WAL 10-K & 10-Q changes, risk factors and insider trading

Our financial performance is highly dependent upon the business environment in the markets where we operate and in the U.S. as a whole. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, or investor or business confidence, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, U.S. government debt default or shutdown, the imposition of tariffs on trade, natural disasters, the emergence of widespread health emergencies or pandemics, terrorist attacks, geopolitical tensions and acts of war (such as the military conflicts in Ukraine and the Middle East), or a combination of these or other factors.

In the U.S. financial services industry, the soundness of financial institutions is closely interrelated. Actual events involving limited liquidity, defaults, non-performance or other adverse developments affecting financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar events, have in the past and may in the future lead to erosion of customer confidence in the banking system or certain banks, deposit volatility, liquidity issues, credit problems, losses or defaults by other institutions, stock price volatility and other adverse developments. The bank closures in the first half of 2023 led to such disruption and volatility, including deposit outflows, at many mid-sized banks, including us, increasing the need for liquidity. Although bank regulators ensured depositors would have access to all of their money after only one business day of the first such bank closure, including funds held in uninsured deposit accounts, it is not certain bank regulators will treat future bank failures similarly. Additionally, theseThese types of events may also adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which we interact on a daily basis. Any of these impacts, or any other impacts resulting from the events described above or other related or similar events, could have a material adverse effect on our liquidity and current and/or projected business operations and financial condition and results of operations.

It is possible that the business environment in the U.S., including with respect to the financial services industry, will continue to be challenging or experience recession or additional volatility in the future. There can be no assurance such conditions will improve in the near term or that conditions will not worsen. There also can be no assurance there will not be additional bank failures or liquidity concerns in particular segments of the financial services industry or in the U.S. financial system as a whole. Such conditions or events could adversely affect our business, results of operations, and financial condition.

Interest rates rose rapidly during 2023, resulting in a significant decline in the fair market values of long duration fixed rate investment securities. Any sale of investment securities held in an unrealized loss position for liquidity or other purposes will cause actual losses to be realized. Gross unrealized losses on our HTM and AFS investment securities totaled $218$160 million and $729$610 million, respectively, as of December 31, 2024.2025. In late 2024, the FRB began lowering rates as inflationary pressure started to ease.ease, Theand in late 2025, the FRB hasagain indicatedlowered additionalrates. decreases to the federal funds target rate in 2025, but noted it will continue to assess additional information and implications forHowever, the economic and inflationary outlook continues to remain uncertain. If the FRB were to reverse course and rapidly increase rates, the increase could result in determiningfurther futuredeclines actionsin withthe respectfair tomarket targetvalues rates.of long duration fixed rate investment securities, constrain our interest rate spread and may adversely affect our business forecasts.

Our earnings could also could be adversely affected in a declining rate environment if the rates on our loans and other investments fall more quickly than those on our deposits and other liabilities. A declining rate environment may also result in a change in the mix of non-interest and interest bearing accounts. Because of our relatively high reliance on net interest income, our revenue and earnings are more sensitive to changes in market rates than other financial institutions with more diversified sources of revenue.

Loan volumes may also be affected by market interest rates on loans. Lower interest rates are typically associated with higher loan originations, but also result in higher loan refinancings which can result in lower average loan yields and the loss of future net servicing revenues on residential loans with an associated write-down of MSRs. In contrast, in rising interest rate environments, loan repayment rates generally decline and result in a lower volume of loan originations. In addition to the impact on our lending business, a decrease in loan originations would adversely affect the volume of loans available for purchase by our mortgage warehousebanking lendingbusiness platform.channel.

We use various interest rate benchmarks in our lending, borrowing and hedging activities. An interest rate benchmark we use in lending, borrowing or hedging may be discontinued or substantially changed in the future. For example, effective January 1, 2022, the administrator of LIBOR ceased the publication of one-week and two-month U.S. dollar LIBOR, and immediately after June 30, 2023, the administrator of LIBOR ceased the publications of the remaining tenors of U.S. dollar LIBOR (one, three, six, and 12-month). Additionally, effective November 15, 2024, the Bloomberg Index Services Limited ceased publication of the Bloomberg Short-Term Bank Yield Index.

Credit losses are an inherent risk in the business of making loans. Management makes various assumptions and judgments about the collectability of our loan portfolio and maintains an ACL estimated to cover expected losses over the life of the loans in our portfolio. The measurement of expected credit losses takes place at the time the financial asset is first added to the balance sheet (with periodic updates thereafter) and is based on a number of factors, including the size of the portfolio, asset classifications, economic trends, industry experience and trends, industry and geographic concentrations, estimated collateral values, management’s assessment of the credit risk inherent in the portfolio, loan underwriting policies, historical loan loss experience, and reasonable and supportable forecasts. In addition, with the exception of residential loans, we individually evaluate all nonaccrual loans identifiedgraded asSubstandard problemor loansworse with a total commitment of $1.0 million or more, and establish an allowance based upon our estimation of the potential loss associated with those problem loans. Additions to the ACL recorded through provision for credit losses decrease our net income. If management’s assumptions and judgments are incorrect or if economic conditions worsen compared to forecast, our actual credit losses may exceed our ACL.

At December 31, 2024,2025, our ACL on funded loans and loss contingency on unfunded loan commitments and letters of credit totaled $373.8$460.6 million and $39.5$49.6 million, respectively. Deterioration in the real estate market or general economic conditions could affect the ability of our loan customers to service their debt, which could result in additional loan loss provisions and increases in our ACL. In addition, future volatility in the banking industry and related economic effects, like those experienced during 2023,effects may adversely impact the Company’s estimate of its ACL and resulting provision for credit losses. We may also be required to record additional loan provisions or increase our ACL based on new information regarding existing loans, input from regulators in connection with their review of our loan portfolio, changes in regulatory guidance, regulations or accounting standards, identification of additional problem loans, changes in economic outlook, and other factors, both within and outside of our management’s control. Moreover, because future events are uncertain and because we may not successfully identify all deteriorating loans in a timely manner, there may be loans that deteriorate in an accelerated time frame.

Increasing political polarization in the United States and its government, including disagreement around conflict-related foreign involvement and aiddomestic policies and other politically charged issues may increase the likelihood of a shutdown of the federal government. Any shutdown of the United States government could adversely impact our ability to originate loans, particularly through AmeriHome’s correspondent and retail operations and our small business lending program. A government shutdown could also adversely affect certain of our borrowers which may be dependent on government funding, contractual arrangements or employment, which could affect such borrowers’ ability to pay principal and interest on our loans or their ability or desire to deposit money with or borrow from our bank. Any of these effects could result in greater loan delinquencies, increases in non-performing, criticized, and classified assets, and a decline in demand for our products and services.

Many of the real and personal properties securing our loans are located in California and more generally in the southwestern portion of the United States. Substantial portions of California experience wildfires from time to time that may cause significant damage throughout the state. For example, early in 2025, Southern California has experienced prolonged wildfires that have resulted in extensive damage. While these wildfires havedid not significantly damageddamage our own properties or the properties pledged by borrowers as collateral, it is possible our borrowers may experience losses in the future, which may materially impair their ability to meet the terms of their obligations. California and the southwestern United States are also prone to other natural disasters, including, but not limited to, drought, earthquakes, flooding, and mudslides. In recent years, drought and decreased snowfall in the Rocky Mountains has led to decreased water flow in the Colorado River, from which many areas in the southwest obtain water, including certain of our markets. Persistence of such conditions or additional significant natural or man-made disasters in the state of California or in our other markets could lead to damage or injury to our own properties and/or employees, declines in population in our markets, and increased risk that our borrowers may experience losses or sustained job interruption, which may materially impair their ability to maintain deposits or meet the terms of their loan obligations. Therefore, additional natural disasters, a man-made disaster or a catastrophic event, persistence of detrimental environmental conditions, or a combination of these or other factors, in any of our markets could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The lack of empirical data surrounding the credit and other financial risks posed by climate change makes it impossible to predict the specific impact climate change may have on our financial condition and results of operations; however, the physical effects of climate change may also impact us. In addition to the risk of more frequent and/or severe natural disasters, climate change can result in longer term shifts in climate patterns such as extreme heat, rising sea level rise,levels, declining fresh waterfreshwater resources, and more frequent and prolonged drought. The effects of climate change may have a significant effect in our geographic markets, and could disrupt our operations, the operations of our customers or third parties on which we rely, or supply chains generally. These disruptions, including increased regulation and compliance cost for our customers and changes in consumer behaviors, could result in declines in the economic conditions in geographic markets or industries in which our customers operate and impact their ability to repay loans or maintain deposits and could affect the value of real estate and other assets that serve as collateral for loans. Climate change could also impact our assets or employees directly or lead to changes in customer preferences that could negatively affect our growth or business strategies.

BankIn recent years, bank regulators have increasingly focused on the physical and financial risks to financial institutions associated with climate change,change. whichHowever, mayexpectations resultwith respect to these matters has been changing, and it is difficult to predict changes in increasedpriorities and requirements regardingwith therespect disclosureto andthese managementmatters, ofincluding climateany riskschanges andin relatedcompliance lending activities.costs. We have also, and may continue,continue toto, become subject to new or heightened regulatory requirements related to climate change, such as requirements relating to operational resiliency, stress testing for various climate stress scenarios, greenhouse gas emissions disclosures, or climate-related financial risk disclosures. New or increased regulations have resulted, and in the future, could result in increased compliance costs or capital requirements. Changes in regulations and customer preferences and behaviors could negatively affect our growth or force us to alter our business strategies, including whether and on what terms and conditions we will engage in certain activities or offer certain products or services and which growth industries and customers we pursue. Additionally, our reputation and customer relationships may be damaged due to our practices related to climate change, including our involvement, or our customers’ involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.

As a regulated financial institution and a publicly traded company, we are facing evolving scrutiny from customers, regulators, investors, and other stakeholders related to ESG practices and disclosure. Frequently, these stakeholders have differing, and sometimes conflicting, views, priorities and expectations regarding ESG issues, which must be considered. State and federal initiatives on social or climate matters may differ or conflict with one another and may also differ from our shareholders' and stakeholders' expectations. For example, changing views against certain ESG and corporate DEI matters has gained momentum across the United States at national, state and local levels, which are referred to by some as “anti-ESG” efforts. Several states have proposed or enacted anti-ESG policies, legislation and initiatives, which may conflict with other regulatory requirements or our stakeholders’ expectations. Corporate DEI practices also have come under increasing scrutiny, including with the issuance of executive orders regarding certain DEI policies and practices in the private sector. These differing, and sometimes conflicting, views, priorities and expectations on ESG issues increase the risk that any action or lack thereof by us on such matters will be perceived negatively by some stakeholders. Failure to adapt to or comply with legal or regulatory requirements or investor or stakeholder expectations and standards on ESG-related issues, or taking action that conflicts with one or another of our stakeholder’s expectations, could negatively impact our reputation, ability to do business with certain customers and business partners, and stock price.price, or could lead to governmental enforcement or private litigation. Any adverse publicity regarding ESG matters or shifts in investor priorities may result in adverse effects on our stock price and/or our business, operations and earnings. Additionally, ESG-related costs, including with respect to compliance with any additional or altered legal or regulatory or disclosure requirements or expectations, could adversely impact our results of operations.

The banking regulatory agencies have expressed concerns about weaknesses in the current CRE market. Banking regulatory authorities typically give CRE lending greater scrutiny and may require banks with higher levels of CRE loans to implement enhanced risk management practices, including stricter underwriting, internal controls, risk management policies, more granular reporting, and portfolio stress testing, as well as possibly higher levels of allowances for losses and capital levels as a result of CRE lending growth and exposure. If our banking regulators determine that our CRE lending activities are particularly risky and are subject to heightened scrutiny, we may incur significant additional costs or be required to restrict certain of our CRE lending activities. Furthermore, failures in our risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which could have a material adverse effect on our business, financial condition and results of operations.

Our loan portfolio consists primarily of commercial and industrial, residential mortgage, and CRE loans, which contain material concentrations in certain business lines or product types, such as mortgage warehouse,finance, real estate, corporate finance, as well as in specific business sectors such as gaming and technology and innovation. These loan concentrations present unique risks and involve specialized underwriting and management as they often involve large loan balances to a single borrower or group of related borrowers. Consequently, an adverse development with respect to one commercial loan or one credit relationship may adversely affect us. In addition, based on the nature of lending to these specialty markets, repayment of loans may be dependent upon borrowers receiving additional equity financing or, in some cases, a successful sale to a third party, public offering, or other form of liquidity event.

We have entered into transactions to mitigate exposure to losses on our loan portfolio. These transactions are structured as credit linked notes, which transfer the risk of first losses on covered loans to these note holders. These notes have an aggregate principal amount of $434.2$407.4 million on aan $8.6$8.1 billion reference pool of residential mortgages. Pursuant to these arrangements, in the event of borrower default, the principal balance of the notes will be reduced by the amount of the loss, up to the amount of the aggregate principal of the notes. However, all residual risk over and above the first loss position is retained by us. While current estimates of future credit losses are below the first loss position, no assurances can be given that future losses will not exceed the first loss position and, if credit losses were to exceed the first loss position, our financial condition and results of operations could be adversely effected. We may enter into more such transactions in the future.

The financial services industry is also facing increasing competitive pressure from the introduction of disruptive new technologies such as blockchain and digital payments, often by non-traditional competitors and financial technology companies. Among other things, technology and other changes are allowing customers to complete financial transactions that historically have involved banks at one or both ends of the transaction. The elimination of banks as intermediaries for certain transactions, as well as further disruption of traditional bank businesses and products by non-banks, could result in the loss of fee income and deposits and otherwise adversely affect our business and results.

We continually evaluate expansion opportunities through acquisitions of banksbanks, branches, and other financial assets and businesses. Like previous acquisitions by us, any future acquisitions will be accompanied by risks commonly encountered in such transactions, including, among other things:

We are continuing to pursue digital payments initiatives and implementation of a fully integrated digital banking platform for our customers. The digital payments products and services we offer may use or rely on blockchain-based technologies or assets. Use of blockchain-based technologies in payments are a relatively new and unproven technology, and the laws and regulations surrounding them are uncertain and evolving. In July 2025, the GENIUS Act was enacted, which provides a legal framework for stablecoins and their issuers in the United States. The GENIUS Act requires the U.S. Treasury Department and federal regulators to issue regulations on a number of topics to interpret and implement the statute, so the effect of the GENIUS Act will depend on what those regulations provide. Blockchain and digital payment technology has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue. Any changes in such laws and regulations applicable to, or scrutiny directed at, our products and services may impede or delay the offering of digital payments solutions, increase our operating costs, require significant management time and attention, or otherwise harm our business or results of operations.

We believe our senior management team has contributed greatly to our performance. In addition, we from time to time experience retirements and other changes to our senior management team. Most recently, we completed a CFO transition in January 2026. Our future performance depends on a smooth transition of our senior management, including finding and training highly qualified replacements who are properly equipped to lead us. We have adopted retention strategies, including equity awards, from which our senior management team benefits in order to achieve our goals. However, we cannot assure our succession planning and retention strategies will be effective and the loss of senior management could have an adverse effect on our business.

A failure inin, or breach ofof, our operationalsecurity or securitytechnology systems or infrastructure,systems, or those of our third-party vendors and other service providers, including as a result of cyber-attacks, could disrupt our businesses,operations, result in the unauthorized disclosure or misuse of confidential or proprietary information, damage our reputation, increase our operating costs, and cause financial losses.

Our businesses operate in an increasingly complex and evolving cybersecurity threat environment. Our operations relydepend on the secure processing, storage, and transmission of confidentialsensitive information and otherwe information.continue Moreover,to aexpand portionour use of third party service providers, which broadens our employeesoverall workcyber remotelyrisk at least some of the time.exposure. Although we takeemploy numerousmultiple layers of protective measurescontrols to maintain the confidentiality, integrity, and security of our customers’ information across all geographies and productbusiness lines, and endeavorwe tocontinually modifyenhance these protective measures as circumstances warrant,these, the nature of cyber threats continues to evolve. AsThreat actors repeatedly target financial institutions and their service providers, and as a result, our computer systems, software, and networkssystem and those of our customers and third-party vendors are, and are likely to continue to beremain vulnerable to unauthorized payments and account access, lossfraudulent activity, data exfiltration or destructiondestruction, ofservice dataoutages, (includingmalware, confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code,ransomware, cyber-attacks, and other adverse events that could have an adverse security impact and result in significant losses to us and/or our customers. These threats may originate externally from increasinglyexternal sophisticated third parties,actors, including foreign governments, organized criminal groups, and other hackers,malicious entities, or fromfailure or vulnerabilities within our outsourced or infrastructure-support providersproviders, or internal environments. Additionally, the continued evolution and applicationincreased developers,usage orof theAI threatstechnologies may originate from within our organization. For example, we recently became aware that a threat actor obtained unauthorized access to files transferred through a third-party secure file transfer software used by WAB, as further describedincrease underthese Item 9B “Other Information” of this Form 10-K.risks.

