ASB 10-Q Quarterly Report Sept. 30, 2024

ASSOCIATED BANC-CORP

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Table of Contents

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, 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 25, 2024 was 151,255,013 .


ASSOCIATED BANC-CORP
Table of Contents


		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	10

	Notes to Consolidated Financial Statements	12

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	50

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	73

	Item 4. Controls and Procedures	74

PART II. Other Information

	Item 1. Legal Proceedings	75

	Item 1A. Risk Factors	75

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	75

	Item 5. Other Information	75

	Item 6. Exhibits	76

	Signatures	77


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


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


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
GSE			Government-Sponsored Enterprise

HTM			Held to Maturity






LTV			Loan-to-Value


Moody's			Moody’s Investors Service
MSRs			Mortgage Servicing Rights
MVE			Market Value of Equity
NAV			Net Asset Value measured at fair 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




YTD			Year-to-Date

Table of Contents


PART I - FINANCIAL INFORMATION

ITEM 1.			Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets


	Sep 30, 2024		Dec 31, 2023
(In thousands, except share and per share data)	(Unaudited)		(Audited)
Assets
Cash and due from banks	$	554,631	$	484,384
Interest-bearing deposits in other financial institutions	408,101		425,089
Federal funds sold and securities purchased under agreements to resell	4,310		14,350
AFS investment securities, at fair value	4,152,527		3,600,892
HTM investment securities, net, at amortized cost	3,769,150		3,860,160
Equity securities	23,158		41,651
FHLB and Federal Reserve Bank stocks, at cost	178,168		229,171
Residential loans held for sale	67,219		33,011
Commercial loans held for sale	11,833		90,303
Loans	29,990,897		29,216,218
Allowance for loan losses	( 361,765 )		( 351,094 )
Loans, net	29,629,131		28,865,124
Tax credit and other investments	265,385		258,067

Premises and equipment, net	373,816		372,978
Bank and corporate owned life insurance	686,704		682,649
Goodwill	1,104,992		1,104,992
Other intangible assets, net	33,863		40,471
Mortgage servicing rights, net	81,977		84,390

Interest receivable	167,777		169,569
Other assets	698,073		658,604
Total assets	$	42,210,815	$	41,015,855
Liabilities and stockholders' equity
Noninterest-bearing demand deposits	$	5,857,421	$	6,119,956
Interest-bearing deposits	27,696,877		27,326,093
Total deposits	33,554,298		33,446,049




Short-term funding	917,028		326,780
FHLB advances	1,913,294		1,940,194
Other long-term funding	844,342		541,269

Allowance for unfunded commitments	35,776		34,776
Accrued expenses and other liabilities	532,842		552,814
Total liabilities	$	37,797,579	$	36,841,882
Stockholders’ equity
Preferred equity	$	194,112	$	194,112
Common equity
Common stock	$	1,752	$	1,752
Surplus	1,714,055		1,714,822
Retained earnings	3,122,307		2,946,805
Accumulated other comprehensive (loss)	( 111,748 )		( 171,096 )
Treasury stock, at cost	( 507,241 )		( 512,421 )
Total common equity	4,219,125		3,979,861
Total stockholders’ equity	4,413,236		4,173,973
Total liabilities and stockholders’ equity	$	42,210,815	$	41,015,855
Preferred shares authorized (par value $ 1.00 per share)	750,000		750,000
Preferred shares issued and outstanding	200,000		200,000
Common shares authorized (par value $ 0.01 per share)	250,000,000		250,000,000
Common shares issued	175,216,409		175,216,409
Common shares outstanding	151,212,711		151,036,674

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)	2024		2023		2024		2023
Interest income
Interest and fees on loans	$	465,728	$	447,912	$	1,376,988	$	1,262,538
Interest and dividends on investment securities
Taxable	51,229		38,210		148,055		104,197
Tax-exempt	14,660		15,941		44,103		47,960
Other interest	8,701		6,575		24,834		17,990
Total interest income	540,318		508,637		1,593,980		1,432,685
Interest expense
Interest on deposits	231,623		193,131		678,916		464,749
Interest on federal funds purchased and securities sold under agreements to repurchase	3,385		3,100		8,551		8,504
Interest on other short-term funding	6,144		—		16,929		1
Interest on FHLB advances	24,799		48,143		80,612		147,365
Interest on long-term funding	11,858		10,019		32,012		25,895
Total interest expense	277,809		254,394		817,021		646,514
Net interest income	262,509		254,244		776,960		786,171
Provision for credit losses	20,991		21,943		68,000		62,014
Net interest income after provision for credit losses	241,518		232,301		708,960		724,157
Noninterest income
Wealth management fees	24,144		20,828		68,466		61,499
Service charges and deposit account fees	13,708		12,864		38,410		38,230
Card-based fees	11,731		11,510		34,973		33,492
Other fee-based revenue	5,057		4,509		14,316		13,249
Capital markets, net	4,317		5,368		13,052		15,544
Mortgage banking, net	2,132		6,501		7,299		17,814
Bank and corporate owned life insurance	4,001		2,047		11,156		6,882

Asset (losses) gains, net	( 474 )		625		( 1,407 )		590
Investment securities gains (losses), net	100		( 11 )		4,047		55

Other	2,504		2,339		7,054		6,841
Total noninterest income	67,221		66,579		197,365		194,195
Noninterest expense
Personnel	121,036		117,159		362,012		347,669
Technology	27,217		26,172		80,579		73,990
Occupancy	13,536		14,125		40,297		42,775
Business development and advertising	6,683		7,100		20,735		20,054
Equipment	4,653		5,016		13,702		14,921
Legal and professional	5,639		4,461		14,740		13,149
Loan and foreclosure costs	2,748		2,049		6,519		4,822
FDIC assessment	8,223		9,150		29,300		25,575
Other intangible amortization	2,203		2,203		6,608		6,608

Other	8,659		8,771		19,622		24,726
Total noninterest expense	200,597		196,205		594,115		574,291
Income before income taxes	108,142		102,674		312,211		344,061
Income tax expense	20,124		19,426		27,451		70,299
Net income	88,018		83,248		284,760		273,762
Preferred stock dividends	2,875		2,875		8,625		8,625
Net income available to common equity	$	85,143	$	80,373	$	276,135	$	265,137
Earnings per common share
Basic	$	0.56	$	0.53	$	1.83	$	1.76
Diluted	$	0.56	$	0.53	$	1.82	$	1.75
Average common shares outstanding
Basic	150,247		150,035		149,993		149,929
Diluted	151,492		151,014		151,244		150,971

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,
($ in thousands)	2024		2023		2024		2023

Net income	$	88,018	$	83,248	$	284,760	$	273,762
Other comprehensive income (loss), net of tax
AFS investment securities
Net unrealized gains (losses)	90,858		( 56,924 )		49,844		( 69,512 )

Amortization of net unrealized losses on AFS securities transferred to HTM securities	2,147		2,327		6,329		6,883
Reclassification adjustment for net losses realized in net income	—		—		197		—


Income tax (expense) benefit	( 23,198 )		13,928		( 14,060 )		15,879
Other comprehensive income (loss) on AFS securities	69,807		( 40,669 )		42,309		( 46,751 )
Cash flow hedge derivatives
Net unrealized gains (losses)	25,609		( 13,592 )		( 639 )		( 33,976 )
Reclassification adjustment for net losses realized in net income	4,705		4,516		14,297		9,097
Income tax benefit	7,405		2,315		5,213		5,488
Other comprehensive income (loss) on cash flow hedge derivatives	37,718		( 6,762 )		18,871		( 19,391 )
Defined benefit pension and postretirement obligations
Amortization of prior service cost	( 73 )		( 81 )		( 217 )		( 244 )
Amortization of actuarial (gain) loss	( 7 )		( 7 )		( 21 )		15

Income tax benefit (expense)	20		23		( 1,594 )		31
Other comprehensive (loss) on pension and postretirement obligations	( 60 )		( 66 )		( 1,832 )		( 198 )
Total other comprehensive income (loss)	107,466		( 47,497 )		59,348		( 66,340 )
Comprehensive income	$	195,483	$	35,751	$	344,108	$	207,422

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)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Total
Balance, December 31, 2023	$	194,112	$	1,752	$	1,714,822	$	2,946,805	$	( 171,096 )	$	( 512,421 )	$	4,173,973


Comprehensive income:
Net income	—		—		—		81,169		—		—		81,169
Other comprehensive (loss)	—		—		—		—		( 38,785 )		—		( 38,785 )
Comprehensive income													42,384
Common stock issued:
Stock-based compensation plans, net	—		—		( 13,839 )		—		—		17,749		3,910


Purchase of treasury stock, open market purchases	—		—		—		—		—		( 18,289 )		( 18,289 )
Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		( 4,572 )		( 4,572 )
Cash dividends:
Common stock, $0.22 per share	—		—		—		( 33,527 )		—		—		( 33,527 )
Preferred stock (a)	—		—		—		( 2,875 )		—		—		( 2,875 )




Stock-based compensation expense, net	—		—		7,669		—		—		—		7,669




Balance, March 31, 2024	$	194,112	$	1,752	$	1,708,652	$	2,991,571	$	( 209,881 )	$	( 517,533 )	$	4,168,673

Comprehensive income:
Net income	—		—		—		115,573		—		—		115,573
Other comprehensive (loss)	—		—		—		—		( 9,333 )		—		( 9,333 )
Comprehensive income													106,241
Common stock issued:
Stock-based compensation plans, net	—		—		( 1,704 )		—		—		2,230		526

Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		( 1,088 )		( 1,088 )
Cash dividends:
Common stock, $0.22 per share	—		—		—		( 33,507 )		—		—		( 33,507 )
Preferred stock (a)	—		—		—		( 2,875 )		—		—		( 2,875 )


Stock-based compensation expense, net	—		—		4,368		—		—		—		4,368
Balance, June 30, 2024	$	194,112	$	1,752	$	1,711,316	$	3,070,762	$	( 219,214 )	$	( 516,391 )	$	4,242,337

Comprehensive income:
Net income	—		—		—		88,018		—		—		88,018
Other comprehensive income	—		—		—		—		107,466		—		107,466
Comprehensive income													195,483
Common stock issued:
Stock-based compensation plans, net	—		—		( 652 )		—		—		9,498		8,845

Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		( 347 )		( 347 )
Cash dividends:
Common stock, $0.22 per share	—		—		—		( 33,599 )		—		—		( 33,599 )
Preferred stock (a)	—		—		—		( 2,875 )		—		—		( 2,875 )


Stock-based compensation expense, net	—		—		3,392		—		—		—		3,392

Balance, September 30, 2024	$	194,112	$	1,752	$	1,714,055	$	3,122,307	$	( 111,748 )	$	( 507,241 )	$	4,413,236

Numbers may not sum due to rounding.

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

Table of Contents

ASSOCIATED BANC-CORP

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


(In thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (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


Comprehensive income:
Net income	—		—		—		103,360		—		—		103,360
Other comprehensive income	—		—		—		—		39,211		—		39,211

Comprehensive income													142,571
Common stock issued:
Stock-based compensation plans, net	—		—		( 12,612 )		—		—		14,379		1,766



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


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



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	—		—		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

Numbers may not sum due to rounding.

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

See accompanying notes to consolidated financial statements.

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Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended Sep 30,
($ in thousands)	2024		2023
Cash flows from operating activities
Net income	$	284,760	$	273,762
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	68,000		62,014
Depreciation and amortization	36,414		34,703
Change in MSRs valuation	959		( 14,658 )

Amortization of other intangible assets	6,608		6,608
Amortization and accretion on earning assets, funding, and other, net	30,998		27,394
Net amortization of tax credit investments	26,307		25,830
(Gains) on sales of investment securities, net	( 3,857 )		—
Asset losses (gains), net	1,407		( 590 )

Loss on mortgage banking activities, net	2,284		2,154
Mortgage loans originated and acquired for sale	( 450,532 )		( 283,469 )
Proceeds from sales of mortgage loans held for sale	415,840		254,619

Changes in certain assets and liabilities:
Decrease (increase) in interest receivable	1,792		( 26,670 )
Increase in interest payable	19,507		69,461
Increase (decrease) in expense payable	332		( 22,632 )
(Decrease) increase in net derivative position	( 61,615 )		3,721


Net change in other assets and other liabilities	( 6,084 )		( 34,137 )
Net cash provided by operating activities	373,120		378,110
Cash flows from investing activities
Net (increase) in loans	( 795,057 )		( 1,436,901 )
Purchases of:
AFS securities	( 1,177,627 )		( 1,109,501 )
HTM securities	—		( 41,524 )
FHLB and Federal Reserve Bank stocks and equity securities	( 122,205 )		( 114,985 )


Proceeds from:
Sales of AFS securities	9,472		—

Sale of FHLB and Federal Reserve Bank stocks and equity securities	196,049		131,272
Prepayments, calls, and maturities of AFS securities	660,732		288,313
Prepayments, calls, and maturities of HTM securities	92,402		101,847
Sales, prepayments, calls, and maturities of other assets	12,759		20,224
Premises, equipment, and software	( 31,702 )		( 43,541 )

Net change in tax credit and alternative investments	( 17,856 )		( 19,615 )

Net cash (used in) investing activities	( 1,173,035 )		( 2,224,411 )
Cash flows from financing activities
Net increase in deposits	108,249		2,487,225

Net increase (decrease) in short-term funding	590,248		( 154,292 )
Net (decrease) in short-term FHLB advances	( 35,000 )		( 580,000 )
Repayment of long-term FHLB advances	( 727 )		( 568 )
Proceeds from long-term FHLB advances	2,656		1,369

Proceeds from issuance of long-term funding	298,800		292,740
Payment of debt issuance costs	( 751 )		—
(Repayment) of finance lease principal	( 66 )		( 64 )


Proceeds from issuance of common stock for stock-based compensation plans	13,281		2,362




Purchase of treasury stock, open market purchases	( 18,289 )		—
Purchase of treasury stock, stock-based compensation plans	( 6,007 )		( 6,507 )
Cash dividends on common stock	( 100,633 )		( 96,005 )
Cash dividends on preferred stock	( 8,625 )		( 8,625 )

Net cash provided by financing activities	843,134		1,937,635
Net increase in cash and cash equivalents	43,219		91,334
Cash and cash equivalents at beginning of period	923,823		621,455
Cash and cash equivalents at end of period (a)	$	967,042	$	712,789

Numbers may not sum due to rounding.

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

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ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended Sep 30,
($ in thousands)	2024		2023
Supplemental disclosures of cash flow information
Cash paid for interest	$	796,621	$	576,221
Cash paid for income and franchise taxes	6,963		68,382
Loans and bank premises transferred to OREO	12,586		5,917
Capitalized mortgage servicing rights	4,458		2,477
Loans transferred (from) into held for sale (into) from portfolio, net	( 74,737 )		6,833



Fair value adjustments on hedged long-term FHLB advances and subordinated debt	( 10,369 )		18,652
Fair value adjustments on foreign currency exchange forwards	1,899		3,308
Fair value adjustments on cash flow hedges	18,871		( 19,391 )

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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 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 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.

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 2023 Annual Report on Form 10-K.

New Accounting Pronouncements Adopted


Standard	Description	Date of 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 has determined the impact on its results of operation, financial position, liquidity, and disclosures is immaterial.

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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 2023-07 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 does not expect the update to have a significant impact on the consolidated financial statements, other than enhanced 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.	Fiscal year 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)	2024		2023		2024		2023
Net income	$	88,018	$	83,248	$	284,760	$	273,762
Preferred stock dividends	( 2,875 )		( 2,875 )		( 8,625 )		( 8,625 )
Net income available to common equity	85,143		80,373		276,135		265,137
Common shareholder dividends	( 33,413 )		( 31,806 )		( 100,131 )		( 95,417 )
Unvested share-based payment awards	( 185 )		( 190 )		( 502 )		( 588 )
Undistributed earnings	$	51,544	$	48,377	$	175,502	$	169,132
Undistributed earnings allocated to common shareholders	$	51,255	$	48,090	$	174,511	$	168,136
Undistributed earnings allocated to unvested share-based payment awards	289		287		991		996
Undistributed earnings	$	51,544	$	48,377	$	175,502	$	169,132
Basic
Distributed earnings to common shareholders	$	33,413	$	31,806	$	100,131	$	95,417
Undistributed earnings allocated to common shareholders	51,255		48,090		174,511		168,136
Total common shareholders earnings, basic	$	84,669	$	79,896	$	274,642	$	263,553
Diluted
Distributed earnings to common shareholders	$	33,413	$	31,806	$	100,131	$	95,417
Undistributed earnings allocated to common shareholders	51,255		48,090		174,511		168,136
Total common shareholders earnings, diluted	$	84,669	$	79,896	$	274,642	$	263,553
Weighted average common shares outstanding	150,247		150,035		149,993		149,929
Effect of dilutive common stock awards	1,244		980		1,251		1,042

Diluted weighted average common shares outstanding	151,492		151,014		151,244		150,971
Basic earnings per common share	$	0.56	$	0.53	$	1.83	$	1.76
Diluted earnings per common share	$	0.56	$	0.53	$	1.82	$	1.75

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Excluded from the earnings per common share calculations were 2 million and 4 million anti-dilutive common stock options for the three months ended September 30, 2024 and 2023, respectively, and 2 million and 3 million anti-dilutive common stock options were excluded from the earnings per common share calculations for the nine months ended September 30, 2024 and 2023, respectively.

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 months ended September 30, 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, 2023	3,792	$	21.25	4.26 years	$	5,834

Exercised	679	18.76
Forfeited or expired	49	24.81
Outstanding at September 30, 2024	3,064	$	21.75	3.46 years	$	4,197
Options Exercisable at September 30, 2024	3,064	$	21.75	3.46 years	$	4,197

(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 months ended September 30, 2024, the intrinsic value of stock options exercised was $ 3 million, compared to approximately $ 272 ,000 for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, the total fair value of stock options vested was approximately $ 489 ,000 compared to approximately $ 955 ,000 for the nine months ended September 30, 2023.

The Corporation also has issued time-based and performance-based restricted stock awards under the 2017 Incentive Compensation Plan and 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 months ended September 30, 2024:


Restricted Stock	Shares (a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	2,349	$	21.20
Granted	823	20.78
Vested	774	23.72
Forfeited	60	21.94
Outstanding at September 30, 2024	2,338	$	21.26

(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 2023 and 2024 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during 2023 and 2024 will generally vest ratably over a period of four years . Expense for restricted stock awards of $ 16 million was recorded for the nine months ended September 30, 2024, compared to $ 14 million for the nine months ended September 30, 2023. Included in compensation expense for the first nine months of 2024 was $ 4 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had $ 21 million of unrecognized compensation costs related to restricted stock awards at September 30, 2024 that are expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2028 .

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

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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.

Note 5 Investment Securities

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


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


AFS investment securities
U.S. Treasury securities	$	39,987	$	—	$	( 3,039 )	$	36,948

Obligations of state and political subdivisions (municipal securities)	82,845		11		( 1,766 )		81,089
Residential mortgage-related securities:
FNMA/FHLMC	1,201,968		990		( 117,544 )		1,085,414
GNMA	2,634,634		30,367		( 1,441 )		2,663,560

Commercial mortgage-related securities:
FNMA/FHLMC	18,423		—		( 388 )		18,035
GNMA	156,873		—		( 5,256 )		151,617
Asset backed securities:
FFELP	113,139		132		( 922 )		112,350
SBA	540		—		( 24 )		516

Other debt securities	3,000		—		( 3 )		2,997
Total AFS investment securities	$	4,251,409	$	31,500	$	( 130,382 )	$	4,152,527
HTM investment securities
U.S. Treasury securities	$	1,000	$	—	$	( 10 )	$	990
Obligations of state and political subdivisions (municipal securities)	1,664,740		4,596		( 128,987 )		1,540,348
Residential mortgage-related securities:
FNMA/FHLMC	900,743		24,025		( 145,885 )		778,883
GNMA	45,180		143		( 2,344 )		42,979
Private-label	329,349		8,519		( 55,765 )		282,103
Commercial mortgage-related securities:
FNMA/FHLMC	775,209		11,142		( 126,498 )		659,852
GNMA	53,005		258		( 5,643 )		47,620
Total HTM investment securities	$	3,769,224	$	48,682	$	( 465,131 )	$	3,352,775

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


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


AFS investment securities
U.S. Treasury securities	$	39,984	$	—	$	( 4,083 )	$	35,902

Obligations of state and political subdivisions (municipal securities)	94,008		23		( 2,214 )		91,817
Residential mortgage-related securities:
FNMA/FHLMC	1,274,052		294		( 153,552 )		1,120,794
GNMA	2,021,242		24,254		( 2,822 )		2,042,675

Commercial mortgage-related securities:
FNMA/FHLMC	18,691		—		( 1,755 )		16,937
GNMA	161,928		—		( 7,135 )		154,793
Asset backed securities:
FFELP	135,832		5		( 1,862 )		133,975
SBA	1,077		2		( 28 )		1,051
Other debt securities	3,000		—		( 50 )		2,950
Total AFS investment securities	$	3,749,814	$	24,579	$	( 173,501 )	$	3,600,892
HTM investment securities
U.S. Treasury securities	$	999	$	—	$	( 36 )	$	963
Obligations of state and political subdivisions (municipal securities)	1,682,473		5,638		( 134,053 )		1,554,059
Residential mortgage-related securities:
FNMA/FHLMC	941,973		27,007		( 164,587 )		804,393
GNMA	48,979		92		( 2,901 )		46,170
Private-label	345,083		9,796		( 65,372 )		289,507
Commercial mortgage-related securities:
FNMA/FHLMC	780,995		12,699		( 160,781 )		632,914
GNMA	59,733		386		( 7,500 )		52,619
Total HTM investment securities	$	3,860,235	$	55,619	$	( 535,230 )	$	3,380,624

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, 2024, are shown below:


	AFS					HTM
($ in thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due in one year or less	$	1,000	$	997		$	11,435	$	11,360
Due after one year through five years	54,051		50,642			58,464		58,594
Due after five years through ten years	44,549		43,392			179,171		175,603
Due after ten years	26,231		26,004			1,416,669		1,295,781
Total debt securities	125,832		121,034			1,665,740		1,541,338
Residential mortgage-related securities:
FNMA/FHLMC	1,201,968		1,085,414			900,743		778,883
GNMA	2,634,634		2,663,560			45,180		42,979
Private-label	—		—			329,349		282,103
Commercial mortgage-related securities:
FNMA/FHLMC	18,423		18,035			775,209		659,852
GNMA	156,873		151,617			53,005		47,620
Asset backed securities:
FFELP	113,139		112,350			—		—
SBA	540		516			—		—

Total investment securities	$	4,251,409	$	4,152,527		$	3,769,224	$	3,352,775
Ratio of fair value to amortized cost			97.7		%			89.0		%

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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, 2024:


($ in thousands)	AAA		AA		A		Not Rated		Total
U.S. Treasury securities	$	1,000	$	—	$	—	$	—	$	1,000
Obligations of state and political subdivisions (municipal securities)	772,689		884,498		5,492		2,060		1,664,740
Residential mortgage-related securities:
FNMA/FHLMC	900,743		—		—		—		900,743
GNMA	45,180		—		—		—		45,180
Private-label	329,349		—		—		—		329,349
Commercial mortgage-related securities:
FNMA/FHLMC	775,209		—		—		—		775,209
GNMA	53,005		—		—		—		53,005
Total HTM securities	$	2,877,174	$	884,498	$	5,492	$	2,060	$	3,769,224

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


($ in thousands)	AAA		AA		A		Not Rated		Total
U.S. Treasury securities	$	999	$	—	$	—	$	—	$	999
Obligations of state and political subdivisions (municipal securities)	760,329		915,303		5,687		1,155		1,682,473
Residential mortgage-related securities:
FNMA/FHLMC	941,973		—		—		—		941,973
GNMA	48,979		—		—		—		48,979
Private-label	345,083		—		—		—		345,083
Commercial mortgage-related securities:
FNMA/FHLMC	780,995		—		—		—		780,995
GNMA	59,733		—		—		—		59,733
Total HTM securities	$	2,938,090	$	915,303	$	5,687	$	1,155	$	3,860,235

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, 2024 and 2023:


	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023



Gross realized (losses) on AFS securities	$	—	$	—	$	( 197 )	$	—


Gain on sale and net write-up (down) of equity securities	100		( 11 )		4,243		55
Investment securities gains, net	$	100	$	( 11 )	$	4,047	$	55
Proceeds from sales of AFS investment securities	$	—	$	—	$	9,472	$	—

During the first quarter of 2024, the Corporation sold its remaining Visa Class B restricted shares at a gain of $ 4 million.

Investment securities with a carrying value of $ 1.4 billion and $ 1.6 billion at September 30, 2024 and December 31, 2023, respectively, were pledged as required to secure certain deposits or for other purposes.

Accrued interest receivable on HTM securities totaled $ 16 million and $ 18 million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on AFS securities totaled $ 17 million and $ 15 million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets.

The allowance for credit losses on HTM securities was approximately $ 75 ,000 at both September 30, 2024 and December 31, 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.

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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, 2024:


	Less than 12 months					12 months or more					Total
($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
AFS investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	( 3,039 )	$	36,948	$	( 3,039 )	$	36,948

Obligations of state and political subdivisions (municipal securities)	18	( 35 )		8,205		112	( 1,731 )		66,172		( 1,766 )		74,377
Residential mortgage-related securities:
FNMA/FHLMC	4	( 22 )		6,211		82	( 117,522 )		1,026,799		( 117,544 )		1,033,011
GNMA	2	( 36 )		20,744		10	( 1,405 )		41,066		( 1,441 )		61,811

Commercial mortgage-related securities:
FNMA/FHLMC	—	—		—		1	( 388 )		18,035		( 388 )		18,035
GNMA	—	—		—		31	( 5,256 )		151,617		( 5,256 )		151,617
Asset backed securities:
FFELP	—	—		—		12	( 922 )		65,319		( 922 )		65,319
SBA	—	—		—		4	( 24 )		498		( 24 )		498
Other debt securities	—	—		—		1	( 3 )		997		( 3 )		997

Total	24	$	( 93 )	$	35,160	254	$	( 130,289 )	$	1,407,452	$	( 130,382 )	$	1,442,613
HTM investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	( 10 )	$	990	$	( 10 )	$	990
Obligations of state and political subdivisions (municipal securities)	83	( 517 )		111,498		642	( 128,470 )		887,316		( 128,987 )		998,814
Residential mortgage-related securities:
FNMA/FHLMC	1	( 1 )		100		108	( 145,884 )		769,122		( 145,885 )		769,223
GNMA	—	—		—		79	( 2,344 )		33,584		( 2,344 )		33,584
Private-label	—	—		—		18	( 55,765 )		282,103		( 55,765 )		282,103
Commercial mortgage-related securities:
FNMA/FHLMC	—	—		—		43	( 126,498 )		632,665		( 126,498 )		632,665
GNMA	—	—		—		13	( 5,643 )		47,620		( 5,643 )		47,620
Total	84	$	( 518 )	$	111,598	904	$	( 464,613 )	$	2,653,401	$	( 465,131 )	$	2,765,000

Table of Contents

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, 2023:


	Less than 12 months					12 months or more					Total
($ in thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
AFS investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	( 4,083 )	$	35,902	$	( 4,083 )	$	35,902

Obligations of state and political subdivisions (municipal securities)	41	( 347 )		23,762		92	( 1,867 )		53,022		( 2,214 )		76,784
Residential mortgage-related securities:
FNMA/FHLMC	18	( 333 )		22,870		71	( 153,219 )		1,080,337		( 153,552 )		1,103,207
GNMA	13	( 924 )		156,847		5	( 1,898 )		26,643		( 2,822 )		183,490

Commercial mortgage-related securities:
FNMA/FHLMC	—	—		—		1	( 1,755 )		16,937		( 1,755 )		16,937
GNMA	9	( 3,160 )		103,055		22	( 3,975 )		51,738		( 7,135 )		154,793
Asset backed securities:
FFELP	—	—		—		14	( 1,862 )		125,339		( 1,862 )		125,339
SBA	—	—		—		5	( 28 )		761		( 28 )		761
Other debt securities	1	( 9 )		991		2	( 42 )		1,958		( 50 )		2,950

Total	82	$	( 4,773 )	$	307,527	213	$	( 168,728 )	$	1,392,635	$	( 173,501 )	$	1,700,162
HTM investment securities
U.S. Treasury securities	—	$	—	$	—	1	$	( 36 )	$	963	$	( 36 )	$	963
Obligations of state and political subdivisions (municipal securities)	182	( 1,535 )		180,270		537	( 132,518 )		792,940		( 134,053 )		973,210
Residential mortgage-related securities:
FNMA/FHLMC	20	( 511 )		30,323		94	( 164,076 )		771,042		( 164,587 )		801,365
GNMA	2	( 17 )		2,128		78	( 2,884 )		34,626		( 2,901 )		36,754
Private-label	—	—		—		18	( 65,372 )		289,507		( 65,372 )		289,507
Commercial mortgage-related securities:
FNMA/FHLMC	1	( 121 )		8,144		44	( 160,660 )		624,770		( 160,781 )		632,914
GNMA	—	—		—		13	( 7,500 )		52,619		( 7,500 )		52,619
Total	205	$	( 2,184 )	$	220,865	785	$	( 533,046 )	$	2,566,468	$	( 535,230 )	$	2,787,333

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, 2024 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. As of September 30, 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 $ 90 million and $ 143 million at September 30, 2024 and December 31, 2023, respectively. The Corporation had Federal Reserve Bank stock of $ 88 million and $ 87 million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on FHLB stock totaled $ 2 million and $ 4 million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on Federal Reserve Bank Stock totaled approximately $ 855,000 at September 30, 2024 and there was none at December 31, 2023. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.

Table of Contents

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 mutual funds. The Corporation had equity securities with readily determinable fair values of $ 11 million and $ 7 million at September 30, 2024 and December 31, 2023, respectively.

Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of an investment in a private loan fund. The Corporation had equity securities without readily determinable fair values carried at $ 13 million and $ 35 million at September 30, 2024 and December 31, 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)	Sep 30, 2024		Dec 31, 2023


Commercial and industrial	$	10,258,899	$	9,731,555
Commercial real estate — owner occupied	1,120,849		1,061,700
Commercial and business lending	11,379,748		10,793,255
Commercial real estate — investor	5,070,635		5,124,245
Real estate construction	2,114,300		2,271,398
Commercial real estate lending	7,184,934		7,395,644
Total commercial	18,564,683		18,188,898
Residential mortgage	7,803,083		7,864,891
Auto finance	2,708,946		2,256,162
Home equity	651,379		628,526
Other consumer	262,806		277,740
Total consumer	11,426,214		11,027,319
Total loans	$	29,990,897	$	29,216,218

Accrued interest receivable on loans totaled $ 132 million at both September 30, 2024 and December 31, 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 $ 180 ,000 for the three months ended September 30, 2024 and $ 2 million for the nine months ended September 30, 2024, compared to approximately $ 347 ,000 and $ 1 million for the three and nine months ended September 30, 2023, respectively.

Table of Contents

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


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














Commercial and industrial:
Risk rating:
Pass	$	574	$	1,899,076	$	1,655,577	$	1,577,257	$	2,578,620	$	1,225,619	$	307,575	$	623,877	$	9,867,600
Special mention	—		47,171		2,605		13,700		7,814		24,638		636		131		96,696
Substandard	926		57,680		66,904		15,304		30,444		106,210		3,529		163		280,234
Nonaccrual	3,608		112		2,569		1,853		8,835		1,000		—		—		14,369
Commercial and industrial	$	5,107	$	2,004,038	$	1,727,655	$	1,608,114	$	2,625,714	$	1,357,467	$	311,740	$	624,172	$	10,258,899
Commercial real estate - owner occupied:
Risk rating:
Pass	$	—	$	15,435	$	154,476	$	190,452	$	176,083	$	227,232	$	114,950	$	199,980	$	1,078,609
Special mention	—		—		—		—		—		1,439		—		—		1,439
Substandard	—		1,051		3,013		13,451		1,625		4,762		4,813		2,801		31,516
Nonaccrual	—		—		7,784		1,501		—		—		—		—		9,285
Commercial real estate - owner occupied	$	—	$	16,486	$	165,272	$	205,405	$	177,708	$	233,433	$	119,763	$	202,781	$	1,120,849
Commercial and business lending:
Risk rating:
Pass	$	574	$	1,914,511	$	1,810,053	$	1,767,709	$	2,754,703	$	1,452,850	$	422,525	$	823,857	$	10,946,209
Special mention	—		47,171		2,605		13,700		7,814		26,078		636		131		98,135
Substandard	926		58,730		69,916		28,756		32,069		110,972		8,342		2,964		311,750
Nonaccrual	3,608		112		10,353		3,354		8,835		1,000		—		—		23,654
Commercial and business lending	$	5,107	$	2,020,524	$	1,892,928	$	1,813,519	$	2,803,422	$	1,590,900	$	431,503	$	826,952	$	11,379,748
Commercial real estate - investor:
Risk rating:
Pass	$	—	$	126,415	$	892,694	$	878,160	$	1,245,948	$	832,555	$	346,208	$	430,094	$	4,752,074
Special mention	—		—		43,089		6,865		1,453		12,347		4,485		8,664		76,903
Substandard	—		—		63,652		40,111		87,955		18,395		—		12,632		222,745
Nonaccrual	—		—		18,913		—		—		—		—		—		18,913
Commercial real estate - investor	$	—	$	126,415	$	1,018,348	$	925,136	$	1,335,356	$	863,297	$	350,693	$	451,390	$	5,070,635
Real estate construction:
Risk rating:
Pass	$	—	$	28,533	$	153,630	$	437,777	$	1,018,975	$	249,924	$	25,245	$	7,831	$	1,921,914
Special mention	—		—		19,002		—		32,080		—		—		16		51,098
Substandard	—		—		11,158		—		58,690		71,424		—		—		141,273
Nonaccrual	—		—		—		—		—		—		—		15		15
Real estate construction	$	—	$	28,533	$	183,790	$	437,777	$	1,109,745	$	321,348	$	25,245	$	7,862	$	2,114,300
Commercial real estate lending:
Risk rating:
Pass	$	—	$	154,948	$	1,046,323	$	1,315,936	$	2,264,923	$	1,082,478	$	371,453	$	437,925	$	6,673,987
Special mention	—		—		62,091		6,865		33,533		12,347		4,485		8,679		128,001
Substandard	—		—		74,810		40,111		146,645		89,820		—		12,632		364,018
Nonaccrual	—		—		18,913		—		—		—		—		15		18,928
Commercial real estate lending	$	—	$	154,948	$	1,202,138	$	1,362,912	$	2,445,101	$	1,184,645	$	375,938	$	459,252	$	7,184,934
Total commercial:
Risk rating:
Pass	$	574	$	2,069,460	$	2,856,377	$	3,083,645	$	5,019,626	$	2,535,329	$	793,978	$	1,261,782	$	17,620,197
Special mention	—		47,171		64,696		20,565		41,348		38,425		5,121		8,810		226,136
Substandard	926		58,730		144,727		68,867		178,714		200,791		8,342		15,597		675,768
Nonaccrual	3,608		112		29,265		3,354		8,835		1,000		—		15		42,582
Total commercial	$	5,107	$	2,175,473	$	3,095,065	$	3,176,431	$	5,248,523	$	2,775,545	$	807,441	$	1,286,204	$	18,564,683

Table of Contents


					Term Loans Amortized Cost Basis by Origination Year (a)
($ in thousands)	Rev Loans Converted to Term (a)		Rev Loans Amortized Cost Basis		YTD 2024		2023		2022		2021		2020		Prior		Total
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	105,940	$	476,946	$	1,662,813	$	2,022,819	$	1,334,633	$	2,118,612	$	7,721,764
Special mention	—		—		—		—		38		—		—		115		153
Substandard	—		—		598		10,147		91		—		—		193		11,029
Nonaccrual	—		—		1,841		2,166		11,179		9,672		8,332		36,948		70,138
Residential mortgage	$	—	$	—	$	108,379	$	489,260	$	1,674,120	$	2,032,491	$	1,342,965	$	2,155,869	$	7,803,083
Auto finance:
Risk rating:
Pass	$	—	$	—	$	975,499	$	946,876	$	722,152	$	55,145	$	82	$	138	$	2,699,892
Special mention	—		—		183		519		812		85		—		—		1,598

Nonaccrual	—		—		360		1,915		4,677		503		—		—		7,456
Auto finance	$	—	$	—	$	976,042	$	949,310	$	727,641	$	55,733	$	82	$	138	$	2,708,946
Home equity:
Risk rating:
Pass	$	7,142	$	553,676	$	724	$	1,730	$	26,429	$	5,250	$	1,944	$	52,717	$	642,471
Special mention	234		53		—		—		—		21		83		483		639
Substandard	—		—		—		7		—		—		—		32		38
Nonaccrual	1,105		209		19		114		827		271		194		6,598		8,231
Home equity	$	8,481	$	553,938	$	743	$	1,851	$	27,256	$	5,542	$	2,221	$	59,829	$	651,379
Other consumer:
Risk rating:
Pass	$	71	$	192,905	$	8,779	$	3,964	$	2,081	$	999	$	537	$	51,039	$	260,303
Special mention	—		812		—		17		5		5		—		1		840
Substandard	—		1,593		—		—		—		—		—		—		1,593
Nonaccrual	—		44		—		8		12		4		1		2		70
Other consumer	$	71	$	195,353	$	8,779	$	3,989	$	2,097	$	1,007	$	538	$	51,042	$	262,806
Total consumer:
Risk rating:
Pass	$	7,213	$	746,580	$	1,090,942	$	1,429,516	$	2,413,475	$	2,084,213	$	1,337,197	$	2,222,505	$	11,324,429
Special mention	234		865		183		536		854		111		83		599		3,231
Substandard	—		1,593		598		10,154		91		—		—		225		12,660
Nonaccrual	1,105		253		2,220		4,203		16,694		10,450		8,526		43,548		85,894
Total consumer	$	8,552	$	749,291	$	1,093,943	$	1,444,409	$	2,431,114	$	2,094,773	$	1,345,806	$	2,266,877	$	11,426,214
Total loans:
Risk rating:
Pass	$	7,786	$	2,816,040	$	3,947,319	$	4,513,161	$	7,433,101	$	4,619,542	$	2,131,175	$	3,484,288	$	28,944,626
Special mention	234		48,036		64,879		21,101		42,202		38,536		5,204		9,409		229,367
Substandard	926		60,323		145,325		79,020		178,805		200,791		8,342		15,821		688,428
Nonaccrual	4,713		365		31,486		7,557		25,529		11,450		8,526		43,563		128,476
Total loans	$	13,659	$	2,924,763	$	4,189,009	$	4,620,840	$	7,679,638	$	4,870,319	$	2,153,247	$	3,553,082	$	29,990,897

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

Table of Contents

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


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







Commercial and industrial:
Risk rating:
Pass	$	1,380	$	1,693,249	$	1,736,617	$	2,877,173	$	1,824,362	$	398,046	$	383,695	$	449,006	$	9,362,149
Special mention	—		21,779		4,017		46,610		8,525		3,529		—		25,341		109,801
Substandard	804		81,924		10,515		39,748		47,279		17,732		94		291		197,582
Nonaccrual	6,414		—		13,317		14,188		33,891		627		—		—		62,022
Commercial and industrial	$	8,598	$	1,796,951	$	1,764,466	$	2,977,719	$	1,914,057	$	419,934	$	383,789	$	474,638	$	9,731,555
Commercial real estate - owner occupied:
Risk rating:
Pass	$	—	$	15,393	$	204,039	$	188,003	$	239,218	$	136,535	$	135,730	$	92,339	$	1,011,259
Special mention	—		271		—		—		6,150		2,635		—		1,293		10,349
Substandard	—		292		14,735		2,791		6,416		8,537		3,086		2,841		38,699
Nonaccrual	—		—		1,394		—		—		—		—		—		1,394
Commercial real estate - owner occupied	$	—	$	15,957	$	220,168	$	190,794	$	251,783	$	147,708	$	138,816	$	96,473	$	1,061,700
Commercial and business lending:
Risk rating:
Pass	$	1,380	$	1,708,642	$	1,940,657	$	3,065,177	$	2,063,580	$	534,581	$	519,426	$	541,345	$	10,373,408
Special mention	—		22,050		4,017		46,610		14,675		6,164		—		26,634		120,150
Substandard	804		82,216		25,250		42,539		53,695		26,269		3,180		3,132		236,281
Nonaccrual	6,414		—		14,710		14,188		33,891		627		—		—		63,416
Commercial and business lending	$	8,598	$	1,812,909	$	1,984,635	$	3,168,514	$	2,165,840	$	567,642	$	522,606	$	571,111	$	10,793,255
Commercial real estate - investor:
Risk rating:
Pass	$	—	$	155,109	$	1,263,866	$	1,247,434	$	1,080,425	$	471,371	$	358,996	$	239,230	$	4,816,433
Special mention	—		502		4,248		25,474		26,208		—		29,772		6,014		92,218
Substandard	—		—		106,002		69,584		15,000		983		—		24,025		215,595

Commercial real estate - investor	$	—	$	155,611	$	1,374,116	$	1,342,492	$	1,121,633	$	472,355	$	388,768	$	269,269	$	5,124,245
Real estate construction:
Risk rating:
Pass	$	—	$	23,307	$	422,277	$	1,176,608	$	547,825	$	87,680	$	5,740	$	7,954	$	2,271,392


Nonaccrual	—		—		—		—		—		—		—		6		6
Real estate construction	$	—	$	23,307	$	422,277	$	1,176,608	$	547,825	$	87,680	$	5,740	$	7,960	$	2,271,398
Commercial real estate lending:
Risk rating:
Pass	$	—	$	178,416	$	1,686,143	$	2,424,042	$	1,628,250	$	559,052	$	364,737	$	247,184	$	7,087,824
Special mention	—		502		4,248		25,474		26,208		—		29,772		6,014		92,218
Substandard	—		—		106,002		69,584		15,000		983		—		24,025		215,595
Nonaccrual	—		—		—		—		—		—		—		6		6
Commercial real estate lending	$	—	$	178,918	$	1,796,393	$	2,519,100	$	1,669,458	$	560,035	$	394,508	$	277,230	$	7,395,644

Table of Contents


					Term Loans Amortized Cost Basis by Origination Year (a)
($ in thousands)	Rev Loans Converted to Term (a)		Rev Loans Amortized Cost Basis		2023		2022		2021		2020		2019		Prior		Total
Total commercial:
Risk rating:
Pass	$	1,380	$	1,887,058	$	3,626,800	$	5,489,219	$	3,691,830	$	1,093,633	$	884,162	$	788,529	$	17,461,232
Special mention	—		22,552		8,265		72,084		40,882		6,164		29,772		32,648		212,368
Substandard	804		82,216		131,253		112,123		68,695		27,253		3,180		27,157		451,876
Nonaccrual	6,414		—		14,710		14,188		33,891		627		—		6		63,422
Total commercial	$	8,598	$	1,991,827	$	3,781,028	$	5,687,614	$	3,835,298	$	1,127,677	$	917,114	$	848,341	$	18,188,898
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	352,321	$	1,617,409	$	2,110,577	$	1,414,186	$	647,778	$	1,650,542	$	7,792,813
Special mention	—		—		—		—		—		—		95		57		152
Substandard	—		—		490		93		—		—		174		26		784
Nonaccrual	—		—		1,425		9,567		9,259		10,397		6,628		33,865		71,142
Residential mortgage	$	—	$	—	$	354,236	$	1,627,070	$	2,119,836	$	1,424,583	$	654,675	$	1,684,490	$	7,864,891
Auto finance:
Risk rating:
Pass	$	—	$	—	$	1,218,820	$	952,839	$	75,209	$	163	$	456	$	132	$	2,247,618
Special mention	—		—		619		1,850		205		—		—		—		2,674
Substandard	—		—		—		73		—		—		—		—		73
Nonaccrual	—		—		1,032		4,332		430		—		3		—		5,797
Auto finance	$	—	$	—	$	1,220,471	$	959,094	$	75,844	$	163	$	458	$	132	$	2,256,162
Home equity:
Risk rating:
Pass	$	8,703	$	521,000	$	1,678	$	29,863	$	6,084	$	2,327	$	4,891	$	53,350	$	619,192
Special mention	179		200		—		87		—		29		15		378		708
Substandard	10		75		10		—		—		—		33		—		118
Nonaccrual	1,302		160		29		495		132		144		368		7,180		8,508
Home equity	$	10,195	$	521,434	$	1,717	$	30,445	$	6,217	$	2,500	$	5,308	$	60,907	$	628,526
Other consumer:
Risk rating:
Pass	$	121	$	196,632	$	6,419	$	3,732	$	2,658	$	1,127	$	460	$	64,121	$	275,149
Special mention	26		843		9		—		3		20		—		6		881
Substandard	—		1,582		—		—		—		—		—		—		1,582
Nonaccrual	27		71		10		1		6		2		8		29		128
Other consumer	$	174	$	199,129	$	6,438	$	3,733	$	2,668	$	1,149	$	468	$	64,156	$	277,740
Total consumer:
Risk rating:
Pass	$	8,824	$	717,632	$	1,579,238	$	2,603,843	$	2,194,529	$	1,417,802	$	653,584	$	1,768,145	$	10,934,773
Special mention	205		1,043		628		1,936		208		49		110		441		4,416
Substandard	10		1,656		500		166		—		—		207		26		2,556
Nonaccrual	1,330		231		2,496		14,396		9,827		10,544		7,007		41,073		85,574
Total consumer	$	10,369	$	720,563	$	1,582,862	$	2,620,341	$	2,204,564	$	1,428,395	$	660,909	$	1,809,685	$	11,027,319
Total loans:
Risk rating:
Pass	$	10,204	$	2,604,690	$	5,206,038	$	8,093,062	$	5,886,359	$	2,511,435	$	1,537,747	$	2,556,674	$	28,396,005
Special mention	205		23,595		8,893		74,020		41,091		6,213		29,882		33,089		216,784
Substandard	814		83,872		131,753		112,289		68,695		27,253		3,387		27,183		454,432
Nonaccrual	7,744		231		17,206		28,584		43,718		11,170		7,007		41,080		148,997
Total loans	$	18,966	$	2,712,389	$	5,363,890	$	8,307,956	$	6,039,862	$	2,556,071	$	1,578,023	$	2,658,026	$	29,216,218

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

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The following table presents gross charge offs by origination year for the nine months ended September 30, 2024:


			Gross Charge Offs by Origination Year
($ in thousands)	Rev Loans Amortized Cost Basis		2024		2023		2022		2021		2020		Prior		Total
Commercial and industrial	$	3,079	$	128	$	10,595	$	8,162	$	22,929	$	3	$	—	$	44,896
Commercial real estate-owner occupied	—		—		—		—		—		—		3		3
Commercial and business lending	3,079		128		10,595		8,162		22,929		3		3		44,899
Commercial real estate-investor	—		—		1		—		4,569		—		—		4,570
Real estate construction	—		—		—		—		—		—		—		—
Commercial real estate lending	—		—		1		—		4,569		—		—		4,570
Total commercial	3,079		128		10,596		8,162		27,498		3		3		49,469
Residential mortgage	—		—		171		94		42		112		283		703
Auto finance	—		129		2,235		4,393		433		—		—		7,189
Home equity	93		—		—		9		19		10		37		168
Other consumer	4,829		20		50		63		68		41		46		5,116
Total consumer	4,922		149		2,456		4,558		562		163		366		13,176
Total gross charge offs	$	8,001	$	277	$	13,052	$	12,720	$	28,060	$	166	$	369	$	62,645

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		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. 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, 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.

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The recorded investment of consumer loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $ 24 million at September 30, 2024 and $ 16 million at December 31, 2023.

The following table presents loans by past due status at September 30, 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	$	10,242,844	$	950	$	262	$	474	$	14,369	$	10,258,899
Commercial real estate - owner occupied	1,109,355		2,209		—		—		9,285		1,120,849
Commercial and business lending	11,352,200		3,159		262		474		23,654		11,379,748
Commercial real estate - investor	5,036,091		10,746		—		4,885		18,913		5,070,635
Real estate construction	2,114,197		72		16		—		15		2,114,300
Commercial real estate lending	7,150,288		10,818		16		4,885		18,928		7,184,934
Total commercial	18,502,488		13,977		278		5,359		42,582		18,564,683
Residential mortgage	7,719,316		13,477		153		—		70,138		7,803,083
Auto finance	2,686,032		13,860		1,598		—		7,456		2,708,946
Home equity	640,002		2,507		639		—		8,231		651,379
Other consumer	258,824		1,265		898		1,748		70		262,806
Total consumer	11,304,174		31,109		3,288		1,748		85,894		11,426,214
Total loans	$	29,806,662	$	45,086	$	3,566	$	7,107	$	128,476	$	29,990,897

(a) Of the total nonaccrual loans, $ 64 million, or 50 %, were current with respect to payment at September 30, 2024.

(b) No interest income was recognized on nonaccrual loans for the three and nine months ended September 30, 2024. In addition, there were $ 16 million of nonaccrual loans for which there was no related ACLL at September 30, 2024.

The following table presents loans by past due status at December 31, 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	$	9,663,587	$	5,374	$	191	$	380	$	62,022	$	9,731,555
Commercial real estate - owner occupied	1,059,948		—		358		—		1,394		1,061,700
Commercial and business lending	10,723,536		5,374		549		380		63,416		10,793,255
Commercial real estate - investor	5,086,117		—		18,697		19,432		—		5,124,245
Real estate construction	2,271,392		—		—		—		6		2,271,398
Commercial real estate lending	7,357,509		—		18,697		19,432		6		7,395,644
Total commercial	18,081,044		5,374		19,246		19,812		63,422		18,188,898
Residential mortgage	7,780,304		13,294		152		—		71,142		7,864,891
Auto finance	2,232,906		14,712		2,674		73		5,797		2,256,162
Home equity	615,810		3,500		708		—		8,508		628,526
Other consumer	273,644		1,233		932		1,803		128		277,740
Total consumer	10,902,664		32,739		4,467		1,876		85,574		11,027,319
Total loans	$	28,983,708	$	38,113	$	23,712	$	21,689	$	148,997	$	29,216,218

(a) Of the total nonaccrual loans, $ 80 million, or 53 %, were current with respect to payment at December 31, 2023.

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

Loan Modifications

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 three and nine months ended September 30, 2024 and September 30, 2023. Each of the types of concessions granted comprised less than 1% of their respective classes of loan portfolios at September 30, 2024.


	Interest Rate Concession
	Amortized Cost
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Commercial and industrial	$	179	$	97	$	364	$	234

Auto	29		113		40		169
Home equity	—		—		—		77
Other consumer	622		568		1,425		1,243
Total loans modified	$	830	$	779	$	1,828	$	1,724

Table of Contents


	Term Extension
	Amortized Cost
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023

Residential mortgage	$	—	$	—	$	—	$	208
Home equity	—		—		—		26

Total loans modified	$	—	$	—	$	—	$	234


	Combination - Interest Rate Concession and Term Extension
	Amortized Cost
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023

Residential mortgage	$	1,215	$	315	$	1,994	$	830
Home equity	163		97		192		262

Total loans modified	$	1,379	$	412	$	2,186	$	1,092

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


	Interest Rate Concession
	Financial Effect, Weighted Average Contractual Interest Rate (Decrease) Increase (a)
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
Loan Type	2024		2023		2024		2023
Commercial and industrial	( 19 )	%	( 20 )	%	( 18 )	%	( 18 )	%
Residential mortgage	2	%	1	%	2	%	1	%
Auto	( 8 )	%	( 5 )	%	( 8 )	%	( 4 )	%
Home equity	( 3 )	%	—	%	( 3 )	%	—	%
Other consumer	( 21 )	%	( 21 )	%	( 21 )	%	( 21 )	%
Weighted average of total loans modified	( 7 )	%	( 12 )	%	( 8 )	%	( 10 )	%

(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.

Term Extension

Financial Effect, Weighted Average Term Increase (a)

Three Months Ended Sep 30,

Nine Months Ended Sep 30,

Loan Type

2024

2023

2024

2023

Residential mortgage

105 months

102 months

116 months

66 months

Home equity

64 months

55 months

64 months

93 months

Weighted average of total loans modified

100 months

92 months

111 months

72 months

(a) During the three months ended September 30, 2024 and September 30, 2023, term extensions changed the weighted average term on modified loans from 273 to 373 months and 123 to 215 months, respectively. During the nine months ended September 30, 2024 and September 30, 2023, term extensions changed the weighted average term on modified loans from 272 to 383 months and 192 to 264 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 twelve months ended September 30, 2024:


	Payment Status (Amortized Cost Basis)
($ in thousands)	Current		30-89 Days Past Due
Commercial and industrial	$	424	$	—
Residential mortgage	1,462		568
Auto	22		21
Home equity	235		33
Other consumer	1,642		—
Total loans modified	$	3,783	$	622

Table of Contents

The following table depicts the performance of loans that have been modified in the nine months ended September 30, 2023:


	Payment Status (Amortized Cost Basis)
($ in thousands)	Current		30-89 Days Past Due		90+ Days Past Due
Commercial and industrial	$	234	$	—	$	—
Residential mortgage	704		126		208
Auto	169		—		—
Home equity	280		—		85
Other consumer	1,243		—		—
Total loans modified	$	2,631	$	126	$	293

The following table provides the amortized cost of loan modifications by loan portfolio and type of concession that were modified in the previous twelve months and subsequently had a payment default during the nine months ended September 30, 2024:


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

Auto	$	8	$	—	$	—
Home equity	—		—		132
Total loans modified	$	8	$	—	$	132

The following table provides the amortized cost of loan modifications by loan portfolio and type of concession that were modified in the previous nine months and subsequently had a payment default during the nine months ended 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 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, 2024 was the Moody's baseline scenario from August 2024, which was reviewed against the September 2024 baseline scenario with no material updates made, over a two 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.

Table of Contents

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


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


Commercial and industrial	$	128,263	$	( 44,896 )	$	1,933	$	( 42,963 )	$	33,104	$	118,404
Commercial real estate — owner occupied	10,610		( 3 )		6		4		1,099		11,713
Commercial and business lending	138,873		( 44,899 )		1,939		( 42,959 )		34,202		130,116
Commercial real estate — investor	67,858		( 4,570 )		—		( 4,570 )		14,776		78,064
Real estate construction	53,554		—		60		60		8,287		61,901
Commercial real estate lending	121,412		( 4,570 )		60		( 4,509 )		23,063		139,965
Total commercial	260,285		( 49,469 )		2,000		( 47,469 )		57,265		270,081
Residential mortgage	37,808		( 703 )		192		( 510 )		( 2,366 )		34,931
Auto finance	24,961		( 7,189 )		2,335		( 4,855 )		7,914		28,020
Home equity	15,403		( 168 )		1,041		873		( 197 )		16,079
Other consumer	12,638		( 5,116 )		748		( 4,368 )		4,384		12,653
Total consumer	90,809		( 13,176 )		4,316		( 8,860 )		9,735		91,684
Total loans	$	351,094	$	( 62,645 )	$	6,316	$	( 56,329 )	$	67,000	$	361,765
Allowance for unfunded commitments


Commercial and industrial	$	13,319	$	—	$	—	$	—	$	452	$	13,771
Commercial real estate — owner occupied	149		—		—		—		( 62 )		87
Commercial and business lending	13,468		—		—		—		390		13,858
Commercial real estate — investor	480		—		—		—		199		679
Real estate construction	17,024		—		—		—		211		17,235
Commercial real estate lending	17,504		—		—		—		410		17,914
Total commercial	30,972		—		—		—		800		31,772


Home equity	2,629		—		—		—		( 81 )		2,548
Other consumer	1,174		—		—		—		282		1,456
Total consumer	3,803		—		—		—		200		4,004
Total loans	$	34,776	$	—	$	—	$	—	$	1,000	$	35,776
Allowance for credit losses on loans


Commercial and industrial	$	141,582	$	( 44,896 )	$	1,933	$	( 42,963 )	$	33,556	$	132,175	1.29	%
Commercial real estate — owner occupied	10,759		( 3 )		6		4		1,036		11,799		1.05	%
Commercial and business lending	152,341		( 44,899 )		1,939		( 42,959 )		34,592		143,974		1.27	%
Commercial real estate — investor	68,338		( 4,570 )		—		( 4,570 )		14,975		78,743		1.55	%
Real estate construction	70,578		—		60		60		8,497		79,136		3.74	%
Commercial real estate lending	138,916		( 4,570 )		60		( 4,509 )		23,472		157,879		2.20	%
Total commercial	291,257		( 49,469 )		2,000		( 47,469 )		58,065		301,853		1.63	%
Residential mortgage	37,808		( 703 )		192		( 510 )		( 2,366 )		34,931		0.45	%
Auto finance	24,961		( 7,189 )		2,335		( 4,855 )		7,914		28,020		1.03	%
Home equity	18,032		( 168 )		1,041		873		( 278 )		18,627		2.86	%
Other consumer	13,812		( 5,116 )		748		( 4,368 )		4,665		14,109		5.37	%
Total consumer	94,613		( 13,176 )		4,316		( 8,860 )		9,935		95,688		0.84	%
Total loans	$	385,870	$	( 62,645 )	$	6,316	$	( 56,329 )	$	68,000	$	397,541	1.33	%

Table of Contents

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


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


Commercial and industrial	$	119,076	$	( 45,687 )	$	3,015	$	( 42,672 )	$	51,859	$	128,263
Commercial real estate — owner occupied	9,475		( 25 )		11		( 15 )		1,150		10,610
Commercial and business lending	128,551		( 45,713 )		3,026		( 42,687 )		53,009		138,873
Commercial real estate — investor	54,398		( 252 )		3,016		2,763		10,697		67,858
Real estate construction	45,589		( 25 )		80		55		7,910		53,554
Commercial real estate lending	99,986		( 277 )		3,095		2,819		18,607		121,412
Total commercial	228,538		( 45,989 )		6,121		( 39,868 )		71,616		260,285
Residential mortgage	38,298		( 952 )		541		( 411 )		( 79 )		37,808
Auto finance	19,619		( 5,950 )		1,241		( 4,709 )		10,051		24,961
Home equity	14,875		( 424 )		1,262		837		( 310 )		15,403
Other consumer	11,390		( 5,453 )		978		( 4,475 )		5,723		12,638
Total consumer	84,182		( 12,779 )		4,021		( 8,758 )		15,384		90,809
Total loans	$	312,720	$	( 58,768 )	$	10,142	$	( 48,626 )	$	87,000	$	351,094
Allowance for unfunded commitments


Commercial and industrial	$	12,997	$	—	$	—	$	—	$	321	$	13,319
Commercial real estate — owner occupied	103		—		—		—		46		149
Commercial and business lending	13,101		—		—		—		367		13,468
Commercial real estate — investor	710		—		—		—		( 230 )		480
Real estate construction	20,583		—		—		—		( 3,558 )		17,024
Commercial real estate lending	21,292		—		—		—		( 3,788 )		17,504
Total commercial	34,393		—		—		—		( 3,421 )		30,972


Home equity	2,699		—		—		—		( 70 )		2,629
Other consumer	1,683		—		—		—		( 509 )		1,174
Total consumer	4,382		—		—		—		( 579 )		3,803
Total loans	$	38,776	$	—	$	—	$	—	$	( 4,000 )	$	34,776
Allowance for credit losses on loans


Commercial and industrial	$	132,073	$	( 45,687 )	$	3,015	$	( 42,672 )	$	52,181	$	141,582	1.45	%
Commercial real estate — owner occupied	9,579		( 25 )		11		( 15 )		1,195		10,759		1.01	%
Commercial and business lending	141,652		( 45,713 )		3,026		( 42,687 )		53,376		152,341		1.41	%
Commercial real estate — investor	55,108		( 252 )		3,016		2,763		10,467		68,338		1.33	%
Real estate construction	66,171		( 25 )		80		55		4,351		70,578		3.11	%
Commercial real estate lending	121,279		( 277 )		3,095		2,819		14,819		138,916		1.88	%
Total commercial	262,931		( 45,989 )		6,121		( 39,868 )		68,195		291,257		1.60	%
Residential mortgage	38,298		( 952 )		541		( 411 )		( 79 )		37,808		0.48	%
Auto finance	19,619		( 5,950 )		1,241		( 4,709 )		10,051		24,961		1.11	%
Home equity	17,574		( 424 )		1,262		837		( 380 )		18,032		2.87	%
Other consumer	13,073		( 5,453 )		978		( 4,475 )		5,214		13,812		4.97	%
Total consumer	88,565		( 12,779 )		4,021		( 8,758 )		14,805		94,613		0.86	%
Total loans	$	351,496	$	( 58,768 )	$	10,142	$	( 48,626 )	$	83,000	$	385,870	1.32	%

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 2024, utilizing a qualitative assessment. Based on this assessment, management concluded that it is 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 2024 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2023 or the first nine months of 2024.

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The Corporation had goodwill of $ 1.1 billion at both September 30, 2024 and December 31, 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)	Nine Months Ended Sep 30, 2024		Year Ended Dec 31, 2023
Core deposit intangibles
Gross carrying amount at the beginning of period	$	88,109	$	88,109

Accumulated amortization	( 54,246 )		( 47,638 )
Net book value	$	33,863	$	40,471
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 months ended September 30, 2024 and the year ended December 31, 2023 is as follows:


($ in thousands)	Nine Months Ended Sep 30, 2024			Year Ended Dec 31, 2023
Mortgage servicing rights
Mortgage servicing rights at beginning of period	$	84,390		$	77,351


Additions	4,458			3,564
Decay	( 5,913 )			( 7,185 )
Valuation:
Change in fair value model assumptions	—			8,881
Changes in fair value of asset	( 959 )			1,778


Mortgage servicing rights at end of period	$	81,977		$	84,390





Portfolio of residential mortgage loans serviced for others (“servicing portfolio”) (a)	$	6,302,408		$	7,364,492
Mortgage servicing rights to servicing portfolio (a)	1.30		%	1.15		%

(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, 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)	Core Deposit Intangibles		Mortgage Servicing Rights
Three months ended December 31, 2024	$	2,203	$	2,458
2025	8,811		11,983
2026	8,811		11,479
2027	8,811		10,478
2028	3,485		9,379
2029	1,681		8,224
Beyond 2029	61		27,975
Total estimated amortization expense and MSRs decay	$	33,863	$	81,977

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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)	Sep 30, 2024		Dec 31, 2023
Short-term funding
Federal funds purchased	$	306,040	$	220,160
Securities sold under agreements to repurchase	110,988		106,620
Federal funds purchased and securities sold under agreements to repurchase	417,028		326,780

BTFP funding	500,000		—
Total short-term funding	$	917,028	$	326,780
Long-term funding
Corporation senior notes, at par	$	300,000	$	—
Corporation subordinated notes, at par	550,000		550,000
Discount and capitalized costs	( 8,807 )		( 7,748 )
Subordinated debt fair value hedge (a)	2,832		( 1,366 )
Finance leases	317		383
Total long-term funding	$	844,342	$	541,269
Total short and long-term funding, excluding FHLB advances	$	1,761,370	$	868,049
FHLB advances
Short-term FHLB advances	$	705,000	$	740,000
Long-term FHLB advances	1,211,835		1,209,907
FHLB advances fair value hedge (a)	( 3,541 )		( 9,713 )
Total FHLB advances	$	1,913,294	$	1,940,194

Total short and long-term funding	$	3,674,663	$	2,808,243

(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, 2024, the Corporation had pledged securities valued at 174 % 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, 2024 and December 31, 2023 are presented in the following table:


	Overnight and Continuous
($ in thousands)	Sep 30, 2024		Dec 31, 2023
Repurchase agreements
Agency mortgage-related securities	$	110,988	$	106,620

Long-Term Funding

Senior Notes

In August 2024 , the Corporation issued $ 300 million in aggregate principal amount of 6.455 % Fixed Rate / Floating Rate Senior Notes Due August 29, 2030 . During the period from, and including, August 29, 2024, to, but excluding, August 29, 2029, the senior notes will have a fixed coupon interest rate of 6.455 % per annum, payable semi-annually in arrears. During the period from, and including, August 29, 2029 , to, but excluding, the maturity date, the senior notes will have a floating rate per annum equal to Compounded SOFR (as defined in the Global Note issued in connection with the senior notes) plus 3.030 %, payable quarterly in arrears. Prior to August 29, 2029 , the Corporation may, at its option, redeem the senior notes, in whole or in part, at any time and from time to time, by paying the aggregate principal amount of the notes to be redeemed plus a "make whole" premium plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. On August 29, 2029 ,

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the Corporation may redeem the senior notes, in whole, but not in part, by paying the aggregate principal amount of the notes to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. At any time and from time to time on or after July 30, 2030 (30 days prior to the maturity date), the Corporation may redeem the senior notes in whole or in part by paying the aggregate principal amount of the senior notes to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. There is no sinking fund for the senior notes. The senior notes were issued at a discount.

Subordinated Notes

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 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.

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.

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 enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest and currency rates as well as other economic conditions.

At inception, the Corporation designates the derivative contract as either a fair value hedge (i.e., a hedge of the fair value of a recognized asset or liability), a cash flow hedge (i.e., a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability), or a non-designated hedge. The hedge accounting methodologies applied for fair value, cash flow, and non-designated hedges are described in the Derivative and Hedging Activities note in the Corporation's 2023 Annual Report on Form 10-K.

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 $ 87 million and $ 93 million of investment securities as collateral at September 30, 2024, and December 31, 2023, respectively. Cash is often pledged as collateral for derivatives that are not centrally cleared. The Corporation's required cash collateral was $ 13 million at September 30, 2024, compared to $ 5 million at December 31, 2023. For fair value information and disclosures and for the Corporation's accounting policy for derivative and hedging activities, see the Fair Value Measurements and Summary of Significant Accounting Policies notes in the Corporation's 2023 Annual Report on Form 10-K.

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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, 2024 and December 31, 2023:


	Sep 30, 2024								Dec 31, 2023
	Asset				Liability				Asset				Liability
($ in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Designated as hedging instruments:
Interest rate-related instruments (a)	$	3,100,000	$	20,010	$	200,000	$	91	$	2,300,000	$	8,075	$	550,000	$	930
Foreign currency exchange forwards	277,977		275		104,064		689		231,566		632		189,212		2,946
Total designated as hedging instruments	20,285				780				8,707				3,876
Not designated as hedging instruments:
Interest rate-related and other instruments	3,862,763		95,396		6,526,977		142,560		3,603,513		111,623		6,528,471		195,662
Foreign currency exchange forwards	108,995		4,865		112,825		4,579		87,526		2,954		135,654		2,746

Mortgage banking (b)	59,674		822		121,000		485		29,490		439		51,500		673
Total not designated as hedging instruments	101,082				147,624				115,016				199,082
Gross derivatives before netting			121,367				148,404				123,723				202,958
Less: Legally enforceable master netting agreements	19,037				19,037				18,234				18,234
Less: Cash collateral pledged/received	8,572				8,631				35,855				—
Total derivative instruments, after netting	$	93,758			$	120,736			$	69,634			$	184,724

(a) The notional amounts of the interest rate-related instruments designated as hedging instruments include forward starting interest rate swaps with an effective date ranging from December 1, 2024 to March 1, 2025, where the asset notional amount and fair value on such swaps were $ 450 million and $ 7 million, respectively.
(b) 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.

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)
($ in thousands)	Sep 30, 2024				Dec 31, 2023
Other long-term funding	$	( 552,832 )	$	( 2,832 )	$	( 548,634 )	$	1,366
FHLB advances	( 596,459 )		3,541		( 590,287 )		9,713
Total	$	( 1,149,290 )	$	710	$	( 1,138,921 )	$	11,079

(a) Excludes hedged items where only foreign currency risk is the designated hedged risk. At September 30, 2024 and December 31, 2023, the carrying amount excluded for foreign currency denominated loans was $ 382 million and $ 421 million, respectively.

The Corporation terminated its $ 500 million fair value hedge during the fourth quarter of 2019. At September 30, 2024, the amortized cost basis of the closed portfolios which had previously been used in the terminated hedging relationship was $ 245 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.

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, 2024 and 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,
	2024				2023				2024				2023
($ 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)	$	( 4,736 )	$	5,318	$	( 4,589 )	$	5,195	$	( 14,404 )	$	16,007	$	( 9,286 )	$	12,039
The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20
Interest contracts:
Hedged items	( 31 )		20,148		( 74 )		( 9,001 )		( 107 )		10,369		( 189 )		( 18,652 )
Derivatives designated as hedging instruments (a)	( 4,705 )		( 14,830 )		( 4,516 )		14,196		( 14,297 )		5,638		( 9,097 )		30,691

(a) Includes net settlements on the derivatives.

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	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,
	2024		2023		2024		2023
($ in thousands)	Capital Markets, Net		Capital Markets, Net		Capital Markets, Net		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	$	—	$	—	$	—	$	—
The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20
Foreign currency contracts:
Hedged items	5,370		( 11,575 )		( 7,969 )		( 2,186 )
Derivatives designated as hedging instruments	( 5,370 )		11,575		7,969		2,186

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, 2024 and 2023:


	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Interest rate-related instruments designated as cash flow hedging instruments
Amount of income (loss) recognized in OCI on cash flow hedge derivative (a)	$	25,609	$	( 13,592 )	$	( 639 )	$	( 33,976 )


Amount of loss reclassified from accumulated other comprehensive income (loss) into interest income (a)	4,705		4,516		14,297		9,097

(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 $ 6 million will be reclassified as an increase 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, 2024. The maximum length of time over which the Corporation is hedging its exposure to the variability in future cash flows is 32 months as of September 30, 2024.

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, 2024 and 2023:


	Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)		2024		2023		2024		2023
Derivative instruments
Interest rate-related and other instruments — customer and mirror, net	Capital markets, net	$	( 215 )	$	222	$	( 273 )	$	359
Interest rate-related instruments — MSRs hedge	Mortgage banking, net	3,363		( 5,877 )		( 948 )		( 5,551 )
Foreign currency exchange forwards	Capital markets, net	1,130		365		1,736		1,751

Interest rate lock commitments (mortgage)	Mortgage banking, net	55		( 24 )		383		321
Forward commitments (mortgage)	Mortgage banking, net	( 390 )		470		188		853

Note 10 Balance Sheet Offsetting

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

The Corporation is permitted to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net basis on the consolidated balance sheets when a legally enforceable master netting agreement exists. The Corporation has elected to net such balances where it has determined that the specified conditions are met.

The Corporation uses master netting agreements to mitigate counterparty credit risk in these transactions, including derivative contracts. A master netting agreement is a single agreement with a counterparty that permits multiple transactions governed by that agreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default (e.g., bankruptcy, failure to make a required payment or securities transfer or deliver collateral or margin when due).

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Typical master netting agreements for these types of transactions also contain a collateral/margin agreement that provides for a security interest in, or title transfer of, securities or cash collateral/margin to the party that has the right to demand margin (the “demanding party”). The collateral/margin agreement typically requires a party to transfer collateral/margin to the demanding party with a value equal to the amount of the margin deficit on a net basis across all transactions governed by the master netting agreement, less any threshold. The collateral/margin agreement grants to the demanding party, upon default by the counterparty, the right to set-off any amounts payable by the counterparty against any posted collateral or the cash equivalent of any posted collateral/margin. It also grants to the demanding party the right to liquidate collateral/margin and to apply the proceeds to an amount payable by the counterparty.

For additional information on the Corporation’s derivative and hedging activities, see the Derivative and Hedging Activities note in the Corporation's 2023 Annual Report on Form 10-K.

The following table presents the interest rate and foreign exchange assets and liabilities subject to an enforceable master netting arrangement as of September 30, 2024 and December 31, 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
($ in thousands)			Derivative Liabilities Offset		Cash Collateral Received				Security Collateral Received		Net Amount
Derivative assets
September 30, 2024	$	63,863	$	( 19,037 )	$	( 8,572 )	$	36,254	$	( 36,254 )	$	—
December 31, 2023	87,075		( 18,234 )		( 35,855 )		32,985		( 32,985 )		—


	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)			Derivative Assets Offset		Cash Collateral Pledged				Security Collateral Pledged		Net Amount
Derivative liabilities
September 30, 2024	$	32,396	$	( 19,037 )	$	( 8,631 )	$	4,727	$	—	$	4,727
December 31, 2023	18,767		( 18,234 )		—		533		—		533

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, 2024		Dec 31, 2023
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale (a)(b)	$	10,462,066	$	11,170,147
Commercial letters of credit (a)	1,069		3,697
Standby letters of credit (c)	234,850		212,029

(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, 2024 or December 31, 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 $ 2 million at both September 30, 2024 and December 31, 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

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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 Sep 30, 2024		Year Ended Dec 31, 2023
Allowance for unfunded commitments
Balance at beginning of period	$	34,776	$	38,776


Provision for unfunded commitments	1,000		( 4,000 )

Balance at end of period	$	35,776	$	34,776

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, 2024 was $ 213 million, compared to $ 219 million at December 31, 2023, included in tax credit and other investments on the consolidated balance sheets.

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 for both the nine months ended September 30, 2024 and September 30, 2023, and $ 9 million for both the three months ended September 30, 2024 and September 30, 2023. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled $ 211 million at September 30, 2024 and $ 215 million at December 31, 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 $ 44 million at September 30, 2024 and $ 27 million at December 31, 2023. Additionally, at September 30, 2024, the Corporation also invests in a private SBA loan fund, recorded in equity securities on the consolidated balance sheets, which has a remaining unfunded equity contribution of $ 3 million.

For the nine months ended September 30, 2024 and the year ended December 31, 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 $ 52 million at September 30, 2024 and $ 40 million at December 31, 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

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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.

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 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.

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 $ 3 million and $ 5 million for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. There were no loss reimbursement and settlement claims paid in the nine months ended September 30, 2024 or for the year ended December 31, 2023. Make whole requests since January 1, 2023 generally arose from loans originated since January 1, 2021

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with such balances totaling $ 4.2 billion at the time of sale, consisting primarily of loans sold to GSEs. As of September 30, 2024, $ 3.5 billion of those loans originated since January 1, 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 $ 775 ,000 at September 30, 2024 and approximately $ 835 ,000 at December 31, 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, 2024 and December 31, 2023, there were $ 14 million and $ 15 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. At September 30, 2024 and December 31, 2023, there were $ 99 million and $ 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 2023 Annual Report on Form 10-K.

The tables below 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, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall:

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	Sep 30, 2024
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and due from banks	$	554,631	$	554,631	$	554,631	$	—	$	—
Interest-bearing deposits in other financial institutions	408,101		408,101		408,101		—		—
Federal funds sold and securities purchased under agreements to resell	4,310		4,310		4,310		—		—
AFS investment securities:
U.S. Treasury securities	36,948		36,948		36,948		—		—

Obligations of state and political subdivisions (municipal securities)	81,089		81,089		—		81,089		—
Residential mortgage-related securities:
FNMA / FHLMC	1,085,414		1,085,414		—		1,085,414		—
GNMA	2,663,560		2,663,560		—		2,663,560		—

Commercial mortgage-related securities:
FNMA / FHLMC	18,035		18,035		—		18,035		—
GNMA	151,617		151,617		—		151,617		—
Asset backed securities:
FFELP	112,350		112,350		—		112,350		—
SBA	516		516		—		516		—
Other debt securities	2,997		2,997		—		2,997		—
Total AFS investment securities	4,152,527		4,152,527		36,948		4,115,578		—

HTM investment securities:
U.S. Treasury securities	1,000		990		990		—		—
Obligations of state and political subdivisions (municipal securities), net	1,664,665		1,540,273		—		1,540,273		—
Residential mortgage-related securities:
FNMA / FHLMC	900,743		778,883		—		778,883		—
GNMA	45,180		42,979		—		42,979		—
Private-label	329,349		282,103		—		282,103		—
Commercial mortgage-related securities:
FNMA / FHLMC	775,209		659,852		—		659,852		—
GNMA	53,005		47,620		—		47,620		—
Total HTM investment securities, net	3,769,150		3,352,700		990		3,351,710		—

Equity securities:
Equity securities	10,658		10,658		10,587		—		71
Equity securities at NAV	12,500		12,500
Total equity securities	23,158		23,158

FHLB and Federal Reserve Bank stocks	178,168		178,168		—		178,168		—
Residential loans held for sale	67,219		67,219		—		67,219		—
Commercial loans held for sale	11,833		11,833		—		11,833		—
Loans, net	29,594,691		28,606,404		—		—		28,606,404
Bank and corporate owned life insurance	686,704		686,704		—		686,704		—
Mortgage servicing rights, net	81,977		81,977		—		—		81,977
Interest rate-related instruments designated as hedging instruments (a)	20,010		20,010		—		20,010		—
Foreign currency exchange forwards designated as hedging instruments (a)	275		275		—		275		—
Interest rate-related and other instruments not designated as hedging instruments (a)	95,396		95,396		—		95,396		—
Foreign currency exchange forwards not designated as hedging instruments (a)	4,865		4,865		—		4,865		—
Interest rate lock commitments to originate residential mortgage loans held for sale	822		822		—		—		822

Total selected assets at fair value	$	39,653,836	$	38,249,099	$	1,015,567	$	8,531,759	$	28,689,273

(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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	Sep 30, 2024
($ in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Liabilities
Deposits:
Noninterest-bearing demand	$	5,857,421	$	5,857,421	$	—	$	—	$	5,857,421
Savings	5,072,508		5,072,508		—		—		5,072,508
Interest-bearing demand	8,605,578		8,605,578		—		—		8,605,578
Money market	6,095,206		6,095,206		—		—		6,095,206
Brokered CDs (a)	4,242,670		4,242,670		—		4,242,670		—
Other time deposits (a)	3,680,914		3,680,914		—		3,680,914		—
Total deposits	33,554,298		33,554,298		—		7,923,584		25,630,714
Short-term funding:
Federal funds purchased and securities sold under agreements to repurchase	417,028		417,001		—		417,001		—
BTFP funding	500,000		499,960		—		499,960		—
Total short-term funding	917,028		916,961		—		916,961		—

FHLB advances	1,913,294		1,916,520		—		1,916,520		—
Other long-term funding	844,342		843,366		—		843,366		—
Standby letters of credit (b)	2,386		2,386		—		2,386		—
Interest rate-related instruments designated as hedging instruments (c)	91		91		—		91		—
Foreign currency exchange forwards designated as hedging instruments (c)	689		689		—		689		—
Interest rate-related and other instruments not designated as hedging instruments (c)	142,560		142,560		—		142,560		—
Foreign currency exchange forwards not designated as hedging instruments (c)	4,579		4,579		—		4,579		—

Forward commitments to sell residential mortgage loans	485		485		—		—		485
Total selected liabilities at fair value	$	37,379,751	$	37,381,935	$	—	$	11,750,736	$	25,631,199

(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 $ 235 million at September 30, 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

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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 months ended September 30, 2024 and the year ended December 31, 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, 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	$	9,522	$	( 2,824 )	$	12,346
Closed loans / settlements	( 7,494 )		292		( 7,785 )
Other	( 1,646 )		2,344		( 3,990 )
Change in mortgage derivative	383		( 188 )		571

Balance September 30, 2024	$	822	$	485	$	337

The following table presents a rollforward of the fair value of Level 3 equity securities, for the nine months ended September 30, 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:


($ in thousands)
Fair value as of December 31, 2022	$	19,225
Gains recognized in investment securities gains, net	5,861

Purchases	11
Sales	( 329 )

Fair value as of December 31, 2023	$	24,769

Gains recognized in investment securities gains, net	$	4,054
Purchases	21
Sales	( 28,772 )

Fair value as of September 30, 2024	$	71

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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)

Sep 30, 2024

Assets

Individually evaluated loans

Level 3

34,440

Provision for credit losses

11,686

OREO (b)

Level 2

188

Other noninterest expense / provision for credit losses (c)

267

Dec 31, 2023

Assets

Individually evaluated loans

Level 3

47,221

Provision for credit losses

45,709

OREO (b)

Level 2

3,139

Other noninterest expense / provision for credit losses (c)

2,532

Equity securities without readily determinable fair values

Level 3

24,671

Investment securities gains (losses), net

5,785

(a) Includes the 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.

The table below presents the unobservable inputs that are readily quantifiable pertaining to Level 3 measurements:


Sep 30, 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	1 %	-	100 %	6 %
Individually evaluated loans	Appraisals / discounted cash flow	Collateral / discount factor	6 %	-	73 %	57 %
Interest rate lock commitments to originate residential mortgage loans held for sale	Discounted cash flow	Closing ratio	46 %	-	100 %	90 %

Note 13 Retirement Plans

The Corporation has a noncontributory defined benefit RAP, covering substantially all employees who meet 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. Retirement plans of acquired entities are typically merged into the RAP depending on the terms of the merger agreement, and, as applicable, credit is usually applied to employees for years of service at the acquired institution for vesting and eligibility purposes.

The Corporation also provides 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.

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, 2024 and 2023 were as follows:


	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
RAP
Service cost	$	508	$	800	$	2,263	$	2,392
Interest cost	2,943		2,794		8,380		8,165
Expected return on plan assets	( 8,649 )		( 8,243 )		( 25,949 )		( 24,647 )
Amortization of prior service cost	( 54 )		( 63 )		( 161 )		( 188 )
Amortization of actuarial loss	—		—		—		37
Total net periodic pension cost	$	( 5,252 )	$	( 4,713 )	$	( 15,467 )	$	( 14,241 )







Postretirement Plan
Interest cost	$	18	$	20	$	54	$	59
Amortization of prior service cost	( 19 )		( 19 )		( 56 )		( 56 )
Amortization of actuarial (gain)	( 7 )		( 7 )		( 21 )		( 22 )
Total net periodic benefit cost	$	( 8 )	$	( 6 )	$	( 23 )	$	( 19 )

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.

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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 2023 or the nine months ended September 30, 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 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 2023 Annual Report on Form 10-K. The net effect of the credit provision is recorded in Risk Management and Shared Services. Indirect 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 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).

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Information about the Corporation’s segments is presented below:


	Corporate and Commercial Specialty
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Net interest income	$	254,935	$	250,365	$	749,062	$	710,031
Net intersegment interest (expense)	( 98,898 )		( 106,675 )		( 291,872 )		( 288,366 )
Segment net interest income	156,037		143,690		457,190		421,665
Noninterest income	37,017		34,086		106,570		99,254
Total revenue	193,054		177,776		563,761		520,919
Provision for credit losses	17,009		14,066		48,930		41,523
Noninterest expense	65,415		63,265		197,159		186,521
Income before income taxes	110,630		100,445		317,672		292,876
Income tax expense	20,999		19,293		59,845		54,104
Net income	$	89,630	$	81,152	$	257,827	$	238,772






Allocated goodwill					$	525,836	$	525,836


	Community, Consumer, and Business
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Net interest income	$	56,574	$	67,139	$	172,575	$	219,883
Net intersegment interest income	135,862		123,900		401,353		317,820
Segment net interest income	192,436		191,039		573,928		537,703
Noninterest income	26,009		29,670		75,921		85,870
Total revenue	218,445		220,709		649,848		623,573
Provision for credit losses	5,195		7,381		17,611		21,467
Noninterest expense	115,656		108,127		333,711		328,790
Income before income taxes	97,594		105,202		298,526		273,316
Income tax expense	20,495		22,092		62,691		57,396
Net income	$	77,099	$	83,109	$	235,835	$	215,920






Allocated goodwill					$	579,156	$	579,156


	Risk Management and Shared Services
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Net interest (loss)	$	( 49,001 )	$	( 63,260 )	$	( 144,677 )	$	( 143,743 )
Net intersegment interest (expense)	( 36,964 )		( 17,225 )		( 109,481 )		( 29,454 )
Segment net interest (loss)	( 85,964 )		( 80,485 )		( 254,158 )		( 173,197 )
Noninterest income	4,196		2,823		14,874		9,071
Total revenue	( 81,768 )		( 77,663 )		( 239,284 )		( 164,126 )
Provision for credit losses	( 1,213 )		496		1,459		( 975 )
Noninterest expense	19,526		24,814		63,245		58,980
(Loss) before income taxes	( 100,081 )		( 102,972 )		( 303,988 )		( 222,131 )
Income tax (benefit)	( 21,370 )		( 21,959 )		( 95,085 )		( 41,202 )
Net (loss)	$	( 78,711 )	$	( 81,013 )	$	( 208,902 )	$	( 180,929 )






Allocated goodwill					$	—	$	—

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	Consolidated Total
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Net interest income	$	262,509	$	254,244	$	776,960	$	786,171
Net intersegment interest income	—		—		—		—
Segment net interest income	262,509		254,244		776,960		786,171
Noninterest income	67,221		66,579		197,365		194,195
Total revenue	329,730		320,823		974,325		980,366
Provision for credit losses	20,991		21,943		68,000		62,014
Noninterest expense	200,597		196,205		594,115		574,291
Income before income taxes	108,142		102,674		312,211		344,061
Income tax expense	20,124		19,426		27,451		70,299
Net income	$	88,018	$	83,248	$	284,760	$	273,762






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

Note 15 Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of accumulated other comprehensive income (loss) at September 30, 2024 and 2023, 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, 2023	$	( 148,641 )	$	3,080	$	( 25,535 )	$	( 171,096 )
Other comprehensive income before reclassifications	49,844		—		—		49,844

Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities losses, net	197		—		—		197
HTM investment securities, net, at amortized cost (a)	6,329		—		—		6,329
Other assets / accrued expenses and other liabilities	—		( 639 )		—		( 639 )
Interest income	—		14,297		—		14,297
Personnel expense	—		—		( 217 )		( 217 )
Other expense	—		—		( 21 )		( 21 )
Income tax (expense) benefit	( 14,060 )		5,213		( 1,594 )		( 10,440 )
Net other comprehensive income (loss) during period	42,309		18,871		( 1,832 )		59,348
Balance September 30, 2024	$	( 106,332 )	$	21,951	$	( 27,367 )	$	( 111,748 )

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 (a)	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 )

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

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($ in thousands)	AFS Investment Securities		Cash Flow Hedge Derivatives		Defined Benefit Pension and Postretirement Obligations		Accumulated Other Comprehensive Income (Loss)
Balance June 30, 2024	$	( 176,139 )	$	( 15,768 )	$	( 27,307 )	$	( 219,214 )
Other comprehensive income before reclassifications	90,858		—		—		90,858

Amounts reclassified from accumulated other comprehensive income (loss):

HTM investment securities, net, at amortized cost (a)	2,147		—		—		2,147
Other assets / accrued expenses and other liabilities	—		25,609		—		25,609
Interest income	—		4,705		—		4,705
Personnel expense	—		—		( 73 )		( 73 )
Other expense	—		—		( 7 )		( 7 )
Income tax (expense) benefit	( 23,198 )		7,405		20		( 15,773 )
Net other comprehensive income (loss) during period	69,807		37,718		( 60 )		107,466
Balance September 30, 2024	$	( 106,332 )	$	21,951	$	( 27,367 )	$	( 111,748 )

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 (a)	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 )

(a) Amortization of 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 38 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 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,
($ in thousands)	2024		2023		2024		2023
Operating lease costs	$	1,631	$	1,594	$	4,727	$	4,536
Finance lease costs	23		23		68		69
Operating lease cash flows	1,795		1,917		5,027		5,442
Finance lease cash flows	23		23		69		69

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, 2024		Dec 31, 2023
Operating lease right-of-use asset	Premises and equipment	$	28,425	$	24,712
Finance lease right-of-use asset	Other assets	303		368
Operating lease liability	Accrued expenses and other liabilities	30,723		27,311
Finance lease liability	Other long-term funding	317		383

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


	Sep 30, 2024					Dec 31, 2023
($ 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
Retail and corporate offices	$	31,317	6.51	3.65	%	$	25,729	5.76	3.12	%
Land	3,435		6.69	3.51	%	4,050		6.98	3.48	%
Equipment	204		1.75	4.62	%	408		2.50	4.62	%
Total operating leases	$	34,955	6.50	3.64	%	$	30,187	5.88	3.19	%
Finance leases
Retail and corporate offices	$	324	3.50	1.32	%	$	394	4.25	1.32	%

Total finance leases	$	324	3.50	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)	Operating Leases		Finance Leases		Total Leases
Three months ended December 31, 2024	$	1,590	$	23	$	1,613
2025	6,550		93		6,643
2026	6,062		93		6,155
2027	5,401		93		5,493
2028	4,727		23		4,750
Beyond 2028	10,625		—		10,625
Total lease payments	$	34,955	$	324	$	35,279
Less: interest	4,232		7		4,239
Present value of lease payments	$	30,723	$	317	$	31,040

As of September 30, 2024 and December 31, 2023, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $ 6 million and $ 3 million, respectively. The leases that had not yet commenced as of September 30, 2024 will commence between October 2024 and April 2025 with lease terms of 1 year to 7 years. Rental income generated by the Corporation's leases is included within occupancy expense on the consolidated statements of income.

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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, 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.

Performance Summary

• Average loans of $29.5 billion increased $135 million from the first nine months of 2023, driven primarily by increases in auto finance and commercial lending, partially offset by a decrease in residential mortgage lending resulting from the Corporation's balance sheet repositioning.

• Average deposits of $33.1 billion increased $2.0 billion, or 6%, from the first nine months of 2023, driven primarily by increases in time deposits, interest-bearing demand deposits, savings deposits, and network transaction deposits, partially offset by decreases in noninterest-bearing demand deposits and money market deposits.

• Net interest income of $777 million decreased $9 million, or 1%, from the first nine months of 2023, and net interest margin was 2.77%, compared to 2.86% for the first nine months of 2023. The decreases in net interest income and net interest margin were driven by the growth of interest bearing liabilities outpacing the growth of earning assets, paired with a smaller rate spread.

• Provision for credit losses was $68 million, compared to a provision of $62 million for the first nine months of 2023, driven by nominal credit movement coupled with general macroeconomic trends.

• Noninterest income of $197 million increased $3 million, or 2%, from the first nine months of 2023, driven by higher wealth management fees, an increase in bank and corporate owned life insurance, and an increase in investment securities gains (losses), net, the latter resulting from the sale of the Corporation's remaining Visa B shares in the first quarter of 2024. These increases were partially offset by a decrease in mortgage banking, net, as a result of net valuation adjustments of the MSRs asset.

• Noninterest expense of $594 million increased $20 million, or 3%, from the first nine months of 2023, primarily driven by increases in personnel, technology, and FDIC assessment expense, the latter due to the special assessment, partially offset by decreases in other expense and occupancy expense.

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Table 1 Summary Results of Operations: Trends


	Nine months ended						Three months ended
($ in thousands, except per share data)	Sep 30, 2024			Sep 30, 2023			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023		Sep 30, 2023
Net income (loss)	$	284,760		$	273,762		$	88,018		$	115,573		$	81,169		$	(90,806)	$	83,248
Net income (loss) available to common equity	276,135			265,137			85,143			112,698			78,294			(93,681)		80,373
Earnings (loss) per common share - basic	1.83			1.76			0.56			0.75			0.52			(0.63)		0.53
Earnings (loss) per common share - diluted	1.82			1.75			0.56			0.74			0.52			(0.62)		0.53
Effective tax rate	8.79		%	20.43		%	18.61		%	(12.33)		%	19.78		%	N/M		18.92		%

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Income Statement Analysis

Net Interest Income

Table 2 Net Interest Income Analysis


	Nine Months Ended Sep 30,
	2024					2023
($ 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	$	10,933,098	$	592,609	7.24%	$	10,835,003	$	546,210	6.74%
Commercial real estate lending	7,291,541		409,752		7.51%	7,286,627		381,425		7.00%
Total commercial	18,224,639		1,002,361		7.35%	18,121,629		927,634		6.84%
Residential mortgage	7,939,493		208,291		3.50%	8,698,542		217,410		3.33%
Auto finance	2,511,694		105,528		5.61%	1,677,838		60,233		4.80%
Other retail	852,121		62,345		9.76%	895,371		59,163		8.82%
Total loans	29,527,946		1,378,524		6.23%	29,393,380		1,264,441		5.75%
Investment securities
Taxable	5,671,823		148,672		3.50%	5,209,845		104,197		2.67%
Tax-exempt (a)	2,120,107		53,806		3.38%	2,314,838		60,429		3.48%
Other short-term investments	609,143		26,574		5.83%	495,883		17,990		4.85%
Investments and other	8,401,073		229,051		3.64%	8,020,566		182,616		3.03%
Total earning assets	37,929,019		$	1,607,575	5.66%	37,413,946		$	1,447,057	5.17%
Other assets, net	3,157,137					3,005,220
Total assets	$	41,086,156				$	40,419,166
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	5,062,518	$	65,330	1.72%	$	4,743,526	$	43,611	1.23%
Interest-bearing demand	7,383,471		147,838		2.67%	6,819,714		106,860		2.09%
Money market	6,017,642		139,987		3.11%	6,853,545		130,201		2.54%
Network transaction deposits	1,630,568		65,697		5.38%	1,420,042		53,259		5.01%
Time deposits	7,230,691		260,063		4.80%	4,447,813		130,818		3.93%
Total interest-bearing deposits	27,324,889		678,916		3.32%	24,284,640		464,749		2.56%
Federal funds purchased and securities sold under agreements to repurchase	259,209		8,551		4.41%	344,950		8,504		3.30%
Other short-term funding	508,913		19,285		5.06%	11,475		1		0.01%
FHLB advances	1,907,104		80,612		5.65%	3,834,247		147,365		5.14%
Long-term funding	573,676		32,012		7.44%	495,434		25,895		6.97%
Total short and long-term funding	3,248,902		140,461		5.77%	4,686,106		181,765		5.18%
Total interest-bearing liabilities	30,573,791		$	819,377	3.58%	28,970,746		$	646,514	2.98%
Noninterest-bearing demand deposits	5,748,446					6,772,521
Other liabilities	537,432					567,938
Stockholders’ equity	4,226,487					4,107,961
Total liabilities and stockholders’ equity	$	41,086,156				$	40,419,166
Interest rate spread					2.08%					2.19%
Net free funds					0.69%					0.67%
Fully tax-equivalent net interest income and net interest margin			$	788,199	2.77%			$	800,543	2.86%
Fully tax-equivalent adjustment			11,239					14,372
Net interest income			$	776,960				$	786,171

(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.

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Table 2 Net Interest Income Analysis


	Three Months Ended,
	Sep 30, 2024					Jun 30, 2024					Sep 30, 2023
($ 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
Earning assets
Loans (a)(b)(c)
Commercial and business lending	$	10,971,390	$	200,327	7.27%	$	11,011,228	$	198,191	7.24%	$	10,985,584	$	194,956	7.04%
Commercial real estate lending	7,235,505		136,699		7.52%	7,249,773		134,203		7.45%	7,312,645		134,370		7.29%
Total commercial	18,206,896		337,027		7.36%	18,261,000		332,394		7.32%	18,298,229		329,326		7.14%
Residential mortgage	7,888,290		70,171		3.56%	7,905,236		69,389		3.51%	8,807,157		74,643		3.39%
Auto finance	2,635,890		37,904		5.72%	2,524,107		35,021		5.58%	1,884,540		24,074		5.07%
Other retail	903,011		21,124		9.34%	889,220		20,504		9.24%	894,685		20,534		9.15%
Total loans	29,634,087		466,226		6.27%	29,579,564		457,307		6.21%	29,884,611		448,577		5.96%
Investment securities
Taxable	5,816,102		51,466		3.54%	5,680,757		50,479		3.55%	5,407,299		38,210		2.83%
Tax-exempt (a)	2,110,896		17,885		3.39%	2,116,174		17,896		3.38%	2,300,488		20,085		3.49%
Other short-term investments	629,431		8,959		5.66%	620,943		9,304		6.03%	483,211		6,575		5.40%
Investments and other	8,556,429		78,310		3.66%	8,417,874		77,680		3.69%	8,190,998		64,870		3.16%
Total earning assets	38,190,516		$	544,535	5.68%	37,997,438		$	534,987	5.65%	38,075,608		$	513,447	5.36%
Other assets, net	3,199,195					3,103,168					3,000,371
Total assets	$	41,389,711				$	41,100,606				$	41,075,980
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	5,125,147	$	21,611	1.68%	$	5,133,688	$	21,972	1.72%	$	4,814,499	$	18,592	1.53%
Interest-bearing demand	7,394,550		49,740		2.68%	7,265,621		48,109		2.66%	6,979,071		41,980		2.39%
Money market	5,942,147		46,290		3.10%	5,995,005		46,391		3.11%	6,294,083		45,034		2.84%
Network transaction deposits	1,644,305		22,077		5.34%	1,595,312		21,416		5.40%	1,639,619		22,008		5.33%
Time deposits	7,562,448		91,907		4.83%	6,927,663		83,173		4.83%	5,955,741		65,517		4.36%
Total interest-bearing deposits	27,668,597		231,623		3.33%	26,917,289		221,062		3.30%	25,683,013		193,131		2.98%
Federal funds purchased and securities sold under agreements to repurchase	299,286		3,385		4.50%	213,921		2,303		4.33%	320,518		3,100		3.84%
Other short-term funding	519,421		6,638		5.08%	561,596		7,044		5.04%	5,041		—		0.01%
FHLB advances	1,750,590		24,799		5.64%	2,432,195		34,143		5.65%	3,460,827		48,143		5.52%
Long-term funding	647,440		11,858		7.33%	533,670		10,096		7.57%	533,744		10,019		7.51%
Total short and long-term funding	3,216,737		46,680		5.78%	3,741,381		53,586		5.75%	4,320,130		61,263		5.63%
Total interest-bearing liabilities	30,885,334		$	278,304	3.59%	30,658,670		$	274,648	3.60%	30,003,143		$	254,394	3.36%
Noninterest-bearing demand deposits	5,652,228					5,712,115					6,318,781
Other liabilities	521,423					563,616					622,004
Stockholders’ equity	4,330,727					4,166,204					4,132,052
Total liabilities and stockholders’ equity	$	41,389,711				$	41,100,606				$	41,075,980
Interest rate spread					2.10%					2.05%					2.00%
Net free funds					0.69%					0.70%					0.71%
Fully tax-equivalent net interest income and net interest margin			$	266,232	2.78%			$	260,340	2.75%			$	259,053	2.71%
Fully tax-equivalent adjustment			3,723					3,747					4,810
Net interest income			$	262,509				$	256,593				$	254,244

(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.

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Notable Contributions to the Change in Net Interest Income

• Fully tax-equivalent net interest income and net interest income were $12 million, or 2%, and $9 million, or 1%, lower than the first nine months of 2023, respectively. The elevated interest rate environment has resulted in the yield on earning assets increasing by 49 bp and the cost of interest-bearing liabilities increasing 60 bp from the first nine 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 $135 million from the first nine months of 2023, and average investments and other short-term investments increased $381 million, or 5%, from the first nine months of 2023.

• Average interest-bearing liabilities increased $1.6 billion, or 6%, compared to the first nine months of 2023. Average interest-bearing deposits increased $3.0 billion, or 13%, from the first nine months of 2023, primarily driven by increases in time deposits, interest-bearing demand deposits, savings deposits, and network transaction deposits, partially offset by a decrease in money market deposits. Average total short and long-term funding decreased $1.4 billion, or 31%, from the first nine months of 2023, primarily driven by a decrease in FHLB advances of $1.9 billion, or 50%, partially offset by an increase in other short-term funding related to the utilization of the BTFP. Average noninterest-bearing demand deposits decreased $1.0 billion, or 15%, versus the first nine months of 2023.

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, 2024 was the Moody's baseline scenario from August 2024, which was reviewed against the September 2024 baseline scenario with no material updates made, over a two 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
($ in thousands, except as noted)	Sep 30, 2024		Sep 30, 2023		YTD % Change		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2024		Sep 30, 2023
Wealth management fees	$	68,466	$	61,499	11	%	$	24,144	$	22,628	$	21,694	$	21,003	$	20,828	7	%	16	%
Service charges and deposit account fees	38,410		38,230		—	%	13,708		12,263		12,439		10,815		12,864		12	%	7	%
Card-based fees	34,973		33,492		4	%	11,731		11,975		11,267		11,528		11,510		(2)	%	2	%
Other fee-based revenue	14,316		13,249		8	%	5,057		4,857		4,402		4,019		4,509		4	%	12	%
Total fee-based revenue	156,165		146,470		7	%	54,640		51,723		49,802		47,365		49,710		6	%	10	%
Capital markets, net	13,052		15,544		(16)	%	4,317		4,685		4,050		9,106		5,368		(8)	%	(20)	%





Mortgage banking, net	7,299		17,814		(59)	%	2,132		2,505		2,662		1,615		6,501		(15)	%	(67)	%
Loss on mortgage portfolio sale	—		—		N/M		—		—		—		(136,239)		—		N/M		N/M
Bank and corporate owned life insurance	11,156		6,882		62	%	4,001		4,584		2,570		3,383		2,047		(13)	%	95	%

Other	7,054		6,841		3	%	2,504		2,222		2,327		2,850		2,339		13	%	7	%
Subtotal	194,726		193,551		1	%	67,595		65,719		61,411		(71,919)		65,965		3	%	2	%
Asset (losses) gains, net	(1,407)		590		N/M		(474)		(627)		(306)		(136)		625		(24)	%	N/M
Investment securities gains (losses), net	4,047		55		N/M		100		67		3,879		(58,958)		(11)		48	%	N/M

Total noninterest income (loss)	$	197,365	$	194,195	2	%	$	67,221	$	65,159	$	64,985	$	(131,013)	$	66,579	3	%	1	%
Mortgage loans originated for sale during period	$	450,532	$	283,469	59	%	$	176,174	$	168,964	$	105,394	$	112,365	$	115,075	4	%	53	%
Mortgage loan settlements during period	415,840		254,619		63	%	187,108		137,706		91,026		957,450		103,452		36	%	81	%

Assets under management, at market value (a)							15,033		14,304		14,171		13,545		12,543		5	%	20	%

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

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Notable Contributions to the Change in Noninterest Income

• Wealth management fees increased $7 million from the first nine months of 2023, mainly driven by increased assets under management.

• Mortgage banking, net, decreased $11 million from the first nine months of 2023, mainly driven by net valuation adjustments of the MSRs asset.

• Bank and corporate owned life insurance increased $4 million from the first nine months of 2023, driven by net favorable valuation changes on policies and an increased number of claims.

• Investment securities gains (losses), net, increased $4 million from the first nine 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
($ in thousands)	Sep 30, 2024		Sep 30, 2023		YTD % Change		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2024		Sep 30, 2023
Personnel	$	362,012	$	347,669	4	%	$	121,036	$	121,581	$	119,395	$	120,686	$	117,159	—	%	3	%
Technology	80,579		73,990		9	%	27,217		27,161		26,200		28,027		26,172		—	%	4	%
Occupancy	40,297		42,775		(6)	%	13,536		13,128		13,633		14,429		14,125		3	%	(4)	%
Business development and advertising	20,735		20,054		3	%	6,683		7,535		6,517		8,350		7,100		(11)	%	(6)	%
Equipment	13,702		14,921		(8)	%	4,653		4,450		4,599		4,742		5,016		5	%	(7)	%
Legal and professional	14,740		13,149		12	%	5,639		4,429		4,672		6,762		4,461		27	%	26	%
Loan and foreclosure costs	6,519		4,822		35	%	2,748		1,793		1,979		585		2,049		53	%	34	%
FDIC assessment	29,300		25,575		15	%	8,223		7,131		13,946		41,497		9,150		15	%	(10)	%
Other intangible amortization	6,608		6,608		—	%	2,203		2,203		2,203		2,203		2,203		—	%	—	%

Other	19,622		24,726		(21)	%	8,659		6,450		4,513		12,110		8,771		34	%	(1)	%
Total noninterest expense	$	594,115	$	574,291	3	%	$	200,597	$	195,861	$	197,657	$	239,391	$	196,205	2	%	2	%
Average FTEs (a)	4,045		4,222		(4)	%	4,041		4,025		4,070		4,130		4,220		—	%	(4)	%

(a) Average FTEs without overtime

Notable Contributions to the Change in Noninterest Expense

• Personnel expense increased $14 million from the first nine months of 2023, primarily driven by merit increases year-over-year.

• FDIC expense increased $4 million from the first nine months of 2023, primarily driven by adjustments to the FDIC's special assessment applied to the 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 $27 million for the nine months ended September 30, 2024, compared to income tax expense of $70 million for the nine months ended September 30, 2023. The Corporation's effective tax rate from continuing operations was 8.79% and 20.43% for the nine months ended September 30, 2024, and 2023, respectively. The decreases in income tax expense and lower effective tax rate during the first nine months of 2024 were primarily due to a strategic reallocation of the investment portfolio and adoption of a legal entity rationalization plan that resulted in the recognition of deferred tax benefits of approximately $33 million.

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.

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Balance Sheet Analysis

• At September 30, 2024, total assets were $42.2 billion, up $1.2 billion, or 3%, from December 31, 2023, and up $573 million, or 1%, from September 30, 2023.

• Interest bearing deposits in other financial institutions were $408 million at September 30, 2024, down $17 million, or 4%, from December 31, 2023, and up $85 million, or 26%, from September 30, 2023.

• AFS investment securities, at fair value were $4.2 billion at September 30, 2024, up $552 million, or 15%, from December 31, 2023, and up $661 million, or 19%, from September 30, 2023. HTM investment securities, net, at amortized cost were $3.8 billion at September 30, 2024, down $91 million, or 2%, from December 31, 2023, and down $131 million, or 3%, from September 30, 2023. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.

• Lo ans of $30.0 billion at September 30, 2024 were up $775 million , or 3%, from December 31, 2023, and down $202 million, or 1%, from September 30, 2023 . See Note 6 Loans of the notes to consolidated financial statements for additional details.

• At September 30, 2024, total deposits of $33.6 billion were up $108 million from December 31, 2023, and were up $1.4 billion , or 4%, from September 30, 2023. See section Deposits and Customer Funding for additional information on deposits.

• FHLB advances were $1.9 billion at September 30, 2024, down $27 million, or 1%, from December 31, 2023, and down $1.8 billion, or 49%, from September 30, 2023. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

• Other long-term funding was $844 million at September 30, 2024, up $303 million, or 56%, from December 31, 2023, and up $315 million, or 59%, from September 30, 2023, primarily driven by the Corporation's issuance of senior notes in August 2024. 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, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
($ in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total


Commercial and industrial	$	10,258,899	34	%	$	9,970,412	34	%	$	9,858,329	33	%	$	9,731,555	33	%	$	10,099,068	33	%
Commercial real estate — owner occupied	1,120,849		4	%	1,102,146		4	%	1,095,894		4	%	1,061,700		4	%	1,054,969		3	%
Commercial and business lending	11,379,748		38	%	11,072,558		37	%	10,954,223		37	%	10,793,255		37	%	11,154,037		37	%
Commercial real estate — investor	5,070,635		17	%	5,001,392		17	%	5,035,195		17	%	5,124,245		18	%	5,218,980		17	%
Real estate construction	2,114,300		7	%	2,255,637		8	%	2,287,041		8	%	2,271,398		8	%	2,130,719		7	%
Commercial real estate lending	7,184,934		24	%	7,257,029		25	%	7,322,237		25	%	7,395,644		25	%	7,349,699		24	%
Total commercial	18,564,683		62	%	18,329,587		62	%	18,276,460		62	%	18,188,898		62	%	18,503,736		61	%
Residential mortgage	7,803,083		26	%	7,840,073		26	%	7,868,180		27	%	7,864,891		27	%	8,782,645		29	%
Auto finance	2,708,946		9	%	2,556,009		9	%	2,471,257		8	%	2,256,162		8	%	2,007,164		7	%


Home equity	651,379		2	%	634,142		2	%	619,764		2	%	628,526		2	%	623,650		2	%
Other consumer	262,806		1	%	258,460		1	%	258,603		1	%	277,740		1	%	275,993		1	%
Total consumer	11,426,214		38	%	11,288,684		38	%	11,217,802		38	%	11,027,319		38	%	11,689,451		39	%
Total loans	$	29,990,897	100	%	$	29,618,271	100	%	$	29,494,263	100	%	$	29,216,218	100	%	$	30,193,187	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 2023 and the first nine months of 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.

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

Table 6 Loan Distribution and Interest Rate Sensitivity


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


Commercial and industrial	$	9,019,092	$	874,137	$	365,168	$	502	$	10,258,899	34	%
Commercial real estate — owner occupied	713,569		297,960		109,320		—		1,120,849		4	%
Commercial real estate — investor	4,727,573		295,830		47,231		—		5,070,635		17	%
Real estate construction	2,081,511		29,766		2,328		694		2,114,300		7	%
Commercial - adjustable	11,595,151		40,203		3,477		—		11,638,832		39	%
Commercial - fixed	4,946,595		1,457,490		520,570		1,196		6,925,851		23	%
Residential mortgage - adjustable	198,787		723,703		1,459,794		290		2,382,574		8	%
Residential mortgage - fixed	3,972		63,604		461,943		4,890,991		5,420,510		18	%
Auto finance	1,228		1,355,273		1,352,445		—		2,708,946		9	%
Home equity	604,548		8,484		29,658		8,688		651,379		2	%
Other consumer	205,370		30,204		17,600		9,631		262,806		1	%
Total loans	$	17,555,652	$	3,678,961	$	3,845,489	$	4,910,795	$	29,990,897	100	%
Fixed-rate	$	4,960,289	$	2,914,348	$	2,382,218	$	4,910,505	$	15,167,359	51	%
Floating or adjustable rate	12,595,363		764,613		1,463,271		290		14,823,537		49	%
Total	$	17,555,652	$	3,678,961	$	3,845,489	$	4,910,795	$	29,990,897	100	%

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

At September 30, 2024, $19.8 billion, or 66%, of the loans outstanding and $16.6 billion, or 89%, 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 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, 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


Sep 30, 2024	NAICS Subsector	Outstanding Balance		Total Exposure		% of Total Loan Exposure
($ in thousands)
Real Estate (a)	531	$	1,840,961	$	3,340,589	8	%
Utilities (b)	221	2,492,889		3,124,225		8	%
Credit Intermediation and Related Activities (c)	522	934,413		1,692,607		4	%

Merchant Wholesalers, Durable Goods	423	541,991		951,881		2	%

(a) Includes REIT lines.

(b) 55% 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.

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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.

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


Sep 30, 2024	% of Total Loan Exposure		% of Total Commercial Real Estate - Investor Loan Exposure
Multi-Family	5	%	35	%
Industrial	3	%	26	%
Office	3	%	19	%

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


Sep 30, 2024	% of Total Loan Exposure		% of Total Real Estate Construction Loan Exposure
Multi-Family	5	%	54	%

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 88% of the outstanding loan balances in the Corporation's branch footprint at September 30, 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.

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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.

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 16 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, with approximately 60% of originations typically secured by used vehicles.

Other consumer: Other consumer consists of student loans, short-term personal installment loans, and credit cards. Credit risk for 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.

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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, and also includes information on accruing loans past due and restructured loans:

Table 10 Nonperforming Assets


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


Commercial and industrial	$	14,369		$	21,190		$	72,243		$	62,022		$	74,812
Commercial real estate — owner occupied	9,285			1,851			2,090			1,394			3,936
Commercial and business lending	23,654			23,041			74,333			63,416			78,748
Commercial real estate — investor	18,913			48,249			18,697			—			10,882
Real estate construction	15			16			18			6			103
Commercial real estate lending	18,928			48,265			18,715			6			10,985
Total commercial	42,582			71,306			93,047			63,422			89,732
Residential mortgage	70,138			68,058			69,954			71,142			66,153
Auto finance	7,456			6,986			7,158			5,797			4,533
Home equity	8,231			7,996			8,100			8,508			7,917
Other consumer	70			77			87			128			222
Total consumer	85,894			83,117			85,299			85,574			78,826
Total nonaccrual loans	128,476			154,423			178,346			148,997			168,558
Commercial real estate owned	11,914			914			914			914			1,062
Residential real estate owned	1,012			1,467			920			1,290			989
Bank properties real estate owned (a)	5,903			5,944			6,603			8,301			6,400
OREO	18,830			8,325			8,437			10,506			8,452

Repossessed assets	793			671			1,241			919			658
Total nonperforming assets	$	148,098		$	163,418		$	188,025		$	160,421		$	177,668








Accruing loans past due 90 days or more
Commercial	$	5,359		$	384		$	426		$	19,812		$	441
Consumer	1,748			1,970			1,992			1,876			1,715
Total accruing loans past due 90 days or more	$	7,107		$	2,354		$	2,417		$	21,689		$	2,156
Restructured loans (accruing)
Commercial	$	424		$	410		$	377		$	306		$	234
Consumer	2,141			2,166			2,080			2,414			1,855
Total restructured loans (accruing)	$	2,565		$	2,576		$	2,457		$	2,719		$	2,089
Nonaccrual restructured loans (included in nonaccrual loans)	$	1,840		$	717		$	1,141		$	805		$	961
Ratios
Nonaccrual loans to total loans	0.43		%	0.52		%	0.60		%	0.51		%	0.56		%
NPAs to total loans plus OREO and repossessed assets	0.49		%	0.55		%	0.64		%	0.55		%	0.59		%
NPAs to total assets	0.35		%	0.39		%	0.46		%	0.39		%	0.43		%

Allowance for credit losses on loans to nonaccrual loans	309.43		%	252.31		%	217.43		%	258.98		%	225.78		%

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Table 10 Nonperforming Assets (continued)


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


Commercial and industrial	$	1,212	$	2,052	$	521	$	5,565	$	1,507
Commercial real estate — owner occupied	2,209		—		—		358		1,877
Commercial and business lending	3,421		2,052		521		5,923		3,384
Commercial real estate — investor	10,746		1,023		19,164		18,697		10,121
Real estate construction	88		—		1,260		—		10
Commercial real estate lending	10,834		1,023		20,424		18,697		10,131
Total commercial	14,255		3,075		20,945		24,619		13,515
Residential mortgage	13,630		10,374		9,903		13,446		11,652
Auto finance	15,458		15,814		12,521		17,386		16,688


Home equity	3,146		3,694		2,819		4,208		3,687
Other consumer	2,163		1,995		2,260		2,166		1,880
Total consumer	34,397		31,877		27,503		37,205		33,908
Total accruing loans 30-89 days past due	$	48,651	$	34,952	$	48,448	$	61,825	$	47,422

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

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. See also Note 6 Loans of the notes to consolidated financial statements for additional restructured loans disclosures.

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

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 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, 2024 was the Moody's baseline scenario from August 2024, which was reviewed against the September 2024 baseline scenario with no material updates made, over a two 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, 2024 and December 31, 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.

Table 11 Allowance for Credit Losses on Loans


	YTD				Quarter Ended
($ in thousands)	Sep 30, 2024		Sep 30, 2023		Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Allowance for loan losses
Balance at beginning of period	$	351,094	$	312,720	$	355,844		$	356,006		$	351,094		$	345,795		$	338,750


Provision for loan losses	67,000		66,000		19,000			21,000			27,000			21,000			25,500


Charge offs	(62,645)		(40,891)		(15,337)			(23,290)			(24,018)			(17,878)			(20,535)
Recoveries	6,316		7,965		2,258			2,127			1,930			2,177			2,079
Net (charge offs) recoveries	(56,329)		(32,925)		(13,078)			(21,163)			(22,088)			(15,701)			(18,455)
Balance at end of period	$	361,765	$	345,795	$	361,765		$	355,844		$	356,006		$	351,094		$	345,795
Allowance for unfunded commitments
Balance at beginning of period	$	34,776	$	38,776	$	33,776		$	31,776		$	34,776		$	34,776		$	38,276


Provision for unfunded commitments	1,000		(4,000)		2,000			2,000			(3,000)			—			(3,500)

Balance at end of period	$	35,776	$	34,776	$	35,776		$	33,776		$	31,776		$	34,776		$	34,776
Allowance for credit losses on loans	$	397,541	$	380,571	$	397,541		$	389,620		$	387,782		$	385,870		$	380,571
Provision for credit losses on loans	68,000		62,000		21,000			23,000			24,000			21,000			22,000
Net loan (charge offs) recoveries


Commercial and industrial	$	(42,963)	$	(29,494)	$	(10,649)		$	(13,676)		$	(18,638)		$	(13,178)		$	(16,558)
Commercial real estate — owner occupied	4		8		—			1			2			(22)			2
Commercial and business lending	(42,959)		(29,487)		(10,649)			(13,674)			(18,636)			(13,200)			(16,556)
Commercial real estate — investor	(4,570)		2,547		(1)			(4,569)			—			216			272
Real estate construction	60		18		2			28			30			38			18
Commercial real estate lending	(4,509)		2,565		2			(4,541)			30			253			290
Total commercial	(47,469)		(26,921)		(10,647)			(18,216)			(18,606)			(12,947)			(16,266)
Residential mortgage	(510)		(358)		(160)			(289)			(62)			(53)			(22)
Auto finance	(4,855)		(3,273)		(1,281)			(1,480)			(2,094)			(1,436)			(1,269)


Home equity	873		652		424			238			211			185			128
Other consumer	(4,368)		(3,025)		(1,414)			(1,417)			(1,537)			(1,450)			(1,027)
Total consumer	(8,860)		(6,004)		(2,431)			(2,947)			(3,482)			(2,754)			(2,189)
Total net (charge offs) recoveries	$	(56,329)	$	(32,925)	$	(13,078)		$	(21,163)		$	(22,088)		$	(15,701)		$	(18,455)








Ratios

Allowance for credit losses on loans to total loans					1.33		%	1.32		%	1.31		%	1.32		%	1.26		%

Allowance for credit losses on loans to net charge offs (annualized)	5.3x		8.6x		7.6x			4.6x			4.4x			6.2x			5.2x
Loan evaluation method for ACLL
Individually evaluated for impairment					$	7,498		$	16,882		$	25,335		$	15,492		$	11,033
Collectively evaluated for impairment					390,043			372,738			362,447			370,378			369,538
Total ACLL					$	397,541		$	389,620		$	387,782		$	385,870		$	380,571
Loan balance
Individually evaluated for impairment					$	41,938		$	70,763		$	92,960		$	62,712		$	86,195
Collectively evaluated for impairment					29,948,958			29,547,508			29,401,303			29,153,505			30,106,993
Total loan balance					$	29,990,897		$	29,618,271		$	29,494,263		$	29,216,218		$	30,193,187

N/M = Not Meaningful

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


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


Commercial and industrial	(58)	(40)	(43)	(55)	(77)	(54)	(66)
Commercial real estate — owner occupied	—	—	—	—	—	(1)	—
Commercial and business lending	(52)	(36)	(39)	(50)	(69)	(48)	(60)
Commercial real estate — investor	(12)	7	—	(37)	—	2	2
Real estate construction	—	—	—	—	1	1	—
Commercial real estate lending	(8)	5	—	(25)	—	1	2
Total commercial	(35)	(20)	(23)	(40)	(41)	(28)	(35)
Residential mortgage	(1)	(1)	(1)	(1)	—	—	—
Auto finance	(26)	(26)	(19)	(24)	(35)	(27)	(27)
Home equity	20	14	26	15	14	12	8
Other consumer	(223)	(145)	(216)	(221)	(232)	(208)	(148)
Total consumer	(10)	(7)	(8)	(10)	(13)	(9)	(7)
Total net (charge offs) recoveries	(25)	(15)	(18)	(29)	(30)	(21)	(25)

(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 $775 million, or 3%, from December 31, 2023, and decreased $202 million, or 1%, from September 30, 2023. The increase from December 31, 2023 was primarily due to growth in commercial and industrial lending and auto finance, partially offset by a decrease in real estate construction lending. The decrease from September 30, 2023 was driven by decreases in residential mortgage lending resulting from the Corporation's balance sheet repositioning and CRE - investor lending, partially offset by growth in auto finance and commercial and industrial lending. See also Note 6 Loans of the notes to consolidated financial statements for additional information on loans.

• Total nonaccrual loans decreased $21 million, or 14%, from December 31, 2023, and decreased $40 million, or 24%, from September 30, 2023. The decreases from both December 31, 2023 and September 30, 2023 were driven by decreases in nonaccrual loans within commercial and industrial lending, partially offset by increases within CRE - investor lending and CRE - owner occupied 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 $23 million from September 30, 2023, primarily driven by increases within commercial and industrial lending and CRE - investor 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, 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, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
($ in thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Noninterest-bearing demand	$	5,857,421	17	%	$	5,815,045	18	%	$	6,254,135	19	%	$	6,119,956	18	%	$	6,422,994	20	%
Savings	5,072,508		15	%	5,157,103		16	%	5,124,639		15	%	4,835,701		14	%	4,836,735		15	%
Interest-bearing demand	8,605,578		26	%	8,284,017		25	%	8,747,127		26	%	8,843,967		26	%	7,528,154		23	%
Money market	6,095,206		18	%	6,294,895		19	%	6,721,674		20	%	6,330,453		19	%	7,268,506		23	%
Brokered CDs	4,242,670		13	%	4,061,578		12	%	3,931,230		12	%	4,447,479		13	%	3,351,399		10	%
Other time deposits	3,680,914		11	%	3,078,401		9	%	2,934,352		9	%	2,868,494		9	%	2,715,538		8	%
Total deposits	$	33,554,298	100	%	$	32,691,039	100	%	$	33,713,158	100	%	$	33,446,049	100	%	$	32,123,326	100	%
Other customer funding (a)	110,988				89,524				90,536				106,620				151,644
Total deposits and other customer funding	$	33,665,286			$	32,780,564			$	33,803,694			$	33,552,669			$	32,274,971
Network transaction deposits (b)	$	1,566,908			$	1,502,919			$	1,792,820			$	1,566,139			$	1,649,389

Net deposits and other customer funding (c)	27,855,707				27,216,066				28,079,644				27,539,051				27,274,183

Time deposits of more than $250,000	742,734				546,586				543,469				522,626				533,853

(a) Includes repurchase agreements.
(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 $108 million from December 31, 2023, and increased $1.4 billion, or 4%, from September 30, 2023. The increase from September 30, 2023 was largely driven by increases in interest-bearing demand, other time deposits and brokered CDs, partially offset by decreases in money market and noninterest-bearing demand deposits.

• Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 22.3% of total deposits at September 30, 2024, compared to 22.7% at December 31, 2023 and 22.6% at September 30, 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, 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, 2024, the Bank had $6.2 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, 2024, the Bank had $3.0 billion available for discount window borrowings.

• A $200 million Parent Company commercial paper program, of which there was none outstanding as of September 30, 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)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Federal Reserve Bank balance	$	405,776		$	482,362		$	419,554		$	421,848		$	314,287
Available FHLB Chicago capacity	6,164,539			5,184,341			7,035,768			5,985,385			5,377,628
Available Federal Reserve Bank discount window capacity	2,981,211			2,336,073			1,438,992			1,433,655			1,335,938
Available BTFP capacity	—			—			—			522,465			618,829
Funding available within one business day (a)	9,551,527			8,002,776			8,894,314			8,363,353			7,646,682
Available federal funds lines	1,401,000			1,406,000			1,495,000			1,550,000			2,518,000
Available brokered deposits capacity (b)	520,809			679,089			446,513			138,512			1,240,488
Unsecured debt capacity (c)	1,000,000			1,000,000			1,000,000			1,000,000			1,000,000
Total available liquidity	$	12,473,336		$	11,087,865		$	11,835,827		$	11,051,865		$	12,405,170
Uninsured and uncollateralized deposits	$	7,492,684		$	7,174,369		$	7,710,911		$	7,586,047		$	7,269,248
Coverage ratio of uninsured and uncollateralized deposits with secured funding available within one business day	127		%	112		%	115		%	110		%	105		%
Coverage ratio of uninsured and uncollateralized deposits with total funding	166		%	155		%	153		%	146		%	171		%

(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 months ended September 30, 2024, net cash provided by operating and financing activities was $373 million and $843 million, respectively, while net cash used in investing activities was $1.2 billion, for a net increase in cash and cash equivalents of $43 million since year-end 2023. At September 30, 2024, assets of $42.2 billion increased $1.2 billion, or 3%, from year-end 2023, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $33.6 billion increased $108 million from year-end 2023, short-term funding increased $590 million, or 181%, and other long-term funding increased $303 million, or 56%, the latter primarily driven by the Corporation's issuance of senior notes in August 2024.

For the nine months ended September 30, 2023, net cash provided by operating and financing activities was $378 million and $1.9 billion, respectively, while net cash used in investing activities was $2.2 billion, for a net increase in cash and cash equivalents of $91 million since year-end 2022. At September 30, 2023, assets of $41.6 billion increased $2.2 billion, or 6%, from year-end 2022, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $32.1 billion increased $2.5 billion, or 8%, from year-end 2022, FHLB advances decreased $587 million, or 14%, while other long-term funding increased $281 million, or 113%, the latter due to the issuance of subordinated debt.

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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, 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 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 months of 2024.

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


	Sep 30, 2024				Dec 31, 2023
	Dynamic Forecast		Static Forecast		Dynamic Forecast		Static Forecast
Gradual Rate Change
100 bp increase in interest rates	1.6	%	1.5	%	1.9	%	2.2	%
200 bp increase in interest rates	2.9	%	2.7	%	3.8	%	4.3	%
100 bp decrease in interest rates	(1.0)	%	(0.7)	%	(1.3)	%	(1.5)	%
200 bp decrease in interest rates	(2.0)	%	(1.4)	%	(2.6)	%	(3.1)	%

At September 30, 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, 2024		Dec 31, 2023
Instantaneous Rate Change
100 bp increase in interest rates	(9.8)	%	(10.1)	%
200 bp increase in interest rates	(20.1)	%	(20.1)	%
100 bp decrease in interest rates	8.7	%	9.7	%
200 bp decrease in interest rates	16.4	%	18.5	%

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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, 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)	Note Reference	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
Time deposits		$	7,781,871	$	127,168	$	14,540	$	5	$	7,923,584
Short-term funding	8	917,028		—		—		—		917,028
FHLB advances	8	1,103,149		604,912		204,707		525		1,913,294

Other long-term funding	8	258,187		182		46		585,927		844,342

Operating leases	16	5,650		10,233		7,680		7,160		30,723

Total		$	10,065,886	$	742,495	$	226,972	$	593,617	$	11,628,970

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, 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 I, Item 1A, Risk Factors in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023.

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Table 18 Capital Ratios


	YTD				Quarter Ended
($ in thousands)	Sep 30, 2024		Sep 30, 2023		Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Risk-based capital (a)
CET1					$	3,238,155		$	3,172,298		$	3,088,613		$	3,074,938		$	3,197,445
Tier 1 capital					3,432,267			3,366,410			3,282,725			3,269,050			3,391,557
Total capital					4,117,632			4,042,812			3,957,879			3,997,205			4,103,998
Total risk-weighted assets					33,326,479			32,767,830			32,753,344			32,732,710			33,497,484
Modified CECL transitional amount					22,425			22,425			22,425			44,851			44,851
CET1 capital ratio					9.72		%	9.68		%	9.43		%	9.39		%	9.55		%
Tier 1 capital ratio					10.30		%	10.27		%	10.02		%	9.99		%	10.12		%
Total capital ratio					12.36		%	12.34		%	12.08		%	12.21		%	12.25		%
Tier 1 leverage ratio					8.49		%	8.37		%	8.24		%	8.06		%	8.42		%
Selected equity and performance ratios
Total stockholders’ equity / total assets					10.46		%	10.19		%	10.13		%	10.18		%	9.91		%
Dividend payout ratio (b)	36.07	%	35.80	%	39.29		%	29.33		%	42.31		%	N/M			39.62		%
Return on average assets	0.93	%	0.91	%	0.85		%	1.13		%	0.80		%	(0.87)		%	0.80		%
Annualized noninterest expense / average assets	1.93	%	1.90	%	1.93		%	1.92		%	1.95		%	2.30		%	1.90		%

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 quarter of 2024.

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Non-GAAP Measures

Table 19 Non-GAAP Measures


	YTD						Quarter Ended
($ in thousands)	Sep 30, 2024			Sep 30, 2023			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Selected equity and performance ratios (a)(b)(c)
Tangible common equity / tangible assets							7.50		%	7.18		%	7.08		%	7.11		%	6.88		%
Return on average equity	9.00		%	8.91		%	8.09		%	11.16		%	7.81		%	(8.74)		%	7.99		%
Return on average tangible common equity	12.99		%	13.07		%	11.52		%	16.25		%	11.31		%	(13.13)		%	11.67		%
Return on average CET1	11.77		%	11.41		%	10.53		%	14.54		%	10.27		%	(11.85)		%	10.08		%

Return on average tangible assets	0.97		%	0.95		%	0.89		%	1.18		%	0.84		%	(0.88)		%	0.84		%
Average stockholders' equity / average assets	10.29		%	10.16		%	10.46		%	10.14		%	10.26		%	9.97		%	10.06		%
Tangible common equity reconciliation (a)
Common equity							$	4,219,125		$	4,048,225		$	3,974,561		$	3,979,861		$	3,933,531
Goodwill and other intangible assets, net							(1,138,855)			(1,141,058)			(1,143,261)			(1,145,464)			(1,147,666)
Tangible common equity							$	3,080,269		$	2,907,167		$	2,831,300		$	2,834,398		$	2,785,865
Tangible assets reconciliation (a)
Total assets							$	42,210,815		$	41,623,908		$	41,137,084		$	41,015,855		$	41,637,381
Goodwill and other intangible assets, net							(1,138,855)			(1,141,058)			(1,143,261)			(1,145,464)			(1,147,666)
Tangible assets							$	41,071,960		$	40,482,850		$	39,993,824		$	39,870,392		$	40,489,715
Average tangible common equity and average CET1 reconciliation (a)
Common equity	$	4,032,375		$	3,913,850		$	4,136,615		$	3,972,092		$	3,987,269		$	3,926,452		$	3,937,940
Goodwill and other intangible assets, net	(1,142,331)			(1,151,039)			(1,140,060)			(1,142,368)			(1,144,588)			(1,146,677)			(1,148,951)
Tangible common equity	2,890,045			2,762,811			2,996,555			2,829,725			2,842,681			2,779,775			2,788,989
Modified CECL transitional amount	22,425			44,851			22,425			22,425			22,425			44,851			44,851
Accumulated other comprehensive loss	200,701			270,989			172,711			241,634			188,067			286,402			302,043
Deferred tax assets, net	20,136			27,853			23,564			24,506			12,303			26,580			27,694
Average CET1	$	3,133,307		$	3,106,504		$	3,215,255		$	3,118,290		$	3,065,475		$	3,137,608		$	3,163,577
Average tangible assets reconciliation (a)
Total assets	$	41,086,156		$	40,419,166		$	41,389,711		$	41,100,606		$	40,769,206		$	41,330,703		$	41,075,980
Goodwill and other intangible assets, net	(1,142,331)			(1,151,039)			(1,140,060)			(1,142,368)			(1,144,588)			(1,146,677)			(1,148,951)
Tangible assets	$	39,943,825		$	39,268,127		$	40,249,651		$	39,958,238		$	39,624,617		$	40,184,026		$	39,927,029




Adjusted net income reconciliation (b)
Net income	$	284,760		$	273,762		$	88,018		$	115,573		$	81,169		$	(90,806)		$	83,248
Other intangible amortization, net of tax	4,956			4,956			1,652			1,652			1,652			1,652			1,652
Adjusted net income	$	289,716		$	278,718		$	89,670		$	117,225		$	82,821		$	(89,154)		$	84,900
Adjusted net income available to common equity reconciliation (b)
Net income available to common equity	$	276,135		$	265,137		$	85,143		$	112,698		$	78,294		$	(93,681)		$	80,373
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	$	281,091		$	270,093		$	86,795		$	114,350		$	79,946		$	(92,029)		$	82,025





Efficiency ratio reconciliation (d)
Federal Reserve efficiency ratio	61.33		%	58.17		%	61.46		%	61.51		%	61.03		%	132.01		%	60.06		%
Fully tax-equivalent adjustment	(0.70)		%	(0.84)		%	(0.69)		%	(0.71)		%	(0.71)		%	(3.29)		%	(0.89)		%
Other intangible amortization	(0.68)		%	(0.67)		%	(0.67)		%	(0.68)		%	(0.69)		%	(1.21)		%	(0.69)		%
Fully tax-equivalent efficiency ratio	59.96		%	56.67		%	60.11		%	60.12		%	59.63		%	127.54		%	58.50		%

(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 $88 million for the third quarter of 2024, compared to net income of $116 million for the second quarter of 2024, the decrease primarily due to an income tax benefit recorded during the second quarter of 2024. Net income available to common equity was $85 million for the third quarter of 2024, or $0.56 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the second quarter of 2024 was $113 million, or $0.75 for basic earnings per common share and $0.74 for diluted earnings per common share (see Table 1).

Fully tax-equivalent net interest income for the third quarter of 2024 was $266 million, $6 million, or 2%, higher than the second quarter of 2024. The net interest margin in the third quarter of 2024 was up 3 bp to 2.78%. Average earning assets increased $193 million, or 1%, to $38.2 billion in the third quarter of 2024. Average loans increased $55 million, primarily driven by growth within the auto finance portfolio, partially offset by a decrease in commercial lending. On the funding side, average total interest-bearing deposits increased $751 million, or 3%, driven primarily by increases in time deposits and interest-bearing demand deposits, partially offset by a decrease in money market deposits. Average FHLB advances decreased $682 million, or 28%, largely due to the increase in average deposits (see Table 2).

The provision for credit losses was $21 million for the third quarter of 2024 and $23 million for the second quarter of 2024 (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 2024 was $67 million, up $2 million, or 3% from the second quarter of 2024, largely driven by an increase in fee based revenue (see Table 3).

Noninterest expense for the third quarter of 2024 was $201 million, up $5 million, or 2%, from the second quarter of 2024, driven primarily by an increase in other expense (see Table 4).

For the third quarter of 2024, the Corporation recognized income tax expense of $20 million, compared to an income tax benefit of $13 million for the second quarter of 2024. See section Income Taxes for a more detailed discussion.

Comparable Quarter Results

The Corporation reported net income of $88 million for the third quarter of 2024, compared to net income of $83 million for the third quarter of 2023. Net income available to common equity was $85 million for the third quarter of 2024, or $0.56 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the third quarter of 2023 was $80 million, or $0.53 for both basic and diluted earnings per share (see Table 1).

Fully tax-equivalent net interest income for the third quarter of 2024 was $266 million, $7 million, or 3%, higher than the third quarter of 2023. The net interest margin between the comparable quarters was up 7 bp, to 2.78% in the third quarter of 2024. The increases in net interest income and net interest margin were due to a mix shift in earning assets resulting in earning asset income growing by more than the growth of interest-bearing liability costs. Average earning assets increased $115 million to $38.2 billion in the third quarter of 2024. Average loans decreased $251 million, or 1%, primarily driven by a decrease in residential mortgage lending, partially offset by an increase in auto finance lending. On the funding side, average interest-bearing deposits increased $2.0 billion, or 8%, from the third quarter of 2023, due to increases in nearly all deposit categories, partially offset by a decrease in money market deposits. Average short and long-term funding decreased $1.1 billion, or 26%, primarily driven by lower FHLB advances (see Table 2).

The provision for credit losses was $21 million for the third quarter of 2024, compared to a provision of $22 million for the third 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 quarter of 2024 was $67 million, up approximately $642,000, or 1%, compared to the third quarter of 2023 (see Table 3).

Noninterest expense for the third quarter of 2024 was $201 million, up $4 million, or 2%, from the third quarter of 2023, driven primarily by an increase in personnel expense (see Table 4).

The Corporation recognized income tax expense of $20 million for the third quarter of 2024, compared to income tax expense of $19 million for the third quarter of 2023. See section Income Taxes for a more detailed discussion.

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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.

Table 20 Selected Segment Financial Data


	Three Months Ended Sep 30,							Nine Months Ended Sep 30,
($ in thousands)	2024			2023			% Change	2024			2023			% Change
Corporate and Commercial Specialty
Total revenue	$	193,054		$	177,776		9%	$	563,761		$	520,919		8%
Provision for credit losses	17,009			14,066			21%	48,930			41,523			18%
Noninterest expense	65,415			63,265			3%	197,159			186,521			6%
Income tax expense	20,999			19,293			9%	59,845			54,104			11%
Net income	89,630			81,152			10%	257,827			238,772			8%
Average earning assets	17,793,940			17,623,399			1%	17,742,342			17,394,620			2%
Average loans	17,778,104			17,615,560			1%	17,732,396			17,379,628			2%
Average deposits	8,677,231			8,828,634			(2)%	8,867,209			9,101,585			(3)%
Average allocated capital (Average CET1) (a)	1,735,937			1,719,303			1%	1,724,583			1,712,292			1%
Return on average allocated capital (a)	20.54		%	18.73		%	181 bp	19.97		%	18.64		%	133 bp
Community, Consumer, and Business
Total revenue	$	218,445		$	220,709		(1)%	$	649,848		$	623,573		4%
Provision for credit losses	5,195			7,381			(30)%	17,611			21,467			(18)%
Noninterest expense	115,656			108,127			7%	333,711			328,790			1%
Income tax expense	20,495			22,092			(7)%	62,691			57,396			9%
Net income	77,099			83,109			(7)%	235,835			215,920			9%
Average earning assets	11,325,394			11,737,319			(4)%	11,247,468			11,496,144			(2)%
Average loans	11,325,394			11,737,319			(4)%	11,247,468			11,496,144			(2)%
Average deposits	18,593,935			18,224,072			2%	18,336,007			18,137,460			1%
Average allocated capital (Average CET1) (a)	750,251			750,454			—%	743,677			731,484			2%
Return on average allocated capital (a)	40.88		%	43.94		%	N/M	42.36		%	39.47		%	N/M
Risk Management and Shared Services
Total revenue	$	(81,768)		$	(77,663)		5%	$	(239,284)		$	(164,126)		46%
Provision for credit losses	(1,213)			496			N/M	1,459			(975)			N/M
Noninterest expense	19,526			24,814			(21)%	63,245			58,980			7%
Income tax (benefit)	(21,370)			(21,959)			(3)%	(95,085)			(41,202)			131%
Net (loss)	(78,711)			(81,013)			(3)%	(208,902)			(180,929)			15%
Average earning assets	9,071,183			8,714,890			4%	8,939,209			8,523,182			5%
Average loans	530,589			531,731			—%	548,082			517,609			6%
Average deposits	6,049,659			4,949,087			22%	5,870,119			3,818,115			54%
Average allocated capital (Average CET1) (a)	729,067			693,819			5%	665,047			662,728			—%
Return on average allocated capital (a)	(44.52)		%	(47.97)		%	N/M	(43.69)		%	(38.24)		%	N/M
Consolidated Total
Total revenue	$	329,730		$	320,823		3%	$	974,325		$	980,366		(1)%
Return on average allocated capital (a)	10.53		%	10.08		%	45 bp	11.77		%	11.41		%	36 bp

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.

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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 $15 million from the three months ended September 30, 2023, and increased $43 million from the nine months ended September 30, 2023, primarily attributable to higher loan volumes and interest rates driving net interest income higher.

• Noninterest expense increased $11 million from the nine months ended September 30, 2023, primarily due to higher personnel costs.

• Average loans increased $163 million from the three months ended September 30, 2023, and increased $353 million from the nine months ended September 30, 2023, primarily driven by growth in commercial and business lending and residential mortgage lending.

• Average deposits decreased $151 million from the three months ended September 30, 2023, and decreased $234 million from the nine months ended September 30, 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 $26 million from the nine months ended September 30, 2023, primarily attributable to receiving net FTP credit for providing funding for the Corporation and higher interest rates.

• Average loans decreased $412 million from the three months ended September 30, 2023, and decreased $249 million from the nine months ended September 30, 2023, driven by a decrease in residential mortgage lending resulting from the Corporation's balance sheet repositioning, partially offset by an increase in auto finance lending.

• Average deposits increased $370 million from the three months ended September 30, 2023, and increased $199 million from the nine months ended September 30, 2023, driven by increases in time deposits and savings deposits, partially offset by decreases in noninterest-bearing demand deposits and money market 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 $75 million from the nine months ended September 30, 2023, primarily driven by increased interest expense.

• Average earning assets increased $356 million from the three months ended September 30, 2023, and increased $416 million from the nine months ended September 30, 2023, primarily driven by higher balances of AFS investment securities in the portfolio.

• Average deposits increased $1.1 billion from the three months ended September 30, 2023, and increased $2.1 billion from the nine months ended September 30, 2023, primarily driven by increases in brokered CDs and network deposits, partially offset by a decrease in money market deposits.

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 2023 Annual Report on Form 10-K. There have been no changes in the Corporation's application of critical accounting estimates since December 31, 2023.

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Recent Developments

On October 29, 2024, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.23 per common share, payable on December 16, 2024, to shareholders of record at the close of business on December 2, 2024. This is an increase of $0.01 from the previous quarterly dividend of $0.22 per common share.

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 16, 2024, to shareholders of record at the close of business on December 2, 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 16, 2024, to shareholders of record at the close of business on December 2, 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, 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, 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 2023 Annual Report on Form 10-K.


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

During the third quarter of 2024, the Corporation repurchased approximately $347,000 of common stock, all of which were repurchases related to tax withholding on equity compensation with no open market repurchases during the quarter. 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, 2024 - July 31, 2024	6,764	$	22.91	—
August 1, 2024 - August 31, 2024	8,396	21.94		—
September 1, 2024 - September 30, 2024	377	21.27		—
Total	15,537	$	22.35	—	2,848,494

(a) During the third quarter of 2024, all common 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' 2021 authorization.

(b) At September 30, 2024, there remained $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, 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, 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.


ITEM 6.			Exhibits

(a) Exhibits:




Exhibit (4), Form of Global Note dated as of August 29, 2024 representing $300,000,000 6.455% Fixed Rate / Floating Rate Senior Notes Due 2030, incorporated by reference to Exhibit 4.1 of the Corporation's Current Report on Form 8-K dated August 26, 2024.
Exhibit (10), Retirement Agreement between Associated Banc-Corp and Tammy C. Stadler, dated July 26, 2024.
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, 2024 has been formatted in Inline XBRL (Inline Extensible Business Reporting Language) and contained in Exhibits in 101.


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 29, 2024						/s/ Andrew J. Harmening
						Andrew J. Harmening
						President and Chief Executive Officer



Date: October 29, 2024						/s/ Derek S. Meyer
						Derek S. Meyer
						Chief Financial Officer



Date: October 29, 2024						/s/ Ryan J. Beld
						Ryan J. Beld
						Chief Accounting Officer

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Part I - Financial Information Item 1. Financial Statements:Item 1. Financial Statements Continued:Note 1 Basis Of Presentation Note 2 Summary Of Significant Accounting Policies Note 3 Earnings Per Common Share Note 4 Stock-based Compensation Note 5 Investment Securities Note 6 Loans Note 7 Goodwill and Other Intangible Assets Note 8 Short and Long-term Funding Note 9 Derivative and Hedging Activities Note 10 Balance Sheet Offsetting Note 11 Commitments, Off-balance Sheet Arrangements, Legal Proceedings, and Regulatory Matters Note 12 Fair Value Measurements Note 13 Retirement Plans Note 14 Segment Reporting Note 15 Accumulated Other Comprehensive Income (loss)Note 16 Leases Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II - Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 5. Other Information Item 6. Exhibits

Exhibits

Exhibit (4), Form of Global Note dated as of August 29, 2024 representing $300,000,000 6.455% Fixed Rate / Floating Rate Senior Notes Due 2030, incorporated by reference to Exhibit 4.1 of the Corporation's Current Report on Form 8-K dated August 26, 2024. Exhibit (10), Retirement Agreement between Associated Banc-Corp and Tammy C. Stadler, dated July 26, 2024. 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.

ASB 10-Q Quarter ended Sept. 30, 2024

Exhibits