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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from__________ to __________

Commission file number: 001-32550 

WESTERN ALLIANCE BANCORPORATION

(Exact name of registrant as specified in its charter)

Delaware	88-0365922
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One E. Washington Street, Suite 1400	Phoenix	Arizona	85004
(Address of principal executive offices)			(Zip Code)

(602) 389-3500

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 Par Value	WAL	New York Stock Exchange
Depositary Shares, Each Representing a 1/400th Interest in a Share of 4.250% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A	WAL PrA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  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, 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.

Large accelerated filer	☒	Accelerated filer	☐
Non accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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  ☒

As of July 28, 2026, Western Alliance Bancorporation had 109,100,864 shares of common stock outstanding.

Table of Contents

INDEX

		Page
Glossary of Entities and Terms		3
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	4
	Consolidated Income Statements	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Equity	7
	Consolidated Statements of Cash Flows	9
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	60
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	88
Item 4.	Controls and Procedures	90
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	90
Item 1A.	Risk Factors	91
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	91
Item 5.	Other Information	91
Item 6.	Exhibits	92
SIGNATURES		93

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GLOSSARY OF ENTITIES AND TERMS

The acronyms and abbreviations identified below are used in various sections of this Form 10-Q, including the Consolidated Financial Statements and the Notes to Unaudited Consolidated Financial Statements in Item 1 and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in Item 2 of this Form 10-Q.

ENTITIES / DIVISIONS:
AmeriHome	AmeriHome Mortgage Company, LLC	WA PWI	Western Alliance Public Welfare Investments, LLC
Bridge	Bridge Bank	WAB or Bank	Western Alliance Bank
BW or REIT	BW Real Estate Inc. or Real Estate Investment Trust	WABT	Western Alliance Business Trust
Company	Western Alliance Bancorporation and subsidiaries	WAL or Parent	Western Alliance Bancorporation
CSI	CS Insurance Company	WATC	Western Alliance Trust Company, N.A.
DST	Digital Settlement Technologies LLC
TERMS:
ACL	Allowance for Credit Losses	FRB	Federal Reserve Bank
AFS	Available-for-Sale	FVO	Fair Value Option
ALCO	Asset and Liability Management Committee	GAAP	U.S. Generally Accepted Accounting Principles
AOCI	Accumulated Other Comprehensive Income	GNMA	Government National Mortgage Association
ASC	Accounting Standards Codification	GSE	Government-Sponsored Enterprise
ASU	Accounting Standards Update	HFI	Held-for-Investment
Basel III	Banking Supervision's December 2010 Final Capital Framework	HFS	Held-for-Sale
BOD	Board of Directors	HTM	Held-to-Maturity
CDARS	Certificate Deposit Account Registry Service	HUD	U.S. Department of Housing and Urban Development
CECL	Current Expected Credit Losses	ICS	Insured Cash Sweep Service
CEO	Chief Executive Officer	IRLC	Interest Rate Lock Commitment
CET1	Common Equity Tier 1	ISDA	International Swaps and Derivatives Association
CFO	Chief Financial Officer	LIHTC	Low-Income Housing Tax Credit
CLO	Collateralized Loan Obligation	MBS	Mortgage-Backed Securities
CRA	Community Reinvestment Act	MSR	Mortgage Servicing Right
CRE	Commercial Real Estate	NDFI	Non-Depository Financial Institution
DTA	Deferred Tax Asset	NPV	Net Present Value
DTL	Deferred Tax Liability	OCI	Other Comprehensive Income
EaR	Earnings-at-Risk	PPNR	Pre-Provision Net Revenue
EBO	Early Buyout	SEC	Securities and Exchange Commission
ECR	Earnings Credit Rates	SERP	Supplemental Executive Retirement Plan
EPS	Earnings per Share	SOFR	Secured Overnight Financing Rate
EVE	Economic Value of Equity	TEB	Tax Equivalent Basis
Exchange Act	Securities Exchange Act of 1934, as Amended	TSR	Total Shareholder Return
FASB	Financial Accounting Standards Board	UPB	Unpaid Principal Balance
FDIC	Federal Deposit Insurance Corporation	USDA	United States Department of Agriculture
FHA	Federal Housing Administration	VA	Veterans Affairs
FHLB	Federal Home Loan Bank	VIE	Variable Interest Entity
FHLMC	Federal Home Loan Mortgage Corporation	XBRL	eXtensible Business Reporting Language
FNMA	Federal National Mortgage Association

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PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	June 30, 2026		December 31, 2025
	(in millions, except shares and per share amounts)
Assets:
Cash and due from banks	$	454	$	497
Interest bearing deposits in other financial institutions	5,482		3,099
Cash and cash equivalents	5,936		3,596
Investment securities - AFS, at fair value; amortized cost of $19,547 at June 30, 2026 and $19,303 at December 31, 2025	18,880		18,788
Investment securities - HTM, at amortized cost and net of ACL of $13.8 and $12.9 (fair value of $1,497 and $1,427) at June 30, 2026 and December 31, 2025, respectively	1,662		1,571
Investment securities - equity	80		79
Investments in restricted stock, at cost	256		248
Loans HFS	4,347		3,498
Loans HFI, net of deferred fees and costs	60,949		58,677
Less: allowance for credit losses	(487)		(461)
Net loans held for investment	60,462		58,216
Mortgage servicing rights	1,500		1,494
Premises and equipment, net	479		442
Operating lease right of use asset	119		131
Bank owned life insurance	1,075		1,057
Goodwill and intangible assets, net	644		649
Deferred tax assets, net	425		349
Investments in LIHTC and renewable energy	571		593
Other assets	2,265		2,063
Total assets	$	98,701	$	92,774
Liabilities:
Deposits:
Non-interest bearing	$	27,820	$	24,353
Interest bearing	54,054		52,806
Total deposits	81,874		77,159
Other borrowings	6,236		5,240
Qualifying debt	1,069		1,076
Operating lease liability	148		160
Other liabilities	1,239		1,193
Total liabilities	90,566		84,828
Commitments and contingencies (Note 15)
Equity:
Preferred stock (par value $0.0001; 20,000,000 authorized; 30,000 shares (12,000,000 depositary shares) issued and outstanding and liquidation value per depositary share of $25 at June 30, 2026 and December 31, 2025)	295		295
Common stock (par value $0.0001; 200,000,000 authorized; 112,360,864 shares issued at June 30, 2026 and 112,491,068 at December 31, 2025) and additional paid in capital	2,202		2,232
Treasury stock, at cost (3,181,959 shares at June 30, 2026 and 2,981,687 shares at December 31, 2025)	(156)		(137)
Accumulated other comprehensive loss	(451)		(344)
Retained earnings	5,952		5,607
Total Western Alliance stockholders’ equity	7,842		7,653
Noncontrolling interest in subsidiary	293		293
Total equity	8,135		7,946
Total liabilities and equity	$	98,701	$	92,774

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions, except per share amounts)
Interest income:
Loans, including fees	$	941.5	$	914.3	$	1,857.2	$	1,795.3
Investment securities	243.0		199.7		461.6		365.5
Dividends and other	47.4		40.4		101.3		89.2
Total interest income	1,231.9		1,154.4		2,420.1		2,250.0
Interest expense:
Deposits	370.5		377.8		731.2		756.1
Qualifying debt	13.8		8.2		26.9		17.5
Other borrowings	50.7		70.8		98.8		128.2
Total interest expense	435.0		456.8		856.9		901.8
Net interest income	796.9		697.6		1,563.2		1,348.2
Provision for credit losses	80.4		39.9		293.6		71.1
Net interest income after provision for credit losses	716.5		657.7		1,269.6		1,277.1
Non-interest income:
Service charges and fees	63.1		39.7		151.6		80.2
Net gain on mortgage loan origination and sale activities	53.4		39.4		126.1		88.9
Net loan servicing revenue	31.3		38.3		30.0		60.1
Income from bank owned life insurance	10.8		11.0		21.5		22.4
Gain on sales of investment securities	3.0		11.4		53.5		13.5
Fair value gain adjustments, net	12.8		0.1		15.9		1.1
Income (loss) from equity investments	11.9		2.9		25.2		(1.9)
Other income	12.5		5.5		27.6		11.4
Total non-interest income	198.8		148.3		451.4		275.7
Non-interest expense:
Salaries and employee benefits	204.3		179.9		409.8		362.3
Deposit costs	179.2		147.4		342.5		284.2
Data processing	52.1		45.0		105.2		90.2
Legal, professional, and directors' fees	32.8		25.3		63.4		54.2
Insurance	28.3		37.4		53.0		75.3
Occupancy	21.1		16.9		40.3		34.1
Loan servicing expenses	17.6		20.1		34.3		36.5
Loan acquisition and origination expenses	8.8		5.8		16.7		11.0
Business development and marketing	8.3		6.1		17.8		12.0
Other expense	30.8		30.8		74.7		55.3
Total non-interest expense	583.3		514.7		1,157.7		1,015.1
Income before provision for income taxes	332.0		291.3		563.3		537.7
Income tax expense	63.2		53.5		105.3		100.8
Net income	268.8		237.8		458.0		436.9
Net income attributable to noncontrolling interest	7.1		7.4		14.2		7.4
Net income attributable to Western Alliance	261.7		230.4		443.8		429.5
Dividends on preferred stock	3.2		3.2		6.4		6.4
Net income available to common stockholders	$	258.5	$	227.2	$	437.4	$	423.1
Earnings per share:
Basic	$	2.37	$	2.08	$	4.00	$	3.89
Diluted	2.36		2.07		3.99		3.86
Weighted average number of common shares outstanding:
Basic	107.8		109.0		108.0		108.9
Diluted	108.0		109.6		108.1		109.6
Dividends declared per common share	$	0.42	$	0.38	$	0.84	$	0.76

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Net income	$	268.8	$	237.8	$	458.0	$	436.9
Other comprehensive income (loss), net:
Unrealized gain (loss) on AFS securities, net of tax effect of $(2.0), $(6.0), $23.1, and $(25.3), respectively	5.9		9.7		(68.3)		65.4
Unrealized gain (loss) on SERP, net of tax effect of $—, $0.0, $0.1, and $0.0, respectively	—		0.1		(0.3)		0.1
Unrealized (loss) gain on junior subordinated debt, net of tax effect of $0.3, $1.3, $0.0, and $0.9, respectively	(0.9)		(4.1)		0.1		(3.0)
Reclassification adjustment for gain on sale of AFS securities included in income, net of tax effect of $0.2, $2.9, $13.0, and $3.5, respectively	(0.7)		(8.8)		(38.5)		(10.4)
Net other comprehensive income (loss)	4.3		(3.1)		(107.0)		52.1
Comprehensive income attributable to noncontrolling interest	7.1		7.4		14.2		7.4
Comprehensive income attributable to Western Alliance	$	266.0	$	227.3	$	336.8	$	481.6

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

	Three Months Ended June 30,
	Preferred Stock			Common Stock			Additional Paid in Capital		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interest in Subsidiary		Total Equity
	Shares	Amount		Shares	Amount
	(in millions)
Balance, March 31, 2025	12.0	$	294.5	110.4	$	—	$	2,261.2	$	(135.8)	$	(478.5)	$	4,980.0	$	293.1	$	7,214.5
Net income	—	—		—	—		—		—		—		230.4		7.4		237.8
Restricted stock, performance stock units, and other grants, net	—	—		—	—		11.1		—		—		—		—		11.1
Restricted stock surrendered (1)	—	—		—	—		—		(0.9)		—		—		—		(0.9)
Dividends paid to preferred stockholders	—	—		—	—		—		—		—		(3.2)		—		(3.2)
Dividends paid to noncontrolling interest	—	—		—	—		—		—		—		—		(7.4)		(7.4)
Dividends paid to common stockholders	—	—		—	—		0.2		—		—		(42.2)		—		(42.0)
Other comprehensive loss, net	—	—		—	—		—		—		(3.1)		—		—		(3.1)
Balance, June 30, 2025	12.0	$	294.5	110.4	$	—	$	2,272.5	$	(136.7)	$	(481.6)	$	5,165.0	$	293.1	$	7,406.8
Balance, March 31, 2026	12.0	$	294.5	109.2	$	—	$	2,190.8	$	(155.0)	$	(455.5)	$	5,740.0	$	293.3	$	7,908.1
Net income	—	—		—	—		—		—		—		261.7		7.1		268.8
Restricted stock, performance stock units, and other grants, net	—	—		—	—		13.1		—		—		—		—		13.1
Restricted stock surrendered (1)	—	—		—	—		—		(0.5)		—		—		—		(0.5)
Stock repurchase	—	—		—	—		(2.3)		—		—		—		—		(2.3)
Dividends paid to preferred stockholders	—	—		—	—		—		—		—		(3.2)		—		(3.2)
Dividends paid to noncontrolling interest	—	—		—	—		—		—		—		—		(7.1)		(7.1)
Dividends paid to common stockholders	—	—		—	—		—		—		—		(45.9)		—		(45.9)
Other comprehensive income, net	—	—		—	—		—		—		4.3		—		—		4.3
Balance, June 30, 2026	12.0	$	294.5	109.2	$	—	$	2,201.6	$	(155.5)	$	(451.2)	$	5,952.6	$	293.3	$	8,135.3

(1)Share amounts represent Treasury Shares.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

	Six Months Ended June 30,
	Preferred Stock			Common Stock			Additional Paid in Capital		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interest in Subsidiary		Total Equity
	Shares	Amount		Shares	Amount
	(in millions)
Balance, December 31, 2024	12.0	$	294.5	110.0	$	—	$	2,245.8	$	(125.0)	$	(533.7)	$	4,825.9	$	—	$	6,707.5
Net income	—	—		—	—		—		—		—		429.5		7.4		436.9
Restricted stock, performance stock units, and other grants, net	—	—		0.5	—		26.5		—		—		—		—		26.5
Restricted stock surrendered (1)	—	—		(0.1)	—		—		(11.7)		—		—		—		(11.7)
Equity issued by subsidiary	—	—		—	—		—		—		—		—		293.1		293.1
Dividends paid to preferred stockholders	—	—		—	—		—		—		—		(6.4)		—		(6.4)
Dividends paid to noncontrolling interest	—	—		—	—		—		—		—		—		(7.4)		(7.4)
Dividends paid to common stockholders	—	—		—	—		0.2		—		—		(84.0)		—		(83.8)
Other comprehensive income, net	—	—		—	—		—		—		52.1		—		—		52.1
Balance, June 30, 2025	12.0	$	294.5	110.4	$	—	$	2,272.5	$	(136.7)	$	(481.6)	$	5,165.0	$	293.1	$	7,406.8
Balance, December 31, 2025	12.0	$	294.5	109.5	$	—	$	2,232.0	$	(136.9)	$	(344.2)	$	5,607.2	$	293.3	$	7,945.9
Net income	—	—		—	—		—		—		—		443.8		14.2		458.0
Restricted stock, performance stock units, and other grants, net	—	—		0.6	—		22.1		—		—		—		—		22.1
Restricted stock surrendered (1)	—	—		(0.2)	—		—		(18.6)		—		—		—		(18.6)
Stock repurchase	—	—		(0.7)	—		(52.6)		—		—		—		—		(52.6)
Dividends paid to preferred stockholders	—	—		—	—		—		—		—		(6.4)		—		(6.4)
Dividends paid to noncontrolling interest	—	—		—	—		—		—		—		—		(14.2)		(14.2)
Dividends paid to common stockholders	—	—		—	—		0.1		—		—		(92.0)		—		(91.9)
Other comprehensive loss, net	—	—		—	—		—		—		(107.0)		—		—		(107.0)
Balance, June 30, 2026	12.0	$	294.5	109.2	$	—	$	2,201.6	$	(155.5)	$	(451.2)	$	5,952.6	$	293.3	$	8,135.3

(1)Share amounts represent Treasury Shares.

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
	2026		2025
	(in millions)
Cash flows from operating activities:
Net income	$	458.0	$	436.9
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses	293.6		71.1
Depreciation and amortization	57.8		51.4
Stock-based compensation	22.1		26.5
Deferred income taxes	(37.3)		(46.9)
Amortization of net discounts for investment securities	(8.3)		(32.5)
Amortization of tax credit investments	32.1		34.1
Amortization of operating lease right of use asset	12.1		11.9
Amortization of net deferred loan fees and net purchase premiums	(33.9)		(38.7)
Purchases and originations of loans HFS	(32,022.8)		(26,746.0)
Proceeds from sales and payments on loans HFS and related securitization activities	30,965.5		25,009.0
Mortgage servicing rights capitalized upon sale of mortgage loans	(588.8)		(544.8)
Net losses (gains) on:
Change in fair value of trading securities, loans HFS, mortgage servicing rights, and related derivatives	42.3		114.8
Fair value adjustments	3.6		4.6
Sale of investment securities	(53.5)		(13.5)
Other	(32.6)		0.7
Other assets	67.1		(275.7)
Other liabilities	(40.3)		(74.6)
Net cash used in operating activities	$	(863.3)	$	(2,011.7)
Cash flows from investing activities:
Investment securities - AFS
Purchases	$	(9,021.8)	$	(9,634.7)
Principal pay downs and maturities	1,667.6		3,567.6
Proceeds from sales	7,158.8		2,606.0
Investment securities - HTM
Purchases	(128.3)		(51.2)
Principal pay downs and maturities	43.6		39.2
Equity securities carried at fair value
Purchases	(0.4)		(0.4)
Redemptions	—		5.0
Proceeds from sales	10.7		22.0
Proceeds from sale of mortgage servicing rights and related holdbacks, net	470.2		518.8
Purchase of other investments	(110.2)		(143.5)
Proceeds from bank owned life insurance, net	—		0.6
Net increase in loans HFI	(2,583.8)		(2,446.9)
Purchase of premises, equipment, and other assets, net	(43.5)		(37.7)
Proceeds from sale of other repossessed assets	0.8		—
Net cash used in investing activities	$	(2,536.3)	$	(5,555.2)

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	Six Months Ended June 30,
	2026		2025
	(in millions)
Cash flows from financing activities:
Net increase in deposits	$	4,713.3	$	4,762.2
Net proceeds from issuance of long-term debt	1,800.0		3,700.0
Payments on long-term debt	(1,714.3)		(3,437.4)
Net increase in short-term borrowings	1,136.7		1,029.6
Net proceeds from issuance of equity by a subsidiary	—		293.1
Cash paid for tax withholding on vested restricted stock and other	(18.6)		(11.7)
Common stock repurchases	(52.6)		—
Cash dividends paid on common and preferred stock	(98.3)		(90.4)
Cash dividends paid to noncontrolling interest	(14.2)		(7.4)
Payment of contingent consideration	(12.4)		—
Net cash provided by financing activities	$	5,739.6	$	6,238.0
Net increase (decrease) in cash and cash equivalents	2,340.0		(1,328.9)
Cash, cash equivalents, and restricted cash at beginning of period	3,595.9		4,095.6
Cash, cash equivalents, and restricted cash at end of period	$	5,935.9	$	2,766.7
Supplemental disclosure:
Cash paid during the period for:
Interest	$	860.4	$	921.0
Income taxes, net	80.4		28.7
Non-cash activities:
Transfers of mortgage-backed securities in settlement of secured borrowings	229.5		1,052.2
Transfers of loans HFI to HFS, net of fair value loss adjustment (1)	117.4		130.7
Unsettled sales of AFS securities	15.2		198.6
Transfers of loans HFI to other assets acquired through foreclosure	25.8		176.1
Transfers of OREO properties to premises and equipment, net	38.7		—

(1)Activity for the six months ended June 30, 2026 and 2025 excludes $39.1 million and $244.1 million, respectively, of loans transferred with an original designation of HFS, which sales activity was classified as operating cash flows.

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WESTERN ALLIANCE BANCORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of operations

WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware. WAL provides a full spectrum of customized loan, deposit, and treasury management capabilities, including funds transfer and other digital payment offerings through its wholly-owned banking subsidiary, WAB.

The Company also serves business customers through a national platform of specialized financial services, including AmeriHome's mortgage banking services and digital payment services for the class action legal industry. In addition, the Company has the following subsidiaries: WATC, a non-depository bank that provides corporate trust services and levered loan administration solutions, and CSI, a non-bank captive insurance company formed and licensed in Arizona and established as part of the Company's overall enterprise risk management strategy.

Basis of presentation    

The accompanying Unaudited Consolidated Financial Statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 have been prepared in accordance with GAAP for interim financial information and Article 10 of Regulation S-X and, therefore, do not include all of the information and footnotes required by GAAP for complete financial statements. Accordingly, these statements should be read in conjunction with the Company's audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The accounts of the Company and its consolidated subsidiaries are included in the Consolidated Financial Statements.

The information furnished in these interim statements reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for each respective period presented. Such adjustments are of a normal, recurring nature. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for any other quarter or for the full year.

Recent accounting pronouncements

Purchased Loans

In November 2025, the FASB issued guidance within ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans. The amendments in this update are intended to improve decision usefulness and comparability of financial reporting for acquired financial assets while retaining the measurement, presentation or disclosure requirements outlined in ASC 326. The update introduces the concept of "purchased seasoned loans," which refers to non-purchased credit deteriorated loans acquired in a business combination or in an asset acquisition more than 90 days after their origination date. The amendments align the accounting for purchased seasoned loans with the gross-up methodology applied to purchased credit deteriorated loans, whereby the initial estimate of credit losses is amortized over the life of the loan as a reduction to interest income, rather than being recognized immediately in earnings as credit loss expense. The update also includes an accounting policy election related to the subsequent measurement of expected credit losses on purchased seasoned loans for entities using a method other than a discounted cash flow analysis. Under this election, entities may use the amortized cost basis of the asset, rather than the unpaid principal balance to estimate credit losses on these loans.

The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. The amendments are to be applied prospectively and early adoption is permitted. The Company is currently evaluating the impact these amendments may have on its Consolidated Financial Statements.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued guidance within ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220). The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. Entities will be required to disclose the amounts of employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. The update also requires entities to include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements, disclose a qualitative description of the amounts remaining in relevant

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expense captions that are not separately disaggregated quantitatively, and disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 and may be applied on a prospective or retrospective basis. The Company is currently evaluating the impact these amendments will have on its Consolidated Financial Statements.

Recently adopted accounting guidance

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued guidance within ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The amendments in this update are intended to modernize and improve the accounting for internal-use software costs. The changes aim to make the recognition and capitalization of software costs more consistent across different development methodologies and eliminates the requirement to assess software development costs based on predefined project stages (e.g., preliminary, application development, post-implementation). The update requires entities to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended.

The Company adopted this guidance on a prospective basis beginning on January 1, 2026. Adoption of this guidance did not have a significant impact on the Company's financial position or results of operations.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance within ASU 2023-09, Income Taxes (Topic 740). The amendments in this update are intended to increase visibility into various income tax components that affect the reconciliation of the effective tax rate to the statutory rate, as well as the qualitative and quantitative aspects of those components. Public business entities will be required to disclose on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet or exceed a five percent threshold (computed by multiplying pretax income by the applicable statutory income tax rate) and include disclosure of state and local jurisdictions that make up the majority of the state and local income tax category in the rate reconciliation. Additional disclosure items include disaggregation of income taxes paid to and income tax expense from federal, state, and foreign jurisdictions as well as disaggregation of income taxes paid to individual jurisdictions in which income taxes paid are equal to or greater than five percent of total income taxes paid.

The Company adopted this guidance on a prospective basis beginning with the annual period ending December 31, 2025 and provided these enhanced income tax disclosures in Note 17. Income Taxes of the Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. There was no impact on the Company's financial position or results of operations.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management's estimates and judgments are ongoing and are based on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities, as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from those estimates and assumptions used in the Consolidated Financial Statements and related notes. Material estimates susceptible to significant changes in the near term, relate to: 1) the determination of the ACL; 2) certain assets and liabilities carried at fair value; and 3) accounting for income taxes.

Principles of consolidation

As of June 30, 2026, WAL has the following significant wholly-owned subsidiaries: WAB and eight unconsolidated subsidiaries used as business trusts in connection with the issuance of trust-preferred securities.

WAB has the following significant subsidiaries: 1) WABT, which holds certain investment securities, municipal and nonprofit loans, and leases; 2) WA PWI, which holds interests in certain limited partnerships invested primarily in low income housing tax credits and small business investment corporations; 3) Helios Prime, which holds interests in certain limited partnerships invested in renewable energy projects; 4) BW, which operates as a real estate investment trust and holds certain of WAB's real

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estate loans and related securities; and 5) Western Finance Company, which purchases and originates equipment finance leases and provides mortgage banking services through its wholly-owned subsidiary, AmeriHome.

The Company does not have any other significant entities that should be consolidated. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the Consolidated Income Statements for the prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income or stockholders’ equity as previously reported.

2. INVESTMENT SECURITIES

The carrying amounts and fair values of investment securities are summarized as follows:

	June 30, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
	(in millions)
Held-to-maturity
Private label residential MBS	$	159	$	—	$	(29)	$	130
Tax-exempt	1,517		2		(152)		1,367
Total HTM securities	$	1,676	$	2	$	(181)	$	1,497
Available-for-sale debt securities
CLO	$	3,218	$	5	$	(2)	$	3,221
Commercial MBS issued by GSEs and GNMA	523		1		(10)		514
Corporate debt securities	229		—		(7)		222
Private label residential MBS	1,289		—		(153)		1,136
Residential MBS issued by GSEs and GNMA	7,767		13		(352)		7,428
Tax-exempt	860		—		(66)		794
U.S. Treasury securities	5,583		—		(89)		5,494
Other	78		—		(7)		71
Total AFS debt securities	$	19,547	$	19	$	(686)	$	18,880

	December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
	(in millions)
Held-to-maturity
Private label residential MBS	$	165	$	—	$	(28)	$	137
Tax-exempt	1,419		3		(132)		1,290
Total HTM securities	$	1,584	$	3	$	(160)	$	1,427
Available-for-sale debt securities
CLO	$	2,743	$	4	$	—	$	2,747
Commercial MBS issued by GSEs and GNMA	638		5		(8)		635
Corporate debt securities	308		—		(11)		297
Private label residential MBS	1,185		2		(148)		1,039
Residential MBS issued by GSEs and GNMA	7,489		52		(311)		7,230
Tax-exempt	879		—		(77)		802
U.S. Treasury securities	5,986		31		(47)		5,970
Other	75		1		(8)		68
Total AFS debt securities	$	19,303	$	95	$	(610)	$	18,788

In addition, the Company held equity securities, which primarily consisted of preferred stock and CRA investments, with a fair value of $80 million and $79 million at June 30, 2026 and December 31, 2025, respectively. Unrealized gains of $0.4 million and unrealized losses of $1.3 million on equity securities for the three months ended June 30, 2026 and 2025, respectively, and unrealized losses of $0.4 million and less than $0.1 million on equity securities for the six months ended June 30, 2026 and 2025, respectively, were recognized in earnings as a component of Fair value gain adjustments, net.

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Securities with carrying amounts of approximately $8.6 billion and $9.1 billion at June 30, 2026 and December 31, 2025, respectively, were pledged for various purposes as required or permitted by law.

The following tables summarize the Company's AFS debt securities in an unrealized loss position, aggregated by major security type and length of time in a continuous unrealized loss position: 

	June 30, 2026
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in millions)
Available-for-sale debt securities
CLO	$	2	$	1,144	$	—	$	—	$	2	$	1,144
Commercial MBS issued by GSEs and GNMA	2		203		8		117		10		320
Corporate debt securities	1		56		6		146		7		202
Private label residential MBS	—		—		153		834		153		834
Residential MBS issued by GSEs and GNMA	39		4,098		313		1,327		352		5,425
Tax-exempt	5		58		61		693		66		751
U.S. Treasury securities	89		5,471		—		—		89		5,471
Other	—		—		7		50		7		50
Total AFS securities	$	138	$	11,030	$	548	$	3,167	$	686	$	14,197

	December 31, 2025
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in millions)
Available-for-sale debt securities
Commercial MBS issued by GSEs and GNMA	$	—	$	—	$	8	$	81	$	8	$	81
Corporate debt securities	1		19		10		226		11		245
Private label residential MBS	—		—		148		875		148		875
Residential MBS issued by GSEs and GNMA	—		—		311		1,503		311		1,503
Tax-exempt	2		10		75		731		77		741
U.S. Treasury securities	47		1,891		—		—		47		1,891
Other	—		—		8		56		8		56
Total AFS securities	$	50	$	1,920	$	560	$	3,472	$	610	$	5,392

The total number of AFS debt securities in an unrealized loss position at June 30, 2026 was 851, compared to 568 at December 31, 2025.

On a quarterly basis, the Company performs an impairment analysis on its AFS debt securities in an unrealized loss position at the end of the period to determine whether credit losses should be recognized on these securities.

Qualitative considerations made by the Company in its impairment analysis are further discussed below.

Government Issued Securities

U.S. Treasury securities and commercial and residential MBS are issued by either government agencies or GSEs. These securities are either explicitly or implicitly guaranteed by the U.S. government, and are highly rated by major rating agencies. Further, principal and interest payments on these securities continue to be made on a timely basis.

Non-Government Issued Securities

Qualitative factors used in the Company's credit loss assessment of its securities not issued and guaranteed by the U.S. government include consideration of any adverse conditions related to a specific security, industry, or geographic region of its securities, any credit ratings below investment grade, the payment structure of the security and the likelihood of the issuer to be able to make payments that increase in the future, and failure of the issuer to make any scheduled principal or interest payments.

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For the Company's corporate debt and tax-exempt securities, the Company also considers various metrics of the issuer including days of cash on hand, the ratio of long-term debt to total assets, the net change in cash between reporting periods, and consideration of any breach in covenant requirements. The Company's corporate debt securities are primarily investment grade, issuers continue to make timely principal and interest payments, and the unrealized losses on these security portfolios primarily relate to changes in interest rates and other market conditions not considered to be credit-related. The Company continues to receive timely principal and interest payments on its tax-exempt securities and the majority of these issuers have revenues pledged for payment of debt service prior to payment of other types of expenses.

For the Company's private label residential MBS, which consist of non-agency collateralized mortgage obligations secured by pools of residential mortgage loans, the Company also considers metrics such as securitization risk weight factor, current credit support, whether there were any mortgage principal losses resulting from defaults in payments on the underlying mortgage collateral, and the credit default rate over the last twelve months. These securities primarily carry investment grade credit ratings, principal and interest payments on these securities continue to be made on a timely basis, and credit support for these securities is considered adequate.

The Company's CLO portfolio consists of highly rated securitization tranches, containing pools of medium- to large-sized corporate, high-yield loans. These are variable rate securities that have an investment grade rating of Single-A or better. Unrealized losses on these securities are primarily a function of the differential from the offer price and the valuation mid-market price as well as changes in interest rates.

Unrealized losses on the Company's other securities portfolio primarily relate to taxable municipal and trust preferred securities. The Company is continuing to receive timely principal and interest payments on its taxable municipal securities, these securities continue to be highly rated and the number of days of cash on hand is strong. The Company's trust preferred securities are investment grade and the issuers continue to make timely principal and interest payments.

As of June 30, 2026, there was no ACL on the Company's AFS debt securities and no related activity occurred during the six months then ended. The following table presents a rollforward of the ACL for the three and six months ended June 30, 2025 based on the Company's impairment analysis of AFS debt securities:

	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025
	(in millions)
Balance, beginning of period	$	0.2	$	0.4
Provision for (recovery of) credit losses	0.1		(0.1)
Charge-offs	—		—
Recoveries	—		—
Balance, end of period	$	0.3	$	0.3

The credit loss model under ASC 326-20, applicable to HTM debt securities, requires recognition of lifetime expected credit losses through an allowance account at the time the security is purchased. The following table presents a rollforward of the ACL on the Company's HTM tax-exempt debt securities:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Balance, beginning of period	$	13.4	$	11.6	$	12.9	$	16.4
Provision for (recovery of) credit losses	0.4		—		0.9		(4.8)
Charge-offs	—		—		—		—
Recoveries	—		—		—		—
Balance, end of period	$	13.8	$	11.6	$	13.8	$	11.6

No allowance has been recognized on the Company's HTM private label residential MBS as losses are not expected due to the Company holding a senior position in these securities.

Accrued interest receivable on AFS and HTM debt securities totaled $141 million and $6 million at June 30, 2026, respectively, and $135 million and $5 million at December 31, 2025, respectively, and is excluded from the estimate of expected credit losses.

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The following tables summarize the carrying amount of the Company’s securities by investment ratings position, which are updated quarterly and used to monitor credit quality of the securities: 

	June 30, 2026
	AAA		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in millions)
Held-to-maturity
Private label residential MBS	$	—	$	—	$	—	$	—	$	—	$	159	$	159
Tax-exempt	—		—		—		—		—		1,517		1,517
Total HTM securities (1)	$	—	$	—	$	—	$	—	$	—	$	1,676	$	1,676
Available-for-sale debt securities
CLO	$	961	$	2,208	$	—	$	—	$	—	$	52	$	3,221
Commercial MBS issued by GSEs and GNMA	1		513		—		—		—		—		514
Corporate debt securities	—		19		59		122		8		14		222
Private label residential MBS	1,110		26		—		—		—		—		1,136
Residential MBS issued by GSEs and GNMA	—		7,428		—		—		—		—		7,428
Tax-exempt	55		349		328		—		—		62		794
U.S. Treasury securities	—		5,494		—		—		—		—		5,494
Other	—		9		2		29		10		21		71
Total AFS securities (1)	$	2,127	$	16,046	$	389	$	151	$	18	$	149	$	18,880
Equity securities
CRA investments	$	—	$	28	$	—	$	—	$	—	$	—	$	28
Preferred stock	—		—		—		21		30		1		52
Total equity securities (1)	$	—	$	28	$	—	$	21	$	30	$	1	$	80

(1)For rated securities where ratings differ, the Company uses an average of the available ratings by major credit agencies.

	December 31, 2025
	AAA		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in millions)
Held-to-maturity
Private label residential MBS	$	—	$	—	$	—	$	—	$	—	$	165	$	165
Tax-exempt	—		—		—		—		—		1,419		1,419
Total HTM securities (1)	$	—	$	—	$	—	$	—	$	—	$	1,584	$	1,584
Available-for-sale debt securities
CLO	$	739	$	1,857	$	151	$	—	$	—	$	—	$	2,747
Commercial MBS issued by GSEs and GNMA	1		634		—		—		—		—		635
Corporate debt securities	—		—		78		138		81		—		297
Private label residential MBS	1,012		26		—		—		1		—		1,039
Residential MBS issued by GSEs and GNMA	—		7,230		—		—		—		—		7,230
Tax-exempt	8		362		361		—		—		71		802
U.S. Treasury securities	—		5,970		—		—		—		—		5,970
Other	—		11		3		28		10		16		68
Total AFS securities (1)	$	1,760	$	16,090	$	593	$	166	$	92	$	87	$	18,788
Equity securities
CRA investments	$	—	$	27	$	—	$	—	$	—	$	—	$	27
Preferred stock	—		—		—		21		30		1		52
Total equity securities (1)	$	—	$	27	$	—	$	21	$	30	$	1	$	79

(1)For rated securities where ratings differ, the Company uses an average of the available ratings by major credit agencies.

A security is considered to be past due once it is 30 days contractually past due under the terms of the agreement. As of June 30, 2026, the Company did not have a significant amount of investment securities that were past due or on nonaccrual status.

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The amortized cost and fair value of the Company's debt securities as of June 30, 2026, by contractual maturities are shown below. MBS are shown separately as individual MBS are comprised of pools of loans with varying maturities.

