v3.26.1
Derivatives
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives 
 
The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities as well as the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio. These derivative financial instruments are not designated as accounting hedges and are recorded at fair value, with changes recognized in earnings.

Interest Rate Swaps

The Company’s primary derivative activity consists of interest rate swaps executed with commercial borrowers to facilitate their risk management strategies. These swaps are economically hedged through offsetting swaps with third parties, minimizing net exposure. As of March 31, 2026, the Company had interest rate swap assets with notional amounts of $4.4 billion and interest rate swap liabilities with notional amounts of $4.5 billion related to this program, compared with notional amounts of $4.5 billion for both assets and liabilities as of December 31, 2025. Collateral posted under these arrangements for initial margins with its clearing houses and is required to post collateral against its obligations under these interest rate swaps totaled $89 million and $93 million at March 31, 2026 and December 31, 2025, respectively. Centrally cleared swaps are cleared through the Chicago Mercantile Exchange and London Clearing House, with variation margin treated as settlement of mark-to-market exposure. Variation margin netting adjustments were $100 million and $98 million at March 31, 2026 and December 31, 2025, respectively. The Company also enters into bilateral Term SOFR swaps that are not clearable; these require daily cash collateral exchanges but no initial margin.
Forward Delivery Contracts

To hedge interest rate risk on mortgage loans held for sale and interest rate lock commitments, the Company enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities at specified prices and dates. Credit risk is limited to the replacement cost of contracts in a gain position, and no counterparty defaults occurred in the three months ended March 31, 2026 and 2025. Market risk is managed by monitoring positions and offsetting differences between customer commitments and broker-dealer contracts. If commitments exceed available loans, the Company settles by paying or receiving a fee equal to the change in market value. As of March 31, 2026 and December 31, 2025, mortgage loan origination commitments totaled $70 million and $39 million, respectively, and forward sales commitments totaled $91 million and $74 million, respectively.

Other Derivative Contracts

The Company uses interest rate futures and forward-settling mortgage-backed securities to hedge interest rate risk on mortgage servicing rights. As of March 31, 2026, the Bank had $214 million notional of interest rate futures contracts and $33 million of mortgage-backed securities, compared to $211 million and $34 million, respectively, as of December 31, 2025. The Company also provides foreign currency hedging services to customers, offsetting these positions with third-party banks to limit risk exposure.

The Company's derivatives are included in other assets or other liabilities on the Consolidated Balance Sheets and measured at fair value. The following table summarizes the types of derivatives, separately by assets and liabilities, and the fair values of such derivatives as of the dates presented:
(in millions)
Asset DerivativesLiability Derivatives
Derivatives not designated as hedging instrumentMarch 31, 2026December 31, 2025March 31, 2026December 31, 2025
Interest rate futures$— $— $3 $— 
Interest rate forward sales commitments1 — — — 
Interest rate swaps80 84 178 179 
Total derivative assets and liabilities$81 $84 $181 $179 

The gains and losses on the Company's interest rate futures and forward sales commitment derivatives are included in residential mortgage banking revenue. The gains and losses on the Company's interest rate swaps and foreign currency derivatives are included in other income. The following table summarizes the types of derivatives and the gains (losses) recorded for the periods indicated:
(in millions)
Three Months Ended
Derivatives not designated as hedging instrumentMarch 31, 2026March 31, 2025
Interest rate futures$(2)$3 
Interest rate forward sales commitments1 (1)
Interest rate swaps— (1)
Total derivative (losses) gains$(1)$1 

The Company is party to interest rate swap contracts that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.
The following table shows the gross interest rate swaps in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts are limited to the outstanding balances of the related asset or liability. Therefore, instances of over collateralization are not shown.
Gross Amounts Not Offset in the Consolidated Balance Sheets
(in millions)Gross Amounts of Recognized Assets/Liabilities
Gross Amounts Offset in the Consolidated Balance Sheets
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets
Financial InstrumentsCollateral Received/PostedNet Amount
March 31, 2026
Derivative Assets
Interest rate swaps$80 $— $80 $4 $50 $26 
Derivative Liabilities
Interest rate swaps$178 $— $178 $4 $1 $173 
December 31, 2025
Derivative Assets
Interest rate swaps$84 $— $84 $26 $35 $23 
Derivative Liabilities
Interest rate swaps$179 $— $179 $26 $— $153