Mortgage Banking Activities (Tables)

3 Months Ended

Mar. 31, 2026

Mortgage Banking Activities [Abstract]

Table 6.1 presents

MSRs, including the changes in MSRs measured using the fair value method and the amortization method. MSRs are included in other assets on the consolidated balance sheet.

Table 6.1: Mortgage Servicing Rights


	Quarter ended March 31,
(in millions)		2026		2025
Residential MSRs at fair value, beginning of period		$	5,696	6,844
Originations/purchases		17		25
Sales and other		1		(76)
Net additions (reductions)		18		(51)
Changes in fair value:
Due to valuation inputs or assumptions:
Market interest rates (1)		28		(123)
Servicing and foreclosure costs		(3)		5

Prepayment estimates and other (2)		31		50
Net changes in valuation inputs or assumptions		56		(68)
Changes due to collection/realization of expected cash flows (3)		(162)		(189)
Total changes in fair value		(106)		(257)
Residential MSRs at fair value, end of period		5,608		6,536
Commercial MSRs at amortized cost, end of period (4)		610		644
Total MSRs		$	6,218	7,180

(1)Includes prepayment rate changes due to changes in market interest rates. Residential MSRs are economically hedged with derivative instruments to reduce exposure to changes in market interest rates.

(2)Represents other changes in valuation model inputs or assumptions, including prepayment rate estimation changes that are independent of mortgage interest rate changes.

(3)Represents the reduction in the residential MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.

(4)The estimated fair value of commercial MSRs was $765 million and $780 million at March 31, 2026 and 2025, respectively.

Assumptions and Sensitivity of Residential MSRs

Table 6.2 provides key weighted-average assumptions used in the valuation of residential MSRs and sensitivity of the current fair value of residential MSRs to immediate adverse changes in

those assumptions. See Note 11 (Fair Value Measurements) for additional information on key assumptions for residential MSRs.

Table 6.2: Assumptions and Sensitivity of Residential MSRs


($ in millions, except cost to service amounts)	Mar 31, 2026			Dec 31, 2025
Fair value of interests held	$	5,608		5,696
Expected weighted-average life (in years)	6.3			6.3

Key assumptions:
Prepayment rate assumption (1)	8.1		%	8.0
Impact on fair value from 10% adverse change	$	(159)		(163)
Impact on fair value from 25% adverse change	(383)			(394)

Discount rate assumption	9.3		%	9.1
Impact on fair value from 100 basis point increase	$	(233)		(243)
Impact on fair value from 200 basis point increase	(446)			(465)

Cost to service assumption ($ per loan)	94			96
Impact on fair value from 10% adverse change	(103)			(106)
Impact on fair value from 25% adverse change	(259)			(266)

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

Servicing Portfolio

We present information for our servicing portfolio in Table 6.3 using unpaid principal balance for loans serviced for others. As the servicer of loans for others, we advance certain payments of

principal, interest, taxes, insurance, and default-related expenses. The credit risk related to these advances is limited since the reimbursement is generally senior to cash payments to investors and are generally reimbursed within a short timeframe from cash flows from the trust, government-sponsored enterprise (GSEs), insurer, or borrower. We maintain an allowance for uncollectible amounts for advances on loans serviced for others that may not be reimbursed if the payments were not made in accordance with applicable servicing agreements or if the insurance or servicing agreements contain limitations on reimbursements. We also advance payments of taxes and insurance for loans on our consolidated balance sheet, which are collectible from the borrower and are written-off when deemed uncollectible.

Table 6.3: Servicing Portfolio


	Mar 31, 2026				Dec 31, 2025
	Residential mortgages			Commercial mortgages	Residential mortgages	Commercial mortgages
Loans serviced for others ($ in billions)	$	387		77	397	77




Weighted average loan rate	3.78		%	4.10	3.78	4.11
Servicer advances, net of an allowance for uncollectible amounts ($ in millions)	$	571		28	688	26

Mortgage Banking Noninterest Income

Table 6.4 presents the components of mortgage banking noninterest income.

Table 6.4: Mortgage Banking Noninterest Income


	Quarter ended March 31,
(in millions)		2026		2025

Contractually specified servicing fees, late charges and ancillary fees		$	308	406
Unreimbursed servicing costs (1)		(30)		(27)

Amortization for commercial MSRs (2)		(41)		(49)
Changes due to collection/realization of expected cash flows (3)		(162)		(189)
Net servicing fees		75		141
Changes in fair value of MSRs due to market interest rates		28		(123)
Net derivative gains (losses) from economic hedges (4)		(26)		132
Changes in fair value of MSRs due to other valuation inputs or assumptions (5)		28		55
Market-related valuation changes to residential MSRs, net of hedge results		30		64
Total net servicing income		105		205
Net gains on mortgage loan originations/sales (6)		96		127
Total mortgage banking noninterest income		$	201	332

(1)Includes costs associated with foreclosures, unreimbursed interest advances to investors, other interest costs, and transaction costs associated with sales of residential MSRs.

(2)Estimated future amortization expense for commercial MSRs was $102 million for the remainder of 2026, and $116 million, $105 million, $81 million, $66 million, and $43 million for the years ended December 31, 2027, 2028, 2029, 2030, and 2031, respectively.

(3)Represents the reduction in the cash flows expected to be collected during the period, net of income accreted due to the passage of time, for residential MSRs measured using the fair value method.

(4)Residential MSRs are economically hedged with derivative instruments to reduce exposure to changes in market interest rates. See Note 10 (Derivatives) for additional information.

(5)Refer to the analysis of changes in residential MSRs presented in Table 6.1 in this Note for more detail.

(6)Includes net gains (losses) of $21 million and $(12) million in first quarter 2026 and 2025, respectively, related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments.