Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands except share data) June 30, 2026 December 31, 2025
Assets
Cash and due from banks $ 209,512 $ 201,315
Interest bearing cash and cash equivalents 3,488,756 1,897,803
Available-for-sale debt securities 3,826,284 3,951,455
Held-to-maturity debt securities 692,332 725,722
Equity securities 43,429 41,998
Trading debt securities
2,539 3,924
Debt and equity securities
4,564,584 4,723,099
Loans held for sale — 4,361
Loans held for investment, mortgage finance 6,383,381 6,064,019
Loans held for investment 18,563,845 17,976,183
Less: Allowance for credit losses on loans 268,268 270,557
Loans held for investment, net 24,678,958 23,769,645
Premises and equipment, net 91,852 88,003
Accrued interest receivable and other assets 878,203 854,552
Goodwill and intangibles, net 1,496 1,496
Total assets $ 33,913,361 $ 31,540,274
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits $ 7,573,788 $ 6,959,097
Interest bearing deposits 21,337,600 19,489,670
Total deposits 28,911,388 26,448,767
Accrued interest payable 19,291 6,716
Other liabilities 484,116 502,834
Short-term borrowings 350,000 330,000
Long-term debt 500,859 620,575
Total liabilities 30,265,654 27,908,892
Stockholders’ equity:
Preferred stock, $ 0.01 par value, $ 1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 at June 30, 2026 and December 31, 2025
300,000 300,000
Common stock, $ 0.01 par value:
Authorized shares - 100,000,000
Issued shares - 52,012,706 and 51,786,456 at June 30, 2026 and December 31, 2025, respectively
520 518
Additional paid-in capital 1,082,419 1,074,496
Retained earnings 2,950,049 2,808,645
Treasury stock - 8,542,539 and 7,532,768 shares at cost at June 30, 2026 and December 31, 2025, respectively
( 586,401 ) ( 487,692 )
Accumulated other comprehensive loss, net of taxes ( 98,880 ) ( 64,585 )
Total stockholders’ equity 3,647,707 3,631,382
Total liabilities and stockholders’ equity $ 33,913,361 $ 31,540,274
See accompanying notes to consolidated financial statements.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME - UNAUDITED
Three Months Ended June 30, Six Months Ended June 30,
(in thousands except per share data) 2026 2025 2026 2025
Interest income
Interest and fees on loans $ 368,416 $ 364,358 $ 716,436 $ 698,508
Debt and equity securities
46,307 45,991 95,897 92,556
Interest bearing cash and cash equivalents 25,207 29,218 46,691 75,792
Total interest income 439,930 439,567 859,024 866,856
Interest expense
Deposits 167,027 174,798 320,931 349,734
Short-term borrowings 3,552 3,444 5,912 11,690
Long-term debt 8,974 7,930 17,085 16,003
Total interest expense 179,553 186,172 343,928 377,427
Net interest income 260,377 253,395 515,096 489,429
Provision for credit losses 18,000 15,000 34,000 32,000
Net interest income after provision for credit losses 242,377 238,395 481,096 457,429
Non-interest income
Service charges on deposit accounts 8,853 8,182 18,076 16,022
Wealth management and trust fee income 5,136 3,730 9,524 7,694
Brokered loan fees 2,103 2,398 4,109 4,347
Investment banking and advisory fees 31,522 24,109 63,538 40,587
Trading income 11,313 7,896 21,564 13,835
Available-for-sale debt securities gains/(losses) — ( 1,886 ) — ( 1,886 )
Other 16,191 9,640 27,573 17,914
Total non-interest income 75,118 54,069 144,384 98,513
Non-interest expense
Salaries and benefits 123,339 120,154 262,686 251,795
Occupancy expense 12,359 12,144 24,764 22,988
Marketing 4,786 3,624 9,758 8,633
Legal and professional 14,700 11,069 26,680 26,058
Communications and technology 28,494 24,314 55,666 47,956
Federal Deposit Insurance Corporation insurance assessment 4,586 5,096 9,463 10,437
Other 17,229 13,875 30,044 25,429
Total non-interest expense 205,493 190,276 419,061 393,296
Income before income taxes 112,002 102,188 206,419 162,646
Income tax expense 27,054 24,860 47,683 38,271
Net income 84,948 77,328 158,736 124,375
Preferred stock dividends 4,312 4,312 8,625 8,625
Net income available to common stockholders $ 80,636 $ 73,016 $ 150,111 $ 115,750
Other comprehensive income
Change in unrealized gain/(loss) $ ( 18,375 ) $ 20,038 $ ( 49,703 ) $ 70,317
Amounts reclassified into net income
2,606 9,967 5,163 20,326
Other comprehensive income/(loss)
( 15,769 ) 30,005 ( 44,540 ) 90,643
Income tax expense/(benefit)
( 3,628 ) 6,774 ( 10,245 ) 20,467
Other comprehensive income/(loss), net of tax
( 12,141 ) 23,231 ( 34,295 ) 70,176
Comprehensive income $ 72,807 $ 100,559 $ 124,441 $ 194,551
Basic earnings per common share
$ 1.85 $ 1.59 $ 3.42 $ 2.52
Diluted earnings per common share
$ 1.83 $ 1.58 $ 3.39 $ 2.49
See accompanying notes to consolidated financial statements.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED
Preferred Stock Common Stock Additional Treasury Stock Accumulated Other
Paid-in Retained Comprehensive
(in thousands except share data) Shares Amount Shares Amount Capital Earnings Shares Amount Income/(Loss) Total
Balance at March 31, 2025 300,000 $ 300,000 51,707,542 $ 517 $ 1,060,028 $ 2,538,385 ( 5,682,609 ) $ ( 332,994 ) $ ( 136,162 ) $ 3,429,774
Comprehensive income/(loss):
Net income — — — — — 77,328 — — — 77,328
Change in other comprehensive income/(loss), net of taxes — — — — — — — — 23,231 23,231
Total comprehensive income 100,559
Preferred stock dividends — — — — — ( 4,312 ) — — — ( 4,312 )
Stock-based compensation expense recognized in earnings — — — — 4,920 — — — — 4,920
Issuance of stock related to stock-based awards — — 39,763 — 135 — — — — 135
Repurchase of common stock — — — — — — ( 317,860 ) ( 21,006 ) — ( 21,006 )
Balance at June 30, 2025 300,000 $ 300,000 51,747,305 $ 517 $ 1,065,083 $ 2,611,401 ( 6,000,469 ) $ ( 354,000 ) $ ( 112,931 ) $ 3,510,070
Balance at March 31, 2026 300,000 $ 300,000 51,974,496 $ 520 $ 1,077,139 $ 2,878,120 ( 8,303,191 ) $ ( 562,833 ) $ ( 86,739 ) $ 3,606,207
Comprehensive income/(loss):
Net income — — — — — 84,948 — — — 84,948
Change in other comprehensive income/(loss), net of taxes — — — — — — — — ( 12,141 ) ( 12,141 )
Total comprehensive income 72,807
Common stock dividends ($ 0.20 per share)
— — — — — ( 8,707 ) — — — ( 8,707 )
Preferred stock dividends — — — — — ( 4,312 ) — — — ( 4,312 )
Stock-based compensation expense recognized in earnings — — — — 4,921 — — — — 4,921
Issuance of stock related to stock-based awards — — 38,210 — 359 — — — — 359
Repurchase of common stock — — — — — — ( 239,348 ) ( 23,568 ) — ( 23,568 )
Balance at June 30, 2026 300,000 $ 300,000 52,012,706 $ 520 $ 1,082,419 $ 2,950,049 ( 8,542,539 ) $ ( 586,401 ) $ ( 98,880 ) $ 3,647,707
See accompanying notes to consolidated financial statements.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED
Preferred Stock Common Stock Additional Treasury Stock Accumulated Other
Paid-in Retained Comprehensive
(in thousands except share data) Shares Amount Shares Amount Capital Earnings Shares Amount Income/(Loss) Total
Balance at December 31, 2024 (audited)
300,000 $ 300,000 51,520,315 $ 515 $ 1,056,719 $ 2,495,651 ( 5,286,503 ) $ ( 301,842 ) $ ( 183,107 ) $ 3,367,936
Comprehensive income/(loss):
Net income — — — — — 124,375 — — — 124,375
Change in other comprehensive income/(loss), net of taxes
— — — — — — — — 70,176 70,176
Total comprehensive income
194,551
Preferred stock dividends — — — — — ( 8,625 ) — — — ( 8,625 )
Stock-based compensation expense recognized in earnings
— — — — 15,279 — — — — 15,279
Issuance of stock related to stock-based awards
— — 226,990 2 ( 6,915 ) — — — — ( 6,913 )
Repurchase of common stock — — — — — — ( 713,966 ) ( 52,158 ) — ( 52,158 )
Balance at June 30, 2025 300,000 $ 300,000 51,747,305 $ 517 $ 1,065,083 $ 2,611,401 ( 6,000,469 ) $ ( 354,000 ) $ ( 112,931 ) $ 3,510,070
Balance at December 31, 2025 (audited)
300,000 $ 300,000 51,786,456 $ 518 $ 1,074,496 $ 2,808,645 ( 7,532,768 ) $ ( 487,692 ) $ ( 64,585 ) $ 3,631,382
Comprehensive income/(loss):
Net income — — — — — 158,736 — — — 158,736
Change in other comprehensive income/(loss), net of taxes — — — — — — — — ( 34,295 ) ( 34,295 )
Total comprehensive income 124,441
Common stock dividends ($ 0.20 per share)
— — — — — ( 8,707 ) — — — ( 8,707 )
Preferred stock dividends — — — — — ( 8,625 ) — — — ( 8,625 )
Stock-based compensation expense recognized in earnings — — — — 17,126 — — — — 17,126
Issuance of stock related to stock-based awards — — 226,250 2 ( 9,203 ) — — — — ( 9,201 )
Repurchase of common stock — — — — — — ( 1,009,771 ) ( 98,709 ) — ( 98,709 )
Balance at June 30, 2026 300,000 $ 300,000 52,012,706 $ 520 $ 1,082,419 $ 2,950,049 ( 8,542,539 ) $ ( 586,401 ) $ ( 98,880 ) $ 3,647,707
See accompanying notes to consolidated financial statements.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
(in thousands) 2026 2025
Operating activities
Net income $ 158,736 $ 124,375
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses 34,000 32,000
Depreciation and amortization 28,368 23,669
Net loss on available-for-sale debt securities — 1,886
Net (gain)/loss on equity securities ( 3,521 ) 104
Sales/(purchases) of trading debt securities, net 1,385 ( 3,888 )
Loss on redemption of long-term debt 2,157 —
Stock-based compensation expense 27,273 20,377
Proceeds from sales and repayments of loans held for sale 21,333 —
Changes in operating assets and liabilities:
Accrued interest receivable and other assets ( 29,275 ) ( 66,954 )
Accrued interest payable and other liabilities ( 49,433 ) ( 68,204 )
Net cash provided by operating activities 191,023 63,365
Investing activities
Purchases of available-for-sale debt securities ( 249,549 ) ( 700,052 )
Proceeds from sales of available-for-sale debt securities — 280,402
Proceeds from maturities, redemptions and pay-downs of available-for-sale debt securities 348,440 238,840
Proceeds from maturities, redemptions and pay-downs of held-to-maturity debt securities 34,928 35,925
Sales/(purchases) of equity securities, net 2,090 6,465
Originations of loans held for investment, mortgage finance ( 51,427,658 ) ( 43,839,841 )
Proceeds from pay-offs of loans held for investment, mortgage finance 51,108,296 43,165,826
Decrease/(increase) in loans held for investment, excluding mortgage finance, net ( 642,436 ) ( 824,215 )
Purchase of premises and equipment, net ( 11,353 ) ( 7,960 )
Net cash used in investing activities ( 837,242 ) ( 1,644,610 )
Financing activities
Net increase/(decrease) in deposits, net 2,462,621 825,710
Issuance of stock related to stock-based awards ( 9,201 ) ( 6,913 )
Common stock dividends paid ( 8,707 ) —
Preferred stock dividends paid ( 8,625 ) ( 8,625 )
Repurchase of common stock ( 98,709 ) ( 52,158 )
Net increase/(decrease) in short-term borrowings, net 20,000 365,000
Redemption of long-term debt ( 509,525 ) ( 40,435 )
Issuance of long-term debt 397,515 —
Net cash provided by financing activities
2,245,369 1,082,579
Net increase/(decrease) in cash and cash equivalents 1,599,150 ( 498,666 )
Cash and cash equivalents at beginning of period 2,099,118 3,188,808
Cash and cash equivalents at end of period $ 3,698,268 $ 2,690,142
Supplemental disclosures of cash flow information
Cash paid during the period for interest $ 369,935 $ 386,987
Cash paid during the period for income taxes $ 67,238 $ 52,813
Transfers of loans from held for investment to held for sale $ 21,333 $ —
See accompanying notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
(1) Operations and Summary of Significant Accounting Policies
Organization and Nature of Business
Texas Capital Bancshares, Inc. (“TCBI” or the “Company”) is a registered bank holding company and a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. TCBI is headquartered in Dallas, with primary banking offices in Austin, Dallas, Fort Worth, Houston and San Antonio, and has built a network of clients across the country.
The Company’s business activities are conducted primarily through its wholly-owned bank subsidiary Texas Capital Bank (the “Bank”) and its wholly-owned non-bank subsidiary, TCBI Securities Inc., doing business as Texas Capital Securities. The Bank is a Texas state-chartered bank. Texas Capital Securities is a registered broker-dealer with the U.S. Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority and Municipal Securities Rulemaking Board.
The Company was incorporated as a Delaware corporation in 1996 and commenced banking operations in 1998.
Basis of Presentation
The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States (“GAAP”) and to generally accepted practices within the banking industry. Certain prior period balances have been reclassified to conform to the current period presentation.
The consolidated interim financial statements are unaudited, and certain information and disclosures in the notes to consolidated unaudited financial statements that are presented in accordance with GAAP have been condensed or omitted. In the opinion of management, the interim financial statements include all normal and recurring adjustments and the disclosures made present a fair presentation of the Company’s financial position and results of operations. The consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q adopted by the SEC. Accordingly, the financial statements and the notes to the consolidated unaudited financial statements required by GAAP for complete annual financial statements do not include all of the information and should be read in conjunction with the consolidated financial statements, and notes thereto, for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for credit losses, the fair value of financial instruments and the status of contingencies are particularly susceptible to significant change.
(2) Earnings Per Share
The following table presents the computation of basic and diluted earnings per share:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands except share and per share data) 2026 2025 2026 2025
Numerator:
Net income
$ 84,948 $ 77,328 $ 158,736 $ 124,375
Preferred stock dividends 4,312 4,312 8,625 8,625
Net income available to common stockholders
$ 80,636 $ 73,016 $ 150,111 $ 115,750
Denominator:
Basic earnings per common share—weighted average common shares 43,599,022 45,791,602 43,845,295 45,956,594
Effect of dilutive outstanding stock-settled awards 463,397 423,792 466,174 446,522
Dilutive earnings per common share—weighted average diluted common shares 44,062,419 46,215,394 44,311,469 46,403,116
Basic earnings per common share
$ 1.85 $ 1.59 $ 3.42 $ 2.52
Diluted earnings per common share
$ 1.83 $ 1.58 $ 3.39 $ 2.49
Anti-dilutive outstanding stock-settled awards 35,752 31,703 30,616 26,974
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(3) Debt and Equity Securities
The following is a summary of the Company’s debt and equity securities:
(in thousands) Amortized
Cost(1) Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair
Value
June 30, 2026
Available-for-sale debt securities:
Residential mortgage-backed securities $ 3,640,879 $ 23,945 $ ( 95,546 ) $ 3,569,278
Commercial mortgage-backed securities
247,212 1,187 ( 1,674 ) 246,725
Credit risk transfer securities
10,672 — ( 391 ) 10,281
Total available-for-sale debt securities 3,898,763 25,132 ( 97,611 ) 3,826,284
Held-to-maturity debt securities:
Residential mortgage-backed securities 692,332 — ( 75,512 ) 616,820
Total held-to-maturity debt securities 692,332 — ( 75,512 ) 616,820
Equity securities 43,429
Trading debt securities
2,539
Total debt and equity securities(2)
$ 4,564,584
December 31, 2025
Available-for-sale debt securities:
Residential mortgage-backed securities $ 3,743,234 $ 41,037 $ ( 91,625 ) $ 3,692,646
Commercial mortgage-backed securities
244,457 3,555 — 248,012
Credit risk transfer securities
11,248 — ( 451 ) 10,797
Total available-for-sale debt securities 3,998,939 44,592 ( 92,076 ) 3,951,455
Held-to-maturity debt securities:
Residential mortgage-backed securities 725,722 — ( 70,890 ) 654,832
Total held-to-maturity debt securities
725,722 — ( 70,890 ) 654,832
Equity securities 41,998
Trading debt securities
3,924
Total debt and equity securities(2)
$ 4,723,099
(1) Excludes accrued interest receivable of $ 15.6 million and $ 16.1 million at June 30, 2026 and December 31, 2025, respectively, related to available-for-sale debt securities and $ 1.1 million and $ 1.2 million at June 30, 2026 and December 31, 2025, respectively, related to held-to-maturity debt securities that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.
(2) Includes available-for-sale debt securities, equity securities and trading debt securities at estimated fair value and held-to-maturity debt securities at amortized cost.
Debt Securities
The amortized cost and estimated fair value as of June 30, 2026, excluding accrued interest receivable, of available-for-sale and held-to-maturity debt securities are presented below by contractual maturity. Actual maturities may differ from contractual maturities of mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.
Available-for-sale Held-to-maturity
(in thousands) Amortized Cost Fair Value Amortized Cost Fair Value
Due within one year $ — $ — $ — $ —
Due after one year through five years — — — —
Due after five years through ten years 258,560 257,694 — —
Due after ten years 3,640,203 3,568,590 692,332 616,820
Total $ 3,898,763 $ 3,826,284 $ 692,332 $ 616,820
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The table below presents the weighted average yields for the Company’s available-for-sale debt securities as of June 30, 2026. Weighted average yields are calculated based on amortized cost on a tax-exempt basis assuming a 21% federal tax rate, where applicable.
Residential mortgage-backed securities Commercial mortgage-backed securities
Credit risk transfer securities
Due within one year — % — % — %
Due after one year through five years — — —
Due after five years through ten years 3.91 4.83 3.75
Due after ten years 4.67 — —
Total 4.67 % 4.83 % 3.75 %
The following table discloses the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months:
Less Than 12 Months 12 Months or Longer Total
(in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss
June 30, 2026
Residential mortgage-backed securities $ 681,674 $ ( 4,105 ) $ 718,376 $ ( 91,441 ) $ 1,400,050 $ ( 95,546 )
Commercial mortgage-backed securities
159,830 ( 1,674 ) — — 159,830 ( 1,674 )
Credit risk transfer securities
— — 10,281 ( 391 ) 10,281 ( 391 )
Total $ 841,504 $ ( 5,779 ) $ 728,657 $ ( 91,832 ) $ 1,570,161 $ ( 97,611 )
December 31, 2025
Residential mortgage-backed securities $ 203,193 $ ( 97 ) $ 934,222 $ ( 91,528 ) $ 1,137,415 $ ( 91,625 )
Commercial mortgage-backed securities
— — — — — —
Credit risk transfer securities
— — 10,797 ( 451 ) 10,797 ( 451 )
Total $ 203,193 $ ( 97 ) $ 945,019 $ ( 91,979 ) $ 1,148,212 $ ( 92,076 )
At June 30, 2026, the Company had 45 available-for-sale debt securities in an unrealized loss position, comprised of 38 residential mortgage-backed securities, five commercial mortgage-backed securities and two credit risk transfer securities. The unrealized losses on the available-for-sale debt securities were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. The Company does not currently intend to sell and based on current conditions it does not believe it is likely that the Company will be required to sell these available-for-sale debt securities before recovery of the amortized cost of such securities in an unrealized loss position and has therefore recorded the unrealized losses related to this portfolio in accumulated other comprehensive income (“AOCI”). Held-to-maturity debt securities consist of government guaranteed securities for which no loss is expected. At June 30, 2026 and December 31, 2025, no allowance for credit losses was established for available-for-sale or held-to-maturity debt securities.
At June 30, 2026 and December 31, 2025, debt securities with carrying values of approximately $ 876,000 and $ 937,000 , respectively, were pledged to secure certain customer deposits.
Equi ty Securities
The following is a summary of unrealized and realized gains/(losses) recognized on equity securities included in other non-interest income on the consolidated statements of income and other comprehensive income:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Net gains/(losses) recognized during the period $ 1,875 $ 1,604 $ 3,521 $ ( 104 )
Less: Realized net gains/(losses) recognized on securities sold 1,244 703 1,852 1,031
Unrealized net gains/(losses) recognized on securities still held $ 631 $ 901 $ 1,669 $ ( 1,135 )
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(4) Loans and Allowance for Credit Losses on Loans
Loans are summarized by portfolio segment as follows:
(in thousands) June 30, 2026 December 31, 2025
Loans held for investment(1)(2):
Commercial $ 13,006,203 $ 12,163,545
Mortgage finance 6,383,381 6,064,019
Commercial real estate 5,128,375 5,378,712
Consumer 429,267 433,926
Loans held for investment 24,947,226 24,040,202
Allowance for credit losses on loans ( 268,268 ) ( 270,557 )
Total loans held for investment, net $ 24,678,958 $ 23,769,645
(1) Excludes accrued interest receivable of $ 110.7 million and $ 107.3 million at June 30, 2026 and December 31, 2025, respectively, that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.
(2) Loans are presented net of deferred loan fees and costs totaling $ 106.9 million and $ 106.8 million at June 30, 2026 and December 31, 2025, respectively.
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The following tables summarize loans held for investment by year of origination and internally assigned credit grades:
(in thousands) 2026 2025 2024 2023 2022 2021
and prior Revolving lines of credit Revolving lines of credit converted to term loans Total
June 30, 2026
Commercial
(1-7) Pass $ 1,277,986 $ 1,748,719 $ 999,490 $ 563,475 $ 470,810 $ 183,760 $ 7,336,769 $ 10,377 $ 12,591,386
(8) Special mention 268 3,189 26,797 17,625 21,681 14,142 152,797 — 236,499
(9) Substandard - accruing 1,697 21,234 8,754 5,000 — 39,127 17,091 — 92,903
(9+) Non-accrual 128 13,733 — 25,282 20,795 11,407 14,070 — 85,415
Total commercial $ 1,280,079 $ 1,786,875 $ 1,035,041 $ 611,382 $ 513,286 $ 248,436 $ 7,520,727 $ 10,377 $ 13,006,203
Mortgage finance
(1-7) Pass $ — $ — $ — $ — $ — $ — $ 6,383,381 $ — $ 6,383,381
(8) Special mention — — — — — — — — —
(9) Substandard - accruing — — — — — — — — —
(9+) Non-accrual — — — — — — — — —
Total mortgage finance $ — $ — $ — $ — $ — $ — $ 6,383,381 $ — $ 6,383,381
Commercial real estate
(1-7) Pass $ 660,682 $ 818,292 $ 616,532 $ 820,533 $ 972,383 $ 813,210 $ 141,308 $ 5,506 $ 4,848,446
(8) Special mention — 581 5,050 58,266 106,223 64,142 7,000 — 241,262
(9) Substandard - accruing — — — — — 101 — — 101
(9+) Non-accrual — — 18,500 — 20,066 — — — 38,566
Total commercial real estate $ 660,682 $ 818,873 $ 640,082 $ 878,799 $ 1,098,672 $ 877,453 $ 148,308 $ 5,506 $ 5,128,375
Consumer
(1-7) Pass $ 13,013 $ 33,550 $ 31,087 $ 26,198 $ 43,271 $ 172,254 $ 108,314 $ — $ 427,687
(8) Special mention — — — — — 1,580 — — 1,580
(9) Substandard - accruing — — — — — — — — —
(9+) Non-accrual — — — — — — — — —
Total consumer $ 13,013 $ 33,550 $ 31,087 $ 26,198 $ 43,271 $ 173,834 $ 108,314 $ — $ 429,267
Total $ 1,953,774 $ 2,639,298 $ 1,706,210 $ 1,516,379 $ 1,655,229 $ 1,299,723 $ 14,160,730 $ 15,883 $ 24,947,226
Gross charge-offs $ 33 $ 3,136 $ 7,314 $ 8,107 $ 7,264 $ — $ 8,731 $ — $ 34,585
(in thousands) 2025 2024 2023 2022 2021 2020
and prior Revolving lines of credit Revolving lines of credit converted to term loans Total
December 31, 2025
Commercial
(1-7) Pass $ 2,038,311 $ 1,164,863 $ 671,070 $ 670,995 $ 107,970 $ 143,631 $ 6,977,639 $ 9,359 $ 11,783,838
(8) Special mention 7,659 16,204 16,093 42,441 15,346 1,239 39,073 — 138,055
(9) Substandard - accruing 25,513 8,824 44,506 — 34,641 4,192 27,830 — 145,506
(9+) Non-accrual 11,293 — 2,959 36,390 — 11,639 33,865 — 96,146
Total commercial $ 2,082,776 $ 1,189,891 $ 734,628 $ 749,826 $ 157,957 $ 160,701 $ 7,078,407 $ 9,359 $ 12,163,545
Mortgage finance
(1-7) Pass $ — $ — $ — $ — $ — $ — $ 6,064,019 $ — $ 6,064,019
(8) Special mention — — — — — — — — —
(9) Substandard - accruing — — — — — — — — —
(9+) Non-accrual — — — — — — — — —
Total mortgage finance $ — $ — $ — $ — $ — $ — $ 6,064,019 $ — $ 6,064,019
Commercial real estate
(1-7) Pass $ 781,062 $ 565,727 $ 941,760 $ 1,543,106 $ 423,708 $ 608,352 $ 254,480 $ 5,305 $ 5,123,500
(8) Special mention 743 45,137 728 90,752 61,132 1,530 7,800 766 208,588
(9) Substandard - accruing 10 25,880 — — — — — — 25,890
(9+) Non-accrual — — — 20,734 — — — — 20,734
Total commercial real estate $ 781,815 $ 636,744 $ 942,488 $ 1,654,592 $ 484,840 $ 609,882 $ 262,280 $ 6,071 $ 5,378,712
Consumer
(1-7) Pass $ 36,507 $ 37,851 $ 28,181 $ 50,765 $ 72,924 $ 113,440 $ 94,258 $ — $ 433,926
(8) Special mention — — — — — — — — —
(9) Substandard - accruing — — — — — — — — —
(9+) Non-accrual — — — — — — — — —
Total Consumer $ 36,507 $ 37,851 $ 28,181 $ 50,765 $ 72,924 $ 113,440 $ 94,258 $ — $ 433,926
Total $ 2,901,098 $ 1,864,486 $ 1,705,297 $ 2,455,183 $ 715,721 $ 884,023 $ 13,498,964 $ 15,430 $ 24,040,202
Gross charge-offs $ 11,233 $ 704 $ 4,234 $ 8,958 $ 28 $ 2,011 $ 25,715 $ — $ 52,883
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The following table details activity in the allowance for credit losses on loans. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories.
(in thousands) Commercial Mortgage
Finance Commercial Real Estate Consumer Total
Six Months Ended June 30, 2026
Beginning balance $ 202,029 $ 6,221 $ 60,559 $ 1,748 $ 270,557
Provision for credit losses on loans 45,871 ( 3,098 ) ( 11,669 ) 48 31,152
Charge-offs 27,487 — 7,098 — 34,585
Recoveries 953 — 184 7 1,144
Net charge-offs (recoveries) 26,534 — 6,914 ( 7 ) 33,441
Ending balance $ 221,366 $ 3,123 $ 41,976 $ 1,803 $ 268,268
Six Months Ended June 30, 2025
Beginning balance $ 198,423 $ 2,755 $ 68,825 $ 1,706 $ 271,709
Provision for credit losses on loans 31,737 7,875 ( 11,011 ) 100 28,701
Charge-offs 23,217 — 931 — 24,148
Recoveries 969 — 413 4 1,386
Net charge-offs (recoveries) 22,248 — 518 ( 4 ) 22,762
Ending balance $ 207,912 $ 10,630 $ 57,296 $ 1,810 $ 277,648
The Company recorded a $ 31.2 million provision for credit losses on loans for the six months ended June 30, 2026, compared to $ 28.7 million for the same period of 2025. The $ 31.2 million provision for credit losses on loans resulted primarily from an increase in criticized loans and $ 33.4 million in net charge-offs recorded during the six months ended June 30, 2026. Criticized loans totaled $ 696.3 million at June 30, 2026, compared to $ 634.9 million at December 31, 2025.
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. At June 30, 2026, the Company had $ 29.5 million in collateral-dependent commercial loans, collateralized by business assets, and $ 38.6 million in collateral-dependent commercial real estate loans, collateralized by real estate.
The table below provides an age analysis of loans held for investment:
(in thousands) 30-59 Days
Past Due 60-89 Days
Past Due 90 Days or More Past Due Total Past
Due Non-accrual(1) Current Total Non-accrual With No Allowance
June 30, 2026
Commercial $ 16,559 $ 7,434 $ 451 $ 24,444 $ 85,415 $ 12,896,344 $ 13,006,203 $ 6,499
Mortgage finance — — — — — 6,383,381 6,383,381 —
Commercial real estate 5,184 1,094 — 6,278 38,566 5,083,531 5,128,375 20,027
Consumer 2,086 222 — 2,308 — 426,959 429,267 —
Total $ 23,829 $ 8,750 $ 451 $ 33,030 $ 123,981 $ 24,790,215 $ 24,947,226 $ 26,526
(1) As of June 30, 2026, $ 450,000 of non-accrual loans were earning interest income on a cash basis compared to $ 470,000 as of December 31, 2025. Additionally, $ 106,000 interest income was recognized on non-accrual loans for the six months ended June 30, 2026 compared to $ 630,000 recognized for the same period in 2025. Accrued interest of $ 5.1 million and $ 919,000 was reversed during the six months ended June 30, 2026 and June 30, 2025, respectively.
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Modifications to Borrowers Experiencing Financial Difficulty
The table below details loans held for investment made to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2026 and June 30, 2025, by type of modification granted and the financial effect of those modifications:
Financial Statement Impact
($ in thousands) Payment
Deferral Term
Extension Payment
Deferral
and Term
Extension Total Percentage of Loans Held for Investment Interest Rate Reduction Term Extension (in months) Payment Deferrals
Three Months Ended June 30, 2026
Commercial $ 54,482 $ 9,533 $ — $ 64,015 0.26 % — % 6
$ 3,437
Total $ 54,482 $ 9,533 $ — $ 64,015 0.26 %
Three Months Ended June 30, 2025
Commercial $ 9,492 $ 11,002 $ 21,580 $ 42,074 0.18 % — % 10 to 26
$ 5,762
Total $ 9,492 $ 11,002 $ 21,580 $ 42,074 0.18 %
Six Months Ended June 30, 2026
Commercial $ 80,002 $ 10,898 $ — $ 90,900 0.36 % — % 4 to 6
$ 5,338
Commercial real estate — — 16,859 16,859 0.07 % — % 6
737
Total $ 80,002 $ 10,898 $ 16,859 $ 107,759 0.43 %
Six Months Ended June 30, 2025
Commercial $ 9,492 $ 12,819 $ 22,338 $ 44,649 0.19 % — % 6 to 26
$ 5,897
Commercial real estate 17,835 — — 17,835 0.07 % — % — $ 369
Total $ 27,327 $ 12,819 $ 22,338 $ 62,484 0.26 %
The table below details loans held for investment that experienced a default during the periods presented subsequent to being granted a modification in the prior twelve months. Default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.
(in thousands)
Payment
Deferral Term
Extension Payment Deferral
and Term Extension
Total
Three Months Ended June 30, 2026
Commercial $ 11,082 $ 416 $ — $ 11,498
Total $ 11,082 $ 416 $ — $ 11,498
Three Months Ended June 30, 2025
Commercial $ 22,500 $ 6,537 $ — $ 29,037
Commercial real estate — — — —
Total
$ 22,500 $ 6,537 $ — $ 29,037
Six Months Ended June 30, 2026
Commercial $ 11,248 $ 416 $ — $ 11,664
Total $ 11,248 $ 416 $ — $ 11,664
Six Months Ended June 30, 2025
Commercial $ 25,496 $ 6,537 $ — $ 32,033
Commercial real estate — — 13,500 13,500
Total $ 25,496 $ 6,537 $ 13,500 $ 45,533
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The table below provides an age analysis of loans held for investment made to borrowers experiencing financial difficulty that were modified in the prior twelve months:
(in thousands) 30-89 Days
Past Due 90+ Days
Past Due Non-Accrual Current Total
June 30, 2026
Commercial $ — $ — $ 49,764 $ 54,874 $ 104,638
Commercial real estate
— — 16,598 — 16,598
Total $ — $ — $ 66,362 $ 54,874 $ 121,236
June 30, 2025
Commercial $ 758 $ — $ 61,005 $ 15,100 $ 76,863
Commercial real estate
— — 17,835 — 17,835
Total $ 758 $ — $ 78,840 $ 15,100 $ 94,698
(5) Short-Term Borrowings and Long-Term Debt
The table below presents a summary of short-term borrowings:
(in thousands) June 30, 2026 December 31, 2025
Federal funds purchased $ — $ 30,000
Federal Home Loan Bank (“FHLB”) borrowings
350,000 300,000
Total short-term borrowings $ 350,000 $ 330,000
The table below presents a summary of long-term debt:
(in thousands) June 30, 2026 December 31, 2025
Bank-issued 5.25 % fixed rate subordinated notes due 2026
$ — $ 134,509
Company-issued 4.00 % fixed rate subordinated notes due 2031
— 372,660
Company-issued 5.301 % fixed rate senior notes due February 2032
387,453 —
Trust preferred floating rate subordinated debentures due November 2032 to December 2036 113,406 113,406
Total long-term debt $ 500,859 $ 620,575
During the first quarter of 2026, the bank-issued 5.25 % fixed rate subordinated notes due 2026 matured and were repaid in full.
During the second quarter of 2026, the Company-issued 4.00 % fixed rate subordinated notes due 2031 were redeemed and repaid in full.
On February 27, 2026, the Company issued $ 400.0 million of fixed-to-floating senior notes. The notes are redeemable, in whole or in part, on February 27, 2031 and mature on February 27, 2032. The notes bear interest at a fixed annual rate of 5.301 %, payable semi-annually, for an initial five-year period and at a floating rate per annum equal to the compounded Secured Overnight Financing Rate (“SOFR”) plus 1.94 %, payable quarterly, for the final year.
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(6) Financial Instruments with Off-Balance Sheet Risk
The table below presents the Company’s financial instruments with off-balance sheet risk, as well as the activity in the allowance for off-balance sheet credit losses related to those financial instruments.
(in thousands) Commercial Mortgage
Finance Commercial
Real Estate Consumer Total
Six Months Ended June 30, 2026
Beginning balance $ 58,209 $ 16 $ 3,979 $ 51 $ 62,255
Provision for off-balance sheet credit losses 3,879 11 ( 1,053 ) 11 2,848
Ending balance $ 62,088 $ 27 $ 2,926 $ 62 $ 65,103
Six Months Ended June 30, 2025
Beginning balance $ 47,907 $ 23 $ 5,351 $ 51 $ 53,332
Provision for off-balance sheet credit losses 4,075 7 ( 767 ) ( 16 ) 3,299
Ending balance $ 51,982 $ 30 $ 4,584 $ 35 $ 56,631
(in thousands) June 30, 2026 December 31, 2025
Commitments to extend credit - period end balance $ 11,888,078 $ 12,193,441
Standby letters of credit - period end balance 745,856 610,178
(7) Regulatory Ratios and Capital
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory (and possibly additional discretionary) actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
The Basel III Capital Rules adopted by U.S. federal banking agencies, among other things, (i) establish the capital measure called “Common Equity Tier 1” (“CET1”), (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 Capital” instruments meeting stated requirements, (iii) require that most deductions/adjustments to regulatory capital measures be made to CET1 and not to other components of capital and (iv) define the scope of the deductions/adjustments to the capital measures.
Additionally, the Basel III Capital Rules require that the Company maintain a 2.5 % capital conservation buffer comprised of CET1, with respect to each of CET1, Tier 1 and total capital to risk-weighted asset ratios. A financial institution with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers. During the six months ended June 30, 2026, the Company declared and paid common stock dividends of $ 8.7 million, representing $ 0.20 per common share. No common stock dividends were paid in 2025. On July 22, 2026, the Company and its board of directors declared and announced a cash dividend of $ 0.20 per common share payable on September 15, 2026, to holders of record at the close of business on September 1, 2026.
Effective December 12, 2025, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $ 200.0 million in shares of its outstanding common stock, excluding the effect of excise tax expense incurred on the net stock repurchases. The share repurchase program will expire on December 31, 2026, but may be suspended or discontinued at any time. The remaining repurchase authorization under the January 22, 2025 share repurchase program was terminated upon authorization of this new program. During the six months ended June 30, 2026, the Company repurchased 1,009,771 shares of its common stock for an aggregate price, including excise tax expense, of $ 98.7 million, at a weighted average price of $ 97.01 per share.
Because the Bank had less than $ 15.0 billion in total consolidated assets as of December 31, 2009, it is allowed to continue to classify the trust preferred securities, all of which were issued prior to May 19, 2010, as Tier 1 capital.
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The table below summarizes the Company’s and the Bank’s actual and required capital ratios under the Basel III Capital Rules and other standards. As shown in the table below, the Company’s and Bank’s capital ratios exceeded the regulatory definition of well capitalized as of June 30, 2026 and December 31, 2025.
June 30, 2026 December 31, 2025
(dollars in thousands) Minimum Capital Required(2) Capital Required to be Well Capitalized Capital Amount Ratio Capital Amount Ratio
The Company
CET1 capital (to risk-weighted assets) 7.00 % N/A $ 3,445,091 12.07 % $ 3,394,471 12.13 %
Tier 1 capital (to risk-weighted assets) 8.50 % 6.00 % 3,855,091 13.51 % 3,804,471 13.60 %
Total capital (to risk-weighted assets) 10.50 % 10.00 % 4,188,462 14.68 % 4,509,943 16.12 %
Tier 1 capital (to average assets)(1) 4.00 % N/A 3,855,091 11.65 % 3,804,471 11.65 %
The Bank
CET1 capital (to risk-weighted assets) 7.00 % 6.50 % $ 3,504,224 12.35 % $ 3,618,691 13.01 %
Tier 1 capital (to risk-weighted assets) 8.50 % 8.00 % 3,504,224 12.35 % 3,618,691 13.01 %
Total capital (to risk-weighted assets) 10.50 % 10.00 % 3,837,595 13.53 % 3,951,503 14.20 %
Tier 1 capital (to average assets)(1) 4.00 % 5.00 % 3,504,224 10.67 % 3,618,691 11.18 %
(1) The Tier 1 capital ratio (to average assets) is not impacted by the Basel III Capital Rules; however, the Federal Reserve Board and the Federal Deposit Insurance Corporation may require the Company and the Bank, respectively, to maintain a Tier 1 capital ratio (to average assets) above the required minimum.
(2) Percentages represent the minimum capital ratios plus, as applicable, the fully phased-in 2.5% CET1 capital buffer under the Basel III Capital Rules.
(8) Stock-Based Compensation
The Company has long-term incentive plans under which stock-based compensation awards are granted to employees and directors by the Company’s board of directors or its designated committee. Grants are subject to vesting requirements and may include, among other things, nonqualified stock options, stock appreciation rights, restricted stock units (“RSUs”), restricted stock and performance units, or any combination thereof.
The table below summarizes the Company’s stock-based compensation expense:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Stock-settled awards:
RSUs $ 4,921 $ 4,920 $ 17,126 $ 15,279
Cash-settled units 4,853 2,707 10,147 5,098
Total $ 9,774 $ 7,627 $ 27,273 $ 20,377
(in thousands except period data) June 30, 2026
Unrecognized compensation expense related to unvested stock-settled awards $ 30,246
Weighted average period over which stock-settled awards expense is expected to be recognized, in years 2.0
Unrecognized compensation expense related to cash-settled units $ 33,372
Weighted average period over which cash-settled units expense is expected to be recognized, in years 2.1
(9) Fair Value Disclosures
The Company determines the fair market values of its assets and liabilities measured at fair value on a recurring and nonrecurring basis using the fair value hierarchy as prescribed in Accounting Standards Codification 820, Fair Value Measurements and Disclosures. See Note 1 - Operations and Summary of Significant Accounting Policies in the 2025 Form 10-K for information regarding the fair value hierarchy and a description of the methods and significant assumptions used by the Company in estimating its fair value disclosures for financial statements.
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Assets and liabilities measured at fair value are as follows:
Fair Value Measurements Using
(in thousands) Level 1 Level 2 Level 3
June 30, 2026
Available-for-sale debt securities:(1)
Residential mortgage-backed securities $ — $ 3,569,278 $ —
Commercial mortgage-backed securities
— 246,725 —
Credit risk transfer securities
— — 10,281
Equity securities(1)
33,429 10,000 —
Trading debt securities(1)
— 2,539 —
Loans held for investment(2)
— — 25,816
Derivative assets(3)
— 15,322 —
Other trading assets(4)
56 — —
Derivative liabilities(3)
— 42,470 —
Securities sold not yet purchased(4)
11,646 — —
Non-qualified deferred compensation plan liabilities(5)
20,333 — —
December 31, 2025
Available-for-sale debt securities:(1)
Residential mortgage-backed securities $ — $ 3,692,646 $ —
Commercial mortgage-backed securities
— 248,012 —
Credit risk transfer securities
— — 10,797
Equity securities(1)
31,998 10,000 —
Trading debt securities(1) — 3,924 —
Loans held for investment(2)
— — 20,844
Derivative assets(3)
— 40,892 —
Derivative liabilities(3)
— 24,458 —
Securities sold not yet purchased(4)
12,026 — —
Non-qualified deferred compensation plan liabilities(5)
18,989 — —
(1) Available-for-sale debt securities, equity securities and trading debt securities are measured at fair value on a recurring basis, generally monthly.
(2) Includes certain collateral-dependent loans held for investment for which a specific allocation of the allowance for credit losses is based upon the fair value of the loan’s underlying collateral. These loans held for investment are measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions.
(3) Derivative assets and liabilities are measured at fair value on a recurring basis, generally monthly.
(4) Other trading assets and securities sold not yet purchased are measured at fair value on a recurring basis, generally monthly.
(5) Non-qualified deferred compensation plan liabilities represent the fair value of the obligation to the employee, which generally corresponds to the fair value of the invested assets, and are measured at fair value on a recurring basis, generally monthly.
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Level 3 Valuations
The following table presents a reconciliation of the level 3 fair value category measured at fair value on a recurring basis:
Net Gains/(Losses)
(in thousands) Balance at Beginning of Period Purchases / Additions Sales / Reductions Realized Unrealized Balance at End of Period
Three Months Ended June 30, 2026
Available-for-sale debt securities:(1)
Credit risk transfer securities
$ 10,574 $ — $ ( 341 ) $ — $ 48 $ 10,281
Three Months Ended June 30, 2025
Available-for-sale debt securities:(1)
Credit risk transfer securities
$ 11,594 $ — $ ( 337 ) $ — $ 110 $ 11,367
Six Months Ended June 30, 2026
Available-for-sale debt securities:(1)
Credit risk transfer securities
$ 10,797 $ — $ ( 576 ) $ — $ 60 $ 10,281
Six Months Ended June 30, 2025
Available-for-sale debt securities:(1)
Credit risk transfer securities
$ 11,926 $ — $ ( 638 ) $ — $ 79 $ 11,367
(1) Unrealized gains/(losses) on available-for-sale debt securities are recorded in AOCI. Realized gains/(losses) are recorded in other non-interest income on the consolidated statements of income and other comprehensive income/(loss).
Credit risk transfer securities
The fair value of credit risk transfer securities is based on a discounted cash flow model, which utilizes Level 3 inputs, the most significant of which were a discount rate and weighted-average life. At June 30, 2026, the discount rates utilized ranged from 5.04 % to 6.16 % and the weighted-average life ranged from 3.73 years to 5.40 years. On a combined amortized cost weighted-average basis a discount rate of 5.55 % and a weighted-average life of 4.49 years were utilized to determine the fair value of these securities at June 30, 2026. At December 31, 2025, the combined weighted-average discount rate and weighted-average life utilized were 5.16 % and 4.65 years, respectively.
Loans held for investment
Certain collateral-dependent loans held for investment are reported at fair value when, based upon an individual evaluation, the specific allocation of the allowance for credit losses that is deducted from the loan's amortized cost is based upon the fair value of the loan's underlying collateral. The $ 25.8 million fair value of loans held for investment at June 30, 2026 reported above includes impaired loans with a carrying value of $ 48.1 million that were reduced by specific allowance allocations totaling $ 22.3 million based on collateral valuations utilizing Level 3 inputs. The $ 20.8 million fair value of loans held for investment at December 31, 2025 reported above includes impaired loans with a carrying value of $ 30.1 million that were reduced by specific allowance allocations totaling $ 9.3 million based on collateral valuations utilizing Level 3 inputs.
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Fair Value of Financial Instruments
A summary of the carrying amounts and estimated fair values of financial instruments is as follows:
Carrying
Amount Estimated Fair Value
(in thousands) Total Level 1 Level 2 Level 3
June 30, 2026
Financial assets:
Cash and cash equivalents $ 3,698,268 $ 3,698,268 $ 3,698,268 $ — $ —
Available-for-sale debt securities 3,826,284 3,826,284 — 3,816,003 10,281
Held-to-maturity debt securities 692,332 616,820 — 616,820 —
Equity securities 43,429 43,429 33,429 10,000 —
Trading debt securities
2,539 2,539 — 2,539 —
Loans held for investment, net 24,678,958 24,398,152 — — 24,398,152
Derivative assets 15,322 15,322 — 15,322 —
Other trading assets
56 56 56 — —
Financial liabilities:
Total deposits 28,911,388 29,604,026 — — 29,604,026
Short-term borrowings 350,000 350,000 — 350,000 —
Long-term debt 500,859 507,435 — 507,435 —
Derivative liabilities 42,470 42,470 — 42,470 —
Securities sold not yet purchased 11,646 11,646 11,646 — —
December 31, 2025
Financial assets:
Cash and cash equivalents $ 2,099,118 $ 2,099,118 $ 2,099,118 $ — $ —
Available-for-sale debt securities 3,951,455 3,951,455 — 3,940,658 10,797
Held-to-maturity debt securities 725,722 654,832 — 654,832 —
Equity securities 41,998 41,998 31,998 10,000 —
Trading debt securities
3,924 3,924 — 3,924 —
Loans held for sale 4,361 4,361 4,361
Loans held for investment, net 23,769,645 23,604,206 — — 23,604,206
Derivative assets 40,892 40,892 — 40,892 —
Financial liabilities:
Total deposits 26,448,767 26,450,932 — — 26,450,932
Short-term borrowings 330,000 330,000 — 330,000 —
Long-term debt 620,575 593,610 — 593,610 —
Derivative liabilities 24,458 24,458 — 24,458 —
Securities sold not yet purchased 12,026 12,026 12,026 — —
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(10) Derivative Financial Instruments
The notional amounts and estimated fair values of derivative positions outstanding are presented in the following table.
June 30, 2026 December 31, 2025
Estimated Fair Value Estimated Fair Value
(in thousands) Notional
Amount Asset Derivative Liability Derivative Notional
Amount Asset Derivative Liability Derivative
Derivatives designated as hedges
Cash flow hedges:
Interest rate contracts:
Swaps hedging loans $ 2,600,000 $ 118 $ 18,833 $ 2,050,000 $ 4,067 $ 770
Fair value hedges:
Interest rate contracts:
Swaps hedging long-term debt 400,000 — 10,200 — — —
Non-hedging derivatives
Customer-initiated and other derivatives:
Foreign currency forward contracts 724,896 10,053 9,600 265,943 1,212 984
Commodity contracts 112,146 3,219 2,784 — — —
Interest rate contracts:
Swaps 7,097,543 28,013 28,013 6,669,382 31,587 31,587
Caps and floors written 2,594,043 630 2,620 2,740,883 3,718 1,054
Caps and floors purchased 2,635,322 2,685 695 2,782,162 1,179 3,842
Forward contracts 28,453,690 49,846 49,198 22,454,928 40,214 40,021
Gross derivatives 94,564 121,943 81,977 78,258
Netting adjustment - offsetting derivative assets/liabilities ( 48,744 ) ( 48,744 ) ( 33,926 ) ( 33,926 )
Netting adjustment - cash collateral received/posted ( 30,498 ) ( 30,729 ) ( 7,159 ) ( 19,874 )
Net derivatives included on the consolidated balance sheets $ 15,322 $ 42,470 $ 40,892 $ 24,458
In the second quarter of 2026, the Company entered into commodity contract derivative instruments with customers while at the same time entering into offsetting commodity contract derivative instruments with another financial institution. These transactions allow the customer to effectively manage their exposure to commodity value fluctuations. Any changes in the fair value of the underlying derivative instruments substantially offset each other, with any difference recorded in trading income on the consolidated statements of income and other comprehensive income.
The Company’s credit exposure on derivative instruments is limited to the net favorable value and interest payments by each counterparty. In some cases, collateral may be required from the counterparties involved if the net value of the derivative instruments exceeds a nominal amount. The Company’s credit exposure associated with these instruments, net of any collateral pledged, was approximately $ 15.3 million at June 30, 2026 and approximately $ 40.9 million at December 31, 2025. Collateral levels are monitored and adjusted on a regular basis for changes in the value of derivative instruments. At June 30, 2026, the Company had $ 116.2 million in cash collateral pledged to counterparties included in interest bearing cash and cash equivalents on the consolidated balance sheet and $ 33.7 million in cash collateral received from counterparties included in interest bearing deposits on the consolidated balance sheet. The comparative amounts at December 31, 2025, were $ 29.5 million in cash collateral pledged to counterparties and $ 7.6 million cash collateral received from counterparties.
The Company also enters into credit risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which the Company is either a participant or a lead bank. The risk participation agreements entered into by the Company as a participant bank provide credit protection to the financial institution counterparty should the borrower fail to perform on its interest rate derivative contract with that financial institution. The Company is party to 24 risk participation agreements where it acts as a participant bank with a notional amount of $ 425.6 million at June 30, 2026, compared to 23 risk participation agreements with a notional amount of $ 338.1 million at December 31, 2025. The maximum estimated exposure to these agreements, assuming 100% default by all obligors, was approximately $ 3.4 million at June 30, 2026 and $ 510,000 at December 31, 2025. The fair value of these exposures was insignificant to the consolidated financial statements at both June 30, 2026 and December 31, 2025. Risk participation agreements entered into by the Company as the lead bank provide credit protection should the borrower fail to perform on its interest rate derivative contract. The Company is party to 52 risk participation agreements where the Company acts as the lead bank having a notional amount of $ 665.1 million at June 30, 2026, compared to 47 agreements having a notional amount of $ 603.1 million at December 31, 2025.
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Derivatives Designated as Cash Flow Hedges
The Company enters into interest rate derivative contracts that are designated as qualifying cash flow hedges to hedge the exposure to variability in expected future cash flows attributable to changes in a contractually specified interest rate.
During the six months ended June 30, 2026, the Company recorded $ 24.7 million in unrealized losses to adjust its cash flow hedges to fair value, which was recorded net of tax to AOCI, and reclassified $ 2.2 million from AOCI as a decrease to interest income on loans. Based on current market conditions, the Company estimates that during the next 12 months, an additional $ 10.4 million will be reclassified from AOCI as a decrease to interest income. As of June 30, 2026, the maximum length of time over which forecasted transactions are hedged is 2.09 years.
Derivatives Designated as Fair Value Hedges
The Company enters into interest rate derivative contracts that are designated as qualifying fair value hedges to hedge the exposure to variability in fair value attributable to changes in a contractually specified interest rate. To qualify for hedge accounting the hedging relationship, both at inception and on an ongoing basis, must be expected to be highly effective in achieving offsetting fair value adjustments attributable to the hedged risk during the term of the hedge if a fair value hedge. As of June 30, 2026, all of the Company’s fair value hedges are accounted for using the shortcut method. The shortcut method assumes perfect hedge effectiveness and eliminates the quantitative aspect of assessing hedge effectiveness. The fair value hedges are recorded at fair value in other assets and other liabilities on the consolidated balance sheets with changes in fair value recorded in the same income statement line item as the offsetting unrealized loss or gain on the hedged item attributable to the risk being hedged.
During the first quarter of 2026, the Company entered into a receive-fixed, pay-variable interest rate swap contract to hedge the change in the fair value due to fluctuations in market interest rates for the $ 400.0 million Company-issued 5.301 % fixed rate senior notes. The change in fair value of the fair value hedge is recorded through earnings with an exact offset against the change in the fair value of the hedged item within interest expense on long-term debt in the consolidated statements of income. During the six months ended June 30, 2026, the Company recorded $ 413,000 in interest expense on long-term debt related to interest settlements on derivatives. As of June 30, 2026, the carrying amount of the hedged liability was $ 387.5 million, which included a $ 10.2 million cumulative basis reduction related to the application of hedge accounting.
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(11) Accumulated Other Comprehensive Income
The following table provides the change in AOCI by component:
(in thousands) Cash Flow Hedges Available-for-Sale Securities Held-to-Maturity Securities Total
Three Months Ended June 30, 2026
Beginning balance $ ( 5,434 ) $ ( 51,352 ) $ ( 29,953 ) $ ( 86,739 )
Change in unrealized gain/(loss) ( 12,586 ) ( 5,789 ) — ( 18,375 )
Amounts reclassified into net income 1,129 — 1,477 2,606
Total other comprehensive income/(loss) ( 11,457 ) ( 5,789 ) 1,477 ( 15,769 )
Income tax expense/(benefit) ( 2,636 ) ( 1,332 ) 340 ( 3,628 )
Total other comprehensive income/(loss), net of tax ( 8,821 ) ( 4,457 ) 1,137 ( 12,141 )
Ending balance $ ( 14,255 ) $ ( 55,809 ) $ ( 28,816 ) $ ( 98,880 )
Three Months Ended June 30, 2025
Beginning balance $ ( 8,020 ) $ ( 93,114 ) $ ( 35,028 ) $ ( 136,162 )
Change in unrealized gain/(loss) 207 19,831 — 20,038
Amounts reclassified into net income 8,379 — 1,588 9,967
Total other comprehensive income/(loss) 8,586 19,831 1,588 30,005
Income tax expense/(benefit) 1,938 4,478 358 6,774
Total other comprehensive income/(loss), net of tax 6,648 15,353 1,230 23,231
Ending balance $ ( 1,372 ) $ ( 77,761 ) $ ( 33,798 ) $ ( 112,931 )
Six Months Ended June 30, 2026
Beginning balance $ 3,100 $ ( 36,563 ) $ ( 31,122 ) $ ( 64,585 )
Change in unrealized gain/(loss) ( 24,708 ) ( 24,995 ) — ( 49,703 )
Amounts reclassified into net income 2,168 — 2,995 5,163
Total other comprehensive income/(loss)
( 22,540 ) ( 24,995 ) 2,995 ( 44,540 )
Income tax expense/(benefit)
( 5,185 ) ( 5,749 ) 689 ( 10,245 )
Total other comprehensive income/(loss), net of tax
( 17,355 ) ( 19,246 ) 2,306 ( 34,295 )
Ending balance $ ( 14,255 ) $ ( 55,809 ) $ ( 28,816 ) $ ( 98,880 )
Six Months Ended June 30, 2025
Beginning balance $ ( 15,275 ) $ ( 131,531 ) $ ( 36,301 ) $ ( 183,107 )
Change in unrealized gain/(loss) 865 69,452 — 70,317
Amounts reclassified into net income 17,093 — 3,233 20,326
Total other comprehensive income/(loss) 17,958 69,452 3,233 90,643
Income tax expense/(benefit) 4,055 15,682 730 20,467
Total other comprehensive income/(loss), net of tax 13,903 53,770 2,503 70,176
Ending balance $ ( 1,372 ) $ ( 77,761 ) $ ( 33,798 ) $ ( 112,931 )
(12) New Accounting Standards
Accounting Standards Update 2026-01 “Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock” (“ASU 2026-01”) improves generally accepted accounting principles by providing authoritative guidance for the initial measurement of paid-in-kind dividends on equity-classified preferred stock. Specifically, the amendments improve the decision usefulness of the financial reporting information provided to investors which helps investors to understand the amount and preference of relative claims on equity. The amendments also provide clear, cost-effective guidance that will reduce complexity. ASU 2026-01 will be effective for the Company beginning January 1, 2027, with early adoption permitted in an interim reporting period, and is not expected to have a significant impact on the Company’s financial statements.
Accounting Standards Update 2026-02 “Environmental Credits and Environmental Credit Obligations (Topic 818) (“ASU 2026-02”) establishes guidance on the recognition, measurement, presentation and disclosure of environmental credits and environmental credit obligations. Under the new standard, entities will recognize and measure environmental credit assets based on their intended use as well as how the credits are obtained. Environmental credit obligations will be recognized and measured depending on whether an entity holds and expects to use compliance environmental credits to settle that obligation. ASU 2026-02 will be effective for the Company beginning January 1, 2028, and is not expected to have a significant impact on the Company’s financial statements.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.