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Variable Interest Entities | 6 Months Ended
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Jun. 30, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Variable Interest Entities | 10. Variable Interest Entities Our significant VIEs are summarized below. Additional information pertaining to the criteria used in determining if an entity is a VIE is included in Note 12 (“Variable Interest Entities”) beginning on page 151 of our 2025 Form 10-K. LIHTC and NMTC investments. We had $2.3 billion and $2.4 billion of investments in LIHTC operating partnerships at June 30, 2026, and December 31, 2025, respectively. These investments are recorded in “accrued income and other assets” on our Consolidated Balance Sheets. We do not have any loss reserves recorded related to these investments because we believe the likelihood of any loss to be remote. For all legally binding, unfunded equity commitments, we increase our recognized investment and recognize a liability. As of June 30, 2026, and December 31, 2025, we had liabilities of $1.1 billion and $1.1 billion, respectively, related to investments in qualified affordable housing projects, which are recorded in “accrued expenses and other liabilities” on our Consolidated Balance Sheets. We continue to invest in these LIHTC operating partnerships. The assets and liabilities presented in the table below convey the size of KCDC’s direct and indirect investments at June 30, 2026, and December 31, 2025. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our Consolidated Balance Sheets. Additional information pertaining to our LIHTC investments is included in Note 12 (“Variable Interest Entities”) beginning on page 151 of our 2025 Form 10-K.
| Unconsolidated VIEs
Dollars in millions | Total Assets | Total Liabilities | Maximum Exposure to Loss
June 30, 2026 |  |  |
LIHTC investments | $ | 9,634 |  | $ | 4,266 |  | $ | 2,863 |
December 31, 2025 |  |  |
LIHTC investments | $ | 11,212 |  | $ | 5,026 |  | $ | 2,913 |
We had $17 million and $18 million in NMTC investments at June 30, 2026 and December 31, 2025, respectively. These investments are recorded in “accrued income and other assets” on our Consolidated Balance Sheets. We amortize our LIHTC and NMTC investments over the period that we expect to receive the tax benefits. During the six months ended June 30, 2026, we recognized $136 million of amortization, $134 million of tax credits and $33 million of other tax benefits associated with these investments within “income taxes” on our income statement. During the six months ended June 30, 2025, we recognized $134 million of amortization, $130 million of tax credits and $33 million of other tax benefits associated with these investments within “income taxes” on our income statement. Principal investments. Our maximum exposure to loss associated with indirect principal investments consists of the investments’ fair value plus any unfunded equity commitments. The fair value of our indirect principal investments totaled $7 million and $9 million at June 30, 2026 and December 31, 2025, respectively. These investments are recorded in “other investments” on our Consolidated Balance Sheets. The table below reflects the size of the private equity funds in which we were invested as well as our maximum exposure to loss in connection with these investments at June 30, 2026, and December 31, 2025.
| Unconsolidated VIEs
Dollars in millions | Total Assets | Total Liabilities | Maximum Exposure to Loss
June 30, 2026 |  |  |
Indirect investments | $ | 1,516 |  | $ | 1 |  | $ | 8 |
December 31, 2025 |  |  |
Indirect investments | $ | 1,858 |  | $ | 3 |  | $ | 10 |
Through our principal investing entities, we have formed and funded operating entities that provide management and other related services to our investment company funds, which directly invest in portfolio companies. These entities had no assets at June 30, 2026, and December 31, 2025, that can be used to settle the entities’ obligations. The entities had no liabilities at June 30, 2026, and December 31, 2025, and other equity investors have no recourse to our general credit. Additional information on our indirect and direct principal investments is provided in Note 5 (“Fair Value Measurements”) beginning on page 131 and in Note 12 (“Variable Interest Entities”) beginning on page 151 of our 2025 Form 10-K. Other unconsolidated VIEs. We are involved with other various entities in the normal course of business which we have determined to be VIEs. We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance or hold a variable interest that could potentially be significant. The table below shows our assets and liabilities associated with these unconsolidated VIEs at June 30, 2026, and December 31, 2025. These assets are recorded in “accrued income and other assets,” “other investments,” “securities available for sale,” “held-to-maturity securities,” and “loans, net of unearned income” on our Consolidated Balance Sheets. Our maximum exposure to loss is equal to the value of the assets recorded. Of the total balance as of June 30, 2026, $16 million related to the purchase of senior notes from a securitization collateralized by sold indirect auto loans. Additional information pertaining to our other unconsolidated VIEs is included in Note 12 (“Variable Interest Entities“) under the heading “Other unconsolidated VIEs” on page 152 of our 2025 Form 10-K.
| Other unconsolidated VIEs
Dollars in millions | Total Assets | Total Liabilities
June 30, 2026 |  |
Other unconsolidated VIEs | $ | 452 |  | $ | — |
December 31, 2025 |  |
Other unconsolidated VIEs | $ | 508 |  | $ | — |

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/810/tableOfContent + Details
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