ALLOWANCE FOR CREDIT LOSSES

The following table presents ACL activity by portfolio segment.


(dollar amounts in millions)	Commercial	Consumer	Total
Three months ended March 31, 2026
ALLL balance, beginning of period	$1,731	$806	$2,537
Loan and lease charge-offs (1)	(98)	(75)	(173)
Recoveries of loans and leases previously charged-off	42	20	62
Provision for loan and lease losses	192	58	250
Allowance on PCD loans and leases at acquisition	268	54	322
Allowance on purchased seasoned loans and leases at acquisition	170	75	245
ALLL balance, end of period	$2,305	$938	$3,243
AULC balance, beginning of period	$145	$61	$206
Provision (benefit) for unfunded lending commitments	(50)	(42)	(92)
Acquired unfunded lending commitments	3	8	11
AULC balance, end of period	$98	$27	$125
ACL balance, end of period	$2,403	$965	$3,368
Three months ended March 31, 2025
ALLL balance, beginning of period	$1,484	$760	$2,244
Loan and lease charge-offs	(74)	(59)	(133)
Recoveries of loans and leases previously charged-off	30	17	47
Provision for loan and lease losses	80	25	105
ALLL balance, end of period	$1,520	$743	$2,263
AULC balance, beginning of period	$144	$58	$202
Provision (benefit) for unfunded lending commitments	14	(1)	13
AULC balance, end of period	$158	$57	$215
ACL balance, end of period	$1,678	$800	$2,478

(1)Includes charge-offs of $23 million on certain commercial loans previously charged off by Cadence, which were written up to the unpaid principal balance

at acquisition and then immediately written off as required by purchase accounting.

At March 31, 2026, the ACL was $3.4 billion, a $625 million increase compared to December 31, 2025. The

increase in the ACL was driven by the ACL recorded for loans acquired in the Cadence transaction in addition to

organic loan and lease growth. The ACL coverage ratio at March 31, 2026 is reflective of the current macroeconomic

forecast and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative

The commercial ACL was $2.4 billion at March 31, 2026, a $527 million increase compared to December 31,

2025, with the increase driven by $438 million of ALLL recorded for commercial loans acquired in the Cadence

transaction, as well as organic growth in commercial loans and leases during the first quarter of 2026. The consumer

ACL was $965 million at March 31, 2026, an increase of $98 million from December 31, 2025, with the increase due

to $129 million of ALLL recorded for consumer loans acquired in the Cadence transaction.

The baseline economic scenario used to estimate our March 31, 2026 ACL assumes continued tariff uncertainty,

but reflects marginal improved performance of the U.S. economy in the near term with minimal change in the

overall outlook. In this scenario, the unemployment rate is expected to remain at 4.5% throughout 2026 before

declining slightly in 2027. The Federal Reserve restarts rate cuts in 2026, resulting in an average federal funds rate of

3.2% for 2026. The inflation outlook stabilizes slightly as the impacts of tariffs and other trade policies moderate,

and near-term inflation declines but remains above the Federal Reserve’s 2% target throughout 2026. After slow

GDP growth to end 2025, GDP growth accelerates in the first quarter of 2026 but is expected to decline over the

remainder of 2026 and remain below 2% for all of 2027.

The economic scenarios used included elevated levels of economic uncertainty including the impact of specific

challenges in the commercial real estate industry, recent inflation levels, the U.S. labor market, the expected path of

interest rate changes by the Federal Reserve, and the impact of significant conflicts on-going around the world.

Given the uncertainty associated with key economic scenario assumptions, the March 31, 2026 ACL included a

general reserve that consists of various risk profile components to address uncertainty not measured within the