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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September 30, 2023~~March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number: 001-31343

Associated Banc-Corp

(Exact name of registrant as specified in its charter)


Wisconsin									39-1098068
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


433 Main Street
Green Bay,	Wisconsin	54301
(Address of principal executive offices)		(Zip Code)

(920) 491-7500

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	ASB	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E	ASB PrE	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.625% Non-Cum. Perp Pref Stock, Srs F	ASB PrF	New York Stock Exchange
6.625% Fixed-Rate Reset Subordinated Notes due 2033	ASBA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of registrant’s common stock, par value $0.01 per share, at ~~October 23, 2023~~April 26, 2024 was ~~150,939,712.~~150,766,697.


ASSOCIATED BANC-CORP
Table of Contents


ASSOCIATED BANC-CORP
Commonly Used Terms
The following listing provides a reference of common acronyms, abbreviations, and other defined terms used throughout the document:






ACLL			Allowance for Credit Losses on Loans

AFS			Available for Sale
ALCO			Asset / Liability Committee



ASU			Accounting Standards Update


the Bank			Associated Bank, National Association
Basel III			International framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquidity
bp			basis point(s)
BTFP			Bank Term Funding Program

~~Call Report~~			~~Consolidated Reports of Condition and Income~~
CDs			Certificates of Deposit
CDIs			Core Deposit Intangibles
CECL			Current Expected Credit Losses
CET1			Common Equity Tier 1


CFPB			Consumer Financial Protection Bureau
Corporation / our			Associated Banc-Corp collectively with all of its subsidiaries and affiliates
CRA			Community Reinvestment Act
CRE			Commercial Real Estate


EAR			Earnings at Risk



Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board

FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Board of Governors of the Federal Reserve System
FFELP			Federal Family Education Loan Program
FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation
FICO			Fair Isaac Corporation, provider of a broad-based risk score to aid in credit decisions
FNMA			Federal National Mortgage Association

FTEs			Full-time equivalent employees
FTP			Funds Transfer Pricing
GAAP			Generally Accepted Accounting Principles
GNMA			Government National Mortgage Association
~~GSEs~~GSE			Government-Sponsored ~~Enterprises~~Enterprise

HTM			Held to Maturity





~~LOCOM~~			~~Lower of Cost or Market~~
LTV			Loan-to-Value


Moody's			Moody’s Investors Service
MSRs			Mortgage Servicing Rights
MVE			Market Value of Equity
NAV			Measured at fair value using Net Asset Value per share (or its equivalent) as a practical expedient
Net Free Funds			Noninterest-bearing sources of funds

NPAs			Nonperforming Assets

OCI			Other Comprehensive Income
OREO			Other Real Estate Owned


Parent Company			Associated Banc-Corp individually
RAP			Retirement Account Plan - the Corporation's noncontributory defined benefit retirement plan


Repurchase Agreements			Securities sold under agreements to repurchase
Restricted Stock Awards			Restricted common stock and restricted common stock units to certain key employees
Retirement Eligible Colleagues			Colleagues whose retirement meets the early retirement or normal retirement definitions under the applicable equity compensation plan
ROCET1			Return on Common Equity Tier 1

SBA			Small Business Administration
SEC			U.S. Securities and Exchange Commission
Series E Preferred Stock			The Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series E, liquidation preference $1,000 per share
Series F Preferred Stock			The Corporation's 5.625% Non-Cumulative Perpetual Preferred Stock, Series F, liquidation preference $1,000 per share
SOFR			Secured Overnight Finance Rate


~~TDRs~~			~~Troubled Debt Restructurings~~

YTD			Year-to-Date

Table of Contents


PART I - FINANCIAL INFORMATION

ITEM 1.			Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets


		Sep 30, 2023		Dec 31, 2022			Mar 31, 2024	Dec 31, 2023
(In thousands, except share and per share data)	(In thousands, except share and per share data)	(Unaudited)		(Audited)		(In thousands, except share and per share data)	(Unaudited)	(Audited)
Assets	Assets
Cash and due from banks
Cash and due from banks
Cash and due from banks	Cash and due from banks	$	388,694	$	436,952
Interest-bearing deposits in other financial institutions	Interest-bearing deposits in other financial institutions	323,130		156,693
Federal funds sold and securities purchased under agreements to resell	Federal funds sold and securities purchased under agreements to resell	965		27,810
AFS investment securities, at fair value	AFS investment securities, at fair value	3,491,679		2,742,025
HTM investment securities, net, at amortized cost	HTM investment securities, net, at amortized cost	3,900,415		3,960,398
Equity securities	Equity securities	35,937		25,216
FHLB and Federal Reserve Bank stocks, at cost	FHLB and Federal Reserve Bank stocks, at cost	268,698		295,496
Residential loans held for sale	Residential loans held for sale	54,790		20,383

Commercial loans held for sale
Loans	Loans	30,193,187		28,799,569
Allowance for loan losses	Allowance for loan losses	(345,795)		(312,720)
Loans, net	Loans, net	29,847,392		28,486,849
Tax credit and other investments	Tax credit and other investments	256,905		276,773

Premises and equipment, net
Premises and equipment, net
Premises and equipment, net	Premises and equipment, net	373,017		376,906
Bank and corporate owned life insurance	Bank and corporate owned life insurance	679,775		676,530
Goodwill	Goodwill	1,104,992		1,104,992
Other intangible assets, net	Other intangible assets, net	42,674		49,282
Mortgage servicing rights, net	Mortgage servicing rights, net	89,131		77,351

Interest receivable	Interest receivable	171,119		144,449
Interest receivable
Interest receivable
Other assets	Other assets	608,068		547,621
Total assets	Total assets	$	41,637,381	$	39,405,727
Liabilities and stockholders' equity	Liabilities and stockholders' equity
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	$	6,422,994	$	7,760,811
Noninterest-bearing demand deposits
Noninterest-bearing demand deposits
Interest-bearing deposits	Interest-bearing deposits	25,700,332		21,875,343
Total deposits	Total deposits	32,123,326		29,636,154
Federal funds purchased and securities sold under agreements to repurchase		451,644		585,139
Commercial paper		—		20,798

Short-term funding

Short-term funding

Short-term funding
FHLB advances	FHLB advances	3,733,041		4,319,861
Other long-term funding	Other long-term funding	529,459		248,071

Allowance for unfunded commitments
Allowance for unfunded commitments
Allowance for unfunded commitments	Allowance for unfunded commitments	34,776		38,776
Accrued expenses and other liabilities	Accrued expenses and other liabilities	637,491		541,438
Total liabilities	Total liabilities	$	37,509,738	$	35,390,237
Stockholders’ equity	Stockholders’ equity
Preferred equity	Preferred equity	$	194,112	$	194,112
Preferred equity
Preferred equity
Common equity	Common equity
Common stock
Common stock
Common stock	Common stock	$	1,752	$	1,752
Surplus	Surplus	1,711,454		1,712,733
Retained earnings	Retained earnings	3,074,014		2,904,882
Accumulated other comprehensive (loss)	Accumulated other comprehensive (loss)	(339,140)		(272,799)
Treasury stock, at cost	Treasury stock, at cost	(514,549)		(525,190)
Total common equity	Total common equity	3,933,531		3,821,378
Total stockholders’ equity	Total stockholders’ equity	4,127,643		4,015,490
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	41,637,381	$	39,405,727
Preferred shares authorized (par value $1.00 per share)	Preferred shares authorized (par value $1.00 per share)	750,000		750,000
Preferred shares issued and outstanding	Preferred shares issued and outstanding	200,000		200,000
Common shares authorized (par value $0.01 per share)	Common shares authorized (par value $0.01 per share)	250,000,000		250,000,000
Common shares issued	Common shares issued	175,216,409		175,216,409
Common shares outstanding	Common shares outstanding	150,951,209		150,444,019

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Income (Unaudited)




		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
(In thousands, except per share data)	(In thousands, except per share data)	2023		2022		2023		2022
(In thousands, except per share data)
(In thousands, except per share data)
Interest income
Interest income
Interest income	Interest income
Interest and fees on loans	Interest and fees on loans	$	447,912	$	275,666	$	1,262,538	$	643,239
Interest and fees on loans
Interest and fees on loans
Interest and dividends on investment securities
Interest and dividends on investment securities
Interest and dividends on investment securities	Interest and dividends on investment securities
Taxable	Taxable	38,210		19,221		104,197		54,009
Taxable
Taxable
Tax-exempt
Tax-exempt
Tax-exempt	Tax-exempt	15,941		16,538		47,960		49,025
Other interest	Other interest	6,575		3,284		17,990		7,696
Other interest
Other interest
Total interest income
Total interest income
Total interest income	Total interest income	508,637		314,708		1,432,685		753,969
Interest expense	Interest expense
Interest expense
Interest expense
Interest on deposits
Interest on deposits
Interest on deposits	Interest on deposits	193,131		26,000		464,749		37,590
Interest on federal funds purchased and securities sold under agreements to repurchase	Interest on federal funds purchased and securities sold under agreements to repurchase	3,100		756		8,504		1,200
Interest on federal funds purchased and securities sold under agreements to repurchase
Interest on federal funds purchased and securities sold under agreements to repurchase
Interest on other short-term funding
Interest on other short-term funding
Interest on other short-term funding	Interest on other short-term funding	—		1		1		2
Interest on FHLB advances	Interest on FHLB advances	48,143		20,792		147,365		38,663
Interest on FHLB advances
Interest on FHLB advances
Interest on long-term funding
Interest on long-term funding
Interest on long-term funding	Interest on long-term funding	10,019		2,722		25,895		8,182
Total interest expense	Total interest expense	254,394		50,270		646,514		85,637
Total interest expense
Total interest expense
Net interest income
Net interest income
Net interest income	Net interest income	254,244		264,439		786,171		668,332
Provision for credit losses	Provision for credit losses	21,943		16,998		62,014		13,006
Provision for credit losses
Provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit losses
Net interest income after provision for credit losses	Net interest income after provision for credit losses	232,301		247,440		724,157		655,326
Noninterest income	Noninterest income
Noninterest income
Noninterest income
Wealth management fees
Wealth management fees
Wealth management fees	Wealth management fees	20,828		19,984		61,499		63,719
Service charges and deposit account fees	Service charges and deposit account fees	12,864		15,029		38,230		48,392
Service charges and deposit account fees
Service charges and deposit account fees
Card-based fees
Card-based fees
Card-based fees	Card-based fees	11,510		11,479		33,492		32,847
Other fee-based revenue	Other fee-based revenue	4,509		4,487		13,249		12,613
Other fee-based revenue
Other fee-based revenue
Capital markets, net
Capital markets, net
Capital markets, net	Capital markets, net	5,368		7,675		15,544		24,331
Mortgage banking, net	Mortgage banking, net	6,501		2,098		17,814		16,635
Mortgage banking, net
Mortgage banking, net
Bank and corporate owned life insurance
Bank and corporate owned life insurance
Bank and corporate owned life insurance	Bank and corporate owned life insurance	2,047		1,827		6,882		8,004

Asset gains, net		625		18		590		1,883
Investment securities gains (losses), net		(11)		5,664		55		5,676
Asset (losses) gains, net

Asset (losses) gains, net

Asset (losses) gains, net
Investment securities gains, net
Investment securities gains, net
Investment securities gains, net

Other

Other

Other	Other	2,339		2,527		6,841		6,613
Total noninterest income	Total noninterest income	66,579		70,788		194,195		220,713
Total noninterest income
Total noninterest income
Noninterest expense
Noninterest expense
Noninterest expense	Noninterest expense
Personnel	Personnel	117,159		118,243		347,669		335,720
Personnel
Personnel
Technology
Technology
Technology	Technology	26,172		22,694		73,990		65,401
Occupancy	Occupancy	14,125		13,717		42,775		43,948
Occupancy
Occupancy
Business development and advertising
Business development and advertising
Business development and advertising	Business development and advertising	7,100		6,778		20,054		17,388
Equipment	Equipment	5,016		4,921		14,921		14,841
Equipment
Equipment
Legal and professional
Legal and professional
Legal and professional	Legal and professional	4,461		4,159		13,149		14,118
Loan and foreclosure costs	Loan and foreclosure costs	2,049		1,631		4,822		5,121
Loan and foreclosure costs
Loan and foreclosure costs
FDIC assessment	FDIC assessment	9,150		5,800		25,575		16,300
FDIC assessment
FDIC assessment
Other intangible amortization
Other intangible amortization
Other intangible amortization	Other intangible amortization	2,203		2,203		6,608		6,608

Other	Other	8,771		15,645		24,726		31,057

Other

Other
Total noninterest expense
Total noninterest expense
Total noninterest expense	Total noninterest expense	196,205		195,791		574,291		550,503
Income before income taxes	Income before income taxes	102,674		122,438		344,061		325,536
Income before income taxes
Income before income taxes
Income tax expense
Income tax expense
Income tax expense	Income tax expense	19,426		26,163		70,299		68,176
Net income	Net income	83,248		96,275		273,762		257,360
Net income
Net income
Preferred stock dividends
Preferred stock dividends
Preferred stock dividends	Preferred stock dividends	2,875		2,875		8,625		8,625
Net income available to common equity	Net income available to common equity	$	80,373	$	93,400	$	265,137	$	248,735
Net income available to common equity
Net income available to common equity
Earnings per common share
Earnings per common share
Earnings per common share	Earnings per common share
Basic	Basic	$	0.53	$	0.62	$	1.76	$	1.66
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	0.53	$	0.62	$	1.75	$	1.65
Average common shares outstanding	Average common shares outstanding
Average common shares outstanding
Average common shares outstanding
Basic
Basic
Basic	Basic	150,035		149,321		149,929		149,063
Diluted	Diluted	151,014		150,262		150,971		150,205
Diluted
Diluted

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Comprehensive Income (Unaudited)


		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022

Net income	Net income	$	83,248	$	96,275	$	273,762	$	257,360
Other comprehensive (loss), net of tax

Net income

Net income
Other comprehensive income (loss), net of tax
Other comprehensive income (loss), net of tax
Other comprehensive income (loss), net of tax
AFS investment securities	AFS investment securities
Net unrealized (losses)		(56,924)		(100,092)		(69,512)		(268,413)
Unrealized (losses) on AFS securities transferred to HTM securities		—		—		—		(67,604)
AFS investment securities
AFS investment securities
Net unrealized (losses) gains
Net unrealized (losses) gains
Net unrealized (losses) gains

Amortization of net unrealized losses on AFS securities transferred to HTM securities	Amortization of net unrealized losses on AFS securities transferred to HTM securities	2,327		2,888		6,883		7,269
Reclassification adjustment for net (gains) realized in net income		—		—		—		(12)

Amortization of net unrealized losses on AFS securities transferred to HTM securities

Amortization of net unrealized losses on AFS securities transferred to HTM securities
Reclassification adjustment for net losses realized in net income
Reclassification adjustment for net losses realized in net income
Reclassification adjustment for net losses realized in net income

Income tax benefit		13,928		24,810		15,879		83,906
Other comprehensive (loss) on AFS securities		(40,669)		(72,394)		(46,751)		(244,854)
Income tax benefit (expense)

Income tax benefit (expense)

Income tax benefit (expense)
Other comprehensive (loss) income on AFS securities
Other comprehensive (loss) income on AFS securities
Other comprehensive (loss) income on AFS securities
Cash flow hedge derivatives	Cash flow hedge derivatives
Net unrealized (losses)		(13,592)		—		(33,976)		—
Cash flow hedge derivatives
Cash flow hedge derivatives
Net unrealized (losses) gains
Net unrealized (losses) gains
Net unrealized (losses) gains
Reclassification adjustment for net losses realized in net income	Reclassification adjustment for net losses realized in net income	4,516		—		9,097		—
Income tax benefit		2,315		—		5,488		—
Other comprehensive (loss) on cash flow hedge derivatives		(6,762)		—		(19,391)		—
Reclassification adjustment for net losses realized in net income
Reclassification adjustment for net losses realized in net income
Income tax (expense)
Income tax (expense)
Income tax (expense)
Other comprehensive (loss) income on cash flow hedge derivatives
Other comprehensive (loss) income on cash flow hedge derivatives
Other comprehensive (loss) income on cash flow hedge derivatives
Defined benefit pension and postretirement obligations
Defined benefit pension and postretirement obligations
Defined benefit pension and postretirement obligations	Defined benefit pension and postretirement obligations
Amortization of prior service cost	Amortization of prior service cost	(81)		(82)		(244)		(244)
Amortization of prior service cost
Amortization of prior service cost
Amortization of actuarial (gain) loss
Amortization of actuarial (gain) loss
Amortization of actuarial (gain) loss	Amortization of actuarial (gain) loss	(7)		347		15		494

Income tax benefit (expense)		23		(474)		31		(470)
Other comprehensive (loss) on pension and postretirement obligations		(66)		(209)		(198)		(221)
Total other comprehensive (loss)		(47,497)		(72,603)		(66,340)		(245,074)
Income tax (expense) benefit

Income tax (expense) benefit

Income tax (expense) benefit
Other comprehensive (loss) income on pension and postretirement obligations
Other comprehensive (loss) income on pension and postretirement obligations
Other comprehensive (loss) income on pension and postretirement obligations
Total other comprehensive (loss) income
Total other comprehensive (loss) income
Total other comprehensive (loss) income
Comprehensive income	Comprehensive income	$	35,751	$	23,672	$	207,422	$	12,286
Comprehensive income
Comprehensive income

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


(In thousands, except per share data)	(In thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Total		(In thousands, except per share data)	Preferred Equity	Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive (Loss)	Treasury Stock	Total
Balance, December 31, 2022		$	194,112	$	1,752	$	1,712,733	$	2,904,882	$	(272,799)	$	(525,190)	$	4,015,490
Balance, December 31, 2023

Comprehensive income:	Comprehensive income:

Comprehensive income:

Comprehensive income:
Net income	Net income	—		—		—		103,360		—		—		103,360
Other comprehensive income		—		—		—		—		39,211		—		39,211
Net income
Net income
Other comprehensive (loss)
Comprehensive income	Comprehensive income													142,571
Common stock issued:	Common stock issued:
Stock-based compensation plans, net	Stock-based compensation plans, net	—		—		(12,612)		—		—		14,379		1,766
Stock-based compensation plans, net
Stock-based compensation plans, net

Purchase of treasury stock, open market purchases

Purchase of treasury stock, open market purchases

Purchase of treasury stock, open market purchases
Purchase of treasury stock, stock-based compensation plans	Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(5,362)		(5,362)
Cash dividends:	Cash dividends:
Common stock, $0.21 per share		—		—		—		(32,013)		—		—		(32,013)
Common stock, $0.22 per share
Common stock, $0.22 per share
Common stock, $0.22 per share
Preferred stock(a)	Preferred stock(a)	—		—		—		(2,875)		—		—		(2,875)

Stock-based compensation expense, net	Stock-based compensation expense, net	—		—		6,086		—		—		—		6,086

Stock-based compensation expense, net

Balance, March 31, 2023		$	194,112	$	1,752	$	1,706,206	$	2,973,354	$	(233,588)	$	(516,173)	$	4,125,663

Comprehensive income:
Net income		—		—		—		87,154		—		—		87,154
Other comprehensive (loss)		—		—		—		—		(58,054)		—		(58,054)
Comprehensive income														29,100
Common stock issued:
Stock-based compensation plans, net		—		—		(1,677)		—		—		1,770		93

Purchase of treasury stock, stock-based compensation plans		—		—		—		—		—		(884)		(884)
Cash dividends:
Common stock, $0.21 per share		—		—		—		(31,996)		—		—		(31,996)
Preferred stock(a)		—		—		—		(2,875)		—		—		(2,875)

Stock-based compensation expense, net		—		—		3,773		—		—		—		3,773
Balance, June 30, 2023		$	194,112	$	1,752	$	1,708,303	$	3,025,637	$	(291,642)	$	(515,287)	$	4,122,874

Comprehensive income:
Net income		—		—		—		83,248		—		—		83,248
Other comprehensive (loss)		—		—		—		—		(47,497)		—		(47,497)
Comprehensive income														35,751
Common stock issued:
Stock-based compensation plans, net		—		—		(497)		—		—		999		503

Purchase of treasury stock, stock-based compensation plans		—		—		—		—		—		(261)		(261)
Cash dividends:
Common stock, $0.21 per share		—		—		—		(31,996)		—		—		(31,996)
Preferred stock(a)		—		—		—		(2,875)		—		—		(2,875)

Stock-based compensation expense, net	Stock-based compensation expense, net	—		—		3,648		—		—		—		3,648

Balance, September 30, 2023		$	194,112	$	1,752	$	1,711,454	$	3,074,014	$	(339,140)	$	(514,549)	$	4,127,643

Balance, March 31, 2024

Balance, March 31, 2024

Balance, March 31, 2024

Numbers may not sum due to rounding.

(a) Series E, $0.3671875 per share; and Series F, $0.3515625 per share.

~~Table of Contents~~


(In thousands, except per share data)	(In thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total		(In thousands, except per share data)	Preferred Equity	Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance, December 31, 2021		$	193,195	$	1,752	$	1,713,851	$	2,672,601	$	(10,317)	$	(546,229)	$	4,024,853
Change in accounting principle(a)		—		—		—		1,713		—		—		1,713
Total stockholders' equity at beginning of period, as adjusted		193,195		1,752		1,713,851		2,674,314		(10,317)		(546,229)		4,026,566
Comprehensive (loss):
Balance, December 31, 2022

Comprehensive income:

Comprehensive income:

Comprehensive income:
Net income	Net income	—		—		—		74,262		—		—		74,262
Other comprehensive (loss)		—		—		—		—		(126,708)		—		(126,708)
Net income
Net income
Other comprehensive income

Comprehensive (loss)														(52,445)
Comprehensive income
Comprehensive income
Comprehensive income
Common stock issued:	Common stock issued:
Stock-based compensation plans, net
Stock-based compensation plans, net
Stock-based compensation plans, net	Stock-based compensation plans, net	—		—		(11,911)		—		—		18,565		6,654

Purchase of treasury stock, stock-based compensation plans	Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(5,193)		(5,193)

Purchase of treasury stock, stock-based compensation plans

Purchase of treasury stock, stock-based compensation plans
Cash dividends:	Cash dividends:
Common stock, $0.20 per share		—		—		—		(30,583)		—		—		(30,583)
Preferred stock(b)		—		—		—		(2,875)		—		—		(2,875)
Common stock, $0.21 per share
Common stock, $0.21 per share
Common stock, $0.21 per share
Preferred stock(a)

Stock-based compensation expense, net

Stock-based compensation expense, net

Stock-based compensation expense, net	Stock-based compensation expense, net	—		—		6,164		—		—		—		6,164

Balance, March 31, 2022		$	193,195	$	1,752	$	1,708,104	$	2,715,118	$	(137,024)	$	(532,858)	$	3,948,287

Comprehensive income:
Net income		—		—		—		86,824		—		—		86,824
Other comprehensive (loss)		—		—		—		—		(45,764)		—		(45,764)
Comprehensive income														41,060
Common stock issued:
Stock-based compensation plans, net		—		—		(1,771)		—		—		1,910		139
Balance, March 31, 2023

Balance, March 31, 2023

Purchase of treasury stock, stock-based compensation plans		—		—		—		—		—		(884)		(884)
Cash dividends:
Common stock, $0.20 per share		—		—		—		(30,331)		—		—		(30,331)
Preferred stock(b)		—		—		—		(2,875)		—		—		(2,875)

Balance, March 31, 2023

Stock-based compensation expense, net		—		—		3,986		—		—		—		3,986

Balance, June 30, 2022		$	193,195	$	1,752	$	1,710,319	$	2,768,736	$	(182,788)	$	(531,832)	$	3,959,382

Comprehensive income:
Net income		—		—		—		96,275		—		—		96,275
Other comprehensive (loss)		—		—		—		—		(72,603)		—		(72,603)
Comprehensive income														23,672
Common stock issued:
Stock-based compensation plans, net		—		—		(3,274)		—		—		4,540		1,266

Purchase of treasury stock, stock-based compensation plans		—		—		—		—		—		(181)		(181)
Cash dividends:
Common stock, $0.20 per share		—		—		—		(30,342)		—		—		(30,342)
Preferred stock(b)		—		—		—		(2,875)		—		—		(2,875)

Stock-based compensation expense, net		—		—		3,030		—		—		—		3,030
Other		916		—		—		(916)		—		—		—
Balance, September 30, 2022		$	194,112	$	1,752	$	1,710,075	$	2,830,877	$	(255,391)	$	(527,473)	$	3,953,952

Numbers may not sum due to rounding.

(a) ~~MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value.~~

~~(b)~~ Series E, $0.3671875 per share; and Series F, $0.3515625 per share.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended Sep 30,

Three Months Ended Mar 31,

($ in thousands)

2023

2022

($ in thousands)

2024

2023

Cash flows from operating activities

Net income

273,762

257,360

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses

62,014

13,006

Depreciation and amortization

34,703

33,743

Change in MSRs valuation

(14,658)

(22,348)

Amortization of other intangible assets

6,608

Amortization of other intangible assets

Amortization and accretion on earning assets, funding, and other, net

27,394

13,280

Net amortization of tax credit investments

25,830

25,916

(Gains) on sales of investment securities, net

—

(260)

Asset (gains), net

(590)

(1,883)

Asset losses (gains), net

Loss on mortgage banking activities, net

2,154

5,712

(Gains) loss on mortgage banking activities, net

Mortgage loans originated and acquired for sale

(283,469)

(535,694)

Proceeds from sales of mortgage loans held for sale

254,619

620,352

Changes in certain assets and liabilities:

(Increase) in interest receivable

(26,670)

(35,254)

Changes in certain assets and liabilities:

Decrease (increase) in interest receivable

Increase in interest payable

69,461

1,795

(Decrease) in expense payable

(22,632)

(17,994)

Increase in net derivative position

3,721

320,972

Increase (decrease) in net derivative position

Net change in other assets and other liabilities

(34,137)

37,018

Net cash provided by operating activities

378,110

722,330

Cash flows from investing activities

Net (increase) in loans

(1,436,901)

(3,595,331)

Net (increase) in loans

Purchases of:

AFS securities

(1,109,501)

(510,301)

HTM securities

(41,524)

(245,826)

FHLB and Federal Reserve Bank stocks and equity securities

(114,985)

(112,157)

Proceeds from:

Sales of AFS securities

—

1,061

Sale of FHLB and Federal Reserve Bank stocks and equity securities

131,272

259

Prepayments, calls, and maturities of AFS securities

288,313

392,275

Prepayments, calls, and maturities of HTM securities

101,847

153,163

Sales, prepayments, calls, and maturities of other assets

20,224

31,732

Premises, equipment, and software, net of disposals

(43,541)

(45,441)

Premises, equipment, and software

Net change in tax credit and alternative investments

(19,615)

(50,386)

Net cash (used in) investing activities

(2,224,411)

(3,980,951)

Net cash (used in) investing activities

Cash flows from financing activities

Net increase in deposits

2,487,225

732,347

Net increase in deposits

Net (decrease) in short-term funding

(154,292)

(69,902)

Net increase (decrease) in short-term FHLB advances

(580,000)

2,583,000

Net increase (decrease) in short-term funding

Net (decrease) increase in short-term FHLB advances

Repayment of long-term FHLB advances

(568)

(413,523)

Proceeds from long-term FHLB advances

1,369

1,356

Proceeds from issuance of long-term funding

292,740

—

Proceeds from issuance of long-term funding

(Repayment) proceeds of finance lease principal

(64)

327

(Repayment) of finance lease principal

Proceeds from issuance of common stock for stock-based compensation plans

2,362

8,059

Purchase of treasury stock, open market purchases

Purchase of treasury stock, stock-based compensation plans

(6,507)

(6,259)

Cash dividends on common stock

(96,005)

(91,256)

Cash dividends on preferred stock

(8,625)

Net cash provided by financing activities

1,937,635

2,735,525

Net increase (decrease) in cash and cash equivalents

91,334

(523,096)

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

621,455

1,025,515

Cash and cash equivalents at end of period(a)

712,789

502,419

Numbers may not sum due to rounding.

(a) No restricted cash due to the Federal Reserve reducing the required reserve ratio to zero.

109

Table of Contents

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


		Nine Months Ended Sep 30,
	Three Months Ended Mar 31,								Three Months Ended Mar 31,
($ in thousands)	($ in thousands)	2023		2022		($ in thousands)	2024	2023
Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information
Cash paid for interest
Cash paid for interest
Cash paid for interest	Cash paid for interest	$	576,221	$	83,337
Cash paid for income and franchise taxes	Cash paid for income and franchise taxes	68,382		6,087
Loans and bank premises transferred to OREO	Loans and bank premises transferred to OREO	5,917		5,052
Capitalized mortgage servicing rights	Capitalized mortgage servicing rights	2,477		6,316
Loans transferred into held for sale from portfolio, net		6,833		1,789
Transfer of AFS securities to HTM securities		—		1,621,990
Unsettled trades to purchase securities		—		4,130
Write-up of equity securities without readily determinable fair values		—		5,690
Loans transferred (from) into held for sale from (into) portfolio, net

Fair value adjustments on hedged long-term FHLB advances and subordinated debt

Fair value adjustments on hedged long-term FHLB advances and subordinated debt

Fair value adjustments on hedged long-term FHLB advances and subordinated debt	Fair value adjustments on hedged long-term FHLB advances and subordinated debt	18,652		14,703
Fair value adjustments on foreign currency exchange forwards	Fair value adjustments on foreign currency exchange forwards	3,308		10,610
Fair value adjustment on cash flow hedges	Fair value adjustment on cash flow hedges	(19,391)		—

1110

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Notes to Consolidated Financial Statements

These interim consolidated financial statements have been prepared according to the rules and regulations of the SEC and, therefore, certain information and footnote disclosures normally presented in accordance with GAAP have been omitted or abbreviated. The information contained on the consolidated financial statements and footnotes in Associated Banc-Corp's ~~2022~~2023 Annual Report on Form 10-K should be referred to in connection with the reading of these unaudited interim consolidated financial statements.

Note 1 Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and comprehensive income, changes in stockholders’ equity, and cash flows of the Corporation and Parent Company for the periods presented, and all such adjustments are of a normal recurring nature. The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. ~~Estimates that are~~The determination of the ACLL is particularly susceptible to significant ~~change include the determination of the ACLL.~~change. Management has evaluated subsequent events for potential recognition or disclosure.

Within the tables presented, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes.

Note 2 Summary of Significant Accounting Policies

The accounting and reporting policies of the Corporation conform to U.S. GAAP and to general practice within the financial services industry. A discussion of these policies can be found in Note 1 Summary of Significant Accounting Policies included in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K.

New Accounting Pronouncements Adopted


Standard	Description	Date of adoption	Effect on financial statements

~~ASU 2022-02 Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures~~	The FASB issued these amendments to eliminate accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, and to require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost. The amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively, except as provided in the next sentence. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Early adoption is permitted if an entity has adopted the amendments in Update 2016-03, including adoption in an interim period.	~~1st Quarter 2023~~	Adoption of this amendment did not have a material impact on the Corporation's results of operation, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties. The Corporation has adopted this update prospectively.

~~Table of Contents~~

~~Future Accounting Pronouncements~~

The expected impact of applicable material accounting pronouncements recently issued or proposed but not yet required to be adopted are discussed in the table below. To the extent that the adoption of new accounting standards materially affects the Corporation's financial condition, results of operations, liquidity or disclosures, the impacts are discussed in the applicable sections of this financial review.


~~Standard~~	~~Description~~	~~Date of anticipated adoption~~	~~Effect on financial statements~~
ASU 2023-02 Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. A reporting entity may make an accounting policy election to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to apply the proportional amortization method at the reporting entity level or to individual investments. The amendments in this update also remove certain guidance for Qualified Affordable Housing Project investments and require the application of the delayed equity contribution guidance to all tax equity investments. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and must be applied on either a modified retrospective or a retrospective basis. Early adoption is permitted in any interim period, however if adopted in an interim period the entity shall adopt the amendments in this update as of the beginning of the fiscal year that includes the interim period.	1st Quarter 2024	The Corporation ~~is currently evaluating~~has determined the impact on its results of operation, financial position, liquidity, and disclosures is immaterial.

Table of Contents

Future Accounting Pronouncements


Standard	Description	Date of anticipated adoption	Effect on financial statements
ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this update also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.	Fiscal year 2024 and interim periods beginning in 1st quarter 2025	The Corporation is currently evaluating the impact on its disclosures.
ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis. Early adoption is permitted.	1st Quarter 2025	The Corporation is currently evaluating the impact on its disclosures.

Note 3 Earnings Per Common Share

Earnings per common share are calculated utilizing the two-class method. Basic earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding adjusted for the dilutive effect of common stock awards (outstanding stock options and unvested restricted stock awards). Presented below are the calculations for basic and diluted earnings per common share:
Three Months Ended Sep 30, Nine Months Ended Sep 30,
($ in thousands, except per share data) 2023 2022 2023 2022
Net income $ 83,248 $ 96,275 $ 273,762 $ 257,360
Preferred stock dividends (2,875) (2,875) (8,625) (8,625)
Net income available to common equity $ 80,373 $ 93,400 $ 265,137 $ 248,735
Common shareholder dividends (31,806) (30,149) (95,417) (90,647)
Unvested share-based payment awards (190) (194) (588) (609)
Undistributed earnings $ 48,377 $ 63,057 $ 169,132 $ 157,479
Undistributed earnings allocated to common shareholders $ 48,090 $ 62,648 $ 168,136 $ 156,454
Undistributed earnings allocated to unvested share-based payment awards 287 409 996 1,025
Undistributed earnings $ 48,377 $ 63,057 $ 169,132 $ 157,479
Basic
Distributed earnings to common shareholders $ 31,806 $ 30,149 $ 95,417 $ 90,647
Undistributed earnings allocated to common shareholders 48,090 62,648 168,136 156,454
Total common shareholders earnings, basic $ 79,896 $ 92,796 $ 263,553 $ 247,102
Diluted
Distributed earnings to common shareholders $ 31,806 $ 30,149 $ 95,417 $ 90,647
Undistributed earnings allocated to common shareholders 48,090 62,648 168,136 156,454
Total common shareholders earnings, diluted $ 79,896 $ 92,796 $ 263,553 $ 247,102
Weighted average common shares outstanding 150,035 149,321 149,929 149,063
Effect of dilutive common stock awards 980 942 1,042 1,141
Diluted weighted average common shares outstanding 151,014 150,262 150,971 150,205
Basic earnings per common share $ 0.53 $ 0.62 $ 1.76 $ 1.66
Diluted earnings per common share $ 0.53 $ 0.62 $ 1.75 $ 1.65

Approximately 4 million and 3 million anti-dilutive common stock shares were excluded from the earnings per common share calculation for the three months ended September 30, 2023 and 2022, respectively, and approximately 3 million anti-dilutive


	Three Months Ended Mar 31,
($ in thousands, except per share data)	2024		2023
Net income	$	81,169	$	103,360
Preferred stock dividends	(2,875)		(2,875)
Net income available to common equity	$	78,294	$	100,485
Common shareholder dividends	(33,407)		(31,808)
Unvested share-based payment awards	(120)		(205)
Undistributed earnings	$	44,767	$	68,472
Undistributed earnings allocated to common shareholders	$	44,524	$	68,086
Undistributed earnings allocated to unvested share-based payment awards	242		386
Undistributed earnings	$	44,767	$	68,472
Basic
Distributed earnings to common shareholders	$	33,407	$	31,808
Undistributed earnings allocated to common shareholders	44,524		68,086
Total common shareholders earnings, basic	$	77,932	$	99,894
Diluted
Distributed earnings to common shareholders	$	33,407	$	31,808
Undistributed earnings allocated to common shareholders	44,524		68,086
Total common shareholders earnings, diluted	$	77,932	$	99,894
Weighted average common shares outstanding	149,855		149,763
Effect of dilutive common stock awards	1,436		1,365

Diluted weighted average common shares outstanding	151,292		151,128
Basic earnings per common share	$	0.52	$	0.67
Diluted earnings per common share	$	0.52	$	0.66

1312

Table of Contents

Approximately 2 million anti-dilutive common stock ~~shares~~options were excluded from the earnings per common share ~~calculation~~calculations for both the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022.~~2023.

Note 4 Stock-Based Compensation

The fair values of stock options and restricted stock awards are amortized as compensation expense on a straight-line basis over the vesting period of the grants. For colleagues who meet the definition of retirement eligible under the 2017 Incentive Compensation Plan and the 2020 Incentive Compensation Plan, expenses related to stock options and restricted stock awards are fully recognized on the date the colleague meets the definition of normal or early retirement. Compensation expense recognized is included in personnel expense on the consolidated statements of income.

A summary of the Corporation’s stock option activity for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 is presented below:
Stock Options
Shares(a)
Weighted Average
Exercise Price Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value(a)
Outstanding at December 31, 2022 3,994 $ 21.06 5.11 years $ 10,525
Exercised 61 17.04
Forfeited or expired 10 23.45
Outstanding at September 30, 2023 3,923 $ 21.12 4.41 years $ 107
Options Exercisable at September 30, 2023 3,709 $ 21.30 4.29 years $ 81


Stock Options	Shares(a)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)
Outstanding at December 31, 2023	3,792	$	21.25	4.26 years	$	5,834

Exercised	179	17.27

Outstanding at March 31, 2024	3,613	$	21.45	4.08 years	$	5,299
Options Exercisable at March 31, 2024	3,613	$	21.45	4.08 years	$	5,299

(a) In thousands

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the intrinsic value of stock options exercised was approximately ~~$272,000,~~$722,000, compared to ~~$3 million~~approximately $219,000 for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. For the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the total fair value of stock options vested was approximately ~~$955,000 compared to $2 million for the nine months ended September 30, 2022.~~

~~The Corporation recognized compensation expense for the vesting of stock options of approximately $265,000 for the nine months ended September 30, 2023,~~$489,000 compared to approximately ~~$587,000~~$955,000 for the ~~nine~~three months ended September 30, 2022. At September 30, 2023, the Corporation had approximately $113,000 of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2024.March 31, 2023.

The Corporation also has issued time-based and performance-based restricted stock awards under the 2017 Incentive Compensation Plan and subsequent 2020 Incentive Compensation Plan. Performance awards are based on performance goals determined by the Compensation and Benefits Committee of the Corporation's Board of Directors, with vesting ranging from a minimum of 0% to a maximum of 150% of the target award. Performance awards are valued utilizing a Monte Carlo simulation model to estimate fair value of the awards at the grant date.

The following table summarizes information about the Corporation’s restricted stock awards activity for the ~~nine~~three months ended ~~September 30, 2023:~~March 31, 2024:


Restricted Stock	Restricted Stock	Shares(a)	Weighted Average Grant Date Fair Value		Restricted Stock	Shares(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022		2,303	$	20.81
Outstanding at December 31, 2023
Granted	Granted	830	22.47
Vested	Vested	771	21.01
Forfeited	Forfeited	35	22.10
Outstanding at September 30, 2023		2,327	$	21.32
Outstanding at March 31, 2024

(a) In thousands

The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the grant's award agreement. Performance-based restricted stock awards granted during ~~2022~~2023 and ~~2023~~2024 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during ~~2022~~2023 and ~~2023~~2024 will generally vest ratably over a period of four years. Expense for restricted stock awards of ~~$14~~$8 million was recorded for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to ~~$13~~$6 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. Included in compensation expense for the first ~~nine~~three months of ~~2023~~2024 was $3 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had ~~$23~~$30 million of unrecognized compensation costs related to restricted stock awards at ~~September 30, 2023~~March 31, 2024 that are expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of ~~2027.~~2028.

~~Table of Contents~~

The Corporation has the ability to issue shares from treasury or new shares upon the exercise of stock options or the granting of restricted stock awards. The Board of Directors has authorized management to repurchase shares of the Corporation’s common stock, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares, if any, will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.

Table of Contents

Note 5 Investment Securities

Investment securities are designated as AFS, HTM, or equity on the consolidated balance ~~sheets at the time of purchase.~~sheets. The amortized cost and fair values of AFS and HTM securities at ~~September 30, 2023~~March 31, 2024 were as follows:


($ in thousands)	($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value		($ in thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized (Losses)	Fair Value



AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities	AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	$	124,555	$	—	$	(15,531)	$	109,024
Agency securities		15,000		—		(1,410)		13,590
U.S. Treasury securities
U.S. Treasury securities

Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	226,808		—		(16,492)		210,317
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	1,678,641		115		(241,997)		1,436,759
GNMA	GNMA	1,416,569		—		(31,898)		1,384,670

Commercial mortgage-related securities:	Commercial mortgage-related securities:
Commercial mortgage-related securities:
Commercial mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	18,779		—		(2,625)		16,154
GNMA	GNMA	188,667		—		(12,193)		176,474
Asset backed securities:	Asset backed securities:
FFELP	FFELP	140,881		83		(2,450)		138,514
FFELP
FFELP
SBA	SBA	3,299		9		(46)		3,261

Other debt securities
Other debt securities
Other debt securities	Other debt securities	3,000		—		(85)		2,915
Total AFS investment securities	Total AFS investment securities	$	3,816,198	$	207	$	(324,727)	$	3,491,679
HTM investment securities	HTM investment securities
U.S. Treasury securities	U.S. Treasury securities	$	999	$	—	$	(51)	$	948
U.S. Treasury securities
U.S. Treasury securities
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	1,700,162		12		(279,659)		1,420,516
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	956,107		28,038		(220,577)		763,567
GNMA	GNMA	50,489		15		(5,192)		45,312
Private-label	Private-label	349,410		10,228		(85,120)		274,518
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	782,291		13,329		(206,522)		589,097
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	61,025		421		(9,506)		51,940
Total HTM investment securities	Total HTM investment securities	$	3,900,483	$	52,043	$	(806,627)	$	3,145,898

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The amortized cost and fair values of AFS and HTM securities at December 31, ~~2022~~2023 were as follows:


($ in thousands)	($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value		($ in thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized (Losses)	Fair Value



AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities

AFS investment securities	AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	$	124,441	$	—	$	(15,063)	$	109,378
Agency securities		15,000		—		(1,468)		13,532
U.S. Treasury securities
U.S. Treasury securities

Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	235,693		96		(5,074)		230,714
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	1,820,642		404		(216,436)		1,604,610
GNMA	GNMA	502,537		314		(5,255)		497,596

Commercial mortgage-related securities:	Commercial mortgage-related securities:
Commercial mortgage-related securities:
Commercial mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	19,038		—		(1,896)		17,142
GNMA	GNMA	115,031		—		(4,569)		110,462
Asset backed securities:	Asset backed securities:
FFELP
FFELP
FFELP	FFELP	157,138		—		(5,947)		151,191
SBA	SBA	4,512		15		(51)		4,477
Other debt securities	Other debt securities	3,000		—		(78)		2,922
Total AFS investment securities	Total AFS investment securities	$	2,997,032	$	830	$	(255,837)	$	2,742,025
HTM investment securities	HTM investment securities
U.S. Treasury securities	U.S. Treasury securities	$	999	$	—	$	(62)	$	936
U.S. Treasury securities
U.S. Treasury securities
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	1,732,351		1,994		(182,697)		1,551,647
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	961,231		31,301		(175,760)		816,771
GNMA	GNMA	52,979		85		(3,436)		49,628
Private-label	Private-label	364,728		11,697		(72,920)		303,505
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	778,796		15,324		(178,281)		615,839
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	69,369		577		(7,254)		62,691
Total HTM investment securities	Total HTM investment securities	$	3,960,451	$	60,978	$	(620,411)	$	3,401,018

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The expected maturities of AFS and HTM securities at ~~September 30, 2023,~~March 31, 2024, are shown below:


		AFS					HTM						AFS		HTM
($ in thousands)	($ in thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value			($ in thousands)	Amortized Cost	Fair Value	Amortized Cost		Fair Value
Due in one year or less	Due in one year or less	$	7,436	$	7,368		$	16,715	$	16,673
Due after one year through five years	Due after one year through five years	190,843		170,918			47,774		46,115
Due after five years through ten years	Due after five years through ten years	136,473		125,923			155,329		144,145
Due after ten years	Due after ten years	34,611		31,636			1,481,344		1,214,531
Total debt securities	Total debt securities	369,363		335,846			1,701,161		1,421,464
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	1,678,641		1,436,759			956,107		763,567
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	1,416,569		1,384,670			50,489		45,312
Private-label	Private-label	—		—			349,410		274,518
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	18,779		16,154			782,291		589,097
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	188,667		176,474			61,025		51,940
Asset backed securities:	Asset backed securities:
FFELP
FFELP
FFELP	FFELP	140,881		138,514			—		—
SBA	SBA	3,299		3,261			—		—

Total investment securities	Total investment securities	$	3,816,198	$	3,491,679		$	3,900,483	$	3,145,898
Total investment securities
Total investment securities
Ratio of fair value to amortized cost	Ratio of fair value to amortized cost			91.5		%			80.7		%	Ratio of fair value to amortized cost			95.4	%		86.1	%

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On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at ~~September 30, 2023:~~March 31, 2024:


($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	AAA		AA		A		Not Rated		Total		AAA	AA	A	Not Rated	Total
U.S. Treasury securities	U.S. Treasury securities	$	999	$	—	$	—	$	—	$	999
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	769,052		923,707		6,248		1,156		1,700,162
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	956,107		—		—		—		956,107
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	50,489		—		—		—		50,489
Private-label	Private-label	349,410		—		—		—		349,410
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	782,291		—		—		—		782,291
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	61,025		—		—		—		61,025
Total HTM securities	Total HTM securities	$	2,969,372	$	923,707	$	6,248	$	1,156	$	3,900,483

The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, ~~2022:~~2023:


($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	AAA		AA		A		Not Rated		Total		AAA	AA	A	Not Rated	Total
U.S. Treasury securities	U.S. Treasury securities	$	999	$	—	$	—	$	—	$	999
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	806,529		917,059		7,604		1,158		1,732,351
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	961,231		—		—		—		961,231
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	52,979		—		—		—		52,979
Private-label	Private-label	364,728		—		—		—		364,728
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	778,796		—		—		—		778,796
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	69,369		—		—		—		69,369
Total HTM securities	Total HTM securities	$	3,034,630	$	917,059	$	7,604	$	1,158	$	3,960,451

The following table summarizes gross realized gains and losses on AFS securities, the gain on sale and net write-up of equity securities, and proceeds from the sale of AFS investment securities for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)

		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)		2023		2022		2023		2022
Gross realized gains on AFS securities		$	—	$	—	$	—	$	21

Gross realized (losses) on AFS securities

Gross realized (losses) on AFS securities

Gross realized (losses) on AFS securities	Gross realized (losses) on AFS securities	—		—		—		(8)

Gain on sale and net write-up (down) of equity securities	Gain on sale and net write-up (down) of equity securities	(11)		5,664		55		5,664

Gain on sale and net write-up (down) of equity securities

Gain on sale and net write-up (down) of equity securities
Investment securities gains (losses), net
Investment securities gains (losses), net
Investment securities gains (losses), net	Investment securities gains (losses), net	$	(11)	$	5,664	$	55	$	5,676
Proceeds from sales of AFS investment securities	Proceeds from sales of AFS investment securities	$	—	$	—	$	—	$	1,061
Proceeds from sales of AFS investment securities
Proceeds from sales of AFS investment securities

During the ~~third~~first quarter of ~~2022,~~2024, the Corporation sold its remaining Visa Class B restricted shares ~~obtained in the acquisition of First Staunton, which were carried~~ at a ~~zero-cost basis. The remaining shares, which are carried at fair value, were subsequently written up to reflect the new observable price resulting from that sale.~~gain of $4 million.

Investment securities with a carrying value of $1.5 billion and $1.6 billion ~~and $2.3 billion~~ at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively, were pledged as required to secure certain deposits or for other purposes.

Accrued interest receivable on HTM securities totaled $16 million and ~~$19~~$18 million at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Accrued interest receivable on AFS securities totaled ~~$14~~$16 million and $9$15 million at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets. ~~There was no interest income reversed for investments going into nonaccrual at both September 30, 2023 and December 31, 2022.~~

~~A security is considered past due once it is 30 days past due under the terms of the agreement. At both September 30, 2023 and December 31, 2022, the Corporation had no past due HTM securities.~~

The allowance for credit losses on HTM securities was approximately ~~$67,000~~$76,000 at ~~September 30, 2023~~March 31, 2024 and approximately ~~$54,000~~$75,000 at December 31, ~~2022,~~2023, attributable entirely to the Corporation's municipal securities, included in HTM investment securities, net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal, and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and private-label residential mortgage-related securities that have credit enhancement which covers the first 15% of losses and, as a result, no allowance for credit losses has been recorded related to these securities.

Table of Contents

The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at ~~September 30, 2023:~~March 31, 2024:


		Less than 12 months					12 months or more					Total					Less than 12 months			12 months or more			Total
($ in thousands)	($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value		($ in thousands)	Number of Securities	Unrealized (Losses)	Fair Value	Number of Securities	Unrealized (Losses)	Fair Value	Unrealized (Losses)	Fair Value
AFS investment securities	AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	—	$	—	$	—	7	$	(15,531)	$	109,024	$	(15,531)	$	109,024
Agency securities		—	—		—		1	(1,410)		13,590		(1,410)		13,590
U.S. Treasury securities
U.S. Treasury securities

Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	229	(6,575)		108,953		182	(9,916)		100,413		(16,492)		209,367
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	20	(1,390)		24,258		107	(240,606)		1,394,562		(241,997)		1,418,820
GNMA	GNMA	75	(27,131)		1,271,478		17	(4,767)		61,087		(31,898)		1,332,565

Commercial mortgage-related securities:	Commercial mortgage-related securities:
Commercial mortgage-related securities:
Commercial mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	—	—		—		1	(2,625)		16,154		(2,625)		16,154
GNMA	GNMA	9	(5,848)		100,659		33	(6,345)		75,815		(12,193)		176,474
Asset backed securities:	Asset backed securities:
FFELP
FFELP
FFELP	FFELP	—	—		—		14	(2,450)		129,503		(2,450)		129,503
SBA	SBA	2	(1)		620		7	(46)		1,525		(46)		2,144
Other debt securities	Other debt securities	1	(21)		979		2	(63)		1,937		(85)		2,915

Total	Total	336	$	(40,967)	$	1,506,947	371	$	(283,760)	$	1,903,609	$	(324,727)	$	3,410,556
Total
Total
HTM investment securities	HTM investment securities
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities	U.S. Treasury securities	—	$	—	$	—	1	$	(51)	$	948	$	(51)	$	948
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	586	(48,660)		663,360		567	(230,998)		743,274		(279,659)		1,406,634
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	31	(2,239)		37,996		92	(218,338)		725,539		(220,577)		763,535
GNMA	GNMA	8	(466)		11,058		78	(4,726)		34,253		(5,192)		45,312
Private-label	Private-label	—	—		—		18	(85,120)		274,518		(85,120)		274,518
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	2	(2,746)		24,130		43	(203,776)		564,968		(206,522)		589,097
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	—	—		—		13	(9,506)		51,940		(9,506)		51,940
Total	Total	627	$	(54,112)	$	736,544	812	$	(752,515)	$	2,395,440	$	(806,627)	$	3,131,984

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For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, ~~2022:~~2023:


		Less than 12 months					12 months or more					Total					Less than 12 months			12 months or more			Total
($ in thousands)	($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value		($ in thousands)	Number of Securities	Unrealized (Losses)	Fair Value	Number of Securities	Unrealized (Losses)	Fair Value	Unrealized (Losses)	Fair Value
AFS investment securities	AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	—	$	—	$	—	7	$	(15,063)	$	109,378	$	(15,063)	$	109,378
Agency securities		—	—		—		1	(1,468)		13,532		(1,468)		13,532
U.S. Treasury securities
U.S. Treasury securities

Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	358	(5,066)		201,260		4	(8)		1,916		(5,074)		203,176
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	24	(31,266)		260,986		84	(185,170)		1,321,420		(216,436)		1,582,406
GNMA	GNMA	23	(4,415)		220,276		2	(840)		11,096		(5,255)		231,372

Commercial mortgage-related securities:	Commercial mortgage-related securities:
Commercial mortgage-related securities:
Commercial mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	1	(1,896)		17,142		—	—		—		(1,896)		17,142
GNMA	GNMA	33	(3,920)		101,036		4	(649)		9,426		(4,569)		110,462
Asset backed securities:	Asset backed securities:
FFELP
FFELP
FFELP	FFELP	3	(1,668)		44,304		12	(4,278)		106,887		(5,947)		151,191
SBA	SBA	2	(1)		417		6	(50)		2,057		(51)		2,474
Other debt securities	Other debt securities	2	(30)		1,970		1	(49)		951		(78)		2,922

Total	Total	446	$	(48,263)	$	847,391	121	$	(207,575)	$	1,576,665	$	(255,837)	$	2,424,055
Total
Total
HTM investment securities	HTM investment securities
U.S. Treasury securities
U.S. Treasury securities
U.S. Treasury securities	U.S. Treasury securities	1	$	(62)	$	936	—	$	—	$	—	$	(62)	$	936
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	771	(96,282)		1,079,216		156	(86,415)		231,022		(182,697)		1,310,238
Residential mortgage-related securities:	Residential mortgage-related securities:
FNMA/FHLMC
FNMA/FHLMC
FNMA/FHLMC	FNMA/FHLMC	79	(18,925)		143,201		22	(156,836)		671,570		(175,760)		814,770
GNMA	GNMA	81	(3,436)		44,476		—	—		—		(3,436)		44,476
Private-label	Private-label	3	(9,509)		58,733		15	(63,411)		244,772		(72,920)		303,505
Commercial mortgage-related securities:	Commercial mortgage-related securities:
FNMA/FHLMC	FNMA/FHLMC	4	(3,814)		20,338		39	(174,467)		576,911		(178,281)		597,249
FNMA/FHLMC
FNMA/FHLMC
GNMA	GNMA	8	(2,528)		34,612		6	(4,726)		28,080		(7,254)		62,691
Total	Total	947	$	(134,556)	$	1,381,511	238	$	(485,855)	$	1,752,354	$	(620,411)	$	3,133,865

The Corporation reviews the AFS investment securities portfolio on a quarterly basis to monitor its credit exposure. A determination as to whether a security’s decline in fair value is the result of credit risk takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in this impairment analysis include the extent to which the security has been in an unrealized loss position, the change in security rating, financial condition and near-term prospects of the issuer, as well as the security and industry specific economic conditions.

Based on the Corporation’s evaluation, management does not believe any unrealized losses at ~~September 30, 2023~~March 31, 2024 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. ~~The~~As of March 31, 2024, the Corporation does not intend to sell, nor does it believe that it will be required to sell, the securities in an unrealized loss position before recovery of their amortized cost basis.

FHLB and Federal Reserve Bank stocks: The Corporation is required to maintain Federal Reserve Bank stock and FHLB stock as a member bank of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of ~~$182~~$86 million and ~~$209~~$143 million at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. The Corporation had Federal Reserve Bank stock of $88 million and $87 million at ~~both September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023, respectively. Accrued interest receivable on FHLB stock totaled $3$2 million and $4 million at ~~both September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023, respectively. There was approximately ~~$958,000~~$921,000 of accrued interest receivable on Federal Reserve Bank Stock at ~~September 30, 2023~~March 31, 2024 and none at December 31, ~~2022.~~2023. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.

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Equity Securities

Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of CRA Qualified Investment mutual funds and other mutual funds. The Corporation had equity securities with readily determinable fair values of $7 million at ~~September 30, 2023~~both March 31, 2024 and ~~$6 million at~~ December 31, ~~2022.~~2023.

Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values ~~which~~ primarily consists of ~~Visa Class B restricted shares and~~ an investment in a private ~~SBA~~ loan ~~fund, was~~fund. The Corporation had equity securities without readily determinable fair values carried at ~~$29~~$13 million and ~~$19~~$35 million at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. During the first quarter of 2024, the Corporation sold all of its remaining Visa Class B restricted shares.

Note 6 Loans

The period end loan composition was as follows:


($ in thousands)	($ in thousands)	Sep 30, 2023		Dec 31, 2022		($ in thousands)	Mar 31, 2024	Dec 31, 2023

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	10,099,068	$	9,759,454
Commercial real estate — owner occupied	Commercial real estate — owner occupied	1,054,969		991,722
Commercial and business lending	Commercial and business lending	11,154,037		10,751,176
Commercial real estate — investor	Commercial real estate — investor	5,218,980		5,080,344
Real estate construction	Real estate construction	2,130,719		2,155,222
Commercial real estate lending	Commercial real estate lending	7,349,699		7,235,565
Total commercial	Total commercial	18,503,736		17,986,742
Residential mortgage	Residential mortgage	8,782,645		8,511,550
Auto finance	Auto finance	2,007,164		1,382,073
Home equity	Home equity	623,650		624,353
Other consumer	Other consumer	275,993		294,851
Total consumer	Total consumer	11,689,451		10,812,828
Total loans	Total loans	$	30,193,187	$	28,799,569

Accrued interest receivable on loans totaled ~~$136~~$133 million at ~~September 30, 2023,~~March 31, 2024, and ~~$113~~$132 million at December 31, ~~2022,~~2023, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received is reversed against interest income when a loan is placed on nonaccrual. The amount of accrued interest reversed was approximately $347,000 and $1 million for the three and nine months ended September 30, 2023, respectively, and approximately $189,000 and $328,000 for the three and nine months ended September 30, 2022, respectively.

2019

Table of Contents

The following table presents loans by credit quality indicator by origination year at ~~September 30, 2023:~~March 31, 2024:


						Term Loans Amortized Cost Basis by Origination Year(a)
					Term Loans Amortized Cost Basis by Origination Year(a)
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2023		2022		2021		2020		2019		Prior		Total		Rev Loans Converted to Term(a)	Rev Loans Amortized Cost Basis	YTD 2024	2023	2022	2021	2020	Prior	Total

Commercial and industrial:	Commercial and industrial:

Commercial and industrial:

Commercial and industrial:
Risk rating:
Risk rating:
Risk rating:	Risk rating:
Pass	Pass	$	477	$	2,065,717	$	1,775,767	$	2,516,155	$	1,427,787	$	549,748	$	481,866	$	895,313	$	9,712,353
Pass
Pass
Special mention	Special mention	39		26,400		39		39,694		8,731		3,667		—		26,136		104,666
Potential problem		829		72,533		311		51,502		57,611		20,222		4,434		623		207,237
Substandard
Nonaccrual	Nonaccrual	14,756		—		13,945		20,299		18,898		21,617		—		53		74,812
Commercial and industrial	Commercial and industrial	$	16,101	$	2,164,649	$	1,790,062	$	2,627,650	$	1,513,027	$	595,254	$	486,300	$	922,126	$	10,099,068
Commercial real estate - owner occupied:	Commercial real estate - owner occupied:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	17,557	$	133,133	$	182,517	$	196,057	$	104,786	$	142,602	$	229,321	$	1,005,973
Special mention	Special mention	—		421		—		2,000		7,666		2,446		4,737		—		17,269
Potential problem		—		—		748		1,177		3,334		1,205		1,807		19,520		27,792
Substandard
Nonaccrual	Nonaccrual	—		—		—		1,568		2,260		—		—		108		3,936
Commercial real estate - owner occupied	Commercial real estate - owner occupied	$	—	$	17,978	$	133,882	$	187,262	$	209,317	$	108,436	$	149,146	$	248,950	$	1,054,969
Commercial and business lending:	Commercial and business lending:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	477	$	2,083,273	$	1,908,900	$	2,698,672	$	1,623,845	$	654,533	$	624,468	$	1,124,635	$	10,718,325
Special mention	Special mention	39		26,821		39		41,694		16,396		6,112		4,737		26,136		121,935
Potential problem		829		72,533		1,060		52,679		60,945		21,427		6,242		20,143		235,029
Substandard
Nonaccrual	Nonaccrual	14,756		—		13,945		21,868		21,158		21,617		—		161		78,748
Commercial and business lending	Commercial and business lending	$	16,101	$	2,182,627	$	1,923,943	$	2,814,912	$	1,722,344	$	703,689	$	635,446	$	1,171,075	$	11,154,037
Commercial real estate - investor:	Commercial real estate - investor:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	157,976	$	500,154	$	1,278,072	$	1,181,060	$	687,373	$	459,677	$	634,704	$	4,899,015
Special mention	Special mention	—		—		9,400		54,103		26,330		—		64,801		5,608		160,243
Potential problem		—		—		6,425		5,842		4,771		69,079		10,903		51,820		148,840
Substandard
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		10,882		10,882
Commercial real estate - investor	Commercial real estate - investor	$	—	$	157,976	$	515,979	$	1,338,016	$	1,212,162	$	756,452	$	535,381	$	703,014	$	5,218,980
Real estate construction:	Real estate construction:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	27,872	$	251,100	$	1,008,428	$	716,123	$	91,982	$	11,970	$	23,141	$	2,130,617

Nonaccrual

Nonaccrual

Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		103		103
Real estate construction	Real estate construction	$	—	$	27,872	$	251,100	$	1,008,428	$	716,123	$	91,982	$	11,970	$	23,244	$	2,130,719
Commercial real estate lending:	Commercial real estate lending:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	185,848	$	751,254	$	2,286,500	$	1,897,183	$	779,355	$	471,646	$	657,845	$	7,029,632
Special mention	Special mention	—		—		9,400		54,103		26,330		—		64,801		5,608		160,243
Potential problem		—		—		6,425		5,842		4,771		69,079		10,903		51,820		148,840
Substandard
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		10,985		10,985
Commercial real estate lending	Commercial real estate lending	$	—	$	185,848	$	767,080	$	2,346,445	$	1,928,284	$	848,434	$	547,351	$	726,258	$	7,349,699
Total commercial:	Total commercial:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	477	$	2,269,121	$	2,660,154	$	4,985,172	$	3,521,028	$	1,433,889	$	1,096,114	$	1,782,480	$	17,747,957
Special mention	Special mention	39		26,821		9,439		95,797		42,727		6,112		69,538		31,744		282,178
Potential problem		829		72,533		7,485		58,521		65,716		90,506		17,144		71,963		383,869
Substandard
Nonaccrual	Nonaccrual	14,756		—		13,945		21,868		21,158		21,617		—		11,146		89,732
Total commercial	Total commercial	$	16,101	$	2,368,474	$	2,691,023	$	5,161,357	$	3,650,628	$	1,552,123	$	1,182,797	$	1,897,334	$	18,503,736

2120

Table of Contents


						Term Loans Amortized Cost Basis by Origination Year(a)
					Term Loans Amortized Cost Basis by Origination Year(a)
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2023		2022		2021		2020		2019		Prior		Total		Rev Loans Converted to Term(a)	Rev Loans Amortized Cost Basis	YTD 2024	2023	2022	2021	2020	Prior	Total
Residential mortgage:	Residential mortgage:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass	Pass	$	—	$	—	$	294,499	$	1,725,855	$	2,176,722	$	1,585,071	$	757,087	$	2,176,012	$	8,715,245

Potential problem		—		—		—		80		—		77		347		744		1,247
Pass
Pass
Special mention
Substandard
Nonaccrual	Nonaccrual	—		—		142		3,098		7,003		7,506		6,742		41,662		66,153
Residential mortgage	Residential mortgage	$	—	$	—	$	294,640	$	1,729,032	$	2,183,725	$	1,592,654	$	764,176	$	2,218,418	$	8,782,645
Auto finance:	Auto finance:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	—	$	885,528	$	1,031,283	$	82,447	$	204	$	614	$	202	$	2,000,278
Special mention	Special mention	—		—		601		1,436		316		—		—		—		2,353

Substandard
Nonaccrual	Nonaccrual	—		—		452		3,551		527		—		4		—		4,533
Auto finance	Auto finance	$	—	$	—	$	886,581	$	1,036,271	$	83,289	$	204	$	617	$	202	$	2,007,164
Home equity:	Home equity:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	7,318	$	514,431	$	4,986	$	35,751	$	1,671	$	1,450	$	4,703	$	51,693	$	614,685
Special mention	Special mention	343		102		—		40		73		—		55		542		811
Potential problem		11		—		—		—		—		—		45		192		236
Substandard
Nonaccrual	Nonaccrual	832		67		—		68		105		99		373		7,205		7,917
Home equity	Home equity	$	8,504	$	514,599	$	4,986	$	35,859	$	1,849	$	1,549	$	5,175	$	59,631	$	623,650
Other consumer:	Other consumer:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	99	$	193,494	$	5,521	$	3,933	$	2,772	$	1,234	$	514	$	67,749	$	275,217
Special mention	Special mention	17		520		—		—		16		14		2		2		553

Substandard
Nonaccrual	Nonaccrual	81		66		11		1		8		73		11		52		222
Other consumer	Other consumer	$	197	$	194,079	$	5,532	$	3,934	$	2,797	$	1,321	$	527	$	67,803	$	275,993
Total consumer:	Total consumer:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	7,417	$	707,925	$	1,190,534	$	2,796,822	$	2,263,612	$	1,587,959	$	762,917	$	2,295,656	$	11,605,425
Special mention	Special mention	360		621		601		1,476		405		14		57		543		3,717
Potential problem		11		—		—		80		—		77		392		935		1,483
Substandard
Nonaccrual	Nonaccrual	913		133		604		6,718		7,644		7,679		7,129		48,919		78,826
Total consumer	Total consumer	$	8,701	$	708,679	$	1,191,739	$	2,805,096	$	2,271,661	$	1,595,728	$	770,495	$	2,346,054	$	11,689,451
Total loans:	Total loans:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	7,894	$	2,977,046	$	3,850,688	$	7,781,993	$	5,784,640	$	3,021,848	$	1,859,031	$	4,078,136	$	29,353,382
Special mention	Special mention	398		27,442		10,039		97,273		43,132		6,126		69,595		32,288		285,895
Potential problem		841		72,533		7,485		58,600		65,716		90,583		17,536		72,899		385,352
Substandard
Nonaccrual	Nonaccrual	15,669		133		14,549		28,585		28,801		29,295		7,129		60,065		168,558
Total loans	Total loans	$	24,802	$	3,077,153	$	3,882,762	$	7,966,452	$	5,922,289	$	3,147,851	$	1,953,292	$	4,243,388	$	30,193,187

(a) Revolving loans converted to term loans are those converted during the reporting period and are also reported in their year of origination.

2221

Table of Contents

The following table presents loans by credit quality indicator by origination year at December 31, ~~2022:~~2023:


						Term Loans Amortized Cost Basis by Origination Year(a)
					Term Loans Amortized Cost Basis by Origination Year(a)
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2022		2021		2020		2019		2018		Prior		Total		Rev Loans Converted to Term(a)	Rev Loans Amortized Cost Basis	2023	2022	2021	2020	2019	Prior	Total

Commercial and industrial:	Commercial and industrial:

Commercial and industrial:

Commercial and industrial:
Risk rating:
Risk rating:
Risk rating:	Risk rating:
Pass	Pass	$	1,423	$	1,938,777	$	3,245,546	$	2,367,008	$	567,833	$	573,120	$	330,642	$	432,906	$	9,455,833
Pass
Pass
Special mention	Special mention	—		93,209		3,411		23,607		—		—		19		32,497		152,744
Potential problem		447		24,549		41,400		4,193		21,887		38,169		218		6,133		136,549
Substandard
Nonaccrual	Nonaccrual	3,926		—		5,210		—		9,119		—		—		—		14,329
Commercial and industrial	Commercial and industrial	$	5,796	$	2,056,535	$	3,295,567	$	2,394,809	$	598,839	$	611,289	$	330,879	$	471,535	$	9,759,454
Commercial real estate - owner occupied:	Commercial real estate - owner occupied:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	12,447	$	211,645	$	225,627	$	163,965	$	160,370	$	73,487	$	97,420	$	944,961
Special mention	Special mention	—		—		—		—		1,136		1,491		9,713		—		12,339
Potential problem		—		1,325		1,238		11,141		5,523		10,769		370		4,055		34,422

Substandard
Nonaccrual
Commercial real estate - owner occupied	Commercial real estate - owner occupied	$	—	$	13,772	$	212,883	$	236,769	$	170,624	$	172,630	$	83,570	$	101,475	$	991,722
Commercial and business lending:	Commercial and business lending:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	1,423	$	1,951,224	$	3,457,191	$	2,592,636	$	731,798	$	733,490	$	404,129	$	530,326	$	10,400,794
Special mention	Special mention	—		93,209		3,411		23,607		1,136		1,491		9,732		32,497		165,083
Potential problem		447		25,874		42,638		15,335		27,410		48,938		589		10,188		170,971
Substandard
Nonaccrual	Nonaccrual	3,926		—		5,210		—		9,119		—		—		—		14,329
Commercial and business lending	Commercial and business lending	$	5,796	$	2,070,307	$	3,508,450	$	2,631,578	$	769,463	$	783,919	$	414,449	$	573,010	$	10,751,176
Commercial real estate - investor:	Commercial real estate - investor:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	38,412	$	106,280	$	1,633,094	$	1,419,000	$	683,121	$	530,444	$	262,858	$	210,299	$	4,845,096
Special mention	Special mention	—		—		61,968		24,149		7,361		9,400		—		10,455		113,333
Potential problem		—		—		16,147		21,303		27,635		1,333		19,017		7,099		92,535
Nonaccrual		—		—		2,177		25,668		—		—		—		1,535		29,380
Substandard

Commercial real estate - investor
Commercial real estate - investor
Commercial real estate - investor	Commercial real estate - investor	$	38,412	$	106,280	$	1,713,387	$	1,490,120	$	718,117	$	541,177	$	281,875	$	229,387	$	5,080,344
Real estate construction:	Real estate construction:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass	Pass	$	—	$	29,892	$	900,593	$	913,107	$	241,230	$	12,062	$	2,226	$	9,775	$	2,108,885
Special mention		—		—		—		—		12,174		33,087		—		—		45,261
Potential problem		—		—		—		—		970		—		—		—		970
Pass
Pass

Nonaccrual

Nonaccrual

Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		105		105
Real estate construction	Real estate construction	$	—	$	29,892	$	900,593	$	913,107	$	254,374	$	45,149	$	2,226	$	9,880	$	2,155,222
Commercial real estate lending:	Commercial real estate lending:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	38,412	$	136,173	$	2,533,687	$	2,332,107	$	924,351	$	542,505	$	265,083	$	220,073	$	6,953,981
Special mention	Special mention	—		—		61,968		24,149		19,535		42,487		—		10,455		158,595
Potential problem		—		—		16,147		21,303		28,605		1,333		19,017		7,099		93,505
Substandard
Nonaccrual	Nonaccrual	—		—		2,177		25,668		—		—		—		1,640		29,485
Commercial real estate lending	Commercial real estate lending	$	38,412	$	136,173	$	2,613,980	$	2,403,227	$	972,492	$	586,326	$	284,101	$	239,267	$	7,235,565

2322

Table of Contents


						Term Loans Amortized Cost Basis by Origination Year(a)
					Term Loans Amortized Cost Basis by Origination Year(a)
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2022		2021		2020		2019		2018		Prior		Total		Rev Loans Converted to Term(a)	Rev Loans Amortized Cost Basis	2023	2022	2021	2020	2019	Prior	Total
Total commercial:	Total commercial:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	39,835	$	2,087,396	$	5,990,879	$	4,924,743	$	1,656,149	$	1,275,996	$	669,213	$	750,399	$	17,354,774
Special mention	Special mention	—		93,209		65,379		47,756		20,671		43,978		9,732		42,952		323,677
Potential problem		447		25,874		58,785		36,638		56,016		50,271		19,606		17,287		264,476
Substandard
Nonaccrual	Nonaccrual	3,926		—		7,387		25,668		9,119		—		—		1,640		43,814
Total commercial	Total commercial	$	44,208	$	2,206,480	$	6,122,430	$	5,034,805	$	1,741,955	$	1,370,245	$	698,550	$	812,278	$	17,986,742
Residential mortgage:	Residential mortgage:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	—	$	1,410,566	$	2,184,125	$	1,716,663	$	817,164	$	370,724	$	1,951,406	$	8,450,648
Special mention	Special mention	—		—		—		284		96		—		—		63		444
Potential problem		—		—		455		71		—		738		29		685		1,978
Substandard
Nonaccrual	Nonaccrual	—		—		8,506		3,851		6,219		3,744		5,014		31,145		58,480
Residential mortgage	Residential mortgage	$	—	$	—	$	1,419,527	$	2,188,332	$	1,722,979	$	821,645	$	375,768	$	1,983,299	$	8,511,550
Auto finance:	Auto finance:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	—	$	—	$	1,271,205	$	106,102	$	333	$	1,267	$	446	$	61	$	1,379,414
Special mention	Special mention	—		—		1,052		118		—		—		—		—		1,170

Substandard
Nonaccrual	Nonaccrual	—		—		1,149		331		—		9		—		—		1,490
Auto finance	Auto finance	$	—	$	—	$	1,273,406	$	106,551	$	333	$	1,276	$	446	$	61	$	1,382,073
Home equity:	Home equity:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	7,254	$	508,212	$	31,389	$	6,508	$	2,112	$	6,197	$	6,966	$	54,827	$	616,211
Special mention	Special mention	47		102		—		—		—		—		47		310		458
Potential problem		—		15		—		—		—		34		2		146		197
Substandard
Nonaccrual	Nonaccrual	1,590		—		306		102		131		307		319		6,322		7,487
Home equity	Home equity	$	8,891	$	508,329	$	31,695	$	6,610	$	2,243	$	6,538	$	7,333	$	61,605	$	624,353
Other consumer:	Other consumer:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	64	$	199,942	$	7,429	$	5,256	$	2,468	$	1,238	$	174	$	77,611	$	294,117
Special mention	Special mention	6		490		11		—		5		5		—		25		537

Substandard
Nonaccrual	Nonaccrual	78		56		11		21		10		56		10		34		197
Other consumer	Other consumer	$	147	$	200,488	$	7,452	$	5,276	$	2,482	$	1,300	$	184	$	77,670	$	294,851
Total consumer:	Total consumer:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	7,318	$	708,154	$	2,720,589	$	2,301,991	$	1,721,576	$	825,866	$	378,310	$	2,083,904	$	10,740,390
Special mention	Special mention	52		592		1,063		403		101		5		47		398		2,609
Potential problem		—		15		455		71		—		772		31		831		2,175
Substandard
Nonaccrual	Nonaccrual	1,668		56		9,973		4,304		6,360		4,116		5,343		37,501		67,654
Total consumer	Total consumer	$	9,038	$	708,817	$	2,732,080	$	2,306,769	$	1,728,037	$	830,759	$	383,731	$	2,122,635	$	10,812,828
Total loans:	Total loans:
Risk rating:	Risk rating:
Risk rating:
Risk rating:
Pass
Pass
Pass	Pass	$	47,152	$	2,795,551	$	8,711,468	$	7,226,734	$	3,377,725	$	2,101,861	$	1,047,522	$	2,834,303	$	28,095,164
Special mention	Special mention	52		93,801		66,443		48,159		20,772		43,983		9,778		43,350		326,286
Potential problem		447		25,889		59,240		36,709		56,016		51,043		19,637		18,118		266,651
Substandard
Nonaccrual	Nonaccrual	5,595		56		17,360		29,972		15,479		4,116		5,343		39,141		111,467
Total loans	Total loans	$	53,246	$	2,915,297	$	8,854,510	$	7,341,574	$	3,469,992	$	2,201,004	$	1,082,280	$	2,934,912	$	28,799,569

(a) Revolving loans converted to term loans are those converted during the reporting period and are also reported in their year of origination.

2423

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The following table presents gross charge offs by origination year ~~at September 30,~~for the three months ended March 31, 2024:


			Gross Charge Offs by Origination Year
($ in thousands)	Rev Loans Amortized Cost Basis		YTD 2024		2023		2022		2021		2020		Prior		Total
Commercial and industrial	$	1,024	$	—	$	125	$	553	$	17,724	$	3	$	—	$	19,429
Commercial real estate-owner occupied	—		—		—		—		—		—		3		3
Commercial and business lending	1,024		—		125		553		17,724		3		3		19,432



Total commercial	1,024		—		125		553		17,724		3		3		19,432
Residential mortgage	—		—		40		—		—		2		47		89
Auto finance	—		—		767		1,675		158		—		—		2,600
Home equity	93		—		—		—		—		—		15		108
Other consumer	1,688		—		15		8		17		28		34		1,790
Total consumer	1,782		—		822		1,683		175		30		95		4,586
Total gross charge offs	$	2,806	$	—	$	947	$	2,236	$	17,899	$	33	$	98	$	24,018

The following table presents gross charge offs by origination year for the year ended December 31, 2023:
Gross Charge Offs by Origination Year
($ in thousands) Rev Loans Amortized Cost Basis YTD 2023 2022 2021 2020 2019 Prior Total
Commercial and industrial $ 2,760 $ 401 $ 5,695 $ 13,264 $ 5,900 $ — $ 3,795 $ 31,816
Commercial and business lending 2,760 401 5,695 13,264 5,900 — 3,795 31,816
Commercial real estate-investor — — — — — — 242 242
Real estate construction — — — — — — 25 25
Commercial real estate lending — — — — — — 266 266
Total commercial 2,760 401 5,695 13,264 5,900 — 4,062 32,082
Residential mortgage — — 128 22 148 7 410 714
Auto finance — 254 3,355 442 — 5 — 4,056
Home equity 12 — 43 45 — 22 147 269
Other consumer 3,351 — 149 124 29 12 106 3,769
Total consumer 3,363 254 3,674 633 177 45 662 8,809
Total gross charge offs $ 6,124 $ 655 $ 9,369 $ 13,897 $ 6,077 $ 45 $ 4,724 $ 40,891


			Gross Charge Offs by Origination Year
($ in thousands)	Rev Loans Amortized Cost Basis		2023		2022		2021		2020		2019		Prior		Total
Commercial and industrial	$	4,130	$	717	$	9,594	$	25,270	$	5,958	$	—	$	18	$	45,687
Commercial real estate-owner occupied	—		—		—		—		—		25		—		25
Commercial and business lending	4,130		717		9,594		25,270		5,958		25		18		45,713
Commercial real estate-investor	—		—		—		—		—		—		252		252
Real estate construction	—		—		—		—		—		—		25		25
Commercial real estate lending	—		—		—		—		—		—		277		277
Total commercial	4,130		717		9,594		25,270		5,958		25		295		45,989
Residential mortgage	—		2		32		42		148		5		723		952
Auto finance	—		795		4,524		626		—		5		—		5,950
Home equity	53		21		3		31		—		22		294		424
Other consumer	4,884		—		72		124		131		72		170		5,453
Total consumer	4,937		818		4,630		823		279		105		1,187		12,779
Total gross charge offs	$	9,068	$	1,535	$	14,224	$	26,093	$	6,237	$	130	$	1,482	$	58,768

Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate policies for ACLL, nonaccrual loans, and charge offs.

For commercial loans, management has determined the pass credit quality indicator to include credits exhibiting acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits performing in accordance with the original contractual terms.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that warrant specific attention from management. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Accruing loan modifications could be pass or special mention, depending on the risk rating on the loan. ~~Potential problem~~Substandard loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, which may jeopardize liquidation of the debt, and are characterized by the distinct possibility the Corporation will sustain some loss if the deficiencies are not corrected. Management has determined commercial loan relationships in nonaccrual status, and commercial and consumer loan relationships with their terms restructured in a loan modification, meet the criteria to be individually evaluated. Commercial loans classified as special mention, ~~potential problem,~~substandard, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass credits, which are performing rated credits, are generally reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

~~The following table presents loans by past due status at September 30, 2023:~~
Accruing
($ in thousands) Current 30-59 Days
Past Due 60-89 Days
Past Due 90+ Days
Past Due
Nonaccrual(a)(b)
Total
Commercial and industrial $ 10,022,308 $ 671 $ 835 $ 441 $ 74,812 $ 10,099,068
Commercial real estate - owner occupied 1,049,156 1,877 — — 3,936 1,054,969
Commercial and business lending 11,071,464 2,548 835 441 78,748 11,154,037
Commercial real estate - investor 5,197,977 10,120 1 — 10,882 5,218,980
Real estate construction 2,130,606 10 — — 103 2,130,719
Commercial real estate lending 7,328,583 10,130 1 — 10,985 7,349,699
Total commercial 18,400,047 12,678 836 441 89,732 18,503,736
Residential mortgage 8,704,840 11,652 — — 66,153 8,782,645
Auto finance 1,985,943 14,335 2,353 — 4,533 2,007,164
Home equity 612,045 2,876 811 — 7,917 623,650
Other consumer 272,175 1,255 625 1,715 222 275,993
Total consumer 11,575,003 30,118 3,789 1,715 78,826 11,689,451
Total loans $ 29,975,051 $ 42,797 $ 4,626 $ 2,156 $ 168,558 $ 30,193,187

~~(a) Of the total nonaccrual loans, $114 million, or 68%, were current with respect to payment at September 30, 2023.~~

(b) No interest income was recognized on nonaccrual loans for the three and nine months ended September 30, 2023. In addition, there were $65 million of nonaccrual loans for which there was no related ACLL at September 30, 2023.

2524

Table of Contents

The following table presents loans by past due status at March 31, 2024:


	Accruing
($ in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(a)(b)		Total


Commercial and industrial	$	9,785,140	$	371	$	150	$	426	$	72,243	$	9,858,329
Commercial real estate - owner occupied	1,093,804		—		—		—		2,090		1,095,894
Commercial and business lending	10,878,944		371		150		426		74,333		10,954,223
Commercial real estate - investor	4,997,335		—		19,164		—		18,697		5,035,195
Real estate construction	2,285,763		1,260		—		—		18		2,287,041
Commercial real estate lending	7,283,098		1,260		19,164		—		18,715		7,322,237
Total commercial	18,162,042		1,631		19,314		426		93,047		18,276,460
Residential mortgage	7,788,322		9,808		94		—		69,954		7,868,180
Auto finance	2,451,552		10,373		2,148		26		7,158		2,471,257
Home equity	608,821		2,506		312		24		8,100		619,764
Other consumer	254,313		1,298		963		1,942		87		258,603
Total consumer	11,103,009		23,985		3,517		1,992		85,299		11,217,802
Total loans	$	29,265,051	$	25,617	$	22,831	$	2,417	$	178,346	$	29,494,263

(a) Of the total nonaccrual loans, $98 million, or 55%, were current with respect to payment at March 31, 2024.

(b) No interest income was recognized on nonaccrual loans for the three months ended March 31, 2024. In addition, there were $20 million of nonaccrual loans for which there was no related ACLL at March 31, 2024.

The following table presents loans by past due status at December 31, ~~2022:~~2023:


	Accruing
($ in thousands)
($ in thousands)
($ in thousands)														Current	30-59 Days Past Due	60-89 Days Past Due	90+ Days Past Due	Nonaccrual(a)(b)	Total

		Accruing
($ in thousands)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(a)(b)		Total
Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	9,738,561	$	716	$	5,566	$	282	$	14,329	$	9,759,454
Commercial real estate - owner occupied	Commercial real estate - owner occupied	991,493		218		12		—		—		991,722
Commercial and business lending	Commercial and business lending	10,730,053		934		5,578		282		14,329		10,751,176
Commercial real estate - investor	Commercial real estate - investor	5,049,897		1,067		—		—		29,380		5,080,344
Real estate construction	Real estate construction	2,155,077		39		—		—		105		2,155,222
Commercial real estate lending	Commercial real estate lending	7,204,975		1,105		—		—		29,485		7,235,565
Total commercial	Total commercial	17,935,028		2,040		5,578		282		43,814		17,986,742
Residential mortgage	Residential mortgage	8,443,072		9,811		63		124		58,480		8,511,550
Auto finance	Auto finance	1,371,176		8,238		1,170		—		1,490		1,382,073
Home equity	Home equity	611,259		5,149		458		—		7,487		624,353
Other consumer	Other consumer	291,722		1,018		592		1,322		197		294,851
Total consumer	Total consumer	10,717,229		24,216		2,283		1,446		67,654		10,812,828
Total loans	Total loans	$	28,652,257	$	26,256	$	7,861	$	1,728	$	111,467	$	28,799,569

(a) Of the total nonaccrual loans, $6480 million, or ~~58%~~53%, were current with respect to payment at December 31, ~~2022.~~2023.

(b) No interest income was recognized on nonaccrual loans for the year ended December 31, ~~2022.~~2023. In addition, there were ~~$11~~$23 million of nonaccrual loans for which there was no related ACLL at December 31, ~~2022.~~2023.

Loan Modifications ~~and Troubled Debt Restructurings~~

Under ASU 2022-02, effective January 1, 2023, loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. Information on these loan modifications originated after the effective date is presented according to the new accounting guidance. Reporting periods prior to the adoption of ASU 2022-02 present information on TDRs under the previous disclosure requirements.

The following tables show the composition of loan modifications made to borrowers experiencing financial difficulty by the loan portfolio and type of concessions granted during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and March 31, 2023. Each of the types of concessions granted comprised less than 1% of their respective classes of loan portfolios at ~~September 30, 2023.~~March 31, 2024.


	~~Interest Rate Concession~~
~~($ in thousands)~~	~~Amortized Cost~~
~~Commercial and industrial~~	$	~~234~~

~~Auto~~	~~169~~
~~Home equity~~	77
~~Other consumer~~	~~1,243~~
~~Total loans modified~~	$	~~1,724~~


	~~Term Extension~~
~~($ in thousands)~~	~~Amortized Cost~~

~~Residential mortgage~~	$	~~208~~
~~Home equity~~	26

~~Total loans modified~~	$	~~234~~


	~~Combination - Interest Rate Concession and Term Extension~~
~~($ in thousands)~~	~~Amortized Cost~~

~~Residential mortgage~~	$	~~830~~
~~Home equity~~	~~262~~

~~Total loans modified~~	$	~~1,092~~


	Interest Rate Concession
	Amortized Cost
($ in thousands)	March 31, 2024		March 31, 2023
Commercial and industrial	$	159	$	47

Auto	46		61
Home equity	—		31
Other consumer	534		498
Total loans modified	$	739	$	637

2625

Table of Contents


	Term Extension
	Amortized Cost
($ in thousands)	March 31, 2024		March 31, 2023

Residential mortgage	$	—	$	209


Total loans modified	$	—	$	209


	Combination - Interest Rate Concession and Term Extension
	Amortized Cost
($ in thousands)	March 31, 2024		March 31, 2023

Residential mortgage	$	643	$	165
Home equity	31		93

Total loans modified	$	674	$	258

The following tables summarize, by loan portfolio, the financial effect of the Corporation's loan modifications on the modified loans as of ~~September 30,~~March 31, 2024 and March 31, 2023:


	Interest Rate Concession
	Financial Effect, Weighted Average Contractual Interest Rate (Decrease) Increase(a)
Loan Type	March 31, 2024		March 31, 2023
Commercial and industrial	(16)	%	(16)	%
Residential mortgage	3	%	—	%
Auto	(9)	%	(2)	%
Home equity	(3)	%	1	%
Other consumer	(21)	%	(20)	%
Weighted average of total loans modified	(9)	%	(17)	%

(a) Due to market conditions, some interest rate concessions on floating rate loans may involve an increase in rate that was lower in comparison to the rate of increase for floating rate loans not modified.


~~Interest Rate Concession~~
~~Loan Type~~	~~Financial Effect, Weighted Average Contractual Interest Rate (Decrease) Increase~~
~~Commercial and industrial~~	~~(18)~~	%
~~Auto~~	~~(4)~~	%
~~Home equity~~	—	%
~~Other consumer~~	~~(21)~~	%
~~Weighted average of total loans modified~~	~~(10)~~	%


Term Extension
~~Loan Type~~	Financial Effect, Weighted Average Term Increase(a)
Loan Type	March 31, 2024	March 31, 2023
Residential mortgage	158 months	26 months
Home equity	7864 months	0 months
Weighted average of total loans modified	32153 months	26 months

(a) During the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and March 31, 2023, term extensions changed the weighted average term on modified loans from ~~297~~254 to ~~328 months.~~407 months and 334 to 360 months, respectively.

The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the ~~nine~~twelve months ended ~~September 30,~~March 31, 2024:


	Payment Status (Amortized Cost Basis)
($ in thousands)	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual
Commercial and industrial	$	377	$	—	$	—	$	—
Residential mortgage	345		—		—		991
Auto	63		3		—		11
Home equity	135		47		—		139
Other consumer	1,487		—		—		—
Total loans modified	$	2,407	$	50	$	—	$	1,141

The following table depicts the performance of loans that have been modified in the three months ended March 31, 2023:


		Payment Status (Amortized Cost Basis)
	Payment Status (Amortized Cost Basis)														Payment Status (Amortized Cost Basis)
($ in thousands)	($ in thousands)	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual		($ in thousands)	Current	30-89 Days Past Due	90+ Days Past Due	Nonaccrual
Commercial and industrial	Commercial and industrial	$	234	$	—	$	—	$	—
Residential mortgage	Residential mortgage	81		126		—		832
Auto	Auto	169		—		—		—
Home equity	Home equity	236		—		—		130
Other consumer	Other consumer	1,243		—		—		—
Total loans modified	Total loans modified	$	1,963	$	126	$	—	$	961

Table of Contents

The following table provides the amortized cost of loan modifications by loan portfolio and type of concession that were modified in the previous ~~nine~~twelve months and subsequently had a payment default ~~as of September 30, 2023:~~
Amortized Cost of Loan Modifications that Subsequently Defaulted
($ in thousands) Interest Rate Concession Term Extension Combination Interest Rate Reduction and Term Extension
Residential mortgage $ — $ 208 $ 206
Home equity — — 18
Total loans modified $ — $ 208 $ 224

~~The following table presents nonaccrual and performing restructured loans by loan portfolio at December~~during the three months ended March 31, ~~2022:~~2024:
($ in thousands) Performing Restructured Loans
Nonaccrual Restructured Loans(a)
Commercial and industrial $ 12,453 $ —
Commercial real estate — owner occupied 316 —
Commercial real estate — investor 128 2,074
Real estate construction 195 9
Residential mortgage 16,829 17,117
Home equity 2,148 927
Other consumer 798 —
Total restructured loans $ 32,868 $ 20,127
~~(a) Nonaccrual restructured loans have been included within nonaccrual loans.~~

~~Table of Contents~~


	Amortized Cost of Loan Modifications that Subsequently Defaulted
($ in thousands)	Interest Rate Concession		Term Extension		Combination Interest Rate Reduction and Term Extension

Auto	$	11	$	—	$	—

Total loans modified	$	11	$	—	$	—

The following table provides the ~~number~~amortized cost of ~~loans modified in a TDR~~loan modifications by loan portfolio and type of concession that were modified in the ~~recorded investment,~~previous three months and ~~unpaid principal balance for~~subsequently had a payment default during the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 2023:
($ in thousands) Number of Loans
Recorded Investment(a)
Unpaid Principal Balance(b)
Commercial and industrial 2 $ 265 $ 265
Commercial real estate — investor 1 547 573
Residential mortgage 44 9,641 9,833
Home equity 12 390 412
Total loans modified 59 $ 10,844 $ 11,083
(a) Represents post-modification outstanding recorded investment.
(b) Represents pre-modification outstanding recorded investment.

During the nine months ended September 30, 2022, restructured loan modifications of commercial loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans for the nine months ended September 30, 2022 primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions.

The following table provides the number of loans modified during the previous twelve months which subsequently defaulted during the nine months ended September 30, 2022, and the recorded investment in these restructured loans at the time of default as of September 30, 2022:

Nine Months Ended September 30, 2022
($ in thousands) Number of
Loans Recorded
Investment
Residential mortgage 4 $ 1,178


	Amortized Cost of Loan Modifications that Subsequently Defaulted
($ in thousands)	Interest Rate Concession		Term Extension		Combination Interest Rate Reduction and Term Extension

Home equity	$	—	$	—	$	60
Total loans modified	$	—	$	—	$	60

The nature and extent of the impairment of modified loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the ACLL.

Allowance for Credit Losses on Loans

The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. The expected lifetime credit losses are the product of multiplying the Corporation's estimates of probability of default, loss given default, and the individual loan level exposure at default on an undiscounted basis. A main factor in the determination of the ACLL is the economic forecast. The forecast the Corporation used for ~~September 30, 2023~~March 31, 2024 was the Moody's baseline scenario from ~~August 2023,~~February 2024, which was reviewed against the ~~September 2023~~March 2024 baseline scenario with no material updates made, over a 2two year reasonable and supportable period with straight-line reversion to the historical losses over the second year of the period. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 11 for additional information on the change in the allowance for unfunded commitments.

2827

Table of Contents

The following table presents a summary of the changes in the ACLL by portfolio segment for the ~~nine~~three months ended ~~September 30, 2023:~~March 31, 2024:


($ in thousands)	($ in thousands)	Dec 31, 2022		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		Sep 30, 2023		ACLL / Loans
($ in thousands)
($ in thousands)																		Dec 31, 2023			Charge offs			Recoveries			Net Charge offs						Provision for credit losses			Mar 31, 2024			ACLL / Loans
Allowance for loan losses	Allowance for loan losses

Commercial and industrial

Commercial and industrial

Commercial and industrial
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial and business lending
Commercial and business lending
Commercial and business lending
Commercial real estate — investor
Commercial real estate — investor
Commercial real estate — investor
Real estate construction
Real estate construction
Real estate construction
Commercial real estate lending
Commercial real estate lending
Commercial real estate lending
Total commercial
Total commercial
Total commercial
Residential mortgage
Residential mortgage
Residential mortgage
Auto finance
Auto finance
Auto finance
Home equity
Home equity
Home equity
Other consumer
Other consumer
Other consumer
Total consumer
Total consumer
Total consumer
Total loans
Total loans
Total loans
Allowance for unfunded commitments
Allowance for unfunded commitments
Allowance for unfunded commitments

Commercial and industrial

Commercial and industrial

Commercial and industrial
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial and business lending
Commercial and business lending
Commercial and business lending
Commercial real estate — investor
Commercial real estate — investor
Commercial real estate — investor
Real estate construction
Real estate construction
Real estate construction
Commercial real estate lending
Commercial real estate lending
Commercial real estate lending
Total commercial
Total commercial
Total commercial

Home equity

Home equity

Home equity
Other consumer
Other consumer
Other consumer
Total consumer
Total consumer
Total consumer
Total loans
Total loans
Total loans
Allowance for credit losses on loans
Allowance for credit losses on loans
Allowance for credit losses on loans

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	119,076	$	(31,816)	$	2,322	$	(29,494)	$	34,710	$	124,292			$	141,582		$	(19,429)		$	791		$	(18,638)			$		$	22,445		$	145,388		1.47	1.47	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	9,475		—		8		8		1,976		11,459				Commercial real estate — owner occupied		10,759			(3)	(3)		5	5		2	2		1,783				1,783			12,544	12,544		1.14	1.14	%
Commercial and business lending	Commercial and business lending	128,551		(31,816)		2,329		(29,487)		36,686		135,751				Commercial and business lending		152,341			(19,432)	(19,432)		796	796		(18,636)	(18,636)		24,227				24,227			157,933	157,933		1.44	1.44	%
Commercial real estate — investor	Commercial real estate — investor	54,398		(242)		2,789		2,547		10,520		67,466				Commercial real estate — investor		68,338			—	—		—	—		—	—		4,174				4,174			72,512	72,512		1.44	1.44	%
Real estate construction	Real estate construction	45,589		(25)		42		18		6,128		51,734				Real estate construction		70,578			—	—		30	30		30	30		(6,383)				(6,383)			64,225	64,225		2.81	2.81	%
Commercial real estate lending	Commercial real estate lending	99,986		(266)		2,831		2,565		16,648		119,200				Commercial real estate lending		138,916			—	—		30	30		30	30		(2,209)				(2,209)			136,737	136,737		1.87	1.87	%
Total commercial	Total commercial	228,538		(32,082)		5,161		(26,921)		53,334		254,951				Total commercial		291,257			(19,432)	(19,432)		826	826		(18,606)	(18,606)		22,018				22,018			294,669	294,669		1.61	1.61	%
Residential mortgage	Residential mortgage	38,298		(714)		357		(358)		2,496		40,437				Residential mortgage		37,808			(89)	(89)		27	27		(62)	(62)		(1,831)				(1,831)			35,915	35,915		0.46	0.46	%
Auto finance	Auto finance	19,619		(4,056)		783		(3,273)		6,654		23,000				Auto finance		24,961			(2,600)	(2,600)		506	506		(2,094)	(2,094)		3,248				3,248			26,114	26,114		1.06	1.06	%
Home equity	Home equity	14,875		(269)		921		652		(413)		15,114				Home equity		18,032			(108)	(108)		319	319		211	211		(1,190)				(1,190)			17,054	17,054		2.75	2.75	%
Other consumer	Other consumer	11,390		(3,769)		744		(3,025)		3,928		12,293				Other consumer		13,812			(1,790)	(1,790)		252	252		(1,537)	(1,537)		1,755				1,755			14,029	14,029		5.43	5.43	%
Total consumer	Total consumer	84,182		(8,809)		2,805		(6,004)		12,666		90,844				Total consumer		94,613			(4,586)	(4,586)		1,104	1,104		(3,482)	(3,482)		1,982				1,982			93,112	93,112		0.83	0.83	%
Total loans	Total loans	$	312,720	$	(40,891)	$	7,965	$	(32,925)	$	66,000	$	345,795			Total loans		$	385,870		$	(24,018)		$	1,930		$	(22,088)		$			$	24,000		$	387,782		1.31	1.31	%
Allowance for unfunded commitments

Commercial and industrial		$	12,997	$	—	$	—	$	—	$	(2,365)	$	10,632
Commercial real estate — owner occupied		103		—		—		—		15		119
Commercial and business lending		13,101		—		—		—		(2,350)		10,751
Commercial real estate — investor		710		—		—		—		39		749
Real estate construction		20,583		—		—		—		(1,000)		19,583
Commercial real estate lending		21,292		—		—		—		(961)		20,331
Total commercial		34,393		—		—		—		(3,311)		31,082

Home equity		2,699		—		—		—		(17)		2,682
Other consumer		1,683		—		—		—		(672)		1,011
Total consumer		4,382		—		—		—		(689)		3,693
Total loans		$	38,776	$	—	$	—	$	—	$	(4,000)	$	34,776
Allowance for credit losses on loans

Commercial and industrial		$	132,073	$	(31,816)	$	2,322	$	(29,494)	$	32,345	$	134,924	1.34	%
Commercial real estate — owner occupied		9,579		—		8		8		1,991		11,578		1.10	%
Commercial and business lending		141,652		(31,816)		2,329		(29,487)		34,336		146,502		1.31	%
Commercial real estate — investor		55,108		(242)		2,789		2,547		10,560		68,214		1.31	%
Real estate construction		66,171		(25)		42		18		5,128		71,317		3.35	%
Commercial real estate lending		121,279		(266)		2,831		2,565		15,687		139,531		1.90	%
Total commercial		262,931		(32,082)		5,161		(26,921)		50,023		286,033		1.55	%
Residential mortgage		38,298		(714)		357		(358)		2,496		40,437		0.46	%
Auto finance		19,619		(4,056)		783		(3,273)		6,654		23,000		1.15	%
Home equity		17,574		(269)		921		652		(430)		17,797		2.85	%
Other consumer		13,073		(3,769)		744		(3,025)		3,256		13,304		4.82	%
Total consumer		88,565		(8,809)		2,805		(6,004)		11,977		94,538		0.81	%
Total loans		$	351,496	$	(40,891)	$	7,965	$	(32,925)	$	62,000	$	380,571	1.26	%

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The following table presents a summary of the changes in the ACLL by portfolio segment for the year ended December 31, ~~2022:~~2023:


($ in thousands)	($ in thousands)	Dec 31, 2021		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		Dec 31, 2022		ACLL / Loans
($ in thousands)
($ in thousands)																		Dec 31, 2022				Charge offs			Recoveries			Net Charge offs								Provision for credit losses		Dec 31, 2023			ACLL / Loans
Allowance for loan losses	Allowance for loan losses

Commercial and industrial

Commercial and industrial

Commercial and industrial
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial and business lending
Commercial and business lending
Commercial and business lending
Commercial real estate — investor
Commercial real estate — investor
Commercial real estate — investor
Real estate construction
Real estate construction
Real estate construction
Commercial real estate lending
Commercial real estate lending
Commercial real estate lending
Total commercial
Total commercial
Total commercial
Residential mortgage
Residential mortgage
Residential mortgage
Auto finance
Auto finance
Auto finance
Home equity
Home equity
Home equity
Other consumer
Other consumer
Other consumer
Total consumer
Total consumer
Total consumer
Total loans
Total loans
Total loans
Allowance for unfunded commitments
Allowance for unfunded commitments
Allowance for unfunded commitments

Commercial and industrial

Commercial and industrial

Commercial and industrial
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial real estate — owner occupied
Commercial and business lending
Commercial and business lending
Commercial and business lending
Commercial real estate — investor
Commercial real estate — investor
Commercial real estate — investor
Real estate construction
Real estate construction
Real estate construction
Commercial real estate lending
Commercial real estate lending
Commercial real estate lending
Total commercial
Total commercial
Total commercial

Home equity

Home equity

Home equity
Other consumer
Other consumer
Other consumer
Total consumer
Total consumer
Total consumer
Total loans
Total loans
Total loans
Allowance for credit losses on loans
Allowance for credit losses on loans
Allowance for credit losses on loans

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	89,857	$	(4,491)	$	5,282	$	791	$	28,428	$	119,076			$	132,073			$		$	(45,687)		$	3,015		$	(42,672)				$				$	52,181		$	141,582		1.45	1.45	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	11,473		—		13		13		(2,011)		9,475				Commercial real estate — owner occupied		9,579			(25)				(25)			11	11		(15)	(15)			1,195						1,195			10,759	10,759		1.01	1.01	%
Commercial and business lending	Commercial and business lending	101,330		(4,491)		5,295		804		26,418		128,551				Commercial and business lending		141,652			(45,713)				(45,713)			3,026	3,026		(42,687)	(42,687)			53,376						53,376			152,341	152,341		1.41	1.41	%
Commercial real estate — investor	Commercial real estate — investor	72,803		(50)		50		—		(18,405)		54,398				Commercial real estate — investor		55,108			(252)				(252)			3,016	3,016		2,763	2,763			10,467						10,467			68,338	68,338		1.33	1.33	%
Real estate construction	Real estate construction	37,643		(48)		106		58		7,887		45,589				Real estate construction		66,171			(25)				(25)			80	80		55	55			4,351						4,351			70,578	70,578		3.11	3.11	%
Commercial real estate lending	Commercial real estate lending	110,446		(98)		156		58		(10,518)		99,986				Commercial real estate lending		121,279			(277)				(277)			3,095	3,095		2,819	2,819			14,819						14,819			138,916	138,916		1.88	1.88	%
Total commercial	Total commercial	211,776		(4,588)		5,451		862		15,900		228,538				Total commercial		262,931			(45,989)				(45,989)			6,121	6,121		(39,868)	(39,868)			68,195						68,195			291,257	291,257		1.60	1.60	%
Residential mortgage	Residential mortgage	40,787		(567)		908		341		(2,830)		38,298				Residential mortgage		38,298			(952)				(952)			541	541		(411)	(411)			(79)						(79)			37,808	37,808		0.48	0.48	%
Auto finance	Auto finance	1,999		(1,041)		98		(943)		18,563		19,619				Auto finance		19,619			(5,950)				(5,950)			1,241	1,241		(4,709)	(4,709)			10,051						10,051			24,961	24,961		1.11	1.11	%
Home equity	Home equity	14,011		(587)		1,385		798		66		14,875				Home equity		17,574			(424)				(424)			1,262	1,262		837	837			(380)						(380)			18,032	18,032		2.87	2.87	%
Other consumer	Other consumer	11,441		(3,363)		1,010		(2,353)		2,301		11,390				Other consumer		13,073			(5,453)				(5,453)			978	978		(4,475)	(4,475)			5,214						5,214			13,812	13,812		4.97	4.97	%
Total consumer	Total consumer	68,239		(5,558)		3,401		(2,157)		18,100		84,182				Total consumer		88,565			(12,779)				(12,779)			4,021	4,021		(8,758)	(8,758)			14,805						14,805			94,613	94,613		0.86	0.86	%
Total loans	Total loans	$	280,015	$	(10,146)	$	8,852	$	(1,294)	$	34,000	$	312,720			Total loans		$	351,496		$			$	(58,768)		$	10,142		$	(48,626)			$					$	83,000		$	385,870		1.32	1.32	%
Allowance for unfunded commitments

Commercial and industrial		$	18,459	$	—	$	—	$	—	$	(5,462)	$	12,997
Commercial real estate — owner occupied		208		—		—		—		(105)		103
Commercial and business lending		18,667		—		—		—		(5,566)		13,101
Commercial real estate — investor		936		—		—		—		(226)		710
Real estate construction		15,586		—		—		—		4,997		20,583
Commercial real estate lending		16,522		—		—		—		4,770		21,292
Total commercial		35,189		—		—		—		(796)		34,393

Home equity		2,592		—		—		—		107		2,699
Other consumer		1,995		—		—		—		(311)		1,683
Total consumer		4,587		—		—		—		(204)		4,382
Total loans		$	39,776	$	—	$	—	$	—	$	(1,000)	$	38,776
Allowance for credit losses on loans

Commercial and industrial		$	108,316	$	(4,491)	$	5,282	$	791	$	22,967	$	132,073	1.35	%
Commercial real estate — owner occupied		11,681		—		13		13		(2,115)		9,579		0.97	%
Commercial and business lending		119,997		(4,491)		5,295		804		20,852		141,652		1.32	%
Commercial real estate — investor		73,739		(50)		50		—		(18,631)		55,108		1.08	%
Real estate construction		53,229		(48)		106		58		12,884		66,171		3.07	%
Commercial real estate lending		126,968		(98)		156		58		(5,748)		121,279		1.68	%
Total commercial		246,965		(4,588)		5,451		862		15,104		262,931		1.46	%
Residential mortgage		40,787		(567)		908		341		(2,830)		38,298		0.45	%
Auto finance		1,999		(1,041)		98		(943)		18,563		19,619		1.42	%
Home equity		16,603		(587)		1,385		798		173		17,574		2.81	%
Other consumer		13,436		(3,363)		1,010		(2,353)		1,990		13,073		4.43	%
Total consumer		72,825		(5,558)		3,401		(2,157)		17,896		88,565		0.82	%
Total loans		$	319,791	$	(10,146)	$	8,852	$	(1,294)	$	33,000	$	351,496	1.22	%

Note 7 Goodwill and Other Intangible Assets

Goodwill

Goodwill is not amortized but is instead subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Corporation conducted its most recent annual impairment testing in May 2023, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation's common stock price and in the KBW Nasdaq Regional Banking Index (KRX), as well as the Corporation's earnings per common share trend over the past year. Based on these assessments, management concluded that it is

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more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There have been no events since the May 2023 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in ~~2022~~2023 or the first ~~nine~~three months of ~~2023.~~2024.

The Corporation had goodwill of $1.1 billion at both ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

Core Deposit Intangibles

The Corporation has CDIs which are amortized. Changes in the gross carrying amount, accumulated amortization, and net book value for CDIs were as follows:


($ in thousands)	($ in thousands)	Nine Months Ended September 30, 2023		Year Ended Dec 31, 2022		($ in thousands)	Three Months Ended March 31, 2024	Year Ended Dec 31, 2023
Core deposit intangibles	Core deposit intangibles
Gross carrying amount at the beginning of period	Gross carrying amount at the beginning of period	$	88,109	$	88,109
Gross carrying amount at the beginning of period
Gross carrying amount at the beginning of period

Accumulated amortization
Accumulated amortization
Accumulated amortization	Accumulated amortization	(45,435)		(38,827)
Net book value	Net book value	$	42,674	$	49,282
Amortization during the period	Amortization during the period	$	6,608	$	8,811

Mortgage Servicing Rights

The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. MSRs are not traded in active markets. As a result, a cash flow model is used to determine fair value. Key assumptions and estimates, including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, are used in measuring the fair value of the MSRs asset. These assumptions are considered significant unobservable inputs. See Note 11 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 12 which further discusses fair value measurement relative to the MSRs asset.

A summary of changes in the balance of the MSRs asset under the fair value measurement method for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and the year ended December 31, ~~2022~~2023 is as follows:

($ in thousands)

Nine Months Ended September 30, 2023

Year Ended Dec 31, 2022

($ in thousands)

Mortgage servicing rights

Mortgage servicing rights at beginning of period

77,351

54,862

Cumulative effect of accounting methodology change

N/A

2,296

Balance at beginning of period, adjusted

77,351

57,158

Mortgage servicing rights at beginning of period

Additions

2,477

7,279

Paydowns

(5,354)

(9,350)

Paydowns

Valuation:

Change in fair value model assumptions

8,338

5,715

Change in fair value model assumptions

Changes in fair value of asset

6,320

16,549

Changes in fair value of asset

Mortgage servicing rights at end of period

89,131

77,351

Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)

6,451,969

6,711,820

Mortgage servicing rights to servicing portfolio

1.38

1.15

Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)(a)

Mortgage servicing rights to servicing portfolio(a)

(a) During the fourth quarter of 2023, the Corporation transferred $969 million of residential mortgages into held for sale and subsequently sold them for $844 million. After sale, the servicing was retained for a short period until full servicing was transferred to the purchaser in January 2024.

The projections of amortization expense for CDIs and decay for MSRs are based on existing asset balances, the current interest rate environment, and prepayment speeds as of ~~September 30, 2023.~~March 31, 2024. The actual expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for CDIs and decay for MSRs:


($ in thousands)	($ in thousands)	Core Deposit Intangibles		Mortgage Servicing Rights
Three months ended December 31, 2023		$	2,203	$	3,630
2024		8,811		13,789
($ in thousands)
($ in thousands)						Core Deposit Intangibles	Mortgage Servicing Rights
Nine months ended December 31, 2024
2025	2025	8,811		12,373
2026	2026	8,811		11,111
2027	2027	8,811		9,768
2028	2028	3,485		8,641
Beyond 2028		1,742		29,819
2029
Beyond 2029
Total estimated amortization expense and MSRs decay	Total estimated amortization expense and MSRs decay	$	42,674	$	89,131

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Note 8 Short and Long-Term Funding

The following table presents the components of short-term funding (funding with original contractual maturities of one year or less), and long-term funding (funding with original contractual maturities greater than one year):


($ in thousands)	($ in thousands)	Sep 30, 2023		Dec 31, 2022		($ in thousands)	Mar 31, 2024	Dec 31, 2023
Short-term funding	Short-term funding
Federal funds purchased	Federal funds purchased	$	300,000	$	344,170
Federal funds purchased
Federal funds purchased
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	151,644		240,969
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	451,644		585,139
Commercial paper		—		20,798

BTFP funding
BTFP funding
BTFP funding
Total short-term funding	Total short-term funding	$	451,644	$	605,937
Long-term funding	Long-term funding

Corporation subordinated notes, at par	Corporation subordinated notes, at par	$	550,000	$	250,000

Corporation subordinated notes, at par

Corporation subordinated notes, at par

Discount and capitalized costs
Discount and capitalized costs
Discount and capitalized costs	Discount and capitalized costs	(8,027)		(544)
Subordinated debt fair value hedge(a)	Subordinated debt fair value hedge(a)	(12,919)		(1,855)
Finance leases	Finance leases	405		469
Total long-term funding	Total long-term funding	$	529,459	$	248,071

Total short and long-term funding, excluding FHLB advances	Total short and long-term funding, excluding FHLB advances	$	981,103	$	854,007
Total short and long-term funding, excluding FHLB advances
Total short and long-term funding, excluding FHLB advances
FHLB advances	FHLB advances
Short-term FHLB advances
Short-term FHLB advances
Short-term FHLB advances	Short-term FHLB advances	$	2,545,000	$	3,125,000
Long-term FHLB advances	Long-term FHLB advances	1,209,938		1,209,170
FHLB advances fair value hedge(a)	FHLB advances fair value hedge(a)	(21,897)		(14,308)
Total FHLB advances	Total FHLB advances	$	3,733,041	$	4,319,861

Total short and long-term funding	Total short and long-term funding	$	4,714,145	$	5,173,869
Total short and long-term funding
Total short and long-term funding

(a) For additional information on the fair value hedges, see Note 9.

Securities Sold Under Agreements to Repurchase

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities).

The Corporation utilizes repurchase agreements to facilitate the needs of its customers. The fair value of securities pledged to secure repurchase agreements may decline. At ~~September 30, 2023,~~March 31, 2024, the Corporation had pledged securities valued at ~~164%~~215% of the gross outstanding balance of repurchase agreements to manage this risk.

The remaining contractual maturity of the securities sold under agreements to repurchase on the consolidated balance sheets as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 are presented in the following table:

Overnight and Continuous

($ in thousands)

Sep 30, 2023

Dec 31, 2022

Repurchase agreements

Agency mortgage-related securities

151,644

240,969

Long-Term Funding

Subordinated Notes

In November 2014, the Corporation issued $250 million of 10-year subordinated notes, due January 2025, and callable October 2024. The subordinated notes have a fixed coupon interest rate of 4.25% and were issued at a discount.

In February 2023, the Corporation issued $300 million of 10-year subordinated notes, due March 1, 2033 and redeemable (i) on the reset date of March 1, 2028 and on any interest payment date thereafter, (ii) at any time on or after the three month period prior to the maturity date, and (iii) upon the occurrence of a Regulatory Capital Treatment Event (as defined in the Global Note). The subordinated notes have a fixed coupon interest rate of 6.625% until the reset date, after which the rate will be equal to the Five-Year U.S. Treasury Rate as of the reset date plus 2.812% per annum. The notes were issued at a discount.

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Finance Leases

Finance leases are used in conjunction with branch operations. See Note 16 for additional disclosure regarding the Corporation’s leases.

Note 9 Derivative and Hedging Activities

The Corporation is exposed to certain risk arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, foreign currency, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates and/or foreign currency exchange rates. The Corporation's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation's known or expected cash receipts and its known or expected cash payments principally related to the Corporation's assets.

The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Corporation is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. To mitigate the counterparty risk, contracts generally contain language outlining collateral pledging requirements for each counterparty. For non-centrally cleared derivatives, collateral must be posted when the market value exceeds certain mutually agreed upon threshold limits. Securities and cash are often pledged as collateral. The Corporation pledged ~~$95~~$89 million and ~~$92~~$93 million of investment securities as collateral at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Cash is often pledged as collateral for derivatives that are not centrally cleared. The Corporation had no required cash collateral at ~~September 30, 2023,~~March 31, 2024, compared to $3$5 million at December 31, ~~2022.~~2023.

To qualify for hedge accounting, a hedging relationship must be highly effective at mitigating the risk associated with the exposure being hedged. The Corporation performs effectiveness assessments of its derivative financial instruments prospectively at inception and both prospectively and retrospectively quarterly thereafter. The initial prospective assessment is performed on a quantitative basis unless the hedging relationship meets certain conditions, and subsequent assessments are performed on a quantitative basis unless certain conditions are met where a qualitative basis may be used. If it is determined that a derivative financial instrument is not highly effective at hedging the designated exposure, hedge accounting is discontinued.

Federal regulations require the Corporation to clear all compound SOFR interest rate swaps through a clearing house, if possible. For derivatives cleared through central clearing houses, the variation margin payments are legally characterized as daily settlements of the derivative rather than collateral. The Corporation's clearing agent for interest rate derivative contracts that are centrally cleared through the Chicago Mercantile Exchange and the London Clearing House settles the variation margin daily. As a result, the variation margin payment and the related derivative instruments are considered a single unit of account for accounting and financial reporting purposes. Depending on the net position, the fair value is reported in other assets or accrued expenses and other liabilities on the consolidated balance sheets. The daily settlement of the derivative exposure does not change or reset the contractual terms of the instrument.

Fair Value Hedges of Interest Rate Risk

The Corporation is exposed to changes in the fair value of its fixed-rate debt due to changes in benchmark interest rates. The Corporation uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rates. Interest rate swaps designated as fair value hedges involve receiving payment of fixed-rate amounts from a counterparty in exchange for the Corporation paying variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, as allowed under U.S. GAAP, the Corporation applied the "shortcut" method of accounting, which permits the assumption of perfect effectiveness. The gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest expense. These items, along with the net interest from the derivative, are reported in the same income statement line as the fixed-rate debt expense.

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Fair Value Hedges of Foreign Currency Exchange Rate Risk

The Corporation is exposed to changes in the fair value of its foreign currency denominated loans due to changes in foreign currency exchange rates. The Corporation uses foreign currency exchange forward contracts to manage its exposure to changes in fair value on these foreign currency denominated loans.

To assess effectiveness of the foreign currency exchange forward contracts, the Corporation has elected to utilize the critical terms match method. Under the critical terms match method, if the hedging relationship meets certain criteria, it allows the Corporation to assume that the hedging relationship is perfectly effective, eliminating the quantitative aspect of assessing effectiveness. The gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in capital markets, net.

Cash Flow Hedges of Interest Rate Risk

The Corporation is exposed to variability in cash flows on its floating rate assets due to changes in benchmark interest rates. The Corporation uses interest rate swaps to hedge certain forecasted transactions for the variability in cash flows attributable to the contractually specified interest rate in order to add stability to net interest income and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve receiving fixed-rate amounts from a counterparty in exchange for the Corporation making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. These items, along with the net interest from the derivative, are reported in the same income statement line as the interest income from the floating-rate assets.

To assess effectiveness of interest rate swaps, the Corporation performs a quantitative analysis using a period by period regression method. When the relationship between the hedged item and hedging instrument is highly effective at achieving offsetting changes in cash flows attributable to the hedged risk, changes in the fair value of these cash flow hedges are recorded in accumulated other comprehensive income (loss) and are subsequently reclassified to interest income as interest payments are made on such variable rate loans.

Derivatives to Accommodate Customer Needs

The Corporation facilitates customer borrowing activity by entering into various derivative contracts which are designated as free standing derivative contracts. Free standing derivative products are entered into primarily for the benefit of commercial customers seeking to manage their exposures to interest rate risk and foreign currency. These derivative contracts are not designated against specific assets and liabilities on the consolidated balance sheets or forecasted transactions and, therefore, do not qualify for hedge accounting treatment. Such derivative contracts are carried at fair value in other assets and accrued expenses and other liabilities on the consolidated balance sheets with changes in the fair value recorded as a component of capital markets, net, and typically include interest rate-related instruments (swaps and caps) and foreign currency exchange forwards. See Note 10 for additional information and disclosures on balance sheet offsetting.

Interest rate-related and other instruments: The Corporation provides interest rate risk management services to commercial customers, primarily interest rate swaps and caps. The Corporation’s market risk from unfavorable movements in interest rates related to these derivative contracts is generally economically hedged by concurrently entering into offsetting derivative contracts. The offsetting derivative contracts have identical notional values, terms, and indices, except in rare circumstances where the indices are not identical which creates a negligible basis mismatch. The Corporation also enters into credit risk participation agreements with financial institution counterparties for interest rate swaps related to loans as either a participant or a lead bank. The risk participation agreements entered into by the Corporation as a participant bank provide credit protection to the financial institution counterparty should the borrower fail to perform on its interest rate derivative contract with that financial institution.

Foreign currency exchange forwards: The Corporation provides foreign currency exchange services to customers, primarily forward contracts. The Corporation's customers enter into a foreign currency exchange forward with the Corporation as a means for them to mitigate exchange rate risk. The Corporation mitigates its risk by then entering into an offsetting foreign currency exchange derivative contract.

Mortgage Derivatives

Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair ~~value~~values of these commitments are recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net on the consolidated statements of income.

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Interest rate-related instruments for MSRs hedge: The fair value of the Corporation's MSRs asset changes in response to changes in primary mortgage loan rates and other assumptions. To mitigate the earnings volatility caused by changes in the fair value of MSRs, the Corporation designates certain financial instruments as an economic hedge. Changes in the fair value of these instruments are generally expected to partially offset changes in the fair value of MSRs and are recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net on the consolidated statements of income.

The following table presents the total notional amounts and gross fair values of the Corporation’s derivatives, as well as the balance sheet netting adjustments as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. The derivative assets and liabilities are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. The resulting net derivative asset and liability fair values are included in other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets.


			Sep 30, 2023								Dec 31, 2022
			Asset				Liability				Asset				Liability
																				Mar 31, 2024					Dec 31, 2023
		Asset																						Asset			Liability			Asset	Liability
($ in thousands)	($ in thousands)		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		($ in thousands)	Notional Amount	Fair Value	Notional Amount	Fair Value		Notional Amount	Fair Value		Notional Amount	Fair Value
Designated as hedging instruments:	Designated as hedging instruments:
Interest rate-related instruments
Interest rate-related instruments
Interest rate-related instruments	Interest rate-related instruments		$	1,150,000	$	2,109	$	1,700,000	$	21,520	$	900,000	$	4,349	$	1,150,000	$	1,260
Foreign currency exchange forwards	Foreign currency exchange forwards		353,217		2,886		70,019		134		261,595		416		167,088		972
Total designated as hedging instruments	Total designated as hedging instruments		4,995				21,654				4,765				2,233
Not designated as hedging instruments:	Not designated as hedging instruments:
Interest rate-related and other instruments	Interest rate-related and other instruments		3,022,150		140,414		6,320,192		294,062		4,246,823		62,401		4,599,391		251,398
Interest rate-related and other instruments
Interest rate-related and other instruments
Foreign currency exchange forwards	Foreign currency exchange forwards		74,245		1,751		63,309		1,393		68,570		437		34,240		402

Mortgage banking(a)(b)			43,436		1,213		84,000		—		21,265		86		33,000		46
Mortgage banking(a)
Mortgage banking(a)
Mortgage banking(a)
Total not designated as hedging instruments	Total not designated as hedging instruments		143,379				295,455				62,925				251,847
Gross derivatives before netting	Gross derivatives before netting				148,373				317,109				67,690				254,079
Less: Legally enforceable master netting agreements	Less: Legally enforceable master netting agreements		1,252				1,252				2,788				2,788
Less: Cash collateral pledged/received	Less: Cash collateral pledged/received		88,207				—				26,898				217
Total derivative instruments, after netting	Total derivative instruments, after netting		$	58,915			$	315,857			$	38,003			$	251,073

(a) The notional amount of the mortgage derivative asset includes interest rate lock commitments, while the notional amount of the mortgage derivative liability includes forward commitments.
~~(b) At September 30, 2023, the mortgage derivative asset included approximately $806,000 of forward commitments fair value.~~

The following table presents amounts that were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges:


		Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included
		Carrying Amount of the Hedged Assets/(Liabilities)(a)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)		Carrying Amount of the Hedged Assets/(Liabilities)(a)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
	Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included															Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included
	Carrying Amount of the Hedged Assets/(Liabilities)(a)											Carrying Amount of the Hedged Assets/(Liabilities)(a)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)	Carrying Amount of the Hedged Assets/(Liabilities)(a)	Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
($ in thousands)	($ in thousands)	September 30, 2023				December 31, 2022				($ in thousands)	March 31, 2024		December 31, 2023
Other long-term funding	Other long-term funding	$	(537,081)	$	12,919	$	(248,145)	$	1,855
FHLB advances	FHLB advances	(578,103)		21,897		(585,692)		14,308
Total	Total	$	(1,115,185)	$	34,815	$	(833,837)	$	16,163

(a) Excludes hedged items where only foreign currency risk is the designated hedged risk. At ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the carrying amount excluded for foreign currency denominated loans was ~~$423~~$411 million and ~~$429~~$421 million, respectively.

The Corporation terminated its $500 million fair value hedge during the fourth quarter of 2019. At ~~September 30, 2023,~~March 31, 2024, the amortized cost basis of the closed portfolios which had previously been used in the terminated hedging relationship was ~~$292~~$260 million and is included in loans on the consolidated balance sheets. This amount includes $1 million of hedging adjustments on the discontinued hedging relationships, which are not presented in the table above.

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The tables below identify the effect of fair value and cash flow hedge accounting on the Corporation's consolidated statements of income for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
		Three months ended Sep 30,								Nine Months Ended Sep 30,
		2023				2022				2023				2022
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
	Three months ended Mar 31,
		2024
		2024
		2024
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Interest Income		Interest Expense		Interest Income		Interest Expense		Interest Income		Interest Expense		Interest Income		Interest Expense
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value or cash flow hedges are recorded(a)	Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value or cash flow hedges are recorded(a)	$	(4,589)	$	5,195	$	(120)	$	(380)	$	(9,286)	$	12,039	$	(428)	$	(380)
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value or cash flow hedges are recorded(a)
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value or cash flow hedges are recorded(a)
The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20
The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20
The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20	The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20
Interest contracts:	Interest contracts:
Interest contracts:
Interest contracts:
Hedged items
Hedged items
Hedged items	Hedged items	(74)		(9,001)		(120)		(14,703)		(189)		(18,652)		(428)		(14,703)
Derivatives designated as hedging instruments(a)	Derivatives designated as hedging instruments(a)	(4,516)		14,196		—		14,323		(9,097)		30,691		—		14,323
Derivatives designated as hedging instruments(a)
Derivatives designated as hedging instruments(a)

(a) Includes net settlements on the derivatives.


		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value Hedging Relationships
		Three months ended Sep 30,				Nine Months Ended Sep 30,
		2023		2022		2023		2022
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value Hedging Relationships
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value Hedging Relationships
		Location and Amount Recognized on the Consolidated Statements of Income in Fair Value Hedging Relationships
	Three months ended Mar 31,
		2024
		2024
		2024
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Capital Markets, Net
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value hedges are recorded	Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value hedges are recorded	$	—	$	—	$	—	$	—
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value hedges are recorded
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value hedges are recorded
The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20
The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20
The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20	The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20
Foreign currency contracts:	Foreign currency contracts:
Foreign currency contracts:
Foreign currency contracts:
Hedged items
Hedged items
Hedged items	Hedged items	(11,575)		(29,846)		(2,186)		(40,346)
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	11,575		29,846		2,186		40,346
Derivatives designated as hedging instruments
Derivatives designated as hedging instruments

The following table presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss) for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022
Interest rate-related instruments designated as cash flow hedging instruments	Interest rate-related instruments designated as cash flow hedging instruments
Amount of (loss) recognized in OCI on cash flow hedge derivative(a)		$	(13,592)	$	—	$	(33,976)	$	—
Interest rate-related instruments designated as cash flow hedging instruments
Interest rate-related instruments designated as cash flow hedging instruments
Amount of (loss) income recognized in OCI on cash flow hedge derivative(a)
Amount of (loss) income recognized in OCI on cash flow hedge derivative(a)
Amount of (loss) income recognized in OCI on cash flow hedge derivative(a)

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest income(a)	Amount of loss reclassified from accumulated other comprehensive income (loss) into interest income(a)	4,516		—		9,097		—

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest income(a)

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest income(a)

(a) The entirety of gains (losses) recognized in OCI as well as the losses reclassified from accumulated other comprehensive income (loss) into interest income were included components in the assessment of hedge effectiveness.

Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedge derivatives are reclassified to interest income as interest payments are made on the hedged variable interest rate assets. The Corporation estimates that ~~$18~~$12 million will be reclassified as a decrease to interest income over the next 12 months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, or the addition of other hedges subsequent to ~~September 30, 2023.~~March 31, 2024. The maximum length of time over which the Corporation is hedging its exposure to the variability in future cash flows is 38 months as of ~~September 30, 2023.~~March 31, 2024.

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The table below identifies the effect of derivatives not designated as hedging instruments on the Corporation's consolidated statements of income for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
			Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income
		Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income
			Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income			2023		2022		2023		2022
Derivative instruments	Derivative instruments
Derivative instruments
Derivative instruments
Interest rate-related and other instruments — customer and mirror, net
Interest rate-related and other instruments — customer and mirror, net
Interest rate-related and other instruments — customer and mirror, net	Interest rate-related and other instruments — customer and mirror, net	Capital markets, net	$	222	$	(33)	$	359	$	533
Interest rate-related instruments — MSRs hedge	Interest rate-related instruments — MSRs hedge	Mortgage banking, net	(5,877)		(3,547)		(5,551)		(12,559)
Interest rate-related instruments — MSRs hedge
Interest rate-related instruments — MSRs hedge
Foreign currency exchange forwards
Foreign currency exchange forwards
Foreign currency exchange forwards	Foreign currency exchange forwards	Capital markets, net	365		709		1,751		1,442

Interest rate lock commitments (mortgage)	Interest rate lock commitments (mortgage)	Mortgage banking, net	(24)		(1,389)		321		(3,020)

Interest rate lock commitments (mortgage)

Interest rate lock commitments (mortgage)
Forward commitments (mortgage)	Forward commitments (mortgage)	Mortgage banking, net	470		3,543		853		3,415
Forward commitments (mortgage)
Forward commitments (mortgage)

Note 10 Balance Sheet Offsetting

Interest Rate-Related Instruments and Foreign Exchange Forwards (“Interest and Foreign Exchange Agreements”)

The Corporation enters into interest rate-related instruments to facilitate the interest rate risk management strategies of commercial customers and foreign exchange forwards to manage customers' exposure to fluctuating foreign exchange rates. The Corporation typically mitigates these risks by entering into equal and offsetting agreements with highly rated third-party financial institutions, though in rare circumstances the agreements are not perfectly equal and offsetting, which creates a negligible basis mismatch. The Corporation is party to master netting arrangements with some of its financial institution counterparties that create single net settlements of all legal claims or obligations to pay or receive the net amount of settlement of the individual interest and foreign exchange agreements. Collateral, usually in the form of investment securities and cash, is posted by the counterparty with net liability positions in accordance with contract thresholds. Derivatives subject to a legally enforceable master netting agreement are reported with assets and liabilities offset resulting in a net position which is further offset by any cash collateral, and is reported in other assets and accrued expenses and other liabilities on the face of the consolidated balance sheets. For disclosure purposes, the net position on the consolidated balance sheets can be further netted down by investment securities collateral received or pledged. See Note 9 for additional information on the Corporation’s derivative and hedging activities.

The following table presents the interest rate and foreign exchange assets and liabilities subject to an enforceable master netting arrangement as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. The interest rate and foreign exchange agreements the Corporation has with its commercial customers are not subject to an enforceable master netting arrangement and are therefore excluded from this table:


		Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets				Net Amounts Presented on the Consolidated Balance Sheets		Gross Amounts Not Offset on the Consolidated Balance Sheets					Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets			Net Amounts Presented on the Consolidated Balance Sheets		Gross Amounts Not Offset on the Consolidated Balance Sheets
($ in thousands)	($ in thousands)			Derivative Liabilities Offset		Cash Collateral Received				Security Collateral Received		Net Amount		($ in thousands)			Derivative Liabilities Offset	Cash Collateral Received				Security Collateral Received		Net Amount
Derivative assets	Derivative assets
September 30, 2023		$	140,884	$	(1,252)	$	(88,207)	$	51,425	$	(32,257)	$	19,168
December 31, 2022		63,029		(2,788)		(26,898)		33,342		(30,753)		2,589
March 31, 2024
March 31, 2024
March 31, 2024
December 31, 2023





















		Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets				Net Amounts Presented on the Consolidated Balance Sheets		Gross Amounts Not Offset on the Consolidated Balance Sheets				Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets			Net Amounts Presented on the Consolidated Balance Sheets		Gross Amounts Not Offset on the Consolidated Balance Sheets
($ in thousands)	($ in thousands)			Derivative Assets Offset		Cash Collateral Pledged				Security Collateral Pledged		Net Amount				($ in thousands)	Derivative Assets Offset	Cash Collateral Pledged			Security Collateral Pledged		Net Amount
Derivative liabilities	Derivative liabilities
September 30, 2023		$	22,964	$	(1,252)	$	—	$	21,713	$	—	$	21,713
December 31, 2022		3,096		(2,788)		(217)		91		—		91
March 31, 2024
March 31, 2024
March 31, 2024
December 31, 2023

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Note 11 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings, and Regulatory Matters

The Corporation utilizes a variety of financial instruments in the normal course of business to meet the financial needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments include lending-related and other commitments (see below) as well as derivative instruments (see Note 9). The following is a summary of lending-related commitments:

($ in thousands)

Sep 30, 2023

Dec 31, 2022

($ in thousands)

Mar 31, 2024

Dec 31, 2023

Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(a)(b)

11,228,683

12,444,275

Commercial letters of credit(a)

4,067

3,188

Standby letters of credit(c)

246,954

270,692

(a) These off-balance sheet financial instruments are exercisable at the market rate prevailing at the date the underlying transaction will be completed and, thus, are deemed to have no current fair value, or the fair value is based on fees currently charged to enter into similar agreements and was not material at ~~September 30, 2023~~March 31, 2024 or December 31, ~~2022.~~2023.

(b) Interest rate lock commitments to originate residential mortgage loans held for sale are considered derivative instruments and are disclosed in Note 9.

(c) Standby letters of credit are presented excluding participations. The Corporation has established a liability of $3$2 million at both ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, as an estimate of the fair value of these financial instruments.

Lending-related Commitments

As a financial services provider, the Corporation routinely enters into commitments to extend credit. Such commitments are subject to the same credit policies and approval process accorded to loans made by the Corporation, with each customer’s creditworthiness evaluated on a case-by-case basis. The commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to these financial instruments is represented by the contractual amount of those instruments. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the customer. Since a significant portion of commitments to extend credit are subject to specific restrictive loan covenants or may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. An allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded commitments (including unfunded loan commitments and letters of credit).

The following table presents a summary of the changes in the allowance for unfunded commitments:

($ in thousands)

Nine Months Ended September 30, 2023

Year Ended December 31, 2022

($ in thousands)

Three Months Ended March 31, 2024

Year Ended December 31, 2023

Allowance for unfunded commitments

Balance at beginning of period

38,776

39,776

Provision for unfunded commitments

(4,000)

(1,000)

Provision for unfunded commitments

Balance at end of period

34,776

38,776

Balance at end of period

Lending-related commitments include commitments to extend credit, commitments to originate residential mortgage loans held for sale, commercial letters of credit, and standby letters of credit. Commitments to extend credit are legally binding agreements to lend to customers at predetermined interest rates, as long as there is no violation of any condition established in the contracts. Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair value of these commitments is recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets. The Corporation’s derivative and hedging activity is further described in Note 9. Commercial and standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party, while standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party.

Other Commitments

The Corporation invests in qualified affordable housing projects, historic projects, new market projects, and opportunity zone funds for the purpose of community reinvestment and obtaining tax credits and other tax benefits. Return on the Corporation's investment in these projects and funds comes in the form of the tax credits and tax losses that pass through to the Corporation, and deferral or elimination of capital gain recognition for tax purposes. The aggregate carrying value of these investments at ~~September 30, 2023~~March 31, 2024 was ~~$222~~$215 million, compared to ~~$250~~$219 million at December 31, ~~2022,~~2023, included in tax credit and other investments on the consolidated balance sheets. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects.

Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits. The Corporation recognized additional income tax expense attributable to the amortization of investments in qualified affordable housing projects of ~~$26 million and $25~~$9 million for both the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and

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~~2023 and September 30, 2022, respectively, and $9 million for both the three months ended September 30, 2023 and September 30, 2022.~~March 31, 2023. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled ~~$219~~$212 million at ~~September 30, 2023~~March 31, 2024 and ~~$246~~$215 million at December 31, ~~2022.~~2023.

The Corporation’s unfunded equity contributions relating to investments in qualified affordable housing and historic projects are recorded in accrued expenses and other liabilities on the consolidated balance sheets. The Corporation’s remaining unfunded equity contributions totaled ~~$27~~$31 million at ~~September 30, 2023~~March 31, 2024 and ~~$40~~$27 million at December 31, ~~2022.~~2023. Additionally, at March 31, 2024, the Corporation also invests in a private SBA loan fund, recorded in equity securities on the consolidated balance sheets, the purpose of which is to identify CRA qualifying loans within a target region, which has a remaining unfunded equity contribution of $3 million.

For the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and the year ended December 31, ~~2022,~~2023, the Corporation did not record any impairment related to qualified affordable housing investments.

The Corporation has principal investment commitments to provide capital-based financing to private companies through either direct investment in specific companies or through investment funds and partnerships. The timing of future cash requirements to fund such principal investment commitments is generally dependent on the investment cycle, whereby privately held companies are funded by private equity investors and ultimately sold, merged, or taken public through an initial offering, which can vary based on overall market conditions, as well as the nature and type of industry in which the companies operate. The Corporation also invests in loan pools that support CRA loans. The timing of future cash requirements to fund these pools is dependent upon loan demand, which can vary over time. The aggregate carrying value of these investments was ~~$34~~$40 million at ~~September 30, 2023~~both March 31, 2024 and ~~$27 million at~~ December 31, ~~2022,~~2023, included in tax credit and other investments on the consolidated balance sheets.

Legal Proceedings

The Corporation is party to various pending and threatened claims and legal proceedings arising in the normal course of business activities, some of which involve claims for substantial amounts. Although there can be no assurance as to the ultimate outcomes, the Corporation believes it has meritorious defenses to the claims asserted against it in its currently outstanding matters and intends to continue to defend itself vigorously with respect to such legal proceedings. The Corporation will consider settlement of cases when, in management’s judgment, it is in the best interests of the Corporation and its shareholders.

On at least a quarterly basis, the Corporation assesses its liabilities and contingencies in connection with all pending or threatened claims and litigation, utilizing the most recent information available. On a matter by matter basis, an accrual for loss is established for those matters which the Corporation believes it is probable that a loss may be incurred and that the amount of such loss can be reasonably estimated. Once established, each accrual is adjusted as appropriate to reflect any subsequent developments. Accordingly, management’s estimate will change from time to time, and actual losses may be more or less than the current estimate. For matters where a loss is not probable, or the amount of the loss cannot be estimated, no accrual is established.

Resolution of legal claims is inherently unpredictable, and in many legal proceedings various factors exacerbate this inherent unpredictability, including where the damages sought are unsubstantiated or indeterminate, it is unclear whether a case brought as a class action will be allowed to proceed on that basis, discovery is not complete, the proceeding is not yet in its final stages, the matters present legal uncertainties, there are significant facts in dispute, there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants), or there is a wide range of potential results.

Management believes that the legal proceedings currently pending against it should not have a material adverse effect on the Corporation’s consolidated financial condition. However, in light of the uncertainties involved in such proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the reserves the Corporation has currently accrued or that a matter will not have material reputational or other qualitative consequences. As a result, the outcome of a particular matter may be material to the Corporation’s operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of the Corporation’s income for that period.

Regulatory Matters

A variety of consumer products, including mortgage and deposit products, and certain fees and charges related to such products, have come under increased regulatory scrutiny. It is possible that regulatory authorities could bring enforcement actions, including civil money penalties, or take other actions against the Corporation in regard to these consumer products. The Bank could also determine of its own accord, or be required by regulators, to refund or otherwise make remediation payments to customers in connection with these products, fees and charges. It is not possible at this time for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss related to such matters.

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In recent consent orders with financial institutions, the CFPB has asserted that certain overdraft charges constitute “unfair and abusive acts and practices.” In certain instances, these financial institutions have agreed to make restitution to customers and to

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pay civil money penalties. Included in the practices that the CFPB has asserted are “unfair and abusive” are 1) overdraft fees on transactions that had a sufficient balance at the time authorized but then later settled with an insufficient balance (“APSN Fees”), and 2) repeat insufficient funds fees on transactions resubmitted for payment after they were initially declined (“Representment Fees”). In light of these orders, the Corporation has undertaken a review of its current and past practices regarding APSN Fees and Representment Fees. Such review could result in changes to our overdraft fee policies, which would reduce our fee income in future periods and which could also result in a decision to make remediation payments to current and past customers who incurred such fees. The Corporation’s financial results may be materially impacted in any period in which the Corporation determines to make any such remediation payments. In addition to the review described above, the Corporation received an arbitration request in July 2023 which, among other things, ~~seeks~~sought to recover APSN Fees and Representment Fees on behalf of approximately 1,400 current and former deposit customers of the Corporation (the “arbitration request”). ~~The~~After mediation of the arbitration request, ~~is being considered~~a settlement of up to $2.1 million including attorneys' fees was concluded in the review of APSN Fees and Representment Fees described above. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time with respect to the arbitration request.February 2024.

Mortgage Repurchase Reserve

The Corporation sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under the Corporation's usual underwriting procedures, and are most often sold on a nonrecourse basis, primarily to the GSEs. The Corporation’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Corporation may be obligated to repurchase the loan or reimburse the GSEs for losses incurred (collectively, “make whole requests”). The make whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. The Corporation also sells qualifying residential mortgage loans guaranteed by U.S. government agencies into GNMA pools.

As a result of make whole requests, the Corporation has repurchased loans with aggregate principal balances of $5$1 million and $6$5 million for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and the year ended December 31, ~~2022,~~2023, respectively. There were no loss reimbursement and settlement claims paid in the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 or for the year ended December 31, ~~2022.~~2023. Make whole requests since January 1, ~~2022~~2023 generally arose from loans originated since January 1, ~~2020~~2021 with such balances totaling ~~$4.6~~$3.9 billion at the time of sale, consisting primarily of loans sold to GSEs. As of ~~September 30, 2023,~~March 31, 2024, $3.3 billion of those loans originated since January 1, ~~2020~~2021 remain outstanding.

The balance in the mortgage repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Corporation could incur from repurchasing a loan, as well as loss reimbursements, indemnifications, and other settlement resolutions. The mortgage repurchase reserve, included in accrued expenses and other liabilities on the consolidated balance sheets, was approximately ~~$680,000~~$704,000 at ~~September 30, 2023~~March 31, 2024 and ~~$1 million~~$835,000 at December 31, ~~2022.~~2023.

The Corporation may also sell residential mortgage loans with limited recourse (limited in that the recourse period ends prior to the loan’s maturity, usually after certain time and/or loan paydown criteria have been met), whereby repurchase could be required if the loan had defined delinquency issues during the limited recourse periods. At ~~September 30, 2023~~both March 31, 2024 and December 31, ~~2022,~~2023, there were $15 million ~~and $7 million, respectively,~~ of residential mortgage loans sold with such recourse risk. There have been limited instances and immaterial historical losses on repurchases for recourse under the limited recourse criteria.

The Corporation has a subordinate position to the FHLB in the credit risk on residential mortgage loans it sold to the FHLB Mortgage Partnership Finance Traditional program in exchange for a monthly credit enhancement fee. The Corporation ~~has not sold~~resumed selling loans to the FHLB with such credit risk retention in February 2024, but prior to that, had not sold any loans with this credit risk retention since February 2005. At ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, there were ~~$17~~$37 million and ~~$19~~$16 million, respectively, of such residential mortgage loans with credit risk recourse, upon which there have been immaterial historical losses to the Corporation.

Note 12 Fair Value Measurements

Fair value represents the estimated price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept).

The valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis are described in the Fair Value Measurements note in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K.

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The ~~table~~tables below ~~presents~~present the Corporation’s financial instruments measured at fair value on a recurring basis and carrying amounts and estimated fair values of certain financial instruments as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, aggregated by the level in the fair value hierarchy within which those measurements fall:


	Mar 31, 2024
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and due from banks	$	429,859	$	429,859	$	429,859	$	—	$	—
Interest-bearing deposits in other financial institutions	420,114		420,114		420,114		—		—
Federal funds sold and securities purchased under agreements to resell	1,610		1,610		1,610		—		—
AFS investment securities:
U.S. Treasury securities	35,558		35,558		35,558		—		—

Obligations of state and political subdivisions (municipal securities)	80,830		80,830		—		80,830		—
Residential mortgage-related securities:
FNMA / FHLMC	1,090,998		1,090,998		—		1,090,998		—
GNMA	2,214,513		2,214,513		—		2,214,513		—

Commercial mortgage-related securities:
FNMA / FHLMC	17,008		17,008		—		17,008		—
GNMA	152,232		152,232		—		152,232		—
Asset backed securities:
FFELP	129,154		129,154		—		129,154		—
SBA	890		890		—		890		—
Other debt securities	2,965		2,965		—		2,965		—
Total AFS investment securities	3,724,148		3,724,148		35,558		3,688,590		—

HTM investment securities:
U.S. Treasury securities	999		969		969		—		—
Obligations of state and political subdivisions (municipal securities), net	1,676,199		1,523,658		—		1,523,658		—
Residential mortgage-related securities:
FNMA / FHLMC	930,148		771,944		—		771,944		—
GNMA	48,043		44,457		—		44,457		—
Private-label	341,153		281,069		—		281,069		—
Commercial mortgage-related securities:
FNMA / FHLMC	779,310		628,928		—		628,928		—
GNMA	57,114		50,183		—		50,183		—
Total HTM investment securities, net	3,832,967		3,301,209		969		3,300,239		—

Equity securities:
Equity securities	7,071		7,071		6,966		—		105
Equity securities at NAV	12,500		12,500
Total equity securities	19,571		19,571

FHLB and Federal Reserve Bank stocks	173,968		173,968		—		173,968		—
Residential loans held for sale	52,414		52,414		—		52,414		—

Loans, net	29,138,257		27,739,448		—		—		27,739,448
Bank and corporate owned life insurance	685,089		685,089		—		685,089		—
Mortgage servicing rights, net	85,226		85,226		—		—		85,226
Interest rate-related instruments designated as hedging instruments(a)	2,164		2,164		—		2,164		—
Foreign currency exchange forwards designated as hedging instruments(a)	624		624		—		624		—
Interest rate-related and other instruments not designated as hedging instruments(a)	113,337		113,337		—		113,337		—
Foreign currency exchange forwards not designated as hedging instruments(a)	5,276		5,276		—		5,276		—
Interest rate lock commitments to originate residential mortgage loans held for sale	666		666		—		—		666

Total selected assets at fair value	$	38,685,290	$	36,754,723	$	895,077	$	8,021,701	$	27,825,445

($ in thousands) Fair Value Hierarchy Sep 30, 2023 Dec 31, 2022
Assets
AFS investment securities:
U.S. Treasury securities Level 1 $ 109,024 $ 109,378
Agency securities Level 2 13,590 13,532
Obligations of state and political subdivisions (municipal securities) Level 2 210,317 230,714
Residential mortgage-related securities:
FNMA / FHLMC Level 2 1,436,759 1,604,610
GNMA Level 2 1,384,670 497,596
Commercial mortgage-related securities:
FNMA / FHLMC Level 2 16,154 17,142
GNMA Level 2 176,474 110,462
Asset backed securities:
FFELP Level 2 138,514 151,191
SBA Level 2 3,261 4,477
Other debt securities Level 2 2,915 2,922
Total AFS investment securities Level 1 $ 109,024 $ 109,378
Total AFS investment securities Level 2 3,382,655 2,632,647
Equity securities with readily determinable fair values Level 1 6,701 5,991
Residential loans held for sale Level 2 54,790 20,383
Mortgage servicing rights, net Level 3 89,131 77,351
Interest rate-related instruments designated as hedging instruments(a)
Level 2 2,109 4,349
Foreign currency exchange forwards designated as hedging instruments(a)
Level 2 2,886 416
Interest rate-related and other instruments not designated as hedging instruments(a)
Level 2 140,414 62,401
Foreign currency exchange forwards not designated as hedging instruments(a)
Level 2 1,751 437
Interest rate lock commitments to originate residential mortgage loans held for sale Level 3 407 86
Forward commitments to sell residential mortgage loans Level 3 806 —
Liabilities
Interest rate-related instruments designated as hedging instruments(a)
Level 2 $ 21,520 $ 1,260
Foreign currency exchange forwards designated as hedging instruments(a)
Level 2 134 972
Interest rate-related and other instruments not designated as hedging instruments(a)
Level 2 294,062 251,398
Foreign currency exchange forwards not designated as hedging instruments(a)
Level 2 1,393 402
Forward commitments to sell residential mortgage loans Level 3 — 46
(a) Figures are presented gross before netting. See Note 9 and Note 10 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the
same counterparty where there is a legally enforceable master netting agreement in place.

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	Mar 31, 2024
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Liabilities
Deposits:
Noninterest-bearing demand	$	6,254,135	$	6,254,135	$	—	$	—	$	6,254,135
Savings	5,124,639		5,124,639		—		—		5,124,639
Interest-bearing demand	8,747,127		8,747,127		—		—		8,747,127
Money market	6,721,674		6,721,674		—		—		6,721,674
Brokered CDs(a)	3,931,230		3,931,230		—		3,931,230		—
Other time deposits(a)	2,934,352		2,934,352		—		2,934,352		—
Total deposits	33,713,158		33,713,158		—		6,865,582		26,847,575
Short-term funding:
Federal funds purchased and securities sold under agreements to repurchase	265,671		265,661		—		265,661		—
BTFP funding	500,000		497,959		—		497,959		—
Total short-term funding	765,671		763,620		—		763,620		—

FHLB advances	1,333,411		1,320,280		—		1,320,280		—
Other long-term funding	536,055		517,009		—		517,009		—
Standby letters of credit(b)	2,347		2,347		—		2,347		—
Interest rate-related instruments designated as hedging instruments(c)	10,685		10,685		—		10,685		—
Foreign currency exchange forwards designated as hedging instruments(c)	230		230		—		230		—
Interest rate-related and other instruments not designated as hedging instruments(c)	222,303		222,303		—		222,303		—
Foreign currency exchange forwards not designated as hedging instruments(c)	4,956		4,956		—		4,956		—

Forward commitments to sell residential mortgage loans	222		222		—		—		222
Total selected liabilities at fair value	$	36,589,039	$	36,554,811	$	—	$	9,707,013	$	26,847,797

(a) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.
(b) The commitment on standby letters of credit was $230 million at March 31, 2024. See Note 11 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.
(c) Figures are presented gross before netting. See Note 9 and Note 10 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place.

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	Dec 31, 2023
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and due from banks	$	484,384	$	484,384	$	484,384	$	—	$	—
Interest-bearing deposits in other financial institutions	425,089		425,089		425,089		—		—
Federal funds sold and securities purchased under agreements to resell	14,350		14,350		14,350		—		—
AFS investment securities:
U.S. Treasury securities	35,902		35,902		35,902		—		—

Obligations of state and political subdivisions (municipal securities)	91,817		91,817		—		91,817		—
Residential mortgage-related securities:
FNMA / FHLMC	1,120,794		1,120,794		—		1,120,794		—
GNMA	2,042,675		2,042,675		—		2,042,675		—

Commercial mortgage-related securities:
FNMA / FHLMC	16,937		16,937		—		16,937		—
GNMA	154,793		154,793		—		154,793		—
Asset backed securities:
FFELP	133,975		133,975		—		133,975		—
SBA	1,051		1,051		—		1,051		—
Other debt securities	2,950		2,950		—		2,950		—
Total AFS investment securities	3,600,892		3,600,892		35,902		3,564,990		—

HTM investment securities:
U.S. Treasury securities	999		963		963		—		—
Obligations of state and political subdivisions (municipal securities), net	1,682,398		1,553,984		—		1,553,984		—
Residential mortgage-related securities:
FNMA / FHLMC	941,973		804,393		—		804,393		—
GNMA	48,979		46,170		—		46,170		—
Private-label	345,083		289,507		—		289,507		—
Commercial mortgage-related securities:
FNMA / FHLMC	780,995		632,914		—		632,914		—
GNMA	59,733		52,619		—		52,619		—
Total HTM investment securities, net	3,860,160		3,380,550		963		3,379,586		—

Equity securities:
Equity securities	31,651		31,651		6,883		—		24,769
Equity securities at NAV	10,000		10,000
Total equity securities	41,651		41,651

FHLB and Federal Reserve Bank stocks	229,171		229,171		—		229,171		—
Residential loans held for sale	33,011		33,011		—		33,011		—
Commercial loans held for sale	90,303		90,303		—		90,303		—
Loans, net	28,865,124		27,371,086		—		—		27,371,086
Bank and corporate owned life insurance	682,649		682,649		—		682,649		—
Mortgage servicing rights, net	84,390		84,390		—		—		84,390
Interest rate-related instruments designated as hedging instruments(a)	8,075		8,075		—		8,075		—
Foreign currency exchange forwards designated as hedging instruments(a)	632		632		—		632		—
Interest rate-related and other instruments not designated as hedging instruments(a)	111,623		111,623		—		111,623		—
Foreign currency exchange forwards not designated as hedging instruments(a)	2,954		2,954		—		2,954		—
Interest rate lock commitments to originate residential mortgage loans held for sale	439		439		—		—		439

Total selected assets at fair value	$	38,534,897	$	36,561,249	$	967,570	$	8,102,995	$	27,480,684

(a) Figures are presented gross before netting. See Note 9 and Note 10 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the
same counterparty where there is a legally enforceable master netting agreement in place.

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	Dec 31, 2023
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Liabilities
Deposits:
Noninterest-bearing demand	$	6,119,956	$	6,119,956	$	—	$	—	$	6,119,956
Savings	4,835,701		4,835,701		—		—		4,835,701
Interest-bearing demand	8,843,967		8,843,967		—		—		8,843,967
Money market	6,330,453		6,330,453		—		—		6,330,453
Brokered CDs(a)	4,447,479		4,447,479		—		4,447,479		—
Other time deposits(a)	2,868,494		2,868,494		—		2,868,494		—
Total deposits	33,446,049		33,446,049		—		7,315,973		26,130,076

Federal funds purchased and securities sold under agreements to repurchase	326,780		326,757		—		326,757		—



FHLB advances	1,940,194		1,944,600		—		1,944,600		—
Other long-term funding	541,269		534,983		—		534,983		—
Standby letters of credit(b)	2,157		2,157		—		2,157		—
Interest rate-related instruments designated as hedging instruments(c)	930		930		—		930		—
Foreign currency exchange forwards designated as hedging instruments(c)	2,946		2,946		—		2,946		—
Interest rate-related and other instruments not designated as hedging instruments(c)	195,662		195,662		—		195,662		—
Foreign currency exchange forwards not designated as hedging instruments(c)	2,746		2,746		—		2,746		—

Forward commitments to sell residential mortgage loans	673		673		—		—		673
Total selected liabilities at fair value	$	36,459,407	$	36,457,504	$	—	$	10,326,755	$	26,130,749

(a) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.

(b) The commitment on standby letters of credit was $212 million at December 31, 2023. See Note 11 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.

(c) Figures are presented gross before netting. See Note 9 and Note 10 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place.

