We utilize a minimum of four forward-looking economic scenarios to calculate lifetime ECL when estimating the allowance for credit losses for in scope financial assets and the liability for off-balance sheet credit exposures. Three of the scenarios are termed the "Consensus Economic Scenarios" which include a 'most likely outcome' (the "Central scenario") and two less likely 'outer' scenarios, referred to as the "Upside scenario" and the "Downside scenario." The fourth scenario, referred to as the "Alternative Downside scenario," is designed to consider severe downside risks with more extreme economic outcomes. Each scenario is assigned a weighting deemed appropriate for the estimation of lifetime ECL, with the majority of the weighting typically placed on the Central scenario. At management's discretion, changes may be made to the weighting assigned to the four scenarios or additional scenarios may be included in order to consider current economic conditions.

Updates to Economic Scenarios and Other Changes During the Six Months Ended June 30, 2026 During the first quarter of 2026, economic uncertainty increased due to the impact of the conflict in the Middle East, including higher energy prices resulting from supply chain disruption, in addition to the ongoing uncertainty associated with tariffs, inflation and interest rates. As a result, in addition to updating our Consensus Economic Scenarios and our Alternative Downside scenario, we developed and utilized a fifth scenario for estimating lifetime ECL at March 31, 2026, referred to as the "Alternative Downside 2 scenario" to address the risks of an energy price shock from a more prolonged Middle East conflict. Each of the five scenarios was assigned weightings with the highest weighting placed on the Central scenario, the second highest weighting placed on the Alternative Downside 2 scenario, the third highest weighting placed on the Downside scenario, and the lowest weightings placed equally on the Upside and Alternative Downside scenarios. This weighting represented management's best estimate of lifetime ECL at that time.

Although the economic outlook improved during the second quarter of 2026, these factors continued to create economic uncertainty. However, as the prevailing range of economic forecasts adequately reflects these heightened economic uncertainties, management determined that the additional fifth scenario, the Alternative Downside 2 scenario, was no longer needed. We updated our Consensus Economic Scenarios and our Alternative Downside scenario to reflect management's current view of forecasted economic conditions and utilized the four updated scenarios for estimating lifetime ECL at June 30, 2026. Each of the four scenarios was assigned weightings with the majority of the weighting placed on the Central scenario, the second highest weighting placed on the Downside scenario, and the lowest weightings placed equally on the Upside and Alternative Downside scenarios. This weighting represents management's best estimate of lifetime ECL under current conditions. The following discussion summarizes the scenarios at June 30, 2026. The economic assumptions described in this section have been formed specifically for the purpose of calculating lifetime ECL.

The Central scenario assumes moderate economic growth in 2026 and 2027, reflecting the prevailing economic and geopolitical environment. As inflation remains elevated in the near term while the labor market softens modestly, the FRB maintains a slight tightening bias. The downside scenarios reflect more adverse economic outcomes than the Central scenario, ranging from a cyclical downturn to a severe recession. They assume tighter financial conditions, a weaker labor market, and higher inflation driven by an escalation of the Middle East conflict.


	For the Quarter Ended
	Dec. 31, 2026		Jun. 30, 2027		Dec. 31, 2027
Unemployment rate (quarterly average):
Forecast at June 30, 2026	4.5	%	4.4	%	4.3	%
Forecast at March 31, 2026	4.5		4.4		4.3
Forecast at December 31, 2025	4.4		4.3		4.2
Gross domestic product growth rate (year-over-year):
Forecast at June 30, 2026	2.0	%	2.0	%	2.0	%
Forecast at March 31, 2026	2.3		2.0		2.0
Forecast at December 31, 2025	1.9		2.0		2.0


	Commercial Loans						Consumer Loans
	Commercial Mortgages(1)		Business and Corporate Banking(1)		Other Comm'l		Residential Mortgages		Other Consumer		Total Loans
	(in millions)
Three Months Ended June 30, 2026
Allowance for credit losses – beginning of period	$	108	$	363	$	1	$	(10)	$	19	$	481
Provision charged (credited) to income	(37)		9		(1)		(6)		(2)		(37)
Charge-offs	—		(35)		—		(1)		(2)		(38)
Recoveries	—		13		—		3		1		17
Net (charge-offs) recoveries	—		(22)		—		2		(1)		(21)

Allowance for credit losses – end of period	$	71	$	350	$	—	$	(14)	$	16	$	423

Three Months Ended June 30, 2025
Allowance for credit losses – beginning of period	$	199	$	423	$	1	$	(11)	$	22	$	634
Provision charged (credited) to income	—		39		—		(8)		(2)		29
Charge-offs	(27)		(25)		—		—		(2)		(54)
Recoveries	—		1		—		2		2		5
Net (charge-offs) recoveries	(27)		(24)		—		2		—		(49)

Allowance for credit losses – end of period	$	172	$	438	$	1	$	(17)	$	20	$	614

Six Months Ended June 30, 2026
Allowance for credit losses – beginning of period	$	108	$	327	$	1	$	(12)	$	18	$	442


Provision charged (credited) to income	(37)		58		(1)		(4)		(1)		15
Charge-offs	—		(48)		—		(2)		(4)		(54)
Recoveries	—		13		—		4		3		20
Net (charge-offs) recoveries	—		(35)		—		2		(1)		(34)

Allowance for credit losses – end of period	$	71	$	350	$	—	$	(14)	$	16	$	423

Six Months Ended June 30, 2025
Allowance for credit losses – beginning of period	$	135	$	390	$	1	$	(12)	$	23	$	537


Provision charged (credited) to income	64		87		—		(8)		(2)		141
Charge-offs	(27)		(40)		—		—		(4)		(71)
Recoveries	—		1		—		3		3		7
Net (charge-offs) recoveries	(27)		(39)		—		3		(1)		(64)

Allowance for credit losses – end of period	$	172	$	438	$	1	$	(17)	$	20	$	614

(1)As discussed further in Note 4, "Loans," in the first quarter of 2026, we updated our presentation of commercial loans. Commercial mortgages previously reported within real estate, including construction are now presented as a separate category. Unsecured loans and loans that are indirectly secured by commercial real estate are now included within business and corporate banking. As a result, we have reclassified prior year amounts to conform to the current year presentation.

Accrued Interest Receivables The following table summarizes accrued interest receivables associated with financial assets carried at amortized cost and securities available-for-sale along with the related allowance for credit losses, which are reported net in other assets on the consolidated balance sheet. These accrued interest receivables are excluded from the amortized cost basis disclosures presented elsewhere in these financial statements, including Note 3, "Securities," and Note 4, "Loans."


	June 30, 2026		December 31, 2025
	(in millions)
Accrued interest receivables:
Loans	$	227	$	222
Securities held-to-maturity	90		70
Other financial assets measured at amortized cost	15		26
Securities available-for-sale	183		169
Total accrued interest receivables	515		487
Allowance for credit losses	—		—
Accrued interest receivables, net	$	515	$	487