ASSOCIATED BANC-CORP - Quarter Report: 2024 September (Form 10-Q)

ACLLAllowance for Credit Losses on LoansAFSAvailable for SaleALCO Asset / Liability CommitteeASUAccounting Standards Updatethe BankAssociated Bank, National AssociationBasel IIIInternational framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquiditybpbasis point(s)BTFPBank Term Funding ProgramCDsCertificates of DepositCDIsCore Deposit IntangiblesCECLCurrent Expected Credit LossesCET1Common Equity Tier 1CFPBConsumer Financial Protection BureauCorporation / ourAssociated Banc-Corp collectively with all of its subsidiaries and affiliatesCRACommunity Reinvestment ActCRECommercial Real EstateEAREarnings at RiskExchange ActSecurities Exchange Act of 1934, as amendedFDICFederal Deposit Insurance CorporationFederal ReserveBoard of Governors of the Federal Reserve SystemFFELPFederal Family Education Loan ProgramFHLBFederal Home Loan BankFHLMCFederal Home Loan Mortgage CorporationFICOFair Isaac Corporation, provider of a broad-based risk score to aid in credit decisionsFNMAFederal National Mortgage AssociationFTEsFull-time equivalent employeesFTPFunds Transfer PricingGAAPGenerally Accepted Accounting PrinciplesGNMAGovernment National Mortgage AssociationGSEGovernment-Sponsored EnterpriseHTMHeld to MaturityLTVLoan-to-ValueMoody's

Moody’s Investors Service

MSRsMortgage Servicing RightsMVEMarket Value of EquityNAVNet Asset Value measured at fair value per share (or its equivalent) as a practical expedientNet Free FundsNoninterest-bearing sources of fundsNPAsNonperforming AssetsOCIOther Comprehensive IncomeOREOOther Real Estate OwnedParent CompanyAssociated Banc-Corp individually RAPRetirement Account Plan - the Corporation's noncontributory defined benefit retirement planRepurchase AgreementsSecurities sold under agreements to repurchaseRestricted Stock AwardsRestricted 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

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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	$	$
Interest-bearing deposits in other financial institutions
Federal funds sold and securities purchased under agreements to resell
AFS investment securities, at fair value
HTM investment securities, net, at amortized cost
Equity securities
FHLB and Federal Reserve Bank stocks, at cost
Residential loans held for sale
Commercial loans held for sale
Loans
Allowance for loan losses	()	()
Loans, net
Tax credit and other investments
Premises and equipment, net
Bank and corporate owned life insurance
Goodwill
Other intangible assets, net
Mortgage servicing rights, net
Interest receivable
Other assets
Total assets	$	$
Liabilities and stockholders' equity
Noninterest-bearing demand deposits	$	$
Interest-bearing deposits
Total deposits
Short-term funding
FHLB advances
Other long-term funding

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 Comprehensive Income (Unaudited)


	Three Months Ended Sep 30,		Nine Months Ended Sep 30,
($ in thousands)	2024	2023	2024	2023
Net income	$	$	$	$
Other comprehensive income (loss), net of tax
AFS investment securities
Net unrealized gains (losses)		()		()

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


Income tax (expense) benefit	()		()
Other comprehensive income (loss) on AFS securities		()		()
Cash flow hedge derivatives
Net unrealized gains (losses)		()	()	()
Reclassification adjustment for net losses realized in net income
Income tax benefit
Other comprehensive income (loss) on cash flow hedge derivatives		()		()
Defined benefit pension and postretirement obligations
Amortization of prior service cost	()	()	()	()
Amortization of actuarial (gain) loss	()	()	()

Income tax benefit (expense)			()
Other comprehensive (loss) on pension and postretirement obligations	()	()	()	()
Total other comprehensive income (loss)		()		()
Comprehensive income	$	$	$	$

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 Equity

Common Stock

Surplus

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss)

Treasury Stock

Total

Balance, December 31, 2023

()

Comprehensive income:

Net income

—

Other comprehensive (loss)

—

()

—

()

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, open market purchases

—

()

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.22 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, March 31, 2024

()

Comprehensive income:

Net income

—

Other comprehensive (loss)

—

()

—

()

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.22 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, June 30, 2024

()

Comprehensive income:

Net income

—

Other comprehensive income

—

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.22 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, September 30, 2024

()

Numbers may not sum due to rounding.

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

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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

()

Comprehensive income:

Net income

—

Other comprehensive income

—

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.21 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, March 31, 2023

()

Comprehensive income:

Net income

—

Other comprehensive (loss)

—

()

—

()

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.21 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, June 30, 2023

()

Comprehensive income:

Net income

—

Other comprehensive (loss)

—

()

—

()

Comprehensive income

Common stock issued:

Stock-based compensation plans, net

—

()

—

Purchase of treasury stock, stock-based compensation plans

—

()

Cash dividends:

Common stock, $0.21 per share

—

()

—

()

Preferred stock(a)

—

()

—

()

Stock-based compensation expense, net

—

Balance, September 30, 2023

()

Numbers may not sum due to rounding.

(a) Series E, $ per share and Series F, $ 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	$	$
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Depreciation and amortization
Change in MSRs valuation		()
Amortization of other intangible assets
Amortization and accretion on earning assets, funding, and other, net
Net amortization of tax credit investments
(Gains) on sales of investment securities, net	()
Asset losses (gains), net		()
Loss on mortgage banking activities, net
Mortgage loans originated and acquired for sale	()	()
Proceeds from sales of mortgage loans held for sale
Changes in certain assets and liabilities:
Decrease (increase) in interest receivable		()
Increase in interest payable
Increase (decrease) in expense payable		()
(Decrease) increase in net derivative position	()
Net change in other assets and other liabilities	()	()
Net cash provided by operating activities
Cash flows from investing activities
Net (increase) in loans	()	()
Purchases of:
AFS securities	()	()
HTM securities		()
FHLB and Federal Reserve Bank stocks and equity securities	()	()
Proceeds from:
Sales of AFS securities
Sale of FHLB and Federal Reserve Bank stocks and equity securities
Prepayments, calls, and maturities of AFS securities
Prepayments, calls, and maturities of HTM securities
Sales, prepayments, calls, and maturities of other assets
Premises, equipment, and software	()	()
Net change in tax credit and alternative investments	()	()
Net cash (used in) investing activities	()	()
Cash flows from financing activities
Net increase in deposits
Net increase (decrease) in short-term funding		()
Net (decrease) in short-term FHLB advances	()	()
Repayment of long-term FHLB advances	()	()
Proceeds from long-term FHLB advances
Proceeds from issuance of long-term funding
Payment of debt issuance costs	()
(Repayment) of finance lease principal	()	()
Proceeds from issuance of common stock for stock-based compensation plans
Purchase of treasury stock, open market purchases	()
Purchase of treasury stock, stock-based compensation plans	()	()
Cash dividends on common stock	()	()
Cash dividends on preferred stock	()	()
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(a)	$	$

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	$	$
Cash paid for income and franchise taxes
Loans and bank premises transferred to OREO
Capitalized mortgage servicing rights
Loans transferred (from) into held for sale (into) from portfolio, net	()
Fair value adjustments on hedged long-term FHLB advances and subordinated debt	()
Fair value adjustments on foreign currency exchange forwards
Fair value adjustments on cash flow hedges		()

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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

Note 2

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Note 3

$ $ $ Preferred stock dividends()()()()Net income available to common equity Common shareholder dividends()()()()Unvested share-based payment awards()()()()Undistributed earnings$ $ $ $ Undistributed earnings allocated to common shareholders$ $ $ $ Undistributed earnings allocated to unvested share-based payment awards Undistributed earnings$ $ $ $ Basic Distributed earnings to common shareholders$ $ $ $ Undistributed earnings allocated to common shareholders Total common shareholders earnings, basic$ $ $ $ DilutedDistributed earnings to common shareholders$ $ $ $ Undistributed earnings allocated to common shareholders Total common shareholders earnings, diluted$ $ $ $ Weighted average common shares outstanding Effect of dilutive common stock awards Diluted weighted average common shares outstanding Basic earnings per common share$ $ $ $ Diluted earnings per common share$ $ $ $

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million and million anti-dilutive common stock options for the three months ended September 30, 2024 and 2023, respectively, and million and 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

$ years$ AFS investment securitiesU.S. Treasury securities$ $ $()$ Obligations of state and political subdivisions (municipal securities) () Residential mortgage-related securities:FNMA/FHLMC () GNMA () Commercial mortgage-related securities:FNMA/FHLMC () GNMA () Asset backed securities:FFELP () SBA () Other debt securities () Total AFS investment securities$ $ $()$ HTM investment securitiesU.S. Treasury securities$ $ $()$ Obligations of state and political subdivisions (municipal securities) () Residential mortgage-related securities:FNMA/FHLMC () GNMA () Private-label () Commercial mortgage-related securities:FNMA/FHLMC () GNMA () Total HTM investment securities$ $ $()$ AFS investment securitiesU.S. Treasury securities$ $ $()$ Obligations of state and political subdivisions (municipal securities) () Residential mortgage-related securities:FNMA/FHLMC () GNMA () Commercial mortgage-related securities:FNMA/FHLMC () GNMA () Asset backed securities:FFELP () SBA () Other debt securities () Total AFS investment securities$ $ $()$ HTM investment securitiesU.S. Treasury securities$ $ $()$ Obligations of state and political subdivisions (municipal securities) () Residential mortgage-related securities:FNMA/FHLMC () GNMA () Private-label () Commercial mortgage-related securities:FNMA/FHLMC () GNMA () Total HTM investment securities$ $ $()$

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. $ $ $ Due after one year through five years Due after five years through ten years Due after ten years Total debt securities Residential mortgage-related securities:FNMA/FHLMC GNMA Private-label Commercial mortgage-related securities:FNMA/FHLMC GNMA Asset backed securities:FFELP SBA $

$ $()$ Gain on sale and net write-up (down) of equity securities () Investment securities gains, net$ $()$ $ Proceeds from sales of AFS investment securities$ $ $ $

million.

Investment securities with a carrying value of $ billion and $ 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 $ million and $ million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on AFS securities totaled $ million and $ 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 $,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, allowance for credit losses has been recorded related to these securities.

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$ $ $()$ $()$ Obligations of state and political subdivisions (municipal securities) () () () Residential mortgage-related securities:FNMA/FHLMC () () () GNMA () () () Commercial mortgage-related securities:FNMA/FHLMC () () GNMA () () Asset backed securities:FFELP () () SBA () () Other debt securities () () Total $()$ $()$ $()$ HTM investment securitiesU.S. Treasury securities $ $ $()$ $()$ Obligations of state and political subdivisions (municipal securities) () () () Residential mortgage-related securities:FNMA/FHLMC () () () GNMA () () Private-label () () Commercial mortgage-related securities:FNMA/FHLMC () () GNMA () () Total $()$ $()$ $()$

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$ $ $()$ $()$ Obligations of state and political subdivisions (municipal securities) () () () Residential mortgage-related securities:FNMA/FHLMC () () () GNMA () () () Commercial mortgage-related securities:FNMA/FHLMC () () GNMA () () () Asset backed securities:FFELP () () SBA () () Other debt securities () () () Total $()$ $()$ $()$ HTM investment securitiesU.S. Treasury securities $ $ $()$ $()$ Obligations of state and political subdivisions (municipal securities) () () () Residential mortgage-related securities:FNMA/FHLMC () () () GNMA () () () Private-label () () Commercial mortgage-related securities:FNMA/FHLMC () () () GNMA () () Total $()$ $()$ $()$

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 $ million and $ million at September 30, 2024 and December 31, 2023, respectively. The Corporation had Federal Reserve Bank stock of $ million and $ million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on FHLB stock totaled $ million and $ million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable on Federal Reserve Bank Stock totaled approximately $ at September 30, 2024 and there was 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.

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million and $ 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 $ million and $ 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

$ Commercial real estate — owner occupied Commercial and business lending Commercial real estate — investor Real estate construction Commercial real estate lending Total commercial Residential mortgage Auto finance Home equity Other consumer Total consumer Total loans$ $

Accrued interest receivable on loans totaled $ 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 $,000 for the three months ended September 30, 2024 and $ million for the nine months ended September 30, 2024, compared to approximately $,000 and $ million for the three and nine months ended September 30, 2023, respectively.

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$ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Commercial and industrial$ $ $ $ $ $ $ $ $ Commercial real estate - owner occupied:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Commercial real estate - owner occupied$ $ $ $ $ $ $ $ $ Commercial and business lending:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Commercial and business lending$ $ $ $ $ $ $ $ $ Commercial real estate - investor:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Commercial real estate - investor$ $ $ $ $ $ $ $ $ Real estate construction:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Real estate construction$ $ $ $ $ $ $ $ $ Commercial real estate lending:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Commercial real estate lending$ $ $ $ $ $ $ $ $ Total commercial:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Total commercial$ $ $ $ $ $ $ $ $

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$ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Residential mortgage$ $ $ $ $ $ $ $ $ Auto finance:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Nonaccrual Auto finance$ $ $ $ $ $ $ $ $ Home equity:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Home equity$ $ $ $ $ $ $ $ $ Other consumer:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Other consumer$ $ $ $ $ $ $ $ $ Total consumer:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Total consumer$ $ $ $ $ $ $ $ $ Total loans:Risk rating:Pass$ $ $ $ $ $ $ $ $ Special mention Substandard Nonaccrual Total loans$ $ $ $ $ $ $ $ $

(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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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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million at September 30, 2024 and $ million at December 31, 2023. $ $ $ $ $ Commercial real estate - owner occupied Commercial and business lending Commercial real estate - investor Real estate construction Commercial real estate lending Total commercial Residential mortgage Auto finance Home equity Other consumer Total consumer Total loans$ $ $ $ $ $

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

(b) interest income was recognized on nonaccrual loans for the three and nine months ended September 30, 2024. In addition, there were $ 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

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	()	%	()	%	()	%	()	%
Residential mortgage		%		%		%		%
Auto	()	%	()	%	()	%	()	%
Home equity	()	%		%	()	%		%
Other consumer	()	%	()	%	()	%	()	%
Weighted average of total loans modified	()	%	()	%	()	%	()	%

(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

months

Home equity

months

Weighted average of total loans modified

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 to months and to 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 to months and to 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.

$ Residential mortgage Auto Home equity Other consumer Total loans modified$ $ ) ) ) ) ) ) ) ) ) ))) ))) ) )))) )))) ) ) ) ) ) ))) ))) ) $ %

Note 7

events since the May 2024 impairment test that have changed the Corporation's impairment assessment conclusion. There were impairment charges recorded in 2023 or the first nine months of 2024.

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billion at both September 30, 2024 and December 31, 2023.

Core Deposit Intangibles

The Corporation has CDIs which are amortized. $ Accumulated amortization()()Net book value$ $ Amortization during the period$ $

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Note 8

$ Securities sold under agreements to repurchase Federal funds purchased and securities sold under agreements to repurchase BTFP funding Total short-term funding$ $ Long-term fundingCorporation senior notes, at par$ $ Corporation subordinated notes, at par Discount and capitalized costs()()

Subordinated debt fair value hedge(a)

()Finance leases Total long-term funding$ $ Total short and long-term funding, excluding FHLB advances$ $ FHLB advancesShort-term FHLB advances$ $ Long-term FHLB advances

FHLB advances fair value hedge(a)

()()Total FHLB advances$ $ Total short and long-term funding$ $

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

Securities Sold Under Agreements to Repurchase

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

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

$ Less: Legally enforceable master netting agreements Less: Cash collateral pledged/received Total derivative instruments, after netting$ $ $ $
(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 $ million and $ 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.

)$()$()$ FHLB advances() () Total$()$ $()$
(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 $ million and $ million, respectively.

The Corporation terminated its $ 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 $ million and is included in loans on the consolidated balance sheets. This amount includes $ million of hedging adjustments on the discontinued hedging relationships, which are not presented in the table above.

)$ $()$ $()$ $()$ The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20Interest contracts:Hedged items () ()()() ()()

Derivatives designated as hedging instruments(a)

()()() () ()

(a) Includes net settlements on the derivatives.

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$ $ $ The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20Foreign currency contracts:Hedged items ()()()Derivatives designated as hedging instruments() $()$()$()

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

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

Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedge derivatives are reclassified to interest income as interest payments are made on the hedged variable interest rate assets. The Corporation estimates that $ 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 months as of September 30, 2024.

)$ $()$ Interest rate-related instruments — MSRs hedgeMortgage banking, net ()()()Foreign currency exchange forwardsCapital markets, net

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

()

December 31, 2023

()

Note 11

Commercial letters of credit(a)

Standby letters of credit(c)

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 $ 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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$ Provision for unfunded commitments ()Balance at end of period$ $

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

Other Commitments

The Corporation invests in qualified affordable housing projects, historic projects, new market projects, and opportunity zone funds for the purpose of community reinvestment and obtaining tax credits and other tax benefits. Return on the Corporation's investment in these projects and funds comes in the form of the tax credits and tax losses that pass through to the Corporation, and deferral or elimination of capital gain recognition for tax purposes. The aggregate carrying value of these investments at September 30, 2024 was $ million, compared to $ 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 $ million for both the nine months ended September 30, 2024 and September 30, 2023, and $ 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 $ million at September 30, 2024 and $ 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 $ million at September 30, 2024 and $ 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 $ million.

For the nine months ended September 30, 2024 and the year ended December 31, 2023, the Corporation did 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 $ million at September 30, 2024 and $ 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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million and $ million for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. There were 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

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billion at the time of sale, consisting primarily of loans sold to GSEs. As of September 30, 2024, $ billion of those loans originated since 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 $,000 at September 30, 2024 and approximately $,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 $ million and $ 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 $ million and $ million, respectively, of such residential mortgage loans with credit risk recourse, upon which there have been historical losses to the Corporation.

Note 12

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$ $ $ $ Interest-bearing deposits in other financial institutions Federal funds sold and securities purchased under agreements to resell AFS investment securities:U.S. Treasury securities Obligations of state and political subdivisions (municipal securities) Residential mortgage-related securities:FNMA / FHLMC GNMA Commercial mortgage-related securities:FNMA / FHLMC GNMA Asset backed securities:FFELP SBA Other debt securities Total AFS investment securities HTM investment securities:U.S. Treasury securities Obligations of state and political subdivisions (municipal securities), net Residential mortgage-related securities:FNMA / FHLMC GNMA Private-label Commercial mortgage-related securities:FNMA / FHLMC GNMA Total HTM investment securities, net Equity securities:Equity securities Equity securities at NAV Total equity securities FHLB and Federal Reserve Bank stocks Residential loans held for sale Commercial loans held for sale Loans, net Bank and corporate owned life insurance Mortgage servicing rights, net

Interest rate-related instruments designated as hedging instruments(a)

Foreign currency exchange forwards designated as hedging instruments(a)

Interest rate-related and other instruments not designated as hedging instruments(a)

Foreign currency exchange forwards not designated as hedging instruments(a)

Interest rate lock commitments to originate residential mortgage loans held for sale Total selected assets at fair value$ $ $ $ $

(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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$ $ $ $ Savings Interest-bearing demand Money market

Brokered CDs(a)

Other time deposits(a)

Total deposits Short-term funding:Federal funds purchased and securities sold under agreements to repurchase BTFP funding Total short-term funding FHLB advances Other long-term funding

Standby letters of credit(b)

Interest rate-related instruments designated as hedging instruments(c)

Foreign currency exchange forwards designated as hedging instruments(c)

Interest rate-related and other instruments not designated as hedging instruments(c)

Foreign currency exchange forwards not designated as hedging instruments(c)

Forward commitments to sell residential mortgage loans Total selected liabilities at fair value$ $ $ $ $
(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 $ 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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Interest rate-related instruments designated as hedging instruments(a)

Foreign currency exchange forwards designated as hedging instruments(a)

Interest rate-related and other instruments not designated as hedging instruments(a)

Foreign currency exchange forwards not designated as hedging instruments(a)

Interest rate lock commitments to originate residential mortgage loans held for sale Total selected assets at fair value$ $ $ $ $

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$ $ $ $ Savings Interest-bearing demand Money market

Brokered CDs(a)

Other time deposits(a)

Total deposits Federal funds purchased and securities sold under agreements to repurchase FHLB advances Other long-term funding

Standby letters of credit(b)

Interest rate-related instruments designated as hedging instruments(c)

Foreign currency exchange forwards designated as hedging instruments(c)

Interest rate-related and other instruments not designated as hedging instruments(c)

Foreign currency exchange forwards not designated as hedging instruments(c)

(b) The commitment on standby letters of credit was $ 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	$	$		$
New production		()
Closed loans / settlements	()			()
Other	()	()		()
Change in mortgage derivative				()

Balance December 31, 2023	$	$		$	()
New production	$	$	()	$
Closed loans / settlements	()			()
Other	()			()
Change in mortgage derivative		()

Balance September 30, 2024	$	$		$

Gains recognized in investment securities gains, net Purchases Sales()

Fair value as of December 31, 2023

$ Gains recognized in investment securities gains, net$ Purchases Sales()

Fair value as of September 30, 2024

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Provision for credit losses$

OREO(b)

Level 2

Other noninterest expense / provision for credit losses(c)

Dec 31, 2023AssetsIndividually evaluated loansLevel 3$ Provision for credit losses$

OREO(b)

Level 2

Other noninterest expense / provision for credit losses(c)

Equity securities without readily determinable fair valuesLevel 3 Investment securities gains (losses), net (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.

%-%%Mortgage servicing rightsDiscounted cash flowConstant prepayment rate%-%%Individually evaluated loansAppraisals / discounted cash flowCollateral / discount factor%-%%Interest rate lock commitments to originate residential mortgage loans held for saleDiscounted cash flowClosing ratio%-%%

Note 13

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.

$ $ $ Interest cost Expected return on plan assets()()()()Amortization of prior service cost()()()()Amortization of actuarial loss Total net periodic pension cost$()$()$()$()Postretirement PlanInterest cost$ $ $ $ Amortization of prior service cost()()()()Amortization of actuarial (gain)()()()()Total net periodic benefit cost$()$()$()$()

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

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contributions during 2023 or the nine months ended September 30, 2024.

Note 14

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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$ $ $ Net intersegment interest (expense)()()()()Segment net interest income Noninterest income Total revenue Provision for credit losses Noninterest expense Income before income taxes Income tax expense Net income$ $ $ $ Allocated goodwill$ $


	Community, Consumer, and Business
	Three Months Ended Sep 30,		Nine Months Ended Sep 30,
($ in thousands)	2024	2023	2024	2023
Net interest income	$	$	$	$
Net intersegment interest income
Segment net interest income
Noninterest income
Total revenue
Provision for credit losses
Noninterest expense
Income before income taxes
Income tax expense
Net income	$	$	$	$






Allocated goodwill			$	$


	Risk Management and Shared Services
	Three Months Ended Sep 30,				Nine Months Ended Sep 30,
($ in thousands)	2024		2023		2024		2023
Net interest (loss)	$	()	$	()	$	()	$	()
Net intersegment interest (expense)	()		()		()		()
Segment net interest (loss)	()		()		()		()
Noninterest income
Total revenue	()		()		()		()
Provision for credit losses	()						()
Noninterest expense
(Loss) before income taxes	()		()		()		()
Income tax (benefit)	()		()		()		()
Net (loss)	$	()	$	()	$	()	$	()






Allocated goodwill					$		$

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$ $ $ Net intersegment interest income Segment net interest income Noninterest income Total revenue Provision for credit losses Noninterest expense Income before income taxes Income tax expense Net income$ $ $ $ Allocated goodwill$ $

Note 15

)$ $()$()Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive income (loss):Investment securities losses, net

HTM investment securities, net, at amortized cost(a)

Other assets / accrued expenses and other liabilities () ()Interest income Personnel expense ()()Other expense ()()Income tax (expense) benefit() ()()Net other comprehensive income (loss) during period () Balance September 30, 2024$()$ $()$()

Balance December 31, 2022

$()$ $()$()Other comprehensive (loss) before reclassifications() ()Amounts reclassified from accumulated other comprehensive income (loss):

HTM investment securities, net, at amortized cost(a)

Other assets / accrued expenses and other liabilities () ()Interest income Personnel expense ()()Other expense Income tax benefit Net other comprehensive (loss) during period()()()()Balance September 30, 2023$()$()$()$()(a) Amortization of net unrealized losses on AFS securities transferred to HTM securities.

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)$()$()$()Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive income (loss):

HTM investment securities, net, at amortized cost(a)

Other assets / accrued expenses and other liabilities Interest income Personnel expense ()()Other expense ()()Income tax (expense) benefit() ()Net other comprehensive income (loss) during period () Balance September 30, 2024$()$ $()$()Balance June 30, 2023$()$()$()$()Other comprehensive (loss) before reclassifications() ()Amounts reclassified from accumulated other comprehensive income (loss):

HTM investment securities, net, at amortized cost(a)

Other assets / accrued expenses and other liabilities () ()Interest income Personnel expense ()()Other expense ()()Income tax benefit Net other comprehensive (loss) during period()()()()Balance September 30, 2023$()$()$()$()(a) Amortization of net unrealized losses on AFS securities transferred to HTM securities.

Note 16

year or longer with remaining maturities up to 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.

$ $ $ Finance lease costs Operating lease cash flows Finance lease cash flows $ Finance lease right-of-use assetOther assets Operating lease liabilityAccrued expenses and other liabilities Finance lease liabilityOther long-term funding

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%$ %Land % %Equipment % %Total operating leases$ %$ %Finance leasesRetail and corporate offices$ %$ %Total finance leases$ %$ % $ $ 2025 2026 2027 2028 Beyond 2028 Total lease payments$ $ $ Less: interest Present value of lease payments$ $ $

As of September 30, 2024 and December 31, 2023, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $ million and $ 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 year to 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,
($ 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.

•Loans 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.

Table of Contents

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

%	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

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

ASSOCIATED BANC-CORP - Quarter Report: 2024 September (Form 10-Q)

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