TEXAS CAPITAL BANCSHARES INC/TX

Previous wording

The following discussion and analysis of the Company’s financial condition and results of operations for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in the 2025 Form 10-K. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or any future period.

Current wording

The following discussion and analysis of the Company’s financial condition and results of operations for the three and nine months ended September 30, 2026 and 2025 should be read in conjunction with its audited consolidated financial statements and the related notes to the consolidated financial statements included in the 2025 Form 10-K. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or any future period.

Previous wording

Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors, including trade policies, geopolitical conflicts, inflation, including increased energy costs, unemployment rates and interest rates; TCBI’s ability to innovate, to anticipate the needs of our current and future customers and to manage increased or expanded competition from banks and other financial service providers in TCBI’s markets; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including its strategic plan and developing and executing new lines of business, products and services; risks related to potential strategic acquisitions, including the risk that TCBI may not be able to consummate acquisitions on favorable terms, if at all, and the risk that TCBI may not realize the anticipated benefits from acquisitions; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, outages, disruptions or security breaches; TCBI’s ability to use technology to provide products and services to its customers; risks related to the development and use of artificial intelligence; changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; TCBI’s ability to manage any unexpected outflows of uninsured deposits…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Because forward-looking statements relate to future results and occurrences, they are subject to inherent and various uncertainties, risks, and changes in circumstances that are difficult to predict, may change over time, are based on management’s expectations and assumptions at the time the statements are made and are not guarantees of future results. Numerous risks and other factors, many of which are beyond management’s control, could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there can be no assurance that any list of risks is complete, important risks and other factors that could cause actual results to differ materially from those contemplated by forward-looking statements include, but are not limited to: economic or business conditions in Texas, the United States or globally that impact TCBI or its customers; negative credit quality developments arising from the foregoing or other factors, including trade policies, geopolitical conflicts, inflation, including increased energy costs, unemployment rates and interest rates; TCBI’s ability to innovate, to anticipate the needs of our current and future customers and to manage increased or expanded competition from banks and other financial service providers in TCBI’s markets; TCBI’s ability to effectively manage its liquidity and maintain adequate regulatory capital to support its businesses; TCBI’s ability to pursue and execute upon growth plans, whether as a function of capital, liquidity or other limitations; TCBI’s ability to successfully execute its business strategy, including its strategic plan and developing and executing new lines of business, products and services; risks related to potential strategic acquisitions, including the risk that TCBI may not be able to consummate acquisitions on favorable terms, if at all, and the risk that TCBI may not realize the anticipated benefits from acquisitions; the extensive regulations to which TCBI is subject and its ability to comply with applicable governmental regulations, including legislative and regulatory changes; TCBI’s ability to effectively manage information technology systems, including third-party vendors, cyber or data privacy incidents or other failures, outages, disruptions or security breaches; TCBI’s ability to use technology to provide products and services to its customers; risks related to the development and use of artificial intelligence; changes in interest rates, including the impact of interest rates on TCBI’s securities portfolio and funding costs, as well as related balance sheet implications stemming from the fair value of our assets and liabilities; the effectiveness of TCBI’s risk management processes, strategies and monitoring; fluctuations in commercial and residential real estate values, especially as they relate to the value of collateral supporting TCBI’s loans; TCBI’s ability to manage any unexpected outflows of uninsured deposit…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Company reported net income of $84.9 million and net income available to common stockholders of $80.6 million for the second quarter of 2026, compared to net income of $77.3 million and net income available to common stockholders of $73.0 million for the second quarter of 2025. On a fully diluted basis, earnings per common share was $1.83 for the second quarter of 2026, compared to $1.58 for the same period in 2025. ROE was 9.56% and ROA was 1.03% for the second quarter of 2026, compared to 9.17% and 0.99%, respectively, for the same period in 2025. The increase in net income for the second quarter of 2026 compared to the second quarter of 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by an increase in non-interest expense.

Current wording

The Company reported net income of $103.7 million and net income available to common stockholders of $99.4 million for the third quarter of 2026, compared to net income of $105.2 million and net income available to common stockholders of $100.9 million for the third quarter of 2025. On a fully diluted basis, earnings per common share was $2.28 for the third quarter of 2026, compared to $2.18 for the same period in 2025. ROE was 11.57% and ROA was 1.25% for the third quarter of 2026, compared to 12.04% and 1.30%, respectively, for the same period in 2025. The decrease in net income for the three months ended September 30, 2026 compared to the same period in 2025 resulted primarily from an increase in non-interest expense, partially offset by an increase in non-interest income.

Previous wording

The Company reported net income of $158.7 million and net income available to common stockholders of $150.1 million for the six months ended June 30, 2026, compared to net income of $124.4 million and net income available to common stockholders of $115.8 million for the same period in 2025. On a fully diluted basis, earnings per common share was $3.39 for the six months ended June 30, 2026, compared to $2.49 for the same period in 2025. ROE was 8.96% and ROA was 0.99% for the six months ended June 30, 2026, compared to 7.40% and 0.80%, respectively, for the same period in 2025. The increase in net income for the six months ended June 30, 2026 compared to the same period in 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by an increase in non-interest expense.

Current wording

The Company reported net income of $262.4 million and net income available to common stockholders of $249.5 million for the nine months ended September 30, 2026, compared to net income of $229.6 million and net income available to common stockholders of $216.6 million for the same period in 2025. On a fully diluted basis, earnings per common share was $5.66 for the nine months ended September 30, 2026, compared to $4.67 for the same period in 2025. ROE was 9.84% and ROA was 1.08% for the nine months ended September 30, 2026, compared to 9.02% and 0.97%, respectively, for the same period in 2025. The increase in net income for the nine months ended September 30, 2026 compared to the same period in 2025 resulted primarily from increases in net interest income and non-interest income, partially offset by increases in provision for credit losses and non-interest expense.

Previous wording

Net interest income was $260.4 million for the three months ended June 30, 2026, compared to $253.4 million for the same period in 2025. The increase was primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by a decrease in earning asset yields and an increase in average interest bearing deposits.

Current wording

Net interest income was $275.0 million for the three months ended September 30, 2026, compared to $271.8 million for the same period in 2025. The increase was primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by a decrease in earning asset yields and an increase in average interest bearing deposits.

Previous wording

Average earning assets for the three months ended June 30, 2026 increased $1.6 billion compared to the same period in 2025, which included increases of $1.5 billion in average total loans held for investment and $116.6 million in average interest bearing cash and cash equivalents, partially offset by a $28.9 million decrease in average investment securities. Average interest bearing liabilities increased $1.6 billion for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to increases of $1.5 billion increase in average interest bearing deposits and $71.8 million in average short-term borrowings, partially offset by a decrease of $6.8 million in average long-term debt. Average non-interest bearing deposits for the three months ended June 30, 2026 decreased to $8.1 billion from $8.2 billion for the same period in 2025.

Current wording

Average earning assets for the three months ended September 30, 2026 increased $756.9 million compared to the same period in 2025, which included increases of $803.1 million in average total loans held for investment and $11.4 million in average loans held for sale, partially offset by decreases of $14.7 million in average interest bearing cash and cash equivalents and $52.9 million in average investment securities. Average interest bearing liabilities increased $1.2 billion for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase of $1.3 billion in average interest bearing deposits, partially offset by a $35.2 million decrease in average short-term borrowings and a decrease of $122.7 million in average long-term debt. Average non-interest bearing deposits for the three months ended September 30, 2026 decreased to $7.9 billion from $8.4 billion for the same period in 2025.

Previous wording

Net interest margin for the three months ended June 30, 2026 was 3.28%, compared to 3.35% for the same period in 2025. The decrease in net interest margin was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields.

Current wording

Net interest margin for the three months ended September 30, 2026 was 3.44%, compared to 3.47% for the same period in 2025. The decrease in net interest margin was primarily due to lower average earning asset yields, partially offset by a decrease in the cost of interest bearing deposits.

Previous wording

The yield on total loans held for investment decreased to 6.04% for the three months ended June 30, 2026, compared to 6.34% for the same period in 2025, and the yield on earning assets decreased to 5.54% for the three months ended June 30, 2026, compared to 5.80% for the same period in 2025. Total cost of deposits decreased to 2.40% for the three months ended June 30, 2026 from 2.65% for the same period in 2025, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.21% for the three months ended June 30, 2026, compared to 2.41% for the same period in 2025.

Current wording

The yield on total loans held for investment decreased to 6.21% for the three months ended September 30, 2026, compared to 6.42% for the same period in 2025, and the yield on earning assets decreased to 5.70% for the three months ended September 30, 2026, compared to 5.88% for the same period in 2025. Total cost of deposits decreased to 2.45% for the three months ended September 30, 2026 from 2.62% for the same period in 2025, and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.23% for the three months ended September 30, 2026, compared to 2.36% for the same period in 2025.

Previous wording

Net interest income was $515.1 million for the six months ended June 30, 2026, compared to $489.4 million for the same period in 2025. The increase was primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by a decrease in earning asset yields and an increase in average interest bearing deposits.

Current wording

Net interest income was $790.1 million for the nine months ended September 30, 2026, compared to $761.2 million for the same period in 2025. The increase was primarily due to an increase in average earning assets and a decrease in funding costs, partially offset by a decrease in earning asset yields and an increase in average interest bearing deposits.

Previous wording

Average earning assets increased $906.5 million for the six months ended June 30, 2026, compared to the same period in 2025, which included increases of $1.7 billion in average total loans held for investment and $70.8 million in average debt and equity securities, partially offset by an $854.4 million decrease in average interest bearing cash and cash equivalents. Average interest bearing liabilities increased $1.0 billion for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase of $1.2 billion in average interest bearing deposits, partially offset by a decrease of $209.3 million in average short-term borrowings. Average non-interest bearing deposits for the six months ended June 30, 2026 decreased to $7.8 billion from $8.0 billion for the same period in 2025.

Current wording

Average interest bearing liabilities increased $1.1 billion for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to an increase of $1.3 billion in average interest bearing deposits, partially offset by decreases of $150.6 million in average short-term borrowings and $38.6 million in average long-term debt. Average non-interest bearing deposits for the nine months ended September 30, 2026 decreased to $7.8 billion from $8.1 billion for the same period in 2025.

Previous wording

Net interest margin for the six months ended June 30, 2026 was 3.35%, compared to 3.27% for the same period of 2025. The increase was primarily due to a decrease in funding costs.

Current wording

Net interest margin for the nine months ended September 30, 2026 was 3.38%, compared to 3.34% for the same period of 2025. The increase in net interest margin was primarily due to a decrease in the cost of interest bearing deposits, partially offset by lower earning asset yields.

Previous wording

The yield on total loans held for investment decreased to 6.08% for the six months ended June 30, 2026, compared to 6.37% for the same period in 2025, and the yield on earning assets decreased to 5.58% for the six months ended June 30, 2026, compared to 5.78% for the same period in 2025. Total cost of deposits decreased to 2.39% for the six months ended June 30, 2026 from 2.70% for the same period in 2025 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.19% for the six months ended June 30, 2026, compared to 2.48% for the same period in 2025.

Current wording

The yield on total loans held for investment decreased to 6.12% for the nine months ended September 30, 2026, compared to 6.39% for the same period in 2025, and the yield on earning assets decreased to 5.63% for the nine months ended September 30, 2026, compared to 5.82% for the same period in 2025. Total cost of deposits decreased to 2.41% for the nine months ended September 30, 2026 from 2.67% for the same period in 2025 and total funding costs, including non-interest bearing deposits and stockholders' equity, decreased to 2.20% for the nine months ended September 30, 2026, compared to 2.44% for the same period in 2025.

Previous wording

Non-interest income increased $21.0 million during the three months ended June 30, 2026, compared to the same period in 2025, primarily due to increases in wealth management and trust fee income, investment banking and advisory fees, trading income and other non-interest income, as well as the absence of a $1.9 million loss on sale of available-for-sale debt securities recognized in the second quarter of 2025.

Current wording

Non-interest income increased $13.1 million during the three months ended September 30, 2026, compared to the same period in 2025, primarily due to increases in service charges on deposit accounts, investment banking and advisory fees, trading income and other non-interest income.

Previous wording

Non-interest income was $144.4 million for the six months ended June 30, 2026, a $45.9 million increase as compared to the same period in 2025, primarily due to increases in investment banking and advisory fees, trading income and other non-interest income.

Current wording

Non-interest income was $226.0 million for the nine months ended September 30, 2026, a $58.9 million increase as compared to the same period in 2025, primarily due to increases in investment banking and advisory fees, trading income and other non-interest income.

Previous wording

Non-interest expense increased $15.2 million during the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to increases in salaries and benefits, marketing, legal and professional, communications and technology and other non-interest expense.

Current wording

Non-interest expense increased $13.3 million during the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to increases in salaries and benefits, occupancy and communications and technology expense, primarily as a result of restructuring expenses recognized in the third quarter of 2026, as well as an increase in other non-interest expense.

Previous wording

Non-interest expense was $419.1 million for the six months ended June 30, 2026, an increase of $25.8 million as compared to the same period in 2025, primarily due to increases in salaries and benefits, communications and technology and other non-interest expense.

Current wording

Non-interest expense was $623.0 million for the nine months ended September 30, 2026, an increase of $39.1 million as compared to the same period in 2025, primarily as a result of increases in salaries and benefits, communications and technology and other non-interest expense.

Previous wording

Total loans held for investment were $24.9 billion at June 30, 2026, an increase of $907.0 million from December 31, 2025, as increases in commercial and mortgage finance loans were partially offset by decreases in commercial real estate and consumer loans. Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 26% and 25% of loans held for investment at June 30, 2026 and December 31, 2025, respectively. Volumes fluctuate based on the level of market demand for the product and the number of days between purchase and sale of the loans, which can be affected by changes in overall market interest rates, and tend to peak at the end of each month.

Current wording

Total loans held for investment were $24.1 billion at September 30, 2026, an increase of $42.8 million from December 31, 2025, as an increase in commercial loans was partially offset by decreases in mortgage finance, commercial real estate and consumer loans. Mortgage finance loans include legal ownership interests in mortgage loans that the Company purchases from unaffiliated mortgage originators, either directly or through a special purpose entity structure, that are typically sold within 10 to 20 days and represent 23% and 25% of loans held for investment at September 30, 2026 and December 31, 2025, respectively. Volumes fluctuate based on the level of market demand for the product and the number of days between purchase and sale of the loans, which can be affected by changes in overall market interest rates, and tend to peak at the end of each month.

Previous wording

The Company originates a substantial majority of all loans held for investment. The Company also participates in shared national credits, both as a participant and as an agent. As of June 30, 2026, the Company had $6.8 billion in shared national credits, $1.4 billion of which the Company administered as agent. All syndicated loans, whether the Company acts as agent or participant, are underwritten to the same standards as all other loans the Company originates. As of June 30, 2026, approximately $26.6 million of the Company’s shared national credits were on non-accrual.

Current wording

The Company originates a substantial majority of all loans held for investment. The Company also participates in shared national credits, both as a participant and as an agent. As of September 30, 2026, the Company had $7.1 billion in shared national credits, $1.4 billion of which the Company administered as agent. All syndicated loans, whether the Company acts as agent or participant, are underwritten to substantially the same standards as all other loans the Company originates. As of September 30, 2026, approximately $26.3 million of the Company’s shared national credits were on non-accrual.

Previous wording

The Company recorded a provision for credit losses of $34.0 million for the six months ended June 30, 2026, compared to a provision of $32.0 million for the six months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026 reflects an increase in criticized loans and $33.4 million in net charge-offs recorded during the six months ended June 30, 2026. Criticized loans totaled $696.3 million at June 30, 2026, compared to $634.9 million at December 31, 2025.

Current wording

The Company recorded a provision for credit losses of $51.0 million for the nine months ended September 30, 2026, compared to a provision of $44.0 million for the nine months ended September 30, 2025. The provision for credit losses for the nine months ended September 30, 2026 reflects an increase in criticized loans and $48.0 million in net charge-offs recorded during the nine months ended September 30, 2026. Criticized loans totaled $782.4 million at September 30, 2026, compared to $634.9 million at December 31, 2025.

Previous wording

(1) Ratios are calculated using average balance for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1) Ratios are calculated using average balance for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

(2) Ratios are annualized utilizing provision for credit losses for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(2) Ratios are annualized utilizing provision for credit losses for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

(1) Ratios are annualized utilizing net charge-offs for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1) Ratios are annualized utilizing net charge-offs for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Estimated uninsured deposits, including accrued interest, were 37% and 42% of total deposits at June 30, 2026 and December 31, 2025, respectively. The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

Current wording

Estimated uninsured deposits, including accrued interest, were 42% of assessable deposits, including accrued interest, at both September 30, 2026 and December 31, 2025. The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

Previous wording

(2)Unsecured revolving, non-amortizing line of credit with maturity date of February 8, 2027. Proceeds may be used for general corporate purposes, including funding regulatory capital infusions into the Bank. The loan agreement contains customary financial covenants and restrictions. No borrowings were made against this line of credit during the six months ended June 30, 2026 or 2025.

Current wording

(2)Unsecured revolving, non-amortizing line of credit with maturity date of February 8, 2027. Proceeds may be used for general corporate purposes, including funding regulatory capital infusions into the Bank. The loan agreement contains customary financial covenants and restrictions. No borrowings were made against this line of credit during the nine months ended September 30, 2026 or 2025.

Previous wording

The Company has long-term debt outstanding of $500.9 million as of June 30, 2026, comprised of trust preferred securities and senior notes with maturity dates ranging from February 2032 to December 2036. See Note 5 - Short-Term Borrowings and Long-Term Debt in the accompanying notes to the consolidated financial statements included elsewhere in this report for additional information. The Company may consider raising additional capital, if needed, in public or private offerings of debt or equity securities to supplement deposits and meet its long-term funding needs.

Current wording

The Company has long-term debt outstanding of $487.3 million as of September 30, 2026, comprised of trust preferred securities and senior notes with maturity dates ranging from February 2032 to December 2036. See Note 5 - Short-Term Borrowings and Long-Term Debt in the accompanying notes to the consolidated financial statements included elsewhere in this report for additional information. The Company may consider raising additional capital, if needed, in public or private offerings of debt or equity securities to supplement deposits and meet its long-term funding needs.

Previous wording

The Company’s equity capital averaged $3.7 billion for the six months ended June 30, 2026 compared to $3.5 billion for the same period in 2025. The Company declared and paid common stock dividends of $8.7 million, representing $0.20 per common share, during the six months ended June 30, 2026. No common stock dividends were paid in 2025. On July 22, 2026, the Company and its board of directors declared and announced a cash dividend of $0.20 per common share payable on September 15, 2026, to holders of record at the close of business on September 1, 2026.

Current wording

The Company’s equity capital averaged $3.7 billion for the nine months ended September 30, 2026 compared to $3.5 billion for the same period in 2025. The Company declared and paid common stock dividends of $17.3 million, representing $0.40 per common share, during the nine months ended September 30, 2026. No common stock dividends were paid in 2025. On October 21, 2026, the Company’s board of directors declared a cash dividend of $0.20 per common share payable on December 15, 2026, to holders of record at the close of business on December 1, 2026.

Previous wording

Effective December 12, 2025, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $200.0 million in shares of its outstanding common stock, excluding the effect of excise tax expense incurred on the net stock repurchases. The share repurchase program will expire on December 31, 2026, but may be suspended or discontinued at any time. The remaining repurchase authorization under the January 22, 2025 share repurchase program was terminated upon authorization of this new program. During the six months ended June 30, 2026, the Company repurchased 1,009,771 shares of its common stock for an aggregate purchase price, including excise tax expense, of $98.7 million, at a weighted average price of $97.01 per share.

Current wording

During the nine months ended September 30, 2026, the Company repurchased, under the authorized share repurchase programs, 2,061,431 shares of its common stock for an aggregate purchase price, including excise tax expense, of $201.7 million, at a weighted average price of $97.00 per share.

Previous wording

Management considers a range of macroeconomic scenarios in connection with the allowance estimation process. Within the various economic scenarios considered as of June 30, 2026, the quantitative estimate of the allowance for credit loss would increase by approximately $91.4 million under sole consideration of the most severe downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

Current wording

Management considers a range of macroeconomic scenarios in connection with the allowance estimation process. Within the various economic scenarios considered as of September 30, 2026, the quantitative estimate of the allowance for credit loss would increase by approximately $94.6 million under sole consideration of the most severe downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled allowance estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the allowance for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.