The Company, in the normal course of business, engages in a variety of activities with entities that are considered VIEs, as defined by GAAP, with its variable interest arising from contractual, ownership, or other monetary interests in the entity. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company is the primary beneficiary of a VIE, and must consolidate it, if its variable interest provides it with the power to direct the activities that significantly impact the VIE and it has the right to receive benefits, or the obligation to absorb losses, that could potentially be significant to the VIE. Both qualitative and quantitative factors are considered regarding the nature, size, and form of involvement with the VIE to determine whether or not a variable interest held is significant to the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis.

The Company routinely sells residential mortgage loans and may, from time to time, sell other types of loans through securitization transactions. In these transactions the loans are transferred into a securitization trust, also referred to as a SPE, to legally isolate the loans from creditors. The SPE then issues beneficial interests collateralized by the transferred assets, with the Company generally retaining a portion of such interests in the form of asset-backed securities. If consolidation of the SPE is not required and certain sale accounting criteria are met, the sold loans are derecognized from the balance sheet. To achieve sale accounting, control of the loans, or other financial assets, must be surrendered upon transfer to the SPE. Retained interests, if any, are recognized as Debt securities in the Consolidated Balance Sheets.

Transfers of financial assets in which the Company has not surrendered control over the transferred assets are accounted for as a secured borrowing with a pledge of collateral. Control is generally considered surrendered when 1) the transferred assets are legally isolated from the Company and its creditors, even in bankruptcy, 2) the transferee has the right to pledge or exchange the transferred assets it received, with no condition that constrains the transferee from taking advantage of this right or that provides more than a trivial benefit to the Company, and 3) the Company does not maintain effective control over the transferred financial assets. Judgment is required to assess whether the Company maintains effective control over transferred financial assets.

The Company has consolidated VIEs related to secured borrowings collateralized by auto loans. The following table summarizes the carrying amount of assets and liabilities for the Company’s consolidated VIEs:


	December 31,
(dollars in millions)	2025	2024
Assets:

Interest-bearing deposits in banks	$157	$209
Net loans and leases	1,929	3,843
Other assets	11	21
Total assets	$2,097	$4,073
Liabilities:
Long-term borrowed funds	$1,598	$3,375
Other liabilities	4	8
Total liabilities	$1,602	$3,383

The Company utilizes a portion of its auto loan portfolio to support certain secured borrowing arrangements, which provides a source of funding for the Company and involves the transfer of auto loans to bankruptcy remote SPEs. These SPEs then issue asset-backed notes to third parties collateralized by the transferred loans. The Company holds certain residual interests in the loans and, therefore, has a right to receive benefits or the obligation to absorb losses that could potentially be significant to the SPEs. In addition, the Company retains servicing for the transferred loans and, therefore, holds the power to direct significant activities that impact the economic performance of the SPEs. As a result, the Company concluded that it is the primary beneficiary of these SPEs and, accordingly, consolidates these VIEs.

The assets of a particular VIE are the primary source of funds to settle its obligations. Creditors of these VIEs do not have recourse to the general credit of the Company. The performance of the loans transferred is the most significant driver impacting the economic performance of the VIEs.

The Company is involved with various VIEs that are not consolidated including lending to SPEs, investments in asset-backed securities, and investments in entities that sponsor affordable housing and renewable energy projects. The Company’s maximum exposure to loss resulting from its involvement with these entities is limited to the balance sheet carrying amount of its investments, unfunded commitments, and the outstanding principal balance of loans to SPEs.

The following table provides a summary of the assets and liabilities included in the Consolidated Balance Sheets related to unconsolidated VIEs that the Company holds an interest in, but is not the primary beneficiary of:


	December 31,
(dollars in millions)	2025	2024
Lending to SPEs included in Loans and leases	$5,631	$4,215
Tax-advantaged investments included in Other assets(1)	2,967	2,902
Unfunded commitments for tax-advantaged investments included in Other liabilities	1,066	1,109
Asset-backed investments included in Debt securities	338	412

The Company provides lending facilities to third-party sponsored SPEs within it Capital Markets business. The SPEs are primarily funded through these lending facilities or a syndication in which the Company participates. The principal risk of these lending facilities is the credit risk related to the underlying assets in the SPE, in which the Company generally holds a priority position.

The sponsor for each respective SPE has the power to direct how proceeds from the Company are utilized and maintains responsibility for any associated servicing commitments. Therefore, the Company is not the primary beneficiary of these SPEs and, accordingly, does not consolidate these VIEs. As of December 31, 2025 and 2024, the lending facilities had undrawn commitments to extend credit of $4.0 billion and $2.8 billion, respectively. For more information on commitments to extend credit see Note 17.

The Company applies the proportional amortization method to account for its tax-advantaged investments including LIHTC and renewable energy. Under the proportional amortization method, the Company applies a practical expedient for its LIHTC investments and amortizes the initial cost of qualifying investments in proportion to the income tax credits received in the current period as compared to the total income tax credits expected to be received over the life of the investment. For renewable energy investments, the Company amortizes the initial cost of qualifying investments in proportion to the income tax credits and other income tax benefits received in the current period as compared to the total income tax credits and other income tax benefits expected to be received over the life of the investment. The net amortization, along with the income tax credits and other income tax benefits received, are included as a component of income tax expense (benefit).

The Company makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing federal tax incentives pursuant to Section 42 of the Internal Revenue Code. The objective of these investments is to generate a satisfactory return on capital, encourage investment in projects that serve affordable housing product offerings, and further the goals of the CRA. The principal activities of the limited partnerships include the identification, development, and operation of multifamily housing properties leased to qualifying residential tenants. Funding for these investments is generally provided through a combination of debt and equity.

LIHTC partnerships in which the Company invests are managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. Therefore, the Company is not the primary beneficiary of these partnerships and, accordingly, does not consolidate these VIEs. The Company’s investments in LIHTC partnerships totaled $2.8 billion and $2.6 billion, respectively, as of December 31, 2025 and 2024. Unfunded commitments related to these investments, included in Other liabilities in the Consolidated Balance Sheets, totaled $1.1 billion as of December 31, 2025 and 2024.

The Company’s investments in certain renewable energy entities provide benefits from government incentives and other tax attributes (e.g., tax depreciation). The Company does not have the power to direct the activities which most significantly affect the performance of these entities as a tax equity investor. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs. The Company’s investments in renewable energy entities totaled $201 million and $269 million, respectively, as of December 31, 2025 and 2024.

Contingent commitments related to the Company’s renewable energy investments were $6 million at December 31, 2025, and are expected to be paid in varying amounts through 2028. These payments are contingent upon the level of electricity production attained by the renewable energy entity relative to its targeted threshold, changes in the production tax credit rates set by the Internal Revenue Service, and the achievement of commercial operation for a certain renewable energy project under its power purchase agreement.

The Company’s investments in asset-backed securities are collateralized by education and residential mortgage loans sold to third-party sponsored VIEs. The Company acts as the primary servicer for the sold education loans and receives a servicing fee, with a third-party servicer responsible for all loans that become significantly delinquent. With respect to sold residential mortgage loans, the Company initially purchases these loans from third parties as part of its mortgage banking activities and then subsequently sells them to FNMA or FHLMC in exchange for mortgage-backed securities issued by securitization SPEs that they sponsor. The securitizations are structured without recourse to the Company except for standard representations and warranties and with no restrictions on the retained interests. The Company does not retain servicing for the sold residential mortgage loans.

The Company’s investments in the asset-backed securities, as well as the primary servicing fee on the sold education loans, are considered variable interests in the VIEs since some of the losses of the VIEs could be absorbed by the Company’s interest in the asset-backed securities or the primary servicing fee. However, the Company does not control the servicing activities on significantly delinquent loans, nor does it retain any servicing activities related to the residential mortgage loans. Since these activities significantly impact the economic performance of the VIEs, the Company has concluded that it is not the primary beneficiary of the VIEs and, accordingly, does not consolidate the VIEs.

Retained interests from the sale and securitization of originated residential mortgage loans totaled $112 million and $329 million, respectively during the years ended December 31, 2025 and 2024. The mortgage-backed securities received from the issuers, FNMA and FHLMC, include a substantive guarantee and are classified as Debt securities available for sale in the Consolidated Balance Sheets. The carrying amount of these mortgage-backed securities totaled $780 million and $708 million, respectively, as of December 31, 2025 and 2024.

The Company makes certain equity investments in various tax credit limited partnerships or limited liability companies in order to achieve a satisfactory return on capital and to assist the Company in achieving goals associated with the CRA. The Company does not have the power to direct the activities which most significantly affect the performance of these entities as an equity investor. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs.

The carrying amount of these investments, included in Other assets in the Consolidated Balance Sheets, totaled $17 million and $23 million, respectively, as of December 31, 2025 and 2024. Unfunded commitments related to these investments, included in Other liabilities in the Consolidated Balance Sheets, totaled $2 million and $4 million, respectively, as of December 31, 2025 and 2024.

The following table summarizes the impact to the Consolidated Statements of Operations relative to the Company’s tax credit programs for which it has elected to apply the proportional amortization method of accounting:


	Year Ended December 31,
(dollars in millions)	2025	2024	2023
Tax credits recognized	$410	$379	$334
Other tax benefits recognized	98	93	71
Amortization	(406)	(363)	(320)
Net benefit (expense) included in Income tax expense	102	109	85
Other income	6	4	5
Allocated income (loss) on investments	(12)	(12)	(10)
Net benefit (expense) included in Noninterest income	(6)	(8)	(5)
Net benefit (expense) included in the Consolidated Statements of Operations(1)	$96	$101	$80