COLUMBIA BANKING SYSTEM, INC.

Note 1 –Summary of Significant Accounting Policies

The accounting and financial reporting policies of Columbia Banking System, Inc. conform to accounting principles generally accepted in the United States of America and with prevailing practices within the banking and securities industries. All references in this report to "Columbia," "we," "our," or "us" or similar references mean the Company and its subsidiaries, including the wholly-owned banking subsidiary Columbia Bank (the "Bank"). FinPac is a commercial equipment leasing company and a wholly-owned subsidiary of the Bank. The accompanying interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and the Bank's wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated. The consolidated financial statements have not been audited. A more detailed description of the Company's accounting and financial reporting policies is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Basis of Presentation - In preparing these consolidated financial statements, the Company has evaluated events and transactions subsequent to June 30, 2026, for potential recognition or disclosure. In management's opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments include those that are normal and recurring in nature and considered necessary for a fair presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim period.

In 2025, management elected to change the presentation of the Company's financial statements and accompanying footnote disclosures from thousands to millions. The change in presentation had no material impact on previously reported financial information, but certain amounts reported for prior periods may differ by insignificant amounts due to the nature of rounding relative to the change in presentation. In addition, historical percentages and per share amounts presented may not add to their respective totals or recalculate due to rounding.

Change in Accounting Estimate -During the second quarter of 2026, the Company changed its methodology for estimating the ACL from a DCF approach to a non-DCF methodology. The revised methodology continues to incorporate PD and LGD assumptions in estimating expected credit losses. Management concluded that the impact of the change was not material to the Company's consolidated financial statements. The change was accounted for as a change in accounting estimate under ASC 250, Accounting Changes and Error Corrections, and was applied prospectively beginning in the second quarter of 2026. For additional information regarding this change in estimate, see Note 5 –Allowance for Credit Losses.

Application of New Accounting Guidance

Significant Accounting Standards Issued but Not Yet Adopted

Note 2 –Business Combinations

Acquisition of Pacific Premier

On August 31, 2025, Columbia completed its acquisition of Pacific Premier, which was wholly acquired in an all-stock transaction valued at $2.4 billion. On September 1, 2025, Pacific Premier's wholly owned banking subsidiary, Pacific Premier Bank, National Association, merged with and into Columbia Bank. Pursuant to the acquisition agreement, each share of Pacific Premier common stock was exchanged for 0.9150 of a share of Columbia common stock.

The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. Fair value measurements were based on significant estimates and assumptions in effect as of the acquisition date and may be subject to adjustment during the measurement period. As of June 30, 2026, the initial accounting for deferred taxes remains preliminary, as the tax returns have not yet been finalized. Accordingly, the deferred tax amounts recognized in the consolidated financial statements are provisional and subject to adjustment during the measurement period, which will not exceed one year from the acquisition date, with any such adjustment recorded to goodwill. Additional information regarding valuation methodologies, as well as the fair values and unpaid principal loan balances acquired, is included in Note 2 –Business Combinations of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The Company's consolidated results for the three and six months ended June 30, 2026 include the operating results of Pacific Premier's operations subsequent to the August 31, 2025 acquisition date. Separate operating results for Pacific Premier are not presented, as they are not practicable to determine following the integration of operations.

During the three and six months ended June 30, 2026, the Company incurred $7 million and $27 million, respectively, of acquisition-related expenses associated with the acquisition of Pacific Premier. These costs were expensed as incurred and primarily included in non-interest expense.

The following unaudited pro forma financial information presents the Company’s results as if the acquisition of Pacific Premier had occurred on January 1, 2024. This information is provided for illustrative purposes only and is not necessarily indicative of actual results. Pro forma adjustments primarily reflect estimated interest income and expense adjustments and amortization of core deposit intangibles and do not reflect anticipated operating cost savings, synergies, or other integration benefits.

(1)Pro forma net income for the three and six months ended June 30, 2025 excludes $11 million and $25 million, respectively, of acquisition-related costs assumed to have been incurred in the first quarter of 2024.

Note 3 –Debt Securities

The following tables present the amortized cost, gross unrealized gains and losses, and estimated fair values of debt securities as of the dates presented:

The Company elected to exclude accrued interest receivable from the amortized cost basis of debt securities disclosed throughout this note. Accrued interest on investment securities totaled $45 million and $46 million as of June 30, 2026 and December 31, 2025, respectively, and is included in other assets on the Consolidated Balance Sheets. There wereno gross realized gains or losses from sales of AFS debt securities for the three and six months ended June 30, 2026 and 2025.

The following tables present debt securities that were in an unrealized loss position as of the dates presented, categorized by the length of time individual securities have been in an unrealized loss position:

The number of individual debt securities in an unrealized loss position in the tables above increased to 814 as of June 30, 2026, as compared to 592 at December 31, 2025. The unrealized losses in the Company's debt securities portfolio are primarily attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, rather than deterioration in the credit quality of the issuers. Management actively monitors the published credit ratings of the issuers of the debt securities for any material changes in rating or outlooks. As the decline in fair value of the debt securities is attributable to interest rate movements and market spread volatility and not credit related factors, no ACL has been recorded on these debt securities as of June 30, 2026.

The following table presents the contractual maturities of the Company's debt securities as of June 30, 2026. Actual maturities may differ from contractual maturities due to the potential for early calls, prepayments, or principal repayments, with or without call or prepayment penalties.

As of June 30, 2026 and December 31, 2025, debt securities with carrying amounts of $6.6 billion and $6.8 billion, respectively, and fair values of $6.2 billion and $6.5 billion, respectively, were pledged to secure borrowing capacity, public deposits, repurchase agreements, and other obligations, as required or permitted by law.

Note 4 –Loans and Leases

The following table presents the major types of loans and leases, net of deferred fees and costs, as of the dates presented:

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans and leases disclosed throughout this note. Interest accrued on loans and leases totaled $181 million and $186 million as of June 30, 2026 and December 31, 2025, respectively, and is included in other assets on the Consolidated Balance Sheets. As of June 30, 2026, loans totaling $29.9 billion were pledged to secure borrowings and available lines of credit, compared to $30.6 billion as of December 31, 2025.

As of June 30, 2026 and December 31, 2025, the net deferred fees and costs were $57 million and $54 million, respectively. Originated loans and leases are reported at the principal amount outstanding, net of deferred fees and costs, partial charge-offs, and interest applied to principal. Total loans and leases also include discounts on acquired loans of $622 million and $707 million as of June 30, 2026 and December 31, 2025, respectively.

Purchased loans are recorded at fair value at the date of purchase. The Company evaluates purchased loans to determine whether they have experienced more-than-insignificant deterioration since origination. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered PCD loans. All other purchased loans are considered non-PCD loans. The outstanding contractual unpaid principal balance of PCD loans, excluding acquisition accounting adjustments, was $428 million and $473 million as of June 30, 2026 and December 31, 2025, respectively. The carrying balance of PCD loans was $372 million and $416 million as of June 30, 2026 and December 31, 2025, respectively.

The Bank, through its commercial equipment leasing subsidiary, FinPac, is a provider of commercial equipment leasing and financing. Direct finance leases are included within the leases and equipment finance segment within the loans and leases, net line item. These direct financing leases typically have terms ofthree years tofive years. Interest income recognized on these leases was $5 million and $11 million for the three and six months ended June 30, 2026, respectively, as compared to $6 million and $11 million for the three and six months ended June 30, 2025, respectively.

Note 5 –Allowance for Credit Losses

The ACL represents management's estimate of expected lifetime credit losses for financial assets measured at amortized costs, including loans and leases and unfunded commitments. For a description of the Company's ACL methodology and significant assumptions, refer to Note 1 –Summary of Significant Accounting Policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the discussion below.

As of June 30, 2026, the ACL was $475 million, a decrease of $10 million from the December 31, 2025 balance of $485 million. The change in the ACL primarily reflects credit migration trends and changes in the economic assumptions incorporated into the Company's credit loss models. The Company estimates expected credit losses using internally developed models that project PD and LGD for loans and leases, incorporating forecasted economic conditions and relevant macroeconomic variables. Management evaluates multiple economic scenarios at each measurement date and selects the scenario determined to be most probable based on current economic conditions. Forecast assumptions are updated periodically and incorporated into the ACL calculation. Changes in projected macroeconomic variables over the forecast period may materially impact the ACL, with uncertainty increasing over longer projection horizons.

During the second quarter of 2026, the Company modified its ACL estimation methodology by transitioning from a DCF methodology to a non-DCF methodology across substantially all loan segments. The methodology change increased the quantitative ACL by $34 million at June 30, 2026. Additionally, the Company revised certain components of its qualitative adjustments, resulting in a $30 million reduction in the ACL. The impact of these updates was a net increase in the total ACL of $4 million as of June 30, 2026. The change in ACL methodology was accounted for prospectively as a change in estimate. The Company's ACL methodology is described in its Annual Report on Form 10-K for the year ended December 31, 2025. Refer to Note 5 –Allowance for Credit Lossesfor a discussion of the methodology changes implemented during the second quarter of 2026 and the Company's current ACL estimation approach.

The Bank opted to use Moody's Analytics' May 2026 consensus economic forecast for estimating the ACL as of June 30, 2026. The forecast used to calculate the ACL as of June 30, 2026 is projecting higher GDP growth, higher unemployment rates, and average federal funds rates trending lower. This is compared to the December 31, 2025 ACL calculation, which used Moody’s Analytics’ November 2025 consensus economic forecast to forecast the variables used in the models.

In the consensus scenario, the probability that the economy will perform better than this consensus is equal to the probability that it will perform worse and includes the following variables:

The Bank uses an additional scenario with the same economic variables, but with varying severity, to assess ACL sensitivity and inform qualitative adjustments. For this analysis, the Bank selected Moody's Analytics' May 2026 S2 scenario (the "S2 Scenario"), which predicts a 75% probability of better economic performance and a 25% probability of worse performance. The S2 Scenario includes the following variables:

Management reviewed the results derived from the economic scenarios and sensitivity analyses of changes in macroeconomic variables and considered these factors in evaluating qualitative adjustments. Along with the quantitative results produced by the models, management also considers prepayment speeds and other qualitative factors when determining the ACL. Qualitative adjustments are applied to address risks and uncertainties that may not be fully reflected in the modeled estimate, including changes in economic conditions, portfolio trends, concentrations of credit risk, and other internal and external factors that could affect expected credit losses. This approach helps ensure that the allowance remains appropriately resilient and responsive to emerging risks, thereby supporting the resilience of the Bank's credit portfolio. These qualitative adjustments supplement the modeled estimate and reflect management's assessment of risks and uncertainties that may not be fully captured by the quantitative analysis. As of June 30, 2026, the Company evaluated qualitative factors and applied a net upward adjustment to the quantitative results for the ACL as set forth above, reflecting risks and uncertainties similar to those considered as of December 31, 2025.

Management believes the ACL was adequate as of June 30, 2026. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ACL and could possibly result in additional charges to the provision for credit losses.

The following tables summarize activity related to the ACL by portfolio segment for the periods indicated:

Asset Quality and Non-Performing Loans and Leases

The Bank actively manages asset quality and controls credit risk through diversification of the loan and lease portfolio and the application of policies designed to promote sound underwriting and loan and lease monitoring practices. The Bank's Credit Quality Administration department is charged with monitoring asset quality, establishing credit policies and procedures, and enforcing the consistent application of these policies and procedures across the Bank. The Bank conducts ongoing reviews of non-performing, past due loans and leases and larger credits, designed to identify potential charges to the ACL, and to determine the adequacy of the ACL. These reviews incorporate a variety of factors, including the financial strength of borrowers, collateral valuations, loan and lease loss experience, estimated loan and lease losses, growth in the loan and lease portfolio, prevailing economic conditions, and other relevant factors.

Loans and Leases Past Due and Non-Accrual Loans and Leases

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. As of June 30, 2026, there wereno non-accrual loans and leases without a related ACL, compared to $2 million as of December 31, 2025. This excludes collateral-dependent loans and leases that had been written down to net realizable value, and therefore did not require an associated ACL, which totaled $91 million and $67 million, at June 30, 2026 and December 31, 2025, respectively. The remaining non-accrual loan balances were substantially covered by government guarantees. The Company recognizedno interest income on non-accrual loans and leases during the three and six months ended June 30, 2026 and 2025.

The following tables present the carrying value of the loans and leases past due, by loan and lease class, as of the dates presented:

(1)Includes government guaranteed mortgage loans that the Bank has the right but not the obligation to repurchase that are past due 90 days or more, totaling $4 million at June 30, 2026.

(2)Includes government guaranteed portion of $41 million and $37 million for 90 days or more and non-accrual loans, respectively.

(1) Includes government guaranteed mortgage loans the Bank has the right but not the obligation to repurchase that are past due 90 days or more, totaling $3 million at December 31, 2025.

(2)Includes government guaranteed portion of $41 million and $38 million for 90 days or more and non-accrual loans, respectively.

Collateral-Dependent Loans and Leases

Loans and leases are classified as collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following tables summarize the amortized cost basis of the collateral-dependent loans and leases by the type of collateral securing the assets as of the periods indicated:

Loan and Lease Modifications Made to Borrowers Experiencing Financial Difficulty

The ACL on modified loans or leases is measured using the same credit loss estimation methods used to determine the ACL for all other loans and leases held for investment. These methods incorporate the post-modification loan or lease terms, as well as defaults and charge-offs associated with the modified loans and leases.

The following tables present the amortized cost basis of loans and leases that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2026 and 2025, by class and type of modification. The percentage of the amortized cost basis of loans and leases to borrowers in financial distress that were modified as compared to the amortized cost basis of each class of financing receivable is also presented below.

The following tables present the financial effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented:

The Company closely monitors the performance of loans and leases to borrowers experiencing financial difficulty that are modified to understand the effectiveness of its modification efforts. Loans and leases are considered to be in payment default at 90 or more days past due. The following tables present the amortized cost basis of modified loans that, within twelve months of the modification date, experienced a subsequent default during the periods presented:

For the three months ended June 30, 2025, all modified loans and leases were current and there were no loan or lease modifications made to borrowers experiencing financial difficulty that subsequently defaulted.

The following tables present an age analysis of loans and leases as of June 30, 2026 and 2025 that have been modified within the prior twelve months:

Credit Quality Indicators

Management regularly reviews loans and leases in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading. The Bank separates its loans and lease portfolios into homogeneous and non-homogeneous categories. Homogeneous loans are rated based on past due status and may enter a higher risk rating scale if modified, requiring six months of timely payments to return to the lower risk rating scale. Non-homogeneous loans use a dual risk rating approach: the PD scale measures the likelihood of default, and the LGD scale measures potential loss if a default occurs. The product of PD and LGD gives the expected loss, providing a common language of credit risk across different loans. For more information about the Company's credit quality indicators, refer to Note 6 –Allowance for Credit Losses included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The following tables present the amortized cost basis of the loans and leases by credit classification and vintage year by loan and lease class of financing receivable, as well as gross charge-offs for the dates presented:

Note 6 –Goodwill and Other Intangible Assets

The Company had $1.5 billion in goodwill as of June 30, 2026 and December 31, 2025, which represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of fair value of liabilities assumed in connection with mergers and acquisitions. The goodwill balance includes $453 million recorded in connection with the acquisition of Pacific Premier in 2025.

The Company performed its annual impairment assessment as of October 31, 2025 and concluded that there was no impairment. As of June 30, 2026, it was determined there were no events or circumstances which would more likely than not reduce the fair value of our reporting unit below its carrying amount.

Core deposit intangibles were determined based on the present value of the expected cost savings attributable to the core deposit funding relative to an alternative source of funding. Intangible assets are being amortized on an accelerated basis over a period of 10 years. No impairment losses have been recognized in the periods presented.

The following table summarizes other intangible assets as of the dates presented:

Amortization expense recognized on intangible assets was $38 million and $79 million for the three and six months ended June 30, 2026, respectively, and $26 million and $54 million for the three and six months ended June 30, 2025, respectively.

The table below presents the forecasted amortization expense for intangible assets as of June 30, 2026:

Note 7 –Borrowings

The Bank's FHLB advances were $4.3 billion as of June 30, 2026, as compared to $3.2 billion at December 31, 2025. These advances have fixed interest rates ranging from 3.83% to 4.02% and all mature in 2026. The FHLB requires the Bank to maintain a specified level of investment in FHLB stock and to pledge sufficient eligible collateral to support secured borrowings. Refer to Note 4 –Loans and Leases for additional information on loans pledged as collateral.

Note 8 –Commitments and Contingencies

Financial Instruments with Off-Balance-Sheet Risk — The Company's financial statements do not reflect certain commitments and contingent liabilities that arise in the normal course of the Bank's business and may expose the Bank to varying degrees of credit, liquidity, and interest rate risk.

The following table presents a summary of the Bank's commitments and contingent liabilities:

The Bank enters into financial instruments with off-balance sheet credit risk in the normal course of business to meet the financing needs of its customers. These instruments primarily consist of commitments to extend credit and standby letters of credit. Such instruments involve credit and interest-rate risk similar to those associated with the Bank's on-balance sheet lending activities. The contractual or notional amounts of these instruments represent the maximum potential exposure to credit loss in each category.

The Bank's exposure to credit loss in the event of non-performance by the counterparty for commitments to extend credit, standby letters of credit, and other financial guarantees is limited to the contractual notional amount of these instruments. The Bank uses the same credit approval, risk management, and monitoring policies for these off-balance sheet instruments as it does for on-balance sheet financial instruments.

Standby letters of credit and written financial guarantees are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including international trade finance, commercial paper, bond financing, and similar transactions. The credit risk associated with issuing letters of credit is substantially similar to the credit risk associated with extending loan facilities to customers. The Bank may require collateral to support these commitments when deemed appropriate, which can include cash, marketable securities, or real estate. There wereno financial guarantees in connection with standby letters of credit that the Bank was required to perform on during the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, approximately $424 million of standby letters of credit were scheduled to expire within one year, with an additional $14 million expiring thereafter.

Residential mortgage loans sold into the secondary market are generally sold with limited recourse to the Company. Under these arrangements, the Company may be obligated to repurchase the loan or otherwise reimburse the investor for losses incurred if a loan experiences an early payment default, fails to meet applicable underwriting or investor guidelines, or is determined to include borrower misrepresentations made prior to closing.

Legal Proceedings and Regulatory Matters—The Company is subject to litigation in court and arbitral proceedings, as well as proceedings, investigations, examinations, and other actions brought or considered by governmental and self-regulatory agencies. The Company is party to various pending and threatened claims and legal proceedings arising in the normal course of business activities, some of which involve claims for substantial or uncertain amounts.

In September 2023,34 related real estate investment entities (the "iCap Entities") that maintained their primary deposit accounts with the Bank filed jointly-administered Chapter 11 bankruptcies in the United States Bankruptcy Court for the Eastern District of Washington. In pleadings filed in the Bankruptcy Court for the Eastern District of Washington on behalf of investors who claimed losses of approximately $290 million, the Bank was identified as a party against which claims may be brought in connection with the iCap Entities' alleged operation of a Ponzi scheme prior to the bankruptcy proceedings described above. On September 26, 2025, the co-trustees of the iCap Trust, a liquidating trust created by the Second Modified Second Amended Joint Chapter 11 Plan of Liquidation of the iCap Entities, filed suit in the United States District Court for the Western District of Washington alleging aiding and abetting claims against the Bank associated with the provision of banking services to the bankrupt iCap Entities. The suit was filed on behalf of investors alleging losses in connection with the iCap Entities. On June 9, 2026, the United States District Court for the Western District of Washington denied the Bank's motion to dismiss, and the Bank subsequently filed a motion for reconsideration of that ruling. Remaining investors may pursue their claims separately. The Bank intends to continue to vigorously defend against any and all claims.

As previously disclosed, in 2023 the Bank was informed by one of its technology service providers (the "Vendor") that a widely reported security incident involving MOVEit, a file sharing software used globally by government agencies, enterprise corporations, and financial institutions, resulted in the unauthorized acquisition by a third party of the names and social security numbers or tax identification numbers of certain of the Bank's consumer and small business customers (the "Vendor Incident"). On behalf of the Bank, the Vendor notified affected customers (approximately 429,000), and the Bank and Vendor notified applicable federal and state regulators regarding the Vendor Incident. Subsequently, the Bank was named in a number of putative class action lawsuits related to the Vendor Incident. The lawsuits collectively allege claims for negligence, negligence per se, breach of contract, breach of implied contract, breach of third-party beneficiary contract, breach of fiduciary duty, invasion of privacy, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of certain state statutes. Given the large number of federal cases throughout the United States (including those involving the Bank), on October 4, 2023 the United States Judicial Panel on Multidistrict Litigation initiated a multidistrict litigation ("MDL") to consolidate such cases – In Re: MOVEit Customer Data Security Breach Litigation, MDL No. 3083 – in the United States District Court for the District of Massachusetts (MDL No. 1:23-md-03083-ADB-PGL). The Bank has engaged defense counsel and intends to vigorously defend against these lawsuits and any similar or related lawsuits or claims. The Bank has notified relevant insurance carriers and business counterparties and continues to reserve all of its relevant rights to indemnity, defense, contribution, and other relief in connection with these matters.

At least quarterly, liabilities and contingencies are assessed in connection with all outstanding or new legal matters, utilizing the most recent information available. If it is determined that a loss from a matter is probable and that the amount of the loss can be reasonably estimated, an accrual for the loss is established. Once established, each accrual is adjusted as appropriate to reflect any subsequent developments in the specific legal matter. It is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Actual losses may be in excess of any established accrual or the range of reasonably possible loss. Management's estimate will change from time to time. For matters where a loss is not probable, or the amount of the loss cannot be estimated, no accrual is established.

The resolution and the outcome of legal claims are unpredictable, exacerbated by factors including the following: damages sought are unsubstantiated or indeterminate; it is unclear whether a case brought as a class action will be allowed to proceed on that basis; discovery or motion practice is not complete; the proceeding is not yet in its final stages; the matters present legal uncertainties; there are significant facts in dispute; there are a large number of parties, including multiple defendants; or there is a wide range of potential results. Any estimate or determination relating to the future resolution of legal and regulatory matters is uncertain and involves significant judgment. The Company is usually 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 process.

Although there can be no assurance as to the ultimate outcome of a specific legal matter, the Company believes it has meritorious defenses to the claims asserted against us in our currently outstanding legal matters, and the Company intends to continue to vigorously defend ourselves. The Company will consider settlement of legal matters when, in management's judgment, it is in the best interests of the Company and its shareholders.

Based on information currently available, advice of counsel, available insurance coverage, and established reserves, the Company believes that the eventual outcome of the actions against us will not have a material adverse effect on the Company's consolidated financial statements. However, it is possible that the ultimate resolution of a matter, if unfavorable, may be material to the Company's results of operations for any particular reporting period.

Concentrations of Credit Risk—The Bank extends real estate mortgage, real estate construction, commercial, agricultural and installment loans and leases to customers primarily located in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington. Based on management's judgment, a concentration of credit risks exists in real estate-related loans, which represented approximately 75% and 76% of the Bank's loan and lease portfolio as of June 30, 2026 and December 31, 2025, respectively. CRE concentrations are actively managed to promote geographic and business diversification, primarily within the Bank's footprint. The multifamily portfolio, including construction loans, represented approximately 24% of the total loan portfolio as of both June 30, 2026 and December 31, 2025. The office portfolio represented approximately 8% of the total loan portfolio for both June 30, 2026 and December 31, 2025, respectively. Although management believes such concentrations do not expose the Bank to risks beyond normal collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax policies, tightening of credit or refinancing markets, or declines in real estate values within the Bank's primary market areas, could have an adverse impact on the repayment of these loans. Primary sources of repayment for a majority of these loans include personal and business cash flows, proceeds from the sale of real property, and proceeds from refinancing.

The Bank also recognizes the credit risks inherent with transactions involving other depository institutions. To mitigate these risks, the Bank has established standards for the selection of correspondent banks and internal limits on exposure to any single correspondent. In addition, the Bank maintains an investment policy that sets forth limitations that apply to all investments with respect to credit rating and concentrations with an issuer.

Note 9 –Derivatives

The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities as well as the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio. These derivative financial instruments are not designated as accounting hedges and are recorded at fair value, with changes recognized in earnings.

Interest Rate Swaps

The Company’s primary derivative activity consists of interest rate swaps executed with commercial borrowers to facilitate their risk management strategies. These swaps are economically hedged through offsetting swaps with third parties, minimizing net exposure. As of June 30, 2026, the Company had interest rate swap assets with notional amounts of $4.4 billion and interest rate swap liabilities with notional amounts of $4.5 billion related to this program, compared with notional amounts of $4.5 billion for both assets and liabilities as of December 31, 2025. Collateral posted under these arrangements for initial margins with its clearing houses and is required to post collateral against its obligations under these interest rate swaps totaled $92 million and $93 million at June 30, 2026 and December 31, 2025, respectively. Centrally cleared swaps are cleared through the Chicago Mercantile Exchange and London Clearing House, with variation margin treated as settlement of mark-to-market exposure. Variation margin netting adjustments were $108 million and $98 million at June 30, 2026 and December 31, 2025, respectively. The Company also enters into bilateral Term SOFR swaps that are not clearable; these require daily cash collateral exchanges but no initial margin.

Forward Delivery Contracts

To hedge interest rate risk on mortgage loans held for sale and interest rate lock commitments, the Company enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities at specified prices and dates. Credit risk is limited to the replacement cost of contracts in a gain position, andno counterparty defaults occurred in the three and six months ended June 30, 2026 and 2025. Market risk is managed by monitoring positions and offsetting differences between customer commitments and broker-dealer contracts. If commitments exceed available loans, the Company settles by paying or receiving a fee equal to the change in market value. As of June 30, 2026 and December 31, 2025, mortgage loan origination commitments totaled $62 million and $39 million, respectively, and forward sales commitments totaled $74 million for both June 30, 2026 and December 31, 2025.

Other Derivative Contracts

The Company uses interest rate futures and forward-settling mortgage-backed securities to hedge interest rate risk on mortgage servicing rights. As of June 30, 2026, the Company had $297 million notional of interest rate futures contracts and $26 million of mortgage-backed securities, compared to $211 million and $34 million, respectively, as of December 31, 2025. The Company also provides foreign currency hedging services to customers, offsetting these positions with third-party banks to limit risk exposure.

The Company's derivatives are included in other assets or other liabilities on the Consolidated Balance Sheets and measured at fair value. The following table summarizes the types of derivatives, separately by assets and liabilities, and the fair values of such derivatives as of the dates presented:

The gains and losses on the Company's interest rate futures and forward sales commitment derivatives are included in residential mortgage banking revenue. The gains and losses on the Company's interest rate swaps and foreign currency derivatives are included in other income. The following table summarizes the types of derivatives and the gains (losses) recorded for the periods indicated:

The Company is party to interest rate swap contracts that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.

The following table shows the gross interest rate swaps in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts are limited to the outstanding balances of the related asset or liability. Therefore, instances of over collateralization are not shown.

Note 10 –Earnings Per Common Share and Shareholders' Equity

The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, net income is allocated between common stock and participating securities based on their respective dividend rights and participation in undistributed earnings. In connection with the Pacific Premier acquisition, the Company issued certain restricted stock awards under share-based compensation plans that qualify as participating securities.

Basic EPS is calculated by dividing net income attributable to common shareholders by the weighted‑average number of common shares outstanding, excluding participating securities. Diluted EPS reflects the weighted‑average number of common shares outstanding adjusted for the effect of potentially dilutive securities, excluding participating securities and any instruments that are anti‑dilutive.

The following table presents the computation of basic and diluted earnings per common share for the periods indicated:

The following table presents the weighted average outstanding restricted stock awards and restricted stock units excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive for the periods indicated:

Share Repurchase Program

On October 29, 2025, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $700 million of the Company's common stock through November 30, 2026. During the three months ended June 30, 2026, the Company repurchased 6.6 million shares for an aggregate purchase price of $199 million, at an average price of $29.93 per share under this program. During the six months ended June 30, 2026, the Company repurchased 13.1 million shares for an aggregate purchase price of $398 million, at an average price of $30.33 per share under this program. There were no share repurchases during the three and six months ended June 30, 2025.

Note 11 –Fair Value Measurement

The following table presents estimated fair values of the Company's financial instruments as of the dates presented, whether or not recognized or recorded at fair value on a recurring basis in the Consolidated Balance Sheets:

(1)Excludes equity investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient of $43 million as of June 30, 2026 and $31 million as of December 31, 2025, respectively.

(2)Loans and leases, net are classified as level 3, with the exception of loans originated as held for sale and transferred into loans held for investment of $70 million and $78 million as of June 30, 2026 and December 31, 2025, respectively, which are classified as level 2.

Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of the periods presented:

The following methods were used to estimate the fair value of each class of financial instrument that is carried at fair value in the tables above:

Securities— Fair values for investment securities are based on quoted market prices when available or through the use of alternative approaches, such as matrix or model pricing, or broker indicative bids, when market quotes are not readily accessible or available. Management periodically reviews the pricing information received from the third-party pricing service and compares it to a secondary pricing service, evaluating significant price variances between services to determine an appropriate estimate of fair value to report.

Loans Held for Sale— Fair value for residential mortgage loans originated as held for sale is determined based on quoted secondary market prices for similar loans, including the implicit fair value of embedded servicing rights. For loans not originated as held for sale, these loans are accounted for at lower of cost or market, with the fair value estimated based on the expected sales price.

Loans and leases— Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including commercial, real estate, and consumer loans. Each loan category is further segregated by fixed and adjustable-rate loans. The fair value of loans is calculated by discounting expected cash flows at rates at which similar loans are currently being made. This model is periodically validated by an independent model validation group. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio. For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans.

Residential Mortgage Servicing Rights— The fair value of MSR is estimated using a DCF model. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income net of servicing costs. This model is periodically validated by an independent model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Management believes the significant inputs utilized are indicative of those that would be used by market participants. The amount of contractually specified servicing fees, late fees, and ancillary fees earned, which is recorded in residential mortgage banking revenue, was $5 million and $11 million for the three and six months ended June 30, 2026, respectively, as compared to $6 million and $12 million for the three and six months ended June 30, 2025, respectively.

Junior Subordinated Debentures— The fair value of junior subordinated debentures is estimated using an income approach valuation technique. The significant unobservable input utilized in the estimation of fair value of these instruments is the credit risk adjusted spread. The credit risk adjusted spread represents the non-performance risk of the liability, contemplating the inherent risk of the obligation. The Company periodically utilizes a valuation firm to determine or validate the reasonableness of inputs and factors that are used to determine the fair value. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction among market participants. Due to credit concerns in the capital markets and inactivity in the trust preferred markets that have limited the observability of market spreads, the Company has classified this as a Level 3 fair value measurement.

Derivative Instruments— Derivatives include interest rate swaps, forward sales commitments, foreign currency derivatives, interest rate futures, and interest rate lock commitments. The fair values of these instruments generally fluctuate with changes in market interest rates. Interest rate swaps, forward sales commitments, and foreign currency derivatives are valued using dealer quotes and secondary market sources and are classified as Level 2 fair value measurements. Interest rate futures are exchange-traded derivatives, valued at fair value using quoted settlement prices from the exchange, and are classified as Level 1. Interest rate lock commitments use a pull-through rate that is considered an unobservable input, so these are classified as Level 3 fair value measurements.

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table provides a description of the valuation technique, significant unobservable inputs, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis as of the dates presented:

Generally, increases in the constant prepayment rate or the discount rate utilized in the fair value measurement of the residential mortgage servicing rights will result in a decrease in fair value. Conversely, decreases in the constant prepayment rate or the discount rate will result in an increase in fair value.

Management believes that the credit risk adjusted spread utilized in the fair value measurement of the junior subordinated debentures carried at fair value is indicative of the non-performance risk premium a willing market participant would require under current market conditions, which is an inactive market. Generally, an increase in the credit spread will result in a decrease in the estimated fair value. Conversely, a decrease in the credit spread will result in an increase in the estimated fair value.

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis for the periods indicated:

Changes in residential mortgage servicing rights carried at fair value are recorded in residential mortgage banking revenue within non-interest income.

The contractual interest expense on the junior subordinated debentures is recorded on an accrual basis as interest on junior subordinated debentures within interest expense. Settlements related to the junior subordinated debentures represent the payment of accrued interest that is embedded in the fair value of these liabilities. The change in fair value of junior subordinated debentures is attributable to the change in the instrument specific credit risk. Accordingly, the unrealized losses of $5 million and $1 million were recorded net of tax as other comprehensive losses of $4 million and $1 million for the three and six months ended June 30, 2026, respectively. Comparatively, unrealized losses of $2 million and unrealized gains of $8 million were recorded net of tax as other comprehensive losses of $2 million and gains of $6 million for the three and six months ended June 30, 2025, respectively. The change recorded for the three and six months ended June 30, 2026 was driven by higher implied forward rates and narrower credit spreads, partially offset by higher market interest rates.

Fair Value of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

From time to time, certain assets are measured at fair value on a nonrecurring basis. These adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment, typically on collateral-dependent loans. The following tables present information about the Company's assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value was recorded during the reporting period. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon.

The following table presents the losses resulting from nonrecurring fair value adjustments for the periods indicated:

The following provides a description of the valuation technique and inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis. Unobservable inputs and qualitative information about the unobservable inputs are not presented as the fair value is determined by third-party information for loans and leases.

The loans and leases amounts above represent collateral-dependent loans and leases that have been adjusted to fair value. When a loan or non-homogeneous lease is identified as collateral-dependent, the Bank measures the impairment using the current fair value of the collateral, less estimated selling costs. Depending on the characteristics of a loan or lease, the fair value of collateral is generally estimated by obtaining external appraisals, but in some cases the value of the collateral may be estimated as having little to no value. When a homogeneous lease or equipment finance agreement becomes 181 days past due, it is determined that the collateral has little to no value. If it is determined that the value of the collateral-dependent loan or lease is less than its recorded investment, the Bank recognizes this impairment and adjusts the carrying value of the loan or lease to fair value, less costs to sell, through the ACL. The loss represents charge-offs on collateral-dependent loans and leases for fair value adjustments based on the fair value of collateral.

Fair Value Option

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale and loans held for investment accounted for under the fair value option as of the dates presented:

The Bank elected to measure certain residential mortgage loans held for sale under the fair value option, with interest income on these loans held for sale reported in interest and fees on loans and leases on the Consolidated Statements of Income. This reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Residential mortgage loans held for sale accounted for under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings. Gains and losses from changes in fair value are reported as a component of residential mortgage banking revenue. For the three months ended June 30, 2026, the Company recorded no material net change in fair value, and a net increase in fair value of $15 million for the six months ended June 30, 2026. This compares to no material change in fair value for the three months ended June 30, 2025 and a net increase in fair value of $1 million for the six months ended June 30, 2025.

Management's intent to sell certain residential mortgage loans classified as held for sale may change over time due to factors including changes in overall market liquidity or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified as loans held for investment and maintained in the Bank's loan portfolio. In the event that loans currently classified as held for sale are reclassified as loans held for investment, the loans will continue to be measured at fair value. Gains and losses from changes in fair value for these loans are reported in earnings as a component of other income and interest income on these loans are reported in interest and fees on loans and leases on the Consolidated Statements of Income. The Company recorded a net decrease in fair value of $1 million and $3 million for the three and six months ended June 30, 2026, respectively. This compares tono net change in fair value for the three months ended June 30, 2025 and a net increase in fair value of $7 million for the six months ended June 30, 2025, respectively.

The Company selected the fair value measurement option for certain junior subordinated debentures originally issued by UHC prior to its merger with Columbia (the Umpqua Statutory Trusts) and for junior subordinated debentures acquired by UHC from Sterling Financial Corporation prior to UHC's merger with Columbia, with changes in fair value recognized as a component of other comprehensive income. The remaining junior subordinated debentures were acquired through business combinations and were measured at fair value at the time of acquisition and subsequently measured at amortized cost.

Note 12 –Income Taxes and Investment Tax Credits

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in most states. The Company believes it is more likely than not that it will be able to fully realize the benefit of its federal and state NOL and tax carryforwards and has not provided a valuation allowance against its deferred tax assets.

As of June 30, 2026, the Company had a net deferred tax asset of $376 million, which is included in other assets on the Consolidated Balance Sheets and includes $5 million of federal and state NOL carry-forwards that will begin to expire in 2027.

The Company recorded income tax expense of $130 million and $88 million for the six months ended June 30, 2026 and 2025, respectively, representing effective tax rates of 24.5% and 27.0%, respectively. The effective tax rates differed from the statutory federal income tax rate primarily due to the impact of state income taxes, non-deductible compensation, non-deductible FDIC assessments, and income on tax-exempt investment securities and loans. The change to the effective tax rate for the six months ended June 30, 2026, as compared to the corresponding period in the prior year, was primarily attributable to a decrease in non-deductible compensation, including severance-related items incurred in the prior-year period.

Investment Tax Credits

The Company is involved in various entities that are considered to be variable interest entities, which are primarily related to investments promoting affordable housing and trust preferred securities. The Company is not required to consolidate variable interest entities, in which it has concluded it does not have a controlling financial interest, and thus not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities' most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity. The maximum exposure to loss in the LIHTC is the amount of equity invested, and credit extended by the Company.

Affordable Housing Tax Credit Investments

The Company makes certain equity investments in various limited partnerships that sponsor affordable housing projects; the purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants.

The Company's investments in these entities generate a return primarily through the realization of federal income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction to income tax expense.

The Company records the investments in affordable housing partnerships of $340 million and $344 million as of June 30, 2026 and December 31, 2025, respectively, as a component of other assets on the Consolidated Balance Sheets and uses the proportional amortization method to account for the investments. The Company's unfunded capital commitments to these investments were $120 million and $140 million as of June 30, 2026 and December 31, 2025, respectively, which are recorded as a component of other liabilities on the Consolidated Balance Sheets. Amortization related to these investments is recorded as a component of the provision for income taxes on the Consolidated Statements of Income.

Note 13 –Segment Reporting

The Company hasone operating and reportable segment based on the products and services offered, primarily banking operations as well as the operations, technology, and administrative functions of the Bank and Holding Company. The Company primarily derives revenue from banking operations by providing consumer and residential real estate loans, commercial lending products, deposit products, and treasury and wealth management services. The Company's primary market areas are in Arizona, California, Colorado, Idaho, Nevada, Oregon, Texas, Utah, and Washington and it manages the business activities on a consolidated basis. The accounting policies of the Bank are the same as those described in Note 1 - Summary of Significant Accounting Policiesof the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The Company's CODM is the Chief Executive Officer. The CODM evaluates performance and makes decisions regarding the allocation of operating and capital based on consolidated net income, as reported on the Consolidated Statements of Income. The CODM also reviews total consolidated assets, as reported on the Consolidated Balance Sheets, as a measure of segment assets.

The CODM uses consolidated net income to evaluate income generated from segment assets in making decisions about the allocation of operating and capital resources. Consolidated net income is also used by the CODM to monitor budget versus actual results and in competitive analysis by benchmarking to the Company's competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation. The CODM is regularly provided with significant segment expense information at a level consistent with that disclosed in the Company's Consolidated Statements of Income.