The disclosures set forth in this item are qualified by, and should be read in conjunction with, the section captioned “Forward-Looking Statements and Factors that Could Affect Future Results” included in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report, as well as other cautionary statements set forth elsewhere in this report. Refer to the discussion of market risks included in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the 2025 Form 10-K. There has been no material change in the types of market risks we face since December 31, 2025. We utilize an earnings simulation model as the primary quantitative tool to measure interest rate risk associated with changes in market rates. The model quantifies the effects of various interest rate scenarios on projected net interest income and net income over the next 12 months. The model measures the impact on net interest income relative to a flat‑rate base‑case scenario under hypothetical interest rate fluctuations over the same period. These simulations incorporate assumptions regarding balance sheet growth and mix, pricing, and the repricing and maturity characteristics of the existing and projected balance sheet. The impact of interest rate derivatives, such as interest rate swaps, caps, and floors, is also included in the model. Other interest rate‑related risks, such as prepayment, basis, and option risk, are also considered. Our model simulations as of June 30, 2026 indicate that our projected balance sheet is slightly less asset-sensitive compared to our balance sheet as of December 31, 2025. For modeling purposes, as of June 30, 2026, the model simulations projected that 100 and 200 basis point ratable increases in interest rates would result in positive variances in net interest income of 1.3% and 2.4%, respectively, relative to the flat-rate case over the next 12 months, while 100 and 200 basis point ratable decreases in interest rates would result in negative variances in net interest income of 0.9% and 2.8%, respectively, relative to the flat-rate case over the next 12 months. For modeling purposes, as of December 31, 2025, the model simulations projected that 100 and 200 basis point ratable increases in interest rates would result in positive variances in net interest income of 1.5% and 3.0%, respectively, relative to the flat-rate case over the next 12 months, while 100 and 200 basis point ratable decreases in interest rates would result in negative variances in net interest income of 1.3% and 3.4%, respectively, relative to the flat-rate case over the next 12 months. We do not currently pay interest on a significant portion of our commercial demand deposits. Whether interest may be paid on these deposits in the future would depend on a variety of factors, some of which are beyond our control. Our June 30, 2026 and December 31, 2025, model simulations did not assume any payment of interest on commercial demand deposits (those not already receiving an earnings credit). Management believes, based on experience during prior interest rate cycles, that it is not likely we will pay interest on these deposits as rates increase. As of June 30, 2026, the effects of a 200 basis point increase and a 200 basis point decrease in interest rates on our derivative holdings would not result in a material variance in our net interest income. The effects of hypothetical fluctuations in interest rates on our securities classified as “trading” under ASC Topic 320, “Investments—Debt and Equity Securities,” are not material. Accordingly, separate quantitative disclosure is not presented.