0000109380us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-01-012023-06-300000109380zions:ProductsAndServicesWealthManagementFeesMemberzions:VectraBankColoradoSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023March 31, 2024 OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________
COMMISSION FILE NUMBER 001-12307
ZIONS BANCORPORATION, NATIONAL ASSOCIATION
(Exact name of registrant as specified in its charter)
United States of America87-0189025
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One South Main
Salt Lake City, Utah84133-1109
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (801) 844-8208

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolsName of Each Exchange on Which Registered
Common Stock, par value $0.001ZIONThe NASDAQ Stock Market LLC
Depositary Shares each representing a 1/40th ownership interest in a share of:
Series A Floating-Rate Non-Cumulative Perpetual Preferred StockZIONPThe NASDAQ Stock Market LLC
Series G Fixed/Floating-Rate Non-Cumulative Perpetual Preferred StockZIONOThe NASDAQ Stock Market LLC
6.95% Fixed-to-Floating Rate Subordinated Notes due September 15, 2028ZIONLThe NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Number of common shares outstanding at July 31, 2023                        148,145,133April 30, 2024                        147,654,732 shares

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Table of Contents

Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
GLOSSARY OF ACRONYMS AND ABBREVIATIONS
ACLAllowance for Credit LossesIPOHECLInitial Public OfferingHome Equity Credit Line
AFSAvailable-for-SaleLIBORHTMLondon Interbank Offered RateHeld-to-Maturity
ALLLAllowance for Loan and Lease LossesLIHTCIPOLow-income Housing Tax CreditInitial Public Offering
AmegyAmegy Bank, a division of Zions Bancorporation, National AssociationMunicipalitiesLIHTCState and Local GovernmentsLow-income Housing Tax Credit
AOCIAccumulated Other Comprehensive Income or LossMunicipalitiesState and Local Governments
ASCAccounting Standards CodificationNAICSNorth American Industry Classification System
ASCASUAccounting Standards CodificationUpdateNASDAQNational Association of Securities Dealers Automated Quotations
ASUBOLIAccounting Standards UpdateBank-Owned Life InsuranceNBAZNational Bank of Arizona, a division of Zions Bancorporation, National Association
BOLIbpsBank-Owned Life InsuranceBasis PointsNIMNet Interest Margin
bpsBasis PointsNMNot Meaningful
BTFPBank Term Funding ProgramNSBNMNevada State Bank, a division of Zions Bancorporation, National AssociationNot Meaningful
CB&TCalifornia Bank & Trust, a division of Zions Bancorporation, National AssociationNSBNevada State Bank, a division of Zions Bancorporation, National Association
CLTVCombined Loan-to-Value RatioOCCOffice of the Comptroller of the Currency
CECLCODMCurrent Expected Credit LossChief Operating Decision MakerOCIOther Comprehensive Income or Loss
CLTVCRECombined Loan-to-Value RatioCommercial Real EstateOREOOther Real Estate Owned
CREDTACommercial Real EstateDeferred Tax AssetPAMProportional Amortization Method
CVADTLCredit Valuation AdjustmentDeferred Tax LiabilityPEIPrivate Equity Investment
DTAEaRDeferred Tax AssetEarnings at RiskPPNRPre-provision Net Revenue
DTLDeferred Tax LiabilityPPPPaycheck Protection Program
EaREPSEarnings at Riskper ShareROURight-of-Use
EPSEVEEarnings per ShareEconomic Value of EquityRULCReserve for Unfunded Lending Commitments
EVEFASBEconomic Value of EquityFinancial Accounting Standards BoardS&PStandard & Poor's
FASBFDICFinancial Accounting Standards BoardFederal Deposit Insurance CorporationSBAU.S. Small Business Administration
FDICFHLBFederal Deposit Insurance CorporationHome Loan BankSBICSmall Business Investment Company
FHLBFederal Home Loan BankSECSecurities and Exchange Commission
FICOFair Isaac CorporationSOFRSecured Overnight Financing Rate
FRBFederal Reserve BoardTCBWThe Commerce Bank of Washington, a division of Zions Bancorporation, National Association
FTPFRBFunds Transfer PricingTDRTroubled Debt Restructuring
GAAPGenerally Accepted Accounting PrinciplesFederal Reserve BoardU.S.United States
GCFFTPGeneral Collateral FundingFunds Transfer PricingVectraVectra Bank Colorado, a division of Zions Bancorporation, National Association
HECLGAAPHome Equity Credit LineGenerally Accepted Accounting PrinciplesZions BankZions Bank, a division of Zions Bancorporation, National Association
HTMGCFHeld-to-MaturityGeneral Collateral Funding

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
PART I.    FINANCIAL INFORMATION
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
This quarterly report includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and assumptions regarding future events or determinations, all of which are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements, industry trends, and results or regulatory outcomes to differ materially from those expressed or implied. Forward-looking statements include, among others:
Statements with respect to the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation, National Association and its subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”); and
Statements preceded or followed by, or that include the words “may,” “might,” “can,” “continue,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “forecasts,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “projects,” “will,” and the negative thereof and similar words and expressions.
Forward-looking statements are not guarantees, nor should they be relied upon as representing management’s views as of any subsequent date. Actual results and outcomes may differ materially from those presented. Although the following list is not comprehensive, important factors that may cause material differences include:
The quality and composition of our loan and securities portfolios and the quality and composition of our deposits;
Changes in general industry, political and economic conditions, including continued elevated inflation, economic slowdown or recession, or other economic disruptions;challenges; changes in interest and reference rates, which could adversely affect our revenue and expenses, the value of assets and obligations,liabilities, and the availability and cost of capital and liquidity; deterioration in economic conditions that may result in increased loan and leases losses;
SecuritiesThe effects of newly enacted and capital markets behavior, including volatilityproposed regulations affecting us and changes in market liquidity and our ability to raise capital;
The impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; adverse media and other expressions of negative public opinion whether directed at us, other banks, the banking industry, generally, or otherwiseas well as changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including those that may adversely affect our reputationresult in decreases in revenue; increases in capital standards; and that of the banking industry;
The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings;
Our ability to recruitincreases in insurance assessments and retain talent, including increased competition for qualified candidates as a result of expanded remote-work opportunities and increased compensationother bank expenses;
Competitive pressures and other factors that may affect aspects of our business, such as pricing and demand for our products and services, including theand our ability to recruit and retain talent;
The impact of technological advancements, digital commerce, artificial intelligence, and artificial intelligence;other innovations affecting the banking industry;
Our ability to complete projects and initiatives and execute on our strategic plans, manage our risks, control compensation and other expenses, and achieve our business objectives;
Our ability to develop and maintain technology, information security systems and controls designed to guard against fraud, cybersecurity, and privacy risks;
Our ability to provide adequate oversight of our suppliers or prevent inadequate performance by third parties upon whom we rely for the delivery of various products and services;
Our ability to developNatural disasters, pandemics, catastrophic events and maintain technology, information security systemsother emergencies and controls designed to guard against fraud, cybersecurity,incidents and privacy risks;their impact on our and our customer’s operations and business and communities, including the increasing difficulty in, and the expense of, obtaining adequate insurance at reasonable prices;

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
Changes and uncertainties in applicable laws, and fiscal, monetary, regulatory, trade, and tax policies, and actions taken by governments, agencies, central banks, and similar organizations, including increases in bank fees, insurance assessments, capital standards, and other regulatory requirements;
The effects of pandemics and other health emergencies that may affect our business, employees, customers, and communities;
The effects of wars and geopolitical conflicts, and other local, national, or international disasters, crises, or conflicts that may occur in the future;
Natural disasters that may impact our and our customer's operations and business; and
Governmental and social responses to environmental, social, and governance issues, including those with respect to climate change.change;
Securities and capital markets behavior, including volatility and changes in market liquidity and our ability to raise capital;
The possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and shareholders’ equity, but not on our regulatory capital;
The impact of bank closures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks;
Adverse news and other expressions of negative public opinion whether directed at us, other banks, the banking industry, or otherwise that may adversely affect our reputation and that of the banking industry generally;
Protracted congressional negotiations and political stalemates regarding government funding and other issues, including those that increase the possibility of government shutdowns, downgrades in United States (“U.S.”) credit ratings, or other economic disruptions; and
The effects of wars and geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the war in the Middle East, and other local, national, or international disasters, crises, or conflicts that may occur in the future.
We caution against the undue reliance on forward-looking statements, which reflect our views only as of the date they are made. Except to the extent required by law, we specifically disclaim any obligation to update any factors or to publicly announce the revisions to any forward-looking statements to reflect future events or developments.
RECENT DEVELOPMENTS
Beginning in the first quarter of 2023 and continuing into the second quarter, the banking industry, particularly regional banks, experienced weakness in bank valuations and a significant withdrawal of predominately uninsured deposits. As a result, several regional banks were closed and placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”). The root causes of the bank closures generally related to weaknesses in liquidity risk, interest rate risk, and capital management.
During the second quarter of 2023, we managed the associated risks through the following actions:
Generated deposit growth through a combination of competitive interest rates and expanded utilization of reciprocal and brokered deposit programs;
Increased total available liquidity sources, which far exceed our level of uninsured deposits;
Actively managed our interest rate and market risk exposures through a rebalancing of our accounting hedges for both fixed-rate available-for-sale (“AFS”) securities and variable-rate commercial loans; and
Further strengthened our regulatory capital position through increased retained earnings.
RESULTS OF OPERATIONS
Comparisons noted below are calculated for the current quarter compared with the same prior-yearprior year period unless otherwise specified. Growth rates of 100% or more are considered not meaningful (“NM”) as they generally reflect a low starting point.
Executive SummaryFirst Quarter 2024 Financial Performance
Our financial results in the second quarter of 2023 reflected solid sequential customer deposit growth and continued strong credit quality. Diluted earnings per share (“EPS”) was $1.11, compared with $1.29 in the second quarter of 2022, as an increase in noninterest income was offset by higher noninterest expense and provision for credit losses.
Net Earnings Applicable to Common Shareholders
(in millions)
Diluted EPSAdjusted PPNR
(in millions)
Efficiency Ratio
1099511649734109951164973510995116497361099511649737
Net interest income remained relatively stable at $591 million, compared with the prior year quarter, as higher earning asset yields were offset by an increase in interest paid on deposits and short-term borrowings. Net interest income was also impacted by a reduction in interest-earning assets and a significant increase in interest-bearing liabilities. The net interest margin (“NIM”) was 2.92%, compared with 2.87%.
The provision for credit losses was $46 million, compared with a $41 million provision in the prior year period, reflecting deterioration in economic forecasts.
Total customer-related noninterest income increased $8 million, or 5%, compared with the prior year period. The increase was driven primarily by improved commercial account activity, including treasury management fees, as well as loan syndication, swaps, and other capital markets income. Total noninterest income increased $17 million, or 10%, primarily due to a $13 million gain on the sale of a bank-owned property.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
TotalExecutive Summary
Our financial results in the first quarter of 2024 reflected low net charge-offs, reduced net interest income, loan growth, and sequential improvement of the net interest margin (“NIM”). Diluted earnings per share (“EPS”) was $0.96, compared with $1.33 in the first quarter of 2023, as lower revenue and slightly higher noninterest expense increased $44was partially offset by a lower provision for credit losses.
Net interest income decreased $93 million, or 9%14%, relative to the prior year period, as higher funding costs more than offset higher earning asset yields. The net interest margin was 2.94%, compared with 3.33%, and was up from 2.91% in the fourth quarter driven largelyof 2023. Net interest income was also impacted by reduced interest-earning assets and an increase in salaries and benefits expense of $17 million, or 6%, primarily due to $13 million in severance expense during the current quarter. Our efficiency ratio was 62.5%, compared with 60.7%, as growth in adjusted noninterest expense outpaced growth in adjusted taxable-equivalent revenue.interest-bearing liabilities.
Average interest-earning assets decreased $1.5$2.2 billion, or 2%3%, from the prior year quarter, driven by declines of $4.5 billion and $2.0 billion in average securities and average money market investments, respectively, and partially offset by an increase of $4.9 billion in average loans and leases. Average interest-bearing liabilities increased $11.2 billion, or 27%, from the prior year quarter, driven by increases of $7.5 billion and $3.7 billion in average short-term borrowings and average federal funds purchased and security repurchase agreements, respectively.
Total loans and leases increased $4.5$1.8 billion, or 9%3%, primarily due to $56.9 billion. The increase was primarilygrowth in the consumer 1-4 family residential mortgage commercial and industrial, commercial real estate term,(“CRE”) multi-family and consumerindustrial construction loan portfolios. Nonperforming assets decreased $37
Average interest-bearing liabilities increased $6.0 billion, or 12%, driven by an increase in average interest-bearing deposits, partially offset by a decline in average borrowed funds.
Total deposits increased $5.0 billion, or 7%, as an increase in interest-bearing deposits was partially offset by a decrease in noninterest-bearing demand deposits. Customer deposits (excluding brokered deposits) totaled $69.9 billion, compared with $63.8 billion at March 31, 2023, and included approximately $7.5 billion of reciprocal deposits at March 31, 2024.
The provision for credit losses was $13 million, compared with $45 million in the prior year period.
Customer-related noninterest income remained flat at $151 million, as an increase in capital markets fees was offset by a decrease in loan-related fees and income. Decreases in noncustomer-related noninterest income were due largely to higher mark-to-market valuation adjustments related to servicing rights in the prior year quarter, a decrease in dividends on Federal Home Loan Bank (“FHLB”) stock, and a valuation loss associated with one of our equity investments in the current period.
Noninterest expense increased $14 million, or 18%3%, driven largely by an increase in deposit insurance and classified loans decreased $241regulatory expense, which included a $13 million or 24%. accrual associated with an updated special assessment estimate by the Federal Deposit Insurance Corporation (“FDIC”) during the quarter. This increase was partially offset by a decrease in salaries and employee benefits expense, primarily due to a decline in incentive compensation accruals.
Net loan and lease charge-offs totaled $13$6 million, or 0.04% of average loans, compared with $9 million,zero net charge-offs in the prior year quarter. Classified loans increased $54 million, or 6%. Nonperforming assets increased to $254 million, or 0.44%, compared with $173 million, or 0.31%, of loans and leases, primarily due to a small number of loans in the commercial and industrial and term commercial real estate portfolios.
Total depositsborrowed funds, consisting primarily of secured borrowings, decreased $4.7$7.3 billion, or 6%57%, from the prior year quarter, mainly due largely to decreasesan increase in larger-balanceinterest-bearing deposits and more rate-sensitive deposits during the first quarter of 2023. Total deposits increased $5.1 billion, or 7%, from March 31, 2023, due to increases of $3.1 billion and $2.0 billiona decrease in brokered and customer deposits, respectively. At June 30, 2023, total customer deposits included approximately $3.4 billion from reciprocal placement products. Borrowed funds, consisting primarily of secured borrowings from the Federal Home Loan Bank (“FHLB”), increased $4.4 billion from the prior year quarter in response to loan growth and the decline in noninterest-bearing deposits.
Second Quarter 2023 Financial Performance
Net Earnings Applicable to Common Shareholders
(in millions)
interest-earning assets.
Diluted EPSAdjusted PPNR
(in millions)
Efficiency Ratio
5749575057515752
Net earnings applicable to common shareholders decreased from the second quarter of 2022, primarily due to an increase in noninterest expense, driven largely by severance and higher FDIC insurance costs. This increase was partially offset by growth in noninterest income. The decrease from the first quarter of 2023 reflected a decrease in interest-earning assets, an increase in interest-bearing liabilities, and an increase in associated funding costs.Diluted earnings per share declined from the second quarter of 2022 primarily as a result of decreased net earnings applicable to common shareholders.Adjusted pre-provision net revenue (“PPNR”) decreased from the second quarter of 2022, primarily due to higher adjusted noninterest expense, which was driven largely by higher FDIC insurance costs. This increase was largely offset by higher adjusted taxable-equivalent revenue.The efficiency ratio increased from the prior year quarter, as growth in adjusted noninterest expense exceeded growth in adjusted taxable-equivalent revenue.

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Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN
Three Months Ended
June 30,
Amount changePercent changeSix Months Ended
June 30,
Amount changePercent change
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)(Dollar amounts in millions)20232022Amount changePercent change20232022Amount changePercent change
Interest and fees on loans 1
Interest and fees on loans 1
$791 $468 $323 69 %$1,517$905$612 68 %
Interest and fees on loans 1
Interest and fees on loans 1
Interest on money market investments
Interest on money market investments
Interest on money market investmentsInterest on money market investments48 12 36 NM1051887 NM
Interest on securitiesInterest on securities138 128 10 27524035 15 
Interest on securities
Interest on securities
Total interest income
Total interest income
Total interest incomeTotal interest income977 608 369 61 1,8971,163734 63 
Interest on depositsInterest on deposits220 213 NM30213289 NM
Interest on deposits
Interest on deposits
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings
Interest on short- and long-term borrowingsInterest on short- and long-term borrowings166 158 NM32513312 NM
Total interest expenseTotal interest expense386 15 371 NM62726601 NM
Total interest expense
Total interest expense
Net interest income
Net interest income
Net interest incomeNet interest income$591 $593 $(2)— %$1,270$1,137$133 12 %
Average interest-earning assetsAverage interest-earning assets$82,500 $84,041 $(1,541)(2)%$83,161$85,061$(1,900)(2)%
Average interest-earning assets
Average interest-earning assets
Average interest-bearing liabilitiesAverage interest-bearing liabilities$52,453 $41,234 $11,219 27 %$50,742$41,683$9,059 22 %
bpsbps
Average interest-bearing liabilities
Average interest-bearing liabilities
bps
bps
bps
Yield on interest-earning assets 2
Yield on interest-earning assets 2
Yield on interest-earning assets 2
Yield on interest-earning assets 2
4.81 %2.94 %187 4.65 %2.80 %185 
Rate paid on total deposits and interest-bearing liabilities 2
Rate paid on total deposits and interest-bearing liabilities 2
1.88 %0.07 %181 1.54 %0.06 %148 
Rate paid on total deposits and interest-bearing liabilities 2
Rate paid on total deposits and interest-bearing liabilities 2
Cost of total deposits 2
Cost of total deposits 2
Cost of total deposits 2
Cost of total deposits 2
1.27 %0.03 %124 0.87 %0.03 %84 
Net interest margin 2
Net interest margin 2
2.92 %2.87 %3.13 %2.73 %40 
Net interest margin 2
Net interest margin 2
1 Includes interest income recoveries of $2 million and $4 million for both the three months ended March 31, 2024, and $4 million and $6 million for the six months ended June 30, 2023, and 2022, respectively.2023.
2 Rates are calculated using amounts in thousands; taxable-equivalentTaxable-equivalent rates are used where applicable.
Net interest income accounted for approximately 76%79% of our net revenue (net interest income plus noninterest income) for the current quarter and remained relatively stable compared withdecreased $93 million, or 14%, relative to the prior year quarter, as higher funding costs more than offset higher earning asset yields were offset by an increase in interest paid on deposits and short-term borrowings. Net interest income was also impacted by a reduction in interest-earning assets and a significant increase in interest-bearing liabilities.
Average interest-earning assets decreased $1.5 billion, or 2%, from the prior year quarter, driven by declines of $4.5 billion and $2.0 billion in average securities and average money market investments, respectively, and was partially offset by an increase of $4.9 billion in average loans and leases. The decline in average securities was primarily due to payments and maturities.
Average interest-bearing liabilities increased $11.2 billion, or 27%, from the prior year quarter, driven by increases of $7.5 billion and $3.7 billion in average short-term borrowings and average federal funds purchased and security repurchase agreements, respectively. The increase in borrowed funds helped to balance loan growth and the decline in noninterest-bearing deposits.
yields. The NIM was 2.92%2.94%, compared with 2.87%. 3.33%, and was up from 2.91% in the fourth quarter of 2023.
The yield on average interest-earning assets was 4.81%5.25% in the secondfirst quarter of 2023,2024, an increase of 18776 basis points (“bps”), reflecting higher interest rates and a favorable mix change from money market investments to loans.higher-yielding assets. The yield on average loans and leases increased 198 basis points76 bps to 5.65%6.06%, and the yield on average securities increased 59 basis points38 bps to 2.56%. The yield on average securities benefited from a decrease2.84% in the market valuefirst quarter of AFS securities due to rising interest rates. 2024.
The rate paid on averagetotal deposits and interest-bearing liabilities increased to 2.95%was 2.34%, compared with 0.14%1.17% in the prior year quarter, and the cost of total deposits was 2.06%, compared with 0.47%, also reflecting the higher interest rate environment competitive pricing,as well as reduced noninterest-bearing deposits.
Net interest income was also impacted by reduced interest-earning assets and an increase in interest-bearing liabilities. Average interest-earning assets decreased $2.2 billion, or 3%, from the prior year quarter, driven by declines of $2.5 billion and $1.5 billion in average securities and average money market investments, respectively. The decrease in average securities was primarily due to principal reductions. These decreases were partially offset by an increase of $1.8 billion in average loans and leases.
Average interest-bearing liabilities increased $6.0 billion, or 12%, from the prior year quarter, driven by an increase of $12.0 billion in average interest-bearing deposits, as customers moved from noninterest-bearing to interest-bearing products in response to the higher interest rate environment. This increase was partially offset by a decrease of $6.0 billion in average borrowed funds.

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1722549755828022The following charts further illustrate the changes in average interest-earning assets and average interest-bearing liabilities:
19471948
Average loans and leases increased $4.9$1.8 billion, or 9%3%, to $56.7$57.9 billion, mainlyprimarily due to growth in average consumer and commercial real estate loans. The yield on total loans increased 198 basis points to 5.65%, reflecting the higher interest rate environment.
Average securities decreased $4.5$2.5 billion, or 17%11%, to $22.0$20.4 billion, primarily due to approximately $3.6 billion inavailable-for-sale (“AFS”) securities principal reductions. During the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed AFS securities to the held-to-maturity (“HTM”) category to reflect our intent for these securities.
549755828026239625732574

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
Average deposits decreased $11.2increased $3.2 billion, or 14%5%, to $69.7$73.4 billionat an average cost of 2.06%, from $70.2 billion at an average cost of 1.27%, from $80.9 billion at an average cost of 0.03%0.47% in the secondfirst quarter of 2022.2023. Average noninterest-bearing deposits as a percentage of total deposits were 43%decreased to 35%, compared with 51%49% during the same prior year period.
The decreaseloan-to-deposit ratio was 78%, compared with 81% in average deposits was driven by a decline in average noninterest-bearing deposits as interest rates increased. In recent years, particularly during the COVID-19 pandemic, we experienced a significant influx of deposits, which was impacted by considerable fiscal and monetary policy decisions. During the prior year with the withdrawal of stimulus by the federal government, our deposits began to decline to more normalized levels. This trend accelerated with prominent bank failures during the first quarter of 2023 and abated during the second quarter of 2023, with period-end deposits increasing meaningfully from March 31, 2023 to June 30, 2023. Total deposits have remained above pre-pandemic (December 31, 2019) levels during 2023.quarter.
Average borrowed funds, consisting primarily of secured borrowings, from the FHLB, increased $11.2decreased $6.0 billion, from the prior year quarteror 45%, to $7.2 billion, due largely to an increase in response to loan growthinterest-bearing deposits and the declinea decrease in noninterest-bearing deposits.interest-earning assets.
For more information on our investmentsinvestment securities portfolio and borrowed funds and how we manage liquidity risk, refer to the “Investment Securities Portfolio” section on page 1615 and the “Liquidity Risk Management” section on page 31. For further discussion of the effects of market rates on net interest income and how we manage interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page 27.28.
The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing liabilities.liabilities:

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)(Unaudited)Three Months Ended
June 30, 2023
Three Months Ended
June 30, 2022
(Unaudited)Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)Average
balance
Amount of
interest 1
Average
yield/rate 1
Average
balance
Amount of
interest 1
Average
yield/rate 1
(Dollar amounts in millions)Average
balance
Interest
Yield/
Rate 1
Average
balance
Interest
Yield/
Rate 1
ASSETSASSETS
Money market investments:Money market investments:
Money market investments:
Money market investments:
Interest-bearing deposits
Interest-bearing deposits
Interest-bearing depositsInterest-bearing deposits$2,899 $37 5.08 %$3,113 $0.66 %$1,447 $$20 5.71 5.71 %$2,724 $$31 4.72 4.72 %
Federal funds sold and securities purchased under agreements to resellFederal funds sold and securities purchased under agreements to resell784 11 5.65 2,542 1.13 
Total money market investmentsTotal money market investments3,683 48 5.20 5,655 12 0.87 
Securities:Securities:
Held-to-maturityHeld-to-maturity10,833 60 2.24 485 2.96 
Available-for-sale 2
11,180 80 2.85 25,722 123 1.91 
Held-to-maturity
Held-to-maturity
Available-for-sale
TradingTrading52 4.78 357 5.07 
Total securitiesTotal securities22,065 141 2.56 26,564 131 1.97 
Loans held for saleLoans held for sale73 7.08 38 — 0.72 
Loans and leases
Loans and leases: 2
Commercial
Commercial
CommercialCommercial30,650 417 5.46 28,952 275 3.81 
Commercial real estateCommercial real estate12,933 225 6.97 12,098 112 3.69 
ConsumerConsumer13,096 156 4.80 10,734 87 3.24 
Total loans and leasesTotal loans and leases56,679 798 5.65 51,784 474 3.67 
Total interest-earning assetsTotal interest-earning assets82,500 988 4.81 84,041 617 2.94 
Cash and due from banksCash and due from banks653 617 
Allowance for credit losses on loans and debt securitiesAllowance for credit losses on loans and debt securities(619)(480)
Allowance for credit losses on loans and debt securities
Allowance for credit losses on loans and debt securities
Goodwill and intangibles
Goodwill and intangibles
Goodwill and intangiblesGoodwill and intangibles1,063 1,015 
Other assetsOther assets5,524 4,712 
Other assets
Other assets
Total assets
Total assets
Total assetsTotal assets$89,121 $89,905 
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:Interest-bearing deposits:
Interest-bearing deposits:
Interest-bearing deposits:
Savings and money market
Savings and money market
Savings and money marketSavings and money market$30,325 $113 1.49 %$38,325 $0.06 %$38,044 $$259 2.73 2.73 %$32,859 $$62 0.77 0.77 %
TimeTime9,494 107 4.55 1,488 0.24 
Total interest-bearing depositsTotal interest-bearing deposits39,819 220 2.22 39,813 0.07 
Total interest-bearing deposits
Total interest-bearing deposits
Borrowed funds:Borrowed funds:
Federal funds and security repurchase agreements
Federal funds and security repurchase agreements
Federal funds and security repurchase agreementsFederal funds and security repurchase agreements4,423 57 5.11 737 0.70 
Other short-term borrowingsOther short-term borrowings7,575 100 5.28 — — 
Long-term debtLong-term debt636 5.97 678 3.79 
Total borrowed fundsTotal borrowed funds12,634 166 5.26 1,421 2.17 
Total interest-bearing liabilitiesTotal interest-bearing liabilities52,453 386 2.95 41,234 15 0.14 
Noninterest-bearing demand depositsNoninterest-bearing demand deposits29,830 41,074 
Other liabilitiesOther liabilities1,580 1,575 
Other liabilities
Other liabilities
Total liabilities
Total liabilities
Total liabilitiesTotal liabilities83,863 83,883 
Shareholders’ equity:Shareholders’ equity:
Shareholders’ equity:
Shareholders’ equity:
Preferred equity
Preferred equity
Preferred equityPreferred equity440 440 
Common equityCommon equity4,818 5,582 
Common equity
Common equity
Total shareholders’ equity
Total shareholders’ equity
Total shareholders’ equityTotal shareholders’ equity5,258 6,022 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$89,121 $89,905 
Total liabilities and shareholders’ equity
Total liabilities and shareholders’ equity
Spread on average interest-bearing funds
Spread on average interest-bearing funds
Spread on average interest-bearing fundsSpread on average interest-bearing funds1.86 %2.80 %1.83 %2.50 %
Net impact of noninterest-bearing sources of fundsNet impact of noninterest-bearing sources of funds1.06 %0.07 %Net impact of noninterest-bearing sources of funds1.11 %0.83 %
Net interest marginNet interest margin$602 2.92 %$602 2.87 %Net interest margin$596 2.94 2.94 %$688 3.33 3.33 %
Memo: total cost of depositsMemo: total cost of deposits1.27 %0.03 %Memo: total cost of deposits2.06 %0.47 %
Memo: total deposits and interest-bearing liabilitiesMemo: total deposits and interest-bearing liabilities$82,283 386 1.88 %$82,308 15 0.07 %Memo: total deposits and interest-bearing liabilities$80,580 468 468 2.34 2.34 %$83,375 241 241 1.17 1.17 %
1 Rates are calculated using amounts in thousands and a tax rate of 21% for the periods presented.Taxable-equivalent rates used where applicable.
2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.

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Six Months Ended
June 30, 2023
Six Months Ended
June 30, 2022
(Dollar amounts in millions)Average
balance
Amount of
interest 1
Average
yield/rate 1
Average
balance
Amount of
interest 1
Average
yield/rate 1
ASSETS
Money market investments:
Interest-bearing deposits$2,771 $68 4.98 %$4,914 $0.34 %
Federal funds sold and securities purchased under agreements to resell1,428 37 5.19 2,422 10 0.84 
Total money market investments4,199 105 5.05 7,336 18 0.50 
Securities:
Held-to-maturity10,928 122 2.26 462 3.04 
Available-for-sale 2
11,500 156 2.73 25,485 229 1.81 
Trading78 2.14 370 4.91 
Total securities22,506 279 2.50 26,317 245 1.88 
Loans held for sale39 6.67 48 — 1.44 
Loans and leases
Commercial30,664 798 5.25 28,725 535 3.76 
Commercial real estate12,904 434 6.78 12,134 213 3.53 
Consumer12,849 300 4.71 10,501 169 3.24 
Total loans and leases56,417 1,532 5.48 51,360 917 3.60 
Total interest-earning assets83,161 1,917 4.65 85,061 1,180 2.80 
Cash and due from banks598 621 
Allowance for credit losses on loans and debt securities(597)(497)
Goodwill and intangibles1,064 1,015 
Other assets5,574 4,463 
Total assets$89,800 $90,663 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Savings and money market$31,585 $175 1.12 %$38,726 $11 0.05 %
Time6,232 127 4.11 1,538 0.25 
Total interest-bearing deposits37,817 302 1.61 40,264 13 0.06 
Borrowed funds:
Federal funds and security repurchase agreements5,015 121 4.85 661 0.43 
Other short-term borrowings7,266 184 5.09 — — 
Long-term debt644 20 6.42 750 12 3.17 
Total borrowed funds12,925 325 5.07 1,419 13 1.88 
Total interest-bearing liabilities50,742 627 2.49 41,683 26 0.12 
Noninterest-bearing demand deposits32,084 40,980 
Other liabilities1,817 1,422 
Total liabilities84,643 84,085 
Shareholders’ equity:
Preferred equity440 440 
Common equity4,717 6,138 
Total shareholders’ equity5,157 6,578 
Total liabilities and shareholders’ equity$89,800 $90,663 
Spread on average interest-bearing funds2.16 %2.68 %
Net impact of noninterest-bearing sources of funds0.97 %0.05 %
Net interest margin$1,290 3.13 %$1,154 2.73 %
Memo: total cost of deposits0.87 %0.03 %
Memo: total deposits and interest-bearing liabilities$82,826 627 1.54 %$82,663 26 0.06 %
1 Rates are calculated using amounts in thousands and a tax rate of 21% for the periods presented.
2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.

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Provision for Credit Losses
The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, inon the income statement.consolidated statement of income. The ACL for debt securities is estimated separately from loans and is recordedincluded in investment securities“Investment securities” on the consolidated balance sheet.
817818817818
The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was $46$13 million, compared with $41$45 million in the secondfirst quarter of 2022. 2023.
The ACL was $711$736 million at June 30, 2023,March 31, 2024, compared with $546$678 million at June 30, 2022.March 31, 2023. The increase in the ACL was primarily due toreflects incremental reserves associated with portfolio-specific risks including commercial real estate and modest deterioration in credit quality, partially offset by improvements in economic forecasts. The ratio of ACL to total loans and leases was 1.25%1.27% and 1.04%1.20% at June 30,March 31, 2024 and 2023, and 2022, respectively. The provision for securities losses was less than $1 million during both the secondfirst quarter of 20232024 and 2022.
13692023.

