What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-10-22 compared with 2026-07-23 · 74 added, 80 removed, 308 unchanged (33% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in the 2025 Form 10-K.

Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or any future period.

The following discussion and analysis of the Company’s financial condition and results of operations for the three and nine months ended September 30, 2026 and 2025 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in the 2025 Form 10-K.

Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or any future period.

Forward-Looking Statements

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the failure to identify, attract and retain key personnel and other employees and to engage in adequate succession planning;

the transfer of the listing of TCBI’s securities to TXSE, a newly operational exchange, and its effect on the trading market, liquidity and price of TCBI’s securities;

severe weather, natural disasters, climate change, acts of war, terrorism, global or other geopolitical conflicts, or other external events, as well as related legislative and regulatory initiatives;

and the risks and factors more fully described in TCBI’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents and filings with the SEC.

The information contained in this communication speaks only as of its date.

The information contained in this report speaks only as of its date.

Except to the extent required by applicable law or regulation, we disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments.

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Selected income statement data and key performance indicators are presented in the table below:

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands except per share data) 2026 2025 2026 2025

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands except per share data) 2026 2025 2026 2025

Net interest income $ 274,983 $ 271,771 $ 790,079 $ 761,200

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(1) Non-interest expense divided by the sum of net interest income and non-interest income.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

The Company reported net income of $84.9 million and net income available to common stockholders of $80.6 million for the second quarter of 2026, compared to net income of $77.3 million and net income available to common stockholders of $73.0 million for the second quarter of 2025.

On a fully diluted basis, earnings per common share was $1.83 for the second quarter of 2026, compared to $1.58 for the same period in 2025.

ROE was 9.56% and ROA was 1.03% for the second quarter of 2026, compared to 9.17% and 0.99%, respectively, for the same period in 2025.

The increase in net income for the second quarter of 2026 compared to the second quarter of 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by an increase in non-interest expense.

Six months ended June 30, 2026 compared to six months ended June 30, 2025

The Company reported net income of $158.7 million and net income available to common stockholders of $150.1 million for the six months ended June 30, 2026, compared to net income of $124.4 million and net income available to common stockholders of $115.8 million for the same period in 2025.

On a fully diluted basis, earnings per common share was $3.39 for the six months ended June 30, 2026, compared to $2.49 for the same period in 2025.

ROE was 8.96% and ROA was 0.99% for the six months ended June 30, 2026, compared to 7.40% and 0.80%, respectively, for the same period in 2025.

The increase in net income for the six months ended June 30, 2026 compared to the same period in 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by an increase in non-interest expense.

Three months ended September 30, 2026 compared to three months ended September 30, 2025

The Company reported net income of $103.7 million and net income available to common stockholders of $99.4 million for the third quarter of 2026, compared to net income of $105.2 million and net income available to common stockholders of $100.9 million for the third quarter of 2025.

On a fully diluted basis, earnings per common share was $2.28 for the third quarter of 2026, compared to $2.18 for the same period in 2025.

ROE was 11.57% and ROA was 1.25% for the third quarter of 2026, compared to 12.04% and 1.30%, respectively, for the same period in 2025.

The decrease in net income for the three months ended September 30, 2026 compared to the same period in 2025 resulted primarily from an increase in non-interest expense, partially offset by an increase in non-interest income.

Nine months ended September 30, 2026 compared to nine months ended September 30, 2025

The Company reported net income of $262.4 million and net income available to common stockholders of $249.5 million for the nine months ended September 30, 2026, compared to net income of $229.6 million and net income available to common stockholders of $216.6 million for the same period in 2025.

On a fully diluted basis, earnings per common share was $5.66 for the nine months ended September 30, 2026, compared to $4.67 for the same period in 2025.

ROE was 9.84% and ROA was 1.08% for the nine months ended September 30, 2026, compared to 9.02% and 0.97%, respectively, for the same period in 2025.

The increase in net income for the nine months ended September 30, 2026 compared to the same period in 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by increases in provision for credit losses and non-interest expense.

Details of the changes in the various components of net income are discussed below.

Taxable Equivalent Net Interest Income Analysis - Quarterly(1)

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

(dollars in thousands) Average

Three Months Ended September 30, 2026 Three Months Ended September 30, 2025

($ in thousands) Average

Balance Income/

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Taxable Equivalent Net Interest Income Analysis - Year to Date(1)

Six Months Ended June 30, 2026 Six Months Ended June 30, 2025

(dollars in thousands) Average

Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025

($ in thousands) Average

Balance Revenue /

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The following table presents the changes in taxable equivalent net interest income and identifies the changes due to differences in the average volume of earning assets and interest bearing liabilities and the changes due to differences in the average interest rate on those assets and liabilities.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2026/2025 2026/2025

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Net Interest Income

Net interest income was $260.4 million for the three months ended June 30, 2026, compared to $253.4 million for the same period in 2025.

Net interest income was $275.0 million for the three months ended September 30, 2026, compared to $271.8 million for the same period in 2025.

The increase was primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by a decrease in earning asset yields and an increase in average interest bearing deposits.

Average earning assets for the three months ended June 30, 2026 increased $1.6 billion compared to the same period in 2025, which included increases of $1.5 billion in average total loans held for investment and $116.6 million in average interest bearing cash and cash equivalents, partially offset by a $28.9 million decrease in average investment securities.

Average interest bearing liabilities increased $1.6 billion for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to increases of $1.5 billion increase in average interest bearing deposits and $71.8 million in average short-term borrowings, partially offset by a decrease of $6.8 million in average long-term debt.

Average non-interest bearing deposits for the three months ended June 30, 2026 decreased to $8.1 billion from $8.2 billion for the same period in 2025.

Net interest margin for the three months ended June 30, 2026 was 3.28%, compared to 3.35% for the same period in 2025.

The decrease in net interest margin was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields.

The yield on total loans held for investment decreased to 6.04% for the three months ended June 30, 2026, compared to 6.34% for the same period in 2025, and the yield on earning assets decreased to 5.54% for the three months ended June 30, 2026, compared to 5.80% for the same period in 2025.

Total cost of deposits decreased to 2.40% for the three months ended June 30, 2026 from 2.65% for the same period in 2025, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.21% for the three months ended June 30, 2026, compared to 2.41% for the same period in 2025.

Net interest income was $515.1 million for the six months ended June 30, 2026, compared to $489.4 million for the same period in 2025.

Average earning assets for the three months ended September 30, 2026 increased $756.9 million compared to the same period in 2025, which included increases of $803.1 million in average total loans held for investment and $11.4 million in average loans held for sale, partially offset by decreases of $14.7 million in average interest bearing cash and cash equivalents and $52.9 million in average investment securities.

Average interest bearing liabilities increased $1.2 billion for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase of $1.3 billion in average interest bearing deposits, partially offset by a $35.2 million decrease in average short-term borrowings and a decrease of $122.7 million in average long-term debt.

Average non-interest bearing deposits for the three months ended September 30, 2026 decreased to $7.9 billion from $8.4 billion for the same period in 2025.

Net interest margin for the three months ended September 30, 2026 was 3.44%, compared to 3.47% for the same period in 2025.

The decrease in net interest margin was primarily due to lower average earning asset yields, partially offset by a decrease in the cost of interest bearing deposits.

The yield on total loans held for investment decreased to 6.21% for the three months ended September 30, 2026, compared to 6.42% for the same period in 2025, and the yield on earning assets decreased to 5.70% for the three months ended September 30, 2026, compared to 5.88% for the same period in 2025.

Total cost of deposits decreased to 2.45% for the three months ended September 30, 2026 from 2.62% for the same period in 2025, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.23% for the three months ended September 30, 2026, compared to 2.36% for the same period in 2025.

Net interest income was $790.1 million for the nine months ended September 30, 2026, compared to $761.2 million for the same period in 2025.

Average earning assets increased $906.5 million for the six months ended June 30, 2026, compared to the same period in 2025, which included increases of $1.7 billion in average total loans held for investment and $70.8 million in average debt and equity securities, partially offset by an $854.4 million decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $1.0 billion for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase of $1.2 billion in average interest bearing deposits, partially offset by a decrease of $209.3 million

in average short-term borrowings.

Average non-interest bearing deposits for the six months ended June 30, 2026 decreased to $7.8 billion from $8.0 billion for the same period in 2025.

Net interest margin for the six months ended June 30, 2026 was 3.35%, compared to 3.27% for the same period of 2025.

The increase was primarily due to a decrease in funding costs.

The yield on total loans held for investment decreased to 6.08% for the six months ended June 30, 2026, compared to 6.37% for the same period in 2025, and the yield on earning assets decreased to 5.58% for the six months ended June 30, 2026, compared to 5.78% for the same period in 2025.

Total cost of deposits decreased to 2.39% for the six months ended June 30, 2026 from 2.70% for the same period in 2025 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.19% for the six months ended June 30, 2026, compared to 2.48% for the same period in 2025.

Average earning assets increased $856.1 million for the nine months ended September 30, 2026, compared to the same period in 2025, which included increases of $1.4 billion in average total loans held for investment and $29.1 million in average debt and equity securities, partially offset by a $571.5 million decrease in average interest bearing cash and cash equivalents.

Average interest bearing liabilities increased $1.1 billion for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to an increase of $1.3 billion in average interest bearing deposits, partially offset by decreases of $150.6 million in average short-term borrowings and $38.6 million in average long-term debt.

Average non-interest bearing deposits for the nine months ended September 30, 2026 decreased to $7.8 billion from $8.1 billion for the same period in 2025.

Net interest margin for the nine months ended September 30, 2026 was 3.38%, compared to 3.34% for the same period of 2025.

The increase in net interest margin was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields.

The yield on total loans held for investment decreased to 6.12% for the nine months ended September 30, 2026, compared to 6.39% for the same period in 2025, and the yield on earning assets decreased to 5.63% for the nine months ended September 30, 2026, compared to 5.82% for the same period in 2025.

Total cost of deposits decreased to 2.41% for the nine months ended September 30, 2026 from 2.67% for the same period in 2025 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.20% for the nine months ended September 30, 2026, compared to 2.44% for the same period in 2025.

Non-interest Income

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2026 2025 2026 2025

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Total non-interest income $ 81,643 $ 68,583 $ 226,027 $ 167,096

Non-interest income increased $21.0 million during the three months ended June 30, 2026, compared to the same period in 2025, primarily due to increases in wealth management and trust fee income, investment banking and advisory fees, trading income and other non-interest income, as well as the absence of a $1.9 million loss on sale of available-for-sale debt securities recognized in the second quarter of 2025.

Non-interest income was $144.4 million for the six months ended June 30, 2026, a $45.9 million increase as compared to the same period in 2025, primarily due to increases in investment banking and advisory fees, trading income and other non-interest income.

Non-interest income increased $13.1 million during the three months ended September 30, 2026, compared to the same period in 2025, primarily due to increases in service charges on deposit accounts, investment banking and advisory fees, trading income and other non-interest income.

Non-interest income was $226.0 million for the nine months ended September 30, 2026, a $58.9 million increase as compared to the same period in 2025, primarily due to increases in investment banking and advisory fees, trading income and other non-interest income.

Non-interest Expense

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2026 2025 2026 2025

7 unchanged sentences

Total non-interest expense $ 203,924 $ 190,575 $ 622,985 $ 583,871

Non-interest expense increased $15.2 million during the three months ended June 30, 2026, compared to the same period in 2025.

The increase was primarily due to increases in salaries and benefits, marketing, legal and professional, communications and technology and other non-interest expense.

Non-interest expense was $419.1 million for the six months ended June 30, 2026, an increase of $25.8 million as compared to the same period in 2025, primarily due to increases in salaries and benefits, communications and technology and other non-interest expense.

Non-interest expense increased $13.3 million during the three months ended September 30, 2026, compared to the same period in 2025.

The increase was primarily due to increases in salaries and benefits, occupancy and communications and technology expense, primarily as a result of restructuring expenses recognized in the third quarter of 2026, as well as an increase in other non-interest expense.

Non-interest expense was $623.0 million for the nine months ended September 30, 2026, an increase of $39.1 million as compared to the same period in 2025, primarily as a result of increases in salaries and benefits, communications and technology and other non-interest expense.

Analysis of Financial Condition

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See Note 1 - Operations and Summary of Significant Accounting Policies in the 2025 Form 10-K for details of these portfolio segments.

(in thousands) June 30, 2026 December 31, 2025

(in thousands) September 30, 2026 December 31, 2025

Commercial $ 13,428,328 $ 12,163,545

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Total loans held for investment $ 24,082,990 $ 24,040,202

Total loans held for investment were $24.9 billion at June 30, 2026, an increase of $907.0 million from December 31, 2025, as increases in commercial and mortgage finance loans were partially offset by decreases in commercial real estate and consumer loans.

Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 26% and 25% of loans held for investment at June 30, 2026 and December 31, 2025, respectively.

Total loans held for investment were $24.1 billion at September 30, 2026, an increase of $42.8 million from December 31, 2025, as an increase in commercial loans was partially offset by decreases in mortgage finance, commercial real estate and consumer loans.

Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 23% and 25% of loans held for investment at September 30, 2026 and December 31, 2025, respectively.

Volumes fluctuate based on the level of market demand for the product and the number of days between purchase and sale of the loans, which can be affected by changes in overall market interest rates, and tend to peak at the end of each month.

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The Company also participates in shared national credits, both as a participant and as an agent.

As of June 30, 2026, the Company had $6.8 billion in shared national credits, $1.4 billion of which the Company administered as agent.

All syndicated loans, whether the Company acts as agent or participant, are underwritten to the same standards as all other loans the Company originates.

As of June 30, 2026, approximately $26.6 million of the Company’s shared national credits were on non-accrual.

As of September 30, 2026, the Company had $7.1 billion in shared national credits, $1.4 billion of which the Company administered as agent.

All syndicated loans, whether the Company acts as agent or participant, are underwritten to substantially the same standards as all other loans the Company originates.

As of September 30, 2026, approximately $26.3 million of the Company’s shared national credits were on non-accrual.

Portfolio Concentrations

Although more than 50% of the Company’s total loan exposure is outside of Texas and more than 50% of deposits are sourced outside of Texas, Texas concentration remains significant.

As of June 30, 2026, a majority of the loans held for investment, excluding mortgage finance and other national lines of business, were to businesses with headquarters or operations in Texas.

As of September 30, 2026, a majority of the loans held for investment, excluding mortgage finance and other national lines of business, were to businesses with headquarters or operations in Texas.

This geographic concentration subjects the Company’s loan portfolio to the general economic conditions within Texas.

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The table below summarizes non-accrual loans by portfolio segment and by type of property securing the credit.

(dollars in thousands) June 30, 2026 December 31, 2025

($ in thousands) September 30, 2026 December 31, 2025

Non-accrual loans held for investment

1 unchanged sentence

Accounts receivable and inventory 306 1,177

Machinery and equipment

Unsecured 119 2,244

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The provision for credit losses, comprised of a provision for loans and off-balance sheet credit losses, is a charge to earnings to maintain the allowance for credit losses at a level consistent with management’s assessment of expected losses at each balance sheet date.

The Company recorded a provision for credit losses of $34.0 million for the six months ended June 30, 2026, compared to a provision of $32.0 million for the six months ended June 30, 2025.

The provision for credit losses for the six months ended June 30, 2026 reflects 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.

The Company recorded a provision for credit losses of $51.0 million for the nine months ended September 30, 2026, compared to a provision of $44.0 million for the nine months ended September 30, 2025.

The provision for credit losses for the nine months ended September 30, 2026 reflects an increase in criticized loans and $48.0 million in net charge-offs recorded during the nine months ended September 30, 2026.

Criticized loans totaled $782.4 million at September 30, 2026, compared to $634.9 million at December 31, 2025.

The table below presents key metrics related to the Company’s credit loss experience:

June 30, 2026 June 30, 2025

September 30, 2026 September 30, 2025

Allowance for credit losses on loans to total loans held for investment 1.12 % 1.13 %

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0.28 % 0.26 %

(1) Ratios are calculated using average balance for the six months ended June 30, 2026 and 2025, respectively.

(2) Ratios are annualized utilizing provision for credit losses for the six months ended June 30, 2026 and 2025, respectively.

(1) Ratios are calculated using average balance for the nine months ended September 30, 2026 and 2025, respectively.

(2) Ratios are annualized utilizing provision for credit losses for the nine months ended September 30, 2026 and 2025, respectively.

The table below details net charge-offs/(recoveries) as a percentage of average total loans by portfolio segment:

Six Months Ended June 30,

(dollars in thousands) Net

Nine Months Ended September 30,

($ in thousands) Net

Charge-offs Net Charge-offs

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Total $ 47,979 0.26 % $ 36,502 0.21 %

(1) Ratios are annualized utilizing net charge-offs for the six months ended June 30, 2026 and 2025, respectively.

(1) Ratios are annualized utilizing net charge-offs for the nine months ended September 30, 2026 and 2025, respectively.

Liquidity and Capital Resources

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The following table summarizes the Company’s interest bearing cash and cash equivalents:

(dollars in thousands) June 30, 2026 December 31, 2025

($ in thousands) September 30, 2026 December 31, 2025

Interest bearing cash and cash equivalents $ 2,479,073 $ 1,897,803

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The following table summarizes period-end total deposits:

June 30, 2026 December 31, 2025

(dollars in thousands) Balance % of Total Balance % of Total

September 30, 2026 December 31, 2025

($ in thousands) Balance % of Total Balance % of Total

Customer deposits $ 25,992,734 93.8 % $ 25,719,595 97.2 %

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Total deposits $ 27,715,655 100.0 % $ 26,448,767 100.0 %

Estimated uninsured deposits, including accrued interest, were 37% and 42% of total deposits at June 30, 2026 and December 31, 2025, respectively.

Estimated uninsured deposits, including accrued interest, were 42% of assessable deposits, including accrued interest, at both September 30, 2026 and December 31, 2025.

The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

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(in thousands)

June 30, 2026 December 31, 2025

September 30, 2026 December 31, 2025

Federal funds purchased $ — $ 30,000

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The following table summarizes the Company’s short-term borrowing capacities net of balances outstanding:

(in thousands) June 30, 2026 December 31, 2025

(in thousands) September 30, 2026 December 31, 2025

FHLB borrowing capacity relating to loans and pledged securities $ 2,695,451 $ 2,570,596

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The loan agreement contains customary financial covenants and restrictions.

No borrowings were made against this line of credit during the six months ended June 30, 2026 or 2025.

The Company has long-term debt outstanding of $500.9 million as of June 30, 2026, comprised of trust preferred securities and senior notes with maturity dates ranging from February 2032 to December 2036.

No borrowings were made against this line of credit during the nine months ended September 30, 2026 or 2025.

The Company has long-term debt outstanding of $487.3 million as of September 30, 2026, comprised of trust preferred securities and senior notes with maturity dates ranging from February 2032 to December 2036.

See Note 5 - Short-Term Borrowings and Long-Term Debt in the accompanying notes to the consolidated financial statements included elsewhere in this report for additional information.

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Capital Resources

The Company’s equity capital averaged $3.7 billion for the six months ended June 30, 2026 compared to $3.5 billion for the same period in 2025.

The Company declared and paid common stock dividends of $8.7 million, representing $0.20 per common share, during the six months ended June 30, 2026.

The Company’s equity capital averaged $3.7 billion for the nine months ended September 30, 2026 compared to $3.5 billion for the same period in 2025.

The Company declared and paid common stock dividends of $17.3 million, representing $0.40 per common share, during the nine months ended September 30, 2026.

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 purchase price, including excise tax expense, of $98.7 million, at a weighted average price of $97.01 per share.

Any repurchases under the Company’s repurchase program will be made in accordance with applicable securities laws from time to time in open market or private transactions.

The extent to which the Company repurchases shares, and the timing of such repurchases, will be at management’s discretion and will depend upon a variety of factors, including market conditions, the Company’s capital position and amount of retained earnings, regulatory requirements and other considerations.

On October 21, 2026, the Company’s board of directors declared a cash dividend of $0.20 per common share payable on December 15, 2026, to holders of record at the close of business on December 1, 2026.

During the nine months ended September 30, 2026, the Company repurchased, under the authorized share repurchase programs, 2,061,431 shares of its common stock for an aggregate purchase price, including excise tax expense, of $201.7 million, at a weighted average price of $97.00 per share.

For additional information on the Company’s capital and stockholders’ equity, see Note 7 - Regulatory Ratios and Capital, in the accompanying notes to the consolidated financial statements included elsewhere in this report.

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Management considers a range of macroeconomic scenarios in connection with the allowance estimation process.

Within the various economic scenarios considered as of June 30, 2026, the quantitative estimate of the allowance for credit loss would increase by approximately $91.4 million under sole consideration of the most severe downside scenario.

Within the various economic scenarios considered as of September 30, 2026, the quantitative estimate of the allowance for credit loss would increase by approximately $94.6 million under sole consideration of the most severe downside scenario.

The quoted sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis