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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2026

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of LHFS measured at fair value:


	March 31, 2026			December 31, 2025
(dollars in millions)	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal	Aggregate Fair Value	Aggregate Unpaid Principal	Aggregate Fair Value Greater (Less) Than Aggregate Unpaid Principal
Residential mortgage loans held for sale	$778	$770	$8	$895	$872	$23
Commercial loans held for sale	139	147	(8)	170	185	(15)

Assets and liabilities measured on recurring basis

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at March 31, 2026:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$31,937	$—	$31,937	$—

Collateralized loan obligations	89	—	89	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	4,334	4,334	—	—
Total debt securities available for sale	36,361	4,334	32,027	—
Loans held for sale:
Residential loans held for sale	778	—	778	—
Commercial loans held for sale	139	—	139	—
Total loans held for sale, at fair value	917	—	917	—
Mortgage servicing rights	1,462	—	—	1,462
Derivative assets:
Interest rate contracts	411	—	411	—
Foreign exchange contracts	528	—	528	—
Commodities contracts	717	—	717	—
TBA contracts	29	—	29	—
Other contracts	7	—	2	5
Total derivative assets	1,692	—	1,687	5
Equity securities, at fair value(1)	269	269	—	—
Short-term investments	65	30	35	—
Total assets	$40,766	$4,633	$34,666	$1,467
Derivative liabilities:
Interest rate contracts	$468	$—	$468	$—
Foreign exchange contracts	366	—	366	—
Commodities contracts	661	—	661	—
TBA contracts	20	—	20	—
Other contracts	4	—	—	4
Total derivative liabilities	1,519	—	1,515	4
Short-term borrowed funds	54	40	14	—
Other liabilities	113	—	113	—
Total liabilities	$1,686	$40	$1,642	$4

(1) Excludes investments of $67 million included in Other assets in the Consolidated Balance Sheets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. These investments include capital contributions to private investment funds and have unfunded capital commitments of $14 million at March 31, 2026, which may be called at any time during prescribed time periods. The credit exposure is generally limited to the carrying amount of investments made and unfunded capital commitments.

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities, on a recurring basis at December 31, 2025:


(dollars in millions)	Total	Level 1	Level 2	Level 3
Debt securities available for sale:
Mortgage-backed securities	$32,484	$—	$32,484	$—
Collateralized loan obligations	89	—	89	—
State and political subdivisions	1	—	1	—
U.S. Treasury and other	3,123	3,123	—	—
Total debt securities available for sale	35,697	3,123	32,574	—
Loans held for sale:
Residential loans held for sale	895	—	895	—
Commercial loans held for sale	170	—	170	—
Total loans held for sale, at fair value	1,065	—	1,065	—
Mortgage servicing rights	1,455	—	—	1,455
Derivative assets:
Interest rate contracts	553	—	553	—
Foreign exchange contracts	510	—	510	—
Commodities contracts	458	—	458	—
TBA contracts	2	—	2	—
Other contracts	9	—	1	8
Total derivative assets	1,532	—	1,524	8
Equity securities, at fair value(1)	251	251	—	—
Short-term investments	72	40	32	—
Total assets	$40,072	$3,414	$35,195	$1,463
Derivative liabilities:
Interest rate contracts	$471	$—	$471	$—
Foreign exchange contracts	373	—	373	—
Commodities contracts	405	—	405	—
TBA contracts	6	—	6	—
Other contracts	3	—	—	3
Total derivative liabilities	1,258	—	1,255	3
Short-term borrowed funds	52	40	12	—
Other liabilities	157	—	157	—
Total liabilities	$1,467	$40	$1,424	$3

(1) Excludes investments of $66 million included in Other assets in the Consolidated Balance Sheets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. These investments include capital contributions to private investment funds and have unfunded capital commitments of $14 million at December 31, 2025, which may be called at any time during prescribed time periods. The credit exposure is generally limited to the carrying amount of investments made and unfunded capital commitments.

Assets measured at fair value on recurring basis and classified as Level 3

The following tables present a roll forward of the balance sheet amounts for assets and liabilities measured at fair value on a recurring basis and classified as Level 3:


	Three Months Ended March 31, 2026
(dollars in millions)		Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance		$1,455	$5
Issuances		48	17


Settlements(2)		(46)	(9)
Changes in fair value recognized in earnings(3)		5	(12)
Ending balance		$1,462	$1


	Three Months Ended March 31, 2025
(dollars in millions)	Mortgage Servicing Rights	Other Derivative Contracts
Beginning balance	$1,491	$1



Issuances	27	16

Sales(1)	(72)	—
Settlements(2)	(39)	(16)
Changes in fair value recognized in earnings(3)	(10)	4
Ending balance	$1,397	$5

(1) For MSRs, represents the sale of the excess servicing yield on MSRs.

(2) For MSRs, represents changes in value of the MSRs due to i) the passage of time including the impact from both regularly scheduled loan principal payments and partial paydowns, and ii) loans that paid off during the period. For other derivative contracts, represents the closeout of interest rate lock commitments and other cash payments.

(3) Represents changes in fair value primarily driven by market conditions. These changes are recorded in Mortgage banking fees and Other income in the Consolidated Statements of Operations.

Fair value measurement inputs and valuation techniques

The following table presents quantitative information about significant unobservable inputs utilized to measure the fair value of Level 3 assets and liabilities:

March 31, 2026

December 31, 2025

Financial Instrument(1)

Valuation Technique

Unobservable Input

Range (Weighted Average)

Mortgage servicing rights

Discounted Cash Flow

Constant prepayment rate

5-15% CPR (7% CPR)

6-15% CPR (7% CPR)

Option adjusted spread

398-1,038 bps (574 bps)

398-1,038 bps (588 bps)

Other derivative contracts

Internal Model

Pull through rate

18-100% (85%)

8-100% (85%)

MSR value

34-181 bps (136 bps)

25-177 bps (134 bps)

(1) Disclosures related to the fair value measurement of financial instruments deemed immaterial are not included.

Losses on assets and liabilities measured on a nonrecurring basis included in earnings

The following table presents losses recorded in earnings on assets measured at fair value on a nonrecurring basis, regardless of whether the asset is still held at period end:


	Three Months Ended March 31,
(dollars in millions)	2026	2025
Collateral-dependent loans	($26)	($59)

Fair value of assets and liabilities measured on a nonrecurring basis

The following table presents the carrying amount and fair value hierarchy of assets that were held as of the period end indicated and for which a nonrecurring fair value adjustment was recorded in earnings during the year. Carrying amount represents the fair value of the asset as of its measurement date, or date on which a nonrecurring fair value adjustment was recorded.


	March 31, 2026				December 31, 2025
(dollars in millions)	Total	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3
Collateral-dependent loans	$87	$—	$17	$70	$135	$—	$24	$111

Assets and liabilities measured at fair value

The following tables present the estimated fair value for financial instruments not recorded at fair value in the Consolidated Financial Statements. The carrying amounts are recorded in the Consolidated Balance Sheets under the indicated captions.


	March 31, 2026
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$7,800	$6,998	$—	$—	$7,484	$6,684	$316	$314
Loans held for sale	620	620	—	—	—	—	620	620
Net loans and leases	141,709	142,607	—	—	458	458	141,251	142,149
Other assets	836	836	—	—	788	788	48	48
Financial liabilities:
Deposits	184,035	183,980	—	—	184,035	183,980	—	—
Short-term borrowed funds	—	—	—	—	—	—	—	—
Long-term borrowed funds	12,260	12,083	—	—	12,260	12,083	—	—


	December 31, 2025
	Total		Level 1		Level 2		Level 3
(dollars in millions)	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
Financial assets(1):



Debt securities held to maturity	$7,933	$7,150	$—	$—	$7,595	$6,812	$338	$338
Loans held for sale	133	133	—	—	—	—	133	133
Net loans and leases	140,749	140,131	—	—	437	437	140,312	139,694
Other assets	807	807	—	—	768	768	39	39
Financial liabilities:
Deposits	183,313	183,277	—	—	183,313	183,277	—	—
Short-term borrowed funds	6	6	—	—	6	6	—	—
Long-term borrowed funds	11,224	11,472	—	—	11,224	11,472	—	—

(1) Excludes cash-related financial instruments not recorded at fair value in the Consolidated Balance Sheets with a carrying value and estimated fair value of $13.1 billion and $13.6 billion at March 31, 2026 and December 31, 2025, respectively.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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