	June 30, 2026
	Amortized Cost		Estimated Fair Value
	(in millions)
Held-to-maturity
Due in one year or less	$	18	$	18
After one year through five years	30		31
After five years through ten years	180		172
After ten years	1,289		1,146
Mortgage-backed securities	159		130
Total HTM securities	$	1,676	$	1,497
Available-for-sale
Due in one year or less	$	850	$	847
After one year through five years	1,462		1,450
After five years through ten years	469		467
After ten years	7,187		7,038
Mortgage-backed securities	9,579		9,078
Total AFS securities	$	19,547	$	18,880

The following table presents gross gains and losses on sales of investment securities:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Available-for-sale securities
Gross gains	$	1.4	$	11.8	$	59.0	$	13.9
Gross losses	—		—		(7.1)		—
Net gain on AFS securities	$	1.4	$	11.8	$	51.9	$	13.9
Equity securities
Gross gains	$	1.6	$	0.2	$	1.6	$	0.2
Gross losses	—		(0.6)		—		(0.6)
Net gain (loss) on equity securities	$	1.6	$	(0.4)	$	1.6	$	(0.4)

During the three and six months ended June 30, 2026, the Company sold AFS securities with a carrying value of $583 million and $7.1 billion, respectively, and recognized a net gain of $1.4 million and $51.9 million, respectively, as U.S. Treasury securities and MBS were sold to secure gains, including hedged U.S. Treasury securities sold as part of interest rate swap terminations that resulted in an $18.7 million gain. During the three and six months ended June 30, 2025, the Company sold AFS securities with a carrying value of $2.4 billion and $2.8 billion, respectively, and recognized a net gain of $11.8 million and $13.9 million, respectively, as U.S. Treasury securities and MBS were sold to secure gains, including hedged U.S. Treasury securities sold as part of an interest rate swap termination that resulted in a $7.7 million gain. See "Note 12. Derivatives and Hedging Activities" for further discussion of terminated interest rate swaps.

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3. LOANS HELD FOR SALE

The Company purchases and originates residential mortgage loans that are held for sale or securitization primarily through its AmeriHome mortgage banking business channel.

The following is a summary of loans HFS by type:

	June 30, 2026		December 31, 2025
	(in millions)
Government-insured or guaranteed:
EBO (1)	$	885	$	571
Non-EBO	1,155		986
Total government-insured or guaranteed	2,040		1,557
Agency-conforming	2,144		1,707
Non-agency	101		167
Small Business Administration	62		67
Total loans HFS	$	4,347	$	3,498

(1)    EBO loans are delinquent FHA, VA, or USDA loans purchased from GNMA pools under the terms of the GNMA MBS program that can be repooled when loans are brought current either through the borrower's reperformance or through completion of a loan modification.

The following is a summary of the net gain on loan purchase, origination, and sale activities on residential mortgage loans to be sold or securitized:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Mortgage servicing rights capitalized upon sale of loans	$	294.1	$	284.4	$	588.8	$	544.8
Net proceeds from sale of loans (1)	(312.5)		(262.8)		(580.3)		(477.7)
Provision for and change in estimate of liability for losses under representations and warranties, net	0.6		0.6		1.7		1.1
Change in fair value of loans HFS and trading securities	50.7		5.9		56.3		33.1
Change in fair value of derivatives:
Unrealized (loss) gain on derivatives	(59.4)		(13.2)		3.7		(73.2)
Realized gain on derivatives	62.0		8.7		22.1		31.7
Total change in fair value of derivatives	2.6		(4.5)		25.8		(41.5)
Net gain on residential mortgage loans HFS	$	35.5	$	23.6	$	92.3	$	59.8
Loan acquisition and origination fees	17.9		15.8		33.8		29.1
Net gain on mortgage loan origination and sale activities	$	53.4	$	39.4	$	126.1	$	88.9

(1)     Represents the difference between cash proceeds received upon settlement and loan basis.

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4. LOANS, LEASES AND ALLOWANCE FOR CREDIT LOSSES

The composition of the Company's HFI loan portfolio is as follows:

	June 30, 2026		December 31, 2025
	(in millions)
Mortgage finance	$	7,405	$	7,271
Municipal & nonprofit	1,716		1,648
Tech & innovation	4,488		4,128
Equity fund resources	1,457		1,233
Other commercial and industrial	14,951		13,789
CRE - owner occupied	1,469		1,533
Hotel franchise finance	4,582		4,185
Other CRE - non-owner occupied	5,969		6,455
Residential	13,909		13,403
Residential - EBO	752		828
Construction and land development	4,072		4,043
Other	179		161
Total loans HFI	60,949		58,677
Allowance for credit losses	(487)		(461)
Total loans HFI, net of allowance	$	60,462	$	58,216

Loans classified as HFI are stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts on acquired and purchased loans, and an ACL. Net deferred fees of $127 million and $120 million reduced the carrying value of loans as of June 30, 2026 and December 31, 2025, respectively. Net unamortized purchase premiums on acquired and purchased loans of $200 million and $186 million increased the carrying value of loans as of June 30, 2026 and December 31, 2025, respectively.

Nonaccrual and Past Due Loans

Loans are placed on nonaccrual status when management determines full repayment of principal and collection of interest according to contractual terms is no longer likely, generally when the loan becomes 90 days or more past due.

The following tables present nonperforming loan balances by loan portfolio segment:

	June 30, 2026
	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with an Allowance for Credit Loss		Total Nonaccrual		Loans Past Due 90 Days or More and Still Accruing
	(in millions)
Tech & innovation	$	6	7		$	13	$	1
Equity fund resources	—		1		1		—
Other commercial and industrial	123		19		142		—
CRE - owner occupied	1		—		1		—
Other CRE - non-owner occupied	215		64		279		—
Residential	—		14		14		54
Residential - EBO	—		—		—		248
Construction and land development	108		1		109		—
Other	3		—		3		—
Total	$	456	$	106	$	562	$	303

Loans contractually delinquent by 90 days or more and still accruing totaled $303 million at June 30, 2026 and consisted primarily of government guaranteed EBO and other residential loans.

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	December 31, 2025
	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with an Allowance for Credit Loss		Total Nonaccrual		Loans Past Due 90 Days or More and Still Accruing
	(in millions)
Municipal & nonprofit	$	—	$	4	$	4	$	3
Tech & innovation	12		8		20		3
Equity fund resources	—		1		1		—
Other commercial and industrial	71		49		120		—
CRE - owner occupied	3		—		3		—
Other CRE - non-owner occupied	188		40		228		—
Residential	—		12		12		51
Residential - EBO	—		—		—		290
Construction and land development	109		—		109		9
Other	2		1		3		—
Total	$	385	$	115	$	500	$	356

Loans contractually delinquent by 90 days or more and still accruing totaled $356 million at December 31, 2025 and consisted primarily of government guaranteed EBO and other residential loans.

The reduction in interest income associated with loans on nonaccrual status was approximately $10.5 million and $8.0 million for the three months ended June 30, 2026 and 2025, respectively, and $19.7 million and $16.0 million for the six months ended June 30, 2026 and 2025, respectively.

Additionally, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $102 million and $107 million at June 30, 2026 and December 31, 2025, respectively.

The following tables present an aging analysis of past due loans by loan portfolio segment:

	June 30, 2026
	Current		30-59 Days Past Due		60-89 Days Past Due		Over 90 days Past Due		Total Past Due		Total Nonaccrual		Total
	(in millions)
Mortgage finance	$	7,405	$	—	$	—	$	—	$	—	$	—	$	7,405
Municipal & nonprofit	1,716		—		—		—		—		—		1,716
Tech & innovation	4,471		1		2		1		4		13		4,488
Equity fund resources	1,456		—		—		—		—		1		1,457
Other commercial and industrial	14,805		3		1		—		4		142		14,951
CRE - owner occupied	1,467		—		1		—		1		1		1,469
Hotel franchise finance	4,582		—		—		—		—		—		4,582
Other CRE - non-owner occupied	5,683		6		1		—		7		279		5,969
Residential	13,767		53		21		54		128		14		13,909
Residential - EBO	402		71		31		248		350		—		752
Construction and land development	3,933		30		—		—		30		109		4,072
Other	173		2		1		—		3		3		179
Total loans	$	59,860	$	166	$	58	$	303	$	527	$	562	$	60,949

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	December 31, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		Over 90 days Past Due		Total Past Due		Total Nonaccrual		Total
	(in millions)
Mortgage finance	$	7,271	$	—	$	—	$	—	$	—	$	—	$	7,271
Municipal & nonprofit	1,641		—		—		3		3		4		1,648
Tech & innovation	4,102		3		—		3		6		20		4,128
Equity fund resources	1,232		—		—		—		—		1		1,233
Other commercial and industrial	13,654		12		3		—		15		120		13,789
CRE - owner occupied	1,530		—		—		—		—		3		1,533
Hotel franchise finance	4,185		—		—		—		—		—		4,185
Other CRE - non-owner occupied	6,226		1		—		—		1		228		6,455
Residential	13,259		55		26		51		132		12		13,403
Residential - EBO	393		94		51		290		435		—		828
Construction and land development	3,920		5		—		9		14		109		4,043
Other	155		2		1		—		3		3		161
Total loans	$	57,568	$	172	$	81	$	356	$	609	$	500	$	58,677

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Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans by credit risk. The following tables present risk ratings by class of financing receivable and origination year. The origination year is the year of origination or renewal.

	Term Loan Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of June 30, 2026	2026		2025		2024		2023		2022		Prior
	(in millions)
Mortgage finance
Pass	$	31	$	11	$	29	$	466	$	299	$	209	$	6,360	$	7,405
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		—		—		—
Total	$	31	$	11	$	29	$	466	$	299	$	209	$	6,360	$	7,405
Municipal & nonprofit
Pass	$	77	$	236	$	219	$	62	$	103	$	984	$	—	$	1,681
Special mention	—		—		—		—		—		31		—		31
Classified	—		—		—		—		—		4		—		4
Total	$	77	$	236	$	219	$	62	$	103	$	1,019	$	—	$	1,716
Tech & innovation
Pass	$	980	$	1,225	$	730	$	198	$	65	$	60	$	1,102	$	4,360
Special mention	2		30		23		—		—		—		13		68
Classified	—		7		5		10		6		—		32		60
Total	$	982	$	1,262	$	758	$	208	$	71	$	60	$	1,147	$	4,488
Equity fund resources
Pass	$	77	$	103	$	1	$	—	$	—	$	1	$	1,274	$	1,456
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		1		—		—		—		—		1
Total	$	77	$	103	$	2	$	—	$	—	$	1	$	1,274	$	1,457
Other commercial and industrial
Pass	$	1,163	$	2,132	$	992	$	216	$	212	$	214	$	9,581	$	14,510
Special mention	1		1		—		4		27		—		43		76
Classified	128		5		141		58		8		3		22		365
Total	$	1,292	$	2,138	$	1,133	$	278	$	247	$	217	$	9,646	$	14,951
CRE - owner occupied
Pass	$	173	$	305	$	153	$	99	$	191	$	485	$	39	$	1,445
Special mention	—		1		—		—		4		3		—		8
Classified	—		1		—		—		9		6		—		16
Total	$	173	$	307	$	153	$	99	$	204	$	494	$	39	$	1,469
Hotel franchise finance
Pass	$	728	$	1,463	$	795	$	431	$	632	$	360	$	98	$	4,507
Special mention	—		—		—		—		—		—		31		31
Classified	—		—		—		—		44		—		—		44
Total	$	728	$	1,463	$	795	$	431	$	676	$	360	$	129	$	4,582
Other CRE - non-owner occupied
Pass	$	776	$	1,274	$	659	$	784	$	1,191	$	630	$	245	$	5,559
Special mention	—		10		13		34		—		1		—		58
Classified	13		16		4		116		203		—		—		352
Total	$	789	$	1,300	$	676	$	934	$	1,394	$	631	$	245	$	5,969

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	Term Loan Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of June 30, 2026	2026		2025		2024		2023		2022		Prior
	(in millions)
Residential
Pass	$	1,086	$	1,244	$	532	$	163	$	2,975	$	7,859	$	32	$	13,891
Special mention	—		—		—		—		—		—		—		—
Classified	—		4		—		5		25		13		1		48
Cumulative fair value hedging adjustment	—		—		—		—		—		—		—		(30)
Total	$	1,086	$	1,248	$	532	$	168	$	3,000	$	7,872	$	33	$	13,909
Residential - EBO
Pass	$	—	$	—	$	24	$	13	$	10	$	705	$	—	$	752
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	24	$	13	$	10	$	705	$	—	$	752
Construction and land development
Pass	$	352	$	1,042	$	510	$	104	$	131	$	19	$	1,764	$	3,922
Special mention	31		10		—		—		—		—		—		41
Classified	—		—		14		33		61		1		—		109
Total	$	383	$	1,052	$	524	$	137	$	192	$	20	$	1,764	$	4,072
Other
Pass	$	3	$	22	$	48	$	1	$	1	$	73	$	25	$	173
Special mention	—		—		—		—		—		3		—		3
Classified	—		—		—		—		—		3		—		3
Total	$	3	$	22	$	48	$	1	$	1	$	79	$	25	$	179
Total by Risk Category
Pass	$	5,446	$	9,057	$	4,692	$	2,537	$	5,810	$	11,599	$	20,520	$	59,661
Special mention	34		52		36		38		31		38		87		316
Classified	141		33		165		222		356		30		55		1,002
Cumulative fair value hedging adjustment	—		—		—		—		—		—		—		(30)
Total	$	5,621	$	9,142	$	4,893	$	2,797	$	6,197	$	11,667	$	20,662	$	60,949

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	Term Loan Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of December 31, 2025	2025		2024		2023		2022		2021		Prior
	(in millions)
Mortgage finance
Pass	$	11	$	—	$	439	$	281	$	—	$	247	$	6,293	$	7,271
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		—		—		—
Total	$	11	$	—	$	439	$	281	$	—	$	247	$	6,293	$	7,271
Municipal & nonprofit
Pass	$	168	$	221	$	97	$	104	$	136	$	915	$	—	$	1,641
Special mention	—		—		—		—		—		3		—		3
Classified	—		—		—		—		—		4		—		4
Total	$	168	$	221	$	97	$	104	$	136	$	922	$	—	$	1,648
Tech & innovation
Pass	$	1,513	$	918	$	176	$	136	$	31	$	45	$	1,115	$	3,934
Special mention	6		72		45		—		—		—		19		142
Classified	4		18		—		28		—		—		2		52
Total	$	1,523	$	1,008	$	221	$	164	$	31	$	45	$	1,136	$	4,128
Equity fund resources
Pass	$	156	$	4	$	—	$	—	$	1	$	2	$	1,069	$	1,232
Special mention	—		—		—		—		—		—		—		—
Classified	—		1		—		—		—		—		—		1
Total	$	156	$	5	$	—	$	—	$	1	$	2	$	1,069	$	1,233
Other commercial and industrial
Pass	$	2,540	$	1,274	$	355	$	263	$	150	$	184	$	8,631	$	13,397
Special mention	—		—		5		27		—		1		50		83
Classified	88		107		58		30		6		4		16		309
Total	$	2,628	$	1,381	$	418	$	320	$	156	$	189	$	8,697	$	13,789
CRE - owner occupied
Pass	$	318	$	162	$	144	$	292	$	210	$	330	$	40	$	1,496
Special mention	—		1		—		4		—		3		—		8
Classified	—		—		—		7		18		4		—		29
Total	$	318	$	163	$	144	$	303	$	228	$	337	$	40	$	1,533
Hotel franchise finance
Pass	$	1,442	$	844	$	463	$	816	$	186	$	260	$	129	$	4,140
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		—		45		—		—		—		45
Total	$	1,442	$	844	$	463	$	861	$	186	$	260	$	129	$	4,185
Other CRE - non-owner occupied
Pass	$	1,261	$	908	$	1,050	$	1,643	$	406	$	361	$	406	$	6,035
Special mention	4		35		25		—		1		—		—		65
Classified	12		7		111		200		24		1		—		355
Total	$	1,277	$	950	$	1,186	$	1,843	$	431	$	362	$	406	$	6,455
Residential
Pass	$	1,283	$	614	$	185	$	3,119	$	7,033	$	1,084	$	33	$	13,351
Special mention	—		—		—		—		—		1		—		1
Classified	2		1		5		24		9		2		—		43
Cumulative fair value hedging adjustment	—		—		—		—		—		—		—		8
Total	$	1,285	$	615	$	190	$	3,143	$	7,042	$	1,087	$	33	$	13,403
Residential - EBO
Pass	$	1	$	36	$	20	$	13	$	164	$	594	$	—	$	828
Special mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		—		—		—		—
Total	$	1	$	36	$	20	$	13	$	164	$	594	$	—	$	828

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	Term Loan Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
As of December 31, 2025	2025		2024		2023		2022		2021		Prior
	(in millions)
Construction and land development
Pass	$	1,059	$	542	$	239	$	230	$	27	$	—	$	1,817	$	3,914
Special mention	10		—		—		10		—		—		—		20
Classified	—		—		32		77		—		—		—		109
Total	$	1,069	$	542	$	271	$	317	$	27	$	—	$	1,817	$	4,043
Other
Pass	$	39	$	3	$	13	$	1	$	1	$	72	$	26	$	155
Special mention	—		—		—		—		—		3		—		3
Classified	—		—		—		—		—		3		—		3
Total	$	39	$	3	$	13	$	1	$	1	$	78	$	26	$	161
Total by Risk Category
Pass	$	9,791	$	5,526	$	3,181	$	6,898	$	8,345	$	4,094	$	19,559	$	57,394
Special mention	20		108		75		41		1		11		69		325
Classified	106		134		206		411		57		18		18		950
Cumulative fair value hedging adjustment	—		—		—		—		—		—		—		8
Total	$	9,917	$	5,768	$	3,462	$	7,350	$	8,403	$	4,123	$	19,646	$	58,677

The following tables present gross charge-offs by class of financing receivable and origination year. The origination year is the year of origination or renewal.

	For the six months ended June 30, 2026
	Gross Charge-offs by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2026		2025		2024		2023		2022		Prior
	(in millions)
Mortgage finance	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Municipal & nonprofit	—		—		—		—		—		—		—		—
Tech & innovation	0.7		1.0		16.5		—		5.8		0.1		16.9		41.0
Equity fund resources	—		—		—		—		—		—		—		—
Other commercial and industrial	—		0.5		26.7		1.1		0.2		6.0		129.9		164.4
CRE - owner occupied	—		—		—		—		0.1		—		—		0.1
Hotel franchise finance	—		—		—		—		—		—		—		—
Other CRE - non-owner occupied	—		—		2.0		15.0		42.6		0.1		—		59.7
Residential	—		—		—		—		—		—		—		—
Residential - EBO	—		—		—		—		—		—		—		—
Construction and land development	—		—		—		—		0.1		—		—		0.1
Other	—		—		—		—		—		1.3		0.1		1.4
Total	$	0.7	$	1.5	$	45.2	$	16.1	$	48.8	$	7.5	$	146.9	$	266.7

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	For the six months ended June 30, 2025
	Gross Charge-offs by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2025		2024		2023		2022		2021		Prior
	(in millions)
Mortgage finance	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Municipal & nonprofit	—		—		—		—		—		—		—		—
Tech & innovation	1.5		6.5		2.4		11.2		0.2		—		—		21.8
Equity fund resources	—		—		—		—		—		—		—		—
Other commercial and industrial	—		—		0.7		6.1		—		0.3		0.5		7.6
CRE - owner occupied	—		—		—		0.3		—		0.2		—		0.5
Hotel franchise finance	—		—		—		—		—		—		—		—
Other CRE - non-owner occupied	—		—		20.2		10.5		0.5		0.8		—		32.0
Residential	—		—		—		—		—		—		—		—
Residential - EBO	—		—		—		—		—		—		—		—
Construction and land development	—		—		0.3		—		—		—		—		0.3
Other	—		—		—		0.1		—		0.4		0.1		0.6
Total	$	1.5	$	6.5	$	23.6	$	28.2	$	0.7	$	1.7	$	0.6	$	62.8

Restructurings for Borrowers Experiencing Financial Difficulty

The following tables present the amortized cost basis of loans HFI that were modified during the period by loan portfolio segment:

	Amortized Cost Basis at June 30, 2026
	Term Extension		Interest Rate Reduction		Payment Delay		Total		% of Total Class of Financing Receivable
Three Months Ended	(dollars in millions)
Other commercial and industrial	$	—	$	—	$	3	$	3	0.0	%
Other CRE - non-owner occupied	33		—		—		33		0.6
Total	$	33	$	—	$	3	$	36	0.1	%

	Amortized Cost Basis at June 30, 2026
	Term Extension		Interest Rate Reduction		Payment Delay		Total		% of Total Class of Financing Receivable
Six Months Ended	(dollars in millions)
Other commercial and industrial	$	30	$	2	$	4	$	36	0.2	%
Other CRE - non-owner occupied	33		—		—		33		0.6
Total	$	63	$	2	$	4	$	69	0.1	%

	Amortized Cost Basis at June 30, 2025
	Term Extension		Interest Rate Reduction		Payment Delay		Total		% of Total Class of Financing Receivable
Three Months Ended	(dollars in millions)
Other commercial and industrial	$	—	$	—	$	1	$	1	0.0	%
Total	$	—	$	—	$	1	$	1	0.0	%

	Amortized Cost Basis at June 30, 2025
	Term Extension		Interest Rate Reduction		Payment Delay		Total		% of Total Class of Financing Receivable
Six Months Ended	(dollars in millions)
Tech & innovation	$	5	$	1	$	18	$	24	0.7	%
Other commercial and industrial	—		—		84		84		0.8
Other CRE - non-owner occupied	35		—		56		91		1.4
Construction and land development	—		—		39		39		0.9
Total	$	40	$	1	$	197	$	238	0.4	%

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The performance of these modified loans is monitored for 12 months following the modification. As of June 30, 2026, modified loans of $164 million were current to 89 days delinquent and $56 million were on nonaccrual status. As of December 31, 2025, modified loans of $114 million were current to 89 days delinquent and $89 million were on nonaccrual status.

In the normal course of business, the Company also modifies EBO loans, which are delinquent FHA, VA, or USDA insured or guaranteed loans repurchased under the terms of the GNMA MBS program and can be repooled or resold when loans are brought current either through the borrower's reperformance or through successful completion of a loss mitigation retention solution. During the three and six months ended June 30, 2026, the Company completed modifications of EBO loans with an amortized cost of $222 million and $307 million, respectively. During the three and six months ended June 30, 2025, the Company completed modifications of EBO loans with an amortized cost of $142 million and $287 million, respectively. These modifications consisted of term extensions, payment delays, and interest rate reductions. Certain of these loans were repooled or resold after modification and are no longer included in the pool of loan modifications being monitored for future performance. As of June 30, 2026, modified EBO loans consisted of $71 million in loans that were current to 89 days delinquent and $43 million in loans 90 days or more delinquent. As of December 31, 2025, modified EBO loans consisted of $27 million in loans that were current to 89 days delinquent and $123 million in loans 90 days or more delinquent.

Collateral-Dependent Loans

The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment:

	June 30, 2026						December 31, 2025
	Real Estate Collateral		Other Collateral		Total		Real Estate Collateral		Other Collateral		Total
	(in millions)
Other commercial and industrial	$	—	$	129	$	129	$	—	$	79	$	79
CRE - owner occupied	1		—		1		3		—		3
Other CRE - non-owner occupied	266		—		266		219		—		219
Construction and land development	108		—		108		109		—		109
Total	$	375	$	129	$	504	$	331	$	79	$	410

The Company did not identify any significant changes in the extent to which collateral secures its collateral dependent loans, whether in the form of general deterioration or from other factors during the period ended June 30, 2026.

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Allowance for Credit Losses

The ACL consists of the ACL on funded loans HFI and an ACL on unfunded loan commitments. The ACL on AFS and HTM securities is estimated separately from loans, see "Note 2. Investment Securities" of these Notes to Unaudited Consolidated Financial Statements for further discussion. Management considers the level of ACL to be a reasonable and supportable estimate of expected credit losses inherent within the Company's HFI loan portfolio as of June 30, 2026.

The below tables reflect the activity in the ACL on loans HFI by loan portfolio segment, which includes an estimate of future recoveries:

	Three Months Ended June 30, 2026
	Balance, March 31, 2026		Provision for (Recovery of) Credit Losses		Charge-offs		Recoveries		Balance, June 30, 2026
	(in millions)
Mortgage finance	$	5.7	$	0.4	$	—	$	—	$	6.1
Municipal & nonprofit	18.4		(2.7)		—		—		15.7
Tech & innovation	52.9		18.5		20.2		(1.0)		52.2
Equity fund resources	4.0		0.7		—		—		4.7
Other commercial and industrial	174.0		6.6		4.4		(0.5)		176.7
CRE - owner occupied	3.6		(0.4)		0.1		—		3.1
Hotel franchise finance	40.5		2.0		—		—		42.5
Other CRE - non-owner occupied	99.4		57.1		32.0		(1.1)		125.6
Residential	23.7		(0.6)		—		—		23.1
Residential - EBO	—		—		—		—		—
Construction and land development	37.6		(2.1)		0.1		—		35.4
Other	1.3		1.8		0.8		—		2.3
Total	$	461.1	$	81.3	$	57.6	$	(2.6)	$	487.4

	Six Months Ended June 30, 2026
	Balance, December 31, 2025		Provision for (Recovery of) Credit Losses		Charge-offs		Recoveries		Balance, June 30, 2026
	(in millions)
Mortgage finance	$	5.5	$	0.6	$	—	$	—	$	6.1
Municipal & nonprofit	13.0		2.7		—		—		15.7
Tech & innovation	44.8		47.0		41.0		(1.4)		52.2
Equity fund resources	2.6		2.1		—		—		4.7
Other commercial and industrial	184.7		155.7		164.4		(0.7)		176.7
CRE - owner occupied	3.4		(0.2)		0.1		—		3.1
Hotel franchise finance	37.7		4.8		—		—		42.5
Other CRE - non-owner occupied	110.4		73.8		59.7		(1.1)		125.6
Residential	23.7		(0.6)		—		—		23.1
Residential - EBO	—		—		—		—		—
Construction and land development	32.3		3.2		0.1		—		35.4
Other	2.5		1.2		1.4		—		2.3
Total	$	460.6	$	290.3	$	266.7	$	(3.2)	$	487.4

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	Three Months Ended June 30, 2025
	Balance, March 31, 2025		Provision for (Recovery of) Credit Losses		Charge-offs		Recoveries		Balance, June 30, 2025
	(in millions)
Mortgage finance	$	4.5	$	(0.1)	$	—	$	—	$	4.4
Municipal & nonprofit	14.8		(3.5)		—		—		11.3
Tech & innovation	44.9		10.4		9.7		(0.1)		45.7
Equity fund resources	1.4		0.8		—		—		2.2
Other commercial and industrial	93.5		23.4		6.7		(0.5)		110.7
CRE - owner occupied	3.7		0.7		0.5		—		3.9
Hotel franchise finance	33.2		2.8		—		—		36.0
Other CRE - non-owner occupied	138.1		(0.7)		17.5		(5.1)		125.0
Residential	19.7		0.2		—		—		19.9
Residential - EBO	—		—		—		—		—
Construction and land development	32.0		1.9		0.3		—		33.6
Other	2.8		(0.2)		0.6		—		2.0
Total	$	388.6	$	35.7	$	35.3	$	(5.7)	$	394.7

	Six Months Ended June 30, 2025
	Balance, December 31, 2024		Provision for (Recovery of) Credit Losses		Charge-offs		Recoveries		Balance, June 30, 2025
	(in millions)
Mortgage finance	$	4.8	$	(0.4)	$	—	$	—	$	4.4
Municipal & nonprofit	14.7		(3.4)		—		—		11.3
Tech & innovation	55.9		10.6		21.8		(1.0)		45.7
Equity fund resources	1.6		0.6		—		—		2.2
Other commercial and industrial	79.4		38.3		7.6		(0.6)		110.7
CRE - owner occupied	3.4		0.9		0.5		(0.1)		3.9
Hotel franchise finance	35.3		0.1		—		(0.6)		36.0
Other CRE - non-owner occupied	134.4		17.5		32.0		(5.1)		125.0
Residential	19.7		0.2		—		—		19.9
Residential - EBO	—		—		—		—		—
Construction and land development	21.3		12.6		0.3		—		33.6
Other	3.3		(0.7)		0.6		—		2.0
Total	$	373.8	$	76.3	$	62.8	$	(7.4)	$	394.7

Accrued interest receivable of $300 million and $287 million at June 30, 2026 and December 31, 2025, respectively, was excluded from the estimate of credit losses. However, accrued interest receivable related to the Company's Residential-EBO loan portfolio segment was included in the estimate of credit losses and had an allowance of $1.2 million as of June 30, 2026 and December 31, 2025. Accrued interest receivable, net of any allowance, is included in Other assets on the Consolidated Balance Sheet.

In addition to the ACL on funded loans HFI, the Company maintains a separate ACL related to off-balance sheet credit exposures, including unfunded loan commitments. This allowance is included in Other liabilities on the Consolidated Balance Sheet.

The below table reflects the activity in the ACL on unfunded loan commitments:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Balance, beginning of period	$	53.3	$	35.1	$	49.6	$	39.5
(Recovery of) provision for credit losses	(1.3)		4.1		2.4		(0.3)
Balance, end of period	$	52.0	$	39.2	$	52.0	$	39.2

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The following tables disaggregate the Company's ACL on funded loans HFI and loan balances by measurement methodology:

	June 30, 2026
	Loans						Allowance
	Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total		Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total
	(in millions)
Mortgage finance	$	7,405	$	—	$	7,405	$	6.1	$	—	$	6.1
Municipal & nonprofit	1,716		—		1,716		15.7		—		15.7
Tech & innovation	4,475		13		4,488		51.8		0.4		52.2
Equity fund resources	1,457		—		1,457		4.7		—		4.7
Other commercial and industrial	14,810		141		14,951		167.0		9.7		176.7
CRE - owner occupied	1,468		1		1,469		3.1		—		3.1
Hotel franchise finance	4,582		—		4,582		42.5		—		42.5
Other CRE - non-owner occupied	5,690		279		5,969		95.7		29.9		125.6
Residential	13,909		—		13,909		23.1		—		23.1
Residential EBO	752		—		752		—		—		—
Construction and land development	3,964		108		4,072		35.4		—		35.4
Other	176		3		179		2.3		—		2.3
Total	$	60,404	$	545	$	60,949	$	447.4	$	40.0	$	487.4

	December 31, 2025
	Loans						Allowance
	Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total		Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total
	(in millions)
Mortgage finance	$	7,271	$	—	$	7,271	$	5.5	$	—	$	5.5
Municipal & nonprofit	1,643		5		1,648		12.8		0.2		13.0
Tech & innovation	4,108		20		4,128		44.1		0.7		44.8
Equity fund resources	1,233		—		1,233		2.6		—		2.6
Other commercial and industrial	13,671		118		13,789		139.0		45.7		184.7
CRE - owner occupied	1,530		3		1,533		3.4		—		3.4
Hotel franchise finance	4,185		—		4,185		37.7		—		37.7
Other CRE - non-owner occupied	6,227		228		6,455		92.8		17.6		110.4
Residential	13,403		—		13,403		23.7		—		23.7
Residential EBO	828		—		828		—		—		—
Construction and land development	3,934		109		4,043		32.3		—		32.3
Other	159		2		161		2.5		—		2.5
Total	$	58,192	$	485	$	58,677	$	396.4	$	64.2	$	460.6

Loan Purchases and Sales

Loan purchases during the three and six months ended June 30, 2026 totaled $1.5 billion and $2.5 billion, respectively, which primarily consisted of residential and commercial and industrial loan purchases. Loan purchases during the three and six months ended June 30, 2025 totaled $755 million and $1.1 billion, respectively, which primarily consisted of residential and commercial and industrial loan purchases.

In the normal course of business, the Company also repurchases guaranteed or insured loans under the terms of the GNMA MBS program which can be repooled when loans are brought current either through the borrower's reperformance or successful completion of a loss mitigation retention solution. During the three and six months ended June 30, 2026, there were no repurchases of these EBO loans. During the three and six months ended June 30, 2025, the Company repurchased $175 million and $302 million of these EBO loans, respectively. Prior to repurchase, these loans are classified as loans eligible for repurchase, which is included as a component of Other assets on the Consolidated Balance Sheet.

During the three and six months ended June 30, 2026, the Company purchased $51 million and $64 million, respectively, of CRE loans, at par, with more-than-insignificant deterioration in credit quality. As the loans were non-performing and repayment is expected to be realized through the sale of the collateral, the loans were classified as collateral dependent loans. As the fair value of the collateral, net of selling costs, exceeded the loan’s outstanding principal balance as of June 30, 2026, no

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allowance for credit losses was recorded. There were no loans purchased with more-than-insignificant deterioration in credit quality during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2026, the Company sold loans with a carrying value of approximately $50 million and $157 million, respectively. No significant gain, loss, or charge-off was recognized on these loan sales during the three months ended June 30, 2026. For the six months ended June 30, 2026, the Company recognized net charge-offs of $6.1 million related to these sales. During the three and six months ended June 30, 2025, the Company sold loans with a carrying value of approximately $161 million and $379 million, respectively, and recognized a net loss of $0.2 million and $2.8 million, respectively, and net charge-offs of $1.7 million for the three and six months ended June 30, 2025.

5. MORTGAGE SERVICING RIGHTS

The following table presents changes in the fair value of the MSR portfolio related to the Company's mortgage banking business and other information related to its servicing portfolio:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Balance, beginning of period	$	1,516	$	1,241	$	1,494	$	1,127
Additions from loans sold with servicing rights retained	294		284		589		545
Carrying value of MSRs sold	(268)		(452)		(479)		(535)
Change in fair value	12		23		34		3
Realization of cash flows	(54)		(52)		(138)		(96)
Balance, end of period	$	1,500	$	1,044	$	1,500	$	1,044
					June 30, 2026		December 31, 2025
					(in millions)
Unpaid principal balance of mortgage loans serviced for others					$	75,682	$	77,540

Changes in the fair value of MSRs are recorded as Net loan servicing revenue in the Consolidated Income Statement. Due to the regulatory capital impact of MSRs on capital ratios, the Company sells certain MSRs and related servicing advances in the normal course of business. The Company may also sell excess servicing spread related to certain mortgage loans serviced by the Company. During the three and six months ended June 30, 2026, the Company recognized a net loss of $3.5 million and a net gain of $8.5 million on MSR sales, which are reflected in Net loan servicing revenue in the Consolidated Income Statement, respectively. The UPB of loans underlying these sales totaled $11.7 billion and $23.5 billion for the three and six months ended June 30, 2026, respectively. During the three and six months ended June 30, 2025, the Company recognized a net gain of $6.6 million and $6.3 million on MSR sales, respectively. The UPB of loans underlying these sales totaled $22.5 billion and $31.2 billion for the three and six months ended June 30, 2025, respectively. As of June 30, 2026 and December 31, 2025, the Company had a remaining receivable balance of $31 million and $22 million, respectively, related to holdbacks on MSR sales for servicing transfers, which are recorded in Other assets on the Consolidated Balance Sheet.

The Company receives loan servicing fees, net of subservicing costs, based on the UPB of the underlying loans. Loan servicing fees are collected from payments made by borrowers. The Company may receive other remuneration from rights to various borrower contracted fees, such as late charges, collateral reconveyance charges, and non-sufficient funds fees. Contractually specified servicing fees, late fees, and ancillary income associated with the Company's MSR portfolio totaled $80.1 million and $157.3 million for the three and six months ended June 30, 2026, respectively, compared to $66.8 million and $125.8 million for the respective periods in 2025. Early payoff fee income totaled $4.9 million and $11.4 million for the three and six months ended June 30, 2026, respectively, compared to $6.1 million and $10.5 million for the respective periods in 2025. These amounts are recorded as Net loan servicing revenue in the Consolidated Income Statement.

In accordance with its contractual loan servicing obligations, the Company is required to advance funds to or on behalf of investors when borrowers do not make payments. The Company advances property taxes and insurance premiums for borrowers who have insufficient funds in escrow accounts, plus any other costs to preserve real estate properties. The Company may also advance funds to maintain, repair, and market foreclosed real estate properties. The Company is entitled to recover all or a portion of the advances from borrowers of reinstated and performing loans, from the proceeds of liquidated properties or from the government agency or GSE guarantor of charged-off loans. Servicing advances are charged-off when they are deemed to be uncollectible. As of June 30, 2026 and December 31, 2025, net servicing advances totaled $81 million and $108 million, respectively, which are recorded in Other assets on the Consolidated Balance Sheet.

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The following table presents the effect of hypothetical changes in the fair value of MSRs caused by assumed immediate adverse changes in the below inputs that are used to determine fair value:

	June 30, 2026
	(in millions)
Fair value of mortgage servicing rights	$	1,500
Decrease in fair value resulting from adverse changes in:
Option adjusted spread
10% change	(27)
20% change	(53)
Conditional prepayment rate
10% change	(49)
20% change	(94)
Cost to service
10% change	(14)
20% change	(27)

Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. In addition, the offsetting effect of hedging activities are not contemplated in these results and further, the effect of a variation in a particular assumption is calculated without changing any other assumptions, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those reported.

6. OTHER ASSETS ACQUIRED THROUGH FORECLOSURE

Other assets acquired through foreclosure consist primarily of properties acquired through, or in-lieu-of, foreclosure and are included in Other assets on the Consolidated Balance Sheet. At June 30, 2026 and December 31, 2025, repossessed assets consisted primarily of office properties and totaled $126 million and $137 million, respectively, net of a valuation allowance of $4.6 million and $7.6 million, respectively. Foreclosed residential real estate properties totaled $4 million and $2 million at June 30, 2026 and December 31, 2025, respectively, net of any valuation allowance.

The Company held 22 properties at June 30, 2026 compared to 15 at December 31, 2025. During the three months ended June 30, 2026, the Company did not have significant OREO activity. During the six months ended June 30, 2026, the Company took possession of properties valued at $27 million, primarily related to one office property, and transferred one property with a carrying value of $39 million from OREO into Premises and equipment, net, due to a change in management intent. The Company recognized net valuation losses of zero and $2.5 million during the three and six months ended June 30, 2026, respectively, and $4.8 million during both the three and six months ended June 30, 2025.

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7. DEPOSITS

The table below summarizes deposits by type:

	June 30, 2026		December 31, 2025
	(in millions)
Non-interest bearing deposits	$	27,820	$	24,353
Interest bearing:
Demand accounts	19,259		18,416
Savings and money market accounts	24,886		24,586
Time certificates of deposit ($250,000 or more)	2,396		2,276
Other time deposits (1)	7,513		7,528
Total deposits	$	81,874	$	77,159

(1)    Other time deposits included $4.2 billion and $4.3 billion of brokered deposits as of June 30, 2026 and December 31, 2025, respectively.

A summary of the contractual maturities for all time deposits as of June 30, 2026 is as follows: 

	(in millions)
2026	$	6,807
2027	3,012
2028	70
2029	14
2030	4
2031	2
Total	$	9,909

Brokered deposits provide an additional source of deposits and are placed with the Bank through third-party brokers. At June 30, 2026 and December 31, 2025, the Company held wholesale brokered deposits of $5.3 billion and $5.4 billion, respectively, excluding reciprocal deposits. In addition, WAB is a participant in the IntraFi Network, a network that offers deposit placement services such as CDARS and ICS, and other reciprocal deposit networks, which offer products that qualify large deposits for FDIC insurance. At June 30, 2026, the Company had $15.2 billion of reciprocal deposits, compared to $14.4 billion at December 31, 2025.

In addition, certain customers with non-interest-bearing accounts receive earnings credits that can be used to offset applicable bank charges, and in certain cases, loan interest. The Company also pays referral fees for certain interest bearing or non-interest bearing deposits that are referred to the Bank. Deposits for which the Company provides account holders with excess earnings credits and referral fees totaled $29.9 billion and $25.1 billion at June 30, 2026 and December 31, 2025, respectively. The below table presents the income statement classification for total earnings credit and referral costs incurred on these deposits:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Income statement line item
Interest income (1)	$	52.5	$	61.3	$	101.2	$	119.4
Service charges and fees (1)	8.4		4.4		16.7		8.6
Deposit costs (2)	173.3		142.8		330.5		272.7
Total earnings credit and referral costs	$	234.2	$	208.5	$	448.4	$	400.7

(1)    Earnings credits recorded as a reduction to Interest income and Service charges and fees.

(2)    Deposit costs also included other deposit related costs of $5.9 million and $4.6 million for the three months ended June 30, 2026 and 2025, respectively, and $12.0 million and $11.5 million for the six months ended June 30, 2026 and 2025, respectively, primarily associated with reciprocal deposits.

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8. OTHER BORROWINGS

The following table summarizes the Company’s other borrowings by type: 

	June 30, 2026		December 31, 2025
	(in millions)
Short-Term:
FHLB advances	$	4,700	$	3,800
Secured borrowings	57		48
Total short-term borrowings	$	4,757	$	3,848
Long-Term:
FHLB advances	$	1,100	$	1,000
Credit linked notes, net	379		392
Total long-term borrowings	$	1,479	$	1,392
Total other borrowings	$	6,236	$	5,240

Short-Term Borrowings

Federal Funds Lines of Credit

The Company maintains uncommitted overnight federal funds lines of credit, which have rates comparable to the federal funds effective rate plus 0.10% to 0.20%. There were no outstanding borrowings on federal funds lines of credit as of June 30, 2026 and December 31, 2025.

FHLB and FRB Advances

The Company also maintains secured overnight lines of credit with the FHLB and the FRB. The Company’s borrowing capacity is determined based on collateral pledged at the time of the borrowing, generally consisting of investment securities and loans. As of June 30, 2026 and December 31, 2025, the Company had additional available credit with the FHLB of $6.3 billion and $8.8 billion, respectively. The weighted average rate on short-term FHLB advances was 4.08% and 4.02% as of June 30, 2026 and December 31, 2025, respectively.

Total available credit with the FRB was $18.4 billion and $17.8 billion as of June 30, 2026 and December 31, 2025, respectively, of which no amounts were drawn.

Repurchase Agreements

Warehouse borrowing lines of credit are used to finance the acquisition of loans through the use of repurchase agreements. Repurchase agreements operate as financings under which the Company transfers loans to secure these borrowings. The borrowing amounts are based on the attributes of the collateralized loans and are defined in the repurchase agreement of each warehouse lender. The Company retains beneficial ownership of the transferred loans and will receive the loans from the lender upon full repayment of the borrowing. The repurchase agreements may require the Company to transfer additional assets to the lender in the event the estimated fair value of the existing transferred loans declines.

As of June 30, 2026 and December 31, 2025, the Company had access to approximately $2.1 billion in uncommitted warehouse funding, of which no amounts were drawn.

Secured Borrowings

Secured borrowings consist of transfers of loans HFS not qualifying for sales accounting treatment. The weighted average interest rate on secured borrowings was 6.23% and 6.14% as of June 30, 2026 and December 31, 2025, respectively.

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Long-Term Borrowings

FHLB Advances

The Company also enters into long-term advances with the FHLB. The Company's borrowing capacity is determined based on the collateral pledged at the time of the borrowing, consisting of the same pools of investment securities and loans pledged for the short-term FHLB advances. The interest rates on these advances are based on daily SOFR plus a fixed spread. The Company may redeem the advances at par plus accrued and unpaid interest plus a make-whole provision upon termination that is based on the interest rate difference between the then current advance interest rate and the interest rate on the terminated advance. After three months from the inception date of the advances, prepayments are no longer subject to the make-whole provision. The weighted average rate on these long-term FHLB advances was 4.07% and 4.24% as of June 30, 2026 and December 31, 2025, respectively.

The Company's outstanding long-term FHLB advances are detailed in the tables below:

June 30, 2026
Description	Issuance Date	Maturity Date	Interest Rate	Principal
				(in millions)
FHLB advance	April 30, 2026	July 30, 2027	SOFR + 0.38%	$	700
FHLB advance	May 29, 2026	August 31, 2027	SOFR + 0.38%	200
FHLB advance	June 30, 2026	September 30, 2027	SOFR + 0.43%	200
Total				$	1,100

December 31, 2025
Description	Issuance Date	Maturity Date	Interest Rate	Principal
				(in millions)
FHLB advance	October 30, 2025	February 1, 2027	SOFR + 0.38%	$	500
FHLB advance	November 26. 2025	February 26, 2027	SOFR + 0.36%	500
Total				$	1,000

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Credit Linked Notes

The Company entered into credit linked note transactions that effectively transfer the risk of first losses on reference pools of the Company's loans purchased under its residential mortgage purchase program to the purchasers of the notes. The principal and interest payable on these notes may be reduced by a portion of the Company's loss on such loans if one of the following occurs with respect to a covered loan: (i) realized losses incurred by the Company on a loan following a liquidation of the loan or certain other events, or (ii) a modification of the loan resulting in a reduction in payments. The aggregate losses, if any, for each payment date will be allocated to reduce the class principal amount and (for modifications) the current interest of the notes in reverse order of class priority. Losses on residential mortgages have not generally been significant. Monthly principal payments on the notes are based on the principal payments of the underlying mortgages.

The Company's outstanding credit linked note issuances are detailed in the tables below:

June 30, 2026
Description	Issuance Date	Maturity Date	Weighted Average Interest Rate	Principal		Unamortized Debt Issuance Costs
				(in millions)
Residential mortgage loans (1)	December 12, 2022	October 25, 2052	SOFR + 7.80%	$	77	$	2
Residential mortgage loans (2)	June 30, 2022	April 25, 2052	SOFR + 6.00%	155		3
Residential mortgage loans (3)	December 29, 2021	July 25, 2059	SOFR + 4.67%	161		2
Total				$	393	$	7

December 31, 2025
Description	Issuance Date	Maturity Date	Weighted Average Interest Rate	Principal		Unamortized Debt Issuance Costs
				(in millions)
Residential mortgage loans (1)	December 12, 2022	October 25, 2052	SOFR + 7.80%	$	80	$	2
Residential mortgage loans (2)	June 30, 2022	April 25, 2052	SOFR + 6.00%	160		3
Residential mortgage loans (3)	December 29, 2021	July 25, 2059	SOFR + 4.67%	167		2
Total				$	407	$	7

(1)    There are multiple classes of these notes, each with an interest rate of one-month SOFR plus a spread that ranges from 2.25% to 11.00% on a reference pool balance of $1.5 billion and $1.6 billion as of June 30, 2026 and December 31, 2025, respectively.

(2)    There are multiple classes of these notes, each with an interest rate of one-month SOFR plus a spread that ranges from 2.25% to 15.00% on a reference pool balance of $3.1 billion and $3.2 billion as of June 30, 2026 and December 31, 2025, respectively.

(3)    There are six classes of these notes, each with an interest rate of one-month SOFR plus a spread that ranges from 3.15% to 8.50% on a reference pool balance of $3.2 billion and $3.3 billion as of June 30, 2026 and December 31, 2025, respectively.

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Table of Contents

9. QUALIFYING DEBT

Subordinated Debt

The Company's subordinated debt issuances are detailed in the tables below:

June 30, 2026
Description	Issuance Date	Maturity Date	Interest Rate	Principal		Unamortized Debt Issuance Costs
				(in millions)
WAL fixed-to-variable-rate (1)	June 2021	June 15, 2031	3M SOFR + 2.25%	$	600	$	4
WAB fixed-to-variable-rate (2)	November 2025	November 15, 2035	6.54%	400		4
Total				$	1,000	$	8

December 31, 2025
Description	Issuance Date	Maturity Date	Interest Rate	Principal		Unamortized Debt Issuance Costs
				(in millions)
WAL fixed-to-variable-rate (1)	June 2021	June 15, 2031	3.00%	$	600	$	4
WAB fixed-to-variable-rate (2)	November 2025	November 15, 2035	6.54%	400		4
Total				$	1,000	$	8

(1)    Notes are redeemable, in whole or in part, beginning on June 15, 2026 at their principal amount plus accrued and unpaid interest and had a fixed interest rate of 3.00%. The notes converted to a variable rate of three-month SOFR plus 225 basis points on this date.

(2)    Notes are redeemable, in whole but not in part, on or after November 15, 2030 and in whole or in part, on or after August 15, 2035, at their principal amount plus accrued and unpaid interest. The notes have a fixed interest rate of approximately 6.54% through November 14, 2030 and then convert to a fixed rate per annum equal to the U.S. Treasury Rate for a five-year maturity plus 285 basis points.

The carrying value of all subordinated debt issuances totaled $984 million and $990 million at June 30, 2026 and December 31, 2025, respectively.

Junior Subordinated Debt

The Company has formed or acquired through acquisition eight statutory business trusts, which exist for the exclusive purpose of issuing Cumulative Trust Preferred Securities. Trust Preferred Securities are hybrid financial instruments, primarily issued by bank holding companies to raise capital. The obligations under these instruments are fully and unconditionally guaranteed by the Company and rank subordinate and junior in right of payment to all other liabilities of the Company. In the event of certain changes or amendments to regulatory requirements or federal tax rules, the debt is redeemable in whole. Based on guidance issued by the FRB, the Company's securities continue to qualify as Tier 1 Capital.

With the exception of debt issued by Bridge Capital Trust I and Bridge Capital Trust II, junior subordinated debt is recorded at fair value at each reporting date due to the FVO election made by the Company under ASC 825. The Company did not make the FVO election for the junior subordinated debt acquired in the Bridge acquisition. Accordingly, the carrying value of these trusts does not reflect the current fair value of the debt and includes a fair market value adjustment established at acquisition that is being accreted over the remaining life of the trusts.

The carrying value of junior subordinated debt was $85 million and $86 million as of June 30, 2026 and December 31, 2025, respectively, with maturity dates ranging from 2033 through 2037. The weighted average interest rate of all junior subordinated debt as of June 30, 2026 and December 31, 2025 was 6.33% and 6.25%, respectively.

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Table of Contents

10. EQUITY

Stock-Based Compensation

Restricted Stock Awards

Restricted stock awards granted to employees generally vest over a three-year period and stock grants made to non-employee WAL directors generally vest over one year. The Company estimates the compensation cost for stock grants based upon the grant date fair value. Stock compensation expense is recognized on a straight-line basis over the requisite service period for the entire award. The aggregate grant date fair value for the restricted stock awards granted during the three and six months ended June 30, 2026 was $0.7 million and $55.2 million, respectively, compared to $0.8 million and $48.8 million for the three and six months ended June 30, 2025. Stock compensation expense related to restricted stock awards granted to employees is included in Salaries and employee benefits in the Consolidated Income Statement. For restricted stock awards granted to WAL directors, the related stock compensation expense is included in Legal, professional, and directors' fees. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense related to employee and WAL director stock grants of $10.2 million and $20.6 million, respectively, compared to $8.1 million and $20.1 million for the respective periods in 2025.

Performance Stock Units

The Company grants performance stock units to members of its executive management that do not vest unless the Company achieves certain performance measures over a three-year performance period. For the 2026 grants, the performance measures are based on the Company’s relative return on equity, while the market measure is based on relative TSR performance. For the 2025 and 2024 grants, the performance measures are based on the Company’s relative return on equity and maintenance of a target CET1 ratio, while the market measure is based on relative TSR performance. The number of shares issued will vary based on the performance measures that are achieved. The Company estimates the cost of performance stock units based upon the grant date fair value and expected vesting percentage over the three-year performance period. During the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $2.5 million and $0.5 million, respectively, compared to $1.8 million and $3.4 million for the respective periods in 2025.

The three-year performance period for the 2023 grant ended on December 31, 2025, and based on the Company's cumulative EPS and TSR performance measures for the performance period, these shares vested at 50% of the target award under the terms of the grant. As a result, 50,828 shares became fully vested and were distributed to executive management in the first quarter of 2026.

Cash Settled Restricted Stock Units

The Company grants cash settled restricted stock units to members of its executive management that vest equally on a monthly basis over a three-year period. As the awards are settled in cash and are not dependent on the occurrence of a future event, these awards are classified as liabilities on the Consolidated Balance Sheet. At each vesting date, the Company settles the vested stock units in cash at the settlement date stock price. During the three and six months ended June 30, 2026, the Company recognized compensation expense of $1.0 million and $1.6 million, respectively, compared to $0.6 million and $0.9 million for the respective periods in 2025.

Deferred Stock Units

The Company also grants deferred stock unit awards to certain members of its management team, which are intended to provide supplemental executive retirement benefits on an unfunded, unsecured basis. These awards can be settled in either stock or cash, at the Company's option. Participants are credited dividend equivalent units for any cash dividends paid with respect to the shares of stock underlying the stock units. These awards vest on the later of (i) the one-year anniversary of the grant date and (ii) the participant's satisfaction of age- and service-related eligibility criteria for a qualified retirement. The aggregate grant date fair value for these deferred stock unit awards, including dividend equivalent units, granted during the three and six months ended June 30, 2026 was $0.1 million, compared to $0.1 million and $1.6 million for the three and six months ended June 30, 2025, respectively. Stock compensation expense related to these deferred stock units is included in Salaries and employee benefits in the Consolidated Income Statement. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense related to these stock grants of $0.4 million and $0.9 million, respectively, compared to $1.3 million and $3.0 million, for the respective periods in 2025.

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Table of Contents

Common Stock Repurchase

During the year ended December 31, 2025, the Company's BOD approved a common stock repurchase program pursuant to which the Company is authorized to repurchase up to $300 million of its shares of common stock. During the three and six months ended June 30, 2026, the Company repurchased 31,924 and 729,938 shares of its common stock, respectively. The shares were repurchased at a weighted average price per share of $71.88 and $71.62, respectively, for a total payment, inclusive of commissions, fees, and taxes, of $2.3 million and $52.6 million, respectively. There were no share repurchases during the comparable periods in 2025. As of June 30, 2026, the aggregate remaining approved amount under the stock repurchase program was approximately $179.6 million.

Preferred Stock

The Company issued and has outstanding 12,000,000 depositary shares, each representing a 1/400th ownership interest in a share of the Company’s 4.250% Series A Fixed-Rate Reset Non-Cumulative Perpetual Preferred Shares, par value $0.0001 per share, with a liquidation preference of $25 per depositary share (equivalent to $10,000 per share of Series A preferred stock). The dividend rate resets every five years beginning on September 30, 2026 to the five-year treasury rate as of the most recent reset dividend determination date plus 3.452%. The Series A preferred stock is redeemable at the Company's option on or after September 30, 2026, on any dividend payment date at a redemption price of $10,000 per share and only participates in the undistributed earnings of the Company if a dividend is declared. During the three and six months ended June 30, 2026 and 2025, the Company declared and paid a quarterly cash dividend of $0.27 per depositary share. The total dividend payment to preferred stockholders was $3.2 million for each three-month period, and $6.4 million for each six-month period.

Cash Dividend on Common Shares

During the three and six months ended June 30, 2026, the Company declared and paid a quarterly cash dividend of $0.42 per share, for a total dividend payment to stockholders of $45.9 million and $92.0 million, respectively. During the three and six months ended June 30, 2025, the Company declared and paid a quarterly cash dividend of $0.38 per share, for a total dividend payment to stockholders of $42.2 million and $84.0 million, respectively.

Treasury Shares

Treasury share purchases represent shares surrendered to the Company equal in value to the statutory payroll tax withholding obligations arising from the vesting of employee restricted stock awards. During the three and six months ended June 30, 2026, the Company purchased treasury shares of 6,499 and 200,272, respectively, at a weighted average price per share of $79.61 and $92.71, respectively. During the three and six months ended June 30, 2025, the Company purchased treasury shares of 12,482 and 133,967, respectively, at a weighted average price per share of $71.07 and $87.34, respectively.

Noncontrolling Interest

BW Series B Preferred Stock Issuance

On March 24, 2025, the Company, WAB, and BW entered into a purchase agreement pursuant to which BW issued and sold an aggregate of 300,000 shares of 9.500% Fixed-Rate Reset Non-Cumulative Exchangeable Perpetual Series B Preferred Stock, no par value per share, with a liquidation preference of $1,000 per share. Gross offering proceeds totaled $300 million, or $293 million net of issuance costs. The dividend rate resets every five years beginning on March 30, 2030 to the five-year treasury rate as of the most recent reset dividend determination date plus 5.402%. The Series B preferred stock is redeemable at BW's option on or after March 30, 2030, on any dividend payment date at the redemption price of $1,000 per share and only participates in the undistributed earnings of BW if a dividend is declared. The shares are conditionally exchangeable into 9.500% Fixed-Rate Reset Non-Cumulative Perpetual Series A Preferred Stock of WAB upon receipt of a directive from an appropriate federal regulatory authority upon the occurrence of certain specified exchange events.

During the three and six months ended June 30, 2026, dividends of $7.1 million and $14.2 million, respectively, were declared and paid to Series B preferred stockholders, compared to $7.4 million for each of the respective periods in 2025. These dividend payments are classified as Net income attributable to noncontrolling interest in the Consolidated Income Statement and as Dividends paid to noncontrolling interest in the Consolidated Statement of Equity.

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11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods indicated: 

	Three Months Ended June 30,
	Unrealized holding gains (losses) on AFS securities		Unrealized holding gains (losses) on SERP		Unrealized holding gains (losses) on junior subordinated debt		Total
	(in millions)
Balance, March 31, 2026	$	(452.7)	$	(0.3)	$	(2.5)	$	(455.5)
Other comprehensive income (loss) before reclassifications	5.9		—		(0.9)		5.0
Amounts reclassified from AOCI	(0.7)		—		—		(0.7)
Net current-period other comprehensive income (loss)	5.2		—		(0.9)		4.3
Balance, June 30, 2026	$	(447.5)	$	(0.3)	$	(3.4)	$	(451.2)
Balance, March 31, 2025	$	(480.6)	$	(0.4)	$	2.5	$	(478.5)
Other comprehensive income (loss) before reclassifications	9.7		0.1		(4.1)		5.7
Amounts reclassified from AOCI	(8.8)		—		—		(8.8)
Net current-period other comprehensive income (loss)	0.9		0.1		(4.1)		(3.1)
Balance, June 30, 2025	$	(479.7)	$	(0.3)	$	(1.6)	$	(481.6)
	Six Months Ended June 30,
	Unrealized holding gains (losses) on AFS securities		Unrealized holding gains (losses) on SERP		Unrealized holding gains (losses) on junior subordinated debt		Total
	(in millions)
Balance, December 31, 2025	$	(340.7)	$	—	$	(3.5)	$	(344.2)
Other comprehensive (loss) income before reclassifications	(68.3)		(0.3)		0.1		(68.5)
Amounts reclassified from AOCI	(38.5)		—		—		(38.5)
Net current-period other comprehensive (loss) income	(106.8)		(0.3)		0.1		(107.0)
Balance, June 30, 2026	$	(447.5)	$	(0.3)	$	(3.4)	$	(451.2)
Balance, December 31, 2024	$	(534.7)	$	(0.4)	$	1.4	$	(533.7)
Other comprehensive income (loss) before reclassifications	65.4		0.1		(3.0)		62.5
Amounts reclassified from AOCI	(10.4)		—		—		(10.4)
Net current-period other comprehensive income (loss)	55.0		0.1		(3.0)		52.1
Balance, June 30, 2025	$	(479.7)	$	(0.3)	$	(1.6)	$	(481.6)

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12. DERIVATIVES AND HEDGING ACTIVITIES

The Company is a party to various derivative instruments. The primary types of derivatives the Company uses are interest rate contracts, forward purchase and sale commitments, and interest rate futures. Generally, these instruments are used to help manage the Company's exposure to interest rate risk and also to meet client financing and hedging needs.

Derivatives are recorded at fair value on the Consolidated Balance Sheet, after taking into account the effects of bilateral collateral and master netting agreements. These agreements allow the Company to settle all derivative contracts held with the same counterparty on a net basis, and to offset net derivative positions with related cash collateral, where applicable.

Derivatives Designated in Hedge Relationships

The Company utilizes derivatives that have been designated as part of a hedge relationship in accordance with the applicable accounting guidance to minimize the exposure to changes in benchmark interest rates, which reduces asset sensitivity and volatility due to interest rate fluctuations, such that interest rate risk falls within Board approved limits. The primary derivative instruments used to manage interest rate risk are interest rate swaps, which convert the contractual interest rate index of agreed-upon amounts of assets and liabilities (i.e., notional amounts) from either a fixed rate to a variable rate, or from a variable rate to a fixed rate.

The Company has interest rate swaps designated as fair value hedges of certain fixed rate loans, AFS debt securities, and qualifying debt instruments. The Company receives variable-rate interest payments in exchange for making fixed-rate payments on loans and AFS debt securities. For qualifying debt instruments, the Company receives fixed-rate payments in exchange for making variable-rate payments over the lives of the contracts without exchanging the notional amounts. The variable-rate interest payments are based on SOFR plus a spread adjustment. No interest rate swaps on hedged AFS U.S. Treasury securities were terminated during the three months ended June 30, 2026. During the six months ended June 30, 2026, the Company terminated interest rate swaps on hedged AFS U.S. Treasury securities, which had a notional value of $1.3 billion and cumulative basis adjustment of $18.6 million at the time of termination. During the three and six months ended June 30, 2025, the Company terminated interest rate swaps on hedged AFS U.S. Treasury securities which had a notional value of $1.0 billion, and cumulative basis adjustment of $11 million at the time of termination. As the hedged securities were sold in the same period as the termination of the swap, both the basis adjustment and the related gain on sale of the hedged securities were recognized in earnings as a component of Gain on sales of investment securities, as described in "Note 2. Investment Securities." The Company recognized net gains on these terminations of $18.7 million during the six months ended June 30, 2026 and $7.7 million during the three and six months ended June 30, 2025.

The Company also has pay fixed/receive variable interest rate swaps, designated as fair value hedges using the portfolio layer method to manage the exposure to changes in fair value associated with pools of fixed rate loans, resulting from changes in the designated benchmark interest rate (federal funds rate). These portfolio layer hedges provide the Company the ability to execute a fair value hedge of the interest rate risk associated with a portfolio of similar prepayable assets, whereby the last dollar amount estimated to remain in the portfolio of assets was identified as the hedged item. Under these interest rate swap contracts, the Company receives a variable rate and pays a fixed rate on the outstanding notional amount. No portfolio layer method swaps were terminated during the three months ended June 30, 2026. During the six months ended June 30, 2026 and the three and six months ended June 30, 2025, the Company terminated portions of its portfolio layer method swaps with notional values of $2.0 billion and $500 million, respectively, and cumulative loan basis adjustments of $19 million and $1 million, respectively, at termination. The cumulative loan basis adjustments were allocated to the individual loans remaining within the closed pools and will be amortized through interest income over the remaining life of those loans. The remaining unamortized basis of terminated portfolio layer method swaps was $23 million and $5 million as of June 30, 2026 and December 31, 2025, respectively.

Derivatives Not Designated in Hedge Relationships

Management enters into certain contracts and agreements, including foreign exchange derivative contracts, back-to-back interest rate contracts, risk participation agreements and equity warrants, which are not designated as accounting hedges. Foreign exchange derivative contracts include spot, forward, forward window, and swap contracts. The purpose of these derivative contracts is to mitigate foreign currency risk on transactions entered into, or on behalf of customers. The Company's back-to-back interest rate contracts are used to allow customers to manage long-term interest rate risk. Contracts with customers, along with the related derivative trades the Company places, are both remeasured at fair value, and are referred to as economic hedges since they economically offset the Company's exposure. Risk participation agreements are entered into with lead banks in certain loan syndication deals to share in the risk of default on interest rate swaps on participated loans. Equity warrants represent the right to buy shares in a company at a specified price and are acquired by the Company primarily in

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connection with negotiating credit facilities and certain other services to private, venture-backed companies in the technology industry. Covered call options are utilized to economically hedge certain investment securities and generate additional income.

The Company also uses derivative financial instruments to manage exposure to interest rate risk within its mortgage banking business related to IRLCs and its inventory of loans HFS and MSRs. The Company economically hedges the changes in fair value associated with changes in interest rates generally by utilizing forward purchase and sale commitments, interest rate futures and interest rate contracts.

Fair Value Hedges

As of June 30, 2026 and December 31, 2025, the following amounts are reflected on the Consolidated Balance Sheet related to cumulative basis adjustments for outstanding fair value hedges:

	June 30, 2026				December 31, 2025
	Carrying Value of Hedged Assets/(Liabilities) (1)		Cumulative Fair Value Hedging Adjustment (2)		Carrying Value of Hedged Assets/(Liabilities) (1)		Cumulative Fair Value Hedging Adjustment (2)
	(in millions)
Loans HFI, net of deferred loan fees and costs (3)	$	1,798	$	(42)	$	3,811	$	—
Investment securities - AFS	3,482		(73)		3,006		(65)
Qualifying debt	(396)		8		(396)		2

(1)Represents the amortized cost basis of the hedged assets and liabilities.

(2)Included in the carrying value of the hedged assets and liabilities.

(3)Included portfolio layer method derivative instruments with $1.5 billion and $3.5 billion designated as the hedged amount (from a closed portfolio of prepayable fixed rate loans with a carrying value of $3.7 billion and $7.2 billion) as of June 30, 2026 and December 31, 2025, respectively. The cumulative basis adjustment included in the carrying value of these hedged items totaled $(30) million and $8 million as of June 30, 2026 and December 31, 2025, respectively.

For the Company's derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current period earnings. The loss or gain on the hedged item is recognized in the same line item as the offsetting loss or gain on the related interest rate swaps. For loans and AFS debt securities, the gain or loss on the hedged item is included in interest income, and for qualifying debt, the gain or loss on the hedged item is included in interest expense, as shown in the table below.

	Three Months Ended June 30,
	2026				2025
Income Statement Classification	Gain/(Loss) on Swaps		Gain/(Loss) on Hedged Item		Gain/(Loss) on Swaps		Gain/(Loss) on Hedged Item
	(in millions)
Interest income on loans, including fees	$	15.0	$	(15.1)	$	(31.6)	$	31.6
Interest income on investment securities	33.0		(31.9)		(38.4)		40.2
Interest expense on qualifying debt	(6.9)		6.9		—		—
	Six Months Ended June 30,
	2026				2025
Income Statement Classification	Gain/(Loss) on Swaps		Gain/(Loss) on Hedged Item		Gain/(Loss) on Swaps		Gain/(Loss) on Hedged Item
	(in millions)
Interest income on loans, including fees	$	24.9	$	(25.1)	$	(95.4)	$	95.5
Interest income on investment securities	10.3		(8.3)		(38.4)		40.2
Interest expense on qualifying debt	(4.6)		4.6		—		—

In addition to the gains and losses on the Company's outstanding fair value hedges presented in the above table, the Company recognized $0.6 million and $0.9 million in interest income related to the amortization of the cumulative basis adjustment on its discontinued portfolio layer method hedges during the three and six months ended June 30, 2026, respectively. The Company recognized $0.1 million in interest income related to the amortization of the cumulative basis adjustment on its discontinued portfolio layer method hedges during the three and six months ended June 30, 2025.

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Fair Values, Volume of Activity, and Gain/Loss Information Related to Derivative Instruments

The following table summarizes the fair value of the Company's derivative instruments on a gross basis as of June 30, 2026, December 31, 2025, and June 30, 2025. The change in the notional amounts of these derivatives from June 30, 2025 to June 30, 2026 indicates the volume of the Company's derivative transaction activity during these periods. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable master netting agreements that allow the Company to settle all derivative contracts with the same counterparty on a net basis and to offset the net derivative position with the related cash collateral. Where master netting agreements are not in effect or are not enforceable under bankruptcy laws, the Company does not adjust those derivative amounts with counterparties.

	June 30, 2026						December 31, 2025						June 30, 2025
			Fair Value						Fair Value						Fair Value
	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Fair value hedges
Interest rate contracts	$	5,706	$	16	$	—	$	7,216	$	85	$	22	$	6,033	$	23	$	56
Total	$	5,706	$	16	$	—	$	7,216	$	85	$	22	$	6,033	$	23	$	56
Derivatives not designated as hedging instruments:
Foreign currency contracts	$	616	$	26	$	20	$	530	$	8	$	4	$	109	$	1	$	2
Forward contracts	33,325		42		59		27,271		21		43		24,687		63		111
Futures contracts (1)	18,486		—		—		23,170		—		—		15,690		—		—
Interest rate lock commitments	4,127		22		1		3,201		20		1		2,947		24		—
Interest rate contracts	10,991		22		24		10,228		34		36		7,984		32		34
Risk participation agreements	301		—		—		242		—		—		226		—		—
Equity warrants	49		37		—		50		39		—		63		33		—
Total	$	67,895	$	149	$	104	$	64,692	$	122	$	84	$	51,706	$	153	$	147
Margin	—		411		—		—		366		7		—		347		(41)
Total, including margin	$	67,895	$	560	$	104	$	64,692	$	488	$	91	$	51,706	$	500	$	106

(1)The Company enters into futures purchase and sales contracts that are subject to daily remargining and almost all of which are based on three-month SOFR to hedge against its MSR valuation exposure. The notional amount on these contracts is substantial as these contracts have a short duration and are intended to cover the longer duration of MSR hedges.

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The fair value of derivative contracts, after taking into account the effects of master netting agreements, is included in Other assets or Other liabilities on the Consolidated Balance Sheet, as summarized in the table below:

	June 30, 2026						December 31, 2025						June 30, 2025
	Gross amount of recognized assets (liabilities)		Gross offset		Net assets (liabilities)		Gross amount of recognized assets (liabilities)		Gross offset		Net assets (liabilities)		Gross amount of recognized assets (liabilities)		Gross offset		Net assets (liabilities)
	(in millions)
Derivatives subject to master netting arrangements:
Assets
Foreign currency contracts	$	25	$	—	$	25	$	6	$	—	$	6	$	—	$	—	$	—
Forward contracts	42		—		42		21		—		21		63		—		63
Interest rate contracts	30		—		30		86		—		86		25		—		25
Margin	411		—		411		366		—		366		347		—		347
Netting	—		(64)		(64)		—		(85)		(85)		—		(134)		(134)
	$	508	$	(64)	$	444	$	479	$	(85)	$	394	$	435	$	(134)	$	301
Liabilities
Foreign currency contracts	$	(1)	$	—	$	(1)	$	(1)	$	—	$	(1)	$	(2)	$	—	$	(2)
Forward contracts	(57)		—		(57)		(40)		—		(40)		(108)		—		(108)
Interest rate contracts	(10)		—		(10)		(46)		—		(46)		(78)		—		(78)
Margin	—		—		—		(7)		—		(7)		41		—		41
Netting	—		64		64		—		85		85		—		134		134
	$	(68)	$	64	$	(4)	$	(94)	$	85	$	(9)	$	(147)	$	134	$	(13)
Derivatives not subject to master netting arrangements:
Assets
Foreign currency contracts	$	1	$	—	$	1	$	2	$	—	$	2	$	1	$	—	$	1
Interest rate lock commitments	22		—		22		20		—		20		24		—		24
Interest rate contracts	8		—		8		33		—		33		30		—		30
Equity warrants	37		—		37		39		—		39		33		—		33
	$	68	$	—	$	68	$	94	$	—	$	94	$	88	$	—	$	88
Liabilities
Foreign currency contracts	$	(19)	$	—	$	(19)	$	(3)	$	—	$	(3)	$	—	$	—	$	—
Forward contracts	(2)		—		(2)		(3)		—		(3)		(3)		—		(3)
Interest rate lock commitments	(1)		—		(1)		(1)		—		(1)		—		—		—
Interest rate contracts	(14)		—		(14)		(12)		—		(12)		(12)		—		(12)
	$	(36)	$	—	$	(36)	$	(19)	$	—	$	(19)	$	(15)	$	—	$	(15)
Total derivatives and margin
Assets	$	576	$	(64)	$	512	$	573	$	(85)	$	488	$	523	$	(134)	$	389
Liabilities	(104)		64		(40)		(113)		85		(28)		(162)		134		(28)

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The following table summarizes the net gain (loss) on derivatives included in the non-interest income line items below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Net gain (loss) on loan origination and sale activities:
Interest rate lock commitments	$	23.2	$	10.8	$	0.7	$	25.8
Forward contracts	(28.6)		(17.5)		16.3		(73.0)
Interest rate contracts	3.0		2.3		6.7		2.3
Other contracts	5.1		(0.1)		2.1		3.4
Net gain (loss) on derivatives	$	2.7	$	(4.5)	$	25.8	$	(41.5)
Net loan servicing revenue:
Forward contracts	$	3.4	$	(9.3)	$	(24.4)	$	(1.9)
Futures contracts	4.1		(0.6)		24.2		(6.4)
Interest rate contracts	(18.3)		16.5		(33.6)		42.8
Net (loss) gain on derivatives	$	(10.8)	$	6.6	$	(33.8)	$	34.5
Fair value gain adjustments, net
Interest rate contracts	$	4.2	$	2.0	$	7.6	$	4.5
Covered call options	5.8		—		6.1		—
Risk participation agreements	0.3		0.1		0.4		0.2
Net gain on derivatives	$	10.3	$	2.1	$	14.1	$	4.7
Income (loss) from equity investments
Equity warrants	$	3.8	$	0.2	$	3.0	$	(0.3)
Net loss on derivatives	$	3.8	$	0.2	$	3.0	$	(0.3)
Other non-interest income
Foreign currency contracts	$	5.5	$	0.3	$	9.9	$	2.3
Net gain on derivatives	$	5.5	$	0.3	$	9.9	$	2.3

Counterparty Credit Risk

Like other financial instruments, derivatives contain an element of credit risk. This risk is measured as the expected replacement value of the contracts. Management enters into bilateral collateral and master netting agreements that provide for the net settlement of all contracts with the same counterparty. Additionally, management monitors counterparty credit risk exposure on each contract to determine appropriate limits on the Company's total credit exposure across all product types, which may require the Company to post collateral to counterparties when these contracts are in a net liability position and conversely, for counterparties to post collateral to the Company when these contracts are in a net asset position. Management reviews the Company's collateral positions on a daily basis and exchanges collateral with counterparties in accordance with standard ISDA documentation and other related agreements. The Company generally posts or holds collateral in the form of cash deposits or highly rated securities issued by the U.S. Treasury or government-sponsored enterprises (FNMA and FHLMC), or guaranteed by GNMA. At June 30, 2026, December 31, 2025, and June 30, 2025 collateral pledged by the Company to counterparties for its derivatives totaled $261 million, $382 million, and $399 million, respectively.

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13. EARNINGS PER SHARE

Diluted EPS is calculated using the weighted average outstanding common shares during the period, including common stock equivalents. Basic EPS is calculated using the weighted average outstanding common shares during the period.

The following tables present the calculation of basic and diluted EPS: 

	Three Months Ended June 30, 2026		Six Months Ended June 30, 2026
	(in millions, except per share amounts)
Net income available to common stockholders	$	258.5	$	437.4
Less: Earnings allocated to participating stock awards (1)	3.3		5.6
Net earnings attributable to common stockholders	$	255.2	$	431.8
Weighted average shares - basic	107.8		108.0
Dilutive effect of stock awards	0.2		0.1
Weighted average shares - diluted	108.0		108.1
Earnings per common share:
Basic	$	2.37	$	4.00
Diluted	2.36		3.99

(1)Represents cash dividends paid to holders of unvested stock awards plus undistributed earnings available to holders of these awards.

	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025
	(in millions, except per share amounts)
Net income available to common stockholders	$	227.2	$	423.1
Weighted average shares - basic	109.0		108.9
Dilutive effect of stock awards	0.6		0.7
Weighted average shares - diluted	109.6		109.6
Earnings per common share:
Basic	$	2.08	$	3.89
Diluted	2.07		3.86

14. INCOME TAXES

The Company's effective tax rate was 19.0% and 18.4% for the three months ended June 30, 2026 and 2025, respectively, and 18.7% and 18.8% for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended June 30, 2026 compared to the same period in 2025 was primarily attributable to an increase in pretax income and a decrease in investment tax credits. For the six months ended June 30, 2026 and 2025, the effective tax rate remained substantially consistent.

As of June 30, 2026, the net DTA balance totaled $425 million, an increase of $76 million from $349 million at December 31, 2025. The overall increase in the net DTA was primarily the result of an increase in credit carryovers and a decrease in the fair market value of AFS securities. Although realization is not assured, the Company believes realization of the recognized net DTA of $425 million at June 30, 2026 is more-likely-than-not based on expectations regarding future taxable income and based on available tax planning strategies that could be implemented if necessary to prevent a carryover from expiring.

At June 30, 2026 and December 31, 2025, the Company had no deferred tax valuation allowance.

LIHTC and renewable energy projects

The Company holds ownership interests in limited partnerships and limited liability companies that invest in affordable housing and renewable energy projects. These investments are designed to generate a return primarily through the realization of federal tax credits and deductions.

Investments in LIHTC and renewable energy totaled $571 million and $593 million as of June 30, 2026 and December 31, 2025, respectively. Unfunded LIHTC and renewable energy obligations are included in Other liabilities on the Consolidated Balance Sheet and totaled $263 million and $329 million as of June 30, 2026 and December 31, 2025, respectively.

The Company recognized tax credits related to LIHTC investments of $21.5 million and $22.1 million during the three months ended June 30, 2026 and 2025, respectively, and $36.1 million and $39.7 million during the six months ended June 30, 2026

46

and 2025, respectively. For the three months ended June 30, 2026 and 2025, amortization related to LIHTC investments of $19.2 million and $19.0 million, respectively, was included as a component of income tax expense, compared to $32.1 million and $34.1 million for the six months ended June 30, 2026 and 2025, respectively.

15. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments and Letters of Credit

The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized on the Consolidated Balance Sheet.

Lines of credit are obligations to lend money to a borrower. Credit risk arises when the borrower's current financial condition may indicate a diminished ability to pay compared to when the commitment was originally made. In the case of letters of credit, the risk arises from the potential failure of the customer to perform according to the terms of a contract. In such a situation, the third party might draw on the letter of credit to pay for completion of the contract and the Company would look to its customer to repay these funds with interest. To minimize the risk, the Company uses the same credit policies in making commitments and conditional obligations as it would for a loan to that customer.

Letters of credit and financial guarantees are commitments issued by the Company to guarantee the performance of a customer to a third party in borrowing arrangements. The term of financial guarantees was one year or less as of both June 30, 2026 and December 31, 2025. The Company generally has recourse to recover from the customer any amounts paid under the guarantees.

A summary of the contractual amounts for unfunded commitments and letters of credit are as follows: 

	June 30, 2026		December 31, 2025
	(in millions)
Commitments to extend credit, including unsecured loan commitments of $932 at June 30, 2026 and $1,034 at December 31, 2025	$	15,020	$	15,420
Credit card commitments and financial guarantees	887		813
Letters of credit, including unsecured letters of credit of $2 at June 30, 2026 and December 31, 2025	699		598
Total	$	16,606	$	16,831

Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. As commitments may expire without being fully drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral.

The Company has exposure to credit losses from unfunded commitments and letters of credit. As funds have not been disbursed on these commitments, they are not reported as loans outstanding. Credit losses related to these commitments are included in Other liabilities as a separate loss contingency and are not included in the ACL reported in "Note 4. Loans, Leases and Allowance for Credit Losses" of these Notes to Unaudited Consolidated Financial Statements. The loss contingency for unfunded loan commitments and letters of credit was $52.0 million and $49.6 million as of June 30, 2026 and December 31, 2025, respectively. Changes to this liability are adjusted through the provision for credit losses in the Consolidated Income Statement.

Commitments to Invest in Renewable Energy Projects

The Company has off-balance sheet commitments to invest in renewable energy projects, as described in "Note 14. Income Taxes" of these Notes to Unaudited Consolidated Financial Statements, subject to the underlying project meeting certain milestones. These conditional commitments totaled $46 million and $21 million as of June 30, 2026 and December 31, 2025, respectively.

Concentrations of Lending Activities

The Company does not have a single external customer from which it derives 10% or more of its revenues. The Company monitors concentrations of lending activities at the product and borrower relationship level. Commercial and industrial loans made up 49% and 48% of the Company's HFI loan portfolio as of June 30, 2026 and December 31, 2025, respectively. The

47

Company's loan portfolio includes significant credit exposure to the CRE market. As of June 30, 2026 and December 31, 2025, CRE related loans accounted for approximately 26% and 27% of total loans at each respective date. Approximately 13% and 14% of CRE loans, excluding construction and land loans, were owner occupied as of June 30, 2026 and December 31, 2025, respectively. No borrower relationships at both the commitment and funded loan level exceeded 5% of total loans HFI as of June 30, 2026 and December 31, 2025.

Contingencies

The Company is involved in various lawsuits of a routine nature that are being handled and defended in the ordinary course of the Company’s business. Expenses are being incurred in connection with these lawsuits, but in the opinion of management, based in part on consultation with outside legal counsel, the resolution of these lawsuits and associated defense costs will not have a material impact on the Company’s financial position, results of operations, or cash flows.

16. FAIR VALUE ACCOUNTING

The fair value of an asset or liability is the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions market participants would use in pricing an asset or liability. ASC 825 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 825 are described in "Note 1. Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally-developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure financial instruments are recorded at fair value, and are applied consistently over time. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below.

Under ASC 825, the Company elected the FVO treatment for junior subordinated debt issued by WAL. This election is irrevocable and results in the recognition of unrealized gains and losses on the debt at each reporting date. These unrealized gains and losses are recognized in OCI rather than earnings. The Company did not elect FVO treatment for the junior subordinated debt assumed in the Bridge Capital Holdings acquisition.

The following table presents unrealized gains and losses from fair value changes on junior subordinated debt:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Unrealized (losses) gains	$	(1.2)	$	(5.4)	$	0.1	$	(3.9)
Changes included in OCI, net of tax	(0.9)		(4.1)		0.1		(3.0)

48

Fair value on a recurring basis

Financial assets and financial liabilities measured at fair value on a recurring basis include the following:

AFS debt securities: Securities classified as AFS are reported at fair value utilizing Level 1 and Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include quoted prices in active markets, dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the bond’s terms and conditions, among other things.

Independent pricing service: The Company's independent pricing service provides pricing information on the majority of the Company's Level 1 and Level 2 AFS debt securities. For a small subset of securities, other pricing sources are used, including observed prices on publicly-traded securities and dealer quotes. Management independently evaluates the fair value measurements received from the Company's third-party pricing service through multiple review steps. First, management reviews what has transpired in the marketplace with respect to interest rates, credit spreads, volatility, and mortgage rates, among other things, and develops an expectation of changes to the securities' valuations from the previous quarter. Then, management selects a sample of investment securities and compares the values provided by its primary third-party pricing service to the market values obtained from secondary sources, including other pricing services and safekeeping statements, and evaluates those with notable variances. In instances where there are discrepancies in pricing from various sources and management expectations, management may manually price securities using currently observed market data to determine whether they can develop similar prices or may utilize bid information from broker dealers. Any remaining discrepancies between management’s review and the prices provided by the vendor are discussed with the vendor and/or the Company’s other valuation advisors.

Equity securities: Preferred stock and CRA investments are reported at fair value utilizing Level 1 inputs.

Trading securities and loans HFS: Certain government-insured or guaranteed and agency-conforming 1-4 family residential loans HFS and trading securities are salable into active markets. Accordingly, the fair value of these loans and securities is based primarily on quoted market or contracted selling prices or a market price equivalent, which are categorized as Level 2 in the fair value hierarchy. The Company's loans HFS are classified as Level 3 in the fair value hierarchy and are measured using a weighted average blend of loan values assuming redelivery into GNMA securities and liquidation, each adjusted by the lifetime liquidation probability.

Mortgage servicing rights: MSRs are measured based on valuation techniques using Level 3 inputs. The Company uses a discounted cash flow model that incorporates assumptions market participants would use in estimating the fair value of servicing rights, including, but not limited to, option adjusted spread, conditional prepayment rate, servicing fee rate, recapture rate, and cost to service.

Derivative financial instruments: Forward contracts are measured based on valuation techniques using Level 2 inputs, such as quoted market prices, contracted selling prices, or a market price equivalent. Interest rate and foreign currency contracts are reported at fair value utilizing Level 2 inputs. The Company obtains dealer quotations to value its interest rate contracts. IRLCs are measured based on valuation techniques that consider loan type, underlying loan amount, maturity date, note rate, loan program, and expected settlement date, with Level 3 inputs for the servicing release premium and pull-through rate. These measurements are adjusted at the loan level to consider the servicing release premium and loan pricing adjustment specific to each loan. The base value is then adjusted for estimated pull-through rates. The pull-through rate and servicing fee multiple are unobservable inputs based on historical experience. Equity warrants are measured using a Black-Scholes option pricing model based on contractual strike price, expected term, the risk-free interest rate, volatility assumptions, dividend yields, and underlying stock prices. As a majority of the warrants in the Company's portfolio are with privately-held companies, volatility assumptions used in the Black-Scholes model are based on public company comparables in similar industries. The volatility input is considered Level 3 as the underlying equity is not publicly traded and is determined using comparable publicly traded companies. The asset valuations are further adjusted using a reliability estimate due to the nature of data availability of privately-held companies. In addition to the above, warrants with publicly-held companies utilize the underlying stock price and are further adjusted by applying a discount up to 20 percent if certain sales restrictions are present.

Junior subordinated debt: The Company estimates the fair value of its junior subordinated debt using a discounted cash flow model which incorporates the effect of the Company’s own credit risk in the fair value of the liabilities (Level 3). The Company’s cash flow assumptions are based on contractual cash flows as the Company anticipates it will pay the debt according to its contractual terms.

49

The fair value of assets and liabilities measured at fair value on a recurring basis was determined using the following inputs: 

	Fair Value Measurements at the End of the Reporting Period Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
June 30, 2026	(in millions)
Assets:
Available-for-sale debt securities
CLO	$	—	$	3,221	$	—	$	3,221
Commercial MBS issued by GSEs and GNMA	—		514		—		514
Corporate debt securities	—		222		—		222
Private label residential MBS	—		1,136		—		1,136
Residential MBS issued by GSEs and GNMA	—		7,428		—		7,428
Tax-exempt	—		794		—		794
U.S. Treasury securities	5,494		—		—		5,494
Other	29		42		—		71
Total AFS debt securities	$	5,523	$	13,357	$	—	$	18,880
Equity securities
CRA investments	$	28	$	—	$	—	$	28
Preferred stock	52		—		—		52
Total equity securities	$	80	$	—	$	—	$	80
Loans HFS (2)	$	—	$	3,261	$	963	$	4,224
Mortgage servicing rights	—		—		1,500		1,500
Derivative assets (1)	—		106		59		165
Liabilities:
Junior subordinated debt (3)	$	—	$	—	$	71	$	71
Derivative liabilities (1)	—		103		1		104

(1)See "Note 12. Derivatives and Hedging Activities." In addition, the carrying value of loans is decreased by $42 million as of June 30, 2026 for the effective portion of the hedge, which relates to the fair value of the hedges put in place to mitigate against fluctuations in interest rates. Derivative assets exclude margin of $411 million. There was no margin for derivative liabilities as of June 30, 2026.

(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.

(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.

50

	Fair Value Measurements at the End of the Reporting Period Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
December 31, 2025	(in millions)
Assets:
Available-for-sale debt securities
CLO	$	—	$	2,747	$	—	$	2,747
Commercial MBS issued by GSEs and GNMA	—		635		—		635
Corporate debt securities	—		297		—		297
Private label residential MBS	—		1,039		—		1,039
Residential MBS issued by GSEs and GNMA	—		7,230		—		7,230
Tax-exempt	—		802		—		802
U.S. Treasury securities	5,970		—		—		5,970
Other	28		40		—		68
Total AFS debt securities	$	5,998	$	12,790	$	—	$	18,788
Equity securities
CRA investments	$	27	$	—	$	—	$	27
Preferred stock	52		—		—		52
Total equity securities	$	79	$	—	$	—	$	79
Loans HFS (2)	$	—	$	2,664	$	700	$	3,364
Mortgage servicing rights	—		—		1,494		1,494
Derivative assets (1)	—		148		59		207
Liabilities:
Junior subordinated debt (3)	$	—	$	—	$	71	$	71
Derivative liabilities (1)	—		105		1		106

(1)See "Note 12. Derivatives and Hedging Activities." Derivative assets and liabilities exclude margin of $366 million and $7 million, respectively.

(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.

(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.

The change in Level 3 liabilities measured at fair value on a recurring basis included in OCI was as follows:

	Junior Subordinated Debt
	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Beginning balance	$	(69.9)	$	(63.2)	$	(71.2)	$	(64.7)
Change in fair value (1)	(1.2)		(5.4)		0.1		(3.9)
Ending balance	$	(71.1)	$	(68.6)	$	(71.1)	$	(68.6)

(1)Unrealized gains (losses) attributable to changes in the fair value of junior subordinated debt are recorded in OCI, net of tax, and totaled $(0.9) million and $(4.1) million for three months ended June 30, 2026 and 2025, respectively, and $0.1 million and $(3.0) million for the six months ended June 30, 2026 and 2025, respectively.

The significant unobservable inputs used in the fair value measurements of these Level 3 liabilities were as follows:

	June 30, 2026		Valuation Technique	Significant Unobservable Inputs	Input Value
	(in millions)
Junior subordinated debt	$	71	Discounted cash flow	Implied credit rating of the Company	5.49	%

 

	December 31, 2025		Valuation Technique	Significant Unobservable Inputs	Input Value
	(in millions)
Junior subordinated debt	$	71	Discounted cash flow	Implied credit rating of the Company	5.36	%

The significant unobservable inputs used in the fair value measurement of the Company’s junior subordinated debt as of June 30, 2026 and December 31, 2025 was the implied credit risk for the Company. The implied credit risk spread as of June 30, 2026 and December 31, 2025 was calculated as the difference between the average of the 9 and 10-year 'BB' rated financial indexes over the 5 and 10-year swap indexes.

51

As of June 30, 2026, the Company estimated the discount rate at 5.49%, which represents an implied credit spread of 1.76% plus three-month SOFR (3.73%). As of December 31, 2025, the Company estimated the discount rate at 5.36%, which was a 1.71% credit spread plus three-month SOFR (3.65%).

The change in Level 3 assets and liabilities measured at fair value on a recurring basis recognized in income was as follows:

	Three Months Ended June 30, 2026								Six Months Ended June 30, 2026
	Loans HFS		MSRs		IRLCs (1)		Warrants		Loans HFS		MSRs		IRLCs (1)		Warrants
	(in millions)
Balance, beginning of period	$	1,011	$	1,516	$	(3)	$	40	$	700	$	1,494	$	19	$	39
Purchases and additions	381		294		6,571		3		903		589		12,111		5
Sales and payments	(429)		(268)		—		—		(654)		(479)		—		—
Transfers from Level 2 to Level 3	3		—		—		—		5		—		—		—
Transfers from Level 3 to Level 2	—		—		—		—		—		—		—		—
Settlement of IRLCs upon acquisition or origination of loans HFS	—		—		(6,549)		—		—		—		(12,109)		—
Warrant exercises	—		—		—		(10)		—		—		—		(12)
Change in fair value	(3)		12		1		4		9		34		(1)		5
Mark to market adjustments	—		—		—		—		—		—		—		—
Realization of cash flows	—		(54)		—		—		—		(138)		—		—
Balance, end of period	$	963	$	1,500	$	20	$	37	$	963	$	1,500	$	20	$	37
Changes in unrealized gains (losses) for the period (2)	$	5	$	3	$	20	$	(3)	$	16	$	26	$	20	$	(3)
	Three Months Ended June 30, 2025								Six Months Ended June 30, 2025
	Loans HFS		MSRs		IRLCs (1)		Warrants		Loans HFS		MSRs		IRLCs (1)		Warrants
	(in millions)
Balance, beginning of period	$	63	$	1,241	$	13	$	31	$	3	$	1,127	$	(2)	$	30
Purchases and additions	90		284		5,490		2		154		545		11,232		6
Sales and payments	(71)		(452)		—		—		(80)		(535)		—		—
Transfers from Level 2 to Level 3	2		—		—		—		4		—		—		—
Transfers from Level 3 to Level 2	—		—		—		—		—		—		—		—
Settlement of IRLCs upon acquisition or origination of loans HFS	—		—		(5,481)		—		—		—		(11,213)		—
Warrant exercises	—		—		—		—		—		—		—		(1)
Change in fair value	—		23		2		—		3		3		7		(2)
Mark to market adjustments	—		—		—		—		—		—		—		—
Realization of cash flows	—		(52)		—		—		—		(96)		—		—
Balance, end of period	$	84	$	1,044	$	24	$	33	$	84	$	1,044	$	24	$	33
Changes in unrealized gains (losses) for the period (2)	$	2	$	3	$	24	$	2	$	3	$	(6)	$	24	$	2

(1)     IRLC asset and liability positions are presented net.

(2)    Amounts recognized as part of non-interest income.

52

The significant unobservable inputs used in the fair value measurements of these Level 3 assets and liabilities were as follows:

		June 30, 2026
Asset/liability	Key inputs	Range	Weighted average
MSRs:	Option adjusted spread (in basis points)	287 - 484	390
	Conditional prepayment rate (1)	5.5% - 12.4%	9.8		%
	Recapture rate	0.0% - 55.0%	25.2		%
	Servicing fee rate (in basis points)	25.0 - 56.5	37.9
	Cost to service	$77 - $83	$	80
Loans HFS:	Lifetime liquidation probability	1.6% to 22.9%	9.7		%
IRLCs:	Servicing fee multiple	4.8 - 7.2	5.9
	Pull-through rate	78% - 100%	91.0		%
Equity warrants:	Volatility	47.5% - 179.2%	77.7		%
	Risk-free interest rate	3.9% - 4.4%	4.1		%
	Time to expiration (in years)	1.0 - 10.0	3.3

		December 31, 2025
Asset/liability	Key inputs	Range	Weighted average
MSRs:	Option adjusted spread (in basis points)	283 - 317	316
	Conditional prepayment rate (1)	6.1% - 14.1%	11.0		%
	Recapture rate	0.0% - 55.0%	25.5		%
	Servicing fee rate (in basis points)	25.0 - 56.5	38.1
	Cost to service	$77 - $83	$	79
Loans HFS:	Lifetime liquidation probability	1.6% - 10.7%	4.6		%
IRLCs:	Servicing fee multiple	4.7 - 6.5	5.5
	Pull-through rate	74% - 100%	92.0		%
Equity warrants:	Volatility	40.3% - 180.4%	74.7		%
	Risk-free interest rate	3.5% - 4.1%	3.6		%
	Time to expiration (in years)	1.0 - 10.0	2.9

(1)    Lifetime total prepayment speed annualized.

The following is a summary of the difference between the aggregate fair value and the aggregate UPB of loans HFS for which the FVO has been elected:

	June 30, 2026						December 31, 2025
	Fair value		UPB		Difference		Fair value		UPB		Difference
	(in millions)
Loans HFS:
Current through 89 days delinquent	$	3,528	$	3,421	$	107	$	2,846	$	2,744	$	102
90 days or more delinquent	696		676		20		518		501		17
Total	$	4,224	$	4,097	$	127	$	3,364	$	3,245	$	119

Fair value on a nonrecurring basis

Certain assets are measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of credit deterioration. The following table presents such assets carried on the Consolidated Balance Sheet by caption and by level within the ASC 825 hierarchy:

	Fair Value Measurements at the End of the Reporting Period Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Active Markets for Similar Assets (Level 2)		Unobservable Inputs (Level 3)
	(in millions)
As of June 30, 2026:
Loans HFI	$	481	$	—	$	—	$	481
Other assets acquired through foreclosure	126		—		—		126
As of December 31, 2025:
Loans HFI	$	395	$	—	$	—	$	395
Other assets acquired through foreclosure	137		—		—		137

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For Level 3 assets measured at fair value on a nonrecurring basis as of period end, the significant unobservable inputs used in the fair value measurements were as follows:

	June 30, 2026		Valuation Technique(s)		Significant Unobservable Inputs	Range
	(in millions)
Loans HFI	$	481	Collateral method	Third party appraisal	Costs to sell	6.0% to 10.0%
			Discounted cash flow method	Discount rate	Contractual loan rate	3.0% to 8.0%
				Scheduled cash collections	Probability of default	0% to 20.0%
				Proceeds from non-real estate collateral	Loss given default	0% to 70.0%
Other assets acquired through foreclosure	126		Collateral method	Third party appraisal	Costs to sell	1.0% to 6.0%

	December 31, 2025		Valuation Technique(s)		Significant Unobservable Inputs	Range
	(in millions)
Loans HFI	$	395	Collateral method	Third party appraisal	Costs to sell	6.0% to 10.0%
			Discounted cash flow method	Discount rate	Contractual loan rate	3.0% to 8.0%
				Scheduled cash collections	Probability of default	0% to 20.0%
				Proceeds from non-real estate collateral	Loss given default	0% to 70.0%
Other assets acquired through foreclosure	137		Collateral method	Third party appraisal	Costs to sell	1.0% to 6.0%

Loans HFI: Loans measured at fair value on a nonrecurring basis include collateral dependent loans. The specific reserves for these loans are based on collateral value, net of estimated disposition costs and other identified quantitative inputs. Collateral value is determined based on independent third-party appraisals or internally-developed discounted cash flow analyses. Appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Fair value is determined, where possible, using market prices derived from an appraisal or evaluation, which are considered to be Level 2. However, certain assumptions and unobservable inputs are often used by the appraiser, therefore qualifying the assets as Level 3 in the fair value hierarchy. In addition, when adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. Internal discounted cash flow analyses are also utilized to estimate the fair value of these loans, which considers internally-developed, unobservable inputs such as discount rates, default rates, and loss severity.

Total Level 3 collateral dependent loans had an estimated fair value of $481 million and $395 million at June 30, 2026 and December 31, 2025, respectively, net of a specific ACL of $23 million and $15 million at June 30, 2026 and December 31, 2025, respectively.

Other assets acquired through foreclosure: Other assets acquired through foreclosure consist of properties acquired as a result of, or in-lieu-of, foreclosure. These assets are initially reported at the fair value determined by independent appraisals using appraised value less estimated cost to sell. Such properties are typically re-appraised every 12 months. Costs relating to the development or improvement of the assets are capitalized and costs relating to holding the assets are charged to expense.

Fair value is determined, where possible, using market prices derived from an appraisal or evaluation, which are considered to be Level 2. However, certain assumptions and unobservable inputs are often used by the appraiser, therefore qualifying the assets as Level 3 in the fair value hierarchy. When significant adjustments are based on unobservable inputs, such as when a current appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the resulting fair value measurement has been categorized as a Level 3 measurement. The Company had $126 million and $137 million of such assets at June 30, 2026 and December 31, 2025, respectively.

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Fair Value of Financial Instruments

The estimated fair value of the Company’s financial instruments is as follows:

	June 30, 2026
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
Financial assets:
Investment securities:
HTM	$	1,676	$	—	$	1,497	$	—	$	1,497
AFS	18,880		5,523		13,357		—		18,880
Equity	80		80		—		—		80
Derivative assets (1)	165		—		106		59		165
Loans HFS	4,347		—		3,285		1,062		4,347
Loans HFI, net	60,462		—		—		58,938		58,938
Mortgage servicing rights	1,500		—		—		1,500		1,500
Accrued interest receivable	505		—		505		—		505
Financial liabilities:
Deposits	$	81,874	$	—	$	81,899	$	—	$	81,899
Other borrowings	6,236		—		6,239		—		6,239
Qualifying debt	1,069		—		980		86		1,066
Derivative liabilities (1)	104		—		103		1		104
Accrued interest payable	109		—		109		—		109

(1)    Derivative assets and liabilities exclude margin of $411 million and zero, respectively.

	December 31, 2025
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
Financial assets:
Investment securities:
HTM	$	1,584	$	—	$	1,427	$	—	$	1,427
AFS	18,788		5,998		12,790		—		18,788
Equity securities	79		79		—		—		79
Derivative assets (1)	207		—		148		59		207
Loans HFS	3,498		—		2,664		834		3,498
Loans HFI, net	58,216		—		—		57,206		57,206
Mortgage servicing rights	1,494		—		—		1,494		1,494
Accrued interest receivable	473		—		473		—		473
Financial liabilities:
Deposits	$	77,159	$	—	$	77,185	$	—	$	77,185
Other borrowings	5,240		—		5,242		—		5,242
Qualifying debt	1,076		—		981		87		1,068
Derivative liabilities (1)	106		—		105		1		106
Accrued interest payable	116		—		116		—		116

(1)    Derivative assets and liabilities exclude margin of $366 million and $7 million, respectively.

Interest rate risk

The Company assumes interest rate risk (the risk to the Company’s earnings and capital from changes in interest rate levels) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments, as well as its future net interest income, will change when interest rate levels change and that change may be either favorable or unfavorable to the Company.

Interest rate risk exposure is measured using interest rate sensitivity analysis to determine the Company's change in EVE and net interest income resulting from hypothetical changes in interest rates. If potential changes to EVE and earnings resulting from hypothetical interest rate changes are not within the limits established by the BOD, the BOD may direct management to adjust the asset and liability mix to bring interest rate risk within BOD-approved limits.

55

ALCO is charged with managing interest rate risk within the BOD-approved limits. Limits are structured to preclude an interest rate risk profile which does not conform to both management and BOD risk tolerances without BOD and ALCO approval. Interest rate risk is also evaluated at the Parent level, which is reported to the BOD and its Finance and Investment Committee.

Fair value of commitments

The estimated fair value of letters of credit outstanding at June 30, 2026 and December 31, 2025 approximates zero as there have been no significant changes in borrower creditworthiness. Loan commitments on which the committed interest rates are less than the current market rate are insignificant at June 30, 2026 and December 31, 2025.

17. SEGMENTS

The Company's operating segments are aggregated with a focus on products and services offered and consist of three reportable segments:

•Commercial: provides commercial banking and treasury management products and services to small and middle-market businesses, specialized banking services to sophisticated commercial institutions and investors within niche industries, as well as financial services to the real estate industry.

•Consumer Related: offers both commercial banking services to enterprises in consumer-related sectors and consumer banking services, such as residential mortgage banking.

•Corporate & Other: consists of the Company's investment portfolio, Corporate borrowings and other related items, income and expense items not allocated to other reportable segments, and inter-segment eliminations.

The Company's segment reporting process begins with the assignment of all loan and deposit accounts directly to the segments where these products are originated and/or serviced. Equity capital is assigned to each segment based on the risk profile of their assets and liabilities. With the exception of goodwill, which is assigned a 100% weighting, equity capital allocations ranged from 0% to 25% during the period. Any excess or deficient equity not allocated to segments based on risk is assigned to the Corporate & Other segment.

Net interest income, provision for credit losses, and non-interest expense amounts are recorded in their respective segments to the extent the amounts are directly attributable to those segments. Net interest income is recorded in each segment on a TEB with a corresponding increase in income tax expense, which is eliminated in the Corporate & Other segment.

Further, net interest income of a reportable segment includes a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics. Using this funds transfer pricing methodology, liquidity is transferred between users and providers. A net user of funds has lending/investing in excess of deposits/borrowings and a net provider of funds has deposits/borrowings in excess of lending/investing. A segment that is a user of funds is charged for the use of funds, while a provider of funds is credited through funds transfer pricing, which is determined based on the average estimated life of the assets or liabilities in the portfolio. Residual funds transfer pricing mismatches are allocable to the Corporate & Other segment and presented in net interest income.

The net income amount for each reportable segment is further derived by the use of expense allocations. Certain expenses not directly attributable to a specific segment are allocated across all segments based on key metrics, such as number of employees, number of transactions processed for loans and deposits, and average loan and deposit balances. These types of expenses include information technology, operations, human resources, finance, risk management, credit administration, legal, and marketing.

Income taxes are applied to each segment based on estimated effective tax rates. Any difference in the corporate tax rate and the aggregate effective tax rates in the segments are adjusted in the Corporate & Other segment.

The assignment and allocation methodologies used in the segment reporting process discussed above change from time to time as systems are enhanced, methods for evaluating segment performance or product lines change or as business segments are realigned.

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The following is a summary of operating segment information for the periods indicated:

Balance Sheet:	Consolidated Company		Commercial		Consumer Related		Corporate & Other
At June 30, 2026:	(in millions)
Assets:
Cash, cash equivalents, and investment securities	$	26,558	$	14	$	—	$	26,544
Loans HFS	4,347		62		4,285		—
Loans HFI, net of deferred fees and costs	60,949		36,153		24,796		—
Less: allowance for credit losses	(487)		(413)		(74)		—
Net loans HFI	60,462		35,740		24,722		—
Goodwill and other intangible assets, net	644		290		354		—
Other assets	6,690		378		2,483		3,829
Total assets	$	98,701	$	36,484	$	31,844	$	30,373
Liabilities:
Deposits	$	81,874	$	31,220	$	44,619	$	6,035
Borrowings and qualifying debt	7,305		—		57		7,248
Other liabilities	1,387		108		500		779
Total liabilities	90,566		31,328		45,176		14,062
Allocated equity:	8,135		3,584		2,637		1,914
Total liabilities and equity	$	98,701	$	34,912	$	47,813	$	15,976
Excess funds (used) provided	$	—	$	(1,572)	$	15,969	$	(14,397)
Income Statement:
Three Months Ended June 30, 2026:	(in millions)
Interest income	$	1,231.9	$	608.6	$	342.3	$	281.0
Interest expense	435.0		165.1		151.7		118.2
Funds transfer pricing	—		(62.0)		343.0		(281.0)
Net interest income (expense)	796.9		381.5		533.6		(118.2)
Provision for (recovery of) credit losses	80.4		82.7		(2.7)		0.4
Net interest income (expense) after provision for credit losses	716.5		298.8		536.3		(118.6)
Non-interest income	198.8		56.9		109.6		32.3
Salaries and employee benefits	204.3		43.8		52.9		107.6
Other non-interest expense (1)	379.0		139.3		338.7		(99.0)
Income (loss) before provision for income taxes	332.0		172.6		254.3		(94.9)
Income tax expense (benefit)	63.2		32.8		48.8		(18.4)
Net income (loss)	$	268.8	$	139.8	$	205.5	$	(76.5)
Six Months Ended June 30, 2026:	(in millions)
Interest income	$	2,420.1	$	1,207.0	$	672.3	$	540.8
Interest expense	856.9		323.4		302.5		231.0
Funds transfer pricing	—		(131.6)		648.3		(516.7)
Net interest income (expense)	1,563.2		752.0		1,018.1		(206.9)
Provision for (recovery of) credit losses	293.6		288.9		3.8		0.9
Net interest income (expense) after provision for credit losses	1,269.6		463.1		1,014.3		(207.8)
Non-interest income	451.4		104.7		228.1		118.6
Salaries and employee benefits	409.8		87.8		103.7		218.3
Other non-interest expense (1)	747.9		278.1		660.6		(190.8)
Income (loss) before provision for income taxes	563.3		201.9		478.1		(116.7)
Income tax expense (benefit)	105.3		37.8		88.3		(20.8)
Net income (loss)	$	458.0	$	164.1	$	389.8	$	(95.9)

(1)    The composition of Other non-interest expense is consistent with Non-interest expense as presented in the Consolidated Income Statement.

57

Balance Sheet:	Consolidated Company		Commercial		Consumer Related		Corporate & Other
At December 31, 2025:	(in millions)
Assets:
Cash, cash equivalents, and investment securities	$	24,034	$	16	$	—	$	24,018
Loans HFS	3,498		67		3,431		—
Loans HFI, net of deferred fees and costs	58,677		34,784		23,893		—
Less: allowance for credit losses	(461)		(390)		(71)		—
Net loans HFI	58,216		34,394		23,822		—
Goodwill and other intangible assets, net	649		290		359		—
Other assets	6,377		352		2,237		3,788
Total assets	$	92,774	$	35,119	$	29,849	$	27,806
Liabilities:
Deposits	$	77,159	$	30,806	$	40,466	$	5,887
Borrowings and qualifying debt	6,316		—		48		6,268
Other liabilities	1,353		91		336		926
Total liabilities	84,828		30,897		40,850		13,081
Allocated equity:	7,946		3,400		2,570		1,976
Total liabilities and equity	$	92,774	$	34,297	$	43,420	$	15,057
Excess funds provided (used)	$	—	$	(822)	$	13,571	$	(12,749)
Income Statement:
Three Months Ended June 30, 2025:	(in millions)
Interest income	$	1,154.4	$	612.9	$	303.3	$	238.2
Interest expense	456.8		153.5		156.9		146.4
Funds transfer pricing	—		(138.3)		286.0		(147.7)
Net interest income	697.6		321.1		432.4		(55.9)
Provision for credit losses	39.9		35.0		4.8		0.1
Net interest income after provision for credit losses	657.7		286.1		427.6		(56.0)
Non-interest income	148.3		38.3		86.0		24.0
Salaries and employee benefits	179.9		35.4		39.1		105.4
Other non-interest expense (1)	334.8		134.4		291.2		(90.8)
Income (loss) before provision for income taxes	291.3		154.6		183.3		(46.6)
Income tax expense	53.5		28.1		34.3		(8.9)
Net income	$	237.8	$	126.5	$	149.0	$	(37.7)
Six Months Ended June 30, 2025:
Interest income	$	2,250.0	$	1,204.4	$	588.5	$	457.1
Interest expense	901.8		303.4		312.9		285.5
Funds transfer pricing	—		(270.1)		556.2		(286.1)
Net interest income	1,348.2		630.9		831.8		(114.5)
Provision for credit losses	71.1		66.2		9.9		(5.0)
Net interest income (expense) after provision for credit losses	1,277.1		564.7		821.9		(109.5)
Non-interest income	275.7		75.2		165.5		35.0
Salaries and employee benefits	362.3		79.6