v3.26.3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
 9 Months Ended
Sep. 30, 2026
Summary of Derivative Instruments [Abstract]  
Schedule of Derivative Amounts
The following schedule presents derivative notional amounts and recorded fair values at September 30, 2026 and December 31, 2025:
September 30, 2026December 31, 2025
Notional
amount		Fair valueNotional
amount		Fair value
(In millions)Other
assets		Other
liabilities		Other
assets		Other
liabilities
Derivatives designated as accounting hedges:
Cash flow hedges:
Hedges of floating-rate assets 1
$22,700 $— $20 $2,750 $7 $1 
Fair value hedges:
Hedges of fixed-rate assets 1
8,441 112 — 7,653 79 — 
Hedges of fixed-rate liabilities2,000 — 6 1,000 — — 
Total derivatives designated as accounting hedges33,141 112 26 11,403 86 1 
Derivatives not designated as accounting hedges: 2
Customer interest rate derivatives30,612 426 542 22,428 251 241 
Customer commodity derivatives3,466 228 213 853 18 17 
Other interest rate derivatives1,928 2 — 5,571 2 — 
Foreign exchange derivatives 3
506 3 2 308 3 1 
Purchased credit derivatives45 — — 64 — — 
Total derivatives not designated as accounting hedges
36,557 659 757 29,224 274 259 
Total gross derivatives$69,698 $771 $783 $40,627 $360 $260 
Less: Offsetting derivative instruments(122)(122)(51)(51)
Less: Cash collateral pledged/received(479)(87)(232)(17)
Total net derivatives presented on balance sheet 4
$170 $574 $77 $192 
1 Balances include forward-starting interest rate derivatives designated as cash flow and fair value hedges of assets whose contractual start dates had not yet occurred as of the reporting dates. Related notional amounts totaled $14.0 billion and $2.9 billion, respectively, at September 30, 2026, compared with $350 million and $2.1 billion, respectively, at December 31, 2025.
2 Notional amounts and fair values for derivatives that are not designated as accounting hedges include both the customer-facing derivatives the Bank executes to assist customers in managing their risks and the dealer-facing derivatives that economically offset the customer transactions to mitigate the Bank's exposure.
3 Includes foreign exchange spot, forward, and option contracts.
4 Effective in the first quarter of 2026, we changed our accounting policy to present qualifying derivative assets and liabilities, along with the associated rights to reclaim or obligations to return cash collateral, on a net basis for all eligible arrangements rather than on a gross basis. Prior period results have been recast to conform to this presentation.
Schedule of Derivative Gains (Losses) Deferred in OCI or Recognized in Earnings
The following schedule presents the gains and losses from derivative instruments designated as cash flow and fair value hedges, either deferred in accumulated other comprehensive income (“AOCI”) or recognized in earnings for the three and nine months ended September 30, 2026 and 2025:
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedgesHedge ineffectivenessEffective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedgesHedge ineffectiveness
Cash flow hedges: 1
Hedges of floating-rate assets$(59)$(12)$— $— $— $(15)$— $— 
Hedges of floating-rate liabilities— — — — — — — — 
Fair value hedges: 2
Hedges of fixed-rate assets— — 5 (1)— — 15 — 
Hedges of fixed-rate liabilities— — (2)— — — (3)— 
Total derivatives designated as accounting hedges
$(59)$(12)$3 $(1)$— $(15)$12 $— 
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
(In millions)Effective portion of derivative gain (loss) deferred in AOCIAmount of gain (loss) reclassified from AOCI into incomeInterest on fair value hedgesHedge ineffectivenessEffective portion of derivative gain (loss) deferred in AOCIAmount of gain (loss) reclassified from AOCI into incomeInterest on fair value hedgesHedge ineffectiveness
Cash flow hedges: 1
Hedges of floating-rate assets$(120)$(34)$— $— $8 $(53)$— $— 
Hedges of floating-rate liabilities— — — — — 1 — — 
Fair value hedges: 2
Hedges of fixed-rate assets— — 16 (1)— — 42 — 
Hedges of fixed-rate liabilities— — (6)(1)— — (8)— 
Total derivatives designated as accounting hedges
$(120)$(34)$10 $(2)$8 $(52)$34 $— 
1 For the 12-month period following September 30, 2026, approximately $85 million of net losses from both active and terminated cash flow hedges will be reclassified from AOCI into interest income, compared with $37 million at September 30, 2025. At September 30, 2026, approximately $12 million of losses related to terminated cash flow hedges remained deferred in AOCI, which are expected to be fully reclassified into earnings by October 2027.
2 We recorded cumulative unamortized basis adjustments from terminated fair value hedges of debt totaling $26 million and $34 million at September 30, 2026 and 2025, respectively. Additionally, we had $2 million and $3 million of cumulative unamortized basis adjustments from terminated fair value hedges of assets at September 30, 2026 and 2025, respectively. Interest on fair value hedges presented above includes the amortization of the remaining unamortized basis adjustments.
Schedule of Gains (Losses) Recognized From Derivatives Not Designated as Accounting Hedges
The following schedule presents the amount of gains (losses) recognized in “Capital markets fees and income” under noninterest income from derivatives not designated as accounting hedges:
Other Noninterest Income/(Expense)
(In millions)Three Months Ended September 30, 2026Nine Months Ended September 30, 2026Three Months Ended September 30, 2025Nine Months Ended September 30, 2025
Derivatives not designated as accounting hedges:
Customer-facing interest rate derivatives
$27 $46 $(2)$16 
Customer-facing commodity derivatives
1 3 — — 
Other interest rate derivatives 1
2 2 1 1 
Foreign exchange derivatives6 19 8 22 
Purchased credit derivatives— — — (1)
Total derivatives not designated as accounting hedges
$36 $70 $7 $38 
1 Includes gains and losses from residential mortgage derivative instruments, which were recognized in “Loan-related fees and income” within noninterest income.
Schedule of Fair Value Hedges
The following schedule presents derivatives used in fair value hedge accounting relationships, including the pre-tax gains and losses recognized on both the derivatives and the corresponding hedged items for the periods presented:
Gains (losses) recorded in income
Three Months Ended September 30, 2026Three Months Ended September 30, 2025
(In millions)
Derivatives
Hedged itemsTotal income statement impact
Derivatives
Hedged itemsTotal income statement impact
Hedges of fixed-rate assets 1, 2
$218 $(219)$(1)$(15)$15 $— 
Hedges of fixed-rate liabilities 1, 2
(41)41 — 3 (3)— 
Gains (losses) recorded in income
Nine Months Ended September 30, 2026Nine Months Ended September 30, 2025
(In millions)
Derivatives
Hedged itemsTotal income statement impact
Derivatives
Hedged itemsTotal income statement impact
Hedges of fixed-rate assets 1, 2
$298 $(299)$(1)$(130)$130 $— 
Hedges of fixed-rate liabilities 1, 2
(60)59 (1)19 (19)— 
1 Includes hedges of benchmark interest rate risk related to fixed-rate long-term debt, AFS securities, and commercial loans. Gains and losses were recognized in interest income or interest expense, consistent with the accounting treatment of the respective hedged items.
2 Income (expense) from derivative instruments excludes interest income and interest expense associated with periodic accruals and settlements in order to align with the presentation of gains and losses on the related hedged items.
Schedule of Basis Adjustments for Hedged Items
The following schedule presents information regarding basis adjustments for hedged items in fair value hedging relationships:
Par value of hedged itemsCarrying amount of the hedged itemsCumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
(In millions)September 30,
2026		December 31, 2025September 30,
2026		December 31, 2025September 30,
2026		December 31, 2025
Hedges of fixed-rate assets 1, 2
$11,475 $11,566 $10,993 $11,383 $(482)$(183)
Hedges of fixed-rate liabilities 1
(2,000)(1,000)(1,950)(1,009)50 (9)
1 Carrying amounts exclude (i) issuance and purchase discounts or premiums, (ii) unamortized issuance and acquisition costs, and (iii) amounts related to terminated fair value hedging relationships.
2 Hedged items include defined portfolios of AFS securities and commercial loans, as well as specifically identified AFS securities. Related basis adjustments were recorded in the same balance-sheet line items as the corresponding hedged assets. At September 30, 2026, the amortized cost basis of assets designated under the portfolio layer method was $8.7 billion, the cumulative basis adjustment associated with these hedging relationships was $105 million, and the notional amount of the designated accounting hedges was $5.7 billion.
Schedule of Offsetting Assets and Liabilities
The following schedule presents derivative, repurchase agreement, and reverse repurchase agreement transactions subject to enforceable master netting arrangements or similar agreements. Derivative assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on the consolidated balance sheet. Reverse repurchase agreements are included in “Federal funds sold and securities purchased under agreements to resell,” and repurchase agreements are included in “Federal funds and other short-term borrowings.” The underlying agreements generally provide for rights of setoff and establish collateral requirements in the event of default or other termination events.
September 30, 2026
Gross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetGross amounts not offset on the
balance sheet		Net amount
(In millions)
Securities collateral 1
Assets:
Derivative assets$771 $(601)$170 $— $170 
Reverse repurchase agreements1,952 (749)1,203 (1,203)— 
Total$2,723 $(1,350)$1,373 $(1,203)$170 
Liabilities:
Derivative liabilities$783 $(209)$574 $(6)$568 
Repurchase agreements1,139 (749)390 (390)— 
Total$1,922 $(958)$964 $(396)$568 
December 31, 2025
Gross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetGross amounts not offset on the
balance sheet		Net amount
(In millions)
Securities collateral 1
Assets:
Derivative assets$360 $(283)$77 $— $77 
Reverse repurchase agreements1,393 — 1,393 (1,393)— 
Total$1,753 $(283)$1,470 $(1,393)$77 
Liabilities:
Derivative liabilities$260 $(68)$192 $— $192 
Repurchase agreements487 — 487 (478)9 
Total$747 $(68)$679 $(478)$201 
1 Represents the fair value of securities collateral pledged or received, limited to the net carrying amount of the related recognized asset or liability.
Schedule of Offsetting Assets and Liabilities
The following schedule presents derivative, repurchase agreement, and reverse repurchase agreement transactions subject to enforceable master netting arrangements or similar agreements. Derivative assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on the consolidated balance sheet. Reverse repurchase agreements are included in “Federal funds sold and securities purchased under agreements to resell,” and repurchase agreements are included in “Federal funds and other short-term borrowings.” The underlying agreements generally provide for rights of setoff and establish collateral requirements in the event of default or other termination events.
September 30, 2026
Gross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetGross amounts not offset on the
balance sheet		Net amount
(In millions)
Securities collateral 1
Assets:
Derivative assets$771 $(601)$170 $— $170 
Reverse repurchase agreements1,952 (749)1,203 (1,203)— 
Total$2,723 $(1,350)$1,373 $(1,203)$170 
Liabilities:
Derivative liabilities$783 $(209)$574 $(6)$568 
Repurchase agreements1,139 (749)390 (390)— 
Total$1,922 $(958)$964 $(396)$568 
December 31, 2025
Gross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetGross amounts not offset on the
balance sheet		Net amount
(In millions)
Securities collateral 1
Assets:
Derivative assets$360 $(283)$77 $— $77 
Reverse repurchase agreements1,393 — 1,393 (1,393)— 
Total$1,753 $(283)$1,470 $(1,393)$77 
Liabilities:
Derivative liabilities$260 $(68)$192 $— $192 
Repurchase agreements487 — 487 (478)9 
Total$747 $(68)$679 $(478)$201 
1 Represents the fair value of securities collateral pledged or received, limited to the net carrying amount of the related recognized asset or liability.