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Line of Business Financial Review

The Company’s major lines of business are Wealth, Corporate, Commercial and Institutional Banking, Consumer and Business Banking, Payment Services, and Treasury and Corporate Support.

Basis for Financial Presentation Business line results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. Refer to Note 16 of the Notes to Consolidated Financial Statements for further information on the business lines’ basis for financial presentation.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the

Company’s diverse customer base. During 2024 and 2023, certain organization and methodology changes were made, including the Company combining its Wealth Management and Investment Services and Corporate and Commercial Banking lines of businesses to create the Wealth, Corporate, Commercial and Institutional Banking line of business during the third quarter of 2023. Prior period results were restated and presented on a comparable basis.

Wealth, Corporate, Commercial and Institutional Banking Wealth, Corporate, Commercial and Institutional Banking provides core banking, specialized lending, transaction and payment processing, capital markets, asset management, and brokerage and investment related services to wealth, middle market, large corporate, government and institutional clients. Wealth, Corporate, Commercial and Institutional Banking contributed $651 million of the Company’s net income in the first quarter of 2024, or a decrease of $291 million (30.9 percent) compared with the first quarter of 2023.

Net revenue decreased $192 million (7.5 percent) in the first quarter of 2024, compared with the first quarter of 2023. Net interest income, on a taxable-equivalent basis, decreased $285 million (18.4 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets. Noninterest income increased $93 million (9.1 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher trust and investment management fees driven by business growth and favorable market conditions, and higher commercial products revenue mainly due to higher corporate bond fees.

Noninterest expense increased $32 million (2.4 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher compensation and employee benefits expense. The provision for credit losses increased $164 million in the first quarter of 2024, compared with the first quarter of 2023, primarily due to commercial real estate credit quality and select commercial downgrades.

Consumer and Business Banking Consumer and Business Banking comprises consumer banking, small business banking and consumer lending. Products and services are delivered through banking offices, telephone servicing and sales, online services, direct mail, ATM processing, mobile devices, distributed mortgage loan officers, and intermediary relationships including auto dealerships, mortgage banks, and strategic business partners. Consumer and Business Banking contributed $601 million of the Company’s net income in the first quarter of 2024, or a decrease of $169 million (21.9 percent) compared with the first quarter of 2023.

Net revenue decreased $305 million (11.1 percent) in the first quarter of 2024, compared with the first quarter of 2023. Net interest income, on a taxable-equivalent basis, decreased $327 million (14.0 percent) in the first quarter of 2024, compared with the first quarter of 2023, due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets. Noninterest income increased $22 million (5.5 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher

mortgage banking revenue driven by higher gain on sale margins, partially offset by a decrease in service charges.

Noninterest expense decreased $127 million (7.4 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to lower net shared services expense and compensation and employee benefits expense. The provision for credit losses increased $48 million in the first quarter of 2024, compared with the first quarter of 2023, due to normalizing credit conditions.

Payment Services Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services and merchant processing. Payment Services contributed $248 million of the Company’s net income in the first quarter of 2024, or a decrease of $62 million (20.0 percent) compared with the first quarter of 2023.

Net revenue increased $123 million (7.7 percent) in the first quarter of 2024, compared with the first quarter of 2023. Net interest income, on a taxable-equivalent basis, increased $80 million (12.2 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher loan yields driven by higher interest rates and customer revolve rates, along with higher loan balances, partially offset by higher funding costs. Noninterest income increased $43 million (4.6 percent) in the first quarter of 2024, compared with the first quarter of 2023, driven by higher card revenue due to higher spend volume and favorable rates, along with increased merchant processing services due to higher spend volume.

Noninterest expense increased $66 million (6.9 percent) in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher net shared services expense driven by investment in infrastructure and technology development. The provision for credit losses increased $139 million (63.2 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to increasing delinquency rates and charge-offs.

Treasury and Corporate Support Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to the business lines, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis. Treasury and Corporate Support recorded a net loss of $181 million in the first quarter of 2024, compared with a net loss of $324 million in the first quarter of 2023.

Net revenue decreased $86 million (31.7 percent) in the first quarter of 2024, compared with the first quarter of 2023. Net interest income, on a taxable-equivalent basis, decreased $121 million (99.2 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher funding costs, partially offset by higher yields on the investment securities portfolio and cash balances. Noninterest income increased $35 million (23.5 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to prior year losses on securities and an increase in commercial products revenue, partially offset by a decrease in other revenue.

Noninterest expense decreased $67 million (12.2 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to prudent expense management, continued focus on operational efficiency, synergies from the MUB acquisition and lower merger and integration charges, along with a decline in the future delivery exposure for merchant and airline processing and other liabilities. These decreases were partially offset by the impact of the FDIC special assessment, higher compensation and employee benefits expense and higher net shared services expense. The provision for credit losses decreased $225 million (99.6 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to relative stability in the economic outlook in the current quarter.

Income taxes are assessed to each line of business at a managerial tax rate of 25.0 percent with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.

Non-GAAP Financial Measures

In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:

•Tangible common equity to tangible assets,

•Tangible common equity to risk-weighted assets, and

•Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the CECL methodology.

These capital measures are viewed by management as useful additional methods of evaluating the Company’s utilization of its capital held and the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company’s capital position relative to other financial services companies. These capital measures are not defined in generally accepted accounting principles (“GAAP”), or are not currently effective or defined in banking regulations. In addition, certain of these measures differ from currently effective capital ratios defined by banking regulations principally in that the currently effective ratios, which are

subject to certain transitional provisions, temporarily exclude the impact of the 2020 adoption of accounting guidance related to impairment of financial instruments based on the CECL methodology. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures. Management believes this information helps investors assess trends in the Company’s capital adequacy.

The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio and net interest margin utilize net interest income on a taxable-equivalent basis.

There may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in this report in their entirety, and not to rely on any single financial measure.

The following tables show the Company’s calculation of these non-GAAP financial measures:

(a)Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

(b)Includes the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology net of deferred taxes.

(c)Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology.

(a)Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

Critical Accounting Policies

The accounting and reporting policies of the Company comply with accounting principles generally accepted in the United States and conform to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. The Company’s financial position and results of operations can be affected by these estimates and assumptions, which are integral to understanding the Company’s financial statements. Critical accounting policies are those policies management believes are the most important to the portrayal of the Company’s financial condition and results, and require management to make estimates that are difficult, subjective or complex. Most accounting policies are not considered by management to be critical accounting policies. Management has discussed the development and the selection of critical accounting policies with the Company’s Audit Committee. Those policies considered to be critical accounting policies relate to the allowance for credit losses, fair value estimates, MSRs, and income taxes. These accounting policies are discussed in detail in “Management’s Discussion and Analysis — Critical Accounting Policies” and the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.