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1338
The bar chart above illustrates the broad categories of change in the ACL from the prior year period. To estimate current expected losses, we use econometric loss models that include multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions. The results derived using these economic scenarios are weighted to produce the credit loss estimate. Management may adjust the weights to reflect their assessment of current conditions and reasonable and supportable forecasts. The second bar represents changes in these economic forecasts and current economic conditions, which increasedincluding management's judgment of the weighting of the economic forecasts. These changes contributed to a $90 million decrease in the ACL by $149 million from the prior year quarter.
The third bar represents changes in credit quality factors and includes risk-grade migration, portfolio-specific risks, and specific reserves against loans, which, when combined, increasedcontributed to a $193 million increase in the ACL, driven largely by $3 million, reflecting relatively stable credit quality. Nonperforming assets decreased $37 million, or 18%, and classified loans decreased $241 million, or 24%. Net loan and lease charge-offs totaled $13 million, or 0.09% annualized of average loans, compared with net charge-offs of $9 million, or 0.07% annualized of average loans in the prior year quarter.an increased focus on certain portfolio-specific risks, including commercial real estate.
The fourth bar represents changes in our loan portfolio changes, driven primarily by loan growth, as well ascomposition, including changes in portfolio mix,loan balances, the aging of the portfolio, and other qualitative risk factors; all of which resulted incontributed to a $13$45 million increasedecrease in the ACL.
See “Credit Risk Management” on page 20 and Note 6 in our 20222023 Form 10-K for more information on how we determine the appropriate level of the ALLL and the RULC.
Noninterest Income
Noninterest income represents revenue earned from products and services that generally have no associated interest rate or yield and is classified as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, insurance-related income, and mark-to-market adjustments on certain derivatives.
Total noninterest income increased $17decreased $4 million, or 10%3%, relative to the prior year. Noninterest income accounted for approximately 24%21% and 22%19% of our net revenue (net interest income plus noninterest income) during the secondfirst quarter of 20232024 and 2022,2023, respectively. The following schedule presents a comparison of the major components of noninterest income.
NONINTEREST INCOME
Three Months Ended
June 30,
Amount
change
Percent
change
Six Months Ended
June 30,
Amount
change
Percent
change
(Dollar amounts in millions)2023202220232022
Commercial account fees$45 $37 $22 %$88 $78 $10 13 %
Card fees25 25 — — 49 50 (1)(2)
Retail and business banking fees16 20 (4)(20)32 40 (8)(20)
Loan-related fees and income19 21 (2)(10)40 43 (3)(7)
Capital markets fees27 21 29 44 36 22 
Wealth management fees14 13 29 27 
Other customer-related fees16 17 (1)(6)31 31 — — 
Customer-related noninterest income162 154 313 305 
Fair value and nonhedge derivative income10 (9)(90)(2)16 (18)NM
Dividends and other income (loss)26 19 NM37 28 NM
Securities gains (losses), net— (1)NM(16)17 NM
Noncustomer-related noninterest income27 18 50 36 27 NM
Total noninterest income$189 $172 $17 10 %$349 $314 $35 11 %
Customer-related Noninterest Income
Total customer-related noninterest income increased $8 million, or 5%, compared with the prior year period. The increase was driven primarily by improved commercial account activity, including treasury management fees, as well as loan syndication, swaps, and other capital markets income. Retail and business banking fees decreased largely as a result of a change in our overdraft and non-sufficient funds practices effected during the third quarter of 2022.income:

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NONINTEREST INCOME
Three Months Ended
March 31,
Amount
change
Percent
change
(Dollar amounts in millions)20242023
Commercial account fees$44 $43 $%
Card fees23 24 (1)(4)
Retail and business banking fees16 16 — — 
Loan-related fees and income15 21 (6)(29)
Capital markets fees24 17 41 
Wealth management fees15 15 — — 
Other customer-related fees14 15 (1)(7)
Customer-related noninterest income151 151 — — 
Fair value and nonhedge derivative income(3)NM
Dividends and other income (loss)11 (5)(45)
Securities gains (losses), net(2)(3)NM
Noncustomer-related noninterest income(4)(44)
Total noninterest income$156 $160 $(4)(3)%
Customer-related Noninterest Income
Customer-related noninterest income remained flat at $151 million. An increase in capital markets fees, driven largely by improved real estate capital markets and securities underwriting activity, was offset by a decrease in loan-related fees and income, primarily due to higher gains on loan sales in the prior year period and a decline in loan servicing income resulting from the sale of associated mortgage servicing rights in the third quarter of 2023.
Noncustomer-related Noninterest Income
Total noncustomer-relatedNoncustomer-related noninterest income increased $9decreased $4 million from the prior year quarter. Dividends and other income increased $19decreased $5 million, primarily due to higher mark-to-market valuation adjustments related to servicing rights in the prior year quarter and a $13 million gain on the sale of a bank-owned property, as well as an increasedecrease in dividends on FHLB stock. Net securities gains decreased $3 million, due to a $4 million valuation loss associated with one of our equity investments in the current period. These increasesdecreases were offset by a $9$4 million decreaseincrease in fair value and nonhedge derivative income, primarily due to a $10 million credit valuation adjustment (“CVA”) gain in the prior year period.adjustments on client-related interest rate swaps.
Noninterest Expense
The following schedule presents a comparison of the major components of noninterest expense.expense:
NONINTEREST EXPENSE
Three Months Ended
June 30,
Amount
change
Percent
change
Six Months Ended
June 30,
Amount
change
Percent
change
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)(Dollar amounts in millions)20232022Amount
change
Percent
change
20232022Amount
change
Percent
change
Salaries and employee benefitsSalaries and employee benefits$324 $307 $17 %$663 $619 $44 %
Salaries and employee benefits
Salaries and employee benefits
Technology, telecom, and information processing
Technology, telecom, and information processing
Technology, telecom, and information processingTechnology, telecom, and information processing58 53 113 105 
Occupancy and equipment, netOccupancy and equipment, net40 36 11 80 74 
Occupancy and equipment, net
Occupancy and equipment, net
Professional and legal services
Professional and legal services
Professional and legal servicesProfessional and legal services16 14 14 29 28 
Marketing and business developmentMarketing and business development13 44 25 17 47 
Marketing and business development
Marketing and business development
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense
Deposit insurance and regulatory expenseDeposit insurance and regulatory expense22 13 69 40 23 17 74 
Credit-related expenseCredit-related expense— — 13 14 (1)(7)
Other real estate expense, net— — — NM— (1)NM
Credit-related expense
Credit-related expense
Other
Other
OtherOther28 25 12 57 47 10 21 
Total noninterest expenseTotal noninterest expense$508 $464 $44 %$1,020 $928 $92 10 %
Adjusted noninterest expense 1
$494 $463 $31 %$1,003 $927 $76 %
Total noninterest expense
Total noninterest expense
Adjusted noninterest expense (non-GAAP)
Adjusted noninterest expense (non-GAAP)
Adjusted noninterest expense (non-GAAP)

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1 Table of ContentsFor information on non-GAAP financial measures, see “Non-GAAP Financial Measures” on page 35.
ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
Total noninterest expense increased $44$14 million, or 9%3%, relative to the prior year quarter. Salaries and benefits expense increased $17 million, or 6%, primarily due to $13 million in severance expense during the current quarter, reflecting our commitment to manage expenses.
Deposit insurance and regulatory expense increased $9$16 million, or 69%, driven largely by a $13 million accrual associated with an increased FDIC insurance base rate beginning in 2023 and changes in balance sheet composition. In May 2023,updated special assessment estimate by the FDIC issued a Notice of Proposed Rulemaking,during the current quarter, which would implement a special assessment to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. Using an assessment base equalwas related to the estimated amount of uninsured deposits at December 31, 2022, the FDIC proposed to collect the special assessment at an annual rate of approximately 12.5 bps over eight quarterly periods, beginning the first quarter of 2024. As proposed, we estimate the total impact of the special assessment on our deposit insurance and regulatory expense would be approximately $80 million. At June 30, 2023, we had not accrued for any portion of this estimated amount. The ultimate impact and timing of expense recognition will depend on the final rule, which is not expected until latebank closures in early 2023.
Technology, telecom, and information processing expense increased $5$7 million, or 9%13%, primarily due to increases in software amortization expenses associated with the replacement of our core loan and deposit banking systems, as well as other related application software, license, and maintenance expenses. Salaries and related amortization expenses.employee benefits expense decreased $8 million, or 2%, primarily due to a decline in incentive compensation accruals.
Adjusted noninterest expense remained relatively flat at $511 million. The efficiency ratio was 62.5%67.9%, compared with 60.7%59.9%, as growth in adjusted noninterest expense outpaced growthprimarily due to a decline in adjusted taxable-equivalent revenue. For information on non-GAAP financial measures, see page 35.
Technology Spend
TechnologyConsistent with our strategic objectives, we invest in technologies that will make us more efficient and enable us to remain competitive. We generally consider these investments as technology spend, which represents expenditures associated with technology-related investments, operations, systems, and infrastructure, and includes current period expenses reportedpresented on ourthe consolidated statement of income, andas well as capitalized investments, net of related amortization and depreciation, reportedpresented on ourthe consolidated balance sheet. Technology spend is reported as a combination of the following:

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Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing;
Other technology-related expense — includes related noncapitalized salaries and employee benefits, occupancy and equipment, and professional and legal services; and
Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.
The following schedule presents the composition of our technology spend:
TECHNOLOGY SPEND
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)
Three Months Ended
June 30,
Amount
change
Percent
change
Six Months Ended
June 30,
Amount
change
Percent
change
(In millions)2023202220232022
Technology, telecom, and information processing expense
Technology, telecom, and information processing expense
Technology, telecom, and information processing expenseTechnology, telecom, and information processing expense$58 $53 $%$113 $105 $%
Other technology-related expenseOther technology-related expense56 51 10 110 100 10 10 
Other technology-related expense
Other technology-related expense
Technology investments
Technology investments
Technology investmentsTechnology investments23 22 49 44 11 
Less: related amortization and depreciationLess: related amortization and depreciation(16)(13)(3)23 (30)(27)(3)11 
Less: related amortization and depreciation
Less: related amortization and depreciation
Total technology spendTotal technology spend$121 $113 $%$242 $222 $20 %
Total technology spend
Total technology spend
Total technology spend increased $8decreased $4 million, or 3%, relative to the prior year quarter, largely due to technology-related compensation,as the aforementioned increase in technology, telecom, and information processing expense was offset by a decrease in certain technology investments, as the replacement of our core loan and deposit banking systems nears completion in application resiliency, and increases in application software and maintenance expense.2024.

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Income Taxes
The following schedule summarizes the income tax expense and effective tax rates for the periods presented.presented:
INCOME TAXES
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)(Dollar amounts in millions)2023202220232022
Income before income taxesIncome before income taxes$226 $260 $508 $515 
Income before income taxes
Income before income taxes
Income tax expense
Income tax expense
Income tax expenseIncome tax expense51 57 129 109 
Effective tax rateEffective tax rate22.6 %21.9 %25.4 %21.2 %
Effective tax rate
Effective tax rate
The effective tax rate was 22.6%24.6% and 21.9%27.7% for the three months ended June 30,March 31, 2024 and 2023, and 2022, respectively. The higher effective tax rate in the prior year period was the result of a change in a discrete item that affected the reserve for uncertain tax positions. See Note 12 of the Notes to Consolidated Financial Statements for more information about the factors that impacted the income tax rates, as well as information about deferred income tax assets and liabilities, and valuation allowances.liabilities.
Preferred Stock Dividends
Preferred stock dividends totaled $9$10 million and $8$6 million for the secondfirst quarter of 2024 and 2023, respectively. The increase was primarily due to changes in the timing and 2022, respectively.rates of dividend payments for certain series of preferred stock.
BALANCE SHEET ANALYSIS
Interest-Earning Assets
Interest-earning assets have associated interest rates or yields, and generally consist of loans and leases, securities, and money market investments, securities, loans, and leases.investments. We strive to maintain a high level of interest-earning assets relative to total assets. For more information regarding the average balances, associated revenue generated, and the respective yields of our interest-earning assets, see the Consolidated Average Balance Sheet on page 10.

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Investment Securities Portfolio
We invest in securities to actively manage liquidity and interest rate risk and to generate interest income. We primarily own securities that can readily provide us with cash and liquidity through secured borrowing agreements without the need to sell the securities. We also manage the duration extension risk of our investment securities portfolio. At June 30, 2023, the estimated duration of ourOur fixed-rate securities portfolio decreased to 3.7 years, compared with 4.1 years at December 31, 2022, and 3.9 years at June 30, 2022, primarily due to the addition of certain portfolio layer method fair value hedges. See Note 7 for more information on these fair value hedges. This duration helps to managebalance the inherent interest rate mismatch between loans and deposits as fixed-rate term investments facilitate the balancing of asset and liability durations, as well as protectprotects the economic value of shareholders'shareholders’ equity. At March 31, 2024, the estimated duration, which measures price sensitivity to interest rate changes, of our securities portfolio was 3.6 percent, unchanged from December 31, 2023.
For information about our borrowing capacity associated with the investment securities portfolio and how we manage our liquidity risk, refer to the “Liquidity Risk Management” section on page 31. See also Note 3 and Note 5 of the Notes to Consolidated Financial Statements for more information on fair value measurements and the accounting for our investment securities portfolio.

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The following schedule presents the major components of our investment securities portfolio.portfolio:
INVESTMENT SECURITIES PORTFOLIO
June 30, 2023December 31, 2022
(In millions)Par ValueAmortized
cost
Fair
value
Par ValueAmortized
cost
Fair
value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities$96 $96 $90 $100 $100 $93 
Agency guaranteed mortgage-backed securities 1
12,456 10,289 10,335 12,921 10,621 10,772 
Municipal securities368 368 343 404 405 374 
Total held-to-maturity12,920 10,753 10,768 13,425 11,126 11,239 
Available-for-sale
U.S. Treasury securities565 565 475 555 557 393 
U.S. Government agencies and corporations:
Agency securities724 717 677 790 782 736 
Agency guaranteed mortgage-backed securities8,913 8,991 7,647 9,566 9,652 8,367 
Small Business Administration loan-backed securities604 646 619 691 740 712 
Municipal securities1,350 1,480 1,391 1,571 1,732 1,634 
Other debt securities25 25 23 75 75 73 
Total available-for-sale12,181 12,424 10,832 13,248 13,538 11,915 
Total HTM and AFS investment securities$25,101 $23,177 $21,600 $26,673 $24,664 $23,154 
March 31, 2024December 31, 2023
(In millions)Par ValueAmortized
cost
Fair
value
Par ValueAmortized
cost
Fair
value
Held-to-maturity
U.S. Government agencies and corporations:
Agency securities$92 $92 $85 $93 $93 $87 
Agency guaranteed mortgage-backed securities11,748 9,776 9,696 11,966 9,935 10,041 
Municipal securities341 341 324 354 354 338 
Total held-to-maturity12,181 10,209 10,105 12,413 10,382 10,466 
Available-for-sale
U.S. Treasury securities585 584 481 585 585 492 
U.S. Government agencies and corporations:
Agency securities634 629 596 669 663 630 
Agency guaranteed mortgage-backed securities8,267 8,335 7,053 8,460 8,530 7,291 
Small Business Administration loan-backed securities509 543 518 535 571 546 
Municipal securities1,228 1,336 1,259 1,269 1,385 1,318 
Other debt securities25 25 24 25 25 23 
Total available-for-sale11,248 11,452 9,931 11,543 11,759 10,300 
Total HTM and AFS investment securities$23,429 $21,661 $20,036 $23,956 $22,141 $20,766 
1 During the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed AFS securities to the HTM category. The transfer of these securities from AFS to HTM at fair value resulted in a discount to the amortized cost basis of the HTM securities equivalent to the $2.4 billion ($1.8 billion after tax) of unrealized losses in AOCI attributable to these securities. The amortization of the unrealized losses will offset the effect of the accretion of the discount created by the transfer. At June 30, 2023, the unamortized discount on the HTM securities totaled approximately $2.2 billion ($1.7 billion after tax).
The amortized cost of total HTMheld-to-maturity (“HTM”) and AFS investment securities decreased $1.5 billion,$480 million, or 6%2%, from December 31, 2022, primarily due to payments and maturities.2023. Approximately 8% and 7%of the total HTM and AFS investment securities were floating-rate instruments at both June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. Additionally, at June 30, 2023,March 31, 2024, we have $3.6 billion of pay-fixed swaps helddesignated as fair value hedges against fixed-rate AFS securities that effectively convert the fixed interest income to a floating rate on the hedged portion of the securities.
At June 30, 2023, the AFS investment securities portfolio included approximately $243 million of net premium that was distributed across the various security categories. TotalMarch 31, 2024, total taxable-equivalent premium amortization for theseour investment securities was $22$17 million for the secondfirst quarter of 2023,2024, compared with $27$26 million for the same prior year period.

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In addition to HTM and AFS securities, we also have a trading securities portfolio, thatcomprised of municipal securities, which totaled $32$59 million at June 30, 2023,March 31, 2024, compared with $465$48 million at December 31, 2022. The prior year-end amount included $395 million of money market mutual sweep accounts. Beginning in the first quarter of 2023, related sweep balances were presented in “Money market investments” on the consolidated balance sheet.2023.
Refer to the “Interest Rate Risk Management” section on page 27,28, the “Capital Management” section on page 33, and Note 5 of the Notes to Consolidated Financial Statements for more discussion regarding our investment securities portfolio, swaps, and related unrealized gains and losses.

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Municipal Investments and Extensions of Credit
We support our communities by providing products and services to state and local governments (“municipalities”), including deposit services, loans, and investment banking services. We also invest in securities issued by municipalities. Our municipal lending products generally include loans in which the debt service is repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.
The following schedule summarizes our total investments and extensions of credit to municipalities:
MUNICIPAL INVESTMENTS AND EXTENSIONS OF CREDIT
(In millions)(In millions)June 30,
2023
December 31,
2022
(In millions)March 31,
2024
December 31,
2023
Loans and leases
Loans and leases
Loans and leasesLoans and leases$4,354 $4,361 
Held-to-maturity securitiesHeld-to-maturity securities368 405 
Available-for-sale securitiesAvailable-for-sale securities1,391 1,634 
Trading securitiesTrading securities32 71 
Trading securities
Trading securities
Unfunded lending commitmentsUnfunded lending commitments361 406 
TotalTotal$6,506 $6,877 
Our municipal loans and securities are primarily associated with municipalities located within our geographic footprint. The municipal loan and lease portfolio is primarily secured by general obligations of municipal entities. Other types of collateral also include real estate, revenue pledges, or equipment. At June 30, 2023,March 31, 2024, we had no municipal loans on nonaccrual.
Municipal securities are internally graded, similar to loans, using risk-grading systems which vary based on the size and type of credit risk exposure. The internal risk grades assigned to our municipal securities follow our definitions of Pass, Special Mention, and Substandard, which are consistent with published definitions of regulatory risk classifications. At June 30, 2023,March 31, 2024, all municipal securities were graded as Pass. See Notes 5 and 6 of the Notes to Consolidated Financial Statements for additional information about the credit quality of these municipal loans and securities.
Loan and Lease Portfolio
We provide a wide range of lending products to commercial customers, generally small- and medium-sized businesses. We also provide various retail lending products and services to consumers and small businesses. The following schedule presents the composition of our loan and lease portfolio.portfolio:

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LOAN AND LEASE PORTFOLIO
June 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)Amount% of
total loans
Amount% of
total loans
(Dollar amounts in millions)Amount% of
total loans
Amount% of
total loans
Commercial:Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrialCommercial and industrial$16,622 29.2 %$16,377 29.4 %$16,519 28.4 28.4 %$16,684 28.9 28.9 %
LeasingLeasing388 0.7 386 0.7 
Owner-occupiedOwner-occupied9,328 16.4 9,371 16.8 
MunicipalMunicipal4,354 7.6 4,361 7.8 
Total commercialTotal commercial30,692 53.9 30,495 54.8 
Commercial real estate:Commercial real estate:
Construction and land developmentConstruction and land development2,498 4.4 2,513 4.5 
Construction and land development
Construction and land development
TermTerm10,406 18.3 10,226 18.4 
Total commercial real estateTotal commercial real estate12,904 22.7 12,739 22.9 
Consumer:Consumer:
Home equity credit line
Home equity credit line
Home equity credit lineHome equity credit line3,291 5.8 3,377 6.1 
1-4 family residential1-4 family residential7,980 14.0 7,286 13.1 
Construction and other consumer real estateConstruction and other consumer real estate1,434 2.5 1,161 2.1 
Bankcard and other revolving plansBankcard and other revolving plans466 0.8 471 0.8 
OtherOther150 0.3 124 0.2 
Total consumerTotal consumer13,321 23.4 12,419 22.3 
Total loans and leasesTotal loans and leases$56,917 100.0 %$55,653 100.0 %Total loans and leases$58,109 100.0 100.0 %$57,779 100.0 100.0 %
At June 30, 2023March 31, 2024 and December 31, 2022,2023, the ratio of loans and leases to total assets was 65%67% and 62%66%, respectively. The largest loan category was commercial and industrial loans, which constituted 28% and 29%of our total loan portfolio at both timefor the same respective periods.
During the first sixthree months of 2023,2024, the loan and lease portfolio increased $1.3 billion,$330 million, or 2%1%, to $56.9$58.1 billion at June 30, 2023, primarily due toMarch 31, 2024. Loan growth of $0.7 billionwas driven largely by increases in consumer 1-4 family residential mortgage loans, driven mainly from an increased demand for adjustable-rate mortgages.and term commercial real estate loans.
Other Noninterest-Bearing Investments
Other noninterest-bearing investments are equity investments that are held primarily for capital appreciation, dividends, or for certain regulatory requirements. The following schedule summarizes our related investments.investments:
OTHER NONINTEREST-BEARING INVESTMENTS
(Dollar amounts in millions)(Dollar amounts in millions)June 30,
2023
December 31,
2022
Amount changePercent change(Dollar amounts in millions)March 31,
2024
December 31,
2023
Amount changePercent change
Bank-owned life insurance
Bank-owned life insurance
Bank-owned life insuranceBank-owned life insurance$549 $546 $%$555 $$553 $$— — %
Federal Home Loan Bank stockFederal Home Loan Bank stock111 294 (183)(62)
Federal Reserve stockFederal Reserve stock65 68 (3)(4)
Farmer Mac stockFarmer Mac stock21 19 11 
SBIC investmentsSBIC investments177 172 
OtherOther33 31 
Total other noninterest-bearing investmentsTotal other noninterest-bearing investments$956 $1,130 $(174)(15)%Total other noninterest-bearing investments$922 $$950 $$(28)(3)(3)%
Total otherOther noninterest-bearing investments decreased $174$28 million, or 15%3%, during the first sixthree months of 2023,2024, primarily due to a $183$34 million decrease in FHLB stock. We are required to invest approximately 4% of our FHLB borrowings in FHLB stock to maintain our borrowing capacity. The decrease in period-end FHLB activity stock was driven largely by declines in FHLB borrowings during the second quarter of 2023 in response to an increase in total deposits.interest-bearing deposits and a decrease in interest-earning assets.

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Visa Class B Shares
In 2007, we received 460,153 non-transferable Class B shares of Visa, Inc. in connection with a restructuring and public offering by Visa U.S.A. These shares are carried at no cost on our consolidated balance sheet. In January 2024, Visa’s previously announced exchange offer proposal was approved by common stockholders, which resulted, among other actions, in a redenomination of all Visa Class B common shares to Class B-1 common shares. In April 2024, Visa commenced its exchange offer allowing Class B-1 shareholders the option to exchange up to 50% of their Class B-1 shares for shares that would be convertible into freely transferable Visa Class A common shares following a temporary restriction period. We did not participate in the exchange offer, which expired on May 3, 2024, in view of contingent obligations associated with certain make-whole provisions required as a condition of the exchange.
Premises, Equipment, and Software
We are in the final phase of a three-phase project to replace our core loan and deposit banking systems. This final phase includes the replacement of our deposit banking systems through multiple affiliate bank conversions. The first and second conversions the first of which waswere successfully completed in May 2023 and April 2024, respectively. We anticipate completing the second quartermigration of 2023. We expect to completesubstantially all of the remaining affiliate bank conversions inaccounts by late summer 2024.
The following schedule summarizes the capitalized costs associated with our core system replacement project, which are depreciated using a useful life of ten years.years:
CAPITALIZED COSTS ASSOCIATED WITH THE CORE SYSTEM REPLACEMENT PROJECT
June 30, 2023
March 31, 2024March 31, 2024
(In millions)(In millions)Phase 1Phase 2Phase 3Total(In millions)Phase 1Phase 2Phase 3Total
Total amount of capitalized costs, less accumulated depreciationTotal amount of capitalized costs, less accumulated depreciation$25 $50 $221 $296 
Total amount of capitalized costs, less accumulated depreciation
Total amount of capitalized costs, less accumulated depreciation
Deposits
Deposits are our primary funding source. In recent years, particularly during the COVID-19 pandemic, we experienced a significant influx of deposits, which was impacted by considerable fiscal and monetary policy decisions. During the prior year, with the withdrawal of stimulus by the federal government, our deposits began to decline to more normalized levels. This trend accelerated with prominent bank failures during the first quarter of 2023 and abated during the second quarter of 2023, with period-end deposits increasing meaningfully from March 31, 2023 to June 30, 2023. Total deposits have remained above pre-pandemic (December 31, 2019) levels during 2023.
The following schedule presents the composition of our deposit portfolio.portfolio:
DEPOSIT PORTFOLIO
June 30, 2023March 31, 2023December 31, 2022December 31, 2019
March 31, 2024
March 31, 2024
March 31, 2024
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)(Dollar amounts in millions)Amount% of
total
deposits
Amount% of
total
deposits
Amount% of
total
deposits
Amount% of
total
deposits
Deposits by typeDeposits by type
Deposits by type
Deposits by type
Noninterest-bearing demand
Noninterest-bearing demand
Noninterest-bearing demandNoninterest-bearing demand$28,670 38.6 %$30,974 44.8 %$35,777 49.9 %$23,576 41.3 %
Interest-bearing:Interest-bearing:
Interest-bearing:
Interest-bearing:
Savings and money market
Savings and money market
Savings and money marketSavings and money market33,303 44.8 30,826 44.5 33,474 46.7 28,249 49.5 
TimeTime3,897 5.2 2,024 2.9 1,484 2.1 2,451 4.3 
Time
Time
Brokered
Brokered
BrokeredBrokered8,453 11.4 5,384 7.8 917 1.3 2,809 4.9 
Total depositsTotal deposits$74,323 100.0 %$69,208 100.0 %$71,652 100.0 %$57,085 100.0 %
Total deposits
Total deposits
Deposit-related metrics
Deposit-related metrics
Deposit-related metricsDeposit-related metrics
Estimated amount of
insured deposits
Estimated amount of
insured deposits
$43,911 59 %$37,846 55 %$34,018 47 %$28,802 50 %
Estimated amount of insured deposits
Estimated amount of insured deposits
Estimated amount of uninsured deposits
Estimated amount of uninsured deposits
Estimated amount of
uninsured deposits
Estimated amount of
uninsured deposits
$30,412 41 %$31,362 45 %$37,634 53 %$28,283 50 %
Estimated amount of collateralized deposits 1
Estimated amount of collateralized deposits 1
$2,679 3.6 %$2,708 3.9 %$2,861 4.0 %$1,928 3.4 %
Estimated amount of collateralized deposits 1
Estimated amount of collateralized deposits 1
Loan-to-deposit ratioLoan-to-deposit ratio77 %81 %78 %85 %
Loan-to-deposit ratio
Loan-to-deposit ratio
1 Includes both insured and uninsured deposits.
Total deposits decreased $724 million, or 1%, from December 31, 2023. At March 31, 2024 and December 31, 2023, customer deposits (excluding brokered deposits) were $69.9 billion and $70.5 billion, and included approximately $7.5 billion and $6.8 billion, respectively, of reciprocal deposits.

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Total deposits increased $5.1 billion, or 7%, fromAt March 31, 2023, and $2.7 billion, or 4%, from December 31, 2022. These increases were primarily due to significant growth in brokered and customer deposits, and partially offset by a decline in noninterest-bearing deposits as interest rates have risen. At June 30, 2023, total customer deposits included approximately $3.4 billion from reciprocal placement products where we distributed our customers’ deposits in a placement network to increase their FDIC insurance and in return we received a matching amount of deposits from other network banks.
At June 30, 2023,2024, the estimated total amount of uninsured deposits was $30.4$32.0 billion, or 41%43%, of total deposits, compared with $31.4$33.2 billion, or 45%44%, and $37.6 billion, or 53%, of total deposits at MarchDecember 31, 2023, and December 31, 2022, respectively. Our loan-to-deposit ratio was 77%78%, compared with 81% and 78%77% for the same respective time periods.
See “Liquidity Risk Management” on page 31 for additional information on liquidity, and borrowed funds.including the ratio of available liquidity to uninsured deposits.
RISK MANAGEMENT
Risk management is an integral part of our operations and is a key determinant of our overall performance. We employ various strategies to prudently manage the risks to which our operations are exposed, including credit risk, market and interest rate risk, liquidity risk, strategic and business risk, operational risk, technology risk, cybersecurity risk, capital/financial reporting risk, legal/compliance risk (including regulatory risk), and reputational risk. These risks are overseen by various management committees including the Enterprise Risk Management Committee. For a more comprehensive discussion of these risks, see “Risk Factors” in our 20222023 Form 10-K.
Credit Risk Management
Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. Credit risk arises primarily from our lending activities, as well as from off-balance sheet credit instruments. Credit policies, credit risk management, and credit examination functions inform and support the oversight of credit risk. Our credit policies emphasize strong underwriting standards and early detection of potential problem credits in order to develop and implement action plans on a timely basis to mitigate potential losses. These formal credit policies and procedures provide us with a framework for consistent underwriting and a basis for sound credit decisions at the local banking affiliate level.
Our overall credit risk management strategy includes diversification of our loan portfolio. Our business activity is conducted primarily within the geographic footprint of our banking affiliates. We strive to avoid the risk of undue concentrations of credit in any particular industry, collateral type, location, or with any individual customer or counterparty. We have actively managed the credit risk in our commercial real estate (“CRE”) portfolio for more than a decade, having reduced CRE loans to 23% of total loans, compared with 33% in late 2008. For a more comprehensive discussion of our credit risk management, see “Credit Risk Management” in our 20222023 Form 10-K.
U.S. Government Agency Guaranteed Loans
We participate in various guaranteed lending programs sponsored by United States (“U.S.”) government agencies, such as the Small Business Administration (“SBA”), Federal Housing Authority, U.S. Department of Veterans Affairs, Export-Import Bank of the U.S., and the U.S. Department of Agriculture. At June 30, 2023, $593March 31, 2024, $540 million of related loans were guaranteed, primarily by the SBA, and included $125 million of Paycheck Protection Program (“PPP”) loans.SBA. The following schedule presents the composition of U.S. government agency guaranteed loans.loans:
U.S. GOVERNMENT AGENCY GUARANTEED LOANS
(Dollar amounts in millions)(Dollar amounts in millions)June 30,
2023
Percent
guaranteed
December 31,
2022
Percent
guaranteed
(Dollar amounts in millions)March 31,
2024
Percent
guaranteed
December 31,
2023
Percent
guaranteed
CommercialCommercial$703 81 %$753 83 %
Commercial
Commercial$654 79 %$664 80 %
Commercial real estateCommercial real estate24 79 21 76 
ConsumerConsumer100 100 
Total loansTotal loans$732 81 %$779 83 %Total loans$683 79 79 %$692 80 80 %

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Commercial Lending
The following schedule provides information regarding lending exposures to certain industries in our commercial lending portfolio.portfolio:
COMMERCIAL LENDING BY INDUSTRY GROUP 1
June 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)AmountPercentAmountPercent(Dollar amounts in millions)AmountPercentAmountPercent
Real estate, rental, and leasing$2,923 9.5 %$2,802 9.2 %
Retail tradeRetail trade2,842 9.3 2,751 9.0 
Retail trade
Retail trade$3,002 9.9 %$2,995 9.8 %
Real estate, rental and leasing
Finance and insuranceFinance and insurance2,634 8.6 2,992 9.8 
Healthcare and social assistanceHealthcare and social assistance2,495 8.1 2,373 7.8 
Public AdministrationPublic Administration2,376 7.7 2,366 7.8 
ManufacturingManufacturing2,319 7.5 2,387 7.8 
Wholesale tradeWholesale trade1,918 6.3 1,880 6.2 
Transportation and warehousing
Utilities 2
Utilities 2
1,590 5.2 1,418 4.6 
Transportation and warehousing1,501 4.9 1,464 4.8 
Mining, quarrying, and oil and gas extraction1,326 4.3 1,349 4.4 
Educational servicesEducational services1,286 4.2 1,302 4.3 
ConstructionConstruction1,276 4.2 1,355 4.4 
Hospitality and food servicesHospitality and food services1,186 3.9 1,238 4.1 
Mining, quarrying, and oil and gas extraction
Professional, scientific, and technical services
Other Services (except Public Administration)Other Services (except Public Administration)1,066 3.5 1,041 3.4 
Professional, scientific, and technical services1,032 3.3 995 3.3 
Other 3
Other 3
2,922 9.5 2,782 9.1 
TotalTotal$30,692 100.0 %$30,495 100.0 %Total$30,479 100.0 100.0 %$30,588 100.0 100.0 %
1 Industry groups are determined by North American Industry Classification System (“NAICS”) codes.
2 Includes primarily utilities, power, and renewable energy.
3 No other industry group exceeds 3.1%3.3%.
Commercial Real Estate Loans
At June 30, 2023March 31, 2024 and December 31, 2022,2023, our CRE loan portfolio totaled $12.9$13.6 billion and $12.7$13.4 billion, respectively, representing approximately 23% of the total loan portfolio for both periods. The majority of our CRE loans are secured by real estate primarily located within our geographic footprint. The following schedule presents the geographic distribution of our CRE loan portfolio based on the location of the primary collateral.collateral:
COMMERCIAL REAL ESTATE LENDING BY COLLATERAL LOCATION
June 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)AmountPercentAmountPercent(Dollar amounts in millions)AmountPercentAmountPercent
Arizona
Arizona
ArizonaArizona$1,656 13 %$1,521 12 %$1,727 12.7 12.7 %$1,726 12.9 12.9 %
CaliforniaCalifornia3,772 29 3,805 30 
ColoradoColorado639 637 
NevadaNevada1,030 910 
TexasTexas2,211 17 2,139 17 
Utah/IdahoUtah/Idaho2,202 17 2,397 19 
Washington/OregonWashington/Oregon912 899 
OtherOther482 431 
Total CRETotal CRE$12,904 100 %$12,739 100 %Total CRE$13,578 100.0 100.0 %$13,371 100.0 100.0 %
Approximately 23%

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
Term CRE loans generally mature within a three- to seven-year period and consist of full, partial, and non-recourse guarantee structures. Typical term CRE loan structures include annually tested operating covenants that require loan rebalancing based on minimum debt service coverage, debt yield, or loan-to-value tests. Construction and land development loans generally mature in 18 to 36 months and contain full or partial recourse guarantee structures with

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one- to five-year extension options or roll-to-perm options that often result in term debt.loans. At June 30, 2023,March 31, 2024, approximately 85% of our CRE loan portfolio was variable-rate, and approximately 20%21% of these variable-rate loans were swapped to a fixed rate.
Underwriting on commercial properties is primarily based on the economic viability of the project with significant consideration given to the creditworthiness and experience of the sponsor. We generally require that the owner’s equity be injectedincluded prior to any advances. Re-margining requirements (required equity infusions upon a decline in value or cash flow of the collateral) are often included in the loan agreement along with guarantees of the sponsor. For a more comprehensive discussion of CRE loans and our underwriting, see the “Commercial Real Estate Loans” section in our 20222023 Form 10-K.
The following schedule provides information regarding lending exposures to certain collateral types inpresents our CRE loan portfolio.portfolio by collateral type:
COMMERCIAL REAL ESTATE LENDING BY COLLATERAL TYPE
June 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)AmountPercentAmountPercent(Dollar amounts in millions)AmountPercentAmountPercent
Commercial propertyCommercial property
Multi-family
Multi-family
Multi-familyMulti-family$3,324 25.7 %$3,068 24.1 %$3,854 28.4 28.4 %$3,709 27.7 27.7 %
IndustrialIndustrial2,828 21.9 2,509 19.7 
OfficeOffice2,157 16.7 2,281 17.9 
RetailRetail1,447 11.2 1,529 12.0 
HospitalityHospitality695 5.4 695 5.4 
LandLand247 1.9 276 2.2 
Other 1
Other 1
1,673 13.0 1,728 13.5 
Residential property 2
Residential property 2
Single familySingle family289 2.3 340 2.7 
Single family
Single family
LandLand73 0.6 75 0.6 
Condo/TownhomeCondo/Townhome28 0.2 13 0.1 
Other 1
Other 1
143 1.1 225 1.8 
TotalTotal$12,904 100.0 %$12,739 100.0 %Total$13,578 100.0 100.0 %$13,371 100.0 100.0 %
1 Included in the total amount of the “Other” categorycommercial and residential categories was approximately $246$216 million and $301$202 million of unsecured loans at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
2 Residential property collateral type consists primarily of loans provided to commercial homebuilders for land, lot, and single-family housing developments.
OurAs previously described, our CRE portfolio is diversified across geography and collateral type, with the largest concentration in multi-family. We provide additional analysis of our multi-family and office CRE portfolioportfolios below in view of increased investor interest in thatthose collateral typetypes in recent periods.
Office CRE loan portfolio
At June 30, 2023 and December 31, 2022, our office CRE loan portfolio totaled $2.2 billion and $2.3 billion, representing 17% and 18% of the total CRE loan portfolio, respectively. The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics.

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Multi-family
At March 31, 2024 and December 31, 2023, our multi-family loan portfolio totaled $3.9 billion and $3.7 billion, representing 28% of the total CRE loan portfolio for both periods. Approximately 36% of the multi-family CRE loan portfolio is scheduled to mature in the next 12 months. The following schedule presents the composition of our multi-family CRE loan portfolio and other related credit quality metrics:
MULTI-FAMILY CRE LOAN PORTFOLIO
(Dollar amounts in millions)March 31, 2024December 31, 2023
Multi-family CRE
Construction and land development$953 $902 
Term2,901 2,807 
Total multi-family CRE$3,854 $3,709 
Credit quality metrics
Criticized loan ratio10.1 %6.1 %
Classified loan ratio0.8 %0.5 %
Nonaccrual loan ratio— %— %
Delinquency ratio— %— %
Net charge-offs, annualized— %— %
Ratio of allowance for credit losses to multi-family CRE loans, at period end2.28 %1.70 %
The following schedules present our multi-family CRE loan portfolio by collateral location for the periods presented:
MULTI-FAMILY CRE LOAN PORTFOLIO BY COLLATERAL LOCATION
(Dollar amounts in millions)March 31, 2024
Collateral Location
Loan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Multi-family CRE
Construction and land development$138 $167 $65 $62 $352 $49 $120 $— $953 
Term280 995 89 193 671 360 251 62 2,901 
Total Multi-family CRE$418 $1,162 $154 $255 $1,023 $409 $371 $62 $3,854 
% of total10.8 %30.2 %4.0 %6.6 %26.6 %10.6 %9.6 %1.6 %100.0 %
(Dollar amounts in millions)December 31, 2023
Collateral Location
Loan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Multi-family CRE
Construction and land development$118 $183 $46 $40 $359 $44 $112 $— $902 
Term322 994 90 188 578 345 228 62 2,807 
Total Multi-family CRE$440 $1,177 $136 $228 $937 $389 $340 $62 $3,709 
% of total11.9 %31.7 %3.7 %6.1 %25.3 %10.4 %9.2 %1.7 %100.0 %
1 Other included $55 million of multi-family loans with collateral located in New Mexico at both March 31, 2024 and December 31, 2023.

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Office CRE loan portfolio
At March 31, 2024 and December 31, 2023, our office CRE loan portfolio totaled $1.9 billion and $2.0 billion, representing 14% and 15% of the total CRE loan portfolio, respectively. Approximately 32% of the office CRE loan portfolio is scheduled to mature in the next 12 months. The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:
OFFICE CRE LOAN PORTFOLIO
(Dollar amounts in millions)(Dollar amounts in millions)June 30, 2023December 31, 2022(Dollar amounts in millions)March 31, 2024December 31, 2023
Office CREOffice CRE
Construction and land development
Construction and land development
Construction and land developmentConstruction and land development$193 $208 
TermTerm1,964 2,073 
Total office CRETotal office CRE$2,157 $2,281 
Credit quality metricsCredit quality metrics
Criticized loan ratioCriticized loan ratio6.4 %7.2 %
Criticized loan ratio
Criticized loan ratio11.0 %11.9 %
Classified loan ratioClassified loan ratio4.8 %5.8 %Classified loan ratio7.6 %8.9 %
Nonaccrual loan ratioNonaccrual loan ratio— %— %Nonaccrual loan ratio1.4 %2.4 %
Delinquency ratioDelinquency ratio— %1.5 %Delinquency ratio2.1 %2.3 %
Net charge-offs, annualizedNet charge-offs, annualized— %— %Net charge-offs, annualized(0.1)%0.2 %
Allowance for credit losses$38$31
Ratio of allowance for credit losses to office CRE loans, at period endRatio of allowance for credit losses to office CRE loans, at period end1.76 %1.36 %
Ratio of allowance for credit losses to office CRE loans, at period end
Ratio of allowance for credit losses to office CRE loans, at period end4.01 %3.80 %
The following schedules present our office CRE loan portfolio by collateral location for the periods presented.presented:
OFFICE CRE LOAN PORTFOLIO BY COLLATERAL LOCATION
(Dollar amounts in millions)June 30, 2023
Collateral Location
Loan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Office CRE
Construction and land development$— $87 $— $$$34 $64 $— $193 
Term289 449 93 93 182 587 240 31 1,964 
Total Office CRE$289 $536 $93 $94 $189 $621 $304 $31 $2,157 
% of total13.4 %24.9 %4.3 %4.4 %8.8 %28.8 %14.0 %1.4 %100.0 %
(Dollar amounts in millions)(Dollar amounts in millions)December 31, 2022(Dollar amounts in millions)March 31, 2024
Collateral Location
Loan typeLoan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Loan type
Loan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Office CREOffice CRE
Construction and land development
Construction and land development
Construction and land developmentConstruction and land development$$79 $— $$— $18 $101 $— $208 
TermTerm295 525 97 99 217 613 195 32 2,073 
Total Office CRETotal Office CRE$303 $604 $97 $101 $217 $631 $296 $32 $2,281 
% of total% of total13.1 %27.0 %4.3 %4.3 %9.6 %26.8 %13.5 %1.4 %100.0 %% of total14.3 %21.5 %4.7 %4.6 %11.1 %26.5 %15.8 %1.5 %100.0 %
(Dollar amounts in millions)December 31, 2023
Collateral Location
Loan typeArizonaCaliforniaColoradoNevadaTexasUtah/
Idaho
Wash-ington
Other 1
Total
Office CRE
Construction and land development$— $64 $— $$22 $29 $74 $— $191 
Term281 412 92 86 179 488 226 29 1,793 
Total Office CRE$281 $476 $92 $88 $201 $517 $300 $29 $1,984 
% of total14.2 %24.0 %4.6 %4.4 %10.1 %26.1 %15.1 %1.5 %100.0 %
1 No other geography exceeds $18exceeded $17 million at both June 30, 2023March 31, 2024 and December 31, 2022.2023.
Consumer Loans
We originate first-lien residential home mortgages considered to be of prime quality. We generally hold variable-rate loans in our portfolio and sell “conforming” fixed-rate loans to third parties, including Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, for which we make representations and warranties that the loans meet certain underwriting and collateral documentation standards.
Our 1-4 family residential mortgage loan portfolio increased $694 million, or 10%, to $8.0 billion at June 30, 2023, compared with $7.3 billion at December 31, 2022, primarily due to an increased demand for adjustable-rate mortgages, which we have retained as part of our overall interest rate risk management strategy.
We also originate home equity credit lines (“HECLs”). At June 30, 2023 and December 31, 2022, our HECL portfolio totaled $3.3 billion and $3.4 billion, respectively. Approximately 41% and 44% of our HECLs are secured by first liens for the same time periods.

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We also originate home equity credit lines (“HECLs”). At June 30,both March 31, 2024 and December 31, 2023, our HECL portfolio totaled $3.4 billion. Approximately 38% and 39% of our HECLs are secured by first liens for the same respective time periods.
At March 31, 2024, loans representing less than 1% of the outstanding balance in the HECL portfolio were estimated to have combined loan-to-value (“CLTV”) ratios above 100%. An estimated CLTV ratio is the ratio of our loan plus any prior lien amounts divided by the estimated current collateral value. At origination, underwriting standards for the HECL portfolio generally include a maximum 80% CLTV with a Fair Isaac Corporation (“FICO”) credit score greater than 700.
Approximately 90%91% of our HECL portfolio is still in the draw period, and about 19% of those loans are scheduled to begin amortizing within the next five years. We believe the risk of loss and borrower default in the event of a loan becoming fully amortizing and the effect of significant interest rate changes is minimal.low, given the rate shock analysis performed at origination. The ratio of HECL net charge-offs (recoveries) for the trailing twelve months to average balances at June 30, 2023both March 31, 2024 and December 31, 20222023, was (0.03)% for both periods.0.05%. See Note 6 of the Notes to Consolidated Financial Statements for additional information on the credit quality of the HECL portfolio.
Nonperforming Assets
Nonperforming assets include nonaccrual loans and other real estate owned (“OREO”) or foreclosed properties. The following schedule presents our nonperforming assets.assets:
NONPERFORMING ASSETS
(Dollar amounts in millions)(Dollar amounts in millions)June 30,
2023
December 31,
2022
(Dollar amounts in millions)
(Dollar amounts in millions)March 31,
2024
December 31,
2023
Nonaccrual loans 1
Nonaccrual loans 1
Nonaccrual loans 1
Nonaccrual loans 1
$162 $149 
Other real estate owned 2
Other real estate owned 2
— 
Total nonperforming assetsTotal nonperforming assets$164 $149 
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2
0.29 %0.27 %
Ratio of nonperforming assets to net loans and leases1 and other real estate owned 2
0.44 %0.39 %
Accruing loans past due 90 days or moreAccruing loans past due 90 days or more$$
Ratio of accruing loans past due 90 days or more to loans and leases 1
Ratio of accruing loans past due 90 days or more to loans and leases 1
0.01 %0.01 %
Ratio of accruing loans past due 90 days or more to loans and leases 1
0.01 %0.01 %
Nonaccrual loans1 and accruing loans past due 90 days or more
Nonaccrual loans1 and accruing loans past due 90 days or more
$169 $155 
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2
0.30 %0.28 %
Ratio of nonperforming assets1 and accruing loans past due 90 days or more to loans and leases1 and other real estate owned 2
0.44 %0.40 %
Nonaccrual loans1 current as to principal and interest payments
Nonaccrual loans1 current as to principal and interest payments
70.4 %57.7 %
Nonaccrual loans1 current as to principal and interest payments
Nonaccrual loans1 current as to principal and interest payments
56.0 %48.8 %
1 Includes loans held for sale.
2 Does not include banking premises held for sale.
Nonperforming assets as a percentage of loans and leases and OREO increased to 0.29%0.44% at June 30, 2023,March 31, 2024, compared with 0.27%0.39% at December 31, 2022.2023. Total nonaccrual loans at June 30, 2023March 31, 2024 increased to $162$248 million from $149$222 million at December 31, 2022,2023, primarily due to increasesa small number of loans in the commercial and industrial and owner-occupied nonaccrual loans.term commercial real estate portfolios. See Note 6 of the Notes to Consolidated Financial Statements for more information on nonaccrual loans.
Loan Modifications
Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan.
On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings For the first three months of 2024 and Vintage Disclosures, which eliminated the recognition and measurement of troubled debt restructurings (“TDRs”) and their related disclosures. ASU 2022-02 requires enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. At June 30, 2023, loans that have been modified to accommodate a borrower experiencing financial difficulties totaled $148 million.$123 million, and $97 million, respectively.

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If a modified loan is on nonaccrual and performs for at least six months according to the modified terms, and an analysis of the customer’s financial condition indicates that we are reasonably assured of repayment of the modified

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principal and interest, the loan may be returned to accrual status. The borrower’s payment performance prior to and following the modification is taken into account to determine whether a loan should be returned to accrual status.
ACCRUING AND NONACCRUING MODIFIED LOANS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY
(In millions)June 30,
2023
Modified loans – accruing$137 
Modified loans – nonaccruing11 
Total$148 
Three Months Ended
March 31,
(In millions)20242023
Modified loans – accruing$116 $96 
Modified loans – nonaccruing
Total$123 $97 
For additional information regarding loan modifications to borrowers experiencing financial difficulty, including information related to TDRs prior to our adoption of ASU 2022-02, see Note 6 of the Notes to Consolidated Financial Statements.
Allowance for Credit Losses
The ACL includes the ALLL and the RULC. The ACL represents our estimate of current expected credit losses
related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. To determine
the adequacy of the allowance, our loan and lease portfolio is segmented based on loan type.
The RULC is a reserve for potential losses associated with off-balance sheet commitments remained stable during the first six months of 2023. The reserveand is separately recordedincluded in “Other
liabilities” on the consolidated balance sheet in “Other liabilities,” and anysheet. Any related increases or decreases in the reserve are recordedincluded in
“Provision for unfunded lending commitments” on the consolidated income statement in “Provision for unfunded lending commitments.”
The following schedule presents the changes in and allocation of the ACL.income.

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SUMMARY OFThe following schedule presents the changes in and allocation of the ACL:
CHANGES IN THE ALLOWANCE FOR CREDIT LOSS EXPERIENCE
(Dollar amounts in millions)Six Months Ended
June 30, 2023
Twelve Months Ended
December 31, 2022
Six Months Ended
June 30, 2022
Loans and leases outstanding$56,917 $55,653 $52,370 
Average loans and leases outstanding:
Commercial30,664 29,225 28,725 
Commercial real estate12,904 12,251 12,134 
Consumer12,849 11,122 10,501 
Total average loans and leases outstanding$56,417 $52,598 $51,360 
Allowance for loan and lease losses:
Balance at beginning of period 1
$572 $513 $513 
Provision for loan losses92 101 10 
Charge-offs:
Commercial23 72 28 
Commercial real estate— — — 
Consumer10 
Total29 82 35 
Recoveries:
Commercial12 32 15 
Commercial real estate— — — 
Consumer11 
Total16 43 20 
Net loan and lease charge-offs13 39 15 
Balance at end of period$651 $575 $508 
Reserve for unfunded lending commitments:
Balance at beginning of period$61 $40 $40 
Provision for unfunded lending commitments(1)21 (2)
Balance at end of period$60 $61 $38 
Total allowance for credit losses:
Allowance for loan and lease losses$651 $575 $508 
Reserve for unfunded lending commitments60 61 38 
Total allowance for credit losses$711 $636 $546 
Ratio of allowance for credit losses to net loans and leases, at period end1.25 %1.14 %1.04 %
Ratio of allowance for credit losses to nonaccrual loans, at period end439 %427 %280 %
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end421 %410 %272 %
Ratio of total net charge-offs to average loans and leases 2
0.05 %0.07 %0.06 %
Ratio of commercial net charge-offs to average commercial loans 2
0.07 %0.14 %0.09 %
Ratio of commercial real estate net charge-offs to average commercial real estate loans 2
— %— %— %
Ratio of consumer net charge-offs to average consumer loans 2
0.03 %(0.01)%0.04 %
LOSSES
(Dollar amounts in millions)Three Months Ended
March 31, 2024
Twelve Months Ended
December 31, 2023
Three Months Ended
March 31, 2023
Loans and leases outstanding$58,109 $57,779 $56,331 
Average loans and leases outstanding:
Commercial30,482 30,519 30,678 
Commercial real estate13,504 13,023 12,876 
Consumer13,921 13,198 12,599 
Total average loans and leases outstanding$57,907 $56,740 $56,153 
Allowance for loan and lease losses:
Balance at beginning of period$684 $572 $572 
Provision for loan losses21 148 46 
Charge-offs:
Commercial10 45 
Commercial real estate— — 
Consumer14 
Total14 62 
Recoveries:
Commercial20 
Commercial real estate— — 
Consumer
Total26 
Net loan and lease charge-offs36 — 
Balance at end of period$699 $684 $618 
Reserve for unfunded lending commitments:
Balance at beginning of period$45 $61 $61 
Provision for unfunded lending commitments(8)(16)(1)
Balance at end of period$37 $45 $60 
Total allowance for credit losses:
Allowance for loan and lease losses$699 $684 $618 
Reserve for unfunded lending commitments37 45 60 
Total allowance for credit losses$736 $729 $678 
Ratio of allowance for credit losses to net loans and leases, at period end1.27 %1.26 %1.20 %
Ratio of allowance for credit losses to nonaccrual loans, at period end297 %328 %396 %
Ratio of allowance for credit losses to nonaccrual loans and accruing loans past due 90 days or more, at period end293 %324 %392 %
Ratio of total net charge-offs to average loans and leases 1
0.04 %0.06 %— %
Ratio of commercial net charge-offs to average commercial loans 1
0.05 %0.08 %(0.04)%
Ratio of commercial real estate net charge-offs to average commercial real estate loans 1
(0.03)%0.02 %— %
Ratio of consumer net charge-offs to average consumer loans 1
0.09 %0.06 %0.10 %
1The beginning balance for the six months ended June 30, 2023 for the allowance for loan losses does not agree to the ending balance at December 31, 2022 because of the adoption of the new accounting standard related to loan modifications to borrowers experiencing financial difficulties.
2 Ratios are annualized for the periods presented except for the period representing the full twelve months.
TheDuring the first three months of 2024, the total ACL increased to $711$736 million from $636 million, during$729 million. The increase in the first six months of 2023,ACL primarily due toreflects incremental reserves associated with portfolio-specific risks including commercial real estate and modest deterioration in credit quality, partially offset by improvements in economic forecasts. See Note 6 of the Notes to Consolidated Financial Statements for additional information related to the ACL and credit trends experienced in each portfolio segment.

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Interest Rate and Market Risk Management
Interest rate and market risk is the potential for reduced net interest incomerisk of losses to current or future earnings and other rate-sensitive income resultingcapital from adverse changes in the level of interest rates. Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates orand other factors.market conditions. Because we engage in transactions involving various financial products, we are exposed to both interest rate risk and market risk. For a more comprehensive discussion of our interest rate and market risk management, see the “Interest Rate and Market Risk Management” section in our 20222023 Form 10-K.
Interest Rate Risk
We strive to position the Bank for interest rate changes and manage the balance sheet sensitivity to reduce the volatility of both net interest income and economic value of equity. equity (“EVE”). With a higher interest rate environment, customer deposit behavior has deviated from the trends observed during the relatively low interest rate period over the prior 15 years. As a result, customers have been more inclined to (1) move deposits to nonbanking products, such as money market mutual funds, that offer higher interest rates, and (2) reduce their balances in noninterest-bearing accounts. These recently observed changes in deposit behavior have been incorporated into our deposit models used in managing interest rate risk, giving more weight to the recently observed behavior, and increased both the deposit beta for interest-bearing products and the percentage of noninterest-bearing deposits assumed to migrate to interest-bearing products. Changes to models are independently reviewed by our Model Risk Management function. Management believes our deposit models are more likely to reflect future behavior of deposits, and therefore we manage our interest rate risk exposure on that basis.
We generally have granular deposit funding. Muchfunding, and much of this funding has an indeterminateindeterminable life with no maturity, and can be withdrawn at any time. Because most deposits come from household and business accounts, their duration is generally longer than the duration of our loan portfolio. As such, we are naturallyhave historically been “asset-sensitive” — meaning that our assets are expected to reprice faster or more significantly than our liabilities. In previous interest rate environments, we have added (1)We regularly use interest rate swaps, to synthetically increase the duration of the loan portfolio, (2) longer-durationinvestment in fixed-rate securities, and (3) longer-duration loansfunding strategies to reducemanage our interest rate risk. These strategies collectively have muted the assetexpected sensitivity to a level where an increase in interest rates of 100 bps would continue to result in a positive change in net interest income and a declineto changes in interest rates would be more muted. Additionally, we have pay-fixed interest rate swaps to adjust the duration of the investment securities portfolio.
rates. Asset sensitivity measures depend upon the assumptions we use for deposit runoff and repricing behavior. As interest rates rise, we expect some customers to move balances from demand deposits to interest-bearing accounts such as money market, savings, or certificates of deposit. Our models are particularly sensitive to the assumption about the rate of such migration.
We also assume a correlation, referred to as a “deposit beta,” with respect to interest-bearing deposits, wherein the rates paid to customers change at a different pace when compared with changes in average benchmark interest rates. Generally, certificates of deposit are assumed to have a high correlation, while interest-bearing checking accounts are assumed to have a lower correlation.
With the recent prominent bank failures during the first half of 2023, customer deposit behavior deviated from modeled behaviors, with the latter being informed using data reflecting an extended period of relatively low interest rates. As such, in addition to our historical-based assumptions, we have included adjusted deposit assumptions into our interest risk rate management, which increase the deposit beta for interest-bearing products and increase the percentage of non-interest bearing deposits that migrate to interest-bearing products.
The following schedule presents deposit duration assumptions using both historical-based deposit behavior as well as the adjusted assumptions discussed previously.previously:
DEPOSIT ASSUMPTIONS
June 30, 2023December 31, 2022
Historical-based assumptionsAdjusted
assumptions
Historical-based assumptions
March 31, 2024March 31, 2024December 31, 2023
ProductProductEffective duration (unchanged)Effective duration
(+200 bps)
Effective duration (unchanged)Effective duration
(+200 bps)
Effective duration (unchanged)Effective duration
(+200 bps)
ProductEffective duration (unchanged)Effective duration
(+200 bps)
Effective duration (unchanged)Effective duration
(+200 bps)
Demand depositsDemand deposits3.9%3.7%2.9%2.7%3.6%3.5%
Demand deposits
Demand deposits3.1%2.9%3.5%3.2%
Money marketMoney market2.2%2.1%1.5%1.3%2.3%2.0%Money market1.4%1.2%1.5%1.4%
Savings and interest-bearing checkingSavings and interest-bearing checking2.9%2.6%2.0%1.6%3.1%2.8%Savings and interest-bearing checking2.0%1.7%2.2%1.9%

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As more rate-sensitive deposits have runoff, theThe effective duration of the deposits under the historical-based assumptions has lengthened due to the remaining deposits that are assumed to be less rate sensitive. Conversely, the effective duration of the deposits under the adjusted assumptions has shortened considerably due to faster deposit repricing.
As noted previously, we utilize derivatives to manage interest rate risk. The following schedule presents derivatives that are designated in qualifying hedging relationships at June 30, 2023.March 31, 2024. Included are the average outstanding derivative notional amounts for each period presented and the weighted average fixed-rate paid or received for each category of cash flow and fair value hedge. Fair value hedges of assets include $2.5 billion in notional of hedges of AFS securities designated under the portfolio layer method that were added during the second quarter of 2023. See Note 7 of the Notes to Consolidated Financial Statements for additional information regarding the impact of these hedging relationships on interest income and expense.

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DERIVATIVES DESIGNATED IN QUALIFYING HEDGING RELATIONSHIPS
2023202420253Q25 - 2Q263Q26 - 2Q27
(Dollar amounts in millions)Third QuarterFourth QuarterFirst QuarterSecond QuarterThird QuarterFourth QuarterFirst QuarterSecond Quarter
Cash flow hedges
Cash flow hedges of assets 1,2
Average outstanding notional$2,550$2,250$1,817$1,483$1,050$550$350$350$221$100
Weighted-average fixed-rate received2.37 %2.24 %2.05 %1.96 %1.82 %1.96 %2.34 %2.34 %1.94 %1.65 %
Cash flow hedges of liabilities 3
Average outstanding notional$500$500$500$500$500$500$500$500$— $— 
Weighted-average fixed-rate paid3.67 %3.67 %3.67 %3.67 %3.67 %3.67 %3.67 %3.67 %— %— %
2023 4
202420252026202720282029203020312032
Fair value hedges
Fair value hedges of assets 4
Average outstanding notional$3,172 $3,444 $3,558 $3,562 $3,558 $1,928 $1,049 $1,044 $1,037 $1,001 
Weighted-average fixed-rate paid3.16 %3.06 %3.03 %3.02 %3.03 %2.28 %1.84 %1.83 %1.83 %1.83 %
Fair value hedges of liabilities 5
Average outstanding notional$— $— $— $— $— $— $— $— $— $— 
Weighted-average fixed-rate received— %— %— %— %— %— %— %— %— %— %
2024202520262Q26 - 1Q272Q27 - 1Q28
(Dollar amounts in millions)Second QuarterThird QuarterFourth QuarterFirst QuarterSecond QuarterThird QuarterFourth QuarterFirst Quarter
Cash flow hedges
Cash flow hedges of assets 1
Average outstanding notional$683$350$350$350$350$350$300$133$100$
Weighted-average fixed-rate received2.55 %2.34 %2.34 %2.34 %2.34 %2.34 %2.13 %1.67 %1.65 %— %
Cash flow hedges of liabilities 2
Average outstanding notional$500$500$500$500$500$$$$— $— 
Weighted-average fixed-rate paid3.67 %3.67 %3.67 %3.67 %3.67 %— %— %— %— %— %
2024202520262027202820292030203120322033
Fair value hedges
Fair value hedges of assets 3
Average outstanding notional$4,469$4,558$4,562$4,558$2,428$1,049$1,044$1,037$1,001$973
Weighted-average fixed-rate paid3.23 %3.21 %3.21 %3.21 %2.47 %1.84 %1.83 %1.83 %1.83 %1.82 %
1 Cash flow hedges of assets consist of receive-fixed swaps hedging pools of floating-rate loans.
2 Cash The longest dated cash flow hedges of assets fullyhedge matures in February 2027. Amounts for 2027 have not been prorated to reflect this hedge maturing during the period.
32 Cash flow hedges of liabilities fullyconsists of a pay-fixed swap hedging rolling FHLB advances. This swap matures in May of 2025.
43 Fair value asset hedges of assets consist of pay-fixed interest rate swaps hedging AFS fixed-rate securities.
5Fair value hedges of debt consist of receive-fixed swaps hedging fixed-rate debt. The sole fair value hedgeAFS securities and fixed-rate commercial loans, as further discussed in Note 7 of debt wasthe Notes to Consolidated Financial Statements. Increasing notional amounts in 2025 are due to forward starting swaps.
At March 31, 2024, we had $173 million of net losses deferred in accumulated other comprehensive income (loss) (“AOCI”) related to terminated duringcash flow hedges. Amounts deferred in AOCI from terminated cash flow hedges will be amortized into interest income on a straight-line basis through the second quarteroriginal maturity dates of 2023.the hedges as long as the hedged forecasted transactions continue to be expected to occur. For more information on amounts deferred in AOCI related to terminated cash flow hedges, see “Interest Rate and Market Risk Management” in our 2023 Form 10-K.
Earnings at Risk (EaR) and Economic Value of Equity (EVE)
Incorporating the historical-based and adjustedour deposit assumptions and the impact of derivatives in qualifying hedging relationships previously discussed, the following schedule presents earnings at risk (“EaR”), or the percentage change in 12-month forward-looking net interest income, and our estimated percentage change in economic value of equity (“EVE”).EVE. Both EaR and EVE are based on a static balance sheet size under parallel interest rate changes ranging from -100 bps to +300 bps. These measures highlight the sensitivity to changes in interest rates across various scenarios; the outcomes are not intended to be forecasts of expected net interest income.
INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY
March 31, 2024December 31, 2023
Parallel shift in rates (in bps) 1
Parallel shift in rates (in bps) 1
Repricing scenario-1000+100+200+300-1000+100+200+300
Earnings at Risk
(EaR)
(3.3)%— %3.7 %7.4 %11.2 %(2.5)%— %2.4 %4.9 %7.4 %
Economic Value of Equity
(EVE)
4.8 %— %(2.6)%(5.5)%(8.0)%2.8 %— %(1.4)%(3.3)%(5.2)%
1 Assumes rates cannot go below zero in the negative rate shift.

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INCOME SIMULATION – CHANGE IN NET INTEREST INCOME AND CHANGE IN ECONOMIC VALUE OF EQUITY
June 30, 2023December 31, 2022
Parallel shift in rates (in bps)1
Parallel shift in rates (in bps)1
Repricing scenario-1000+100+200+300-1000+100+200+300
Historical-based assumptions:
Earnings at Risk
(EaR)
(5.8)%— %5.9 %11.8 %17.7 %(2.4)%— %2.4 %4.8 %7.1 %
Economic Value of Equity
(EVE)
(0.1)%— %1.9 %3.5 %4.8 %2.0 %— %(1.1)%(2.3)%(3.7)%
Adjusted assumptions:
Earnings at Risk
(EaR)
(1.3)%— %1.4 %2.9 %4.4 %
Economic Value of Equity
(EVE)
4.8 %— %(4.1)%(8.6)%(12.9)%
1 Assumes rates cannot go below zero in the negative rate shift.
Under the historical-based assumptions, theThe asset sensitivity, as measured by EaR, increased during the secondfirst quarter of 2023,2024, primarily due to an increase in pay-fixed interest rate swap notional, partially offset by deposit migration from low beta products (e.g., checking accounts) to high beta products.products (e.g., money market accounts) and a shift from short- to long-term fixed-rate borrowings. Under the adjustedour current deposit assumptions, asset sensitivity decreased significantly due to faster deposit repricing.
interest rate risk remains within policy limits. For interest-bearing deposits with indeterminateindeterminable maturities, the weighted average modeled beta is 32% under53%.
Prepayment assumptions are an important factor in how we manage interest rate risk. Certain assets in our portfolio, such as 1-4 family residential mortgages and mortgage-backed securities, can be prepaid at any time by the historical-based assumptions,borrower, which may significantly affect our expected cash flows. At March 31, 2024, lifetime prepayment speeds on loans and 55% under the adjusted assumptions.mortgage-backed securities were estimated to be 8.7% and 6.1%, respectively.
The EaR analysis focuses on parallel rate shocks across the term structure of benchmark interest rates. In a non-parallel rate scenario where the overnight rate increases 200 bps,shorter-term rates increase slightly, but the ten-year rate increases only 30by 200 bps, the increase in EaR is modeled under the historical-based assumptions towould be approximately two-thirds of50 percent larger than the change associated with the parallel +200 bps rate change.
EaR has inherent limitations in describing expected changes in net interest income in rapidly changing interest rate environments due to a lag in asset and liability repricing behavior. As such, we expect net interest income to change due to “latent” and “emergent” interest rate sensitivity. Unlike EaR, which measures net interest income over 12 months, latent and emergent interest rate sensitivity explains changes in current quarter net interest income, compared with expected net interest income in the same quarter one year forward.
Latent interest rate sensitivity refers to future changes in net interest income based upon past rate movements that have yet to be fully recognized in revenue but will be recognized over the near term. We expect latent sensitivity to reduceincrease net interest income by approximately 4%0.8% in the secondfirst quarter of 2024,2025, compared with the secondfirst quarter of 2023.2024.
Emergent interest rate sensitivity refers to future changes in net interest income based upon future interest rate movements and is measured from the latent level of net interest income. If interest rates rise consistent with the forward curve at June 30, 2023,March 31, 2024, we expect emergent sensitivity to increase net interest income by approximately 1%1.0% from the latent sensitivity level, for a cumulative 3% reduction1.8% increase in net interest income. For a +100 bps and -100 bps parallel interest rate shock to the implied forward rate path, the cumulative net interest income sensitivity would be 2.8% and -0.5%, respectively.
Our focus on business banking also plays a significant role in determining the nature of our asset-liability management posture. At June 30, 2023, $25.8March 31, 2024, $26.6 billion of our commercial lending and CRE loan balances were scheduled to reprice in the next six months. For these variable-rate loans, we have executed $2.9 billion$850 million of cash flow hedges by receiving fixed rates on interest rate swaps. At June 30, 2023,March 31, 2024, we also had $3.6$3.7 billion of variable-rate consumer loans scheduled to reprice in the next six months. The impact on asset sensitivity from commercial or consumer loans with floors has become insignificant as rates have risen. See Notes 3 and 7 of the Notes to Consolidated Financial Statements for additional information regarding derivative instruments.

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LIBOR Transition
London Interbank Offered Rate (“LIBOR”) has been phased out globally, and banks were required to migrate to alternative reference rates by June 30, 2023. We implemented processes, procedures, and systems to mitigate contract risk. New originations, and any modifications or renewals of LIBOR-based contracts, contained fallback language to facilitate transition to an alternative reference rate. Additionally, under the Adjustable Interest Rate (LIBOR) Act of 2022, the Federal Reserve Board (“FRB”) identified benchmark replacement rates for LIBOR contracts lacking fallback provisions with a clearly defined or practical replacement benchmark rate. At June 30, 2023, we have remediated substantially all our LIBOR exposure through fallback language, replacement indices, or reliance upon the provisions under the LIBOR Act.
Market Risk – Fixed Income
We are exposed to market risk through changes in fair value. This includes market risk for trading securities and for interest rate swaps used to hedge interest rate risk. We underwrite municipal and corporate securities. We also trade municipal, agency, and treasury securities. This underwriting and trading activity exposes us to a risk of loss arising from adverse changes in the prices of these fixed-income securities.
Changes in the fair value of AFS securities and in interest rate swaps that qualify as cash flow hedges are included in accumulated other comprehensive income (loss) (“AOCI”)AOCI for each financial reporting period. During the secondfirst quarter of 2023,2024, the $32$12 million after-tax increaseimprovement in AOCI loss related to investment securities was driven largely by declines in the fair value of the AFS securities primarily due to changes in benchmark interest rates.paydowns on the AFS securities. For more discussion regarding investment securities and AOCI, see the “Capital Management” section on page 33. See also Note 5 of the Notes to Consolidated Financial Statements for further information regarding the accounting for investment securities.
Our noninterest-bearing deposits are more valuable in a rising interest rate environment, creating meaningful economic value that is not fully reflected on our balance sheet since deposits and related intangible assets are not recorded at fair value for accounting purposes.

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Equity Investments
Through our equity investment activities, we own equity securities that are publicly traded. In addition, we own equity securities in governmental entities and companies, e.g., FRBFederal Reserve (“FRB”) and the FHLB, that are not publicly traded. Equity investments may be accounted for at cost less impairment and adjusted for observable price changes, fair value, the equity method, or proportional or full consolidation methods of accounting, depending on our ownership position and degree of influence over the investees’ business. Regardless of the accounting method, the values of our investments are subject to fluctuation. Because the fair value of these securities may fall below the cost at which we acquired them, we are exposed to the possibility of loss. Equity investments in private and public companies are evaluated, monitored, and approved by members of management in our Equity Investments Committee and Securities Valuation Committee.
We hold both direct and indirect investments in predominantly pre-public companies, primarily through various Small Business Investment Company (“SBIC”) venture capital funds as a strategy to provide beneficial financing, growth, and expansion opportunities to diverse businesses generally in communities within our geographic footprint. Our equity exposure to these investments was approximately $177$196 million and $172$190 million at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. On occasion, some of the companies within our SBIC investment may issue an initial public offering (“IPO”). In this case, the fund is generally subject to a lockout period before liquidatingwe can liquidate the investment, which can introduce additional market risk. See Note 3 of the Notes to Consolidated Financial Statements for additional information regarding the valuation of our SBIC investments.

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Liquidity Risk Management
Liquidity refers to our ability to meet our cash, contractual, and collateral obligations, and to manage both expected and unexpected cash flows without adversely impacting our operations or financial strength. We manage our liquidity to provide funds for our customers’ credit needs, our anticipated financial and contractual obligations, and other corporate activities. Sources of liquidity primarily include deposits, borrowings, equity, and unencumberedpaydowns of assets, such as loans and investment securities. Our investment securities are primarily held as a source of contingent liquidity. We primarilygenerally own securities that can readily provide us with cash and liquidity through secured borrowing agreements with securities pledged as collateral.
We maintain and regularly test a contingency funding plan to identify sources and uses of liquidity. Additionally, we have aOur Board-approved liquidity policy that requires us to monitor and maintain adequate liquidity, diversify funding positions, and anticipate future funding needs. In accordance with this policy, we monitor our liquidity positions by conducting various stress tests and evaluating certain liquid asset measurements, such as a 30-day liquidity coverage ratio.
We perform regular liquidity stress tests and assess our portfolio of highly liquid assets (sufficient to cover 30-day funding needs under stress scenarios). These stress tests include projections of funding maturities, uses of funds, and assumptions of deposit runoff. TheseThe assumptions consider the size of deposit account, operational nature of deposits, type of depositor, and concentrations of funding sources including large depositors and aggregate levels of uncollateralized deposits exceeding insured levels. Concentrated funding sources are given large runoff factors up to 100% in projecting stressed funding needs. Our liquidity stress testing considers multiple timeframes ranging from overnight to 12 months. Our liquidity policy requires us to maintain sufficient on-balance sheet liquidity in the form of FRB reserve balance and other highly liquid assets to meet stressed outflow assumptions.
We have a dedicated funding desk that monitors real-time inflows and outflows of our FRB account, and we have tools, including ready access to repo markets and FHLB advances, to manage intraday liquidity. FHLB borrowings are “open-term,” allowing us the ability to retain or return funds based on our liquidity needs. We pledge a large portion of our highly liquid investment securities portfolio through the General Collateral Funding (“GCF”) repo program. Through this program, high-quality collateral is pledged, and program participants exchange funds anonymously, which allows for near instant access to funding during market hours.
Additionally, we have pledged collateral to the FRB’s primary credit facility (or discount window) and to the Bank Term Funding Program (“BTFP”), which provide additional contingent funding sources outside the normal operating hours of the FHLB and the GCF program. The BTFP offersoffered loans of up to one year in length to eligible

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depository institutions pledging U.S. Treasuries, agency debt and government mortgage-backed securities, and other qualifying assets as collateral. Unlike other funding sources, borrowing capacityThe availability of advances under the program ended in mid-March 2024. At March 31, 2024, our outstanding borrowings under the BTFP is basedwere $3.0 billion, with $1.5 billion maturing on the par value, not the fair value, of collateral. Advances canDecember 31, 2024, and another $1.5 billion maturing on January 15, 2025. These advances may be requested under the program through mid-March 2024.
prepaid at any time without penalty. For more information on our liquidity risk management practices, see “Liquidity Risk Management” in our 20222023 Form 10-K.
For the first sixthree months of 2023,2024, the primary sources of cash came from a decrease in investment securities, a decreasean increase in money market investments,short-term borrowings, and net cash provided by operating activities. Uses of cash during the same period primarily included primarily a decrease in short-term borrowings,deposits, an increase in loans and leases, and dividends paid on common and preferred stock.an increase in money market investments. Cash payments for interest reflected in operating expenses were $546$491 million and $31$224 million for the first sixthree months of 20232024 and 2022,2023, respectively.
The FHLB and FRB have been, and continue to be, a significant source of back-up liquidity and funding. We are a member of the FHLB of Des Moines, which allows member banks to borrow against eligible loans and securities to satisfy liquidity and funding requirements. We are required to invest in FHLB and FRB stock to maintain our borrowing capacity. At June 30, 2023,March 31, 2024, our total investment in FHLB and FRB stock was $111$45 million and $65 million, respectively, compared with $294$79 million and $68$65 million at December 31, 2022.

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2023.
At June 30, 2023,March 31, 2024, loans with a carrying value of $24.5$22.9 billion and $15.3$15.8 billion, compared with $23.7$24.8 billion and $3.9$11.5 billion at December 31, 2022,2023, were pledged at the FHLB and FRB, respectively, as collateral for current and potential borrowings.
At June 30, 2023March 31, 2024 and December 31, 2022,2023, investment securities with a carrying value of $21.1$19.8 billion and $13.5$20.5 billion, respectively, were pledged as collateral for potential borrowings. For the same time periods, these pledgespledged securities included $9.9$9.2 billion and $8.3$9.5 billion for available use through the GCF repo program, $7.1$5.4 billion and $1.0$5.5 billion to the FRB, and $4.1$5.1 billion and $4.2$5.5 billion to secure collateralized public and trust deposits, advances, and for other purposes.
A large portion of these pledged assets are unencumbered, but are pledged to provide immediate access to contingency sources of funds. The following schedule presents our total available liquidity including unused collateralized borrowing capacity.capacity:
AVAILABLE LIQUIDITY
March 31, 2024March 31, 2024December 31, 2023
(Dollar amounts in billions)(Dollar amounts in billions)FHLB
FRB 1
GCFBTFPTotalFHLB
FRB 1
GCFBTFPTotal
June 30, 2023December 31, 2022
(In billions)FHLBFRBGCFBTFPTotalFHLBFRBGCFBTFPTotal
Total borrowing capacity
Total borrowing capacity
Total borrowing capacityTotal borrowing capacity$17.1 $13.6 $10.0 $7.1 $47.8 $16.6 $4.0 $8.4 $— $29.0 
Borrowings outstandingBorrowings outstanding2.6 — 2.0 — 4.6 7.2 — 2.7 — 9.9 
Remaining capacity, at period endRemaining capacity, at period end$14.5 $13.6 $8.0 $7.1 $43.2 $9.4 $4.0 $5.7 $— $19.1 
Cash and due from banksCash and due from banks0.7 0.7 
Interest-bearing deposits 1
1.5 1.3 
Cash and due from banks
Cash and due from banks
Interest-bearing deposits 2
Total available liquidityTotal available liquidity$45.4 $21.1 
Ratio of available liquidity to uninsured depositsRatio of available liquidity to uninsured deposits149 %56 %Ratio of available liquidity to uninsured deposits130 %122 %
1 Represents borrowing capacity and borrowings outstanding at the Federal Reserve Bank discount window.
2Represents funds deposited by the Bank primarily at the Federal Reserve Bank.
At June 30, 2023March 31, 2024 and December 31, 2022,2023, our total available liquidity was $45.4$41.6 billion, compared with $21.1$40.6 billion, respectively. At June 30, 2023,March 31, 2024, we had sources of liquidity whichthat exceeded our uninsured deposits without the need to sell any investment securities.

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Credit Ratings
General financial market and economic conditions also impact our access to, and cost of, external financing. Access to funding markets is also directly affected by the credit ratings we receive from various rating agencies. The ratings not only influence the costs associated with borrowings, but can also influence the sources of the borrowings. All of the credit rating agencies rate our debt at an investment-grade level. During the second quarter of 2023, as a result of broader uncertainty in the banking industry, Standard & Poor's (“S&P”) changed their outlook on our long-term deposit and issuer ratings to “Negative” from “Stable.” Additionally, Moody's downgraded our long-term issuer rating to Baa2 from Baa1, our short-term debt rating to P2 from P1, and changed their outlook on our long-term deposit and issuer ratings to “Stable” from “Ratings under review.”
The following schedule presents our current credit ratings.ratings:
CREDIT RATINGS
as of July 31, 2023:April 30, 2024:
Rating agencyOutlook Long-term issuer/senior
debt rating
Subordinated debt ratingShort-term debt rating
KrollPositiveStableA-BBB+K2
S&PNegativeBBB+BBBNR
FitchStableBBB+BBBF1F2
Moody'sStableBaa2NRP2
We may, from time to time, issue additional preferred stock, senior or subordinated notes, or other forms of capital or debt instruments, depending on our capital, funding, asset-liability management, or other needs as market

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conditions warrant. These additional issuances may be subject to required regulatory approvals. We believe that our sources of available liquidity are adequate to meet all reasonably foreseeable short- and intermediate-term demands.
Capital Management
A strong capital position is vital to the achievement of our key corporate objectives, our continued profitability, and to promoting depositor and investor confidence. We seek to (1) maintain sufficient capital to support the current needs and growth of our businesses, consistent with our assessment of their potential to create value for shareholders, and (2) fulfill responsibilities to depositors and bondholders while managing capital distributions to shareholders through dividends and repurchases of common stock.
We utilize stress testing as an important mechanism to inform our decisions on the appropriate level of capital, based upon actual and hypothetically stressed economic conditions, which are comparable in severity toincluding the scenarios published by the FRB.FRB’s supervisory severely adverse scenario. The timing and amount of capital actions are subject to various factors, including our financial performance, business needs, prevailing and anticipated economic conditions, and the results of our internal stress testing, as well as Board and Office of the Comptroller of the Currency (“OCC”) approval. Shares may be repurchased occasionally in the open market or through privately negotiated transactions. For a more comprehensive discussion of our capital risk management, see “Capital Management” in our 20222023 Form 10-K.
SHAREHOLDERS' EQUITY
(Dollar amounts in millions)(Dollar amounts in millions)June 30,
2023
December 31,
2022
Amount changePercent change(Dollar amounts in millions)March 31,
2024
December 31,
2023
Amount changePercent change
Shareholders’ equity:Shareholders’ equity:
Preferred stock
Preferred stock
Preferred stockPreferred stock$440 $440 $— — %$440 $$440 $$— — — %
Common stock and additional paid-in capitalCommon stock and additional paid-in capital1,722 1,754 (32)(2)
Retained earningsRetained earnings6,051 5,811 240 
Accumulated other comprehensive lossAccumulated other comprehensive loss(2,930)(3,112)182 
Total shareholders' equityTotal shareholders' equity$5,283 $4,893 $390 %Total shareholders' equity$5,829 $$5,691 $$138 %
Total shareholders’ equity increased $390$138 million, or 8%2%, to $5.3$5.8 billion at June 30, 2023,March 31, 2024, compared with $4.9$5.7 billion at December 31, 2022.2023. Common stock and additional paid-in capital decreased $32$26 million, primarily due to common stock repurchasesrepurchases. In February 2024, the Board approved a plan to repurchase up to $35 million of common shares outstanding during the year 2024. During the first quarter of 2023. As the macroeconomic environment remained uncertain,2024, we did not repurchaserepurchased 0.9 million common shares during the second quarteroutstanding for $35 million.

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The AOCI balance was a $2.9loss of $2.6 billion loss at June 30, 2023,March 31, 2024, and forprimarily reflects the first six months of 2023, reflected (1) a $9 million decline in the fair value of fixed-rate AFSinvestment securities as a result of higher interest rates, offsetand includes $2.0 billion ($1.5 billion after tax) of unrealized losses on the securities previously transferred from AFS to HTM. During the first quarter of 2024, AOCI improved $83 million, driven largely by a $103$46 million increase in unrealized loss amortization of the discount onassociated with the securities transferred from AFS to HTM, during the fourth quarter of 2022, and (2) an $88$12 million increaseprimarily related to paydowns on AFS securities. AOCI was also positively impacted by a $25 million change in unrealized holding gains and other adjustments associated withnet deferred losses related to derivative instruments.instruments used for risk management purposes. Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities with unrealized losses. Although changes in AOCI are reflected in shareholders’ equity, they are excluded from regulatory capital, and therefore do not impact our regulatory ratios.
For more discussion on our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.

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CAPITAL DISTRIBUTIONS
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In millions, except share data)
(In millions, except share data)
(In millions, except share data)(In millions, except share data)2023202220232022
Capital distributions:Capital distributions:
Capital distributions:
Capital distributions:
Preferred dividends paid
Preferred dividends paid
Preferred dividends paidPreferred dividends paid$9$8$15$16
Total capital distributed to preferred shareholdersTotal capital distributed to preferred shareholders981516
Total capital distributed to preferred shareholders
Total capital distributed to preferred shareholders
Common dividends paid
Common dividends paid
Common dividends paidCommon dividends paid6158122116
Bank common stock repurchased 1
Bank common stock repurchased 1
5050101
Bank common stock repurchased 1
Bank common stock repurchased 1
Total capital distributed to common shareholders
Total capital distributed to common shareholders
Total capital distributed to common shareholdersTotal capital distributed to common shareholders61108172217
Total capital distributed to preferred and common shareholdersTotal capital distributed to preferred and common shareholders$70$116$187$233
Total capital distributed to preferred and common shareholders
Total capital distributed to preferred and common shareholders
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)Weighted average diluted common shares outstanding (in thousands)147,696 150,838 147,865 151,264 
Common shares outstanding, at period end (in thousands)Common shares outstanding, at period end (in thousands)148,144 150,471 148,144 150,471 
Common shares outstanding, at period end (in thousands)
Common shares outstanding, at period end (in thousands)
1 Includes amounts related to the common shares acquired from our publicly announced plans and those acquired in connection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the exercise of stock options.
Pursuant to the OCC’s “Earnings Limitation Rule,” our dividend payments are restricted to an amount equal to the sum of the total of (1) our net income for that year, and (2) retained earnings for the preceding two years, unless the OCC approves the declaration and payment of dividends in excess of such amount. At June 30, 2023,As of April 1, 2024, we had $1.7$1.1 billion of retained net profits available for distribution.
During the secondfirst quarter of 2023,2024, we paid dividends on preferred stock of $9$10 million and dividends on common stock of $61 million, or $0.41 per share. In July 2023,April 2024, the Board declared a regular quarterly dividend of $0.41 per common share, payable on August 24, 2023May 23, 2024 to shareholders of record on August 17, 2023.May 16, 2024. See Note 9 of the Notes to Consolidated Financial Statements for additional information about our capital management actions.
Basel III
We are subject to Basel III capital requirements that include certain minimum regulatory capital ratios. At June 30, 2023,March 31, 2024, we exceeded all capital adequacy requirements under the Basel III capital rules. Based on our internal stress testing and other assessments of capital adequacy, we believe we hold capital sufficiently in excess of internal and regulatory requirements for well-capitalized banks. See the “Supervision and Regulation” section and Note 15 of our 20222023 Form 10-K for more information about our compliance with the Basel III capital requirements. The following schedule presents our capital amounts, capital ratios, and other selected performance ratios.ratios:

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CAPITAL AMOUNTS AND RATIOS
(Dollar amounts in millions)(Dollar amounts in millions)June 30,
2023
December 31,
2022
June 30,
2022
(Dollar amounts in millions)March 31,
2024
December 31,
2023
March 31,
2023
Basel III risk-based capital amounts:Basel III risk-based capital amounts:
Common equity tier 1 capital
Common equity tier 1 capital
Common equity tier 1 capitalCommon equity tier 1 capital$6,692 $6,481 $6,257 
Tier 1 risk-basedTier 1 risk-based7,131 6,921 6,697 
Total risk-basedTotal risk-based8,378 8,077 7,784 
Risk-weighted assetsRisk-weighted assets66,917 66,111 63,424 
Basel III risk-based capital ratios:Basel III risk-based capital ratios:
Common equity tier 1 capital ratioCommon equity tier 1 capital ratio10.0 %9.8 %9.9 %
Common equity tier 1 capital ratio
Common equity tier 1 capital ratio10.4 %10.3 %9.9 %
Tier 1 risk-based ratioTier 1 risk-based ratio10.7 10.5 10.6 
Total risk-based ratioTotal risk-based ratio12.5 12.2 12.3 
Tier 1 leverage ratioTier 1 leverage ratio8.0 7.7 7.4 
Other ratios:Other ratios:
Average equity to average assets (three months ended)Average equity to average assets (three months ended)5.9 %5.4 %6.7 %
Average equity to average assets (three months ended)
Average equity to average assets (three months ended)6.5 %6.2 %5.6 %
Return on average common equity (three months ended)Return on average common equity (three months ended)13.8 25.4 14.0 
Return on average tangible common equity (three months ended) 1
Return on average tangible common equity (three months ended) 1
10.0 16.9 12.5 
Tangible equity ratio 1
Tangible equity ratio 1
8.0 7.6 7.6 
Tangible common equity ratio 1
Tangible common equity ratio 1
7.5 7.1 7.1 
1 See Non-GAAP“Non-GAAP Financial MeasuresMeasures” on page 35 for more information regarding these ratios.
During the third quarter of 2023, federal bank regulators issued a proposal to implement the Basel Committee on Banking Supervision’s finalization of the post-crisis bank regulatory capital reforms. The proposal, commonly referred to as the “Basel III Endgame,” would significantly revise the capital requirements applicable to large banking organizations, defined as those with total assets of $100 billion or more, and would potentially impact our current and future capital planning, including share repurchase activity. At March 31, 2024, we had $87.1 billion in total assets and do not currently qualify as a large banking organization. We continue to evaluate the potential impact of the proposal, as we expect it is more likely than not we would become subject to this proposal in the future, were it to be finalized in its current form.
Federal bank regulators also issued proposals that would (1) expand a long-term debt requirement to all banks with total assets of $100 billion or more, and (2) revise requirements for resolution planning. For more information about these regulatory proposals and their potential impact, see “Recent Regulatory Developments” in the Supervision and Regulation section of our 2023 Form 10-K.
NON-GAAP FINANCIAL MEASURES
This Form 10-Q presents non-GAAP financial measures, in addition to GAAPgenerally accepted accounting principles (“GAAP”) financial measures. The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are presented in the following schedules. We consider these adjustments to be relevant to ongoing operating results and provide a meaningful basis for period-to-period comparisons. We use these non-GAAP financial measures to assess our performance and financial position. We believe that presenting these non-GAAP financial measures permitsallows investors to assess our performance on the same basis as that applied by our management and the financial services industry.
Non-GAAP financial measures have inherent limitations and are not necessarily comparable to similar financial measures that may be presented by other financial services companies. Although non-GAAP financial measures are frequently used by stakeholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.

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Tangible Common Equity and Related Measures
Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets and their related amortization and AOCI. We excluded the effect of AOCI to align with its impact on certain incentive compensation plans that utilize return on tangible common equity as a performance metric.amortization. We believe these non-GAAP measures provide useful information about our use of shareholders’ equity and provide a basis for evaluating the performance of a business more consistently, whether acquired or developed internally.
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)
Three Months Ended
(Dollar amounts in millions)March 31,
2024
December 31,
2023
March 31,
2023
Net earnings applicable to common shareholders (GAAP)$143 $116 $198 
Adjustment, net of tax:
Amortization of core deposit and other intangibles
Net earnings applicable to common shareholders, net of tax(a)$144 $117 $199 
Average common equity (GAAP)$5,289 $4,980 $4,614 
Average goodwill and intangibles(1,058)(1,060)(1,064)
Average tangible common equity (non-GAAP)(b)$4,231 $3,920 $3,550 
Number of days in quarter(c)91 92 90 
Number of days in year(d)366 365 365 
Return on average tangible common equity (non-GAAP) 1
(a/b/c)*d13.7 %11.8 %22.7 %
1 Excluding the effect of AOCI from average tangible common equity would result in associated returns of 8.4%, 6.7%, and 12.3% for the periods presented, respectively.
TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)
(Dollar amounts in millions, except per share amounts)March 31,
2024
December 31,
2023
March 31,
2023
Total shareholders’ equity (GAAP)$5,829 $5,691 $5,184 
Goodwill and intangibles(1,057)(1,059)(1,063)
Tangible equity (non-GAAP)(a)4,772 4,632 4,121 
Preferred stock(440)(440)(440)
Tangible common equity (non-GAAP)(b)$4,332 $4,192 $3,681 
Total assets (GAAP)$87,060 $87,203 $88,573 
Goodwill and intangibles(1,057)(1,059)(1,063)
Tangible assets (non-GAAP)(c)$86,003 $86,144 $87,510 
Common shares outstanding (in thousands)(d)147,653 148,153 148,100 
Tangible equity ratio (non-GAAP)(a/c)5.5 %5.4 %4.7 %
Tangible common equity ratio (non-GAAP)(b/c)5.0 %4.9 %4.2 %
Tangible book value per common share (non-GAAP)(b/d)$29.34 $28.30 $24.85 

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (NON-GAAP)
Three Months Ended
(Dollar amounts in millions)June 30,
2023
March 31,
2023
June 30,
2022
Net earnings applicable to common shareholders (GAAP)(a)$166 $198 $195 
Adjustment, net of tax:
Amortization of core deposit and other intangibles— 
Net earnings applicable to common shareholders, net of tax(a)$167 $199 $195 
Average common equity (GAAP)$4,818 $4,614 $5,582 
Average goodwill and intangibles(1,063)(1,064)(1,015)
Average accumulated other comprehensive loss (income)2,931 3,030 1,702 
Average tangible common equity (non-GAAP)(b)$6,686 $6,580 $6,269 
Number of days in quarter(c)91 90 91 
Number of days in year(d)365 365 365 
Return on average tangible common equity (non-GAAP)(a/b/c)*d10.0 %12.3 %12.5 %
TANGIBLE EQUITY RATIO, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER COMMON SHARE (ALL NON-GAAP MEASURES)
(Dollar amounts in millions, except per share amounts)June 30,
2023
March 31,
2023
June 30,
2022
Total shareholders’ equity (GAAP)$5,283 $5,184 $5,632 
Goodwill and intangibles(1,062)(1,063)(1,015)
Accumulated other comprehensive loss (income)2,930 2,920 2,100 
Tangible equity (non-GAAP)(a)7,151 7,041 6,717 
Preferred stock(440)(440)(440)
Tangible common equity (non-GAAP)(b)$6,711 $6,601 $6,277 
Total assets (GAAP)$87,230 $88,573 $87,784 
Goodwill and intangibles(1,062)(1,063)(1,015)
Accumulated other comprehensive loss (income)2,930 2,920 2,100 
Tangible assets (non-GAAP)(c)$89,098 $90,430 $88,869 
Common shares outstanding (in thousands)(d)148,144 148,100 150,471 
Tangible equity ratio (non-GAAP)(a/c)8.0 %7.8 %7.6 %
Tangible common equity ratio (non-GAAP)(b/c)7.5 %7.3 %7.1 %
Tangible book value per common share (non-GAAP)(b/d)$45.30 $44.57 $41.72 
Efficiency Ratio and Adjusted Pre-Provision Net Revenue
The efficiency ratio is a measure of operating expense relative to revenue. We believe the efficiency ratio provides useful information regarding the cost of generating revenue. We make adjustments to exclude certain items that are not generally expected to recur frequently, as identified in the subsequent schedule, which we believe allows for more consistent comparability across periods. Adjusted noninterest expense provides a measure as to how we are managing our expenses. Adjusted pre-provision net revenue (“PPNR”) enables management and others to assess our ability to generate capital. Taxable-equivalent net interest income allows us to assess the comparability of revenue arising from both taxable and tax-exempt sources.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
EFFICIENCY RATIO (NON-GAAP) AND ADJUSTED PRE-PROVISION NET REVENUE (NON-GAAP)
Three Months EndedSix Months EndedYear Ended
(Dollar amounts in millions)June 30,
2023
March 31,
2023
June 30,
2022
June 30,
2023
June 30,
2022
December 31,
2022
Noninterest expense (GAAP)(a)$508 $512 $464 $1,020 $928 $1,878 
Adjustments:
Severance costs13 14 
Other real estate expense, net— — — — 
Amortization of core deposit and other intangibles— — 
SBIC investment success fee accrual 1
— — — — (1)(1)
Total adjustments(b)14 17 
Adjusted noninterest expense (non-GAAP)(a-b)=(c)$494 $509 $463 $1,003 $927 $1,876 
Net interest income (GAAP)(d)$591 $679 $593 $1,270 $1,137 $2,520 
Fully taxable-equivalent adjustments(e)11 20 17 37 
Taxable-equivalent net interest income (non-GAAP)(d+e)=f602 688 602 1,290 1,154 2,557 
Noninterest income (GAAP)g189 160 172 349 314 632 
Combined income (non-GAAP)(f+g)=(h)791 848 774 1,639 1,468 3,189 
Adjustments:
Fair value and nonhedge derivative gains(3)10 (2)16 16 
Securities gains (losses), net 1
— (16)(15)
Total adjustments 2
(i)(2)11 (1)— 
Adjusted taxable-equivalent revenue (non-GAAP)(h-i)=(j)$790 $850 $763 $1,640 $1,468 $3,188 
Pre-provision net revenue (non-GAAP)(h)-(a)$283 $336 $310 $619 $540 $1,311 
Adjusted PPNR (non-GAAP)(j)-(c)296 341 300 637 541 1,312 
Efficiency ratio (non-GAAP)(c/j)62.5 %59.9 %60.7 %61.2 %63.1 %58.8 %
1 The success fee accrual is associated with the gains and losses from our SBIC investments, which are excluded from the efficiency ratio through securities gains (losses), net.
2 Excluding the $13 million gain on sale of bank-owned premises recorded in dividends and other income, the efficiency ratio for the three months and six months ended June 30, 2023 would have been 63.6% and 61.6%, respectively.
Three Months EndedYear Ended
(Dollar amounts in millions)March 31,
2024
December 31,
2023
March 31,
2023
December 31,
2023
Noninterest expense (GAAP)(a)$526 $581 $512 $2,097 
Adjustments:
Severance costs— — 14 
Amortization of core deposit and other intangibles
Restructuring costs— — — 
FDIC special assessment13 90 — 90 
Total adjustments(b)15 92 111 
Adjusted noninterest expense (non-GAAP)(c)=(a-b)$511 $489 $509 $1,986 
Net interest income (GAAP)(d)$586 $583 $679 $2,438 
Fully taxable-equivalent adjustments(e)10 10 41 
Taxable-equivalent net interest income (non-GAAP)(f)=(d+e)596 593 688 2,479 
Noninterest income (GAAP)g156 148 160 677 
Combined income (non-GAAP)(h)=(f+g)752 741 848 3,156 
Adjustments:
Fair value and nonhedge derivative gains(9)(3)(4)
Securities gains (losses), net(2)(1)
Total adjustments(i)(1)(10)(2)— 
Adjusted taxable-equivalent revenue (non-GAAP)(j)=(h-i)$753 $751 $850 $3,156 
Pre-provision net revenue (non-GAAP)(h)-(a)$226 $160 $336 $1,059 
Adjusted PPNR (non-GAAP)(j)-(c)242 262 341 1,170 
Efficiency ratio (non-GAAP)(c/j)67.9 %65.1 %59.9 %62.9 %

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ITEM 1.    FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED BALANCE SHEETS
(In millions, shares in thousands)June 30,
2023
December 31,
2022
(Unaudited)
ASSETS
Cash and due from banks$701 $657 
Money market investments:
Interest-bearing deposits1,531 1,340 
Federal funds sold and securities purchased under agreements to resell781 2,426 
Investment securities:
Held-to-maturity, at amortized cost (fair value: $10,768 and $11,239)10,753 11,126 
Available-for-sale, at fair value10,832 11,915 
Trading, at fair value32 465 
Total investment securities21,617 23,506 
Loans held for sale36 
Loans and leases, net of unearned income and fees56,917 55,653 
Less allowance for loan and lease losses651 575 
Loans held for investment, net of allowance56,266 55,078 
Other noninterest-bearing investments956 1,130 
Premises, equipment and software, net1,414 1,408 
Goodwill and intangibles1,062 1,065 
Other real estate owned
Other assets2,863 2,924 
Total assets$87,230 $89,545 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand$28,670 $35,777 
Interest-bearing:
Savings and money market33,394 33,566 
Time12,259 2,309 
Total deposits74,323 71,652 
Federal funds and other short-term borrowings5,513 10,417 
Long-term debt538 651 
Reserve for unfunded lending commitments60 61 
Other liabilities1,513 1,871 
Total liabilities81,947 84,652 
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares440 440 
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 148,144 and 148,664 shares) and additional paid-in capital1,722 1,754 
Retained earnings6,051 5,811 
Accumulated other comprehensive income (loss)(2,930)(3,112)
Total shareholders’ equity5,283 4,893 
Total liabilities and shareholders’ equity$87,230 $89,545 
(In millions, shares in thousands)March 31,
2024
December 31,
2023
(Unaudited)
ASSETS
Cash and due from banks$709 $716 
Money market investments:
Interest-bearing deposits1,688 1,488 
Federal funds sold and securities purchased under agreements to resell894 937 
Investment securities:
Held-to-maturity, at amortized cost (fair value: $10,105 and $10,466)10,209 10,382 
Available-for-sale, at fair value9,931 10,300 
Trading, at fair value59 48 
Total investment securities20,199 20,730 
Loans held for sale12 53 
Loans and leases, net of unearned income and fees58,109 57,779 
Less allowance for loan and lease losses699 684 
Loans held for investment, net of allowance57,410 57,095 
Other noninterest-bearing investments922 950 
Premises, equipment and software, net1,396 1,400 
Goodwill and intangibles1,057 1,059 
Other real estate owned
Other assets2,767 2,769 
Total assets$87,060 $87,203 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand$25,137 $26,244 
Interest-bearing:
Savings and money market38,879 38,721 
Time10,221 9,996 
Total deposits74,237 74,961 
Federal funds and other short-term borrowings4,895 4,379 
Long-term debt544 542 
Reserve for unfunded lending commitments37 45 
Other liabilities1,518 1,585 
Total liabilities81,231 81,512 
Shareholders’ equity:
Preferred stock, without par value; authorized 4,400 shares440 440 
Common stock ($0.001 par value; authorized 350,000 shares; issued and outstanding 147,653 and 148,153 shares) and additional paid-in capital1,705 1,731 
Retained earnings6,293 6,212 
Accumulated other comprehensive income (loss)(2,609)(2,692)
Total shareholders’ equity5,829 5,691 
Total liabilities and shareholders’ equity$87,060 $87,203 
See accompanying notes to consolidated financial statements.

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)(Unaudited)Three Months Ended
June 30,
Six Months Ended
June 30,
(Unaudited)
(Unaudited)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)(In millions, except shares and per share amounts)2023202220232022
Interest income:Interest income:
Interest income:
Interest income:
Interest and fees on loans
Interest and fees on loans
Interest and fees on loansInterest and fees on loans$791 $468 $1,517 $905 
Interest on money market investmentsInterest on money market investments48 12 105 18 
Interest on money market investments
Interest on money market investments
Interest on securities
Interest on securities
Interest on securitiesInterest on securities138 128 275 240 
Total interest incomeTotal interest income977 608 1,897 1,163 
Total interest income
Total interest income
Interest expense:
Interest expense:
Interest expense:Interest expense:
Interest on depositsInterest on deposits220 302 13 
Interest on deposits
Interest on deposits
Interest on short- and long-term borrowings
Interest on short- and long-term borrowings
Interest on short- and long-term borrowingsInterest on short- and long-term borrowings166 325 13 
Total interest expenseTotal interest expense386 15 627 26 
Total interest expense
Total interest expense
Net interest income
Net interest income
Net interest incomeNet interest income591 593 1,270 1,137 
Provision for credit losses:Provision for credit losses:
Provision for credit losses:
Provision for credit losses:
Provision for loan and lease lossesProvision for loan and lease losses46 39 92 10 
Provision for loan and lease losses
Provision for loan and lease losses
Provision for unfunded lending commitments
Provision for unfunded lending commitments
Provision for unfunded lending commitmentsProvision for unfunded lending commitments— (1)(2)
Total provision for credit lossesTotal provision for credit losses46 41 91 
Total provision for credit losses
Total provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit lossesNet interest income after provision for credit losses545 552 1,179 1,129 
Noninterest income:Noninterest income:
Noninterest income:
Noninterest income:
Commercial account fees
Commercial account fees
Commercial account feesCommercial account fees45 37 88 78 
Card feesCard fees25 25 49 50 
Card fees
Card fees
Retail and business banking fees
Retail and business banking fees
Retail and business banking feesRetail and business banking fees16 20 32 40 
Loan-related fees and incomeLoan-related fees and income19 21 40 43 
Loan-related fees and income
Loan-related fees and income
Capital markets fees
Capital markets fees
Capital markets feesCapital markets fees27 21 44 36 
Wealth management feesWealth management fees14 13 29 27 
Wealth management fees
Wealth management fees
Other customer-related fees
Other customer-related fees
Other customer-related feesOther customer-related fees16 17 31 31 
Customer-related noninterest incomeCustomer-related noninterest income162 154 313 305 
Customer-related noninterest income
Customer-related noninterest income
Fair value and nonhedge derivative income
Fair value and nonhedge derivative income
Fair value and nonhedge derivative incomeFair value and nonhedge derivative income10 (2)16 
Dividends and other income (loss)Dividends and other income (loss)26 37 
Dividends and other income (loss)
Dividends and other income (loss)
Securities gains (losses), net
Securities gains (losses), net
Securities gains (losses), netSecurities gains (losses), net— (16)
Total noninterest incomeTotal noninterest income189 172 349 314 
Total noninterest income
Total noninterest income
Noninterest expense:
Noninterest expense:
Noninterest expense:Noninterest expense:
Salaries and employee benefitsSalaries and employee benefits324 307 663 619 
Salaries and employee benefits
Salaries and employee benefits
Technology, telecom, and information processing
Technology, telecom, and information processing
Technology, telecom, and information processingTechnology, telecom, and information processing58 53 113 105 
Occupancy and equipment, netOccupancy and equipment, net40 36 80 74 
Occupancy and equipment, net
Occupancy and equipment, net
Professional and legal services
Professional and legal services
Professional and legal servicesProfessional and legal services16 14 29 28 
Marketing and business developmentMarketing and business development13 25 17 
Marketing and business development
Marketing and business development
Deposit insurance and regulatory expense
Deposit insurance and regulatory expense
Deposit insurance and regulatory expenseDeposit insurance and regulatory expense22 13 40 23 
Credit-related expenseCredit-related expense13 14 
Other real estate expense, net— — — 
Credit-related expense
Credit-related expense
Other
Other
OtherOther28 25 57 47 
Total noninterest expenseTotal noninterest expense508 464 1,020 928 
Total noninterest expense
Total noninterest expense
Income before income taxes
Income before income taxes
Income before income taxesIncome before income taxes226 260 508 515 
Income taxesIncome taxes51 57 129 109 
Income taxes
Income taxes
Net income
Net income
Net incomeNet income175 203 379 406 
Preferred stock dividendsPreferred stock dividends(9)(8)(15)(16)
Preferred stock dividends
Preferred stock dividends
Net earnings applicable to common shareholders
Net earnings applicable to common shareholders
Net earnings applicable to common shareholdersNet earnings applicable to common shareholders$166 $195 $364 $390 
Weighted average common shares outstanding during the period:Weighted average common shares outstanding during the period:
Weighted average common shares outstanding during the period:
Weighted average common shares outstanding during the period:
Basic shares (in thousands)
Basic shares (in thousands)
Basic shares (in thousands)Basic shares (in thousands)147,692 150,635 147,852 150,958 
Diluted shares (in thousands)Diluted shares (in thousands)147,696 150,838 147,865 151,264 
Diluted shares (in thousands)
Diluted shares (in thousands)
Net earnings per common share:
Net earnings per common share:
Net earnings per common share:Net earnings per common share:
BasicBasic$1.11 $1.29 $2.44 $2.56 
Basic
Basic
DilutedDiluted1.11 1.29 2.44 2.56 
Diluted
Diluted
See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions)2023202220232022
Net income for the period$175 $203 $379 $406 
Other comprehensive income (loss), net of tax:
Net unrealized holding gains (losses) on investment securities 1
(32)(698)94 (1,820)
Net unrealized losses on other noninterest-bearing investments— (1)— (1)
Net unrealized holding gains (losses) on derivative instruments(8)(50)21 (184)
Reclassification adjustment for decrease (increase) in interest income recognized in earnings on derivative instruments30 (5)67 (15)
Total other comprehensive income (loss), net of tax(10)(754)182 (2,020)
Comprehensive income (loss)$165 $(551)$561 $(1,614)
Three Months Ended
March 31,
(In millions)20242023
Net income for the period$153 $204 
Other comprehensive income, net of tax:
Net unrealized holding gains on investment securities12 77 
Unrealized loss amortization associated with the securities transferred from AFS to HTM46 49 
Net unrealized holding gains (losses) on derivative instruments(1)29 
Reclassification adjustment for decrease in interest income recognized in earnings on derivative instruments26 37 
Other comprehensive income, net of tax83 192 
Comprehensive income$236 $396 
See accompanying notes to consolidated financial statements.
1 For the three and six months ended June 30, 2023, the amounts include $86 million and $9 million related to the decline in the fair value of fixed-rate AFS securities as a result of higher interest rates, offset by $54 million and $103 million in amortization of the discount on the securities transferred from AFS to HTM during the fourth quarter of 2022, respectively.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(In millions, except shares
and per share amounts)
(In millions, except shares
and per share amounts)
Preferred
stock
Common stockAccumulated paid-in capitalRetained earningsAccumulated other
comprehensive income (loss)
Total
shareholders’ equity
Shares
(in thousands)
Amount
Balance at March 31, 2023$440 148,100 $— $1,715 $5,949 $(2,920)$5,184 
Net income for the period175 175 
Other comprehensive loss, net of tax(10)(10)
(In millions, except shares
and per share amounts)
(In millions, except shares
and per share amounts)
Preferred
stock
Common stock shares
 (in thousands)
Accumulated paid-in capitalRetained earningsAccumulated other
comprehensive income (loss)
Total
shareholders’ equity
Balance at December 31, 2023
Balance at December 31, 2023
Balance at December 31, 2023
Net income for the period
Other comprehensive income, net of tax
Bank common stock repurchased
Bank common stock repurchased
Bank common stock repurchased
Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefitsNet activity under employee plans and related tax benefits44 
Dividends on preferred stockDividends on preferred stock(9)(9)
Dividends on common stock, $0.41 per shareDividends on common stock, $0.41 per share(61)(61)
Change in deferred compensationChange in deferred compensation(3)(3)
Balance at June 30, 2023$440 148,144 $— $1,722 $6,051 $(2,930)$5,283 
Balance at March 31, 2024
Balance at March 31, 2022$440 151,348 $— $1,889 $5,311 $(1,346)$6,294 
Balance at December 31, 2022
Balance at December 31, 2022
Balance at December 31, 2022
Net income for the periodNet income for the period203 203 
Other comprehensive loss, net of tax(754)(754)
Other comprehensive income, net of tax
Cumulative effect adjustment, due to adoption of ASU 2022-02, net of tax
Bank common stock repurchasedBank common stock repurchased(936)(50)(50)
Net activity under employee plans and related tax benefitsNet activity under employee plans and related tax benefits59 
Net activity under employee plans and related tax benefits
Net activity under employee plans and related tax benefits
Dividends on preferred stockDividends on preferred stock(8)(8)
Dividends on common stock, $0.38 per share(58)(58)
Dividends on common stock, $0.41 per share
Change in deferred compensationChange in deferred compensation(1)(1)
Balance at June 30, 2022$440 150,471 $— $1,845 $5,447 $(2,100)$5,632 
Balance at March 31, 2023
See accompanying notes to consolidated financial statements.

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(In millions, except shares
and per share amounts)
Preferred
stock
Common stockAccumulated paid-in capitalRetained earningsAccumulated other
comprehensive income (loss)
Total
shareholders’ equity
Shares
(in thousands)
Amount
Balance at December 31, 2022$440 148,664 $— $1,754 $5,811 $(3,112)$4,893 
Net income for the period379 379 
Other comprehensive income, net of tax182 182 
Cumulative effect adjustment, due to adoption of ASU 2022-02, net of tax
Bank common stock repurchased(953)(50)(50)
Net activity under employee plans and related tax benefits433 18 18 
Dividends on preferred stock(15)(15)
Dividends on common stock, $0.82 per share(122)(122)
Change in deferred compensation(4)(4)
Balance at June 30, 2023$440 148,144 $— $1,722 $6,051 $(2,930)$5,283 
Balance at December 31, 2021$440 151,625 $— $1,928 $5,175 $(80)$7,463 
Net income for the period406 406 
Other comprehensive loss, net of tax(2,020)(2,020)
Bank common stock repurchased(1,714)(101)(101)
Net activity under employee plans and related tax benefits560 18 18 
Dividends on preferred stock(16)(16)
Dividends on common stock, $0.76 per share(116)(116)
Change in deferred compensation(2)(2)
Balance at June 30, 2022$440 150,471 $— $1,845 $5,447 $(2,100)$5,632 

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ZIONS BANCORPORATION, NATIONAL ASSOCIATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
(In millions)(In millions)Six Months Ended
June 30,
(In millions)Three Months Ended
March 31,
2023202220242023
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES
Net income for the periodNet income for the period$379 $406 
Net income for the period
Net income for the period
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Provision for credit losses
Provision for credit lossesProvision for credit losses91 
Depreciation and amortizationDepreciation and amortization72 45 
Share-based compensationShare-based compensation24 22 
Deferred income tax expense (benefit)(13)29 
Net decrease in trading securities433 67 
Net decrease (increase) in loans held for sale(25)42 
Deferred income tax expense
Net decrease (increase) in trading securities
Net decrease in loans held for sale
Change in other liabilitiesChange in other liabilities(363)389 
Change in other assetsChange in other assets164 (205)
Other, netOther, net57 
Net cash provided by operating activitiesNet cash provided by operating activities819 804 
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in money market investments1,454 8,895 
Net decrease (increase) in money market investments
Net decrease (increase) in money market investments
Net decrease (increase) in money market investments
Proceeds from maturities and paydowns of investment securities held-to-maturityProceeds from maturities and paydowns of investment securities held-to-maturity526 48 
Purchases of investment securities held-to-maturityPurchases of investment securities held-to-maturity(21)(220)
Proceeds from sales, maturities, and paydowns of investment securities available-for-saleProceeds from sales, maturities, and paydowns of investment securities available-for-sale1,328 1,915 
Purchases of investment securities available-for-salePurchases of investment securities available-for-sale(301)(5,773)
Net change in loans and leasesNet change in loans and leases(1,311)(1,476)
Purchases and sales of other noninterest-bearing investmentsPurchases and sales of other noninterest-bearing investments176 (1)
Purchases of premises and equipmentPurchases of premises and equipment(53)(102)
Other, netOther, net(18)11 
Other, net
Other, net
Net cash provided by investing activitiesNet cash provided by investing activities1,780 3,297 
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits2,671 (3,728)
Net decrease in deposits
Net decrease in deposits
Net decrease in deposits
Net change in short-term borrowed fundsNet change in short-term borrowed funds(4,904)115 
Redemption of long-term debt(128)(290)
Proceeds from the issuance of common stock
Proceeds from the issuance of common stock
Proceeds from the issuance of common stockProceeds from the issuance of common stock
Dividends paid on common and preferred stockDividends paid on common and preferred stock(138)(130)
Bank common stock repurchasedBank common stock repurchased(50)(101)
Other, netOther, net(8)(11)
Net cash used in financing activitiesNet cash used in financing activities(2,555)(4,137)
Net increase (decrease) in cash and due from banks44 (36)
Net decrease in cash and due from banks
Cash and due from banks at beginning of periodCash and due from banks at beginning of period657 595 
Cash and due from banks at end of periodCash and due from banks at end of period$701 $559 
Cash paid for interestCash paid for interest$546 $31 
Net cash paid for income taxesNet cash paid for income taxes231 
Noncash activities:Noncash activities:
Loans held for investment reclassified to loans held for sale, netLoans held for investment reclassified to loans held for sale, net49 61 
Loans held for investment reclassified to loans held for sale, net
Loans held for investment reclassified to loans held for sale, net
See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2023March 31, 2024
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Zions Bancorporation, National Association and its majority-owned subsidiaries (collectively “Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. References to GAAP, including standards promulgated by the Financial Accounting Standards Board (“FASB”), are made according to sections of the Accounting Standards Codification (“ASC”).
The results of operations for the three and six months ended June 30,March 31, 2024 and 2023 and 2022 are not necessarily indicative of the results that may be expected in future periods. In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.Notes. Actual results could differ from those estimates. For further information, refer to the consolidated financial statements and accompanying footnotes included in our 20222023 Form 10-K.
We evaluated events that occurred between June 30, 2023March 31, 2024 and the date the accompanying financial statements were issued, and determined that there were no material events that would require adjustments to our consolidated financial statements or significant disclosure in the accompanying Notes. As referenced in Note 7 of the Notes to Consolidated Financial Statements, we entered into additional pay-fixed swaps with an aggregate notional amount of $1 billion that were designated as fair value hedges of a defined portfolio of fixed-rate commercial loans in July 2023.
Zions Bancorporation, N.A. is a commercial bank headquartered in Salt Lake City, Utah. We provide a wide range of banking products and related services in 11 Western and Southwestern states through seven separately managed bank divisions, which we refer to as “affiliates,” or “affiliate banks,” each with its own local branding and management team. These include Zions Bank, in Utah, Idaho, and Wyoming; California Bank & Trust (“CB&T”); Amegy Bank (“Amegy”), in Texas; National Bank of Arizona (“NBAZ”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”), in Colorado and New Mexico; and The Commerce Bank of Washington (“TCBW”) which operates under that name in Washington and under the name The Commerce Bank of Oregon in Oregon.

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2. RECENT ACCOUNTING PRONOUNCEMENTS
StandardDescriptionDate of adoptionEffective dateEffect on the financial statements or other significant matters
Standards not yet adopted by the Bank as of March 31, 2024
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
This Accounting Standards Update (“ASU”) expands operating segment disclosures and requires all segment disclosures to be reported in both annual and interim periods. The new standard requires disclosure of the following:
Significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) for reportable segments;
The title and position of the CODM as well as how the CODM uses the reported measure(s) of profit and loss to assess segment performance; and
“Other segment items” by reportable segment and a description of its composition.
Annual periods beginning January 1, 2024; Interim periods beginning January 1, 2025The overall effect of this standard is not expected to have a material impact on our financial statements.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
This ASU expands tax disclosures to provide more information to better assess how an entity’s operations, related tax risks, and tax planning affect its tax rate and prospects for future cash flows. The enhancements in this ASU require that an entity disaggregate income taxes paid and income (or loss) from continuing operations before tax expense (or benefit), and income tax expense (or benefit) from continuing operations.
The new standard requires disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold.
January 1, 2025The overall effect of this standard is not expected to have a material impact on our financial statements.
Standards adopted by the Bank during the first quarter of 2024
ASU 2022-03,
Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
This ASU clarifies that contractual restrictions prohibiting the sale of an equity security are not considered part of the unit of account of the equity security, and therefore, are not considered in measuring fair value. The amendments clarify that an entity cannot recognize and measure a contractual sale restriction as a separate unit of account. The amendments in this ASU also require additional qualitative and quantitative disclosures for equity securities subject to contractual sale restrictions.January 1, 2024We adopted the new standard on January 1, 2024. The adoption of this standard did not have a material effect on our financial statements.
ASU 2023-02,
Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)

This Accounting Standards Update (“ASU”)ASU expands the optional use of the proportional amortization method (“PAM”), previously limited to investments in low-income housing tax credit (“LIHTC”) structures, to any eligible equity investments made primarily for the purpose of receiving income tax credit and other tax benefits when certain criteria are met. PAM results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense (benefit).
This ASU allows for an accounting policy election to apply PAM on a tax-credit-program-by-tax-credit-program basis. The ASU also includes additional disclosure requirements about equity investments accounted for using PAM.
The new standard is effective for calendar year-end public companies beginning
January 1, 2024 with early adoption permitted.Periods beginning after December 15, 2023
We do not currently have any additional equity investments that are eligible for PAM underadopted the provisions of this ASU. We will continue to evaluate its use for new investments. The overall effect of the guidance is not expected to have a material impact on our financial statements.
We do not plan to early adopt this new standard.
ASU 2022-03,
Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

This ASU clarifies that contractual restrictions prohibiting the sale of an equity security are not considered part of the unit of account of the equity security, and therefore, are not considered in measuring fair value. The amendments clarify that an entity cannot recognize and measure a contractual sale restriction as a separate unit of account. The amendments in this ASU also require additional qualitative and quantitative disclosures for equity securities subject to contractual sale restrictions.
The new standard is effective for calendar year-end public companies beginning January 1, 2024, with early adoption permitted.
Periods beginning after December 15, 2023
The requirements of this ASU are consistent with our current treatment of equity securities subject to contractual sale restrictions and are not expected to impact the fair value measurements of these securities.
We are evaluating supplementary disclosure requirements and additional data needed to meet these requirements. The overall effect of this standard is not expected to have a material impact on our financial statements.
We do not plan to early adopt this new standard.
Standards adopted by the Bank
ASU 2022-02,
Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
This ASU eliminated the recognition and measurement requirements for troubled debt restructurings (“TDRs”) for creditors that have adopted ASC 326 (“CECL”), eliminated certain TDR disclosures, and required enhanced disclosures about loan modifications for borrowers experiencing financial difficulty.
The new standard also required public companies to present current period gross charge-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures.
Periods beginning after December 15, 2022We adopted this ASU on a modified retrospective basis on January 1, 2023. It2024. The adoption of this standard did not have a material impacteffect on our financial statements.

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3. FAIR VALUE
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For more information about our valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 3 of our 20222023 Form 10-K.
Fair Value Hierarchy
The following schedule presents assets and liabilities measured at fair value on a recurring basis:
(In millions)(In millions)June 30, 2023(In millions)March 31, 2024
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
ASSETSASSETS
Available-for-sale securities:Available-for-sale securities:
Available-for-sale securities:
Available-for-sale securities:
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporationsU.S. Treasury, agencies, and corporations$475 $8,943 $— $9,418 
Municipal securitiesMunicipal securities1,391 1,391 
Other debt securities
Other debt securities
Other debt securitiesOther debt securities23 23 
Total available-for-saleTotal available-for-sale475 10,357 — 10,832 
Trading securitiesTrading securities32 32 
Other noninterest-bearing investments:Other noninterest-bearing investments:
Bank-owned life insuranceBank-owned life insurance549 549 
Bank-owned life insurance
Bank-owned life insurance
Private equity investments 1
Private equity investments 1
84 87 
Other assets:Other assets:
Agriculture loan servicing and interest-only strips17 17 
Loans held for sale20 20 
Agriculture loan servicing
Agriculture loan servicing
Agriculture loan servicing
Deferred compensation plan assets
Deferred compensation plan assets
Deferred compensation plan assetsDeferred compensation plan assets114 114 
DerivativesDerivatives491 491 
Total assetsTotal assets$592 $11,449 $101 $12,142 
LIABILITIESLIABILITIES
Securities sold, not yet purchasedSecurities sold, not yet purchased$347 $— $— $347 
Securities sold, not yet purchased
Securities sold, not yet purchased
Other liabilities:Other liabilities:
DerivativesDerivatives409 409 
Derivatives
Derivatives
Total liabilitiesTotal liabilities$347 $409 $— $756 
1 The Level 1 private equity investments (“PEIs”) relate to the portion of our Small Business Investment Company (“SBIC”) investments that are publicly traded.

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(In millions)(In millions)December 31, 2022(In millions)December 31, 2023
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
ASSETSASSETS
Available-for-sale securities:Available-for-sale securities:
Available-for-sale securities:
Available-for-sale securities:
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporations
U.S. Treasury, agencies, and corporationsU.S. Treasury, agencies, and corporations$393 $9,815 $— $10,208 
Municipal securitiesMunicipal securities1,634 1,634 
Other debt securitiesOther debt securities73 73 
Other debt securities
Other debt securities
Total available-for-sale
Total available-for-sale
Total available-for-saleTotal available-for-sale393 11,522 — 11,915 
Trading securitiesTrading securities395 70 465 
Other noninterest-bearing investments:Other noninterest-bearing investments:
Bank-owned life insuranceBank-owned life insurance546 546 
Bank-owned life insurance
Bank-owned life insurance
Private equity investments 1
Private equity investments 1
81 85 
Other assets:Other assets:
Agriculture loan servicing and interest-only strips14 14 
Agriculture loan servicing
Agriculture loan servicing
Agriculture loan servicing
Loans held for sale
Deferred compensation plan assetsDeferred compensation plan assets114 114 
DerivativesDerivatives386 386 
Total assetsTotal assets$906 $12,524 $95 $13,525 
LIABILITIESLIABILITIES
Securities sold, not yet purchasedSecurities sold, not yet purchased$187 $— $— $187 
Securities sold, not yet purchased
Securities sold, not yet purchased
Other liabilities:Other liabilities:
DerivativesDerivatives451 451 
Derivatives
Derivatives
Total liabilitiesTotal liabilities$187 $451 $— $638 
1 The Level 1 PEIs relate to the portion of our SBIC investments that are publicly traded.
Level 3 Valuations
Our Level 3 financial instruments include PEIs and agriculture loan servicing, and interest-only strips.servicing. For additional information regarding our Level 3 financial instruments, including the methods and significant assumptions used to estimate their fair value, see Note 3 of our 20222023 Form 10-K.
Rollforward

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Roll-forward of Level 3 Fair Value Measurements
The following schedule presents a rollforwardroll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:
Level 3 Instruments
Three Months EndedSix Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Level 3 Instruments
Level 3 Instruments
Level 3 Instruments
Three Months Ended
March 31, 2024
March 31, 2024
March 31, 2024
(In millions)
(In millions)
(In millions)(In millions)Private equity investmentsAg loan servicing & interest-only stripsPrivate equity investmentsAg loan servicing & interest-only stripsPrivate equity investmentsAg loan servicing & interest-only stripsPrivate equity investmentsAg loan servicing & interest-only strips
Balance at beginning of periodBalance at beginning of period$82 $18 $74 $12 $81 $14 $66 $12 
Unrealized securities gains (losses), net(3)— — — (3)— — 
Balance at beginning of period
Balance at beginning of period
Other noninterest income (expense)
Other noninterest income (expense)
Other noninterest income (expense)Other noninterest income (expense)— (1)— — — — — 
PurchasesPurchases— — — — 
Purchases
Purchases
Cost of investments sold
Cost of investments sold
Cost of investments soldCost of investments sold— — — — — — (3)— 
Transfers out 1
— — — — — — — — 
Transfers out
Transfers out
Transfers out
Balance at end of periodBalance at end of period$84 $17 $77 $12 $84 $17 $77 $12 
Balance at end of period
Balance at end of period
1 Represents the transfer of SBIC investments out of Level 3 and into Level 1 because they are publicly traded.

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The rollforwardroll-forward of Level 3 instruments includes the following realized gains and losses recognized in securities“Securities gains (losses), net” on the consolidated statement of income for the periods presented:
(In millions)Three Months EndedSix Months Ended
June 30,March 31, 2024March 31, 2023June 30, 2022June 30, 2023June 30, 2022
Securities gains (losses), net$2 $— $— $(2)
Nonrecurring Fair Value Measurements
Certain assets and liabilities may be measured at fair value on a nonrecurring basis, including impaired loans that have been measured based on the fair value of the underlying collateral, other real estate owned (“OREO”), and equity investments without readily determinable fair values. Nonrecurring fair value adjustments generally include changes in value resulting from observable price changes for equity investments without readily determinable fair values, write-downs of individual assets, or the application of lower of cost or fair value accounting. At June 30, 2023,March 31, 2024, we had $10$2 million of collateral-dependent loans classified in Level 2, and we recognized $4less than $1 million of losses from fair value changes related to these loans. At December 31, 2022, we had an insignificant amount of assets or liabilities that had fair value changes measured on a nonrecurring basis. For additional information regarding the measurement ofassets and liabilities measured at fair value for impaired loans, collateral-dependent loans, and OREO,on a nonrecurring basis, see Note 3 of our 20222023 Form 10-K.
Fair Value of Certain Financial Instruments
The following schedule presents the carrying values and estimated fair values of certain financial instruments:
June 30, 2023December 31, 2022
(In millions)(In millions)Carrying
value

Fair value
LevelCarrying
value
Fair valueLevel
(In millions)
(In millions)
Financial assets:
Financial assets:
Financial assets:Financial assets:
Held-to-maturity investment securitiesHeld-to-maturity investment securities$10,753 $10,768 2$11,126 $11,239 2
Held-to-maturity investment securities
Held-to-maturity investment securities
Loans and leases (including loans held for sale), net of allowance
Loans and leases (including loans held for sale), net of allowance
Loans and leases (including loans held for sale), net of allowanceLoans and leases (including loans held for sale), net of allowance56,302 53,885 355,086 53,093 3
Financial liabilities:Financial liabilities:
Financial liabilities:
Financial liabilities:
Time deposits
Time deposits
Time depositsTime deposits12,259 12,187 22,309 2,269 2
Long-term debtLong-term debt538 460 2651 635 2
Long-term debt
Long-term debt
The previouspreceding schedule does not include certain financial instruments that are recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which the carrying value approximates fair value. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value, see Note 3 of our 20222023 Form 10-K.
Fair Value Option for Certain Loans Held for Sale
During the second quarter of 2023, we elected the fair value option for certain commercial real estate loans that are intended for sale or securitization and are hedged with derivative instruments. Electing the fair value option reduces the accounting volatility that would otherwise result from the asymmetry created by accounting for the loans held for sale at the lower of cost or fair value and the derivatives at fair value without the complexity of applying hedge accounting. These loans are presented in “Loans held for sale” on the consolidated balance sheet, and associated gains and losses are presented in “Capital markets fees” on the consolidated statement of income. These commercial real estate loans measured at fair value are generally classified in Level 2 in the fair value hierarchy because their pricing is based on observable market inputs. At June 30, 2023, we had $19.8 million of loans measured at fair value ($20.0 million par value). For the second quarter of 2023, we recognized approximately $2 million of net gains from fair value changes of loans carried at fair value and the associated derivatives.

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4. OFFSETTING ASSETS AND LIABILITIES
The following schedules present gross and net information for selected financial instruments on the balance sheet.sheet:
June 30, 2023
Gross amounts not offset in the balance sheet
March 31, 2024March 31, 2024
Gross amounts not offset on the balance sheet
(In millions)
(In millions)
(In millions)(In millions)Gross amounts recognizedGross amounts offset in the balance sheetNet amounts presented in the balance sheetFinancial instrumentsCash collateral received/pledgedNet amountGross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetFinancial instrumentsCash collateral received/pledgedNet amount
Assets:Assets:
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resellFederal funds sold and securities purchased under agreements to resell$868 $(87)$781 $— $— $781 
Derivatives (included in other assets)Derivatives (included in other assets)491 — 491 (9)(470)12 
Total assetsTotal assets$1,359 $(87)$1,272 $(9)$(470)$793 
Liabilities:Liabilities:
Federal funds and other short-term borrowingsFederal funds and other short-term borrowings$5,600 $(87)$5,513 $— $— $5,513 
Federal funds and other short-term borrowings
Federal funds and other short-term borrowings
Derivatives (included in other liabilities)Derivatives (included in other liabilities)409 — 409 (9)(1)399 
Total liabilitiesTotal liabilities$6,009 $(87)$5,922 $(9)$(1)$5,912 
December 31, 2022
Gross amounts not offset in the balance sheet
December 31, 2023December 31, 2023
Gross amounts not offset on the balance sheet
(In millions)
(In millions)
(In millions)(In millions)Gross amounts recognizedGross amounts offset in the balance sheetNet amounts presented in the balance sheetFinancial instrumentsCash collateral received/pledgedNet amountGross amounts recognizedGross amounts offset on the balance sheetNet amounts presented on the balance sheetFinancial instrumentsCash collateral received/pledgedNet amount
Assets:Assets:
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resell
Federal funds sold and securities purchased under agreements to resellFederal funds sold and securities purchased under agreements to resell$2,451 $(25)$2,426 $— $— $2,426 
Derivatives (included in other assets)Derivatives (included in other assets)386 — 386 (10)(367)
Total assetsTotal assets$2,837 $(25)$2,812 $(10)$(367)$2,435 
Liabilities:Liabilities:
Federal funds and other short-term borrowingsFederal funds and other short-term borrowings$10,442 $(25)$10,417 $— $— $10,417 
Federal funds and other short-term borrowings
Federal funds and other short-term borrowings
Derivatives (included in other liabilities)Derivatives (included in other liabilities)451 — 451 (10)— 441 
Total liabilitiesTotal liabilities$10,893 $(25)$10,868 $(10)$— $10,858 
Security repurchase and reverse repurchase agreements are offset, when applicable, inon the balance sheet according to master netting agreements. Security repurchase agreements are included within “Federal funds and other short-term borrowings.”borrowings” on the consolidated balance sheet. Derivative instruments may be offset under their master netting agreements; however, for accounting purposes, we present these items on a gross basis inon our balance sheet. See Note 7 for further information regarding derivative instruments.
5. INVESTMENTS
Investment Securities
Investment securities are classified as held-to-maturity (“HTM”), available-for-sale (“AFS”), or trading. HTM securities, which management has the intent and ability to hold until maturity, are measuredcarried at amortized cost. The amortized cost amounts represent the original cost of the investments, adjusted for related amortization or accretion of any purchase premiums or discounts, and for any impairment losses, including credit-related impairment. AFS securities are carried at fair value, and changes in fair value (unrealized gains and losses) are reported as net increases or decreases to accumulated other comprehensive income (“AOCI”), net of related taxes. Trading securities are carried at fair value with gains and losses recognized in current period earnings.

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The carrying values of our securities do not include accrued interest receivables of $58 million and $65 million at March 31, 2024 and December 31, 2023, respectively. These receivables are included in “Other assets” on the consolidated balance sheet.
When a security is transferred from AFS to HTM, the difference between its amortized cost basis and fair value at the date of transfer is amortized as a yield adjustment through interest income, and the fair value at the date of transfer results in either a premium or discount to the amortized cost basis of the HTM securities. The amortization of the unrealized gains or losses reported in accumulated other comprehensive income (“AOCI”)AOCI will offset the effect of the accretionamortization of the premium or discount in interest income that is created by the transfer. The discount associated with securities previously transferred from AFS to HTM was $2.0 billion ($1.5 billion after tax) at March 31, 2024.

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AFS securities are measured at fair value, and changes in fair value (unrealized gains and losses) are reported as net increases or decreases to AOCI, net of related taxes. Trading securities are measured at fair value with gains and losses recognized in current period earnings. The carrying values of our securities do not include accrued interest receivables of $67 million and $75 million at June 30, 2023 and December 31, 2022, respectively. These receivables are presented on the consolidated balance sheet in “Other assets.” See Notes 3 and 5 of our 20222023 Form 10-K for more information regarding our process to estimate the fair value and accounting for our investment securities, respectively.
The following schedule presents the amortized cost and estimated fair values of our HTM and AFS securities:
June 30, 2023
March 31, 2024March 31, 2024
(In millions)(In millions)Amortized
cost
Gross unrealized gainsGross unrealized lossesEstimated
fair value
(In millions)Amortized
cost
Gross unrealized gains 1
Gross unrealized lossesEstimated
fair value
Held-to-maturityHeld-to-maturity
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securitiesAgency securities$96 $— $$90 
Agency guaranteed mortgage-backed securities 1
10,289 116 70 10,335 
Agency securities
Agency securities
Agency guaranteed mortgage-backed securities
Municipal securitiesMunicipal securities368 — 25 343 
Total held-to-maturityTotal held-to-maturity10,753 116 101 10,768 
Available-for-saleAvailable-for-sale
U.S. Treasury securitiesU.S. Treasury securities565 — 90 475 
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities717 — 40 677 
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities8,991 — 1,344 7,647 
Small Business Administration loan-backed securitiesSmall Business Administration loan-backed securities646 — 27 619 
Municipal securitiesMunicipal securities1,480 — 89 1,391 
Other debt securitiesOther debt securities25 — 23 
Total available-for-saleTotal available-for-sale12,424 — 1,592 10,832 
Total HTM and AFS investment securitiesTotal HTM and AFS investment securities$23,177 $116 $1,693 $21,600 
December 31, 2022
December 31, 2023December 31, 2023
(In millions)(In millions)Amortized
cost
Gross unrealized gainsGross unrealized lossesEstimated
fair value
(In millions)Amortized
cost
Gross unrealized gains 1
Gross unrealized lossesEstimated
fair value
Held-to-maturityHeld-to-maturity
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securitiesAgency securities$100 $— $$93 
Agency guaranteed mortgage-backed securities 1
10,621 165 14 10,772 
Agency securities
Agency securities
Agency guaranteed mortgage-backed securities
Municipal securitiesMunicipal securities405 — 31 374 
Total held-to-maturityTotal held-to-maturity11,126 165 52 11,239 
Available-for-saleAvailable-for-sale
U.S. Treasury securitiesU.S. Treasury securities557 — 164 393 
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities782 — 46 736 
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities9,652 — 1,285 8,367 
Small Business Administration loan-backed securitiesSmall Business Administration loan-backed securities740 29 712 
Municipal securitiesMunicipal securities1,732 99 1,634 
Other debt securitiesOther debt securities75 — 73 
Total available-for-saleTotal available-for-sale13,538 1,625 11,915 
Total HTM and AFS investment securitiesTotal HTM and AFS investment securities$24,664 $167 $1,677 $23,154 
1During Gross unrealized gains for the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backedrespective AFS securities to the HTM category to reflect our intent for these securities. The transfer of these securities from AFS to HTM at fair value resulted in a discount to the amortized cost basis of the HTM securities equivalent to the $2.4 billion ($1.8 billion after tax) of unrealized losses in AOCI. The amortization of the unrealized losses will offset the effect of the accretion of the discount created by the transfer. At June 30, 2023, the unamortized discount on the HTM securities totaled approximately $2.2 billion ($1.7 billion after tax).security categories were individually less than $1 million.

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Maturities
The following schedule presents the amortized cost and weighted average yields of debt securities by contractual maturity of principal payments at June 30, 2023.March 31, 2024. This schedule does not reflect the duration of the portfolio, which would incorporate amortization, expected prepayments, interest rate resets, and fair value hedges.hedges; the effects of which result in measured durations shorter than contractual maturities.
June 30, 2023
Total
debt securities
Due in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten years
March 31, 2024March 31, 2024
Total
debt securities
Total
debt securities
Due in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten years
(Dollar amounts in millions)(Dollar amounts in millions)Amortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yield(Dollar amounts in millions)Amortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yieldAmortized costAverage yield
Held-to-maturityHeld-to-maturity
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities$96 3.54 %$— — %$— — %$— — %$96 3.54 %$92 3.52 3.52 %$— — — %$— — — %$— — — %$92 3.52 3.52 %
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities10,289 1.84 — — — — 46 2.02 10,243 1.84 
Municipal securities 1
Municipal securities 1
368 3.15 27 2.77 135 2.98 168 3.33 38 3.19 
Total held-to-maturity securitiesTotal held-to-maturity securities10,753 1.90 27 2.77 135 2.98 214 3.05 10,377 1.86 
Available-for-saleAvailable-for-sale
U.S. Treasury securitiesU.S. Treasury securities565 3.12 164 5.01 — — — — 401 2.35 
U.S. Treasury securities
U.S. Treasury securities
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities717 2.65 114 1.07 191 3.13 218 2.63 194 3.12 
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities8,991 1.99 21 4.38 233 1.56 1,502 2.09 7,235 1.97 
Small Business Administration loan-backed securitiesSmall Business Administration loan-backed securities646 5.22 — — 33 5.84 146 4.30 467 5.46 
Municipal securities 1
Municipal securities 1
1,480 2.18 122 2.40 500 2.62 678 1.84 180 2.08 
Other debt securitiesOther debt securities25 8.53 — — — — 10 9.50 15 7.88 
Total available-for-sale securitiesTotal available-for-sale securities12,424 2.28 421 3.15 957 2.58 2,554 2.22 8,492 2.22 
Total HTM and AFS investment securitiesTotal HTM and AFS investment securities$23,177 2.10 %$448 3.13 %$1,092 2.63 %$2,768 2.29 %$18,869 2.02 %Total HTM and AFS investment securities$21,661 2.12 2.12 %$508 3.29 3.29 %$839 2.66 2.66 %$2,663 2.30 2.30 %$17,651 2.04 2.04 %
1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.

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The following schedule presents gross unrealized losses for AFS securities and the estimated fair value by length of time the securities have been in an unrealized loss position.position:
June 30, 2023
Less than 12 months12 months or moreTotal
March 31, 2024March 31, 2024
Less than 12 monthsLess than 12 months12 months or moreTotal
(In millions)(In millions)Gross
unrealized
losses
Estimated
fair
value
Gross
unrealized
losses
Estimated
fair
value
Gross
unrealized
losses
Estimated
fair
value
(In millions)Gross
unrealized
losses
Estimated
fair
value
Gross
unrealized
losses
Estimated
fair
value
Gross
unrealized
losses
Estimated
fair
value
Available-for-saleAvailable-for-sale
Available-for-sale
Available-for-sale
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securitiesU.S. Treasury securities$— $55 $90 $311 $90 $366 
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities33 38 617 40 650 
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities83 482 1,261 7,140 1,344 7,622 
Small Business Administration loan-backed securitiesSmall Business Administration loan-backed securities— 21 27 525 27 546 
Municipal securitiesMunicipal securities495 82 871 89 1,366 
OtherOther— — 13 13 
Total available-for-sale investment securitiesTotal available-for-sale investment securities$92 $1,086 $1,500 $9,477 $1,592 $10,563 
Total available-for-sale investment securities
Total available-for-sale investment securities
December 31, 2022
Less than 12 months12 months or moreTotal
December 31, 2023December 31, 2023
Less than 12 monthsLess than 12 months12 months or moreTotal
(In millions)(In millions)Gross
unrealized
losses
Estimated
 fair
 value
Gross
unrealized
losses
Estimated
 fair
 value
Gross
unrealized
losses
Estimated
 fair
 value
(In millions)Gross
unrealized
losses
Estimated
 fair
 value
Gross
unrealized
losses
Estimated
 fair
 value
Gross
unrealized
losses
Estimated
 fair
 value
Available-for-saleAvailable-for-sale
Available-for-sale
Available-for-sale
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securitiesU.S. Treasury securities$94 $308 $70 $85 $164 $393 
U.S. Government agencies and corporations:U.S. Government agencies and corporations:
Agency securities
Agency securities
Agency securitiesAgency securities39 634 102 46 736 
Agency guaranteed mortgage-backed securitiesAgency guaranteed mortgage-backed securities447 4,322 838 4,042 1,285 8,364 
Small Business Administration loan-backed securitiesSmall Business Administration loan-backed securities101 21 524 29 625 
Municipal securitiesMunicipal securities63 1,295 36 256 99 1,551 
OtherOther13 — — 13 
Total available-for-sale investment securitiesTotal available-for-sale investment securities$653 $6,673 $972 $5,009 $1,625 $11,682 
Total available-for-sale investment securities
Total available-for-sale investment securities
At June 30, 2023March 31, 2024 and December 31, 2022,2023, approximately 3,2192,940 and 3,5622,998 AFS investment securities were in an unrealized loss position, respectively.
Impairment
On a quarterly basis, we review our investment securities portfolio for the presence of impairment on an individual security basis. For additional information on our policy and impairment evaluation process for investment securities, see Note 5 of our 20222023 Form 10-K.
AFS Impairment
We did not recognize any impairment on our AFS investment securities portfolio during the first sixthree months of 2023.2024. Unrealized losses primarily relate to changes inhigher interest rates subsequent to the purchase of securities and are not attributable to credit; as such, absent any future sales, we would expect to receive the full principal value at maturity. At June 30, 2023,March 31, 2024, we had not initiated any sales of AFS securities, nor did we have an intent to sell any identified securities with unrealized losses. We do not believe it is more likely than not that we would be required to sell such securities before recovery of their amortized cost basis.
HTM Impairment
For HTM securities, the allowance for credit losses (“ACL”) is assessed consistent with the approach described in Note 6 for loans and leases measured at amortized cost. At June 30, 2023,March 31, 2024, the ACL on HTM securities was less than $1 million, all HTM securities were risk-graded as Pass” in terms of credit quality, and none were considered past due.

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Securities Gains and Losses Recognized in Income
The following schedule presents securities gains and losses recognized in the consolidated income statement.income:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
(In millions)
(In millions)Gross gainsGross lossesGross gainsGross lossesGross gainsGross lossesGross gainsGross losses
(In millions)
Available-for-sale
Available-for-sale
Available-for-saleAvailable-for-sale$71 $71 $— $— $72 $73 $— $— 
TradingTrading— — 10 — — 
Trading
Trading
Other noninterest-bearing investments
Other noninterest-bearing investments
Other noninterest-bearing investmentsOther noninterest-bearing investments10 10 — 13 12 21 
Total gainsTotal gains88 88 — 95 94 21 
Total gains
Total gains
Net gains (losses) 1
Net gains (losses) 1
Net gains (losses) 1
Net gains (losses) 1
$— $$$(16)
1 Net gains (losses) were recognized in securities“Securities gains (losses) in, net” on the income statement.consolidated statement of income.
The following schedule presents interest income by security type.type:
Three Months Ended June 30,
20232022
(In millions)TaxableNontaxableTotalTaxableNontaxableTotal
Investment securities:
Held-to-maturity$59 $$60 $$$
Available-for-sale69 77 109 11 120 
Trading— — 
Total securities$128 $10 $138 $112 $16 $128 
Six Months Ended June 30,
20232022
Three Months Ended March 31,Three Months Ended March 31,
202420242023
(In millions)(In millions)TaxableNontaxableTotalTaxableNontaxableTotal(In millions)TaxableNontaxableTotalTaxableNontaxableTotal
Investment securities:Investment securities:
Held-to-maturity
Held-to-maturity
Held-to-maturityHeld-to-maturity$120 $$122 $$$
Available-for-saleAvailable-for-sale138 14 152 205 19 224 
TradingTrading— — 
Total securitiesTotal securities$258 $17 $275 $210 $30 $240 

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6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES
Loans, Leases, and Loans Held for Sale
Loans and leases are summarized as follows according to major portfolio segment and specific loan class:
(In millions)June 30,
2023
December 31,
2022
Loans held for sale$36 $
Commercial:
Commercial and industrial 1
$16,622 $16,377 
Leasing388 386 
Owner-occupied9,328 9,371 
Municipal4,354 4,361 
Total commercial30,692 30,495 
Commercial real estate:
Construction and land development2,498 2,513 
Term10,406 10,226 
Total commercial real estate12,904 12,739 
Consumer:
Home equity credit line3,291 3,377 
1-4 family residential7,980 7,286 
Construction and other consumer real estate1,434 1,161 
Bankcard and other revolving plans466 471 
Other150 124 
Total consumer13,321 12,419 
Total loans and leases$56,917 $55,653 
1Commercial and industrial loan balances include Paycheck Protection Program (“PPP”) loans of $126 million and $197 million for the respective periods presented.
(In millions)March 31,
2024
December 31,
2023
Loans held for sale$12 $53 
Commercial:
Commercial and industrial$16,519 $16,684 
Leasing388 383 
Owner-occupied9,295 9,219 
Municipal4,277 4,302 
Total commercial30,479 30,588 
Commercial real estate:
Construction and land development2,686 2,669 
Term10,892 10,702 
Total commercial real estate13,578 13,371 
Consumer:
Home equity credit line3,382 3,356 
1-4 family residential8,778 8,415 
Construction and other consumer real estate1,321 1,442 
Bankcard and other revolving plans439 474 
Other132 133 
Total consumer14,052 13,820 
Total loans and leases$58,109 $57,779 
Loans and leases are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $38$32 million and $49$37 million at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. Amortized cost basis does not include accrued interest receivables of $263$300 million and $247$299 million at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. These receivables are presented in the consolidated balance sheet within the “Other assets” line item.
Municipal loans generally include loans to state and local governments (“municipalities”) with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.
Land acquisition and development loans included in the construction and land development loan portfolio were $229$237 million at June 30, 2023March 31, 2024 and $262$219 million at December 31, 2022.2023.
Loans with a carrying value of $39.8$38.7 billion at June 30, 2023March 31, 2024 and $27.6$36.3 billion at December 31, 20222023 have been pledged at the Federal Reserve (“FRB”) and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.
At the time of origination, we determine the classification of loans as either held for investment or held for sale. Loans held for sale are measured at fair value or the lower of cost or fair value and primarily consist of (1) commercial real estate (“CRE”) loans that are sold into securitization entities, and (2) conforming residential mortgages that are generally sold to U.S. government agencies. The following schedule presents loans added to, or sold from, the held for sale category during the periods presented.presented:

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Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In millions)
(In millions)
(In millions)(In millions)2023202220232022
Loans added to held for saleLoans added to held for sale$220 $190 $306 $487 
Loans added to held for sale
Loans added to held for sale
Loans sold from held for saleLoans sold from held for sale188 187 277 523 
Loans sold from held for sale
Loans sold from held for sale
Occasionally, we have continuing involvement in the sold loans in the form of servicing rights or guarantees. The principal balance of sold loans for which we retain servicing was $3.4$0.5 billion and $3.5$0.4 billion at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. Income from sold loans, excluding servicing, was $2 million and $7$1 million for the three and six months ended June 30, 2023,March 31, 2024, and $4 million and $10$5 million for the three and six months ended June 30, 2022, respectively.March 31, 2023. Other income from loans sold includes fair value adjustments on loans that are included in “Capital markets fees” on the consolidated statement of income.
Allowance for Credit Losses
The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our 20222023 Form 10-K.
The ACL for AFS and HTM debt securities is estimated separately from loans. For HTM securities, the ACL is estimated consistent with the approach for loans measured at amortized cost. See Note 5 of our 20222023 Form 10-K for further discussion of our methodology used to estimate the ACL on AFS and HTM debt securities.
Changes in the ACL are summarized as follows:
Three Months Ended March 31, 2024Three Months Ended March 31, 2024
(In millions)(In millions)CommercialCommercial
real estate
ConsumerTotal
Allowance for loan losses
Three Months Ended June 30, 2023
(In millions)CommercialCommercial
real estate
ConsumerTotal
Allowance for loan losses
Balance at beginning of period
Balance at beginning of period
Balance at beginning of periodBalance at beginning of period$313 $160 $145 $618 
Provision for loan lossesProvision for loan losses24 21 46 
Gross loan and lease charge-offsGross loan and lease charge-offs20 — 22 
RecoveriesRecoveries— 
Net loan and lease charge-offs (recoveries)Net loan and lease charge-offs (recoveries)14 — (1)13 
Balance at end of periodBalance at end of period$323 $181 $147 $651 
Reserve for unfunded lending commitmentsReserve for unfunded lending commitments
Balance at beginning of periodBalance at beginning of period$19 $28 $13 $60 
Balance at beginning of period
Balance at beginning of period
Provision for unfunded lending commitmentsProvision for unfunded lending commitments(2)— 
Balance at end of periodBalance at end of period$20 $29 $11 $60 
Total allowance for credit losses at end of periodTotal allowance for credit losses at end of period
Allowance for loan lossesAllowance for loan losses$323 $181 $147 $651 
Allowance for loan losses
Allowance for loan losses
Reserve for unfunded lending commitmentsReserve for unfunded lending commitments20 29 11 60 
Total allowance for credit lossesTotal allowance for credit losses$343 $210 $158 $711 

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Six Months Ended June 30, 2023
Three Months Ended March 31, 2023Three Months Ended March 31, 2023
(In millions)(In millions)CommercialCommercial
real estate
ConsumerTotal(In millions)CommercialCommercial real estateConsumerTotal
Allowance for loan lossesAllowance for loan losses
Balance at December 31, 2022$300 $156 $119 $575 
Adjustment for change in accounting standard— (4)(3)
Balance at beginning of period
Balance at beginning of period
Balance at beginning of periodBalance at beginning of period$300 $152 $120 $572 
Provision for loan lossesProvision for loan losses34 29 29 92 
Gross loan and lease charge-offsGross loan and lease charge-offs23 — 29 
RecoveriesRecoveries12 — 16 
Net loan and lease charge-offs (recoveries)Net loan and lease charge-offs (recoveries)11 — 13 
Balance at end of periodBalance at end of period$323 $181 $147 $651 
Reserve for unfunded lending commitmentsReserve for unfunded lending commitments
Balance at beginning of period
Balance at beginning of period
Balance at beginning of periodBalance at beginning of period$16 $33 $12 $61 
Provision for unfunded lending commitmentsProvision for unfunded lending commitments(4)(1)(1)
Balance at end of periodBalance at end of period$20 $29 $11 $60 
Total allowance for credit losses at end of periodTotal allowance for credit losses at end of period
Allowance for loan lossesAllowance for loan losses$323 $181 $147 $651 
Allowance for loan losses
Allowance for loan losses
Reserve for unfunded lending commitmentsReserve for unfunded lending commitments20 29 11 60 
Total allowance for credit lossesTotal allowance for credit losses$343 $210 $158 $711 
Three Months Ended June 30, 2022
(In millions)CommercialCommercial real estateConsumerTotal
Allowance for loan losses
Balance at beginning of period$282 $102 $94 $478 
Provision for loan losses12 12 15 39 
Gross loan and lease charge-offs15 — 18 
Recoveries— 
Net loan and lease charge-offs (recoveries)— 
Balance at end of period$286 $114 $108 $508 
Reserve for unfunded lending commitments
Balance at beginning of period$14 $12 $10 $36 
Provision for unfunded lending commitments(1)— 
Balance at end of period$13 $15 $10 $38 
Total allowance for credit losses at end of period
Allowance for loan losses$286 $114 $108 $508 
Reserve for unfunded lending commitments13 15 10 38 
Total allowance for credit losses$299 $129 $118 $546 

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Six Months Ended June 30, 2022
(In millions)CommercialCommercial
real estate
ConsumerTotal
Allowance for loan losses
Balance at beginning of period$311 $107 $95 $513 
Provision for loan losses(12)15 10 
Gross loan and lease charge-offs28 — 35 
Recoveries15 — 20 
Net loan and lease charge-offs (recoveries)13 — 15 
Balance at end of period$286 $114 $108 $508 
Reserve for unfunded lending commitments
Balance at beginning of period$19 $11 $10 $40 
Provision for unfunded lending commitments(6)— (2)
Balance at end of period$13 $15 $10 $38 
Total allowance for credit losses at end of period
Allowance for loan losses$286 $114 $108 $508 
Reserve for unfunded lending commitments13 15 10 38 
Total allowance for credit losses$299 $129 $118 $546 
Nonaccrual Loans
Loans are generally placed on nonaccrual status when payment in full of principal and interest is not expected, or the loan is 90 days or more past due as to principal or interest, unless the loan is both well-secured and in the process of collection. Factors we consider in determining whether a loan is placed on nonaccrual include delinquency status, collateral value, borrower or guarantor financial statement information, bankruptcy status, and other information which would indicate that the full and timely collection of interest and principal is uncertain.
A nonaccrual loan may be returned to accrual status when (1) all delinquent interest and principal become current in accordance with the terms of the loan agreement, (2) the loan, if secured, is well-secured, (3) the borrower has paid according to the contractual terms for a minimum of six months, and (4) an analysis of the borrower indicates a reasonable assurance of the borrower's ability and willingness to maintain payments.
The amortized cost basis of nonaccrual loans is summarized as follows:
June 30, 2023
Amortized cost basisTotal amortized cost basis
(In millions)with no allowancewith allowanceRelated allowance
Commercial:
Commercial and industrial$11 $60 $71 $33 
Owner-occupied20 29 
Total commercial31 69 100 34 
Commercial real estate:
Term13 
Total commercial real estate13 
Consumer:
Home equity credit line— 12 12 
1-4 family residential35 37 
Total consumer loans47 49 
Total$40 $122 $162 $43 

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December 31, 2022
Amortized cost basisTotal amortized cost basis
(In millions)with no allowancewith allowanceRelated allowance
Commercial:
Commercial and industrial$$55 $63 $27 
Owner-occupied13 11 24 
Total commercial21 66 87 28 
Commercial real estate:
Term— 14 14 
Total commercial real estate— 14 14 
Consumer:
Home equity credit line10 11 
1-4 family residential28 37 
Total consumer loans10 38 48 
Total$31 $118 $149 $35 
The amortized cost basis of nonaccrual loans is summarized as follows:
March 31, 2024
Amortized cost basisTotal amortized cost basis
(In millions)with no allowancewith allowanceRelated allowance
Commercial:
Commercial and industrial$$103 $110 $25 
Leasing— 
Owner-occupied13 20 
Total commercial20 112 132 27 
Commercial real estate:
Construction and land development— — 
Term34 42 
Total commercial real estate34 43 
Consumer:
Home equity credit line23 27 
1-4 family residential36 44 
Bankcard and other revolving plans— 
Other— — 
Total consumer loans12 61 73 11 
Total$66 $182 $248 $39 

December 31, 2023
Amortized cost basisTotal amortized cost basis
(In millions)with no allowancewith allowanceRelated allowance
Commercial:
Commercial and industrial$11 $71 $82 $30 
Leasing— 
Owner-occupied12 20 
Total commercial23 81 104 32 
Commercial real estate:
Construction and land development22 — 22 — 
Term37 39 
Total commercial real estate59 61 
Consumer:
Home equity credit line16 17 
1-4 family residential32 40 
Total consumer loans48 57 10 
Total$91 $131 $222 $43 
For accruing loans, interest is accrued and interest payments are recognized into interest income according to the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, any uncollected or accrued interest is reversed from interest income in a timely manner (generally within one month), and any payments received on these loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. When the collectability of the amortized cost basis for a nonaccrual loan is no longer in doubt, then interest payments may be recognized in interest income on a cash basis. For the three and six months ended June 30,March 31, 2024 and 2023, and 2022, there was no interest income recognized on a cash basis during the period the loans were on nonaccrual.

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The amount of accrued interest receivables reversed from interest income during the periods presented is summarized by loan portfolio segment as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In millions)
(In millions)
(In millions)(In millions)2023202220232022
CommercialCommercial$$$$
Commercial
Commercial
Commercial real estate
Commercial real estate
Commercial real estateCommercial real estate— — — — 
ConsumerConsumer— — 
Consumer
Consumer
TotalTotal$$$$
Total
Total
Past Due Loans
Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

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Past due loans (accruing and nonaccruing) are summarized as follows:
June 30, 2023
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
loans
Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial$16,594 $18 $10 $28 $16,622 $$57 
Leasing388 — — — 388 — — 
Owner-occupied9,320 9,328 — 24 
Municipal4,347 — 4,354 — — 
Total commercial30,649 30 13 43 30,692 81 
Commercial real estate:
Construction and land development2,497 — 2,498 — — 
Term10,385 18 21 10,406 13 
Total commercial real estate12,882 19 22 12,904 13 
Consumer:
Home equity credit line3,275 12 16 3,291 — 
1-4 family residential7,950 10 20 30 7,980 — 14 
Construction and other consumer real estate1,434 — — — 1,434 — — 
Bankcard and other revolving plans463 466 — 
Other149 — 150 — — 
Total consumer loans13,271 25 25 50 13,321 20 
Total$56,802 $74 $41 $115 $56,917 $$114 
December 31, 2022
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
loans
Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial$16,331 $24 $22 $46 $16,377 $$45 
Leasing386 — — — 386 — — 
Owner-occupied9,344 20 27 9,371 15 
Municipal4,361 — — — 4,361 — — 
Total commercial30,422 44 29 73 30,495 60 
Commercial real estate:
Construction and land development2,511 — 2,513 — — 
Term10,179 37 10 47 10,226 — 
Total commercial real estate12,690 39 10 49 12,739 — 
Consumer:
Home equity credit line3,369 3,377 — 
1-4 family residential7,258 19 28 7,286 — 16 
Construction and other consumer real estate1,161 — — — 1,161 — — 
Bankcard and other revolving plans467 471 — 
Other124 — — — 124 — — 
Total consumer loans12,379 17 23 40 12,419 22 
Total$55,491 $100 $62 $162 $55,653 $$86 
March 31, 2024
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
loans
Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial$16,480 $17 $22 $39 $16,519 $$87 
Leasing386 — 388 — — 
Owner-occupied9,288 9,295 — 18 
Municipal4,276 — 4,277 — — 
Total commercial30,430 25 24 49 30,479 105 
Commercial real estate:
Construction and land development2,682 2,686 — — 
Term10,818 44 30 74 10,892 — 
Total commercial real estate13,500 47 31 78 13,578 — 
Consumer:
Home equity credit line3,361 11 10 21 3,382 — 14 
1-4 family residential8,740 15 23 38 8,778 — 16 
Construction and other consumer real estate1,321 — — — 1,321 — — 
Bankcard and other revolving plans436 439 — 
Other131 — 132 — 
Total consumer loans13,989 29 34 63 14,052 31 
Total$57,919 $101 $89 $190 $58,109 $$139 
December 31, 2023
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
loans
Accruing
loans
90+ days
past due
Nonaccrual
loans
that are
current 1
Commercial:
Commercial and industrial$16,631 $38 $15 $53 $16,684 $$65 
Leasing381 — 383 — — 
Owner-occupied9,206 11 13 9,219 18 
Municipal4,301 — 4,302 — — 
Total commercial30,519 52 17 69 30,588 83 
Commercial real estate:
Construction and land development2,645 22 24 2,669 — — 
Term10,661 14 27 41 10,702 — 
Total commercial real estate13,306 16 49 65 13,371 — 
Consumer:
Home equity credit line3,334 17 22 3,356 — 
1-4 family residential8,375 17 23 40 8,415 — 13 
Construction and other consumer real estate1,442 — — — 1,442 — — 
Bankcard and other revolving plans468 474 — 
Other132 — 133 — — 
Total consumer loans13,751 40 29 69 13,820 22 
Total$57,576 $108 $95 $203 $57,779 $$108 
1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.

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Credit Quality Indicators
In addition to the nonaccrual and past due criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades assigned to loans follow our definition of Pass, Special Mention, Substandard, and Doubtful, which are consistent with published definitions of regulatory risk classifications.
Pass – A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.
Special Mention – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date.
Substandard – A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.
Doubtful – A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.
There were noThe balance of loans classified as Doubtful was $5 million at June 30, 2023 andMarch 31, 2024, compared with zero at December 31, 2022.2023.
For consumer loans and for commercial and commercial real estate (“CRE”)CRE loans with commitments greater than $1 million, we generally assign internal risk grades similar to those described previously based on automated rules that depend on refreshed credit scores, payment performance, and other risk indicators. These are generally assigned either a Pass, Special Mention, or Substandard grade, and are reviewed as we identify information that might warrant a grade change.
The following schedule presents the amortized cost basis of loans and leases categorized by year of origination and by credit quality classification as monitored by management. The schedule also summarizes the current period gross charge-offs by year of origination.

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March 31, 2024
Term loansRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions)20242023202220212020PriorTotal
Commercial:
Commercial and industrial
Pass$361 $2,617 $2,200 $1,133 $568 $968 $7,978 $166 $15,991 
Special Mention— 90 20 72 198 
Accruing Substandard19 30 13 40 100 220 
Nonaccrual— 32 47 18 110 
Total commercial and industrial380 2,658 2,331 1,167 578 1,059 8,168 178 16,519 
Gross charge-offs— — — 10 
Leasing
Pass39 94 116 42 26 57 — — 374 
Special Mention— — — — 12 
Accruing Substandard— — — — — — — — — 
Nonaccrual— — — — — — — 
Total leasing39 96 126 43 27 57 — — 388 
Gross charge-offs— — — — — — — — — 
Owner-occupied
Pass248 1,126 1,852 1,979 975 2,524 209 50 8,963 
Special Mention— 21 14 25 15 94 
Accruing Substandard10 31 28 20 115 — 218 
Nonaccrual— — 11 — — 20 
Total owner-occupied254 1,141 1,893 2,029 1,016 2,675 232 55 9,295 
Gross charge-offs— — — — — — — — — 
Municipal
Pass121 598 1,056 1,014 599 855 4,248 
Special Mention— — — — — — — — — 
Accruing Substandard— 15 — — — 29 
Nonaccrual— — — — — — — — — 
Total municipal121 613 1,056 1,020 602 860 4,277 
Gross charge-offs— — — — — — — — — 
Total commercial794 4,508 5,406 4,259 2,223 4,651 8,402 236 30,479 
Total commercial gross charge-offs— — — 10 
Commercial real estate:
Construction and land development
Pass95 613 933 273 35 12 501 124 2,586 
Special Mention— — 70 — — — — 78 
Accruing Substandard— 19 — — — — 21 
Nonaccrual— — — — — — — 
Total construction and land development95 632 942 343 36 12 502 124 2,686 
Gross charge-offs— — — — — — — — — 
Term
Pass431 1,735 2,375 1,680 1,286 2,136 286 109 10,038 
Special Mention95 74 183 103 109 — 10 578 
Accruing Substandard41 69 30 12 17 30 — 35 234 
Nonaccrual— 26 — — 12 — — 42 
Total term567 1,882 2,614 1,795 1,412 2,182 286 154 10,892 
Gross charge-offs— — — — — — — — — 
Total commercial real estate662 2,514 3,556 2,138 1,448 2,194 788 278 13,578 
Total commercial real estate gross charge-offs— — — — — — — — — 

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March 31, 2024March 31, 2024
Term loans
Amortized cost basis by year of origination
Amortized cost basis by year of origination
Amortized cost basis by year of origination
(In millions)
(In millions)
(In millions)20242023202220212020PriorTotal
June 30, 2023
Term loansRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions)20232022202120202019PriorTotal
Commercial:
Commercial and industrial
Consumer:
Consumer:
Consumer:
Home equity credit line
Home equity credit line
Home equity credit line
Pass
Pass
PassPass$1,442 $2,955 $1,550 $758 $600 $703 $8,039 $177 $16,224 
Special MentionSpecial Mention49 88 155 
Accruing SubstandardAccruing Substandard37 33 28 65 172 
NonaccrualNonaccrual52 71 
Total commercial and industrial1,449 3,000 1,562 768 635 781 8,244 183 16,622 
Total home equity credit line
Gross charge-offsGross charge-offs— — — — 20 
Leasing
1-4 family residential
Pass
Pass
PassPass53 146 58 38 54 31 — — 380 
Special MentionSpecial Mention— — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total leasing53 149 59 38 54 35 — — 388 
Total 1-4 family residential
Gross charge-offsGross charge-offs— — — — — — — — — 
Owner-occupied
Construction and other consumer real estate
Pass
Pass
PassPass662 2,027 2,077 1,058 761 2,128 199 48 8,960 
Special MentionSpecial Mention66 17 13 — 108 
Accruing SubstandardAccruing Substandard32 51 20 17 102 — 231 
NonaccrualNonaccrual— 12 11 — 29 
Total owner-occupied670 2,064 2,195 1,093 798 2,254 206 48 9,328 
Total construction and other consumer real estate
Gross charge-offsGross charge-offs— — — — — — — — — 
Municipal
Bankcard and other revolving plans
Pass
Pass
PassPass250 1,188 1,194 688 407 575 — 4,306 
Special MentionSpecial Mention— 38 — — — — — — 38 
Accruing SubstandardAccruing Substandard— — — — — 10 
NonaccrualNonaccrual— — — — — — — — — 
Total municipal250 1,226 1,200 691 408 575 — 4,354 
Total bankcard and other revolving plans
Gross charge-offsGross charge-offs— — — — — — — — — 
Total commercial2,422 6,439 5,016 2,590 1,895 3,645 8,454 231 30,692 
Total commercial gross charge-offs— — — — 20 
Commercial real estate:
Construction and land development
Other consumer
Pass
Pass
PassPass182 667 667 270 36 490 118 2,433 
Special MentionSpecial Mention— — 12 — — 15 — 32 
Accruing SubstandardAccruing Substandard— 10 — 22 — — — 33 
NonaccrualNonaccrual— — — — — — — — — 
Total construction and land development187 677 668 282 58 505 118 2,498 
Total other consumer
Gross charge-offsGross charge-offs— — — — — — — — — 
Term
Pass876 2,704 1,888 1,673 969 1,639 219 173 10,141 
Special Mention23 17 41 — — 93 
Accruing Substandard30 23 37 27 41 — — 159 
Nonaccrual— — — — — — 13 
Total term929 2,744 1,890 1,751 1,002 1,698 219 173 10,406 
Gross charge-offs— — — — — — — — — 
Total commercial real estate1,116 3,421 2,558 2,033 1,060 1,701 724 291 12,904 
Total commercial real estate gross charge-offs— — — — — — — — — 
Total consumer
Total consumer gross charge-offs
Total loans
Total gross charge-offs

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June 30, 2023
Term loansRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
December 31, 2023December 31, 2023
Term loans
Amortized cost basis by year of origination
Amortized cost basis by year of origination
Amortized cost basis by year of origination
(In millions)(In millions)20232022202120202019PriorRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basisTotal
Consumer:
Home equity credit line
(In millions)
(In millions)20232022202120202018PriorTotal
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrial
Pass
Pass
PassPass— — — — — — 3,184 93 3,277 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— — — — — — 10 12 
Total home equity credit line— — — — — — 3,196 95 3,291 
Total commercial and industrial
Gross charge-offsGross charge-offs— — — — — — — — — Gross charge-offs10 10 — — — — 24 24 4545
1-4 family residential
Leasing
Pass
Pass
PassPass651 1,970 1,664 1,011 620 2,025 — — 7,941 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— — 28 — — 37 
Total 1-4 family residential651 1,970 1,666 1,014 624 2,055 — — 7,980 
Total leasing
Gross charge-offsGross charge-offs— — — — — — — — — 
Construction and other consumer real estate
Owner-occupied
Pass
Pass
PassPass74 940 372 27 12 — — 1,434 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total construction and other consumer real estate74 940 372 27 12 — — 1,434 
Total owner-occupied
Gross charge-offsGross charge-offs— — — — — — — — — 
Bankcard and other revolving plans
Municipal
Pass
Pass
PassPass— — — — — — 462 464 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total bankcard and other revolving plans— — — — — — 464 466 
Total municipal
Gross charge-offsGross charge-offs— — — — — — — 
Other consumer
Total commercial
Total commercial gross charge-offs
Commercial real estate:
Construction and land development
Construction and land development
Construction and land development
Pass
Pass
PassPass61 48 24 — — 150 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total other consumer61 48 24 — — 150 
Total construction and land development
Gross charge-offsGross charge-offs— — — — — — — — — 
Total consumer786 2,958 2,062 1,049 642 2,067 3,660 97 13,321 
Total consumer gross charge-offs— — — — — — — 
Total loans$4,324 $12,818 $9,636 $5,672 $3,597 $7,413 $12,838 $619 $56,917 
Total gross charge-offs$— $$$— $— $— $$$22 
Term
Pass
Pass
Pass
Special Mention
Accruing Substandard
Nonaccrual
Total term
Gross charge-offs
Total commercial real estate
Total commercial real estate gross charge-offs

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December 31, 2022
Term loansRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
(In millions)20222021202020192018PriorTotal
Commercial:
Commercial and industrial
Pass$3,363 $1,874 $979 $876 $293 $264 $8,054 $182 $15,885 
Special Mention10 52 50 — 118 
Accruing Substandard26 17 78 30 67 84 311 
Nonaccrual— 11 32 63 
Total commercial and industrial3,390 1,891 1,011 1,017 325 335 8,220 188 16,377 
Leasing
Pass160 71 47 66 18 19 — — 381 
Special Mention— — — — — — — — — 
Accruing Substandard— — — — — — — 
Nonaccrual— — — — — — — — — 
Total leasing160 71 47 66 18 24 — — 386 
Owner-occupied
Pass2,157 2,285 1,143 874 654 1,679 187 74 9,053 
Special Mention15 16 — 49 
Accruing Substandard16 33 48 20 55 64 — 245 
Nonaccrual10 — 24 
Total owner-occupied2,175 2,334 1,198 906 717 1,769 198 74 9,371 
Municipal
Pass1,230 1,220 816 441 168 437 — 4,320 
Special Mention32 — — — — — — 38 
Accruing Substandard— — — — — — — 
Nonaccrual— — — — — — — — — 
Total municipal1,262 1,226 816 441 168 440 — 4,361 
Total commercial6,987 5,522 3,072 2,430 1,228 2,568 8,426 262 30,495 
Commercial real estate:
Construction and land development
Pass548 671 455 81 617 96 2,472 
Special Mention— — — — — — 
Accruing Substandard17 — — 22 — — — — 39 
Nonaccrual— — — — — — — — — 
Total construction and land development566 672 455 103 617 96 2,513 
Term
Pass2,861 2,107 1,686 1,012 666 1,229 276 112 9,949 
Special Mention39 21 11 — — — 76 
Accruing Substandard42 34 21 53 35 — — 187 
Nonaccrual— — — — — 14 
Total term2,942 2,130 1,731 1,037 724 1,274 276 112 10,226 
Total commercial real estate3,508 2,802 2,186 1,140 726 1,276 893 208 12,739 

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December 31, 2022
Term loansRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basis
Amortized cost basis by year of origination
December 31, 2023December 31, 2023
Term loans
Amortized cost basis by year of origination
Amortized cost basis by year of origination
Amortized cost basis by year of origination
(In millions)
(In millions)
(In millions)(In millions)20222021202020192018PriorRevolving loans amortized cost basisRevolving loans converted to term loans amortized cost basisTotal20232022202120202018PriorTotal
Consumer:Consumer:
Consumer:
Consumer:
Home equity credit lineHome equity credit line
Home equity credit line
Home equity credit line
Pass
Pass
PassPass— — — — — — 3,265 98 3,363 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— — — — — — 11 
Total home equity credit lineTotal home equity credit line— — — — — — 3,276 101 3,377 
Gross charge-offs
1-4 family residential1-4 family residential
Pass
Pass
PassPass1,913 1,503 1,024 638 381 1,788 — — 7,247 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— 26 — — 37 
Total 1-4 family residentialTotal 1-4 family residential1,913 1,505 1,026 642 384 1,816 — — 7,286 
Gross charge-offs
Construction and other consumer real estateConstruction and other consumer real estate
Pass
Pass
PassPass583 485 64 19 — — 1,161 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total construction and other consumer real estateTotal construction and other consumer real estate583 485 64 19 — — 1,161 
Gross charge-offs
Bankcard and other revolving plansBankcard and other revolving plans
Pass
Pass
PassPass— — — — — — 468 470 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total bankcard and other revolving plansTotal bankcard and other revolving plans— — — — — — 469 471 
Gross charge-offs
Other consumerOther consumer
Pass
Pass
PassPass68 30 12 — — 124 
Special MentionSpecial Mention— — — — — — — — — 
Accruing SubstandardAccruing Substandard— — — — — — — — — 
NonaccrualNonaccrual— — — — — — — — — 
Total other consumerTotal other consumer68 30 12 — — 124 
Gross charge-offs
Total consumerTotal consumer2,564 2,020 1,102 669 393 1,823 3,745 103 12,419 
Total consumer gross charge-offs
Total loansTotal loans$13,059 $10,344 $6,360 $4,239 $2,347 $5,667 $13,064 $573 $55,653 
Total gross charge-offs
Loan Modifications
On January 1, 2023, we adopted ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminated the recognition and measurement of troubled debt restructurings (“TDRs”) and their related disclosures. As a result, we no longer separately measure an allowance for credit losses for TDRs, relying instead on our credit loss estimation models. The adoption of this guidance did not have a material impact on our financial statements.
ASU 2022-02 requires enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications may also occur when the borrower experiences financial difficulty and needs

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temporary or permanent relief from the original contractual terms of the loan. For loans that have been modified with a borrower experiencing financial difficulty, we use the same credit loss estimation methods that we use for the

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rest of the loan portfolio. These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historical modified loans. All nonaccruing loans more than $1 million are evaluated individually, regardless of modification.
We consider many factors in determining whether to agree to a loan modification and we seek a solution that will both minimize potential loss to us and attempt to help the borrower. We evaluate borrowers’ current and forecasted future cash flows, their ability and willingness to make current contractual or proposed modified payments, the value of the underlying collateral (if applicable), the possibility of obtaining additional security or guarantees, and the potential costs related to a repossession or foreclosure and the subsequent sale of the collateral.
A modified loan on nonaccrual will generally remain on nonaccrual until the borrower has proven the ability to perform under the modified structure for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual. There were no
On an ongoing basis, we monitor the performance of all modified loans according to borrowers experiencing financial difficultytheir modified terms. The amortized cost of modified loans that had a payment default during the three and six months ended June 30,March 31, 2024 and 2023, which were still in default at period end, and were within 12 months or less of being modified.modified was approximately $18 million, primarily commercial real estate loans, and less than $1 million, respectively.
The amortized cost of loans to borrowers experiencing financial difficulty that were modified during the period, by loan class and modification type, is summarized in the following schedule:
Three Months Ended June 30, 2023
Amortized cost associated with
the following modification types:
(In millions)Interest
rate reduction
Maturity
or term
extension
Principal
forgiveness
Multiple modification types 1
Total 2
Percentage of total loans 3
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Amortized cost associated with
the following modification types:
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)Interest
rate reduction
Maturity
or term
extension
Principal
forgiveness
Payment
deferral
Multiple modification types 1
Total 2
Percentage of total loans 3
Commercial:Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrialCommercial and industrial$$27 $— $— $28 0.2 %$— $$26 $$— $$— $$$$30 0.2 0.2 %
Owner-occupiedOwner-occupied— 20 — — 20 0.2 
Total commercialTotal commercial47 — — 48 0.2 
Total commercial
Total commercial
Commercial real estate:Commercial real estate:
Construction and land development
Construction and land development
Construction and land developmentConstruction and land development— 18 — — 18 0.7 
TermTerm— 34 — — 34 0.3 
Total commercial real estateTotal commercial real estate— 52 — — 52 0.4 
Consumer:Consumer:
Home equity credit line
Home equity credit line
Home equity credit line
1-4 family residential1-4 family residential— — — 
Bankcard and other revolving plansBankcard and other revolving plans— — — 0.2 
Bankcard and other revolving plans
Bankcard and other revolving plans
Other
Total consumer loansTotal consumer loans— — 
TotalTotal$$100 $$$103 0.2 %Total$— $$114 $$$$— $$$$123 0.2 0.2 %

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Six Months Ended June 30, 2023
Amortized cost associated with
the following modification types:
(In millions)Interest
rate reduction
Maturity
or term
extension
Principal
forgiveness
Multiple modification types 1
Total 2
Percentage of total loans 3
Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
Amortized cost associated with
the following modification types:
Amortized cost associated with
the following modification types:
Amortized cost associated with
the following modification types:
(Dollar amounts in millions)
(Dollar amounts in millions)
(Dollar amounts in millions)
Commercial:
Commercial:
Commercial:Commercial:
Commercial and industrialCommercial and industrial$$42 $— $— $43 0.3 %
Commercial and industrial
Commercial and industrial
Owner-occupied
Owner-occupied
Owner-occupiedOwner-occupied22 — — 26 0.3 
Total commercialTotal commercial64 — — 69 0.2 
Total commercial
Total commercial
Commercial real estate:
Commercial real estate:
Commercial real estate:Commercial real estate:
Construction and land developmentConstruction and land development— 18 — — 18 0.7 
Construction and land development
Construction and land development
Term
Term
TermTerm— 58 — — 58 0.6 
Total commercial real estateTotal commercial real estate— 76 — — 76 0.6 
Total commercial real estate
Total commercial real estate
Consumer:Consumer:
Consumer:
Consumer:
Home equity credit line
Home equity credit line
Home equity credit line
1-4 family residential
1-4 family residential
1-4 family residential1-4 family residential— — — 
Bankcard and other revolving plansBankcard and other revolving plans— — — 0.2 
Bankcard and other revolving plans
Bankcard and other revolving plans
Other
Other
Other
Total consumer loans
Total consumer loans
Total consumer loansTotal consumer loans— — 
TotalTotal$$141 $$$148 0.3 %
Total
Total
1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications.
2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $10$3 million and $8 millionat June 30, 2023.March 31, 2024 and March 31, 2023, respectively.
3 Amounts less than 0.05% are rounded to zero.
The financial impact of loan modifications to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023, is summarized in the following schedule:schedules:
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
(In millions)Weighted-average interest rate reduction (in percentage points)Weighted-average term extension
(in months)
Weighted-average interest rate reduction (in percentage points)Weighted-average term extension
(in months)
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
Weighted-average interest rate reduction (in percentage points)
Commercial:Commercial:
Commercial:
Commercial:
Commercial and industrial
Commercial and industrial
Commercial and industrialCommercial and industrial1.0 %81.0 %9
Owner-occupiedOwner-occupied— 74.4 7
Owner-occupied
Owner-occupied
Total commercial
Total commercial
Total commercialTotal commercial1.0 83.7 8
Commercial real estate:Commercial real estate:
Commercial real estate:
Commercial real estate:
Construction and land development
Construction and land development
Construction and land developmentConstruction and land development— 6— 6
TermTerm— 18— 17
Term
Term
Total commercial real estate
Total commercial real estate
Total commercial real estateTotal commercial real estate— 14— 15
Consumer: 1
Consumer: 1
Consumer: 1
Consumer: 1
Home equity credit line
Home equity credit line
Home equity credit line
1-4 family residential
1-4 family residential
1-4 family residential1-4 family residential1.3 1101.3 110
Bankcard and other revolving plansBankcard and other revolving plans— 65— 61
Bankcard and other revolving plans
Bankcard and other revolving plans
Other
Other
Other
Total consumer loans
Total consumer loans
Total consumer loansTotal consumer loans1.3 871.3 87
Total weighted average financial impactTotal weighted average financial impact1.1 %123.4 %13
Total weighted average financial impact
Total weighted average financial impact
1 Primarily relates to one loana small number of loans within each consumer loan class.

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Loan modifications to borrowers experiencing financial difficulty during the three and six months ended June 30,March 31, 2024 and 2023 resulteddid not result in $1 million of principal forgiveness for any class of loan for each respective period.
The following schedule presents the totalaging of loans to borrowers experiencing financial difficulty that were modified on or after April 1, 2023 through March 31, 2024, presented by portfolio segment and loan portfolio for both periods.class:
March 31, 2024
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
amortized cost of loans
Commercial:
Commercial and industrial$62 $— $$$68 
Owner-occupied10 — — — 10 
Municipal— — — 
Total commercial80 — 86 
Commercial real estate:
Construction and land development23 25 
Term199 17 21 220 
Total commercial real estate222 18 23 245 
Consumer:
Home equity credit line— — — 
1-4 family residential— 
Bankcard and other revolving plans— — — — — 
Other— — — 
Total consumer loans— 
Total$307 $18 $13 $31 $338 
The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after January 1, 2023, (thethe date we adopted ASU 2022-02)2022-02, through June 30,March 31, 2023, presented by portfolio segment and loan class.class:
June 30, 2023
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
amortized cost of loans
Commercial:
Commercial and industrial$40 $$— $$43 
Owner-occupied25 — 26 
Total commercial65 69 
Commercial real estate:
Construction and land development18 — — — 18 
Term58 — — — 58 
Total commercial real estate76 — — — 76 
Consumer:
1-4 family residential— — — 
Bankcard and other revolving plans— — — 
Total consumer loans— — — 
Total$144 $$$$148 
Troubled Debt Restructuring Disclosures Prior to Our Adoption of ASU 2022-02
Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which we have granted a concession that we would not otherwise consider, are considered TDRs. For further discussion of our policies and processes regarding TDRs, see Note 6 of our 2022 Form 10-K.
March 31, 2023
(In millions)Current30-89 days
past due
90+ days
past due
Total
past due
Total
amortized cost of loans
Commercial:
Commercial and industrial$20 $16 $— $16 $36 
Owner-occupied10 — — — 10 
Municipal— — — — — 
Total commercial30 16 — 16 46 
Commercial real estate:
Construction and land development— — — — — 
Term49 — — — 49 
Total commercial real estate49 — — — 49 
Consumer:
Home equity credit line— — — — — 
1-4 family residential— — 
Bankcard and other revolving plans— — — 
Other— — — — — 
Total consumer loans— 
Total$80 $17 $— $17 $97 

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Information on TDRs, including the amortized cost on an accruing and nonaccruing basis by loan class and modification type is summarized in the following schedules:
December 31, 2022
Amortized cost resulting from the following modification types:
(In millions)Interest
rate below
market
Maturity
or term
extension
Principal
forgiveness
Payment
deferral
Other 1
Multiple
modification
types 2
Total
Accruing
Commercial:
Commercial and industrial$$12 $— $— $$28 $50 
Owner-occupied— — 13 12 28 
Municipal— — — — — — — 
Total commercial13 — 22 40 78 
Commercial real estate:
Construction and land development— — — — — 
Term27 — 27 28 84 
Total commercial real estate27 — 27 28 92 
Consumer:
Home equity credit line— — — 
1-4 family residential— 15 21 
Total consumer loans— 16 27 
Total accruing42 29 51 65 197 
Nonaccruing
Commercial:
Commercial and industrial— — — 15 
Owner-occupied— — — — 
Total commercial— — 23 
Commercial real estate:
Term— 10 — — — — 10 
Total commercial real estate— 10 — — — — 10 
Consumer:
Home equity credit line— — — — — 
1-4 family residential— — — 
Total consumer loans— — 
Total nonaccruing11 10 38 
Total$$53 $$32 $61 $74 $235 
1 Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.
2 Includes TDRs that resulted from a combination of the previous modification types reflected in the schedule.
Unfunded lending commitments related to TDRs totaled $7 million at December 31, 2022.
The total amortized cost of all TDRs in which interest rates were modified below market was $63 million at December 31, 2022. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.
The net financial impact on interest income due to interest rate modifications below market for accruing TDRs for the year ended December 31, 2022 was not significant.

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On an ongoing basis, we monitor the performance of all TDRs according to their restructured terms. Subsequent payment default is defined in terms of delinquency, when principal or interest payments are past due 90 days or more for commercial loans, or 60 days or more for consumer loans.
The amortized cost of TDRs that had a payment default during the year ended December 31, 2022, which were still in default at period end, and were within 12 months or less of being modified as TDRs was approximately $10 million.
Collateral-Dependent Loans
When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on (1) the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, (2) the observable market price of the loan, or (3) the fair value of the loan’s underlying collateral.
Select information on loans for which the borrower is experiencing financial difficulties and repayment is expected to be provided substantially through the operation or sale of the underlying collateral, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:
March 31, 2024March 31, 2024
(Dollar amounts in millions)(Dollar amounts in millions)Amortized costMajor types of collateral
Weighted average LTV 1
Commercial:
June 30, 2023
(Dollar amounts in millions)Amortized costMajor types of collateral
Weighted average LTV 1
Commercial:
Commercial and industrial$10 Accounts Receivable81%
Owner-occupied
Owner-occupied
Owner-occupiedOwner-occupied12 Hospital29%$HospitalHospital51%
Commercial real estate:Commercial real estate:
Commercial real estate:
Commercial real estate:
Construction and land development
Construction and land development
Construction and land developmentLots / Homes107%
TermTermHotel, Multi-family89%Term31 Office BuildingOffice Building86%
Consumer:
Consumer:
Consumer:
Home equity credit line
Home equity credit line
Home equity credit lineResidential21%
TotalTotal$25 
Total
Total
December 31, 2022
December 31, 2023December 31, 2023
(Dollar amounts in millions)(Dollar amounts in millions)Amortized costMajor types of collateral
Weighted average LTV 1
(Dollar amounts in millions)Amortized costMajor types of collateral
Weighted average LTV 1
Commercial:Commercial:
Owner-occupiedOwner-occupied$Land, Warehouse29%
Owner-occupied
Owner-occupied$Hospital17%
Commercial real estate:Commercial real estate:
Commercial real estate:
Commercial real estate:
Construction and land development
Construction and land development
Construction and land development22 Office Building92%
TermTermMulti-family55%Term28 Office BuildingOffice Building87%
Consumer:Consumer:
Consumer:
Consumer:
Home equity credit lineHome equity credit lineSingle family residential13%
1-4 family residentialSingle family residential41%
Home equity credit line
Home equity credit line— 
TotalTotal$
Total
Total
1 The fair value is based on the most recent appraisal or other collateral evaluation.
Foreclosed Residential Real Estate
At June 30, 2023 and December 31, 2022, we did not have anyThe balance of foreclosed residential real estate property.property was less than $1 million at March 31, 2024, compared with zero at December 31, 2023. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure was $8 million and $10$11 million for the same periods, respectively.both periods.

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7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Accounting
Our primary objective for using derivatives is to manage interest rate risk. We use derivatives to stabilize forecasted interest income from variable-rate assets and to modify the coupon or the duration of fixed-rate financial assets or liabilities. We also assist clients with their risk management needs through the use of derivatives. Cash receipts and payments from derivatives designated in qualifying hedging relationships are classified in the same category as the cash flows from the items being hedged in the statement of cash flows, and cash flows from undesignated derivatives are classified as operating activities. For a more detailed discussion of the use of and accounting policies regarding derivative instruments, see Note 7 of our 20222023 Form 10-K.
Fair Value Hedges of Liabilities – During the second quarter of 2023, we terminated our remaining receive-fixed interest rate swap with a notional amount of $500 million that had been designated in a qualifying fair value hedge relationship of fixed-rate debt. The receive-fixed interest rate swap effectively converted the interest on our fixed-rate debt to floating until it was terminated. Prior to termination, changes in the fair value of derivatives designated

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as fair value hedges of debt were offset by changes in the fair value of the hedged debt instruments as shown in the schedules on the following pages. The unamortized hedge basis adjustments resulting from the terminated hedging relationship will be amortized over the remaining life of the fixed-rate debt.
Fair Value Hedges of Assets During the second quarter of 2023, we entered into new fair value hedges of a defined portfolio of AFS securities using pay-fixed, receive-floating swaps with an aggregate notional amount of $2.5 billion that are designated as hedges under the portfolio layer method described in ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method. In July 2023, we entered into additional pay-fixed swaps with an aggregate notional amount of $1 billion that were designated as fair value hedges of a defined portfolio of fixed-rate commercial loans.
At June 30, 2023, we also had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of $1.1 billion designated as fair value hedges of specifically identified AFS securities. Fair value hedges of fixed-rate AFS securitiesassets effectively convert the fixed interest income to a floating rate on the hedged portion of the securities.assets. Changes in fair value of derivatives designated as fair value hedges of fixed-rate AFS securitiesfinancial assets were largely offset by changes in the value of the hedged securities,assets, as shown in the schedules on the following pages. At March 31, 2024, we had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of $3.6 billion designated as fair value hedges of fixed-rate AFS securities. We had an additional $1.0 billion of aggregate notional designated as hedges of fixed-rate commercial loans.
Cash Flow HedgesCash flow hedges of variable-rate assets and liabilities effectively convert the variable interest receipts and payments to fixed. At June 30, 2023,March 31, 2024, we had receive-fixed interest rate swaps with an aggregate notional amount of $2.9 billion$850 million designated as cash flow hedges of pools of floating-rate commercial loans. During the second quarter of 2023,Additionally, at March 31, 2024, we terminated cash flow hedging relationshipshad one pay-fixed interest rate swap with an aggregatea notional amount of $2.8 billion. At June 30, 2023, there was $222$500 million of losses deferred in AOCI related to terminateddesignated as a cash flow hedges that are expected to be fully amortized by October 2027.hedge of the variability in the interest payments on certain FHLB advances. Changes in the fair value of qualifying cash flow hedges during the quarter were recorded in AOCI as shown in the schedule below. The amounts deferred in AOCI are reclassified into earnings in the periods in which the hedged interest receipts or payments occur (i.e., when the hedged forecasted transactions affect earnings). At March 31, 2024, there was $173 million of losses deferred in AOCI related to terminated cash flow hedges that are expected to be fully amortized by October 2027.
Collateral and Credit Risk
Exposure to credit risk arises from the possibility of nonperformance by counterparties. No significant losses on derivative instruments have occurred as a result of counterparty nonperformance. For more information on how we incorporate counterparty credit risk in derivative valuations, see Note 3 of our 20222023 Form 10-K. For additional discussion of collateral and the associated credit risk related to our derivative contracts, see Note 7 of our 20222023 Form 10-K.
Our derivative contracts require us to pledge collateral for derivatives that are in a net liability position at a given balance sheet date. Certain of these derivative contracts contain credit risk-related contingent features that include the requirement to maintain a minimum debt credit rating. We may be required to pledge additional collateral if a credit risk-related feature were triggered, such as a downgrade of our credit rating. In past situations, not all counterparties have not generally demanded that additional collateral be pledged when provided for by the contractual terms. At June 30, 2023,March 31, 2024, the fair value of our derivative liabilities was $409$388 million, for which we were required to pledge

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cash collateral of $2less than $1 million in the normal course of business. If our credit rating were downgraded one notch by either Standard & Poor’s (“S&P”) or Moody’s at June 30, 2023,March 31, 2024, there would likely be no additional collateral required to be pledged.
Derivative Amounts
The following schedule presents information regarding notional amounts and recorded gross fair values at June 30, 2023March 31, 2024 and December 31, 2022,2023, and the related gain (loss) of derivative instruments.instruments:
June 30, 2023December 31, 2022
Notional
amount 1
Fair valueNotional
amount
Fair value
(In millions)Other
assets
Other
liabilities
Other
assets
Other
liabilities
Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:
Receive-fixed interest rate swaps$2,850 $— $— $7,633 $— $
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps500— — — — — 
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps— — — 500 — — 
Asset hedges: Pay-fixed interest rate swaps3,572 80 — 1,228 84 — 
Total derivatives designated as hedging instruments6,922 80 — 9,361 84 
Derivatives not designated as hedging instruments:
Customer interest rate derivatives 2
13,726 406 407 13,670 296 443 
Other interest rate derivatives3,576 — 862 — — 
Foreign exchange derivatives216 605 
Purchased credit derivatives18 — — — — 
Total derivatives not designated as hedging instruments17,536 411 409 15,137 302 450 
Total derivatives$24,458 $491 $409 $24,498 $386 $451 

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March 31, 2024December 31, 2023
Notional
amount 1
Fair valueNotional
amount
Fair value
(In millions)Other
assets
Other
liabilities
Other
assets
Other
liabilities
Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:
Receive-fixed interest rate swaps$850 $— $— $1,450 $— $— 
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps500— — 500— — 
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps— — — — — — 
Asset hedges: Pay-fixed interest rate swaps4,570 89 — 4,571 78 — 
Total derivatives designated as hedging instruments5,920 89 — 6,521 78 — 
Derivatives not designated as hedging instruments:
Customer interest rate derivatives 1
14,694 389 387 14,375 337 330 
Other interest rate derivatives1,461 — 1,001 — 
Foreign exchange derivatives267 216 
Purchased credit derivatives— — — 35 — 
Total derivatives not designated as hedging instruments16,422 392 388 15,627 342 333 
Total derivatives$22,342 $481 $388 $22,148 $420 $333 
1 Centrally cleared swaps originally indexed to London Interbank Offered Rate (“LIBOR”) were divided into short-dated, LIBOR-indexed spot starting swaps and forward starting Secured Overnight Financing Rate (“SOFR”) swaps when the clearing houses transitioned to SOFR. The LIBOR-indexed swaps will fully mature in the third quarter of 2023. The notional amounts above reflect the economic substance of our derivatives and do not include the duplicate notional amounts during the transition period.
2 Customer interest rate derivatives include both customer-facing derivativederivatives as well as offsetting derivatives facing other dealer banks. The fair value of these derivatives include a net credit valuation adjustment (“CVA”) of $10$9 million, reducing the fair value of the liability at June 30, 2023,both March 31, 2024, and $13 million, reducing the fair value of the liability at December 31, 2022.2023.
The amount of derivative gains (losses) from cash flow and fair value hedges that were deferred in other comprehensive income (“OCI”) or recognized in earnings for the three and sixthree months ended June 30,March 31, 2024 and 2023 and 2022 is presented in the schedules below.
Three Months Ended March 31, 2024
(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedges
Cash flow hedges of floating-rate assets:1
Interest rate swaps(5)(36)— 
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps— 
Fair value hedges:2
Debt hedges: Receive-fixed interest rate swaps— — (2)
Asset hedges: Pay-fixed interest rate swaps— — 23 
Total derivatives designated as hedging instruments$(1)$(34)$21 

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Three Months Ended June 30, 2023
Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
(In millions)(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedges
Cash flow hedges of floating-rate assets:1
Cash flow hedges of floating-rate assets:1
Purchased interest rate floors$— $— $— 
Received-fixed interest rate swaps(21)(41)— 
Cash flow hedges of floating-rate assets:1
Cash flow hedges of floating-rate assets:1
Interest rate swaps
Interest rate swaps
Interest rate swaps
Cash flow hedges of floating-rate liabilities:
Cash flow hedges of floating-rate liabilities:
Cash flow hedges of floating-rate liabilities:Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swapsPay-fixed interest rate swaps11 — 
Fair value hedges:
Pay-fixed interest rate swaps
Pay-fixed interest rate swaps
Fair value hedges: 2
Fair value hedges: 2
Fair value hedges: 2
Debt hedges: Receive-fixed interest rate swapsDebt hedges: Receive-fixed interest rate swaps— — (8)
Basis amortization on terminated hedges2
— (1)
Asset hedges: Pay-Fixed interest rate swaps— — 
Basis amortization on terminated asset hedges3
— — — 
Debt hedges: Receive-fixed interest rate swaps
Debt hedges: Receive-fixed interest rate swaps
Asset hedges: Pay-fixed interest rate swaps
Asset hedges: Pay-fixed interest rate swaps
Asset hedges: Pay-fixed interest rate swaps
Total derivatives designated as hedging instrumentsTotal derivatives designated as hedging instruments$(10)$(40)$— 
Total derivatives designated as hedging instruments
Total derivatives designated as hedging instruments
Six Months Ended June 30, 2023
(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors$— $— $— 
Received-fixed interest rate swaps17 (90)— 
Cash flow hedges of floating-rate liabilities:
Pay-fixed interest rate swaps11 — 
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps— — (5)
Basis amortization on terminated debt hedges 2
— — (1)
Asset hedges: Pay-fixed interest rate swaps— — 16 
Basis amortization on terminated asset hedges 3
— — — 
Total derivatives designated as hedging instruments$28 $(89)$10 
Three Months Ended June 30, 2022
(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors$— $— $— 
Interest rate swaps(66)— 
Fair value hedges of liabilities:
Receive-fixed interest rate swaps— — 
Basis amortization on terminated hedges2
— — — 
Fair value hedges of assets:
Pay-fixed interest rate swaps— — (1)
Basis amortization on terminated hedges 2
— — — 
Total derivatives designated as hedging instruments$(66)$$— 

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Six Months Ended June 30, 2022
(In millions)Effective portion of derivative gain/(loss) deferred in AOCIAmount of gain/(loss) reclassified from AOCI into incomeInterest on fair value hedges
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors$— $$— 
Interest rate swaps(244)17 — 
Fair value hedges of liabilities:
Receive-fixed interest rate swaps— — 
Basis amortization on terminated hedges 2, 3
— — 
Fair value hedges of assets:
Pay-fixed interest rate swaps— — (2)
Basis amortization on terminated hedges 2, 3
— — — 
Total derivatives designated as hedging instruments$(244)$19 $
1 For the 12 months following June 30, 2023,March 31, 2024, we estimate that $106$102 million of losses will be reclassified from AOCI into interest income, compared with an estimate of $94$156 million of losses at June 30, 2022.March 31, 2023.
2 At June 30, 2023,March 31, 2024, the total cumulative unamortized basis adjustment for terminated fair value hedges of debt was $50$45 million. We did not have any cumulative unamortized basis adjustment for terminated fair value hedges of debt at June 30, 2022.March 31, 2023. We had $3 million and $7$10 million of cumulative unamortized basis adjustments from terminated fair value hedges of assets at June 30,March 31, 2024 and 2023, and 2022, respectively. Interest on fair value hedges presented above include the amortization of the remaining unamortized basis adjustments.
The amount of gains (losses) recognized from derivatives not designated as accounting hedges is summarized as follows:
Other Noninterest Income/(Expense)
Other Noninterest Income/(Expense)
Other Noninterest Income/(Expense)
Other Noninterest Income/(Expense)
(In millions)(In millions)Three Months Ended June 30, 2023Six Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives
Customer-facing interest rate derivatives
Customer-facing interest rate derivativesCustomer-facing interest rate derivatives$10 $11 $17 $30 
Other interest rate derivativesOther interest rate derivatives(1)— 
Other interest rate derivatives
Other interest rate derivatives
Foreign exchange derivatives
Foreign exchange derivatives
Foreign exchange derivativesForeign exchange derivatives15 14 
Purchased credit derivativesPurchased credit derivatives$(1)$(1)$— $— 
Purchased credit derivatives
Purchased credit derivatives
Total derivatives not designated as hedging instrumentsTotal derivatives not designated as hedging instruments$19 $28 $24 $44 
Total derivatives not designated as hedging instruments
Total derivatives not designated as hedging instruments
The following schedule presents derivatives used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the periods presented.presented:
Gain/(loss) recorded in income
Three Months Ended June 30, 2023Three Months Ended June 30, 2022
Gain/(loss) recorded in income
Gain/(loss) recorded in income
Gain/(loss) recorded in income
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
(In millions)
(In millions)
(In millions)(In millions)
Derivatives 2
Hedged itemsTotal income statement impact
Derivatives 2
Hedged itemsTotal income statement impact
Debt: Receive-fixed interest rate swaps 1, 2
Debt: Receive-fixed interest rate swaps 1, 2
$$(2)$— $(18)$18 $— 
Debt: Receive-fixed interest rate swaps 1, 2
Debt: Receive-fixed interest rate swaps 1, 2
Assets: Pay-fixed interest rate swaps 1, 2
Assets: Pay-fixed interest rate swaps 1, 2
66 (67)(1)97 (97)— 
Assets: Pay-fixed interest rate swaps 1, 2
Assets: Pay-fixed interest rate swaps 1, 2

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Gain/(loss) recorded in income
Six Months Ended June 30, 2023Six Months Ended June 30, 2022
(In millions)
Derivatives 2
Hedged itemsTotal income statement impact
Derivatives 2
Hedged itemsTotal income statement impact
Debt: Receive-fixed interest rate swaps 1, 2
$14 $(14)$— $(50)$50 $— 
Assets: Pay-fixed interest rate swaps 1, 2
26 (27)(1)150 (150)— 
1 Consists of hedges of benchmark interest rate risk of fixed-rate long-term debt, fixed-rate AFS securities, and fixed-rate AFS securities.commercial loans. Gains and losses were recorded in net interest expense or income consistent with the hedged items.
2 The income/expense for derivatives does not reflect interest income/expense from periodic accruals and payments to be consistent with the presentation of the gains/(losses) on the hedged items.

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The following schedule provides information regarding basis adjustments for hedged items.items:
Par value of hedged assets/(liabilities)
Carrying amount of the hedged assets/(liabilities) 1
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item
(In millions)June 30, 2023December 31, 2022June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Long-term fixed-rate debt 2
$— $(500)$— $(435)$— $65 
Fixed-rate assets 3
11,129 1,228 10,898 962 (231)(266)
Par value of hedged assets/(liabilities)
Carrying amount of the hedged assets/(liabilities) 1
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item
(In millions)March 31, 2024December 31, 2023March 31, 2024December 31, 2023March 31, 2024December 31, 2023
Fixed-rate assets 2
12,039 12,389 11,761 12,209 (278)(180)
1 Carrying amounts exclude (1) issuance and purchase discounts or premiums, (2) unamortized issuance and acquisition costs, and (3) amounts related to terminated fair value hedges.
2 We terminated the remaining fair value hedge of debt during the second quarter of 2023. The remaining hedge basis adjustments will be amortized over the life of the associated debt.
3These amounts include the amortized cost basis of defined portfolios of AFS securities and commercial loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the defined portfolio anticipated to be outstanding for the designated hedged period. At June 30, 2023,March 31, 2024, the amortized cost basis of the defined portfolios used in these hedging relationships was $10.1$11.0 billion; the cumulative basis adjustment associated with these hedging relationships was $36.8$50.5 million; and the notional amounts of the designated hedging instruments were $2.5$3.5 billion.
8. LEASES
We have operating and finance leases for branches, corporate offices, and data centers. At June 30, 2023,March 31, 2024, we had 412408 branches, of which 277278 are owned and 135130 are leased. We lease our headquarters in Salt Lake City, Utah. The remaining maturities of our lease commitments range from the year 20232024 to 2062,, and some lease arrangements include options to extend or terminate the leases.
All leases with lease terms greater than twelve months are reported as a lease liability with a corresponding right-of-use (“ROU”) asset. We present ROU assets for operating leases and finance leases on the consolidated balance sheet in “Other assets,” and “Premises, equipment and software, net,” respectively. The corresponding liabilities for those leases are presented in “Other liabilities,” and “Long-term debt.” For more information about our lease policies, see Note 8 of our 20222023 Form 10-K.
The following schedule presents ROU assets and lease liabilities with associated weighted average remaining life and discount rate:
(Dollar amounts in millions)March 31,
2024
December 31, 2023
Operating leases
ROU assets, net of amortization$168$172
Lease liabilities193198
Finance leases
ROU assets, net of amortization33
Lease liabilities44
Weighted average remaining lease term (years)
Operating leases8.68.7
Finance leases16.216.5
Weighted average discount rate
Operating leases3.4 %3.4 %
Finance leases3.1 %3.1 %

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The following schedule presents ROU assets and lease liabilities with associated weighted average remaining life and discount rate.
(Dollar amounts in millions)June 30,
2023
December 31, 2022
Operating leases
ROU assets, net of amortization$170$173
Lease liabilities195198
Finance leases
ROU assets, net of amortization34
Lease liabilities44
Weighted average remaining lease term (years)
Operating leases8.68.4
Finance leases16.917.4
Weighted average discount rate
Operating leases3.1 %2.9 %
Finance leases3.1 %3.1 %
Additionaladditional information related to lease expense is presented in the following schedule.expense:
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
(In millions)
(In millions)
(In millions)
Lease expense:
Lease expense:
Lease expense:
Operating lease expense
Operating lease expense
Operating lease expense
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2023202220232022
Lease expense:
Operating lease expense$11 $12 $22 $24 
Other expenses associated with operating leases 1
Other expenses associated with operating leases 1
Other expenses associated with operating leases 1
Other expenses associated with operating leases 1
16 12 30 24 
Total lease expenseTotal lease expense$27 $24 $52 $48 
Total lease expense
Total lease expense
Related cash disbursements from operating leasesRelated cash disbursements from operating leases$12 $12 $24 $25 
Related cash disbursements from operating leases
Related cash disbursements from operating leases
1 Other expenses primarily include property taxes and building and property maintenance.
The following schedule presents the total contractual undiscounted lease payments for operating lease liabilities by expected due date for each of the next five years.years:
(In millions)(In millions)Total undiscounted lease payments(In millions)Total undiscounted lease payments
2023 1
$24 
202440 
2024 1
2024 1
2024 1
2025202532 
2026202627 
2027202718 
2028
ThereafterThereafter87 
TotalTotal$228 
1 Contractual maturities for the sixnine months remaining in 2023.2024.
We enter into certain lease agreements where we are the lessor of real estate. Real estate leases are made from bank-owned and subleased property to generate cash flow from the property, including from leasing vacant suites in which we occupy portions of the building. Operating lease income was $4 million and $3 million for both the secondfirst quarter of 20232024 and 2022, respectively, and $8 million and $7 million for the first six months of 2023 and 2022, respectively.2023.
We originated equipment leases, considered to be sales-type leases or direct financing leases, totaling $388$388 million and $386$383 million at June 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. We recorded income of $4 million$4 million and $3 million on these leases for both the secondfirst quarter of 20232024 and 2022, respectively, and $8 million and $6 million for the first six months of 2023 and 2022, respectively.2023.

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9. LONG-TERM DEBT AND SHAREHOLDERS’ EQUITY
Long-Term Debt
The long-term debt carrying values presented inon the consolidated balance sheet represent the par value of the debt, adjusted for any unamortized premium or discount, unamortized debt issuance costs, and basis adjustments for interest rate swaps designated as fair value hedges.
The following schedule presents the components of our long-term debt.debt:
LONG-TERM DEBT
(In millions)
(In millions)
(In millions)(In millions)June 30,
2023
December 31, 2022
Subordinated notes 1
Subordinated notes 1
$534 $519 
Senior notes— 128 
Subordinated notes 1
Subordinated notes 1
Finance lease obligations
Finance lease obligations
Finance lease obligationsFinance lease obligations
TotalTotal$538 $651 
Total
Total
1 The change in the subordinated notes balance is primarily due to a fair value hedge accounting adjustment. See also Note 7.
The decrease in long-term debt was primarily due to the redemption of $128 million, 4.50% matured senior notes during the second quarter of 2023.
Shareholders' Equity
Our common stock is traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market. At June 30, 2023,March 31, 2024, there were 148.1147.7 million shares of $0.001 par value common stock outstanding. Common stock and additional paid-in capital decreased $32 million, or 2%, to $1.7 billion at June 30, 2023, from December 31, 2022, primarily due to common stock repurchases during the first quarter of 2023. As the macroeconomic environment remained uncertain, we did not repurchase common shares during the second quarter of 2023, nor do we expect to repurchase common shares during the third quarter of 2023.
AOCI was a $2.9 billion loss at June 30, 2023. The following schedule presents the changes in AOCI by component.
(In millions)Net unrealized gains/(losses) on investment securitiesNet unrealized gains/(losses) on derivatives and otherPension and post-retirementTotal
Six Months Ended June 30, 2023
Balance at December 31, 2022$(2,800)$(311)$(1)$(3,112)
OCI before reclassifications, net of tax 1
94 21 — 115 
Amounts reclassified from AOCI, net of tax— 67 — 67 
Other comprehensive income94 88 — 182 
Balance at June 30, 2023$(2,706)$(223)$(1)$(2,930)
Income tax expense included in OCI$31 $28 $— $59 
Six Months Ended June 30, 2022
Balance at December 31, 2021$(78)$— $(2)$(80)
OCI (loss) before reclassifications, net of tax(1,820)(185)— (2,005)
Amounts reclassified from AOCI, net of tax— (15)— (15)
Other comprehensive loss(1,820)(200)— (2,020)
Balance at June 30, 2022$(1,898)$(200)$(2)$(2,100)
Income tax benefit included in OCI (loss)$(590)$(65)$— $(655)
1 For the six months ended June 30, 2023, the OCI related to net unrealized gains/(losses) on investment securities reflected a $9 million decline in the fair value of fixed-rate AFS securities as a result of higher interest rates, offset by a $103 million increase in amortization of the discount on the securities transferred from AFS to HTM during the fourth quarter of 2022.
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Amounts reclassified from AOCI 1
Statement of income (SI)
(In millions)Three Months Ended
June 30,
Six Months Ended
June 30,
Details about AOCI components2023202220232022Affected line item
Net unrealized gains (losses) on derivative instruments$(40)$$(89)$20 SIInterest and fees on loans
Less: Income tax expense (benefit)(10)(22)
Amounts reclassified from AOCI$(30)$$(67)$15 
outstanding. Common stock and additional paid-in capital decreased $26 million, or 2%, to $1.7 billion at March 31, 2024, from December 31, 2023, primarily due to common stock repurchases. During the first quarter of 2024, we repurchased 0.9 million common shares outstanding for $35 million at an average price of $39.32 per share.
1 Positive reclassification amounts indicate increases to earningsThe AOCI balance was a loss of $2.6 billion at March 31, 2024, and primarily reflects the decline in the income statement.fair value of fixed-rate investment securities as a result of higher interest rates, and includes $2.0 billion ($1.5 billion after tax) of unrealized losses on the securities previously transferred from AFS to HTM. The following schedule presents the changes in AOCI by major component:
(In millions)Net unrealized gains/(losses) on investment securitiesNet unrealized gains/(losses) on derivatives and otherPension and post-retirementTotal
Three Months Ended March 31, 2024
Balance at December 31, 2023$(2,526)$(165)$(1)$(2,692)
Other comprehensive income (loss) before reclassifications, net of tax12 (1)— 11 
Amounts reclassified from AOCI, net of tax46 26 — 72 
Other comprehensive income58 25 — 83 
Balance at March 31, 2024$(2,468)$(140)$(1)$(2,609)
Income tax expense included in OCI$19 $$— $27 
Three Months Ended March 31, 2023
Balance at December 31, 2022$(2,800)$(311)$(1)$(3,112)
Other comprehensive income before reclassifications, net of tax77 29 — 106 
Amounts reclassified from AOCI, net of tax49 37 — 86 
Other comprehensive income126 66 — 192 
Balance at March 31, 2023$(2,674)$(245)$(1)$(2,920)
Income tax expense included in OCI$41 $22 $— $63 
Amounts reclassified from AOCI
(In millions)Three Months Ended
March 31,
AOCI components20242023Affected line item on statement of income
Net unrealized gains (losses) on investment securities$(61)$(65)Securities gains (losses), net
Less: Income tax expense (benefit)(15)(16)
Total$(46)$(49)
Net unrealized gains (losses) on derivative instruments$(34)$(49)Interest and fees on loans; Interest on short- and long-term borrowings
Less: Income tax expense (benefit)(8)(12)
Total$(26)$(37)
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10. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES
Commitments and Guarantees
The following schedule presents the contractual amounts related to off-balance sheet financial instruments used to meet the financing needs of our customers.customers:
(In millions)(In millions)June 30,
2023
December 31,
2022
(In millions)March 31,
2024
December 31,
2023
Unfunded lending commitments 1
Unfunded lending commitments 1
$29,731 $29,628 
Unfunded lending commitments 1
Unfunded lending commitments 1
Standby letters of credit:Standby letters of credit:
Financial
Financial
FinancialFinancial579 667 
PerformancePerformance178 184 
Commercial letters of creditCommercial letters of credit36 11 
Mortgage-backed security purchase agreements 2
Mortgage-backed security purchase agreements 2
51 23 
Total unfunded commitmentsTotal unfunded commitments$30,575 $30,513 
1 Net of participations.
2 Represents agreements with Farmer Mac to purchase securities backed by certain agricultural mortgage loans.
For more information about these commitments and guarantees including their terms and collateral requirements, see Note 16 of our 20222023 Form 10-K.
Legal Matters
We are involved in various legal proceedings or governmental inquiries, which may include litigation in court and arbitral proceedings, as well as investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies. Litigation may relate to lending, deposit and other customer relationships, vendor and contractual issues, employee matters, intellectual property matters, personal injuries and torts, regulatory and legal compliance, and other matters. While most matters relate to individual claims, we are also subject to putative class action claims and similar broader claims. Proceedings, investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies may relate to our banking, investment advisory, trust, securities, and other products and services; our customers’ involvement in money laundering, fraud, securities violations and other illicit activities or our policies and practices relating to such customer activities; and our compliance with the broad range of banking, securities and other laws and regulations applicable to us. At any given time, we may be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters.
At June 30, 2023,March 31, 2024, we were subject to the following material litigation or governmental inquiries:litigation:
Two civil cases, Lifescan Inc. and Johnson & Johnson Health Care Services v. Jeffrey Smith, et. al., brought against us in the United States District Court for the District of New Jersey in December 2017, and Roche Diagnostics and Roche Diabetes Care Inc. v. Jeffrey C. Smith, et. al., brought against us in the United States District Court for the District of New Jersey in March 2019. In these cases, certain manufacturers and distributors of medical products seek to hold us liable for allegedly fraudulent practices of a borrower of the Bank who filed for bankruptcy protection in 2017. The cases are in discovery phases. Trialthe late stages of discovery. No trial has not been scheduled in either case.set.
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Sipple v. Zions Bancorporation, N.A., brought against us in the District Court of Clark County, Nevada in February 2021 with respect to foreign transaction fees. This case is in the early discovery phase and trial has not been scheduled.scheduled for October 2024. The parties are currently engaged in settlement discussions.
At least quarterly, we review outstanding and new legal matters, utilizing then availablethen-available information. In accordance with applicable accounting guidance, if we determine that a loss from a matter is probable and the amount of the loss can be reasonably estimated, we establish an accrual for the loss. In the absence of such a determination, no accrual is made. Once established, accruals are adjusted to reflect developments relating to the matters.
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In our review, we also assess whether we can determine the range of reasonably possible losses for significant matters in which we are unable to determine that the likelihood of a loss is remote. Because of the difficulty of predicting the outcome of legal matters, discussed subsequently, we are able to meaningfully estimate such a range only for a limited number of matters. Based on information available at June 30, 2023,March 31, 2024, we estimated that the aggregate range of reasonably possible losses for those matters to be from zero to approximately $5$10 million in excess of amounts accrued. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which a meaningful estimate is not possible are not included within this estimated range and, therefore, this estimated range does not represent our maximum loss exposure.
Based on our current knowledge, we believe that our current estimated liability for litigation and other legal actions and claims, reflected in our accruals and determined in accordance with applicable accounting guidance, is adequate and that liabilities in excess of the amounts currently accrued, if any, arising from litigation and other legal actions and claims for which an estimate as previously described is possible, will not have a material impact on our financial condition, results of operations, or cash flows. However, in light of the significant uncertainties involved in these matters, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to our financial condition, results of operations, or cash flows for any given reporting period.
Any estimate or determination relating to the future resolution of litigation, arbitration, governmental or self-regulatory examinations, investigations or actions or similar matters is inherently uncertain and involves significant judgment. This is particularly true in the early stages of a legal matter, when legal issues and facts have not been well articulated, reviewed, analyzed, and vetted through discovery, preparation for trial or hearings, substantive and productive mediation or settlement discussions, or other actions. It is also particularly true with respect to class action and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues or novel legal theories, and examinations, investigations and other actions conducted or brought by governmental and self-regulatory agencies, in which the normal adjudicative process is not applicable. Accordingly, we usually are unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of a probable or reasonably likely loss, until relatively late in the course of a legal matter, sometimes not until a number of years have elapsed. Accordingly, our judgments and estimates relating to claims will change from time to time in light of developments and actual outcomes will differ from our estimates. These differences may be material.
11. REVENUE RECOGNITION
We derive our revenue primarily from interest income on loans and securities, which represented approximately 80% of our total revenue in the second quarter of 2023.securities. Only noninterest income is considered to be revenue from contracts with customers in scope of ASC 606. For more information about our revenue recognition from contracts, see Note 17 of our 20222023 Form 10-K.
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Disaggregation of Revenue
The following schedule below presents net revenue by our operating business segmentssegment for the three months ended June 30, 2023March 31, 2024 and 2022.2023:
Zions BankCB&TAmegy
Zions BankZions BankCB&TAmegy
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
Commercial account fees
Commercial account fees
Commercial account feesCommercial account fees$14 $12 $$$14 $11 
Card feesCard fees13 14 
Retail and business banking feesRetail and business banking fees
Capital markets fees
Capital markets fees
Capital markets feesCapital markets fees— — — — — — 
Wealth management feesWealth management fees
Other customer-related feesOther customer-related fees
Total noninterest income from contracts with customers (ASC 606)Total noninterest income from contracts with customers (ASC 606)40 40 19 18 32 29 
Other noninterest income (non-ASC 606 customer-related)Other noninterest income (non-ASC 606 customer-related)14 13 
Total customer-related noninterest incomeTotal customer-related noninterest income46 46 33 26 40 42 
Other noncustomer-related noninterest incomeOther noncustomer-related noninterest income15 — 
Total noninterest incomeTotal noninterest income49 49 35 27 55 42 
Net interest incomeNet interest income178 170 152 142 116 120 
Net interest income
Net interest income
Total net revenueTotal net revenue$227 $219 $187 $169 $171 $162 
NBAZNSBVectra
NBAZ
NBAZ
NBAZNSBVectra
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
Commercial account fees
Commercial account fees
Commercial account feesCommercial account fees$$$$$$
Card feesCard fees
Retail and business banking feesRetail and business banking fees
Capital markets fees
Capital markets fees
Capital markets feesCapital markets fees— — — — — — 
Wealth management feesWealth management fees— 
Other customer-related feesOther customer-related fees— — — — 
Total noninterest income from contracts with customers (ASC 606)Total noninterest income from contracts with customers (ASC 606)11 10 
Other noninterest income (non-ASC 606 customer-related)Other noninterest income (non-ASC 606 customer-related)— — 
Total customer-related noninterest incomeTotal customer-related noninterest income10 10 11 12 
Other noncustomer-related noninterest incomeOther noncustomer-related noninterest income— — — — 
Total noninterest incomeTotal noninterest income11 11 11 12 
Net interest incomeNet interest income64 55 49 39 38 35 
Net interest income
Net interest income
Total net revenueTotal net revenue$75 $66 $60 $51 $45 $43 
TCBWOtherConsolidated Bank
TCBW
TCBW
TCBWOtherConsolidated Bank
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
Commercial account fees
Commercial account fees
Commercial account feesCommercial account fees$$$$— $45 $37 
Card feesCard fees— (2)37 36 
Retail and business banking feesRetail and business banking fees— — (2)16 20 
Capital markets fees
Capital markets fees
Capital markets feesCapital markets fees— — 
Wealth management feesWealth management fees— — — — 14 13 
Other customer-related feesOther customer-related fees— — 15 16 
Total noninterest income from contracts with customers (ASC 606)Total noninterest income from contracts with customers (ASC 606)128 123 
Other noninterest income (non-ASC 606 customer-related)Other noninterest income (non-ASC 606 customer-related)— — (1)34 31 
Total customer-related noninterest incomeTotal customer-related noninterest income13 162 154 
Other noncustomer-related noninterest incomeOther noncustomer-related noninterest income— — 13 27 18 
Total noninterest incomeTotal noninterest income19 21 189 172 
Net interest incomeNet interest income15 15 (21)17 591 593 
Net interest income
Net interest income
Total net revenueTotal net revenue$17 $17 $(2)$38 $780 $765 
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The schedule below presents net revenue by our operating business segments for the six months ended June 30, 2023 and 2022.
Zions BankCB&TAmegy
(In millions)202320222023202220232022
Commercial account fees$28 $27 $15 $14 $28 $22 
Card fees26 27 10 10 16 16 
Retail and business banking fees12 
Capital markets fees— — — — — — 
Wealth management fees12 11 
Other customer-related fees
Total noninterest income from contracts with customers (ASC 606)79 81 37 35 62 57 
Other noninterest income (non-ASC 606 customer-related)13 11 19 14 17 22 
Total customer-related noninterest income92 92 56 49 79 79 
Other noncustomer-related noninterest income17 — 
Total noninterest income99 95 59 51 96 79 
Net interest income363 326 311 271 240 232 
Total net revenue$462 $421 $370 $322 $336 $311 
NBAZNSBVectra
(In millions)202320222023202220232022
Commercial account fees$$$$$$
Card fees
Retail and business banking fees
Capital markets fees— — — — — — 
Wealth management fees
Other customer-related fees— — 
Total noninterest income from contracts with customers (ASC 606)19 19 23 21 12 12 
Other noninterest income (non-ASC 606 customer-related)— 
Total customer-related noninterest income20 22 23 25 13 16 
Other noncustomer-related noninterest income— — — — 
Total noninterest income21 23 23 25 13 16 
Net interest income129 106 99 77 79 68 
Total net revenue$150 $129 $122 $102 $92 $84 
TCBWOtherConsolidated Bank
(In millions)202320222023202220232022
Commercial account fees$$$$— $88 $78 
Card fees— — 72 72 
Retail and business banking fees— — (1)32 40 
Capital markets fees— — 
Wealth management fees— — (1)— 27 26 
Other customer-related fees— 15 18 30 30 
Total noninterest income from contracts with customers (ASC 606)16 21 251 248 
Other noninterest income (non-ASC 606 customer-related)— 11 (2)62 57 
Total customer-related noninterest income27 19 313 305 
Other noncustomer-related noninterest income— — 36 
Total noninterest income35 22 349 314 
Other real estate owned gain from sale— — — — — — 
Net interest income31 28 18 29 1,270 1,137 
Total net revenue$34 $31 $53 $51 $1,619 $1,451 
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Revenue from contracts with customers did not generate significant contract assets and liabilities. Contract receivables are included in “Other assets” on the consolidated balance sheet. Payment terms vary by services offered, and the timing between completion of performance obligations and payment is generally not significant.
12. INCOME TAXES
The effective income tax rate was 22.6%24.6% for the secondfirst quarter of 2024, compared with 27.7% for the first quarter of 2023. The higher effective tax rate in the first quarter of 2023 compared with 21.9%was the result of a change in a discrete item that affected the reserve for the second quarter of 2022. The effectiveuncertain tax rates for the first six months of 2023 and 2022 were 25.4% and 21.2%, respectively.positions. The tax rates during both periods were reduced by nontaxable municipal interest income and nontaxable income from certain bank-owned life insurance (“BOLI”), and were increased by the non-deductibilitynondeductibility of Federal Deposit Insurance Corporation (“FDIC”) premiums, certain executive compensation plans, and other fringe benefits. The FDIC insurance premiums are nondeductible, whereas the FDIC special assessments are tax rate for the first six months of 2023 was higher relative to the same prior year period, primarily as a result of a discrete item that affected the reserve for uncertain tax positions during the first quarter of 2023.deductible.
At both June 30, 2023March 31, 2024 and December 31, 2022,2023, we had a net deferred tax asset (“DTA”) totaling $1.1$1.0 billion. OnThe net DTA or DTL is included in either “Other assets” or “Other liabilities,” respectively, on the consolidated balance sheet, the net DTA is included in “Other assets.”sheet.
We evaluate DTAs on a regular basis to determine whether a valuation allowance is required. In conducting this evaluation, we consider all available evidence, both positive and negative, based on the more-likely-than-not criteria that such assets will be realized. This evaluation includes, but is not limited to, the following:
Future reversals of existing deferred tax liabilities (“DTLs”) — These DTLs have a reversal pattern generally consistent with DTAs and are used to realize the DTAs.
Tax planning strategies — We have considered prudent and feasible tax planning strategies that we would implement to preserve the value of the DTAs, if necessary.
Future projected taxable income — We expect future taxable income will offset the reversal of remaining net DTAs.
Based on this evaluation, we concluded that a valuation allowance was not required at both June 30, 2023March 31, 2024 and December 31, 2022.2023.
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13. NET EARNINGS PER COMMON SHARE
Basic and diluted net earnings per common share based on the weighted average outstanding shares are summarized as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)
(In millions, except shares and per share amounts)(In millions, except shares and per share amounts)2023202220232022
Basic:Basic:
Basic:
Basic:
Net incomeNet income$175 $203 $379 $406 
Net income
Net income
Less common and preferred dividends
Less common and preferred dividends
Less common and preferred dividendsLess common and preferred dividends70 66 138 132 
Undistributed earningsUndistributed earnings105 137 241 274 
Undistributed earnings
Undistributed earnings
Less undistributed earnings applicable to nonvested shares
Less undistributed earnings applicable to nonvested shares
Less undistributed earnings applicable to nonvested sharesLess undistributed earnings applicable to nonvested shares
Undistributed earnings applicable to common sharesUndistributed earnings applicable to common shares104 136 239 272 
Undistributed earnings applicable to common shares
Undistributed earnings applicable to common shares
Distributed earnings applicable to common shares
Distributed earnings applicable to common shares
Distributed earnings applicable to common sharesDistributed earnings applicable to common shares61 57 121 115 
Total earnings applicable to common sharesTotal earnings applicable to common shares$165 $193 $360 $387 
Total earnings applicable to common shares
Total earnings applicable to common shares
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)Weighted average common shares outstanding (in thousands)147,692 150,635 147,852 150,958 
Net earnings per common shareNet earnings per common share$1.11 $1.29 $2.44 $2.56 
Net earnings per common share
Net earnings per common share
Diluted:
Diluted:
Diluted:Diluted:
Total earnings applicable to common sharesTotal earnings applicable to common shares$165 $193 $360 $387 
Total earnings applicable to common shares
Total earnings applicable to common shares
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding (in thousands)Weighted average common shares outstanding (in thousands)147,692 150,635 147,852 150,958 
Dilutive effect of stock options (in thousands)Dilutive effect of stock options (in thousands)203 13 306 
Dilutive effect of stock options (in thousands)
Dilutive effect of stock options (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)
Weighted average diluted common shares outstanding (in thousands)Weighted average diluted common shares outstanding (in thousands)147,696 150,838 147,865 151,264 
Net earnings per common shareNet earnings per common share$1.11 $1.29 $2.44 $2.56 
Net earnings per common share
Net earnings per common share
The following schedule presents the weighted average stock awards that were anti-dilutive and not included in the calculation of diluted earnings per share:
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
(In thousands)
(In thousands)
(In thousands)(In thousands)2023202220232022
Restricted stock and restricted stock unitsRestricted stock and restricted stock units1,421 1,251 1,378 1,289 
Restricted stock and restricted stock units
Restricted stock and restricted stock units
Stock optionsStock options1,449 200 1,381 155 
Stock options
Stock options
14. OPERATING SEGMENT INFORMATION
We manage our operations with a primary focus on geographic area. We conduct our operations primarily through seven separately managed affiliate banks, each with its own local branding and management team, including Zions Bank, California Bank & Trust, Amegy Bank, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. These affiliate banks comprise our primary business segments. Performance assessment and resource allocation are based upon this geographic structure. Our affiliate banks are supported by an enterprise operating segment (referred to as the “Other” segment) that provides governance and risk management, allocates capital, establishes strategic objectives, and includes centralized technology, back-office functions, and certain lines of business not operated through our affiliate banks.
We allocate the cost of centrally provided services to the business segments based upon estimated or actual usage of those services. We also allocate capital based on the risk-weighted assets held at each business segment. We use an internal funds transfer pricing (“FTP”) allocation process to report results of operations for business segments. This process is subject to change and refinement over time. Total average loans and deposits presented for the business segments include insignificant intercompany amounts between business segments and may also include deposits with the “Other” segment.
At June 30, 2023,March 31, 2024, Zions Bank operated 95 branches in Utah, 25 branches in Idaho, and one branch in Wyoming. CB&T operated 7775 branches in California. Amegy operated 75 branches in Texas. NBAZ operated 56 branches in
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Arizona. NSB operated 4643 branches in Nevada. Vectra operated 3334 branches in Colorado and one branch in New Mexico. TCBW operated two branches in Washington and one branch in Oregon.
Transactions between business segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations. The following schedule presents average loans, average deposits, and income before income taxes because we use these metrics when evaluating performance and making decisions pertaining to the business segments. The condensed statement of income identifies the components of income and expense which affect the operating amounts presented in the “Other” segment.
The following schedule presents selected operating segment information for the three months ended June 30, 2023March 31, 2024 and 2022:2023:
Zions BankCB&TAmegy
Zions BankZions BankCB&TAmegy
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
SELECTED INCOME STATEMENT DATASELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest incomeNet interest income$178 $170 $152 $142 $116 $120 
Provision for credit lossesProvision for credit losses15 16 12 
Net interest income after provision for credit lossesNet interest income after provision for credit losses171 169 137 126 104 115 
Noninterest incomeNoninterest income49 49 35 27 55 42 
Noninterest expenseNoninterest expense138 125 94 84 100 88 
Income (loss) before income taxesIncome (loss) before income taxes$82 $93 $78 $69 $59 $69 
SELECTED AVERAGE BALANCE SHEET DATASELECTED AVERAGE BALANCE SHEET DATA
Total average loansTotal average loans$14,250 $13,120 $14,152 $12,895 $12,880 $11,934 
Total average loans
Total average loans
Total average depositsTotal average deposits19,191 25,035 13,333 16,663 11,873 16,253 
NBAZNSBVectra
NBAZ
NBAZ
NBAZNSBVectra
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
SELECTED INCOME STATEMENT DATASELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest incomeNet interest income$64 $55 $49 $39 $38 $35 
Provision for credit lossesProvision for credit losses10 
Net interest income after provision for credit lossesNet interest income after provision for credit losses60 49 42 36 36 25 
Noninterest incomeNoninterest income11 11 11 12 
Noninterest expenseNoninterest expense45 42 42 37 34 30 
Income (loss) before income taxesIncome (loss) before income taxes$26 $18 $11 $11 $$
SELECTED AVERAGE BALANCE SHEET DATASELECTED AVERAGE BALANCE SHEET DATA
Total average loansTotal average loans$5,243 $4,888 $3,427 $2,914 $3,998 $3,527 
Total average loans
Total average loans
Total average depositsTotal average deposits6,873 8,447 6,630 7,546 3,271 4,189 
TCBWOtherConsolidated Bank
TCBW
TCBW
TCBWOtherConsolidated Bank
(In millions)(In millions)202320222023202220232022(In millions)202420232024202320242023
SELECTED INCOME STATEMENT DATASELECTED INCOME STATEMENT DATA
Net interest income
Net interest income
Net interest incomeNet interest income$15 $15 $(21)$17 $591 $593 
Provision for credit lossesProvision for credit losses— (1)(1)46 41 
Net interest income after provision for credit lossesNet interest income after provision for credit losses15 14 (20)18 545 552 
Noninterest incomeNoninterest income19 21 189 172 
Noninterest expenseNoninterest expense49 52 508 464 
Income (loss) before income taxesIncome (loss) before income taxes$11 $10 $(50)$(13)$226 $260 
SELECTED AVERAGE BALANCE SHEET DATASELECTED AVERAGE BALANCE SHEET DATA
Total average loansTotal average loans$1,689 $1,579 $1,040 $927 $56,679 $51,784 
Total average loans
Total average loans
Total average depositsTotal average deposits1,099 1,547 7,379 1,207 69,649 80,887 
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The following schedule presents selected operating segment information for the six months ended June 30, 2023 and 2022:
Zions BankCB&TAmegy
(In millions)202320222023202220232022
SELECTED INCOME STATEMENT DATA
Net interest income$363 $326 $311 $271 $240 $232 
Provision for credit losses31 — 15 22 23 (22)
Net interest income after provision for credit losses332 326 296 249 217 254 
Noninterest income99 95 59 51 96 79 
Noninterest expense273 248 186 168 198 175 
Income (loss) before income taxes$158 $173 $169 $132 $115 $158 
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans$14,115 $12,969 $14,084 $12,870 $12,862 $11,865 
Total average deposits20,067 25,574 13,985 16,566 12,576 16,333 
NBAZNSBVectra
(In millions)202320222023202220232022
SELECTED INCOME STATEMENT DATA
Net interest income$129 $106 $99 $77 $79 $68 
Provision for credit losses11 — 
Net interest income after provision for credit losses125 104 88 77 73 62 
Noninterest income21 23 23 25 13 16 
Noninterest expense92 82 82 74 67 59 
Income (loss) before income taxes$54 $45 $29 $28 $19 $19 
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans$5,197 $4,831 $3,377 $2,866 $3,990 $3,463 
Total average deposits7,025 8,201 6,800 7,492 3,488 4,243 
TCBWOtherConsolidated Bank
(In millions)202320222023202220232022
SELECTED INCOME STATEMENT DATA
Net interest income$31 $28 $18 $29 $1,270 $1,137 
Provision for credit losses(1)(1)91 
Net interest income after provision for credit losses29 27 19 30 1,179 1,129 
Noninterest income35 22 349 314 
Noninterest expense13 12 109 110 1,020 928 
Income (loss) before income taxes$19 $18 $(55)$(58)$508 $515 
SELECTED AVERAGE BALANCE SHEET DATA
Total average loans$1,700 $1,585 $1,092 $911 $56,417 $51,360 
Total average deposits1,240 1,564 4,720 1,271 69,901 81,244 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our most significant risks include interest rate and market risk, which are closely monitored by management as previously discussed. For more information regarding interest rate and market risk, see the “Interest Rate and Market Risk Management” section in this Form 10-Q.
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ITEM 4. CONTROLS AND PROCEDURES
Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures at June 30, 2023.March 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at June 30, 2023.March 31, 2024. There were no changes in our internal control over financial reporting during the secondfirst quarter of 20232024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information contained in Note 10 of the Notes to Consolidated Financial Statements is incorporated by reference herein.
ITEM 1A. RISK FACTORS
We amendThere have been no material changes to the following two risk factors discussedas previously disclosed in Part I, Item 1A. Risk Factors in our 20222023 Form 10-K:10-K.
Changes
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following schedule summarizes our share repurchases for the first quarter of 2024:
SHARE REPURCHASES
Period
Total number
of shares
repurchased 1
Average
price paid
per share
Total number of shares purchased as part of publicly announced plans or programs
January— — — 
February890,167 $39.32 890,167 
March— — — 
First quarter 2024890,167 39.32 890,167 
1 Includes common shares acquired in levelsconnection with our stock compensation plan. Shares were acquired from employees to pay for their payroll taxes and sourcesstock option exercise cost upon the exercise of liquiditystock options under provisions of an employee share-based compensation plan.
ITEM 5. OTHER INFORMATION
None of our directors or officers have adopted, modified, or terminated a Rule 10b5-1(c) trading arrangement during the three months ended March 31, 2024. Our directors and capital, includingofficers participate in certain of our benefits plans such as our Omnibus Incentive Plan and Payshelter 401(k) and Employee Stock Ownership Plan, and may from time to time make elections to have shares withheld to cover withholding taxes or pay the resulting effectsexercise price of recent events in the banking industry, may limit our operations and potential growth.
Our primary source of liquidity is deposits from our customers,options granted thereunder, which elections may be impacted by market-related forces suchdesigned to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements as increased competition for these deposits and a varietydefined in Item 408(c) of other factors. Deposits across the banking industry have been fluctuating in recent quarters in large part due to the increased interest rate environment and prominent bank failures. We, like many other banks, experienced some deposit outflows as customers spread deposits among several different banks to maximize their amount of FDIC insurance, moved deposits to institutions offering higher rates or banks deemed “too big to fail,” or removed deposits from the U.S. financial system entirely. Although our deposit levels have stabilized during the most recent quarter, our cost of funds has increased, and the potential for greater volatility remains, particularly if there is negative news surrounding us or perceived risks regarding our safety and soundness. If we are unable to continue to fund assets through customer bank deposits or access funding sources on favorable terms, or if we suffer an increase in borrowing costs or FDIC insurance assessments, or otherwise fail to manage liquidity effectively, our liquidity, operating margins, financial condition, and results of operations may be materially and adversely affected.
The Federal Reserve's tightened monetary policy may contribute to a decline in the value of our fixed-rate loans and investment securities that are pledged as collateral to support short-term borrowings, and other economic conditions may also affect our liquidity and efforts to manage associated risks. The FHLB system and Federal Reserve have been, and continue to be, a significant source of additional liquidity and funding. Changes in FHLB funding programs could adversely affect our liquidity and management of associated risks.
Problems encountered by other financial institutions could adversely affect financial markets generally and have indirect adverse effects on us.
The soundness and stability of many financial institutions may be closely interrelated as a result of credit, trading, clearing, or other relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions. This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which we interact on a daily basis, and therefore, could adversely affect us.This phenomenon has been evident in the recent events affecting the banking industry, as financial institutions, like us, have been impacted by concerns regarding the soundness or creditworthiness of other financial institutions. This has caused substantial and cascading disruption within the financial markets, increased expenses, and adversely impacted the market price and volatility of our common stock.Regulation S-K.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 6. EXHIBITS
a.Exhibits
Exhibit
Number
Description
Second Amended and Restated Articles of Association of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.1 of Form 8-K filed on October 2, 2018.*
Second Amended and Restated Bylaws of Zions Bancorporation, National Association, incorporated by reference to Exhibit 3.2 of Form 8-K filed on April 4, 2019.*
Zions Bancorporation 2024-2026 Value Sharing Plan (filed herewith).
Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith).
101Pursuant to Rules 405 and 406 of Regulation S-T, the following information is formatted in Inline XBRL (i) the Consolidated Balance Sheets as of June 30, 2023March 31, 2024 and December 31, 2022,2023, (ii) the Consolidated Statements of Income for the three months ended June 30,March 31, 2024 and March 31, 2023, and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022, (iii) the Consolidated Statements of Comprehensive Income for the three months ended June 30,March 31, 2024 and March 31, 2023, and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022, (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the three months ended June 30,March 31, 2024 and March 31, 2023, and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022, (v) the Consolidated Statements of Cash Flows for the sixthree months ended June 30,March 31, 2024 and March 31, 2023, and June 30, 2022, and (vi) the Notes to Consolidated Financial Statements (filed herewith).
104The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.
* Incorporated by reference
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt are not filed. We agree to furnish a copy thereof to the Securities and Exchange Commission and the Office of the Comptroller of the Currency upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ZIONS BANCORPORATION, NATIONAL ASSOCIATION
/s/ Harris H. Simmons
Harris H. Simmons, Chairman and
Chief Executive Officer
/s/ Paul E. BurdissR. Ryan Richards
Paul E. Burdiss,R. Ryan Richards, Executive Vice President and Chief Financial Officer
Date: August 4, 2023May 8, 2024
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