We alsoare facesubject theto riska wide range of potential operational disruption,disruptions, failure,including termination,failure of our technology infrastructure, cyber-attacks, and natural or capacityman-made constraints of any of the third parties that facilitate our business activities, including vendors, exchanges, clearing agents, clearing houses, or other financial intermediaries. Such parties could also be the source or cause of an attack on, or breach of, our operational systems, data or infrastructure.disasters. The rapid evolution and increased adoption of artificial intelligenceAI technologies has also given rise tointroduced additional vulnerabilities and potential entry points for cyber threats. InOur addition, we may be atoverall risk of an operational failure with respect to our customers’ systems. Our risk and exposure to these matters remains heightened becausedue of, among other things,to the evolving naturethreat of these threats,landscapes, the outsourcing of many of ourcertain business operations,processes, and the continuedbroader uncertainuncertainties in the global economic environment. As cyber threats continue to evolve, we may be required to expenddevote significant additional resources to continue to modify or enhancestrengthen our protective measurescontrols or to investigate and remediate anycybersecurity informationvulnerabilities securityor vulnerabilities.incidents.

We maintain insurance policies that we believe provide reasonable coverage for an institution of our sizesize, scope, and scopetechnology with similar technological systems.environment. However, wesuch cannotinsurance assuremay thatnot these policies will afford coverage forcover all possible losses or wouldmay be sufficientinsufficient to cover all financial losses, damages, or penalties, includingor lost revenues, shouldarising wefrom experiencea any one or morefailure of our systems or those of a third party’s systems failing or experiencing an attack.party.

We rely on third parties to providesupport key components of ourcritical business infrastructure.operations.

We rely on third parties to providesupport key components for ourcritical business operations, such as data processing and storage, recordingtransaction and monitoring transactions,processing, online banking interfaces and services,systems, internet connections,connectivity, and network access. WhileAlthough we havemaintain a robust due diligence processand inmonitoring placeprogram to selectover third-party vendors,service providers, we do not control theirthe actions.actions Any problems caused byof these third parties,parties. includingOperational thosefailures, resultingcapacity fromconstraints, breakdownstechnology outages, cyber-attacks, performance issues, or otherservice disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breachesinterruptions at a vendor,service failure of a vendor to provide services for any reason, or poor performance by a vendorprovider could adversely affectimpair our ability to deliver products and servicesservices, toaffect customer experience, and negatively impact our customers and otherwise conduct our business.operations. Financial or operational difficultiesstress of a third-party vendorservice provider could alsoimpair impact our operations if those difficulties interfere with theirits ability to servefulfill us.contracted services. Replacing third-partysuch vendorsproviders could createrequire significant delaystime, cost, and expenseoperational adjustments, and theresuitable isalternative noproviders guaranteemay that such replacement vendors willnot be available aton comparable rates, on similar terms,terms or inwithin arequired timely manner, if at all.timeframes. Any of these thingsevents could adversely affect our business and financial performance.

Although we devote substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the persistence and increasing sophistication of possible perpetrators, we may experience financial losses or reputational harm as a result of fraud. Our lending customers may also experience fraud in their businesses that could adversely affect their ability to repay their loans or make use of services. Our customers’ and our exposure to fraud may result in unexpected loan losses that exceed those that have been provided for in the ACL.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, largely related to increased digitization of banking services and capabilities (including those related to or involving artificial intelligence,AI, machine learning, blockchain, and other technologies) and mobile banking solutions. We expect new technologies will continue to emerge and may be superior to or render obsolete the technologies currently used in our products and services. Our future success depends in part upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in operations. Many of our competitors, because of their larger size and available capital, have substantially greater resources to invest in technological improvements. Developing or acquiring new technologies and incorporating them into our products and services may require significant investment, take considerable time, and ultimately may not be successful. We cannot predict which technological developments or innovations will become widely adopted or how those technologies may be regulated. We also may not be able to effectively market new technology-driven products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations.

We are subject to extensive regulation, supervision, and legislation that govern almost all aspects of our operations. Intended to protect customers, depositors, and the DIF, these laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, require monitoring and reporting of suspicious activity and of customers who are perceived to present a heightened risk of money laundering or other illegal activity, limit the dividends or distributions that WAB can pay to WAL or that we can pay to our stockholders, restrict the ability of affiliates to guarantee our debt, impose certain specific accounting requirements on us that may be more restrictive and result in greater or earlier charges to earnings or reductions in our capital than prescribed by GAAP, among other things. Our mortgage warehousebanking lendingbusiness channel operations subject us to regulations that have grown in complexity in recent years and may continue to do so as consumer protection measures change. Our mortgage warehousebanking lendingbusiness channel operations are subject to federal, state and local laws, regulations and judicial and administrative decisions, including those designed to discourage predatory lending and regulate collections and servicing practices with respect to mortgage loans.

We are also subject to changes in federal and state law, as well as regulations and governmental policies, income tax laws, and accounting principles. Regulations affecting banks and other financial institutions are under continuous review and frequently change, and the ultimate effect of such changes cannot be predicted. RegulationsRegulations, laws and lawsinterpretations, as well as the supervision, examination and enforcement priorities and policies of the bank regulators, may be modified at any time, and new legislationlegislation, regulations and interpretations may be enacted that will affect us, WAB, and our other subsidiaries.subsidiaries, including as a result of changes in political leadership and leadership and senior staffs of the bank regulators. Any such changes, as well as changes in federal and state law, as well aslaws, regulations and governmental policies, income tax laws, and accounting principles, could affect us in substantial and unpredictable ways, including ways that may adversely affect our business, financial condition, or results of operations. Failure to appropriately comply with any such laws, regulationsregulations, policies or principles or an alleged failure to comply, even if we acted in good faith or the alleged failure reflects a difference in interpretation, could result in sanctions by regulatory agencies, civil moneymonetary penalties or damage to our reputation, all of which could adversely affect our business, financial condition, or results of operations.

If we were unable to comply with regulatory directives in the future, or if we were unable to comply with the terms of any future supervisory requirements to which we may become subject, then we could become subject to a variety of supervisory actions and orders, including cease and desist orders, prompt corrective actions, MOUs, and/or other regulatory enforcement actions. If our regulators were to take such supervisory actions, then we could, among other things, become subject to restrictions on our ability to enter into acquisitions and develop any new business, as well as restrictions on our existing business. We could also could be required to raise additional capital, dispose of certain assets and liabilities, or both, within a prescribed period of time. Failure to implement the measures in the time frames provided, or at all, could result in additional orders or penalties from federal and state regulators, which could result in one or more of the remedial actions described above. In the event we were ultimately unable to comply with the terms of a regulatory enforcement action, we could fail and be placed into receivership by the FDIC or the chartering agency. The terms of any such supervisory action and the consequences associated with any failure to comply therewith could have a material negative effect on our business, operating flexibility, and financial condition.

Current and proposed regulationsRegulations addressing consumer privacy and data use and security could increase our costs and impact our reputation.

•volatility and economic disruption in the banking industry, such as that experienced in 2023,industry or the economy more broadly;

•changes in national and global financial markets and economies and general market conditions, such as interest or foreign exchange rates, inflation, stock, commodity or real estate valuations or volatility and other global, geopolitical, regulatory or judicial events that effect the financial markets and economy including international tensions, pandemics, terrorism and war, including the military conflicts in Ukraine and the Middle East;

We have paid regular quarterly dividends on our common stock since the third quarter of 2019, subject to quarterly declarations by the BOD, and have also paid dividends on our depositary shares representing our preferred stock since the issuance of such securities in the third quarter of 2021. WeFrom have previously adopted common stock repurchase programs, pursuant to whichtime-to-time, we have also repurchased shares of our outstanding common stock,stock pursuant to common stock repurchase programs. In September 2025, the mostBOD recentadopted a common stock repurchase program, pursuant to which we remain authorized to repurchase up to $231.9 million of whichshares expiredof inour common stock as of December 2020.31, 2025.

Our dividend payments and/or stock repurchase practices may change from time-to-time, and no assurance can be provided that we will continue to declare dividends in any particular amounts or at all, or institutecontinue ato newrepurchase shares of our outstanding common stock pursuant to our stock repurchase program. Dividends and/or stock repurchases are subject to capital availability and the discretion of our BOD, which must evaluate, among other things, whether cash dividends and/or stock repurchases are in the best interest of our stockholders and are in compliance with all applicable laws and any agreements containing provisions that limit our ability to declare and pay cash dividends and/or repurchase stock. Furthermore, our outstanding Series A preferred stock is senior to our common stock and could adversely affect our ability to declare or pay dividends or distributions on common stock. Under the terms of the Series A preferred stock, we are prohibited from paying dividends on our common stock unless all dividends for the latest dividend period on all outstanding shares of Series A preferred stock have been declared and paid in full or declared and a sum sufficient for the payment of those dividends has been set aside. A reduction in or elimination of our dividend payments or dividend program could have a negative effect on our stock price.

We may from time to time issue debt securities, borrow money through other means, or issue preferred stock. We may also borrow money from the FRB, the FHLB, other financial institutions, and other lenders. At December 31, 2024,2025, we had outstanding subordinated debt, senior secured and unsecured debt, and short-term borrowings. We also have outstanding depositary shares representing Series A preferred stock, which is senior to our common stock. BW has outstanding preferred stock as well, which is pari passu with our Series A preferred stock and is conditionally exchangeable into preferred stock of WAB upon receipt of a directive from an appropriate federal regulatory authority upon the occurrence of certain specified exchange events. All of these securities or borrowings have priority over our common stock in a liquidation, which could affect the market price of our stock.

Our BOD is authorized to issue one or more classes or series of preferred stock from time to time without any action on the part of the stockholders. Our BOD also has the power, without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights, and preferences over our common stock with respect to dividends or upon our dissolution, winding-up, and liquidation and other terms. If we or any of our subsidiaries issue additional preferred stock in the future that has a preference over our common stock, with respect to the payment of dividends or upon liquidation, dissolution, or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock and/or the rights of holders of our common stock, the market price of our common stock could be adversely affected.

MarketRecent Developments

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 30%27% and 33%30% of total loans at December 31, 20242025 and 2023,2024, respectively. Approximately 14% and 16% of CRE loans, excluding construction and land loans, were owner occupied at December 31, 2025 and less2024, thanrespectively, 5%and 4% were non-owner occupied office loans at both December 31, 20242025 and 2023.2024. AsIn elevatedresponse focusto onchanging theconditions evolving industry dynamics facingin the CRE market have emerged over the past year,market, the Company has been proactive in establishing enhanced monitoring policies and procedures as it relates to its CRE loans and has undertaken actions to limit the growth of its CRE portfolio, as further discussed in “Item 1. Business, Lending Activities – Asset Quality” of this Form 10-K.portfolio. During the year ended December 31, 2024,2025, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $56.8$55.5 million, which primarily related to office properties. As the Company is focused on moving nonperforming loans through its standard credit resolution process, the Company took possession of five CRE office properties during the year ended December 31, 2025, which drove the net increase in other assets acquired through foreclosure from December 31, 2024. While the Company believes its increased monitoring efforts to provide earlier identification of potential stressed loans and proactive engagement with borrowers has helped the Company assess its credit related exposure related to this portfolio segment and establish adequate reserve levels,levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

WAL is a bank holding company headquartered in Phoenix, Arizona, incorporated under the laws of the state of Delaware. WAL provides a full spectrum of customized loan, deposit and treasury management capabilities, including funds transfer and other digital payment offerings, through its wholly-owned banking subsidiary, WAB,WAB. togetherEffective withas of October 4, 2025, the Company completed its bankingbrand divisionsunity initiative, consolidating its legacy division bank brands: ABA, BON, FIB, Bridge, and TPB.TPB, under a single unified name, Western Alliance Bank.

The Company also providesserves anbusiness arraycustomers through a national platform of specialized financial services across the country,services, including mortgage banking services through AmeriHome, treasury management services to the homeowner's association sector,AmeriHome and digital payment services for the class action legal industry.

•Net income available to common stockholders of $774.9$956.2 million forand 2024,diluted earnings per share of $8.73, an increase from $709.6$774.9 million and from $7.09 per share, respectively, for 20232024

•PPNR1 increased $140.9$294.2 million to $1.1$1.4 billion, compared to $996.2$1.1 millionbillion in 20232024

•Stockholders'Total equity of $6.7$7.9 billion, an increase of $629$1.2 millionbillion from December 31, 20232024

•Tangible bookBook value per share,common netshare of tax1, of $52.27,$67.20, an increase of 11.9%15.4% from $46.72$58.24 at December 31, 20232024

For all banks and bank holding companies, asset quality plays a significant role in the overall financial condition of the institution and results of operations. The Company measures asset quality in terms of nonaccrual loans as a percentage of gross loans HFI and net charge-offs as a percentage of average loans.loans HFI. Net charge-offs are calculated as the difference between charged-off loans and recovery payments received on previously charged-off loans. The following table summarizes the Company's key asset quality metrics for loans HFI:

Loans HFI increased by $3.4$5.0 billion, or 6.7%,9.3%, to $58.7 billion as of December 31, 2025, compared to $53.7 billion as of December 31, 2024,2024. comparedBy toloan $50.3type, the increase in loans HFI from December 31, 2024 was driven by increases in commercial and industrial, commercial real estate, and residential loans of $4.8 billion, $330 million, and $326 million, respectively, partially offset by a decrease of $424 million in construction and land development loans. In addition, loans HFS increased $1.2 billion from $2.3 billion as of December 31, 2023.2024 Byprimarily loandue type,to commercial and industrial loans and CRE, non-owner occupied loans increased $4.0 billion and $218 million, respectively, from December 31, 2023. Thisan increase in loansgovernment-insured HFIor was partially offset by decreases in residential real estateguaranteed and constructionagency-conforming and land development loans of $452 million and $410 million, respectively.loans.

Total deposits increased $11.0$10.8 billion, or 19.9%,16.3%, to $77.2 billion as of December 31, 2025 from $66.3 billion as of December 31, 2024 from $55.3 billion as of December 31, 2023.2024. By type, the increase in deposits from December 31, 20232024 was driven by increases of $6.4$5.5 billion, $3.4 billion, and $2.5 billion in non-interest bearing, savings and money market accountsmarket, and $4.3interest billionbearing demand deposits, respectively, partially offset by a decrease of $605 million in non-interestcertificates bearingof deposits.deposit.

The following tables present financial measures related to tangible common equity. Tangible common equity represents total stockholders' equity reduced by goodwill and intangible assetsassets, preferred stock, and preferrednoncontrolling stock.interest in subsidiary. Management believes tangible common equity financial measures are useful in evaluating the Company's capital strength, financial condition, and ability to manage potential losses.

The following table presents certain financial measures related to regulatory capital under Basel III, which includes CET1 and total capital. The FRB and other banking regulators use CET1 and total capital as a basis for assessing a bank's capital adequacy; therefore, management believes it is useful to assess financial condition and capital adequacy using this same basis. Specifically, the CET1, tier 1 capital, and total capital ratioratios takestake into consideration the risk levels of assets and off-balance sheet financial instruments. In addition, management believes the classified assets to CET1 plus allowance measure is an important regulatory metric for assessing asset quality.

As permitted by the regulatory capital rules, the Company elected the CECL transition option that delayed the estimated impact on regulatory capital resulting from the adoption of CECL over a five-year transition period ending December 31, 2024. Accordingly, capital ratios and amounts for 2024 include a 25% capital benefit that resulted from the increased ACL related to the adoption of ASC 326,326. compared to a 50%This capital benefit forwas 2023.fully phased out beginning in 2025.

(21)IncludedInterest inincome theincludes yielda computationreduction arefor netearnings loancredits feestotaling of $109.0$240.9 million and $131.2$239.8 million for the yearyears ended December 31, 20242025 and 2023,2024, respectively.

(34)Includes non-accrualnonaccrual loans.

The Company's primary source of revenue is interest income. For the year ended December 31, 2024,2025, interest income wastotaled $4.5$4.7 billion, an increase of $505.8$151.8 million, or 12.5%,3.3%, compared to $4.0$4.5 billion for the year ended December 31, 2023.2024. This increasegrowth was primarily theattributable resultto increases of a $243.5$111.8 million increase from investment securities dueand to$76.5 million from HFS loans, driven by higher average balances of $2.7 billion and $1.3 billion, respectively. These increases were partially offset by a $5.3$25.8 billionmillion increasedecline in averageHFI investmentloan securitiesinterest balancesincome, andresulting from a $216.4lower millionrate increaseenvironment fromthat HFIwas loansnot duefully tomitigated by a $2.6$3.7 billion increase in average HFI loan balances. AverageThe average yield on interest earning assets decreased to 6.17%5.72% for the year ended December 31, 2024,2025, compared to 6.22%6.17% for 2023,2024, which was primarily the result of a lower yields on investment securities.loans.

For the year ended December 31, 2024,2025, interest expense wastotaled $1.9$1.8 billion, a decrease of $94.1 million, or 4.9%, compared to $1.7$1.9 billion for the year ended December 31, 2023.2024. Interest expense on deposits increaseddeclined $457.6by $62.4 million for the same period due to an $8.4 billion increase in average interest-bearing deposits, coupled with increasing rates. Deposit rates increased year-over-year due to increasesreductions in the federal funds target rate throughoutin 2023late that2025, which were not fully offset by reductionsa concentrated$5.2 billion increase in theaverage latterinterest-bearing part of 2024.deposits. Interest expense on short-term borrowings decreased $218.3by $95.9 million for the year ended December 31, 20242025 compared to the same period in 20232024 asprimarily due to a result of a decrease of $3.9$1.2 billion reduction in the average balance.balance, while interest expense on long-term borrowings increased by $69.4 million, reflecting a $1.6 billion increase in the average balance over the same period.

For the year ended December 31, 2024,2025, net interest income wastotaled $2.6$2.9 billion, an increase of $245.9 million, or 9.4%, compared to $2.3$2.6 billion for the year ended December 31, 2023.2024. TheThis increasegrowth in net interest income was drivenprimarily byattributable to an $8.9$8.5 billion increase in average interest earning assets, which was partially offset by ana $5.5 billion increase of $4.5 billion in average interest-bearing liabilities. The decrease in netNet interest margin ofdeclined 5by 7 basis points comparedfrom to2024, 2023 is the result of higher funding costs on deposits and borrowings, coupled withreflecting lower asset yields duringin 2024.2025, which were partially mitigated by reduced funding costs associated with deposits and borrowings.

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the yearyears ended December 31, 20242025 and 2023,2024, the Company recorded a provision for credit losses of $145.9$224.1 million and $62.6$145.9 million, respectively. The increase in the provision for credit losses from the year ended December 31, 20232024 is primarily reflective of net charge-offs of $93.3$131.1 million, loan growth,growth of $5.0 billion, establishment of a $29.6 million reserve related to the Cantor Group V loan, and anqualitative incremental ACL build for CRE non-owner occupied loans resulting from current market conditions.overlays.

ForThe Company's effective tax rates for the years ended December 31, 20242025 and 2023,2024 thewere Company's effective tax rate was 20.5%17.9% and 22.6%,20.5%, respectively. The decrease in the effective tax rate for the year ended December 31, 20242025 compared to the same period in 20232024 was primarily dueattributable to increases inhigher investment tax credit benefits and tax-exempta income.reduction in nondeductible insurance premium expenses.

The Company's reportableoperating segments are aggregated with a focus on products and services offered and consist of three reportable segments:

Total assets increased to $92.8 billion at December 31, 2025, an increase of $11.8 billion, or 14.6%, from $80.9 billion at December 31, 20242024. fromThis $70.9 billion at December 31, 2023. The increase in total assets of $10.1 billion, or 14.2%,growth was primarily driven primarily by anhigher increasedeposit in deposits,levels, which drovesupported loan growth of $3.4$5.0 billion and contributed to increasesa $5.3 billion increase in cash and cash equivalents of $2.5 billion and investment securitiessecurities, of $2.4 billion asreflecting the CompanyCompany's hasstrategic focusedfocus on increasingexpanding its holdings of high quality liquid assets. Loans HFI increasedgrew by $3.4$5.0 billion, or 6.7%,9.3%, to $58.7 billion as of December 31, 2025, compared to $53.7 billion as of December 31, 2024, compared to $50.3 billion as of December 31, 2023.2024. By loan type, commercial and industrialindustrial, commercial real estate, and CRE, non-owner occupiedresidential loans increased $4.0$4.8 billionbillion, $330 million, and $218$326 million, respectively, from December 31, 2023,2024, partially offset by decreasesa $424 million decrease in residential real estate and construction and land development loans of $452 million and $410 million, respectively, during the same period. In addition, loans HFS increasedrose $884by million$1.2 billion to $3.5 billion at December 31, 2024,2025, upprimarily fromattributable $1.4to billionan asincrease ofin Decembergovernment-insured 31,or 2023.guaranteed and agency-conforming loans.

Total liabilities increased $9.4$10.6 billion, or 14.6%,14.3%, to $74.2$84.8 billion at December 31, 2024,2025, compared to $64.8 billion at December 31, 2023. The increase in liabilities is due primarily to an increase in total deposits. Total deposits increased $11.0 billion, or 19.9%, to $66.3$74.2 billion at December 31, 2024. The increase inwas depositslargely attributable to higher deposit levels, which increased $10.8 billion, or 16.3%, to $77.2 billion at December 31, 2025. Deposit growth from December 31, 20232024 was driven by increases in non-interest bearing demand deposits of $5.5 billion, savings and money market accounts of $6.4$3.4 billionbillion, and non-interest-bearinginterest-bearing demand deposits of $4.3$2.5 billion.billion, These increases werepartially offset in part by a decrease of $605 million in othercertificates of deposit. Other borrowings ofdecreased $1.7by billion$333 million due to a decreasereduction in short-termlong-term FHLB borrowings, though this was partially offset by an increase in long-termshort-term FHLB borrowings.

Total stockholders’ equity increased by $629$1.2 million,billion, or 10.3%,18.5%, to $7.9 billion at December 31, 2025, compared to $6.7 billion at December 31, 2024, compared to $6.1 billion at December 31, 2023.2024. The increase in stockholders'total equity iswas primarily adriven functionby net income and the issuance of preferred shares through the Company's REIT, which generated net income,proceeds of $293 million. These increases were partially offset by dividends to common and preferred stockholders.paid.

The carrying value of debt securities increased $2.4$5.4 billion, or 19.1%,35.9%, from December 31, 2023.2024. The increase in investment securities is largely attributable to purchases of CLOs, U.S. treasury securities, and Residential MBS issued by GSEs and GNMA, partially offset by sales of CLOs. These actions were part of the Company's effortsmade to shiftcapitalize itson higher yields from investment grade securities, while also maintaining a balanced portfolio mix towardof high quality liquid assets.

The Company does not hold any subprime MBS in its investment portfolio. Approximately 83%86% of its MBS are GSE or GNMA issued. The MBS that are not GSE issued consist primarily of investment grade securities, including $921$1.0 millionbillion rated AAA and $26 million rated AA.

Gross unrealized losses on the Company's AFS securities at December 31, 20242025 relate primarily to changes in interest rates and other market conditions not considered to be credit-related issues. The Company has reviewed its securities on which there is an unrealized loss in accordance with its ACL policy described in "Note 1. Summary of Significant Accounting Policies" in Item 8 of this Form 10-K. Based on the analysis performed, management determined anno ACL of $0.4 million on the Company's AFS securities was required at December 31, 2024.2025.

The credit loss model applicable to HTM securities requires recognition of lifetime expected credit losses through an allowance account at the time the security is purchased. For the year ended December 31, 2024,2025, the Company recognized a release of provision for credit losses on HTM securities of $8.6$3.5 million, compared to $2.6provision expense of $8.6 million for the same period in 2023,2024, resulting in a total allowance of $16.4$12.9 million and $7.8$16.4 million as of December 31, 20242025 and 2023,2024, respectively.

The Company purchases and originates residential mortgage loans that are held for sale or securitization primarily through its AmeriHome mortgage banking business channel that are held for sale or securitization.channel. At December 31, 2024,2025, the loans HFS balance totaled $2.3$3.5 billion, compared to $1.4$2.3 billion at December 31, 2023.2024. The increase in loans HFS from December 31, 20232024 relates primarily to agencygovernment-insured conformingor guaranteed and agency-conforming loans.

As of December 31, 20242025 and 2023,2024, 14% and 16% of the Company's CRE loans, excluding construction and land loans, were owner occupied, respectively, with substantially all of these loans secured by first liens and had an initial loan-to-value ratio of generally not more than 75%.

The following tables present the amortized cost basis of loans HFI that were modified during the period by loan portfolio segment:

The performance of these modified loans is monitored for 12 months following the modification. As of December 31, 2025, 2024, and 2023 modified loans of $114 million, $128 millionmillion, and $95 million, respectively, were current with contractual payments and $89 million, $169 millionmillion, and $111 million, respectively, were on nonaccrual status. As of December 31, 2023, modified loans of $95 million were current with contractual payments and $111 million were on nonaccrual status.

In the normal course of business, the Company also modifies EBO loans, which are delinquent FHA, VA, or USDA insured or guaranteed loans repurchased under the terms of the GNMA MBS program and can be repooled or resold when loans are brought current either through the borrower's reperformance or through successful completion of a loanloss modification.mitigation retention solution. During the years ended December 31, 20242025, 2024, and 2023, the Company completed modifications of EBO loans with an amortized cost of $532 million, $366 millionmillion, and $225 million, respectively. These modifications wereconsisted largelyof term extensions, payment delaysdelays, and terminterest extensions.rate reductions. Certain of these loans were repooled or resold after modification and are no longer included in the pool of loan modifications being monitored for future performance. As of December 31, 2025, modified EBO loans consisted of $27 million in loans that were current to 89 days delinquent and $123 million in loans 90 days or more delinquent. As of December 31, 2024, modified EBO loans consisted of $29 million in loans that were current to 89 days delinquent and $11 million in loans 90 days or more delinquent. As of December 31, 2023, modified EBO loans consisted of $26 million in loans that were current to 89 days delinquent and $12 million in loans 90 days or more delinquent.

In addition to the ACL on funded loans HFI, the Company maintains a separate ACL related to off-balance sheet credit exposures, including unfunded loan commitments. This allowance balance totaled $39.5$49.6 million and $31.6$39.5 million at December 31, 20242025 and 2023,2024, respectively, and is included in Other liabilities on the Consolidated Balance Sheet. The increase in the ACL related to off-balance sheet credit exposures is due to higher unfunded loan commitments at December 31, 2024 compared to December 31, 2023.

The Company classifies loans consistent with federal banking regulations using a nine category grading system. These loan grades are described in further detail in "Item 1. Business” of this Form 10-K. The following tabletables presentspresent information regarding potential and actual problem loans, consisting of loans graded as Special Mention, Substandard, Doubtful, and Loss, but whichthat are still performing and are not individually evaluated for credit losses:

Certain statements contained in this Quarterly Report on Form 10-Q for the quarter ended MarchJune 31,30, 2026 are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including without limitation, statements regarding our expectations with respect to our business, financial and operating results, including our deposits,deposits and deposit optimization strategy, liquidity and funding, changes in economic conditions and the related impact on the Company's business, and statements that are related to or are dependent on estimates or assumptions relating to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts.

The forward-looking statements contained in this Form 10-Q reflect the Company's current views about future events and financial performance and are subject to certain risks, uncertainties, assumptions, and changes in circumstances that may cause the Company's actual results to differ significantly from historical results and those expressed in any forward-looking statement. Risks and uncertainties include those set forth in the Company's filings with the SEC and the following factors that could cause actual results to differ materially from historical or expected results: 1) adverse financial market and economic conditions, including the effects of inflation and any recession in the United States, adverse developments in the financial services industry generally, U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers, and any related impact on customer behavior, the potential impact on borrowers of supply chain disruptions and the economic and market impacts of the geopolitical conflicts such as the conflicts in Ukraine and the Middle East; 2) changes in interest rates and increased rate competition; 3) the discontinuation of or substantial changes to interest rate benchmarks utilized in our lending, borrowing and hedging activities; 4) exposure of financial instruments to certain market risks that may increase the volatility of earnings and AOCI; 5) the inherent risk associated with accounting estimates, including the impact to the allowance, provision for credit losses, and capital levels; 6) exposure to natural and man-made disasters in markets where we operate and the impact of climate change and sustainability practices on us and our customers; 7) the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; 8) higher defaults on our loan portfolio than we expect; 9) increased foreclosures and ownership of real property; 10) changes in management's estimate of the adequacy of the allowance for credit losses; 11) dependency on real estate and events that negatively impact the real estate market; 12) concentrations in certain business lines or product types within our loan portfolio; 13) residual risk retained by us on reference pools covered by credit linked notes; 14) exposures related to the properties to which we acquire title; 15) ability to compete in a highly competitive market; 16) expansion strategies through acquisitions or implementation of new lines of business or new products and services that may not be successful and supervisory actions by regulatory agencies which may limit our ability to pursue certain growth opportunities; 17) uncertainty associated with digital payment initiatives; 18) ability to recruit and retain qualified employees and implement adequate succession planning to mitigate the loss of key members of our senior management team; 19) ability to meet capital adequacy and liquidity requirements and the sufficiency of liquidity; 20) dependence on low-cost deposits; 21) risks related to representations and warranties made on third-party loan sales; 22) ability to borrow from the FHLB or the FRB; 23) a change in our creditworthiness; 24) information security breaches; 25) reliance on third parties to provide key components of our infrastructure; 26) perpetration of fraud; 27) ability to implement and improve our controls and processes to keep pace with growth; 28) risk of operating in a highly regulated industry and our ability to remain in compliance; 29) ability to adapt to technological change; 30) technological risks and developments and cyber threats, attacks or events; 31) emerging external focus among regulators and other officials related to risks in connection with the development and use of artificial intelligence; 32) failure to comply with state and federal banking agency laws and regulations; 33) results of any tax audit findings, challenges to our tax positions, or adverse changes or interpretations of tax laws; 34) risks related to ownership and price of our preferred and common stock; 35) ability to continue to declare quarterly dividends; 36) additional regulatory requirements resulting from our continued growth; 37) management's estimates and projections of interest rates and interest rate policies; 38) the execution of our business plan; 39) the outcome of legal proceedings regardingwith the Cantor Group V, LLC loan and the Leucadia Asset Management LLC loan,borrowers, the amount of funds and/or collateral that may be available for repayment of such loans, and any adverse economic or other events impacting the collateral, borrower or guarantors with respect to such loans.

The Company's loan portfolio includes significant credit exposure to the CRE market, with CRE related loans comprising approximately 26% and 27% of total loans at MarchJune 31,30, 2026 and December 31, 2025.2025, respectively. Approximately 13% and 14% of CRE loans, excluding construction and land loans, were owner occupied,occupied at June 30, 2026 and lessDecember 31, 2025, respectively. Less than 4% of HFI loans were non-owner occupied office loans at MarchJune 31,30, 2026 and December 31, 2025. During the three and six months ended MarchJune 31,30, 2026, the Company recognized gross charge-offs on CRE non-owner occupied loans totaling $27.7$32.0 million and $59.7 million, which primarily related to office properties.respectively. As the Company continues to focus on moving nonperforming loans through its standard credit resolution process, the Company took possession of one CRE office property during the threesix months ended MarchJune 31,30, 2026. While the Company believes its reserve levels are adequate, CRE market conditions may worsen, which could result in further deterioration of asset quality in this portfolio.

In August 2025, the Bank initiated a lawsuit in Los Angeles Superior Court against Cantor Group V, LLC and certain individual guarantors in connection with the Bank's note finance revolving credit facility to Cantor Group V, LLC, alleging fraud by the borrower for failing to provide collateral loans in the first position, seeking appointment of a receiver and recovery of funds, and seeking other forms of relief and damages related to claims against the borrower. In addition, under certain circumstances such as fraud, the Bank holds both a limited guaranty and full guaranty from two ultra-high net worth individuals. As of September 30, 2025, the Bank moved the $98.5 million facility to nonaccrual status and established a specific allowance of $29.6 million for this loan. During the three months ended March 31, 2026, management reevaluated the existing collateral based on updated “as-is” appraisals and due to the expected duration of the resolution process, recognized a charge-off of $26.1 million from the previously established reserve. ANo specificadditional allowancecharge-offs ofwere $3.5 million remains on this loan as of March 31, 2026. To further protect the Company's collateral position, management completed the purchase of a $13 million non-performing senior lien loanrecognized during the three months ended MarchJune 31,30, 2026 and plans to acquire additional non-performing senior lien loans as appropriate.2026.

In MarchMay 2026, the Bank and its collateral agent filed aan amended complaint in New York Supreme Court against Jefferies Financial Group, Leucadia Asset Management LLC, and affiliates (collectively, the "Defendants") alleging breach of contractcontract, fraud, negligence, promissory estoppel, and fraudulentunjust inducementenrichment in connection with a trade finance loan extended by the Bank, seeking declaratory and injunctive relief for the recovery of funds, and other forms of relief and damages related to claims against the Defendants. This loan was collateralizedsecured by accounts receivable the Bank's borrower purchased from First Brands Group, which filed for bankruptcy in September 2025. The loan entered default status following the identification of servicing failures, including lapses in UCC filings, and in October 2025, the Bank entered into a forbearance agreement pursuant to which the Defendants agreed to cause full repayment of the loan by March 31, 2026. Defendants then made payments pursuant to the forbearance agreement from October 2025 to January 15, 2026, when the Bank received the most recent payment of $42.1 million.2026. In late February 2026, after the Company was notified the remaining principal balance of the loan would not be repaid as agreed and with the Defendants' failure to make the payment due onthat February 27, 2026,month, the Company recorded a charge‑off of $126.4 million for the remaining loan balance. The Company continues to pursue recovery through litigation and other available remedies. Any future recoveries will be recognized when realized or realizable.

Financial Results Highlights for the FirstSecond Quarter of 2026

•Net income available to common stockholders of $178.9 million (or $241.0$258.5 million, as adjusted1), compared to $195.9$227.2 million for the firstsecond quarter 2025

•Diluted earnings per share of $1.65 (or $2.22, as adjusted1),$2.36, compared to $1.79$2.07 per share for the firstsecond quarter 2025

•Net revenue of $1.0 billion (or $968.4$995.7 million, as adjusted1), compared to $778.0$845.9 million for the firstsecond quarter 2025, with non-interest expense of $574.4$583.3 million, compared to $500.4$514.7 million for the firstsecond quarter 2025

•PPNRPPNR1 of $444.5 million (or $394.0$412.4 million, as adjusted1), up 60.1%24.5% from $277.6$331.2 million in the firstsecond quarter 202512025

•Total loans HFI of $59.1$60.9 billion, up $465$2.3 million,billion, or 0.8%,3.9%, from December 31, 2025

•Total equity of $7.9$8.1 billion, aan decreaseincrease of $38$189 million, or 0.5%,2.4%, from December 31, 2025

•Nonperforming loans to funded HFI loans decreasedincreased to 0.83%,0.92%, compared to 0.85% at December 31, 2025

•Nonperforming assets (nonaccrual loans and repossessed assets) decreasedincreased to 0.62%0.70% of total assets, compared to 0.69% at December 31, 2025

•Annualized net loan charge-offs to average loans outstanding of 1.45% (or 0.39%, as adjusted1),0.37%, compared to 0.20%0.22% for the firstsecond quarter 2025

•Net interest margin of 3.54%,3.53%, increasedflat from 3.47% in the firstsecond quarter 2025

•Tangible common equity ratioratio1 of 6.8%,7.0%, compared to 7.3% at December 31, 202512025

•Book value per common share of $67.03,$69.11, aan decreaseincrease of $0.17,$1.91, or 0.3%,2.8%, from $67.20 at December 31, 2025

•Tangible book value per share, net of tax,tax1, of $61.14,$63.24, aan decreaseincrease of $0.15,$1.95, or 0.2%,3.2%, from $61.29 at December 31, 202512025

•Efficiency ratio1 of 55.8%58.0% in the firstsecond quarter 2026, compared to 63.5%60.1% in the firstsecond quarter 2025

•Efficiency ratio, adjusted for deposit costs1 of 47.5%,48.9%, compared to 55.8%51.8% in the firstsecond quarter 2025 The impact to the Company from these items, and others of both a positive and negative nature, are discussed in more detail below as they pertain to the Company’s overall comparative performance for the three and six months ended MarchJune 31,30, 2026.

(21)Annualized on an actual/actual basis for the three months ended MarchJune 31,30, 2026. Actual year-to-date for the year ended December 31, 2025.

Total assets increased to $98.9$98.7 billion at MarchJune 31,30, 2026, an increase of $6.1$5.9 billion, or 6.6%,6.4%, from $92.8 billion at December 31, 2025. Higher deposit levels supported an increase in cash of $5.0$2.3 billion, and also funded HFI and HFS loan growth of $465$2.3 millionbillion and $438$849 million, respectively.

Loans HFI increased $465$2.3 million,billion, or 0.8%,3.9%, to $59.1$60.9 billion as of MarchJune 31,30, 2026, compared to $58.7 billion as of December 31, 2025. By loan type, commercial and industrialindustrial, residential, and residentialconstruction and land development loans increased $295$1.8 millionbillion, $396 million, and $113$186 million, respectively, from December 31, 2025.2025, partially offset by a decrease in commercial real estate owner occupied loans of $105 million. In addition, loans HFS increased $438$849 million, or 12.5%,24.3%, from $3.5 billion as of December 31, 2025 primarily due to an increase in government-insured or guaranteed and agency-conforming mortgage loans.

Total deposits increased $5.6$4.7 billion, or 7.2%,6.1%, to $82.7$81.9 billion as of MarchJune 31,30, 2026 from $77.2 billion as of December 31, 2025. By type, the increase in deposits from December 31, 2025 was driven by increases of $3.7$3.5 billion, $969$843 million, $300 million, and $828$105 million in non-interest bearing deposits, interest bearing demand deposits, and savings and money market accounts, and certificates of deposit, respectively.

The adjusted non-GAAP revenue, earnings and return metrics presented below for the threesix months ended MarchJune 31,30, 2026 excludeexclude, as applicable, the impact to provision for credit losses related to the charge-off of charging off the remaining balance of the Leucadia Asset Management LLC loan asbalance well asand gains fromon investment security sales ofexecuted investmentduring securitiesthe thatthree weremonth executedended March 31, 2026 as part of the Company's mitigation strategy, as applicable. In addition, net charge-offs for the three months ended March 31, 2026 have been adjusted to exclude the impact of fraud related charge-offs associated with the Leucadia Asset Management LLC and Cantor Group V, LLC loans.strategy.

(1)Yields on loans and securities have been adjusted to a TEB. The taxable-equivalent adjustment was $10.1 million and $10.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

(2)Interest income includes a reduction for earnings credits totaling $48.7$52.5 million and $58.1$61.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

(3)Included in the yield computation are net loan fees of $23.9 million and $23.8$25.5 million for each of the three months ended MarchJune 31,30, 2026 and 2025, respectively.2025.

The Company's primary source of revenue is interest income. For the three months ended MarchJune 31,30, 2026, interest income totaled $1.2 billion, an increase of $92.6$77.5 million, or 8.5%,6.7%, compared tofrom the threesame monthsperiod ended March 31,in 2025. This growth was primarily the result of higher interest income from investment securities and loans HFI, which increased by $51.9$43.9 million and $21.1$16.3 million, respectively, driven by a $4.7$4.5 billion increase in the average balances for each of these asset categories.

For the three months ended MarchJune 31,30, 2026, interest expense totaled $421.9$435.0 million, a decrease of $23.1$21.8 million, or 5.2%,4.8%, compared to $445.0$456.8 million for the threesame monthsperiod ended March 31,in 2025. The declinedecrease was driven by reductions inlower interest expense on long-term debt and depositsdeposits, ofwhich $18.0declined $18.3 million and $17.6$7.3 million, respectively. The decrease in interest expense on long-term debt resulted from a $1.3 billion reduction in the average balance of long-term debt, while lower rates led todrove the decreasedecline in interest expense on deposits. These decreases were partially offset by an increase in interest expense on short-termqualifying borrowingsdebt of $8.7$5.6 million, resulting from a higher$245 million increase in the average balance ofand $1.2higher billion.interest rates.

For the three months ended MarchJune 31,30, 2026, net interest income totaled $766.3$796.9 million, an increase of $115.7$99.3 million, or 17.8%,14.2%, compared to $650.6$697.6 million for the threesame monthsperiod ended March 31,in 2025. The increase in net interest income was driven by an increase in average interest earning assets of $11.8$11.1 billion and lower ratesinterest onbearing deposits,deposit rates, partially offset by lower yields on interest earning assets and an increase inhigher average interest bearing liabilities.liability balances. Net interest margin improvedwas 7unchanged basisat points3.53%, toas 3.54%,lower largely reflecting reducedfunding costs onfrom interestthe bearinglower-rate liabilitiesenvironment in a lower rate environment, though partiallywere offset by declining yields on interest earning assets.

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans, unfunded loan commitments, and investment securities. The provision is equal to the amount required to maintain the ACL at a level adequate to absorb estimated lifetime credit losses inherent in the loan and investment securities portfolios based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three and six months ended MarchJune 31,30, 2026, the Company recorded a provision for credit losses of $213.2$80.4 million and $293.6 million, compared to $31.2$39.9 million and $71.1 million for the three and six months ended MarchJune 31,30, 2025. The provision for credit losses for the three and six months ended MarchJune 31,30, 2026 is primarily reflective of loan growth and net loan charge-offs of $208.5$55.0 million.million Thisand $263.5 million, respectively. Charge-offs for the six months ended June 30, 2026 included a charge-off of $126.4 million for the remaining balance of the Leucadia Asset Management LLC loan and a $26.1 million charge-off from the specific reserve previously established on the Cantor Group V, LLC loan.

Total non-interest income for the threesix months ended MarchJune 31,30, 2026 increased by $125.2$175.7 million compared tofrom the same period in 2025. This growth was2025 primarily attributabledue to higher service charges and fees, gain on sales of investment securities, and net gain on mortgage loan origination and salessale activities.activities, and income from equity investments. Service charges and fees rose by $51.3$71.4 million, reflectingdriven by higher commercial banking, disbursementsdisbursements, and unused commitment fees. In addition, gainGain on sales of investment securities increased by$40.0 $48.4million, million as management executedreflecting a series of security sales executed by management during the quarter.first quarter of 2026. Net gain on mortgage loan origination and sale activities wasincreased higher$37.2 bymillion, $23.2as discussed in the preceding paragraph. Income from equity investments increased $27.1 million, which was primarily driven by a loss on a solar investment in the second quarter of 2025 that did not recur and gains on warrant valuations. These increases were partially offset by a similar$30.1 million decrease in net loan servicing revenuerevenue, ofas $23.1discussed million.in the preceding paragraph.

Total non-interest expense for the three months ended MarchJune 31,30, 2026 increased by $74.0$68.6 million compared tofrom the same period in 2025, primarily due to higher deposit costs,costs and salaries and employee benefits, and other non-interest expense.benefits. Deposit costs wereincreased up $26.5$31.8 million attributabledriven by higher average ECR balances, which increased approximately $6.0 billion to increased$31.6 ECR balances.billion. Salaries and employee benefits rose by $23.1$24.4 million, reflecting higher average salaries and headcount. Other non-interest expense grew by $19.4 million, largely driven by increased costs from operating OREO properties and costs to support revenue growth in the Company's disbursements business. These increases were partially offset by a reduction in insurance expense of $13.2 million, due to lower FDIC assessment fees following a decline in brokered deposit levels.

The Company's effective tax rate was 18.2%19.0% and 19.2%18.4% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 18.7% and 18.8% for the six months ended June 30, 2026 and 2025, respectively. The decreaseincrease in the effective tax rate for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 was primarily dueattributable to an increase in pretax income and a decrease in nondeductibleinvestment insurancetax premiumscredits. For the six months ended June 30, 2026 and an2025, increasethe ineffective stocktax compensationrate benefitremained insubstantially 2026.consistent.

Total assets increased $6.1$5.9 billion, or 6.6%,6.4%, to $98.9$98.7 billion at MarchJune 31,30, 2026, compared to $92.8 billion at December 31, 2025. Higher deposit levels supported an increase in cash of $5.0$2.3 billion, and also funded HFI and HFS loan growth. Loans HFI increased $465$2.3 million,billion, or 0.8%,3.9%, to $59.1$60.9 billion as of MarchJune 31,30, 2026, compared to $58.7 billion as of December 31, 2025. By loan type, commercial and industrialindustrial, residential, and residentialconstruction and land development loans increased $295$1.8 millionbillion, $396 million, and $113$186 million, respectively, from December 31, 2025. Loans HFS increased $438$849 million from $3.5 billion as of December 31, 2025 primarily due to an increase in government-insured or guaranteed and agency-conforming mortgage loans.

Total liabilities increased $6.1$5.7 billion to $90.9$90.6 billion at MarchJune 31,30, 2026, compared to $84.8 billion at December 31, 2025 as total deposits increased $5.6$4.7 billion, or 7.2%,6.1%, to $82.7$81.9 billion. By type, the increase in deposits from December 31, 2025 was driven by increases of $3.7$3.5 billion in non-interest bearing deposits, $969$843 million in interest bearing demand deposits, and $828$300 million in savings and money market accounts.accounts, and $105 million in certificates of deposit. Other borrowings increased $370$996 million from December 31, 2025, primarily due to an increase in overnight borrowings.

Total equity of $7.9$8.1 billion at MarchJune 31,30, 2026 decreasedincreased $38$189 million, or 0.5%,2.4%, from December 31, 2025.2025 primarily due to net income of $458.0 million for the six months ended June 30, 2026. This declineincrease was primarilypartially attributableoffset toby unrealized fair value changeslosses on AFS securities, recorded net of tax in OCI, share repurchasesrepurchases, and quarterly dividends to common and preferred stockholders,stockholders totaling $112.5 million, including REIT preferred stockholders. Net income of $189.2 million for the three months ended March 31, 2026 partially offset these decreases.

The decreaseincrease in total debt securities of $46$184 million from December 31, 2025 was primarily driven by net sales of U.S. Treasury securities and commercial MBS during the three months ended March 31, 2026, partially offset by net purchases of CLOs and Residential MBS issued by GSEs and GNMA, partially offset by sales of U.S. Treasury securities and commercial MBS during the six months ended June 30, 2026 as the Company sold securities to secure gains.

The Company purchases and originates residential mortgage loans that are held for sale or securitization through its AmeriHome mortgage banking business channel. As of MarchJune 31,30, 2026, loans HFS totaled $3.9$4.3 billion, an increase of $438$849 million, or 12.5%,24.3%, compared to $3.5 billion at December 31, 2025. The increase in loans HFS from December 31, 2025 primarily related to an increase in government-insured or guaranteed and agency-conforming mortgage loans.

Loans classified as HFI are stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts on acquired and purchased loans, and an ACL. Net deferred loan fees of $124$127 million and $120 million reduced the carrying value of loans as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Net unamortized purchase premiums on acquired and purchased loans of $193$200 million and $186 million increased the carrying value of loans as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

The Company monitors concentrations of lending activities at the product and borrower relationship level. As of MarchJune 31,30, 2026 and December 31, 2025, no borrower relationships at both the commitment and funded loan level exceeded 5% of total loans HFI.

Commercial and industrial loans made up 49% and 48% of total loans HFI as of MarchJune 31,30, 2026 and December 31, 2025.2025, respectively. A subset of commercial and industrial loans consist of loans to NDFIs, which, as defined by regulatory guidance, are entities that provide services similar to traditional banks but do not accept deposits from the general public and are not regulated by Federal banking agencies.

In addition, the Company's loan portfolio includes significant credit exposure to the CRE market as CRE related loans accounted for approximately 26% and 27% of total loans at MarchJune 31,30, 2026 and December 31, 2025.2025, respectively. Non-owner occupied CRE loans are loans where the primary source of repayment is rental income generated from the collateral property. Owner occupied CRE loans are loans secured by owner occupied non-farm nonresidential properties where the primary source of repayment (more than 50%) is the cash flow from the ongoing operations and activities conducted by the borrower who owns the property. These CRE loans are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties.

The following table presents the Company’s CRE non-owner occupied loans by origination year as of MarchJune 31,30, 2026: