. We emphasize strong underwriting standards and the early identification of potential problem credits to facilitate timely corrective actions and mitigate potential losses. For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our 2025 Form 10-K.
U.S. Government Agency Guaranteed Loans
We participate in several guaranteed lending programs sponsored by United States (“U.S.”) government agencies, including the U.S. Small Business Administration (“SBA”), Federal Housing Authority, U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At June 30, 2026, approximately $651 million in loans were guaranteed, primarily by the SBA.
The following schedule presents the composition of our U.S. government agency guaranteed loans:
U.S. GOVERNMENT AGENCY GUARANTEED LOANS
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | Percent guaranteed | Amount | Percent guaranteed | |||||||||||||||||||
| Commercial | $ | 819 | 76 | % | $ | 766 | 77 | % | |||||||||||||||
| Commercial real estate | 33 | 76 | 31 | 71 | |||||||||||||||||||
| Consumer | 4 | 100 | 4 | 100 | |||||||||||||||||||
| Total loans | $ | 856 | 76 | $ | 801 | 77 | |||||||||||||||||
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Commercial Lending
The following schedule presents the composition of our commercial lending portfolio:
COMMERCIAL LENDING PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total commercial loans | Amount | % of total commercial loans | Amount change | Percent change | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 19,131 | 58.6 | % | $ | 18,111 | 57.2 | % | $ | 1,020 | 5.6 | % | |||||||||||||||||||||||
| Owner-occupied | 9,336 | 28.6 | 9,274 | 29.3 | 62 | 0.7 | |||||||||||||||||||||||||||||
| Municipal | 4,173 | 12.8 | 4,294 | 13.5 | (121) | (2.8) | |||||||||||||||||||||||||||||
| Total commercial | $ | 32,640 | 100.0 | % | $ | 31,679 | 100.0 | % | $ | 961 | 3.0 | ||||||||||||||||||||||||
1 Effective March 31, 2026, balances previously reported as “Leasing” were reclassified to the “Commercial and industrial” loan segment. Prior period amounts have been reclassified to conform to the current presentation. At June 30, 2026 and December 31, 2025, the leasing portfolio totaled $352 million and $367 million, respectively.
Our commercial loan portfolio spans a broad range of industries and generally carries maturities of one to five years, with amortization schedules determined by the nature of the underlying collateral and guarantees. These loans are typically structured to meet diverse financing needs and may take the form of seasonal, term, working capital, or bridge loans, offered as revolving and non-revolving lines of credit, amortizing term loans, guidance facilities, or single-payment loans. Loan agreements typically include covenants requiring borrowers to provide periodic financial statements, enabling ongoing monitoring of business performance, leverage, debt service coverage, and liquidity.
The underwriting process for commercial loans focuses on a comprehensive evaluation of management quality, financial performance, industry dynamics, sponsorship (where applicable), and transaction structure. Credit enhancements are generally secured through collateral and guarantees from the owners or sponsors. Prospective cash flows are stress-tested under various downside scenarios, including revenue decline, margin compression, and interest rate volatility.
The following schedule presents the geographic distribution of our commercial lending portfolio, based on the location of the primary borrower:
COMMERCIAL LENDING BY GEOGRAPHY
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||
| Arizona | $ | 2,307 | 7.1 | % | $ | 5 | $ | 2,338 | 7.4 | % | $ | 7 | |||||||||||||||||||||||
| California | 6,388 | 19.6 | 85 | 6,351 | 20.0 | 68 | |||||||||||||||||||||||||||||
| Colorado | 1,682 | 5.2 | 3 | 1,710 | 5.4 | 4 | |||||||||||||||||||||||||||||
| Nevada | 1,403 | 4.3 | 2 | 1,384 | 4.4 | 2 | |||||||||||||||||||||||||||||
| Texas | 8,343 | 25.6 | 28 | 7,978 | 25.2 | 32 | |||||||||||||||||||||||||||||
| Utah/Idaho | 7,013 | 21.4 | 19 | 6,479 | 20.4 | 23 | |||||||||||||||||||||||||||||
| Washington/Oregon | 1,404 | 4.3 | 6 | 1,425 | 4.5 | 8 | |||||||||||||||||||||||||||||
Other 1 | 4,100 | 12.5 | 4 | 4,014 | 12.7 | 2 | |||||||||||||||||||||||||||||
| Total commercial | $ | 32,640 | 100.0 | % | $ | 152 | $ | 31,679 | 100.0 | % | $ | 146 | |||||||||||||||||||||||
1 No other geography exceeded 1.9% and 2.1% for June 30, 2026 and December 31, 2025, respectively.
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The following schedule presents the industry distribution of our commercial lending portfolio, classified based on the North American Industry Classification System:
COMMERCIAL LENDING BY INDUSTRY
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Real estate, rental, and leasing | $ | 3,419 | 10.5 | % | $ | 20 | $ | 3,321 | 10.5 | % | $ | 32 | |||||||||||||||||||||||
| Retail trade | 2,863 | 8.8 | 12 | 2,810 | 8.9 | 6 | |||||||||||||||||||||||||||||
| Manufacturing | 2,788 | 8.5 | 31 | 2,591 | 8.2 | 20 | |||||||||||||||||||||||||||||
| Finance and insurance | 2,519 | 7.7 | 9 | 2,306 | 7.3 | 10 | |||||||||||||||||||||||||||||
| Healthcare and social assistance | 2,344 | 7.2 | 9 | 2,342 | 7.4 | 7 | |||||||||||||||||||||||||||||
| Wholesale trade | 2,322 | 7.1 | 1 | 1,870 | 5.9 | 1 | |||||||||||||||||||||||||||||
| Public administration | 1,829 | 5.6 | — | 2,226 | 7.0 | — | |||||||||||||||||||||||||||||
| Hospitality and food services | 1,703 | 5.2 | 7 | 1,423 | 4.5 | 2 | |||||||||||||||||||||||||||||
| Transportation and warehousing | 1,598 | 4.9 | 4 | 1,567 | 4.9 | 6 | |||||||||||||||||||||||||||||
Utilities 1 | 1,561 | 4.8 | — | 1,591 | 5.0 | — | |||||||||||||||||||||||||||||
| Construction | 1,539 | 4.7 | 9 | 1,529 | 4.8 | 13 | |||||||||||||||||||||||||||||
| Educational services | 1,305 | 4.0 | 5 | 1,187 | 3.7 | — | |||||||||||||||||||||||||||||
| Other Services (except Public administration) | 1,212 | 3.7 | 2 | 1,098 | 3.5 | 2 | |||||||||||||||||||||||||||||
| Mining, quarrying, and oil and gas extraction | 1,202 | 3.7 | 6 | 1,284 | 4.1 | — | |||||||||||||||||||||||||||||
| Professional, scientific, and technical services | 1,030 | 3.2 | 3 | 1,071 | 3.4 | 3 | |||||||||||||||||||||||||||||
Other 2 | 3,406 | 10.4 | 34 | 3,463 | 10.9 | 44 | |||||||||||||||||||||||||||||
| Total | $ | 32,640 | 100.0 | % | $ | 152 | $ | 31,679 | 100.0 | % | $ | 146 | |||||||||||||||||||||||
1 Includes primarily utilities, power, and renewable energy.
2 No other industry group exceeded 2.9% and 3.2% for June 30, 2026 and December 31, 2025, respectively.
As previously noted, our commercial lending portfolio is well-diversified across both geographic regions and industry sectors. Given ongoing investor interest in loans extended to nondepository financial institutions (“NDFIs”), we provided the following information regarding these exposures within our commercial lending portfolio.
Loans to Nondepository Financial Institutions (NDFIs)
NDFIs are financial entities that provide banking-like services but generally do not accept public deposits and are not subject to federal banking regulation. We provide financing to a diversified range of NDFIs, including mortgage and business credit intermediaries, private equity funds, consumer credit intermediaries, insurance companies, investment firms, and other financial intermediaries. These exposures are actively managed through concentration limits, stress testing, compliance monitoring, and ongoing assessments of portfolio quality, liquidity, and capital adequacy. For a more detailed discussion of these NDFIs, see the corresponding section in our 2025 Form 10-K.
At June 30, 2026, loans to NDFIs totaled $2.5 billion, representing 8% of total commercial loans and 4% of total loans, compared with $2.0 billion, or 6% of total commercial loans and 3% of total loans, at December 31, 2025.
The following schedule presents the composition of our NDFI lending portfolio:
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NDFI LENDING PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Mortgage credit intermediaries | $ | 547 | 21.7 | % | $ | 9 | $ | 352 | 17.6 | % | $ | 9 | |||||||||||||||||||||||
| Business credit intermediaries | 991 | 39.4 | — | 968 | 48.4 | — | |||||||||||||||||||||||||||||
| Private equity funds | 219 | 8.7 | — | 121 | 6.1 | — | |||||||||||||||||||||||||||||
| Consumer credit intermediaries | 307 | 12.2 | — | 303 | 15.2 | — | |||||||||||||||||||||||||||||
| Other financial institutions | 454 | 18.0 | — | 253 | 12.7 | 1 | |||||||||||||||||||||||||||||
| Total NDFI portfolio | $ | 2,518 | 100.0 | % | $ | 9 | $ | 1,997 | 100.0 | % | $ | 10 | |||||||||||||||||||||||
NDFI loan balances increased during the first six months of 2026, primarily due to a second-quarter reclassification of approximately $366 million of commercial loans to the NDFI category based on industry and purpose.
The following schedule presents NDFI credit quality metrics:
NDFI CREDIT QUALITY
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Credit quality metrics | |||||||||||
| Criticized loan ratio | 1.2 | % | 0.8 | % | |||||||
| Classified loan ratio | 1.2 | % | 0.8 | % | |||||||
| Nonaccrual loan ratio | 0.4 | % | 0.5 | % | |||||||
| Delinquency ratio | 0.4 | % | — | % | |||||||
Annualized ratio of NDFI net charge-offs1 to average loans | — | % | 2.7 | % | |||||||
| Ratio of allowance for credit losses to NDFI loans, at period end | 1.15 | % | 1.03 | % | |||||||
1 Ratios are annualized for June 30, 2026, and represent full-year amounts for December 31, 2025. Total NDFI net charge-offs in 2025 included a $50 million charge-off associated with revolving lines of credit extended to two related commercial borrowers to finance the origination and purchase of commercial and residential mortgages.
Commercial Real Estate Lending
The following schedule presents the composition of our CRE lending portfolio:
COMMERCIAL REAL ESTATE LENDING PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total CRE loans | Amount | % of total CRE loans | Amount change | Percent change | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||
| Term | $ | 11,850 | 84.3 | % | $ | 11,234 | 83.9 | % | $ | 616 | 5.5 | % | |||||||||||||||||||||||
| Construction and land development | 2,213 | 15.7 | 2,162 | 16.1 | 51 | 2.4 | |||||||||||||||||||||||||||||
| Total commercial real estate | $ | 14,063 | 100.0 | % | $ | 13,396 | 100.0 | % | $ | 667 | 5.0 | ||||||||||||||||||||||||
Term CRE loans typically have maturities ranging from three to seven years and may incorporate full, partial, or non-recourse guarantee structures. Standard term CRE loan arrangements generally include annually tested operating covenants, requiring loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value (“LTV”) ratios.
Construction and land development loans generally mature within 18 to 36 months and may involve full or partial recourse guarantees. These loans often include one- to five-year extension options or roll-to-permanent features, which commonly convert into term loans upon completion.
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Underwriting for commercial properties primarily emphasizes the economic viability of the project, while also giving considerable weight to the sponsor's creditworthiness and experience. Owners are generally required to contribute their equity prior to any loan advances. Loan agreements frequently include remargining provisions—requiring additional equity infusions if the collateral's value or cash flow declines—as well as sponsor guarantees.
At June 30, 2026, the weighted average LTV ratio for our term CRE portfolio was below 60%. For CRE loans, LTV is calculated as the loan amount divided by the most recent appraised value of the underlying collateral. For a more comprehensive discussion of our CRE loan portfolio, see “Commercial Real Estate Loans” in our 2025 Form 10-K. The following schedule presents the geographic distribution of our commercial real estate lending portfolio, based on the location of the primary collateral:
COMMERCIAL REAL ESTATE LENDING BY GEOGRAPHY
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||
| Arizona | $ | 1,779 | 12.7 | % | $ | — | $ | 1,709 | 12.8 | % | $ | — | |||||||||||||||||||||||
| California | 3,569 | 25.4 | 30 | 3,549 | 26.5 | 22 | |||||||||||||||||||||||||||||
| Colorado | 794 | 5.6 | — | 726 | 5.4 | 16 | |||||||||||||||||||||||||||||
| Nevada | 1,056 | 7.5 | — | 1,016 | 7.6 | — | |||||||||||||||||||||||||||||
| Texas | 2,756 | 19.6 | 4 | 2,566 | 19.2 | 5 | |||||||||||||||||||||||||||||
| Utah/Idaho | 2,472 | 17.6 | — | 2,376 | 17.7 | — | |||||||||||||||||||||||||||||
| Washington/Oregon | 1,189 | 8.4 | — | 1,122 | 8.4 | 30 | |||||||||||||||||||||||||||||
| Other | 448 | 3.2 | — | 332 | 2.4 | — | |||||||||||||||||||||||||||||
| Total commercial real estate | $ | 14,063 | 100.0 | % | $ | 34 | $ | 13,396 | 100.0 | % | $ | 73 | |||||||||||||||||||||||
The following schedule presents our commercial real estate lending portfolio by the type of collateral:
COMMERCIAL REAL ESTATE LENDING BY COLLATERAL TYPE
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Commercial property | |||||||||||||||||||||||||||||||||||
| Multifamily | $ | 4,209 | 29.9 | % | $ | — | $ | 3,994 | 29.8 | % | $ | — | |||||||||||||||||||||||
| Industrial | 3,197 | 22.7 | 9 | 3,045 | 22.7 | — | |||||||||||||||||||||||||||||
| Retail | 1,734 | 12.3 | — | 1,586 | 11.8 | — | |||||||||||||||||||||||||||||
| Office | 1,563 | 11.1 | 20 | 1,675 | 12.5 | 67 | |||||||||||||||||||||||||||||
| Hospitality | 787 | 5.6 | 4 | 678 | 5.1 | 5 | |||||||||||||||||||||||||||||
| Land | 301 | 2.2 | — | 286 | 2.1 | — | |||||||||||||||||||||||||||||
Other 1 | 1,516 | 10.8 | 1 | 1,436 | 10.8 | — | |||||||||||||||||||||||||||||
Residential property 2 | |||||||||||||||||||||||||||||||||||
| Single family | 424 | 3.0 | — | 398 | 3.0 | 1 | |||||||||||||||||||||||||||||
| Land | 127 | 0.9 | — | 111 | 0.8 | — | |||||||||||||||||||||||||||||
| Condo/Townhome | 29 | 0.2 | — | 29 | 0.2 | — | |||||||||||||||||||||||||||||
Other 1 | 176 | 1.3 | — | 158 | 1.2 | — | |||||||||||||||||||||||||||||
| Total | $ | 14,063 | 100.0 | % | $ | 34 | $ | 13,396 | 100.0 | % | $ | 73 | |||||||||||||||||||||||
1 Included in the total amount of the “Other” commercial and residential categories was approximately $255 million and $232 million of unsecured loans at June 30, 2026 and December 31, 2025, respectively.
2 Residential property consists primarily of loans provided to commercial homebuilders for land, lot, and single-family housing developments.
As previously noted, our CRE lending portfolio remains well diversified across both geographic markets and collateral types, with multifamily properties representing the largest concentration. Given ongoing investor interest
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in multifamily, industrial, and office collateral types, we have provided additional analysis of these segments within our CRE portfolio below. For CRE loans approaching maturity, we generally expect substantially all borrowers to successfully refinance either with the Bank or other lending institutions. This expectation is supported by strong underlying property cash flows, prudent LTV ratios, sufficient borrower equity contributions, and the financial strength and support of guarantors.
Multifamily CRE
At June 30, 2026 and December 31, 2025, our multifamily CRE loan portfolio totaled $4.2 billion and $4.0 billion, respectively, representing 30% of the total CRE loan portfolio at each period end. Approximately 45% of the multifamily CRE loan portfolio is scheduled to mature within the next 12 months.
Subsequent to quarter-end, on July 31, 2026, we completed our previously disclosed acquisition of Basis Multifamily Finance I, LLC, including its team, capabilities, and related mortgage servicing rights. The acquisition expands our multifamily lending capabilities and strengthens our commercial real estate and capital markets businesses. For more information, see “Executive Summary” and the Subsequent Events section in Note 1 of the Notes to Consolidated Financial Statements.
The following schedule presents the composition of our multifamily CRE loan portfolio, along with related credit quality metrics:
MULTIFAMILY CRE LOAN PORTFOLIO
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Multifamily CRE | |||||||||||
| Term | $ | 3,513 | $ | 3,203 | |||||||
| Construction and land development | 696 | 791 | |||||||||
| Total multifamily CRE | $ | 4,209 | $ | 3,994 | |||||||
| Credit quality metrics | |||||||||||
| Criticized loan ratio | 16.6 | % | 17.5 | % | |||||||
| Classified loan ratio | 13.4 | % | 15.0 | % | |||||||
| Nonaccrual loan ratio | — | % | — | % | |||||||
| Delinquency ratio | 0.1 | % | — | % | |||||||
| Annualized ratio of multifamily CRE net charge-offs (recoveries) to average loans | — | % | — | % | |||||||
| Ratio of allowance for credit losses to multifamily CRE loans, at period end | 1.43 | % | 1.50 | % | |||||||
| Weighted average LTV for multifamily term CRE loans | 60 | % | 59 | % | |||||||
Industrial CRE
At June 30, 2026 and December 31, 2025, our industrial CRE loan portfolio totaled $3.2 billion and $3.0 billion, respectively, representing 23% of the total CRE loan portfolio at each period end. Approximately 31% of the industrial CRE loan portfolio is scheduled to mature within the next 12 months.
The following schedule presents the composition of our industrial CRE loan portfolio and other related credit quality metrics:
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INDUSTRIAL CRE LOAN PORTFOLIO
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Industrial CRE | |||||||||||
| Term | $ | 2,768 | $ | 2,720 | |||||||
| Construction and land development | 429 | 325 | |||||||||
| Total industrial CRE | $ | 3,197 | $ | 3,045 | |||||||
| Credit quality metrics | |||||||||||
| Criticized loan ratio | 10.0 | % | 11.3 | % | |||||||
| Classified loan ratio | 8.3 | % | 10.3 | % | |||||||
| Nonaccrual loan ratio | 0.3 | % | — | % | |||||||
| Delinquency ratio | — | % | — | % | |||||||
| Annualized ratio of industrial CRE net charge-offs (recoveries) to average loans | 0.3 | % | — | % | |||||||
| Ratio of allowance for credit losses to industrial CRE loans, at period end | 0.78 | % | 1.48 | % | |||||||
| Weighted average LTV for industrial term CRE loans | 51 | % | 63 | % | |||||||
Office CRE
At June 30, 2026 and December 31, 2025, our office CRE loan portfolio totaled $1.6 billion and $1.7 billion, respectively, representing 11% and 13% of the total CRE loan portfolio. Approximately 33% of the office CRE loan portfolio is scheduled to mature within the next 12 months.
The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:
OFFICE CRE LOAN PORTFOLIO
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Office CRE | |||||||||||
| Term | $ | 1,536 | $ | 1,655 | |||||||
| Construction and land development | 27 | 20 | |||||||||
| Total office CRE | $ | 1,563 | $ | 1,675 | |||||||
| Credit quality metrics | |||||||||||
| Criticized loan ratio | 7.9 | % | 9.4 | % | |||||||
| Classified loan ratio | 7.2 | % | 9.3 | % | |||||||
| Nonaccrual loan ratio | 1.3 | % | 4.0 | % | |||||||
| Delinquency ratio | 0.1 | % | 1.1 | % | |||||||
| Annualized ratio of office CRE net charge-offs (recoveries) to average loans | (0.2) | % | 0.1 | % | |||||||
| Ratio of allowance for credit losses to office CRE loans, at period end | 2.75 | % | 2.93 | % | |||||||
| Weighted average LTV for office term CRE loans | 57 | % | 57 | % | |||||||
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Consumer Lending
The following schedule presents the composition of our consumer lending portfolio:
CONSUMER LENDING PORTFOLIO
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total consumer loans | Amount | % of total consumer loans | Amount change | Percent change | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||
| 1-4 family residential | $ | 10,293 | 65.2 | % | $ | 10,462 | 66.1 | % | $ | (169) | (1.6) | % | |||||||||||||||||||||||
| Home equity credit line | 4,077 | 25.8 | 3,950 | 25.0 | 127 | 3.2 | |||||||||||||||||||||||||||||
| Construction and other consumer real estate | 757 | 4.8 | 782 | 4.9 | (25) | (3.2) | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | 537 | 3.4 | 515 | 3.3 | 22 | 4.3 | |||||||||||||||||||||||||||||
| Other | 114 | 0.8 | 116 | 0.7 | (2) | (1.7) | |||||||||||||||||||||||||||||
| Total consumer | $ | 15,778 | 100.0 | % | $ | 15,825 | 100.0 | % | $ | (47) | (0.3) | ||||||||||||||||||||||||
The following schedule presents the geographic distribution of our consumer lending portfolio, based on the location of the primary borrower:
CONSUMER LENDING BY GEOGRAPHY
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amount | % of total | Nonaccrual loans | Amount | % of total | Nonaccrual loans | |||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||
| Arizona | $ | 1,442 | 9.2 | % | $ | 7 | $ | 1,439 | 9.1 | % | $ | 7 | |||||||||||||||||||||||
| California | 3,740 | 23.7 | 20 | 3,683 | 23.3 | 15 | |||||||||||||||||||||||||||||
| Colorado | 1,374 | 8.7 | 13 | 1,396 | 8.8 | 12 | |||||||||||||||||||||||||||||
| Nevada | 1,340 | 8.5 | 14 | 1,344 | 8.5 | 12 | |||||||||||||||||||||||||||||
| Texas | 3,600 | 22.8 | 28 | 3,658 | 23.1 | 25 | |||||||||||||||||||||||||||||
| Utah/Idaho | 3,488 | 22.1 | 19 | 3,521 | 22.3 | 19 | |||||||||||||||||||||||||||||
| Washington/Oregon | 321 | 2.0 | 3 | 320 | 2.0 | 3 | |||||||||||||||||||||||||||||
| Other | 473 | 3.0 | 2 | 464 | 2.9 | 3 | |||||||||||||||||||||||||||||
| Total consumer | $ | 15,778 | 100.0 | % | $ | 106 | $ | 15,825 | 100.0 | % | $ | 96 | |||||||||||||||||||||||
1-4 Family Residential Mortgages
We originate first-lien residential home mortgage loans considered to be of prime quality. At June 30, 2026, our 1-4 family residential mortgage loan portfolio totaled $10.3 billion, representing 65% of our total consumer loan portfolio, compared with $10.5 billion, or 66%, at December 31, 2025.
At both June 30, 2026 and December 31, 2025, approximately 89% of the portfolio consisted of variable-rate loans. During the second quarter of 2026, we sold approximately $350 million of residential mortgage loans, including both fixed- and variable-rate loans, through a combination of recurring flow sales and portfolio transactions. In connection with these sales, we provided customary representations and warranties regarding compliance with specified underwriting standards and collateral documentation requirements.
Home Equity Credit Lines
We also originate home equity credit lines (“HECLs”). At June 30, 2026 and December 31, 2025, our HECL portfolio totaled $4.1 billion and $4.0 billion, respectively. Approximately 34% of the portfolio was secured by first liens at each date. Since December 31, 2025, there have been no material changes in the portfolio's credit quality, underwriting standards, composition, or overall risk characteristics.
For additional information regarding our HECL portfolio, including underwriting standards, collateral characteristics, and credit quality, see “Home Equity Credit Lines” in our 2025 Form 10-K as well as Note 6 of the Notes to Consolidated Financial Statements.
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Credit Quality
We monitor credit quality by assessing multiple factors, including nonperforming status, internal risk grades, and net charge-offs. These metrics are integral to our overall evaluation of the adequacy of the ACL. For more information on these factors and the ACL, see Note 6 of the Notes to Consolidated Financial Statements.
Nonperforming Assets
Nonperforming assets include nonaccrual loans and other real estate owned (“OREO”), or foreclosed properties. The following schedule presents the composition of our nonperforming assets:
NONPERFORMING ASSETS
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
Nonaccrual loans 1 | $ | 292 | $ | 315 | |||||||
Other real estate owned 2 | 6 | 5 | |||||||||
| Total nonperforming assets | $ | 298 | $ | 320 | |||||||
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2 | 0.48 | % | 0.52 | % | |||||||
| Accruing loans past due 90 days or more | $ | 3 | $ | 5 | |||||||
Ratio of accruing loans past due 90 days or more to loans and leases 1 | — | % | 0.01 | % | |||||||
Nonaccrual loans1 and accruing loans past due 90 days or more | $ | 295 | $ | 320 | |||||||
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2 | 0.48 | % | 0.53 | % | |||||||
| Accruing loans past due 30-89 days | $ | 91 | $ | 96 | |||||||
| Classified loans | $ | 2,327 | $ | 2,380 | |||||||
| Ratio of classified loans to total loans and leases | 3.72 | % | 3.91 | % | |||||||
Ratio of nonaccrual loans1 current as to principal and interest payments | 57.5 | % | 56.8 | % | |||||||
1 Includes loans held for sale.
2 Does not include banking premises held for sale.
Nonperforming assets totaled $298 million, or 0.48% of total loans and leases and other real estate owned at June 30, 2026, compared with $320 million, or 0.52%, at December 31, 2025. Nonperforming assets decreased primarily within the term CRE loan portfolio. For more information about nonaccrual loans, see Note 6 of the Notes to Consolidated Financial Statements.
Classified Loans
Classified loans are considered loans with well-defined weaknesses and are assigned using our internal risk grade definitions of substandard and doubtful, which are consistent with regulatory risk classifications. The following schedule presents our classified loans by loan segment:
CLASSIFIED LOANS
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | |||||||||
Commercial | $ | 1,109 | $ | 1,063 | |||||||
| Commercial real estate | 1,101 | 1,205 | |||||||||
| Consumer | 117 | 112 | |||||||||
| Total classified loans | $ | 2,327 | $ | 2,380 | |||||||
| Ratio of classified loans to total loans and leases | 3.72 | % | 3.91 | % | |||||||
Classified loans totaled $2.3 billion, or 3.72% of total loans and leases, at June 30, 2026, compared with $2.4 billion, or 3.91%, at December 31, 2025. The decline was primarily driven by reductions in classified CRE exposures, largely attributable to loan payoffs. The loss content of our CRE loan portfolio continues to be mitigated by disciplined underwriting, supported by substantial borrower equity and guarantor support. As a result, our CRE credit performance remains strong, with low levels of nonperforming assets and net charge-offs.
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Allowance for Credit Losses
The ACL comprises both the ALLL and the RULC and represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date.
We estimate current expected credit losses using econometric loss models that incorporate historical credit loss experience, prevailing economic conditions, and multiple forward-looking economic scenarios. These scenarios—including optimistic, baseline, and stressed conditions—are weighted to produce the quantitative component of the ACL, and management may adjust the weightings based on its assessment of current economic conditions and reasonable and supportable forecasts. Because economic forecasts may not always align with observed credit quality trends, changes in the ACL may not necessarily correspond directionally with changes in credit quality.
Additionally, we consider qualitative and environmental factors that may indicate actual losses could differ from amounts estimated by the quantitative models. The influence of these factors on the ACL may vary from quarter to quarter.
During the first six months of 2026, the qualitative component of the ACL declined, primarily reflecting the impact of loss model enhancements and reduced qualitative reserves within the CRE portfolio. These decreases were partially offset by higher qualitative reserves in certain C&I portfolios.
For additional information on the ACL and credit trends by portfolio segment, see “The Allowance and Provision for Credit Losses” section on page 13 and Note 6 of the Notes to Consolidated Financial Statements.
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The following schedule presents the components of the ACL and credit-related balances and metrics:
ACL AND CREDIT-RELATED BALANCES AND METRICS
| (Dollar amounts in millions) | Six Months Ended June 30, 2026 | Twelve Months Ended December 31, 2025 | Six Months Ended June 30, 2025 | ||||||||||||||
| Loans and leases outstanding | $ | 62,481 | $ | 60,900 | $ | 60,813 | |||||||||||
| Average loans and leases outstanding: | |||||||||||||||||
| Commercial | 32,011 | 31,389 | 31,209 | ||||||||||||||
| Commercial real estate | 13,687 | 13,562 | 13,585 | ||||||||||||||
| Consumer | 15,797 | 15,470 | 15,256 | ||||||||||||||
| Total average loans and leases outstanding | $ | 61,495 | $ | 60,421 | $ | 60,050 | |||||||||||
| Allowance for loan and lease losses: | |||||||||||||||||
| Balance at beginning of period | $ | 678 | $ | 696 | $ | 696 | |||||||||||
| Provision for loan losses | (3) | 71 | 17 | ||||||||||||||
| Charge-offs: | |||||||||||||||||
| Commercial | 15 | 103 | 19 | ||||||||||||||
| Commercial real estate | 3 | 4 | — | ||||||||||||||
| Consumer | 7 | 15 | 5 | ||||||||||||||
| Total | 25 | 122 | 24 | ||||||||||||||
| Recoveries: | |||||||||||||||||
| Commercial | 9 | 24 | 7 | ||||||||||||||
| Commercial real estate | 1 | 4 | — | ||||||||||||||
| Consumer | 2 | 5 | 1 | ||||||||||||||
| Total | 12 | 33 | 8 | ||||||||||||||
| Net loan and lease charge-offs | 13 | 89 | 16 | ||||||||||||||
| Balance at end of period | $ | 662 | $ | 678 | $ | 697 | |||||||||||
| Reserve for unfunded lending commitments: | |||||||||||||||||
| Balance at beginning of period | $ | 46 | $ | 45 | $ | 45 | |||||||||||
| Provision for unfunded lending commitments | (1) | 1 | 1 | ||||||||||||||
| Balance at end of period | $ | 45 | $ | 46 | $ | 46 | |||||||||||
| Total allowance for credit losses: | |||||||||||||||||
| Allowance for loan and lease losses | $ | 662 | $ | 678 | $ | 697 | |||||||||||
| Reserve for unfunded lending commitments | 45 | 46 | 46 | ||||||||||||||
| Total allowance for credit losses | $ | 707 | $ | 724 | $ | 743 | |||||||||||
| Ratio of allowance for credit losses to net loans and leases, at period end | 1.13 | % | 1.19 | % | 1.22 | % | |||||||||||
| Ratio of allowance for credit losses to nonaccrual loans, at period end | 242 | % | 230 | % | 244 | % | |||||||||||
| Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end | 240 | % | 226 | % | 234 | % | |||||||||||
Ratio of total net charge-offs to average loans and leases 1 | 0.04 | % | 0.15 | % | 0.11 | % | |||||||||||
Ratio of commercial net charge-offs to average commercial loans 1 | 0.04 | % | 0.25 | % | 0.15 | % | |||||||||||
Ratio of commercial real estate net charge-offs (recoveries) to average commercial real estate loans 1 | 0.03 | % | — | % | — | % | |||||||||||
Ratio of consumer net charge-offs to average consumer loans 1 | 0.06 | % | 0.06 | % | 0.11 | % | |||||||||||
1 Ratios are annualized for the periods presented, except for the period representing the full twelve months.
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Interest Rate and Market Risk Management
Interest rate and market risk refer to the potential for adverse impacts on current or future earnings and capital arising from changes in interest rates and other market conditions. Given our involvement in transactions with a broad range of financial instruments, we are inherently exposed to these risks. For more information on our approach to managing interest rate and market risk, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.
We actively manage our exposure to interest rate fluctuations by positioning the balance sheet to reduce volatility in both net interest income and the economic value of equity (“EVE”). Given that a significant portion of our balance sheet funding is derived from non-maturity deposit products, we rely on behavioral models and assumptions to forecast the sensitivity of earnings to interest rate movements. These models and assumptions are subject to ongoing performance monitoring and refinement.
When observed deposit behavior diverges from model expectations, the models are updated accordingly, with greater emphasis placed on recently observed behavior. All model changes are independently reviewed by our Model Risk Management function.
Our deposit-behavior models incorporate assumptions about the correlation between the rates paid on interest-bearing deposits and fluctuations in average benchmark interest rates. This is commonly referred to as “deposit beta.” Certificates of deposit are typically modeled with a higher degree of correlation, whereas interest-bearing checking accounts are assumed to exhibit a lower sensitivity to rate changes.
Many consumer and business deposit accounts have historically demonstrated stability and limited sensitivity to rate changes, resulting in a longer duration relative to our loan portfolio. As a result, our balance sheet has typically been “asset-sensitive,” meaning that assets are expected to reprice more quickly or more significantly than our liabilities. Measures of asset sensitivity are particularly influenced by changes in deposit modeling assumptions.
To manage interest rate risk, we regularly employ a combination of interest rate derivatives, investments in fixed-rate securities, and funding strategies. Collectively, these tools help moderate the expected sensitivity of net interest income and EVE to changes in interest rates.
The following schedule presents deposit duration assumptions discussed previously:
DEPOSIT ASSUMPTIONS
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Product | Effective duration (-200 bps) | Effective duration (unchanged) | Effective duration (+200 bps) | Effective duration (-200 bps) | Effective duration (unchanged) | Effective duration (+200 bps) | ||||||||||||||||||||||||||||||||
| Demand deposits | 4.8% | 4.2% | 3.7% | 4.9% | 4.2% | 3.7% | ||||||||||||||||||||||||||||||||
| Money market | 1.8% | 1.5% | 1.3% | 1.9% | 1.5% | 1.3% | ||||||||||||||||||||||||||||||||
| Savings and interest-bearing checking | 2.1% | 1.7% | 1.6% | 2.2% | 1.8% | 1.6% | ||||||||||||||||||||||||||||||||
As previously discussed, we utilize derivative instruments to manage interest rate risk. The following schedule presents derivatives designated in qualifying hedging relationships at June 30, 2026. It includes the average outstanding derivative notional amounts for each reporting period presented and the weighted-average fixed rates paid or received across cash flow and fair value hedge categories. For more information regarding our hedge accounting strategies and the impact of these hedging relationships on interest income and expense, see Note 4 of the Notes to Consolidated Financial Statements.
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DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS AND CERTAIN ECONOMIC HEDGES
| 2026 | 2027 | Annual Periods | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Third Quarter | Fourth Quarter | First Quarter | Second Quarter | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges of assets 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average outstanding notional 2 | $ | 8,650 | $ | 8,780 | $ | 8,596 | $ | 8,357 | $ | 7,368 | $ | 759 | $ | 95 | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||
| Weighted-average fixed-rate received | 3.44 | % | 3.45 | % | 3.46 | % | 3.55 | % | 3.56 | % | 3.85 | % | 3.79 | % | — | % | — | % | — | % | |||||||||||||||||||||||||||||||||||||||
| Fair value hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value hedges of debt 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average outstanding notional | $ | 1,500 | $ | 1,500 | $ | 1,500 | $ | 1,500 | $ | 1,314 | $ | 553 | $ | 500 | $ | 500 | $ | 500 | $ | 500 | |||||||||||||||||||||||||||||||||||||||
| Weighted-average fixed-rate received | 4.37 | % | 4.37 | % | 4.37 | % | 4.37 | % | 4.33 | % | 3.99 | % | 3.93 | % | 3.93 | % | 3.93 | % | 3.93 | % | |||||||||||||||||||||||||||||||||||||||
Fair value hedges of assets 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average outstanding notional 2 | $ | 5,542 | $ | 5,538 | $ | 5,533 | $ | 5,531 | $ | 5,558 | $ | 5,269 | $ | 4,150 | $ | 2,975 | $ | 2,408 | $ | 2,177 | |||||||||||||||||||||||||||||||||||||||
| Weighted-average fixed-rate paid | 3.34 | % | 3.34 | % | 3.34 | % | 3.34 | % | 3.34 | % | 3.32 | % | 3.23 | % | 3.12 | % | 3.02 | % | 2.97 | % | |||||||||||||||||||||||||||||||||||||||
1 Cash flow hedges of assets consist of receive-fixed interest rate swaps and purchased three-month SOFR futures that are used to hedge pools of floating-rate loans.
2 Notional amounts for forward-starting derivatives are excluded until the trades become effective.
3 Fair value hedges of debt consist of receive-fixed swaps that hedge fixed-rate subordinated and senior notes.
4 Fair value hedges of assets consist of pay-fixed swaps that hedge fixed-rate AFS securities and fixed-rate commercial loans.
At June 30, 2026, we had $19 million of net losses deferred in accumulated other comprehensive income (“AOCI”) related to terminated cash flow hedges. These deferred amounts are amortized into interest income on a straight-line basis over the original maturity periods of the respective hedges, provided the forecasted transactions are expected to occur. For more information regarding amounts deferred in AOCI from terminated cash flow hedges, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.
Earnings at Risk (EaR) and Economic Value of Equity (EVE)
Incorporating deposit assumptions, the effects of derivatives designated in qualifying hedging relationships, and certain short-dated economic hedges, the following schedule presents our earnings at risk (“EaR”) and estimated changes in EVE. EaR represents the percentage change in projected 12-month net interest income. Both EaR and EVE are based on a static balance sheet and reflect instantaneous, parallel shifts in interest rates ranging from -200 to +200 bps. These measures are intended to illustrate the sensitivity of net interest income and equity value to changes in interest rates across a range of scenarios and should not be interpreted as forecasts of expected net interest income.
INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parallel shift in rates (in bps) 1 | Parallel shift in rates (in bps) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repricing scenario | -200 | -100 | 0 | +100 | +200 | -200 | -100 | 0 | +100 | +200 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings at Risk (EaR) | (7.1) | % | (3.6) | % | — | % | 3.6 | % | 7.2 | % | (7.8) | % | (4.0) | % | — | % | 4.0 | % | 7.9 | % | ||||||||||||||||||||||||||||||||||||||||||
Economic Value of Equity (EVE) | (2.1) | % | (0.7) | % | — | % | (0.1) | % | (0.8) | % | (1.5) | % | (0.3) | % | — | % | (0.5) | % | (1.4) | % | ||||||||||||||||||||||||||||||||||||||||||
1 Assumes rates do not decline below zero in the negative rate shifts.
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Asset sensitivity, as measured by EaR, decreased during the first six months of 2026, primarily due to increased hedging activity. Based on current deposit assumptions, interest rate risk remained within established policy limits. For interest-bearing deposits with indeterminable maturities, the weighted average modeled beta was 49%.
Prepayment assumptions are a key factor in the management of interest rate risk. Certain assets within our portfolio, including 1-4 family residential mortgages and mortgage-backed securities, are subject to borrower-driven prepayments that can significantly affect projected cash flows. At June 30, 2026 and December 31, 2025, estimated lifetime prepayment speeds for loans were 14.9% and 14.8%, respectively, reflecting the aging of the portfolio, as loans become more seasoned and borrowers are more likely to refinance or repay their loans early over time. Estimated prepayment speeds for mortgage-backed securities were 7.0% for both periods.
Our EaR analysis primarily evaluates the impact of parallel rate shocks across the term structure of benchmark interest rates. Additionally, we perform non-parallel rate shock scenarios to identify potential risks not captured under parallel rate assumptions. In these scenarios, the most significant effects on EaR typically result from movements in short-term interest rates.
Our strategic focus on business banking remains a key component of our asset-liability management strategy. At June 30, 2026, $31.8 billion of commercial and CRE loans were scheduled to reprice within the following six months. To help manage the interest rate risk associated with these variable-rate exposures, we maintained $8.7 billion in aggregate average notional value of active interest rate derivatives during that period, including interest rate swaps and certain short-term interest rate futures designated as cash flow hedges. Additionally, $4.8 billion of variable-rate consumer loans were scheduled to reprice over the same timeframe. For further information regarding derivative instruments, see Notes 3 and 4 of the Notes to Consolidated Financial Statements.
Fixed Income
We are subject to market risk arising from fluctuations in the fair value of financial instruments, including trading securities and interest rate swaps used to hedge interest rate exposure. Our underwriting activities include municipal and corporate securities, and we actively trade in municipal, agency, and U.S. Treasury securities. These activities expose us to potential losses resulting from adverse price movements in fixed-income markets. Changes in the fair value of AFS securities and interest rate swaps that qualify as cash flow hedges are recognized in AOCI each reporting period. For additional information on investment securities and AOCI, refer to the “Capital Management” section on page 36. For more information on the accounting treatment of investment securities, see Note 5 of the Notes to Consolidated Financial Statements.
Equity Investments
Through our equity investment activities, we hold both publicly traded equity securities and non-marketable equity securities in governmental entities and institutions, such as the Federal Reserve Board (“FRB”) and the FHLB. For more information regarding our equity investments, see “Interest Rate and Market Risk Management” in our 2025 Form 10-K.
We hold investments primarily in pre-public companies, largely through a diversified portfolio of SBIC funds. This investment strategy is designed to support the financing, growth, and expansion of a broad range of businesses, primarily within our geographic footprint. At June 30, 2026, and December 31, 2025, our equity exposure to these investments was $330 million and $271 million, respectively.
Occasionally, companies within our SBIC portfolio may complete an initial public offering (“IPO”), which introduces additional market risk due to post-IPO lock-up restrictions. For more information regarding the valuation of our SBIC investments, see Note 3 of the Notes to Consolidated Financial Statements.
Liquidity Risk Management
Liquidity represents our ability to meet cash, contractual, and collateral obligations while effectively managing both anticipated and unanticipated cash flow needs without adversely affecting our operations or financial condition. We manage liquidity to provide sufficient funding for customer credit requirements, financial and contractual
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commitments, and other corporate activities. Our primary sources of contingent liquidity include secured borrowings through repurchase agreements backed by investment securities, as well as other collateral prepositioned with the FHLB and the FRB. In addition, we maintain the capacity to issue brokered certificates of deposit and unsecured debt. For more information regarding our approach to managing liquidity risk, see “Liquidity Risk Management” in our 2025 Form 10-K.
For the first six months of 2026, the primary sources of cash included reductions in money market investments, growth in deposits, net cash provided by operating activities, and proceeds from the issuance of long-term debt. Primary uses of cash during the same period included growth in loans and leases, reductions in short-term borrowings, common stock repurchases, and dividend payments on common and preferred stock. Cash interest payments, which are reflected in operating expenses, totaled $668 million and $829 million for the first six months of 2026 and 2025, respectively.
The FHLB and FRB continue to serve as important sources of contingent liquidity and funding. As a member of the FHLB of Des Moines, we have the ability to borrow against eligible loans and securities to support liquidity and funding needs. To maintain this borrowing capacity, we are required to hold investments in both FHLB and FRB stock. At June 30, 2026, our total investment in FHLB and FRB stock totaled $10 million and $52 million, respectively, compared with $100 million and $54 million, respectively, at December 31, 2025. The decline in FHLB stock holdings reflects a significant reduction in FHLB borrowings.
At June 30, 2026, loans with a carrying value of $25.6 billion and $18.4 billion were pledged to the FHLB and FRB, respectively, as collateral supporting existing and contingent borrowing capacity. This compares with $25.2 billion and $18.0 billion pledged at December 31, 2025.
At June 30, 2026 and December 31, 2025, we had $17.2 billion and $17.5 billion, respectively, of investment securities pledged as collateral to support contingent borrowing capacity. The pledged securities consisted of:
•$8.5 billion and $7.9 billion, respectively, designated for available use under the Fixed Income Clearing Corporation's General Collateral Finance (“GCF”) program and other repurchase agreement programs;
•$4.5 billion at both dates, pledged to the FHLB and FRB in total; and
•$4.2 billion and $5.1 billion, respectively, pledged to secure public and trust deposits, advances, and other collateralized obligations.
A significant portion of these pledged assets is unencumbered, but remains pledged to provide immediate access to contingency funding sources. The following schedule presents our total available liquidity, including unused collateralized borrowing capacity:
AVAILABLE LIQUIDITY
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in billions) | FHLB | FRB 1 | GCF 2 | Total | FHLB | FRB 1 | GCF 2 | Total | |||||||||||||||||||||||||||||||||||||||
| Total borrowing capacity | $ | 17.1 | $ | 18.8 | $ | 8.5 | $ | 44.4 | $ | 17.4 | $ | 18.4 | $ | 8.0 | $ | 43.8 | |||||||||||||||||||||||||||||||
| Borrowings outstanding | — | — | — | — | 2.0 | — | 0.1 | 2.1 | |||||||||||||||||||||||||||||||||||||||
| Remaining capacity, at period end | $ | 17.1 | $ | 18.8 | $ | 8.5 | $ | 44.4 | $ | 15.4 | $ | 18.4 | $ | 7.9 | $ | 41.7 | |||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 0.8 | $ | 0.7 | |||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits 3 | 1.4 | 2.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Total available liquidity | $ | 46.6 | $ | 44.6 | |||||||||||||||||||||||||||||||||||||||||||
| Ratio of available liquidity to uninsured deposits | 135% | 130% | |||||||||||||||||||||||||||||||||||||||||||||
1 Represents borrowing capacity and borrowings outstanding at the Federal Reserve Bank discount window.
2 Includes $746 million and $3.1 billion pledged for available use through other repo programs for the periods presented.
3 Represents funds deposited by the Bank primarily at the Federal Reserve Bank.
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At June 30, 2026, our total available liquidity was $46.6 billion, compared with $44.6 billion at December 31, 2025. At June 30, 2026, our sources of liquidity exceeded the estimated amount of uninsured deposits of $34.4 billion without the need to sell any investment securities.
Credit Ratings
General financial market and economic conditions affect our access to, and the cost of, external financing. Our access to funding markets is also influenced by the credit ratings assigned by rating agencies, which affect both our borrowing costs and access to funding sources. All credit rating agencies currently rate our debt at an investment-grade level. In May 2026, Fitch upgraded the Bank’s short-term debt rating to “F1” from “F2.” No other credit rating actions occurred during the period.
The following schedule presents our credit ratings:
| CREDIT RATINGS | ||||||||||||||||||||||||||
| as of July 31, 2026: | ||||||||||||||||||||||||||
| Rating agency | Outlook | Long-term issuer/senior debt rating | Subordinated debt rating | Short-term debt rating | ||||||||||||||||||||||
| Kroll | Stable | A- | BBB+ | K2 | ||||||||||||||||||||||
| S&P | Stable | BBB+ | BBB | NR | ||||||||||||||||||||||
| Fitch | Stable | BBB+ | BBB | F1 | ||||||||||||||||||||||
| Moody's | Stable | Baa2 | NR | P2 | ||||||||||||||||||||||
We may periodically issue or redeem preferred stock, senior or subordinated notes, or other capital and debt instruments to support our capital requirements, funding needs, asset-liability management objectives, and prevailing market conditions. Certain issuances may require regulatory approval. In February 2026, we issued $500 million of 4.48% Fixed-to-Floating Senior Notes. Previously, in August 2025, we issued $500 million of 4.70% Fixed-to-Floating Senior Notes, and in July 2026, we issued an additional $500 million of 5.24% Fixed-to-Floating Senior Notes.
For additional information regarding our capital actions, see “Capital Management” and in our 2025 Form 10-K.
Capital Management
We believe that maintaining a strong capital position is critical to achieving our key strategic objectives, sustaining long-term profitability, and reinforcing confidence among depositors, creditors, and investors. We focus on: (1) maintaining sufficient capital to support the current needs and growth of our businesses, aligned with our assessment of their potential to deliver shareholder value, and (2) meeting our obligations to depositors and bondholders while prudently managing capital distributions to shareholders through dividends and common stock repurchases.
We utilize stress testing as an important tool to inform our decisions on the appropriate level of capital to maintain, based on hypothetically stressed economic conditions, including the FRB’s supervisory severely adverse scenario. The timing and magnitude of capital actions are influenced by several factors, such as financial performance, business needs, prevailing and anticipated economic conditions, internal stress testing results, and approvals from both the Board of Directors (“Board”) and the Office of the Comptroller of the Currency (“OCC”). Share repurchases may occur periodically in the open market or through privately negotiated transactions.
For a more comprehensive discussion of our capital risk management, see “Capital Management” in our 2025 Form 10-K.
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SHAREHOLDERS' EQUITY
| (Dollar amounts in millions) | June 30, 2026 | December 31, 2025 | Amount change | Percent change | |||||||||||||||||||
| Shareholders’ equity: | |||||||||||||||||||||||
Preferred stock | $ | 66 | $ | 66 | $ | — | — | % | |||||||||||||||
Common stock and additional paid-in capital | 1,602 | 1,726 | (124) | (7) | |||||||||||||||||||
Retained earnings | 7,880 | 7,329 | 551 | 8 | |||||||||||||||||||
| Accumulated other comprehensive loss | (1,867) | (1,941) | 74 | 4 | |||||||||||||||||||
| Total shareholders' equity | $ | 7,681 | $ | 7,180 | $ | 501 | 7 | ||||||||||||||||
Total shareholders’ equity increased $501 million, or 7%, to $7.7 billion at June 30, 2026, compared with $7.2 billion at December 31, 2025. The increase reflected a $124 million decline in common stock and additional paid-in capital, primarily due to common share repurchases.
In May 2026, we announced a plan to repurchase up to $225 million of our common shares outstanding during the remainder of 2026. We repurchased 1.2 million shares for $75 million in the second quarter of 2026 and 1.3 million shares for $77 million in the first quarter, the latter of which included $2 million of shares acquired in connection with our stock compensation plan. In July 2026, we announced a plan to repurchase up to $75 million of common shares outstanding during the third quarter as part of our previously authorized share repurchase target for 2026 of $300 million.
At June 30, 2026, the AOCI balance reflected a net loss of $1.9 billion, primarily attributable to a decline in the fair value of fixed-rate AFS securities driven by changes in interest rates. This amount includes $1.5 billion ($1.1 billion after tax) of unrealized losses associated with securities previously transferred from AFS to HTM.
Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities in an unrealized loss position, nor do we believe it is more likely than not that we would be required to sell such securities prior to recovering their amortized cost basis. Although changes in AOCI are reflected in shareholders’ equity, they are currently excluded from regulatory capital and therefore do not impact our regulatory ratios. For more information on our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.
CAPITAL DISTRIBUTIONS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions, except share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Capital distributions: | |||||||||||||||||||||||
| Preferred dividends paid | $ | 1 | $ | 1 | $ | 2 | $ | 2 | |||||||||||||||
| Total capital distributed to preferred shareholders | 1 | 1 | 2 | 2 | |||||||||||||||||||
| Common dividends paid | 67 | 64 | 134 | 129 | |||||||||||||||||||
Bank common stock repurchased 1 | 75 | — | 152 | 41 | |||||||||||||||||||
| Total capital distributed to common shareholders | 142 | 64 | 286 | 170 | |||||||||||||||||||
| Total capital distributed to preferred and common shareholders | $ | 143 | $ | 65 | $ | 288 | $ | 172 | |||||||||||||||
Weighted average diluted common shares outstanding (in thousands) | 146,210 | 147,053 | 146,621 | 147,210 | |||||||||||||||||||
| Common shares outstanding, at period end (in thousands) | 145,939 | 147,603 | 145,939 | 147,603 | |||||||||||||||||||
1 Includes amounts related to common shares acquired through our announced plan and those acquired in connection with our stock compensation plan. These shares were acquired from employees to cover their payroll taxes and stock option exercise costs upon the exercise of stock options.
Pursuant to the OCC’s “Earnings Limitation Rule,” dividend payments are limited to the sum of net income for the current fiscal year and retained earnings for the two preceding years, unless prior approval is obtained from the OCC to exceed this threshold. As of July 1, 2026, we had $1.7 billion in retained net profits available for distribution.
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In the second quarters of 2026 and 2025, dividends paid on preferred stock totaled $1 million in each period. Dividends paid on common stock totaled $67 million, or $0.45 per share, during the second quarter of 2026, compared with $64 million, or $0.43 per share, during the second quarter of 2025. In July 2026, the Board declared a quarterly common stock dividend of $0.48 per share, payable on August 20, 2026 to shareholders of record on August 13, 2026. For additional information regarding capital actions, see Note 8 of the Notes to Consolidated Financial Statements.
Basel III
We are subject to the Basel III capital requirements, which include specific minimum regulatory capital ratios. At June 30, 2026, we exceeded all capital adequacy requirements under the Basel III framework. Based on our internal stress testing and other capital adequacy assessments, we believe our capital levels sufficiently exceed both internal and regulatory requirements for well-capitalized institutions. For more information regarding our compliance with Basel III capital requirements, see the “Supervision and Regulation” section and Note 15 of our 2025 Form 10-K.
In March 2026, the federal banking agencies issued proposed Basel III Endgame rules that would revise U.S. regulatory capital requirements, including risk‑weighted asset calculations and the treatment of AOCI. While the proposals remain subject to review and potential revision, we are evaluating their impact and expect to remain well capitalized as we continue to manage our capital position in response to evolving regulatory requirements.
The following schedule presents our capital amounts, capital ratios, and other selected performance ratios:
CAPITAL AMOUNTS AND RATIOS
| (Dollar amounts in millions, except per share amounts) | June 30, 2026 | December 31, 2025 | June 30, 2025 | ||||||||||||||
Basel III risk-based capital amounts: | |||||||||||||||||
| Common equity tier 1 capital | $ | 8,368 | $ | 7,936 | $ | 7,570 | |||||||||||
| Tier 1 risk-based | 8,434 | 8,003 | 7,637 | ||||||||||||||
| Total risk-based | 9,917 | 9,510 | 9,243 | ||||||||||||||
| Risk-weighted assets | 70,744 | 69,142 | 69,026 | ||||||||||||||
| Basel III risk-based capital ratios: | |||||||||||||||||
| Common equity tier 1 capital ratio | 11.8 | % | 11.5 | % | 11.0 | % | |||||||||||
| Tier 1 risk-based ratio | 11.9 | % | 11.6 | % | 11.1 | % | |||||||||||
| Total risk-based ratio | 14.0 | % | 13.8 | % | 13.4 | % | |||||||||||
| Tier 1 leverage ratio | 9.4 | % | 9.0 | % | 8.5 | % | |||||||||||
| Other ratios: | |||||||||||||||||
| Average equity to average assets (three months ended) | 8.3 | % | 7.8 | % | 7.1 | % | |||||||||||
Return on average common equity (three months ended) 1 | 24.3 | % | 14.9 | % | 15.3 | % | |||||||||||
Return on average tangible common equity (three months ended) 1 | 28.6 | % | 17.9 | % | 18.7 | % | |||||||||||
Tangible equity ratio 2 | 7.5 | % | 7.0 | % | 6.3 | % | |||||||||||
Tangible common equity ratio 2 | 7.4 | % | 6.9 | % | 6.2 | % | |||||||||||
Tangible book value per common share 2 | $ | 44.74 | $ | 40.79 | $ | 36.81 | |||||||||||
1 Excluding $252 million of pre-tax net gains ($199 million after tax), return on average common equity and return on average tangible common equity for the three months ended June 30, 2026 would have been approximately 14.0%, and 16.6%, respectively.
2 See “Non-GAAP Financial Measures” on page 39 for more information regarding these ratios.
At June 30, 2026, our common equity tier 1 (“CET1”) capital was $8.4 billion, an increase of 11%, compared with $7.6 billion in the prior year period. The CET1 capital ratio improved to 11.8%, compared with 11.0%. Tangible book value per common share increased 22% to $44.74, mainly due to higher retained earnings and reduced unrealized losses in AOCI. See the section below for more information regarding non-GAAP financial measures.
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NON-GAAP FINANCIAL MEASURES
This Form 10-Q includes certain non-GAAP financial measures in addition to those prepared in accordance with generally accepted accounting principles (“GAAP”). Reconciliations of the non-GAAP measures to the most directly comparable GAAP measures are included in the accompanying schedules. Management uses these non-GAAP measures to evaluate financial results and believes they provide useful supplemental information for period-to-period comparisons.
Non-GAAP financial measures have limitations and may not be directly comparable to similar measures reported by other financial institutions. These measures should not be considered in isolation and should be evaluated in conjunction with the corresponding GAAP measures and related reconciliations. Investors are encouraged to consider GAAP results as the primary basis for assessing our financial condition and results of operations.
Tangible Common Equity and Related Measures
Tangible common equity and related metrics are non-GAAP financial measures that exclude the impact of intangible assets and the related amortization. Management believes these measures provide useful supplemental information in evaluating the use of shareholders’ equity and assessing performance across both acquired and internally developed businesses.
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)
| Three Months Ended | ||||||||||||||||||||
| (Dollar amounts in millions) | June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||||||||||
Net earnings applicable to common shareholders (GAAP) | $ | 452 | $ | 232 | $ | 243 | ||||||||||||||
| Adjustment, net of tax: | ||||||||||||||||||||
| Amortization of core deposit and other intangibles | 2 | 2 | 2 | |||||||||||||||||
Net earnings applicable to common shareholders, net of tax | (a) | $ | 454 | $ | 234 | $ | 245 | |||||||||||||
| Average common equity (GAAP) | $ | 7,457 | $ | 7,194 | $ | 6,357 | ||||||||||||||
| Average goodwill and intangibles | (1,088) | (1,090) | (1,097) | |||||||||||||||||
| Average tangible common equity (non-GAAP) | (b) | $ | 6,369 | $ | 6,104 | $ | 5,260 | |||||||||||||
| Number of days in quarter | (c) | 91 | 90 | 91 | ||||||||||||||||
| Number of days in year | (d) | 365 | 365 | 365 | ||||||||||||||||
Return on average tangible common equity (non-GAAP) 1 | (a/b/c)*d | 28.6 | % | 15.5 | % | 18.7 | % | |||||||||||||
1 Excluding $252 million of pre-tax net gains ($199 million after tax), return on average tangible common equity for the three months ended June 30, 2026 would have been approximately 16.6%.
TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)
| (Dollar amounts in millions, except shares and per share amounts) | June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||||||||||
| Total shareholders’ equity (GAAP) | $ | 7,681 | $ | 7,296 | $ | 6,596 | ||||||||||||||
| Goodwill and intangibles | (1,086) | (1,089) | (1,096) | |||||||||||||||||
| Tangible equity (non-GAAP) | (a) | 6,595 | 6,207 | 5,500 | ||||||||||||||||
| Preferred stock | (66) | (66) | (66) | |||||||||||||||||
| Tangible common equity (non-GAAP) | (b) | $ | 6,529 | $ | 6,141 | $ | 5,434 | |||||||||||||
| Total assets (GAAP) | $ | 89,041 | $ | 87,957 | $ | 88,586 | ||||||||||||||
| Goodwill and intangibles | (1,086) | (1,089) | (1,096) | |||||||||||||||||
| Tangible assets (non-GAAP) | (c) | $ | 87,955 | $ | 86,868 | $ | 87,490 | |||||||||||||
| Common shares outstanding (in thousands) | (d) | 145,939 | 147,077 | 147,603 | ||||||||||||||||
| Tangible equity ratio (non-GAAP) | (a/c) | 7.5 | % | 7.1 | % | 6.3 | % | |||||||||||||
| Tangible common equity ratio (non-GAAP) | (b/c) | 7.4 | % | 7.1 | % | 6.2 | % | |||||||||||||
| Tangible book value per common share (non-GAAP) | (b/d) | $ | 44.74 | $ | 41.75 | $ | 36.81 | |||||||||||||
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Efficiency Ratio and Adjusted Pre-Provision Net Revenue
The efficiency ratio measures operating expenses relative to revenue and is useful to assess the cost of generating revenue. The adjusted efficiency ratio excludes certain items not generally expected to recur frequently, as described in the accompanying schedule, and is intended to enhance comparability across reporting periods. Adjusted noninterest expense reflects management's effectiveness in managing operating costs, while adjusted pre-provision net revenue is used to evaluate our capacity to generate capital. Taxable-equivalent net interest income is presented to facilitate comparability between revenue earned from taxable and tax-exempt sources.
EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)
| Three Months Ended | Six Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | December 31, 2025 | ||||||||||||||||||||||||||||||||
| Noninterest expense (GAAP) | (a) | $ | 551 | $ | 562 | $ | 527 | $ | 1,113 | $ | 1,065 | $ | 2,138 | |||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||
Severance costs | 1 | 3 | 2 | 4 | 5 | 16 | ||||||||||||||||||||||||||||||||
Other real estate expense, net | 1 | — | — | 1 | — | (2) | ||||||||||||||||||||||||||||||||
Amortization of core deposit and other intangibles | 2 | 2 | 2 | 4 | 4 | 8 | ||||||||||||||||||||||||||||||||
| SBIC investment success fee accrual | 7 | — | 2 | 7 | 2 | 5 | ||||||||||||||||||||||||||||||||
| FDIC special assessment | (6) | (1) | — | (7) | — | (11) | ||||||||||||||||||||||||||||||||
Total adjustments | (b) | 5 | 4 | 6 | 9 | 11 | 16 | |||||||||||||||||||||||||||||||
Adjusted noninterest expense (non-GAAP) | (c)=(a-b) | $ | 546 | $ | 558 | $ | 521 | $ | 1,104 | $ | 1,054 | $ | 2,122 | |||||||||||||||||||||||||
| Net interest income (GAAP) | (d) | $ | 677 | $ | 662 | $ | 648 | $ | 1,339 | $ | 1,272 | $ | 2,627 | |||||||||||||||||||||||||
Fully taxable-equivalent adjustments | (e) | 11 | 11 | 13 | 22 | 24 | 46 | |||||||||||||||||||||||||||||||
Taxable-equivalent net interest income (non-GAAP) | (f)=(d+e) | 688 | 673 | 661 | 1,361 | 1,296 | 2,673 | |||||||||||||||||||||||||||||||
| Customer-related noninterest income (non-GAAP) | (g) | 182 | 172 | 164 | 354 | 322 | 662 | |||||||||||||||||||||||||||||||
| Net credit valuation adjustment (CVA) | (h) | 1 | (2) | — | (1) | — | (9) | |||||||||||||||||||||||||||||||
Adjusted customer-related noninterest income (non-GAAP) | (i)=(g-h) | 181 | 174 | 164 | 355 | 322 | 671 | |||||||||||||||||||||||||||||||
Noncustomer-related noninterest income (GAAP) | (j) | 278 | 15 | 26 | 293 | 39 | 96 | |||||||||||||||||||||||||||||||
Securities gains (losses), net | (k) | 269 | 3 | 14 | 272 | 20 | 52 | |||||||||||||||||||||||||||||||
Adjusted noncustomer-related noninterest income (non-GAAP) | (l)=(j-k) | 9 | 12 | 12 | 21 | 19 | 44 | |||||||||||||||||||||||||||||||
| Combined income (non-GAAP) | (m)= (f+g+j) | $ | 1,148 | $ | 860 | $ | 851 | $ | 2,008 | $ | 1,657 | $ | 3,431 | |||||||||||||||||||||||||
Adjusted taxable-equivalent revenue (non-GAAP) | (n)= (f+i+l) | 878 | 859 | 837 | 1,737 | 1,637 | 3,388 | |||||||||||||||||||||||||||||||
Pre-provision net revenue (non-GAAP) | (m)-(a) | $ | 597 | $ | 298 | $ | 324 | $ | 895 | $ | 592 | $ | 1,293 | |||||||||||||||||||||||||
| Adjusted PPNR (non-GAAP) | (n)-(c) | 332 | 301 | 316 | 633 | 583 | 1,266 | |||||||||||||||||||||||||||||||
Efficiency ratio (non-GAAP) 1 | (c/n) | 62.2 | % | 65.0 | % | 62.2 | % | 63.6 | % | 64.4 | % | 62.6 | % | |||||||||||||||||||||||||
1 Excluding the $15 million charitable contribution, adjusted noninterest expense for the year ended December 31, 2025 would have been $2.11 billion, resulting in an efficiency ratio of 62.2%.
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ITEM 1. FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED BALANCE SHEETS
| (In millions, shares in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| (Unaudited) | (Unaudited) | ||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Money market investments: | |||||||||||
| Interest-bearing deposits | |||||||||||
| Federal funds sold and securities purchased under agreements to resell | |||||||||||
| Trading securities, at fair value | |||||||||||
| Investment securities: | |||||||||||
| Available-for-sale, at fair value | |||||||||||
Held-to-maturity, at amortized cost (fair value: $ | |||||||||||
| Total investment securities | |||||||||||
Loans held for sale (includes $ | |||||||||||
Loans and leases, net of unearned income and fees 1 | |||||||||||
| Allowance for loan and lease losses | |||||||||||
| Loans held for investment, net of allowance | |||||||||||
| Other noninterest-bearing investments | |||||||||||
| Premises, equipment and software, net | |||||||||||
| Goodwill and intangibles | |||||||||||
| Other real estate owned | |||||||||||
Other assets 1 | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing demand | $ | $ | |||||||||
| Interest-bearing: | |||||||||||
| Savings and money market | |||||||||||
| Time | |||||||||||
| Total deposits | |||||||||||
Federal funds and other short-term borrowings 1 | |||||||||||
| Long-term debt | |||||||||||
| Reserve for unfunded lending commitments | |||||||||||
Other liabilities 1 | |||||||||||
| Total liabilities | |||||||||||
| Shareholders’ equity: | |||||||||||
Preferred stock, without par value; authorized | |||||||||||
Common stock ($ | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
1 Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis. Prior period results have been recast to conform to this presentation.
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CONSOLIDATED STATEMENTS OF INCOME
| (Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| (In millions, except shares and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Interest income: | |||||||||||||||||||||||
| Interest and fees on loans | $ | $ | $ | $ | |||||||||||||||||||
| Interest on money market investments | |||||||||||||||||||||||
| Interest on securities | |||||||||||||||||||||||
| Total interest income | |||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Interest on deposits | |||||||||||||||||||||||
| Interest on short- and long-term borrowings | |||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||
| Net interest income | |||||||||||||||||||||||
| Provision for credit losses: | |||||||||||||||||||||||
| Provision for loan and lease losses | ( | ||||||||||||||||||||||
| Provision for unfunded lending commitments | ( | ( | ( | ( | |||||||||||||||||||
| Total provision for credit losses | ( | ( | |||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||
| Commercial account fees | |||||||||||||||||||||||
| Card fees | |||||||||||||||||||||||
| Retail and business banking fees | |||||||||||||||||||||||
| Loan-related fees and income | |||||||||||||||||||||||
| Capital markets fees and income | |||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||
| Customer-related noninterest income | |||||||||||||||||||||||
| Dividends and other income | |||||||||||||||||||||||
| Securities gains (losses), net | |||||||||||||||||||||||
| Total noninterest income | |||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||
| Professional and legal services | |||||||||||||||||||||||
| Marketing and business development | |||||||||||||||||||||||
| Deposit insurance and regulatory expense | |||||||||||||||||||||||
| Credit-related expense | |||||||||||||||||||||||
| Other real estate expense, net | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income taxes | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
| Net earnings applicable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding during the period: | |||||||||||||||||||||||
| Basic shares (in thousands) | |||||||||||||||||||||||
| Diluted shares (in thousands) | |||||||||||||||||||||||
| Net earnings per common share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income for the period | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income, net of tax: | |||||||||||||||||||||||
| Net change in unrealized gains on investment securities | |||||||||||||||||||||||
| Unrealized loss amortization associated with the securities transferred from AFS to HTM | |||||||||||||||||||||||
| Net change in cash flow hedge derivatives | ( | ( | |||||||||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| (In millions, except shares and per share amounts) | Preferred stock | Common stock shares (in thousands) | Accumulated paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders’ equity | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income for the period | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Bank common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Net activity under employee plans and related tax benefits | — | — | — | ||||||||||||||||||||||||||||||||
| Dividends on preferred stock | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends on common stock, $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Change in deferred compensation | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income for the period | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Bank common stock repurchased | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net activity under employee plans and related tax benefits | — | — | — | ||||||||||||||||||||||||||||||||
| Dividends on preferred stock | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends on common stock, $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Change in deferred compensation | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
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| (In millions, except shares and per share amounts) | Preferred stock | Common stock shares (in thousands) | Accumulated paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders’ equity | |||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income for the period | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Bank common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Net activity under employee plans and related tax benefits | — | — | — | ||||||||||||||||||||||||||||||||
| Dividends on preferred stock | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends on common stock, $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Change in deferred compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income for the period | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Bank common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Net activity under employee plans and related tax benefits | — | — | — | ||||||||||||||||||||||||||||||||
| Dividends on preferred stock | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends on common stock, $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Change in deferred compensation | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| (In millions) | Six Months Ended June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income for the period | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Provision for credit losses | ( | ||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Deferred income tax expense | |||||||||||
Net increase in trading securities | ( | ( | |||||||||
Net decrease (increase) in loans held for sale | ( | ||||||||||
Change in other liabilities | ( | ||||||||||
Change in other assets | ( | ||||||||||
| Net gains on equity securities | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Net decrease in money market investments | |||||||||||
| Proceeds from maturities and paydowns of investment securities held-to-maturity | |||||||||||
| Purchases of investment securities held-to-maturity | ( | ||||||||||
| Proceeds from sales, maturities, and paydowns of investment securities available-for-sale | |||||||||||
| Purchases of investment securities available-for-sale | ( | ( | |||||||||
| Net change in loans and leases | ( | ( | |||||||||
| Purchases and sales of other noninterest-bearing investments | ( | ||||||||||
| Purchases of premises and equipment | ( | ( | |||||||||
| Acquisition of California branches, net of cash acquired | |||||||||||
Other, net | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Net increase (decrease) in deposits | ( | ||||||||||
| Net change in short-term borrowed funds | ( | ||||||||||
| Proceeds from the issuance of long-term debt | |||||||||||
| Proceeds from the issuance of common stock | |||||||||||
| Dividends paid on common and preferred stock | ( | ( | |||||||||
| Bank common stock repurchased | ( | ( | |||||||||
| Other, net | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net increase in cash and due from banks | |||||||||||
| Cash and due from banks at beginning of period | |||||||||||
| Cash and due from banks at end of period | $ | $ | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Net cash paid for income taxes | |||||||||||
Noncash activities: | |||||||||||
| Loans held for investment reclassified to loans held for sale, net | |||||||||||
| Deposits acquired in purchase of California branches (at time of purchase) | |||||||||||
| Loans acquired in purchase of California branches, net (at time of purchase) | |||||||||||
See accompanying notes to consolidated financial statements.
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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2026
1. BASIS OF PRESENTATION
Zions Bancorporation, National Association (“Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) is a bank headquartered in Salt Lake City, Utah. We provide a wide range of banking products and related services, primarily in 11 Western states through seven separately managed affiliates: Zions Bank; California Bank & Trust (“CB&T”); Amegy Bank (“Amegy”); National Bank of Arizona (“NBAZ”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”); and The Commerce Bank Northwest (“TCBNW”).
The consolidated financial statements include our accounts as well as those of our majority-owned subsidiaries that are consolidated. This includes wholly owned subsidiaries such as ZMFU II, Inc., which supports our municipal lending operations, and Zions Direct, Inc., a registered broker-dealer under the Exchange Act, among other subsidiaries.
Investments where we possess significant influence over the investee's operating and financial policies are accounted for using the equity method. All intercompany accounts and transactions have been eliminated during consolidation. Assets held in an agency or fiduciary capacity are excluded from the consolidated financial statements.
These financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) and prevailing practices within the financial services industry for interim financial information, and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of the interim financial statements have been included. References to GAAP, including standards issued by the Financial Accounting Standards Board, are cited based on the applicable accounting guidance.
The results of operations for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results that may be expected for future periods. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the accompanying Notes. Actual results could differ from those estimates. For further information, refer to the consolidated financial statements and accompanying Notes included in our 2025 Form 10-K.
Subsequent Events
We evaluated events occurring between June 30, 2026 and the date of issuance of the accompanying financial statements. Based on this evaluation, we concluded that no material events occurred that would require adjustments to the consolidated financial statements. As referenced in Note 8 of the Notes to Consolidated Financial Statements, on July 28, 2026, we issued $500 million of 5.24
On July 31, 2026, we completed our previously disclosed acquisition of Basis Multifamily Finance I, LLC, the agency lending platform and subsidiary of Basis Investment Group, including its team, capabilities, and related mortgage servicing rights. Through the acquisition, we obtained participation in the Fannie Mae DUS® program and Freddie Mac Optigo® Conventional and Small Balance Loan programs and expanded our multifamily lending platform. The acquisition will be accounted for as a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. As of the issuance date of these financial statements, the initial accounting for the acquisition has not been finalized.
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2. RECENT ACCOUNTING PRONOUNCEMENTS
Standard | Description | Effective date | Effect on the financial statements or other significant matters | |||||||||||||||||
Standards not yet adopted by the Bank as of June 30, 2026 | ||||||||||||||||||||
ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) | This accounting standards update (“ASU”) requires additional disclosures of certain costs and expenses in both interim and annual reporting periods, including: •Amounts of employee compensation, depreciation, and intangible asset amortization included in certain expense lines presented on the face of the income statement within continuing operations. •A qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. | Annual periods beginning January 1, 2027; Interim periods beginning January 1, 2028. | The overall effect of this standard is not expected to have a material impact on our consolidated financial statements. | |||||||||||||||||
ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) | This ASU modernizes the accounting treatment for internal-use software to better reflect current development practices, including agile and iterative approaches. Key provisions include: •Elimination of Prescriptive Project Stages: The guidance no longer requires classification of costs by development phase, thereby removing rigid stage-based criteria. •Capitalization Criteria: Capitalization of eligible software development costs commences once management has both authorized and committed to funding the project, and it is probable that the project will be completed, and requires consideration of development uncertainties. | Annual and interim periods beginning after December 15, 2027. | The overall effect of this standard is not expected to have a material impact on our consolidated financial statements. | |||||||||||||||||
ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans | This ASU broadens the population of financial assets subject to the gross-up method under Topic 326 to include all purchased seasoned loans (excluding credit cards), which are defined as: •Non-purchase credit deteriorated (“PCD”) loans acquired in a business combination. •Non-PCD loans acquired in an asset acquisition more than 90 days after their origination date. | Annual and interim periods beginning after December 15, 2026. | The overall effect of this standard is not expected to have a material impact on our consolidated financial statements. | |||||||||||||||||
ASU 2025-09, Derivatives and Hedging (Topic 815)—Hedge Accounting Improvements | This ASU introduces targeted improvements to ASC Topic 815 to better align hedge accounting with common risk management strategies. The updates address multiple items, including the following: •Similar risk assessment for cash flow hedges. •Hedging interest payments on choose-your-rate debt. •Net written options as hedging instruments. | Annual and interim periods beginning after December 15, 2026. | The overall effect of this standard is not expected to have a material impact on our consolidated financial statements. | |||||||||||||||||
Standards adopted by the Bank during the second quarter of 2026 | ||||||||||||||||||||
There were no accounting standards adopted during the three and six months ended June 30, 2026 that had a material effect on our consolidated financial statements. | ||||||||||||||||||||
3. FAIR VALUE
We measure certain assets and liabilities at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in the principal market or most advantageous market available to us, in an orderly transaction between market participants as of the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value, as well as the fair value hierarchy, see Note 3 of our 2025 Form 10-K.
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Fair Value Hierarchy
The following schedule presents assets and liabilities measured at fair value on a recurring basis:
| (In millions) | June 30, 2026 | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting | Total | |||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Trading securities | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||
| U.S. Treasury, agencies, and corporations | — | ||||||||||||||||||||||||||||
| Municipal securities | — | ||||||||||||||||||||||||||||
| Other debt securities | — | ||||||||||||||||||||||||||||
| Total available-for-sale | — | ||||||||||||||||||||||||||||
| Loans held for sale | — | ||||||||||||||||||||||||||||
| Other noninterest-bearing investments: | |||||||||||||||||||||||||||||
| Bank-owned life insurance | — | ||||||||||||||||||||||||||||
Private equity investments 1 | — | ||||||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||
| Agriculture loan servicing | — | ||||||||||||||||||||||||||||
| Deferred compensation plan assets | — | ||||||||||||||||||||||||||||
| Derivatives | ( | ||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Fed funds and other short-term borrowings: | |||||||||||||||||||||||||||||
| Securities sold, not yet purchased | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Other liabilities: | |||||||||||||||||||||||||||||
| Derivatives | ( | ||||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| (In millions) | December 31, 2025 | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Netting | Total | |||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Trading securities | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||
| U.S. Treasury, agencies, and corporations | — | ||||||||||||||||||||||||||||
| Municipal securities | — | ||||||||||||||||||||||||||||
| Other debt securities | — | ||||||||||||||||||||||||||||
| Total available-for-sale | — | ||||||||||||||||||||||||||||
| Loans held for sale | — | ||||||||||||||||||||||||||||
| Other noninterest-bearing investments: | |||||||||||||||||||||||||||||
| Bank-owned life insurance | — | ||||||||||||||||||||||||||||
Private equity investments 1 | — | ||||||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||
| Agriculture loan servicing | — | ||||||||||||||||||||||||||||
| Deferred compensation plan assets | — | ||||||||||||||||||||||||||||
| Derivatives | ( | ||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Fed funds and other short-term borrowings: | |||||||||||||||||||||||||||||
| Securities sold, not yet purchased | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Other liabilities: | |||||||||||||||||||||||||||||
| Derivatives | ( | ||||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
1 The Level 1 private equity investments (“PEIs”) generally relate to the portion of our Small Business Investment Company (“SBIC”) investments and other similar investments that are publicly traded.
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Fair Value Option for Certain Loans Held for Sale
We apply the fair value option to certain commercial real estate (“CRE”) loans designated for sale to third-party conduits for securitization and hedged with derivative instruments. This election reduces accounting volatility that would otherwise result from the mismatch between measuring loans held for sale at the lower of cost or fair value and derivatives at fair value, without requiring the application of hedge accounting. These loans are included in “Loans held for sale” on the consolidated balance sheet. Related fair value gains and losses are included in “Capital markets fees and income” on the consolidated statement of income, and accrued interest is included in “Interest and fees on loans.”
At June 30, 2026 and December 31, 2025, we had $51 million and $71 million, respectively, of loans measured at fair value, with a corresponding unpaid principal balance of $51 million and $72 million. During the first six months of 2026 and 2025, we recognized approximately $7 million and $3 million, respectively, in net gains from loan sales and valuation adjustments related to loans measured at fair value and the associated derivatives.
Level 3 Valuations
Our Level 3 financial instruments include PEIs and agriculture loan servicing. For additional information regarding our Level 3 financial instruments, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our 2025 Form 10-K.
Roll-forward of Level 3 Fair Value Measurements
The following schedule presents a roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:
| Level 3 Instruments | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Private equity investments | Ag loan servicing | Private equity investments | Ag loan servicing | Private equity investments | Ag loan servicing | Private equity investments | Ag loan servicing | |||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Unrealized securities gains, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest income | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of investments sold | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Transfers out | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
The roll-forward of Level 3 instruments includes the following realized gains and losses recognized in “Securities gains (losses), net” on the consolidated statement of income for the periods presented:
| (In millions) | Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Securities gains (losses), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Nonrecurring Fair Value Measurements
Certain assets and liabilities are measured at fair value on a nonrecurring basis. These include impaired loans measured at the fair value of the underlying collateral, other real estate owned (“OREO”), and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally arise from observable price changes for such equity investments, write-downs of individual assets, or the application of lower of cost or fair value accounting.
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At June 30, 2026, we had $11 million in collateral-dependent loans measured at fair value. During the second quarter of 2026, we recognized $3 million losses related to changes in fair value for these loans. For more information regarding assets and liabilities measured at fair value on a nonrecurring basis, see Note 3 of our 2025 Form 10-K.
Fair Value of Certain Financial Instruments
The following schedule presents the carrying values and estimated fair values of certain financial instruments:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Carrying value | Fair value | Level | Carrying value | Fair value | Level | |||||||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||||||||
| Held-to-maturity investment securities | $ | $ | 2 | $ | $ | 2 | |||||||||||||||||||||||||||||
Loans and leases (including loans held for sale), net of allowance | 3 | 3 | |||||||||||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||||||||
| Time deposits | 2 | 2 | |||||||||||||||||||||||||||||||||
| Long-term debt | 2 | 2 | |||||||||||||||||||||||||||||||||
The preceding schedule excludes financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which carrying value approximates fair value. For additional information regarding the financial instruments included within the scope of this disclosure, along with the valuation methodologies and significant assumptions used in estimating their fair values, see Note 3 of our 2025 Form 10-K.
4. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Accounting
We utilize derivative instruments—including interest rate swaps, futures, options, foreign exchange and commodity contracts, credit derivatives, and various customer-facing products—to manage exposure to interest rate, foreign exchange, commodity, credit, and other market risks. Our objective is to reduce volatility in interest income, interest expense, earnings, and capital. These instruments allow us to adjust the sensitivity of our assets and liabilities to changes in market rates and other market conditions.
In addition, we offer derivative products to customers to support their risk management needs. The resulting exposures are generally mitigated through offsetting transactions with dealer counterparties or central clearing houses. We do not use derivatives for speculative purposes. For more information regarding our use of derivative instruments and related accounting policies, see Note 7 of our 2025 Form 10-K.
Collateral and Credit Risk
Credit risk associated with derivative instruments arises from the potential nonperformance of counterparties. No significant derivative-related losses attributable to counterparty default occurred during the first six months of 2026. For a discussion of how counterparty credit risk is incorporated into derivative valuations, see Note 3 of our 2025 Form 10-K. For additional information regarding collateral arrangements and related credit risk for derivative contracts, see Note 7 of our 2025 Form 10-K.
Certain derivative contracts contain credit risk-related contingent features, such as minimum credit rating requirements. If these features were triggered, we may be required to post additional collateral; however, counterparties have not historically exercised their rights to demand additional collateral in all instances when permitted. If our credit rating had been downgraded by one notch by Standard and Poor’s (“S&P”) or Moody’s at June 30, 2026, we do not believe that additional collateral would have been required to be pledged. Centrally cleared derivatives do not include credit risk-related contingent features that would require additional collateral in the event of a credit rating downgrade.
At June 30, 2026, the gross fair value of our derivative liabilities was $369 million. To satisfy margin requirements in the ordinary course of business, we pledged cash collateral of $43 million. Additionally, we pledged U.S.
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Treasuries with an aggregate face value of $200 million to satisfy initial margin requirements with certain dealer counterparties and central clearing houses.
Derivative Notional Amounts and Fair Values
The following schedule presents derivative notional amounts and recorded fair values at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Notional amount | Fair value | Notional amount | Fair value | ||||||||||||||||||||||||||||||||
| (In millions) | Other assets | Other liabilities | Other assets | Other liabilities | |||||||||||||||||||||||||||||||
| Derivatives designated as accounting hedges: | |||||||||||||||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||||||||||||||
Hedges of floating-rate assets 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||||||||||||||
Hedges of fixed-rate assets 1 | |||||||||||||||||||||||||||||||||||
| Hedges of fixed-rate liabilities | |||||||||||||||||||||||||||||||||||
| Total derivatives designated as accounting hedges | |||||||||||||||||||||||||||||||||||
Derivatives not designated as accounting hedges: 2 | |||||||||||||||||||||||||||||||||||
| Customer interest rate derivatives | |||||||||||||||||||||||||||||||||||
| Customer commodity derivatives | |||||||||||||||||||||||||||||||||||
| Other interest rate derivatives | |||||||||||||||||||||||||||||||||||
Foreign exchange derivatives 3 | |||||||||||||||||||||||||||||||||||
| Purchased credit derivatives | |||||||||||||||||||||||||||||||||||
Total derivatives not designated as accounting hedges | |||||||||||||||||||||||||||||||||||
| Total gross derivatives | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: Offsetting derivative instruments | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Less: Cash collateral pledged/received | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total net derivatives presented on balance sheet 4 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
1 Balances include forward-starting interest rate derivatives designated as cash flow and fair value hedges of assets that had not yet become effective as of the reporting dates. Related notional amounts were $9.5 billion and $2.7 billion, respectively, at June 30, 2026, compared with $350 million and $2.1 billion at December 31, 2025.
2 Notional amounts and fair values for derivatives that are not designated as accounting hedges include both the customer-facing derivatives the Bank executes to assist customers in managing their risks and the dealer-facing derivatives that economically offset the customer transactions to mitigate the Bank's exposure.
3 Includes both spot and forward FX trades.
4 Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis. Prior period results have been recast to conform to this presentation.
Hedge Accounting Gains/Losses Recognized in Earnings and Deferred in AOCI
The following schedule present the gains and losses from derivative instruments designated as cash flow and fair value hedges, either deferred in accumulated other comprehensive income (“AOCI”) or recognized in earnings for the three and six months ended June 30, 2026 and 2025:
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| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Effective portion of derivative gain/(loss) deferred in AOCI | Amount of gain/(loss) reclassified from AOCI into income | Interest on fair value hedges | Effective portion of derivative gain/(loss) deferred in AOCI | Amount of gain/(loss) reclassified from AOCI into income | Interest on fair value hedges | |||||||||||||||||||||||||||||
Cash flow hedges: 1 | |||||||||||||||||||||||||||||||||||
| Hedges of floating-rate assets | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Hedges of floating-rate liabilities | |||||||||||||||||||||||||||||||||||
Fair value hedges: 2 | |||||||||||||||||||||||||||||||||||
| Hedges of fixed-rate assets | |||||||||||||||||||||||||||||||||||
| Hedges of fixed-rate liabilities | ( | ( | |||||||||||||||||||||||||||||||||
Total derivatives designated as accounting hedges | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Effective portion of derivative gain (loss) deferred in AOCI | Amount of gain (loss) reclassified from AOCI into income | Interest on fair value hedges | Effective portion of derivative gain (loss) deferred in AOCI | Amount of gain (loss) reclassified from AOCI into income | Interest on fair value hedges | |||||||||||||||||||||||||||||
Cash flow hedges: 1 | |||||||||||||||||||||||||||||||||||
| Hedges of floating-rate assets | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Hedges of floating-rate liabilities | |||||||||||||||||||||||||||||||||||
Fair value hedges: 2 | |||||||||||||||||||||||||||||||||||
| Hedges of fixed-rate assets | |||||||||||||||||||||||||||||||||||
| Hedges of fixed-rate liabilities | ( | ( | |||||||||||||||||||||||||||||||||
Total derivatives designated as accounting hedges | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
1 For the 12-month period following June 30, 2026, approximately $58 million of net losses from both active and terminated cash flow hedges will be reclassified from AOCI into interest income, compared with $45 million at June 30, 2025. At June 30, 2026, approximately $19 million of losses related to terminated cash flow hedges remained deferred in AOCI, which are expected to be fully reclassified into earnings by October 2027.
2 We recorded cumulative unamortized basis adjustments from terminated fair value hedges of debt totaling $28 million and $36 million at June 30, 2026 and 2025, respectively. Additionally, we had $2 million and $3 million of cumulative unamortized basis adjustments from terminated fair value hedges of assets at June 30, 2026 and 2025, respectively. Interest on fair value hedges presented above includes the amortization of the remaining unamortized basis adjustments.
Gains/Losses Recognized in Earnings from Derivatives Not Designated as Accounting Hedges
The following schedule presents the amount of gains (losses) recognized in “Capital markets fees and income” under noninterest income from derivatives not designated as accounting hedges:
| Other Noninterest Income/(Expense) | |||||||||||||||||||||||
| (In millions) | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | |||||||||||||||||||
Derivatives not designated as accounting hedges: | |||||||||||||||||||||||
Customer-facing interest rate derivatives | $ | $ | $ | $ | |||||||||||||||||||
Customer-facing commodity derivatives | |||||||||||||||||||||||
Other interest rate derivatives 1 | ( | ( | |||||||||||||||||||||
| Foreign exchange derivatives | |||||||||||||||||||||||
| Purchased credit derivatives | ( | ( | |||||||||||||||||||||
Total derivatives not designated as accounting hedges | $ | $ | $ | $ | |||||||||||||||||||
1 Includes gains and losses from mortgage derivative instruments, which were recognized in “Loan-related fees and income” within noninterest income.
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Fair Value Hedges and Hedged Items Gains/Losses
The following schedule presents derivatives used in fair value hedge accounting relationships, including the pre-tax gains and losses recognized on both the derivatives and the corresponding hedged items for the periods presented:
| Gains (losses) recorded in income | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Derivatives | Hedged items | Total income statement impact | Derivatives | Hedged items | Total income statement impact | |||||||||||||||||||||||||||||
Hedges of fixed-rate assets 1, 2 | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Hedges of fixed-rate liabilities 1, 2 | ( | ( | |||||||||||||||||||||||||||||||||
| Gains (losses) recorded in income | |||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Derivatives | Hedged items | Total income statement impact | Derivatives | Hedged items | Total income statement impact | |||||||||||||||||||||||||||||
Hedges of fixed-rate assets 1, 2 | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Hedges of fixed-rate liabilities 1, 2 | ( | ( | |||||||||||||||||||||||||||||||||
1 Includes hedges of benchmark interest rate risk related to fixed-rate long-term debt, AFS securities, and commercial loans. Gains and losses were recognized in interest income or interest expense, consistent with the accounting treatment of the respective hedged items.
2 Income (expense) from derivative instruments excludes interest income and interest expense associated with periodic accruals and settlements in order to align with the presentation of gains and losses on the related hedged items.
Fair Value Hedges and Basis Adjustments
The following schedule presents information regarding basis adjustments for hedged items in fair value hedging relationships:
| Par value of hedged items | Carrying amount of the hedged items | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items | |||||||||||||||||||||||||||||||||
| (In millions) | June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||
Hedges of fixed-rate assets 1, 2 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Hedges of fixed-rate liabilities 1 | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
1 Carrying amounts exclude (i) issuance and purchase discounts or premiums, (ii) unamortized issuance and acquisition costs, and (iii) amounts related to terminated fair value hedging relationships.
2 Hedged items include defined portfolios of AFS securities and commercial loans, as well as specifically identified AFS securities. Related basis adjustments were recorded in the same balance-sheet line items as the corresponding hedged assets. At June 30, 2026, the amortized cost basis of assets designated under the portfolio layer method was $9.0 billion, the cumulative basis adjustment associated with these hedging relationships was $31 million, and the notional amount of the designated accounting hedges was $5.7 billion.
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5. INVESTMENT SECURITIES
Investment Securities
We classify our investment securities as either available-for-sale (“AFS”) or held-to-maturity (“HTM”). AFS securities, which primarily consist of debt instruments used to manage liquidity and interest rate risk and to generate interest income, are measured at fair value. Unrealized gains and losses from AFS securities, net of applicable taxes, are recognized in other comprehensive income.
HTM securities represent investments that management has both the intent and ability to hold until maturity. These securities are carried at amortized cost, which reflects the original purchase price, adjusted for the amortization or accretion of any premiums or discounts, as well as any impairment losses, including those related to credit. Gains or losses resulting from the sale of investment securities are recognized in noninterest income and are measured using the specific identification method.
The carrying values of our investment securities exclude accrued interest receivables of $66 million and $64 million at June 30, 2026 and December 31, 2025, respectively. These amounts are included in “Other assets” on the consolidated balance sheet.
Investment securities with a carrying value of $17.2 billion and $17.5 billion were pledged as collateral for potential borrowings at June 30, 2026 and December 31, 2025, respectively.
When a security is transferred from AFS to HTM, the difference between its amortized cost basis and its fair value on the transfer date is amortized as a yield adjustment through interest income. The fair value at the transfer date establishes either a premium or discount relative to the amortized cost basis of the HTM securities. The amortization of unrealized gains or losses reported in AOCI offsets the impact of amortizing the resulting premium or discount through interest income created by the transfer.
The discount associated with securities previously transferred from AFS to HTM was $1.5 billion ($1.1 billion after tax) at June 30, 2026, compared with $1.6 billion ($1.2 billion after tax) at December 31, 2025.
For additional information regarding our fair value estimation process and the accounting treatment of our investment securities, see Notes 3 and 5, respectively, of our 2025 Form 10-K.
The following schedule presents the amortized cost and estimated fair values of our AFS and HTM securities:
| June 30, 2026 | |||||||||||||||||||||||
| (In millions) | Amortized cost | Gross unrealized gains 1 | Gross unrealized losses | Estimated fair value | |||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||
| Small Business Administration loan-backed securities | |||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||
| Total available-for-sale | |||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||
| Total held-to-maturity | |||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | |||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||
| (In millions) | Amortized cost | Gross unrealized gains 1 | Gross unrealized losses | Estimated fair value | |||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||
| Small Business Administration loan-backed securities | |||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||
| Total available-for-sale | |||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||
| Total held-to-maturity | |||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | |||||||||||||||||||
1 Gross unrealized gains for the respective AFS security categories without values were individually less than $1
The following schedule presents gross unrealized losses for AFS securities and the estimated fair value, categorized by the length of time the securities have been in an unrealized loss position:
| June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (In millions) | Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | |||||||||||||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||||||||||||||
| Small Business Administration loan-backed securities | |||||||||||||||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total available-for-sale investment securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (In millions) | Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | |||||||||||||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||||||||||||||
| Small Business Administration loan-backed securities | |||||||||||||||||||||||||||||||||||
| Municipal securities | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total available-for-sale investment securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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At June 30, 2026 and December 31, 2025, the number of AFS investment securities in an unrealized loss position totaled 1,956 and 2,037 , respectively.
There were no
| | ||
The following schedule presents interest income categorized by investment security type:
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Taxable | Nontaxable | Total | Taxable | Nontaxable | Total | |||||||||||||||||||||||||||||
| Available-for-sale | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Taxable | Nontaxable | Total | Taxable | Nontaxable | Total | |||||||||||||||||||||||||||||
| Available-for-sale | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Maturities
The following schedule presents the amortized cost and weighted average yields of debt securities, categorized by the remaining contractual maturity of principal payments at June 30, 2026. The schedule does not reflect the effects of interest rate resets or fair value hedges. Additionally, the remaining contractual principal maturities shown do not represent the portfolio's duration, as they exclude expected prepayments or amortization, which typically result in measured durations that are significantly shorter than contractual maturities.
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| June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total debt securities | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Amortized cost | Average yield | Amortized cost | Average yield | Amortized cost | Average yield | Amortized cost | Average yield | Amortized cost | Average yield | |||||||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Small Business Administration loan-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agencies and corporations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency guaranteed mortgage-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total held-to-maturity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.
Impairment
AFS Impairment
We review our AFS securities portfolio for potential impairment on a quarterly basis, assessing each security individually. For additional information regarding our impairment assessment methodology and the related accounting policies applicable to investment securities, see Note 5 of our 2025 Form 10-K.
No impairment losses were recognized on our AFS investment securities portfolio during the first six months of 2026 or 2025. The unrealized losses primarily reflect the impact of higher interest rates subsequent to the purchase of the securities and are not attributable to credit-related factors. Accordingly, absent any future sales, we expect to recover the full principal value of these securities upon maturity. At June 30, 2026, we did not intend to sell any securities in an unrealized loss position, nor do we believe it is more likely than not that we would be required to sell such securities prior to recovering their amortized cost basis.
HTM Impairment
For HTM securities, the allowance for credit losses (“ACL”) is evaluated using the same methodology applied to loans and leases measured at amortized cost, as described in Note 6. At June 30, 2026, the ACL for HTM securities was less than $1 million. All HTM securities were assigned a credit quality rating of “Pass,” with none classified as past due.
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6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES
Loans, Leases, and Loans Held for Sale
The following schedule presents our loan and lease portfolio according to major portfolio segment and specific class:
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Loans held for sale | $ | $ | |||||||||
| Commercial: | |||||||||||
Commercial and industrial 1 | $ | $ | |||||||||
| Owner-occupied | |||||||||||
| Municipal | |||||||||||
| Total commercial | |||||||||||
| Commercial real estate: | |||||||||||
| Term | |||||||||||
| Construction and land development | |||||||||||
| Total commercial real estate | |||||||||||
| Consumer: | |||||||||||
| 1-4 family residential | |||||||||||
| Home equity credit line | |||||||||||
| Construction and other consumer real estate | |||||||||||
| Bankcard and other revolving plans | |||||||||||
| Other | |||||||||||
| Total consumer | |||||||||||
Total loans and leases | $ | $ | |||||||||
1 Effective March 31, 2026, balances previously reported as “Leasing” were reclassified to the “Commercial and industrial” loan segment. Prior period amounts have been reclassified to conform to the current presentation. At June 30, 2026 and December 31, 2025, the leasing portfolio totaled $352 million and $367 million, respectively.
Loans and leases classified as held for investment are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $55 million and $61 million at June 30, 2026 and December 31, 2025, respectively. The amortized cost basis of the loans does not include accrued interest receivables of $272 million and $276 million at June 30, 2026 and December 31, 2025, respectively. These receivables are included in “” on the consolidated balance sheet.
Municipal loans generally include loans to state and local governments (“municipalities”), with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.
Land acquisition and development loans included in the construction and land development loan portfolio were $251 million at June 30, 2026 and $257 million at December 31, 2025.
Loans with a carrying value of $44.0 billion at June 30, 2026 and $43.2 billion at December 31, 2025 have been pledged at the Federal Reserve (“FRB”) and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.
Loans held for sale are measured individually at fair value or the lower of cost or fair value and primarily consist of CRE loans sold into securitization entities, and conforming residential mortgages generally sold to U.S. government agencies. The following schedule presents loans added to, or sold from, the held for sale category during the periods presented:
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Loans added to held for sale | $ | $ | $ | ||||||||||||||||||||
| Loans sold from held for sale | |||||||||||||||||||||||
From time to time, we retain continuing involvement in loans sold through servicing rights or guarantees. At June 30, 2026, the principal balance of loans sold for which servicing was retained was $987 million, compared with $679 million at December 31, 2025. Income generated from sold loans, excluding servicing income, totaled $5 million and $12 million for the three and six months ended June 30, 2026, and $2 million and $5 million for the corresponding periods in 2025.
Allowance for Credit Losses
The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our 2025 Form 10-K.
The ACL on AFS and HTM debt securities is estimated separately from the ACL on loans. For HTM debt securities, the ACL is evaluated using the same methodology applied to loans and leases measured at amortized cost. For more information regarding our methodology used to estimate the ACL on AFS and HTM debt securities, see Note 5 of our 2025 Form 10-K.
Changes in the ACL are summarized as follows:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| (In millions) | Commercial | Commercial real estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for loan losses | ( | ||||||||||||||||||||||
| Gross loan and lease charge-offs | |||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | |||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for unfunded lending commitments | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Total allowance for credit losses at end of period | |||||||||||||||||||||||
| Allowance for loan losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
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| Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| (In millions) | Commercial | Commercial real estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for loan losses | ( | ( | |||||||||||||||||||||
| Gross loan and lease charge-offs | |||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | |||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for unfunded lending commitments | ( | ( | ( | ||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Total allowance for credit losses at end of period | |||||||||||||||||||||||
| Allowance for loan losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| (In millions) | Commercial | Commercial real estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for loan losses | ( | ||||||||||||||||||||||
| Gross loan and lease charge-offs | |||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | |||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for unfunded lending commitments | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Total allowance for credit losses at end of period | |||||||||||||||||||||||
| Allowance for loan losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
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| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| (In millions) | Commercial | Commercial real estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for loan losses | ( | ||||||||||||||||||||||
| Gross loan and lease charge-offs | |||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | |||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Provision for unfunded lending commitments | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Total allowance for credit losses at end of period | |||||||||||||||||||||||
| Allowance for loan losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserve for unfunded lending commitments | |||||||||||||||||||||||
| Total allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
Nonaccrual Loans
Loans are generally placed on nonaccrual when the full collection of principal and interest is not expected, or when the loan is 90 days or more past due on principal or interest, unless the loan is both well secured and in the process of collection. The decision to place a loan on nonaccrual considers factors such as delinquency status, collateral valuation, the financial condition of the borrower or guarantor, bankruptcy proceedings, pending litigation, and any other indicators that create uncertainty regarding the full and timely collection of principal and interest.
A nonaccrual loan may be restored to accrual status when the following conditions are met: (1) all delinquent principal and interest are brought current in accordance with the loan agreement; (2) the loan, if secured, is well secured; (3) the borrower has made payments according to the contractual terms for a minimum of six months; and (4) an analysis of the borrower indicates a reasonable assurance of their ability and willingness to continue making payments.
The following schedule presents the amortized cost basis of loans on nonaccrual:
| June 30, 2026 | |||||||||||||||||||||||
| Amortized cost basis | Total amortized cost basis | ||||||||||||||||||||||
| (In millions) | with no allowance 1 | with allowance | Related allowance | ||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
| Term | |||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||
| Amortized cost basis | Total amortized cost basis | ||||||||||||||||||||||
| (In millions) | with no allowance 1 | with allowance | Related allowance | ||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
| Term | |||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
1 Nonaccrual loans with no allowance primarily consist of loans for which a specific reserve is estimated based on the fair value of the collateral. As a result, we generally charge off the portion of the loan balance that exceeds that fair value, and no reserve or related allowance is established for these loans.
For accruing loans, interest is accrued, and interest payments are recognized as interest income in accordance with the contractual terms of the loan agreement. For nonaccrual loans, the accrual of interest is discontinued, and any previously accrued but uncollected interest is promptly reversed from interest income, generally within one month. Payments received on nonaccrual loans are applied to reduce the outstanding principal balance and are not recognized as interest income. However, when the collectability of the amortized cost basis of a nonaccrual loan is no longer in doubt, interest payments may be recognized as interest income on a cash basis. For the three and six months ended June 30, 2026 and 2025, no
The following schedule presents the amount of accrued interest receivables reversed from interest income, categorized by loan portfolio segment during the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Commercial | $ | $ | $ | $ | |||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Past Due Loans
Closed-end loans with monthly scheduled payments are reported as past due when the borrower is delinquent for two or more monthly payments. Similarly, open-end credit arrangements, including bankcard and other revolving credit plans, are reported as past due when the minimum required payment has not been received for two or more billing cycles. Other multi-payment obligations (e.g., quarterly or semi-annual), as well as single payment and demand notes, are reported as past due when either principal or interest remains due and unpaid 30 days or more.
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Past due loans (accruing and nonaccruing) are summarized as follows:
| June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (In millions) | Current | 30-89 days past due | 90+ days past due | Total past due | Total loans | Accruing loans 90+ days past due | Nonaccrual loans that are current 1 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||||||||||||||
Construction and other consumer real estate | |||||||||||||||||||||||||||||||||||||||||
Bankcard and other revolving plans | |||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| (In millions) | Current | 30-89 days past due | 90+ days past due | Total past due | Total loans | Accruing loans 90+ days past due | Nonaccrual loans that are current 1 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||||||||||||||
Construction and other consumer real estate | |||||||||||||||||||||||||||||||||||||||||
Bankcard and other revolving plans | |||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is not expected.
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Credit Quality Indicators
In addition to nonaccrual and past due criteria, we evaluate loans using internal risk-grading systems that vary based on the size and type of credit risk exposure. Loans are assigned internal risk grades of Pass, Special Mention, Substandard, and Doubtful, which are aligned with published regulatory risk classifications.
The definitions of these risk grades are summarized as follows:
•Pass — Pass-rated assets are considered higher quality and do not meet the criteria for any of the other risk categories. The likelihood of loss is considered low.
•Special Mention — Special Mention assets have potential weaknesses that warrant management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the borrower's repayment capacity or our credit position at a future date.
•Substandard — Substandard assets are inadequately protected by the borrower's current net worth and repayment capacity or by the collateral pledged, if any. These assets have well-defined weaknesses and are characterized by the distinct possibility that a loss may be sustained if the deficiencies are not corrected.
•Doubtful — Doubtful assets exhibit all of the weaknesses inherent in Substandard assets, with the added characteristic that collection or liquidation in full is highly questionable and improbable.
There were no
For commercial and CRE loans with commitments greater than $1 million, we assign either one of several grades within the Pass classification or one of the previously described regulatory risk classifications. Internal risk grades for these loans are reviewed at least quarterly, or more frequently when information becomes available that may affect the credit risk of the loan.
For consumer loans and for commercial and CRE loans with commitments of $1 million or less, internal risk grades generally consistent with the classifications previously described are assigned using automated processes that incorporate refreshed credit scores, payment performance, and other relevant risk indicators. These loans are typically assigned a Pass, Special Mention, or Substandard grade and are reviewed as information is identified that might warrant a change in risk grade.
The following schedules present the amortized cost of loans and leases by vintage year, defined as the year of origination or, when applicable, the year of the most recent renewal, extension, or significant modification that resets the loan’s vintage. As a result, certain loans presented in the current‑year vintage were originated in prior periods and do not represent new credit originations. The schedules also present balances by the credit quality classifications used by management in monitoring portfolio risk.
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| June 30, 2026 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans amortized cost basis | Revolving loans converted to term loans amortized cost basis | |||||||||||||||||||||||||||
| Amortized cost basis by year of origination | |||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total owner-occupied | |||||||||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total municipal | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total term | |||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total construction and land development | |||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||
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| June 30, 2026 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans amortized cost basis | Revolving loans converted to term loans amortized cost basis | |||||||||||||||||||||||||||
| Amortized cost basis by year of origination | |||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total 1-4 family residential | |||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total home equity credit line | |||||||||||||||||||||||||||||
| Construction and other consumer real estate | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total construction and other consumer real estate | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Other consumer | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total other consumer | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans amortized cost basis | Revolving loans converted to term loans amortized cost basis | |||||||||||||||||||||||||||
| Amortized cost basis by year of origination | |||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total owner-occupied | |||||||||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total municipal | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total term | |||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total construction and land development | |||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans amortized cost basis | Revolving loans converted to term loans amortized cost basis | |||||||||||||||||||||||||||
| Amortized cost basis by year of origination | |||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total 1-4 family residential | |||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total home equity credit line | |||||||||||||||||||||||||||||
| Construction and other consumer real estate | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total construction and other consumer real estate | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Other consumer | |||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||
| Accruing Substandard | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||
| Total other consumer | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
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The following schedules present gross charge-offs categorized by year of loan origination for the periods presented:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans gross charge-offs | Revolving loans converted to term loans gross charge-offs | |||||||||||||||||||||||||||
| Gross charge-offs by year of loan origination | |||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans gross charge-offs | Revolving loans converted to term loans gross charge-offs | |||||||||||||||||||||||||||
| Gross charge-offs by year of loan origination | |||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Owner occupied | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans gross charge-offs | Revolving loans converted to term loans gross charge-offs | |||||||||||||||||||||||||||
| Gross charge-offs by year of loan origination | |||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Term loans | Revolving loans gross charge-offs | Revolving loans converted to term loans gross charge-offs | |||||||||||||||||||||||||||
| Gross charge-offs by year of loan origination | |||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||
| Bankcard and other revolving plans | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Loan Modifications
Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Modifications may also occur when the borrower experiences financial difficulty and requires temporary or permanent relief from the original contractual terms. For loans modified due to a borrower experiencing financial difficulty, we apply the same credit loss estimation methods used for the rest of the loan portfolio. These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historically modified loans. All nonaccruing loans greater than $1 million are evaluated individually, regardless of the type of modification.
We generally consider a borrower to be experiencing financial difficulty when available information indicates the borrower is unlikely to meet its contractual obligations without a modification of the loan terms. Indicators include actual or probable payment default; bankruptcy or the likelihood thereof; substantial doubt about the borrower’s ability to continue as a going concern; insufficient expected cash flows to service debt; or an inability to obtain financing at market terms. A borrower is also considered to be experiencing financial difficulty when repayment is dependent on support from a sponsor or guarantor. Additional indicators may include liquidity constraints, declining collateral values, failure to meet loan covenants, adverse industry changes, and sustained deterioration in financial performance.
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A modified loan on nonaccrual will generally remain on nonaccrual until the borrower has demonstrated the ability to perform under the modified terms for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the modification, or significant events that coincide with the modification, are considered in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual.
We monitor the performance of all modified loans on an ongoing basis in accordance with their modified terms. Modified loans are considered to be in default if they become past due after modification. Commercial loans are considered to be in default when they are 90 days or more past due, while consumer loans are considered to be in default when they are 60 days or more past due. For the three and six months ended June 30, 2026, modified loans to borrowers experiencing financial difficulty that defaulted during the period and were modified within the preceding 12 months totaled less than $1 million and $1 million, respectively. For the corresponding periods ended June 30, 2025, such loans totaled less than $1 million and $2 million, respectively.
The amortized cost of loans to borrowers experiencing financial difficulty that were modified during the period, by loan class and modification type, is summarized in the following schedule:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost associated with the following modification types: | |||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Interest rate reduction | Maturity or term extension | Principal forgiveness | Payment deferral | Multiple modification types 1 | Total 2 | Percentage of total loans 3 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost associated with the following modification types: | |||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Interest rate reduction | Maturity or term extension | Principal forgiveness | Payment deferral | Multiple modification types 1 | Total 2 | Percentage of total loans 3 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost associated with the following modification types: | |||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Interest rate reduction | Maturity or term extension | Principal forgiveness | Payment deferral | Multiple modification types 1 | Total 2 | Percentage of total loans 3 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Amortized cost associated with the following modification types: | |||||||||||||||||||||||||||||||||||||||||
| (Dollar amounts in millions) | Interest rate reduction | Maturity or term extension | Principal forgiveness | Payment deferral | Multiple modification types 1 | Total 2 | Percentage of total loans 3 | ||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. During the three and six months ended June 30, 2026, modified loans totaling $67 million and $68 million, respectively, included both interest rate reductions and maturity or term extensions.
2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $19 million and
$38 million at June 30, 2026 and June 30, 2025, respectively.
$
3 Amounts less than 0.05% are rounded to zero.
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The following schedule presents the financial impact of loan modifications to borrowers experiencing financial difficulty:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||||||||||||||||||
| Weighted-average interest rate reduction (in percentage points) | Weighted-average term extension (in months) | Weighted-average interest rate reduction (in percentage points) | Weighted-average term extension (in months) | ||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | % | % | |||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
Term | |||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||
Consumer:1 | |||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||
| Total weighted average financial impact | |||||||||||||||||||||||
| Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||
| Weighted-average interest rate reduction (in percentage points) | Weighted-average term extension (in months) | Weighted-average interest rate reduction (in percentage points) | Weighted-average term extension (in months) | ||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | % | % | |||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
Term | |||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||
| Total weighted average financial impact | |||||||||||||||||||||||
Loan modifications to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026, resulted in no 1
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The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after July 1, 2025 through June 30, 2026, categorized by portfolio segment and loan class:
| June 30, 2026 | |||||||||||||||||||||||||||||
| (In millions) | Current | 30-89 days past due | 90+ days past due | Total past due | Total amortized cost of loans | ||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Home equity credit line | |||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after July 1, 2024 through June 30, 2025, categorized by portfolio segment and loan class:
| June 30, 2025 | |||||||||||||||||||||||||||||
| (In millions) | Current | 30-89 days past due | 90+ days past due | Total past due | Total amortized cost of loans | ||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||
| Total commercial | |||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Term | |||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| 1-4 family residential | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Collateral-Dependent Loans
When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on (1) the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, (2) the observable market price of the loan, or (3) the fair value of the loan’s underlying collateral.
Select information on loans for which the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the underlying collateral, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:
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| June 30, 2026 | |||||||||||||||||
| (Dollar amounts in millions) | Amortized cost | Major types of collateral | Weighted average LTV 1 | ||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | $ | Semi-trailers and semi-tractors | |||||||||||||||
| Owner-occupied | Office buildings and agriculture production | ||||||||||||||||
| Municipal | Multifamily apartments | ||||||||||||||||
| Commercial real estate: | |||||||||||||||||
| Term | Office and industrial buildings | ||||||||||||||||
| Consumer: | |||||||||||||||||
| 1-4 family residential | Single family residential | ||||||||||||||||
| Total | $ | ||||||||||||||||
| December 31, 2025 | |||||||||||||||||
| (Dollar amounts in millions) | Amortized cost | Major types of collateral | Weighted average LTV 1 | ||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | $ | Single family residential | |||||||||||||||
| Owner occupied | Agriculture production and industrial buildings | ||||||||||||||||
| Municipal | Multifamily apartments | ||||||||||||||||
| Commercial real estate: | |||||||||||||||||
| Term | Office building | ||||||||||||||||
| Consumer: | |||||||||||||||||
| 1-4 family residential | Single family residential | ||||||||||||||||
| Total | $ | ||||||||||||||||
1 The fair value is based on the most recent appraisal or other collateral evaluation.
Foreclosed Residential Real Estate
The balance of foreclosed residential real estate property was $2 million at June 30, 2026 and $1 million at December 31, 2025. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure was $19 million and $20 million at June 30, 2026 and December 31, 2025, respectively.
7. LEASES
We have operating and finance leases for branches, data centers, and corporate offices, including our headquarters in Salt Lake City, Utah. At June 30, 2026, we had 407 branches, with 279 owned and 128 leased. The remaining maturities of our lease commitments range from the year 2026 to 2062, with some lease arrangements including options to extend or terminate the leases.
Leases with terms longer than twelve months are reported as a lease liability with a corresponding right-of-use (“ROU”) asset. ROU assets for operating leases and finance leases are included in “” and “” on the consolidated balance sheet, respectively. The corresponding liabilities for those leases are included in “” and “” respectively. For more information about our lease policies, see Note 8 of our 2025 Form 10-K.
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The following schedule presents ROU assets and lease liabilities with the associated weighted average remaining life and discount rate:
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Operating leases | |||||||||||
| ROU assets, net of amortization | $ | $ | |||||||||
| Lease liabilities | |||||||||||
| Finance leases | |||||||||||
| ROU assets, net of amortization | |||||||||||
| Lease liabilities | |||||||||||
| Weighted average remaining lease term (years) | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
The following schedule presents additional information related to lease expense:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Lease expense: | |||||||||||||||||||||||
| Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Other expenses associated with operating leases 1 | |||||||||||||||||||||||
| Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
| Related cash disbursements for operating leases | $ | $ | $ | $ | |||||||||||||||||||
1 Other expenses primarily include property taxes and building and property maintenance.
The following schedule presents the total contractual undiscounted lease payments for operating lease liabilities by expected due date for each of the next five years:
| (In millions) | Total undiscounted lease payments | ||||
2026 1 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less imputed interest | |||||
| Total | $ | ||||
1 Represents contractual maturities remaining in 2026.
We enter into lease arrangements as a lessor of certain real estate properties, including bank-owned and subleased locations, to generate income. These activities include leasing vacant suites within buildings that we partially occupy. Operating lease income totaled $4 8
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8. LONG-TERM DEBT AND SHAREHOLDERS’ EQUITY
Long-Term Debt
Long-term debt carrying values include the par value of the debt, adjusted for unamortized premiums or discounts, unamortized debt issuance costs, and fair value hedge basis adjustments.
The following schedule presents the components of our long-term debt:
LONG-TERM DEBT
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
Subordinated notes 1 | $ | $ | |||||||||
| Senior notes | |||||||||||
| Finance lease obligations | |||||||||||
| Total | $ | $ | |||||||||
1 The change in the subordinated notes balance is primarily due to fair value hedge basis adjustments. See also Note 4.
During the first quarter of 2026, we issued $500 million of 4.48 % Fixed-to-Floating Senior Notes, maturing on February 9, 2029. On July 28, 2026, we issued $500 million of 5.24
Shareholders' Equity
Our preferred stock is listed on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market under the ticker symbol “ZIONP.” We have 4.4 million authorized shares of preferred stock, without par value, each carrying a liquidation preference of $1,000 per share. At June 30, 2026, 66,139 shares of Series A preferred stock were outstanding.
Our common stock is listed on the NASDAQ Global Select Market under the ticker symbol “ZION.” At June 30, 2026, there were 145.9 million shares of common stock outstanding, each with a par value of $0.001 . The aggregate balance of common stock and additional paid-in-capital was $1.6 billion at June 30, 2026, compared with $1.7 billion at December 31, 2025.
In May 2026, we announced a plan to repurchase up to $225 million of our common shares outstanding during the remainder of 2026. We repurchased 1.2 million shares for $75 million, at an average price of $61.79 per share in the second quarter of 2026 and 1.3 million shares for $77 million, at an average price of $60.79 per share in the first quarter, the latter of which included $2 million of shares acquired in connection with our stock compensation plan. In July 2026, we announced a plan to repurchase up to $75 million of common shares outstanding during the third quarter as part of our previously authorized share repurchase target for 2026 of $300 million.
At June 30, 2026, the AOCI balance reflected a net loss of $1.9 billion, primarily attributable to a decline in the fair value of fixed-rate AFS securities driven by changes in interest rates. This amount includes $1.5 billion ($1.1 billion after tax) of unrealized losses associated with securities previously transferred from AFS to HTM.
The following schedule presents the changes in AOCI:
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| (In millions) | Net unrealized gains (losses) on investment securities | Net unrealized gains (losses) on derivatives and other | Pension and post-retirement | Total | |||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| Balance at December 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI, net of tax | |||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Balance at June 30, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Income tax expense (benefit) included in other comprehensive income | $ | $ | ( | $ | $ | ||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income before reclassifications, net of tax | |||||||||||||||||||||||
| Amounts reclassified from AOCI, net of tax | |||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Income tax expense included in other comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Amounts reclassified from AOCI | ||||||||||||||||||||||||||||||||
| (In millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
| AOCI components | 2026 | 2025 | 2026 | 2025 | Affected line item on statement of income | |||||||||||||||||||||||||||
Net unrealized gains (losses) on investment securities | $ | ( | $ | ( | $ | ( | $ | ( | Securities gains (losses), net | |||||||||||||||||||||||
| Less: Income tax expense (benefit) | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
Net unrealized gains (losses) on derivative instruments and other | $ | ( | $ | ( | $ | ( | $ | ( | Interest and fees on loans; Interest on short- and long-term borrowings | |||||||||||||||||||||||
| Less: Income tax expense (benefit) | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
9. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES
Commitments and Guarantees
We utilize various financial instruments, including loan commitments, commercial letters of credit, and standby letters of credit, to support our customers’ financing needs. These instruments expose us to varying degrees of credit, liquidity, and interest rate risk that are not fully reflected on the consolidated balance sheet. The associated credit risk is evaluated and recorded as a reserve for unfunded lending commitments, which is presented separately on the consolidated balance sheet.
The following schedule presents the contractual amounts related to off-balance sheet financial instruments used to support our customers’ financing needs:
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
Unfunded lending commitments 1 | $ | $ | |||||||||
| Standby letters of credit: | |||||||||||
| Financial | |||||||||||
| Performance | |||||||||||
| Commercial letters of credit | |||||||||||
| Total unfunded commitments | $ | $ | |||||||||
1 Net of participations.
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For more information about these commitments and guarantees including their terms and collateral requirements, see Note 16 of our 2025 Form 10-K.
Legal Matters
We participate in various legal proceedings or governmental inquiries, which may include litigation in court, arbitration, investigations, examinations, and other actions initiated or considered by governmental and self-regulatory agencies. These matters may relate to lending, deposit, and other customer relationships; supplier and contractual issues; employee matters; intellectual property disputes; personal injury and other tort claims; and regulatory or legal compliance issues. While many of these matters involve individual claims, we are also subject to putative class action claims and other broader claims.
Governmental and self-regulatory proceedings, investigations, examinations, and related actions may concern our banking, investment advisory, trust, securities, and other products and services; our customers’ involvement in money laundering, fraud, securities violations, and other illicit activities; or our policies and practices regarding such customer activities. They may also involve our compliance with the wide range of applicable banking, securities, and other laws and regulations. At any given time, we may be responding to subpoenas and requests for documents, data, or testimony and engaging in discussions to address or resolve these matters.
At June 30, 2026, we were subject to the following significant litigation:
•Two civil cases—Lifescan, Inc. and Johnson & Johnson Health Care Services v. Jeffrey C. Smith, et al., filed in December 2017, and Roche Diagnostics and Roche Diabetes Care Inc. v. Jeffrey C. Smith, et al., filed in March 2019—were brought against us in the United States District Court for the District of New Jersey. In these cases, certain manufacturers and distributors of medical products allege that we are liable for purportedly fraudulent conduct by a borrower of the Bank that sought bankruptcy protection in 2017. Discovery is substantially complete as to most parties. However, final rulings on certain dispositive motions remain pending, and additional dispositive motions have not yet been filed or resolved. Both cases are currently scheduled for trial in April 2027.
Based on our current knowledge, we believe that the estimated liabilities for litigation and other legal actions and claims, as reflected in our accruals and determined in accordance with applicable accounting guidance, are adequate. We also currently believe that any liabilities in excess of the amounts accrued, if any, arising from litigation and other legal actions and claims for which a loss is estimable, would not have a significant impact on our financial condition, results of operations, or cash flows. However, given the substantial uncertainties inherent in these matters—and the potentially significant or indeterminate damages sought in some cases—an unfavorable outcome could affect our financial condition, results of operations, or cash flows in a particular reporting period.
The process of estimating and assessing potential outcomes associated with litigation, arbitration, governmental or self-regulatory examinations, investigations, or similar matters is inherently uncertain and requires significant judgment. This uncertainty is especially pronounced in the early stages of a legal matter, when legal issues and relevant facts have not yet been fully developed, analyzed, or tested through discovery, trial or hearing preparation, substantive mediation or settlement discussions, or other procedural milestones. It is also especially relevant for class actions or other multi-party claims; matters involving complex procedural or substantive issues or novel legal theories; and examinations, investigations, or other actions initiated by governmental and self-regulatory agencies, where traditional adjudicative processes may not apply.
As a result, we are often unable to determine whether the likelihood of 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 life cycle of a legal matter, and in some cases not until several years have passed. Our assessments relating to these currently inestimable claims will evolve as developments occur, and actual outcomes may significantly differ from our estimates over time.
For more information regarding our accounting for legal matters, see Note 16 of our 2025 Form 10-K.
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10. REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers, including noninterest income within the scope of the applicable accounting guidance, is recognized when control of the promised goods or services is transferred to the customer. Revenue is measured at an amount that reflects the consideration we expect to be entitled in exchange for those goods or services. Incremental costs of obtaining a contract are expensed as incurred when the related amortization period is one year or less. For more information regarding revenue from contracts with customers, see Note 17 of our 2025 Form 10-K.
Disaggregation of Revenue
The following schedule presents revenue from contracts with customers disaggregated by operating segment and reconciles those amounts to total noninterest income for the three months ended June 30, 2026 and 2025. Customer-related noninterest income from other sources represents revenue earned from customers that falls outside the scope of the applicable accounting guidance for revenue from contracts with customers.
| Zions Bank | CB&T | Amegy | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Card fees 1 | |||||||||||||||||||||||||||||||||||
Retail and business banking fees | |||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | ( | ||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| NBAZ | NSB | Vectra | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Card fees 1 | |||||||||||||||||||||||||||||||||||
Retail and business banking fees | |||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | ( | ||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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| TCBNW | Other | Consolidated Bank | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Card fees 1 | |||||||||||||||||||||||||||||||||||
Retail and business banking fees | ( | ||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | ( | ( | |||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | |||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
1 Card fees exclude costs associated with reward programs that are netted against interchange fees, as these costs fall outside the scope of the applicable accounting guidance for revenue from contracts with customers.
2 Capital markets fees and income exclude revenue related to real estate capital markets, swaps, loan syndications, foreign exchange activities, and net credit valuation adjustment (“CVA”), as these items are not within the scope of the applicable accounting guidance for revenue from contracts with customers.
The following schedule presents revenue from contracts with customers disaggregated by operating segment and reconciles those amounts to total noninterest income for the six months ended June 30, 2026 and 2025. Customer-related noninterest income from other sources represents revenue earned from customers that falls outside the scope of the applicable accounting guidance for revenue from contracts with customers.
| Zions Bank | CB&T | Amegy | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Card fees 1 | |||||||||||||||||||||||||||||||||||
Retail and business banking fees | |||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | |||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| NBAZ | NSB | Vectra | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Card fees 1 | |||||||||||||||||||||||||||||||||||
Retail and business banking fees | |||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | ( | ||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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| TCBNW | Other | Consolidated Bank | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
Commercial account fees | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Card fees 1 | ( | ||||||||||||||||||||||||||||||||||
Retail and business banking fees | ( | ||||||||||||||||||||||||||||||||||
Capital markets fees and income 2 | |||||||||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||||||||
| Other customer-related fees | |||||||||||||||||||||||||||||||||||
Total noninterest income from contracts with customers | |||||||||||||||||||||||||||||||||||
Customer-related noninterest income from other sources | |||||||||||||||||||||||||||||||||||
Total customer-related noninterest income | |||||||||||||||||||||||||||||||||||
Noncustomer-related noninterest income | |||||||||||||||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
1 Card fees exclude costs associated with reward programs that are netted against interchange fees, as these costs fall outside the scope of the applicable accounting guidance for revenue from contracts with customers.
2 Capital markets fees and income exclude revenue related to real estate capital markets, swaps, loan syndications, foreign exchange activities, and net credit valuation adjustment (“CVA”), as these items are not within the scope of the applicable accounting guidance for revenue from contracts with customers.
Revenue from contracts with customers did not result in significant contract assets or contract liabilities. Contract receivables are included in “Other assets” on the consolidated balance sheet. Although payment terms vary based on the nature of the services provided, the interval between satisfying performance obligations and receiving payment is generally short and not considered significant.
11. INCOME TAXES
The effective income tax rate was 22.3 % for the second quarter of 2026, compared with 21.8 % for the second quarter of 2025. For the six months ended June 30, the effective tax rates were 21.8 % in 2026 and 24.9 % in 2025. The tax rates during these periods were primarily increased by the nondeductibility of certain Federal Deposit Insurance Corporation (“FDIC”) premiums, disallowed interest expense, and other adjustments. While FDIC insurance premiums are not deductible for tax purposes, FDIC special assessments are tax deductible. Conversely, the effective tax rates were primarily reduced by nontaxable municipal interest income and various tax credits.
The tax rate for the six months ended June 30, 2025 was further impacted by the enactment of new state tax legislation during the first quarter of 2025. This legislative change required a revaluation of our net deferred tax asset (“DTA”), which primarily arises from unrealized losses in AOCI on certain securities.
At June 30, 2026 and December 31, 2025, our net DTA totaled $673 million and $714 million, respectively. The net DTA or deferred tax liability (“DTL”) is included in either “Other assets” or “Other liabilities,” respectively, on the consolidated balance sheet.
We regularly evaluate our DTAs to determine whether a valuation allowance is required, applying the “more-likely-than-not” criterion that such assets will be realized and considering all available positive and negative evidence. Based on this evaluation, we concluded that no valuation allowance was required at June 30, 2026 or December 31, 2025.
For more information about the factors affecting our effective tax rate, the significant components of our DTAs and DTLs, and unrecognized tax benefits related to uncertain tax positions, see Note 20 of our 2025 Form 10-K.
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12. NET EARNINGS PER COMMON SHARE
The following schedule presents the basic and diluted net earnings per common share, calculated using the weighted-average number of shares outstanding:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In millions, except shares and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Less common and preferred dividends | |||||||||||||||||||||||
| Undistributed earnings | |||||||||||||||||||||||
| Less undistributed earnings applicable to nonvested shares | |||||||||||||||||||||||
| Undistributed earnings applicable to common shares | |||||||||||||||||||||||
| Distributed earnings applicable to common shares | |||||||||||||||||||||||
| Total earnings applicable to common shares | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding (in thousands) | |||||||||||||||||||||||
| Net earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted: | |||||||||||||||||||||||
| Total earnings applicable to common shares | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding (in thousands) | |||||||||||||||||||||||
| Dilutive effect of stock options (in thousands) | |||||||||||||||||||||||
| Weighted average diluted common shares outstanding (in thousands) | |||||||||||||||||||||||
| Net earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
The following schedule presents the weighted-average stock awards that were antidilutive and therefore excluded from the calculation of diluted earnings per share:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Restricted stock and restricted stock units | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
13. OPERATING SEGMENT INFORMATION
We provide a wide range of banking products and related services, primarily in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Our operations are organized principally through seven separately managed affiliate banks, each operating under its own local brand and management team: Zions Bank, CB&T, Amegy, NBAZ, NSB, Vectra, and TCBNW. These affiliate banks constitute our primary operating segments.
Our affiliate model emphasizes local authority and accountability, including locally informed pricing and product customization, to maximize customer satisfaction, strengthen community relationships, and improve profitability and shareholder returns.
At June 30, 2026, Zions Bank operated 92 branches in Utah, 25 branches in Idaho, and one branch in Wyoming. CB&T operated 77 branches in California. Amegy operated 76 branches in Texas. NBAZ operated 56 branches in Arizona. NSB operated 43 branches in Nevada. Vectra operated 33 branches in Colorado and one branch in New Mexico. TCBNW operated two branches in Washington and one branch in Oregon. During the first six months of 2026, all of the Bank's assets and revenues were located in or derived from operations within the United States.
We focus on serving customers in the communities in which we operate. Each operating segment offers a wide range of banking products and related services, delivered digitally or through other traditional channels. These
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include commercial and small business banking, capital markets and investment banking, commercial real estate lending, retail banking, and wealth management.
The affiliate banks are supported by an enterprise-level segment—referred to as the “Other” segment—which provides governance and risk oversight, capital allocation, and strategic objectives, and includes centralized technology infrastructure, back-office operations, and certain business lines that are not managed through the affiliate structure.
Centrally provided services are allocated to the operating segments based on estimated or actual usage of those services. Capital is allocated according to the risk-weighted assets held by each segment. We utilize an internal funds transfer pricing (“FTP”) process to measure segment performance. This methodology is subject to ongoing refinement. Transactions between segments are generally conducted at fair value, with intercompany profits eliminated in consolidation. Total average loans and deposits for the segments include minor intercompany amounts and certain deposits with the “Other” segment.
We evaluate segment performance and allocate resources primarily based on income or loss from operations before income taxes. The accounting policies applied to the operating segments are consistent with those described in the Notes to Consolidated Financial Statements.
The chief operating decision maker (“CODM”) is our Chairman and Chief Executive Officer. The CODM regularly receives certain segment-level information, including net interest income, noninterest income, significant noninterest expenses, and income or loss from operations before income taxes. This information is used to evaluate performance and inform resource allocation decisions for each segment.
The following schedule presents selected operating segment information that is regularly provided to the CODM to evaluate performance and allocate resources for the three months ended June 30, 2026 and 2025:
| Zions Bank | CB&T | Amegy | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | |||||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before taxes | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
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| NBAZ | NSB | Vectra | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for credit losses | ( | ||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | |||||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before taxes | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
| TCBNW | Other | Consolidated Bank | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Provision for credit losses | ( | ||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | ( | ||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | ( | ( | |||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before taxes | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
1 Interest income is shown net of interest expense consistent with the information regularly provided to the CODM and used to evaluate segment performance.
2 Other direct expenses include professional and legal services, marketing and business development, deposit insurance and regulatory expense, credit-related expense, other real estate expense, and other noninterest expenses.
The following schedule presents selected operating segment information that is regularly provided to the CODM to evaluate performance and allocate resources for the six months ended June 30, 2026 and 2025:
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| Zions Bank | CB&T | Amegy | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | |||||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
Income (loss) before taxes | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
| NBAZ | NSB | Vectra | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | |||||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
Income (loss) before taxes | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
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| TCBNW | Other | Consolidated Bank | |||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||||||||||||||||||||||||||
Net interest income 1 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | ( | ||||||||||||||||||||||||||||||||
Net interest income after provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||||||||
| Technology, telecom, and information processing | |||||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | |||||||||||||||||||||||||||||||||||
Other direct expenses 2 | |||||||||||||||||||||||||||||||||||
| Indirect/allocated expenses | ( | ( | |||||||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||||||||
Income (loss) before taxes | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| SELECTED AVERAGE BALANCE SHEET DATA | |||||||||||||||||||||||||||||||||||
| Total average loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total average deposits | |||||||||||||||||||||||||||||||||||
1 Interest income is shown net of interest expense consistent with the information regularly provided to the CODM and used to evaluate segment performance.
2 Other direct expenses include professional and legal services, marketing and business development, deposit insurance and regulatory expense, credit-related expense, other real estate expense, and other noninterest expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our most significant risks include interest rate and market risk, which are actively monitored by management, as previously discussed. For more information regarding interest rate and market risk, see the “Interest Rate and Market Risk Management” section of this Form 10-Q.
ITEM 4. CONTROLS AND PROCEDURES
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026.
There were no changes in our internal control over financial reporting that occurred during the second quarter of 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information contained in Note 9 of the Notes to Consolidated Financial Statements is incorporated by reference herein.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A. Risk Factors in our 2025 Form 10-K.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
| Period | Total number of shares purchased 1 | Average price paid per share | Total number of shares purchased as part of announced plans or programs | |||||||||||||||||
| April | 3,093 | $ | 62.52 | — | ||||||||||||||||
| May | 1,036,700 | $ | 61.66 | 1,036,700 | ||||||||||||||||
| June | 178,770 | $ | 62.49 | 177,352 | ||||||||||||||||
Second quarter 2026 | 1,218,563 | $ | 61.79 | 1,214,052 | ||||||||||||||||
1 Includes amounts related to common shares acquired in connection with our stock compensation plan. These shares were acquired from employees to cover their payroll taxes and stock option exercise costs upon the exercise of stock options.
ITEM 5. OTHER INFORMATION
No director or officer adopted terminated
ITEM 6. EXHIBITS
a.Exhibits
| Exhibit Number | Description | ||||||||||
3.1 | Second Amended and Restated Articles of Association of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.1 of Form 8-K filed on October 2, 2018. | * | |||||||||
3.2 | Second Amended and Restated Bylaws of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.2 of Form 8-K filed on April 4, 2019. | * | |||||||||
31.1 | Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith). | ||||||||||
31.2 | Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith). | ||||||||||
32 | Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith). | ||||||||||
| 101 | Pursuant to Rules 405 and 406 of Regulation S-T, the following information is formatted in Inline XBRL (i) the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, (ii) the Consolidated Statements of Income for the three and six months ended June 30, 2026 and June 30, 2025, (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and June 30, 2025, (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2026 and June 30, 2025, (v) the Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and June 30, 2025, and (vi) the Notes to Consolidated Financial Statements (filed herewith). | ||||||||||
| 104 | The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL. | ||||||||||
* Incorporated by reference
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt are not filed. We agree to furnish a copy thereof to the Securities and Exchange Commission and the Office of the Comptroller of the Currency upon request.
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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.
| ZIONS BANCORPORATION, NATIONAL ASSOCIATION | ||
| /s/ Harris H. Simmons | ||
| Harris H. Simmons, Chairman and Chief Executive Officer | ||
| /s/ R. Ryan Richards | ||
| R. Ryan Richards, Executive Vice President and Chief Financial Officer | ||
Date: August 6, 2026
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