The table below presents a rollforward of the consolidated balance sheets amounts for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and the year ended December 31, ~~2022,~~2023, for the Corporation's mortgage derivatives measured on a recurring basis and classified within Level 3 of the fair value hierarchy:
($ in thousands) Interest rate lock commitments to originate residential mortgage loans held for sale Forward commitments to sell residential mortgage loans Total
Balance December 31, 2021 $ 2,617 $ (30) $ 2,647
New production 10,442 (2,028) 12,470
Closed loans / settlements (913) 24,766 (25,679)
Other (12,060) (22,662) 10,603
Change in mortgage derivative (2,531) 76 (2,607)
Balance December 31, 2022 $ 86 $ 46 $ 40
New production $ 4,681 $ (1,274) $ 5,955
Closed loans / settlements (2,417) 1,969 (4,386)
Other (1,943) (1,547) (396)
Change in mortgage derivative 321 (853) 1,173
Balance September 30, 2023 $ 407 $ (806) $ 1,213

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($ in thousands)	Interest rate lock commitments to originate residential mortgage loans held for sale		Forward commitments to sell residential mortgage loans		Total
Balance December 31, 2022	$	86	$	46	$	40
New production	6,557		(1,816)		8,373
Closed loans / settlements	(4,171)		2,494		(6,665)
Other	(2,033)		(51)		(1,982)
Change in mortgage derivative	352		627		(274)

Balance December 31, 2023	$	439	$	673	$	(234)
New production	$	1,820	$	(590)	$	2,409
Closed loans / settlements	(1,546)		188		(1,734)
Other	(46)		(49)		3
Change in mortgage derivative	227		(451)		678

Balance March 31, 2024	$	666	$	222	$	444

The following table presents a rollforward of the ~~carrying~~fair value of Level 3 equity securities, ~~without readily determinable fair values still held as of September 30,~~for the three months ended March 31, 2024 and the year ended December 31, 2023, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable. Also shown are the cumulative upward and downward adjustments for the Corporation's equity securities without readily determinable fair values as of September 30, 2023:changes:


($ in thousands)
~~Equity securities without readily determinable fair values~~
~~Carrying~~Fair value as of December 31, 2022	$	19,225
Gains recognized in investment securities gains, net	5,861

Purchases	~~10,011~~11
Sales	(329)

~~Carrying~~Fair value as of ~~September 30,~~December 31, 2023	$	~~29,236~~24,769

~~Cumulative upward carrying value changes between January 1, 2018 and September 30, 2023~~Gains recognized in investment securities gains, net	$	~~19,134~~4,054
~~Cumulative downward carrying~~Purchases	8
Sales	(28,725)

Fair value ~~changes/impairment between January 1, 2018 and September 30, 2023~~as of March 31, 2024	$	—105

Table of Contents

The table below presents the Corporation’s assets measured at fair value on a nonrecurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall:

($ in thousands)

Fair Value Hierarchy

Fair Value

Consolidated Statements of Income Category of Adjustment Recognized in Income

Adjustment Recognized on the Consolidated Statements of Income(a)

($ in thousands)

Fair Value Hierarchy

Fair Value

Consolidated Statements of Income Category of Adjustment Recognized in Income

Adjustment Recognized on the Consolidated Statements of Income(a)

September 30, 2023

March 31, 2024

Assets

Individually evaluated loans

Level 3

56,506

Provision for credit losses

28,926

OREO(b)

Level 2

1,315

Other noninterest expense / provision for credit losses(c)

1,124

December 31, 2022

December 31, 2023

Assets

Individually evaluated loans

Level 3

23,584

Provision for credit losses

4,405

OREO(b)

Level 2

2,196

Other noninterest expense / provision for credit losses(c)

971

Equity securities without readily determinable fair values

Level 3

19,134

Investment securities gains (losses), net

5,690

Equity securities without readily determinable fair values

(a) Includes the ~~full year~~YTD impact on the consolidated statements of income.

(b) If the fair value of the collateral exceeds the carrying amount of the asset, no charge off or adjustment is necessary, the asset is not considered to be carried at fair value and is therefore not included in the table.

(c) When a property's value is written down at the time it is transferred to OREO, the charge off is booked to the provision for credit losses. When a property is already in OREO and subsequently written down, the charge off is booked to other noninterest expense.

Certain nonfinancial assets and nonfinancial liabilities measured at fair value on a nonrecurring basis include the fair value analysis in the goodwill impairment test as well as intangible assets and other nonfinancial long-lived assets measured at fair value for the purpose of impairment assessment.

The table below presents the unobservable inputs that are readily quantifiable pertaining to Level 3 measurements:
September 30, 2023 Valuation Technique Significant Unobservable Input Range of Inputs Weighted Average Input Applied
Mortgage servicing rights Discounted cash flow Option adjusted spread 6% - 8% 6%
Mortgage servicing rights Discounted cash flow Constant prepayment rate —% - 100% 6%
Individually evaluated loans Appraisals / Discounted cash flow Collateral / Discount factor 22% - 36% 34%
Interest rate lock commitments to originate residential mortgage loans held for sale Discounted cash flow Closing Ratio 48% - 100% 84%

~~Table of Contents~~

~~Fair Value of Financial Instruments~~

~~The Corporation is required to disclose estimated fair values for its financial instruments.~~

~~Fair value estimates are set forth below for the Corporation’s financial instruments:~~
Sep 30, 2023 Dec 31, 2022
($ in thousands) Fair Value Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value
Financial assets
Cash and due from banks Level 1 $ 388,694 $ 388,694 $ 436,952 $ 436,952
Interest-bearing deposits in other financial institutions Level 1 323,130 323,130 156,693 156,693
Federal funds sold and securities purchased under agreements to resell Level 1 965 965 27,810 27,810
AFS investment securities Level 1 109,024 109,024 109,378 109,378
AFS investment securities Level 2 3,382,655 3,382,655 2,632,647 2,632,647
HTM investment securities, net Level 1 999 948 999 936
HTM investment securities, net Level 2 3,899,416 3,144,883 3,959,399 3,400,028
Equity securities with readily determinable fair values Level 1 6,701 6,701 5,991 5,991
Equity securities without readily determinable fair values NAV 10,000 10,000 — —
Equity securities without readily determinable fair values Level 3 19,236 19,236 19,225 19,225
FHLB and Federal Reserve Bank stocks Level 2 268,698 268,698 295,496 295,496
Residential loans held for sale Level 2 54,790 54,790 20,383 20,383
Loans, net Level 3 29,847,392 28,705,298 28,486,849 27,481,426
Bank and corporate owned life insurance Level 2 679,775 679,775 676,530 676,530
Mortgage servicing rights, net Level 3 89,131 89,131 77,351 77,351
Derivatives (other assets)(a)
Level 2 147,160 147,160 67,603 67,603
Interest rate lock commitments to originate residential mortgage loans held for sale (other assets) Level 3 407 407 86 86
Forward commitments to sell residential mortgage loans (other assets) Level 3 806 806 — —
Financial liabilities
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts Level 3 $ 26,056,389 $ 26,056,389 $ 27,705,996 $ 27,705,996
Brokered CDs and other time deposits(b)
Level 2 6,066,937 6,066,937 1,930,158 1,930,158
Short-term funding Level 2 451,644 451,624 605,937 605,205
FHLB advances Level 2 3,733,041 3,734,775 4,319,861 4,322,264
Other long-term funding Level 2 529,459 519,337 248,071 242,151
Standby letters of credit(c)
Level 2 2,691 2,691 2,881 2,881
Derivatives (accrued expenses and other liabilities)(a)
Level 2 317,109 317,109 254,033 254,033
Forward commitments to sell residential mortgage loans (accrued expenses and other liabilities) Level 3 — — 46 46
(a) Figures are presented gross before netting. See Note 9 and Note 10 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the
same counterparty where there is a legally enforceable master netting agreement in place.
(b) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.
(c) The commitment on standby letters of credit was $247 million at September 30, 2023 and $271 million at December 31, 2022. See Note 11 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.


March 31, 2024	Valuation Technique	Significant Unobservable Input	Range of Inputs			Weighted Average Input Applied
Mortgage servicing rights	Discounted cash flow	Option adjusted spread	5%	-	8%	5%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	—%	-	100%	6%
Individually evaluated loans	Appraisals / Discounted cash flow	Collateral / Discount factor	11%	-	56%	52%
Interest rate lock commitments to originate residential mortgage loans held for sale	Discounted cash flow	Closing Ratio	25%	-	100%	86%

Note 13 Retirement Plans

The Corporation has a noncontributory defined benefit RAP, covering substantially all employees who meet ~~participation~~the eligibility requirements. The benefits are based primarily on years of service and the employee’s eligible compensation paid. Employees of acquired entities generally participate in the RAP after consummation of the business combinations. ~~Any retirement~~Retirement plans of acquired entities are typically merged into the RAP ~~after completion~~depending on the terms of the ~~mergers,~~merger agreement, and, as applicable, credit is usually ~~given~~applied to employees for years of service at the acquired institution for vesting and eligibility purposes.

The Corporation also provides ~~legacy~~ healthcare access to a limited group of retired employees from a previous acquisition in the Postretirement Plan. There are no other active retiree healthcare plans.

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The components of net periodic pension cost and net periodic benefit cost for the RAP and Postretirement Plan for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ were as follows:


		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022
RAP	RAP
RAP
RAP
Service cost
Service cost
Service cost	Service cost	$	800	$	906	$	2,392	$	2,752
Interest cost	Interest cost	2,794		1,820		8,165		5,364
Interest cost
Interest cost
Expected return on plan assets
Expected return on plan assets
Expected return on plan assets	Expected return on plan assets	(8,243)		(6,706)		(24,647)		(20,177)
Amortization of prior service cost	Amortization of prior service cost	(63)		(63)		(188)		(188)
Amortization of prior service cost
Amortization of prior service cost
Amortization of actuarial loss	Amortization of actuarial loss	—		347		37		494
Amortization of actuarial loss
Amortization of actuarial loss
Total net periodic pension cost
Total net periodic pension cost
Total net periodic pension cost	Total net periodic pension cost	$	(4,713)	$	(3,696)	$	(14,241)	$	(11,754)

Postretirement Plan	Postretirement Plan

Postretirement Plan

Postretirement Plan
Interest cost
Interest cost
Interest cost	Interest cost	$	20	$	13	$	59	$	40
Amortization of prior service cost	Amortization of prior service cost	(19)		(19)		(56)		(56)
Amortization of prior service cost
Amortization of prior service cost
Amortization of actuarial (gain)
Amortization of actuarial (gain)
Amortization of actuarial (gain)	Amortization of actuarial (gain)	(7)		—		(22)		—
Total net periodic benefit cost	Total net periodic benefit cost	$	(6)	$	(6)	$	(19)	$	(17)
Total net periodic benefit cost
Total net periodic benefit cost

The components of net periodic pension cost and net periodic benefit cost, other than the service cost component, are included in the line item other of noninterest expense on the consolidated statements of income. The service cost components are included in personnel on the consolidated statements of income.

The Corporation’s funding policy is to pay at least the minimum amount required by federal law and regulations, with consideration given to the maximum funding amounts allowed. The Corporation regularly reviews the funding of its RAP. There were no contributions during ~~2022~~2023 or the ~~nine~~three months ended ~~September 30, 2023.~~March 31, 2024.

Note 14 Segment Reporting

The Corporation utilizes a risk-based internal profitability measurement system to provide strategic business unit reporting. The profitability measurement system is based on internal management methodologies designed to produce consistent results and reflect the underlying economics of the units. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer, and the distribution of those products and services are similar. The three reportable segments are Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The financial information of the Corporation’s segments has been compiled utilizing the accounting policies described in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K, with certain exceptions. The more significant of these exceptions are described herein.

The reportable segment results are presented based on the Corporation's internal management accounting process. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to U.S. GAAP. As a result, reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in previously reported segment financial data. Additionally, the information presented is not indicative of how the segments would perform if they operated as independent entities.

To determine financial performance of each segment, the Corporation allocates FTP assignments, the provision for credit losses, certain noninterest expenses, income taxes, and equity to each segment. Allocation methodologies are subject to periodic adjustment as the internal management accounting system is revised, the interest rate environment evolves, and business or product lines within the segments change. Also, because the development and application of these methodologies is a dynamic process, the financial results presented may be periodically reviewed.

The Corporation allocates net interest income using an internal FTP methodology that charges users of funds (assets, primarily loans) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment and/or re-pricing characteristics of the assets and liabilities. The net effect of this allocation is offset in the Risk Management and Shared Services segment to ensure consolidated totals reflect the Corporation's net interest income. The net FTP allocation is reflected as net intersegment interest income (expense) in the accompanying tables.

The provision for credit losses is allocated to segments based on the expected long-term annual net charge off rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for credit losses is determined based on an ACLL model using the methodologies described in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K. The net effect of the credit provision is recorded in Risk Management and Shared Services. Indirect

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expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expense and bank-wide expense accruals (including, when applicable, amortization of CDIs and other intangible assets associated with acquisitions, acquisition-related costs, and asset gains on disposed business units) are generally not allocated to segments. Income taxes are allocated to segments based on the Corporation’s estimated effective tax rate, with certain segments adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk).

A brief description of each business segment is presented below. A more in-depth discussion of these segments can be found in the Segment Reporting note in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K.

The Corporate and Commercial Specialty segment serves a wide range of customers including larger businesses, developers, not-for-profits, municipalities, and financial institutions by providing lending and deposit solutions as well as the support to deliver, fund, and manage such banking solutions. In addition, this segment provides a variety of investment, fiduciary, and retirement planning products and services to individuals and small to mid-sized businesses. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses, by providing lending and deposit solutions. The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches).

Information about the Corporation’s segments is presented below:


		Corporate and Commercial Specialty
		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Corporate and Commercial Specialty
		Corporate and Commercial Specialty
		Corporate and Commercial Specialty
	Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022
Net interest income	Net interest income	$	250,365	$	161,143	$	710,031	$	363,135
Net interest income
Net interest income
Net intersegment interest (expense)
Net intersegment interest (expense)
Net intersegment interest (expense)	Net intersegment interest (expense)	(106,675)		(40,117)		(288,366)		(36,893)
Segment net interest income	Segment net interest income	143,690		121,026		421,665		326,242
Segment net interest income
Segment net interest income
Noninterest income
Noninterest income
Noninterest income	Noninterest income	34,081		35,663		99,243		112,620
Total revenue	Total revenue	177,771		156,688		520,908		438,862
Total revenue
Total revenue
Provision for credit losses
Provision for credit losses
Provision for credit losses	Provision for credit losses	14,066		11,904		41,523		36,803
Noninterest expense	Noninterest expense	63,207		58,934		186,351		172,141
Noninterest expense
Noninterest expense
Income before income taxes
Income before income taxes
Income before income taxes	Income before income taxes	100,498		85,851		293,034		229,918
Income tax expense	Income tax expense	19,304		15,967		54,138		42,248
Income tax expense
Income tax expense
Net income
Net income
Net income	Net income	$	81,194	$	69,884	$	238,897	$	187,670

Allocated goodwill	Allocated goodwill					$	525,836	$	525,836

Allocated goodwill

Allocated goodwill


		Community, Consumer, and Business
		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Community, Consumer, and Business
		Community, Consumer, and Business
		Community, Consumer, and Business
	Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022
Net interest income	Net interest income	$	67,139	$	87,156	$	219,883	$	233,699
Net interest income
Net interest income
Net intersegment interest income
Net intersegment interest income
Net intersegment interest income	Net intersegment interest income	123,900		49,437		317,820		98,907
Segment net interest income	Segment net interest income	191,039		136,593		537,703		332,606
Segment net interest income
Segment net interest income
Noninterest income
Noninterest income
Noninterest income	Noninterest income	29,675		26,745		85,881		92,072
Total revenue	Total revenue	220,714		163,338		623,584		424,679
Total revenue
Total revenue
Provision for credit losses
Provision for credit losses
Provision for credit losses	Provision for credit losses	7,381		5,378		21,467		14,958
Noninterest expense	Noninterest expense	108,185		107,860		328,960		311,423
Noninterest expense
Noninterest expense
Income before income taxes
Income before income taxes
Income before income taxes	Income before income taxes	105,148		50,100		273,158		98,298
Income tax expense	Income tax expense	22,187		10,521		57,469		20,642
Income tax expense
Income tax expense
Net income
Net income
Net income	Net income	$	82,961	$	39,579	$	215,688	$	77,655

Allocated goodwill	Allocated goodwill					$	579,156	$	579,156

Allocated goodwill

Allocated goodwill

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		Risk Management and Shared Services
		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
										Risk Management and Shared Services
	Three Months Ended Mar 31,
($ in thousands)	($ in thousands)	2023		2022		2023		2022
Net interest income (loss)		$	(63,260)	$	16,140	$	(143,743)	$	71,498
($ in thousands)
($ in thousands)
Net interest (loss)
Net interest (loss)
Net interest (loss)
Net intersegment (expense)	Net intersegment (expense)	(17,225)		(9,320)		(29,454)		(62,014)
Segment net interest income (loss)		(80,485)		6,820		(173,197)		9,484
Net intersegment (expense)
Net intersegment (expense)
Segment net interest (loss)
Segment net interest (loss)
Segment net interest (loss)
Noninterest income
Noninterest income
Noninterest income	Noninterest income	2,823		8,381		9,071		16,021
Total revenue	Total revenue	(77,663)		15,201		(164,126)		25,505
Total revenue
Total revenue
Provision for credit losses
Provision for credit losses
Provision for credit losses	Provision for credit losses	496		(283)		(975)		(38,756)
Noninterest expense	Noninterest expense	24,814		28,997		58,980		66,940
Noninterest expense
Noninterest expense
(Loss) before income taxes	(Loss) before income taxes	(102,972)		(13,513)		(222,131)		(2,679)
Income tax expense (benefit)		(22,065)		(325)		(41,308)		5,286
(Loss) before income taxes
(Loss) before income taxes
Income tax (benefit)
Income tax (benefit)
Income tax (benefit)
Net (loss)
Net (loss)
Net (loss)	Net (loss)	$	(80,907)	$	(13,189)	$	(180,823)	$	(7,965)

Allocated goodwill	Allocated goodwill					$	—	$	—

Allocated goodwill

Allocated goodwill

Consolidated Total
Three Months Ended Sep 30, Nine Months Ended Sep 30,
($ in thousands) 2023 2022 2023 2022
Net interest income $ 254,244 $ 264,439 $ 786,171 $ 668,332
Net intersegment interest income — — — —
Segment net interest income 254,244 264,439 786,171 668,332
Noninterest income 66,579 70,788 194,195 220,713
Total revenue 320,823 335,227 980,366 889,045
Provision for credit losses 21,943 16,998 62,014 13,006
Noninterest expense 196,205 195,791 574,291 550,503
Income before income taxes 102,674 122,438 344,061 325,536
Income tax expense 19,426 26,163 70,299 68,176
Net income $ 83,248 $ 96,275 $ 273,762 $ 257,360
Allocated goodwill $ 1,104,992 $ 1,104,992


	Consolidated Total
	Three Months Ended Mar 31,
($ in thousands)	2024		2023
Net interest income	$	257,858	$	274,010
Net intersegment interest income	—		—
Segment net interest income	257,858		274,010
Noninterest income	64,985		62,073
Total revenue	322,842		336,083
Provision for credit losses	24,001		17,971
Noninterest expense	197,657		187,412
Income before income taxes	101,185		130,700
Income tax expense	20,016		27,340
Net income	$	81,169	$	103,360






Allocated goodwill	$	1,104,992	$	1,104,992

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Note 15 Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of accumulated other comprehensive income (loss) at ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ including changes during the preceding three ~~and nine~~ month periods as well as any reclassifications out of accumulated other comprehensive income (loss):
($ in thousands) AFS Investment
Securities Cash Flow Hedge Derivatives Defined Benefit
Pension and
Postretirement
Obligations Accumulated
Other
Comprehensive
Income (Loss)
Balance December 31, 2022 $ (233,192) $ 3,360 $ (42,968) $ (272,799)
Other comprehensive (loss) before reclassifications (69,512) — — (69,512)
Amounts reclassified from accumulated other comprehensive income (loss):
HTM investment securities, net, at amortized cost 6,883 — — 6,883
Other assets / accrued expenses and other liabilities — (33,976) — (33,976)
Interest income — 9,097 — 9,097
Personnel expense — — (244) (244)
Other expense — — 15 15
Income tax benefit 15,879 5,488 31 21,398
Net other comprehensive loss during period (46,751) (19,391) (198) (66,340)
Balance September 30, 2023 $ (279,943) $ (16,032) $ (43,166) $ (339,140)
Balance December 31, 2021 $ (5,266) $ — $ (5,051) $ (10,317)
Other comprehensive (loss) before reclassifications (268,413) — — (268,413)
Unrealized (losses) on AFS securities transferred to HTM securities (67,604) — — (67,604)
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities (gains), net (12) — — (12)
HTM investment securities, net, at amortized cost 7,269 — — 7,269
Personnel expense — — (244) (244)
Other expense — — 494 494
Income tax (expense) benefit 83,906 — (470) 83,436
Net other comprehensive (loss) during period (244,854) — (221) (245,074)
Balance September 30, 2022 $ (250,120) $ — $ (5,272) $ (255,391)

($ in thousands) AFS Investment
Securities Cash Flow Hedge Derivatives Defined Benefit
Pension and
Postretirement
Obligations Accumulated
Other
Comprehensive
Income (Loss)
Balance June 30, 2023 $ (239,273) $ (9,270) $ (43,099) $ (291,642)
Other comprehensive (loss) before reclassifications (56,924) — — (56,924)
Amounts reclassified from accumulated other comprehensive income (loss):
HTM investment securities, net, at amortized cost 2,327 — — 2,327
Other assets / accrued expenses and other liabilities — (13,592) — (13,592)
Interest income — 4,516 — 4,516
Personnel expense — — (81) (81)
Other expense — — (7) (7)
Income tax benefit 13,928 2,315 23 16,266
Net other comprehensive (loss) during period (40,669) (6,762) (66) (47,497)
Balance September 30, 2023 $ (279,943) $ (16,032) $ (43,166) $ (339,140)
Balance June 30, 2022 $ (177,726) $ — $ (5,062) $ (182,788)
Other comprehensive (loss) before reclassifications (100,092) — — (100,092)
Amounts reclassified from accumulated other comprehensive income (loss):
HTM investment securities, net, at amortized cost 2,888 — — 2,888
Personnel expense — — (82) (82)
Other expense — — 347 347
Income tax (expense) benefit 24,810 — (474) 24,336
Net other comprehensive (loss) during period (72,394) — (209) (72,603)
Balance September 30, 2022 $ (250,120) $ — $ (5,272) $ (255,391)


($ in thousands)	AFS Investment Securities		Cash Flow Hedge Derivatives		Defined Benefit Pension and Postretirement Obligations		Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2023	$	(148,641)	$	3,080	$	(25,535)	$	(171,096)
Other comprehensive (loss) before reclassifications	(29,889)		—		—		(29,889)

Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities losses, net	197		—		—		197
HTM investment securities, net, at amortized cost(a)	2,060		—		—		2,060
Other assets / accrued expenses and other liabilities	—		(19,461)		—		(19,461)
Interest income	—		4,823		—		4,823
Personnel expense	—		—		(72)		(72)
Other expense	—		—		(7)		(7)
Income tax benefit (expense)	6,885		(1,688)		(1,633)		3,564
Net other comprehensive (loss) during period	(20,746)		(16,326)		(1,712)		(38,785)
Balance March 31, 2024	$	(169,388)	$	(13,246)	$	(27,247)	$	(209,881)

Balance December 31, 2022	$	(233,192)	$	3,360	$	(42,968)	$	(272,799)
Other comprehensive income before reclassifications	36,478		—		—		36,478

Amounts reclassified from accumulated other comprehensive income (loss):

HTM investment securities, net, at amortized cost(a)	2,267		—		—		2,267
Other assets / accrued expenses and other liabilities	—		13,763		—		13,763
Interest income	—		1,262		—		1,262
Personnel expense	—		—		(81)		(81)
Other expense	—		—		30		30
Income tax (expense) benefit	(9,892)		(4,694)		79		(14,507)
Net other comprehensive income during period	28,853		10,331		27		39,211
Balance March 31, 2023	$	(204,339)	$	13,691	$	(42,940)	$	(233,588)

~~Table~~
(a) Amortization of ~~Contents~~net unrealized losses on AFS securities transferred to HTM securities.

Note 16 Leases

The Corporation has operating leases for retail and corporate offices, land, and equipment. The Corporation also has a finance lease for retail and corporate offices.

These leases have original terms of 1 year or longer with remaining maturities up to 39 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any purchase options or optional periods that the Corporation is reasonably likely to extend have been included in the capitalization.

The discount rate used to capitalize the operating leases is the Corporation's FHLB borrowing rate on the date of lease commencement. When determining the rate to discount specific lease obligations, the repayment period and term are considered.

Operating and finance lease costs and cash flows resulting from these leases are presented below:


		Three Months Ended Sep 30,				Nine Months Ended Sep 30,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023		2022		2023		2022
Operating lease costs	Operating lease costs	$	1,594	$	1,637	$	4,536	$	5,361
Operating lease costs
Operating lease costs
Finance lease costs
Finance lease costs
Finance lease costs	Finance lease costs	23		23		69		96
Operating lease cash flows	Operating lease cash flows	1,917		1,880		5,442		6,614
Operating lease cash flows
Operating lease cash flows
Finance lease cash flows	Finance lease cash flows	23		22		69		103
Finance lease cash flows
Finance lease cash flows

Table of Contents

The right-of-use asset and lease liability by lease classifications on the consolidated balance sheets were as follows:

($ in thousands)

Consolidated Balance Sheets Category

Sep 30, 2023

Dec 31, 2022

($ in thousands)

Consolidated Balance Sheets Category

Mar 31, 2024

Dec 31, 2023

Operating lease right-of-use asset

Premises and equipment

23,677

25,617

Finance lease right-of-use asset

Other assets

390

455

Operating lease liability

Accrued expenses and other liabilities

26,059

28,357

Finance lease liability

Other long-term funding

405

469

The lease payment obligations, weighted-average remaining lease term, and weighted-average original discount rate were as follows:


		Sep 30, 2023					Dec 31, 2022
	Mar 31, 2024																							Mar 31, 2024					Dec 31, 2023
($ in thousands)	($ in thousands)	Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		($ in thousands)		Lease payments			Weighted-average lease term (in years)		Weighted-average discount rate			Lease payments			Weighted-average lease term (in years)		Weighted-average discount rate
Operating leases	Operating leases
Retail and corporate offices
Retail and corporate offices
Retail and corporate offices	Retail and corporate offices	$	23,662	5.44	2.81	%	$	26,140	5.92	2.62	%	$	24,223		5.61	5.61		3.14	%	$	25,729		5.76	5.76		3.12	%
Land	Land	4,255		7.11	3.47	%	4,766		7.59	3.14	%	Land		3,846			6.87	6.87	3.49		%	4,050			6.98	6.98	3.48	%
Equipment	Equipment	408		2.75	4.62	%	—		0.00	—	%	Equipment		408			2.25	2.25	4.62		%	408			2.50	2.50	4.62	%
Total operating leases	Total operating leases	$	28,325	5.64	2.93	%	$	30,906	6.17	2.70	%	Total operating leases		$	28,476		5.73	5.73	3.21		%	$	30,187		5.88	5.88	3.19	%
Finance leases	Finance leases
Retail and corporate offices	Retail and corporate offices	$	417	4.50	1.32	%	$	485	5.25	1.32	%
Retail and corporate offices
Retail and corporate offices														$	370		4.00		1.32		%	$	394		4.25		1.32	%

Total finance leases	Total finance leases	$	417	4.50	1.32	%	$	485	5.25	1.32	%
Total finance leases
Total finance leases														$	370		4.00		1.32		%	$	394		4.25		1.32	%

Contractual lease payment obligations for each of the next five years and thereafter, in addition to a reconciliation to the Corporation’s lease liability, were as follows:


($ in thousands)	($ in thousands)	Operating Leases		Finance Leases		Total Leases		($ in thousands)	Operating Leases	Finance Leases	Total Leases
Three months ended December 31, 2023		$	1,509	$	23	$	1,532
2024		6,124		93		6,217
Nine months ended December 31, 2024
2025	2025	5,223		93		5,315
2026	2026	4,672		93		4,765
2027	2027	4,014		93		4,107
Beyond 2027		6,782		23		6,805
2028
Beyond 2028
Total lease payments	Total lease payments	$	28,325	$	417	$	28,742
Less: interest	Less: interest	2,266		12		2,278
Present value of lease payments	Present value of lease payments	$	26,059	$	405	$	26,464

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $4$6 million and ~~$13~~$3 million, respectively. The leases that had not yet commenced as of ~~September 30, 2023~~March 31, 2024 will commence between ~~October 2023~~May 2024 and ~~December 2024~~April 2025 with lease terms of 1 year to 611 years.

4849

Table of Contents


ITEM 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This report contains statements that may constitute forward-looking statements within the meaning of the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, such as statements other than historical facts contained or incorporated by reference into this report. These forward-looking statements include statements with respect to the Corporation’s financial condition, results of operations, plans, objectives, future performance and business, including statements preceded by, followed by or that include the words “believes,” “expects,” or “anticipates,” references to estimates or similar expressions. Future filings by the Corporation with the SEC, and future statements other than historical facts contained in written material, press releases and oral statements issued by, or on behalf of the Corporation may also constitute forward-looking statements.

All forward-looking statements contained in this report or which may be contained in future statements made for or on behalf of the Corporation are based upon information available at the time the statement is made and the Corporation assumes no obligation to update any forward-looking statements, except as required by federal securities law. Forward-looking statements are subject to significant risks and uncertainties, and the Corporation’s actual results may differ materially from the expected results discussed in such forward-looking statements. Factors that might cause actual results to differ from the results discussed in forward-looking statements include, but are not limited to, the risk factors in Item 1A, Risk Factors, in the Corporation’s Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, and as may be described from time to time in the Corporation’s subsequent SEC filings.

Overview

The following discussion and analysis is presented to assist in the understanding and evaluation of the Corporation’s financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements, footnotes, and supplemental financial data appearing elsewhere in this Quarterly Report on Form 10-Q and should be read in conjunction therewith. Management continually evaluates strategic acquisition opportunities and various other strategic alternatives that could involve the sale or acquisition of branches or other assets, or the consolidation or creation of subsidiaries. Within the tables presented, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes.

~~Table of Contents~~

Performance Summary

•Average loans of $29.4 billion increased ~~$3.9 billion,~~$523 million, or ~~15%~~2%, from the first ~~nine~~three months of ~~2022, with growth~~2023, driven primarily by increases in ~~all major loan categories. For 2023, the Corporation expects period end loan growth of 5% to 6%.~~auto finance and real estate construction loans, partially offset by a decrease in residential mortgage loans.

•Average deposits of ~~$31.1~~$33.3 billion increased ~~$2.5~~$3.4 billion, or 9%11%, from the first ~~nine~~three months of ~~2022,~~2023, driven primarily by increases in ~~time deposits~~brokered CDs and ~~network transaction~~other time deposits, partially offset by ~~a decrease~~decreases in ~~noninterest-bearing~~noninterest bearing demand and money market deposits. ~~For 2023, the Corporation expects end of period core customer deposit compression of 3% with growth of 2% for the second half of the year.~~

•Net interest income of ~~$786~~$258 million ~~increased $118~~decreased $16 million, or ~~18%~~6%, from the first ~~nine~~three months of ~~2022,~~2023, and net interest margin was ~~2.86%~~2.79% compared to ~~2.77%~~3.07% for the first ~~nine~~three months of ~~2022.~~2023. The ~~increase~~decreases in net interest income ~~was~~and net interest margin were driven by increases in interest bearing liabilities outpacing the increase in earning assets and higher costs associated with those interest income as a result of growth in balances across all loan categories, which also benefited from the Federal Reserve increasing the federal funds target interest rate 225 bp since September 30, 2022, partially offset by higher interest expense on deposits and borrowings. For 2023, the Corporation expects net interest income growth of 8% to 10%.bearing liabilities.

•Provision for credit losses was ~~$62~~$24 million, compared to a provision of ~~$13~~$18 million for the first ~~nine~~three months of ~~2022,~~2023, driven by a mix of portfolio loan growth, nominal credit movement, and general macroeconomic trends. ~~For 2023, the Corporation expects to adjust provision to reflect changes to risk grades, economic conditions, loan volumes, and other indications of credit quality.~~

•Noninterest income of ~~$194~~$65 million ~~decreased $27~~increased $3 million, or ~~12%~~5%, from the first ~~nine~~three months of ~~2022, partially~~2023, driven by ~~a decrease~~an increase in ~~service charges and deposit account fees eliminated in 2022 and a decrease in capital markets,~~investment securities gains (losses), net primarily as a result of ~~lower interest rate swap revenue and syndication~~the sale of the Corporation's remaining Visa B shares in the first quarter of 2024, as well as higher wealth management fees. ~~For 2023, the Corporation expects total noninterest income to compress by 8% to 10%.~~

•Noninterest expense of ~~$574~~$198 million increased ~~$24~~$10 million, or 4%5%, from the first ~~nine~~three months of ~~2022,~~2023, primarily driven by ~~higher personnel~~an increase in FDIC expense ~~largely as a result of increased FTEs due to hiring~~ related to ~~previously announced initiatives and continued investment in our employees, increased FDIC assessment expense driven by~~ the ~~FDIC assessment rate increase effective January 2023, and increased technology expense. For 2023, the Corporation expects total noninterest expense to grow by 3% to 4%.~~special assessment.

Table of Contents

Table 1 Summary Results of Operations: Trends
Nine months ended Three months ended
($ in thousands, except per share data) Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022
Net income $ 273,762 $ 257,360 $ 83,248 $ 87,154 $ 103,360 $ 108,762 $ 96,275
Net income available to common equity 265,137 248,735 80,373 84,279 100,485 105,887 93,400
Earnings per common share - basic 1.76 1.66 0.53 0.56 0.67 0.70 0.62
Earnings per common share - diluted 1.75 1.65 0.53 0.56 0.66 0.70 0.62
Effective tax rate 20.43 % 20.94 % 18.92 % 21.26 % 20.92 % 18.89 % 21.37 %

~~Back to table of contents~~

~~Income Statement Analysis~~

~~Net Interest Income~~

~~Table 2 Net Interest Income Analysis~~
Nine Months Ended Sep 30,
2023 2022
($ in thousands)
Average
Balance Interest
Income /
Expense Average
Yield /
Rate Average
Balance Interest
Income /
Expense Average
Yield /
Rate
Assets
Earning assets
Loans(a)(b)(c)
Commercial and business lending $ 10,835,003 $ 546,210 6.74% $ 9,623,927 $ 236,971 3.29%
Commercial real estate lending 7,286,627 381,425 7.00% 6,438,335 176,006 3.65%
Total commercial 18,121,629 927,634 6.84% 16,062,262 412,977 3.44%
Residential mortgage 8,698,542 217,410 3.33% 7,920,382 177,906 2.99%
Auto finance 1,677,838 60,233 4.80% 657,150 17,837 3.63%
Other retail 895,371 59,163 8.82% 888,241 35,900 5.40%
Total loans 29,393,380 1,264,441 5.75% 25,528,036 644,621 3.37%
Investment securities
Taxable 5,209,845 104,197 2.67% 4,371,244 54,009 1.65%
Tax-exempt(a)
2,314,838 60,429 3.48% 2,416,064 61,771 3.41%
Other short-term investments 495,883 17,990 4.85% 625,748 7,696 1.64%
Investments and other 8,020,566 182,616 3.03% 7,413,056 123,477 2.22%
Total earning assets 37,413,946 $ 1,447,057 5.17% 32,941,092 $ 768,098 3.11%
Other assets, net 3,005,220 3,134,678
Total assets $ 40,419,166 $ 36,075,770
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits
Savings $ 4,743,526 $ 43,611 1.23% $ 4,650,105 $ 1,427 0.04%
Interest-bearing demand 6,819,714 106,860 2.09% 6,573,680 14,307 0.29%
Money market 6,853,545 130,201 2.54% 7,090,960 12,642 0.24%
Network transaction deposits 1,420,042 53,259 5.01% 795,059 6,460 1.09%
Time deposits 4,447,813 130,818 3.93% 1,266,116 2,754 0.29%
Total interest-bearing deposits 24,284,640 464,749 2.56% 20,375,920 37,590 0.25%
Federal funds purchased and securities sold under agreements to repurchase 344,950 8,504 3.30% 376,687 1,200 0.43%
Commercial paper 11,475 1 0.01% 23,106 2 0.01%
FHLB advances 3,834,247 147,365 5.14% 2,445,486 38,663 2.11%
Long-term funding 495,434 25,895 6.97% 249,759 8,182 4.37%
Total short and long-term funding 4,686,106 181,765 5.18% 3,095,039 48,047 2.07%
Total interest-bearing liabilities 28,970,746 $ 646,514 2.98% 23,470,959 $ 85,637 0.49%
Noninterest-bearing demand deposits 6,772,521 8,189,067
Other liabilities 567,938 446,249
Stockholders’ equity 4,107,961 3,969,495
Total liabilities and stockholders’ equity $ 40,419,166 $ 36,075,770
Interest rate spread 2.19% 2.62%
Net free funds 0.67% 0.15%
Fully tax-equivalent net interest income and net interest margin $ 800,543 2.86% $ 682,461 2.77%
Fully tax-equivalent adjustment 14,372 14,129
Net interest income $ 786,171 $ 668,332

~~(a) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.~~

(b) Nonaccrual loans and loans held for sale have been included in the average balances.
(c) Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.


	Three months ended
($ in thousands, except per share data)		Mar 31, 2024			Dec 31, 2023		Sep 30, 2023			Jun 30, 2023			Mar 31, 2023
Net income (loss)		$	81,169		$	(90,806)	$	83,248		$	87,154		$	103,360
Net income (loss) available to common equity		78,294			(93,681)		80,373			84,279			100,485
Earnings (loss) per common share - basic		0.52			(0.63)		0.53			0.56			0.67
Earnings (loss) per common share - diluted		0.52			(0.62)		0.53			0.56			0.66
Effective tax rate		19.78		%	N/M		18.92		%	21.26		%	20.92		%

Table of Contents

Table 2 Net Interest Income Analysis


		Three Months Ended,																	Three Months Ended,
		Sep 30, 2023					Jun 30, 2023					Sep 30, 2022							Mar 31, 2024									Dec 31, 2023									Mar 31, 2023
($ in thousands)	($ in thousands)	Average Balance		Interest Income / Expense		Average Yield / Rate	Average Balance		Interest Income / Expense		Average Yield / Rate	Average Balance		Interest Income / Expense		Average Yield / Rate	($ in thousands)		Average Balance			Interest Income / Expense			Average Yield / Rate			Average Balance			Interest Income / Expense			Average Yield / Rate			Average Balance			Interest Income / Expense			Average Yield / Rate
Assets	Assets
Earning assets	Earning assets
Earning assets
Earning assets
Loans(a)(b)(c)	Loans(a)(b)(c)
Loans(a)(b)(c)
Loans(a)(b)(c)

Commercial and business lending

Commercial and business lending

Commercial and business lending	Commercial and business lending	$	10,985,584	$	194,956	7.04%	$	10,899,337	$	184,080	6.77%	$	10,192,463	$	110,215	4.29%	$	10,816,255		$	194,090		7.22%	7.22%		$	10,820,214		$	193,808		7.11%	7.11%		$	10,616,026		$	167,174		6.39%	6.39%
Commercial real estate lending	Commercial real estate lending	7,312,645		134,370		7.29%	7,295,367		127,967		7.04%	6,768,054		78,887		4.62%	Commercial real estate lending		7,389,962			138,850	138,850		7.56%	7.56%		7,397,809			138,437	138,437		7.42%	7.42%		7,251,193			119,087	119,087		6.66%	6.66%
Total commercial	Total commercial	18,298,229		329,326		7.14%	18,194,703		312,047		6.88%	16,960,517		189,101		4.42%	Total commercial		18,206,217			332,940	332,940		7.35%	7.35%		18,218,024			332,245	332,245		7.24%	7.24%		17,867,219			286,262	286,262		6.50%	6.50%
Residential mortgage	Residential mortgage	8,807,157		74,643		3.39%	8,701,496		72,056		3.31%	8,223,531		64,069		3.12%	Residential mortgage		7,896,956			68,787	68,787		3.48%	3.48%		8,691,258			76,035	76,035		3.50%	3.50%		8,584,528			70,711	70,711		3.30%	3.30%
Auto finance	Auto finance	1,884,540		24,074		5.07%	1,654,523		19,701		4.78%	969,918		9,170		3.75%	Auto finance		2,373,720			32,603	32,603		5.52%	5.52%		2,138,536			29,221	29,221		5.42%	5.42%		1,490,115			16,458	16,458		4.48%	4.48%
Other retail	Other retail	894,685		20,534		9.15%	887,574		20,135		9.08%	901,738		13,868		6.13%	Other retail		892,128			20,661	20,661		9.28%	9.28%		904,618			21,026	21,026		9.27%	9.27%		903,956			18,494	18,494		8.23%	8.23%
Total loans	Total loans	29,884,611		448,577		5.96%	29,438,297		423,939		5.77%	27,055,703		276,209		4.06%	Total loans		29,369,022			454,991	454,991		6.22%	6.22%		29,952,435			458,527	458,527		6.08%	6.08%		28,845,818			391,925	391,925		5.49%	5.49%
Investment securities	Investment securities
Taxable	Taxable	5,407,299		38,210		2.83%	5,304,381		35,845		2.70%	4,328,586		19,221		1.78%
Taxable
Taxable																			5,517,023			46,727			3.39%			5,344,578			41,809			3.13%			4,912,416			30,142			2.45%
Tax-exempt(a)	Tax-exempt(a)	2,300,488		20,085		3.49%	2,314,825		20,152		3.48%	2,435,957		20,838		3.42%	Tax-exempt(a)		2,133,352			18,024	18,024		3.38%	3.38%		2,209,662			19,244	19,244		3.48%	3.48%		2,329,519			20,192	20,192		3.47%	3.47%
Other short-term investments	Other short-term investments	483,211		6,575		5.40%	511,487		6,086		4.77%	378,528		3,284		3.45%	Other short-term investments		576,782			8,311	8,311		5.80%	5.80%		767,256			10,418	10,418		5.39%	5.39%		493,061			5,329	5,329		4.37%	4.37%
Investments and other	Investments and other	8,190,998		64,870		3.16%	8,130,693		62,083		3.05%	7,143,071		43,342		2.42%	Investments and other		8,227,158			73,062	73,062		3.55%	3.55%		8,321,495			71,471	71,471		3.43%	3.43%		7,734,996			55,664	55,664		2.88%	2.88%
Total earning assets	Total earning assets	38,075,608		$	513,447	5.36%	37,568,991		$	486,022	5.18%	34,198,774		$	319,551	3.72%	Total earning assets		37,596,179			$	528,053		5.64%	5.64%		38,273,931			$	529,998		5.51%	5.51%		36,580,814			$	447,589		4.94%	4.94%
Other assets, net	Other assets, net	3,000,371					2,989,321					3,073,005
Total assets	Total assets	$	41,075,980				$	40,558,311				$	37,271,779
Total assets
Total assets
Liabilities and stockholders' equity
Liabilities and stockholders' equity
Liabilities and stockholders' equity	Liabilities and stockholders' equity
Interest-bearing liabilities	Interest-bearing liabilities
Interest-bearing liabilities
Interest-bearing liabilities
Interest-bearing deposits	Interest-bearing deposits
Interest-bearing deposits
Interest-bearing deposits
Savings
Savings
Savings	Savings	$	4,814,499	$	18,592	1.53%	$	4,749,808	$	15,160	1.28%	$	4,735,285	$	516	0.04%	$	4,928,031		$	21,747		1.77%	1.77%		$	4,861,913		$	20,334		1.66%	1.66%		$	4,664,624		$	9,859		0.86%	0.86%
Interest-bearing demand	Interest-bearing demand	6,979,071		41,980		2.39%	6,663,775		34,961		2.10%	6,587,404		10,306		0.62%	Interest-bearing demand		7,490,119			49,990	49,990		2.68%	2.68%		7,156,151			47,277	47,277		2.62%	2.62%		6,814,487			29,918	29,918		1.78%	1.78%
Money market	Money market	6,294,083		45,034		2.84%	6,743,810		43,529		2.59%	7,328,165		9,474		0.51%	Money market		6,116,604			47,306	47,306		3.11%	3.11%		6,121,105			47,110	47,110		3.05%	3.05%		7,536,393			41,637	41,637		2.24%	2.24%
Network transaction deposits	Network transaction deposits	1,639,619		22,008		5.33%	1,468,006		18,426		5.03%	873,168		4,716		2.14%	Network transaction deposits		1,651,937			22,205	22,205		5.41%	5.41%		1,616,719			22,034	22,034		5.41%	5.41%		1,147,089			12,825	12,825		4.53%	4.53%
Time deposits	Time deposits	5,955,741		65,517		4.36%	4,985,949		50,119		4.03%	1,230,859		989		0.32%	Time deposits		7,198,315			84,983	84,983		4.75%	4.75%		6,264,621			72,121	72,121		4.57%	4.57%		2,362,260			15,182	15,182		2.61%	2.61%
Total interest-bearing deposits	Total interest-bearing deposits	25,683,013		193,131		2.98%	24,611,348		162,196		2.64%	20,754,882		26,000		0.50%	Total interest-bearing deposits		27,385,005			226,231	226,231		3.32%	3.32%		26,020,510			208,875	208,875		3.18%	3.18%		22,524,853			109,422	109,422		1.97%	1.97%
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	320,518		3,100		3.84%	285,754		2,261		3.17%	380,674		756		0.79%	Federal funds purchased and securities sold under agreements to repurchase		263,979			2,863	2,863		4.36%	4.36%		347,204			3,734	3,734		4.27%	4.27%		429,780			3,143	3,143		2.97%	2.97%
Commercial paper		5,041		—		0.01%	12,179		—		0.01%	18,308		1		0.01%

Other short-term funding

Other short-term funding

Other short-term funding																			449,999			5,603			5.01%			—			—			—%			17,339			—			0.01%
FHLB advances	FHLB advances	3,460,827		48,143		5.52%	3,796,106		49,261		5.20%	3,283,328		20,792		2.51%	FHLB advances		1,540,247			21,671	21,671		5.66%	5.66%		3,467,433			49,171	49,171		5.63%	5.63%		4,254,532			49,960	49,960		4.76%	4.76%
Long-term funding	Long-term funding	533,744		10,019		7.51%	543,003		9,596		7.07%	249,838		2,722		4.36%	Long-term funding		539,106			10,058	10,058		7.46%	7.46%		531,155			10,185	10,185		7.67%	7.67%		408,175			6,281	6,281		6.16%	6.16%
Total short and long-term funding	Total short and long-term funding	4,320,130		61,263		5.63%	4,637,042		61,118		5.28%	3,932,149		24,270		2.45%	Total short and long-term funding		2,793,331			40,194	40,194		5.78%	5.78%		4,345,793			63,090	63,090		5.77%	5.77%		5,109,826			59,384	59,384		4.71%	4.71%
Total interest-bearing liabilities	Total interest-bearing liabilities	30,003,143		$	254,394	3.36%	29,248,389		$	223,314	3.06%	24,687,031		$	50,270	0.81%	Total interest-bearing liabilities		30,178,337			$	266,425		3.55%	3.55%		30,366,302			$	271,965		3.55%	3.55%		27,634,679			$	168,807		2.48%	2.48%
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	6,318,781					6,669,787					8,119,475
Other liabilities	Other liabilities	622,004					511,074					480,672
Other liabilities
Other liabilities
Stockholders’ equity
Stockholders’ equity
Stockholders’ equity	Stockholders’ equity	4,132,052					4,129,061					3,984,602
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	41,075,980				$	40,558,311				$	37,271,779
Total liabilities and stockholders’ equity
Total liabilities and stockholders’ equity
Interest rate spread
Interest rate spread
Interest rate spread	Interest rate spread					2.00%					2.12%					2.91%													2.09%															1.96%						2.46%
Net free funds	Net free funds					0.71%					0.68%					0.22%	Net free funds														0.70%														0.73%						0.61%
Fully tax-equivalent net interest income and net interest margin	Fully tax-equivalent net interest income and net interest margin			$	259,053	2.71%			$	262,708	2.80%			$	269,281	3.13%	Fully tax-equivalent net interest income and net interest margin								$	261,628		2.79%	2.79%								$	258,033		2.69%	2.69%					$	278,782	3.07%	3.07%
Fully tax-equivalent adjustment	Fully tax-equivalent adjustment			4,810					4,791					4,843
Net interest income	Net interest income			$	254,244				$	257,917				$	264,439
Net interest income
Net interest income

(a) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.

Table of Contents

Notable Contributions to the Change in Net Interest Income

•Fully tax-equivalent net interest income and net interest income were ~~$118~~$17 million, or ~~17%~~6%, and ~~$118~~$16 million, or ~~18%~~6%, ~~higher~~lower than the first ~~nine~~three months of ~~2022,~~2023, respectively. Average loans increased $3.9 billion, or 15%, from the first nine months of 2022, and average investments and other short-term investments increased $608 million, or 8%, from the first nine months of 2022. The increase in net interest income was driven by a higher federal funds target rate combined with growth in all major loan categories. Since ~~September 30, 2022,~~March 31, 2023, the Federal Reserve increased the federal funds target interest rate ~~225~~50 bp, which contributed to the yield on earning assets increasing by ~~206 bp.~~70 bp and the cost of interest-bearing liabilities increasing 107 bp from the first three months of 2023. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.

•Average loans increased $523 million, or 2%, from the first three months of 2023, and average investments and other short-term investments increased $492 million, or 6%, from the first three months of 2023.

• Average interest-bearing liabilities increased ~~$5.5~~$2.5 billion, or ~~23%~~9%, compared to the first ~~nine~~three months of ~~2022.~~2023. Average interest-bearing deposits increased ~~$3.9~~$4.9 billion, or ~~19%~~22%, from the first ~~nine~~three months of ~~2022,~~2023, primarily driven by increases in time deposits, ~~and~~interest-bearing demand deposits, network transaction deposits, and savings deposits, partially offset by a decrease in money market deposits. Average noninterest-bearing demand deposits decreased ~~$1.4~~$1.5 billion, or ~~17%~~20%, versus the first ~~nine~~three months of ~~2022.~~2023. Average FHLB advances ~~increased $1.4~~decreased $2.7 billion, or ~~57%~~64%, from the first ~~nine~~three months of ~~2022,~~2023, partially offset by an increase in other short-term funding related to ~~fund balance sheet growth. The cost of interest-bearing liabilities increased 249 bp from~~utilizing the ~~first nine months of 2022.~~BTFP.

Provision for Credit Losses

The provision for credit losses is predominantly a function of the Corporation’s reserving methodology and judgments as to other qualitative and quantitative factors used to determine the appropriate level of the ACLL, which focuses on changes in the size and character of the loan portfolio, changes in levels of individually evaluated and other nonaccrual loans, historical losses and delinquencies in each portfolio category, the risk inherent in specific loans, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, and other factors which could affect potential credit losses. The forecast the Corporation used for ~~September 30, 2023~~March 31, 2024 was the Moody's baseline scenario from ~~August 2023,~~February 2024, which was reviewed against the ~~September 2023~~March 2024 baseline scenario with no material updates made, over a 2two year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. See additional discussion under the sections titled Loans, Credit Risk, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Noninterest Income

Table 3 Noninterest Income


		Nine months ended						Three months ended										Changes vs
						Three months ended
						Three months ended
						Three months ended																					Changes vs
($ in thousands, except as noted)	($ in thousands, except as noted)	Sep 30, 2023		Sep 30, 2022		YTD % Change		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2023		Sep 30, 2022		($ in thousands, except as noted)		Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2023			Mar 31, 2023
Wealth management fees	Wealth management fees	$	61,499	$	63,719	(3)	%	$	20,828	$	20,483	$	20,189	$	20,403	$	19,984	2	%	4	%	Wealth management fees		$	21,694		$	21,003		$	20,828		$	20,483		$	20,189		3	3	%	7	%
Service charges and deposit account fees	Service charges and deposit account fees	38,230		48,392		(21)	%	12,864		12,372		12,994		13,918		15,029		4	%	(14)	%	Service charges and deposit account fees		12,439			10,815	10,815		12,864	12,864		12,372	12,372		12,994	12,994		15	15	%	(4)	%
Card-based fees	Card-based fees	33,492		32,847		2	%	11,510		11,396		10,586		11,167		11,479		1	%	—	%	Card-based fees		11,267			11,528	11,528		11,510	11,510		11,396	11,396		10,586	10,586		(2)	(2)	%	6	%
Other fee-based revenue	Other fee-based revenue	13,249		12,613		5	%	4,509		4,465		4,276		3,290		4,487		1	%	—	%	Other fee-based revenue		4,402			4,019	4,019		4,509	4,509		4,465	4,465		4,276	4,276		10	10	%	3	%
Total fee-based revenue	Total fee-based revenue	146,470		157,571		(7)	%	49,710		48,715		48,045		48,779		50,979		2	%	(2)	%	Total fee-based revenue		49,802			47,365	47,365		49,710	49,710		48,715	48,715		48,045	48,045		5	5	%	4	%
Capital markets, net	Capital markets, net	15,544		24,331		(36)	%	5,368		5,093		5,083		5,586		7,675		5	%	(30)	%	Capital markets, net		4,050			9,106	9,106		5,368	5,368		5,093	5,093		5,083	5,083		(56)	(56)	%	(20)	%

Mortgage banking, net	Mortgage banking, net	17,814		16,635		7	%	6,501		7,768		3,545		2,238		2,098		(16)	%	N/M

Mortgage banking, net

Mortgage banking, net																								2,662			1,615			6,501			7,768			3,545			65		%	(25)	%
Loss on mortgage portfolio sale																						Loss on mortgage portfolio sale		—			(136,239)			—			—			—			(100)		%	N/M
Bank and corporate owned life insurance	Bank and corporate owned life insurance	6,882		8,004		(14)	%	2,047		2,172		2,664		3,427		1,827		(6)	%	12	%	Bank and corporate owned life insurance		2,570			3,383	3,383		2,047	2,047		2,172	2,172		2,664	2,664		(24)	(24)	%	(4)	%

Other
Other
Other	Other	6,841		6,613		3	%	2,339		2,080		2,422		4,102		2,527		12	%	(7)	%		2,327		2,850	2,850		2,339	2,339		2,080	2,080		2,422	2,422		(18)	(18)	%	(4)		%
Subtotal	Subtotal	193,551		213,154		(9)	%	65,965		65,827		61,758		64,132		65,106		—	%	1	%	Subtotal		61,411			(71,919)	(71,919)		65,965	65,965		65,827	65,827		61,758	61,758		N/M	N/M		(1)	%
Asset gains (losses), net	Asset gains (losses), net	590		1,883		(69)	%	625		(299)		263		(545)		18		N/M				Asset gains (losses), net		(306)			(136)	(136)		625	625		(299)	(299)		263	263		125	125	%	N/M
Investment securities gains (losses), net	Investment securities gains (losses), net	55		5,676		(99)	%	(11)		14		51		(1,930)		5,664		N/M				Investment securities gains (losses), net		3,879			(58,958)	(58,958)		(11)	(11)		14	14		51	51		N/M	N/M

Total noninterest income		$	194,195	$	220,713	(12)	%	$	66,579	$	65,543	$	62,073	$	61,657	$	70,788	2	%	(6)	%
Total noninterest income (loss)
Total noninterest income (loss)
Total noninterest income (loss)																								$	64,985		$	(131,013)		$	66,579		$	65,543		$	62,073		N/M			5	%
Mortgage loans originated for sale during period	Mortgage loans originated for sale during period	$	283,469	$	535,694	(47)	%	$	115,075	$	99,141	$	69,254	$	64,419	$	131,743	16	%	(13)	%	Mortgage loans originated for sale during period		$	105,394		$	112,365		$	115,075		$	99,141		$	69,254		(6)	(6)	%	52	%
Mortgage loan settlements during period	Mortgage loan settlements during period	254,619		620,352		(59)	%	103,452		96,514		54,652		94,682		119,942		7	%	(14)	%	Mortgage loan settlements during period		91,026			957,450	957,450		103,452	103,452		96,514	96,514		54,652	54,652		(90)	(90)	%	67	%

Assets under management, at market value(a)	Assets under management, at market value(a)							12,543		12,995		12,412		11,843		11,142		(3)	%	13	%
Assets under management, at market value(a)
Assets under management, at market value(a)																								14,171			13,545			12,543			12,995			12,412			5		%	14	%

N/M = Not Meaningful
(a) $ in millions. Excludes assets held in brokerage accounts.

Table of Contents

Notable Contributions to the Change in Noninterest Income

•Service charges and deposit account fees decreased $10 million from the first nine months of 2022, primarily due to the reduction and elimination of many deposit account fees in the third quarter of 2022.

•~~Capital markets, net decreased $9 million from the first nine months of 2022, as a result of lower interest rate swap revenue and syndication fees.~~

•Wealth management fees ~~decreased~~increased $2 million from the first ~~nine~~three months of ~~2022,~~2023, mainly driven by ~~market conditions.~~increased assets under management.

•Investment securities gains (losses), net increased $4 million from the first three months of 2023, as a result of the sale of the Corporation's remaining Visa B shares.

Noninterest Expense

Table 4 Noninterest Expense


		Nine months ended						Three months ended										Change vs
						Three months ended
						Three months ended
						Three months ended																			Change vs
($ in thousands)	($ in thousands)	Sep 30, 2023		Sep 30, 2022		YTD % Change		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2023		Sep 30, 2022		($ in thousands)	Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2023			Mar 31, 2023
Personnel	Personnel	$	347,669	$	335,720	4	%	$	117,159	$	114,089	$	116,420	$	118,381	$	118,243	3	%	(1)	%	Personnel	$	119,395	$	120,686	$	117,159	$	114,089	$	116,420	(1)	(1)	%	3	%
Technology	Technology	73,990		65,401		13	%	26,172		24,220		23,598		25,299		22,694		8	%	15	%	Technology	26,200		28,027	28,027	26,172	26,172	24,220	24,220	23,598	23,598	(7)	(7)	%	11	%
Occupancy	Occupancy	42,775		43,948		(3)	%	14,125		13,587		15,063		15,846		13,717		4	%	3	%	Occupancy	13,633		14,429	14,429	14,125	14,125	13,587	13,587	15,063	15,063	(6)	(6)	%	(9)	%
Business development and advertising	Business development and advertising	20,054		17,388		15	%	7,100		7,106		5,849		8,136		6,778		—	%	5	%	Business development and advertising	6,517		8,350	8,350	7,100	7,100	7,106	7,106	5,849	5,849	(22)	(22)	%	11	%
Equipment	Equipment	14,921		14,841		1	%	5,016		4,975		4,930		4,791		4,921		1	%	2	%	Equipment	4,599		4,742	4,742	5,016	5,016	4,975	4,975	4,930	4,930	(3)	(3)	%	(7)	%
Legal and professional	Legal and professional	13,149		14,118		(7)	%	4,461		4,831		3,857		4,132		4,159		(8)	%	7	%	Legal and professional	4,672		6,762	6,762	4,461	4,461	4,831	4,831	3,857	3,857	(31)	(31)	%	21	%
Loan and foreclosure costs	Loan and foreclosure costs	4,822		5,121		(6)	%	2,049		1,635		1,138		804		1,631		25	%	26	%	Loan and foreclosure costs	1,979		585	585	2,049	2,049	1,635	1,635	1,138	1,138	N/M	N/M		74	%
FDIC assessment	FDIC assessment	25,575		16,300		57	%	9,150		9,550		6,875		6,350		5,800		(4)	%	58	%	FDIC assessment	13,946		41,497	41,497	9,150	9,150	9,550	9,550	6,875	6,875	(66)	(66)	%	103	%
Other intangible amortization	Other intangible amortization	6,608		6,608		—	%	2,203		2,203		2,203		2,203		2,203		—	%	—	%	Other intangible amortization	2,203		2,203	2,203	2,203	2,203	2,203	2,203	2,203	2,203	—	—	%	—	%

Other	Other	24,726		31,057		(20)	%	8,771		8,476		7,479		10,618		15,645		3	%	(44)	%
Other
Other																							4,513		12,110		8,771		8,476		7,479		(63)		%	(40)	%
Total noninterest expense	Total noninterest expense	$	574,291	$	550,503	4	%	$	196,205	$	190,673	$	187,412	$	196,560	$	195,791	3	%	—	%	Total noninterest expense	$	197,657	$	239,391	$	196,205	$	190,673	$	187,412	(17)	(17)	%	5	%
Average FTEs(a)	Average FTEs(a)	4,222		4,101		3	%	4,220		4,227		4,219		4,169		4,182		—	%	1	%	Average FTEs(a)	4,070		4,130	4,130	4,220	4,220	4,227	4,227	4,219	4,219	(1)	(1)	%	(4)	%

(a) Average FTEs without overtime

Notable Contributions to the Change in Noninterest Expense

•Personnel expense increased ~~$12~~$3 million from the first ~~nine~~three months of ~~2022,~~2023, largely as a result of increased ~~FTEs due to hiring related to previously announced initiatives and continued investment in our employees.~~

•FDIC expense increased $9 million from the first nine months of 2022, primarily driven by the FDIC's assessment rate change on January 1, 2023. The Corporation is expecting additional FDIC assessment expense associated with the special assessment that was proposed by the FDIC in May 2023. The proposal would assess a 12.5 bp annual special assessment on the Bank's uninsured deposits reported in the Call Report for December 31, 2022, excluding the first $5 billion of uninsured deposits, and would be in place for two years. The Bank's Call Report uninsured deposits at December 31, 2022 were $15.7 billion. Once an assessment is approved, the full expense for the two year period will be recognized.fringe benefit expense.

•Technology expense increased $9$3 million from the first ~~nine~~three months of ~~2022,~~2023, driven by digital investments tied to our strategic initiatives.

•FDIC expense increased $7 million from the first three months of 2023, primarily driven by the special assessment applied to the Corporation and other banks relating to the FDIC's increased estimated loss attributable to the protection of depositors at Silicon Valley Bank and Signature Bank.

Income Taxes

The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of ~~$70~~$20 million for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to income tax expense of ~~$68~~$27 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. The Corporation's effective tax rate from continuing operations was ~~20.43%~~19.78% and 20.92% for the ~~first nine~~three months ofended March 31, 2024, and 2023, ~~compared to an effective tax rate of 20.94% for the first nine months of 2022.~~respectively. The ~~increase~~decreases in income tax expense and effective tax rate during the first ~~nine~~three months of ~~2023 was primarily driven by an increase in income before tax. The decrease in the effective tax rate was~~2024 were primarily driven by a decrease in ~~state tax expense.~~pretax income partially offset by an increase in nondeductible expenses. The Corporation expects a full year effective tax rate of 2019 to 21%, assuming no change in the statutory corporate tax rate.

Income tax expense recorded on the consolidated statements of income involves the interpretation and application of certain accounting pronouncements and federal and state tax laws and regulations. The Corporation is subject to examination by various taxing authorities. Examination by taxing authorities may impact the amount of tax expense and/or the reserve for uncertainty in income taxes if their interpretations differ from those of management, based on their judgments about information available to them at the time of their examinations.

Table of Contents

Balance Sheet Analysis

•At ~~September 30, 2023,~~March 31, 2024, total assets were ~~$41.6~~$41.1 billion, up ~~$2.2 billion, or 6%,~~$121 million from December 31, ~~2022,~~2023, and up ~~$3.6 billion,~~$435 million, or 9%1%, from ~~September 30, 2022.~~March 31, 2023.

•Interest bearing deposits in other financial institutions were ~~$323~~$420 million at ~~September 30, 2023, up $166~~March 31, 2024, down $5 million, or ~~106%~~1%, from December 31, ~~2022,~~2023, and ~~up $211~~down $91 million, or ~~188%~~18%, from ~~September 30, 2022.~~March 31, 2023.

•AFS investment securities, at fair value were ~~$3.5~~$3.7 billion at ~~September 30, 2023,~~March 31, 2024, up ~~$750~~$123 million, or ~~27%~~3%, from December 31, ~~2022,~~2023, and up ~~$1.0 billion,~~$343 million, or ~~40%~~10%, from ~~September 30, 2022.~~March 31, 2023. HTM investment securities, net, at amortized cost were ~~$3.9~~$3.8 billion at ~~September 30, 2023,~~March 31, 2024, down ~~$60 million, or 2%, from December 31, 2022, and down $51~~$27 million, or 1%, from ~~September 30, 2022.~~December 31, 2023, and down $134 million, or 3%, from March 31, 2023. Additionally, FHLB and Federal Reserve Bank stocks, at cost were $174 million, down $55 million, or 24%, from December 31, 2023 and down $157 million, or 48%, from March 31, 2023, as a result of the paydown of FHLB advances. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.

•Loans of ~~$30.2~~$29.5 billion at ~~September 30, 2023~~March 31, 2024 were up $~~1.4 billion~~278 million, or 5%1%, from December 31, ~~2022,~~2023, and up $~~2.4 billion,~~287 million, or 9%1%, from ~~September 30, 2022~~March 31, 2023. See Note 6 Loans of the notes to consolidated financial statements for additional details.

•At ~~September 30, 2023,~~March 31, 2024, total deposits of ~~$32.1~~$33.7 billion were up ~~$2.5 billion,~~$267 million, or 8%1%, from December 31, ~~2022,~~2023, and were up ~~$2.9~~$3.4 billion, or ~~10%~~11%, from ~~September 30, 2022.~~March 31, 2023. See section Deposits and Customer Funding for additional information on deposits.

•Federal funds purchased and securities sold under agreements to repurchase were ~~$452~~$266 million at ~~September 30, 2023,~~March 31, 2024, down ~~$133~~$61 million, or ~~23%~~19%, from December 31, ~~2022,~~2023, and up ~~$175~~$57 million, or ~~63%~~27%, from ~~September 30, 2022.~~March 31, 2023. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

•FHLB advances were ~~$3.7~~$1.3 billion at ~~September 30, 2023,~~March 31, 2024, down ~~$587~~$607 million, or ~~14%~~31%, from December 31, ~~2022,~~2023, and down $~~44 million,~~3.7 billion, or 1%73%, from ~~September 30, 2022. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.~~

•~~Other long-term~~March 31, 2023. BTFP funding was ~~$529~~$500 million at ~~September 30, 2023, up $281 million, or 113%, from~~ ~~December~~March 31, ~~2022,~~2024, which was used to pay down FHLB advances during the quarter. ~~and up $280 million, or 112%, from September 30, 2022, primarily driven by the Corporation's issuance of subordinated notes in February 2023.~~ See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

Loans

Table 5 Period End Loan Composition


		Sep 30, 2023				Jun 30, 2023				Mar 31, 2023				Dec 31, 2022				Sep 30, 2022						Mar 31, 2024						Dec 31, 2023						Sep 30, 2023						Jun 30, 2023						Mar 31, 2023
($ in thousands)	($ in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		($ in thousands)		Amount			% of Total			Amount			% of Total			Amount			% of Total			Amount			% of Total			Amount			% of Total

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	10,099,068	33	%	$	10,055,487	34	%	$	9,869,781	34	%	$	9,759,454	34	%	$	9,571,925	34	%	$	9,858,329		33	33	%	$	9,731,555		33	33	%	$	10,099,068		33	33	%	$	10,055,487		34	34	%	$	9,869,781		34	34	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	1,054,969		3	%	1,058,237		4	%	1,050,236		4	%	991,722		3	%	999,786		4	%	Commercial real estate — owner occupied		1,095,894			4	4	%	1,061,700			4	4	%	1,054,969			3	3	%	1,058,237			4	4	%	1,050,236			4	4	%
Commercial and business lending	Commercial and business lending	11,154,037		37	%	11,113,724		37	%	10,920,017		37	%	10,751,176		37	%	10,571,711		38	%	Commercial and business lending		10,954,223			37	37	%	10,793,255			37	37	%	11,154,037			37	37	%	11,113,724			37	37	%	10,920,017			37	37	%
Commercial real estate — investor	Commercial real estate — investor	5,218,980		17	%	5,312,928		18	%	5,094,249		17	%	5,080,344		18	%	5,064,289		18	%	Commercial real estate — investor		5,035,195			17	17	%	5,124,245			18	18	%	5,218,980			17	17	%	5,312,928			18	18	%	5,094,249			17	17	%
Real estate construction	Real estate construction	2,130,719		7	%	2,009,060		7	%	2,147,070		7	%	2,155,222		7	%	1,835,159		7	%	Real estate construction		2,287,041			8	8	%	2,271,398			8	8	%	2,130,719			7	7	%	2,009,060			7	7	%	2,147,070			7	7	%
Commercial real estate lending	Commercial real estate lending	7,349,699		24	%	7,321,988		25	%	7,241,318		25	%	7,235,565		25	%	6,899,449		25	%	Commercial real estate lending		7,322,237			25	25	%	7,395,644			25	25	%	7,349,699			24	24	%	7,321,988			25	25	%	7,241,318			25	25	%
Total commercial	Total commercial	18,503,736		61	%	18,435,711		62	%	18,161,335		62	%	17,986,742		62	%	17,471,159		63	%	Total commercial		18,276,460			62	62	%	18,188,898			62	62	%	18,503,736			61	61	%	18,435,711			62	62	%	18,161,335			62	62	%
Residential mortgage	Residential mortgage	8,782,645		29	%	8,746,345		29	%	8,605,164		29	%	8,511,550		30	%	8,314,902		30	%	Residential mortgage		7,868,180			27	27	%	7,864,891			27	27	%	8,782,645			29	29	%	8,746,345			29	29	%	8,605,164			29	29	%
Auto finance	Auto finance	2,007,164		7	%	1,777,974		6	%	1,551,538		5	%	1,382,073		5	%	1,117,136		4	%	Auto finance		2,471,257			8	8	%	2,256,162			8	8	%	2,007,164			7	7	%	1,777,974			6	6	%	1,551,538			5	5	%

Home equity	Home equity	623,650		2	%	615,506		2	%	609,787		2	%	624,353		2	%	612,608		2	%

Home equity

Home equity																								619,764			2		%	628,526			2		%	623,650			2		%	615,506			2		%	609,787			2		%
Other consumer	Other consumer	275,993		1	%	273,367		1	%	279,248		1	%	294,851		1	%	301,475		1	%	Other consumer		258,603			1	1	%	277,740			1	1	%	275,993			1	1	%	273,367			1	1	%	279,248			1	1	%
Total consumer	Total consumer	11,689,451		39	%	11,413,193		38	%	11,045,737		38	%	10,812,828		38	%	10,346,121		37	%	Total consumer		11,217,802			38	38	%	11,027,319			38	38	%	11,689,451			39	39	%	11,413,193			38	38	%	11,045,737			38	38	%
Total loans	Total loans	$	30,193,187	100	%	$	29,848,904	100	%	$	29,207,072	100	%	$	28,799,569	100	%	$	27,817,280	100	%	Total loans		$	29,494,263		100	100	%	$	29,216,218		100	100	%	$	30,193,187		100	100	%	$	29,848,904		100	100	%	$	29,207,072		100	100	%

The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30 to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during ~~2022~~2023 and the first ~~nine~~three months of ~~2023.~~2024. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

Table of Contents

The Corporation’s loan distribution and interest rate sensitivity as of ~~September 30, 2023~~March 31, 2024 are summarized in the following table:

Table 6 Loan Distribution and Interest Rate Sensitivity


($ in thousands)	($ in thousands)	Within 1 Year(a)		1-5 Years		5-15 Years		Over 15 Years		Total		% of Total		($ in thousands)		Within 1 Year(a)			1-5 Years			5-15 Years			Over 15 Years			Total			% of Total

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	9,181,210	$	652,572	$	256,501	$	8,784	$	10,099,068	33	%	$	8,836,304		$	686,351		$	326,893		$	8,780		$	9,858,329		33	33	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	652,639		279,043		122,993		295		1,054,969		3	%	Commercial real estate — owner occupied		679,920			293,112	293,112		122,863	122,863		—	—		1,095,894	1,095,894		4	4	%
Commercial real estate — investor	Commercial real estate — investor	4,846,003		226,962		146,015		—		5,218,980		17	%	Commercial real estate — investor		4,677,835			292,300	292,300		65,061	65,061		—	—		5,035,195	5,035,195		17	17	%
Real estate construction	Real estate construction	2,048,329		43,915		29,697		8,779		2,130,719		7	%	Real estate construction		2,244,789			32,646	32,646		1,766	1,766		7,840	7,840		2,287,041	2,287,041		8	8	%
Commercial - adjustable	Commercial - adjustable	11,413,802		29,485		8,026		—		11,451,314		38	%	Commercial - adjustable		11,232,462			36,821	36,821		3,538	3,538		—	—		11,272,820	11,272,820		38	38	%
Commercial - fixed	Commercial - fixed	5,314,379		1,173,006		547,180		17,857		7,052,422		23	%	Commercial - fixed		5,206,386			1,267,588	1,267,588		513,045	513,045		16,620	16,620		7,003,640	7,003,640		24	24	%
Residential mortgage - adjustable	Residential mortgage - adjustable	316,708		1,020,151		1,883,429		301		3,220,588		11	%	Residential mortgage - adjustable		203,699			602,574	602,574		1,549,413	1,549,413		295	295		2,355,982	2,355,982		8	8	%
Residential mortgage - fixed	Residential mortgage - fixed	5,576		86,514		538,718		4,931,249		5,562,057		18	%	Residential mortgage - fixed		4,712			72,493	72,493		499,394	499,394		4,935,599	4,935,599		5,512,198	5,512,198		19	19	%
Auto finance	Auto finance	369		733,245		1,273,550		—		2,007,164		7	%	Auto finance		651			1,075,501	1,075,501		1,395,104	1,395,104		—	—		2,471,257	2,471,257		8	8	%
Home equity	Home equity	564,104		11,253		39,252		9,041		623,650		2	%	Home equity		565,196			10,358	10,358		34,966	34,966		9,245	9,245		619,764	619,764		2	2	%
Other consumer	Other consumer	201,452		36,438		25,150		12,953		275,993		1	%	Other consumer		194,771			32,113	32,113		20,666	20,666		11,052	11,052		258,603	258,603		1	1	%
Total loans	Total loans	$	17,816,390	$	3,090,092	$	4,315,305	$	4,971,401	$	30,193,187	100	%	Total loans		$	17,407,877		$	3,097,448		$	4,016,126		$	4,972,812		$	29,494,263		100	100	%
Fixed-rate	Fixed-rate	$	5,329,729	$	2,039,525	$	2,423,850	$	4,971,100	$	14,764,204	49	%	Fixed-rate		$	5,220,674		$	2,456,672		$	2,463,175		$	4,972,517		$	15,113,038		51	51	%
Floating or adjustable rate	Floating or adjustable rate	12,486,661		1,050,567		1,891,455		301		15,428,984		51	%	Floating or adjustable rate		12,187,203			640,776	640,776		1,552,950	1,552,950		295	295		14,381,225	14,381,225		49	49	%
Total	Total	$	17,816,390	$	3,090,092	$	4,315,305	$	4,971,401	$	30,193,187	100	%	Total		$	17,407,877		$	3,097,448		$	4,016,126		$	4,972,812		$	29,494,263		100	100	%

(a) Demand loans, past due loans, overdrafts, and credit cards are reported in the “Within 1 Year” category.

At ~~September 30, 2023, $20.8~~March 31, 2024, $19.6 billion, or ~~69%~~66%, of the loans outstanding and ~~$16.8~~$16.5 billion, or ~~91%~~90%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

Credit Risk

An active credit risk management process is used for commercial loans to ensure that sound and consistent credit decisions are made. Credit risk is controlled by detailed underwriting procedures, comprehensive loan administration, and periodic review of borrowers’ outstanding loans and commitments. Borrower relationships are formally reviewed and graded on an ongoing basis for early identification of potential problems. Further analysis by customer, industry, and geographic location are performed to monitor trends, financial performance, and concentrations. See Note 6 Loans of the notes to consolidated financial statements for additional information on managing overall credit quality.

The loan portfolio is widely diversified by types of borrowers, industry groups, and market areas primarily within the Corporation's ~~branch~~lending footprint. Significant loan concentrations are considered to exist when there are amounts loaned to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At ~~September 30, 2023,~~March 31, 2024, no significant concentrations existed in the Corporation’s portfolio in excess of 10% of total loan exposure.

Commercial and business lending: The commercial and business lending classification primarily includes commercial loans to large corporations, middle market companies, small businesses, and asset-based and equipment financing.

Table 7 Largest Commercial and Industrial Industry Group Exposures, by NAICS Subsector


September 30, 2023		NAICS Subsector	Outstanding Balance		Total Exposure		% of Total Loan Exposure
March 31, 2024									March 31, 2024	NAICS Subsector	Outstanding Balance		Total Exposure		% of Total Loan Exposure
($ in thousands)									($ in thousands)
Real Estate(a)	Real Estate(a)	531	$	1,872,397	$	3,482,921	8	%	Real Estate(a)	531	$	1,768,102	$	3,292,974	8	8	%
Utilities(b)	Utilities(b)	221	2,295,402		2,690,573		6	%	Utilities(b)	221	2,584,397		3,190,718	3,190,718	8	8	%
Credit Intermediation and Related Activities(c)	Credit Intermediation and Related Activities(c)	522	1,019,466		1,916,996		5	%	Credit Intermediation and Related Activities(c)	522	786,948		1,741,721	1,741,721	4	4	%

Merchant Wholesalers, Durable Goods	Merchant Wholesalers, Durable Goods	423	498,039		929,829		2	%
Merchant Wholesalers, Durable Goods
Merchant Wholesalers, Durable Goods										423	453,915		931,764		2		%

(a) Includes REIT lines.

(b) ~~52%~~59% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

The remaining commercial and industrial portfolio is spread over a diverse range of industries, none of which exceed 2% of total loan exposure.

The CRE-owner occupied portfolio is spread over a diverse range of industries, none of which exceed 2% of total loan exposure.

The credit risk related to commercial and business lending is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.

Table of Contents

Commercial real estate - investor: CRE-investor is comprised of loans secured by various non-owner occupied or investor income producing property types.

Table 8 Largest Commercial Real Estate Investor Property Type Exposures


September 30, 2023		% of Total Loan Exposure		% of Total Commercial Real Estate - Investor Loan Exposure
March 31, 2024						March 31, 2024	% of Total Loan Exposure		% of Total Commercial Real Estate - Investor Loan Exposure
Multi-Family	Multi-Family	5	%	35	%	Multi-Family	4	%	33	%
Industrial	Industrial	3	%	24	%	Industrial	3	%	25	%
Office	Office	3	%	21	%	Office	3	%	21	%

The remaining CRE-investor portfolio is spread over various other property types, none of which exceed 2% of total loan exposure.

Credit risk is managed in a similar manner to commercial and business lending by employing sound underwriting guidelines, lending primarily to borrowers in local markets and businesses, periodically evaluating the underlying collateral, and formally reviewing the borrower’s financial soundness and relationship on an ongoing basis.

Real estate construction: Real estate construction loans are primarily short-term or interim loans that provide financing for the acquisition or development of commercial income properties, multi-family projects, or residential development, both single family and condominium. Real estate construction loans are made to developers and project managers who are generally well known to the Corporation and have prior successful project experience. The credit risk associated with real estate construction loans is generally confined to specific geographic areas but is also influenced by general economic conditions. The Corporation controls the credit risk on these types of loans by making loans in familiar markets to developers, reviewing the merits of individual projects, controlling loan structure, and monitoring project progress and construction advances.

Table 9 Largest Real Estate Construction Property Type Exposures


September 30, 2023		% of Total Loan Exposure		% of Total Real Estate Construction Loan Exposure
March 31, 2024						March 31, 2024	% of Total Loan Exposure		% of Total Real Estate Construction Loan Exposure
Multi-Family	Multi-Family	5	%	43	%	Multi-Family	5	%	49	%
Industrial	Industrial	3	%	25	%	Industrial	2	%	23	%

The remaining real estate construction portfolio is spread over various other property types, none of which exceed 2% of total loan exposure.

The Corporation’s current lending standards for CRE and real estate construction lending are determined by property type and specifically address many criteria, including: maximum loan amounts, maximum LTV, requirements for pre-leasing and/or presales, minimum borrower equity, and maximum loan-to-cost. Currently, the maximum standard for LTV is 80%, with lower limits established for certain higher risk types, such as raw land that has a 50% LTV maximum. The Corporation’s LTV guidelines are in compliance with regulatory supervisory limits. In most cases, for real estate construction loans, the loan amounts include interest reserves, which are built into the loans and sized to fund loan payments through construction and lease up and/or sell out.

Residential mortgages: Residential mortgage loans are primarily first lien home mortgages with a maximum loan-to-collateral value without credit enhancement (e.g. private mortgage insurance) of 80%. The residential mortgage portfolio is focused primarily in the Corporation's three-state branch footprint, with approximately ~~87%~~88% of the outstanding loan balances in the Corporation's branch footprint at ~~September 30, 2023.~~March 31, 2024. The rates on adjustable rate mortgages adjust based upon the movement in the underlying index which is then added to a margin and rounded to the nearest 0.125%. That result is then subjected to any periodic caps to produce the borrower's interest rate for the coming term. Most of the adjustable rate mortgages have an initial fixed rate term of 3, 5, 7 or 10 years.

The Corporation generally retains certain fixed-rate residential real estate mortgages in its loan portfolio, including retail and private banking jumbo mortgages and CRA-related mortgages. As part of management’s historical practice of originating and servicing residential mortgage loans, generally the Corporation’s 30 year, agency conforming, fixed-rate residential real estate mortgage loans have been sold in the secondary market with servicing rights retained. Subject to management’s analysis of the current interest rate environment, among other market factors, the Corporation may choose to retain mortgage loan production on its balance sheet.

The Corporation’s underwriting and risk-based pricing guidelines for residential mortgage loans include minimum borrower FICO score and maximum LTV of the property securing the loan. Residential mortgage products generally are underwritten using FHLMC and FNMA secondary marketing guidelines.

Table of Contents

Home equity: Home equity consists of both home equity lines of credit and closed-end home equity loans. The Corporation’s credit risk monitoring guidelines for home equity are based on an ongoing review of loan delinquency status, as well as a quarterly review of FICO score deterioration and property devaluation. The Corporation does not routinely obtain appraisals on performing loans to update LTV ratios after origination; however, the Corporation monitors the local housing markets by reviewing the various home price indices and incorporates the impact of the changing market conditions in its ongoing credit monitoring process. For junior lien home equity loans, the Corporation is unable to track the performance of the first lien loan if it does not own or service the first lien loan. However, the Corporation obtains a refreshed FICO score on a quarterly basis and monitors this as part of its assessment of the home equity portfolio.

The Corporation’s underwriting and risk-based pricing guidelines for home equity lines of credit and loans consist of a combination of both borrower FICO score and the original cumulative LTV against the property securing the loan. Currently, the Corporation's policy sets the maximum acceptable LTV at 90%. The Corporation's current home equity line of credit offering is priced based on floating rate indices and generally allows 10 years of interest-only payments followed by a 20-year amortization of the outstanding balance. The loans in the Corporation's portfolio generally have an original term of 20 years with principal and interest payments required.

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 1416 states throughout the Northeast, Mid-Atlantic, and Midwestern United States. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to the Corporation pursuant to dealer agreements. The Corporation’s underwriting and pricing guidelines are based on a dual risk grade derived from a combination of FICO auto score and proprietary internal custom score. Minimum grade and FICO score standards ensure the credit risk is appropriately managed to the Corporation’s risk appetite. Further, the grade influences loan-specific parameters such as vehicle age, term, LTV, loan amount, mileage, payment and debt service thresholds, and pricing. Maximum loan terms offered are 84 months on select grades with vehicle age, mileage, and other limitations in place to qualify. The program is designed to capture primarily prime and super prime contracts. Over time, the Corporation expects roughly 60% of originations to be secured by used vehicles.

Other consumer: Other consumer consists of student loans, short-term personal installment loans, and credit cards. The Corporation had $67 million and $76 million of student loans at September 30, 2023 and December 31, 2022, respectively, the majority of which are government guaranteed. Federally guaranteed student loan payments resumed in October 2023 after over three years of payment moratoriums that began as a result of the COVID-19 pandemic. The Corporation is not originating new student loans and the student loan portfolio is in run-off. Credit risk for ~~non-government guaranteed~~ student loans, short-term personal installment loans, and credit cards is influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral. Risks of loss are generally on smaller average balances per loan spread over many borrowers. Once charged off, there is usually less opportunity for recovery of these smaller consumer loans. Credit risk is primarily controlled by reviewing the creditworthiness of the borrowers, monitoring payment histories, and taking appropriate collateral and guarantee positions.

Table of Contents

Nonperforming Assets

Management is committed to a proactive nonaccrual and problem loan identification philosophy. This philosophy is implemented through the ongoing monitoring and review of all pools of risk in the loan portfolio to ensure that problem loans are identified quickly and the risk of loss is minimized. Table 10 provides detailed information regarding NPAs, which include nonaccrual loans, OREO, and repossessed ~~assets:~~assets, and also includes information on accruing loans past due and restructured loans:

Table 10 Nonperforming Assets


($ in thousands)	($ in thousands)	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			($ in thousands)	Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023
Nonperforming assets	Nonperforming assets

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	74,812		$	34,907		$	22,735		$	14,329		$	15,576
Commercial real estate — owner occupied	Commercial real estate — owner occupied	3,936			1,444			1,478			—			—
Commercial and business lending	Commercial and business lending	78,748			36,352			24,213			14,329			15,576
Commercial real estate — investor	Commercial real estate — investor	10,882			22,068			25,122			29,380			37,479
Real estate construction	Real estate construction	103			125			178			105			141
Commercial real estate lending	Commercial real estate lending	10,985			22,193			25,300			29,485			37,620
Total commercial	Total commercial	89,732			58,544			49,513			43,814			53,196
Residential mortgage	Residential mortgage	66,153			61,718			58,274			58,480			55,485
Auto finance	Auto finance	4,533			3,065			2,436			1,490			302
Home equity	Home equity	7,917			7,788			7,246			7,487			7,325
Other consumer	Other consumer	222			163			100			197			98
Total consumer	Total consumer	78,826			72,733			68,056			67,654			63,210
Total nonaccrual loans	Total nonaccrual loans	168,558			131,278			117,569			111,467			116,406
Commercial real estate owned	Commercial real estate owned	1,062			1,062			3,071			325			325
Residential real estate owned	Residential real estate owned	989			870			2,987			2,878			2,560
Bank properties real estate owned(a)	Bank properties real estate owned(a)	6,400			5,643			9,125			11,580			13,487
OREO	OREO	8,452			7,575			15,184			14,784			16,373

Repossessed assets	Repossessed assets	658			348			92			215			299
Repossessed assets
Repossessed assets
Total nonperforming assets	Total nonperforming assets	$	177,668		$	139,201		$	132,845		$	126,466		$	133,078

Accruing loans past due 90 days or more	Accruing loans past due 90 days or more

Accruing loans past due 90 days or more

Accruing loans past due 90 days or more
Commercial
Commercial
Commercial	Commercial	$	441		$	366		$	323		$	282		$	121
Consumer	Consumer	1,715			1,360			1,380			1,446			1,297
Total accruing loans past due 90 days or more	Total accruing loans past due 90 days or more	$	2,156		$	1,726		$	1,703		$	1,728		$	1,417
Restructured loans (accruing)(b)
Restructured loans (accruing)
Commercial
Commercial
Commercial	Commercial	$	234		$	168		$	47		$	13,093		$	16,097
Consumer	Consumer	1,855			1,271			716			19,775			19,036
Total restructured loans (accruing)	Total restructured loans (accruing)	$	2,089		$	1,439		$	763		$	32,868		$	35,132
Nonaccrual restructured loans (included in nonaccrual loans)(b)		$	961		$	796		$	341		$	20,127		$	21,650
Nonaccrual restructured loans (included in nonaccrual loans)
Ratios	Ratios
Nonaccrual loans to total loans
Nonaccrual loans to total loans
Nonaccrual loans to total loans	Nonaccrual loans to total loans	0.56		%	0.44		%	0.40		%	0.39		%	0.42		%	0.60	%	0.51		%	0.56		%	0.44		%	0.40		%
NPAs to total loans plus OREO and repossessed assets	NPAs to total loans plus OREO and repossessed assets	0.59		%	0.47		%	0.45		%	0.44		%	0.48		%	NPAs to total loans plus OREO and repossessed assets	0.64		%	0.55		%	0.59		%	0.47		%	0.45	%
NPAs to total assets	NPAs to total assets	0.43		%	0.34		%	0.33		%	0.32		%	0.35		%	NPAs to total assets	0.46		%	0.39		%	0.43		%	0.34		%	0.33	%

Allowance for credit losses on loans to nonaccrual loans	Allowance for credit losses on loans to nonaccrual loans	225.78		%	287.20		%	311.48		%	315.34		%	285.79		%
Allowance for credit losses on loans to nonaccrual loans
Allowance for credit losses on loans to nonaccrual loans																		217.43		%	258.98		%	225.78		%	287.20		%	311.48	%

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Table 10 Nonperforming Assets (continued)


($ in thousands)	($ in thousands)	Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		($ in thousands)	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023
Accruing loans 30-89 days past due	Accruing loans 30-89 days past due

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	$	1,507	$	12,005	$	4,239	$	6,283	$	1,861
Commercial real estate — owner occupied	Commercial real estate — owner occupied	1,877		1,484		2,955		230		—
Commercial and business lending	Commercial and business lending	3,384		13,489		7,195		6,512		1,861
Commercial real estate — investor	Commercial real estate — investor	10,121		—		—		1,067		—
Real estate construction	Real estate construction	10		76		—		39		43
Commercial real estate lending	Commercial real estate lending	10,131		76		—		1,105		43
Total commercial	Total commercial	13,515		13,565		7,195		7,618		1,904
Residential mortgage	Residential mortgage	11,652		8,961		7,626		9,874		6,517
Auto finance	Auto finance	16,688		11,429		8,640		9,408		6,206

Home equity	Home equity	3,687		4,030		4,113		5,607		4,234

Home equity

Home equity
Other consumer	Other consumer	1,880		2,025		1,723		1,610		1,592
Total consumer	Total consumer	33,908		26,444		22,102		26,499		18,549
Total accruing loans 30-89 days past due	Total accruing loans 30-89 days past due	$	47,422	$	40,008	$	29,297	$	34,117	$	20,452

Potential problem loans

Commercial and industrial		$	207,237	$	205,228	$	135,047	$	136,549	$	108,556
Commercial real estate — owner occupied		27,792		29,396		32,077		34,422		28,287
Commercial and business lending		235,029		234,624		167,124		170,971		136,843
Commercial real estate — investor		148,840		106,662		89,653		92,535		117,982
Real estate construction		—		—		—		970		—
Commercial real estate lending		148,840		106,662		89,653		93,505		117,982
Total commercial		383,869		341,286		256,776		264,476		254,825
Residential mortgage		1,247		1,646		1,684		1,978		2,845

Home equity		236		240		244		197		185

Total consumer		1,483		1,886		1,928		2,175		3,030
Total potential problem loans		$	385,352	$	343,173	$	258,704	$	266,651	$	257,855

(a) Primarily closed branches and other bank operated real estate facilities, pending disposition.

(b) On January 1, 2023, the Corporation adopted ASU 2022-02. Under this update, TDRs were eliminated and replaced with a modified loan classification. As a result, amounts reported for March 31, 2023 and forward will not be comparable to prior period reported amounts.

Nonaccrual loans: Nonaccrual loans are considered to be one indicator of potential future loan losses. See Note 6 Loans of the notes to consolidated financial statements for additional nonaccrual loan disclosures. See also sections Credit Risk and Allowance for Credit Losses on Loans.

Accruing loans past due 90 days or more: Loans past due 90 days or more but still accruing interest are classified as such where the underlying loans are both well secured (the collateral value is sufficient to cover principal and accrued interest) and are in the process of collection.

Restructured loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. On January 1, 2023, the Corporation adopted ASU 2022-02 prospectively. As a result, loans that were restructured prior to adoption are no longer considered TDRs, and loans restructured since January 1, 2023 are considered restructured. As a result, periods prior to 2023 are no longer comparable. See also Note 6 Loans of the notes to consolidated financial statements for additional restructured loans disclosures.

~~Potential problem loans:~~ The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the ACLL. Potential problem loans are generally defined by management to include loans rated as substandard by management that are collectively evaluated; however, there are circumstances present to create doubt as to the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that the Corporation expects losses to occur, but that management recognizes a higher degree of risk associated with these loans.

OREO: Management actively seeks to ensure OREO properties held are monitored to minimize the Corporation’s risk of loss.

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Allowance for Credit Losses on Loans

Credit risks within the loan portfolio are inherently different for each loan type. Credit risk is controlled and monitored through the use of lending standards, a thorough review of potential borrowers, and ongoing review of loan payment performance. Active asset quality administration, including early problem loan identification and timely resolution of problems, aids in the management of credit risk and the minimization of loan losses. Credit risk management for each loan type is discussed in the section entitled Credit Risk. See Note 6 Loans of the notes to consolidated financial statements for additional disclosures on the ACLL.

To assess the appropriateness of the ACLL, the Corporation focuses on the evaluation of many factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, credit report refreshes, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the ~~level of potential problem loans, the~~ risk characteristics of the various classifications of loan segments, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, funding assumptions on lines, and other qualitative and quantitative factors which could affect potential credit losses. The forecast the Corporation used for ~~September 30, 2023~~March 31, 2024 was the Moody's baseline scenario from ~~August 2023,~~February 2024, which was reviewed against the ~~September 2023~~March 2024 baseline scenario with no material updates made, over a 2two year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the ACLL is not necessarily indicative of the trend of future credit losses on loans in any particular segment. Therefore, management considers the ACLL a critical accounting estimate, see section Critical Accounting Estimates for additional information on the ACLL. See section Nonperforming Assets for a detailed discussion on asset quality. See also Note 6 Loans of the notes to consolidated financial statements for additional ACLL disclosures. Table 5 provides information on loan growth and period end loan composition, Table 10 provides additional information regarding NPAs, and Table 11 and Table 12 provide additional information regarding activity in the ACLL.

The loan segmentation used in calculating the ACLL at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 was generally comparable. The methodology to calculate the ACLL consists of the following components: a valuation allowance estimate is established for

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commercial and consumer loans determined by the Corporation to be individually evaluated, using discounted cash flows, estimated fair value of underlying collateral, and/or other data available. Loans are segmented for criticized loan pools by loan type as well as for non-criticized loan pools by loan type, primarily based on risk rating rates after considering loan type, historical loss and delinquency experience, credit quality, and industry classifications. Loans that have been criticized are considered to have a higher risk of default than non-criticized loans, as circumstances were present to support the lower loan grade, warranting higher loss factors. Additionally, management allocates ACLL to absorb losses that may not be provided for by the other components due to qualitative factors evaluated by management, such as limitations within the credit risk grading process, known current economic or business conditions that may not yet show in trends, industry or other concentrations with current issues that impose higher inherent risks than are reflected in the loss factors, and other relevant considerations. The total allowance is available to absorb losses from any segment of the loan portfolio.

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Table 11 Allowance for Credit Losses on Loans


		YTD				Quarter Ended
				Quarter Ended
				Quarter Ended
				Quarter Ended
($ in thousands)	($ in thousands)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			($ in thousands)		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023
Allowance for loan losses	Allowance for loan losses
Balance at beginning of period
Balance at beginning of period
Balance at beginning of period	Balance at beginning of period	$	312,720	$	280,015	$	338,750		$	326,432		$	312,720		$	292,904		$	280,771

Provision for loan losses	Provision for loan losses	66,000		13,000		25,500			23,500			17,000			21,000			14,000

Provision for loan losses

Provision for loan losses

Charge offs

Charge offs

Charge offs	Charge offs	(40,891)		(7,165)		(20,535)			(14,855)			(5,501)			(2,982)			(3,346)
Recoveries	Recoveries	7,965		7,054		2,079			3,674			2,212			1,798			1,478
Net (charge offs) recoveries	Net (charge offs) recoveries	(32,925)		(111)		(18,455)			(11,181)			(3,289)			(1,183)			(1,867)
Balance at end of period	Balance at end of period	$	345,795	$	292,904	$	345,795		$	338,750		$	326,432		$	312,720		$	292,904
Allowance for unfunded commitments	Allowance for unfunded commitments
Balance at beginning of period	Balance at beginning of period	$	38,776	$	39,776	$	38,276		$	39,776		$	38,776		$	39,776		$	36,776
Balance at beginning of period
Balance at beginning of period

Provision for unfunded commitments	Provision for unfunded commitments	(4,000)		—		(3,500)			(1,500)			1,000			(1,000)			3,000

Provision for unfunded commitments

Provision for unfunded commitments

Balance at end of period
Balance at end of period
Balance at end of period	Balance at end of period	$	34,776	$	39,776	$	34,776		$	38,276		$	39,776		$	38,776		$	39,776
Allowance for credit losses on loans	Allowance for credit losses on loans	$	380,571	$	332,680	$	380,571		$	377,027		$	366,208		$	351,496		$	332,680
Provision for credit losses on loans	Provision for credit losses on loans	62,000		13,000		22,000			22,000			18,000			20,000			17,000
Net loan (charge offs) recoveries	Net loan (charge offs) recoveries

Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	(29,494)		512		(16,558)			(11,177)			(1,759)			278			(897)
Commercial real estate — owner occupied	Commercial real estate — owner occupied	8		10		2			3			3			3			3
Commercial and business lending	Commercial and business lending	(29,487)		523		(16,556)			(11,174)			(1,756)			281			(894)
Commercial real estate — investor	Commercial real estate — investor	2,547		—		272			2,276			—			—			—
Real estate construction	Real estate construction	18		43		18			(18)			18			16			9
Commercial real estate lending	Commercial real estate lending	2,565		43		290			2,257			18			16			9
Total commercial	Total commercial	(26,921)		565		(16,266)			(8,917)			(1,738)			297			(885)
Residential mortgage	Residential mortgage	(358)		465		(22)			(283)			(53)			(125)			(42)
Auto finance	Auto finance	(3,273)		(175)		(1,269)			(1,048)			(957)			(768)			(165)

Home equity

Home equity

Home equity	Home equity	652		675		128			183			340			123			(101)
Other consumer	Other consumer	(3,025)		(1,642)		(1,027)			(1,117)			(881)			(711)			(675)
Total consumer	Total consumer	(6,004)		(676)		(2,189)			(2,264)			(1,550)			(1,480)			(983)
Total net (charge offs) recoveries	Total net (charge offs) recoveries	$	(32,925)	$	(111)	$	(18,455)		$	(11,181)		$	(3,289)		$	(1,183)		$	(1,867)

Ratios	Ratios

Ratios

Ratios

Allowance for credit losses on loans to total loans

Allowance for credit losses on loans to total loans

Allowance for credit losses on loans to total loans	Allowance for credit losses on loans to total loans					1.26		%	1.26		%	1.25		%	1.22		%	1.20		%		1.31	%	1.32	%	1.26	%	1.26	%	1.25	%

Allowance for credit losses on loans to net charge offs (annualized)	Allowance for credit losses on loans to net charge offs (annualized)	8.6x		N/M		5.2x			8.4x			27.5x			74.9x			44.9x
Allowance for credit losses on loans to net charge offs (annualized)
Allowance for credit losses on loans to net charge offs (annualized)																							4.4x		6.2x		5.2x		8.4x		27.5x
Loan evaluation method for ACLL	Loan evaluation method for ACLL
Individually evaluated for impairment
Individually evaluated for impairment
Individually evaluated for impairment	Individually evaluated for impairment					$	11,033		$	12,268		$	11,585		$	10,324		$	15,739
Collectively evaluated for impairment	Collectively evaluated for impairment					369,538			364,759			354,623			341,172			316,942
Total ACLL	Total ACLL					$	380,571		$	377,027		$	366,208		$	351,496		$	332,680
Loan balance	Loan balance
Individually evaluated for impairment	Individually evaluated for impairment					$	86,195		$	58,109		$	48,934		$	76,577		$	87,712
Individually evaluated for impairment
Individually evaluated for impairment
Collectively evaluated for impairment	Collectively evaluated for impairment					30,106,993			29,790,795			29,158,138			28,722,992			27,729,568
Total loan balance	Total loan balance					$	30,193,187		$	29,848,904		$	29,207,072		$	28,799,569		$	27,817,280

N/M = Not Meaningful

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Table 12 Annualized Net (Charge Offs) Recoveries(a)


			Quarter Ended
			Quarter Ended
			Quarter Ended
(In basis points)									(In basis points)	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023
Net loan (charge offs) recoveries

		YTD		Quarter Ended
(In basis points)		Sep 30, 2023	Sep 30, 2022	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022
Net loan (charge offs) recoveries
Commercial and industrial

Commercial and industrial

Commercial and industrial	Commercial and industrial	(40)	1	(66)	(46)	(7)	1	(4)
Commercial real estate — owner occupied	Commercial real estate — owner occupied	—	—	—	—	—	—	—
Commercial and business lending	Commercial and business lending	(36)	1	(60)	(41)	(7)	1	(3)
Commercial real estate — investor	Commercial real estate — investor	7	—	2	18	—	—	—
Real estate construction	Real estate construction	—	—	—	—	—	—	—
Commercial real estate lending	Commercial real estate lending	5	—	2	12	—	—	—
Total commercial	Total commercial	(20)	—	(35)	(20)	(4)	1	(2)
Residential mortgage	Residential mortgage	(1)	1	—	(1)	—	(1)	—
Auto finance	Auto finance	(26)	(4)	(27)	(25)	(26)	(24)	(7)
Home equity	Home equity	14	15	8	12	22	8	(7)
Other consumer	Other consumer	(145)	(74)	(148)	(163)	(125)	(95)	(89)
Total consumer	Total consumer	(7)	(1)	(7)	(8)	(6)	(6)	(4)
Total net (charge offs) recoveries	Total net (charge offs) recoveries	(15)	—	(25)	(15)	(5)	(2)	(3)

(a) Annualized ratio of net charge offs to average loans by loan type.

Notable Contributions to the Change in the Allowance for Credit Losses on Loans

•Total loans increased ~~$1.4 billion,~~$278 million, or 5%1%, from December 31, ~~2022,~~2023, and increased ~~$2.4 billion,~~$287 million, or 9%1%, from ~~September 30, 2022.~~March 31, 2023. The increase from ~~September 30, 2022~~December 31, 2023 was primarily due to growth in auto finance and commercial and business lending, partially offset by a decrease in CRE - investor lending. The increase from March 31, 2023 was driven by growth ~~across nearly all major loan portfolios~~in auto finance and real estate construction lending, partially offset by a decrease in residential mortgage lending resulting from the Corporation's strategic initiatives. See also Note 6 Loans of the notes to consolidated financial statements for additional information on loans.

•~~Potential problem~~Total nonaccrual loans increased ~~$119~~$29 million, or ~~45%~~20%, from December 31, ~~2022,~~2023, and increased ~~$127~~$61 million, or ~~49%~~52%, from ~~September 30, 2022.~~March 31, 2023. The ~~increases~~increase from ~~both~~ December 31, ~~2022 and September 30, 2022 were primarily~~2023 was driven by increases in ~~potential problem~~nonaccrual loans within CRE-investor lending and commercial and industrial ~~and CRE-investor~~ lending. ~~See Table 10 for additional information regarding potential problem loans.~~

•~~Total nonaccrual loans increased $57 million, or 51%,~~The increase from ~~December~~March 31, ~~2022, and increased $52 million, or 45%, from September 30, 2022. The increases from both December 31, 2022 and September 30, 2022 were~~2023 was primarily due to increases in nonaccrual loans within commercial and industrial lending and residential mortgage lending, partially offset by ~~decreases within~~a decrease in CRE-investor lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

•YTD net charge offs increased ~~$33~~$19 million from ~~September 30, 2022,~~March 31, 2023, primarily driven by an increase in net charge offs within commercial and industrial lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Management believes the level of ACLL to be appropriate at ~~September 30, 2023.~~March 31, 2024.

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Deposits and Customer Funding

The following table summarizes the composition of our deposits and customer funding:

Table 13 Period End Deposit and Customer Funding Composition


		Sep 30, 2023				Jun 30, 2023				Mar 31, 2023				Dec 31, 2022				Sep 30, 2022
	Mar 31, 2024																													Mar 31, 2024						Dec 31, 2023						Sep 30, 2023						Jun 30, 2023				Mar 31, 2023
($ in thousands)	($ in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		($ in thousands)	Amount		% of Total			Amount			% of Total			Amount			% of Total			Amount			% of Total			Amount			% of Total
Noninterest-bearing demand	Noninterest-bearing demand	$	6,422,994	20	%	$	6,565,666	21	%	$	7,328,689	24	%	$	7,760,811	26	%	$	8,224,579	28	%	Noninterest-bearing demand	$	6,254,135	19	19	%	$	6,119,956		18	18	%	$	6,422,994		20	20	%	$	6,565,666		21	21	%	$	7,328,689		24	24	%
Savings	Savings	4,836,735		15	%	4,777,415		15	%	4,730,472		16	%	4,604,848		16	%	4,708,720		16	%	Savings	5,124,639		15	15	%	4,835,701			14	14	%	4,836,735			15	15	%	4,777,415			15	15	%	4,730,472			16	16	%
Interest-bearing demand	Interest-bearing demand	7,528,154		23	%	7,037,959		22	%	6,977,121		23	%	7,100,727		24	%	7,122,218		24	%	Interest-bearing demand	8,747,127		26	26	%	8,843,967			26	26	%	7,528,154			23	23	%	7,037,959			22	22	%	6,977,121			23	23	%
Money market	Money market	7,268,506		23	%	7,521,930		23	%	8,357,625		28	%	8,239,610		28	%	7,909,232		27	%	Money market	6,721,674		20	20	%	6,330,453			19	19	%	7,268,506			23	23	%	7,521,930			23	23	%	8,357,625			28	28	%
Brokered CDs	Brokered CDs	3,351,399		10	%	3,818,325		12	%	1,185,565		4	%	541,916		2	%	—		—	%	Brokered CDs	3,931,230		12	12	%	4,447,479			13	13	%	3,351,399			10	10	%	3,818,325			12	12	%	1,185,565			4	4	%
Other time deposits	Other time deposits	2,715,538		8	%	2,293,114		7	%	1,752,351		6	%	1,388,242		5	%	1,233,833		4	%	Other time deposits	2,934,352		9	9	%	2,868,494			9	9	%	2,715,538			8	8	%	2,293,114			7	7	%	1,752,351			6	6	%
Total deposits	Total deposits	$	32,123,326	100	%	$	32,014,409	100	%	$	30,331,824	100	%	$	29,636,154	100	%	$	29,198,581	100	%	Total deposits	$	33,713,158	100	100	%	$	33,446,049		100	100	%	$	32,123,326		100	100	%	$	32,014,409		100	100	%	$	30,331,824		100	100	%
Other customer funding(a)	Other customer funding(a)	151,644				170,873				226,258				261,767				283,856
Total deposits and other customer funding	Total deposits and other customer funding	$	32,274,971			$	32,185,282			$	30,558,081			$	29,897,921			$	29,482,437
Total deposits and other customer funding
Total deposits and other customer funding
Network transaction deposits(b)
Network transaction deposits(b)
Network transaction deposits(b)	Network transaction deposits(b)	$	1,649,389			$	1,600,619			$	1,273,420			$	979,003			$	864,086

Net deposits and other customer funding(c)	Net deposits and other customer funding(c)	27,274,183				26,766,338				28,099,096				28,377,001				28,618,351

Net deposits and other customer funding(c)

Net deposits and other customer funding(c)

Time deposits of more than $250,000	Time deposits of more than $250,000	533,853				465,446				345,169				282,206				222,318

Time deposits of more than $250,000

Time deposits of more than $250,000

(a) Includes repurchase agreements and commercial paper.
(b) Included above in interest-bearing demand and money market.
(c) Total deposits and other customer funding, excluding brokered CDs and network transaction deposits.

•Total deposits, which are the Corporation's largest source of funds, increased ~~$2.5 billion,~~$267 million, or 8%1%, from December 31, ~~2022,~~2023, and increased ~~$2.9~~$3.4 billion, or ~~10%~~11%, from ~~September 30, 2022,~~March 31, 2023, the latter primarily due to increases in brokered CDs, interest-bearing demand, other time deposits, ~~and~~ network transaction deposits and savings, partially offset by ~~a decrease~~decreases in money market and noninterest-bearing ~~demand deposit accounts.~~demand.

•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were ~~22.4%~~ 22.9% of total deposits at ~~September 30, 2023,~~March 31, 2024, compared to ~~26.4%~~22.7% at December 31, ~~2022~~2023 and ~~29.1%~~ 26.2% at ~~September 30, 2022.~~March 31, 2023.

Liquidity

The objective of liquidity risk management is to ensure that the Corporation has the ability to generate sufficient cash or cash equivalents in a timely and cost effective manner to satisfy the cash flow requirements of depositors and borrowers and to meet its other commitments as they become due. The Corporation’s liquidity risk management process is designed to identify, measure, and manage the Corporation’s funding and liquidity risk to meet its daily funding needs in the ordinary course of business, as well as to address expected and unexpected changes in its funding requirements. The Corporation engages in various activities to manage its liquidity risk, including diversifying its funding sources, stress testing, and holding readily-marketable assets which can be used as a source of liquidity, if needed.

The Corporation performs dynamic scenario analysis in accordance with industry best practices. Measures have been established to ensure the Corporation has sufficient high quality short-term liquidity to meet cash flow requirements under stressed scenarios. In addition, the Corporation also reviews static measures such as deposit funding as a percentage of total assets and liquid asset levels. Strong capital ratios, credit quality, and core earnings are also essential to maintaining cost effective access to wholesale funding markets. At ~~September 30, 2023,~~March 31, 2024, the Corporation was in compliance with its internal liquidity objectives and had sufficient asset-based liquidity to meet its obligations even under a stressed scenario.

The Corporation maintains diverse and readily available liquidity sources, including:

•Lines of credit with the Federal Reserve Bank and FHLB, which require eligible loan and investment collateral to be pledged. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of ~~September 30, 2023,~~March 31, 2024, the Bank had ~~$5.4~~$7.0 billion available for future funding. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of ~~September 30, 2023,~~March 31, 2024, the Bank had ~~$1.3~~$1.4 billion available for discount window borrowings.

•The BTFP, against which the Corporation can borrow with qualifying investment securities as collateral, valued at par as permitted by the terms of the program. As of September 30, 2023, the Bank had up to $619 million available for borrowing under the BTFP.

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•A $200 million Parent Company commercial paper program, of which there was none outstanding as of ~~September 30, 2023.~~March 31, 2024.

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•Dividends and service fees from subsidiaries, as well as the proceeds from issuance of capital, which are also funding sources for the Parent Company.

•Acquisition related equity issuances by the Parent Company; the Corporation has filed a shelf registration statement with the SEC under which the Parent Company may, from time to time, offer shares of the Corporation’s common stock in connection with acquisitions of businesses, assets, or securities of other companies.

•Other issuances by the Parent Company; the Corporation maintains on file with the SEC a universal shelf registration statement, under which the Parent Company may offer the following securities, either separately or in units: debt securities, preferred stock, depositary shares, common stock, and warrants.

•Bank issuances; the Bank may also issue institutional CDs, network transaction deposits, and brokered CDs.

•Global Bank Note Program issuances; the Bank has implemented a program pursuant to which it may from time to time offer up to $2.0 billion aggregate principal amount of its unsecured senior and subordinated notes.

The following table presents secured and total available liquidity sources, estimated uninsured and uncollateralized deposits (excluding intercompany deposits), and coverage of estimated uninsured and uncollateralized deposits:

Table 14 Liquidity Sources and Uninsured Deposit Coverage Ratio


($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	September 30, 2023			June 30, 2023			March 31, 2023			Mar 31, 2024		Dec 31, 2023			Sep 30, 2023				Jun 30, 2023		Mar 31, 2023
Federal Reserve Bank balance	Federal Reserve Bank balance	$	314,287		$	178,983		$	504,169
Available FHLB Chicago capacity	Available FHLB Chicago capacity	5,377,628			5,148,360			3,453,813
Available Federal Reserve Bank discount window capacity	Available Federal Reserve Bank discount window capacity	1,335,938			1,635,140			1,799,453
Available BTFP capacity	Available BTFP capacity	618,829			633,817			644,915
Funding available within one business day(a)	Funding available within one business day(a)	7,646,682			7,596,300			6,402,351
Available federal funds lines	Available federal funds lines	2,518,000			2,623,000			2,773,000
Available brokered deposits capacity(b)	Available brokered deposits capacity(b)	1,240,488			761,301			3,646,393
Unsecured debt capacity(c)	Unsecured debt capacity(c)	1,000,000			1,000,000			1,000,000
Total available liquidity	Total available liquidity	$	12,405,170		$	11,980,601		$	13,821,744
Uninsured and uncollateralized deposits	Uninsured and uncollateralized deposits	$	7,200,701		$	6,674,744		$	7,337,286
Coverage ratio of uninsured and uncollateralized deposits with secured funding		106		%	114		%	87		%
Coverage ratio of uninsured and uncollateralized deposits with secured funding available within one business day											Coverage ratio of uninsured and uncollateralized deposits with secured funding available within one business day	115		%	110		%	105	%		107		%	81	%
Coverage ratio of uninsured and uncollateralized deposits with total funding	Coverage ratio of uninsured and uncollateralized deposits with total funding	172		%	179		%	188		%	Coverage ratio of uninsured and uncollateralized deposits with total funding	156		%	146		%	171	%		169		%	174	%

(a) Estimated based on normal course of operations with indicated institution.

(b) Availability based on internal policy limitations. The Corporation includes outstanding deposits that have received a primary purpose exemption in the brokered deposit classification as they have similar funding characteristics and risk as brokered deposits.

Based on contractual obligations and ongoing operations, the Corporation's sources of liquidity are sufficient to meet present and future liquidity needs. See Table 17 for information about the Corporation's contractual obligations and other commitments. See section Deposits and Customer Funding for information about uninsured deposits and concentrations.

Credit ratings impact the Corporation's ability to issue debt securities and the cost to borrow money. Adverse changes in credit ratings impact not only the ability to raise funds in the capital markets but also the cost of these funds. For additional information regarding risks related to adverse changes in our credit ratings, see Part II, Item 1A, Risk Factors.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2024, net cash provided by operating and financing activities was $155 million and $49 million, respectively, while net cash used in investing activities was $275 million, for a net decrease in cash and cash equivalents of $72 million since year-end 2023. At March 31, 2024, assets of $41.1 billion increased $121 million from year-end 2023. On the funding side, deposits of $33.7 billion increased $267 million, or 1%, from year-end 2023, short-term funding increased $439 million, or 134%, and FHLB advances decreased $607 million, or 31%.

For the three months ended March 31, 2023, net cash provided by operating and financing activities was ~~$378~~$47 million and ~~$1.9~~$1.2 billion, respectively, while net cash used in investing activities was ~~$2.2~~$1.1 billion, for a net increase in cash and cash equivalents of ~~$91~~$201 million since year-end 2022. At ~~September 30,~~March 31, 2023, assets of ~~$41.6~~$40.7 billion increased ~~$2.2~~$1.3 billion, or 6%3%, from year-end 2022, primarily due to increases in AFS Securities, loan growth and ~~increases in AFS securities.~~cash balances. On the funding side, deposits of ~~$32.1~~$30.3 billion increased ~~$2.5 billion,~~$696 million, or 8%2%, from year-end 2022, FHLB advances ~~decreased $587~~increased $666 million, or ~~14%~~15%, ~~while~~and other long-term funding increased ~~$281~~$296 million, or ~~113%~~119%, the latter due to the issuance of subordinated debt.

For the nine months ended September 30, 2022, net cash provided by operating and financing activities was $722 million and $2.7 billion, respectively, while net cash used in investing activities was $4.0 billion, for a net decrease in cash and cash equivalents of $523 million since year-end 2021. At September 30, 2022, assets of $38.0 billion increased $2.9 billion, or 8%, from year-end 2021, primarily due to loan growth. On the funding side, deposits of $29.2 billion increased $732 million, or 3%, from year-end 2021 and FHLB advances increased $2.2 billion, or 133%, to fund loan growth.

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Quantitative and Qualitative Disclosures about Market Risk

Market risk and interest rate risk are managed centrally. Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates or other factors. Interest rate risk is the potential for reduced net interest income resulting from adverse changes in the level of interest rates. As a financial institution that engages in transactions involving an array of financial products, the Corporation is exposed to both market risk and interest rate risk. In addition to market risk, interest rate risk is measured and managed through a number of methods. The Corporation uses financial modeling simulation techniques that measure the sensitivity of future earnings due to changing rate environments to measure interest rate risk.

Policies established by the Corporation’s ALCO and approved by the Board of Directors are intended to limit these risks. The Board has delegated day-to-day responsibility for managing market and interest rate risk to ALCO. The primary objectives of market risk management are to minimize any adverse effect that changes in market risk factors may have on net interest income and to offset the risk of price changes for certain assets recorded at fair value.

Interest Rate Risk

The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by the Board of Directors. These limits and guidelines reflect the Corporation's risk appetite for interest rate risk over both short-term and long-term horizons.

The major sources of the Corporation's non-trading interest rate risk are timing differences in the maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, and the potential exercise of explicit or embedded options. We measure these risks and their impact by identifying and quantifying exposures through the use of sophisticated simulation and valuation models which are employed by management to understand interest rate sensitive EAR and MVE at risk. The Corporation’s interest rate risk profile is such that, generally, a higher yield curve adds to income while a lower yield curve has a negative impact on earnings. The Corporation's EAR profile is asset sensitive at ~~September 30, 2023.~~March 31, 2024.

For further discussion of the Corporation's interest rate risk and corresponding key assumptions, see the Interest Rate Risk section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K.

The sensitivity analysis included below is measured as a percentage change in EAR due to gradual moves in benchmark interest rates from a baseline scenario over 12 months. We evaluate the sensitivity using: 1) a dynamic forecast incorporating expected growth in the balance sheet, and 2) a static forecast where the current balance sheet is held constant.

While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact. No EAR breaches occurred during the first ~~nine~~three months of ~~2023.~~2024.

Table 15 Estimated % Change in Rate Sensitive Earnings at Risk Over 12 Months


		Sep 30, 2023				Dec 31, 2022
	Mar 31, 2024																		Mar 31, 2024			Dec 31, 2023
		Dynamic Forecast		Static Forecast		Dynamic Forecast		Static Forecast			Dynamic Forecast			Static Forecast			Dynamic Forecast			Static Forecast
Gradual Rate Change	Gradual Rate Change
100 bp increase in interest rates
100 bp increase in interest rates
100 bp increase in interest rates	100 bp increase in interest rates	2.0	%	2.2	%	3.9	%	3.4	%	1.7	%	1.6		%	1.9		%	2.2		%
200 bp increase in interest rates	200 bp increase in interest rates	4.0	%	4.4	%	7.8	%	6.8	%	200 bp increase in interest rates	3.2		%	3.1		%	3.8		%	4.3	%
100 bp decrease in interest rates	100 bp decrease in interest rates	(0.6)	%	(0.9)	%	(3.4)	%	(2.9)	%	100 bp decrease in interest rates	(1.0)		%	(1.0)		%	(1.3)		%	(1.5)	%
200 bp decrease in interest rates	200 bp decrease in interest rates	(0.8)	%	(1.3)	%	(6.7)	%	(5.7)	%	200 bp decrease in interest rates	(1.9)		%	(1.8)		%	(2.6)		%	(3.1)	%

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At ~~September 30, 2023,~~March 31, 2024, the MVE profile indicates a decrease in net balance sheet value due to instantaneous upward changes in rates and an increase in net balance sheet value due to instantaneous downward changes in rates.

Table 16 Market Value of Equity Sensitivity


		Sep 30, 2023		Dec 31, 2022
	Mar 31, 2024										Mar 31, 2024	Dec 31, 2023
Instantaneous Rate Change	Instantaneous Rate Change
100 bp increase in interest rates
100 bp increase in interest rates
100 bp increase in interest rates	100 bp increase in interest rates	(9.1)	%	(4.2)	%	(9.5)	%	(10.1)		%
200 bp increase in interest rates	200 bp increase in interest rates	(18.0)	%	(8.2)	%	200 bp increase in interest rates	(19.0)		%	(20.1)	%
100 bp decrease in interest rates	100 bp decrease in interest rates	9.2	%	4.3	%	100 bp decrease in interest rates	9.1		%	9.7	%
200 bp decrease in interest rates	200 bp decrease in interest rates	17.8	%	8.0	%	200 bp decrease in interest rates	17.4		%	18.5	%

Since MVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in MVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, MVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changes in product spreads that could mitigate the adverse impact of changes in interest rates. The MVE measure in the 200 bp increase in interest rates scenario is outside of the policy limit, which has been reported to the Corporation's Board.

The above EAR and MVE measures do not include all actions that management may undertake to manage this risk in response to anticipated changes in interest rates.

Contractual Obligations, Commitments, Off-Balance Sheet Arrangements, and Contingent Liabilities

The following table summarizes significant contractual obligations and other commitments at ~~September 30, 2023,~~March 31, 2024, at those amounts contractually due to the recipient, including any unamortized premiums or discounts, hedge basis adjustments, or other similar carrying value adjustments.

Table 17 Contractual Obligations and Other Commitments


($ in thousands)	($ in thousands)	Note Reference	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total		($ in thousands)	Note Reference	One Year or Less	One to Three Years	Three to Five Years	Over Five Years	Total
Time deposits	Time deposits		$	5,816,730	$	228,851	$	21,350	$	5	$	6,066,937
Short-term funding	Short-term funding	8	451,644		—		—		—		451,644
FHLB advances	FHLB advances	8	2,545,633		990,845		195,009		1,554		3,733,041

Other long-term funding	Other long-term funding	8	88		246,660		138		282,574		529,459
Other long-term funding
Other long-term funding

Operating leases
Operating leases
Operating leases	Operating leases	16	5,614		9,230		7,117		4,099		26,059

Total	Total		$	8,819,709	$	1,475,586	$	223,613	$	288,232	$	10,807,141
Total
Total

The Corporation also has obligations under its derivatives, lending-related commitments, and retirement plans as described in Note 9 Derivative and Hedging Activities, Note 11 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings, and Regulatory Matters, and Note 13 Retirement Plans of the notes to consolidated financial statements, respectively. Further discussion of the nature of each obligation is included in the referenced note to the consolidated financial statements.

Capital

Management actively reviews capital strategies for the Corporation and each of its subsidiaries in light of perceived business risks, future growth opportunities, industry standards, and compliance with regulatory requirements. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, stability of earnings, changing competitive forces, economic conditions in markets served, and strength of management. At ~~September 30, 2023,~~March 31, 2024, the capital ratios of the Corporation and its banking subsidiaries were in excess of regulatory minimum requirements. The Corporation’s capital ratios are summarized in the following table.

Compliance with regulatory minimum capital requirements is a tool used in assessing the Corporation's capital adequacy, but not determinative of how the Corporation would fare under extreme stress. Factors that may affect the adequacy of the Corporation's capital include the inherent limitations of fair value estimates and the assumptions thereof, the inherent limitations of the regulatory risk-weights assigned to various asset types, the inherent limitations of accounting classifications of certain investments and the effect on their measurement, external macroeconomic conditions and their effects on capital and the Corporation's ability to raise capital or refinance capital commitments, and the extent of steps taken by state or federal government authorities in periods of extreme stress.

For additional information regarding the potential for additional regulation and supervision, see Part ~~II,~~I, Item 1A, Risk Factors in the ~~Corporation's quarterly report~~Corporation’s Annual Report on Form ~~10-Q~~10-K for the ~~quarter~~year ended ~~March~~December 31, 2023.

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Table 18 Capital Ratios


		YTD				Quarter Ended
				Quarter Ended
				Quarter Ended
				Quarter Ended
($ in thousands)	($ in thousands)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			($ in thousands)		Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023
Risk-based Capital(a)
Risk-based capital(a)
CET1
CET1
CET1	CET1					$	3,197,445		$	3,143,131		$	3,085,618		$	3,035,578		$	2,955,710
Tier 1 capital	Tier 1 capital					3,391,557			3,337,243			3,279,730			3,229,690			3,149,822
Total capital	Total capital					4,103,998			4,051,096			3,990,606			3,680,227			3,582,099
Total risk-weighted assets	Total risk-weighted assets					33,497,484			33,146,137			32,648,115			32,472,008			31,405,843
Modified CECL transitional amount	Modified CECL transitional amount					44,851			44,851			44,851			67,276			67,276
CET1 capital ratio	CET1 capital ratio					9.55		%	9.48		%	9.45		%	9.35		%	9.41		%	CET1 capital ratio		9.43		%	9.39		%	9.55		%	9.48		%	9.45	%
Tier 1 capital ratio	Tier 1 capital ratio					10.12		%	10.07		%	10.05		%	9.95		%	10.03		%	Tier 1 capital ratio		10.02		%	9.99		%	10.12		%	10.07		%	10.05	%
Total capital ratio	Total capital ratio					12.25		%	12.22		%	12.22		%	11.33		%	11.41		%	Total capital ratio		12.08		%	12.21		%	12.25		%	12.22		%	12.22	%
Tier 1 leverage ratio	Tier 1 leverage ratio					8.42		%	8.40		%	8.46		%	8.59		%	8.66		%	Tier 1 leverage ratio		8.24		%	8.06		%	8.42		%	8.40		%	8.46	%
Selected Equity and Performance Ratios
Selected equity and performance ratios
Total stockholders’ equity / total assets
Total stockholders’ equity / total assets
Total stockholders’ equity / total assets	Total stockholders’ equity / total assets					9.91		%	10.00		%	10.14		%	10.19		%	10.39		%		10.13	%	10.18		%	9.91		%	10.00		%	10.14		%
Dividend payout ratio(b)	Dividend payout ratio(b)	35.80	%	36.14	%	39.62		%	37.50		%	31.34		%	30.00		%	32.26		%	Dividend payout ratio(b)		42.31		%	N/M			39.62		%	37.50		%	31.34	%
Return on average assets	Return on average assets	0.91	%	0.95	%	0.80		%	0.86		%	1.06		%	1.12		%	1.02		%	Return on average assets		0.80		%	(0.87)		%	0.80		%	0.86		%	1.06	%
Annualized noninterest expense / average assets	Annualized noninterest expense / average assets	1.90	%	2.04	%	1.90		%	1.89		%	1.92		%	2.03		%	2.08		%	Annualized noninterest expense / average assets		1.95		%	2.30		%	1.90		%	1.89		%	1.92	%

N/M = Not Meaningful
(a) The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain
transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor, and compare the quality and
composition of the Corporation's capital with the capital of other financial services companies.
(b) Ratio is based upon basic earnings per common share.

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the ~~third~~first quarter of ~~2023.~~2024.

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Non-GAAP Measures

Table 19 Non-GAAP Measures


		YTD						Quarter Ended
					Quarter Ended
					Quarter Ended
					Quarter Ended
($ in thousands)	($ in thousands)	Sep 30, 2023			Sep 30, 2022			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			($ in thousands)		Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023
Selected equity and performance ratios(a)(b)(c)	Selected equity and performance ratios(a)(b)(c)
Tangible common equity / tangible assets
Tangible common equity / tangible assets
Tangible common equity / tangible assets	Tangible common equity / tangible assets							6.88		%	6.94		%	7.03		%	6.97		%	7.06		%		7.08	%	7.11		%	6.88		%	6.94		%	7.03		%
Return on average equity	Return on average equity	8.91		%	8.67		%	7.99		%	8.47		%	10.32		%	10.81		%	9.59		%	Return on average equity		7.81		%	(8.74)		%	7.99		%	8.47		%	10.32	%
Return on average tangible common equity	Return on average tangible common equity	13.07		%	12.96		%	11.67		%	12.38		%	15.26		%	16.15		%	14.32		%	Return on average tangible common equity		11.31		%	(13.13)		%	11.67		%	12.38		%	15.26	%
Return on average CET1	Return on average CET1	11.41		%	11.60		%	10.08		%	10.88		%	13.38		%	14.04		%	12.69		%	Return on average CET1		10.27		%	(11.85)		%	10.08		%	10.88		%	13.38	%

Return on average tangible assets	Return on average tangible assets	0.95		%	1.00		%	0.84		%	0.90		%	1.11		%	1.18		%	1.08		%
Return on average tangible assets
Return on average tangible assets																									0.84		%	(0.88)		%	0.84		%	0.90		%	1.11	%
Average stockholders' equity / average assets	Average stockholders' equity / average assets	10.16		%	11.00		%	10.06		%	10.18		%	10.26		%	10.40		%	10.69		%	Average stockholders' equity / average assets		10.26		%	9.97		%	10.06		%	10.18		%	10.26	%
Tangible common equity reconciliation(a)	Tangible common equity reconciliation(a)
Common equity
Common equity
Common equity	Common equity							$	3,933,531		$	3,928,762		$	3,931,551		$	3,821,378		$	3,759,840
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net							(1,147,666)			(1,149,869)			(1,152,072)			(1,154,274)			(1,156,477)
Tangible common equity	Tangible common equity							$	2,785,865		$	2,778,893		$	2,779,480		$	2,667,104		$	2,603,363
Tangible assets reconciliation(a)	Tangible assets reconciliation(a)
Total assets	Total assets							$	41,637,381		$	41,219,473		$	40,702,519		$	39,405,727		$	38,049,607
Total assets
Total assets
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net							(1,147,666)			(1,149,869)			(1,152,072)			(1,154,274)			(1,156,477)
Tangible assets	Tangible assets							$	40,489,715		$	40,069,604		$	39,550,448		$	38,251,453		$	36,893,130
Average tangible common equity and average CET1 reconciliation(a)	Average tangible common equity and average CET1 reconciliation(a)
Common equity
Common equity
Common equity	Common equity	$	3,913,850		$	3,776,296		$	3,937,940		$	3,934,949		$	3,867,890		$	3,797,568		$	3,791,396
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net	(1,151,039)			(1,159,982)			(1,148,951)			(1,151,039)			(1,153,173)			(1,155,408)			(1,157,754)
Tangible common equity	Tangible common equity	2,762,811			2,616,314			2,788,989			2,783,910			2,714,716			2,642,160			2,633,642
Modified CECL transitional amount	Modified CECL transitional amount	44,851			67,276			44,851			44,851			44,851			67,276			67,276
Accumulated other comprehensive loss	Accumulated other comprehensive loss	270,989			147,258			302,043			251,624			258,827			254,178			189,935
Deferred tax assets, net	Deferred tax assets, net	27,853			36,085			27,694			27,714			28,157			29,248			29,875
Average CET1	Average CET1	$	3,106,504		$	2,866,934		$	3,163,577		$	3,108,099		$	3,046,551		$	2,992,862		$	2,920,729
Average tangible assets reconciliation(a)	Average tangible assets reconciliation(a)
Total assets	Total assets	$	40,419,166		$	36,075,770		$	41,075,980		$	40,558,311		$	39,607,065		$	38,385,436		$	37,271,779
Total assets
Total assets
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net	(1,151,039)			(1,159,982)			(1,148,951)			(1,151,039)			(1,153,173)			(1,155,408)			(1,157,754)
Tangible assets	Tangible assets	$	39,268,127		$	34,915,788		$	39,927,029		$	39,407,273		$	38,453,892		$	37,230,028		$	36,114,025

Adjusted net income reconciliation(b)	Adjusted net income reconciliation(b)

Adjusted net income reconciliation(b)

Adjusted net income reconciliation(b)
Net income
Net income
Net income	Net income	$	273,762		$	257,360		$	83,248		$	87,154		$	103,360		$	108,762		$	96,275
Other intangible amortization, net of tax	Other intangible amortization, net of tax	4,956			4,956			1,652			1,652			1,652			1,652			1,652
Adjusted net income	Adjusted net income	$	278,718		$	262,316		$	84,900		$	88,806		$	105,012		$	110,414		$	97,927
Adjusted net income available to common equity reconciliation(b)	Adjusted net income available to common equity reconciliation(b)
Net income available to common equity	Net income available to common equity	$	265,137		$	248,735		$	80,373		$	84,279		$	100,485		$	105,887		$	93,400
Net income available to common equity
Net income available to common equity
Other intangible amortization, net of tax	Other intangible amortization, net of tax	4,956			4,956			1,652			1,652			1,652			1,652			1,652
Adjusted net income available to common equity	Adjusted net income available to common equity	$	270,093		$	253,691		$	82,025		$	85,931		$	102,137		$	107,539		$	95,052
Core customer deposit reconciliation
End of period core customer deposits reconciliation
Total deposits
Total deposits
Total deposits	Total deposits							$	32,123,326		$	32,014,409		$	30,331,824		$	29,636,154		$	29,198,581
Network transaction deposits	Network transaction deposits							(1,649,389)			(1,600,619)			(1,273,420)			(979,003)			(864,086)
Brokered CDs	Brokered CDs							(3,351,399)			(3,818,325)			(1,185,565)			(541,916)			—
Core customer deposits	Core customer deposits							$	27,122,539		$	26,595,465		$	27,872,839		$	28,115,235		$	28,334,495
Efficiency ratio reconciliation(d)	Efficiency ratio reconciliation(d)
Federal Reserve efficiency ratio
Federal Reserve efficiency ratio
Federal Reserve efficiency ratio	Federal Reserve efficiency ratio	58.17		%	62.32		%	60.06		%	58.49		%	56.07		%	55.47		%	60.32		%		61.03	%	132.01		%	60.06		%	58.49		%	56.07		%
Fully tax-equivalent adjustment	Fully tax-equivalent adjustment	(0.84)		%	(0.98)		%	(0.89)		%	(0.85)		%	(0.79)		%	(0.77)		%	(0.87)		%	Fully tax-equivalent adjustment		(0.71)		%	(3.29)		%	(0.89)		%	(0.85)		%	(0.79)	%
Other intangible amortization	Other intangible amortization	(0.67)		%	(0.75)		%	(0.69)		%	(0.68)		%	(0.66)		%	(0.62)		%	(0.67)		%	Other intangible amortization		(0.69)		%	(1.21)		%	(0.69)		%	(0.68)		%	(0.66)	%
Fully tax-equivalent efficiency ratio	Fully tax-equivalent efficiency ratio	56.67		%	60.60		%	58.50		%	56.96		%	54.64		%	54.08		%	58.79		%	Fully tax-equivalent efficiency ratio		59.63		%	127.54		%	58.50		%	56.96		%	54.64	%

(a) Tangible common equity and tangible assets exclude goodwill and other intangible assets, net.

(b) Adjusted net income and adjusted net income available to common equity, which are used in the calculation of return on average tangible assets and return on average tangible common equity, respectively, add back other intangible amortization, net of tax.

(c) These capital measurements are used by management, regulators, investors, and analysts to assess, monitor, and compare the quality and composition of our capital with the capital of other financial services companies.

(d) The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains (losses), net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net.

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Sequential Quarter Results

The Corporation reported net income of ~~$83~~$81 million for the ~~third~~first quarter of 2024, compared to net loss of $91 million for the fourth quarter of 2023, ~~compared~~due to ~~net income of $87 million for~~ the ~~second~~balance sheet repositioning executed in the fourth quarter of 2023. Net income available to common equity was ~~$80~~$78 million for the ~~third~~first quarter of ~~2023,~~2024, or ~~$0.53~~$0.52 for both basic and diluted earnings per common share. Comparatively, net ~~income~~loss available to common equity for the ~~second~~fourth quarter of 2023 was ~~$84~~$94 million, or ~~$0.56~~a loss of $0.63 for ~~both~~ basic and $0.62 for diluted earnings per common share (see Table 1).

Fully tax-equivalent net interest income for the ~~third~~first quarter of ~~2023~~2024 was ~~$259~~$262 million, $4 million, or 1%, ~~lower~~higher than the ~~second~~fourth quarter of 2023. The net interest margin in the ~~third~~first quarter of ~~2023~~2024 was ~~down 9~~up 10 bp to ~~2.71%~~2.79%. The ~~decreases~~increases in net interest income and net interest margin were due to ~~increased interest-bearing liability costs. Average earning assets increased $507 million, or 1%, to $38.1 billion in~~a full quarter of benefit from the ~~third~~balance sheet repositioning announced during the fourth quarter of 2023. Average earning assets decreased $678 million, or 2%, to $37.6 billion in the first quarter of 2024. Average loans ~~increased $446~~decreased $583 million, or 2%, driven primarily by a decrease in residential mortgages and partially offset by growth ~~across all loan categories.~~in auto finance. On the funding side, average total interest-bearing deposits increased ~~$1.1~~$1.4 billion, or 4%5%, due to increases in time deposits, interest-bearing demand, savings, and network transaction deposits, ~~and savings,~~ partially offset by a decrease in money market. Average FHLB advances decreased ~~$335 million,~~$1.9 billion, or 9%56%, due to deposit growth, ~~during~~paydowns with the proceeds of the mortgage portfolio sale in the fourth quarter of 2023, and the utilization of the BTFP (see Table 2).

The provision for credit losses was ~~$22~~$24 million for ~~both~~ the ~~third~~first quarter of 2024 and ~~second~~$21 million for the fourth quarter of 2023 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Noninterest income for the ~~third~~first quarter of 2024 was $65 million, up $196 million from the fourth quarter of 2023, ~~was $67 million, up $1 million, or 2%, from~~primarily due to one-time items related to the ~~second~~balance sheet repositioning announced in the fourth quarter of 2023 (see Table 3).

Noninterest expense for the ~~third~~first quarter of ~~2023~~2024 was ~~$196~~$198 million, ~~up $6~~down $42 million, or 3%17%, from the ~~second~~fourth quarter of 2023, driven primarily by ~~increases in personnel and technology expenses~~the FDIC special assessment (see Table 4).

For the ~~third~~first quarter of ~~2023,~~2024, the Corporation recognized income tax expense of ~~$19~~$20 million, compared to income tax ~~expense~~benefit of ~~$24~~$47 million for the ~~second~~fourth quarter of 2023. ~~See Income Taxes section for a detailed discussion on income taxes.~~

~~Comparable Quarter Results~~

The Corporation reported net income of $83 million for the third quarter of 2023 compared to net income of $96 million for the third quarter of 2022. Net income available to common equity was $80 million for the third quarter of 2023, or $0.53 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the third quarter of 2022 was $93 million, or $0.62 for both basic and diluted earnings per share (see Table 1).

Fully tax-equivalent net interest income for the third quarter of 2023 was $259 million, $10 million, or 4%, lower than the third quarter of 2022. The net interest margin between the comparable quarters was down 42 bp, to 2.71% in the third quarter of 2023. The decreases in net interest income and net interest margin were due to interest-bearing liability costs rising at a faster rate of growth than earning asset revenues as a result of deposit funding pressures. Average earning assets increased $3.9 billion, or 11%, to $38.1 billion in the third quarter of 2023, as average loans increased $2.8 billion, or 10%, driven by growth across nearly all loan categories, and investments and other increased $1.0 billion, or 15%. On the funding side, average interest-bearing deposits increased $4.9 billion, or 24%, from the third quarter of 2022, due to increases in time deposits, network transaction deposits, interest-bearing demand, and savings, partially offset by a decrease in money market. Average short and long-term funding increased $388 million, or 10% (see Table 2), primarily driven by the issuance of subordinated debt in the first quarter of 2023.

The provision for credit losses was $22 million for the third quarter of 2023, compared to a provision of $17 million for the third quarter of 2022 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Noninterest income for the third quarter of 2023 was $67 million, down $4 million, or 6%, compared to the third quarter of 2022, primarily due to lower investment securities gains (losses), net; capital markets, net; and service charges and deposit account fees; partially offset by higher mortgage banking, net income. (see Table 3).

~~Noninterest expense was effectively flat at $196 million for both the third quarters of 2023 and 2022(see Table 4).~~

~~The Corporation recognized income tax expense of $19 million for the third quarter of 2023, compared to an income tax expense of $26 million~~ ~~for the third~~ ~~quarter of 2022.~~ See section Income Taxes for a detailed discussion on income taxes.

~~Table of Contents~~

Segment Review

As discussed in Note 14 Segment Reporting of the notes to consolidated financial statements, the Corporation’s reportable segments have been determined based upon its internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer, and the distribution of those products and services are similar. The reportable segments are Corporate and Commercial Specialty; Community, Consumer and Business; and Risk Management and Shared Services.

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Table 20 Selected Segment Financial Data


		Three Months Ended Sep 30,							Nine Months Ended Sep 30,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
		Three Months Ended Mar 31,
($ in thousands)
($ in thousands)
($ in thousands)	($ in thousands)	2023			2022			% Change	2023			2022			% Change
Corporate and Commercial Specialty	Corporate and Commercial Specialty
Corporate and Commercial Specialty
Corporate and Commercial Specialty
Total revenue
Total revenue
Total revenue	Total revenue	$	177,771		$	156,688		13%	$	520,908		$	438,862		19%
Provision for credit losses	Provision for credit losses	14,066			11,904			18%	41,523			36,803			13%
Provision for credit losses
Provision for credit losses
Noninterest expense
Noninterest expense
Noninterest expense	Noninterest expense	63,207			58,934			7%	186,351			172,141			8%
Income tax expense	Income tax expense	19,304			15,967			21%	54,138			42,248			28%
Income tax expense
Income tax expense
Net income
Net income
Net income	Net income	81,194			69,884			16%	238,897			187,670			27%
Average earning assets	Average earning assets	17,623,106			16,123,187			9%	17,393,044			15,213,821			14%
Average earning assets
Average earning assets
Average loans
Average loans
Average loans	Average loans	17,615,560			16,118,417			9%	17,379,628			15,210,316			14%
Average deposits	Average deposits	8,828,634			9,256,598			(5)%	9,101,585			9,139,639			—%
Average deposits
Average deposits
Average allocated capital (Average CET1)(a)
Average allocated capital (Average CET1)(a)
Average allocated capital (Average CET1)(a)	Average allocated capital (Average CET1)(a)	1,719,300			1,606,052			7%	1,712,290			1,514,786			13%
Return on average allocated capital(a)	Return on average allocated capital(a)	18.74		%	17.26		%	148 bp	18.65		%	16.56		%	N/M
Return on average allocated capital(a)
Return on average allocated capital(a)
Community, Consumer, and Business
Community, Consumer, and Business
Community, Consumer, and Business	Community, Consumer, and Business
Total revenue	Total revenue	$	220,714		$	163,338		35%	$	623,584		$	424,679		47%
Total revenue
Total revenue
Provision for credit losses
Provision for credit losses
Provision for credit losses	Provision for credit losses	7,381			5,378			37%	21,467			14,958			44%
Noninterest expense	Noninterest expense	108,185			107,860			—%	328,960			311,423			6%
Noninterest expense
Noninterest expense
Income tax expense
Income tax expense
Income tax expense	Income tax expense	22,187			10,521			111%	57,469			20,642			178%
Net income	Net income	82,961			39,579			110%	215,688			77,655			178%
Net income
Net income
Average earning assets
Average earning assets
Average earning assets	Average earning assets	11,737,319			10,416,253			13%	11,496,144			9,796,760			17%
Average loans	Average loans	11,737,319			10,416,253			13%	11,496,144			9,796,760			17%
Average loans
Average loans
Average deposits
Average deposits
Average deposits	Average deposits	18,224,072			18,636,223			(2)%	18,137,460			18,532,576			(2)%
Average allocated capital (Average CET1)(a)	Average allocated capital (Average CET1)(a)	750,457			640,571			17%	731,486			583,265			25%
Average allocated capital (Average CET1)(a)
Average allocated capital (Average CET1)(a)
Return on average allocated capital(a)
Return on average allocated capital(a)
Return on average allocated capital(a)	Return on average allocated capital(a)	43.86		%	24.51		%	N/M	39.42		%	17.80		%	N/M
Risk Management and Shared Services	Risk Management and Shared Services
Risk Management and Shared Services
Risk Management and Shared Services
Total revenue
Total revenue
Total revenue	Total revenue	$	(77,663)		$	15,201		N/M	$	(164,126)		$	25,505		N/M
Provision for credit losses	Provision for credit losses	496			(283)			N/M	(975)			(38,756)			(97)%
Provision for credit losses
Provision for credit losses
Noninterest expense	Noninterest expense	24,814			28,997			(14)%	58,980			66,940			(12)%
Income tax expense (benefit)		(22,065)			(325)			N/M	(41,308)			5,286			N/M
Noninterest expense
Noninterest expense
Income tax (benefit)
Income tax (benefit)
Income tax (benefit)
Net (loss)
Net (loss)
Net (loss)	Net (loss)	(80,907)			(13,189)			N/M	(180,823)			(7,965)			N/M
Average earning assets	Average earning assets	8,715,183			7,659,334			14%	8,524,759			7,930,511			7%
Average earning assets
Average earning assets
Average loans
Average loans
Average loans	Average loans	531,731			521,033			2%	517,609			520,961			(1)%
Average deposits	Average deposits	4,949,087			981,535			N/M	3,818,115			892,773			N/M
Average deposits
Average deposits
Average allocated capital (Average CET1)(a)
Average allocated capital (Average CET1)(a)
Average allocated capital (Average CET1)(a)	Average allocated capital (Average CET1)(a)	693,819			674,106			3%	662,728			768,883			(14)%
Return on average allocated capital(a)	Return on average allocated capital(a)	(47.91)		%	(9.45)		%	N/M	(38.22)		%	(2.88)		%	N/M
Return on average allocated capital(a)
Return on average allocated capital(a)
Consolidated Total
Consolidated Total
Consolidated Total	Consolidated Total
Total revenue	Total revenue	$	320,823		$	335,227		(4)%	$	980,366		$	889,045		10%
Total revenue
Total revenue
Return on average allocated capital(a)	Return on average allocated capital(a)	10.08		%	12.69		%	N/M	11.41		%	11.60		%	-19 bp
Return on average allocated capital(a)
Return on average allocated capital(a)

N//M = Not meaningful

(a) The Federal Reserve establishes capital adequacy requirements for the Corporation, including CET1. For segment reporting purposes, the ROCET1 reflects return on average allocated CET1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock
dividends.

~~Table of Contents~~

Notable Changes in Segment Financial Data

The Corporate and Commercial Specialty segment consists of lending and deposit solutions to larger businesses, developers, not-for-profits, municipalities, and financial institutions, and the support to deliver, fund, and manage such banking solutions. In addition, this segment provides a variety of investment, fiduciary, and retirement planning products and services to individuals and small to mid-sized businesses.

•Total revenue increased ~~$82 million from the nine months ended September 30, 2022 and increased $21~~$13 million from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily attributable to higher loan volumes and interest rates driving net interest income higher.

•Noninterest expense increased ~~$14 million from the nine months ended September 30, 2022 and increased~~ $4 million from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily due to higher personnel costs and allocated corporate overhead.

•Average loans increased ~~$2.2 billion from the nine months ended September 30, 2022 and increased $1.5 billion~~$548 million from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily driven by growth in commercial and business lending and CRE lending.

Table of Contents

•Average deposits decreased ~~$428~~$379 million from the three months ended ~~September 30, 2022,~~March 31, 2023, driven by decreases in noninterest-bearing demand deposits and money market deposits, partially offset by an increase in interest-bearing demand deposits.

The Community, Consumer, and Business segment consists of lending and deposit solutions to individuals and small to mid-sized businesses.

•Total revenue increased ~~$199 million from the nine months ended September 30, 2022 and increased $57~~$19 million from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily attributable to receiving net FTP credit for providing funding for the Corporation and higher interest rates.

•Noninterest expense increased $18 million from the nine months ended September 30, 2022, driven by higher allocated corporate overhead and increased technology expense, as the Corporation continues to invest in digital investments tied to its strategic initiatives.

•Average loans increased $1.7 billion from the nine months ended September 30, 2022 and increased $1.3 billion from the three months ended September 30, 2022, primarily driven by growth in auto finance lending and residential mortgage lending.

•Average deposits decreased $395 million from the nine months ended September 30, 2022 and decreased $412 million from the three months ended September 30, 2022, driven by decreases in noninterest bearing demand deposits and money market deposits, partially offset by an increase in time deposits.

The Risk Management and Shared Services segment includes key shared Corporate functions, Parent Company activity, intersegment eliminations, and residual revenues and expenses.

•Total revenue decreased ~~$190 million from the nine months ended September 30, 2022 and decreased $93~~$45 million from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily driven by increased interest expense as a result of holding more brokered CDs and other short term funding.

•Provision for credit losses increased ~~$38~~$4 million from the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, driven by loan growth, nominal credit movement, and general macroeconomic trends.

•~~Average earning assets~~Noninterest expense increased ~~$594~~$7 million ~~from the nine months ended September 30, 2022 and increased $1.1 billion~~ from the three months ended ~~September 30, 2022,~~March 31, 2023, driven by the FDIC special assessment.

•Average earning assets increased $562 million from the three months ended March 31, 2023, primarily driven by higher balances of AFS investment securities in the portfolio.

•Average deposits increased ~~$2.9 billion from the nine months ended September 30, 2022 and increased $4.0~~$3.8 billion from the three months ended ~~September 30, 2022,~~March 31, 2023, primarily driven by increases in brokered CDs and network deposits.

~~Table of Contents~~

Critical Accounting Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. The determination of the ACLL is particularly susceptible to significant change. A discussion of these estimates can be found in the Critical Accounting Estimates section in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Corporation’s ~~2022~~2023 Annual Report on Form 10-K. There have been no changes in the Corporation's application of critical accounting estimates since December 31, ~~2022.~~2023.

Recent Developments

On ~~October 24, 2023,~~April 30, 2024, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.22 per common share, payable on ~~December 15, 2023~~June 17, 2024 to shareholders of record at the close of business on ~~December 1, 2023. This is an increase of $0.01 from the previous quarterly dividend of $0.21 per common share.~~June 3, 2024. The Board of Directors also declared a regular quarterly cash dividend of $0.3671875 per depositary share on Associated's 5.875% Series E Perpetual Preferred Stock, payable on ~~December 15, 2023~~June 17, 2024 to shareholders of record at the close of business on ~~December 1, 2023.~~June 3, 2024. The Board of Directors also declared a regular quarterly cash dividend of $0.3515625 per depositary share on Associated's 5.625% Series F Perpetual Preferred Stock, payable on ~~December 15, 2023~~June 17, 2024 to shareholders of record at the close of business on ~~December 1, 2023.~~June 3, 2024.


ITEM 3.			Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is set forth in Item 2 under the captions Quantitative and Qualitative Disclosures about Market Risk and Interest Rate Risk.

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ITEM 4.			Controls and Procedures

The Corporation maintains disclosure controls and procedures as required under Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended, that are designed to ensure that information required to be disclosed in the Corporation's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Corporation’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of ~~September 30, 2023,~~March 31, 2024, the Corporation’s management carried out an evaluation, under the supervision and with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on the foregoing, its Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective as of ~~September 30, 2023.~~March 31, 2024.

No changes were made to the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act of 1934) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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PART II - OTHER INFORMATION


ITEM 1.			Legal Proceedings

The information required by this item is set forth in Part I, Item 1 under Note 11 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings, and Regulatory Matters of the notes to consolidated financial statements.


ITEM 1A.			Risk Factors

There have been no material changes in the Risk Factors described in the Corporation’s ~~2022~~2023 Annual Report on Form ~~10-K other than as set out in the Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, in Item 1A of Part II.~~10-K.


ITEM 2.			Unregistered Sales of Equity Securities and Use of Proceeds

During the ~~third~~first quarter of ~~2023,~~2024, the Corporation repurchased ~~approximately $261,000~~$23 million of common stock, ~~all~~including $18 million of ~~which were~~open market purchases and $5 million of repurchases related to tax withholding on equity ~~compensation with no open market purchases during the quarter.~~compensation. The repurchase details are presented in the table below:

Common Stock Purchases
Total Number of
Shares Purchased(a)
Average Price
Paid per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans
or Programs(b)
Period
July 1, 2023 - July 31, 2023 6,763 $ 18.17 — —
August 1, 2023 - August 31, 2023 7,163 18.47 — —
September 1, 2023 - September 30, 2023 356 17.66 — —
Total 14,282 $ 18.31 — 4,654,934


	Total Number of Shares Purchased(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(b)
Period

January 1, 2024 - January 31, 2024	—	$	—	—
February 1, 2024 - February 29, 2024	1,043,080	20.27		900,000
March 1, 2024 - March 31, 2024	83,219	20.68		—
Total	1,126,299	$	20.30	900,000	2,852,467

(a) During the ~~third~~first quarter of ~~2023, all common~~2024, the Corporation repurchased 226,299 shares ~~repurchased were~~ for minimum tax withholding settlements on equity compensation. These purchases do not count against the maximum value of shares remaining available for purchase under the Board of Directors' authorization.

(b) At ~~September 30, 2023,~~March 31, 2024, there remained ~~$80~~$61 million authorized to be repurchased under the Board of Directors' 2021 $100 million authorization. The maximum number of shares that may yet be purchased under this authorization is based on the closing share price on ~~September 30, 2023.~~March 31, 2024.

Repurchases under Board authorized repurchase programs are subject to any necessary regulatory approvals and other limitations and may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchases, or similar facilities.


ITEM 5.			Other Information

During the three months ended ~~September 30, 2023,~~March 31, 2024, no director or "officer" of the Corporation adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6.			Exhibits

(a) Exhibits:




Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by Andrew J. Harmening, Chief Executive Officer.
Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by Derek S. Meyer, Chief Financial Officer.
Exhibit (32), Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley.
Exhibit (101), Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Changes in Stockholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
Exhibit (104), The cover page from the Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2023~~March 31, 2024 has been formatted in Inline XBRL (Inline Extensible Business Reporting Language) and contained in Exhibits in 101.

7674


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



						ASSOCIATED BANC-CORP
						(Registrant)

Date: ~~October 26, 2023~~April 30, 2024						/s/ Andrew J. Harmening
						Andrew J. Harmening
						President and Chief Executive Officer

Date: ~~October 26, 2023~~April 30, 2024						/s/ Derek S. Meyer
						Derek S. Meyer
						Chief Financial Officer

Date: ~~October 26, 2023~~April 30, 2024						/s/ Tammy C. Stadler
						Tammy C. Stadler
						Chief Accounting Officer

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		Page
PART I. Financial Information

	Item 1. Financial Statements (Unaudited):	5

	Consolidated Balance Sheets	5

	Consolidated Statements of Income	6

	Consolidated Statements of Comprehensive Income	7

	Consolidated Statements of Changes in Stockholders’ Equity	8

	Consolidated Statements of Cash Flows	109

	Notes to Consolidated Financial Statements	1211

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4950

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	7371

	Item 4. Controls and Procedures	7472

PART II. Other Information

	Item 1. Legal Proceedings	7573

	Item 1A. Risk Factors	7573

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7573

	Item 5. Other Information	7573

	Item 6. Exhibits	7674

	Signatures	7775


($ in thousands)	Performing Restructured Loans		Nonaccrual Restructured Loans(a)


Commercial and industrial	$	12,453	$	—
Commercial real estate — owner occupied	316		—
Commercial real estate — investor	128		2,074
Real estate construction	195		9
Residential mortgage	16,829		17,117

Home equity	2,148		927
Other consumer	798		—
Total restructured loans	$	32,868	$	20,127


($ in thousands)	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)

Commercial and industrial	2	$	265	$	265

Commercial real estate — investor	1	547		573

Residential mortgage	44	9,641		9,833
Home equity	12	390		412

Total loans modified	59	$	10,844	$	11,083