FCNCA 10-Q Quarter ended March 31, 2025

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NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Nature of Operations

First Citizens BancShares, Inc. (the “Parent Company” and, when including all of its subsidiaries on a consolidated basis, “we,” “us,” “our,” “BancShares”) is a financial holding company organized under the laws of Delaware that conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (“FCB”), which is headquartered in Raleigh, North Carolina. BancShares operates a network of branches and offices, predominantly located in the Southeast, Mid-Atlantic, Midwest and Western United States. BancShares provides various types of commercial and consumer banking services, including lending, leasing, and wealth management services. Deposit services include checking, savings, money market, and time deposit accounts.

Business Combinations

BancShares accounts for business combinations using the acquisition method of accounting. Under this method, acquired assets and assumed liabilities are included with the acquirer’s accounts at their estimated fair value as of the date of acquisition, with any excess of purchase price over the fair values of the net assets acquired and any finite-lived intangible assets established in connection with the business combination recognized as goodwill. To the extent the fair value of identifiable net assets acquired exceeds the purchase price, a gain on acquisition is recognized. Acquisition-related costs are recognized as period expenses as incurred.

Refer to Note 2—Business Combinations for additional information.

BASIS OF PRESENTATION

Principles of Consolidation and Basis of Presentation

These consolidated financial statements and notes thereto are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Interim results are not necessarily indicative of results for a full year.

The consolidated financial statements of BancShares include the accounts of BancShares and its subsidiaries, certain partnership interests and variable interest entities (“VIEs”) where BancShares is the primary beneficiary, if applicable. All significant intercompany accounts and transactions are eliminated upon consolidation. Assets held in agency or fiduciary capacity are not included in the consolidated financial statements.

Refer to Note 8—Variable Interest Entities for additional information regarding VIEs.

Reclassifications

Financial Statements

In certain instances, amounts reported in the 2024 consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported stockholders’ equity or net income.

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Changes to the Composition of Reportable Segments

We updated our segment reporting during the first quarter of 2025 (the “Segment Reporting Updates”) as we transferred certain components from the SVB Commercial and General Bank segments to the Commercial Bank segment and modified our segment expense allocation methodology. The Segment Reporting Updates did not result in the addition or removal of any of our existing segments at December 31, 2024, and the global fund banking and investor dependent loan portfolios, as well as a substantial portion of the innovation commercial and industrial (“innovation C&I”) and cash flow dependent loan portfolios, remain in the SVB Commercial segment.

Segment disclosures for 2024 periods included in this Form 10-Q were recast to conform with the above-described Segment Reporting Updates. Refer to Note 17—Segment Information for additional information.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions impact the amounts reported in the consolidated financial statements and accompanying notes and the disclosures provided, and actual results could differ from those estimates. The significant estimate related to the determination of the allowance for loan and lease losses (“ALLL”) is considered a critical accounting estimate.

SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are described in the 2024 Form 10-K. There were no material changes to these policies during the three months ended March 31, 2025.

NOTE 2 — BUSINESS COMBINATIONS

Silicon Valley Bridge Bank Acquisition

On March 27, 2023 (the “SVBB Acquisition Date”), FCB acquired substantially all loans and certain other assets and assumed all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. (“SVBB”) from the Federal Deposit Insurance Corporation (the “FDIC”) pursuant to the terms of a purchase and assumption agreement (the “SVBB Purchase Agreement”) by and among FCB, the FDIC, and the FDIC, as receiver of SVBB (the “SVBB Acquisition”).

BancShares determined that the SVBB Acquisition constituted a business combination as defined by Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . Accordingly, the assets acquired and liabilities assumed were initially presented at their estimated fair values based on valuations as of March 27, 2023. The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows, market conditions at the time of the SVBB Acquisition and other future events that were highly subjective in nature. Management finalized its fair value estimates for the acquired assets and assumed liabilities within the allowable one-year period following the SVBB Acquisition Date (“Measurement Period Adjustments”). BancShares recorded Measurement Period Adjustments during 2023 and none during the year ended December 31, 2024.

Pursuant to the terms of the SVBB Purchase Agreement, FCB acquired assets with a total fair value of approximately $ 107.54 billion as of the SVBB Acquisition Date, primarily including $ 68.47 billion of loans, net of the initial ALLL for purchased credit deteriorated (“PCD”) loans, and $ 35.31 billion of cash and interest-earning deposits at banks. FCB also assumed liabilities with a total fair value of approximately $ 61.42 billion, primarily including $ 56.01 billion of customer deposits. The deposits were acquired without a premium and the assets were acquired at a discount of approximately $ 16.45 billion pursuant to the terms of the SVBB Purchase Agreement. Further details regarding the fair values of the acquired assets and assumed liabilities are provided in the “Fair Value Purchase Price Allocation” table below.

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In connection with the SVBB Purchase Agreement, FCB also entered into a commercial shared loss agreement with the FDIC (the “Shared-Loss Agreement”). The Shared-Loss Agreement covered an estimated $ 60 billion of commercial loans (collectively, the “Covered Assets”) at the time of acquisition. The FDIC agreed to reimburse FCB for 0 % of losses of up to $ 5 billion with respect to Covered Assets and 50 % of losses in excess of $ 5 billion with respect to Covered Assets (“FDIC Loss Sharing”) and FCB agreed to reimburse the FDIC for 50 % of recoveries related to such Covered Assets (“FCB reimbursement”). The Shared-Loss Agreement provided for FDIC Loss Sharing for five years and FCB reimbursement for eight years . The Shared-Loss Agreement extended to loans funded within one year of the SVBB Acquisition Date that were unfunded commitments to loans at the SVBB Acquisition Date. On April 7, 2025, FCB and the FDIC entered into an agreement (the “Shared-Loss Termination Agreement”) to terminate the Shared-Loss Agreement. As a result of entering into the Shared-Loss Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the date of the Shared-Loss Termination Agreement, including FCB’s reporting covenants and obligations related to FDIC Loss Sharing and FCB reimbursement. There was no impact to our consolidated balance sheets or statements of income resulting from the Shared-Loss Termination Agreement because there was no loss indemnification asset or true-up liability associated with the Shared-Loss Agreement, primarily based on evaluation of historical loss experience and the credit quality of the Covered Assets.

In connection with the SVBB Acquisition, FCB issued a five -year $ 35 billion note payable to the FDIC (the “Original Purchase Money Note”), and entered into binding terms and conditions for an up to $ 70 billion line of credit provided by the FDIC for related risks and liquidity purposes (the “Initial Liquidity Commitment”). At such time, FCB and the FDIC agreed to negotiate additional terms and documents augmenting and superseding the Original Purchase Money Note and Initial Liquidity Commitment, and on November 20, 2023, FCB and the FDIC entered into new financing agreements for those purposes. On November 20, 2023, the Original Purchase Money Note was amended and restated, dated as of March 27, 2023 and maturing March 27, 2028 (the “Purchase Money Note”), adjusting the principal amount to approximately $ 36.07 billion. FCB and the FDIC, as lender and as collateral agent, also entered into an Advance Facility Agreement, dated as of March 27, 2023, and effective as of November 20, 2023 (the “Advance Facility Agreement”), which provided total advances available through March 27, 2025 of up to $ 70 billion solely to provide liquidity to offset deposit withdrawal or runoff of former SVBB deposit accounts and to fund the unfunded commercial lending commitments acquired in the SVBB Acquisition. There were no amounts outstanding on the facility at the end of the draw period on March 27, 2025.

Purchase Price Consideration for the SVBB Acquisition

As consideration for the SVBB Acquisition, FCB issued the Purchase Money Note with a principal amount of $ 36.07 billion (fair value of $ 35.81 billion). FCB pledged specified assets as collateral security for the Purchase Money Note and the Advance Facility Agreement, including loans purchased from the FDIC as receiver to SVBB, the related loan documents and collections, accounts established for collections and disbursements, any items credited thereto, such additional collateral (if any) as the parties may agree to in the future, and proceeds thereof. The interest rate on the Purchase Money Note accrues at a rate of 3.50 % per annum. There are no scheduled principal payments under the Purchase Money Note. FCB may voluntarily prepay principal under the Purchase Money Note without premium or penalty, twice per month. The principal amount of the Purchase Money Note is based on the carrying value of net assets acquired less the asset discount of $ 16.45 billion pursuant to the terms of the SVBB Purchase Agreement.

In addition, as part of the consideration for the SVBB Acquisition, BancShares issued a Cash Settled Value Appreciation Instrument to the FDIC (the “Value Appreciation Instrument”) in which FCB agreed to make a cash payment to the FDIC equal to the product of (i) 5 million and (ii) the excess amount by which the average volume weighted price of one share of Class A common stock, over the two Nasdaq trading days immediately prior to the date on which the Value Appreciation Instrument is exercised exceeds $ 582.55 ; provided that the settlement amount does not exceed $ 500 million. The FDIC exercised its right under the Value Appreciation Instrument on March 28, 2023 and a $ 500 million payment was made on April 4, 2023.

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The following table provides the final purchase price allocation, including Measurement Period Adjustments, to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the SVBB Acquisition Date.

Fair Value Purchase Price Allocation

dollars in millions															Fair Value Purchase Price Allocation as of March 27, 2023
Purchase price consideration
Purchase Money Note (1)															$	35,808
Value Appreciation Instrument															500
Purchase price consideration															$	36,308
Assets
Cash and due from banks															$	1,310
Interest-earning deposits at banks															34,001
Investment securities available for sale															385
Loans and leases, net of the initial PCD ALLL															68,468
Affordable housing tax credit and other unconsolidated investments															1,273
Premises and equipment															308
Core deposit intangibles															230
Other assets															1,564
Total assets acquired															$	107,539
Liabilities
Deposits															$	56,014
Borrowings															10
Deferred tax liabilities															3,364
Other liabilities															2,035
Total liabilities assumed															$	61,423
Fair value of net assets acquired															46,116
Gain on acquisition, after income taxes (2)															$	9,808
Gain on acquisition, before income taxes (2)															$	13,172

(1) The principal amount of the Purchase Money Note is the carrying value of net assets acquired of approximately $ 52.52 billion less the asset discount of $ 16.45 billion pursuant to the SVBB Purchase Agreement. The $ 35.81 billion above is net of a fair value discount of approximately $ 264 million.

(2) The difference between the gain on acquisition before and after taxes reflects the deferred tax liabilities of $ 3.36 billion recorded in the SVBB Acquisition.

The gain on acquisition of $ 9.81 billion, net of income taxes of $ 3.36 billion, was recorded in noninterest income during the year ended December 31, 2023, and represents the excess of the fair value of net assets acquired over the purchase price.

Purchase Money Note

The fair value of the Purchase Money Note was estimated based on the income approach, which includes: (i) projecting cash flows over a certain discrete projection period and (ii) discounting those projected cash flows to present value at a rate of return that considers the relative risk of the cash flows and the time value of money.

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NOTE 3 — INVESTMENT SECURITIES

The following tables include the amortized cost and fair value of investment securities:

Amortized Cost and Fair Value - Investment Securities

dollars in millions			March 31, 2025
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Investment securities available for sale
U.S. Treasury			$	13,105					$	55					$	( 10 )					$	13,150
Government agency			71						—						( 2 )						69
Residential mortgage-backed securities			16,905						143						( 443 )						16,605
Commercial mortgage-backed securities			3,759						21						( 186 )						3,594
Corporate bonds			483						1						( 19 )						465
Municipal bonds			17						—						—						17
Total investment securities available for sale			$	34,340					$	220					$	( 660 )					$	33,900
Investment in marketable equity securities			$	78					$	21					$	( 4 )					$	95
Investment securities held to maturity
U.S. Treasury			$	484					$	—					$	( 25 )					$	459
Government agency			1,491						—						( 91 )						1,400
Residential mortgage-backed securities			4,668						17						( 595 )						4,090
Commercial mortgage-backed securities			3,378						—						( 630 )						2,748
Supranational securities			301						—						( 27 )						274
Other			2						—						—						2
Total investment securities held to maturity			$	10,324					$	17					$	( 1,368 )					$	8,973
Total investment securities			$	44,742					$	258					$	( 2,032 )					$	42,968
			December 31, 2024
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Investment securities available for sale
U.S. Treasury			$	13,897					$	33					$	( 27 )					$	13,903
Government agency			79						—						( 2 )						77
Residential mortgage-backed securities			16,161						41						( 582 )						15,620
Commercial mortgage-backed securities			3,869						7						( 210 )						3,666
Corporate bonds			489						—						( 22 )						467
Municipal bonds			17						—						—						17
Total investment securities available for sale			$	34,512					$	81					$	( 843 )					$	33,750
Investment in marketable equity securities			$	79					$	27					$	( 5 )					$	101
Investment securities held to maturity
U.S. Treasury			$	483					$	—					$	( 31 )					$	452
Government agency			1,489						—						( 115 )						1,374
Residential mortgage-backed securities			4,558						2						( 682 )						3,878
Commercial mortgage-backed securities			3,407						—						( 678 )						2,729
Supranational securities			300						—						( 33 )						267
Other			2						—						—						2
Total investment securities held to maturity			$	10,239					$	2					$	( 1,539 )					$	8,702
Total investment securities			$	44,830					$	110					$	( 2,387 )					$	42,553

U.S. Treasury investments include Treasury bills and Notes issued by the U.S. Treasury. Investments in government agency securities represent securities issued by the Small Business Administration (“SBA”), Federal Home Loan Bank (“FHLB”) and other U.S. agencies. Investments in residential and commercial mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in corporate bonds represent positions in debt securities of other financial institutions. Municipal bonds are revenue bonds. Investments in marketable equity securities represent positions in common stock of publicly traded financial institutions. Investments in supranational securities represent securities issued by the Supranational Entities & Multilateral Development Banks. Other held to maturity investments include certificates of deposit with other financial institutions.

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BancShares initially held approximately 354,000 shares of Visa, Inc. (“Visa”) Class B common stock (“Visa Class B common stock”). Effective January 24, 2024, all outstanding shares of Visa Class B common stock were redenominated as Visa Class B-1 common stock (“Visa Class B-1 common stock”) pursuant to Visa’s eighth amended and restated certificate of incorporation. BancShares currently holds approximately 354,000 shares of Visa Class B-1 common stock. Until the resolution of certain litigation, at which time the Visa Class B-1 common stock will convert to publicly traded Visa Class A common stock, or the potential exchange of Visa Class B-1 common stock for other marketable classes of Visa common stock, these shares are only transferable to other stockholders of Visa Class B-1 common stock or certain new denominations of Visa’s former Class B common stock. As a result, there is limited transfer activity in private transactions between buyers and sellers. Given this limited trading activity and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange of Visa Class B-1 common stock for shares of Visa Class A common stock or other marketable classes of Visa common stock, these shares are not considered to have a readily determinable fair value and have no carrying value. BancShares continues to monitor the trading activity in Visa Class B-1 common stock, the status of the resolution of certain litigation matters at Visa, and other potential exchange alternatives that would trigger the conversion of the Visa Class B-1 common stock into Visa Class A common stock or other marketable classes of Visa common stock.

Accrued interest receivable for available for sale and held to maturity debt securities was excluded from the estimate for credit losses. At March 31, 2025, accrued interest receivable for available for sale and held to maturity debt securities was $ 178 million and $ 19 million, respectively. At December 31, 2024, accrued interest receivable for available for sale and held to maturity debt securities was $ 177 million and $ 20 million, respectively. During the three months ended March 31, 2025 and 2024, there was no accrued interest that was deemed uncollectible and written off against interest income.

A security is considered past due once it is 30 days contractually past due under the terms of the agreement. There were no securities past due as of March 31, 2025 or December 31, 2024.

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Residential and commercial mortgage-backed and government agency securities are stated separately as they are not due at a single maturity date.

Maturities - Debt Securities

dollars in millions			March 31, 2025												December 31, 2024
			Amortized Cost						Fair Value						Amortized Cost						Fair Value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less			$	5,503					$	5,508					$	5,090					$	5,086
After one through five years			7,727						7,764						8,945						8,949
After five through 10 years			353						338						346						330
After 10 years			22						22						22						22
Government agency			71						69						79						77
Residential mortgage-backed securities			16,905						16,605						16,161						15,620
Commercial mortgage-backed securities			3,759						3,594						3,869						3,666
Total investment securities available for sale			$	34,340					$	33,900					$	34,512					$	33,750
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less			$	450					$	443					$	429					$	419
After one through five years			1,281						1,209						1,299						1,208
After five through 10 years			547						483						546						468
Residential mortgage-backed securities			4,668						4,090						4,558						3,878
Commercial mortgage-backed securities			3,378						2,748						3,407						2,729
Total investment securities held to maturity			$	10,324					$	8,973					$	10,239					$	8,702

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T he following table presents interest and dividend income on investment securities:

Interest and Dividends on Investment Securities

dollars in millions			Three Months Ended March 31,
			2025						2024
Interest income - taxable investment securities (1)			$	413					$	281
Interest income - nontaxable investment securities			—						—
Dividend income - marketable equity securities			1						1
Interest on investment securities			$	414					$	282

(1) Amount includes interest income on securities purchased under agreements to resell.

The following table presents the gross realized gain and loss on sales of investment securities available for sale, and the net realized gain on sale of marketable equity securities:

Realized Gain (Loss) on Sale of Investment Securities, Net

dollars in millions			Three Months Ended March 31,
			2025						2024
Gross realized gain on sale of investment securities available for sale			$	1					$	—
Gross realized loss on sale of investment securities available for sale			( 2 )						—
Net realized loss on sale of investment securities available for sale			( 1 )						—
Net realized gain on sale of marketable equity securities			1						—
Realized gain (loss) on sale of investment securities, net			$	—					$	—

The following table provides information regarding investment securities available for sale with unrealized losses:

Gross Unrealized Losses on Debt Securities Available For Sale

dollars in millions			March 31, 2025
			Less than 12 months												12 months or more												Total
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Investment securities available for sale
U.S. Treasury			$	902					$	( 2 )					$	590					$	( 8 )					$	1,492					$	( 10 )
Government agency			—						—						69						( 2 )						69						( 2 )
Residential mortgage-backed securities			1,796						( 10 )						3,531						( 433 )						5,327						( 443 )
Commercial mortgage-backed securities			126						( 1 )						1,285						( 185 )						1,411						( 186 )
Corporate bonds			47						( 1 )						406						( 18 )						453						( 19 )
Total			$	2,871					$	( 14 )					$	5,881					$	( 646 )					$	8,752					$	( 660 )
			December 31, 2024
			Less than 12 months												12 months or more												Total
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Investment securities available for sale
U.S. Treasury			$	3,791					$	( 12 )					$	981					$	( 15 )					$	4,772					$	( 27 )
Government agency			—						—						77						( 2 )						77						( 2 )
Residential mortgage-backed securities			7,470						( 61 )						3,575						( 521 )						11,045						( 582 )
Commercial mortgage-backed securities			1,183						( 8 )						1,342						( 202 )						2,525						( 210 )
Corporate bonds			16						—						438						( 22 )						454						( 22 )
Total			$	12,460					$	( 81 )					$	6,413					$	( 762 )					$	18,873					$	( 843 )

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As of March 31, 2025, there were 476 investment securities available for sale with continuous unrealized losses for more than 12 months, of which 416 were government sponsored enterprise-issued mortgage-backed securities, government agency securities, or U.S. Treasury securities and the remaining 60 were corporate bonds. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Given the consistently strong credit rating of the U.S. Treasury, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, as of March 31, 2025, no allowance for credit loss was required. For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. As a result of this analysis, we determined that no allowance for credit loss was required for investment securities available for sale as of March 31, 2025.

BancShares’ portfolio of held to maturity debt securities consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. Given the consistently strong credit rating of the U.S. Treasury, the Supranational Entities & Multilateral Development Banks and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, no allowance for credit loss was required for debt securities held to maturity as of March 31, 2025.

There were no debt securities on nonaccrual status as of March 31, 2025 or December 31, 2024.

Investment securities having an aggregate carrying value of $ 4.07 billion at March 31, 2025, and $ 3.94 billion at December 31, 2024, were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

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NOTE 4 — LOANS AND LEASES

Unless otherwise noted, loans held for sale are not included in the following tables. Leases in the following tables include finance leases, but exclude operating lease equipment.

Loans by Class

dollars in millions			March 31, 2025						December 31, 2024
Commercial
Commercial construction			$	5,529					$	5,109
Owner occupied commercial mortgage			16,951						16,842
Non-owner occupied commercial mortgage			16,139						16,194
Commercial and industrial			31,899						31,640
Leases			2,022						2,014
Total commercial			72,540						71,799
Consumer
Residential mortgage			23,060						23,152
Revolving mortgage			2,635						2,567
Consumer auto			1,487						1,523
Consumer other			965						986
Total consumer			28,147						28,228
SVB
Global fund banking			28,572						27,904
Investor dependent - early stage			908						997
Investor dependent - growth stage			2,050						2,196
Innovation C&I and cash flow dependent			9,141						9,097
Total SVB (1)			40,671						40,194
Total loans and leases			$	141,358					$	140,221

(1) Total SVB Loans are irrespective of segment composition further described in Note 17—Segment Information.

At March 31, 2025 and December 31, 2024, accrued interest receivable on loans included in other assets was $ 601 million and $ 603 million, respectively, and was excluded from the estimate of credit losses.

The discount on acquired loans is accreted to interest income over the contractual life of the loan using the effective interest method. Discount accretion income was $ 84 million for the three months ended March 31, 2025, including $ 8 million for unfunded commitments. Discount accretion income was $ 163 million for the three months ended March 31, 2024, including $ 35 million for unfunded commitments.

The following table presents selected components of the amortized cost of loans, including the unamortized discount on acquired loans.

Components of Amortized Cost

dollars in millions			March 31, 2025						December 31, 2024
Deferred fees, including unamortized costs and unearned fees on non-PCD loans			$	( 85 )					$	( 91 )
Net unamortized discount on acquired loans
Non-PCD			$	1,449					$	1,504
PCD			75						94
Total net unamortized discount			$	1,524					$	1,598

The aging and nonaccrual status of the outstanding loans and leases by class at March 31, 2025 and December 31, 2024 are provided in the tables below. Loans and leases less than 30 days past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and remain in compliance with the respective agreement.

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Loans and Leases - Delinquency and Nonaccrual Status (1) (2)

dollars in millions			March 31, 2025
			Accruing Loans
			30-59 Days Past Due						60-89 Days Past Due						90 Days or Greater						Total Past Due						Current						Total Accruing						Nonaccrual Loans						Total
Commercial
Commercial construction			$	21					$	17					$	41					$	79					$	5,441					$	5,520					$	9					$	5,529
Owner occupied commercial mortgage			59						7						3						69						16,806						16,875						76						16,951
Non-owner occupied commercial mortgage			104						54						71						229						15,543						15,772						367						16,139
Commercial and industrial			185						50						9						244						31,298						31,542						357						31,899
Leases			48						8						1						57						1,936						1,993						29						2,022
Total commercial			417						136						125						678						71,024						71,702						838						72,540
Consumer
Residential mortgage			188						28						6						222						22,677						22,899						161						23,060
Revolving mortgage			17						5						—						22						2,587						2,609						26						2,635
Consumer auto			10						2						—						12						1,467						1,479						8						1,487
Consumer other			5						3						3						11						953						964						1						965
Total consumer			220						38						9						267						27,684						27,951						196						28,147
SVB
Global fund banking			—						—						—						—						28,572						28,572						—						28,572
Investor dependent - early stage			5						1						—						6						874						880						28						908
Investor dependent - growth stage			2						3						—						5						2,003						2,008						42						2,050
Innovation C&I and cash flow dependent			73						—						—						73						8,966						9,039						102						9,141
Total SVB			80						4						—						84						40,415						40,499						172						40,671
Total loans and leases			$	717					$	178					$	134					$	1,029					$	139,123					$	140,152					$	1,206					$	141,358
			December 31, 2024
			Accruing Loans
			30-59 Days Past Due						60-89 Days Past Due						90 Days or Greater						Total Past Due						Current						Total Accruing						Nonaccrual Loans						Total
Commercial
Commercial construction			$	21					$	1					$	1					$	23					$	5,077					$	5,100					$	9					$	5,109
Owner occupied commercial mortgage			30						9						2						41						16,739						16,780						62						16,842
Non-owner occupied commercial mortgage			43						27						78						148						15,621						15,769						425						16,194
Commercial and industrial			118						39						16						173						31,182						31,355						285						31,640
Leases			33						11						2						46						1,937						1,983						31						2,014
Total commercial			245						87						99						431						70,556						70,987						812						71,799
Consumer
Residential mortgage			172						27						7						206						22,798						23,004						148						23,152
Revolving mortgage			20						4						—						24						2,519						2,543						24						2,567
Consumer auto			12						3						—						15						1,500						1,515						8						1,523
Consumer other			5						3						3						11						974						985						1						986
Total consumer			209						37						10						256						27,791						28,047						181						28,228
SVB
Global fund banking			—						—						—						—						27,904						27,904						—						27,904
Investor dependent - early stage			8						1						—						9						947						956						41						997
Investor dependent - growth stage			2						—						—						2						2,148						2,150						46						2,196
Innovation C&I and cash flow dependent			52						1						—						53						8,940						8,993						104						9,097
Total SVB			62						2						—						64						39,939						40,003						191						40,194
Total loans and leases			$	516					$	126					$	109					$	751					$	138,286					$	139,037					$	1,184					$	140,221

(1) Accrued interest that was reversed when the loan went to nonaccrual status was $ 7 million for the three months ended March 31, 2025 and $ 14 million for year ended December 31, 2024.

(2) Nonaccrual loans for which there was no related ALLL totaled $ 419 million at March 31, 2025 and $ 303 million at December 31, 2024.

Other real estate owned (“OREO”) and repossessed assets were $ 105 million as of March 31, 2025 and $ 64 million as of December 31, 2024.

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Credit Quality Indicators

Loans and leases are monitored for credit quality on a recurring basis. Commercial loans and leases and consumer loans have different credit quality indicators as a result of the unique characteristics of the loan classes being evaluated. The credit quality indicators for commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.

Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at March 31, 2025 and December 31, 2024, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit.

The credit quality indicator for consumer loans is based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases. An exemption is applied to government guaranteed loans as the principal repayments are insured by the Federal Housing Administration and U.S. Department of Veterans Affairs and thus remain on accrual status regardless of delinquency status.

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The following tables summarize the commercial and SVB loans disaggregated by year of origination and by risk rating. The consumer loan delinquency status by year of origination is also presented below. The tables reflect the amortized cost of the loans and include PCD loans.

Commercial Loans - Risk Classifications by Class

March 31, 2025
Risk Classification:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2025						2024						2023						2022						2021						2020 & Prior						Revolving												Total
Commercial construction
Pass			$	636					$	1,384					$	1,662					$	1,079					$	192					$	132					$	162					$	1					$	5,248
Special Mention			28						25						83						21						—						7						—						—						164
Substandard			16						21						9						54						9						8						—						—						117
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total commercial construction			680						1,430						1,754						1,154						201						147						162						1						5,529
Owner occupied commercial mortgage
Pass			591						2,683						2,501						2,655						2,475						4,782						203						29						15,919
Special Mention			2						28						23						89						54						60						7						—						263
Substandard			13						58						104						219						78						282						14						1						769
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total owner occupied commercial mortgage			606						2,769						2,628						2,963						2,607						5,124						224						30						16,951
Non-owner occupied commercial mortgage
Pass			699						3,274						3,490						2,501						1,495						3,030						116						3						14,608
Special Mention			35						86						113						159						4						26						—						—						423
Substandard			32						311						137						230						38						279						—						—						1,027
Doubtful			—						15						—						11						4						51						—						—						81
Ungraded			—						—						—						—						—						—						—						—						—
Total non-owner occupied commercial mortgage			766						3,686						3,740						2,901						1,541						3,386						116						3						16,139
Commercial and industrial
Pass			4,253						8,002						4,110						2,919						1,689						1,805						6,662						53						29,493
Special Mention			90						119						99						244						143						28						133						—						856
Substandard			85						220						174						229						239						60						290						3						1,300
Doubtful			—						10						25						33						13						2						20						—						103
Ungraded			—						—						—						—						—						—						147						—						147
Total commercial and industrial			4,428						8,351						4,408						3,425						2,084						1,895						7,252						56						31,899
Leases
Pass			226						657						450						255						119						100						—						—						1,807
Special Mention			6						28						20						25						5						2						—						—						86
Substandard			6						37						34						19						11						14						—						—						121
Doubtful			—						2						3						2						1						—						—						—						8
Ungraded			—						—						—						—						—						—						—						—						—
Total leases			238						724						507						301						136						116						—						—						2,022
Total commercial			$	6,718					$	16,960					$	13,037					$	10,744					$	6,569					$	10,668					$	7,754					$	90					$	72,540

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SVB - Risk Classifications by Class

March 31, 2025
Risk Classification:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2025						2024						2023						2022						2021						2020 & Prior						Revolving												Total
Global fund banking
Pass			$	214					$	902					$	172					$	111					$	18					$	19					$	27,049					$	83					$	28,568
Special Mention			—						—						—						—						—						—						—						—						—
Substandard			—						—						—						3						—						—						1						—						4
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total global fund banking			214						902						172						114						18						19						27,050						83						28,572
Investor dependent - early stage
Pass			46						279						109						59						1						—						107						—						601
Special Mention			—						16						9						2						—						—						—						—						27
Substandard			—						64						88						50						8						—						41						3						254
Doubtful			2						2						12						7						1						—						2						—						26
Ungraded			—						—						—						—						—						—						—						—						—
Total investor dependent - early stage			48						361						218						118						10						—						150						3						908
Investor dependent - growth stage
Pass			136						804						309						177						12						—						188						—						1,626
Special Mention			—						45						4						1						13						—						28						—						91
Substandard			—						84						131						55						4						—						17						—						291
Doubtful			—						15						3						19						—						1						4						—						42
Ungraded			—						—						—						—						—						—						—						—						—
Total investor dependent - growth stage			136						948						447						252						29						1						237						—						2,050
Innovation C&I and cash flow dependent
Pass			446						1,915						1,284						1,099						342						104						2,247						12						7,449
Special Mention			43						—						64						73						20						—						132						—						332
Substandard			1						94						300						423						207						28						277						—						1,330
Doubtful			7						—						12						9						—						—						2						—						30
Ungraded			—						—						—						—						—						—						—						—						—
Total innovation C&I and cash flow dependent			497						2,009						1,660						1,604						569						132						2,658						12						9,141
Total SVB			$	895					$	4,220					$	2,497					$	2,088					$	626					$	152					$	30,095					$	98					$	40,671

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Consumer Loans - Delinquency Status by Class

March 31, 2025
Days Past Due:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2025						2024						2023						2022						2021						2020 & Prior						Revolving												Total
Residential mortgage
Current			$	391					$	2,275					$	2,860					$	5,152					$	5,021					$	7,007					$	6					$	—					$	22,712
30-59 days			—						7						12						28						39						115						—						—						201
60-89 days			—						—						2						5						5						28						—						—						40
90 days or greater			1						1						3						8						8						86						—						—						107
Total residential mortgage			392						2,283						2,877						5,193						5,073						7,236						6						—						23,060
Revolving mortgage
Current			—						—						—						—						—						—						2,485						112						2,597
30-59 days			—						—						—						—						—						—						14						6						20
60-89 days			—						—						—						—						—						—						1						6						7
90 days or greater			—						—						—						—						—						—						3						8						11
Total revolving mortgage			—						—						—						—						—						—						2,503						132						2,635
Consumer auto
Current			131						565						321						245						133						75						—						—						1,470
30-59 days			—						2						2						3						2						1						—						—						10
60-89 days			—						1						1						1						1						—						—						—						4
90 days or greater			—						1						1						1						—						—						—						—						3
Total consumer auto			131						569						325						250						136						76						—						—						1,487
Consumer other
Current			16						142						127						82						25						21						540						—						953
30-59 days			—						1						1						—						—						1						3						—						6
60-89 days			—						—						—						—						—						1						2						—						3
90 days or greater			—						—						—						—						—						1						2						—						3
Total consumer other			16						143						128						82						25						24						547						—						965
Total consumer			$	539					$	2,995					$	3,330					$	5,525					$	5,234					$	7,336					$	3,056					$	132					$	28,147

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The following tables represent current credit quality indicators by origination year as of December 31, 2024:

Commercial Loans - Risk Classifications by Class

December 31, 2024
Risk Classification:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2024						2023						2022						2021						2020						2019 & Prior						Revolving												Total
Commercial construction
Pass			$	1,095					$	1,854					$	1,276					$	287					$	152					$	52					$	148					$	—					$	4,864
Special Mention			—						80						35						—						7						24						—						—						146
Substandard			—						8						47						20						7						17						—						—						99
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total commercial construction			1,095						1,942						1,358						307						166						93						148						—						5,109
Owner occupied commercial mortgage
Pass			2,721						2,445						2,747						2,581						2,199						2,988						223						29						15,933
Special Mention			22						46						70						58						32						61						9						—						298
Substandard			30						34						136						82						73						245						10						1						611
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total owner occupied commercial mortgage			2,773						2,525						2,953						2,721						2,304						3,294						242						30						16,842
Non-owner occupied commercial mortgage
Pass			2,879						3,082						2,744						2,041						1,598						2,134						119						3						14,600
Special Mention			—						66						293						43						4						86						—						—						492
Substandard			12						15						171						39						116						653						—						—						1,006
Doubtful			—						—						—						—						20						76						—						—						96
Ungraded			—						—						—						—						—						—						—						—						—
Total non-owner occupied commercial mortgage			2,891						3,163						3,208						2,123						1,738						2,949						119						3						16,194
Commercial and industrial
Pass			9,677						4,862						3,417						2,042						1,101						1,408						6,886						62						29,455
Special Mention			92						53						178						245						25						69						114						—						776
Substandard			61						127						225						106						167						207						274						4						1,171
Doubtful			5						23						35						15						1						18						6						—						103
Ungraded			—						—						—						—						—						—						135						—						135
Total commercial and industrial			9,835						5,065						3,855						2,408						1,294						1,702						7,415						66						31,640
Leases
Pass			739						506						300						147						96						46						—						—						1,834
Special Mention			13						17						29						5						4						—						—						—						68
Substandard			21						29						23						13						9						8						—						—						103
Doubtful			1						3						2						2						1						—						—						—						9
Ungraded			—						—						—						—						—						—						—						—						—
Total leases			774						555						354						167						110						54						—						—						2,014
Total commercial			$	17,368					$	13,250					$	11,728					$	7,726					$	5,612					$	8,092					$	7,924					$	99					$	71,799

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SVB - Risk Classifications by Class

December 31, 2024
Risk Classification:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
			2024						2023						2022						2021						2020						2019 & Prior						Revolving												Total
Global fund banking
Pass			$	892					$	179					$	147					$	20					$	14					$	12					$	26,588					$	36					$	27,888
Special Mention			—						—						—						—						—						—						—						—						—
Substandard			—						—						5						8						2						—						1						—						16
Doubtful			—						—						—						—						—						—						—						—						—
Ungraded			—						—						—						—						—						—						—						—						—
Total global fund banking			892						179						152						28						16						12						26,589						36						27,904
Investor dependent - early stage
Pass			293						201						94						5						—						—						97						3						693
Special Mention			8						8						3						—						—						—						—						—						19
Substandard			44						83						62						17						—						—						41						—						247
Doubtful			15						16						6						—						—						—						1						—						38
Ungraded			—						—						—						—						—						—						—						—						—
Total investor dependent - early stage			360						308						165						22						—						—						139						3						997
Investor dependent - growth stage
Pass			842						439						258						32						—						—						218						—						1,789
Special Mention			9						20						3						—						—						—						26						—						58
Substandard			78						90						102						14						1						—						20						—						305
Doubtful			11						3						22						5						—						—						3						—						44
Ungraded			—						—						—						—						—						—						—						—						—
Total investor dependent - growth stage			940						552						385						51						1						—						267						—						2,196
Innovation C&I and cash flow dependent
Pass			2,136						1,433						1,205						347						120						—						2,147						5						7,393
Special Mention			53						183						77						57						4						—						89						—						463
Substandard			94						220						389						226						28						—						180						—						1,137
Doubtful			—						—						7						—						—						—						97						—						104
Ungraded			—						—						—						—						—						—						—						—						—
Total innovation C&I and cash flow dependent			2,283						1,836						1,678						630						152						—						2,513						5						9,097
Total SVB			$	4,475					$	2,875					$	2,380					$	731					$	169					$	12					$	29,508					$	44					$	40,194

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Consumer Loans - Delinquency Status by Class

December 31, 2024
Days Past Due:			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2024						2023						2022						2021						2020						2019 & Prior						Revolving												Total
Residential mortgage
Current			$	2,178					$	2,968					$	5,264					$	5,148					$	2,913					$	4,353					$	4					$	—					$	22,828
30-59 days			3						13						19						23						31						95						—						—						184
60-89 days			1						3						5						2						2						28						—						—						41
90 days or greater			—						4						6						7						9						73						—						—						99
Total residential mortgage			2,182						2,988						5,294						5,180						2,955						4,549						4						—						23,152
Revolving mortgage
Current			—						—						—						—						—						—						2,420						108						2,528
30-59 days			—						—						—						—						—						—						16						6						22
60-89 days			—						—						—						—						—						—						1						5						6
90 days or greater			—						—						—						—						—						—						3						8						11
Total revolving mortgage			—						—						—						—						—						—						2,440						127						2,567
Consumer auto
Current			617						358						277						155						68						27						—						—						1,502
30-59 days			3						3						3						2						1						1						—						—						13
60-89 days			1						1						1						1						—						—						—						—						4
90 days or greater			1						1						1						1						—						—						—						—						4
Total consumer auto			622						363						282						159						69						28						—						—						1,523
Consumer other
Current			147						144						99						30						6						18						531						—						975
30-59 days			1						—						—						—						—						1						3						—						5
60-89 days			—						—						1						—						—						—						2						—						3
90 days or greater			—						—						—						—						—						1						2						—						3
Total consumer other			148						144						100						30						6						20						538						—						986
Total consumer			$	2,952					$	3,495					$	5,676					$	5,369					$	3,030					$	4,597					$	2,982					$	127					$	28,228

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Gross Charge-offs

Gross charge-off vintage disclosures by origination year and loan class are summarized in the following tables:

Three Months Ended March 31, 2025
			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2025						2024						2023						2022						2021						2020 & Prior						Revolving												Total
Commercial
Non-owner occupied commercial mortgage			$	—					$	10					$	3					$	10					$	—					$	17					$	—					$	—					$	40
Commercial and industrial			—						6						19						10						4						5						15						1						60
Leases			—						1						1						1						1						1						—						—						5
Total commercial			—						17						23						21						5						23						15						1						105
Consumer
Consumer auto			—						1						1						1						—						—						—						—						3
Consumer other			—						—						1						—						—						—						4						—						5
Total consumer			—						1						2						1						—						—						4						—						8
SVB
Investor dependent - early stage			—						4						14						9						3						—						1						—						31
Investor dependent - growth stage			—						—						—						3						3						2						—						—						8
Innovation C&I and cash flow dependent			—						—						—						—						—						—						15						—						15
Total SVB			—						4						14						12						6						2						16						—						54
Total loans and leases			$	—					$	22					$	39					$	34					$	11					$	25					$	35					$	1					$	167

Three Months Ended March 31, 2024
			Term Loans by Origination Year																																										Revolving Converted to Term Loans
dollars in millions			2024						2023						2022						2021						2020						2019 & Prior						Revolving												Total
Commercial
Non-owner occupied commercial mortgage			$	—					$	—					$	—					$	—					$	—					$	29					$	—					$	—					$	29
Commercial and industrial			1						8						8						2						1						2						14						—						36
Leases			—						2						4						2						1						1						—						—						10
Total commercial			1						10						12						4						2						32						14						—						75
Consumer
Consumer auto			—						1						1						—						—						—						—						—						2
Consumer other			—						—						1						—						—						—						4						—						5
Total consumer			—						1						2						—						—						—						4						—						7
SVB
Investor dependent - early stage			—						4						13						6						—						—						1						—						24
Investor dependent - growth stage			—						2						4						7						1						—						—						—						14
Innovation C&I and cash flow dependent			—						3						—						—						—						—						5						—						8
Total SVB			—						9						17						13						1						—						6						—						46
Total loans and leases			$	1					$	20					$	31					$	17					$	3					$	32					$	24					$	—					$	128

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Loan Modifications for Borrowers Experiencing Financial Difficulties

As part of BancShares’ ongoing credit risk management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with the borrowers’ current ability to repay. BancShares’ modifications granted to debtors experiencing financial difficulties typically take the form of term extensions, interest rate reductions, payment delays, principal forgiveness, or a combination thereof. Modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance.

The following tables present the amortized cost of loan modifications made to debtors experiencing financial difficulty, disaggregated by class and type of loan modification. The tables also provide financial effects by type of such loan modifications for the respective loan class.

Amortized Cost of Loans Modified during the three months ended March 31, 2025

dollars in millions			Term Extension (1)						Payment Delay						Interest Rate Reduction						Term Extension (1) and Interest Rate Reduction						Term Extension (1) and Payment Delay						Other Combinations						Total						Percent of Total Loan Class
Commercial
Commercial construction			$	16					$	—					$	—					$	—					$	1					$	—					$	17					0.31		%
Owner occupied commercial mortgage			12						2						—						—						14						—						28						0.16
Non-owner occupied commercial mortgage			18						—						—						—						62						—						80						0.49
Commercial and industrial			24						17						—						2						17						—						60						0.19
Total commercial			70						19						—						2						94						—						185						0.25
Consumer
Residential mortgage			4						—						—						1						3						—						8						0.04
Total consumer			4						—						—						1						3						—						8						0.03
SVB
Investor dependent - early stage			—						11						—						—						—						—						11						1.22
Investor dependent - growth stage			4						10						—						—						—						—						14						0.70
Innovation C&I and cash flow dependent			37						—						—						—						7						—						44						0.48
Total SVB			41						21						—						—						7						—						69						0.17
Total loans and leases			$	115					$	40					$	—					$	3					$	104					$	—					$	262					0.19		%

(1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended.

Amortized Cost of Loans Modified during the three months ended March 31, 2024

dollars in millions			Term Extension (1)						Payment Delay						Interest Rate Reduction						Term Extension (1) and Interest Rate Reduction						Term Extension (1) and Payment Delay						Other Combinations						Total						Percent of Total Loan Class
Commercial
Commercial construction			$	3					$	—					$	—					$	—					$	—					$	—					$	3					0.08		%
Owner occupied commercial mortgage			15						—						1						1						9						—						26						0.16
Non-owner occupied commercial mortgage			38						—						—						—						27						—						65						0.42
Commercial and industrial			23						—						—						8						—						—						31						0.11
Total commercial			79						—						1						9						36						—						125						0.19
Consumer
Residential mortgage			6						—						—						2						—						—						8						0.03
Revolving mortgage			1						—						—						1						—						—						2						0.08
Total consumer			7						—						—						3						—						—						10						0.03
SVB
Investor dependent - early stage			—						6						—						—						2						—						8						0.63
Investor dependent - growth stage			—						24						—						—						10						—						34						1.25
Innovation C&I and cash flow dependent			18						—						—						—						7						—						25						0.27
Total SVB			18						30						—						—						19						—						67						0.17
Total loans and leases			$	104					$	30					$	1					$	12					$	55					$	—					$	202					0.15		%

(1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended.

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Financial Effects of Loan Modifications made during the three months ended March 31, 2025

dollars in millions			Weighted Average Term Extension (in Months)						Weighted Average Interest Rate Reduction						Weighted Average Payment Delay (in Months)						Amount of Principal Forgiven
Commercial
Commercial construction			8						—		%				5						$	—
Owner occupied commercial mortgage			8						—						6						—
Non-owner occupied commercial mortgage			6						—						6						—
Commercial and industrial			9						1.65						9						—
Total commercial			7						1.65						7						—
Consumer
Residential mortgage			22						1.87						5						—
Revolving mortgage			60						3.21						5						—
Consumer auto			20						—						4						—
Consumer other			—						9.97						—						—
Total consumer			24						2.41						5						—
SVB
Investor dependent - early stage			—						—						5						—
Investor dependent - growth stage			12						—						6						—
Innovation C&I and cash flow dependent			22						—						12						—
Total SVB			21						—						7						—
Total loans and leases			11						2.06		%				7						$	—

Financial Effects of Loan Modifications made during the three months ended March 31, 2024

dollars in millions			Weighted Average Term Extension (in Months)						Weighted Average Interest Rate Reduction						Weighted Average Payment Delay (in Months)						Amount of Principal Forgiven
Commercial
Commercial construction			22						2.49		%				—						$	—
Owner occupied commercial mortgage			23						0.79						20						—
Non-owner occupied commercial mortgage			27						—						48						—
Commercial and industrial			9						1.39						4						—
Total commercial			21						1.31						41						—
Consumer
Residential mortgage			52						1.52						—						—
Revolving mortgage			59						4.15						—						—
Consumer auto			30						0.26						—						—
Consumer other			49						9.19						—						—
Total consumer			53						2.41						—						—
SVB
Investor dependent - early stage			6						—						7						—
Investor dependent - growth stage			19						—						10						—
Innovation C&I and cash flow dependent			12						—						6						—
Total SVB			14						—						9						—
Total loans and leases			21						1.52		%				22						$	—

Borrowers experiencing financial difficulties are typically identified in our credit risk management process before loan modifications occur. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a modification. Since the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ALLL because of the measurement methodologies used to estimate the ALLL, a change to the ALLL is generally not recorded upon modification. Upon BancShares’ determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off.

At March 31, 2025, there were $ 53 million of loans modified in the twelve months ended March 31, 2025, which defaulted subsequent to modification.

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The following tables present the amortized cost and performance of loans to borrowers experiencing financial difficulties for which the terms of the loan were modified during the referenced periods. The period of delinquency is based on the number of days the scheduled payment is contractually past due.

Modified Loans Payment Status (twelve months ended March 31, 2025)

dollars in millions			Current						30–59 Days Past Due						60–89 Days Past Due						90 Days or Greater Past Due						Total
Commercial
Commercial construction			$	25					$	—					$	—					$	—					$	25
Owner occupied commercial mortgage			61						3						1						—						65
Non-owner occupied commercial mortgage			204						9						—						23						236
Commercial and industrial			180						4						1						2						187
Total commercial			470						16						2						25						513
Consumer
Residential mortgage			12						1						1						3						17
Revolving mortgage			8						—						—						—						8
Total consumer			20						1						1						3						25
SVB
Investor dependent - early stage			22						3						—						—						25
Investor dependent - growth stage			41						—						—						—						41
Innovation C&I and cash flow dependent			143						—						—						3						146
Total SVB			206						3						—						3						212
Total loans and leases			$	696					$	20					$	3					$	31					$	750

Modified Loans Payment Status (twelve months ended March 31, 2024)

dollars in millions			Current						30–59 Days Past Due						60–89 Days Past Due						90 Days or Greater Past Due						Total
Commercial
Commercial construction			$	4					$	—					$	—					$	—					$	4
Owner occupied commercial mortgage			26						2						—						1						29
Non-owner occupied commercial mortgage			314						39						—						—						353
Commercial and industrial			107						5						2						1						115
Total commercial			451						46						2						2						501
Consumer
Residential mortgage			15						1						—						1						17
Revolving mortgage			4						—						—						—						4
Total consumer			19						1						—						1						21
SVB
Investor dependent - early stage			22						2						—						3						27
Investor dependent - growth stage			63						—						—						—						63
Innovation C&I and cash flow dependent			56						—						—						28						84
Total SVB			141						2						—						31						174
Total loans and leases			$	611					$	49					$	2					$	34					$	696

At March 31, 2025, there were $ 6 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the three months ended March 31, 2025. At December 31, 2024, there were $ 55 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the year ended December 31, 2024 .

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Loans Pledged

The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta, the Federal Reserve Bank (“FRB”) and FDIC.

Loans Pledged

dollars in millions			March 31, 2025						December 31, 2024
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans			$	17,992					$	17,873
Less: advances			—						—
Less: letters of credit			1,450						1,450
Available borrowing capacity			$	16,542					$	16,423
Pledged non-PCD loans			$	30,112					$	30,421
FRB
Lendable collateral value of pledged non-PCD loans			$	5,612					$	5,475
Less: advances			—						—
Available borrowing capacity			$	5,612					$	5,475
Pledged non-PCD loans			$	6,432					$	6,309
FDIC
Lendable collateral value of pledged loans			$	39,415					$	41,282
Less: advances			—						—
Less: Purchase Money Note			35,991						35,991
Available borrowing capacity (1)			$	—					$	5,291
Pledged loans			$	39,173					$	41,040

(1) The draw period ended on March 27, 2025, therefore there is no available borrowing capacity at March 31, 2025.

As a member of the FHLB, FCB can access financing based on an evaluation of its creditworthiness, statement of financial position, size and eligibility of collateral. FCB may at any time grant a security interest in, sell, convey or otherwise dispose of any of the assets used for collateral, provided that FCB is in compliance with the collateral maintenance requirement immediately following such disposition.

Under borrowing arrangements with the FRB, BancShares has access to the FRB Discount Window on a secured basis. There were no outstanding borrowings with the FRB Discount Window at March 31, 2025 or December 31, 2024.

In connection with the SVBB Acquisition, FCB and the FDIC entered into financing agreements, including the five-year Purchase Money Note, and the Advance Facility Agreement, which allowed for advances through March 27, 2025. There were no amounts outstanding at the end of the draw period of the facility on March 27, 2025. Refer to Note 2—Business Combinations for further discussion of these agreements and Note 9—Borrowings for the outstanding carrying value of the Purchase Money Note.

NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES

The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale, if any, is reported in the Consolidated Statements of Income as provision or benefit for credit losses.

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The ALLL activity for loans and leases is summarized in the following table:

Allowance for Loan and Lease Losses

dollars in millions			Three Months Ended March 31, 2025																								Three Months Ended March 31, 2024
			Commercial						Consumer						SVB						Total						Commercial						Consumer						SVB						Total
Balance at beginning of period			$	1,063					$	158					$	455					$	1,676					$	1,126					$	166					$	455					$	1,747
Provision (benefit) for loan and lease losses			105						10						33						148						59						( 6 )						40						93
Charge-offs			( 105 )						( 8 )						( 54 )						( 167 )						( 75 )						( 7 )						( 46 )						( 128 )
Recoveries			15						3						5						23						10						2						13						25
Balance at end of period			$	1,078					$	163					$	439					$	1,680					$	1,120					$	155					$	462					$	1,737

The increase in the ALLL at March 31, 2025 compared to December 31, 2024 was primarily due to modest deterioration in the macroeconomic forecast, as well as increases in loan volume, partially offset by the result of a mix shift from the investor dependent portfolio to the global fund banking portfolio, which has a lower loss rate relative to our other loan portfolios, and lower specific reserves for individually evaluated loans.

The following table presents the components of the provision for credit losses:

Provision for Credit Losses

dollars in millions			Three Months Ended March 31,
			2025						2024
Provision for loan and lease losses			$	148					$	93
Provision (benefit) for off-balance sheet credit exposure			6						( 29 )
Provision for credit losses			$	154					$	64

NOTE 6 — LEASES

Lessee

BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our lease liabilities relate to United States real estate leases under operating lease arrangements. Our real estate leases have remaining lease terms of up to 33 years. Our lease terms may include options to extend or terminate the lease, and our operating leases have renewal terms that can extend from 1 to 25 years. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised.

The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates:

Supplemental Lease Information

dollars in millions			Classification						March 31, 2025						December 31, 2024
Lease assets:
Operating lease ROU assets			Other assets						$	300					$	316
Finance leases			Premises and equipment						35						15
Total lease assets									$	335					$	331
Lease liabilities:
Operating leases			Other liabilities						$	340					$	357
Finance leases			Other borrowings						36						15
Total lease liabilities									$	376					$	372
Weighted-average remaining lease terms:
Operating leases									7.3 years						7.4 years
Finance leases									8.9 years						11.7 years
Weighted-average discount rate:
Operating leases									2.94		%				2.94		%
Finance leases									4.31						3.96

As of March 31, 2025, there were no leases that have not yet commenced that would have a material impact on BancShares’ consolidated financial statements.

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The following table presents components of lease cost:

Components of Net Lease Cost

dollars in millions									Three Months Ended March 31,
			Classification						2025						2024
Operating lease cost			Occupancy expense						$	18					$	18
Finance lease ROU asset amortization			Equipment expense						1						1
Variable lease cost (1)			Occupancy expense						7						9
Sublease income			Occupancy expense						( 2 )						( 1 )
Net lease cost (1)									$	24					$	27

(1) Includes short-term lease cost.

Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term.

For finance leases, the right of use (“ROU”) asset is amortized straight-line over the lease term as equipment expense and interest on the lease liability is recognized separately; however, interest on the lease liability was less than $ 1 million per year and is therefore not presented in the table above.

Variable lease cost includes common area maintenance, property taxes, utilities, and other operating expenses related to leased premises recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments adjusted periodically for inflation. While lease liabilities are not remeasured because of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.

Sublease income results from leasing excess building space that BancShares is no longer utilizing under operating leases, which have remaining lease terms of up to 12 years.

The following table presents supplemental cash flow information related to leases:

Supplemental Cash Flow Information

dollars in millions			Three Months Ended March 31,
			2025						2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	19					$	18
Financing cash flows from finance leases			1						—
ROU assets obtained in exchange for new operating lease liabilities			3						17
ROU assets obtained in exchange for new finance lease liabilities			22						—

Lessor

BancShares leases equipment to commercial end-users under operating lease and finance lease arrangements. The majority of operating lease equipment is long-lived rail equipment, which is typically leased several times over its life. We also lease technology and office equipment, and large and small industrial, medical, and transportation equipment under both operating leases and finance leases.

Our Rail operating leases typically do not include purchase options. Many of our finance leases, and other equipment operating leases, offer the lessee the option to purchase the equipment at fair market value or for a nominal fixed purchase option. Many of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond the initial contractual term. Our leases typically do not include early termination options. Continued rent payments are due if leased equipment is not returned at the end of the lease.

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The table that follows presents lease income related to BancShares’ operating and finance leases:

Lease Income

dollars in millions			Three Months Ended March 31,
			2025						2024
Lease income – operating leases			$	254					$	237
Variable lease income – operating leases (1)			16						18
Rental income on operating leases			270						255
Interest income – sales type and direct financing leases			43						43
Variable lease income included in other noninterest income (2)			14						16
Interest income – leveraged leases			1						1
Total lease income			$	328					$	315

(1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis.

Goodwill

BancShares had goodwill of $ 346 million at March 31, 2025 and December 31, 2024. There was no goodwill impairment during the three months ended March 31, 2025 or 2024. Goodwill relates to the General Bank reporting segment.

Core Deposit Intangibles

Core deposit intangibles represent the estimated fair value of core deposits and other customer relationships acquired. Core deposit intangibles are being amortized over their estimated useful lives. The following tables summarize the activity for core deposit intangibles:

Core Deposit Intangibles

			Three Months Ended March 31,
dollars in millions			2025
Balance at beginning of period, net of accumulated amortization			$	249
Less: amortization for the period			15
Balance at end of period, net of accumulated amortization			$	234

The following table summarizes the accumulated amortization balance for core deposit intangibles:

Core Deposit Intangible Accumulated Amortization

dollars in millions			March 31, 2025						December 31, 2024
Gross balance			$	501					$	501
Less: accumulated amortization			267						252
Balance, net of accumulated amortization			$	234					$	249

The following table summarizes the expected amortization expense as of March 31, 2025 in subsequent periods for core deposit intangibles:

Core Deposit Intangible Expected Amortization

dollars in millions
Remainder 2025			$	39
2026			46
2027			39
2028			34
2029			30
2030			28
Thereafter			18
Balance, net of accumulated amortization			$	234

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NOTE 8 — VARIABLE INTEREST ENTITIES

Unconsolidated VIEs

Unconsolidated VIEs include limited partnership interests and joint ventures where BancShares’ involvement is limited to an investor interest and BancShares does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The table below provides a summary of the assets and liabilities included on the Consolidated Balance Sheets associated with unconsolidated VIEs. The table also presents our maximum exposure to loss which consists of outstanding book basis and unfunded commitments for future investments, and represents potential losses that would be incurred under hypothetical circumstances, such that the value of BancShares’ interests and any associated collateral declines to zero and assuming no recovery. BancShares believes the possibility is remote under this hypothetical scenario; accordingly, this disclosure is not an indication of expected loss.

Unconsolidated VIEs Carrying Value

dollars in millions			March 31, 2025						December 31, 2024
Affordable housing tax credit investments			$	2,406					$	2,357
Other tax credit equity investments			2						2
Total tax credit equity investments			$	2,408					$	2,359
Other unconsolidated investments			170						157
Total affordable housing tax credit and other unconsolidated investments (maximum loss exposure) (1)			$	2,578					$	2,516
Liabilities for commitments to fund tax credit investments (2)			$	1,234					$	1,214

(1) Included in other assets.

(2) Represents commitments to invest in qualified affordable housing investments and other investments qualifying for community reinvestment tax credits. These commitments are payable on demand and included in other liabilities.

We have investments in qualified affordable housing projects, primarily to support our Community Reinvestment Act (“CRA”) initiatives and obtain tax credits. These investments are accounted for using the PAM and provide tax benefits in the form of tax deductions from operating losses and tax credits. Under the PAM, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received, and the net investment performance is recognized on the Consolidated Statements of Income as a component of income tax expense.

The table below summarizes the amortization of our affordable housing tax credit investments and the related tax credits and other tax benefits that are recognized in income tax expense on the Consolidated Statements of Income.

Tax Credit Investments Recognized in Income Tax Expense

dollars in millions			Three Months Ended March 31,
			2025						2024
Amortization of affordable housing tax credit investments (1)			$	64					$	59
Tax credits from affordable housing tax credit investments			( 68 )						( 57 )
Other tax benefits from affordable housing tax credit investments			( 7 )						( 11 )
Net income tax benefit from affordable housing tax credit investments (2)			$	( 11 )					$	( 9 )

(1) Amortization is included in depreciation, amortization, and accretion, net as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

NOTE 9 — BORROWINGS

Short-term Borrowings

Securities Sold under Agreements to Repurchase

BancShares held $ 450 million and $ 367 million at March 31, 2025 and December 31, 2024, respectively, of securities sold under agreements to repurchase that have overnight contractual maturities and are collateralized by government agency securities. The weighted average interest rate for securities sold under agreements to repurchase was 0.51 % and 0.59 % at March 31, 2025 and December 31, 2024, respectively.

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BancShares utilizes securities sold under agreements to repurchase to facilitate the needs for collateralization of commercial customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates BancShares to repurchase the security at an agreed upon date, repurchase price and interest rate. These agreements are recorded at the amount of cash received in connection with the transactions and are reflected as securities sold under customer repurchase agreements.

BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents. The carrying value of investment securities pledged as collateral under repurchase agreements was $ 526 million and $ 435 million at March 31, 2025 and December 31, 2024, respectively.

Long-term Borrowings

On March 12, 2025, the Parent Company issued and sold $ 500 million aggregate principal amount of its 5.231 % Fixed-to-Floating Rate Senior Notes due 2031 and $ 750 million aggregate principal amount of its 6.254 % Fixed-to-Fixed Rate Subordinated Notes due 2040 in a public offering.

The following table presents long-term borrowings, net of the respective unamortized purchase accounting adjustments and issuance costs:

Long-term Borrowings

dollars in millions			Maturity						March 31, 2025						December 31, 2024
Parent Company:
Senior:
Fixed-to-Floating Senior Notes at 5.231 % (1)			March 2031						$	497					$	—
Subordinated:
Fixed-to-Floating subordinated notes at 3.375 % (2)			March 2030						350						350
Fixed-to-Fixed Subordinated Notes at 6.254 % (3)			March 2040						745						—
Subsidiaries:
Senior:
Fixed senior unsecured notes at 6.00 %			April 2036						58						58
Subordinated:
Fixed subordinated notes at 6.125 %			March 2028						441						445
Secured:
Purchase Money Note to FDIC fixed at 3.50 % (4)			March 2028						35,829						35,816
Capital lease obligations			Maturities through May 2057						36						15
Total long-term borrowings									$	37,956					$	36,684

(1) The fixed rate period will end March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded Secured Overnight Financing Rate (“SOFR”) Index Rate plus 141 basis points (“bps”) per annum until the maturity date (or date of earlier redemption).

(2) The fixed rate period ended on March 15, 2025, and the notes now bear a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum.

(3) The interest rate will reset on March 12, 2035, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate plus 197 bps per annum until the maturity date (or date of earlier redemption).

(4) Refer to Note 2—Business Combinations and Note 4—Loans and Leases.

Pledged Assets

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NOTE 10 — DERIVATIVE FINANCIAL INSTRUMENTS

Our derivatives designated as hedging instruments include interest rate swap contracts utilized to manage our interest rate exposure for items on our Consolidated Balance Sheets. This includes floating-rate loan portfolio cash flow hedges and fair value hedges of our fixed-rate borrowings and deposits.

Our derivatives not designated as hedging instruments mainly include interest rate and foreign exchange contracts that our customers utilized for their risk management needs. We typically manage our exposure to these customer derivatives by entering into offsetting or “back-to-back” interest rate and foreign exchange contracts with third-party dealers.

Derivative instruments that are cleared through certain central counterparty clearing houses are settled-to-market and reported net of collateral positions.

Refer to Note 11—Fair Value for further information on derivatives.

The following table presents notional amounts and fair values of derivative financial instruments:

Notional Amount and Fair Value of Derivative Financial Instruments

dollars in millions			March 31, 2025																		December 31, 2024
			Notional Amount						Asset Fair Value						Liability Fair Value						Notional Amount						Asset Fair Value						Liability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Fair Value Hedges
Interest rate contracts hedging time deposits			$	134					$	—					$	—					$	334					$	—					$	—
Interest rate contracts hedging long-term borrowings			400						—						—						750						—						—
Total fair value hedges (1) (2)			534						—						—						1,084						—						—
Cash Flow Hedges
Interest rate contracts hedging loans (1) (2)			4,000						1						—						3,500						1						—
Total derivatives designated as hedging instruments			$	4,534					$	1					$	—					$	4,584					$	1					$	—
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Interest rate contracts (1) (2)			$	26,924					$	428					$	( 433 )					$	26,235					$	491					$	( 516 )
Foreign exchange contracts (3)			9,971						108						( 107 )						7,843						152						( 108 )
Other contracts (4)			1,419						16						( 1 )						1,316						16						( 1 )
Total derivatives not designated as hedging instruments			$	38,314					$	552					$	( 541 )					$	35,394					$	659					$	( 625 )
Gross derivatives fair values presented in the Consolidated Balance Sheets									$	553					$	( 541 )											$	660					$	( 625 )
Less: gross amounts offset in the Consolidated Balance Sheets									—						—												—						—
Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets									$	553					$	( 541 )											$	660					$	( 625 )

(1) Fair value balances include accrued interest.

(2) BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information.

(3) The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $ 377 million and $ 0 million, respectively, as of March 31, 2025, and $ 177 million and $ 0 million, respectively, as of December 31, 2024.

(4) Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants.

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The following table presents the impact of variation margin netting on derivative assets and liabilities:

Variation Margin Payments

dollars in millions			March 31, 2025												December 31, 2024
			Asset Fair Value						Liability Fair Value						Asset Fair Value						Liability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Gross fair value			$	22					$	—					$	15					$	—
Cleared trades, variation margin netting			( 21 )						—						( 14 )						—
Total derivatives designated as hedging instruments			$	1					$	—					$	1					$	—
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Gross fair value			$	618					$	( 572 )					$	742					$	( 647 )
Cleared trades, variation margin netting			( 66 )						31						( 83 )						22
Total derivatives not designated as hedging instruments			$	552					$	( 541 )					$	659					$	( 625 )
Gross derivatives fair values presented in the Consolidated Balance Sheets			$	553					$	( 541 )					$	660					$	( 625 )
Amounts subject to master netting agreements (1)			( 103 )						103						( 48 )						48
Cash collateral pledged (received) subject to master netting agreements (2)			( 328 )						18						( 539 )						2
Total net derivative fair value			$	122					$	( 420 )					$	73					$	( 575 )

(1) BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure.

(2) In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively.

Fair Value Hedges

The following table presents the impact of fair value hedges recorded in interest expense on the Consolidated Statements of Income:

Recognized Gains (Losses) on Fair Value Hedges

dollars in millions									Three Months Ended March 31,
			Interest Expense						2025						2024
Gain (loss) on hedging instruments - time deposits			Deposits						$	—					$	—
Loss on hedging instruments - borrowings			Borrowings						—						( 5 )
Gain (loss) on hedged item - time deposits			Deposits						—						—
Gain on hedged item - borrowings			Borrowings						1						5
Net gain on fair value hedges			Total interest expense						$	1					$	—

The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges:

Carrying Value of Hedged Items

dollars in millions									Cumulative Fair Value Hedging Adjustment Included in the Carrying Value of Hedged Items
			Carrying Value of Hedged Items						Currently Designated						No Longer Designated
March 31, 2025
Long-term borrowings			$	441					$	1					$	—
Deposits			134						—						—
December 31, 2024
Long-term borrowings			795						2						—
Deposits			335						1						—

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Cash Flow Hedges

The following table presents the pretax unrealized gain on hedging instruments in cash flow hedges, which are reported in other comprehensive income, and the pretax amount reclassified from accumulated other comprehensive income (“AOCI”) to earnings:

Unrealized Gain on Cash Flow Hedges

dollars in millions			Three Months Ended March 31,
			2025						2024
Other comprehensive income on cash flow hedge derivatives before reclassifications			$	12					$	—
Amounts reclassified from AOCI to earnings			( 3 )						—
Other comprehensive income on cash flow hedge derivatives			$	9					$	—

The following table presents other information for cash flow hedges:

Other Information for Cash Flow Hedges

dollars in millions			March 31, 2025						December 31, 2024
Unrealized gain on cash flow hedge derivatives reported in AOCI, net of income taxes			$	15					$	8
Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1)			$	7					$	7
Maximum number of months over which forecasted cash flows are hedged			28						24

(1) Reclassified amounts could differ from amounts actually recognized due to factors such as changes in interest rates, hedge de-designations and the addition of other hedges.

Non-Qualifying Hedges

The following table presents gains on non-qualifying hedges recognized on the Consolidated Statements of Income:

Gains (Losses) on Non-Qualifying Hedges

dollars in millions									Three Months Ended March 31,
			Amounts Recognized						2025						2024
Interest rate contracts			Other noninterest income						$	( 1 )					$	8
Foreign currency forward contracts			Other noninterest income						( 19 )						12
Other contracts			Other noninterest income						( 1 )						( 1 )
Total non-qualifying hedges - income statement impact									$	( 21 )					$	19

NOTE 11 — FAIR VALUE

Fair Value Hierarchy

BancShares measures certain financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels.

Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the lowest level of input significant to the fair value measurement with Level 1 inputs considered highest and Level 3 inputs considered lowest. A brief description of each input level follows:

• Level 1 inputs are quoted prices in active markets for identical assets and liabilities.

• Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices observable for the assets or liabilities and market corroborated inputs.

• Level 3 inputs are unobservable inputs for the asset or liability. These unobservable inputs and assumptions reflect the estimates market participants would use in pricing the asset or liability.

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Assets and Liabilities Measured at Fair Value - Recurring Basis

The following table presents assets and liabilities measured at fair value on a recurring basis:

Assets and Liabilities Measured at Fair Value - Recurring Basis

dollars in millions			March 31, 2025
			Total						Level 1						Level 2						Level 3
Assets
Investment securities available for sale
U.S. Treasury			$	13,150					$	—					$	13,150					$	—
Government agency			69						—						69						—
Residential mortgage-backed securities			16,605						—						16,605						—
Commercial mortgage-backed securities			3,594						—						3,594						—
Corporate bonds			465						—						297						168
Municipal bonds			17						—						17						—
Total investment securities available for sale			$	33,900					$	—					$	33,732					$	168
Marketable equity securities			95						42						53						—
Loans held for sale			70						—						70						—
Loans			23						—						23						—
Derivative assets (1)
Total qualifying hedge assets			$	1					$	—					$	1					$	—
Interest rate contracts — non-qualifying hedges			$	428					$	—					$	425					$	3
Foreign exchange contracts — non-qualifying hedges			108						—						108						—
Other derivative contracts — non-qualifying hedges			16						—						—						16
Total non-qualifying hedge assets			$	552					$	—					$	533					$	19
Total derivative assets			$	553					$	—					$	534					$	19
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges			$	—					$	—					$	—					$	—
Interest rate contracts — non-qualifying hedges			$	433					$	—					$	433					$	—
Foreign exchange contracts — non-qualifying hedges			107						—						107						—
Other derivative contracts — non-qualifying hedges			1						—						—						1
Total non-qualifying hedge liabilities			$	541					$	—					$	540					$	1
Total derivative liabilities			$	541					$	—					$	540					$	1
(1) Derivative fair values include accrued interest.

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dollars in millions			December 31, 2024
			Total						Level 1						Level 2						Level 3
Assets
Investment securities available for sale
U.S. Treasury			$	13,903					$	—					$	13,903					$	—
Government agency			77						—						77						—
Residential mortgage-backed securities			15,620						—						15,620						—
Commercial mortgage-backed securities			3,666						—						3,666						—
Corporate bonds			467						—						299						168
Municipal bonds			17						—						17						—
Total investment securities available for sale			$	33,750					$	—					$	33,582					$	168
Marketable equity securities			101						48						53						—
Loans held for sale			55						—						55						—
Derivative assets (1)
Total qualifying hedge assets			$	1					$	—					$	1					$	—
Interest rate contracts — non-qualifying hedges			$	491					$	—					$	490					$	1
Foreign exchange contracts — non-qualifying hedges			152						—						152						—
Other derivative contracts — non-qualifying hedges			16						—						—						16
Total non-qualifying hedge assets			$	659					$	—					$	642					$	17
Total derivative assets			$	660					$	—					$	643					$	17
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges			$	—					$	—					$	—					$	—
Interest rate contracts — non-qualifying hedges			$	516					$	—					$	516					$	—
Foreign exchange contracts — non-qualifying hedges			108						—						108						—
Other derivative contracts — non-qualifying hedges			1						—						—						1
Total non-qualifying hedge liabilities			$	625					$	—					$	624					$	1
Total derivative liabilities			$	625					$	—					$	624					$	1

(1) Derivative fair values include accrued interest.

The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a recurring basis are as follows:

Investment securities available for sale . The fair value of U.S. Treasury, government agency, mortgage-backed securities, municipal bonds, and a portion of the corporate bonds are generally estimated using a third-party pricing service. To obtain an understanding of the processes and methodologies used, management reviews correspondence from the third-party pricing service. Management also performs a price variance analysis process to corroborate the reasonableness of prices. The third-party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models which use a variety of inputs, such as benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. The remaining corporate bonds held are generally measured at fair value based on indicative bids from broker-dealers using inputs that are not directly observable. These securities are classified as Level 3.

Marketable equity securities. Equity securities are measured at fair value using observable closing prices. The valuation also considers the amount of market activity by examining trade volume. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market.

Loans and Loans held for sale. Certain residential real estate loans originated for sale to investors are carried at fair value based on quoted market prices for similar types of loans, which are considered Level 2 inputs. In instances when loans are not sold and subsequently transferred to portfolio, accounting at fair value is continued.

Derivative Assets and Liabilities. Derivatives were valued using models that incorporate inputs depending on the type of derivative. Other than the fair value of equity warrants and credit derivatives, which were estimated using Level 3 inputs, most derivative instruments were valued using Level 2 inputs based on observed pricing for similar assets and liabilities and model-based valuation techniques for which all significant assumptions are observable in the market. Refer to Note 10—Derivative Financial Instruments for notional amounts and fair values.

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The following tables summarize information about significant unobservable inputs related to BancShares’ categories of Level 3 financial assets and liabilities measured on a recurring basis:

Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis

dollars in millions
Financial Instrument						Estimated Fair Value												Valuation Technique						Significant Unobservable Inputs
						March 31, 2025						December 31, 2024
Assets
Corporate bonds						$	168					$	168					Indicative bid provided by broker						Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer.
Interest rate & other derivative — non-qualifying hedges						$	19					$	17					Internal valuation model						Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument.
Liabilities
Interest rate & other derivative — non-qualifying hedges						$	1					$	1					Internal valuation model						Not material

The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):

Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis

dollars in millions			Three Months Ended March 31, 2025																		Three Months Ended March 31, 2024
			Corporate Bonds						Other Derivative Assets — Non-Qualifying						Other Derivative Liabilities — Non-Qualifying						Corporate Bonds						Other Derivative Assets — Non-Qualifying						Other Derivative Liabilities — Non-Qualifying
Beginning balance			$	168					$	17					$	1					$	157					$	7					$	1
Purchases			—						2						—						—						3						—
Changes in fair value included in earnings			—						1						—						—						—						—
Changes in fair value included in comprehensive income			—						—						—						4						—						—
Maturity and settlements			—						( 1 )						—						—						( 1 )						—
Ending balance			$	168					$	19					$	1					$	161					$	9					$	1

Fair Value Option

The following table summarizes the difference between the aggregate fair value and the unpaid principal balance (“UPB”) for residential mortgage loans originated for sale measured at fair value:

Aggregate Fair Value and UPB - Residential Mortgage Loans

dollars in millions			March 31, 2025																		December 31, 2024
			Fair Value						Unpaid Principal Balance						Difference						Fair Value						Unpaid Principal Balance						Difference
Originated loans held for sale (1)			$	93					$	94					$	( 1 )					$	55					$	54					$	1

(1) Originated loans held for sale include loans held for sale and loans originated for sale but transferred to portfolio and held for investment.

BancShares has elected the fair value option for residential mortgage loans originated for sale. This election reduces certain timing differences in the Consolidated Statements of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value that were recorded as a component of other noninterest income were insignificant for the three months ended March 31, 2025 and 2024. Interest earned on originated loans held for sale is recorded within interest income on loans and leases in the Consolidated Statements of Income.

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of March 31, 2025 or December 31, 2024.

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Assets Measured at Estimated Fair Value on a Non-recurring Basis

Certain assets or liabilities are required to be measured at estimated fair value on a non-recurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower of cost or fair value (“LOCOM”) or other impairment accounting. The following table presents carrying value of assets measured at estimated fair value on a non-recurring basis for which gains and losses have been recorded in the periods. The gains and losses reflect amounts recorded for the respective periods, regardless of whether the asset is still held at period end.

Assets Measured at Fair Value - Non-recurring Basis

dollars in millions			Fair Value Measurements
			Total						Level 1						Level 2						Level 3						Total Gains (Losses)
March 31, 2025
Assets held for sale - loans			$	23					$	—					$	—					$	23					$	( 7 )
Loans - collateral dependent loans			212						—						—						212						( 55 )
Other real estate owned			66						—						—						66						( 8 )
Total			$	301					$	—					$	—					$	301					$	( 70 )
December 31, 2024
Assets held for sale - loans			$	13					$	—					$	—					$	13					$	( 7 )
Loans - collateral dependent loans			388						—						—						388						( 171 )
Other real estate owned			16						—						—						16						6
Total			$	417					$	—					$	—					$	417					$	( 172 )

Certain other assets are adjusted to their fair value on a non-recurring basis, including certain loans, OREO, and goodwill, which are periodically tested for impairment. Most loans held for investment, deposits, and borrowings are not reported at fair value.

The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a non-recurring basis are as follows:

Assets held for sale - loans. Loans held for investment subsequently transferred to held for sale are carried at the LOCOM. When available, the fair values for the transferred loans are based on quoted prices from the purchase commitments for the individual loans being transferred and are considered Level 1 inputs. The fair value of Level 2 assets was primarily estimated based on prices of recent trades of similar assets. For other loans held for sale, the fair value of Level 3 assets was primarily measured under the income approach using the discounted cash flow model based on Level 3 inputs including discount rate or the price of committed trades. Gains and losses are recorded in noninterest income.

Loans - collateral dependent loans. The population of Level 3 loans measured at fair value that are experiencing financial difficulty and measured on a non-recurring basis includes collateral-dependent loans evaluated individually. Collateral values are determined using appraisals or other third-party value estimates of the subject property discounted based on estimated selling costs, and adjustments for other external factors that may impact the marketability of the collateral. Gains and losses generally reflect the required net provision and charge-offs specific to the loans included in the population for the respective periods and are recorded in the provision for credit losses.

Other real estate owned. OREO is carried at LOCOM. OREO asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts, generally between 7 % and 10 %, applied for estimated selling costs and other external factors that may impact the marketability of the property. At March 31, 2025 and December 31, 2024, the weighted average discount applied was 8.76 % and 9.45 %, respectively. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals are ordered to ensure the reported values reflect the most current information.

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Financial Instruments Fair Value

The table below presents the carrying values and estimated fair values for financial instruments, excluding leases and certain other assets and liabilities for which these disclosures are not required.

Carrying Values and Fair Values of Financial Assets and Liabilities

dollars in millions			March 31, 2025
									Estimated Fair Value
			Carrying Value						Level 1						Level 2						Level 3						Total
Financial Assets
Cash and due from banks			$	812					$	812					$	—					$	—					$	812
Interest-earning deposits at banks			24,692						24,692						—						—						24,692
Securities purchased under agreements to resell			345						—						345						—						345
Investment in marketable equity securities			95						42						53						—						95
Investment securities available for sale			33,900						—						33,732						168						33,900
Investment securities held to maturity			10,324						—						8,973						—						8,973
Loans held for sale			183						—						70						115						185
Net loans			137,692						—						1,491						136,450						137,941
Accrued interest receivable			920						—						920						—						920
Federal Home Loan Bank stock			20						—						20						—						20
Mortgage servicing rights			28						—						—						46						46
Derivative assets - qualifying hedges			1						—						1						—						1
Derivative assets - non-qualifying hedges			552						—						533						19						552
Financial Liabilities
Deposits with no stated maturity			147,330						—						147,330						—						147,330
Time deposits			11,995						—						11,986						—						11,986
Credit balances of factoring clients			1,145						—						—						1,145						1,145
Securities sold under customer repurchase agreements			450						—						450						—						450
Long-term borrowings			37,920						—						37,714						—						37,714
Accrued interest payable			107						—						107						—						107
Derivative liabilities - qualifying hedges			—						—						—						—						—
Derivative liabilities - non-qualifying hedges			541						—						540						1						541
			December 31, 2024
									Estimated Fair Value
			Carrying Value						Level 1						Level 2						Level 3						Total
Financial Assets
Cash and due from banks			$	814					$	814					$	—					$	—					$	814
Interest-earning deposits at banks			21,364						21,364						—						—						21,364
Securities purchased under agreements to resell			158						—						158						—						158
Investment in marketable equity securities			101						48						53						—						101
Investment securities available for sale			33,750						—						33,582						168						33,750
Investment securities held to maturity			10,239						—						8,702						—						8,702
Loans held for sale			82						—						55						27						82
Net loans			136,567						—						1,463						133,409						134,872
Accrued interest receivable			902						—						902						—						902
Federal Home Loan Bank stock			20						—						20						—						20
Mortgage servicing rights			27						—						—						47						47
Derivative assets - qualifying hedges			1						—						1						—						1
Derivative assets - non-qualifying hedges			659						—						642						17						659
Financial Liabilities
Deposits with no stated maturity			141,976						—						141,976						—						141,976
Time deposits			13,253						—						13,247						—						13,247
Credit balances of factoring clients			1,016						—						—						1,016						1,016
Securities sold under customer repurchase agreements			367						—						367						—						367
Long-term borrowings			36,669						—						36,220						—						36,220
Accrued interest payable			134						—						134						—						134
Derivative liabilities - qualifying hedges			—						—						—						—						—
Derivative liabilities - non-qualifying hedges			625						—						624						1						625

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The methods and assumptions used to estimate the fair value of each class of financial instruments not discussed elsewhere are as follows:

Interest-earning Deposits at Banks. The carrying value of interest-earning deposits at banks approximates its fair value due to its short-term nature and is classified on the fair value hierarchy as Level 1. The balances at March 31, 2025 and December 31, 2024 included $ 213 million and $ 211 million, respectively, as a required minimum deposit under the Purchase Money Note.

Net loans. The carrying value of net loans is net of the ALLL. Loans are generally valued by discounting expected cash flows using market inputs with adjustments based on cohort level assumptions for certain loan types as well as internally developed estimates at a business segment level. Due to the significance of the unobservable market inputs and assumptions, as well as the absence of a liquid secondary market for most loans, these loans are classified as Level 3. Certain loans are measured based on observable market prices sourced from external data providers and classified as Level 2. Nonaccrual loans are written down and reported at their estimated recovery value, which approximates their fair value, and classified as Level 3.

Securities Purchased Under Agreements to Resell. The fair value of securities purchased under agreements to resell equal the carrying value due to the short term nature, generally overnight, and therefore present an insignificant risk of change in fair value due to changes in market interest rate, and classified as Level 2.

Investment securities held to maturity. BancShares’ portfolio of debt securities held to maturity consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. We primarily use prices obtained from pricing services to determine the fair value of securities, which are Level 2 inputs.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value, as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs.

Mortgage servicing rights. The fair value of mortgage servicing rights (“MSRs”) is determined using a pooling methodology. Similar loans are pooled together and a model which relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for MSRs are considered Level 3 inputs.

Deposits. The estimated fair value of deposits with no stated maturity, such as demand deposit accounts, money market accounts, and savings accounts was the amount payable on demand at the reporting date. The fair value of time deposits was estimated based on a discounted cash flow technique using Level 2 inputs appropriate to the contractual maturity.

Credit balances of factoring clients. The impact of the time value of money from the unobservable discount rate for credit balances of factoring clients is inconsequential due to the short term nature of these balances, therefore, the fair value approximated carrying value, and the credit balances are classified as Level 3.

Short-term borrowed funds. The fair value of short-term borrowed funds, which includes repurchase agreements, approximates carrying value and are classified as Level 2.

Long-term borrowings. For certain long-term senior and subordinated unsecured borrowings, the fair values are sourced from a third-party pricing service. The fair values of other long-term borrowings are determined by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, senior and subordinated debentures, and other borrowings are classified as Level 2.

For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of March 31, 2025 and December 31, 2024. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short-term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified as Level 1. Accrued interest receivable and accrued interest payable are classified as Level 2.

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NOTE 12 — STOCKHOLDERS' EQUITY

A roll forward of common stock activity is presented in the following table:

Number of Shares of Common Stock

			Common Stock Outstanding
			Class A						Class B
Common stock - December 31, 2024			12,712,436						1,005,185
Shares repurchased under authorized repurchase plan			( 302,683 )						—
Common stock - March 31, 2025			12,409,753						1,005,185

Common Stock

The Parent Company has Class A common stock and Class B common stock, each with a par value of $ 1 . Class A common stockholders have one vote per share while Class B common stockholders have 16 votes per share.

Non-Cumulative Perpetual Preferred Stock

The following table summarizes BancShares’ non-cumulative perpetual preferred stock:

Preferred Stock

dollars in millions, except per share and par value data
Preferred Stock						Issuance Date						Earliest Redemption Date						Par Value						Shares Authorized, Issued and Outstanding																		Liquidation Preference Per Share						Total Liquidation Preference						Dividend
Series A						March 12, 2020						March 15, 2025						$	0.01					345,000																		$	1,000					$	345					5.375 %
Series B (1)						January 3, 2022						January 4, 2027						0.01						325,000																		1,000						325						SOFR + 3.972 %
Series C						January 3, 2022						January 4, 2027						0.01						8,000,000																		25						200						5.625 %

(1) Upon conversion to SOFR in 2023, BancShares began paying a credit spread adjustment in addition to the stated dividend.

Dividends on BancShares Series A, B, and C preferred stock (together, “BancShares Preferred Stock”) will be paid when, as, and if declared by the Board of Directors of the Parent Company, or a duly authorized committee thereof, to the extent that the Parent Company has lawfully available funds to pay dividends. If declared, dividends with respect to the BancShares Preferred Stock will accrue and be payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. Dividends on the BancShares Preferred Stock will not be cumulative. For further description of BancShares’ Preferred Stock, refer to Note 16—Stockholders’ Equity in the Notes to the Consolidated Financial Statements included in the 2024 Form 10-K.

NOTE 13 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table details the components of AOCI:

Components of Accumulated Other Comprehensive Loss

dollars in millions			March 31, 2025																		December 31, 2024
			Pretax						Income Taxes						Net of Income Taxes						Pretax						Income Taxes						Net of Income Taxes
Unrealized loss on securities available for sale			$	( 440 )					$	95					$	( 345 )					$	( 762 )					$	178					$	( 584 )
Unrealized loss on securities available for sale transferred to held to maturity			( 6 )						2						( 4 )						( 6 )						2						( 4 )
Defined benefit pension items			182						( 47 )						135						182						( 47 )						135
Unrealized gain on cash flow hedge derivatives			20						( 5 )						15						11						( 3 )						8
Total accumulated other comprehensive loss			$	( 244 )					$	45					$	( 199 )					$	( 575 )					$	130					$	( 445 )

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The following table details the changes in the components of AOCI, net of income taxes:

Changes in Accumulated Other Comprehensive (Loss) Income by Component

dollars in millions			Unrealized loss on securities available for sale						Unrealized loss on securities available for sale transferred to held to maturity						Defined benefit pension items												Unrealized gain on cash flow hedge derivatives						Total accumulated other comprehensive loss
Balance as of December 31, 2024			$	( 584 )					$	( 4 )					$	135											$	8					$	( 445 )
AOCI activity before reclassifications			239						—						—												10						249
Amounts reclassified from AOCI to earnings			—						—						—												( 3 )						( 3 )
Other comprehensive income for the period			239						—						—												7						246
Balance as of March 31, 2025			$	( 345 )					$	( 4 )					$	135											$	15					$	( 199 )
Balance as of December 31, 2023			$	( 577 )					$	( 5 )					$	91											$	—					$	( 491 )
Other comprehensive loss for the period			( 91 )						—						—												—						( 91 )
Balance as of March 31, 2024			$	( 668 )					$	( 5 )					$	91											$	—					$	( 582 )

Other Comprehensive Income

The amounts included in the Consolidated Statements of Comprehensive Income are net of income taxes. The following table presents the pretax and after tax components of other comprehensive income:

Other Comprehensive Income (Loss) by Component

dollars in millions			Three Months Ended March 31,
			2025																		2024
			Pretax						Income Taxes						Net of Income Taxes						Pretax						Income Taxes						Net of Income Taxes						Income Statement Line Items
Unrealized loss on securities available for sale:
Other comprehensive income (loss) on securities available for sale			$	322					$	( 83 )					$	239					$	( 124 )					$	33					$	( 91 )
Unrealized gain on cash flow hedge derivatives:
AOCI activity before reclassifications			$	12					$	( 2 )					$	10					$	—					$	—					$	—
Amounts reclassified from AOCI to earnings			( 3 )						—						( 3 )						—						—						—						Interest and fees on loans
Other comprehensive income on cash flow hedge derivatives			$	9					$	( 2 )					$	7					$	—					$	—					$	—
Total other comprehensive income (loss)			$	331					$	( 85 )					$	246					$	( 124 )					$	33					$	( 91 )

NOTE 14 — EARNINGS PER COMMON SHARE

The following table sets forth the computation of the basic and diluted earnings per common share:

Earnings per Common Share

dollars in millions, except per share data			Three Months Ended March 31,
			2025						2024
Net income			$	483					$	731
Preferred stock dividends			15						15
Net income available to common stockholders			$	468					$	716
Weighted average common shares outstanding
Basic shares outstanding			13,575,231						14,533,302
Stock-based awards			—						3,140
Diluted shares outstanding			13,575,231						14,536,442
Earnings per common share
Basic			$	34.47					$	49.27
Diluted			$	34.47					$	49.26

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NOTE 15 — INCOME TAXES

BancShares’ global effective income tax rates (“ETRs”) were 25.8 % and 27.2 % for the three months ended March 31, 2025 and 2024, respectively. The decrease in the ETR for the three months ended March 31, 2025 compared to 2024 was primarily due to a reduction in the state and local income tax rate.

The quarterly income tax expense is based on a projection of BancShares’ annual ETR. This annual ETR is applied to the year-to-date consolidated pretax income to determine the interim provision for income taxes before discrete items. The ETR each period is also impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to the valuation allowances, and discrete items. The currently forecasted ETR may vary from the actual year-end 2025 ETR due to the changes in these factors.

Uncertain Tax Benefits

BancShares’ recognizes tax benefits when it is more likely than not that the position will prevail, based solely on the technical merits under the tax law of the relevant jurisdiction. BancShares will recognize the tax benefit if the position meets this recognition threshold determined based on the largest amount of the benefit that is more than likely to be realized.

Deferred Tax Assets and Valuation Adjustments

NOTE 16 — EMPLOYEE BENEFIT PLANS

BancShares sponsors non-contributory defined benefit pension plans for its qualifying employees. The service cost component of net periodic benefit cost is included in salaries and wages, while all other non-service cost components are included in other noninterest expense.

The components of net periodic benefit cost are as follows:

			Three Months Ended March 31,
			2025						2024
Service cost			$	2					$	2
Interest cost			16						15
Expected return on assets			( 24 )						( 23 )
Net periodic benefit			$	( 6 )					$	( 6 )

NOTE 17 — SEGMENT INFORMATION

Effective January 1, 2025, we made changes to the composition of our reportable segments as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation, and the segment disclosures below for 2024 were recast to conform with those segment composition changes.

BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We do not aggregate multiple operating segments into a reportable segment. Therefore, each of our operating segments are reportable segments.

Certain noninterest expenses are directly incurred by a segment, while others are not. Noninterest expenses not directly incurred by a segment are included in Corporate unless allocated to a segment (“Allocated Expenses”). Under our segment expense allocation methodology, Allocated Expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below are presented net of Allocated Expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate.

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General Bank

The General Bank segment delivers products and services to consumers and businesses through our extensive network of branches and various digital channels. We offer a full suite of deposit products, loans (primarily residential mortgages and business and commercial loans), cash management, private banking and wealth management, payment services, and treasury services. We offer conforming and jumbo residential mortgage loans throughout the United States that are primarily originated through branches and retail referrals, employee referrals, internet leads, direct marketing and a correspondent lending channel, as well as through our private banking service. Private banking and wealth management offers a customized suite of products and services to individuals and institutional clients, as well as private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. The General Bank segment offers brokerage, investment advisory, private stock loans, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, family office, financial planning, tax planning and trust services. The General Bank segment also includes a community association bank channel that supports deposit, cash management and lending to homeowner associations and property management companies.

Revenue is primarily generated from interest earned on loans. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of BancShares’ income related to deposit fees and service charges, cardholder services, along with essentially all of the wealth management services income. We primarily originate loans by utilizing our branch network and industry referrals, as well as direct digital marketing efforts. We derive our SBA loans through a network of SBA originators. We periodically purchase loans on a whole-loan basis. We also invest in community development that supports the construction of affordable housing in our communities in line with our CRA initiatives.

Commercial Bank

The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily to small and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, asset-backed lending, capital finance, maritime, aerospace and defense, and sponsor finance. Loans offered are primarily senior secured loans collateralized by accounts receivable, inventory, machinery and equipment, transportation equipment, and/or intangibles, and are often used for working capital, plant expansion, acquisitions, or recapitalizations. These loans include revolving lines of credit and term loans and, depending on the nature of the collateral, may be referred to as collateral-backed loans, asset-based loans or cash flow loans. We provide senior secured loans to developers and other commercial real estate (“CRE”) professionals. Additionally, we provide small business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process.

We provide factoring, receivable management and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. Factoring entails the assumption of credit risk with respect to trade accounts receivable arising from the sale of goods from our factoring clients to their customers that have been factored (i.e., sold or assigned to the factor). Our factoring clients, which are generally manufacturers or importers of goods, are the counterparties on factoring, financing or receivables purchasing agreements to sell trade receivables to us. Our factoring clients’ customers, which are generally retailers, are the account debtors and obligors on trade accounts receivable that have been factored.

Revenue is primarily generated from interest and fees on loans. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of BancShares’ capital market fees, and other revenue from banking services. Rental income is generally influenced by the size of the operating lease portfolio. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive most of our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors. We also utilize referrals as a source for commercial lending business. We may periodically buy participations or syndications of loans and lines of credit and purchase loans on a whole-loan basis.

Operating lease equipment is subject to depreciation expense over the useful life of the small and large ticket equipment, which is generally 3 - 10 years.

SVB Commercial

The SVB Commercial segment offers products and services to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. The SVB Commercial segment provides solutions to the financial needs of commercial clients. Loan products consist of capital call lines of credit, investor dependent loans, cash flow dependent loans, and innovation C&I loans made primarily to technology, life science and healthcare companies.

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Revenue is primarily generated from interest earned on loans. Noninterest income is mostly generated from fees, including essentially all of client investment fees and most of the international fees, and other revenue from lending-related activities and banking services.

Deposit products include business and analysis checking accounts, money market accounts, multi-currency accounts, bank accounts, sweep accounts, and positive pay services. Services are provided through online and mobile banking platforms as well as branch locations.

Rail

The Rail segment offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers throughout North America. Railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. Revenue is generated primarily from rental income on operating lease equipment, which is included in noninterest income, and to a lesser extent, gains on sale of leasing equipment. Rental income is generally influenced by the size of the operating lease portfolio, utilization of the railcars, re-pricing of equipment renewed upon lease maturities, and pricing on new leases. Re-pricing refers to the rental rate in the renewed equipment contract compared to the prior contract.

Operating lease equipment is subject to depreciation expense over the useful life of the rail equipment, which is generally longer in duration, 40 - 50 years. The Rail segment leases railcars, primarily pursuant to full-service lease contracts under which we, as lessor, are responsible for railcar maintenance and repair. Maintenance and other operating lease expenses relate to equipment ownership and leasing costs associated with the railcar portfolio and tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.

Corporate

All other financial information not included in the segments is reported in Corporate. Corporate contains BancShares’ centralized treasury function, which manages the investment security portfolio, interest-earning deposits at banks and corporate/wholesale funding (e.g., borrowings, Direct Bank deposits and brokered deposits). Corporate deposits are primarily comprised of Direct Bank deposits.

Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations. Noninterest income includes gains or losses on sales of investment securities, fair value adjustments on marketable equity securities, and income from bank owned life insurance (“BOLI”). Personnel cost in Corporate includes the personnel costs not allocated to the operating segments. Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, Day 2 Provision for Credit Losses and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of Allocated Expenses as discussed above.

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Segment Results and Select Period End Balances

The following tables present the condensed income statements by segment and include the significant segment expenses and measure of segment profit or loss.

			Three Months Ended March 31, 2025
			General Bank						Commercial Bank						SVB Commercial						Rail						Corporate (1)						BancShares (2)
Net interest income (expense)			$	788					$	293					$	493					$	( 52 )					$	141					$	1,663
Rental income on operating lease equipment			—						56						—						214						—						270
All other noninterest income			164						69						132						2						( 2 )						365
Total noninterest income			164						125						132						216						( 2 )						635
Total revenue			952						418						625						164						139						2,298
Depreciation on operating lease equipment			—						44						—						54						—						98
Maintenance and other operating lease expenses			—						—						—						58						—						58
Personnel cost			214						72						114						8						410						818
Acquisition-related expenses			—						—						—						—						42						42
All other noninterest expense (3)			351						159						265						14						( 312 )						477
Total noninterest expense			565						275						379						134						140						1,493
Provision for credit losses			46						85						23						—						—						154
Income (loss) before income taxes			341						58						223						30						( 1 )						651
Income tax expense			88						15						57						8						—						168
Net income (loss)			$	253					$	43					$	166					$	22					$	( 1 )					$	483
Select Period End Balances
Loans and leases			$	64,847					$	38,631					$	37,818					$	62					$	—					$	141,358
Operating lease equipment, net			—						731						—						8,640						—						9,371
Deposits			74,309						2,994						37,020						12						44,990						159,325
(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.

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dollars in millions			Three Months Ended March 31, 2024
			General Bank						Commercial Bank						SVB Commercial						Rail						Corporate (1)						BancShares (2)
Net interest income (expense)			$	684					$	300					$	523					$	( 43 )					$	353					$	1,817
Rental income on operating lease equipment			—						57						—						198						—						255
All other noninterest income			145						83						134						4						6						372
Total noninterest income			145						140						134						202						6						627
Total revenue			829						440						657						159						359						2,444
Depreciation on operating lease equipment			—						46						—						50						—						96
Maintenance and other operating lease expenses			—						—						—						45						—						45
Personnel cost			207						74						119						8						336						744
Acquisition-related expenses			—						—						—						—						58						58
All other noninterest expense (3)			321						140						247						14						( 289 )						433
Total noninterest expense			528						260						366						117						105						1,376
Provision for credit losses			21						20						23						—						—						64
Income before income taxes			280						160						268						42						254						1,004
Income tax expense			79						42						75						11						66						273
Net income			$	201					$	118					$	193					$	31					$	188					$	731
Select Period End Balances
Loans and leases			$	62,015					$	36,251					$	37,042					$	62					$	—					$	135,370
Operating lease equipment, net			—						763						—						8,048						—						8,811
Deposits			70,908						3,400						33,879						14						41,408						149,609
(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.

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NOTE 18 — COMMITMENTS AND CONTINGENCIES

Commitments

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments involve elements of credit, interest rate or liquidity risk and include commitments to extend credit and standby letters of credit.

The accompanying table summarizes credit-related commitments and other purchase and funding commitments:

dollars in millions			March 31, 2025						December 31, 2024
Financing Commitments
Financing assets (excluding leases)			$	52,514					$	53,250
Letters of Credit
Standby letters of credit			2,305						2,188
Other letters of credit			99						103
Deferred Purchase Agreements			1,602						1,802
Purchase and Funding Commitments (1)			119						178

(1) BancShares’ purchase and funding commitments relate to the equipment leasing businesses’ commitments to fund Rail’s railcar manufacturer purchase and upgrade commitments.

Financing Commitments

Commitments to extend credit are legally binding agreements to lend to customers. These commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires collateral be pledged to secure the commitment, including cash deposits, securities and other assets.

Financing commitments, referred to as loan commitments or lines of credit, primarily reflect BancShares’ agreements to lend to its customers, subject to the customers’ compliance with contractual obligations. At March 31, 2025 and December 31, 2024, substantially all undrawn financing commitments were senior facilities. Financing commitments also include $ 164 million and $ 79 million at March 31, 2025 and December 31, 2024, respectively, related to off-balance sheet commitments to fund equity investments. Commitments to fund equity investments are contingent on events that have yet to occur and may be subject to change.

As financing commitments may not be fully drawn, may expire unused, may be reduced or canceled at the customer’s request, and may require the customer to be in compliance with certain conditions, commitment amounts do not necessarily reflect actual future cash flow requirements.

The table above excludes uncommitted revolving credit facilities extended by Commercial Services to its clients for working capital purposes. In connection with these facilities, Commercial Services has the sole discretion throughout the duration of these facilities to determine the amount of credit that may be made available to its clients at any time and whether to honor any specific advance requests made by its clients under these credit facilities.

Letters of Credit

Standby letters of credit are commitments to pay the beneficiary thereof if drawn upon by the beneficiary upon satisfaction of the terms of the letter of credit. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as in extending loans to clients and, therefore, these letters of credit are collateralized when necessary. These financial instruments generate fees and involve, to varying degrees, elements of credit risk in excess of amounts recognized in the Consolidated Balance Sheets.

Deferred Purchase Agreements

A deferred purchase agreement (“DPA”) is provided in conjunction with factoring, whereby a client is provided with credit protection for trade receivables without purchasing the receivables. The trade receivables terms generally require payment in 90 days or less. If the client’s customer is unable to pay an undisputed receivable solely as the result of credit risk, BancShares is then required to purchase the receivable from the client, less any borrowings for such client based on such defaulted receivable. The outstanding amount in the table above, less $ 145 million and $ 166 million at March 31, 2025 and December 31, 2024, respectively, of borrowings for such clients, is the maximum amount that BancShares would be required to pay under all DPAs. This maximum amount would only occur if all receivables subject to DPAs default in the manner described above, thereby requiring BancShares to purchase all such receivables from the DPA clients.

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The table above includes $ 1.57 billion and $ 1.74 billion of DPA exposures at March 31, 2025 and December 31, 2024, respectively, related to receivables on which BancShares has assumed the credit risk. The table also includes $ 36 million and $ 59 million available under DPA credit line agreements provided at March 31, 2025 and December 31, 2024, respectively. The DPA credit line agreements specify a contractually committed amount of DPA credit protection and are cancellable by us only after a notice period, which is typically 90 days or less.

Litigation and Other Contingencies

The Parent Company and certain of its subsidiaries have been named as a defendant in legal actions arising from its normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed.

BancShares is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory, and arbitration proceedings as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. These matters arise in connection with the ordinary conduct of BancShares’ business. At any given time, BancShares may also be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters (all of the foregoing collectively being referred to as “Litigation”). While most Litigation relates to individual claims, BancShares may be subject to putative class action claims and similar broader claims and indemnification obligations.

In light of the inherent difficulty of predicting the outcome of Litigation matters and indemnification obligations, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, BancShares cannot state with confidence what the eventual outcome of the pending Litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines, or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, BancShares’ establishes reserves for Litigation when those matters present loss contingencies as to which it is both probable that a loss will occur and the amount of such loss can reasonably be estimated. Based on currently available information, BancShares does not believe that the outcome of Litigation that is currently pending will have a material impact on BancShares’ consolidated financial statements. The actual results of resolving such matters may be substantially higher than the amounts reserved.

For certain Litigation matters in which BancShares is involved, BancShares is able to estimate a range of reasonably possible losses in excess of established reserves and insurance. For other matters for which a loss is probable or reasonably possible, such an estimate cannot be determined. For Litigation and other matters where losses are reasonably possible, management currently estimates an aggregate range of reasonably possible losses of up to $ 10 million in excess of any established reserves and any insurance we reasonably believe we will collect related to those matters. This estimate represents reasonably possible losses (in excess of established reserves and insurance) over the life of such Litigation, which may span a currently indeterminable number of years, and is based on information currently available as of March 31, 2025. The Litigation matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate.

Those Litigation matters for which an estimate is not reasonably possible or as to which a loss does not appear to be reasonably possible, based on current information, are not included within this estimated range and, therefore, this estimated range does not represent BancShares’ maximum loss exposure.

The foregoing statements about BancShares’ Litigation are based on BancShares’ judgments, assumptions, and estimates and are necessarily subjective and uncertain. In the event of unexpected future developments, it is possible that the ultimate resolution of these cases, matters, and proceedings, if unfavorable, may be material to BancShares’ consolidated financial position in a particular period.

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