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ASSOCIATED BANC-CORP - Quarter Report: 2022 March (Form 10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2022
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)
Wisconsin39-1098068
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
433 Main Street
Green Bay,Wisconsin54301
(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 classTrading symbolName of each exchange on which registered
Common stock, par value $0.01 per shareASBNew York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs EASB PrENew York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.625% Non-Cum. Perp Pref Stock, Srs FASB PrFNew 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 filerAccelerated 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 April 25, 2022 was 150,043,865.
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ASSOCIATED BANC-CORP
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ASSOCIATED BANC-CORP
Commonly Used Acronyms and Abbreviations
The following listing provides a reference of common acronyms and abbreviations used throughout the document:
ACLLAllowance for Credit Losses on Loans
AFSAvailable for Sale
ALCO Asset / Liability Committee
ARRCAlternative Reference Rate Committee
ASCAccounting Standards Codification
Associated / Corporation / our / weAssociated Banc-Corp collectively with all of its subsidiaries and affiliates
ASUAccounting Standards Update
the BankAssociated Bank, National Association
Basel IIIInternational framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquidity
bpbasis point(s)
CDsCertificates of Deposit
CDIsCore Deposit Intangibles
CECLCurrent Expected Credit Losses
CET1Common Equity Tier 1
CFPBConsumer Financial Protection Bureau
CRACommunity Reinvestment Act
CRECommercial Real Estate
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act
EAREarnings at Risk
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FDICFederal Deposit Insurance Corporation
Federal ReserveBoard of Governors of the Federal Reserve System
FFELPFederal Family Education Loan Program
FHLBFederal Home Loan Bank
FHLMCFederal Home Loan Mortgage Corporation
FICOFair Isaac Corporation, provider of a broad-based risk score to aid in credit decisions
FNMAFederal National Mortgage Association
FOMCFederal Open Market Committee
FTEsFull-time equivalent employees
FTPFunds Transfer Pricing
GAAPGenerally Accepted Accounting Principles
GNMAGovernment National Mortgage Association
GSEsGovernment-Sponsored Enterprises
HTMHeld to Maturity
LIBORLondon Interbank Offered Rate
LOCOMLower of Cost or Market
LTVLoan-to-Value
MSRsMortgage Servicing Rights
MVEMarket Value of Equity
Net Free FundsNoninterest-bearing sources of funds
NIINet Interest Income
NPAsNonperforming Assets
OREOOther Real Estate Owned
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Parent CompanyAssociated Banc-Corp individually
PPPPaycheck Protection Program
RAPRetirement Account Plan - the Corporation's noncontributory defined benefit retirement plan
Repurchase AgreementsSecurities sold under agreements to repurchase
Restricted Stock AwardsRestricted common stock and restricted common stock units to certain key employees
Retirement Eligible ColleaguesColleagues whose retirement meets the early retirement or normal retirement definitions under the applicable equity compensation plan
ROCET1
Return on Common Equity Tier 1
RockefellerRockefeller Capital Management
S&PStandard & Poor's
SBASmall Business Administration
SECU.S. Securities and Exchange Commission
Series C Preferred StockThe Corporation's 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference $1,000 per share
Series D Preferred StockThe Corporation's 5.375% Non-Cumulative Perpetual Preferred Stock, Series D, liquidation preference $1,000 per share
Series E Preferred StockThe Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series E, liquidation preference $1,000 per share
Series F Preferred StockThe Corporation's 5.625% Non-Cumulative Perpetual Preferred Stock, Series F, liquidation preference $1,000 per share
SOFRSecured Overnight Finance Rate
TBATo-Be-Announced
TDRsTroubled Debt Restructurings
UDAAPs
Unfair, Deceptive, or Abusive Acts or Practices
WhitnellWhitnell & Co.
YTDYear-to-Date

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PART I - FINANCIAL INFORMATION
ITEM 1.Financial Statements:

ASSOCIATED BANC-CORP
Consolidated Balance Sheets
 Mar 31, 2022Dec 31, 2021
 (In Thousands, except share and per share data)
(Unaudited)(Audited)
Assets
Cash and due from banks$334,138 $343,831 
Interest-bearing deposits in other financial institutions166,929 681,684 
Investment securities AFS, at fair value2,780,803 4,332,015 
Investment securities HTM, net, at amortized cost3,939,855 2,238,947 
Equity securities18,560 18,352 
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost168,281 168,281 
Residential loans held for sale91,582 136,638 
Loans24,531,926 24,224,949 
Allowance for loan losses(279,058)(280,015)
Loans, net24,252,867 23,944,934 
Tax credit and other investments284,561 293,733 
Premises and equipment, net387,550 385,173 
Bank and corporate owned life insurance679,538 680,021 
Goodwill1,104,992 1,104,992 
Other intangible assets, net55,890 58,093 
Mortgage servicing rights, net(a)
67,015 54,862 
Interest receivable83,120 80,528 
Other assets540,218 582,168 
Total assets$34,955,900 $35,104,253 
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits$8,315,699 $8,504,077 
Interest-bearing deposits20,089,710 19,962,353 
Total deposits28,405,409 28,466,430 
Federal funds purchased and securities sold under agreements to repurchase368,768 319,532 
Commercial paper30,593 34,730 
FHLB advances1,537,948 1,621,047 
Other long-term funding249,797 249,324 
Allowance for unfunded commitments38,776 39,776 
Accrued expenses and other liabilities376,322 348,560 
Total liabilities$31,007,613 $31,079,399 
Stockholders’ Equity
Preferred equity$193,195 $193,195 
Common equity
Common stock$1,752 $1,752 
Surplus1,708,104 1,713,851 
Retained earnings2,715,118 2,672,601 
Accumulated other comprehensive (loss)(137,024)(10,317)
Treasury stock, at cost(532,858)(546,229)
Total common equity3,755,092 3,831,658 
Total stockholders’ equity3,948,287 4,024,853 
Total liabilities and stockholders’ equity$34,955,900 $35,104,253 
Preferred shares authorized (par value $1.00 per share)
750,000 750,000 
Preferred shares issued and outstanding200,000 200,000 
Common shares authorized (par value $0.01 per share)
250,000,000 250,000,000 
Common shares issued175,216,409 175,216,409 
Common shares outstanding150,037,780 149,342,641 
Numbers may not sum due to rounding.
(a) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value.
See accompanying notes to consolidated financial statements.
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Item 1. Financial Statements Continued:
ASSOCIATED BANC-CORP
Consolidated Statements of Income (Unaudited)
 Three Months Ended Mar 31,
 (In Thousands, except per share data)
20222021
Interest income
Interest and fees on loans$167,697 $174,049 
Interest and dividends on investment securities
Taxable16,472 7,014 
Tax-exempt16,108 14,162 
Other interest1,993 1,694 
Total interest income202,270 196,920 
Interest expense
Interest on deposits3,571 5,909 
Interest on federal funds purchased and securities sold under agreements to repurchase38 26 
Interest on other short-term funding
Interest on FHLB advances8,182 9,493 
Interest on long-term funding2,730 5,585 
Total interest expense14,522 21,018 
Net interest income187,747 175,902 
Provision for credit losses(3,990)(23,004)
Net interest income after provision for credit losses191,737 198,906 
Noninterest income
Wealth management fees22,404 22,414 
Service charges and deposit account fees16,856 14,855 
Card-based fees9,926 9,743 
Other fee-based revenue3,766 4,596 
Capital markets, net8,646 8,118 
Mortgage banking, net8,391 23,925 
Bank and corporate owned life insurance 2,071 2,702 
Asset gains, net188 4,809 
Investment securities gains (losses), net21 (39)
Gains on sale of branches, net(a)
— 1,002 
Other2,198 3,216 
Total noninterest income74,467 95,343 
Noninterest expense
Personnel104,811 104,026 
Technology21,485 20,740 
Occupancy16,080 16,156 
Business development and advertising4,954 4,395 
Equipment4,960 5,518 
Legal and professional5,087 6,530 
Loan and foreclosure costs2,014 2,220 
FDIC assessment5,100 4,750 
Other intangible amortization2,203 2,236 
Other6,597 8,775 
Total noninterest expense173,292 175,347 
Income before income taxes92,912 118,903 
Income tax expense18,650 24,602 
Net income74,262 94,301 
Preferred stock dividends2,875 5,207 
Net income available to common equity$71,387 $89,094 
Earnings per common share
Basic$0.48 $0.58 
Diluted$0.47 $0.58 
Average common shares outstanding
Basic148,781 152,355 
Diluted150,492 153,688 
Numbers may not sum due to rounding.
(a) Includes the deposit premium on the sale of branches net of miscellaneous costs to sell. See Note 2 Acquisitions and Dispositions for additional details on the branch sales.
See accompanying notes to consolidated financial statements.
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Item 1. Financial Statements Continued:
ASSOCIATED BANC-CORP
Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended Mar 31,
 ($ in Thousands)
20222021
Net income$74,262 $94,301 
Other comprehensive income (loss), net of tax
Investment securities AFS
Net unrealized (losses)(103,284)(23,979)
Unrealized (losses) on AFS securities transferred to HTM securities(67,604)— 
Amortization of net unrealized losses on AFS securities transferred to HTM securities1,108 518 
Reclassification adjustment for net losses (gains) realized in net income(21)39 
Income tax benefit43,098 5,851 
Other comprehensive (loss) on AFS securities(126,702)(17,571)
Defined benefit pension and postretirement obligations
Amortization of prior service cost(81)(37)
Amortization of actuarial loss74 1,050 
Income tax (expense) benefit(253)
Other comprehensive income (loss) on pension and postretirement obligations(6)760 
Total other comprehensive (loss)(126,708)(16,811)
Comprehensive income (loss)$(52,445)$77,490 
Numbers may not sum due to rounding.
See accompanying notes to consolidated financial statements.

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Item 1. Financial Statements Continued:    
ASSOCIATED BANC-CORP
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(In Thousands, except per share data)Preferred EquityCommon StockSurplusRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury StockTotal
Balance, December 31, 2021$193,195 $1,752 $1,713,851 $2,672,601 $(10,317)$(546,229)$4,024,853 
Change in accounting principle(a)
— — — 1,713 — — 1,713 
Total shareholder's equity at beginning of period, as adjusted193,195 1,752 1,713,851 2,674,314 (10,317)(546,229)4,026,566 
Comprehensive income (loss)
Net income— — — 74,262 — — 74,262 
Other comprehensive (loss)— — — — (126,708)— (126,708)
Comprehensive (loss)(52,445)
Common stock issued
Stock-based compensation plans, net— — (11,911)— — 18,565 6,654 
Purchase of treasury stock, stock-based compensation plans— — — — — (5,193)(5,193)
Cash dividends
Common stock, $0.20 per share— — — (30,583)— — (30,583)
Preferred stock(b)
— — — (2,875)— — (2,875)
Stock-based compensation expense, net— — 6,164 — — — 6,164 
Balance, March 31, 2022$193,195 $1,752 $1,708,104 $2,715,118 $(137,024)$(532,858)$3,948,287 
Numbers may not sum due to rounding.
(a) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value.
(b) Series E, $0.3671875 per share; and Series F, $0.3515625 per share.

(In Thousands, except per share data)Preferred EquityCommon StockSurplusRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury StockTotal
Balance, December 31, 2020$353,512 $1,752 $1,720,329 $2,458,920 $12,618 $(456,198)$4,090,933 
Comprehensive income (loss)
Net income— — — 94,301 — — 94,301 
Other comprehensive (loss)— — — — (16,811)— (16,811)
Comprehensive income77,490 
Common stock issued
Stock-based compensation plans, net— — (16,986)— — 27,542 10,556 
Purchase of treasury stock, open market purchases— — — — — (17,973)(17,973)
Purchase of treasury stock, stock-based compensation plans— — — — — (3,593)(3,593)
Cash dividends
Common stock, $0.18 per share— — — (27,870)— — (27,870)
Preferred stock(a)
— — — (5,207)— — (5,207)
Stock-based compensation expense, net— — 3,444 — — — 3,444 
Balance, March 31, 2021$353,512 $1,752 $1,706,786 $2,520,144 $(4,193)$(450,222)$4,127,780 
Numbers may not sum due to rounding.
(a) Series C, $0.3828125 per share; Series D, $0.3359375 per share; 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)
Three Months Ended Mar 31,
 ($ in Thousands)
20222021
Cash Flow From Operating Activities
Net income$74,262 $94,301 
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Provision for credit losses(3,990)(23,004)
Depreciation and amortization11,680 12,038 
Change in MSRs valuation(a)
(9,451)(10,578)
Amortization of other intangible assets2,203 2,236 
Amortization and accretion on earning assets, funding, and other, net5,338 7,941 
Net amortization of tax credit investments8,535 8,301 
Losses (gains) on sales of investment securities, net(21)39 
Asset (gains), net(188)(4,809)
(Gains) on sale of branch, net— (1,002)
(Gain) loss on mortgage banking activities, net4,183 (10,326)
Mortgage loans originated and acquired for sale(252,113)(412,645)
Proceeds from sales of mortgage loans held for sale296,089 400,135 
Changes in certain assets and liabilities
(Increase) decrease in interest receivable(2,592)3,797 
(Decrease) in interest payable(1,917)(8,694)
(Decrease) in expense payable(46,737)(12,818)
(Increase) decrease in net derivative position152,545 69,829 
Net change in other assets and other liabilities8,292 43,027 
Net cash provided by operating activities246,119 157,768 
Cash Flow From Investing Activities
Net decrease (increase) in loans(305,878)274,733 
Purchases of
AFS securities(409,376)(809,140)
HTM securities(135,301)(37,215)
Federal Home Loan Bank and Federal Reserve Bank stocks and equity securities(1)(1)
Premises, equipment, and software, net of disposals(17,141)(6,477)
Proceeds from
Sales of AFS and equity securities 742 51,295 
Prepayments, calls, and maturities of AFS securities 167,986 419,235 
Prepayments, calls, and maturities of HTM securities 51,206 97,196 
Sales, prepayments, calls, and maturities of other assets18,012 8,525 
Net cash received in business segment sale— 2,484 
Net change in tax credit and alternative investments(10,293)(12,990)
Net cash (used in) investing activities(640,045)(12,354)
Cash Flow From Financing Activities
Net increase (decrease) in deposits(60,949)1,225,867 
Net decrease in deposits due to branch sales— (31,083)
Net increase (decrease) in short-term funding45,098 (62,639)
Net increase in short-term FHLB advances320,000 — 
Repayment of long-term FHLB advances(414,578)(2,954)
Proceeds from long-term FHLB advances11,506 251 
(Repayment) proceeds of finance lease principal399 (37)
Proceeds from issuance of common stock for stock-based compensation plans6,654 10,556 
Purchase of treasury stock, open market purchases— (17,973)
Purchase of treasury stock, stock-based compensation plans(5,193)(3,593)
Cash dividends on common stock(30,583)(27,870)
Cash dividends on preferred stock(2,875)(5,207)
Net cash provided by (used in) financing activities(130,521)1,085,319 
Net increase (decrease) in cash and cash equivalents(524,447)1,230,732 
Cash and cash equivalents at beginning of period1,025,515 716,048 
Cash and cash equivalents at end of period(b)
$501,068 $1,946,780 
Numbers may not sum due to rounding.
(a) On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value. For all prior periods, MSRs were carried at LOCOM.
(b) No restricted cash due to the Federal Reserve reducing the required reserve ratio to zero.
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ASSOCIATED BANC-CORP
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended Mar 31,
 ($ in Thousands)
20222021
Supplemental disclosures of cash flow information
Cash paid for interest$16,267 $29,258 
Cash (received from) income and franchise taxes(1,471)(114)
Loans and bank premises transferred to OREO426 15,426 
Capitalized mortgage servicing rights3,042 3,348 
Loans transferred into held for sale from portfolio, net2,644 5,582 
Transfer of AFS securities to HTM securities1,621,990 — 
Unsettled trades to purchase securities4,246 3,000 

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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 2021 Annual Report on Form 10-K should be referred to in connection with the reading of these unaudited interim consolidated financial statements.
Note 1 Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and comprehensive income, changes in stockholders’ equity, and cash flows of the Corporation and Parent Company for the periods presented, and all such adjustments are of a normal recurring nature. The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the ACLL and MSRs valuation. Management has evaluated subsequent events for potential recognition or disclosure.
Within the tables presented, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes.
Note 2 Acquisitions and Dispositions
Acquisitions:
The Corporation did not have any acquisitions during the first three months of 2022 or during 2021.
Dispositions:
2021
On March 1, 2021, the Corporation closed on the sale of its wealth management subsidiary, Whitnell, to Rockefeller for a purchase price of $8 million. Associated reported a first quarter 2021 pre-tax gain of $2 million, included in asset gains, net on the consolidated statements of income, in conjunction with the sale.
On February 26, 2021, the Bank completed the sale of one branch located in Monroe, Wisconsin to Summit Credit Union. Under the terms of the transaction, the Bank sold $31 million in total deposits and no loans. The Bank received an approximately 4% purchase premium on deposits transferred.
Note 3 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 2021 Annual Report on Form 10-K. As a result of the irrevocable election to account for MSRs under the fair value measurement methodology, as permitted under ASC 860-50-35-3, there has been a change to the Corporation's significant accounting policies since December 31, 2021, which is described below.
Mortgage Servicing Rights
The Corporation sells residential mortgage loans in the secondary market and typically retains the rights to service the loans sold. Upon sale, a MSRs asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs asset under the fair value measurement method. As a result of the change, a cumulative effect adjustment of $2 million, increasing retained earnings on the consolidated balance sheets, was recognized. Under this methodology, changes in the fair value are recognized in earnings as they occur through mortgage banking, net on the consolidated statements of income.
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MSRs are not traded in active markets. 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, used by this model are based on current market sources. Assumptions used to value MSRs are considered significant unobservable inputs. A separate third-party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults and other relevant factors. Fair value estimates from outside sources are received periodically to corroborate the results of the valuation model.
New Accounting Pronouncements Adopted
There were no applicable material accounting pronouncements adopted by the Corporation since December 31, 2021.
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, or liquidity, the impacts are discussed in the applicable sections of this financial review.
StandardDescriptionDate of anticipated adoptionEffect on financial statements
ASU 2022-02 Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage DisclosuresThe FASB issued these amendments to eliminate accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, and to require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost. The amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively, except as provided in the next sentence. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Early adoption is permitted if an entity has adopted the amendments in Update 2016-03, including adoption in an interim period.1st Quarter 2023Adoption of this amendment is not expected to have a material impact on the Corporation's results of operation, financial position or liquidity, but will result in additional disclosure requirements related to gross charge offs by vintage year.
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Note 4 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 Mar 31,
 (In Thousands, except per share data)20222021
Net income$74,262 $94,301 
Preferred stock dividends(2,875)(5,207)
Net income available to common equity$71,387 $89,094 
Common shareholder dividends(30,372)(27,661)
Unvested share-based payment awards(211)(209)
Undistributed earnings$40,804 $61,224 
Undistributed earnings allocated to common shareholders$40,548 $60,836 
Undistributed earnings allocated to unvested share-based payment awards256 387 
Undistributed earnings$40,804 $61,224 
Basic
Distributed earnings to common shareholders$30,372 $27,661 
Undistributed earnings allocated to common shareholders40,548 60,836 
Total common shareholders earnings, basic$70,920 $88,497 
Diluted
Distributed earnings to common shareholders$30,372 $27,661 
Undistributed earnings allocated to common shareholders40,548 60,836 
Total common shareholders earnings, diluted$70,920 $88,497 
Weighted average common shares outstanding148,781 152,355 
Effect of dilutive common stock awards1,711 1,333 
Diluted weighted average common shares outstanding150,492 153,688 
Basic earnings per common share$0.48 $0.58 
Diluted earnings per common share$0.47 $0.58 
Anti-dilutive common stock options of approximately 2 million and 3 million for the three months ended March 31, 2022 and 2021, respectively, were excluded from the earnings per common share calculation.
Note 5 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 three months ended March 31, 2022 is presented below:
Stock Options
Shares(a)
Weighted Average
Exercise Price
Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value(a)
Outstanding at December 31, 20214,814 $20.72 5.96 years$12,532 
Exercised(362)17.65 
Outstanding at March 31, 20224,452 $20.97 5.85 years$11,138 
Options Exercisable at March 31, 20223,775 $21.29 5.52 years$8,661 
(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 both the three months ended March 31, 2022 and 2021, the intrinsic value of stock options exercised was $3 million. For the three months ended March 31, 2022, the total fair value of stock options vested was $2 million compared to $3 million for the three months ended March 31, 2021.
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The Corporation recognized compensation expense for the vesting of stock options of approximately $241,000 for the three months ended March 31, 2022, compared to approximately $403,000 for the three months ended March 31, 2021. Compensation expense for the first quarter of 2022 related to accelerated vesting of stock options for retirement eligible colleagues was immaterial. At March 31, 2022, the Corporation had $1 million of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2024.
The Corporation also has issued time-based and performance-based restricted stock awards under the 2017 Incentive Compensation Plan and subsequent 2020 Incentive Compensation Plan. Performance awards are based on performance goals determined by the Corporation's Compensation and Benefits Committee, 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 three months ended March 31, 2022:
Restricted Stock Awards
Shares(a)
Weighted Average
Grant Date Fair Value
Outstanding at December 31, 20212,635 $19.87 
Granted650 23.69 
Vested(618)23.73 
Forfeited(1)21.97 
Outstanding at March 31, 20222,666 $20.70 
(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 2021 and 2022 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during 2021 and 2022 will vest ratably over a period of four years. Expense for restricted stock awards of $6 million was recorded for the three months ended March 31, 2022 and $3 million was recorded for the three months ended March 31, 2021. Included in compensation expense for the first three months of 2022 was $3 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had $31 million of unrecognized compensation costs related to restricted stock awards at March 31, 2022 that are expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2026.
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 in the market, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares, if any, will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.

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Note 6 Investment Securities
Investment securities are designated as AFS, HTM, or equity on the consolidated balance sheets at the time of purchase. The amortized cost and fair values of AFS and HTM securities at March 31, 2022 were as follows:
($ in Thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Fair Value
Investment securities AFS
U. S. Treasury securities$124,328 $— $(8,196)$116,132 
Agency securities15,000 — (800)14,200 
Obligations of state and political subdivisions (municipal securities)368,831 3,764 (195)372,401 
Residential mortgage-related securities
FNMA / FHLMC1,993,893 937 (100,011)1,894,819 
GNMA59,470 166 (726)58,909 
Commercial mortgage-related securities
FNMA / FHLMC19,290 496 — 19,786 
GNMA128,019 18 (1,278)126,760 
Asset backed securities
FFELP173,068 — (4,090)168,978 
SBA5,865 33 (53)5,845 
Other debt securities3,000 — (27)2,973 
Total investment securities AFS$2,890,763 $5,416 $(115,376)$2,780,803 
Investment securities HTM
U. S. Treasury securities$998 $— $(34)$964 
Obligations of state and political subdivisions (municipal securities)1,696,536 32,201 (80,896)1,647,842 
Residential mortgage-related securities
FNMA / FHLMC956,470 35,739 (72,418)919,790 
GNMA44,742 116 (643)44,215 
Private-label384,016 13,460 (28,955)368,521 
Commercial mortgage-related securities
FNMA/FHLMC764,775 17,620 (88,784)693,610 
GNMA92,383 1,032 (3,456)89,959 
Total investment securities HTM$3,939,920 $100,167 $(275,186)$3,764,901 
During the first quarter of 2022, the Corporation redesignated approximately $1.6 billion of mortgage-related securities from AFS to HTM. The reclassification of these investment securities was accounted for at fair value. Management elected to transfer these investment securities as the Corporation has the positive intent and ability to hold these investment securities to maturity. See Note 16 for additional information on the unrealized losses on investment securities transferred from AFS to HTM.

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The amortized cost and fair values of AFS and HTM securities at December 31, 2021 were as follows:
($ in Thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Fair Value
Investment securities AFS
U. S. Treasury securities$124,291 $— $(1,334)$122,957 
Agency securities15,000 — (103)14,897 
Obligations of state and political subdivisions (municipal securities)381,517 18,940 — 400,457 
Residential mortgage-related securities
FNMA / FHLMC2,709,399 3,729 (21,249)2,691,879 
GNMA66,189 1,591 — 67,780 
Private-label332,028 31 (2,335)329,724 
Commercial mortgage-related securities
FNMA / FHLMC357,240 2,686 (9,302)350,623 
GNMA165,439 1,360 — 166,799 
Asset backed securities
FFELP177,974 475 (1,123)177,325 
SBA6,594 39 (54)6,580 
Other debt securities3,000 — (6)2,994 
Total investment securities AFS$4,338,671 $28,850 $(35,506)$4,332,015 
Investment securities HTM
U. S. Treasury securities$1,000 $$— $1,001 
Obligations of state and political subdivisions (municipal securities)1,628,759 113,179 (1,951)1,739,988 
Residential mortgage-related securities
FNMA / FHLMC34,347 1,792 — 36,139 
GNMA48,053 1,578 — 49,631 
Commercial mortgage-related securities
FNMA / FHLMC425,937 122 (6,659)419,400 
GNMA100,907 1,799 (200)102,506 
 Total investment securities HTM$2,239,003 $118,471 $(8,809)$2,348,664 
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Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The expected maturities of AFS and HTM securities at March 31, 2022, are shown below:
 AFSHTM
($ in Thousands)Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due in one year or less$5,167 $5,171 $18,432 $18,503 
Due after one year through five years89,914 87,185 34,156 34,343 
Due after five years through ten years378,692 374,733 163,456 164,057 
Due after ten years37,386 38,617 1,481,489 1,431,903 
Total debt securities511,159 505,706 1,697,534 1,648,806 
Residential mortgage-related securities
FNMA / FHLMC1,993,893 1,894,819 956,470 919,790 
GNMA59,470 58,909 44,742 44,215 
Private-label— — 384,016 368,521 
Commercial mortgage-related securities
FNMA / FHLMC19,290 19,786 764,775 693,610 
GNMA128,019 126,760 92,383 89,959 
Asset backed securities
FFELP 173,068 168,978 — — 
SBA5,865 5,845 — — 
Total investment securities$2,890,763 $2,780,803 $3,939,920 $3,764,901 
Ratio of fair value to amortized cost96.2 %95.6 %
On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at March 31, 2022:
($ in Thousands)AAAAAANot RatedTotal
U. S. Treasury securities$998 $— $— $— $998 
Obligations of state and political subdivisions (municipal securities)762,066 920,883 12,692 895 1,696,536 
Residential mortgage-related securities
FNMA / FHLMC956,470 — — — 956,470 
GNMA44,742 — — — 44,742 
Private-label384,016 — — — 384,016 
Commercial mortgage-related securities
FNMA / FHLMC764,775 — — — 764,775 
GNMA 92,383 — — — 92,383 
Total HTM securities$3,005,450 $920,883 $12,692 $895 $3,939,920 
The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2021:
($ in Thousands)AAAAAANot RatedTotal
U. S. Treasury securities$1,000 $— $— $— $1,000 
Obligations of state and political subdivisions (municipal securities)702,399 914,591 10,873 896 1,628,759 
Residential mortgage-related securities
FNMA / FHLMC34,347 — — — 34,347 
GNMA48,053 — — — 48,053 
Commercial mortgage-related securities
FNMA / FHLMC425,937 — — — 425,937 
GNMA 100,907 — — — 100,907 
Total HTM securities$1,312,642 $914,591 $10,873 $896 $2,239,003 
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Investment securities gains (losses), net includes proceeds from the sale of AFS investment securities. The proceeds from the sale of AFS investment securities for the three months ended March 31, 2022 and 2021, are shown below:
Three Months Ended Mar 31,
($ in Thousands)20222021
Gross gains on AFS securities$21 $36 
Gross (losses) on AFS securities— (75)
Investment securities gains (losses), net21 (39)
Proceeds from sales of investment securities AFS$734 $51,295 
During the first quarter of 2021, the Corporation sold $51 million of lower yielding U.S. Treasury and Agency securities at a slight loss to take advantage of the steeper yield curve by reinvesting the proceeds into similar but higher yielding, longer duration securities.
Investment securities with a carrying value of $2.2 billion and $2.3 billion at March 31, 2022 and December 31, 2021, respectively, were pledged to secure certain deposits or for other purposes.
Accrued interest receivable on HTM securities totaled $16 million and $15 million at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on AFS securities totaled $8 million and $9 million at March 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets. There was no interest income reversed for investments going into nonaccrual at both March 31, 2022 and 2021.
A security is considered past due once it is 30 days past due under the terms of the agreement. At both March 31, 2022 and December 31, 2021, the Corporation had no past due HTM securities.

The allowance for credit losses on HTM securities was approximately $65,000 at March 31, 2022 and approximately $55,000 at December 31, 2021, attributable entirely to the Corporation's municipal securities, included in investment securities HTM, 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, 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 March 31, 2022:
 Less than 12 months12 months or moreTotal
($ in Thousands)Number
of
Securities
Unrealized
(Losses)
Fair
Value
Number
of
Securities
Unrealized
(Losses)
Fair
Value
Unrealized
(Losses)
Fair
Value
Investment securities AFS
U.S. Treasury securities$(7,346)$107,050 (850)$9,082 $(8,196)$116,132 
Agency securities(800)14,200 — — — (800)14,200 
Obligations of state and political subdivisions (municipal securities)64 (195)35,501 — — — (195)35,501 
Residential mortgage-related securities
FNMA / FHLMC88 (80,850)1,617,123 (19,161)235,380 (100,011)1,852,503 
GNMA(726)44,614 — — — (726)44,614 
GNMA commercial mortgage-related securities31 (1,278)113,831 — — — (1,278)113,831 
Asset backed securities
FFELP(1,955)110,489 (2,135)58,489 (4,090)168,978 
SBA— — — (53)2,763 (53)2,763 
Other debt securities(27)1,973 — — — (27)1,973 
Total207 $(93,177)$2,044,781 26 $(22,199)$305,713 $(115,376)$2,350,494 
Investment securities HTM
U.S. Treasury securities$(34)$964 — $— $— $(34)$964 
Obligations of state and political subdivisions (municipal securities)346 (79,571)576,351 (1,325)5,100 (80,896)581,451 
Residential mortgage-related securities
FNMA / FHLMC51 (72,418)896,284 — — — (72,418)896,284 
GNMA46 (643)33,468 — — — (643)33,468 
Private-label18 (28,955)368,521 — — — (28,955)368,521 
 Commercial mortgage-related securities
FNMA / FHLMC15 (79,178)342,543 (9,606)72,787 (88,784)415,331 
GNMA33 (3,456)368,244 — — — (3,456)368,244 
Total510 $(264,255)$2,586,375 12 $(10,930)$77,887 $(275,186)$2,664,262 
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For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2021:
 Less than 12 months12 months or moreTotal
($ in Thousands)Number
of
Securities
Unrealized
(Losses)
Fair
Value
Number
of
Securities
Unrealized
(Losses)
Fair
Value
Unrealized
(Losses)
Fair
Value
Investment securities AFS
U.S. Treasury securities$(1,334)$122,957 — $— $— $(1,334)$122,957 
Agency securities(103)14,897 — — — (103)14,897 
Residential mortgage-related securities
FNMA / FHLMC74 (21,249)2,172,837 — — — (21,249)2,172,837 
Private-label12 (2,335)248,617 — — — (2,335)248,617 
FNMA / FHLMC commercial mortgage-related securities19 (9,302)328,568 — — — (9,302)328,568 
Asset backed securities
FFELP(256)64,282 (867)62,576 (1,123)126,858 
SBA— — — (54)3,902 (54)3,902 
Other debt securities(6)2,994 — — — (6)2,994 
Total120 $(34,586)$2,955,152 17 $(920)$66,478 $(35,506)$3,021,630 
Investment securities HTM
Obligations of state and political subdivisions (municipal securities)49 $(1,951)$112,038 — $— $— $(1,951)$112,038 
Commercial mortgage-related securities
FNMA/FHLMC18 (6,272)388,072 $(387)$10,775 (6,659)398,847 
GNMA(200)33,468 — — — (200)33,468 
Total72 $(8,422)$533,577 $(387)$10,775 $(8,809)$544,352 
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 March 31, 2022 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. 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 $82 million at both March 31, 2022 and December 31, 2021. The Corporation had Federal Reserve Bank stock of $87 million at both March 31, 2022 and December 31, 2021. Accrued interest receivable on FHLB stock totaled approximately $962,000 and $975,000 at March 31, 2022 and December 31, 2021, respectively. There was $520,000 accrued interest receivable on Federal Reserve Bank stock at March 31, 2022 and none at December 31, 2021. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.
Equity Securities
Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of CRA Qualified Investment mutual funds and other mutual funds. At both March 31, 2022 and December 31, 2021, the Corporation had equity securities with readily determinable fair values of $5 million.
Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values, which primarily consists of approximately 78,000 Visa Class B restricted shares, was carried at $14 million at both March 31, 2022 and December 31, 2021.
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Note 7 Loans
The period end loan composition was as follows:
($ in Thousands)Mar 31, 2022Dec 31, 2021
PPP$17,995 $66,070 
Asset-based lending & equipment finance(a)
231,040 178,027 
Commercial and industrial8,102,380 8,208,289 
Commercial real estate — owner occupied973,572 971,326 
Commercial and business lending9,324,986 9,423,711 
Commercial real estate — investor4,469,241 4,384,569 
Real estate construction1,760,076 1,808,976 
Commercial real estate lending6,229,317 6,193,545 
Total commercial15,554,303 15,617,256 
Residential mortgage7,609,343 7,567,310 
Auto finance497,523 143,045 
Home equity580,867 595,615 
Other consumer289,889 301,723 
Total consumer8,977,622 8,607,693 
Total loans$24,531,926 $24,224,949 
(a) Periods prior to Mar 31, 2022 do not include equipment finance.

Accrued interest receivable on loans totaled $58 million at March 31, 2022, and $55 million at December 31, 2021, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled approximately $95,000 and $98,000 for the three months ended March 31, 2022 and March 31, 2021, respectively.

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The following table presents commercial and consumer loans by credit quality indicator by vintage year at March 31, 2022:
Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)
Rev Loans Converted to Term(a)
Rev Loans Amortized Cost BasisYTD 20222021202020192018PriorTotal
PPP:(b)
Risk rating:
Pass$— $— $— $16,118 $1,782 $— $— $— $17,900 
Potential Problem— — — — 54 — — — 54 
Nonaccrual— — — — 41 — — — 41 
PPP$— $— $— $16,118 $1,877 $— $— $— $17,995 
Asset-based lending & equipment finance:
Risk rating:
Pass$— $27,624 $22,962 $116,851 $42,930 $1,243 $223 $150 $211,982 
Potential Problem— 2,057 — — 17,000 — — — 19,057 
Asset-based lending & equipment finance$— $29,681 $22,962 $116,851 $59,930 $1,243 $223 $150 $231,040 
Commercial and industrial:
Risk rating:
Pass$— $2,113,051 $320,013 $2,622,986 $802,154 $905,744 $582,722 $602,568 $7,949,237 
Special Mention— 11,619 — 5,900 3,226 — — 38,777 59,521 
Potential Problem37 3,793 17,540 1,369 3,540 45,200 20,584 1,372 93,396 
Nonaccrual71 — 71 — 154 — — — 225 
Commercial and industrial$108 $2,128,462 $337,623 $2,630,255 $809,074 $950,944 $603,306 $642,716 $8,102,380 
Commercial real estate - owner occupied:
Risk rating:
Pass$— $19,947 $28,850 $273,534 $183,174 $181,284 $106,991 $154,061 $947,840 
Special Mention— 247 — — 1,310 — — 169 1,726 
Potential Problem— — 635 5,632 2,195 10,571 — 4,972 24,005 
Commercial real estate - owner occupied$— $20,194 $29,485 $279,166 $186,678 $191,855 $106,991 $159,202 $973,572 
Commercial and business lending:
Risk rating:
Pass$— $2,160,622 $371,825 $3,029,488 $1,030,039 $1,088,271 $689,936 $756,778 $9,126,959 
Special Mention— 11,865 — 5,900 4,537 — — 38,946 61,248 
Potential Problem37 5,850 18,175 7,001 22,788 55,771 20,584 6,344 136,513 
Nonaccrual71 — 71 — 195 — — — 266 
Commercial and business lending$108 $2,178,337 $390,071 $3,042,390 $1,057,559 $1,144,041 $710,520 $802,068 $9,324,986 
Commercial real estate - investor:
Risk rating:
Pass$— $90,319 $391,108 $1,616,587 $704,283 $713,819 $308,963 $318,092 $4,143,170 
Special Mention— — 2,750 55,652 16,289 32,847 — 6,855 114,393 
Potential Problem— — 21,291 21,155 28,694 25,722 28,804 5,125 130,792 
Nonaccrual— — 573 65,404 7,906 7,003 — — 80,886 
Commercial real estate - investor$— $90,319 $415,721 $1,758,799 $757,172 $779,391 $337,767 $330,071 $4,469,241 
Real estate construction:
Risk rating:
Pass$— $27,848 $105,439 $867,680 $517,765 $152,883 $45,941 $12,395 $1,729,950 
Special Mention— — — 934 11,929 16,454 — — 29,317 
Potential Problem— — — 84 116 — — — 200 
Nonaccrual— — — — — — — 609 609 
Real estate construction$— $27,848 $105,439 $868,698 $529,810 $169,337 $45,941 $13,004 $1,760,076 
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Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)
Rev Loans Converted to Term(a)
Rev Loans Amortized Cost BasisYTD 20222021202020192018PriorTotal
Commercial real estate lending:
Risk rating:
Pass$— $118,167 $496,547 $2,484,267 $1,222,047 $866,702 $354,904 $330,487 $5,873,120 
Special Mention— — 2,750 56,586 28,218 49,302 — 6,855 143,711 
Potential Problem— — 21,291 21,239 28,810 25,722 28,804 5,125 130,992 
Nonaccrual— — 573 65,404 7,906 7,003 — 609 81,495 
Commercial real estate lending$— $118,167 $521,160 $2,627,496 $1,286,982 $948,729 $383,708 $343,075 $6,229,317 
Total commercial:
Risk rating:
Pass$— $2,278,789 $868,372 $5,513,755 $2,252,087 $1,954,972 $1,044,840 $1,087,265 $15,000,080 
Special Mention— 11,865 2,750 62,486 32,755 49,302 — 45,800 204,958 
Potential Problem37 5,850 39,466 28,241 51,598 81,493 49,388 11,469 267,505 
Nonaccrual71 — 644 65,404 8,101 7,003 — 609 81,761 
Total commercial$108 $2,296,504 $911,231 $5,669,886 $2,344,541 $2,092,770 $1,094,228 $1,145,143 $15,554,303 
Residential mortgage:
Risk rating:
Pass$— $— $247,943 $1,874,892 $1,859,312 $916,031 $407,380 $2,246,835 $7,552,394 
Special Mention— — — — — — — 90 90 
Potential Problem— — 276 468 288 578 280 1,142 3,032 
Nonaccrual— — 979 2,160 3,102 3,955 6,946 36,684 53,827 
Residential mortgage$— $— $249,198 $1,877,520 $1,862,703 $920,564 $414,606 $2,284,751 $7,609,343 
Auto finance:
Risk rating:
Pass$— $— $357,813 $135,564 $578 $2,262 $921 $295 $497,432 
Special Mention— — — 42 — — — 42 
Nonaccrual— — — — — 35 14 — 49 
Auto finance$— $— $357,813 $135,606 $578 $2,296 $934 $296 $497,523 
Home equity:
Risk rating:
Pass$2,698 $486,976 $2,212 $2,245 $1,480 $6,900 $8,143 $64,691 $572,646 
Special Mention91 122 — — — 14 56 384 575 
Potential Problem— — — — — — 10 146 156 
Nonaccrual171 55 — 119 145 328 6,834 7,490 
Home equity$2,960 $487,152 $2,212 $2,254 $1,599 $7,058 $8,537 $72,054 $580,867 
Other consumer:
Risk rating:
Pass$76 $174,209 $1,843 $9,113 $3,504 $2,109 $340 $98,217 $289,335 
Special Mention429 — 10 12 — — 459 
Nonaccrual49 — — 12 — 28 95 
Other consumer$80 $174,687 $1,843 $9,123 $3,528 $2,115 $340 $98,253 $289,889 
Total consumer:
Risk rating:
Pass$2,774 $661,185 $609,810 $2,021,815 $1,864,874 $927,302 $416,784 $2,410,038 $8,911,807 
Special Mention94 551 — 52 12 14 56 482 1,167 
Potential Problem— — 276 468 288 578 290 1,288 3,188 
Nonaccrual171 103 979 2,169 3,234 4,141 7,288 43,546 61,460 
Total consumer$3,040 $661,840 $611,065 $2,024,504 $1,868,408 $932,034 $424,418 $2,455,354 $8,977,622 
Total loans:
Risk rating:
Pass(c)
$2,774 $2,939,973 $1,478,182 $7,535,570 $4,116,960 $2,882,275 $1,461,624 $3,497,303 $23,911,887 
Special Mention94 12,417 2,750 62,538 32,767 49,315 56 46,283 206,125 
Potential Problem37 5,850 39,742 28,709 51,886 82,071 49,678 12,757 270,693 
Nonaccrual242 103 1,623 67,573 11,335 11,143 7,288 44,154 143,221 
Total loans$3,148 $2,958,343 $1,522,296 $7,694,390 $4,212,949 $3,024,804 $1,518,646 $3,600,497 $24,531,926 
(a) Revolving loans converted to term loans are also reported in their year of origination.
(b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans.
(c) Accruing TDRs are included in pass unless otherwise rated as special mention.

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The following table presents commercial and consumer loans by credit quality indicator by vintage year at December 31, 2021:
Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)
Rev Loans Converted to Term(a)
Rev Loans Amortized Cost Basis20212020201920182017PriorTotal
PPP:(b)
Risk rating:
Pass$— $— $44,921 $18,610 $— $— $— $— $63,531 
Special Mention— — 212 281 — — — — 493 
Potential Problem— — 2,000 — — — — — 2,000 
Nonaccrual— — — 46 — — — — 46 
PPP$— $— $47,134 $18,936 $— $— $— $— $66,070 
Commercial and industrial:(c)
Risk rating:
Pass$2,084 $2,371,605 $2,631,753 $852,758 $986,300 $710,491 $177,568 $493,876 $8,224,351 
Special Mention— 7,068 5,900 1,695 — — — 2,811 17,474 
Potential Problem2,706 26,387 23,415 19,960 46,296 20,924 104 1,172 138,258 
Nonaccrual76 — 5,996 161 52 24 — — 6,233 
Commercial and industrial$4,867 $2,405,059 $2,667,064 $874,575 $1,032,647 $731,439 $177,671 $497,860 $8,386,316 
Commercial real estate - owner occupied:
Risk rating:
Pass$10,092 $30,869 $261,418 $178,424 $187,073 $110,169 $54,538 $117,011 $939,503 
Special Mention— 226 — 4,628 — — — 245 5,100 
Potential Problem— 526 5,953 4,721 10,047 727 2,204 2,546 26,723 
Commercial real estate - owner occupied$10,092 $31,621 $267,371 $187,773 $197,120 $110,896 $56,742 $119,802 $971,326 
Commercial and business lending:
Risk rating:
Pass$12,176 $2,402,474 $2,938,092 $1,049,792 $1,173,373 $820,660 $232,106 $610,887 $9,227,385 
Special Mention— 7,294 6,112 6,604 — — — 3,056 23,066 
Potential Problem2,706 26,913 31,368 24,681 56,343 21,651 2,307 3,718 166,981 
Nonaccrual76 — 5,996 207 52 24 — — 6,279 
Commercial and business lending$14,958 $2,436,680 $2,981,569 $1,081,284 $1,229,767 $842,335 $234,414 $617,662 $9,423,711 
Commercial real estate - investor:
Risk rating:
Pass$37,430 $105,521 $1,650,936 $685,423 $867,606 $414,079 $139,320 $230,452 $4,093,337 
Special Mention— — 57,163 27,384 33,016 72 — 6,781 124,416 
Potential Problem— — 21,309 9,860 22,243 34,591 3,564 14,573 106,138 
Nonaccrual— — 45,502 8,158 6,820 — — 197 60,677 
Commercial real estate - investor$37,430 $105,521 $1,774,910 $730,825 $929,685 $448,741 $142,883 $252,003 $4,384,569 
Real estate construction:
Risk rating:
Pass$— $31,773 $843,664 $614,469 $204,337 $48,647 $2,229 $12,212 $1,757,331 
Special Mention— — 2,203 11,929 — 15,885 41 30,060 
Potential Problem— — 37 120 21,251 — — — 21,408 
Nonaccrual— — — — — — — 177 177 
Real estate construction$— $31,773 $845,903 $626,518 $225,588 $64,532 $2,270 $12,392 $1,808,976 
Commercial real estate lending:
Risk rating:
Pass$37,430 $137,294 $2,494,600 $1,299,893 $1,071,943 $462,726 $141,549 $242,664 $5,850,668 
Special Mention— — 59,366 39,313 33,016 15,957 41 6,784 154,476 
Potential Problem— — 21,345 9,980 43,494 34,591 3,564 14,573 127,546 
Nonaccrual— — 45,502 8,158 6,820 — — 374 60,855 
Commercial real estate lending$37,430 $137,294 $2,620,814 $1,357,343 $1,155,273 $513,273 $145,153 $264,395 $6,193,545 
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Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)
Rev Loans Converted to Term(a)
Rev Loans Amortized Cost Basis20212020201920182017PriorTotal
Total commercial:
Risk rating:
Pass$49,606 $2,539,768 $5,432,693 $2,349,685 $2,245,316 $1,283,386 $373,655 $853,551 $15,078,053 
Special Mention— 7,294 65,478 45,917 33,016 15,957 41 9,840 177,543 
Potential Problem2,706 26,913 52,713 34,660 99,837 56,241 5,871 18,291 294,527 
Nonaccrual76 — 51,498 8,365 6,872 24 — 374 67,134 
Total commercial$52,388 $2,573,974 $5,602,382 $2,438,627 $2,385,040 $1,355,608 $379,567 $882,057 $15,617,256 
Residential mortgage:
Risk rating:
Pass$— $— $1,771,447 $1,945,029 $974,188 $428,459 $673,447 $1,716,419 $7,508,989 
Special Mention— — — — — 285 — 461 746 
Potential Problem— — 475 332 404 265 81 658 2,214 
Nonaccrual— — 1,993 2,911 4,479 6,224 6,019 33,734 55,362 
Residential mortgage$— $— $1,773,915 $1,948,272 $979,071 $435,233 $679,547 $1,751,272 $7,567,310 
Auto finance:
Risk rating: