v3.26.1
Fair Value Accounting (Tables)
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Gains and Losses from Fair Value Changes Included in Consolidated Statement of Operations
The following table presents unrealized gains and losses from fair value changes on junior subordinated debt:
Three Months Ended March 31,
20262025
(in millions)
Unrealized gains$1.3 $1.5 
Changes included in OCI, net of tax1.0 1.1 
Fair Value of Assets and Liabilities
The fair value of assets and liabilities measured at fair value on a recurring basis was determined using the following inputs: 
Fair Value Measurements at the End of the Reporting Period Using:
Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Fair Value
March 31, 2026(in millions)
Assets:
Available-for-sale debt securities
CLO$— $2,966 $— $2,966 
Commercial MBS issued by GSEs and GNMA— 471 — 471 
Corporate debt securities— 297 — 297 
Private label residential MBS— 1,005 — 1,005 
Residential MBS issued by GSEs and GNMA— 7,497 — 7,497 
Tax-exempt— 788 — 788 
U.S. Treasury securities5,610 — — 5,610 
Other28 39 — 67 
Total AFS debt securities$5,638 $13,063 $— $18,701 
Equity securities
CRA investments$28 $— $— $28 
Preferred stock51 — — 51 
Total equity securities$79 $— $— $79 
Loans HFS (2)$— $2,804 $1,011 $3,815 
Mortgage servicing rights— — 1,516 1,516 
Derivative assets (1)— 227 49 276 
Liabilities:
Junior subordinated debt (3)$— $— $70 $70 
Derivative liabilities (1)— 127 12 139 
(1)See "Note 12. Derivatives and Hedging Activities." In addition, the carrying value of loans is decreased by $26 million as of March 31, 2026 for the effective portion of the hedge, which relates to the fair value of the hedges put in place to mitigate against fluctuations in interest rates. Derivative assets and liabilities exclude margin of $260 million and $31 million, respectively.
(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
 Fair Value Measurements at the End of the Reporting Period Using:
Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Fair Value
December 31, 2025(in millions)
Assets:
Available-for-sale debt securities
CLO$— $2,747 $— $2,747 
Commercial MBS issued by GSEs and GNMA— 635 — 635 
Corporate debt securities— 297 — 297 
Private label residential MBS— 1,039 — 1,039 
Residential MBS issued by GSEs and GNMA— 7,230 — 7,230 
Tax-exempt— 802 — 802 
U.S. Treasury securities5,970 — — 5,970 
Other28 40 — 68 
Total AFS debt securities$5,998 $12,790 $— $18,788 
Equity securities
Preferred stock$52 $— $— $52 
CRA investments27 — — 27 
Total equity securities$79 $— $— $79 
Loans - HFS (2)$— $2,664 $700 $3,364 
Mortgage servicing rights— — 1,494 1,494 
Derivative assets (1)— 148 59 207 
Liabilities:
Junior subordinated debt (3)$— $— $71 $71 
Derivative liabilities (1)— 105 1 106 
(1)See "Note 12. Derivatives and Hedging Activities." Derivative assets and liabilities exclude margin of $366 million and $7 million, respectively.
(2)Includes only the portion of loans HFS that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
(3)Includes only the portion of junior subordinated debt that is recorded at fair value at each reporting period pursuant to the election of FVO treatment.
Change in Level 3 Liabilities Measured at Fair Value on Recurring Basis
The change in Level 3 liabilities measured at fair value on a recurring basis included in OCI was as follows:
Junior Subordinated Debt
Three Months Ended March 31,
20262025
(in millions)
Beginning balance$(71.2)$(64.7)
Change in fair value (1)1.3 1.5 
Ending balance$(69.9)$(63.2)
(1)Unrealized gains (losses) attributable to changes in the fair value of junior subordinated debt are recorded in OCI, net of tax, and totaled $1.0 million and $1.1 million for three months ended March 31, 2026 and 2025, respectively.
The change in Level 3 assets and liabilities measured at fair value on a recurring basis included in income was as follows:
Three Months Ended March 31, 2026
Loans HFSMSRsIRLCs (1)Warrants
(in millions)
Balance, beginning of period$700 $1,494 $19 $39 
Purchases and additions522 295 5,540 2 
Sales and payments(225)(211)— — 
Transfers from Level 2 to Level 32 — — — 
Settlement of IRLCs upon acquisition or origination of loans HFS— — (5,560)— 
Warrant exercises— — — (2)
Change in fair value12 22 (2)1 
Realization of cash flows— (84)— — 
Balance, end of period$1,011 $1,516 $(3)$40 
Changes in unrealized gains for the period (2)$15 $22 $(3)$(1)
Three Months Ended March 31, 2025
Loans HFSMSRsIRLCs (1)Warrants
(in millions)
Balance, beginning of period$3 $1,127 $(2)$30 
Purchases and additions65 260 5,742 3 
Sales and payments(9)(83)— — 
Transfers from Level 2 to Level 32 — — — 
Settlement of IRLCs upon acquisition or origination of loans HFS— — (5,733)— 
Change in fair value2 (20)6 (2)
Realization of cash flows— (43)— — 
Balance, end of period$63 $1,241 $13 $31 
Changes in unrealized gains for the period (2)$1 $(19)$13 $(1)
(1)     IRLC asset and liability positions are presented net.
(2)    Amounts recognized as part of non-interest income.
The significant unobservable inputs used in the fair value measurements of these Level 3 assets and liabilities were as follows:
March 31, 2026
Asset/liabilityKey inputsRangeWeighted average
MSRs:Option adjusted spread (in basis points)
327 - 458
377 
Conditional prepayment rate (1)
5.8% - 13.0%
10.3 %
Recapture rate
0.0% - 55.0%
25.1 %
Servicing fee rate (in basis points)
25.0 - 56.5
39.3 
Cost to service
$77 - $83
$79 
Loans HFS:Lifetime liquidation probability
2.1% to 12.5%
6.7 %
IRLCs:Servicing fee multiple
4.7 - 7.0
5.7 
Pull-through rate
80% - 100%
91.0 %
Equity warrants:Volatility
46.6% - 168.8%
78.1 %
Risk-free interest rate
3.7% - 4.4%
3.9 %
Time to expiration (in years)
1.0 - 10.0
2.8
December 31, 2025
Asset/liabilityKey inputsRangeWeighted average
MSRs:Option adjusted spread (in basis points)
283 - 317
316 
Conditional prepayment rate (1)
6.1% - 14.1%
11.0 %
Recapture rate
0.0% - 55.0%
25.5 %
Servicing fee rate (in basis points)
25.0 - 56.5
38.1 
Cost to service
$77 - $83
$79 
Loans HFS:Lifetime liquidation probability
1.6% - 10.7%
4.6 %
IRLCs:Servicing fee multiple
4.7 - 6.5
5.5 
Pull-through rate
74% - 100%
92.0 %
Equity warrants:Volatility
40.3% - 180.4%
74.7 %
Risk-free interest rate
3.5% - 4.1%
3.6 %
Time to expiration (in years)
1.0 - 10.0
2.9
(1)    Lifetime total prepayment speed annualized.
For Level 3 assets measured at fair value on a nonrecurring basis as of period end, the significant unobservable inputs used in the fair value measurements were as follows:
March 31, 2026Valuation Technique(s)Significant Unobservable InputsRange
(in millions)
Loans HFI$409 Collateral methodThird party appraisalCosts to sell
6.0% to 10.0%
Discounted cash flow methodDiscount rateContractual loan rate
3.0% to 8.0%
Scheduled cash collectionsProbability of default
0% to 20.0%
Proceeds from non-real estate collateralLoss given default
0% to 70.0%
Other assets acquired through foreclosure123 Collateral methodThird party appraisalCosts to sell
1.0% to 6.0%
December 31, 2025Valuation Technique(s)Significant Unobservable InputsRange
(in millions)
Loans HFI$395 Collateral methodThird party appraisalCosts to sell
6.0% to 10.0%
Discounted cash flow methodDiscount rateContractual loan rate
3.0% to 8.0%
Scheduled cash collectionsProbability of default
0% to 20.0%
Proceeds from non-real estate collateralLoss given default
0% to 70.0%
Other assets acquired through foreclosure137 Collateral methodThird party appraisalCosts to sell
1.0% to 6.0%
Assets Measured at Fair Value on Nonrecurring Basis
The significant unobservable inputs used in the fair value measurements of these Level 3 liabilities were as follows:
March 31, 2026Valuation TechniqueSignificant Unobservable InputsInput Value
(in millions)
Junior subordinated debt$70 Discounted cash flowImplied credit rating of the Company5.71 %
 
December 31, 2025Valuation TechniqueSignificant Unobservable InputsInput Value
(in millions)
Junior subordinated debt$71 Discounted cash flowImplied credit rating of the Company5.36 %
The following table presents such assets carried on the Consolidated Balance Sheet by caption and by level within the ASC 825 hierarchy:
 Fair Value Measurements at the End of the Reporting Period Using
 TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)		Active Markets for Similar Assets
(Level 2)		Unobservable Inputs
(Level 3)
 (in millions)
As of March 31, 2026:
Loans HFI$409 $— $— $409 
Other assets acquired through foreclosure123 — — 123 
As of December 31, 2025:
Loans HFI$395 $— $— $395 
Other assets acquired through foreclosure137 — — 137 
Estimated Fair Value of Financial Instruments
The following is a summary of the difference between the aggregate fair value and the aggregate UPB of loans HFS for which the FVO has been elected:
March 31, 2026December 31, 2025
Fair valueUPBDifferenceFair valueUPBDifference
(in millions)
Loans HFS:
Current through 89 days delinquent$3,057 $2,996 $61 $2,846 $2,744 $102 
90 days or more delinquent758 732 26 518 501 17 
Total$3,815 $3,728 $87 $3,364 $3,245 $119 
The estimated fair value of the Company’s financial instruments is as follows:
March 31, 2026
Carrying AmountFair Value
Level 1Level 2Level 3Total
(in millions)
Financial assets:
Investment securities:
HTM$1,625 $— $1,450 $— $1,450 
AFS18,701 5,638 13,063 — 18,701 
Equity79 79 — — 79 
Derivative assets (1)276 — 227 49 276 
Loans HFS3,936 — 2,804 1,132 3,936 
Loans HFI, net58,681 — — 57,296 57,296 
Mortgage servicing rights1,516 — — 1,516 1,516 
Accrued interest receivable473 — 473 — 473 
Financial liabilities:
Deposits$82,723 $— $82,749 $— $82,749 
Other borrowings5,610 — 5,610 — 5,610 
Qualifying debt1,072 — 968 85 1,053 
Derivative liabilities (1)139 — 127 12 139 
Accrued interest payable120 — 120 — 120 
(1)    Derivative assets and liabilities exclude margin of $260 million and $31 million, respectively.

December 31, 2025
Carrying AmountFair Value
Level 1Level 2Level 3Total
(in millions)
Financial assets:
Investment securities:
HTM$1,584 $— $1,427 $— $1,427 
AFS18,788 5,998 12,790 — 18,788 
Equity securities79 79 — — 79 
Derivative assets (1)207 — 148 59 207 
Loans HFS3,498 — 2,664 834 3,498 
Loans HFI, net58,216 — — 57,206 57,206 
Mortgage servicing rights1,494 — — 1,494 1,494 
Accrued interest receivable473 — 473 — 473 
Financial liabilities:
Deposits$77,159 $— $77,185 $— $77,185 
Other borrowings5,240 — 5,242 — 5,242 
Qualifying debt1,076 — 981 87 1,068 
Derivative liabilities (1)106 — 105 1 106 
Accrued interest payable116 — 116 — 116 
(1)    Derivative assets and liabilities exclude margin of $366 million and $7 million, respectively.