FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Fair Value, Assets and Liabilities Measured on 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, 2026
	Total		Level 1		Level 2		Level 3
Assets
Investment securities available for sale
U.S. Treasury	$	12,442	$	—	$	12,442	$	—
Government agency	38		—		38		—
Residential mortgage-backed securities	17,595		—		17,595		—
Commercial mortgage-backed securities	3,099		—		3,099		—
Corporate bonds	128		—		108		20
Municipal bonds	12		—		12		—

Total investment securities available for sale	$	33,314	$	—	$	33,294	$	20
Marketable equity securities	130		50		80		—
Loans held for sale	89		—		89		—
Loans	24		—		24		—
Derivative assets (1)


Total qualifying hedge assets	$	—	$	—	$	—	$	—
Interest rate contracts — non-qualifying hedges	$	356	$	—	$	353	$	3
Foreign exchange contracts — non-qualifying hedges	114		—		114		—
Other derivative contracts — non-qualifying hedges	28		—		—		28
Total non-qualifying hedge assets	$	498	$	—	$	467	$	31
Total derivative assets	$	498	$	—	$	467	$	31
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges	$	—	$	—	$	—	$	—

Interest rate contracts — non-qualifying hedges	$	366	$	—	$	366	$	—
Foreign exchange contracts — non-qualifying hedges	82		—		82		—
Other derivative contracts — non-qualifying hedges	—		—		—		—
Total non-qualifying hedge liabilities	$	448	$	—	$	448	$	—
Total derivative liabilities	$	448	$	—	$	448	$	—
(1) Derivative fair values include accrued interest.


dollars in millions	December 31, 2025
	Total		Level 1		Level 2		Level 3
Assets
Investment securities available for sale
U.S. Treasury	$	10,673	$	—	$	10,673	$	—
Government agency	43		—		43		—
Residential mortgage-backed securities	17,623		—		17,623		—
Commercial mortgage-backed securities	3,299		—		3,299		—
Corporate bonds	140		—		117		23
Municipal bonds	12		—		12		—

Total investment securities available for sale	$	31,790	$	—	$	31,767	$	23
Marketable equity securities	127		50		77		—
Loans held for sale	87		—		87		—
Loans	22		—		22		—
Derivative assets (1)

Total qualifying hedge assets	$	—	$	—	$	—	$	—
Interest rate contracts — non-qualifying hedges	$	385	$	—	$	383	$	2
Foreign exchange contracts — non-qualifying hedges	122		—		122		—
Other derivative contracts — non-qualifying hedges	27		—		—		27
Total non-qualifying hedge assets	$	534	$	—	$	505	$	29
Total derivative assets	$	534	$	—	$	505	$	29
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges	$	—	$	—	$	—	$	—

Interest rate contracts — non-qualifying hedges	$	381	$	—	$	381	$	—
Foreign exchange contracts — non-qualifying hedges	113		—		113		—
Other derivative contracts — non-qualifying hedges	—		—		—		—
Total non-qualifying hedge liabilities	$	494	$	—	$	494	$	—
Total derivative liabilities	$	494	$	—	$	494	$	—

(1) Derivative fair values include accrued interest.

Schedule of Fair Value Measurement Inputs and Valuation Techniques

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, 2026

December 31, 2025

Assets

Corporate bonds

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

Internal valuation model

Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument.

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

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, 2026						Three Months Ended March 31, 2025
	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	$	23	$	29	$	—	$	168	$	17	$	1
Purchases	—		1		—		—		2		—
Changes in fair value included in earnings	—		3		—		—		1		—
Changes in fair value included in comprehensive income	—		—		—		—		—		—

Transfers out	—		—		—		—		—		—
Maturity and settlements	(3)		(2)		—		—		(1)		—
Ending balance	$	20	$	31	$	—	$	168	$	19	$	1

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

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


dollars in millions	Three Months Ended March 31, 2026						Three Months Ended March 31, 2025
	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	$	23	$	29	$	—	$	168	$	17	$	1
Purchases	—		1		—		—		2		—
Changes in fair value included in earnings	—		3		—		—		1		—
Changes in fair value included in comprehensive income	—		—		—		—		—		—

Transfers out	—		—		—		—		—		—
Maturity and settlements	(3)		(2)		—		—		(1)		—
Ending balance	$	20	$	31	$	—	$	168	$	19	$	1

Schedule of 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, 2026						December 31, 2025
	Fair Value		Unpaid Principal Balance		Difference		Fair Value		Unpaid Principal Balance		Difference
Originated loans held for sale (1)	$	113	$	114	$	(1)	$	109	$	109	$	—

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

Schedule of Fair Value, Assets Measured on Nonrecurring Basis

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
	Carrying Value		Level 1		Level 2		Level 3		Total Gains (Losses)
March 31, 2026
Assets held for sale - loans	$	25	$	—	$	—	$	25	$	(4)
Loans - collateral dependent loans	192		—		—		192		(44)
Other real estate owned	55		—		—		55		(1)

Total	$	272	$	—	$	—	$	272	$	(49)
December 31, 2025
Assets held for sale - loans	$	5	$	—	$	—	$	5	$	(7)
Loans - collateral dependent loans	186		—		—		186		(157)
Other real estate owned	104		—		—		104		—

Total	$	295	$	—	$	—	$	295	$	(164)

Schedule of Carrying Values and Estimated Fair Values for Financial Instruments

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, 2026
			Estimated Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	1,080	$	1,080	$	—	$	—	$	1,080
Interest-earning deposits at banks	23,189		23,189		—		—		23,189
Securities purchased under agreements to resell	223		—		223		—		223
Investment in marketable equity securities	130		50		80		—		130
Investment securities available for sale	33,314		—		33,294		20		33,314
Investment securities held to maturity	9,542		—		8,360		—		8,360
Loans held for sale	1,118		—		733		385		1,118
Net loans	145,170		—		1,487		144,707		146,194
Accrued interest receivable	955		—		955		—		955
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	33		—		—		54		54

Derivative assets - non-qualifying hedges	498		—		467		31		498
Financial Liabilities
Deposits with no stated maturity	157,599		—		157,599		—		157,599
Time deposits	13,243		—		13,223		—		13,223
Credit balances of factoring clients	1,284		—		—		1,284		1,284
Securities sold under customer repurchase agreements	170		—		170		—		170

Long-term borrowings	33,719		—		33,641		—		33,641
Accrued interest payable	109		—		109		—		109

Derivative liabilities - non-qualifying hedges	448		—		448		—		448

	December 31, 2025
			Estimated Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	801	$	801	$	—	$	—	$	801
Interest-earning deposits at banks	19,801		19,801		—		—		19,801
Securities purchased under agreements to resell	232		—		232		—		232
Investment in marketable equity securities	127		50		77		—		127
Investment securities available for sale	31,790		—		31,767		23		31,790
Investment securities held to maturity	9,647		—		8,491		—		8,491
Loans held for sale	799		—		781		18		799
Net loans	144,346		—		1,580		143,782		145,362
Accrued interest receivable	912		—		912		—		912
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	32		—		—		50		50

Derivative assets - non-qualifying hedges	534		—		505		29		534
Financial Liabilities
Deposits with no stated maturity	150,342		—		150,342		—		150,342
Time deposits	11,236		—		11,227		—		11,227
Credit balances of factoring clients	1,148		—		—		1,148		1,148
Securities sold under customer repurchase agreements	224		—		224		—		224

Long-term borrowings	35,712		—		35,795		—		35,795
Accrued interest payable	140		—		140		—		140

Derivative liabilities - non-qualifying hedges	494		—		494		—		494

- Definition

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

+ References + Details