ZIONS BANCORPORATION NATIONAL ASSOCIATION UT

REPORT ON MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Zions Bancorporation, N.A is responsible for establishing and maintaining adequate internal control over financial reporting as defined by Exchange Act Rules 13a-15 and 15d-15.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Although any system of internal control can be compromised by human error or intentional circumvention of required procedures, we believe our system provides reasonable assurance that financial transactions are recorded and reported properly, providing an adequate basis for reliable financial statements.

Our management has used the criteria established in Internal Control – Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) to evaluate the effectiveness of our internal control over financial reporting.

Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, and has concluded that such internal control over financial reporting is effective. There are no material weaknesses in our internal control over financial reporting that have been identified by our management.

Ernst & Young LLP, an independent registered public accounting firm, has audited our consolidated financial statements for the year ended December 31, 2024, and has also issued an attestation report, which is included herein, on internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”).

REPORTS OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:42)

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and the Board of Directors of Zions Bancorporation, National Association

Opinion on Internal Control Over Financial Reporting

We have audited Zions Bancorporation, National Association’s (“the Bank”)internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“the COSO criteria”). In our opinion, the Bank maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the 2024 consolidated financial statements of the Bank and our report dated February 25, 2025, expressed an unqualified opinion thereon.

Basis for Opinion

The Bank’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Bank’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Salt Lake City, Utah

REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To the Shareholders and the Board of Directors of Zions Bancorporation, National Association

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zions Bancorporation, National Association (“the Bank”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Bank at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Bank’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on the Bank’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account and the disclosures to which it relates.

Allowance for loan and lease losses

/s/Ernst & Young LLP

We have served as the Bank’s auditor since 2000.

Salt Lake City, Utah

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Zions Bancorporation, National Association (“Zions Bancorporation, N.A.,” “the Bank,” “we,” “our,” “us”) is a 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 affiliates: 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 Commerce Bank of Oregon in Oregon.

Basis of Financial Statement Presentation and Principles of Consolidation

The consolidated financial statements include our accounts and those of our majority-owned, consolidated subsidiaries. This also includes our wholly-owned subsidiaries, such as ZMFU II, Inc., which is utilized for our municipal lending business, and Zions Direct, Inc., a registered broker-dealer under the Exchange Act, among other subsidiaries.

Investments in which we have the ability to exercise significant influence over the operating and financial policies of the investee are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation. Assets held in an agency or fiduciary capacity are excluded from the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and prevailing practices within the financial services industry. References to GAAP, including standards issued by the Financial Accounting Standards Board (“FASB”), are made according to sections of the Accounting Standards Codification (“ASC”). In preparing the consolidated financial statements, we make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates.

Subsequent Events

We evaluated events that occurred between December 31, 2024, and the date the accompanying financial statements were issued. We determined that there were no material events requiring adjustments to our consolidated financial statements or significant disclosure in the accompanying notes.

Variable Interest Entities

A variable interest entity (“VIE”) is consolidated when we are identified as the primary beneficiary of the VIE. Current accounting guidance requires continuous analysis to determine the primary beneficiary of a VIE. At the start of our involvement, and periodically thereafter, we reassess our consolidation conclusions for all entities with which we are involved. At December 31, 2024, and 2023, we had no VIEs consolidated in our financial statements.

Statement of Cash Flows

For purposes of presentation on the consolidated statements of cash flows, “cash and cash equivalents” are defined as those amounts included in “Cash and due from banks” on the consolidated balance sheets.

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell consist of overnight and term agreements, with the majority maturing within 50 days. These agreements are generally classified as collateralized financing transactions and are carried at the acquisition cost plus accrued interest. We, or third parties on our behalf, take possession of the underlying securities. The fair value of such securities is continuously monitored throughout the contract term to ensure asset values remain sufficient to mitigate counterparty default risk. Contractual provisions allow us to sell or repledge certain securities accepted as collateral for securities purchased under agreements to resell. At December 31, 2024, and 2023, we held $1.4 billion and $0.9 billion, respectively, of securities for which we were permitted by contract to sell or repledge. The average balance of securities purchased under agreements to resell was $2.2 billion and $1.3 billion in 2024 and 2023, and the maximum amount outstanding at any month-end during these same periods was $3.0 billion and $2.0 billion, respectively. If sold, our obligation to return the collateral is recorded as “securities sold, not yet purchased” and included as a liability in “Federal funds and other short-term borrowings” on the consolidated balance sheet.

Other Noninterest-bearing Investments

Other noninterest-bearing investments include private equity investments (“PEIs”), venture capital securities, securities acquired for various debt and regulatory requirements, bank-owned life insurance (“BOLI”), and certain other noninterest-bearing investments. See Note 3 for further information.

Certain PEIs and venture capital securities are accounted for under the equity method of accounting when we can exercise significant influence over the investee's operating and financial policies. Equity investments in PEIs that do not grant significant influence are reported at fair value, unless a readily determinable fair value in unavailable. In such cases, we have elected to measure PEIs at cost, less impairment (if any), plus or minus observable price changes from identical or similar investments of the same issuer, referred to as the “measurement alternative.” Periodic impairment reviews are conducted by comparing carrying values with fair value estimates. Changes in fair value, impairment losses, and gains and losses from sales are included in “Securities gains (losses), net” on the consolidated statement of income.

BOLI is accounted for at fair value based on the cash surrender values (“CSVs”) of the general account insurance policies.

Business Combinations

Business combinations are accounted for under the acquisition method of accounting. Upon initially obtaining control, we recognize 100% of all acquired assets and assumed liabilities, regardless of the ownership percentage. These assets and liabilities are recorded at their estimated fair values, with goodwill recognized when such net fair values are less than the acquisition cost. Certain transaction and restructuring costs are expensed as incurred. Changes to estimated fair values from a business combination are recognized as adjustments to goodwill during the measurement period, which cannot exceed one year from the acquisition date. The results of operations of acquired businesses are included on our consolidated statement of income from the date of acquisition.

Other Real Estate Owned

Other real estate owned (“OREO”) consists primarily of commercial and residential real estate acquired in partial or full satisfaction of loan obligations. These properties are initially recorded at fair value, less estimated selling costs, based on recent property appraisals at the time of transfer. Subsequently, they are recorded at the lower of cost or fair value, less estimated selling costs.

Significant Accounting Policies

The following schedule references other significant accounting policies and the Note and page where a description of each policy can be found:

2. RECENT ACCOUNTING PRONOUNCEMENTS

3. FAIR VALUE

Fair Value Measurement

We measure many of our assets and liabilities at fair value. Fair value is defined as the price that would be received to sell 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. To enhance consistency and comparability in fair value measurements, we prioritize valuation inputs following a three-level hierarchy, as described below. We prioritize quoted prices in active markets and minimize reliance on unobservable inputs. When observable market prices are unavailable, fair value is estimated using modeling techniques, employing assumptions that align with those that market participants would consider in pricing the asset or liability. Changes in market conditions may reduce the availability of quoted prices or observable data.

The following fair value hierarchy prioritizes the use of observable inputs over unobservable inputs when measuring the fair value of assets and liabilities:

•Level 1 — Quoted prices in active markets for identical assets or liabilities that we have the ability to access;

•Level 2 — Observable inputs other than Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in less active markets, observable inputs other than quoted prices used in the valuation of an asset or liability, and inputs derived principally from or corroborated by observable market data through correlation or other means; and

•Level 3 — Unobservable inputs supported by minimal or no market activity for financial instruments whose value is determined by pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The classification of a fair value measurement within the fair value hierarchy is based on the lowest level input that is significant to the measurement. Market activity is presumed to be orderly in the absence of evidence of forced or disorderly sales. Applicable accounting guidance precludes the use of blockage factors or liquidity adjustments due to the quantity of securities held by the Bank.

We measure certain assets and liabilities at fair value on a recurring basis when fair value is the primary measure for accounting. Fair value is also used on a nonrecurring basis for certain assets or liabilities to determine any impairment, apply lower of cost or fair value accounting, or for disclosure purposes of certain financial instruments.

Fair Value Policies and Procedures

We have established various policies, processes, and controls to ensure that fair values are reasonably estimated, reviewed, and approved for use. Our Securities Valuation Committee, comprised of executive management, reviews and approves the key components of fair value measurements on a quarterly basis, including critical valuation assumptions for Level 3 measurements. Our Model Risk Management Group conducts model validations, including internal models, and sets policies and procedures for revalidation, including the timing of revalidation.

Third-party Service Providers

We utilize a third-party pricing service to measure fair value of substantially all of our Level 2 available-for-sale (“AFS”) securities. Fair value measurements for other Level 2 AFS securities generally rely on inputs corroborated by market data and include discounted cash flow analyses.

For Level 2 securities, the third-party pricing service provides ongoing documentation that includes market data, detailed pricing information and market reference data. This documentation includes benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data from the vendor trading platform. We regularly review, test, and validate this information.

The following describes the hierarchy designations, valuation methodologies, and key inputs used to measure fair value on a recurring basis for designated financial instruments:

Trading securities

Trading securities are measured using observable market inputs and are classified in Level 1 and Level 2.

Available-for-Sale investment securities

•U.S. Treasury, Agencies and Corporations — U.S. Treasury securities measured using quoted market prices are classified in Level 1. U.S. agency and corporate securities measured using observable market inputs are classified in Level 2.

•Municipal Securities — Municipal securities are measured using observable market inputs and are classified in Level 2.

•Other Debt Securities — Other debt securities are measured using quoted prices for similar securities and are classified in Level 2.

Loans held for sale

We have elected the fair value option for certain commercial real estate (“CRE”) loans designated for sale to a third-party conduit for securitization. These loans are measured at fair value using observable market prices for mortgage-backed securities with similar collateral, and are therefore generally classified in Level 2. The valuation of these loans incorporates adjustments for differences between the securities and the underlying loans, considering factors such as credit quality, portfolio composition, and liquidity.

Bank-owned Life Insurance

BOLI is measured according to the CSV of the insurance policies. Nearly all policies are general account policies with CSVs based on our claims on the assets of the insurance companies. The insurance companies’ investments predominantly include fixed-income securities, such as investment-grade corporate bonds and various types of mortgage instruments. Management regularly reviews the performance of its BOLI investments, including concentrations among insurance providers, and classifies BOLI balances in Level 2 in the fair value hierarchy.

Private Equity Investments

PEIs measured at fair value on a recurring basis are generally classified in Level 3 due to the inclusion of unobservable inputs in their valuation. Key assumptions and considerations include current and projected financial performance, recent financing activities, economic and market conditions, market comparable companies, market liquidity, and other relevant factors. The majority of these PEIs are held in our Small Business Investment Company (“SBIC”) and consist of early-stage venture investments. These investments are reviewed at least quarterly by the Securities Valuation Committee and whenever a new round of financing occurs. Some of these investments may be valued using multiples of operating performance. Occasionally, PEIs may become publicly traded and are then measured in Level 1. Certain restrictions may apply to the redemption of these investments.

Agriculture Loan Servicing

We service agriculture loans approved and funded by the Federal Agricultural Mortgage Corporation (“FAMC”) under an agreement for the loans it owns. The servicing assets are measured at fair value, representing our projection of the present value of net future servicing cash flows. Due to the inclusion of unobservable inputs in these measurements, these assets are classified in Level 3.

Deferred Compensation Plan Assets

Invested assets in the deferred compensation plan consist of shares of registered investment companies. These mutual funds are valued using quoted market prices, representing the net asset value (“NAV”) of shares held by the plan at the end of the period. Consequently, these assets are classified in Level 1.

Derivatives

Exchange-traded derivatives, such as foreign currency exchange contracts, are generally classified in Level 1 due to their trading in active markets. Conversely, over-the-counter derivatives, which primarily include interest rate swaps, forwards, options, and purchased credit default swaps, are generally classified in Level 2. This classification arises because their fair values are derived from third-party services that utilize observable market inputs. These inputs include yield curves, foreign exchange rates, commodity prices, option volatility, counterparty credit risk, and other related data. Valuations incorporate credit valuation adjustments (“CVAs”) to account for nonperformance risk associated with both our counterparties and us. CVAs are generally determined by applying a credit spread to the total expected exposure, net of any collateral, of the derivative.

Securities Sold, Not Yet Purchased

Securities sold, not yet purchased, are included in “Federal funds and other short-term borrowings” on the consolidated balance sheet. They are measured using quoted market prices and are generally classified in Level 1. In cases where market prices for identical securities are unavailable, quoted prices for similar securities are utilized, with the related balances classified in Level 2.

Fair Value Hierarchy

The following schedule presents assets and liabilities measured at fair value on a recurring basis:

1 The level 1 PEIs generally relate to the portion of our SBIC investments and other similar investments that are publicly traded.

Fair Value Option for Certain Loans Held for Sale

We have elected the fair value option for certain commercial real estate loans designated for sale to a third-party conduit for securitization and hedged with derivative instruments. This election mitigates the accounting volatility that would otherwise arise from the asymmetry of accounting for loans held for sale at the lower of cost or fair value and derivatives at fair value, without the complexity of applying hedge accounting. These loans are included in “Loans held for sale” on the consolidated balance sheet. Associated fair value gains and losses are included in “Capital markets fees” on the consolidated statement of income, while accrued interest is included in “Interest and fees on loans.”

At December 31, 2024 and 2023, we had $25 million and $43 million of loans measured at fair value, with an unpaid principal balance of $26 million and $43 million, respectively. During 2024 and 2023, we recognized approximately $14 million and $4 million of net gains from loan sales and valuation adjustments of loans measured at fair value and the associated derivatives, respectively.

Level 3 Valuations

Roll-forward of Level 3 Fair Value Measurements

The following schedule presents a roll-forward of assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs:

The roll-forward of Level 3 instruments includes the following realized gains and losses recognized in “Securities gains (losses), net” on the consolidated statement of income for the periods presented:

Nonrecurring Fair Value Measurements

Certain assets and liabilities may be measured at fair value on a nonrecurring basis. These include impaired loans measured at the fair value of the underlying collateral, 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.

Collateral-dependent loans were measured at the lower of amortized cost or the fair value of the collateral. OREO was initially measured at fair value based on collateral appraisals at the time of transfer and subsequently at the lower of cost or fair value (less any selling costs). The fair value measurement for collateral-dependent loans and OREO was based on third-party appraisals utilizing one or more valuation techniques (income, market, and cost approaches). Adjustments to calculated fair values were made based on recently completed and validated third-party appraisals, third-party appraisal services, automated valuation services, or our informed judgment. Automated valuation services, which use models based on market, economic, and demographic values, may be primarily used for residential properties when values from any of the previous methods were not available within 90 days of the balance sheet date. At December 31, 2024, we hadno collateral-dependent loans marked to fair value, and during 2024, we recognizedno losses from fair value changes related to these loans.

Fair Value of Certain Financial Instruments

The following schedule presents the carrying values and estimated fair values of certain financial instruments:

The preceding schedule excludes certain financial instruments recorded at fair value on a recurring basis, as well as certain financial assets and liabilities for which the carrying value approximates fair value. These include cash and due from banks, money market investments, demand, savings, and money market deposits, federal funds purchased and other short-term borrowings, and security repurchase agreements. The estimated fair value of demand, savings, and money market deposits is the amount payable on demand at the reporting date. Carrying value is used because these accounts have no stated maturity, customers can withdraw funds immediately, and there is generally negligible credit risk. Instruments for which carrying value approximates fair value are generally classified in Level 2 in the fair value hierarchy, as their pricing is largely based on observable market inputs. Time and foreign deposits are measured at fair value by discounting future cash flows using the applicable yield curve to the given maturity dates. Long-term debt is measured at fair value based on actual market trades (i.e., an asset value) when available, or by discounting cash flows to maturity using the applicable yield curve adjusted for credit spreads.

For loans measured at amortized cost, fair value is estimated for disclosure purposes by discounting future cash flows using the applicable yield curve, adjusted by a factor derived from analyzing recent loan originations and incorporating a liquidity premium inherent in the loan. These future cash flows are then reduced by the estimated aggregate credit losses over the life of the loan portfolio. The fair value for held-to-maturity (“HTM”) securities is estimated using a third-party pricing service or an internal model, which utilizes observable market yields as inputs.

These fair value disclosures represent our best estimates based on relevant market information and judgments regarding current economic conditions, future expected loss experience, risk characteristics of the various instruments, and other factors. These estimates are inherently subjective, involve uncertainties and significant judgment, and cannot be determined with precision. Changes in methodologies and assumptions would significantly affect these estimates.

4. OFFSETTING ASSETS AND LIABILITIES

The following schedule presents gross and net information for selected financial instruments on the balance sheet:

Security repurchase and reverse repurchase agreements are offset, when applicable, on the balance sheet according to master netting agreements. Security repurchase agreements are included in “Federal funds and other short-term 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 on our balance sheet. See Note 7 for further information regarding derivative instruments.

5. INVESTMENT SECURITIES

Investment Securities

We classify our investment securities as either available-for-sale (“AFS”) or held-to-maturity (“HTM”), according to their purpose and holding period. Gains or losses on the sale of investment securities are recognized using the specific identification method and are recorded in noninterest income.

AFS securities are measured at fair value and consist of debt securities used to manage liquidity and interest rate risk and to generate interest income. Unrealized gains and losses from AFS securities, after applicable taxes, are recorded as a component of other comprehensive income (“OCI”).

HTM securities, which management has the intent and ability to hold until maturity, are carried at amortized cost. The amortized cost represents the original investment cost, adjusted for related amortization or accretion of any purchase premiums or discounts, and for any impairment losses, including credit-related impairment.

The carrying values of our investment securities do not include accrued interest receivables of $60 million and $65 million at December 31, 2024, and 2023, respectively. These receivables are included in “Other assets” on the consolidated balance sheet. The purchase premiums for callable debt securities classified as AFS or HTM are amortized into interest income at an effective yield to the earliest call date. The purchase premiums and discounts for all other AFS and HTM securities are recorded as interest income over the contractual life of the security using the effective yield method. As principal prepayments are received on securities, a proportionate amount of the related premium or discount is recognized in income so that the effective yield on the remaining portion of the security continues unchanged. See Note 3 for more information about the process to estimate fair value for investment securities.

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. 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 unrealized gains or losses reported in accumulated other comprehensive income (“AOCI”) will offset the effect of the amortization of the premium or discount in interest income created by the transfer. The discount associated with securities previously transferred from AFS to HTM was$1.8 billion ($1.4 billion after tax) at December 31, 2024, compared with $2.1 billion ($1.5 billion after tax) at December 31, 2023.

The following schedule presents the amortized cost and estimated fair values of our AFS and HTM securities:

1 Gross unrealized gains for the respective AFS security categories were individually less than $1 million.

Maturities

The following schedule presents the amortized cost and weighted average yields of debt securities by remaining contractual maturity of principal payments at December 31, 2024. It does not incorporate interest rate resets and fair value hedges. The remaining contractual principal maturities do not reflect the duration of the portfolio, which includes amortization and expected prepayments; these effects result in measured durations shorter than contractual maturities.

1 The yields on tax-exempt securities are calculated on a tax-equivalent basis.

The following schedule presents gross unrealized losses for AFS securities and the estimated fair value, categorized by the length of time the securities have been in an unrealized loss position:

At December 31, 2024, and 2023, approximately 2,534 and 2,998 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 AFS securities, when the fair value of a debt security is less than its amortized cost basis at the balance sheet date, we assess for credit impairment. When determining if the fair value of an investment is less than the amortized cost basis, we exclude accrued interest from the amortized cost basis of the investment. If we intend to sell an identified security, or if it is more likely than not we will be required to sell the security before recovering its amortized cost basis, we write the amortized cost down to the security’s fair value at the reporting date through earnings.

If we have the intent and ability to hold the securities, we determine whether any impairment is attributable to credit-related factors. We analyze certain factors, primarily internal and external credit ratings, to determine if the decline in fair value below the amortized cost basis results from a credit loss or other factors. If a credit impairment is identified, we measure the amount of credit loss and recognize an allowance for it.

To measure the credit loss, we generally compare the present value of expected cash flows from the security to its amortized cost basis. These cash flows are adjusted for credit using assumptions for default probability and loss severity, among other factors. Additional inputs, such as prepayment rate assumptions, are also utilized, and certain internal models may be employed. To determine the credit-related portion of impairment, we use the security-specific effective interest rate to estimate the present value of cash flows. If the present value of cash flows is less than the amortized cost basis of the security, this amount is recorded as an allowance for credit loss, limited to the amount by which the fair value is less than the amortized cost basis (i.e., the credit impairment cannot result in the security being carried at an amount lower than its fair value).

The assumptions used to estimate expected cash flows depend on the asset class, structure, and credit rating of the security. Declines in fair value not recorded in the allowance are recorded in other comprehensive income, net of applicable taxes. The process, methodology, and factors considered to evaluate securities for impairment are described below. See also Note 3 for additional information regarding the measurement of our investment securities at fair value.

AFS Impairment

We did not recognize any impairment on our AFS investment securities portfolio during 2024 and 2023. Unrealized losses primarily relate to higher interest rates subsequent to the purchase of securities and are not attributable to credit. Therefore, absent any future sales, we expect to receive the full principal value at maturity. At December 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 recovering 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 December 31, 2024, the ACL on HTM securities wasless than $1 million, all HTM securities were risk-graded as “Pass” in terms of credit quality, and none were considered past due.

Investment Securities Gains and Losses Recognized in Income

The following schedule presents investment securities gains and losses recognized in income:

The following schedule presents interest income categorized by investment security type:

6. LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

Loans, Leases, and Loans Held for Sale

At the time of origination, loans are classified as either held for investment or held for sale based on our intended purpose. We may subsequently change our intent for a loan or group of loans and reclassify them accordingly. Loans held for sale are carried at the lower of cost or fair value. A valuation allowance is recorded when cost exceeds fair value, based on reviews at the time of reclassification and periodically thereafter. Associated gains and losses are calculated based on the difference between sales proceeds and carrying value, and are included in “Loan-related fees and income” on the consolidated statement of income.

In the ordinary course of business, we may syndicate portions of loans or transfer portions of loans under participation agreements to manage credit risk and portfolio concentration. We evaluate loan participations to ensure they comply with the relevant accounting guidance to qualify as sales.

We elect the fair value option for certain CRE loans designated for sale or securitization and are hedged with derivative instruments, as described further in Note 3. Gains and losses on the sale of these loans are included in “Capital markets fees” on the consolidated statement of income.

The following schedule presents our loan and lease portfolio according to major portfolio segment and specific class:

Loans and leases classified as held for investment are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $43 million and $37 million at December 31, 2024, and December 31, 2023, respectively. These unamortized amounts are amortized into interest income over the life of the loan using the interest method. The amortized cost basis of the loans does not include accrued interest receivables of $281 million and $299 million at December 31, 2024, and December 31, 2023, respectively. These receivables are included in “Other assets” on the consolidated balance sheet.

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 totaled $260 million at December 31, 2024 and $219 million at December 31, 2023.

Loans with a carrying value of approximately $40.4 billion at December 31, 2024, and $36.3 billion at December 31, 2023, have been pledged at the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.

Loans held for sale are measured individually at fair value or the lower of cost or fair value and primarily consist of CRE loans sold into securitization entities and conforming residential mortgages 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:

Occasionally, we retain continuing involvement in sold loans through servicing rights or guarantees. The principal balance of sold loans for which we have retained servicing was approximately $615 million at December 31, 2024, and $431 million at December 31, 2023. Income from loans sold, excluding servicing, was $8 million in 2024, $16 million in 2023, and $14 million in 2022.

We evaluate loans throughout their lifecycle for indications of credit deterioration, which may affect the loan status, risk grading, and potentially the accounting for that loan. Loan status categories include accruing or nonaccruing, past due as to contractual payments, and modified. The 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. 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 carried at amortized cost. See Note 5 for further discussion on our assessment of expected credit losses on AFS securities and disclosures related to AFS and HTM securities.

The ACL is calculated using the loan’s amortized cost basis, which includes the principal balance, net of unamortized premiums, discounts, and deferred fees and costs. We do not estimate the ACL for accrued interest receivables, as we reverse or write off uncollectible accrued interest receivable balances in a timely manner, generally within one month.

The methodologies we use to estimate the ACL depend on various factors, including the type of loan, the age and contractual term of the loan, expected payments (both contractual and estimated prepayments), credit quality indicators, economic forecasts, and the evaluation method (whether individually or collectively evaluated). Loan extensions or renewals are not considered in the ACL unless they are included in the original or modified loan contract and are not unconditionally cancellable.

Losses are charged to the ACL when recognized. Generally, commercial and CRE loans are charged off or charged down when they are determined to be uncollectible in whole or in part, or when 180 days past due, unless the loan is well secured and in process of collection. Consumer loans are either charged off or charged down to net realizable value no later than the month in which they become 180 days past due. Closed-end consumer loans that are not secured by residential real estate are either charged off or charged down to net realizable value no later than the month in which they become 120 days past due.

We establish the amount of the ACL by analyzing the portfolio at least quarterly, and we adjust the provision for loan losses and unfunded lending commitments to ensure the ACL is at an appropriate level at the balance sheet date. The ACL is determined based on our review of loans with similar risk characteristics, which are evaluated on a collective basis, as well as loans without similar risk characteristics, which are evaluated on an individual basis.

For commercial and CRE loans with commitments greater than $1 million, we assign internal risk grades using a comprehensive loan grading system based on financial and statistical models, individual credit analysis, and loan officer experience and judgment. The credit quality indicators described subsequently are based on this grading system. Estimated credit losses on all loan segments, including consumer and small commercial and CRE loans with commitments less than or equal to $1 million that are evaluated on a collective basis, are derived from statistical analyses of our historical default and loss experience since January 2008.

We estimate current expected credit losses for each loan by considering historical credit loss experience, current conditions, and reasonable and supportable forecasts about the future. We use the following two types of credit loss estimation models:

•Econometric loss models, which rely on statistical analyses of our historical loss experience, dependent on economic factors and other loan-level characteristics. Statistically relevant economic factors vary depending on the type of loan, but include variables such as unemployment, real estate price indices, energy prices, and gross domestic product (“GDP”). The models use 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.

•Loss models based on our long-term average historical credit loss experience since 2008, which rely on statistical analyses of our historical loss experience, dependent upon loan-level characteristics.

Credit loss estimates for the first 12 months of a loan’s remaining life are derived using econometric loss models. Over a subsequent 12-month reversion period, we blend the estimated credit losses from the two model types on a straight-line basis. For the remaining life of the loan, the estimated credit losses are derived from the long-term average historical credit loss models.

For loans that do not share risk characteristics with other loans, we estimate lifetime expected credit losses on an individual basis. These include nonaccrual loans with a balance greater than $1 million. When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on either the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

When we base the specific reserve on the fair value of the loan’s underlying collateral, we generally charge off the portion of the balance that exceeds the fair value. For these loans, subsequent to the charge-off, if the fair value of the loan’s underlying collateral increases according to an updated appraisal, we establish a negative reserve up to the lesser of the amount of the charge-off or the updated fair value.

The methodologies described previously generally rely on historical loss information to help determine the quantitative portion of the ACL. We also consider other qualitative and environmental factors related to current conditions and reasonable and supportable forecasts that may indicate current expected credit losses could differ from the historical information reflected in our quantitative models. Thus, after applying historical loss experience, we review the quantitative portion of ACL for each portfolio segment. We then monitor various qualitative risk factors that influence our judgment regarding the level of the ACL across the portfolio segments. These factors primarily include:

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments;

•The volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

•Lending policies and procedures, including changes in underwriting standards and practices for collection, charge-off, and recovery;

•The experience, ability, and depth of lending management and other relevant staff;

•The nature and volume of the portfolio;

•The quality of the credit review function;

•The existence, growth, and effect of any concentration of credit;

•The effect of other external factors such as regulatory, legal, and technological environments; fiscal and monetary actions; competition; and events such as natural disasters and pandemics.

The magnitude of the impact of these factors on our qualitative assessment of the ACL changes from quarter to quarter based on management's assessment of these factors, the extent to which these factors are already reflected in quantitative loss estimates, and the extent to which changes in these factors diverge from one to another. We also consider the uncertainty and imprecision inherent in the estimation process when evaluating the ACL.

Off-balance Sheet Credit Exposures

We estimate current expected credit losses for off-balance sheet loan commitments, including letters of credit that are not unconditionally cancellable. This estimate uses the same procedures and methodologies described previously for loans and is calculated as the difference between the estimated current expected credit loss and the funded balance, if greater than zero.

Changes in the Allowance for Credit Losses

The following schedule presents a roll forward of the ACL categorized by loan portfolio segment:

Nonaccrual Loans

Loans are generally placed on nonaccrual when payment in full of principal and interest is not expected, or the loan is 90 days or more past due on principal or interest, unless it is both well secured and in the process of collection. The determination to place a loan on nonaccrual status considers factors such as delinquency status, collateral value, financial statements of the borrower or guarantor, bankruptcy status, and other indicators that suggest uncertainty in the full and timely collection of principal and interest.

A nonaccrual loan may be restored to accrual status when the following conditions are met: (1) all delinquent principal and interest are brought current in accordance with the loan agreement; (2) the loan, if secured, is well secured; (3) the borrower has made payments according to the contractual terms for a minimum of six months; and

(4) an analysis of the borrower indicates a reasonable assurance of their ability and willingness to continue making payments. The following schedule presents the amortized cost basis of loans on nonaccrual:

For accruing loans, interest is accrued, and interest payments are recognized as interest income in accordance with the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, and any uncollected or accrued interest is promptly reversed from interest income, generally within one month. Payments received on nonaccruing loans are not recognized as interest income, but are applied to reduce the outstanding principal balance. When the collectibility of the amortized cost basis of a nonaccrual loan is no longer in doubt, interest payments may be recognized as interest income on a cash basis. During 2024 and 2023, no interest income was recognized on a cash basis while the loans were on nonaccrual.

The following schedule presents the amount of accrued interest receivables reversed from interest income categorized by loan portfolio segment during the periods presented:

Past Due Loans

Closed-end loans with monthly payments 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 (e.g., quarterly, semi-annual), single payment, and demand notes are reported as past due when either principal or interest is due and unpaid for 30 days or more.

The following schedules present loans categorized by their past-due or delinquency status:

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is not expected.

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 definitions of Pass, Special Mention, Substandard, and Doubtful, which align with published regulatory risk classifications.

Definitions of Pass, Special Mention, Substandard, and Doubtful are summarized as follows:

•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 warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or 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 the collateral pledged, if any. Assets classified as Substandard 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.

The amount of loans classified as Doubtful totaled $14 million at December 31, 2024. There wereno loans classified as Doubtful at December 31, 2023.

For commercial and CRE loans with commitments greater than $1 million, we assign one of multiple grades within the Pass classification or one of the previously described risk classifications. We assess our internal risk grades quarterly, or as soon as we identify information that affects the credit risk of the loan.

For consumer loans and for commercial and CRE loans with commitments of $1 million or less, we generally assign internal risk grades similar to those previously described based on automated rules that consider refreshed credit scores, payment performance, and other risk indicators. These loans 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 schedules present the amortized cost of loans and leases categorized by year of origination and by credit quality classifications as monitored by management:

The following schedules present gross charge-offs categorized by year of loan origination for the periods presented:

Loan Modifications

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Modifications may also occur when the borrower experiences financial difficulty and requires temporary or permanent relief from the original contractual terms. For loans modified due to a borrower experiencing financial difficulty, we apply the same credit loss estimation methods used for the rest of the loan portfolio. These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historically modified loans. All nonaccruing loans greater than $1 million are evaluated individually, regardless of the type of modification.

We consider various factors when determining whether to agree to a loan modification, aiming to minimize potential loss while helping the borrower. Our evaluation includes the 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 sponsors 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 demonstrated the ability to perform under the modified terms 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 considered 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.

We continuously monitor the performance of all modified loans according to their modified terms. The amortized cost of modified loans that experienced a payment default during the twelve months ended December 31, 2024 and December 31, 2023, and were still in default at period end, and were within 12 months or less of being modified, totaled $1 million and less than $1 million, respectively.

The following schedule presents the amortized cost of loans to borrowers experiencing financial difficulty that were modified during the period, categorized by loan class and modification type:

1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. At December 31, 2024, $185 million included in multiple modification types were both interest rate reductions and maturity or term extensions.

2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $11 million and $22 million at December 31, 2024 and 2023, respectively.

3 Amounts less than 0.05% are rounded to zero.

The following schedule presents the financial impact of loan modifications to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024 and 2023:

1 Primarily relates to a small number of loans within each respective loan class.

Loan modifications to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024 and 2023, resulted in approximately $1 million and less than $1 million of principal forgiveness, respectively, for the total loan portfolio for the period.

The following schedule presents the aging of loans to borrowers experiencing financial difficulty that were modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through December 31, 2024, categorized by portfolio segment and loan class.

Collateral-dependent Loans

When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

The following schedules present select information on loans for which the repayment is expected to be provided substantially through the operation or sale of the underlying collateral and the borrower is experiencing financial difficulties, including the type of collateral and the extent to which the collateral secures the loans:

1 The fair value is based on the most recent appraisal or other collateral evaluation.

Foreclosed Residential Real Estate

At both December 31, 2024, and December 31, 2023, we had less than $1 million in foreclosed residential real estate property. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure was $14 million and $11 million for the same respective periods.

7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives for Using Derivatives

Our primary objective for using derivatives is to manage interest rate risk. We utilize derivatives to manage volatility in interest income, interest expense, earnings, and capital by adjusting our interest rate sensitivity to minimize the impact of interest rate fluctuations. Derivatives are employed to stabilize forecasted interest income from variable-rate assets and to modify the coupon or duration of fixed-rate financial assets or liabilities as deemed advisable. Additionally, we assist customers with their risk management needs through the use of derivatives.

Derivatives Related to Interest Rate Risk Management —We apply hedge accounting to certain derivatives executed for risk management purposes. However, not all derivatives involved in our risk management activities are designated for hedge accounting. Derivatives not designated as accounting hedges are used to economically manage our exposure to interest rate movements, including offsetting customer-facing derivatives. These derivatives are not used for speculative purposes. These derivatives either do not require hedge accounting for their economic impact to be appropriately reflected in our financial statements or they do not meet the strict hedge accounting requirements.

Derivatives Related to Customers —We provide certain borrowers with access to over-the-counter interest rate derivatives, which we generally offset with interest rate derivatives executed with dealers or central clearing houses. Other interest rate derivatives that we offer to customers, or use for our own purposes, include mortgage rate locks and forward sale loan commitments. Additionally, we provide commercial customers with short-term foreign currency spot trades or forward contracts, typically with maturities of 90 days or less. These trades are largely offset by foreign currency trades with closely matching terms executed with other dealer counterparties or central clearing houses.

Accounting for Derivatives

We record all derivatives at fair value, and include them in “Other assets” or “Other liabilities” on the consolidated balance sheet, regardless of their accounting designation. We enter into International Swaps and Derivatives Association, Inc. (“ISDA”) master netting agreements, or similar agreements, with substantially all derivative counterparties. Where legally enforceable, these agreements grant us the right, in the event of default or other specified contingent events by the counterparty, to use cash or liquidate securities held as collateral and to offset receivables and payables with the same counterparty. For the consolidated balance sheet, we report all derivatives on a gross fair value basis, meaning we do not offset derivative assets, liabilities, and cash collateral held with the same counterparty, even where we have a legally enforceable master netting agreement. Note 3 discusses the process for estimating fair value for derivatives. The accounting for changes in the fair value of derivatives depends on their intended use and resulting accounting designation.

Derivatives Designated in Qualifying Hedging Relationships

We apply hedge accounting to certain derivatives executed for risk management purposes, primarily interest rate risk. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged, and the hedging relationship must be formally documented. We primarily use regression analysis to assess the effectiveness of each hedging relationship, unless the hedge qualifies for other methods of assessing effectiveness (e.g., shortcut or critical terms match), both at inception and on an ongoing basis. We designate derivatives as fair value and cash flow hedges for accounting purposes.

Derivatives designated as accounting hedges are formally documented at the inception of the hedging relationship. This documentation includes the relationship between the hedging instrument and the hedged items or transactions, the risk management objective and strategy, and the methodology that will be used at inception and on an ongoing basis to assess the effectiveness of the hedging relationship. This ensures the hedge remains highly effective at offsetting changes in fair value or cash flows of the hedged items or transactions. If a hedging relationship is determined to no longer be highly effective, hedge accounting is discontinued prospectively.

Derivatives used to hedge the exposure to changes in the fair value of assets, liabilities, or firm commitments attributable to interest rates or other eligible risks, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Changes in the fair value of derivatives that are not part of designated fair value or cash flow hedging relationships are recorded in current period earnings.

Fair Value Hedges —We generally use interest rate swaps designated as fair value hedges to mitigate changes in the fair value of fixed-rate assets and liabilities for specific risks, such as interest rate risk resulting from changes in a benchmark interest rate. We employ both pay-fixed, receive-floating and received-fixed, pay-floating interest rate swaps to effectively convert certain fixed-rate assets and liabilities to floating rates. In qualifying fair value hedges, changes in value of the derivative hedging instrument are recognized in current period earnings in the same line item affected by the hedged item. Similarly, the periodic changes in value of the hedged item, for the risk being hedged, are recognized in current period earnings, thereby offsetting all, or a significant majority, of the change in the value of the derivative hedging instrument. Interest accruals on both the derivative hedging instrument and the hedged item are recorded in the same line item, effectively converting the designated fixed-rate assets or liabilities to a floating rate.

Generally, the designated risk being hedged in all of our fair value hedges is the change in fair value of the secured overnight financing rate (“SOFR”) (or an alternative rate) benchmark swap rate component of the contractual coupon cash flows of the fixed-rate assets or liabilities. The swaps are structured to match the critical terms of the hedged items, maximizing the economic and accounting effectiveness of the hedging relationships and resulting in the expectation that the swaps will be highly effective as hedging instruments. All interest rate swaps designated as fair value hedges were highly effective and met all other requirements to remain designated and part of qualifying hedge accounting relationships as of the balance sheet date.

Fair Value Hedges of Liabilities— During the fourth quarter of 2024, we entered into a receive-fixed, pay-floating interest rate swap with a notional amount of $500 million to hedge the interest rate risk of a fixed-rate subordinated debt issuance. The receive-fixed interest rate swap effectively converts the interest on our fixed-rate debt to floating through the term of the hedging relationship. Changes in the fair value of the derivative designated as a fair value hedge of our fixed-rate debt were generally offset by changes in the fair value of the hedged debt instruments. We continue to have unamortized basis adjustments related to a previously terminated fair value hedge of fixed-rate debt as discussed in the schedule below. The unamortized basis adjustments from the previously terminated fair value hedge will be amortized over the remaining life of the fixed-rate debt, which matures in 2029. See Note 13 for more information on the hedged debt.

Fair Value Hedges of Assets— At December 31, 2024, we had $1.0 billion in aggregate notional amount of pay-fixed, receive-floating interest rate swaps designated as a fair value hedge of a defined portfolio of fixed-rate commercial loans. These swaps were designated in accordance with the portfolio layer method described in ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method. Additionally, we had $2.5 billion in aggregate notional amount of pay-fixed swaps designated under the portfolio layer method as fair value hedges of a defined portfolio of fixed-rate AFS securities.

At December 31, 2024, we also had pay-fixed, receive-floating interest rate swaps with an aggregate notional amount of $1.2 billion designated as fair value hedges of specifically identified AFS securities. Fair value hedges of fixed-rate assets effectively convert certain fixed-rate financial assets to a floating rate on the hedged portion of the assets. Changes in fair value of derivatives designated as fair value hedges of fixed-rate financial assets were largely offset by changes in the value of the hedged assets, as presented in the schedules below.

Cash Flow Hedges— For derivatives designated and qualifying as cash flow hedges, as long as the hedging relationship continues to qualify for hedge accounting, the entire change in the fair value of the hedging instrument is recorded in OCI and recognized in earnings, as the hedged transaction affects earnings. Ineffectiveness is not measured or separately disclosed. Gains or losses on derivatives designated as cash flow hedges are recognized in the same financial statement line item as the hedged transactions. We may use interest rate swaps, options, or a combination of options in our cash flow hedging strategy to eliminate or reduce the variability of interest receipts on floating-rate commercial loans and interest payments on floating-rate debt due to changes in any separately identifiable and reliably measurable contractual interest rate index.

At December 31, 2024, we had receive-fixed interest rate swaps with an aggregate notional amount of $550 million designated as cash flow hedges of the variability of interest receipts on floating-rate commercial loans. At December 31, 2024, we had $94 million of net losses deferred in AOCI related to terminated cash flow hedges. Amounts deferred in AOCI from terminated cash flow hedges will be amortized into interest income on a straight-line basis through the original maturity dates of the hedges, provided the hedged forecasted transactions continue to be expected to occur. These amounts will be fully reclassified to interest income by the fourth quarter of 2027. Additionally, at December 31, 2024, we had one pay-fixed interest rate swap with a notional amount of $500 million designated as a cash flow hedge of the variability in interest payments on certain FHLB advances.

Hedge Effectiveness —We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows on the derivative hedging instrument with the changes in fair value or cash flows on the designated hedged item or transactions for the risk being hedged. If a hedging relationship ceases to qualify for hedge accounting, the relationship is discontinued, and future changes in the fair value of the derivative instrument are recognized in current period earnings. For a discontinued or terminated fair value hedging relationship, all remaining basis adjustments to the carrying amount of the hedged item are amortized into interest income or expense over the remaining life of the hedged item, consistent with the amortization of other discounts or premiums. Previous balances deferred in AOCI from discontinued or terminated cash flow hedges are reclassified into interest income or expense as the hedged transactions affect earnings or over the originally specified term of the hedging relationship.

Collateral and Credit Risk

Credit risk arises from the possibility of nonperformance by counterparties. No significant losses on derivative instruments occurred during 2024 as a result of counterparty nonperformance. We manage our counterparty exposure for derivative contracts by centrally clearing all eligible derivatives and by executing dealer-facing derivative transactions with well-capitalized financial institutions.

For derivatives that are not centrally cleared, the counterparties are typically financial institutions or our customers. For financial institution counterparties, we manage our credit exposure through the use of a Credit Support Annex (“CSA”) to an ISDA master agreement with each counterparty. Eligible collateral types are documented by the CSA and controlled under our general credit policies. Collateral and derivative exposure balances are typically monitored on a daily basis. At December 31, 2024, all variation margin posted or received pursuant to the collateral terms of a CSA was in cash. We generally satisfy initial margin requirements by posting securities when permitted by the terms of the CSA.

We provide interest rate swaps to our customers to help them manage their exposure to fluctuations in interest rates. Upon issuance, these customer swaps are offset with closely matching derivative contracts to mitigate our interest rate risk exposure. The fee income from these customer swaps is included in “Capital markets fees” on the consolidated statement of income. We manage the credit risk associated with customer nonperformance through additional underwriting processes. These processes include modeling the credit risk exposure for the swap, utilizing shared collateral and guarantee protection applicable to the loan, and implementing credit approvals, limits, and monitoring procedures.

We measure counterparty credit risk by calculating a CVA, which captures the value of nonperformance risk for both our customers and ourselves. Periodic changes in the net CVA are recorded in current period earnings and included in “Fair value and nonhedge derivative income or loss” on the consolidated statement of income.

Our derivative contracts require us to pledge collateral for derivatives in a net liability position. Certain derivative contracts include credit risk-related contingent features, such as the requirement to maintain a minimum debt credit rating. If a credit risk-related feature were triggered, such as a downgrade of our credit rating, we may be required to pledge additional collateral. Historically, not all counterparties have demanded additional collateral when contractually permitted.

At December 31, 2024, the fair value of our derivative liabilities was $350 million, for which we pledged approximately $3 million in cash collateral in the normal course of business to satisfy variation margin requirements. Additionally, we pledged $180 million in U.S. Treasuries to satisfy initial margin requirements with certain dealer counterparties and central clearing houses. If our credit rating were downgraded one notch by either Standard and Poor’s (“S&P”) or Moody’s at December 31, 2024, it is unlikely that additional collateral would be required to be pledged. Derivatives that are centrally cleared do not have credit risk-related features requiring additional collateral in the event of a credit rating downgrade.

Derivative Amounts

The following schedule presents derivative notional amounts and recorded gross fair values at December 31, 2024 and 2023:

1 The notional amount includes forward-starting swaps that are not yet effective.

2 Customer interest rate derivatives include both customer-facing and offsetting dealer-facing derivatives. These derivatives include a net CVA of $9 million at both December 31, 2024 and December 31, 2023, which reduces the fair value. These adjustments are necessary to reflect our nonperformance risk as well as that of the respective counterparty.

The following schedules present the amount of gains (losses) from derivative instruments designated as cash flow and fair value hedges that were deferred in AOCI or recognized in earnings for years ended December 31, 2024 and 2023:

1 For the 12 months following December 31, 2024, we estimate that $63 million of net losses from active and terminated cash flow hedges will be reclassified from AOCI into interest income/expense, compared with an estimate of $118 million at December 31, 2023.

2 We had cumulative unamortized basis adjustments from terminated fair value hedges of debt totaling $39 million and $46 million at December 31, 2024 and 2023, respectively. Additionally, we had $3 million of cumulative unamortized basis adjustments from terminated fair value hedges of assets at both December 31, 2024 and 2023. Interest on fair value hedges presented above includes the amortization of the remaining unamortized basis adjustments.

The following schedule presents the amount of gains (losses) recognized from derivatives not designated as accounting hedges:

The following schedule presents derivatives used in fair value hedge accounting relationships, along with the pre-tax gains/(losses) recorded on these derivatives and the related hedged items for the periods presented:

1 Includes hedges of benchmark interest rate risk for fixed-rate long-term debt, fixed-rate AFS securities and fixed-rate commercial loans. Gains and losses were recorded in 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 maintain consistency with the presentation of the gains/(losses) on the hedged items. Periodic interest income/expense for fair value hedges is shown in a separate schedule above.

The following schedule presents information regarding basis adjustments for hedged items in fair value hedging relationships:

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 Includes the amortized cost basis of defined portfolios of AFS securities and commercial loans used to designate hedging relationships, where the hedged item is the stated amount of assets in the defined portfolio anticipated to be outstanding for the designated hedged period. At December 31, 2024, the amortized cost basis of the defined portfolios used in these hedging relationships was $10.2 billion; the cumulative basis adjustment associated with these hedging relationships was $41 million, and the notional amounts of the designated hedging instruments were $3.5 billion.

8. LEASES

We have operating and finance leases for branches, data centers, and corporate offices, including our headquarters in Salt Lake City, Utah. At December 31, 2024, we had 404 branches, with 275 owned and 129 leased. The remaining maturities of our lease commitments range from the year 2025 to 2062, with some lease arrangements including 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 include ROU assets for operating leases and finance leases in “Other assets” and “Premises, equipment and software, net” on the consolidated balance sheet, respectively. The corresponding liabilities for those leases are included in “Other liabilities” and “Long-term debt,” respectively.

ROU assets and related lease liabilities reflect the present value of the future minimum lease payments over the lease term at commencement date. Since most of our leases do not provide an implicit rate, we use our secured incremental borrowing rate, which is commensurate with the lease term, to calculate the present value of future payments. The ROU asset also includes any lease prepayments, initial direct costs, amortization, and certain nonlease components, such as maintenance, utilities, or tax payments. Our lease terms incorporate options to extend or terminate the lease when it is reasonably certain that we will exercise these options.

The following schedule presents ROU assets and lease liabilities with associated weighted average remaining life and discount rate:

The following schedule presents additional information related to lease expense:

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:

We enter into certain lease agreements where we are the lessor of real estate. These leases involve bank-owned and subleased properties to generate cash flow, including leasing vacant suites within buildings we partially occupy. Operating lease income totaled$13 million in 2024, and $14 million in both 2023 and 2022.

We originated equipment leases, classified as sales-type leases or direct-financing leases, totaling$377 million and $383 million at December 31, 2024 and 2023, respectively. We recorded income of$18 million, $16 million, and $12 million from these leases during 2024, 2023, and 2022, respectively.

9. PREMISES, EQUIPMENT, AND SOFTWARE

Premises, equipment, and software are reported at cost, net of accumulated depreciation and amortization. Depreciation, primarily calculated using the straight-line method, is allocated to operations over the estimated useful lives of the assets: generally 25 to 40 years for buildings, three to 10 years for furniture and equipment, andthree to 10 years for software, including capitalized costs related to technology initiatives. Leasehold improvements are amortized over the shorter of the lease term (including any reasonably certain extension options) or the estimated useful lives of the improvements. Premises, equipment, and software are periodically evaluated for impairment.

The following schedule presents the components of our premises, equipment, and software, including the accumulated depreciation and amortization:

1 The totals for 2024 and 2023 include $51 million and $40 million, respectively, of capitalized costs that are not yet depreciating, as the respective assets have not been placed in service.

10. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is recorded upon the completion of a business combination as the difference between the purchase price and the fair value of the net assets acquired. We perform an evaluation annually as of October 1, or more frequently if events or circumstances indicate that the carrying value exceeds fair value. We may elect to perform a qualitative analysis to determine if it is more likely than not that the fair value of our reporting unit is less than its carrying amount. If the carrying amount is more likely than not to exceed its fair value, additional quantitative analysis is performed to determine the amount of goodwill impairment. If the fair value is less than the carrying value, an impairment is recorded for the difference. During the fourth quarter of 2024, we performed our annual goodwill impairment evaluation utilizing a qualitative analysis. During the fourth quarter of 2023, we performed a full quantitative analysis. Based on our evaluations conducted in 2024 and 2023, the goodwill at our reporting units wasnot impaired.

The following schedule presents the carrying amount of goodwill for our business segments with goodwill, as well as the balance of our core deposits and other intangible assets, net of related accumulated amortization:

11. DEPOSITS

The following schedule presents the composition of our deposits:

The following schedule presents the aggregate amount of all time deposits by maturity at December 31, 2024:

The following schedule presents the amount of time deposits that exceed $250,000 by scheduled maturity at December 31, 2024:

Deposit overdrafts reclassified as loans totaled $8 million and $11 million at December 31, 2024 and 2023, respectively.

12. SHORT-TERM BORROWINGS

The following schedule presents selected information for FHLB advances and other short-term borrowings:

We pledge loans and investment securities as collateral for current and potential borrowings. We may borrow from the FHLB under lines of credit secured by blanket pledge arrangements. We maintain collateral with carrying amounts adjusted for the types of collateral pledged, ensuring they equal at least 100% of the outstanding advances. Additionally, we may borrow from the Federal Reserve Board (“FRB”) based on the amount of collateral pledged.

A significant portion of these pledged assets are unencumbered, but are pledged to provide immediate access to contingency sources of funds. At December 31, 2024, our remaining FHLB and FRB collateralized borrowing capacity was$12.0 billion and $17.7 billion, respectively, compared with $15.0 billion and $9.8 billion at December 31, 2023.

Federal funds purchased and security repurchase agreements generally mature in less than 30 days. We execute overnight repurchase agreements with sweep accounts in conjunction with a master repurchase agreement. In such cases, securities under our control are pledged, and interest is paid on the collected balance of the customers’ accounts. For nonsweep overnight and term repurchase agreements, securities are transferred to the applicable counterparty. In certain instances, the counterparty is contractually entitled to sell or repledge securities accepted as collateral. At December 31, 2024, nearly all security repurchase agreements were overnight term accounts.

13. LONG-TERM DEBT

The following schedule presents the components of our long-term debt:

Long-term debt carrying values include the par value of the debt, adjusted for any unamortized premium or discount, unamortized debt issuance costs, and fair value hedge basis adjustments. The increase in long-term debt from the prior year was primarily due to the issuance of $500 million of 6.82% Fixed-to-Floating Subordinated Notes due 2035, partially offset by the redemption of $88 million of 6.95% Fixed-to-Floating Subordinated Notes due 2028, during the fourth quarter of 2024.

During the fourth quarter of 2024, we entered into a receive-fixed interest rate swap designated as a hedge of the $500 million subordinated notes maturing in November 2035. In 2023, we terminated a receive-fixed interest rate swap designated as a hedge of the $500 million subordinated notes maturing in October 2029. The remaining unamortized hedge basis adjustment from the terminated hedging relationship is amortized into earnings through the contractual maturity date of the hedged notes. The carrying values include any unamortized hedge basis adjustments. See Note 7 for more information on derivatives designated as qualifying hedges.

Subordinated Notes

The following schedule presents our subordinated notes outstanding at December 31, 2024:

The 3.25% subordinated notes are unsecured, interest is payable semi-annually, and the earliest redemption date is July 29, 2029. The 6.82% subordinated notes are unsecured, with interest payable semi-annually during the fixed-rate period; the earliest redemption date for these notes is November 19, 2034, after which the interest rate changes to an annual floating rate equal to compounded SOFR +2.83%, payable quarterly.

Maturities of Long-term Debt

The following schedule presents the carrying value of our long-term debt by maturity for each of the next five years:

14. SHAREHOLDERS’ EQUITY

Preferred Stock

We have 4.4 million authorized shares of preferred stock without par value, each with a liquidation preference of $1,000 per share, or $25 per depositary share. Except for Series I and J, all preferred shares were issued in the form of depositary shares, with each depositary share representing a 1/40 th ownership interest in a share of the preferred stock. All outstanding preferred shares are registered with the Securities and Exchange Commission (“SEC”). Additionally, Series A preferred shares are listed and traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Select Market.

Preferred shareholders generally receive asset distributions before common shareholders; however, they have only limited voting rights. Preferred stock dividends reduce earnings applicable to common shareholders and are paid on the 15th day of the months indicated in the following schedule, subject to Board approval.

The preferred shares are redeemable at our option after the expiration of any applicable redemption restrictions. The redemption amount is calculated at the per share liquidation preference plus any declared but unpaid dividends. Redemptions are subject to certain regulatory provisions, including satisfying well-capitalized minimum requirements.

The following schedule presents the components of our preferred stock:

Preferred Stock Redemption

In December 2024, we fully redeemed the outstanding shares of our Series G, I, and J preferred stock. The redemption resulted in a one-time reduction to net earnings applicable to common shareholders of approximately $6 million, arising from the recognition of capitalized preferred stock issuance costs. At December 31, 2024,66,139 shares of Series A preferred stock were outstanding. At December 31, 2023,66,139,138,390,98,555, and 136,368 of preferred shares series A, G, I, and J respectively, were outstanding.

Common Stock

Our common stock is traded on the NASDAQ Global Select Market. At December 31, 2024, we had 147.9 million shares of $0.001 par common stock outstanding. The balance of common stock and additional paid-in-capital was$1.7 billion at December 31, 2024, and increased$6 million, or less than 1%, from the prior year.

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. We didnot repurchase common shares during the second, third, or fourth quarters of 2024. In 2023, we repurchased 0.9 million common shares outstanding for $50 million at an average price of $52.82. These repurchased amounts do not include certain insignificant balances related to the common shares acquired in connection with our stock compensation plan, which were acquired from employees to cover their payroll taxes and stock option exercise costs upon the exercise of stock options.

In February 2025, we received the necessary approvals to repurchase up to $40 million of common shares outstanding during the fiscal year 2025.

Accumulated Other Comprehensive Income

The AOCI balance was a loss of$2.4 billion at December 31, 2024, an improvement of $312 million when compared with December 31, 2023, and largely reflects a decline in the fair value of fixed-rate AFS securities as a result of changes in interest rates.

The following schedule presents the changes in AOCI:

Deferred Compensation

Deferred compensation consists of invested assets, including our common stock, held in rabbi trusts for certain employees and directors. The fair value of our common stock was approximately$19 million at both December 31, 2024 and 2023. We consolidate the rabbi trust assets and liabilities and include them in “Other assets” and “Other liabilities” on the consolidated balance sheet, respectively. At December 31, 2024 and 2023, associated trust assets totaled approximately$149 million and$124 million, and trust liabilities totaled approximately $168 million and $143 million, respectively.

15. REGULATORY MATTERS

We are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet these minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that could materially impact our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must adhere to specific capital guidelines involving quantitative measures of our assets, liabilities, and certain off-balance sheet items, as calculated under regulatory accounting practices. At December 31, 2024 and 2023, we exceeded all capital adequacy requirements under the Basel III capital rules.

Regulatory measures for capital adequacy require us to maintain minimum amounts and ratios of common equity Tier 1 (“CET1”) to risk-weighted assets, Tier 1 capital (as defined in the regulations), total capital, and Tier 1 capital to average assets (Tier 1 leverage ratio). “Well-capitalized” levels are also published as benchmarks for evaluating capital positions. At December 31, 2024 and 2023, all of our capital amounts and ratios exceeded the “well-capitalized” levels under the regulatory framework for prompt corrective action.

Dividends declared by us may not exceed specified criteria unless otherwise approved by our regulators. When determining dividends, we consider current and historical earnings levels, retained earnings, and risk-based and other regulatory capital requirements and limitations.

Our internal stress tests seek to comprehensively measure all risks to which we are exposed, the potential losses from those risk exposures under adverse scenarios, and our resulting capital levels. These stress tests subject our balance sheet and other risk characteristics to thorough analysis using our own models.

The following schedule presents our capital amounts and ratios and the minimum requirements to be well capitalized under Basel III at December 31, 2024 and 2023:

The Basel III capital rules require us to maintain certain minimum capital ratios, as well as a 2.5% “capital conservation buffer,” designed to absorb losses during periods of economic stress. This buffer is composed entirely of CET1. The following schedule presents the minimum capital ratios and capital conservation buffer requirements, compared with our capital ratios at December 31, 2024:

Financial institutions with a CET1 to risk-weighted assets ratio above the minimum, but below the capital conservation buffer, face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. Our internal triggers and limits, both under actual conditions and baseline projections, are more stringent than the capital conservation buffer requirements.

16. COMMITMENTS, GUARANTEES, CONTINGENT LIABILITIES, AND RELATED PARTIES

Commitments and Guarantees

We utilize various financial instruments, including loan commitments, commercial letters of credit, and standby letters of credit, to meet our customers’ financing needs. They involve varying degrees of credit, liquidity, and interest rate risk beyond the amounts presented on the consolidated balance sheet. The credit risk associated with these commitments is assessed similarly to the ALLL. The RULC is presented separately on the consolidated balance sheet.

The following schedule presents the contractual amounts related to off-balance sheet financial instruments used to meet our customers’ financing needs:

1 Net of participations.

2 Represents agreements with Farmer Mac to purchase securities backed by certain agricultural mortgage loans.

Loan commitments are agreements to lend to a customer subject to specified conditions. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on our initial credit evaluation of the counterparty. Types of collateral vary and may include accounts receivable, inventory, property, plant and equipment, and income-producing properties.

While making loan commitments exposes us to credit risk, a significant portion of such commitments is expected to expire without being drawn upon. At December 31, 2024, we had $8.2 billion of commitments scheduled to expire in 2025. We apply the same credit policies and procedures to loan commitments and conditional obligations as we do for on-balance sheet instruments, including credit approvals, limits, and ongoing monitoring.

We issue standby and commercial letters of credit as conditional commitments to guarantee a customer's performance to a third party. These guarantees primarily support public and private borrowing arrangements, such as commercial paper, bond financing, and similar transactions. At December 31, 2024, standby letters of credit totaled $836 million, and are set to expire in 2025. The credit risk involved in issuing letters of credit is equivalent to that of extending credit to customers, and we generally hold marketable securities and cash equivalents as collateral.

Certain mortgage loans sold have limited recourse provisions for periods ranging from three months toone year. The losses resulting from the exercise of these provisions have not been significant.

Legal Matters

We are involved in various legal proceedings or governmental inquiries, which may include litigation in court, arbitral proceedings, investigations, examinations, and other actions initiated or considered by governmental and self-regulatory agencies. Litigation may pertain to lending, deposit and other customer relationships, supplier and contractual issues, employee matters, intellectual property matters, personal injuries and torts, regulatory and legal compliance, and other matters. While most matters involve individual claims, we are also subject to putative class action claims and similar broader claims. Proceedings, investigations, examinations, and other actions initiated 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 concerning such customer activities. Additionally, these actions may pertain to our compliance with the broad range of banking, securities and other applicable laws and regulations. At any given time, we may be responding to subpoenas, requests for documents, data, and testimony relating to these matters and engaging in discussions to resolve them.

At December 31, 2024, we were subject to the following material litigation:

•Two civil cases, Lifescan Inc. and Johnson & Johnson Health Care Services v. Jeffrey C. 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. During 2024, discovery was substantially completed for most parties in both cases. However, rulings on certain dispositive motions remain outstanding, and other dispositive motions have yet to be filed or ruled upon. No trial dates have been set for either case.

•In the matter of Streck and Ariza v. Zions Bancorporation, N.A., an arbitration matter pending before the American Arbitration Association, related to an employment dispute brought by two former employees alleging damages arising from claims of alleged gender discrimination, retaliation, and constructive discharge. The case is in the final hearing phase.

At least quarterly, we review both outstanding and new legal matters utilizing the latest information available. If we determine that a loss from a matter is probable and can be reasonably estimated, we establish an accrual for the best estimate of the loss. If no amount within a range of probable losses is a better estimate than any other amount within the range, we establish an accrual for the minimum amount in that range. For matters where a loss is not probable, we do not establish an accrual. Once established, accruals are adjusted to reflect any developments related to the matters.

In our review, we also assess whether we can determine the range of reasonably possible losses for significant matters where the likelihood of a loss is not remote. Due to the difficulty of predicting the outcome of legal matters, discussed subsequently, we can meaningfully estimate such a range for only a limited number of cases. Based on information available at December 31, 2024, we estimated that the aggregate range of reasonably possible losses for these matters is between zero and approximately $10 million in excess of amounts accrued. The matters underlying this estimated range will change over time, and actual results may vary significantly from this estimate. Matters for which a meaningful estimate is not possible are not included within this estimated range; therefore, this estimated range does not represent our maximum loss exposure.

Based on our current knowledge, we believe that our estimated liability for litigation and other legal actions and claims, as reflected in our accruals and determined in accordance with applicable accounting guidance, is adequate. We also believe that any liabilities in excess of the amounts currently accrued, if any, arising from litigation and other legal actions and claims for which an estimate is possible, will not have a material impact on our financial condition, results of operations, or cash flows. However, given the significant uncertainties involved in these matters, and the potentially large or indeterminate damages sought in some cases, an adverse outcome in one or more of these matters could materially affect our financial condition, results of operations, or cash flows for any given reporting period.

Any estimate or determination regarding the future resolution of litigation, arbitration, governmental or self-regulatory examinations, investigations, 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 fully articulated, reviewed, analyzed, and vetted through discovery, trial or hearing preparation, substantive and productive mediation or settlement discussions, or other actions. It is also especially true for class actions and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues, novel legal theories, and examinations, investigations, and other actions conducted or brought by governmental and self-regulatory agencies, where the normal adjudicative process is not applicable. As a result, we are often 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. Consequently, our judgments and estimates relating to claims will change over time in light of developments, and actual outcomes will differ from our estimates. These differences may be material.

Related Party Transactions

We have no material related party transactions requiring disclosure. In the ordinary course of business, we extend credit to related parties, including executive officers, directors, principal shareholders, and their associates and related interests. These related party loans are made in compliance with applicable banking regulations.

17. REVENUE FROM CONTRACTS WITH CUSTOMERS

Noninterest income and revenue from contracts with customers are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The incremental cost of obtaining a contract is recorded as an expense when incurred, provided the amortization period of the related asset is one year or less. For performance obligations satisfied over time, if we have the right to consideration from a customer that corresponds directly with the value of our performance completed to date, we generally recognize revenue in the amount to which we have the right to invoice. We generally do not disclose information about our remaining performance obligations for those obligations with an original expected duration of one year or less, or where revenue is recognized in the amount to which we have a right to invoice.

The following describes our revenue from contracts with customers:

Commercial Account Fees

Commercial account fee income consists primarily of account analysis fees, merchant fees, and payroll services income. Revenue is recognized as the services are rendered or upon their completion.

Card Fees

Card fee income primarily includes interchange fees from credit and debit cards, net fees earned from processing card transactions for merchants, and automated teller machine (“ATM”) services. Revenue from card fees is recognized as it is earned.

Retail and Business Banking Fees

Retail and business banking fees generally consist of fees for providing customers with deposit services. These fees primarily include insufficient funds fees, noncustomer ATM charges, and various other fees on deposit accounts. Service charges on deposit accounts include fees earned in lieu of compensating balances, as well as fees for performing cash management and other deposit account services. These service charges are recognized over the period in which the related service is provided. Treasury management fees are billed monthly based on services rendered during the month.

Capital Markets Fees

Capital markets fees primarily include fees associated with municipal advisory, securities underwriting, and investment banking advisory services provided to customers. Revenue is recognized either as the services are rendered or upon their completion.

Wealth Management Fees

Wealth management fees primarily consist of wealth management commissions, along with other portfolio and advisory services. Revenue is recognized as the services are rendered or upon their completion. Financial planning, fiduciary, and estate services generally have performance obligations extending beyond 12 months, although the amount of future performance obligations is not significant.

Other Customer-related Fees

Other customer-related fees generally include miscellaneous income sources, including fees associated with compliance and support services to pharmacies and healthcare providers, corporate trust fees, other advisory and referral fees, and fees for claims and inventory management services for certain customers. Revenue is recognized as the services are rendered or upon their completion.

Disaggregation of Revenue

The following schedule presents revenue from contracts with customers and provides a reconciliation to total noninterest income by operating business segment. Customer-related noninterest income from other sources represents revenue from customers that falls outside the scope of the applicable accounting guidance for revenue from contracts with customers.

1 Card fees exclude costs associated with reward programs that are netted against interchange fees, as these costs are not within the scope of applicable accounting guidance for revenue from contracts with customers.

2 Capital markets fees exclude revenue associated with real estate capital markets, swaps, loan syndications, and foreign exchange activities, as the related fees are not within the scope of applicable accounting guidance for revenue from contracts with customers.

Revenue from contracts with customers did not result in 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 the completion of performance obligations and payment is generally not significant.

18. RETIREMENT PLANS

Defined Contribution Plan

We offer a 401(k) and employee stock ownership plan under which employees select from a number of investment alternatives. Employees can contribute up to 80% of their earnings subject to the annual maximum allowed contribution. We match 100% of the first 3% of employee contributions and 50% of the next 3% of employee contributions. Matching contributions to participants totaled $35 million in 2024 and 2023, and $33 millionin 2022.

The 401(k) plan also has a noncontributory profit-sharing feature that is discretionary and may range from 0% to 3.5% of eligible compensation based upon our performance according to a formula approved annually by the Board. The profit-sharing expense was $14 million, $16 million, and $19 million in 2024,2023, and 2022, respectively. The profit-sharing contribution to participants consisted of shares of our common stock purchased in the open market.

Defined Benefit Plans

Supplemental Retirement Plans — These unfunded, nonqualified plans are for certain current and former employees. Each year, our contributions to these plans are made in amounts sufficient to meet benefit payments to plan participants. Our liability for these plans totaled approximately $9 million at both December 31, 2024 and 2023.

Post-retirement Plan — This unfunded health care and life insurance plan provides post-retirement benefits to certain former full-time employees who meet minimum age and service requirements. Our contribution toward the retiree medical premium has been permanently frozen at an amount that does not increase in any future year. Each year, our contributions to the plan are made in amounts sufficient to meet the portion of the premiums that are our responsibility. Our liability for this plan was less than $1 million at both December 31, 2024 and 2023.

The liability for supplemental retirement and post-retirement benefits is included in “Other liabilities” on the consolidated balance sheet.

19. SHARE-BASED COMPENSATION

We maintain a share-based compensation incentive plan that permits the granting of stock options, restricted stock, restricted stock units (“RSUs”), and other awards to employees and nonemployee directors. At December 31, 2024, the total shares authorized under the plan were 4,300,000, with 1,965,994 available for future grants.

All share-based payments to employees, including grants of employee stock options, are recorded as compensation expense based on their grant date values, taking into account service and performance vesting requirements. The value of an equity award is estimated on the grant date using a fair value model, which considers post-vesting restrictions, but does not account for service or performance vesting conditions.

We classify all share-based awards as equity instruments. Compensation expense is included in “Salaries and employee benefits” on the consolidated statement of income, with the corresponding equity effect included in shareholders’ equity. Forfeitures of share-based compensation awards are accounted for as they occur. Substantially all share-based awards, including stock options, restricted stock, and RSUs, feature graded vesting, which is recognized on a straight-line basis over the vesting period.

The following schedule presents compensation expense and the related tax benefit for all share-based awards:

At December 31, 2024, the unrecognized compensation expense for nonvested share-based awards was approximately$35 million. This amountis expected to be recognized over a weighted average period of 2.4 years.

Stock Options

Stock options granted to employees generally vest at a rate of one-third per year and expire seven years after the grant date. No stock options were granted in 2024. For stock options granted in 2023 and 2022, the Black-Scholes option pricing model was used to estimate the grant date value for determining compensation expense.

The following schedule presents the weighted average grant date value and the significant assumptions applied in the Black-Scholes model for these options:

The assumptions for expected dividend yield, expected volatility, and expected life reflect management’s judgment and take into account historical experience. Expected volatility is partially based on historical volatility. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant, corresponding to the expected life of the option.

The following schedule presents our stock option activity for the three years ended December 31, 2024:

We issue new authorized common shares upon the exercise of stock options. The total intrinsic value of stock options exercised was approximately$2 million in both 2024 and 2023, and $7 million in 2022. Cash received from the exercise of stock options totaled$9 million in 2024, $2 million in 2023, and $8 million in 2022.

The following schedule presents additional selected information on stock options at December 31, 2024:

1 The weighted average remaining contractual life excludes 5,223 stock options without a fixed expiration date, which were assumed during the Amegy acquisition. These options expire one year after the employee's termination date, depending on certain circumstances.

The aggregate intrinsic value of outstanding stock options was $4 million at December 31, 2024, and less than$1 million at December 31, 2023. Similarly, the aggregate intrinsic value of exercisable options was $4 million and less than$1 million at the same respective dates. For exercisable options, the weighted average remaining contractual life was 2.6 years at December 31, 2024, and 2.7 yearsat December 31, 2023, excluding the stock options previously noted without a fixed expiration date. At December 31, 2024, there were 253,940 unvested stock options outstanding, with a weighted average exercise price of$58.08, a weighted average remaining life of 4.7 years, and an aggregate intrinsic value of$255 thousand.

Restricted Stock and Restricted Stock Units

Restricted stock is common stock that carries certain restrictions related to trading and the potential for forfeiture. Typically, restricted stock vests over afour-year period. Holders of restricted stock possess full voting rights and receive dividend equivalents during the vesting period. Additionally, holders can elect to be subject to income tax on the grant date rather than the vesting date.

RSUs represent the right to receiveone share of common stock per unit and generally vest over afour-year period. Holders of RSUs receive dividend equivalents during the vesting period, but do not possess voting rights. Compensation expense is determined based on the number of restricted shares or RSUs granted and the market price of our common stock at the grant date. During 2024, 2023, and 2022, we granted 25,866,39,771, and 16,722 RSUs, respectively, to nonemployee directors. These RSUs vested immediately upon grant.

The following schedule presents our restricted stock activity for the three years ended December 31, 2024:

The following schedule presents our RSU activity for the three years ended December 31, 2024:

The total grant date value of restricted stock and RSUs vested during the year was$28 million in 2024, $27 million in 2023, and $25 million in 2022. At December 31, 2024,66,059 shares of restricted stock and 1,108,442 RSUs were expected to vest according to their respective schedules, with an aggregate intrinsic value of$4 million and$60 million, respectively.

20. INCOME TAXES

The following schedule presents the major components of our income tax expense:

The following schedule presents a reconciliation of income tax expense calculated at the statutory federal income tax rate of 21% with the actual income tax expense:

Deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are calculated based on temporary differences between the financial statement values of assets and liabilities and their respective tax basis, using enacted tax laws and rates. Any changes in tax rates affecting DTAs and DTLs are recognized in income during the period that includes the enactment date. DTAs are recognized to the extent that management considers it more likely than not that they will be realized. Unrecognized tax benefits for uncertain tax positions primarily relate to tax credits on technology initiatives.

The net DTA or DTL is included in “Other assets” and “Other liabilities” on the consolidated balance sheet, respectively. The following schedule presents the tax effects of temporary differences that result in significant portions of DTAs and DTLs:

We have certain fixed-rate AFS investment securities whose fair value has declined due to increases in benchmark interest rates, resulting in unrealized losses in the AFS portfolio and a corresponding DTA. The sale of these securities could result in significant realized losses, requiring future earnings to utilize the DTAs. However, as previously discussed in Note 5, we have both the intent and ability to hold these securities until their value recovers.

We regularly evaluate DTAs to determine whether a valuation allowance is required. This evaluation is based on the more-likely-than-not criteria that such assets will be realized, considering all available evidence, both positive and negative. This evaluation includes, but is not limited to, the following factors:

•Future reversals of existing DTLs — These DTLs generally have a reversal pattern consistent with DTAs and are used to realize the DTAs.

•Tax planning strategies — We consider 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 to offset the reversal of remaining net DTAs.

Based on this evaluation, we concluded that a valuation allowance was not required at December 31, 2024 and December 31, 2023.

At December 31, 2024, the tax effect of remaining net operating loss and tax credit carryforwards was less than $1 million, expiring through 2039.

We have a liability for unrecognized tax benefits related to uncertain tax positions for tax credits on technology initiatives. The following schedule presents a roll forward of gross unrecognized tax benefits:

At December 31, 2024 and 2023, our liability for unrecognized tax benefits included approximately $7 million and $13 million, respectively (net of the federal tax benefit on state taxes) that, if recognized, would affect the effective tax rate. The amount of gross unrecognized tax benefits related to tax credits on technology initiatives that may decrease during the 12 months following December 31, 2024 is approximately $3 million.

Interest and penalties related to unrecognized tax benefits are included in “Income tax expense” on the consolidated statement of income. At December 31, 2024 and 2023, accrued interest and penalties included in “Other liabilities” on the consolidated balance sheet, net of any federal and state tax benefits, totaled approximately $1 million and $2 million, respectively.

We file income tax returns in U.S. federal and various state jurisdictions and are no longer subject to income tax examinations for years prior to 2021 for federal and certain state returns.

21. NET EARNINGS PER COMMON SHARE

Net earnings per common share are based on net earnings applicable to common shareholders, net of preferred stock dividends. Basic net earnings per common share are calculated using the weighted average number of outstanding common shares during each year. Unvested share-based awards with rights to receive nonforfeitable dividends are considered participating securities and included in the computation of basic earnings per share. Diluted net earnings per common share are based on the weighted average number of outstanding common shares during each year, including common stock equivalents. Stock options, restricted stock, RSUs, and stock warrants are converted to common stock equivalents using the more dilutive of the treasury stock method or the two-class method. Diluted net earnings per common share exclude common stock equivalents whose effect is antidilutive.

The following schedule presents basic and diluted net earnings per common share based on the weighted average outstanding shares:

The following schedule presents the weighted average stock awards that were anti-dilutive and not included in the calculation of diluted earnings per share: