UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, ~~2016~~2017



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

Commission file number: 001-31343

~~Commission File Number: 001-31343~~

Associated Banc-Corp

(Exact name of registrant as specified in its charter)



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

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

(920) 491-7500

(Registrant’s telephone number, including area code)

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

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

Yes þ No ¨

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

Yes þ No ¨

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



Large accelerated filer þ	Accelerated filer ¨

Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Emerging growth company ¨

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

Yes ¨ No þ

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of registrant’s common stock, par value $0.01 per share, at October 25, ~~2016,~~2017, was ~~150,469,386.~~151,164,803.

ASSOCIATED BANC-CORP

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets



	September 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
	(In Thousands, except share and per share data)
Assets
Cash and due from banks	$	354,331		$	446,558
Interest-bearing deposits in other financial institutions	109,596			149,175
Federal funds sold and securities purchased under agreements to resell	27,700			46,500
Investment securities held to maturity, at amortized cost	2,233,579			1,273,536
Investment securities available for sale, at fair value	3,801,699			4,680,226
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	172,446			140,001
Residential loans held for sale⁽¹⁾	113,064			108,010
Commercial loans held for sale	9,718			12,474
Loans	20,931,460			20,054,716
Allowance for loan losses	(276,551		)	(278,335		)
Loans, net	20,654,909			19,776,381
Premises and equipment, net	330,065			330,315
Bank and corporate owned life insurance	589,093			585,290
Goodwill	972,006			971,951
Mortgage servicing rights, net	58,377			61,476
Other intangible assets, net	14,080			15,377
Trading assets	48,429			52,398
Other assets	575,455			489,647
Total assets	$	30,064,547		$	29,139,315
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	5,177,734		$	5,392,208
Interest-bearing deposits	17,155,717			16,496,240
Total deposits	22,333,451			21,888,448
Federal funds purchased and securities sold under agreements to repurchase	476,550			508,347
Other short-term funding	588,067			583,688
Long-term funding	3,147,285			2,761,795
Trading liabilities	46,812			51,103
Accrued expenses and other liabilities	268,781			254,622
Total liabilities	26,860,946			26,048,003
Stockholders’ Equity
Preferred equity	159,929			159,929
Common equity
Common stock	1,615			1,630
Surplus	1,442,328			1,459,498
Retained earnings	1,792,184			1,695,764
Accumulated other comprehensive income (loss)	(54,288		)	(54,679		)
Treasury stock, at cost	(138,167		)	(170,830		)
Total common equity	3,043,672			2,931,383
Total stockholders’ equity	3,203,601			3,091,312
Total liabilities and stockholders’ equity	$	30,064,547		$	29,139,315
Preferred shares issued	165,000			165,000
Preferred shares authorized (par value $1.00 per share)	750,000			750,000
Common shares issued	161,460,708			163,030,209
Common shares authorized (par value $0.01 per share)	250,000,000			250,000,000
Treasury shares of common stock	9,143,102			10,909,362


(1)	Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated. For more information on this accounting policy change, please refer to Note 3 to Notes to the Consolidated Financial Statements.

September 30, 2016 December 31, 2015
(Unaudited) (Audited)
(In Thousands, except share and per share data)
ASSETS
Cash and due from banks $ 356,047
$ 374,921
Interest-bearing deposits in other financial institutions 240,010
79,764
Federal funds sold and securities purchased under agreements to resell 14,250
19,000
Investment securities held to maturity, at amortized cost 1,253,494
1,168,230
Investment securities available for sale, at fair value 4,846,088
4,967,414
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost 140,215
147,240
Loans held for sale 230,795
124,915
Loans 19,844,005
18,714,343
Allowance for loan losses (269,540 ) (274,264 )
Loans, net 19,574,465
18,440,079
Premises and equipment, net 329,726
267,606
Goodwill 971,951
968,844
Mortgage servicing rights, net 58,414
61,341
Other intangible assets, net 15,902
16,458
Trading assets 60,780
32,192
Other assets 1,060,627
1,043,831
Total assets $ 29,152,764
$ 27,711,835
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing demand deposits $ 5,337,677
$ 5,562,466
Interest-bearing deposits 16,410,035
15,445,199
Total deposits 21,747,712
21,007,665
Federal funds purchased and securities sold under agreements to repurchase 698,772
431,438
Other short-term funding 541,321
402,978
Long-term funding 2,761,635
2,676,164
Trading liabilities 62,301
33,430
Accrued expenses and other liabilities 243,908
222,914
Total liabilities 26,055,649
24,774,589
Stockholders’ equity
Preferred equity 159,929
121,379
Common equity:
Common stock 1,630
1,642
Surplus 1,459,161
1,458,522
Retained earnings 1,662,778
1,593,239
Accumulated other comprehensive loss (1,254 ) (32,616 )
Treasury stock, at cost (185,129 ) (204,920 )
Total common equity 2,937,186
2,815,867
Total stockholders’ equity 3,097,115
2,937,246
Total liabilities and stockholders’ equity $ 29,152,764
$ 27,711,835
Preferred shares issued 165,000
125,114
Preferred shares authorized (par value $1.00 per share) 750,000
750,000
Common shares issued 163,030,209
164,200,068
Common shares authorized (par value $0.01 per share) 250,000,000
250,000,000
Treasury shares of common stock 11,787,605
12,960,636

See accompanying notes to consolidated financial statements.

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Income (Unaudited)


	Three months ended September 30,					Nine months ended September 30,					Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015		2016			2015		2017			2016			2017			2016
	(In Thousands, except per share data)										(In Thousands, except per share data)
INTEREST INCOME
Interest Income
Interest and fees on loans	$	167,350		$	155,663	$	490,065		$	460,025	$	196,972		$	167,350		$	554,867		$	490,065
Interest and dividends on investment securities:
Taxable	22,948			24,937		72,734			73,897		24,162			22,948			71,295			72,734
Tax-exempt	8,141			7,917		23,865			23,369		8,268			8,141			24,540			23,865
Other interest	1,064			1,489		3,449			4,952		2,492			1,064			5,581			3,449
Total interest income	199,503			190,006		590,113			562,243		231,894			199,503			656,283			590,113
INTEREST EXPENSE
Interest Expense
Interest on deposits	13,118			8,521		36,562			24,281		27,778			13,118			65,882			36,562
Interest on Federal funds purchased and securities sold under agreements to repurchase	326			248		1,000			714		768			326			2,107			1,000
Interest on other short-term funding	296			83		1,656			279		1,039			296			3,946			1,656
Interest on long-term funding	7,229			10,645		23,657			32,159		12,187			7,229			30,133			23,657
Total interest expense	20,969			19,497		62,875			57,433		41,772			20,969			102,068			62,875
NET INTEREST INCOME	178,534			170,509		527,238			504,810
Net Interest Income											190,122			178,534			554,215			527,238
Provision for credit losses	21,000			8,000		55,000			17,500		5,000			21,000			26,000			55,000
Net interest income after provision for credit losses	157,534			162,509		472,238			487,310		185,122			157,534			528,215			472,238
NONINTEREST INCOME
Noninterest Income
Trust service fees	11,700			12,273		34,656			36,875		12,785			11,700			37,066			34,656
Service charges on deposit accounts	17,445			17,385		50,162			48,894		16,268			17,445			48,654			50,162
Card-based and other nondeposit fees	12,777			12,618		37,485			38,631		12,619			12,777			38,848			37,485
Insurance commissions	19,431			17,561		62,818			57,366		19,815			19,431			62,288			62,818
Brokerage and annuity commissions	4,155			3,809		12,047			11,684		4,392			4,155			13,071			12,047
Mortgage banking, net	18,291			6,643		26,562			23,992		6,585			18,291			16,191			26,562
Capital market fees, net	7,012			2,170		14,343			7,329		4,610			7,012			12,535			14,343
Bank owned life insurance income	3,290			2,448		11,033			7,704
Bank and corporate owned life insurance income											6,580			3,290			13,094			11,033
Asset gains (losses), net	(1,034		)	244		(853		)	2,931		(16		)	(1,034		)	(716		)	(853		)
Investment securities gains (losses), net	(13		)	2,796		6,201			4,038		3			(13		)	359			6,201
Other	2,180			2,118		6,140			6,916		2,254			2,180			6,746			6,140
Total noninterest income	95,234			80,065		260,594			246,360		85,895			95,234			248,136			260,594
NONINTEREST EXPENSE
Noninterest Expense
Personnel expense	103,819			101,134		307,346			304,272		105,852			103,819			314,954			307,346
Occupancy	15,362			14,187		42,379			46,178		12,294			15,362			40,345			42,379
Equipment	5,319			6,003		16,161			17,514		5,232			5,319			15,951			16,161
Technology	14,173			14,748		42,887			46,660		15,233			14,173			45,126			42,887
Business development and advertising	5,251			5,964		20,053			18,120		7,764			5,251			20,751			20,053
Other intangible amortization	525			885		1,568			2,574		450			525			1,459			1,568
Loan expense	3,535			3,305		10,198			9,982		3,330			3,535			8,924			10,198
Legal and professional fees	4,804			4,207		14,685			13,089		6,248			4,804			16,125			14,685
Foreclosure / OREO expense, net	960			645		4,167			3,071		906			960			3,593			4,167
FDIC expense	9,000			6,000		25,500			18,500		7,800			9,000			23,800			25,500
Other	12,566			14,507		38,701			42,394		12,318			12,566			36,406			38,701
Total noninterest expense	175,314			171,585		523,645			522,354		177,427			175,314			527,434			523,645
Income before income taxes	77,454			70,989		209,187			211,316		93,590			77,454			248,917			209,187
Income tax expense	23,638			21,551		63,746			65,806		28,589			23,638			69,663			63,746
Net income	53,816			49,438		145,441			145,510
Net Income											65,001			53,816			179,254			145,441
Preferred stock dividends	2,188			2,184		6,555			4,957		2,339			2,188			7,008			6,555
Net income available to common equity	$	51,628		$	47,254	$	138,886		$	140,553	$	62,662		$	51,628		$	172,246		$	138,886
Earnings per common share:
Basic	$	0.34		$	0.31	$	0.92		$	0.93	$	0.41		$	0.34		$	1.13		$	0.92
Diluted	$	0.34		$	0.31	$	0.92		$	0.92	$	0.41		$	0.34		$	1.11		$	0.92
Average common shares outstanding:
Basic	148,708			148,614		148,607			149,524		150,565			148,708			150,983			148,607
Diluted	149,973			149,799		149,645			150,704		152,968			149,973			153,782			149,645

See accompanying notes to consolidated financial statements.

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
($ in Thousands)
Net income $ 53,816
$ 49,438
$ 145,441
$ 145,510
Other comprehensive income (loss), net of tax:
Investment securities available for sale:
Net unrealized gains (losses) (22,894 ) 22,907
59,849
35,101
Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities (1,441 ) —
(4,465 ) —
Reclassification adjustment for net (gains) losses realized in net income 13
(2,796 ) (6,201 ) (4,038 )
Income tax (expense) benefit 9,280
(7,725 ) (18,768 ) (11,907 )
Other comprehensive income (loss) on investment securities available for sale (15,042 ) 12,386
30,415
19,156
Defined benefit pension and postretirement obligations:
Amortization of prior service cost (80 ) 12
(55 ) 37
Amortization of actuarial loss 621
627
1,586
1,692
Income tax expense (206 ) (243 ) (584 ) (659 )
Other comprehensive income on pension and postretirement obligations 335
396
947
1,070
Total other comprehensive income (loss) (14,707 ) 12,782
31,362
20,226
Comprehensive income $ 39,109
$ 62,220
$ 176,803
$ 165,736



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	($ in Thousands)
Net income	$	65,001		$	53,816		$	179,254		$	145,441
Other comprehensive income, net of tax
Investment securities available for sale
Net unrealized gains (losses)	(1,986		)	(22,894		)	16,384			59,849
Net unrealized gain (loss) on available for sale securities transferred to held to maturity securities	—			—			(14,738		)	—
Amortization of net unrealized gain (loss) on available for sale securities transferred to held to maturity securities	76			(1,441		)	(2,499		)	(4,465		)
Reclassification adjustment for net gains (losses) realized in net income⁽¹⁾	—			13			—			(6,201		)
Income tax (expense) benefit	734			9,280			328			(18,768		)
Other comprehensive income (loss) on investment securities available for sale	(1,176		)	(15,042		)	(525		)	30,415
Defined benefit pension and postretirement obligations
Amortization of prior service cost	(38		)	(80		)	(113		)	(55		)
Amortization of actuarial loss (gains)	621			621			1,596			1,586
Income tax (expense) benefit	(225		)	(206		)	(567		)	(584		)
Other comprehensive income (loss) on pension and postretirement obligations	358			335			916			947
Total other comprehensive income (loss)	(818		)	(14,707		)	391			31,362
Comprehensive income	$	64,183		$	39,109		$	179,645		$	176,803


(1)	Includes only available for sale securities.

See accompanying notes to consolidated financial statements.

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


	Preferred Equity			Common Stock			Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total			Preferred Equity			Common Stock			Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
	($ in Thousands, except per share data)																					(In Thousands, except per share data)
Balance, December 31, 2014	$	59,727		$	1,665		$	1,484,933		$	1,497,818		$	(4,850	)	$	(239,042	)	$	2,800,251
Comprehensive income:
Balance, December 31, 2015																						$	121,379		$	1,642		$	1,458,522		$	1,593,239		$	(32,616	)	$	(204,920	)	$	2,937,246
Comprehensive income
Net income	—			—			—			145,510			—			—			145,510			—			—			—			145,441			—			—			145,441
Other comprehensive income	—			—			—			—			20,226			—			20,226			—			—			—			—			31,362			—			31,362
Comprehensive income																			165,736																					176,803
Common stock issued:
Stock-based compensation plans, net	—			—			2,880			(21,786		)	—			34,279			15,373
Acquisition of Ahmann & Martin Co.	—			26			43,504			—			—			—			43,530
Purchase of common stock returned to authorized but unissued	—			(49		)	(92,951		)	—			—			—			(93,000		)
Purchase of treasury stock	—			—			—			—			—			(5,070		)	(5,070		)
Cash dividends:
Common stock, $0.30 per share	—			—			—			(45,599		)	—			—			(45,599		)
Preferred stock	—			—			—			(4,957		)	—			—			(4,957		)
Issuance of preferred stock	62,966			—			—			—			—			—			62,966
Purchase of preferred stock	(1,209		)	—			—			(126		)	—			—			(1,335		)
Other	(105		)	—			—			(661		)	—			—			(766		)
Stock-based compensation expense, net	—			—			14,575			—			—			—			14,575
Tax benefit of stock-based compensation	—			—			2,093			—			—			—			2,093
Balance, September 30, 2015	$	121,379		$	1,642		$	1,455,034		$	1,570,199		$	15,376		$	(209,833	)	$	2,953,797
Balance, December 31, 2015	$	121,379		$	1,642		$	1,458,522		$	1,593,239		$	(32,616	)	$	(204,920	)	$	2,937,246
Comprehensive income:
Net income	—			—			—			145,441			—			—			145,441
Other comprehensive income	—			—			—			—			31,362			—			31,362
Comprehensive income																			176,803
Common stock issued:
Common stock issued
Stock-based compensation plans, net	—			—			1,785			(18,070		)	—			24,034			7,749			—			—			1,785			(18,070		)	—			24,034			7,749
Purchase of common stock returned to authorized but unissued	—			(12		)	(19,995		)	—			—			—			(20,007		)	—			(12		)	(19,995		)	—			—			—			(20,007		)
Purchase of treasury stock	—			—			—			—			—			(4,243		)	(4,243		)	—			—			—			—			—			(4,243		)	(4,243		)
Cash dividends:
Cash dividends
Common stock, $0.33 per share	—			—			—			(49,642		)	—			—			(49,642		)	—			—			—			(49,642		)	—			—			(49,642		)
Preferred stock	—			—			—			(6,555		)	—			—			(6,555		)	—			—			—			(6,555		)	—			—			(6,555		)
Issuance of preferred stock	97,066			—			—			—			—			—			97,066			97,066			—			—			—			—			—			97,066
Redemption of preferred stock	(57,338		)	—			—			(1,565		)	—			—			(58,903		)	(57,338		)	—			—			(1,565		)	—			—			(58,903		)
Purchase of preferred stock	(1,178		)	—			—			(70		)	—			—			(1,248		)	(1,178		)	—			—			(70		)	—			—			(1,248		)
Stock-based compensation expense, net	—			—			18,047			—			—			—			18,047			—			—			18,047			—			—			—			18,047
Tax benefit of stock-based compensation	—			—			802			—			—			—			802
Other																						—			—			802			—			—			—			802
Balance, September 30, 2016	$	159,929		$	1,630		$	1,459,161		$	1,662,778		$	(1,254	)	$	(185,129	)	$	3,097,115		$	159,929		$	1,630		$	1,459,161		$	1,662,778		$	(1,254	)	$	(185,129	)	$	3,097,115

Balance, December 31, 2016																						$	159,929		$	1,630		$	1,459,498		$	1,695,764		$	(54,679	)	$	(170,830	)	$	3,091,312
Comprehensive income
Net income																						—			—			—			179,254			—			—			179,254
Other comprehensive income																						—			—			—			—			391			—			391
Comprehensive income																																								179,645
Common stock issued
Stock-based compensation plans, net																						—			—			1,952			(20,768		)	—			41,276			22,460
Purchase of common stock returned to authorized but unissued																									(15		)	(37,016		)	—			—			—			(37,031		)
Purchase of treasury stock																						—			—			—			—			—			(8,613		)	(8,613		)
Cash dividends
Common stock, $0.36 per share																						—			—			—			(55,058		)	—			—			(55,058		)
Preferred stock																						—			—			—			(7,008		)	—			—			(7,008		)
Stock-based compensation expense, net																						—			—			16,860			—			—			—			16,860
Other																						—			—			1,034			—			—			—			1,034
Balance, September 30, 2017																						$	159,929		$	1,615		$	1,442,328		$	1,792,184		$	(54,288	)	$	(138,167	)	$	3,203,601

See accompanying notes to consolidated financial statements.

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2017			2016
	($ in Thousands)						($ in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Flow From Operating Activities
Net income	$	145,441		$	145,510		$	179,254		$	145,441
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	55,000			17,500			26,000			55,000
Depreciation and amortization	34,121			35,788			35,054			34,121
Addition to (recovery of) valuation allowance on mortgage servicing rights, net	2,486			(306		)
Addition to valuation allowance on mortgage servicing rights, net							286			2,486
Amortization of mortgage servicing rights	9,142			8,902			7,635			9,142
Amortization of other intangible assets	1,568			2,574			1,459			1,568
Amortization and accretion on earning assets, funding, and other, net	34,077			29,039			27,230			34,077
Tax benefit of stock based compensation	802			2,093
Net amortization of tax credit investments							14,685			4,437
Gain on sales of investment securities, net	(6,201		)	(4,038		)	(359		)	(6,201		)
(Gain) loss on sales of assets and impairment write-downs, net	853			(2,931		)
Gain on mortgage banking activities, net	(21,741		)	(15,504		)
Asset (gains) losses, net							716			853
(Gain) loss on mortgage banking activities, net							(3,762		)	(21,741		)
Mortgage loans originated and acquired for sale	(983,930		)	(911,133		)	(466,135		)	(983,930		)
Proceeds from sales of mortgage loans held for sale	1,147,278			941,575			551,697			1,147,278
Increase in interest receivable	(5,809		)	(3,404		)
Decrease in interest payable	(5,994		)	(2,642		)
Deferred pension cost - contributions							(6,242		)	—
(Increase) decrease in interest receivable							(9,765		)	(5,809		)
Increase (decrease) in interest payable							3,410			(5,994		)
Net change in other assets and other liabilities	576			(19,018		)	(44,882		)	5,451
Net cash provided by operating activities	407,669			224,005			316,281			416,179
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Flow From Investing Activities
Net increase in loans	(1,461,884		)	(935,208		)	(991,334		)	(1,461,884		)
Purchases of:
Purchases of
Available for sale securities	(849,466		)	(2,075,062		)	(701,080		)	(849,466		)
Held to maturity securities	(151,556		)	(207,139		)	(121,596		)	(151,556		)
Federal Home Loan Bank and Federal Reserve Bank stocks	(72,975		)	(14,279		)	(195,356		)	(72,975		)
Premises, equipment, and software, net of disposals	(90,691		)	(36,778		)	(32,925		)	(90,691		)
Other assets	(4,628		)	(9,903		)
Proceeds from:
Proceeds from
Sales of available for sale securities	359,591			1,066,957			—			359,591
Sales of Federal Home Loan Bank stock	80,000			42,514
Sales of held to maturity securities							16,059			—
Sale of Federal Home Loan Bank and Federal Reserve Bank stocks							162,911			80,000
Prepayments, calls, and maturities of available for sale investment securities	651,403			869,635			551,962			651,403
Prepayments, calls, and maturities of held to maturity investment securities	55,579			7,190			151,565			55,579
Sales, prepayments, calls, and maturities of other assets	19,351			17,793			10,833			19,351
Net cash (paid) received in acquisition	(685		)	1,132
Net change in tax credit investments							(35,027		)	(13,138		)
Net cash paid in acquisition							(217		)	(685		)
Net cash used in investing activities	(1,465,961		)	(1,273,148		)	(1,184,205		)	(1,474,471		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	740,047			1,794,891
Cash Flow From Financing Activities
Net increase (decrease) in deposits							445,003			740,047
Net increase (decrease) in short-term funding	405,677			(45,953		)	(27,418		)	405,677
Repayment of long-term funding	(1,180,027		)	(1,500,026		)	(115,017		)	(1,180,027		)
Proceeds from issuance of long-term funding	1,265,000			250,000			500,000			1,265,000
Proceeds from issuance of preferred shares							—			97,066
Proceeds from issuance of common stock for stock-based compensation plans	7,749			15,373			22,460			7,749
Proceeds from issuance of preferred stock	97,066			62,966
Redemption of preferred stock	(58,903		)	—
Redemption of preferred shares							—			(58,903		)
Purchase of preferred stock	(1,248		)	(1,335		)	—			(1,248		)
Purchase of common stock returned to authorized but unissued	(20,007		)	(93,000		)	(37,031		)	(20,007		)
Purchase of treasury stock	(4,243		)	(5,070		)
Purchase of treasury stock for tax withholding							(8,613		)	(4,243		)
Cash dividends on common stock	(49,642		)	(45,599		)	(55,058		)	(49,642		)
Cash dividends on preferred stock	(6,555		)	(4,957		)	(7,008		)	(6,555		)
Net cash provided by financing activities	1,194,914			427,290			717,318			1,194,914
Net increase (decrease) in cash and cash equivalents	136,622			(621,853		)	(150,606		)	136,622
Cash and cash equivalents at beginning of period	473,685			1,032,067			642,233			473,685
Cash and cash equivalents at end of period	$	610,307		$	410,214		$	491,627		$	610,307
Supplemental disclosures of cash flow information:
Supplemental disclosures of cash flow information
Cash paid for interest	$	68,371		$	59,751		$	98,151		$	68,371
Cash paid for income and franchise taxes	53,126			58,975
Cash paid for income taxes							61,959			53,126
Loans and bank premises transferred to other real estate owned	8,834			5,782			5,872			8,834
Capitalized mortgage servicing rights	8,701			9,853			4,822			8,701
Loans transferred into held for sale from portfolio, net	256,188			—			75,289			256,188
Unsettled trades to sell securities	—			139,286
Acquisition:
Acquisition
Fair value of assets acquired, including cash and cash equivalents	522			4,590			—			522
Fair value ascribed to goodwill and intangible assets	4,119			51,791			217			4,119
Fair value of liabilities assumed	1,423			12,851			—			1,423
Common stock issued in acquisition	—			43,530

See accompanying notes to consolidated financial statements.

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 Securities and Exchange Commission and, therefore, certain information and footnote disclosures normally presented in accordance with U.S. generally accepted accounting principles have been omitted or abbreviated. The information contained in the consolidated financial statements and footnotes in the Corporation's ~~2015~~2016 Annual Report on Form 10-K, should be referred to in connection with the reading of these unaudited interim financial statements.

Note 1 Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and comprehensive income, changes in stockholders’ equity, and cash flows of Associated Banc-Corp (individually referred to herein as the “Parent Company,” and together with all of its subsidiaries and affiliates, collectively referred to herein as the “Corporation”) for the periods presented, and all such adjustments are of a normal recurring nature. The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, goodwill impairment assessment, mortgage servicing rights valuation, and income taxes. Management has evaluated subsequent events for potential recognition or disclosure.

Note 2 Acquisitions

~~On February 17, 2015,~~Completed Acquisitions

During the first quarter of 2017, the Corporation ~~acquired Ahmann & Martin Co.,~~completed a ~~risk and employee benefits consulting firm based in Minnesota. The firm was merged into Associated Financial Group, LLC ("AFG"), the Corporation's~~small insurance ~~brokerage subsidiary. The Corporation's~~ acquisition ~~of Ahmann & Martin Co. enhanced the Corporation's ability~~ to ~~offer clients unique, comprehensive solutions to meet their~~complement its existing insurance and ~~financial risk management needs.~~benefits related products and services provided by Associated Benefits and Risk Consulting ("ABRC"). The ~~transaction was valued at approximately $48 million with the opportunity to increase the consideration by $8 million should certain contingencies be met over a defined period.~~

The transaction was accounted for using the acquisition method of accounting and as such, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair value on the acquisition date. Goodwill from the acquisition represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is not deductible for tax purposes. As a result of the acquisition, the Corporation recorded goodwill of ~~approximately $40 million~~$55,000 and other ~~intangible assets~~intangibles of ~~approximately $12 million. Goodwill was assigned~~$162,000 related to the ~~Corporation's Community, Consumer, and Business segment. See Note 8 for additional information on goodwill and other intangible assets.~~insurance acquisition.

During the first quarter of 2016, the Corporation completed two small insurance acquisitions to complement its existing insurance and benefits related products and services provided by ~~AFG.~~ABRC. The Corporation recorded goodwill of $3 million and other intangibles of $1 million related to these insurance acquisitions.

~~During~~See Note 8 for additional information on goodwill and other intangible assets.

Acquisitions Update

On October 2, 2017, the ~~second quarter~~Corporation completed its previously announced acquisition of ~~2016, Associated Banc-Corp~~Whitnell & Co., a wealth management family services firm based in Oak Brook, IL.

On July 20, 2017, the Corporation and Bank Mutual Corporation ("Bank Mutual") jointly announced that ~~it has begun rebranding AFG. The rebranding follows~~they had entered into an Agreement and Plan of Merger, dated as of July 20, 2017 (the "Merger Agreement") under which Bank Mutual will merge with and into the ~~February 2015 acquisition~~Corporation. Under the terms of ~~Ahmann & Martin Co.~~the Merger Agreement, Bank Mutual's shareholders will receive 0.422 shares of Corporation common stock for each share of Bank Mutual's common stock. Subject to customary closing conditions, including regulatory approvals and ~~two small insurance acquisitions during~~approval by the Bank Mutual shareholders, the transaction is expected to close in the first quarter of 2016. On September 12, 2016, Associated Banc-Corp announced the completion of state licensure filings, enabling AFG to officially rebrand its employee benefits, insurance and human resource consulting services business unit from AFG to Associated Benefits and Risk Consulting ("ABRC").2018.

Note 3 Summary of Significant Accounting Policies

Accounting Policy Elections

Effective January 1, 2017, residential mortgage loans that are classified as held for sale are accounted using the fair value option method of accounting. The Corporation has elected the fair value option to mitigate accounting mismatches between held for sale loan valuations and corresponding derivative commitments. Prior to January 1, 2017,residential mortgage loans that were classified as held for sale were accounted for at the lower of cost or market method (“LOCOM”) of accounting.

New Accounting Pronouncements Adopted

In September 2015, the FASB issued an amendment to simplify the accounting for measurement adjustments to prior business combinations. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any,



Standard	Description	Date of adoption	Effect on financial statements
ASU 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities	The FASB issued amendments to require that certain purchased callable debt securities held at a premium be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount, which continue to be amortized to maturity.	1st Quarter 2017	The Corporation early adopted the accounting standard with no material impact on results of operations, financial position, or liquidity.
ASU 2017-03 Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)	The standard states that for ASUs which have not been adopted yet, the registrant needs to determine the potential effects (if material) of those ASUs on the financial statements when adopted and include the appropriate disclosures in the financial statements. If the impact of adoption is unknown or cannot be estimated, the registrant should include a statement noting this and consider adding qualitative disclosures to the financial statements to assist the reader in evaluating the impact of the ASUs, when adopted, on the financial statements.	1st Quarter 2017	No material impact on results of operations, financial position, or liquidity.
ASU 2016-17 Consolidation (Topic 810): Interests Held through Related Parties That Are Under Common Control	The FASB issued an amendment to address how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity.	1st Quarter 2017	No material impact on results of operations, financial position, or liquidity.
ASU 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	The FASB issued an amendment involving several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Entities should apply the amendment related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Entities should apply the amendment related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement retrospectively. The amendment requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively.	4th Quarter 2016	The Corporation early adopted the accounting standard and recognized a $1 million reduction in income taxes for the excess tax benefits on stock-based compensation. The remaining provisions of this accounting standard did not have a material impact on the results of operations, financial position, or liquidity.
ASU 2016-07 Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting	The FASB issued an amendment to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendment also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the equity method had been in effect during all previous periods that the investment had been held. The amendment requires that the equity method investor add the cost of acquiring the additional interests in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendment requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. Entities should apply the amendment prospectively to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method.	1st Quarter 2017	No material impact on results of operations, financial position, or liquidity.

adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity.

In May 2015, the FASB issued an amendment to eliminate the requirement to categorize investments measured using the net asset value per share ("NAV") practical expedient in the fair value hierarchy table. Entities are required to disclose the fair value of investments measured using the NAV practical expedient so that financial statement users can reconcile amounts reported in the fair value hierarchy table to amounts reported on the balance sheet. This amendment required retrospective application and was effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity.

In April 2015, the FASB issued an amendment to provide guidance to customers about whether a cloud computing arrangement included a software license. If the cloud computing arrangement includes a software license, then the customer should account for the software license element consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This amendment was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity.

In April 2015, the FASB issued an amendment to simplify the presentation of debt issuance costs. This amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB expanded this amendment to include SEC staff views related to debt issuance costs associated with line-of-credit arrangements. The SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This amendment required retrospective application and was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016. All prior periods have been restated to reflect this change in presentation, resulting in a $3 million reduction to other assets and a corresponding $3 million reduction to long-term funding on the balance sheet compared to the amounts originally reported at December 31, 2015.

In February 2015, the FASB issued an amendment to modify existing consolidation guidance for reporting companies that are required to evaluate whether they should consolidate legal entities. The new standard will place more emphasis on risk of loss when determining a controlling financial interest. Frequency in the application of related-party guidance for determining a controlling financial interest will be reduced. Also, consolidation conclusions for public and private companies among several industries that make use of limited partnerships or VIEs changed. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, and with no material impact on its results of operations, financial position, or liquidity.

In January 2015, the FASB issued an amendment to eliminate from U.S. GAAP the concept of extraordinary items. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The amended guidance prohibits separate disclosure of extraordinary items in the income statement. This amendment was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Corporation adopted the accounting standard during the first quarter of 2016, as required, with no material impact.

In June 2014, the FASB issued an amendment to the stock compensation accounting guidance to clarify that a performance target that affects vesting of a share-based payment and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This amendment was effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2015. The Corporation adopted the accounting standard on a prospective basis during the first quarter of 2016, as required, with no material impact on its results of operations, financial position, or liquidity.

Note 4 Earnings Per Common Share

Earnings per common share are calculated utilizing the two-class method. Basic earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share are calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding adjusted for the dilutive effect of common stock awards (outstanding stock options and unvested restricted stock ~~awards,~~awards) and ~~outstanding~~ common stock ~~warrants).~~warrants. Presented below are the calculations for basic and diluted earnings per common share.



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(In thousands, except per share data)
Net income	$	65,001		$	53,816		$	179,254		$	145,441
Preferred stock dividends	(2,339		)	(2,188		)	(7,008		)	(6,555		)
Net income available to common equity	$	62,662		$	51,628		$	172,246		$	138,886
Common shareholder dividends	(18,149		)	(16,431		)	(54,726		)	(49,077		)
Unvested share-based payment awards	(105		)	(177		)	(332		)	(565		)
Undistributed earnings	$	44,408		$	35,020		$	117,188		$	89,244
Undistributed earnings allocated to common shareholders	44,150			34,645			116,418			88,294
Undistributed earnings allocated to unvested share-based payment awards	258			375			770			950
Undistributed earnings	$	44,408		$	35,020		$	117,188		$	89,244
Basic
Distributed earnings to common shareholders	$	18,149		$	16,431		$	54,726		$	49,077
Undistributed earnings allocated to common shareholders	44,150			34,645			116,418			88,294
Total common shareholders earnings, basic	$	62,299		$	51,076		$	171,144		$	137,371
Diluted
Distributed earnings to common shareholders	$	18,149		$	16,431		$	54,726		$	49,077
Undistributed earnings allocated to common shareholders	44,150			34,645			116,418			88,294
Total common shareholders earnings, diluted	$	62,299		$	51,076		$	171,144		$	137,371
Weighted average common shares outstanding	150,565			148,708			150,983			148,607
Effect of dilutive common stock awards	1,815			1,265			2,081			1,038
Effect of dilutive common stock warrants	588			—			718			—
Diluted weighted average common shares outstanding	152,968			149,973			153,782			149,645
Basic earnings per common share	$	0.41		$	0.34		$	1.13		$	0.92
Diluted earnings per common share	$	0.41		$	0.34		$	1.11		$	0.92

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
(In thousands, except per share data)
Net income $ 53,816
$ 49,438
$ 145,441
$ 145,510
Preferred stock dividends (2,188 ) (2,184 ) (6,555 ) (4,957 )
Net income available to common equity $ 51,628
$ 47,254
$ 138,886
$ 140,553
Common shareholder dividends $ (16,431 ) $ (14,927 ) $ (49,077 ) $ (45,149 )
Unvested share-based payment awards (177 ) (164 ) (565 ) (450 )
Undistributed earnings $ 35,020
$ 32,163
$ 89,244
$ 94,954
Undistributed earnings allocated to common shareholders $ 34,645
$ 31,813
$ 88,294
$ 93,961
Undistributed earnings allocated to unvested share-based payment awards 375
350
950
993
Undistributed earnings $ 35,020
$ 32,163
$ 89,244
$ 94,954
Basic
Distributed earnings to common shareholders $ 16,431
$ 14,927
$ 49,077
$ 45,149
Undistributed earnings allocated to common shareholders 34,645
31,813
88,294
93,961
Total common shareholders earnings, basic $ 51,076
$ 46,740
$ 137,371
$ 139,110
Diluted
Distributed earnings to common shareholders $ 16,431
$ 14,927
$ 49,077
$ 45,149
Undistributed earnings allocated to common shareholders 34,645
31,813
88,294
93,961
Total common shareholders earnings, diluted $ 51,076
$ 46,740
$ 137,371
$ 139,110
Weighted average common shares outstanding 148,708
148,614
148,607
149,524
Effect of dilutive common stock awards 1,265
1,185
1,038
1,180
Diluted weighted average common shares outstanding 149,973
149,799
149,645
150,704
Basic earnings per common share $ 0.34
$ 0.31
$ 0.92
$ 0.93
Diluted earnings per common share $ 0.34
$ 0.31
$ 0.92
$ 0.92

~~Options to purchase~~Anti-dilutive common stock options of approximately 1 million ~~shares were outstanding~~and 4 million for ~~both~~ the three months ended September 30, 2017 and 2016, respectively, and approximately 1 million and 4 million for the nine months ended September 30, 2017 and 2016, ~~and September 30, 2015,~~ respectively, ~~but~~were excluded from the ~~calculation of diluted~~ earnings per common share ~~as the effect would have been anti-dilutive.~~calculation. Warrants to purchase approximately 4 million shares were outstanding for ~~both~~ the three and nine months ended September 30, 2016, ~~and 2015, respectively,~~ but excluded from the calculation of diluted earnings per common shares as the effect would have been anti-dilutive.

Note 5 Stock-Based Compensation

~~Stock-Based Compensation Plan:~~

In March 2013, the Board of Directors, with subsequent approval of the Corporation’s shareholders, approved the adoption of the 2013 Incentive Compensation Plan (“2013 Plan”). Under the 2013 Plan, options are generally exercisable up to 10 years from the date of grant, have an exercise price that is equal to the closing price of the Corporation’s stock on the grant date, and vest ratably over four years. The 2013 Plan also provides for the issuance of restricted common stock and restricted common stock units to certain key employees (collectively referred to as “restricted stock awards”). The shares of restricted stock are restricted as to transfer, but are not restricted as to dividend payment or voting rights. Restricted stock units receive dividend equivalents but do not have voting rights. The transfer restrictions lapse over three or four years, depending upon whether the awards are service-based or performance-based. Service-based awards are contingent upon continued employment or meeting the requirements for retirement, and performance-based awards are based on earnings per share performance goals, relative total shareholder return, and continued employment or meeting the requirements for retirement. The 2013 Plan provides that restricted stock awards and

stock options will immediately become fully vested upon retirement from the Corporation of those colleagues whose retirement meets the early retirement or normal retirement definitions under the plan (“retirement eligible colleagues”).

~~Accounting for Stock-Based Compensation:~~

The fair value of stock options granted is estimated on the date of grant using a Black-Scholes option pricing model, while the fair value of restricted stock awards is their fair market value on the date of grant. The fair values of stock options and restricted stock awards are amortized as compensation expense on a straight-line basis over the vesting period of the grants. For retirement eligible colleagues, expenses related to stock options and restricted stock awards are fully recognized on the date the colleague meets the definition of normal or early retirement. Compensation expense recognized is included in personnel expense in the consolidated statements of income.

Assumptions are used in estimating the fair value of stock options granted. The weighted average expected life of the stock option represents the period of time that stock options are expected to be outstanding and is estimated using historical data of stock option exercises and forfeitures. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on the implied volatility of the Corporation’s stock.

The following assumptions were used in estimating the fair value for options granted in the first nine months of ~~2016~~2017 and full year ~~2015.~~2016.



	2017		2016
Dividend yield	2.00	%	2.50	%
Risk-free interest rate	2.00	%	2.00	%
Weighted average expected volatility	25.00	%	25.00	%
Weighted average expected life	5.5 years		5.5 years
Weighted average per share fair value of options	$5.30		$3.36

2016 2015
Dividend yield 2.50 % 2.00 %
Risk-free interest rate 2.00 % 2.00 %
Weighted average expected volatility 25.00 % 20.00 %
Weighted average expected life 5.5 years
6.0 years
Weighted average per share fair value of options $3.36 $3.08

The Corporation is required to estimate potential forfeitures of stock grants and adjust compensation expense recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock-based compensation expense to be recognized in future periods.

A summary of the Corporation’s stock option activity for the ~~year ended December 31, 2015, and the~~ nine months ended September 30, ~~2016~~2017 is presented below.



Stock Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value^(a)
Outstanding at December 31, 2016	6,357,843		$	17.67	6.10	$	47,902
Granted	799,558		25.61
Exercised	(1,291,244	)	16.32
Forfeited or expired	(506,395	)	31.90
Outstanding at September 30, 2017	5,359,762		$	18.07	6.55	$	34,334
Options Exercisable at September 30, 2017	3,072,811		$	16.54	5.25	$	23,911


(a)	$ in Thousands

Stock Options Shares
Weighted Average
Exercise Price
Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (000s)
Outstanding at December 31, 2014 7,847,338
$ 18.34

Granted 1,348,504
17.95

Exercised (1,351,646 ) 13.90

Forfeited or expired (1,215,053 ) 29.13

Outstanding at December 31, 2015 6,629,143
$ 17.22
6.24 $ 18,730
Options Exercisable at December 31, 2015 4,190,245
$ 17.25
4.93 $ 14,873
Granted 1,302,298
$ 17.45

Exercised (466,779 ) 14.15

Forfeited or expired (181,552 ) 21.61

Outstanding at September 30, 2016 7,283,110
$ 17.35
6.18 $ 23,503
Options Exercisable at September 30, 2016 4,558,016
$ 17.31
4.76 $ 17,635

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For the nine months ended September 30, ~~2016,~~2017, the intrinsic value of stock options exercised was approximately $2$12 million. For the ~~year~~nine months ended ~~December 31, 2015~~September 30, 2016, the intrinsic value of the stock options exercised was $7$2 million. The total fair value of stock options ~~that~~ vested ~~were~~was $4 million and $3 million ~~and $6 million, respectively,~~ for the nine months ended September 30, 2017 and September 30, 2016, ~~and for the year ended December 31, 2015.~~respectively. The Corporation recognized compensation expense for the vesting of stock options of $3 million ~~and $4 million~~ for both the nine months ended September 30, ~~2016~~2017 and ~~year ended December 31, 2015, respectively.~~September 30, 2016. Included in compensation expense for ~~the nine months ended September 30, 2016~~2017 was approximately ~~$923,000~~$570,000 of expense for the accelerated vesting of stock options granted to retirement eligible colleagues. At September 30, ~~2016,~~2017, the Corporation had $6approximately $5 million of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominantly through ~~the fourth~~first quarter ~~2019.~~

2021.

The following table summarizes information about the Corporation’s restricted stock activity for the ~~year ended December 31, 2015, and for the~~ nine months ended September 30, ~~2016.~~2017.



Restricted Stock	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016	2,377,380		$	17.40
Granted	748,024		25.55
Vested	(872,020	)	17.92
Forfeited	(101,703	)	20.02
Outstanding at September 30, 2017	2,151,681		$	19.94

Restricted Stock Shares Weighted Average Grant Date Fair Value
Outstanding at December 31, 2014 1,982,126
$ 15.79
Granted 1,173,847
18.09
Vested (709,582 ) 15.62
Forfeited (196,363 ) 16.87
Outstanding at December 31, 2015 2,250,028
$ 17.03
Granted 1,073,057
$ 17.48
Vested (831,433 ) 16.61
Forfeited (94,725 ) 17.60
Outstanding at September 30, 2016 2,396,927
$ 17.35

The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the ~~grant.~~grant's award agreement. Performance-based restricted stock awards granted during ~~2015~~2016 and ~~2016~~2017 will vest ratably over a three year period, while service-based restricted stock awards granted during ~~2015~~2016 and ~~2016~~2017 will vest ratably over a four year period. Expense for restricted stock awards of approximately ~~$15~~$14 million was recorded for ~~both~~ the nine months ended September 30, ~~2016~~2017 and approximately $15 million for the ~~year~~nine months ended ~~December 31, 2015.~~September 30, 2016. Included in compensation expense for ~~the nine months ended 2016~~2017 was approximately $3$2 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had ~~$24~~$22 million of unrecognized compensation costs related to restricted stock awards at September 30, ~~2016,~~2017, that is expected to be recognized over the remaining requisite service periods that extend predominantly through ~~fourth~~first quarter ~~2019.~~2021.

The Corporation has the ability to issue shares from treasury or new shares upon the exercise of stock options or the granting of restricted stock awards. The Board of Directors has authorized management to repurchase shares of the Corporation’s common stock ~~each quarter~~ in the market, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares will be based on market and investment opportunities, capital levels, growth prospects,

and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.

Note 6 Investment Securities

Investment securities are generally classified as available for sale or held to maturity at the time of purchase. The majority of the Corporation's investment securities are mortgage-related securities issued by the Government National Mortgage Association (“GNMA”) or government-sponsored enterprises ("GSE") such as the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). The amortized cost and fair values of securities available for sale and held to maturity were as follows.



September 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value


	($ in Thousands)
Investment securities available for sale
U. S. Treasury securities	$	1,003	$	—	$	(2	)	$	1,001
Residential mortgage-related securities
FNMA / FHLMC	494,041		12,780		(1,560		)	505,261
GNMA	1,681,380		2,504		(16,048		)	1,667,836
Private-label	1,083		—		(11		)	1,072
GNMA commercial mortgage-related securities	1,539,169		73		(26,165		)	1,513,077
Asset backed securities	108,590		63		(25		)	108,628
Other securities (debt and equity)	4,718		132		(26		)	4,824
Total investment securities available for sale	$	3,829,984	$	15,552	$	(43,837	)	$	3,801,699
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	$	1,192,290	$	14,525	$	(3,858	)	$	1,202,957
Residential mortgage-related securities
FNMA / FHLMC	42,386		464		(404		)	42,446
GNMA	444,196		3,712		(2,615		)	445,293
GNMA commercial mortgage-related securities	554,707		10,250		(11,808		)	553,149
Total investment securities held to maturity	$	2,233,579	$	28,951	$	(18,685	)	$	2,243,845

September 30, 2016
Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses
Fair Value

($ in Thousands)
Investment securities available for sale:
U. S. Treasury securities $ 1,000
$ 1
$ —
$ 1,001
Residential mortgage-related securities:
FNMA / FHLMC 882,951
29,941
(32 ) 912,860
GNMA 1,798,096
14,183
(750 ) 1,811,529
Private-label 1,215
—
(15 ) 1,200
GNMA commercial mortgage-related securities 2,121,913
4,218
(11,462 ) 2,114,669
Other securities (debt and equity) 4,718
111
—
4,829
Total investment securities available for sale $ 4,809,893
$ 48,454
$ (12,259 ) $ 4,846,088
Investment securities held to maturity:
Obligations of state and political subdivisions (municipal securities) $ 1,129,056
$ 31,897
$ (233 ) $ 1,160,720
Residential mortgage-related securities:
FNMA / FHLMC 38,297
1,009
(16 ) 39,290
GNMA 86,141
1,703
(24 ) 87,820
Total investment securities held to maturity $ 1,253,494
$ 34,609
$ (273 ) $ 1,287,830



December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value


	($ in Thousands)
Investment securities available for sale
U. S. Treasury securities	$	1,000	$	—	$	—		$	1,000
Residential mortgage-related securities
FNMA / FHLMC	625,234		17,298		(2,602		)	639,930
GNMA	2,028,301		1,372		(25,198		)	2,004,475
Private-label	1,134		1		(14		)	1,121
GNMA commercial mortgage-related securities	2,064,508		356		(35,966		)	2,028,898
Other securities (debt and equity)	4,718		105		(21		)	4,802
Total investment securities available for sale	$	4,724,895	$	19,132	$	(63,801	)	$	4,680,226
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	$	1,145,843	$	3,868	$	(12,036	)	$	1,137,675
Residential mortgage-related securities
FNMA / FHLMC	37,697		439		(693		)	37,443
GNMA	89,996		216		(656		)	89,556
Total investment securities held to maturity	$	1,273,536	$	4,523	$	(13,385	)	$	1,264,674

December 31, 2015 Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value

($ in Thousands)
Investment securities available for sale:
U. S. Treasury securities $ 999
$ —
$ (2 ) $ 997
Residential mortgage-related securities:
FNMA / FHLMC 1,388,995
33,791
(8,160 ) 1,414,626
GNMA 1,605,956
507
(16,460 ) 1,590,003
Private-label 1,722
1
(14 ) 1,709
GNMA commercial mortgage-related securities 1,982,477
1,334
(28,501 ) 1,955,310
Other securities (debt and equity) 4,718
51
—
4,769
Total investment securities available for sale $ 4,984,867
$ 35,684
$ (53,137 ) $ 4,967,414
Investment securities held to maturity:
Municipal securities $ 1,043,767
$ 16,803
$ (339 ) $ 1,060,231
Residential mortgage-related securities:
FNMA / FHLMC 41,469
513
(645 ) 41,337
GNMA 82,994
189
(309 ) 82,874
Total investment securities held to maturity $ 1,168,230
$ 17,505
$ (1,293 ) $ 1,184,442

The amortized cost and fair values of investment securities available for sale and held to maturity at September 30, ~~2016,~~2017, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Available for Sale					Held to Maturity
	Amortized Cost		Fair Value			Amortized Cost		Fair Value
	($ in Thousands)
Due in one year or less	$	1,000	$	1,000		$	54,259	$	48,123
Due after one year through five years	4,703		4,675			222,037		227,978
Due after five years through ten years	—		—			281,559		284,789
Due after ten years	—		—			634,435		642,067
Total debt securities	5,703		5,675			1,192,290		1,202,957
Residential mortgage-related securities
FNMA / FHLMC	494,041		505,261			42,386		42,446
GNMA	1,681,380		1,667,836			444,196		445,293
Private-label	1,083		1,072			—		—
GNMA commercial mortgage-related securities	1,539,169		1,513,077			554,707		553,149
Asset backed securities	108,590		108,628			—		—
Equity securities	18		150			—		—
Total investment securities	$	3,829,984	$	3,801,699		$	2,233,579	$	2,243,845
Ratio of Fair Value to Amortized Cost			99.3		%			100.5		%

Available for Sale Held to Maturity
($ in Thousands)
Amortized
Cost

Fair
Value

Amortized
Cost

Fair
Value
Due in one year or less $ 4,500
$ 4,535
$ 38,786
$ 27,004
Due after one year through five years 1,200
1,200
250,221
260,817
Due after five years through ten years —
—
234,104
243,746
Due after ten years —
—
605,945
629,153
Total debt securities 5,700
5,735
1,129,056
1,160,720
Residential mortgage-related securities:
FNMA / FHLMC 882,951
912,860
38,297
39,290
GNMA 1,798,096
1,811,529
86,141
87,820
Private-label 1,215
1,200
—
—
GNMA commercial mortgage-related securities 2,121,913
2,114,669
—
—
Equity securities 18
95
—
—
Total investment securities $ 4,809,893
$ 4,846,088
$ 1,253,494
$ 1,287,830
Ratio of Fair Value to Amortized Cost 100.8 % 102.7 %
During the nine months ended September 30, 2017, the Corporation reclassified approximately $1 billion of GNMA residential mortgage-related securities and GNMA commercial mortgage-related securities from available for sale to held to maturity. The GNMA residential and commercial mortgage-related securities are principally securities with a CRA component in the underlying collateral. The reclassification of these investment securities was accounted for at fair value. Management elected to transfer these investment securities as the Corporation has the positive intent and ability to hold these investment securities to maturity.

In the third quarter of 2017, the Corporation purchased approximately $109 million of asset backed securities collateralized with government guaranteed student loans.

The proceeds from the sale of investment securities for the first nine months ended September 30, 2017 and 2016 are shown below.



	Nine Months Ended September 30,
	2017			2016
	($ in Thousands)
Gross gains on available for sale securities	$	—		$	6,403
Gross gains on held to maturity securities	364			—
Total gains	364			6,403
Gross losses on available for sale securities	—			(202		)
Gross losses on held to maturity securities	(5		)	—
Total losses	(5		)	(202		)
Investment securities gains, net	$	359		$	6,201
Proceeds from sales of investment securities	$	16,059		$	359,591

During the first nine months of ~~2016,~~2017, the Corporation sold approximately ~~$360~~$16 million of ~~FNMA~~municipal securities classified as held to maturity due to significant credit concerns and ~~FHLMC mortgage-related securities and reinvested into GNMA mortgage-related securities, generating~~negative actions taken by credit rating agencies, primarily as a ~~$6 million~~result of budgetary pressures in the State of Illinois. These sales resulted in a net gain ~~on sale. This sale~~ of ~~FNMA and FHLMC mortgage-related~~approximately $359,000.

Investment securities ~~and the subsequent purchase of GNMA mortgage-related securities lowered risk weighted assets and related capital requirements.~~

Nine Months Ended September 30,
2016 2015
($ in Thousands)
Gross gains $ 6,403
$ 8,047
Gross losses (202 ) (4,009 )
Investment securities gains, net $ 6,201
$ 4,038
Proceeds from sales of investment securities $ 359,591
$ 1,206,242

~~Securities~~ with a carrying value of approximately ~~$2.6~~$2.9 billion and ~~$3.2~~$1.8 billion at September 30, ~~2016,~~2017, and December 31, ~~2015,~~2016, respectively, were pledged to secure certain deposits or for other purposes as required or permitted by law.

The following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at September 30, ~~2016.~~2017.



	Less than 12 months						12 months or more						Total
September 30, 2017	Number of Securities	Unrealized Losses			Fair Value		Number of Securities	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
	($ in Thousands)
Investment securities available for sale
U.S. Treasury securities	1	$	(2	)	$	1,001	—	$	—		$	—	$	(2	)	$	1,001
Residential mortgage-related securities
FNMA / FHLMC	16	(1,254		)	177,782		2	(306		)	33,842		(1,560		)	211,624
GNMA	22	(9,455		)	687,814		14	(6,593		)	378,457		(16,048		)	1,066,271
Private-label	—	—			—		1	(11		)	1,072		(11		)	1,072
GNMA commercial mortgage-related securities	42	(4,962		)	551,833		56	(21,203		)	891,178		(26,165		)	1,443,011
Asset backed securities	5	(25		)	52,851		—	—			—		(25		)	52,851
Other securities (debt and equity)	1	(26		)	174		—	—			—		(26		)	174
Total	87	$	(15,724	)	$	1,471,455	73	$	(28,113	)	$	1,304,549	$	(43,837	)	$	2,776,004
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	195	$	(1,195	)	$	138,178	108	$	(2,663	)	$	94,432	$	(3,858	)	$	232,610
Residential mortgage-related securities
FNMA / FHLMC	12	(124		)	17,816		4	(280		)	9,910		(404		)	27,726
GNMA	29	(1,628		)	223,379		7	(987		)	67,981		(2,615		)	291,360
GNMA commercial mortgage-related securities	5	(841		)	94,758		19	(10,967		)	427,161		(11,808		)	521,919
Total	241	$	(3,788	)	$	474,131	138	$	(14,897	)	$	599,484	$	(18,685	)	$	1,073,615

Less than 12 months 12 months or more Total

Number
of
Securities

Unrealized
Losses

Fair
Value

Number
of
Securities

Unrealized
Losses

Fair
Value

Unrealized
Losses

Fair
Value
($ in Thousands)
Investment securities available for sale:
Residential mortgage-related securities:
FNMA / FHLMC 3
$ (32 ) $ 14,694
—
$ —
$ —
$ (32 ) $ 14,694
GNMA 8
(750 ) 280,378
—
—
—
(750 ) 280,378
Private-label —
—
—
1
(15 ) 1,197
(15 ) 1,197
GNMA commercial mortgage-related securities 40
(2,035 ) 828,434
21
(9,427 ) 466,898
(11,462 ) 1,295,332
Total 51
$ (2,817 ) $ 1,123,506
22
$ (9,442 ) $ 468,095
$ (12,259 ) $ 1,591,601
Investment securities held to maturity:
Municipal securities 37
$ (224 ) $ 37,317
4
$ (9 ) $ 1,842
$ (233 ) $ 39,159
Residential mortgage-related securities:
FNMA / FHLMC 1
(8 ) 1,108
1
(8 ) 6,834
(16 ) 7,942
GNMA 5
(24 ) 6,317
—
—
—
(24 ) 6,317
Total 43
$ (256 ) $ 44,742
5
$ (17 ) $ 8,676
$ (273 ) $ 53,418

For comparative purposes, the following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, ~~2015.~~2016.



	Less than 12 months						12 months or more						Total
December 31, 2016	Number of Securities	Unrealized Losses			Fair Value		Number of Securities	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
	($ in Thousands)
Investment securities available for sale
Residential mortgage-related securities
FNMA / FHLMC	14	$	(2,602	)	$	244,252	—	$	—		$	—	$	(2,602	)	$	244,252
GNMA	54	(25,198		)	1,723,523		—	—			—		(25,198		)	1,723,523
Private-label	—	—			—		1	(14		)	1,119		(14		)	1,119
GNMA commercial mortgage-related securities	74	(16,445		)	1,427,889		21	(19,521		)	429,258		(35,966		)	1,857,147
Other securities (debt and equity)	3	(21		)	1,479		—	—			—		(21		)	1,479
Total	145	$	(44,266	)	$	3,397,143	22	$	(19,535	)	$	430,377	$	(63,801	)	$	3,827,520
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	700	$	(11,937	)	$	414,186	4	$	(99	)	$	1,752	$	(12,036	)	$	415,938
Residential mortgage-related securities
FNMA / FHLMC	14	(441		)	17,477		1	(252		)	6,031		(693		)	23,508
GNMA	39	(656		)	64,633		—	—			—		(656		)	64,633
Total	753	$	(13,034	)	$	496,296	5	$	(351	)	$	7,783	$	(13,385	)	$	504,079

Less than 12 months 12 months or more Total
Number
of
Securities Unrealized
Losses Fair
Value Number
of
Securities Unrealized
Losses Fair
Value Unrealized
Losses Fair
Value
($ in Thousands)
Investment securities available for sale:
U.S. Treasury securities 1
$ (2 ) $ 997
—
$ —
$ —
$ (2 ) $ 997
Residential mortgage-related securities:
FNMA / FHLMC 17
(1,548 ) 220,852
14
(6,612 ) 338,186
(8,160 ) 559,038
GNMA 46
(16,460 ) 1,434,484
—
—
—
(16,460 ) 1,434,484
Private-label 1
(1 ) 83
3
(13 ) 1,565
(14 ) 1,648
GNMA commercial mortgage-related securities 40
(9,610 ) 1,132,844
21
(18,891 ) 448,218
(28,501 ) 1,581,062
Total 105
$ (27,621 ) $ 2,789,260
38
$ (25,516 ) $ 787,969
$ (53,137 ) $ 3,577,229
Investment securities held to maturity:
Municipal securities 53
$ (146 ) $ 23,137
24
$ (193 ) $ 9,254
$ (339 ) $ 32,391
Residential mortgage-related securities:
FNMA / FHLMC 10
(177 ) 12,754
3
(468 ) 11,106
(645 ) 23,860
GNMA 21
(201 ) 45,499
3
(108 ) 6,797
(309 ) 52,296
Total 84
$ (524 ) $ 81,390
30
$ (769 ) $ 27,157
$ (1,293 ) $ 108,547

The Corporation reviews the investment securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider

in the other-than-temporary impairment analysis include, the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions.

Based on the Corporation’s evaluation, management does not believe any unrealized loss at September 30, ~~2016,~~2017, represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions, and not credit deterioration. The unrealized losses reported for municipal securities relate to various state and

local political subdivisions and school districts. The Corporation currently does not intend to sell nor does it believe that it will be required to sell the securities contained in the above unrealized losses table before recovery of their amortized cost basis. The reduction in unrealized losses at September 30, 2016 is due to the reduction in overall interest rates. The U.S. Treasury 3-year and 5-year rates dropped by 43 basis points ("bp") and 62 bp, respectively, from December 31, 2015.

Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank ~~Stocks:~~stocks: The Corporation is required to maintain Federal Reserve stock and FHLB stock as a member 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. At September 30, ~~2016,~~2017, and December 31, ~~2015,~~2016, the Corporation had FHLB stock of ~~$65~~$97 million and ~~$74~~$65 million, respectively. The Corporation had Federal Reserve Bank stock of ~~$75~~$76 million and ~~$73~~$75 million at September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively.

Note 7 Loans

The period end loan composition was as follows.



	September 30, 2017		December 31, 2016
	($ in Thousands)
Commercial and industrial	$	6,534,660	$	6,489,014
Commercial real estate — owner occupied	827,064		897,724
Commercial and business lending	7,361,724		7,386,738
Commercial real estate — investor	3,345,536		3,574,732
Real estate construction	1,552,135		1,432,497
Commercial real estate lending	4,897,671		5,007,229
Total commercial	12,259,395		12,393,967
Residential mortgage	7,408,471		6,332,327
Home equity	890,130		934,443
Other consumer	373,464		393,979
Total consumer	8,672,065		7,660,749
Total loans	$	20,931,460	$	20,054,716

September 30,
2016 December 31,
2015
($ in Thousands)
Commercial and industrial $ 6,721,557
$ 6,190,683
Commercial real estate — owner occupied 892,678
918,212
Commercial and business lending 7,614,235
7,108,895
Commercial real estate — investor 3,530,370
3,234,266
Real estate construction 1,314,431
1,162,145
Commercial real estate lending 4,844,801
4,396,411
Total commercial 12,459,036
11,505,306
Residential mortgage 6,034,166
5,783,267
Home equity 951,594
1,005,802
Other consumer 399,209
419,968
Total consumer 7,384,969
7,209,037
Total loans $ 19,844,005
$ 18,714,343

The following table presents commercial and consumer loans by credit quality indicator at September 30, ~~2016.~~2017.


	Pass		Special Mention		Potential Problem		Nonaccrual		Total		Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)										($ in Thousands)
Commercial and industrial	$	5,983,940	$	180,425	$	351,290	$	205,902	$	6,721,557	$	6,101,491	$	157,106	$	153,779	$	122,284	$	6,534,660
Commercial real estate - owner occupied	791,951		46,345		47,387		6,995		892,678		742,257		11,741		57,468		15,598		827,064
Commercial and business lending	6,775,891		226,770		398,677		212,897		7,614,235		6,843,748		168,847		211,247		137,882		7,361,724
Commercial real estate - investor	3,480,535		5,042		36,765		8,028		3,530,370		3,284,497		10,726		46,770		3,543		3,345,536
Real estate construction	1,303,013		8,625		1,929		864		1,314,431		1,550,462		15		118		1,540		1,552,135
Commercial real estate lending	4,783,548		13,667		38,694		8,892		4,844,801		4,834,959		10,741		46,888		5,083		4,897,671
Total commercial	11,559,439		240,437		437,371		221,789		12,459,036		11,678,707		179,588		258,135		142,965		12,259,395
Residential mortgage	5,973,633		3,832		3,226		53,475		6,034,166		7,352,286		881		650		54,654		7,408,471
Home equity	936,443		726		78		14,347		951,594		876,003		1,364		124		12,639		890,130
Other consumer	398,481		428		—		300		399,209		372,638		567		—		259		373,464
Total consumer	7,308,557		4,986		3,304		68,122		7,384,969		8,600,927		2,812		774		67,552		8,672,065
Total loans	$	18,867,996	$	245,423	$	440,675	$	289,911	$	19,844,005
Total											$	20,279,634	$	182,400	$	258,909	$	210,517	$	20,931,460

The following table presents commercial and consumer loans by credit quality indicator at December 31, ~~2015.~~2016.



	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	5,937,119	$	141,328	$	227,196	$	183,371	$	6,489,014
Commercial real estate - owner occupied	805,871		17,785		64,524		9,544		897,724
Commercial and business lending	6,742,990		159,113		291,720		192,915		7,386,738
Commercial real estate - investor	3,491,217		14,236		51,228		18,051		3,574,732
Real estate construction	1,429,083		105		2,465		844		1,432,497
Commercial real estate lending	4,920,300		14,341		53,693		18,895		5,007,229
Total commercial	11,663,290		173,454		345,413		211,810		12,393,967
Residential mortgage	6,275,162		1,314		5,615		50,236		6,332,327
Home equity	919,740		1,588		114		13,001		934,443
Other consumer	393,161		562		—		256		393,979
Total consumer	7,588,063		3,464		5,729		63,493		7,660,749
Total	$	19,251,353	$	176,918	$	351,142	$	275,303	$	20,054,716

Pass Special Mention Potential Problem Nonaccrual Total
($ in Thousands)
Commercial and industrial $ 5,522,809
$ 341,169
$ 233,130
$ 93,575
$ 6,190,683
Commercial real estate - owner occupied 835,572
38,885
35,706
8,049
918,212
Commercial and business lending 6,358,381
380,054
268,836
101,624
7,108,895
Commercial real estate - investor 3,153,703
45,976
25,944
8,643
3,234,266
Real estate construction 1,157,034
252
3,919
940
1,162,145
Commercial real estate lending 4,310,737
46,228
29,863
9,583
4,396,411
Total commercial 10,669,118
426,282
298,699
111,207
11,505,306
Residential mortgage 5,727,437
1,552
2,796
51,482
5,783,267
Home equity 988,574
1,762
222
15,244
1,005,802
Other consumer 419,087
556
—
325
419,968
Total consumer 7,135,098
3,870
3,018
67,051
7,209,037
Total loans $ 17,804,216
$ 430,152
$ 301,717
$ 178,258
$ 18,714,343

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 allowance for loan losses, allowance for unfunded commitments, nonaccrual, and charge off policies.

For commercial loans, management has determined the pass credit quality indicator to include credits that exhibit 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 that are 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 deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem 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, that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Lastly, management considers a loan to be impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. Commercial loans classified as special mention, potential problem, and nonaccrual ~~loans~~ are reviewed at a minimum on a quarterly basis, while pass and performing rated credits are reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

The following table presents loans by past due status at September 30, ~~2016.~~

2017.


	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due^(a)		Nonaccrual ^(b)		Total		Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due^(a)		Nonaccrual^(b)		Total
	($ in Thousands)												($ in Thousands)
Commercial and industrial	$	6,514,451	$	576	$	374	$	254	$	205,902	$	6,721,557	$	6,410,690	$	1,254	$	124	$	308	$	122,284	$	6,534,660
Commercial real estate - owner occupied	884,814		754		115		—		6,995		892,678		809,944		1,522		—		—		15,598		827,064
Commercial and business lending	7,399,265		1,330		489		254		212,897		7,614,235		7,220,634		2,776		124		308		137,882		7,361,724
Commercial real estate - investor	3,521,712		17		613		—		8,028		3,530,370		3,340,884		1,109		—		—		3,543		3,345,536
Real estate construction	1,313,165		337		65		—		864		1,314,431		1,549,895		685		15		—		1,540		1,552,135
Commercial real estate lending	4,834,877		354		678		—		8,892		4,844,801		4,890,779		1,794		15		—		5,083		4,897,671
Total commercial	12,234,142		1,684		1,167		254		221,789		12,459,036		12,111,413		4,570		139		308		142,965		12,259,395
Residential mortgage	5,973,994		6,407		290		—		53,475		6,034,166		7,344,947		8,327		543		—		54,654		7,408,471
Home equity	931,774		4,627		846		—		14,347		951,594		870,300		5,852		1,339		—		12,639		890,130
Other consumer	395,606		1,499		547		1,257		300		399,209		370,216		987		699		1,303		259		373,464
Total consumer	7,301,374		12,533		1,683		1,257		68,122		7,384,969		8,585,463		15,166		2,581		1,303		67,552		8,672,065
Total loans	$	19,535,516	$	14,217	$	2,850	$	1,511	$	289,911	$	19,844,005
Total													$	20,696,876	$	19,736	$	2,720	$	1,611	$	210,517	$	20,931,460


(a)	The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at September 30, ~~2016~~2017 (the same as the reported balances for the accruing loans noted above).


(b)	Of the total nonaccrual loans, $~~215~~156 million or 74% were current with respect to payment at September 30, ~~2016.~~2017.

The following table presents loans by past due status at December 31, ~~2015.~~2016.


	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due ^(a)		Nonaccrual ^(b)		Total		Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due^(a)		Nonaccrual^(b)		Total
	($ in Thousands)												($ in Thousands)
Commercial and industrial	$	6,095,848	$	602	$	409	$	249	$	93,575	$	6,190,683	$	6,303,994	$	965	$	448	$	236	$	183,371	$	6,489,014
Commercial real estate - owner occupied	903,021		7,142		—		—		8,049		918,212		886,796		968		416		—		9,544		897,724
Commercial and business lending	6,998,869		7,744		409		249		101,624		7,108,895		7,190,790		1,933		864		236		192,915		7,386,738
Commercial real estate - investor	3,225,332		291		—		—		8,643		3,234,266		3,555,750		431		500		—		18,051		3,574,732
Real estate construction	1,160,909		270		26		—		940		1,162,145		1,431,284		264		105		—		844		1,432,497
Commercial real estate lending	4,386,241		561		26		—		9,583		4,396,411		4,987,034		695		605		—		18,895		5,007,229
Total commercial	11,385,110		8,305		435		249		111,207		11,505,306		12,177,824		2,628		1,469		236		211,810		12,393,967
Residential mortgage	5,726,855		4,491		439		—		51,482		5,783,267		6,273,949		7,298		844		—		50,236		6,332,327
Home equity	982,639		6,190		1,729		—		15,244		1,005,802		915,593		4,265		1,584		—		13,001		934,443
Other consumer	416,374		1,195		675		1,399		325		419,968		389,157		2,471		718		1,377		256		393,979
Total consumer	7,125,868		11,876		2,843		1,399		67,051		7,209,037		7,578,699		14,034		3,146		1,377		63,493		7,660,749
Total loans	$	18,510,978	$	20,181	$	3,278	$	1,648	$	178,258	$	18,714,343
Total													$	19,756,523	$	16,662	$	4,615	$	1,613	$	275,303	$	20,054,716


(a)	The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, ~~2015~~2016 (the same as the reported balances for the accruing loans noted above).


(b)	Of the total nonaccrual loans, $~~124~~224 million or ~~69%~~81% were current with respect to payment at December 31, ~~2015.~~2016.

The following table presents impaired loans individually evaluated under ASC Topic 310 at September 30, ~~2016.~~2017.

Recorded
Investment Unpaid
Principal
Balance Related
Allowance Average
Recorded
Investment Interest
Income
Recognized
($ in Thousands)
Loans with a related allowance
Commercial and industrial $ 61,219
$ 65,586
$ 9,293
$ 61,337
$ 1,228
Commercial real estate — owner occupied 8,721
10,641
319
9,133
262
Commercial and business lending 69,940
76,227
9,612
70,470
1,490
Commercial real estate — investor 17,154
17,601
629
21,450
1,405
Real estate construction 1,229
1,626
449
1,301
49
Commercial real estate lending 18,383
19,227
1,078
22,751
1,454
Total commercial 88,323
95,454
10,690
93,221
2,944
Residential mortgage 65,381
70,568
12,087
66,845
1,734
Home equity 21,382
23,277
10,162
22,654
862
Other consumer 1,226
1,288
211
1,268
22
Total consumer 87,989
95,133
22,460
90,767
2,618
Total loans $ 176,312
$ 190,587
$ 33,150
$ 183,988
$ 5,562
Loans with no related allowance
Commercial and industrial $ 174,931
$ 221,213
$ —
$ 179,696
$ 1,227
Commercial real estate — owner occupied 5,719
6,472
—
5,906
—
Commercial and business lending 180,650
227,685
—
185,602
1,227
Commercial real estate — investor 6,226
6,501
—
7,393
—
Real estate construction —
—
—
—
—
Commercial real estate lending 6,226
6,501
—
7,393
—
Total commercial 186,876
234,186
—
192,995
1,227
Residential mortgage 6,143
6,289
—
6,206
133
Home equity 650
650
—
651
23
Other consumer —
—
—
—
—
Total consumer 6,793
6,939
—
6,857
156
Total loans $ 193,669
$ 241,125
$ —
$ 199,852
$ 1,383
Total
Commercial and industrial $ 236,150
$ 286,799
$ 9,293
$ 241,033
$ 2,455
Commercial real estate — owner occupied 14,440
17,113
319
15,039
262
Commercial and business lending 250,590
303,912
9,612
256,072
2,717
Commercial real estate — investor 23,380
24,102
629
28,843
1,405
Real estate construction 1,229
1,626
449
1,301
49
Commercial real estate lending 24,609
25,728
1,078
30,144
1,454
Total commercial 275,199
329,640
10,690
286,216
4,171
Residential mortgage 71,524
76,857
12,087
73,051
1,867
Home equity 22,032
23,927
10,162
23,305
885
Other consumer 1,226
1,288
211
1,268
22
Total consumer 94,782
102,072
22,460
97,624
2,774
Total impaired loans^(a)
$ 369,981
$ 431,712
$ 33,150
$ 383,840
$ 6,945


~~(a)~~	~~The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 78% of the unpaid principal balance at September 30, 2016.~~

~~The following table presents impaired loans at December 31, 2015.~~


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)										($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	57,785	$	59,409	$	8,162	$	46,833	$	855	$	67,226	$	72,343	$	11,540	$	76,082	$	1,050
Commercial real estate — owner occupied	9,705		9,804		448		10,087		412		12,255		12,374		1,549		12,032		192
Commercial and business lending	67,490		69,213		8,610		56,920		1,267		79,481		84,717		13,089		88,114		1,242
Commercial real estate — investor	27,822		29,444		1,831		28,278		1,914		16,974		16,988		1,812		16,992		1,224
Real estate construction	1,450		2,154		453		1,667		66		476		586		75		489		22
Commercial real estate lending	29,272		31,598		2,284		29,945		1,980		17,450		17,574		1,887		17,481		1,246
Total commercial	96,762		100,811		10,894		86,865		3,247		96,931		102,291		14,976		105,595		2,488
Residential mortgage	66,590		71,084		12,462		68,183		2,374		42,684		45,028		6,893		43,090		1,258
Home equity	21,769		23,989		10,118		22,624		1,147		10,351		11,283		3,684		10,537		411
Other consumer	1,154		1,225		195		1,199		30		1,092		1,093		118		1,095		1
Total consumer	89,513		96,298		22,775		92,006		3,551		54,127		57,404		10,695		54,722		1,670
Total loans	$	186,275	$	197,109	$	33,669	$	178,871	$	6,798
Total loans^(a)											$	151,058	$	159,695	$	25,671	$	160,317	$	4,158
Loans with no related allowance
Commercial and industrial	$	65,083	$	72,259	$	—	$	79,573	$	1,657	$	86,802	$	99,480	$	—	$	100,398	$	927
Commercial real estate — owner occupied	6,221		6,648		—		6,534		15		6,871		7,716		—		7,016		—
Commercial and business lending	71,304		78,907		—		86,107		1,672		93,673		107,196		—		107,414		927
Commercial real estate — investor	2,736		2,840		—		2,763		90		589		732		—		606		—
Real estate construction	—		—		—		—		—		213		218		—		220		—
Commercial real estate lending	2,736		2,840		—		2,763		90		802		950		—		826		—
Total commercial	74,040		81,747		—		88,870		1,762		94,475		108,146		—		108,240		927
Residential mortgage	4,762		5,033		—		4,726		126		6,469		7,074		—		6,492		105
Home equity	544		544		—		544		30		540		543		—		540		—
Other consumer	—		—		—		—		—		—		—		—		—		—
Total consumer	5,306		5,577		—		5,270		156		7,009		7,617		—		7,032		105
Total loans(a)	$	79,346	$	87,324	$	—	$	94,140	$	1,918	$	101,484	$	115,763	$	—	$	115,272	$	1,032
Total
Commercial and industrial	$	122,868	$	131,668	$	8,162	$	126,406	$	2,512	$	154,028	$	171,823	$	11,540	$	176,480	$	1,977
Commercial real estate — owner occupied	15,926		16,452		448		16,621		427		19,126		20,090		1,549		19,048		192
Commercial and business lending	138,794		148,120		8,610		143,027		2,939		173,154		191,913		13,089		195,528		2,169
Commercial real estate — investor	30,558		32,284		1,831		31,041		2,004		17,563		17,720		1,812		17,598		1,224
Real estate construction	1,450		2,154		453		1,667		66		689		804		75		709		22
Commercial real estate lending	32,008		34,438		2,284		32,708		2,070		18,252		18,524		1,887		18,307		1,246
Total commercial	170,802		182,558		10,894		175,735		5,009		191,406		210,437		14,976		213,835		3,415
Residential mortgage	71,352		76,117		12,462		72,909		2,500		49,153		52,102		6,893		49,582		1,363
Home equity	22,313		24,533		10,118		23,168		1,177		10,891		11,826		3,684		11,077		411
Other consumer	1,154		1,225		195		1,199		30		1,092		1,093		118		1,095		1
Total consumer	94,819		101,875		22,775		97,276		3,707		61,136		65,021		10,695		61,754		1,775
Total impaired loans^(a)	$	265,621	$	284,433	$	33,669	$	273,011	$	8,716
Total loans^(a)											$	252,542	$	275,458	$	25,671	$	275,589	$	5,190


(a)	The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 82% of the unpaid principal balance at ~~December 31, 2015.~~September 30, 2017.

The following table presents impaired loans individually evaluated under ASC Topic 310 at December 31, 2016.



	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	99,786	$	105,175	$	21,047	$	104,808	$	2,345
Commercial real estate — owner occupied	5,544		5,568		23		5,840		263
Commercial and business lending	105,330		110,743		21,070		110,648		2,608
Commercial real estate — investor	26,764		27,031		3,410		30,665		2,120
Real estate construction	509		648		84		529		31
Commercial real estate lending	27,273		27,679		3,494		31,194		2,151
Total commercial	132,603		138,422		24,564		141,842		4,759
Residential mortgage	37,902		39,979		6,438		38,608		1,551
Home equity	11,070		11,909		3,943		11,420		627
Other consumer	1,012		1,023		109		1,021		2
Total consumer	49,984		52,911		10,490		51,049		2,180
Total loans^(a)	$	182,587	$	191,333	$	35,054	$	192,891	$	6,939
Loans with no related allowance
Commercial and industrial	$	113,485	$	134,863	$	—	$	117,980	$	1,519
Commercial real estate — owner occupied	8,439		9,266		—		8,759		138
Commercial and business lending	121,924		144,129		—		126,739		1,657
Commercial real estate — investor	6,144		6,478		—		7,092		—
Real estate construction	—		—		—		—		—
Commercial real estate lending	6,144		6,478		—		7,092		—
Total commercial	128,068		150,607		—		133,831		1,657
Residential mortgage	5,974		6,998		—		6,610		184
Home equity	106		107		—		107		4
Other consumer	—		—		—		—		—
Total consumer	6,080		7,105		—		6,717		188
Total loans^(a)	$	134,148	$	157,712	$	—	$	140,548	$	1,845
Total
Commercial and industrial	$	213,271	$	240,038	$	21,047	$	222,788	$	3,864
Commercial real estate — owner occupied	13,983		14,834		23		14,599		401
Commercial and business lending	227,254		254,872		21,070		237,387		4,265
Commercial real estate — investor	32,908		33,509		3,410		37,757		2,120
Real estate construction	509		648		84		529		31
Commercial real estate lending	33,417		34,157		3,494		38,286		2,151
Total commercial	260,671		289,029		24,564		275,673		6,416
Residential mortgage	43,876		46,977		6,438		45,218		1,735
Home equity	11,176		12,016		3,943		11,527		631
Other consumer	1,012		1,023		109		1,021		2
Total consumer	56,064		60,016		10,490		57,766		2,368
Total loans^(a)	$	316,735	$	349,045	$	35,054	$	333,439	$	8,784


(a)	The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 81% of the unpaid principal balance at December 31, 2016.

Troubled Debt Restructurings (“Restructured Loans”):

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. ~~See Note 1 “Summary of Significant Accounting Policies," in the Corporation’s 2015 Annual Report on Form 10-K for the Corporation's accounting policy for troubled debt restructurings.~~ The Corporation had a recorded investment of $9approximately $17 million in loans modified in troubled debt restructurings for the nine months ended September 30, ~~2016,~~2017, of which approximately $4$6 million ~~was~~were in accrual status and $5$11 million ~~was~~were in nonaccrual pending a sustained period of repayment. The following table presents nonaccrual and performing restructured loans by loan portfolio.



	September 30, 2017				December 31, 2016
	Performing Restructured Loans		Nonaccrual Restructured Loans^(a)		Performing Restructured Loans		Nonaccrual Restructured Loans^(a)
	($ in Thousands)
Commercial and industrial	$	32,572	$	7,994	$	31,884	$	1,276
Commercial real estate — owner occupied	4,077		2,145		5,490		2,220
Commercial real estate — investor	14,294		589		15,289		924
Real estate construction	316		160		359		150
Residential mortgage	16,859		20,248		18,100		21,906
Home equity	7,987		2,364		7,756		2,877
Other consumer	1,073		20		979		32
Total	$	77,178	$	33,520	$	79,857	$	29,385

September 30, 2016 December 31, 2015

Performing
Restructured
Loans

Nonaccrual
Restructured
Loans^(a)

Performing
Restructured
Loans

Nonaccrual
Restructured
Loans^(a)
($ in Thousands)
Commercial and industrial $ 30,248
$ 2,398
$ 29,293
$ 1,714
Commercial real estate — owner occupied 7,445
2,275
7,877
2,703
Commercial real estate — investor 15,352
941
21,915
3,936
Real estate construction 365
154
510
177
Residential mortgage 18,049
22,743
19,870
24,592
Home equity 7,685
3,209
7,069
4,522
Other consumer 926
38
829
40
Total restructured loans $ 80,070
$ 31,758
$ 87,363
$ 37,684


(a)	Nonaccrual restructured loans have been included within nonaccrual loans.

The following table provides the number of loans modified in a troubled debt restructuring by loan portfolio during the nine months ended September 30, 2017 and 2016, ~~and 2015,~~respectively, and the recorded investment and unpaid principal balance as of September 30, 2017 and 2016, ~~and 2015.~~respectively.



	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016
	Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)		Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)
	($ in Thousands)
Commercial and industrial	19	$	11,387	$	15,898	10	$	2,455	$	2,517
Commercial real estate — owner occupied	2	710		710		1	117		124
Real estate construction	—	—		—		1	66		91
Residential mortgage	48	4,445		4,638		56	4,676		4,922
Home equity	35	934		1,182		47	1,709		1,793
Other consumer	—	—		—		1	15		16
Total	104	$	17,476	$	22,428	116	$	9,038	$	9,463

Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015

Number
of
Loans

Recorded
Investment^(a)

Unpaid
Principal
Balance^(b)

Number
of
Loans

Recorded
Investment^(a)

Unpaid
Principal
Balance^(b)
($ in Thousands)
Commercial and industrial 10
$ 2,455
$ 2,517
10
$ 2,410
$ 3,033
Commercial real estate — owner occupied 1
117
124
4
2,847
3,007
Commercial real estate — investor —
—
—
3
2,949
2,998
Real estate construction 1
66
91
1
5
5
Residential mortgage 56
4,676
4,922
77
7,393
7,586
Home equity 47
1,709
1,793
61
2,109
2,220
Other consumer 1
15
16
—
—
—
Total 116
$ 9,038
$ 9,463
156
$ 17,713
$ 18,849


(a)	Represents post-modification outstanding recorded investment.


(b)	Represents pre-modification outstanding recorded investment.

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the nine months ended September 30, ~~2016,~~2017, restructured loan modifications of commercial and industrial, commercial real estate, and real estate construction loans primarily included maturity date extensions ~~interest rate concessions,~~and payment schedule ~~modifications, or a combination of these concessions.~~modifications. Restructured loan modifications of home equity and residential mortgage loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the nine months ended September 30, ~~2016.~~2017.

The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the nine months ended September 30, 2017 and 2016, ~~and 2015,~~respectively, as well as the recorded investment in these restructured loans as of September 30, 2017 and 2016, ~~and 2015.~~respectively.



	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	($ in Thousands)
Commercial and industrial	1	$	1	—	$	—
Residential mortgage	21	1,335		36	3,310
Home equity	14	371		12	182
Other consumer	—	—		1	15
Total	36	$	1,707	49	$	3,507

Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015

Number of
Loans

Recorded
Investment

Number of
Loans

Recorded
Investment
($ in Thousands)
Commercial and industrial —
$ —
1
$ 153
Commercial real estate — owner occupied —
—
1
297
Residential mortgage 36
3,310
45
4,176
Home equity 12
182
21
627
Other consumer 1
15
—
—
Total 49
$ 3,507
68
$ 5,253

All loans modified in a troubled debt restructuring are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, is considered in the determination of an appropriate level of the allowance for loan losses.

~~A summary of the changes in the allowance~~Allowance for ~~loan losses by portfolio segment for the nine months ended September 30, 2016, was as follows.~~

$ in Thousands
Commercial
and
industrial

Commercial
real estate
- owner
occupied

Commercial
real estate
- investor

Real estate
construction

Residential
mortgage

Home
equity

Other
consumer
Total
December 31, 2015 $ 129,959
$ 18,680
$ 43,018
$ 25,266
$ 28,261
$ 23,555
$ 5,525
$ 274,264
Charge offs (63,368 ) (265 ) (1,495 ) (380 ) (3,035 ) (3,434 ) (2,853 ) (74,830 )
Recoveries 13,461
48
1,610
111
506
2,730
640
19,106
Net charge offs (49,907 ) (217 ) 115
(269 ) (2,529 ) (704 ) (2,213 ) (55,724 )
Provision for loan losses 57,051
(4,106 ) (2,366 ) (1,873 ) 1,121
(897 ) 2,070
51,000
September 30, 2016 $ 137,103
$ 14,357
$ 40,767
$ 23,124
$ 26,853
$ 21,954
$ 5,382
$ 269,540
Allowance for loan losses:
Individually evaluated for impairment $ 8,570
$ —
$ 79
$ —
$ 976
$ —
$ —
$ 9,625
Collectively evaluated for impairment 128,533
14,357
40,688
23,124
25,877
21,954
5,382
259,915
Total allowance for loan losses $ 137,103
$ 14,357
$ 40,767
$ 23,124
$ 26,853
$ 21,954
$ 5,382
$ 269,540
Loans:
Individually evaluated for impairment $ 203,834
$ 5,719
$ 7,023
$ —
$ 9,389
$ 650
$ —
$ 226,615
Collectively evaluated for impairment 6,517,723
886,959
3,523,347
1,314,431
6,024,777
950,944
399,209
19,617,390
Total loans $ 6,721,557
$ 892,678
$ 3,530,370
$ 1,314,431
$ 6,034,166
$ 951,594
$ 399,209
$ 19,844,005
Credit Losses

The allowance for credit losses is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the allowance for loan losses represents management’s estimate of an amount appropriate to provide for probable credit losses in the loan portfolio at the balance sheet date. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in accrued expenses and other liabilities on the consolidated balance sheets. See Note 12 for additional information on the allowance for unfunded commitments.

The following table presents a summary of the changes in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2017.



($ in Thousands)	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2016	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Charge offs	(33,928		)	(83		)	(803		)	(225		)	(1,472		)	(2,208		)	(3,238		)	(41,957		)
Recoveries	9,072			158			218			60			754			2,348			563			13,173
Net Charge offs	(24,856		)	75			(585		)	(165		)	(718		)	140			(2,675		)	(28,784		)
Provision for loan losses	23,587			(4,352		)	1,798			(1,340		)	4,632			(479		)	3,154			27,000
September 30, 2017	$	138,857		$	9,757		$	46,498		$	25,427		$	30,960		$	20,025		$	5,027		$	276,551
Allowance for loan losses
Individually evaluated for impairment	$	11,540		$	1,549		$	1,812		$	75		$	6,893		$	3,684		$	118		$	25,671
Collectively evaluated for impairment	127,317			8,208			44,686			25,352			24,067			16,341			4,909			250,880
Total allowance for loan losses	$	138,857		$	9,757		$	46,498		$	25,427		$	30,960		$	20,025		$	5,027		$	276,551
Loans
Individually evaluated for impairment	$	154,028		$	19,126		$	17,563		$	689		$	49,153		$	10,891		$	1,092		$	252,542
Collectively evaluated for impairment	6,380,632			807,938			3,327,973			1,551,446			7,359,318			879,239			372,372			20,678,918
Total loans	$	6,534,660		$	827,064		$	3,345,536		$	1,552,135		$	7,408,471		$	890,130		$	373,464		$	20,931,460

For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, ~~2015,~~2016, was as follows.



($ in Thousands)	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2015	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Charge offs	(71,016		)	(512		)	(1,504		)	(558		)	(4,332		)	(4,686		)	(3,831		)	(86,439		)
Recoveries	14,543			74			1,624			203			755			3,491			820			21,510
Net Charge offs	(56,473		)	(438		)	120			(355		)	(3,577		)	(1,195		)	(3,011		)	(64,929		)
Provision for loan losses	66,640			(4,208		)	2,147			2,021			2,362			(1,996		)	2,034			69,000
December 31, 2016	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Allowance for loan losses
Individually evaluated for impairment	$	21,047		$	23		$	3,410		$	84		$	6,438		$	3,943		$	109		$	35,054
Collectively evaluated for impairment	119,079			14,011			41,875			26,848			20,608			16,421			4,439			243,281
Total allowance for loan losses	$	140,126		$	14,034		$	45,285		$	26,932		$	27,046		$	20,364		$	4,548		$	278,335
Loans
Individually evaluated for impairment	$	213,271		$	13,983		$	32,908		$	509		$	43,876		$	11,176		$	1,012		$	316,735
Collectively evaluated for impairment	6,275,743			883,741			3,541,824			1,431,988			6,288,451			923,267			392,967			19,737,981
Total loans	$	6,489,014		$	897,724		$	3,574,732		$	1,432,497		$	6,332,327		$	934,443		$	393,979		$	20,054,716

$ in Thousands
Commercial
and
industrial

Commercial
real estate
- owner
occupied

Commercial
real estate
- investor

Real estate
construction

Residential
mortgage

Home
equity

Other
consumer
Total
December 31, 2014 $ 117,635
$ 16,510
$ 46,333
$ 20,999
$ 31,926
$ 26,464
$ 6,435
$ 266,302
Charge offs (27,687 ) (2,645 ) (4,645 ) (750 ) (5,636 ) (7,048 ) (3,869 ) (52,280 )
Recoveries 9,821
921
4,157
2,268
1,077
3,233
765
22,242
Net charge offs (17,866 ) (1,724 ) (488 ) 1,518
(4,559 ) (3,815 ) (3,104 ) (30,038 )
Provision for loan losses 30,190
3,894
(2,827 ) 2,749
894
906
2,194
38,000
December 31, 2015 $ 129,959
$ 18,680
$ 43,018
$ 25,266
$ 28,261
$ 23,555
$ 5,525
$ 274,264
Allowance for loan losses:
Individually evaluated for impairment $ 7,522
$ —
$ 229
$ —
$ 166
$ 46
$ —
$ 7,963
Collectively evaluated for impairment 122,437
18,680
42,789
25,266
28,095
23,509
5,525
266,301
Total allowance for loan losses $ 129,959
$ 18,680
$ 43,018
$ 25,266
$ 28,261
$ 23,555
$ 5,525
$ 274,264
Loans:
Individually evaluated for impairment $ 91,569
$ 6,221
$ 5,460
$ —
$ 6,956
$ 1,281
$ —
$ 111,487
Collectively evaluated for impairment 6,099,114
911,991
3,228,806
1,162,145
5,776,311
1,004,521
419,968
18,602,856
Total loans $ 6,190,683
$ 918,212
$ 3,234,266
$ 1,162,145
$ 5,783,267
$ 1,005,802
$ 419,968
$ 18,714,343

AAt September 30, 2017, the oil and gas portfolio was comprised of 56 credits, totaling $577 million of outstanding balances. The allowance related to the oil and gas portfolio was $30 million at September 30, 2017 and represented 5.2% of total oil and gas loans.



($ in Millions)	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
Balance at beginning of period	$	38		$	42
Charge offs	(26		)	(59		)
Recoveries	—			—
Net Charge offs	(26		)	(59		)
Provision for loan losses	18			55
Balance at end of period	$	30		$	38
Allowance for loan losses
Individually evaluated for impairment	$	2		$	14
Collectively evaluated for impairment	28			24
Total allowance for loan losses	$	30		$	38
Loans
Individually evaluated for impairment	$	92		$	147
Collectively evaluated for impairment	485			521
Total loans	$	577		$	668

The following table presents a summary of the changes in the allowance for unfunded ~~commitments was as follows.~~commitments.



	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	($ in Thousands)
Allowance for Unfunded Commitments
Balance at beginning of period	$	25,400		$	24,400
Provision for unfunded commitments	(1,000		)	1,000
Balance at end of period	$	24,400		$	25,400

Nine Months Ended September 30, 2016 Year Ended December 31, 2015
($ in Thousands)
Allowance for Unfunded Commitments:
Balance at beginning of period $ 24,400
$ 24,900
Provision for unfunded commitments 4,000
(500 )
Balance at end of period $ 28,400
$ 24,400

Note 8 Goodwill and Other Intangible Assets

~~Goodwill:~~Goodwill

Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment testing process is conducted by assigning net assets and goodwill to each reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of each reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of a reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the reporting unit’s goodwill to the implied fair value of goodwill. The implied fair value is computed by adjusting all assets and liabilities of the reporting unit to current fair value with the offset adjustment to goodwill. The adjusted goodwill balance is the implied fair value of the goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill.

The Corporation conducted its most recent annual impairment testing in May ~~2016,~~2017, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation’s common stock price and in the overall bank common stock index (based on the S&P 400 Regional Bank Sub-Industry Index), as well as the Corporation’s earnings per common share trend over the past year. Based on these assessments, management concluded that the ~~2016~~2017 annual qualitative impairment assessment indicated that it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative

analysis was not required. There ~~were~~have been no events since the May ~~2016~~2017 impairment testing that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in ~~2015~~2016 or the first nine months of ~~2016.~~2017.

At both September 30, 2017 and December 31, 2016, the Corporation had goodwill of $972 ~~million, compared to $969 million at December 31, 2015. There was an addition to the carrying amount of goodwill of~~million. Goodwill increased minimally by approximately ~~$3 million as a result of two small insurance acquisitions~~$55,000 during the first quarter of ~~2016.~~2017 as a result of a small insurance acquisition. See Note 2 for additional information on the Corporation's acquisitions.

Other Intangible ~~Assets:~~Assets

The Corporation has other intangible assets that are amortized, consisting of core deposit intangibles, other intangibles (primarily related to customer relationships acquired in connection with the Corporation’s insurance agency acquisitions), and mortgage servicing rights. ~~Core deposit intangibles~~During the first quarter of 2017, the Corporation added approximately ~~$15 million were fully amortized in 2015 and have been removed from both the gross carrying amount and the accumulated amortization for 2016. There was an addition to the gross carrying amount~~$162,000 of other intangibles ~~of $1 million for the~~relating to customer relationships associated with ~~two~~one small insurance ~~acquisitions that occurred during the first quarter of 2016.~~acquisition. See Note 2 for additional information on the Corporation's acquisitions. During the fist nine months of 2017, core deposit intangibles fully amortized. For core deposit intangibles and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows.



	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	($ in Thousands)
Core deposit intangibles
Gross carrying amount	$	4,385		$	4,385
Accumulated amortization	(4,385		)	(4,273		)
Net book value	$	—		$	112
Amortization during the year	$	112		$	281
Other intangibles
Gross carrying amount	$	32,572		$	32,410
Accumulated amortization	(18,492		)	(17,145		)
Net book value	$	14,080		$	15,265
Additions during the period	$	162		$	1,012
Amortization during the year	$	1,347		$	1,812

Nine Months Ended
September 30, 2016

Year Ended
December 31, 2015
($ in Thousands)
Core deposit intangibles:
Gross carrying amount $ 4,385
$ 19,545
Accumulated amortization (4,203 ) (19,152 )
Net book value $ 182
$ 393
Amortization during the year $ 211
$ 1,404
Other intangibles:
Gross carrying amount $ 32,410
$ 31,398
Accumulated amortization (16,690 ) (15,333 )
Net book value $ 15,720
$ 16,065
Additions during the period $ 1,012
$ 12,115
Amortization during the year $ 1,357
$ 1,690

~~Mortgage Servicing Rights:~~The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income and assessed for impairment at each reporting date.

The Corporation evaluates its mortgage servicing rights asset for impairment at minimum on a quarterly basis. Impairment is assessed based on fair value at each reporting date using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). As mortgage interest rates fall, prepayment speeds are usually faster and the value of the mortgage servicing rights asset generally decreases, requiring additional valuation reserve. Conversely, as mortgage interest rates rise, prepayment speeds are usually slower and the value of the mortgage servicing rights asset generally increases, requiring less valuation reserve. A valuation allowance is established, through a charge to earnings, to the extent the amortized cost of the mortgage servicing rights exceeds the estimated fair value by stratification. If it is later determined that all or a portion of the temporary impairment no longer exists for a stratification, the valuation is reduced through a recovery to earnings. An other-than-temporary impairment (i.e., recoverability is considered

remote when considering interest rates and loan pay off activity) is recognized as a write-down of the mortgage servicing rights asset and the related valuation allowance (to the extent a valuation allowance is available) and then against earnings. A direct write-down permanently reduces the carrying value of the mortgage servicing rights asset and valuation allowance, precluding subsequent recoveries. See Note 12 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 13 which further discusses fair value measurement relative to the mortgage servicing rights asset.

A summary of changes in the balance of the mortgage servicing rights asset and the mortgage servicing rights valuation allowance was as follows.



	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	($ in Thousands)
Mortgage servicing rights
Mortgage servicing rights at beginning of period	$	62,085		$	62,150
Additions	4,822			12,262
Amortization	(7,635		)	(12,327		)
Mortgage servicing rights at end of period	$	59,272		$	62,085
Valuation allowance at beginning of period	(609		)	(809		)
(Additions) recoveries, net	(286		)	200
Valuation allowance at end of period	(895		)	(609		)
Mortgage servicing rights, net	$	58,377		$	61,476
Fair value of mortgage servicing rights	$	62,625		$	73,149
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)	$	7,653,458		$	7,974,742
Mortgage servicing rights, net to servicing portfolio	0.76		%	0.77		%
Mortgage servicing rights expense ^(a)	$	7,921		$	12,127

Nine Months Ended
September 30, 2016

Year Ended
December 31, 2015
($ in Thousands)
Mortgage servicing rights:
Mortgage servicing rights at beginning of period $ 62,150
$ 61,379
Additions 8,701
12,372
Amortization (9,142 ) (11,601 )
Mortgage servicing rights at end of period $ 61,709
$ 62,150
Valuation allowance at beginning of period (809 ) (1,234 )
(Additions) recoveries, net (2,486 ) 425
Valuation allowance at end of period (3,295 ) (809 )
Mortgage servicing rights, net $ 58,414
$ 61,341
Fair value of mortgage servicing rights $ 58,937
$ 70,686
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”) $ 8,010,973
$ 7,915,224
Mortgage servicing rights, net to servicing portfolio 0.73 % 0.77 %
Mortgage servicing rights expense (1) $ 11,628
$ 11,176


~~(1)~~(a)	Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net in the consolidated statements of income.

The following table shows the estimated future amortization expense for amortizing intangible assets. The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of September 30, ~~2016.~~2017. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable.



Estimated Amortization Expense	Other Intangibles		Mortgage Servicing Rights
	($ in Thousands)
Three Months Ended December 31, 2017	$	451	$	2,593
2018	1,771		9,337
2019	1,472		7,792
2020	1,355		6,522
2021	1,331		5,484
2022	1,308		4,641
Beyond 2022	6,392		22,903
Total Estimated Amortization Expense	$	14,080	$	59,272

Estimated Amortization Expense Core Deposit Intangibles Other Intangibles Mortgage Servicing Rights
($ in Thousands)
Three months ending December 31, 2016 $ 70
$ 455
$ 3,263
2017 112
1,786
11,237
2018 —
1,756
8,956
2019 —
1,457
7,223
2020 —
1,340
5,858
2021 —
1,316
4,784
Beyond 2021 —
7,610
20,388
Total Estimated Amortization Expense $ 182
$ 15,720
$ 61,709

Note 9 Short and Long-Term Funding

The following table presents the components of short-term funding (funding with original contractual maturities of one year or less) and long-term funding (funding with original contractual maturities greater than one year) ~~were as follows.~~.



	September 30, 2017			December 31, 2016
	($ in Thousands)
Short-Term Funding
Federal funds purchased	$	220,575		$	208,150
Securities sold under agreements to repurchase	255,975			300,197
Federal funds purchased and securities sold under agreements to repurchase	$	476,550		$	508,347
FHLB advances	520,000			482,000
Commercial paper	68,067			101,688
Other short-term funding	588,067			583,688
Total short-term funding	$	1,064,617		$	1,092,035
Long-Term Funding
FHLB advances	$	2,650,172		$	2,265,188
Senior notes, at par	250,000			250,000
Subordinated notes, at par	250,000			250,000
Other long-term funding and capitalized costs	(2,887		)	(3,393		)
Total long-term funding	3,147,285			2,761,795
Total short and long-term funding	$	4,211,902		$	3,853,830

September 30, 2016 December 31, 2015
($ in Thousands)
Short-Term Funding
Federal funds purchased $ 221,165
$ 47,870
Securities sold under agreements to repurchase 477,607
383,568
Federal funds purchased and securities sold under agreements to repurchase 698,772
431,438
FHLB advances 450,000
335,000
Commercial paper 91,321
67,978
Other short-term funding 541,321
402,978
Total short-term funding $ 1,240,093
$ 834,416
Long-Term Funding
FHLB advances $ 2,265,198
$ 1,750,225
Senior notes, at par 250,000
680,000
Subordinated notes, at par 250,000
250,000
Other long-term funding and capitalized costs (3,563 ) (4,061 )
Total long-term funding 2,761,635
2,676,164
Total short and long-term funding $ 4,001,728
$ 3,510,580

Securities ~~sold under agreements~~Sold Under Agreements to ~~repurchase~~Repurchase ("~~repurchase agreements"~~Repurchase Agreements")

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). See Note 11 for additional disclosures on balance sheet offsetting.

The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of its customers. As of September 30, ~~2016,~~2017, the Corporation pledged ~~GSE~~agency mortgage-related securities with a fair value of ~~$543~~$391 million as collateral for the repurchase agreements. Securities pledged as collateral under repurchase agreements are maintained with the Corporation's safekeeping agents and are monitored on a daily basis due to the market risk of fair value changes in the underlying securities. The Corporation generally pledges excess securities to ensure there is sufficient collateral to satisfy short-term fluctuations in both the repurchase agreement balances and the fair value of the underlying securities.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, ~~2016~~2017 and December 31, ~~2015~~2016 are presented in the following table.



	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
September 30, 2017					($ in Thousands)
Repurchase agreements
Agency mortgage-related securities	$	255,975	$	—	$	—	$	—	$	255,975
Total	$	255,975	$	—	$	—	$	—	$	255,975
December 31, 2016
Repurchase agreements
Agency mortgage-related securities	$	300,197	$	—	$	—	$	—	$	300,197
Total	$	300,197	$	—	$	—	$	—	$	300,197

Remaining Contractual Maturity of the Agreements
September 30, 2016 Overnight and Continuous Up to 30 days 30-90 days Greater than 90 days Total
($ in Thousands)
Repurchase agreements
GSE securities $ 477,607
$ —
$ —
$ —
$ 477,607
Total $ 477,607
$ —
$ —
$ —
$ 477,607
December 31, 2015
Repurchase agreements
GSE securities $ 383,568
$ —
$ —
$ —
$ 383,568
Total $ 383,568
$ —
$ —
$ —
$ 383,568

Long-Term Funding

~~Long-term funding:~~

FHLB advances:At September 30, ~~2016,~~2017, the long-term FHLB advances had ~~maturity dates primarily ranging from 2018 through 2019, and had an~~a weighted average interest rate of ~~0.33%. At~~1.02%, compared to 0.50% at December 31, ~~2015, the long-term FHLB advances had maturity dates primarily ranging from 2018 through 2019, and had an average interest rate of 0.13%.~~2016. The majority of FHLB advances are indexed to the FHLB discount note and re-price at varying intervals. The advances offer flexible, low cost, long-term funding that improves the Corporation’s liquidity profile.

~~2011~~ Senior ~~Notes:~~ In March 2011, the Corporation issued $300 million of senior notes due March 2016, and callable February 2016, with a 5.125% fixed coupon at a discount. In September 2011, the Corporation “re-opened” the offering and issued an additional $130 million of the same notes at a premium. All notes were redeemed in February 2016 at par.

~~2014 Senior Notes:~~notes: In November 2014, the Corporation issued $250 million of senior notes, due November 2019, and callable October 2019. The senior notes have a fixed coupon interest rate of 2.75% and were issued at a discount.

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

Note 10 Derivative and Hedging Activities

The Corporation facilitates customer borrowing activity by providing various interest rate risk management, commodity hedging, and foreign currency exchange solutions through its capital markets area. To date, all of the notional amounts of customer transactions have been matched with a mirror hedge with another counterparty. The Corporation has used, and may use again in the future, derivative instruments to hedge the variability in interest payments or protect the value of certain assets and liabilities recorded on its consolidated balance sheets from changes in interest rates. The predominant derivative and hedging activities include interest rate-related instruments (swaps and caps), foreign currency exchange forwards, commodity contracts, written options, purchased options, and certain mortgage banking activities.

The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Corporation is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. To mitigate the counterparty risk, interest rate and commodity-related instruments generally contain language outlining collateral pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain mutually agreed upon threshold limits. The Corporation ~~was required to pledge $38~~pledged $26 million of investment securities as collateral at September 30, ~~2016,~~2017, and pledged $9$40 million of investment securities as collateral at December 31, ~~2015.~~2016. Federal regulations require the Corporation to clear all LIBOR interest rate swaps through a clearing house if it can be cleared. As such, the Corporation is required to pledge cash collateral for the margin. At September 30, ~~2016,~~2017 the Corporation posted $3 million of cash collateral for the margin ~~of $37 million,~~ compared to ~~$22 million~~none at December 31, ~~2015.~~

The Corporation’s derivative and hedging instruments are recorded at fair value on the consolidated balance sheets. The fair value of the Corporation’s interest rate-related instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative and also includes a nonperformance / credit risk component (credit valuation adjustment). See Note 13 for additional fair value information and disclosures.2016.

Derivatives to Accommodate Customer Needs

The Corporation enters into various derivative contracts which are ~~not~~ designated as ~~hedging instruments. Such~~free standing derivative contracts. Free standing derivative products are entered into primarily for the benefit of commercial customers seeking to manage their exposures to interest rate risk, foreign currency, and commodity ~~price risks.~~prices. These derivative contracts are not designated against specific assets and liabilities on the balance sheet or forecasted transactions and, therefore, do not qualify for hedge accounting treatment. Such derivative contracts are carried at fair value on the consolidated balance sheets with changes in the fair value recorded as a component of ~~capital~~Capital market fees, net, and typically include interest rate-related instruments (swaps and caps), foreign currency exchange forwards, and commodity contracts. See Note 11 for additional information and disclosures on balance sheet offsetting.

Interest rate-related instruments:The Corporation provides interest rate risk management services to commercial customers, primarily forward interest rate swaps and caps. The Corporation’s market risk from unfavorable movements in interest rates related to these derivative contracts is generally economically hedged by concurrently entering into offsetting derivative contracts. The offsetting derivative contracts have identical notional values, terms and indices.

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

derivative contract. ~~Such foreign currency exchange contracts are carried at fair value on the consolidated balance sheets with changes in fair value recorded as a component of capital market fees, net.~~

Commodity contracts: ~~The Corporation provides commodity risk management services to commercial customers, exclusively oil and gas contracts.~~ Commodity contracts are entered into primarily for the benefit of commercial customers seeking to manage their exposure to fluctuating commodity prices. The Corporation mitigates its risk by then entering into an offsetting commodity derivative contract. ~~Commodity contracts are carried at fair value on the consolidated balance sheets with changes in fair value recorded as a component of capital market fees, net.~~

The table below identifies the balance sheet category and fair values of the Corporation’s free standing derivative instruments, ~~to accommodate customer needs~~ which are not designated as hedging instruments.



	September 30, 2017						December 31, 2016
($ in Thousands)	Notional Amount		Fair Value			Balance Sheet Category	Notional Amount		Fair Value			Balance Sheet Category
Interest rate-related instruments — customer and mirror	$	2,198,794	$	26,837		Trading assets	$	2,039,323	$	33,671		Trading assets
Interest rate-related instruments — customer and mirror	2,198,794		(26,469		)	Trading liabilities	2,039,323		(33,188		)	Trading liabilities
Foreign currency exchange forwards	130,191		3,053			Trading assets	109,675		2,002			Trading assets
Foreign currency exchange forwards	122,307		(3,033		)	Trading liabilities	106,251		(1,943		)	Trading liabilities
Commodity contracts	424,996		18,539			Trading assets	127,582		16,725			Trading assets
Commodity contracts	396,754		(17,310		)	Trading liabilities	128,368		(15,972		)	Trading liabilities

September 30, 2016 December 31, 2015
($ in Thousands) Notional Amount
Fair
Value

Balance Sheet
Category
Notional Amount Fair
Value
Balance Sheet
Category
Interest rate-related instruments — customer and mirror $ 1,953,306
$ 47,504
Trading assets $ 1,665,965
$ 29,391
Trading assets
Interest rate-related instruments — customer and mirror 1,953,306
(49,887 ) Trading liabilities 1,665,965
(30,886 ) Trading liabilities
Foreign currency exchange forwards 77,732
1,063
Trading assets 72,976
1,532
Trading assets
Foreign currency exchange forwards 76,945
(1,014 ) Trading liabilities 65,649
(1,398 ) Trading liabilities
Commodity contracts 158,209
12,213
Trading assets 44,380
1,269
Trading assets
Commodity contracts 159,048
(11,400 ) Trading liabilities 44,256
(1,146 ) Trading liabilities

Mortgage ~~derivatives~~Derivatives

Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair value of these commitments is recorded on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net.

Written and ~~purchased options (time deposit)~~Purchased Options (Time Deposit)

Historically, the Corporation had entered into written and purchased option derivative instruments to facilitate an equity linked time deposit product (the “Power CD”), which the Corporation ceased offering in September 2013. The Power CD was a time deposit that provided the purchaser a guaranteed return of principal at maturity plus a potential equity return (a written option), while the Corporation received a known stream of funds based on the equity return (a purchased option). The written and purchased options are mirror derivative instruments, which are carried at fair value on the consolidated balance sheets.

The table below identifies the balance sheet category and fair values of the Corporation’s derivative instruments, which are not designated as hedging instruments.



	September 30, 2017						December 31, 2016
($ in Thousands)	Notional Amount		Fair Value			Balance Sheet Category	Notional Amount		Fair Value			Balance Sheet Category
Interest rate lock commitments (mortgage)	$	354,075	$	2,729		Other assets	$	285,345	$	206		Other assets
Forward commitments (mortgage)	243,500		234			Other assets	179,600		2,908			Other assets
Purchased options (time deposit)	53,074		1,434			Other assets	80,554		2,576			Other assets
Written options (time deposit)	53,074		(1,434		)	Other liabilities	80,554		(2,576		)	Other liabilities

September 30, 2016 December 31, 2015
($ in Thousands) Notional Amount Fair
Value
Balance Sheet
Category Notional Amount Fair
Value
Balance Sheet
Category
Interest rate lock commitments (mortgage) $ 520,932
$ 3,726
Other assets $ 271,530
$ 958
Other assets
Forward commitments (mortgage) 383,000
(1,868 ) Other liabilities 231,798
403
Other assets
Purchased options (time deposit) 81,004
2,455
Other assets 104,582
2,715
Other assets
Written options (time deposit) 81,004
(2,455 ) Other liabilities 104,582
(2,715 ) Other liabilities

The table below identifies the income statement category of the gains and losses recognized in income on the Corporation’s derivative instruments not designated as hedging instruments.



	Income Statement Category of Gain / (Loss) Recognized in Income	Nine Months Ended September 30,
($ in Thousands)		2017			2016
Derivative Instruments
Interest rate-related instruments — customer and mirror, net	Capital market fees, net	$	(115	)	$	(888	)
Interest rate lock commitments (mortgage)	Mortgage banking, net	2,523			2,768
Forward commitments (mortgage)	Mortgage banking, net	(2,674		)	(2,271		)
Foreign currency exchange forwards	Capital market fees, net	(39		)	(85		)
Commodity contracts	Capital market fees, net	476			690

Income Statement Category of
Gain / (Loss) Recognized in Income
For the Nine Months Ended September 30,
($ in Thousands) 2016 2015
Interest rate-related instruments — customer and mirror, net Capital market fees, net $ (888 ) $ 85
Interest rate lock commitments (mortgage) Mortgage banking, net 2,768
637
Forward commitments (mortgage) Mortgage banking, net (2,271 ) 453
Foreign currency exchange forwards Capital market fees, net (85 ) 16
Commodity contracts Capital market fees, net 690
—

Note 11 Balance Sheet Offsetting

Interest Rate-Related Instruments and Commodity Contracts (“Interest and Commodity Agreements”)

The Corporation enters into interest rate-related instruments to facilitate the interest rate risk management strategies of commercial customers. The Corporation also enters into commodity contracts to manage commercial customers' exposure to fluctuating commodity prices. The Corporation mitigates these risks by entering into equal and offsetting interest and commodity agreements with highly rated third party financial institutions. The Corporation is party to master netting arrangements with its financial institution counterparties that creates a single net settlement of all legal claims or obligations to pay or receive the net amount of settlement of the individual interest and commodity agreements. Collateral, usually in the form of investment securities and cash, is posted by the counterparty with net liability positions in accordance with contract thresholds. The Corporation does not offset assets and liabilities under these arrangements for financial statement presentation purposes. See Note 10 for additional information on the Corporation’s derivative and hedging activities.

Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”)

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. These repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities). The right of set-off for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an interest payment to the counterparty). In addition, the Corporation does not enter into reverse repurchase agreements; therefore, there is no such offsetting to be done with the repurchase agreements. See Note 9 for additional disclosures on repurchase agreements.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement. The interest and commodity agreements we have with our commercial customers are not subject to an enforceable master netting arrangement, and therefore, are excluded from this table.



	Gross amounts recognized						Gross amounts not offset in the balance sheet
	Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts presented in the balance sheet		Financial instruments			Collateral			Net amount
	($ in Thousands)
September 30, 2017
Derivative assets
Interest and commodity agreements	$	23,224	$	—	$	23,224	$	(21,783	)	$	(1,441	)	$	—
Derivative liabilities
Interest and commodity agreements	$	21,783	$	—	$	21,783	$	(21,783	)	$	—		$	—
December 31, 2016
Derivative assets
Interest and commodity agreements	$	18,031	$	—	$	18,031	$	(18,031	)	$	—		$	—
Derivative liabilities
Interest and commodity agreements	$	31,075	$	—	$	31,075	$	(18,031	)	$	(11,148	)	$	1,896

Gross
amounts
recognized

Gross amounts not offset
in the balance sheet

Gross amounts
offset in the
balance sheet

Net amounts
presented in
the balance sheet

Financial
instruments
Collateral Net amount
($ in Thousands)
September 30, 2016
Derivative assets:
Interest and commodity agreements $ 5,193
$ —
$ 5,193
$ (5,193 ) $ —
$ —
Derivative liabilities:
Interest and commodity agreements $ 59,413
$ —
$ 59,413
$ (5,193 ) $ (54,220 ) $ —
December 31, 2015
Derivative assets:
Interest and commodity instruments $ 1,466
$ —
$ 1,466
$ (1,466 ) $ —
$ —
Derivative liabilities:
Interest and commodity instruments $ 30,200
$ —
$ 30,200
$ (1,466 ) $ (28,734 ) $ —

Note 12 Commitments, Off-Balance Sheet Arrangements, ~~and~~ Legal Proceedings and Regulatory Matters



	September 30, 2017		December 31, 2016
	($ in Thousands)
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale^(a)(b)	$	8,002,766	$	8,131,131
Commercial letters of credit^(a)	8,961		7,923
Standby letters of credit^(c)	233,783		259,632

September 30, 2016 December 31, 2015
($ in Thousands)
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(1)(2) $ 7,849,498
$ 7,402,518
Commercial letters of credit(1) 8,935
9,945
Standby letters of credit(3) 265,381
296,508


1)(a)	These off-balance sheet financial instruments are exercisable at the market rate prevailing at the date the underlying transaction will be completed and, thus, are deemed to have no current fair value, or the fair value is based on fees currently charged to enter into similar agreements and is not material at September 30, ~~2016~~2017 or December 31, ~~2015.~~2016.


2)(b)	Interest rate lock commitments to originate residential mortgage loans held for sale are considered derivative instruments and are disclosed in Note 10.


3)(c)	The Corporation has established a liability of $2 million at September 30, 2017 and $3 million at ~~both September 30, 2016 and~~ December 31, ~~2015,~~2016, as an estimate of the fair value of these financial instruments.

Lending-related Commitments

As a financial services provider, the Corporation routinely enters into commitments to extend credit. Such commitments are subject to the same credit policies and approval process accorded to loans made by the Corporation, with each customer’s creditworthiness evaluated on a case-by-case basis. The commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to these financial instruments is represented by the contractual amount of those instruments. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the customer. Since a significant portion of commitments to extend credit are subject to specific restrictive loan covenants or may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. An allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded commitments (including unfunded loan commitments and letters of credit). The allowance for unfunded commitments ~~increased to $28~~totaled $24 million at September 30, ~~2016 compared to $24~~2017 and $25 million at December 31, ~~2015,~~2016, and is included in accrued expenses and other liabilities on the consolidated balance sheets.

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 on the consolidated balance sheets. The Corporation’s derivative and hedging activity is further described in Note 10. 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 has principal investment commitments to provide capital-based financing to private and public companies through either direct investments in specific companies or through investment funds and partnerships. The timing of future cash requirements to fund such 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 unconsolidated projects including low-income housing, new market tax credit projects, and historic tax credit projects to promote the revitalization of primarily low-to-moderate-income neighborhoods throughout the local communities of its bank subsidiary. As a limited partner in these unconsolidated projects, the Corporation is allocated tax credits and deductions associated with the underlying projects. The aggregate carrying value of these investments at September 30, ~~2016,~~2017, was ~~$68~~$142 million, compared to ~~$52~~$85 million at December 31, ~~2015, and is~~2016, included in other assets on the consolidated balance sheets. Related to these investments, the Corporation had remaining commitments to fund of ~~$54~~$101 million at September 30, ~~2016,~~2017, and ~~$61~~$69 million at December 31, ~~2015.~~2016.

Legal Proceedings

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

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

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

A lawsuit, R.J. ZAYED v. Associated Bank, N.A., was filed in the United States District Court for the District of Minnesota on January 29, 2013. The lawsuit relates to a Ponzi scheme perpetrated by Oxford Global Partners and related entities (“Oxford”) and individuals and was brought by the receiver for Oxford. Oxford was a depository customer of Associated Bank (the "Bank"). The lawsuit claims that the Bank is liable for failing to uncover the Oxford Ponzi scheme, and specifically alleges the Bank aided and abetted (1) the fraudulent scheme; (2) a breach of fiduciary duty; (3) conversion; and (4) false representations and omissions. The lawsuit seeks unspecified consequential and punitive damages. The District Court granted the Bank’s motion to dismiss the complaint on September 30, 2013. On March 2, 2015, the U.S. Court of Appeals for the Eighth Circuit reversed the District Court and remanded the case back to the District Court for further proceedings. On January 31, 2017, the District Court granted the Bank’s motion for summary judgment. The receiver has appealed the District Court’s summary judgment decision to the Eighth Circuit Court of Appeals. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time. A lawsuit by investors in the same Ponzi scheme, Herman Grad, et al v. Associated Bank, N.A., brought in Brown County, Wisconsin in October 2009 was dismissed by the circuit court, and the dismissal was affirmed by the Wisconsin Court of Appeals in June 2011 in an unpublished opinion.

Two complaints were filed against the Bank on January 11, 2016 in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division in connection with the In re: World Marketing Chicago, LLC, et al Chapter 11 bankruptcy proceeding. In the first complaint, The Official Committee of Unsecured Creditors of World Marketing Chicago, LLC, et al v. Associated Bank, N.A., the plaintiff seeks to avoid guarantees and pledges of collateral given by the debtors to secure a revolving financing commitment of $6 million to the debtors’ parent company from the Bank. The plaintiff alleges a variety of legal theories under federal and state law, including fraudulent conveyance, preferential transfer and conversion, in support of its position. The plaintiff seeks return of approximately $4 million paid to the Bank and the avoidance of the security interest in the collateral securing the remaining indebtedness to the Bank. The Bank intends to vigorously defend this lawsuit. In the second complaint, American Funds Service Company v. Associated Bank, N.A., the plaintiff alleges that approximately $600,000 of funds it had advanced to the World Marketing entities to apply towards future postage fees was swept by the Bank from World Marketing’s bank accounts. Plaintiff seeks the return of such funds from the Bank under several theories, including Sec. 541(d) of the Bankruptcy Code, the creation of a resulting trust, and unjust enrichment. The Bank intends to vigorously defend this lawsuit. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time with respect to these two lawsuits.

Subsequent to the announcement on July 20, 2017, of the Merger Agreement between the Corporation and Bank Mutual, several lawsuits were filed in connection with the proposed merger. On July 28, 2017, two substantially identical purported class action complaints, each by various individual plaintiffs, were filed with the Wisconsin Circuit Court for Milwaukee County on behalf of the respective named plaintiffs and other Bank Mutual shareholders against Bank Mutual, the members of the Bank Mutual board, and the Corporation. The lawsuits are captioned Schumel et al v. Bank Mutual Corporation et al. and Paquin et al. v. Bank Mutual Corporation et al. Both complaints allege state law breach of fiduciary duty claims against the Bank Mutual board for, among other things, seeking to sell Bank Mutual through an allegedly defective process, for an allegedly unfair price and on allegedly unfair terms. On August 30, 2017, a third purported class action complaint, captioned Wollenburg et al. v. Bank Mutual Corporation

et al., was filed in the Wisconsin Circuit Court for Milwaukee County, on behalf of the same class of shareholders and against the same defendants as the prior two complaints. The Wollenburg complaint asserts similar allegations as the prior two complaints, and further alleges that the preliminary proxy statement/prospectus filed with the SEC contains various alleged misstatements or omissions under federal securities law. The Paquin, Schumel and Wollenburg complaints allege that the Corporation aided and abetted Bank Mutual's directors' alleged breaches of fiduciary duty. The parties have entered into a stipulation seeking to consolidate the three actions. On September 13, 2017, the Corporation filed a notice of removal of the Paquin, Schumel and Wollenburg actions to the United States District Court for the Eastern District of Wisconsin. On September 15, 2017, the plaintiffs in the Paquin, Schumel and Wollenburg actions filed identical motions to remand the three cases back to state court, and on September 27, 2017, the defendants filed oppositions to the motions to remand. On October 3, 2017, the defendants filed motions to dismiss the three actions. On September 6, 2017, a fourth purported class action complaint, captioned Parshall et al., v. Bank Mutual Corporation et al., was filed in the U.S. District Court for the Eastern District of Wisconsin, on behalf of the same class of shareholders and against the same defendants as the prior complaints. The Parshall complaint criticizes the adequacy of the merger consideration and alleges that Bank Mutual, the members of the Bank Mutual board and the Corporation allegedly omitted and/or misrepresented certain information in the registration statement on Form S-4 filed in connection with the proposed merger in violation of the federal securities laws. The lawsuits seek, among other things, to enjoin the consummation of the transaction and damages. The Corporation believes the allegations are without merit. On October 13, 2017, Bank Mutual and the Corporation reached agreement with the plaintiffs in each of the four cases whereby Bank Mutual issued certain additional disclosures in a Form 8-K, and each of the plaintiffs have agreed to dismiss their actions with prejudice as to the named plaintiffs and without prejudice as to the rest of the purported class members.

Regulatory Matters

On May 22, 2015, the Bank entered into a Conciliation Agreement ("Conciliation Agreement") with the U.S. Department of Housing and Urban Development ("HUD") which resolved the HUD investigation into the Bank's lending practices during the years 2008-2010. The Bank's commitments under the Conciliation Agreement are spread over a three-year period and include commitments to do the following in minority communities: make mortgage loans of approximately $196 million; open one branch and four loan production offices; establish special financing programs; make affordable home repair grants; engage in affirmative marketing outreach; provide financial education programs; and make grants to support community reinvestment training and education. The cost of these commitments will be spread over four calendar years and is not expected to have a material impact on the Corporation's financial condition or results of operation.

Beginning in late 2013, the Corporation began reviewing a variety of legacy products provided by third parties, including debt protection and identity protection products. In connection with this review, the Corporation has made remediation payments to affected customers and former customers, and has reserved accordingly.

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

~~Two complaints were filed against~~On March 27, 2017, the Bank ~~on January 11, 2016 in~~received a Community Reinvestment Act ("CRA") rating from the ~~United States Bankruptcy Court~~Office of the Comptroller of the Currency of "Satisfactory" for the ~~Northern District~~period from January 1, 2011 through July 27, 2015. As a result of ~~Illinois, Eastern Division in connection with~~this rating, the ~~In re: World Marketing Chicago, LLC, et al~~ ~~Chapter 11 bankruptcy proceeding. In the first complaint,~~ ~~The Official Committee of Unsecured Creditors of World Marketing Chicago, LLC, et al v. Associated Bank, N.A.,~~ the plaintiff seeks to avoid guarantees and pledges of collateral given by the debtors to secure a revolving financing commitment of $6 million to the debtors’ parent company from the Bank. The plaintiff alleges a variety of legal theories under federal and state law, including fraudulent conveyance, preferential transfer and conversion, in support of its position. The plaintiff seeks return of approximately $4 million paid to the Bank and the avoidancerestrictions on certain of the ~~security interest in~~Bank's activities that had been imposed under the ~~collateral securing the remaining indebtedness~~previous "Needs to ~~the Bank. The Bank intends to vigorously defend this lawsuit. In the second complaint,~~ ~~American~~

~~Funds Service Company v. Associated Bank, N.A.,~~ the plaintiff alleges that approximately $600,000 of funds it had advanced to the World Marketing entities to apply towards future postage fees was swept by the Bank from World Marketing’s bank accounts. Plaintiff seeks the return of such funds from the Bank under several theories, including Sec. 541(d) of the Bankruptcy Code, the creation of a resulting trust, and unjust enrichment. The Bank intends to vigorously defend this lawsuit. It is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss at this time with respect to these two lawsuits.Improve" CRA rating are no longer applicable.

Mortgage Repurchase Reserve

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

As a result of make whole requests, the Corporation has repurchased loans with principal balances of approximately $2$1 million and $3$2 million during the nine months ended September 30, ~~2016~~2017 and the year ended December 31, ~~2015,~~2016, respectively. The loss reimbursement and settlement claims paid for both the nine months ended September 30, ~~2016~~2017 and the year ended December 31, ~~2015, respectively,~~

2016 were negligible. Make whole requests during ~~2015~~2016 and the first nine months of ~~2016~~2017 generally arose from loans sold during the period of January 1, 2012 to September 30, ~~2016,~~2017, which totaled ~~$8.8~~$9.7 billion at the time of sale, and consisted primarily of loans sold to GSEs. As of September 30, ~~2016,~~2017, approximately ~~$6.0~~$6.1 billion of these sold loans 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 following summarizes the changes in the mortgage repurchase reserve.



	Nine Months Ended September 30, 2017			Year Ended December 31, 2016
	($ in Thousands)
Balance at beginning of period	$	900		$	1,197
Repurchase provision expense	165			456
Adjustments to provision expense	—			(750		)
Charge offs, net	(148		)	(3		)
Balance at end of period	$	917		$	900

Nine Months Ended
September 30, 2016

Year Ended
December 31, 2015
($ in Thousands)
Balance at beginning of period $ 1,197
$ 3,258
Repurchase provision expense 342
428
Adjustments to provision expense —
(2,450 )
Charge offs, net (5 ) (39 )
Balance at end of period $ 1,534
$ 1,197

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, ~~2016,~~2017, and December 31, ~~2015,~~2016, there were approximately ~~$48~~$77 million and ~~$68~~$62 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 in exchange for a monthly credit enhancement fee. The Corporation has not sold loans to the FHLB with such credit risk retention since February 2005. At September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, there were ~~$104~~$79 million and ~~$132~~$98 million, respectively, of such residential mortgage loans with credit risk recourse, upon which there have been negligible historical losses to the Corporation.

Note 13 Fair Value Measurements

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

~~Assets and Liabilities Measured at Fair Value on a Recurring Basis~~

Investment securities available for ~~sale~~:sale: Where quoted prices are available in an active market, investment securities are classified in Level 1 of the fair value hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and are classified in Level 2 of the fair value hierarchy. Lastly, in certain cases where there is limited activity or less transparency around inputs to the estimated fair value, securities are classified within Level 3 of the fair value hierarchy. To validate the fair value estimates, assumptions, and controls, the Corporation looks to transactions for similar instruments and utilizes independent pricing provided by third party vendors or brokers and relevant market indices. While none of these sources are solely indicative of fair value, they serve as directional indicators for the appropriateness of the Corporation’s fair value estimates. The Corporation has determined that the fair value measures of its investment securities are classified predominantly within Level 1 or 2 of the fair value hierarchy. See Note 6 for additional disclosure regarding the Corporation’s investment securities.

Residential loans held for sale: Loans held for sale, which consist generally of current production of certain fixed-rate, first-lien residential mortgage loans, are now carried at estimated fair value. Effective January 1, 2017, management elected the fair value option to account for all newly originated mortgage loans held for sale which results in the financial impact of changing market conditions being reflected currently in earnings as opposed to being dependent upon the timing of sales. Therefore, the continually adjusted values going forward will better reflect the price the Corporation expects to receive from the sale of such loans. The estimated fair value was based on what secondary markets are currently offering for portfolios with similar characteristics, which the Corporation classifies as a Level 2 fair value measurement.

Derivative financial instruments (interest rate-related ~~instruments~~)instruments): The Corporation has used, and may use again in the future, interest rate swaps to manage its interest rate risk. In addition, the Corporation offers interest rate-related instruments (swaps and caps) to service our customers’ needs, for which the Corporation simultaneously enters into offsetting derivative financial

instruments (i.e., mirror interest rate-related instruments) with third parties to manage its interest rate risk associated with these financial instruments. The valuation of the Corporation’s derivative financial instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative and, also includes a nonperformance / credit risk component (credit valuation adjustment). See Note 10 for additional disclosure regarding the Corporation’s interest rate-related instruments.

The discounted cash flow analysis component in the fair value ~~measurement~~measurements reflects the contractual terms of the derivative financial instruments, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. More specifically, the fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments), with the variable cash payments (or receipts) based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Likewise, the fair values of interest rate options (i.e., interest rate caps) are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fall below (or rise above) the strike rate of the floors (or caps), with the variable interest rates used in the calculation of projected receipts on the floor (or cap) based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative financial instruments for the effect of nonperformance risk, the Corporation has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

While the Corporation has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Corporation has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions as of September 30, ~~2016,~~2017, and December 31, ~~2015,~~2016, and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. Therefore, the Corporation has determined that the fair value measures of its derivative financial instruments in their entirety are classified within Level 2 of the fair value hierarchy.

Derivative financial instruments (foreign currency exchange ~~forwards~~)forwards): The Corporation provides foreign currency exchange services to customers. In addition, the Corporation may enter into a foreign currency exchange forward to mitigate the exchange rate risk attached to the cash flows of a loan or as an offsetting contract to a forward entered into as a service to our customer. The valuation of the Corporation’s foreign currency exchange forwards is determined using quoted prices of foreign currency exchange forwards with similar characteristics, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and are classified in Level 2 of the fair value hierarchy. See Note 10 for additional disclosures regarding the Corporation’s foreign currency exchange forwards.

Derivative financial instruments (commodity ~~contracts~~)contracts): The Corporation enters into commodity contracts to manage commercial customers' exposure to fluctuating commodity prices, for which the Corporation simultaneously enters into offsetting derivative financial instruments (i.e., mirror commodity contracts) with third parties to manage its risk associated with these financial instruments. The valuation of the Corporation’s commodity contracts is determined using quoted prices of the underlying ~~instrument,~~instruments, and are classified in Level 2 of the fair value hierarchy. See Note 10 for additional disclosures regarding the Corporation’s commodity contracts.

The table below presents the Corporation’s financial instruments measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall.



	Fair Value Hierarchy	September 30, 2017		December 31, 2016
		($ in Thousands)
Assets
Investment securities available for sale:
U.S. Treasury securities	Level 1	$	1,001	$	1,000
Residential mortgage-related securities:
FNMA / FHLMC	Level 2	505,261		639,930
GNMA	Level 2	1,667,836		2,004,475
Private-label	Level 2	1,072		1,121
GNMA commercial mortgage-related securities	Level 2	1,513,077		2,028,898
Asset backed securities	Level 2	108,628		—
Other securities (debt and equity)	Level 1	1,650		1,602
Other securities (debt and equity)	Level 2	3,174		3,000
Other securities (debt and equity)	Level 3	—		200
Total investment securities available for sale	Level 1	2,651		2,602
Total investment securities available for sale	Level 2	3,799,048		4,677,424
Total investment securities available for sale	Level 3	—		200
Residential loans held for sale ^(a)	Level 2	113,064		—
Interest rate-related instruments	Level 2	26,837		33,671
Foreign currency exchange forwards	Level 2	3,053		2,002
Interest rate lock commitments to originate residential mortgage loans held for sale	Level 3	2,729		206
Forward commitments to sell residential mortgage loans	Level 3	234		2,908
Commodity contracts	Level 2	18,539		16,725
Purchased options (time deposit)	Level 2	1,434		2,576
Liabilities
Interest rate-related instruments	Level 2	$	26,469	$	33,188
Foreign currency exchange forwards	Level 2	3,033		1,943
Commodity contracts	Level 2	17,310		15,972
Written options (time deposit)	Level 2	1,434		2,576


(a)	Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated. For more information on this accounting policy change, please refer to Note 3.

The table below presents a rollforward of the balance sheet amounts for the nine months ended September 30, 2017 and the year ended December 31, 2016, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy.



	Investment Securities Available for Sale			Derivative Financial Instruments
	($ in Thousands)
Balance December 31, 2015	$	200		$	1,361
Total net gains included in income
Mortgage derivative gain	—			1,753
Balance December 31, 2016	$	200		$	3,114
Total net losses included in income
Mortgage derivative loss	—			(151		)
Transfer out of level 3 securities^(a)	(200		)	—
Balance September 30, 2017	$	—		$	2,963

(a) During the first quarter of 2017, the $200,000 level 3 investment security was transferred to level 2 based upon new pricing information.

For Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2017, the Corporation utilized the following valuation techniques and significant unobservable inputs.

Derivative financial instruments (mortgage ~~derivatives): Mortgage derivatives include~~derivative — interest rate lock commitments to originate residential mortgage loans held for ~~sale to individual customers and forward commitments to sell residential mortgage loans to various investors.~~ sale): The ~~Corporation relies on an internal valuation model to estimate the~~ fair value ~~of its interest~~is determined by the change in value from each loan’s rate lock ~~commitments~~date to ~~originate residential mortgage loans held for sale, which includes grouping~~ the ~~interest~~expected rate lock ~~commitments by interest rate and terms, applying an estimated pull-through rate~~expiration date based on ~~historical experience,~~the underlying loan attributes, estimated closing ratios, and ~~then multiplying by quoted~~ investor ~~prices~~price matrix determined to be reasonably applicable to each loan commitment. The closing ratio calculation takes into consideration historical experience and loan-level attributes, particularly the ~~loan commitment groups based on~~change in the current interest rates from the time of initial rate ~~terms,~~lock. The closing ratio is periodically reviewed for reasonableness and ~~rate lock expiration dates~~reported to the Associated Mortgage Risk Management Committee. At September 30, 2017, the closing ratio was 87%.

Derivative financial instruments (mortgage derivative—forward commitments to sell mortgage loans): Mortgage derivatives include forward commitments to deliver closed end residential mortgage loans into conforming Agency Mortgage Backed Securities (To be Announced, "TBA") or conforming Cash Forward sales. The fair value of such instruments is determined by the ~~loan commitment groups.~~difference of current market prices for such traded instruments or available from forward cash delivery commitments and the original traded price for such commitments.

The Corporation also relies on an internal valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Corporation would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing available. While there are Level 2 and 3 inputs used in the valuation models, the Corporation has determined that the majority of the inputs significant in the valuation of both of the mortgage derivatives fall within Level 3 of the fair value hierarchy. See Note 10 for additional disclosure regarding the Corporation’s mortgage derivatives.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a nonrecurring basis at the lower of amortized cost or estimated fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

~~Loans Held~~

Commercial loans held for ~~Sale:~~sale: Loans held for sale ~~which consist generally of current production of certain fixed-rate, first-lien residential mortgage loans, and certain commercial loans, once a decision has been made to sell such loans,~~ are carried at the lower of cost or estimated fair value. The estimated fair value ~~was~~is based on ~~what secondary markets are currently offering for portfolios with similar characteristics,~~a discounted cash flow analysis, which the Corporation classifies as a Level 2 nonrecurring fair value measurement.

Other real estate owned: Certain other real estate owned, upon initial recognition, was re-measured and reported at fair value through a charge off to the allowance for loan losses based upon the estimated fair value of the other real estate owned, less estimated selling costs. The fair value of other real estate owned, upon initial recognition or subsequent impairment, was estimated using appraised values, which the Corporation classifies as a Level 2 nonrecurring fair value measurement.

For Level 3, assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2017, the Corporation utilized the following valuation techniques and significant unobservable inputs.

Impaired ~~Loans:~~loans: The Corporation considers a loan impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral for collateral-dependent loans, or the estimated liquidity of the note. See Note 7 for additional information regarding the Corporation’s impaired loans.

Mortgage servicing ~~rights~~: rights: Mortgage servicing rights do not trade in an active, open market with readily observable prices. While sales of mortgage servicing rights do occur, the precise terms and conditions typically are not readily available to allow for a “quoted price for similar assets” comparison. Accordingly, the Corporation utilizes an independent valuation from a third party which uses a discounted cash flow model to estimate the fair value of its mortgage servicing rights. The valuation model incorporates prepayment assumptions to project mortgage servicing rights cash flows based on the current interest rate scenario, which is then discounted to estimate an expected fair value of the mortgage servicing rights. The valuation model considers portfolio characteristics of the underlying mortgages, contractually specified servicing fees, prepayment assumptions, discount rate assumptions, delinquency rates, late charges, other ancillary revenue, costs to service, and other economic factors. The Corporation periodically reviews and assesses the underlying inputs and assumptions used in the model. In addition, the Corporation compares its fair value estimates and assumptions to observable market data for mortgage servicing rights, where available, and to recent market activity and actual portfolio experience. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy. The Corporation uses the amortization method (i.e., lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, for its mortgage servicing rights assets. ~~See Note 8 for additional disclosure regarding the Corporation’s mortgage servicing rights.~~

The table below presents the Corporation’s investment securities available for sale and derivative financial instruments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall.

~~Assets and Liabilities Measured at Fair Value on a Recurring Basis~~

Fair Value Hierarchy September 30, 2016 December 31, 2015
($ in Thousands)
Assets:
Investment securities available for sale:
U.S. Treasury securities Level 1 $ 1,001
$ 997
Residential mortgage-related securities:
FNMA / FHLMC Level 2 912,860
1,414,626
GNMA Level 2 1,811,529
1,590,003
Private-label Level 2 1,200
1,709
GNMA commercial mortgage-related securities Level 2 2,114,669
1,955,310
Other securities (debt and equity) Level 1 1,629
1,569
Other securities (debt and equity) Level 2 3,000
3,000
Other securities (debt and equity) Level 3 200
200
Total investment securities available for sale Level 1 2,630
2,566
Total investment securities available for sale Level 2 4,843,258
4,964,648
Total investment securities available for sale Level 3 200
200
Interest rate-related instruments Level 2 47,504
29,391
Foreign currency exchange forwards Level 2 1,063
1,532
Interest rate lock commitments to originate residential mortgage loans held for sale Level 3 3,726
958
Forward commitments to sell residential mortgage loans Level 3 —
403
Commodity contracts Level 2 12,213
1,269
Purchased options (time deposit) Level 2 2,455
2,715
Liabilities:
Interest rate-related instruments Level 2 $ 49,887
$ 30,886
Foreign currency exchange forwards Level 2 1,014
1,398
Forward commitments to sell residential mortgage loans Level 3 1,868
—
Commodity contracts Level 2 11,400
1,146
Written options (time deposit) Level 2 2,455
2,715

The table below presents a rollforward of the balance sheet amounts for the nine months ended September 30, 2016 and the year ended December 31, 2015, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy.

Investment Securities
Available for Sale

Derivative Financial
Instruments
($ in Thousands)
Balance December 31, 2014 $ 200
$ (488 )
Total net gains included in income:
Mortgage derivative gain —
1,849
Balance December 31, 2015 $ 200
$ 1,361
Total net gains included in income:
Mortgage derivative gain —
497
Balance September 30, 2016 $ 200
$ 1,858

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of September 30, 2016, the Corporation utilized the following valuation techniques and significant unobservable inputs.

~~Derivative financial instruments (mortgage derivative — interest rate lock commitments to originate residential mortgage loans held for sale)~~: The significant unobservable input used in the fair value measurement of the Corporation’s mortgage derivative interest rate lock commitments is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data, particularly the change in the current interest rates from the time of initial rate lock. The closing ratio is periodically reviewed for reasonableness and reported to the Associated Mortgage Risk Management Committee. At September 30, 2016, the closing ratio was 88%.

~~Impaired loans~~: For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral for collateral-dependent loans, or the estimated liquidity of the note, resulting in an average discount of approximately 20%.

~~Mortgage servicing rights~~: The discounted cash flow analyses that generate expected market prices utilize the observable characteristics of the mortgage servicing rights portfolio, as well as certain unobservable valuation parameters. The significant unobservable inputs used in the fair value measurement of the Corporation’s mortgage servicing rights are the weighted average constant prepayment rate and weighted average discount ~~rate, which were 15.5% and 9.6% at September 30, 2016, respectively.~~rate. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement.

These parameter assumptions fall within a range that the Corporation, in consultation with an independent third party, believes purchasers of servicing would apply to such portfolios sold into the current secondary servicing market. Discussions are held with members from Treasury and the Community, Consumer, and Business segment to reconcile the fair value estimates and the key assumptions used by the respective parties in arriving at those estimates. The Associated Mortgage Risk Management Committee is responsible for providing control over the valuation methodology and key assumptions. To assess the reasonableness of the fair value measurement, the Corporation also compares the fair value and constant prepayment rate to a value calculated by an independent third party on an annual basis. See Note 8 for additional disclosure regarding the Corporation’s mortgage servicing rights.

The table below presents the Corporation’s ~~loans held for sale, impaired loans, and mortgage servicing rights~~assets measured at fair value on a nonrecurring basis, ~~as of September 30, 2016 and December 31, 2015,~~ aggregated by the level in the fair value hierarchy within which those measurements fall.

~~Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis~~



				Income Statement Category of Adjustment Recognized in Income	Adjustment Recognized in Income
($ in Thousands)	Fair Value Hierarchy	Fair Value			Adjustment Recognized in Income
September 30, 2017
Assets
Commercial loans held for sale^(a)	Level 2	$	9,718	Provision for credit losses	$	—
Impaired loans^(c)	Level 3	54,762		Provision for credit losses^(d)	(22,703		)
Other real estate owned	Level 2	3,291		Foreclosure / OREO expense, net	(939		)
Mortgage servicing rights	Level 3	62,625		Mortgage banking, net	(286		)

December 31, 2016
Assets
Commercial loans held for sale	Level 2	$	12,474	Provision for credit losses	$	(559	)
Residential loans held for sale^(b)	Level 2	108,010		Mortgage banking, net	(3,760		)
Impaired loans^(c)	Level 3	79,270		Provision for credit losses^(d)	(75,194		)
Other real estate owned	Level 2	9,752		Foreclosure / OREO expense, net	(1,091		)
Mortgage servicing rights	Level 3	73,149		Mortgage banking, net	200

Income Statement Category of
Adjustment Recognized in Income Adjustment Recognized in Income
($ in Thousands) Fair Value Hierarchy Fair Value
September 30, 2016
Assets:
Commercial loans held for sale Level 2 $ 16,912
Provision for credit losses $ (451 )
Mortgage loans held for sale (1) Level 2 214,298
Mortgage banking, net —
Impaired loans (2) Level 3 47,554
Provision for credit losses (53,866 )
Mortgage servicing rights Level 3 58,937
Mortgage banking, net (2,486 )

December 31, 2015
Assets:
Mortgage loans held for sale Level 2 $ 124,915
Mortgage banking, net $ (155 )
Impaired loans (2) Level 3 41,891
Provision for credit losses (7,796 )
Mortgage servicing rights Level 3 70,686
Mortgage banking, net 425


~~(1)~~(a)	~~Loans~~Commercial loans held for sale are carried at the lower of cost or estimated fair value. At September 30, ~~2016,~~2017, the estimated fair value exceeded the cost and therefore there was no adjustment recognized in ~~the Consolidated Statements of Income.~~income.


~~(2)~~(b)	Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated. For more information on this accounting policy change, please refer to Note 3.


(c)	Represents individually evaluated impaired loans, net of the related allowance for loan losses.


(d)	Represents provision for credit losses on individually evaluated impaired loans.

The change in provision for credit loss is primarily due to the oil and gas portfolio. For more information on the oil and gas portfolio, see Note 7.

Certain nonfinancial assets and nonfinancial liabilities measured at fair value on a nonrecurring basis include ~~other real estate owned (upon initial recognition or subsequent impairment), nonfinancial assets and nonfinancial liabilities measured at~~the fair value analysis in the second step of a goodwill impairment test, and intangible assets and other nonfinancial long-lived assets measured at fair value for impairment assessment.

~~During the first nine months of 2016~~

The Corporations's significant Level 3 measurements which employ unobservable inputs that are readily quantifiable pertain to mortgage servicing rights and ~~the full year 2015, certain other real estate owned, upon initial recognition, was re-measured~~impaired loans. The table below presents information about these inputs and reported at fair value through a charge off to the allowance for loan losses based upon the estimated fair value of the other real estate owned, less estimated selling costs. The fair value of other real estate owned, upon initial recognition orfurther discussion is found above.



	Valuation Technique	Significant Unobservable Input	Weighted Average Input Applied
September 30, 2017	Valuation Technique	Significant Unobservable Input	Weighted Average Input Applied
Mortgage servicing rights	Discounted cash flow	Discount rate	11%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	12%
Impaired Loans	Appraisals / Discounted cash flow	Collateral / Discount factor	16%

subsequent impairment, was estimated using appraised values, which the Corporation classifies as a Level 2 nonrecurring fair value measurement. Other real estate owned measured at fair value upon initial recognition totaled approximately $9 million for the first nine months of 2016 and $11 million for the year ended December 31, 2015, respectively. In addition to other real estate owned measured at fair value upon initial recognition, the Corporation also recorded write-downs to the balance of other real estate owned for subsequent impairment of $1 million and $3 million to foreclosure / OREO expense, net for the nine months ended September 30, 2016 and the year ended December 31, 2015, respectively.

Fair Value of Financial ~~Instruments:~~Instruments

The Corporation is required to disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions are set forth below for the Corporation’s financial instruments.


		September 30, 2016				December 31, 2015					September 30, 2017				December 31, 2016
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value

		($ in Thousands)									($ in Thousands)
Financial assets:
Financial assets
Cash and due from banks	Level 1	$	356,047	$	356,047	$	374,921	$	374,921	Level 1	$	354,331	$	354,331	$	446,558	$	446,558
Interest-bearing deposits in other financial institutions	Level 1	240,010		240,010		79,764		79,764		Level 1	109,596		109,596		149,175		149,175
Federal funds sold and securities purchased under agreements to resell	Level 1	14,250		14,250		19,000		19,000		Level 1	27,700		27,700		46,500		46,500
Investment securities held to maturity	Level 2	1,253,494		1,287,830		1,168,230		1,184,442		Level 2	2,233,579		2,243,845		1,273,536		1,264,674
Investment securities available for sale	Level 1	2,630		2,630		2,566		2,566		Level 1	2,651		2,651		2,602		2,602
Investment securities available for sale	Level 2	4,843,258		4,843,258		4,964,648		4,964,648		Level 2	3,799,048		3,799,048		4,677,424		4,677,424
Investment securities available for sale	Level 3	200		200		200		200		Level 3	—		—		200		200
FHLB and Federal Reserve Bank stocks	Level 2	140,215		140,215		147,240		147,240		Level 2	172,446		172,446		140,001		140,001
Loans held for sale	Level 2	230,795		231,210		124,915		124,915
Commercial loans held for sale										Level 2	9,718		9,718		12,474		12,474
Residential loans held for sale										Level 2	113,064		113,064		108,010		108,010
Loans, net	Level 3	19,574,465		19,588,911		18,440,079		18,389,832		Level 3	20,654,909		20,504,971		19,776,381		19,680,317
Bank owned life insurance	Level 2	584,088		584,088		583,019		583,019
Bank and corporate owned life insurance										Level 2	589,093		589,093		585,290		585,290
Derivatives (trading and other assets)	Level 2	63,235		63,235		34,907		34,907		Level 2	49,863		49,863		54,974		54,974
Derivatives (trading and other assets)	Level 3	3,726		3,726		1,361		1,361		Level 3	2,963		2,963		3,114		3,114
Financial liabilities:
Financial liabilities
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Level 3	$	20,221,611	$	20,221,611	$	19,444,863	$	19,444,863	Level 3	$	20,012,174	$	20,012,174	$	20,282,321	$	20,282,321
Brokered CDs and other time deposits	Level 2	1,526,101		1,530,993		1,562,802		1,564,464		Level 2	2,321,277		2,321,277		1,606,127		1,606,127
Short-term funding	Level 2	1,240,093		1,240,093		834,416		834,416		Level 2	1,064,617		1,064,617		1,092,035		1,092,035
Long-term funding	Level 2	2,761,635		2,820,062		2,676,164		2,728,112		Level 2	3,147,285		3,171,059		2,761,795		2,791,841
Standby letters of credit (1)	Level 2	2,619		2,619		2,954		2,954
Standby letters of credit^(a)										Level 2	2,346		2,346		2,566		2,566
Derivatives (trading and other liabilities)	Level 2	64,756		64,756		36,145		36,145		Level 2	48,246		48,246		53,679		53,679
Derivatives (trading and other liabilities)	Level 3	1,868		1,868		—		—


~~(1)~~(a)	The commitment on standby letters of credit was ~~$265~~$234 million and ~~$297~~$260 million at September 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.

Cash and due from banks, interest-bearing deposits in other financial institutions, and federal funds sold and securities purchased under agreements to ~~resell—~~resell: For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Investment securities (held to maturity and available for sale)—: The fair value of investment securities is based on quoted prices in active markets, or if quoted prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.

FHLB and Federal Reserve Bank ~~stocks—~~stocks: The carrying amount is a reasonable fair value estimate for the Federal Reserve Bank and FHLB stocks given their “restricted” nature (i.e., the stock can only be sold back to the respective institutions (FHLB or Federal Reserve Bank) or another member institution at par).

Loans held for ~~sale—~~sale: The fair value estimation process for the loans held for sale portfolio is segregated by loan type. The estimated fair value for ~~mortgage~~residential loans held for sale was based on what secondary markets are currently offering for portfolios with similar characteristics. The estimated fair value for commercial loans held for sale was based on a discounted cash flow analysis.

Loans, ~~net—~~net: The fair value estimation process for the loan portfolio uses an exit price concept and reflects discounts the Corporation believes are consistent with liquidity discounts in the market place. Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial and industrial, real estate construction, commercial real estate (owner occupied and investor), residential mortgage, home equity, and other consumer. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar maturities. The fair value analysis also included other assumptions to estimate fair value,

intended to approximate those a market participant would use in an orderly transaction, with adjustments for discount rates, interest rates, liquidity, and credit spreads, as appropriate.

Bank and corporate owned life ~~insurance—~~insurance ("BOLI" and "COLI"): The fair value of ~~bank owned life insurance~~BOLI and COLI approximates the carrying amount, because upon liquidation of these investments, the Corporation would receive the cash surrender value which equals the carrying amount. The Corporation has not purchased any new BOLI or COLI policies since 2008.

~~Deposits—~~Deposits: The fair value of deposits with no stated maturity such as noninterest-bearing demand, savings, interest-bearing demand, and money market accounts, is equal to the amount payable on demand as of the balance sheet date. The fair value of Brokered CDs and other time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. However, if the estimated fair value of Brokered CDs and other time deposits is less than the carrying value, the carrying value is reported as the fair value.

Short-term ~~funding—~~funding: The carrying amount is a reasonable estimate of fair value for existing short-term funding.

Long-term ~~funding—~~funding: Rates currently available to the Corporation for debt with similar terms and remaining maturities are used to estimate the fair value of existing long-term funding.

Standby letters of ~~credit—~~credit: The fair value of standby letters of credit represents deferred fees arising from the related off-balance sheet financial instruments. These deferred fees approximate the fair value of these instruments and are based on several factors, including the remaining terms of the agreement and the credit standing of the customer.

Derivatives (trading and other) - : A detailed description of the Corporation's derivative instruments can be found under the "Assets and Liabilities Measured at Fair Value on a Recurring Basis" section of this footnote.

~~Limitations—~~Limitations: Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Corporation’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Corporation’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Note 14 Retirement Plans

The Corporation has a noncontributory defined benefit retirement plan (the Retirement Account Plan (“RAP”)) covering substantially all ~~full-time employees.~~employees who meet participation requirements. The benefits are based primarily on years of service and the employee’s compensation paid. Employees of acquired entities generally participate in the RAP after consummation of the business combinations. Any retirement plans of acquired entities are typically merged into the RAP after completion of the mergers, and credit is usually given to employees for years of service at the acquired institution for vesting and eligibility purposes.

The Corporation also provides legacy healthcare access ~~for eligible~~to a limited group of retired employees ~~in its Postretirement Plan (the “Postretirement Plan”). Retirees who are at least 55 years of age with 5 years of service are eligible to participate~~from a previous acquisition in the Postretirement Plan. ~~The Corporation has~~There are no ~~plan assets attributable to the Postretirement Plan. The Corporation reserves the right to make changes to the Postretirement Plan at any time.~~

other active retiree healthcare plans.

The components of net periodic benefit cost for the RAP and Postretirement ~~Plans~~Plan for three and nine months ended September 30, ~~2016~~2017 and ~~2015~~2016 were as follows.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	($ in Thousands)
Components of Net Periodic Benefit Cost
RAP
Service cost	$	1,713		$	1,636		$	5,276		$	5,086
Interest cost	1,795			1,781			5,307			5,341
Expected return on plan assets	(4,929		)	(5,085		)	(14,692		)	(15,215		)
Amortization of prior service cost	(19		)	(80		)	(56		)	(55		)
Amortization of actuarial loss	619			621			1,594			1,586
Total net pension cost	$	(821	)	$	(1,127	)	$	(2,571	)	$	(3,257	)
Postretirement Plan
Interest cost	$	26		$	35		$	74		$	107
Amortization of prior service cost	(19		)	—			(57		)	—
Amortization of actuarial loss	2			—			2			—
Total net periodic benefit cost	$	9		$	35		$	19		$	107

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
($ in Thousands)
Components of Net Periodic Benefit Cost
Pension Plan:
Service cost $ 1,636
$ 2,318
$ 5,086
$ 8,443
Interest cost 1,781
1,678
5,341
4,963
Expected return on plan assets (5,085 ) (5,379 ) (15,215 ) (16,079 )
Amortization of prior service cost (80 ) 12
(55 ) 37
Amortization of actuarial loss 621
627
1,586
1,692
Total net periodic pension cost $ (1,127 ) $ (744 ) $ (3,257 ) $ (944 )
Postretirement Plan:
Interest cost $ 35
$ 35
$ 107
$ 105
Total net periodic benefit cost $ 35
$ 35
$ 107
$ 105
The Corporation’s funding policy is to pay at least the minimum amount required by federal law and regulations, with consideration given to the maximum funding amounts allowed. The Corporation regularly reviews the funding of its RAP. The Corporation made contributions of $6 million to its RAP in the first nine months of 2017. No contribution was made during the first nine months of 2016.

Note 15 Segment Reporting

The Corporation utilizes a risk-based internal profitability measurement system to provide strategic business unit reporting. The profitability measurement system is based on internal management methodologies designed to produce consistent results and reflect the underlying economics of the units. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The three reportable segments are Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The financial information of the Corporation’s segments has been compiled utilizing the accounting policies described in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K, with certain exceptions. The more significant of these exceptions are described herein.

The Corporation allocates net interest income using an internal funds transfer pricing ("FTP") methodology that charges users of funds (assets) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment and / or repricing characteristics of the assets and liabilities. The net effect of this allocation is recorded in the Risk Management and Shared Services segment.

During 2015, the Corporation adopted enhanced FTP methodology utilizing new, more granular deposit information which incorporated the additional dimension of vintage (based on time from when the deposit account was opened) for determining the funds credit for non-maturity deposits. The new deposit information demonstrated that deposit accounts with the Corporation for a longer period of time had a lower attrition rate, warranting a higher crediting rate (based on a longer-term segment of the yield curve) to reflect the long-term value such deposits provide to the Corporation.

A credit provision 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 incurred loss model using the methodologies described in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K to assess the overall appropriateness of the allowance for loan ~~losses and the allowance for unfunded commitments.~~losses. 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~~bank-

wide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions) 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).

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. generally accepted accounting principles. 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.

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 footnote in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K. ~~There have been no changes in the Corporation's segments since December 31, 2015.~~

The Corporate and Commercial Specialty segment serves a wide range of customers including larger businesses, developers, not-for-profits, municipalities, and financial institutions. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses. The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches).

Information about the Corporation’s segments is presented below.

Segment Income Statement Data
($ in Thousands)
Corporate and
Commercial
Specialty

Community,
Consumer, and
Business

Risk Management
and Shared Services

Consolidated
Total
Nine Months Ended September 30, 2016
Net interest income $ 242,800
$ 257,848
$ 26,590
$ 527,238
Noninterest income 35,172
207,460
17,962
260,594
Total revenue 277,972
465,308
44,552
787,832
Credit provision* 38,933
18,357
(2,290 ) 55,000
Noninterest expense 109,511
370,714
43,420
523,645
Income before income taxes 129,528
76,237
3,422
209,187
Income tax expense (benefit) 42,623
26,683
(5,560 ) 63,746
Net income $ 86,905
$ 49,554
$ 8,982
$ 145,441
Return on average allocated capital (ROCET1)** 10.9 % 10.5 % 1.4 % 9.7 %
Nine Months Ended September 30, 2015
Net interest income $ 230,130
$ 261,951
$ 12,729
$ 504,810
Noninterest income 36,222
199,753
10,385
246,360
Total revenue 266,352
461,704
23,114
751,170
Credit provision* 30,312
19,625
(32,437 ) 17,500
Noninterest expense 106,643
366,121
49,590
522,354
Income before income taxes 129,397
75,958
5,961
211,316
Income tax expense (benefit) 44,384
26,585
(5,163 ) 65,806
Net income $ 85,013
$ 49,373
$ 11,124
$ 145,510
Return on average allocated capital (ROCET1)** 11.8 % 10.3 % 3.9 % 10.3 %

Segment Balance Sheet Data
($ in Thousands)
Corporate and
Commercial
Specialty

Community,
Consumer, and
Business

Risk Management
and Shared Services

Consolidated
Total
Average Balances for YTD September 2016
Average earning assets $ 10,097,995
$ 9,287,158
$ 6,508,356
$ 25,893,509
Average loans 10,088,777
9,285,848
166,447
19,541,072
Average deposits 5,906,695
11,320,106
3,531,614
20,758,415
Average allocated capital (CET1)** $ 1,063,598
$ 631,484
$ 225,813
$ 1,920,895
Average Balances for YTD September 2015
Average earning assets $ 9,373,312
$ 8,719,078
$ 6,326,369
$ 24,418,759
Average loans 9,363,936
8,719,078
71,378
18,154,392
Average deposits 5,730,918
10,786,342
3,145,612
19,662,872
Average allocated capital (CET1)** $ 966,746
$ 640,116
$ 213,750
$ 1,820,612


Segment Income Statement Data
($ in Thousands)	Corporate and Commercial Specialty			Community, Consumer, and Business			Risk Management and Shared Services			Consolidated Total			Corporate and Commercial Specialty			Community, Consumer, and Business			Risk Management and Shared Services			Consolidated Total
Three Months Ended September 30, 2016
Nine Months Ended September 30, 2017
Net interest income	$	83,567		$	87,274		$	7,693		$	178,534		$	271,615		$	270,011		$	12,589		$	554,215
Noninterest income	12,623			78,580			4,031			95,234			36,768			198,546			12,822			248,136
Total revenue	96,190			165,854			11,724			273,768			308,383			468,557			25,411			802,351
Credit provision*	11,080			5,969			3,951			21,000
Credit provision^(a)													32,549			15,317			(21,866		)	26,000
Noninterest expense	37,968			127,454			9,892			175,314			116,578			361,580			49,276			527,434
Income (loss) before income taxes	47,142			32,431			(2,119		)	77,454			159,256			91,660			(1,999		)	248,917
Income tax expense (benefit)	14,907			11,351			(2,620		)	23,638			53,082			32,081			(15,500		)	69,663
Net income	$	32,235		$	21,080		$	501		$	53,816		$	106,174		$	59,579		$	13,501		$	179,254
Return on average allocated capital (ROCET1)**	11.7		%	13.2		%	(2.9		)%	10.5		%
Three Months Ended September 30, 2015
Return on average allocated capital (ROCET1)^(b)													12.7		%	13.6		%	2.2		%	11.0		%
Nine Months Ended September 30, 2016
Net interest income	$	78,283		$	88,209		$	4,017		$	170,509		$	242,800		$	257,848		$	26,590		$	527,238
Noninterest income	11,305			64,879			3,881			80,065			35,172			207,460			17,962			260,594
Total revenue	89,588			153,088			7,898			250,574			277,972			465,308			44,552			787,832
Credit provision*	10,851			5,963			(8,814		)	8,000
Credit provision^(a)													38,933			18,357			(2,290		)	55,000
Noninterest expense	37,293			122,361			11,931			171,585			109,511			370,714			43,420			523,645
Income before income taxes	41,444			24,764			4,781			70,989
Income (loss) before income taxes													129,528			76,237			3,422			209,187
Income tax expense (benefit)	13,955			8,667			(1,071		)	21,551			42,623			26,683			(5,560		)	63,746
Net income	$	27,489		$	16,097		$	5,852		$	49,438		$	86,905		$	49,554		$	8,982		$	145,441
Return on average allocated capital (ROCET1)**	11.0		%	10.1		%	6.7		%	10.2		%
Return on average allocated capital (ROCET1)^(b)													10.9		%	10.5		%	1.4		%	9.7		%


Segment Balance Sheet Data
($ in Thousands)	Corporate and Commercial Specialty		Community, Consumer, and Business		Risk Management and Shared Services		Consolidated Total		Corporate and Commercial Specialty		Community, Consumer, and Business		Risk Management and Shared Services		Consolidated Total
Average Balances for 3Q16
Average balances for YTD September 2017
Average earning assets	$	10,441,454	$	9,414,718	$	6,577,991	$	26,434,163	$	10,846,418	$	9,418,173	$	6,587,401	$	26,851,992
Average loans	10,435,341		9,413,401		204,034		20,052,776		10,837,933		9,414,880		248,165		20,500,978
Average deposits	6,227,305		11,526,639		3,650,081		21,404,025		6,759,105		11,568,220		3,486,354		21,813,679
Average allocated capital (CET1)**	$	1,091,624	$	633,392	$	227,600	$	1,952,616
Average Balances for 3Q15
Average allocated capital (CET1)^(b)									$	1,121,800	$	584,774	$	387,388	$	2,093,962
Average balances for YTD September 2016
Average earning assets	$	9,475,469	$	8,917,831	$	6,441,043	$	24,834,343	$	10,097,995	$	9,287,158	$	6,508,356	$	25,893,509
Average loans	9,466,761		8,917,831		68,157		18,452,749		10,088,777		9,285,848		166,447		19,541,072
Average deposits	6,044,306		10,969,172		3,280,121		20,293,599		5,906,695		11,320,106		3,531,614		20,758,415
Average allocated capital (CET1)**	$	988,283	$	632,878	$	216,275	$	1,837,436
* The consolidated credit provision is equal to the actual reported provision for credit losses.
** The Federal Reserve establishes capital adequacy requirements for the Corporation. Average allocated capital represents average common equity Tier 1, as defined by the Federal Reserve. For segment reporting purposes, the ROCET1, a non-GAAP financial measure, reflects return on average allocated common equity Tier 1 (“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.
Average allocated capital (CET1)^(b)									$	1,063,598	$	631,484	$	225,813	$	1,920,895


(a)	The consolidated credit provision is equal to the actual reported provision for credit losses.

(b)

The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the return on common equity Tier 1 ("ROCET1") reflects return on average allocated common equity Tier 1. 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.



Segment Income Statement Data
($ in Thousands)	Corporate and Commercial Specialty			Community, Consumer, and Business			Risk Management and Shared Services			Consolidated Total
Three Months Ended September 30, 2017
Net interest income	$	92,356		$	90,952		$	6,814		$	190,122
Noninterest income	12,278			67,867			5,750			85,895
Total revenue	104,634			158,819			12,564			276,017
Credit provision^(a)	9,499			5,046			(9,545		)	5,000
Noninterest expense	39,681			120,241			17,505			177,427
Income (loss) before income taxes	55,454			33,532			4,604			93,590
Income tax expense (benefit)	19,070			11,736			(2,217		)	28,589
Net income	$	36,384		$	21,796		$	6,821		$	65,001
Return on average allocated capital (ROCET1)^(b)	12.8		%	14.7		%	4.4		%	11.7		%
Three Months Ended September 30, 2016
Net interest income	$	83,567		$	87,274		$	7,693		$	178,534
Noninterest income	12,623			78,580			4,031			95,234
Total revenue	96,190			165,854			11,724			273,768
Credit provision^(a)	11,080			5,969			3,951			21,000
Noninterest expense	37,968			127,454			9,892			175,314
Income (loss) before income taxes	47,142			32,431			(2,119		)	77,454
Income tax expense (benefit)	14,907			11,351			(2,620		)	23,638
Net income	$	32,235		$	21,080		$	501		$	53,816
Return on average allocated capital (ROCET1)^(b)	11.7		%	13.2		%	(2.9		)%	10.5		%



Segment Balance Sheet Data
($ in Thousands)	Corporate and Commercial Specialty		Community, Consumer, and Business		Risk Management and Shared Services		Consolidated Total
Three Months Ended September 30, 2017
Average earning assets	$	10,923,762	$	9,608,242	$	6,927,791	$	27,459,795
Average loans	10,916,829		9,602,098		380,210		20,899,137
Average deposits	7,398,970		11,788,606		3,253,869		22,441,445
Average allocated capital (CET1)^(b)	$	1,125,181	$	588,841	$	405,653	$	2,119,675
Three Months Ended September 30, 2016
Average earning assets	$	10,441,454	$	9,414,718	$	6,577,991	$	26,434,163
Average loans	10,435,341		9,413,401		204,034		20,052,776
Average deposits	6,227,305		11,526,639		3,650,081		21,404,025
Average allocated capital (CET1)^(b)	$	1,091,624	$	633,392	$	227,600	$	1,952,616


(a)	The consolidated credit provision is equal to the actual reported provision for credit losses.


(b)	The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the ROCET1 reflects return on average allocated common equity Tier 1. 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.

Note 16 Accumulated Other Comprehensive Income (Loss)

The following ~~table summarizes~~tables summarize the components, ofchanges, and reclassifications from accumulated other comprehensive income (loss) ~~at September 30, 2016~~for the nine months and ~~2015, changes during the~~ three ~~and nine month periods then ended, and reclassifications out of accumulated other comprehensive income (loss) during the three and nine month periods~~months ended September 30, 2017 and 2016, ~~and 2015,~~ respectively.



($ in Thousands)	Investment Securities Available For Sale			Defined Benefit Pension and Post Retirement Obligations			Accumulated Other Comprehensive Income (Loss)
Balance January 1, 2017	$	(20,079	)	$	(34,600	)	$	(54,679	)
Other comprehensive income (loss) before reclassifications	1,646			—			1,646
Amounts reclassified from accumulated other comprehensive income (loss)
Personnel expense	—			1,483			1,483
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)	(2,499		)	—			(2,499		)
Income tax (expense) benefit	328			(567		)	(239		)
Net other comprehensive income (loss) during period	(525		)	916			391
Balance September 30, 2017	$	(20,604	)	$	(33,684	)	$	(54,288	)

Balance January 1, 2016	$	459		$	(33,075	)	$	(32,616	)
Other comprehensive income (loss) before reclassifications	59,849			—			59,849
Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities gain (loss), net	(6,201		)	—			(6,201		)
Personnel expense	—			1,531			1,531
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)	(4,465		)	—			(4,465		)
Income tax (expense) benefit	(18,768		)	(584		)	(19,352		)
Net other comprehensive income (loss) during period	30,415			947			31,362
Balance September 30, 2016	$	30,874		$	(32,128	)	$	(1,254	)

	Investment Securities Available For Sale			Defined Benefit Pension and Post Retirement Obligations			Accumulated Other Comprehensive Income (Loss)
Balance July 1, 2017	$	(19,428	)	$	(34,042	)	$	(53,470	)
Other comprehensive income (loss) before reclassifications	(1,986		)	—			(1,986		)
Amounts reclassified from accumulated other comprehensive income (loss)
Personnel expense	—			583			583
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)	76			—			76
Income tax (expense) benefit	734			(225		)	509
Net other comprehensive income (loss) during period	(1,176		)	358			(818		)
Balance September 30, 2017	$	(20,604	)	$	(33,684	)	$	(54,288	)

Balance July 1, 2016	$	45,916		$	(32,463	)	$	13,453
Other comprehensive income (loss) before reclassifications	(22,894		)	—			(22,894		)
Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities gain (loss), net	13			—			13
Personnel expense	—			541			541
Interest income (amortization of net unrealized losses (gains) on available for sale securities transferred to held to maturity securities)	(1,441		)	—			(1,441		)
Income tax (expense) benefit	9,280			(206		)	9,074
Net other comprehensive income (loss) during period	(15,042		)	335			(14,707		)
Balance September 30, 2016	$	30,874		$	(32,128	)	$	(1,254	)

($ in Thousands) Investments
Securities
Available
For Sale Defined Benefit
Pension and
Post Retirement
Obligations Accumulated
Other
Comprehensive
Income (Loss)
Balance January 1, 2016 $ 459
$ (33,075 ) $ (32,616 )
Other comprehensive income before reclassifications 59,849
—
59,849
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net (6,201 ) —
(6,201 )
Personnel expense —
1,531
1,531
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) (4,465 ) —
(4,465 )
Income tax expense (18,768 ) �� (584 ) (19,352 )
Net other comprehensive income during period 30,415
947
31,362
Balance September 30, 2016 $ 30,874
$ (32,128 ) $ (1,254 )
Balance January 1, 2015 $ 18,512
$ (23,362 ) $ (4,850 )
Other comprehensive income before reclassifications 35,101
—
35,101
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net (4,038 ) —
(4,038 )
Personnel expense —
1,729
1,729
Income tax expense (11,907 ) (659 ) (12,566 )
Net other comprehensive income during period 19,156
1,070
20,226
Balance September 30, 2015 $ 37,668
$ (22,292 ) $ 15,376

($ in Thousands) Investments
Securities
Available
For Sale Defined Benefit
Pension and
Post Retirement
Obligations Accumulated
Other
Comprehensive
Income (Loss)
Balance July 1, 2016 $ 45,916
$ (32,463 ) $ 13,453
Other comprehensive loss before reclassifications (22,894 ) —
(22,894 )
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities loss, net 13
—
13
Personnel expense —
541
541
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities) (1,441 ) —
(1,441 )
Income tax (expense) benefit 9,280
(206 ) 9,074
Net other comprehensive income (loss) during period (15,042 ) 335
(14,707 )
Balance September 30, 2016 $ 30,874
$ (32,128 ) $ (1,254 )
Balance July 1, 2015 $ 25,282
$ (22,688 ) $ 2,594
Other comprehensive income before reclassifications 22,907
—
22,907
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net (2,796 ) —
(2,796 )
Personnel expense —
639
639
Income tax expense (7,725 ) (243 ) (7,968 )
Net other comprehensive income during period 12,386
396
12,782
Balance September 30, 2015 $ 37,668
$ (22,292 ) $ 15,376



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 Securities and Exchange Commission ("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, ~~2015,~~2016, 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 other various strategic alternatives that could involve the sale or acquisition of branches or other assets, or the consolidation or creation of subsidiaries.

Beginning in the third quarter of 2017, we have removed bank and corporate owned life insurance from other assets and included it as a separate line in the balance sheet. The Corporation has not purchased any new BOLI or COLI policies since 2008. Given the increasing age of the BOLI and COLI insureds, the Corporation expects the cash surrender value to decrease over time as more policy payouts occur. All prior periods have been restated to reflect the change in presentation.

Performance Summary

~~Quarter average~~Average loans of ~~$20.1~~$20.5 billion increased ~~$411 million,~~$1.0 billion, or 2%5%, from the ~~second quarter~~first nine months of ~~2016. Total~~2016, and residential mortgage lending accounted for 89% of average ~~commercial lending grew 10% from the comparable quarter in 2015.~~

~~Quarter average~~loan growth. Average deposits of ~~$21.4~~$21.8 billion increased $1.1 billion, or 5%, from the ~~second quarter~~first nine months of 2016. ~~Average noninterest-bearing deposits grew 13% from the comparable quarter in 2015.~~

Net interest income of ~~$179~~$554 million ~~for the third quarter of 2016 was up $2~~increased $27 million, or 1%5%, from the ~~second quarter~~first nine months of 2016. Net interest ~~income grew 5% from the comparable quarter of 2015. Net interest~~ margin ~~of 2.77%~~ was ~~down from 2.81%~~2.83% compared to 2.80% in the ~~second quarter~~first nine months of ~~2016 and down 5 basis points from the third quarter of 2015.~~2016.

Provision for credit losses of ~~$21~~$26 million ~~was up $7~~decreased $29 million, or 53%, from the ~~second quarter~~first nine months of 2016.

Noninterest income of ~~$95~~$248 million was ~~up $13 million, or 16%~~down 5% from the ~~second quarter~~first nine months of 2016, reflecting lower mortgage banking income, net, driven by portfolio loans sales during the first nine months of 2016.

Noninterest expense of ~~$175~~$527 million for the first nine months of 2017 was up ~~$1 million, or~~ 1% ~~from~~compared to the ~~second quarter of~~first nine months 2016.

~~TABLE 1:~~Table 1 Summary Results of Operations: Trends

~~(In thousands, except per share data)~~


																						YTD Sep 2017			YTD Sep 2016			3Q17			2Q17			1Q17			4Q16			3Q16
	YTD Sep 2016			YTD Sep 2015			3Q16			2Q16			1Q16			4Q15			3Q15			($ in Thousands, except per share data)
Net income	$	145,441		$	145,510		$	53,816		$	49,091		$	42,534		$	42,791		$	49,438		$	179,254		$	145,441		$	65,001		$	57,983		$	56,270		$	54,833		$	53,816
Net income available to common equity	$	138,886		$	140,553		$	51,628		$	46,922		$	40,336		$	40,593		$	47,254		172,246			138,886			62,662			55,644			53,940			52,485			51,628
Earnings per common share - basic	$	0.92		$	0.93		$	0.34		$	0.31		$	0.27		$	0.27		$	0.31		1.13			0.92			0.41			0.36			0.36			0.35			0.34
Earnings per common share - diluted	$	0.92		$	0.92		$	0.34		$	0.31		$	0.27		$	0.27		$	0.31		1.11			0.92			0.41			0.36			0.35			0.34			0.34
Effective tax rate	30.47		%	31.14		%	30.52		%	30.39		%	30.51		%	26.82		%	30.36		%	27.99		%	30.47		%	30.55		%	25.58		%	27.31		%	30.07		%	30.52		%

~~INCOME STATEMENT ANALYSIS~~

Income Statement Analysis

Net Interest Income

~~TABLE 2:~~Table 2 Net Interest Income Analysis


	Nine months ended September 30,												Nine Months Ended September 30,
	2016						2015						2017						2016
	Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate
	($ in Thousands)												($ in Thousands)
ASSETS
Earning assets:
Loans:(1)(2)(3)
Assets
Earning assets
Loans^(1)(2)(3)
Commercial and business lending	$	7,391,735	$	177,457	3.21	%	$	7,083,736	$	168,188	3.17	%	$	7,280,302	$	197,356	3.62	%	$	7,391,735	$	177,563	3.21	%
Commercial real estate lending	4,660,538		120,758		3.46	%	4,171,250		108,785		3.49	%	4,979,132		143,093		3.84	%	4,660,538		120,758		3.46	%
Total commercial	12,052,273		298,215		3.30	%	11,254,986		276,973		3.29	%	12,259,434		340,449		3.71	%	12,052,273		298,321		3.31	%
Residential mortgage	6,102,383		145,384		3.18	%	5,435,277		134,923		3.31	%	6,956,937		169,231		3.24	%	6,102,383		145,384		3.18	%
Retail	1,386,416		49,337		4.75	%	1,464,129		50,851		4.64	%	1,284,607		48,039		4.99	%	1,386,416		49,231		4.74	%
Total loans	19,541,072		492,936		3.37	%	18,154,392		462,747		3.40	%	20,500,978		557,719		3.63	%	19,541,072		492,936		3.37	%
Investment securities:
Investment securities
Taxable	4,953,410		72,734		1.96	%	4,845,424		73,897		2.03	%	4,819,580		71,295		1.97	%	4,953,410		72,734		1.96	%
Tax-exempt(1)	1,076,603		36,513		4.52	%	963,458		35,754		4.95	%
Tax-exempt⁽¹⁾													1,153,382		37,546		4.34	%	1,076,603		36,513		4.52	%
Other short-term investments	322,424		3,449		1.43	%	455,485		4,952		1.45	%	378,052		5,581		1.97	%	322,424		3,449		1.43	%
Investments and other	6,352,437		112,696		2.37	%	6,264,367		114,603		2.44	%	6,351,014		114,422		2.40	%	6,352,437		112,696		2.37	%
Total earning assets	25,893,509		$	605,632	3.12	%	24,418,759		$	577,350	3.16	%	26,851,992		$	672,141	3.34	%	25,893,509		$	605,632	3.12	%
Other assets, net	2,478,574						2,452,790						2,466,764						2,478,574
Total assets	$	28,372,083					$	26,871,549					$	29,318,756					$	28,372,083
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,420,398	$	662	0.06	%	$	1,329,548	$	751	0.08	%	$	1,517,901	$	671	0.05	%	$	1,420,398	$	662	0.06	%
Interest-bearing demand	3,672,705		7,113		0.26	%	3,218,089		3,049		0.13	%	4,290,862		16,483		0.51	%	3,672,705		7,113		0.26	%
Money market	9,071,388		19,709		0.29	%	9,100,867		12,223		0.18	%	9,201,369		36,507		0.53	%	9,071,388		19,709		0.29	%
Time deposits	1,550,693		9,078		0.78	%	1,616,474		8,258		0.68	%
Time													1,853,295		12,221		0.88	%	1,550,693		9,078		0.78	%
Total interest-bearing deposits	15,715,184		36,562		0.31	%	15,264,978		24,281		0.21	%	16,863,427		65,882		0.52	%	15,715,184		36,562		0.31	%
Federal funds purchased and securities sold under agreements to repurchase	629,976		1,000		0.21	%	632,714		714		0.15	%	460,672		2,107		0.61	%	629,976		1,000		0.21	%
Other short-term funding	769,049		1,656		0.29	%	170,300		279		0.22	%	646,266		3,946		0.82	%	769,049		1,656		0.29	%
Total short-term funding	1,399,025		2,656		0.25	%	803,014		993		0.17	%	1,106,938		6,053		0.73	%	1,399,025		2,656		0.25	%
Long-term funding	2,964,807		23,657		1.06	%	3,273,898		32,159		1.31	%	2,979,712		30,133		1.35	%	2,964,807		23,657		1.06	%
Total short and long-term funding	4,363,832		26,313		0.80	%	4,076,912		33,152		1.08	%	4,086,650		36,186		1.18	%	4,363,832		26,313		0.80	%
Total interest-bearing liabilities	20,079,016		$	62,875	0.42	%	19,341,890		$	57,433	0.40	%	20,950,077		$	102,068	0.65	%	20,079,016		$	62,875	0.42	%
Noninterest-bearing demand deposits	5,043,231						4,397,894						4,950,252						5,043,231
Other liabilities	247,624						251,937						260,409						247,624
Stockholders’ equity	3,002,212						2,879,828						3,158,018						3,002,212
Total liabilities and stockholders’ equity	$	28,372,083					$	26,871,549					$	29,318,756					$	28,372,083
Interest rate spread					2.70	%					2.76	%					2.69	%					2.70	%
Net free funds					0.10	%					0.08	%					0.14	%					0.10	%
Fully tax-equivalent net interest income and net interest margin			$	542,757	2.80	%			$	519,917	2.84	%			$	570,073	2.83	%			$	542,757	2.80	%
Fully tax-equivalent adjustment			15,519						15,107						15,858						15,519
Net interest income			$	527,238					$	504,810					$	554,215					$	527,238


(1)	The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.


(2)	Nonaccrual loans and loans held for sale have been included in the average balances.


(3)	Interest income includes net loan fees.

~~TABLE 2:~~Table 2 Net Interest Income Analysis ~~(Continued)~~Continued


	Quarter ended																		Three Months Ended
	September 30, 2016						June 30, 2016						September 30, 2015						September 30, 2017						June 30, 2017						September 30, 2016
	Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate
	($ in Thousands)																		($ in Thousands)
ASSETS
Earning assets:
Loans:(1)(2)(3)
Assets
Earning assets
Loans^(1)(2)(3)
Commercial and business lending	$	7,577,470	$	61,147	3.21	%	$	7,474,633	$	59,052	3.18	%	$	7,089,664	$	55,944	3.13	%	$	7,318,594	$	71,169	3.86	%	$	7,321,523	$	65,507	3.59	%	$	7,577,470	$	61,184	3.21	%
Commercial real estate lending	4,855,827		41,600		3.41	%	4,654,111		40,169		3.47	%	4,260,329		36,694		3.42	%	4,973,436		50,396		4.02	%	4,964,257		47,562		3.84	%	4,855,827		41,600		3.41	%
Total commercial	12,433,297		102,747		3.29	%	12,128,744		99,221		3.29	%	11,349,993		92,638		3.24	%	12,292,030		121,565		3.93	%	12,285,780		113,069		3.69	%	12,433,297		102,784		3.29	%
Residential mortgage	6,255,264		49,254		3.15	%	6,129,924		48,382		3.16	%	5,658,253		47,004		3.32	%	7,339,827		59,828		3.26	%	6,957,865		56,097		3.23	%	6,255,264		49,254		3.15	%
Retail	1,364,215		16,283		4.77	%	1,383,317		16,414		4.75	%	1,444,503		16,913		4.67	%	1,267,280		16,541		5.21	%	1,278,345		16,048		5.03	%	1,364,215		16,246		4.76	%
Total loans	20,052,776		168,284		3.35	%	19,641,985		164,017		3.35	%	18,452,749		156,555		3.38	%	20,899,137		197,934		3.77	%	20,521,990		185,214		3.62	%	20,052,776		168,284		3.35	%
Investment securities:
Investment securities
Taxable	4,859,750		22,948		1.89	%	4,967,437		24,270		1.95	%	4,968,609		24,937		2.01	%	4,846,653		24,162		1.97	%	4,781,488		23,658		1.98	%	4,859,750		22,948		1.89	%
Tax-exempt(1)	1,119,873		12,456		4.45	%	1,064,252		12,077		4.54	%	997,489		12,112		4.86	%
Tax-exempt⁽¹⁾																			1,177,962		12,650		4.30	%	1,143,736		12,459		4.36	%	1,119,873		12,456		4.45	%
Other short-term investments	401,764		1,064		1.06	%	294,375		1,318		1.80	%	415,496		1,489		1.43	%	536,043		2,492		1.85	%	297,341		1,553		2.09	%	401,764		1,064		1.06	%
Investments and other	6,381,387		36,468		2.29	%	6,326,064		37,665		2.38	%	6,381,594		38,538		2.42	%	6,560,658		39,304		2.40	%	6,222,565		37,670		2.42	%	6,381,387		36,468		2.29	%
Total earning assets	26,434,163		$	204,752	3.09	%	25,968,049		$	201,682	3.12	%	24,834,343		$	195,093	3.13	%	27,459,795		$	237,238	3.44	%	26,744,555		$	222,884	3.34	%	26,434,163		$	204,752	3.09	%
Other assets, net	2,534,209						2,674,427						2,442,078						2,504,232						2,454,351						2,534,209
Total assets	$	28,968,372					$	28,642,476					$	27,276,421					$	29,964,027					$	29,198,906					$	28,968,372
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,448,223	$	198	0.05	%	$	1,445,020	$	228	0.06	%	$	1,357,677	$	254	0.07	%	$	1,545,884	$	282	0.06	%	$	1,541,129	$	201	0.05	%	$	1,448,223	$	198	0.05	%
Interest-bearing demand	4,151,708		2,937		0.28	%	3,640,733		2,144		0.24	%	3,199,391		962		0.12	%	4,347,550		6,767		0.62	%	4,272,620		5,506		0.52	%	4,151,708		2,937		0.28	%
Money market	9,088,943		6,956		0.30	%	8,692,782		6,309		0.29	%	9,538,030		4,350		0.18	%	9,367,907		15,357		0.65	%	9,064,874		11,763		0.52	%	9,088,943		6,956		0.30	%
Time deposits	1,553,349		3,027		0.78	%	1,540,424		2,997		0.78	%	1,624,661		2,955		0.72	%
Time																			2,187,986		5,372		0.97	%	1,752,255		3,710		0.85	%	1,553,349		3,027		0.78	%
Total interest-bearing deposits	16,242,223		13,118		0.32	%	15,318,959		11,678		0.31	%	15,719,759		8,521		0.22	%	17,449,327		27,778		0.63	%	16,630,878		21,180		0.51	%	16,242,223		13,118		0.32	%
Federal funds purchased and securities sold under agreements to repurchase	655,825		326		0.20	%	674,360		378		0.23	%	649,891		248		0.15	%	398,200		768		0.76	%	489,571		824		0.67	%	655,825		326		0.20	%
Other short-term funding	324,623		296		0.36	%	1,209,511		845		0.28	%	154,811		83		0.21	%	416,124		1,039		0.99	%	842,305		1,827		0.87	%	324,623		296		0.36	%
Total short-term funding	980,448		622		0.25	%	1,883,871		1,223		0.26	%	804,702		331		0.16	%	814,324		1,807		0.88	%	1,331,876		2,651		0.80	%	980,448		622		0.25	%
Long-term funding	3,256,099		7,229		0.89	%	3,052,581		6,923		0.91	%	3,021,119		10,645		1.41	%	3,239,687		12,187		1.50	%	2,932,348		9,950		1.36	%	3,256,099		7,229		0.89	%
Total short and long-term funding	4,236,547		7,851		0.74	%	4,936,452		8,146		0.66	%	3,825,821		10,976		1.15	%	4,054,011		13,994		1.37	%	4,264,224		12,601		1.18	%	4,236,547		7,851		0.74	%
Total interest-bearing liabilities	20,478,770		$	20,969	0.41	%	20,255,411		$	19,824	0.39	%	19,545,580		$	19,497	0.40	%	21,503,338		$	41,772	0.77	%	20,895,102		$	33,781	0.65	%	20,478,770		$	20,969	0.41	%
Noninterest-bearing demand deposits	5,161,802						4,969,994						4,573,840						4,992,118						4,892,271						5,161,802
Other liabilities	281,442						228,027						237,725						283,724						246,395						281,442
Stockholders’ equity	3,046,358						3,189,044						2,919,276						3,184,847						3,165,138						3,046,358
Total liabilities and stockholders’ equity	$	28,968,372					$	28,642,476					$	27,276,421					$	29,964,027					$	29,198,906					$	28,968,372
Interest rate spread					2.68	%					2.73	%					2.73	%					2.67	%					2.69	%					2.68	%
Net free funds					0.09	%					0.08	%					0.09	%					0.17	%					0.14	%					0.09	%
Fully tax-equivalent net interest income and net interest margin			$	183,783	2.77	%			$	181,858	2.81	%			$	175,596	2.82	%			$	195,466	2.84	%			$	189,103	2.83	%			$	183,783	2.77	%
Fully tax-equivalent adjustment			5,249						5,141						5,087						5,344						5,284						5,249
Net interest income			$	178,534					$	176,717					$	170,509					$	190,122					$	183,819					$	178,534


(1)	The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.


(2)	Nonaccrual loans and loans held for sale have been included in the average balances.


(3)	Interest income includes net loan fees.

Notable ~~contributions~~Contributions to the ~~change~~Change in ~~net interest income were:~~Net Interest Income

Net interest income in the consolidated statements of income (which excludes the fully tax-equivalent adjustment) was $554 million for the first nine months of 2017 compared to $527 million for the first nine months of ~~2016 compared to $505 million for the first nine months of 2015.~~2016. See sections ~~“Interest~~Interest Rate ~~Risk”~~Risk and ~~“Quantitative~~Quantitative and Qualitative Disclosures about Market ~~Risk”~~Risk, for a discussion of interest rate risk and market risk.

Fully tax-equivalent net interest income of ~~$543~~$570 million for the first nine months of ~~2016~~2017 was ~~$23~~$27 million higher than the first nine months of 2015. The increase in fully tax-equivalent net interest income was attributable to a favorable volume variance (as balance sheet changes in both volume and mix increased fully tax-equivalent net interest income by $37 million) and a $1 million day variance (one additional day in the first nine months of 2016), partially offset by an unfavorable rate variance (as the impact of changes in the interest rate environment and product pricing decreased fully tax-equivalent net interest income by $15 million).2016.

Average earning assets of ~~$25.9~~$26.9 billion for the first nine months of ~~2016~~2017 were ~~$1.5 billion,~~$958 million, or 6%4%, higher than the first nine months of ~~2015.~~2016. Average loans increased ~~$1.4 billion,~~$960 million, or 8%5%, primarily due to ~~a $797 million increase in commercial loans and a $667~~an $855 million increase in residential mortgage ~~loans. Average securities~~loans and ~~short-term investments increased $88 million, primarily due to~~ a ~~$113~~$319 million increase in ~~municipal securities and a $109 million increase in mortgage-related securities,~~commercial real estate lending, partially offset by ~~a $153 million decrease in interest-bearing deposits~~decreases in other ~~banks.~~retail loans and commercial and business lending.

Average interest-bearing liabilities of ~~$20.1~~$21.0 billion for the first nine months of ~~2016~~2017 were up ~~$737~~$871 million, or 4%, versus the first nine months of ~~2015.~~2016. On average, interest-bearing deposits increased ~~$450~~$1.1 billion and short-term funding decreased $292 million ~~and noninterest-bearing demand deposits (a principal component of net free funds) increased $645 million. On average, short and long-term funding increased $287 million compared~~ to $1.1 billion from the first nine months of ~~2015, including a $596 million increase in short-term funding, partially offset by a $309 million decrease in long-term funding. The Corporation redeemed $430 million of senior notes in February~~ 2016.

The net interest margin for the first nine months of ~~2016~~2017 was ~~2.80%~~2.83%, compared to ~~2.84%~~2.80% for the first nine months of ~~2015.~~2016. The increase was primarily driven by a 4 ~~basis points~~basis-point ("bp") decline in net interest margin was attributable to a 6 bp decrease in interest rate spread (the sum of a 4 bp decrease in the yield on earning assets and a 2 bp increase in the cost of interest-bearing liabilities) partially offset by a 2 bp increaseexpansion in the net free funds ~~benefit.~~benefit as the value of noninterest-bearing deposits increases as a result of Federal Funds rate increases.

For the first nine months of ~~2016,~~2017, loan yields ~~decreased 3 bp~~increased 26 bps to ~~3.37%, due~~3.63% compared to ~~competitive pricing pressures in this low interest rate environment.~~the first nine months of 2016. The yield on investment securities and other short-term investments ~~decreased 7~~increased 3 bp to ~~2.37%, and was also impacted by the low interest rate environment and higher prepayment speeds of mortgage-related securities purchased at a premium.~~2.40%.

The cost of interest-bearing liabilities was ~~0.42%~~0.65% for the first nine months of ~~2016, 2 bp~~2017, which was 23 bps higher than the first nine months of ~~2015.~~2016. The increase was primarily due to a 1021 bp increase in the ~~average~~ cost of average interest-bearing deposits (to ~~0.31%~~0.52%) and ~~an 8~~a 48 bp increase in the cost of short-term funding (to ~~0.25%~~0.73%), both primarily due to increases in the ~~December 2015~~ Federal Reserve interest rate.

The Federal Reserve increased the targeted federal funds rate ~~increase; partially offset by~~on June 14, 2017, to a ~~25 bp decrease~~range of 1.00% to 1.25% from 0.75% to 1.00%. The Federal Reserve has indicated that it expects gradual increases in the ~~cost~~Federal Funds rate. However, the timing and magnitude of ~~long-term funding (to 1.06%), primarily due to the early redemption of $430 million of senior notes in February 2016.~~any such increases are uncertain and will depend on domestic and global economic conditions.

Provision for Credit Losses

The provision for credit losses (which includes the provision for loan losses and the provision for unfunded commitments) for the nine months ended September 30, ~~2016~~2017 was ~~$55~~$26 million, compared to ~~$18~~$55 million for the nine months ended September 30, ~~2015.~~2016. Net charge offs were $29 million (representing 0.19% of average loans) for the nine months ended September 30, 2017, compared to $56 million (representing 0.38% of average loans) for the nine months ended September 30, ~~2016, compared to $22 million (representing 0.16% of average loans) for the nine months ended September 30, 2015.~~2016. The ratio of the allowance for loan losses to total loans was ~~1.36% and 1.42% at~~1.32% for September 30, ~~2016~~2017 and ~~2015, respectively.~~1.36% for September 30, 2016.

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 allowance for loan losses and the allowance for unfunded commitments, which focuses on changes in the size and character of the loan portfolio, changes in levels of impaired and other nonaccrual loans, historical losses and delinquencies in each portfolio category, the level of loans sold or transferred to held for sale, the risk inherent in specific loans, concentrations of loans to specific borrowers or industries, existing economic conditions, the fair value of underlying collateral, and other factors which could affect potential credit losses. See additional discussion under sections, ~~“Loans,” “Credit~~Loans, Credit Risk,~~” “Nonaccrual Loans, Potential Problem Loans,~~ Nonperforming Assets, and ~~Other Real Estate Owned,” and “Allowance~~Allowance for Credit Losses.”

Noninterest Income

~~TABLE 3:~~Table 3 Noninterest Income


																					3Q16 Change vs										YTD % Change																	3Q17 Change vs
($ in Thousands)	YTD Sep 2016			YTD Sep 2015		YTD Change		3Q16			2Q16			1Q16		4Q15			3Q15		2Q16		3Q15
($ in Thousands, except AUM)																									YTD Sep 2017			YTD Sep 2016			YTD % Change		YTD % Change		3Q17			2Q17			1Q17			4Q16			3Q16			2Q17		3Q16
Trust service fees	$	34,656		$	36,875	(6	)%	$	11,700		$	11,509		$	11,447	$	11,965		$	12,273	2	%	(5	)%	$	37,066		$	34,656		$	12,785	YTD % Change			$	12,346		$	11,935		$	12,211		$	11,700		4	%	9	%
Service charges on deposit accounts	50,162			48,894		3	%	17,445			16,444			16,273		16,577			17,385		6	%	—	%	48,654			50,162			(3	)%	16,268			16,030			16,356			16,447			17,445			1	%	(7	)%
Card-based and other nondeposit fees	37,485			38,631		(3	)%	12,777			12,717			11,991		12,694			12,618		—	%	1	%	38,848			37,485			4	%	12,619			13,764			12,465			12,592			12,777			(8	)%	(1	)%
Insurance commissions	62,818			57,366		10	%	19,431			22,005			21,382		17,997			17,561		(12	)%	11	%	62,288			62,818			(1	)%	19,815			20,853			21,620			17,977			19,431			(5	)%	2	%
Brokerage and annuity commissions	12,047			11,684		3	%	4,155			4,098			3,794		3,694			3,809		1	%	9	%	13,071			12,047			9	%	4,392			4,346			4,333			4,188			4,155			1	%	6	%
Subtotal ("fee-based revenue")	197,168			193,450		2	%	65,508			66,773			64,887		62,927			63,646		(2	)%	3	%	199,927			197,168			1	%	65,879			67,339			66,709			63,415			65,508			(2	)%	1	%
Mortgage banking income	38,190			32,588		17	%	21,903			8,300			7,987		10,851			9,557		164	%	129	%	24,112			38,190			(37	)%	9,147			7,692			7,273			12,058			21,903			19	%	(58	)%
Mortgage servicing rights expense	11,628			8,596		35	%	3,612			4,233			3,783		2,580			2,914		(15	)%	24	%	7,921			11,628			(32	)%	2,562			2,665			2,694			499			3,612			(4	)%	(29	)%
Mortgage banking, net	26,562			23,992		11	%	18,291			4,067			4,204		8,271			6,643		350	%	175	%	16,191			26,562			(39	)%	6,585			5,027			4,579			11,559			18,291			31	%	(64	)%
Capital market fees, net	14,343			7,329		96	%	7,012			3,793			3,538		3,423			2,170		85	%	223	%	12,535			14,343			(13	)%	4,610			4,042			3,883			7,716			7,012			14	%	(34	)%
Bank owned life insurance income ("BOLI")	11,033			7,704		43	%	3,290			2,973			4,770		2,092			2,448		11	%	34	%
Bank and corporate owned life insurance income																									13,094			11,033			19	%	6,580			3,899			2,615			3,338			3,290			69	%	100	%
Other	6,140			6,916		(11	)%	2,180			1,789			2,171		2,580			2,118		22	%	3	%	6,746			6,140			10	%	2,254			2,213			2,279			2,379			2,180			2	%	3	%
Subtotal (“fee income”)	255,246			239,391		7	%	96,281			79,395			79,570		79,293			77,025		21	%	25	%
Subtotal																									248,493			255,246			(3	)%	85,908			82,520			80,065			88,407			96,281			4	%	(11	)%
Asset gains (losses), net	(853		)	2,931		(129	)%	(1,034		)	(343		)	524		(391		)	244		201	%	(524	)%	(716		)	(853		)	(16	)%	(16		)	(466		)	(234		)	767			(1,034		)	(97	)%	(98	)%
Investment securities gains (losses), net	6,201			4,038		54	%	(13		)	3,116			3,098		4,095			2,796		(100	)%	(100	)%	359			6,201			(94	)%	3			356			—			3,115			(13		)	(99	)%	(123	)%
Total noninterest income	$	260,594		$	246,360	6	%	$	95,234		$	82,168		$	83,192	$	82,997		$	80,065	16	%	19	%	$	248,136		$	260,594		(5	)%	$	85,895		$	82,410		$	79,831		$	92,289		$	95,234		4	%	(10	)%
Mortgage loans originated for sale during period	$	983,930		$	911,133	8	%	$	466,092		$	323,989		$	193,849	$	316,973		$	291,931	44	%	60	%	$	466,135		$	983,930		(53	)%	$	245,851		$	119,004		$	101,280		$	287,194		$	466,092		107	%	(47	)%
Trust assets under management, at market value	$	8,178,839		$	7,625,613	7	%	$	8,178,839		$	7,944,187		$	7,843,512	$	7,729,131		$	7,625,613	3	%	7	%
Mortgage loan settlements during period																									$	551,696		$	1,147,278		(52	)%	$	187,568		$	167,550		$	196,578		$	395,382		$	655,298		12	%	(71	)%
Trust assets under management ("AUM"), at market value^(a)																									$	9,243		$	8,179		13	%	$	9,243		$	8,997		$	8,716		$	8,302		$	8,179		3	%	13	%


(a)	AUM $ in millions

Notable ~~contributions~~Contributions to the ~~change~~Change in ~~noninterest income were:~~Noninterest Income

Fee-based revenue was ~~$197~~$200 million, ~~for the nine months ended September 30, 2016,~~ an increase of $4$3 million ~~(2%~~(1%) compared to the first nine months ~~ended September 30, 2015. Insurance commissions were $63~~of 2016. Within fee based revenue, trust service fees increased $2 million, primarily due to an increase ~~of $5 million (10%) compared to the nine months ended September 30, 2015, primarily attributable to increased property and casualty and employee benefit related commissions.~~in assets under management.

Net mortgage banking income for the first nine months ~~ended September 30, 2016~~of 2017 was ~~$27~~$16 million, ~~up $3~~down $10 million ~~(11%~~(39%) ~~compared to~~from the first nine months ~~ended September 30, 2015. Net mortgage banking consists~~ of gross mortgage banking income less mortgage servicing rights expense. Gross mortgage banking income includes servicing fees, the gain or loss on sales of mortgage loans to the secondary market, changes to the mortgage repurchase reserve, and the fair value adjustments on the mortgage derivatives. Gross mortgage banking income increased $6 million,2016, primarily due to ~~gross gains of $9 million on~~ portfolio loan sales during the third quarter of 2016.

Mortgage servicing rights expense includes both the amortization of the mortgage servicing rights asset and changes to the valuation allowance associated with the mortgage servicing rights asset. Mortgage servicing rights expense is affected by the size of the servicing portfolio, as well as the changes in the estimated fair value of the mortgage servicing rights asset. Mortgage servicing rights expense was $12 million for the nine months ended September 30, 2016, up $3 million (35%) compared to the nine months ended September 30, 2015. The increase in mortgage servicing rights expense was primarily due to a $3 million addition to the valuation reserve for the nine months ended September 30, 2016 compared to a slight recovery during the nine months ended September 30, 2015, reflecting lower interest rates at September 30, 2016. See section “Critical Accounting Policies," in the Corporation’s 2015 Annual Report on Form 10-K, Note 8, “Goodwill and Other Intangible Assets,” and Note 13, “Fair Value Measurements,” of the notes to consolidated financial statements for additional disclosure.

Capital market fees, ~~were $14 million, an increase of $7 million (96%) compared to the nine months ended September 30, 2015. The increase~~net, was ~~primarily due to a $2 million increase in syndication fees and a $3 million increase in fee revenue resulting from a higher volume of interest rate-related derivatives.~~

Net investment securities gains of $6 million and $4 million for the nine months ended September 30, 2016 and 2015, respectively, were due to the sale of FNMA and FHLMC mortgage-related securities and reinvestment into GNMA mortgage-related securities. See Note 6, "Investment Securities" of the notes to consolidated financial statements for additional information on the investment securities portfolio.

~~Net asset losses of $1~~$13 million for the first nine months of ~~2016 were~~2017, down $2 million (13%), driven primarily ~~due to impairment losses on two historic tax credit investments that were placed in service during the third quarter of 2016. Net asset gains of $3~~by decreased syndication fee revenue.

Bank and corporate owned life insurance income was $13 million for the first nine months of ~~2015~~2017, up $2 million from the first nine months of 2016, driven by increased policy payouts.

Net investment securities gains were ~~primarily~~down $6 million for the first nine months of 2017, due to ~~the~~$6 million gain on ~~sales~~the sale of ~~alternative equity investments.~~FNMA and FHLMC securities during the first nine months of 2016.

Noninterest Expense

~~TABLE 4:~~Table 4 Noninterest Expense


	YTD Sep 2016		YTD Sep 2015		YTD Change												3Q16 Change vs																											3Q17 Change vs
($ in Thousands)							3Q16		2Q16		1Q16		4Q15		3Q15		2Q16		3Q15		YTD Sep 2017			YTD Sep 2016			YTD % Change		3Q17			2Q17			1Q17			4Q16			3Q16			2Q17		3Q16
Personnel expense	$	307,346	$	304,272	1	%	$	103,819	$	102,129	$	101,398	$	100,469	$	101,134	2	%	3	%	$	314,954		$	307,346		2	%	$	105,852		$	104,683		$	104,419		$	107,491		$	103,819		1	%	2	%
Occupancy	42,379		46,178		(8	)%	15,362		13,215		13,802		14,718		14,187		16	%	8	%	40,345			42,379			(5	)%	12,294			12,832			15,219			13,690			15,362			(4	)%	(20	)%
Equipment	16,161		17,514		(8	)%	5,319		5,396		5,446		5,695		6,003		(1	)%	(11	)%	15,951			16,161			(1	)%	5,232			5,234			5,485			5,328			5,319			—	%	(2	)%
Technology	42,887		46,660		(8	)%	14,173		14,450		14,264		13,953		14,748		(2	)%	(4	)%	45,126			42,887			5	%	15,233			15,473			14,420			14,413			14,173			(2	)%	7	%
Business development and advertising	20,053		18,120		11	%	5,251		6,591		8,211		7,652		5,964		(20	)%	(12	)%	20,751			20,053			3	%	7,764			7,152			5,835			6,298			5,251			9	%	48	%
Other intangible amortization	1,568		2,574		(39	)%	525		539		504		520		885		(3	)%	(41	)%	1,459			1,568			(7	)%	450			496			513			525			525			(9	)%	(14	)%
Loan expense	10,198		9,982		2	%	3,535		3,442		3,221		4,120		3,305		3	%	7	%	8,924			10,198			(12	)%	3,330			2,974			2,620			3,443			3,535			12	%	(6	)%
Legal and professional fees	14,685		13,089		12	%	4,804		4,856		5,025		3,963		4,207		(1	)%	14	%	16,125			14,685			10	%	6,248			5,711			4,166			5,184			4,804			9	%	30	%
Foreclosure / OREO expense, net	4,167		3,071		36	%	960		1,330		1,877		2,371		645		(28	)%	49	%
Foreclosure / OREO expense																					3,593			4,167			(14	)%	906			1,182			1,505			677			960			(23	)%	(6	)%
FDIC expense	25,500		18,500		38	%	9,000		8,750		7,750		7,500		6,000		3	%	50	%	23,800			25,500			(7	)%	7,800			8,000			8,000			9,250			9,000			(3	)%	(13	)%
Other	38,701		42,394		(9	)%	12,566		13,662		12,473		15,032		14,507		(8	)%	(13	)%
Other expense																					36,406			38,701			(6	)%	12,318			12,579			11,509			12,616			12,566			(2	)%	(2	)%
Total noninterest expense	$	523,645	$	522,354	—	%	$	175,314	$	174,360	$	173,971	$	175,993	$	171,585	1	%	2	%	$	527,434		$	523,645		1	%	$	177,427		$	176,316		$	173,691		$	178,915		$	175,314		1	%	1	%
Personnel expense to total noninterest expense																					60		%	59		%			60		%	59		%	60		%	60		%	59		%
Average full-time equivalent employees	4,422		4,436				4,477		4,415		4,374		4,378		4,421						4,368			4,422					4,384			4,352			4,370			4,439			4,477

Notable ~~contributions~~Contributions to the ~~change~~Change in ~~noninterest expense were:~~Noninterest Expense

Personnel expense (which includes salary-related expenses and fringe benefit expenses) was ~~$307~~$315 million for the first nine months of 2017, up $8 million (2%) from the first nine months of 2016, primarily due to increased health insurance cost and incentive plan estimates.

Nonpersonnel noninterest expense on a combined basis was $212 million, down $4 million (2%) compared to the first nine months of 2016. Occupancy expense decreased $2 million (5%) in the first nine months of 2017, primarily driven by ongoing internal consolidation efforts. FDIC expense was $24 million for the first nine months of 2017, down $2 million (7%) from the first nine months of 2016, primarily driven by risk-weighted asset strategies deployed by the Corporation.

Income Taxes

The Corporation recognized income tax expense of $70 million for the nine months ended September 30, ~~2016, up $3 million (1%) from the nine months ended September 30, 2015. The increase was primarily due to a $2 million increase in health insurance costs.~~

~~Nonpersonnel noninterest expenses on a combined basis were $216 million, down $2 million (1%)~~2017, compared to the nine months ended September 30, 2015. Occupancy expense was down $4 million (8%), primarily attributable to ongoing consolidation efforts and the Corporation's acquisition of the Milwaukee Center. Technology expense was down $4 million (8%) from the nine months ended September 30, 2015, primarily driven by a reduction in external technology support services. FDIC expense was $7 million (38%) higher than the comparable period in 2015, reflecting growth in criticized and risk-weighted assets. All remaining noninterest expense categories on a combined basis were down $1 million (1%).

~~Income Taxes~~

~~The Corporation recognized~~ income tax expense of $64 million for the nine months ended September 30, ~~2016 compared to income tax expense of $66 million for the nine months ended September 30, 2015.~~2016. The change in income tax expense was due primarily ~~due~~ to ~~the decrease in the level of pretax income between periods,~~ an increase in ~~proceeds from BOLI policy non-taxable redemptions and an increase in benefits from tax credits.~~pre-tax book income. The effective tax rate was ~~30.47%~~27.99% for the first nine months ~~ended September 30, 2016,~~of 2017, compared to an effective tax rate of ~~31.14%~~30.47% for the first nine months ~~ended September 30, 2015.~~of 2016, reflecting a change in accounting standards related to stock compensation and a recent favorable tax court ruling.

Income tax expense recorded in the consolidated statements of income involves the interpretation and application of certain accounting pronouncements and federal and state tax laws and regulations, and is, therefore, considered a critical accounting policy. The Corporation is subject to examination by various taxing authorities. Examination by taxing authorities may impact the amount of tax expense and / or 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. See section ~~“Critical~~Critical Accounting Policies,” in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K for additional information on income taxes.

~~BALANCE SHEET ANALYSIS~~

Balance Sheet Analysis

At September 30, ~~2016,~~2017, total assets were ~~$29.2~~$30.1 billion, up ~~$1.4 billion (5%~~$925 million (3%) from December 31, ~~2015~~2016 and up ~~$1.7 billion (6%~~$912 million (3%) from September 30, ~~2015.~~2016.

Loans of ~~$19.8~~$20.9 billion at September 30, 2017 were up $877 million (4%) from December 31, 2016 and were up $1.1 billion ~~(6%) from December 31, 2015 and were up $1.3 billion (7%~~(5%) from September 30, ~~2015.~~2016. See section ~~"Loans" and Note 7 "Loans"~~Loans for additional information on loans.

~~Premises and equipment, net~~At September 30, 2017, total deposits of ~~$330~~$22.3 billion were up $445 million ~~increased $62 million (23%~~(2%) from December 31, ~~2015~~2016 and ~~increased $59~~were up $586 million ~~(22%~~(3%) from September 30, ~~2015, primarily due to the purchase of the Milwaukee Center.~~

~~At September 30, 2016, total deposits of $21.7 billion were up $740 million (4%) from December 31, 2015 and were up $1.2 billion (6%) from September 30, 2015.~~2016. See section ~~"Deposits~~Deposits and Customer ~~Funding"~~Funding for additional information on deposits.

Short and long-term funding of ~~$4.0~~$4.2 billion atincreased $358 million (9%) from December 31, 2016 and increased $210 million (5%) from September 30, 2016 increased $491 million (14%) since year-end 2015, primarily due to a $406 million increase in short-term funding and a $515 million increase in long-term FHLB advances, partially offset by the redemption of $430 million in senior notes in February 2016. ~~See Note 9 "Short and Long-Term Funding" for additional information on short and long-term funding.~~

Loans

~~TABLE 5:~~Table 5 Period End Loan Composition



	September 30, 2016				June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
	($ in Thousands)																				($ in Thousands)
Commercial and industrial	$	6,721,557	34	%	$	6,701,986	34	%	$	6,511,648	34	%	$	6,190,683	33	%	$	6,128,080	33	%	$	6,534,660	31	%	$	6,571,000	32	%	$	6,300,646	31	%	$	6,489,014	32	%	$	6,721,557	34	%
Commercial real estate — owner occupied	892,678		4	%	921,736		5	%	917,285		5	%	918,212		5	%	966,689		5	%	827,064		4	%	845,336		4	%	878,391		4	%	897,724		5	%	892,678		4	%
Commercial and business lending	7,614,235		38	%	7,623,722		39	%	7,428,933		39	%	7,108,895		38	%	7,094,769		38	%	7,361,724		35	%	7,416,336		36	%	7,179,037		35	%	7,386,738		37	%	7,614,235		38	%
Commercial real estate — investor	3,530,370		18	%	3,495,791		18	%	3,276,733		17	%	3,234,266		17	%	3,183,352		17	%	3,345,536		16	%	3,329,585		16	%	3,415,355		17	%	3,574,732		18	%	3,530,370		18	%
Real estate construction	1,314,431		7	%	1,285,573		6	%	1,184,398		6	%	1,162,145		6	%	1,124,280		6	%	1,552,135		8	%	1,651,805		8	%	1,553,205		8	%	1,432,497		7	%	1,314,431		7	%
Commercial real estate lending	4,844,801		25	%	4,781,364		24	%	4,461,131		23	%	4,396,411		23	%	4,307,632		23	%	4,897,671		24	%	4,981,390		24	%	4,968,560		25	%	5,007,229		25	%	4,844,801		25	%
Total commercial	12,459,036		63	%	12,405,086		63	%	11,890,064		62	%	11,505,306		61	%	11,402,401		61	%	12,259,395		59	%	12,397,726		60	%	12,147,597		60	%	12,393,967		62	%	12,459,036		63	%
Residential mortgage	6,034,166		30	%	6,035,720		30	%	5,944,457		31	%	5,783,267		31	%	5,682,178		31	%	7,408,471		35	%	7,115,457		34	%	6,715,282		33	%	6,332,327		31	%	6,034,166		30	%
Home equity revolving lines of credit	851,382		4	%	861,311		4	%	867,860		4	%	883,759		5	%	883,573		5	%
Home equity loans junior liens	100,212		1	%	107,460		1	%	115,134		1	%	122,043		1	%	130,892		1	%
Home equity	951,594		5	%	968,771		5	%	982,994		5	%	1,005,802		6	%	1,014,465		6	%	890,130		4	%	897,111		4	%	911,969		5	%	934,443		5	%	951,594		5	%
Other consumer	399,209		2	%	405,709		2	%	409,725		2	%	419,968		2	%	425,729		2	%	373,464		2	%	372,775		2	%	372,835		2	%	393,979		2	%	399,209		2	%
Total consumer	7,384,969		37	%	7,410,200		37	%	7,337,176		38	%	7,209,037		39	%	7,122,372		39	%	8,672,065		41	%	8,385,343		40	%	8,000,086		40	%	7,660,749		38	%	7,384,969		37	%
Total loans	$	19,844,005	100	%	$	19,815,286	100	%	$	19,227,240	100	%	$	18,714,343	100	%	$	18,524,773	100	%	$	20,931,460	100	%	$	20,783,069	100	%	$	20,147,683	100	%	$	20,054,716	100	%	$	19,844,005	100	%
Commercial real estate - investor and Real estate construction loan detail:
Farmland	$	6,530	—	%	$	6,181	—	%	$	5,557	—	%	$	7,135	—	%	$	9,645	—	%
Multi-family	1,030,976		29	%	1,076,549		31	%	974,051		30	%	932,360		29	%	921,456		29	%
Non-owner occupied	2,492,864		71	%	2,413,061		69	%	2,297,125		70	%	2,294,771		71	%	2,252,251		71	%
Commercial real estate — investor	$	3,530,370	100	%	$	3,495,791	100	%	$	3,276,733	100	%	$	3,234,266	100	%	$	3,183,352	100	%
1-4 family construction	$	330,250	25	%	$	353,244	27	%	$	320,984	27	%	$	309,396	27	%	$	315,538	28	%
All other construction	984,181		75	%	932,329		73	%	863,414		73	%	852,749		73	%	808,742		72	%
Real estate construction	$	1,314,431	100	%	$	1,285,573	100	%	$	1,184,398	100	%	$	1,162,145	100	%	$	1,124,280	100	%

Commercial and business lending was $7.6 billion and represented 38% of total loans at September 30, 2016, an increase of $505 million (7%) from December 31, 2015 and an increase of $519 million (7%) from September 30, 2015.

Commercial real estate lending totaled $4.8 billion at September 30, 2016 and represented 25% of total loans, an increase of $448 million (10%) from December 31, 2015 and an increase of $537 million (12%) from September 30, 2015.

Consumer loans were $7.4 billion and represented 37% of total loans at September 30, 2016, an increase of $176 million (2%) from December 31, 2015 and an increase of $263 million (4%) from September 30, 2015.

The Corporation has long-term guidelines relative to the proportion of ~~Commercial~~commercial and ~~Business, Commercial Real Estate,~~business, commercial real estate, and Consumer loans within the overall loan portfolio, with each targeted to represent 30-40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during ~~2015~~2016 and the first nine months of ~~2016.~~2017. Furthermore, certain sub-asset classes within the respective portfolios were further defined and dollar limitations were 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.

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.

~~Factors that are important to~~ See Note 7 Loans, for additional information on 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 allowance for loan losses, allowance for unfunded commitments, nonaccrual and charge off policies.quality.

The loan portfolio is widely diversified by types of borrowers, industry groups, and market areas within our branch 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, ~~2016,~~2017, no significant concentrations existed in the Corporation’s portfolio in excess of 10% of total loans.

Commercial and business lending:

The commercial and business lending classification primarily includes commercial loans to large corporations, middle market companies and small businesses and lease financing. At September 30, ~~2016,~~2017, the largest industry group within the commercial and business lending category was the manufacturing sector, which represented 7%6% of total loans and ~~18%~~16% of the total commercial and business lending portfolio. The next largest industry group within the commercial and business lending category included the ~~finance and insurance portfolio, which represented 5% of total loans and represented 13% of the total commercial and business lending portfolio, followed by the~~ power and utilities portfolio, which represented 5% of total loans and represented ~~12%~~14% of the total commercial and business lending ~~portfolio.~~portfolio at September 30, 2017. The remaining commercial and business lending portfolio is spread over a diverse range of industries, none of which exceed 5% of total loans. The credit risk related to commercial loans 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. Currently, a higher risk segment of the commercial and business lending portfolio is loans to borrowers supporting oil and gas exploration and production, which are further discussed under ~~“Oil and gas lending” below. The~~ oil and gas ~~portfolio represented less than 4% of total loans at September 30, 2016.~~lending below.

Oil and gas lending:

The Corporation provides reserve based loans to oil and gas exploration and production firms. The Corporation's oil and gas lending team is based in Houston and focuses on serving the funding needs of small and mid-sized companies in the upstream oil and gas business. The oil and gas loans are generally first lien, reserve-based, and borrowing base dependent lines of credit. A small portion of the portfolio is in a second lien position to which the Corporation also holds the first lien position. The portfolio is diversified across all major U.S. geographic basins. The portfolio is ~~diverse~~diversified by product line with approximately ~~60%~~58% in oil and ~~40%~~42% in gas at September 30, ~~2016.~~2017. Borrowing base re-determinations for the portfolio are completed at least twice a year and are based on detailed engineering reports and discounted cash flow analysis.

The following table summarizes information about the Corporation's oil and gas loan portfolio.

~~TABLE 6:~~Table 6 Oil and Gas Loan Portfolio


	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	($ in Millions)															($ in Millions)
Pass	$	351		$	387		$	402		$	522		$	587		$	446		$	411		$	405		$	426		$	351
Special mention	47			64			75			86			74			—			39			8			20			47
Potential problem	171			176			150			124			84			39			37			78			75			171
Nonaccrual	127			129			129			20			13			92			114			134			147			127
Total oil and gas related loans	$	696		$	756		$	756		$	752		$	758		$	577		$	601		$	625		$	668		$	696
Quarter net charge offs	$	22		$	19		$	13		$	—		$	—		$	8		$	12		$	6		$	6		$	22
Oil and gas related allowance	$	38		$	42		$	49		$	42		$	29		$	30		$	33		$	42		$	38		$	38
Oil and gas related allowance ratio	5.5		%	5.6		%	6.5		%	5.6		%	3.8		%	5.2		%	5.4		%	6.7		%	5.7		%	5.5		%

~~The Corporation proactively risk grades and reserves accordingly against the oil and gas loan portfolio.~~ Lower market pricing and increased market volatility has led to downward migration within the portfolio. At September 30, ~~2016,~~2017, nonaccrual oil and gas related loans totaled approximately ~~$127~~$92 million, representing ~~18%~~16% of the oil and gas loan portfolio, ~~an increase~~a decrease of ~~$107~~$55 million from December 31, 2015. Potential problem oil and gas related loans totaled approximately $171 million at September 30, 2016, compared to $124 million at December 31, 2015. The increase in nonaccrual and potential problem oil and gas related loans was primarily due to downgrades associated with the issuance of revised regulatory guidance, as well as the negative outlook for a near term oil and gas price recovery. The allowance for loan losses on oil and gas related loans was $38 million at September 30, 2016 compared to $42 million December 31, 2015.2016.

Commercial real estate - investor:

Commercial real estate-investor is comprised of loans secured by various non-owner occupied or investor income producing property types. At September 30, ~~2016,~~2017, the largest property type exposures within the commercial real estate-investor portfolio were loans secured by multi-family properties, which represented 5% of total loans and 29% of the total commercial real estate-investor portfolio and loans secured by retail properties which represented 5% of total loans and 28% of the total commercial real estate-investor portfolio. The remaining commercial real estate-investor portfolio is spread over various other property types, none of which exceed 5% of total loans. Of the exposure in the Corporation's commercial real estate retailer portfolio, our largest tenant exposure is approximately 5%, spread over six loans, to a national investment grade grocer. 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.

The Corporation’s current lending standards for commercial real estate and real estate construction lending are determined by property type and specifically address many criteria, including: maximum loan amounts, maximum loan-to-value (“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 ~~which~~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.

~~TABLE 7:~~Table 7 Commercial Loan ~~Maturity~~ Distribution and Interest Rate Sensitivity


	Maturity (1)
September 30, 2016	Within 1 Year (2)			1-5 Years			After 5 Years			Total			% of Total
September 30, 2017															Within 1 Year^(a)			1-5 Years			After 5 Years			Total			% of Total
	($ in Thousands)														($ in Thousands)
Commercial and industrial	$	5,760,243		$	692,962		$	268,352		$	6,721,557		54	%	$	5,860,886		$	469,480		$	204,294		$	6,534,660		53	%
Commercial real estate — investor	2,151,190			1,292,605			86,575			3,530,370			28	%	2,457,622			827,405			60,509			3,345,536			27	%
Commercial real estate — owner occupied	333,692			424,067			134,919			892,678			7	%	409,936			307,477			109,651			827,064			7	%
Real estate construction	1,033,765			252,316			28,350			1,314,431			11	%	1,428,540			94,874			28,721			1,552,135			13	%
Total	$	9,278,890		$	2,661,950		$	518,196		$	12,459,036		100	%	$	10,156,984		$	1,699,236		$	403,175		$	12,259,395		100	%
Fixed rate	$	4,163,696		$	926,300		$	271,336		$	5,361,332		43	%	$	4,357,609		$	743,284		$	310,221		$	5,411,114		44	%
Floating or adjustable rate	5,115,194			1,735,650			246,860			7,097,704			57	%	5,799,375			955,952			92,954			6,848,281			56	%
Total	$	9,278,890		$	2,661,950		$	518,196		$	12,459,036		100	%	$	10,156,984		$	1,699,236		$	403,175		$	12,259,395		100	%
Percent by maturity distribution	75		%	21		%	4		%	100		%			83		%	14		%	3		%	100		%


~~(1)~~	~~Based upon scheduled principal repayments.~~


~~(2)~~(a)	Demand loans, past due loans, and overdrafts are reported in the “Within 1 Year” category.

The total commercial loans that were floating or adjustable rate was ~~$7.1~~$6.8 billion ~~(57%~~(56%) at September 30, ~~2016.~~2017. Including the ~~$4.2~~$4.4 billion of fixed rate loans due within one year, ~~90%~~91% of the commercial loan portfolio noted above matures, re-prices, or resets within one year. ~~Of the fixed rate loans due within one year, 95% have an original maturity within one year.~~

Residential ~~mortgage:~~

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%. At September 30, ~~2016,~~2017, the residential mortgage portfolio was comprised of ~~$1.5~~$2.5 billion of fixed-rate residential real estate mortgages and ~~$4.5~~$4.9 billion of variable-rate residential real estate mortgages, compared to ~~$1.6~~$1.8 billion of fixed-rate mortgages and ~~$4.2~~$4.5 billion variable-rate mortgages at December 31, ~~2015. During the third quarter of 2016, the Corporation sold $239 million of portfolio loans generating gross gains of $9 million.~~2016. The residential mortgage portfolio is focused primarily in our three-state branch footprint, with approximately ~~89%~~88% of the outstanding loan balances in our branch footprint at September 30, ~~2016.~~2017. As part of management’s historical practice of originating and servicing residential mortgage loans, generally the Corporation’s ~~30-year,~~30 year, agency conforming, fixed-rate residential real estate mortgage loans are sold in the secondary market with servicing rights retained. During the first half of 2017, the Corporation retained substantially all of its 30 year production through May. Beginning in June, the Corporation resumed originating for sale. The majority of the on balance sheet residential mortgage portfolio consists of hybrid, adjustable rate mortgage loans with initial fixed rate terms of 3, 5, 7, or 10 years. The Corporation ~~may retain~~also generally retains certain fixed-rate residential real estate mortgages in its loan portfolio, including ~~some~~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 were 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 30 year mortgage loan production on its balance sheet.

The Corporation’s underwriting and risk-based pricing guidelines for residential mortgage loans include minimum borrower FICO 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, approximately ~~22%~~24% are first lien positions. Home equity loans and lines in a junior position at September 30, ~~2016~~2017 included approximately ~~40%~~35% for which the Corporation also owned or serviced the related first lien loan and approximately ~~60%~~65% where the Corporation did not own or service the related first lien loan.

The Corporation’s credit risk monitoring guidelines for home equity is 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 and loans consist of a combination of both borrower FICO and the original cumulative LTV ofagainst the property securing the loan. Currently, ~~for~~our policy sets the maximum

acceptable LTV at 90% and the minimum acceptable FICO at 670. The Corporation's current home equity ~~products,~~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 ~~maximum acceptable LTV is 90% for customers with FICO scores exceeding 700. Home~~outstanding balance. The Corporation has significantly curtailed its offerings of fixed-rate, closed end home equity loans. The loans in the Corporation's portfolio generally have aan original term of 20 ~~year term and are fixed rate~~years with principal and interest payments ~~required, while home equity lines are generally tied to floating rate indices.~~required.

Based upon outstanding balances at September 30, ~~2016,~~2017, the following table presents the periods when home equity lines of credit revolving periods are scheduled to end.

~~TABLE 8:~~Table 8 Home Equity Line of Credit - Revolving Period End Dates


	$ in Thousands		% of Total		$ in Thousands		% of Total
Less than 5 years	$	44,365	5	%	$	56,613	7	%
5 — 10 years	215,540		25	%
5 to 10 years					214,719		26	%
Over 10 years	591,477		70	%	542,371		67	%
Total home equity revolving lines of credit	$	851,382	100	%	$	813,703	100	%

Other consumer:

Other consumer consists of student loans, ~~as well as~~ short-term and other personal installment loans and credit cards. The Corporation had ~~$221~~$190 million and ~~$249~~$214 million of student loans at September 30, ~~2016,~~2017, and December 31, ~~2015,~~2016, respectively, the majority of which are government guaranteed. Credit risk for non-government guaranteed student, short-term and 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. The student loan portfolio is in run-off and no new student loans are being originated.

~~Nonaccrual Loans, Potential Problem Loans, and Other Real Estate Owned~~

Nonperforming Assets

Management is committed to a proactive nonaccrual and ~~potential~~ 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 9 provides detailed information regarding nonperforming assets, which include nonaccrual loans and other real estate ~~owned.~~owned, and other nonperforming assets.

~~TABLE 9:~~Table 9 Nonperforming Assets


																September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			($ in Thousands)
	($ in Thousands)
Nonperforming assets:
Nonperforming assets
Commercial and industrial	$	205,902		$	193,439		$	197,115		$	93,575		$	60,184		$	122,284		$	141,475		$	164,891		$	183,371		$	205,902
Commercial real estate — owner occupied	6,995			9,635			9,443			8,049			13,368			15,598			15,800			17,925			9,544			6,995
Commercial and business lending	212,897			203,074			206,558			101,624			73,552			137,882			157,275			182,816			192,915			212,897
Commercial real estate — investor	8,028			11,528			12,330			8,643			6,921			3,543			7,206			8,273			18,051			8,028
Real estate construction	864			957			840			940			997			1,540			1,717			1,247			844			864
Commercial real estate lending	8,892			12,485			13,170			9,583			7,918			5,083			8,923			9,520			18,895			8,892
Total commercial	221,789			215,559			219,728			111,207			81,470			142,965			166,198			192,336			211,810			221,789
Residential mortgage	53,475			52,300			52,212			51,482			51,957			54,654			51,975			54,183			50,236			53,475
Home equity revolving lines of credit	9,462			8,797			8,822			9,917			8,060
Home equity loans junior liens	4,885			5,566			5,250			5,327			5,581
Home equity	14,347			14,363			14,072			15,244			13,641			12,639			13,482			13,212			13,001			14,347
Other consumer	300			380			383			325			386			259			233			260			256			300
Total consumer	68,122			67,043			66,667			67,051			65,984			67,552			65,690			67,655			63,493			68,122
Total nonaccrual loans	289,911			282,602			286,395			178,258			147,454			210,517			231,888			259,991			275,303			289,911
Commercial real estate owned	9,758			7,473			9,695			7,942			9,242			5,098			4,825			5,599			7,176			9,758
Residential real estate owned	3,006			4,391			4,689			4,768			3,788			3,385			2,957			1,941			3,098			3,006
Bank properties real estate owned	1,735			1,805			1,672			1,859			710			—			—			—			—			1,735
Other real estate owned (“OREO”)	14,499			13,669			16,056			14,569			13,740			8,483			7,782			7,540			10,274			14,499
Other nonperforming assets																7,418			7,418			7,418			7,418			—
Total nonperforming assets (“NPAs”)	$	304,410		$	296,271		$	302,451		$	192,827		$	161,194		$	226,418		$	247,088		$	274,949		$	292,995		$	304,410
Commercial real estate-investor & Real estate construction nonaccrual loans detail:
Multi-family	$	448		$	115		$	415		$	2		$	2
Non-owner occupied	7,580			11,413			11,915			8,641			6,919
Commercial real estate — investor	$	8,028		$	11,528		$	12,330		$	8,643		$	6,921
1-4 family construction	$	94		$	153		$	274		$	314		$	337
All other construction	770			804			566			626			660
Real estate construction	$	864		$	957		$	840		$	940		$	997
Accruing loans past due 90 days or more:
Accruing loans past due 90 days or more
Commercial	$	254		$	248		$	217		$	249		$	178		$	308		$	248		$	258		$	236		$	254
Consumer	1,257			1,246			1,412			1,399			1,306			1,303			1,287			1,462			1,377			1,257
Total accruing loans past due 90 days or more	$	1,511		$	1,494		$	1,629		$	1,648		$	1,484		$	1,611		$	1,535		$	1,720		$	1,613		$	1,511
Restructured loans (accruing):
Restructured loans (accruing)
Commercial	$	53,410		$	57,251		$	57,980		$	59,595		$	55,006		$	51,259		$	50,634		$	51,274		$	53,022		$	53,410
Consumer	26,660			26,175			27,617			27,768			27,803			25,919			26,691			27,785			26,835			26,660
Total restructured loans (accruing)	$	80,070		$	83,426		$	85,597		$	87,363		$	82,809		$	77,178		$	77,325		$	79,059		$	79,857		$	80,070
Nonaccrual restructured loans (included in nonaccrual loans)	$	31,758		$	34,841		$	35,232		$	37,684		$	36,583		$	33,520		$	51,715		$	78,902		$	29,385		$	31,758
Ratios:
Ratios
Nonaccrual loans to total loans	1.46		%	1.43		%	1.49		%	0.95		%	0.80		%	1.01		%	1.12		%	1.29		%	1.37		%	1.46		%
NPAs to total loans plus OREO	1.53		%	1.49		%	1.57		%	1.03		%	0.87		%	1.08		%	1.19		%	1.36		%	1.46		%	1.53		%
NPAs to total assets	1.04		%	1.02		%	1.07		%	0.70		%	0.59		%	0.75		%	0.83		%	0.94		%	1.01		%	1.04		%
Allowance for loan losses to nonaccrual loans	93		%	95		%	97		%	154		%	178		%	131.37		%	121.22		%	108.72		%	101.10		%	92.97		%

~~TABLE 9:~~Table 9 Nonperforming Assets (continued)


	September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
	($ in Thousands)										($ in Thousands)
Accruing loans 30-89 days past due:
Accruing loans 30-89 days past due
Commercial and industrial	$	950	$	2,124	$	2,901	$	1,011	$	3,296	$	1,378	$	1,255	$	1,675	$	1,413	$	950
Commercial real estate — owner occupied	869		193		520		7,142		2,018		1,522		1,284		970		1,384		869
Commercial and business lending	1,819		2,317		3,421		8,153		5,314		2,900		2,539		2,645		2,797		1,819
Commercial real estate — investor	630		2,715		1,072		291		1,218		1,109		899		1,122		931		630
Real estate construction	402		524		415		296		373		700		135		431		369		402
Commercial real estate lending	1,032		3,239		1,487		587		1,591		1,809		1,034		1,553		1,300		1,032
Total commercial	2,851		5,556		4,908		8,740		6,905		4,709		3,573		4,198		4,097		2,851
Residential mortgage	6,697		7,382		3,594		4,930		4,811		8,870		9,165		7,243		8,142		6,697
Home equity revolving lines of credit	4,137		6,075		3,582		5,559		6,142
Home equity loans junior liens	1,336		1,655		2,222		2,360		2,423
Home equity	5,473		7,730		5,804		7,919		8,565		7,191		5,924		4,512		5,849		5,473
Other consumer	2,046		1,895		1,682		1,870		1,723		1,686		1,746		1,658		3,189		2,046
Total consumer	14,216		17,007		11,080		14,719		15,099		17,747		16,835		13,413		17,180		14,216
Total accruing loans 30-89 days past due	$	17,067	$	22,563	$	15,988	$	23,459	$	22,004	$	22,456	$	20,408	$	17,611	$	21,277	$	17,067
Commercial real estate-investor & Real estate construction accruing loans 30-89 days past due detail:
Farmland	$	—	$	—	$	—	$	—	$	66
Multi-family	613		668		324		108		114
Non-owner occupied	17		2,047		748		183		1,038
Commercial real estate — investor	$	630	$	2,715	$	1,072	$	291	$	1,218
1-4 family construction	$	—	$	157	$	—	$	27	$	28
All other construction	402		367		415		269		345
Real estate construction	$	402	$	524	$	415	$	296	$	373
Potential problem loans:
Potential problem loans
Commercial and industrial	$	351,290	$	379,818	$	328,464	$	233,130	$	192,174	$	153,779	$	142,607	$	218,930	$	227,196	$	351,290
Commercial real estate — owner occupied	47,387		45,671		41,107		35,706		41,466		57,468		60,724		58,994		64,524		47,387
Commercial and business lending	398,677		425,489		369,571		268,836		233,640		211,247		203,331		277,924		291,720		398,677
Commercial real estate — investor	36,765		25,081		25,385		25,944		23,633		46,770		48,569		49,217		51,228		36,765
Real estate construction	1,929		2,117		2,422		3,919		2,354		118		8,901		10,141		2,465		1,929
Commercial real estate lending	38,694		27,198		27,807		29,863		25,987		46,888		57,470		59,358		53,693		38,694
Total commercial	437,371		452,687		397,378		298,699		259,627		258,135		260,801		337,282		345,413		437,371
Residential mortgage	3,226		3,953		3,488		2,796		3,966		650		1,576		2,155		5,615		3,226
Home equity revolving lines of credit	46		62		48		48		141
Home equity loans junior liens	32		32		161		174		86
Home equity	78		94		209		222		227		124		208		220		114		78
Total consumer	3,304		4,047		3,697		3,018		4,193		774		1,784		2,375		5,729		3,304
Total potential problem loans	$	440,675	$	456,734	$	401,075	$	301,717	$	263,820	$	258,909	$	262,585	$	339,657	$	351,142	$	440,675

Nonaccrual ~~Loans:~~loans: Nonaccrual loans are considered to be one indicator of potential future loan losses. See Note 7 ~~“Loans,”~~Loans, of the notes to consolidated financial statements for additional nonaccrual loan disclosures. The ratio of nonaccrual loans to total loans at September 30, ~~2016~~2017 was ~~1.46%~~1.01%, as compared to ~~0.80%~~1.37% at December 31, 2016 and 1.46% at September 30, ~~2015 and 0.95% at December 31, 2015.~~2016. See also sections ~~“Credit Risk”~~Credit Risk and ~~“Allowance~~Allowance for Credit Losses.”

Accruing ~~Loans Past Due~~loans past due 90 ~~Days~~days or ~~More:~~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. Accruing loans 90 days or more past due at September 30, ~~2016~~2017 were relatively unchanged from both December 31, 2016 and September 30, ~~2015 and December 31, 2015.~~2016.

~~Troubled Debt Restructurings (“~~Restructured ~~Loans”):~~loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See also Note 7 ~~“Loans,”~~Loans, of the notes to consolidated financial statements for additional restructured loans disclosures.

Potential ~~Problem Loans:~~problem loans: The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the allowance for loan losses. Potential problem loans are generally defined by management to include loans rated as substandard by management but that are not considered impaired (i.e., nonaccrual loans and accruing troubled debt restructurings); however, there are circumstances present to create doubt as to the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that the Corporation expects losses to occur, but that management recognizes a higher degree of risk associated with these loans. ~~The increase in potential problem loans is primarily due to the risk migration on certain general commercial and oil and gas credits.~~

~~Other Real Estate Owned:~~ ~~Other real estate owned was $14 million at September 30, 2016 and September 30, 2015, compared to $15 million at December 31, 2015.~~ OREO: Management actively seeks to ensure OREO properties held are monitored to minimize the Corporation’s risk of loss.

Other nonperforming assets: The asset represents the Bank's ownership interest in a profit participation agreement in an entity created to own certain oil and gas assets obtained as a result of bankruptcy and liquidation of a borrower in partial satisfaction of their loan.

Allowance for Credit Losses

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 minimization of loan losses. Credit risk management for each loan type is discussed in the section entitled ~~“Credit~~Credit Risk.”

~~The~~ See Note 7 Loans, for additional disclosures on the allowance for credit losses is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the allowance for loan losses represents management’s estimate of an amount appropriate to provide for probable credit losses in the loan portfolio at the balance sheet date. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in accrued expenses and other liabilities on the consolidated balance sheets.losses.

To assess the appropriateness of the allowance for loan losses, an allocation methodology is applied by the Corporation which focuses on 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, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the level of potential problem loans, the risk characteristics of the various classifications of loans, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions, the fair value of underlying collateral, and other qualitative and quantitative factors which could affect potential credit losses. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the allowance for loan losses is not necessarily indicative of the trend of future loan losses in any particular category. Therefore, management considers the allowance for loan losses a critical accounting ~~policy — see~~policy—See section ~~“Critical~~Critical Accounting Policies," in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K for additional information on the allowance for loan losses. See section, ~~“Nonaccrual Loans, Potential Problem Loans, and Other Real Estate Owned,”~~Nonperforming Assets, for a detailed discussion on asset quality. See also Note 7 ~~“Loans,”~~Loans, of the notes to consolidated financial statements for additional allowance for loan losses disclosures. Table 5 provides information on loan growth and period end loan composition, Table 9 provides additional information regarding nonperforming assets, and ~~Tables~~Table 10 and Table 11 provide additional information regarding activity in the allowance for loan losses.

The methodology used for the allocation of the allowance for loan losses at September 30, ~~2016~~2017 and December 31, ~~2015~~2016 was generally comparable, whereby the Corporation segregated its loss factors (used for both criticized and non-criticized loans) into a component primarily based on historical loss rates and a component primarily based on other qualitative factors that are probable to affect loan collectability. The Corporation’s allowance for loan losses methodology considers an estimate of the historical loss emergence period (which is the period of time between the event that triggers a loss and the confirmation and / or charge off of that loss), probability of default, and loss given default for each loan portfolio segment. Management allocates the allowance for loan losses by pools of risk within each loan portfolio. The allocation methodology consists of the following components: First, a valuation allowance estimate is established for specifically identified commercial and consumer loans determined by the Corporation to be impaired, using discounted cash flows, estimated fair value of underlying collateral, and / or other data available. Second, management allocates the allowance for loan losses with loss factors, for criticized loan pools by loan type as well as for non-criticized loan pools by loan type, primarily based on historical loss rates after considering loan type, historical loss and delinquency experience, and industry statistics. 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. The loss factors applied in the methodology are periodically re-evaluated and adjusted to reflect changes in historical loss levels or other risks.

During the second quarter of 2016, in conjunction with the annual stress testing processes and continual review of the allowance for loan losses methodology, the Corporation further segmented its commercial and industrial loan portfolio into more refined risk categories. Specifically, the Corporation isolated certain mortgage warehouse lines structured as repurchase facilities as we own the underlying mortgage loan; thus, the inherent risk is lower in these transactions. As a result, the loss factors for these mortgage warehouse lines were updated to align more closely with those of similar portfolio mortgage loans, resulting in a $6 million reduction to the allowance for credit losses during the second quarter of 2016. Lastly, management allocates allowance for loan losses to absorb unrecognized losses that may not be provided for by the other components due to other 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 10:~~

Table 10 Allowance for Credit Losses


	YTD																					YTD
	September 30, 2016			September 30, 2015			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			Sep 2017			Sep 2016			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	($ in Thousands)																					($ in Thousands)
Allowance for Loan Losses:
Allowance for Loan Losses
Balance at beginning of period	$	274,264		$	266,302		$	267,780		$	277,370		$	274,264		$	262,536		$	261,538		$	278,335		$	274,264		$	281,101		$	282,672		$	278,335		$	269,540		$	267,780
Provision for loan losses	51,000			18,500			20,000			11,000			20,000			19,500			9,000			27,000			51,000			6,000			11,000			10,000			18,000			20,000
Charge offs	(74,830		)	(39,539		)	(28,964		)	(24,621		)	(21,245		)	(12,741		)	(11,732		)	(41,957		)	(74,830		)	(14,727		)	(15,376		)	(11,854		)	(11,609		)	(28,964		)
Recoveries	19,106			17,273			10,724			4,031			4,351			4,969			3,730			13,173			19,106			4,177			2,805			6,191			2,404			10,724
Net charge offs	(55,724		)	(22,266		)	(18,240		)	(20,590		)	(16,894		)	(7,772		)	(8,002		)	(28,784		)	(55,724		)	(10,550		)	(12,571		)	(5,663		)	(9,205		)	(18,240		)
Balance at end of period	$	269,540		$	262,536		$	269,540		$	267,780		$	277,370		$	274,264		$	262,536		$	276,551		$	269,540		$	276,551		$	281,101		$	282,672		$	278,335		$	269,540
Allowance for Unfunded Commitments:
Allowance for Unfunded Commitments
Balance at beginning of period	$	24,400		$	24,900		$	27,400		$	24,400		$	24,400		$	23,900		$	24,900		$	25,400		$	24,400		$	25,400		$	24,400		$	25,400		$	28,400		$	27,400
Provision for unfunded commitments	4,000			(1,000		)	1,000			3,000			—			500			(1,000		)	(1,000		)	4,000			(1,000		)	1,000			(1,000		)	(3,000		)	1,000
Balance at end of period	$	28,400		$	23,900		$	28,400		$	27,400		$	24,400		$	24,400		$	23,900		$	24,400		$	28,400		$	24,400		$	25,400		$	24,400		$	25,400		$	28,400
Allowance for credit losses^(A)(a)	$	297,940		$	286,436		$	297,940		$	295,180		$	301,770		$	298,664		$	286,436		$	300,951		$	297,940		$	300,951		$	306,501		$	307,072		$	303,735		$	297,940
Provision for credit losses^(B)(b)	$	55,000		$	17,500		$	21,000		$	14,000		$	20,000		$	20,000		$	8,000		$	26,000		$	55,000		$	5,000		$	12,000		$	9,000		$	15,000		$	21,000
Net loan (charge offs) recoveries:
Net loan (charge offs) recoveries
Commercial and industrial	$	(49,907	)	$	(13,280	)	$	(16,407	)	$	(18,564	)	$	(14,936	)	$	(4,586	)	$	(4,709	)	$	(24,856	)	$	(49,907	)	$	(9,442	)	$	(11,046	)	$	(4,368	)	$	(6,566	)	$	(16,407	)
Commercial real estate — owner occupied	(217		)	(1,433		)	(154		)	(20		)	(43		)	(291		)	504			75			(217		)	13			43			19			(221		)	(154		)
Commercial and business lending	(50,124		)	(14,713		)	(16,561		)	(18,584		)	(14,979		)	(4,877		)	(4,205		)	(24,781		)	(50,124		)	(9,429		)	(11,003		)	(4,349		)	(6,787		)	(16,561		)
Commercial real estate — investor	115			177			(564		)	(560		)	1,239			(665		)	(496		)	(585		)	115			55			(126		)	(514		)	5			(564		)
Real estate construction	(269		)	1,378			(22		)	(219		)	(28		)	140			(38		)	(165		)	(269		)	(150		)	(26		)	11			(86		)	(22		)
Commercial real estate lending	(154		)	1,555			(586		)	(779		)	1,211			(525		)	(534		)	(750		)	(154		)	(95		)	(152		)	(503		)	(81		)	(586		)
Total commercial	(50,278		)	(13,158		)	(17,147		)	(19,363		)	(13,768		)	(5,402		)	(4,739		)	(25,531		)	(50,278		)	(9,524		)	(11,155		)	(4,852		)	(6,868		)	(17,147		)
Residential mortgage	(2,529		)	(3,845		)	(540		)	(757		)	(1,232		)	(714		)	(1,562		)	(718		)	(2,529		)	(26		)	(564		)	(128		)	(1,048		)	(540		)
Home equity revolving lines of credit	(591		)	(1,999		)	36			275			(902		)	(294		)	(533		)
Home equity loans junior liens	(113		)	(899		)	89			42			(244		)	(623		)	(358		)
Home equity	(704		)	(2,898		)	125			317			(1,146		)	(917		)	(891		)	140			(704		)	(87		)	54			173			(491		)	125
Other consumer	(2,213		)	(2,365		)	(678		)	(787		)	(748		)	(739		)	(810		)	(2,675		)	(2,213		)	(913		)	(906		)	(856		)	(798		)	(678		)
Total consumer	(5,446		)	(9,108		)	(1,093		)	(1,227		)	(3,126		)	(2,370		)	(3,263		)	(3,253		)	(5,446		)	(1,026		)	(1,416		)	(811		)	(2,337		)	(1,093		)
Total net charge offs	$	(55,724	)	$	(22,266	)	$	(18,240	)	$	(20,590	)	$	(16,894	)	$	(7,772	)	$	(8,002	)	$	(28,784	)	$	(55,724	)	$	(10,550	)	$	(12,571	)	$	(5,663	)	$	(9,205	)	$	(18,240	)
Commercial real estate-investor and Real estate construction net charge off detail:
Multi-family	$	(2	)	$	(39	)	$	—		$	—		$	(2	)	$	—		$	(35	)
Non-owner occupied	117			216			(564		)	(560		)	1,241			(665		)	(461		)
Commercial real estate — investor	$	115		$	177		$	(564	)	$	(560	)	$	1,239		$	(665	)	$	(496	)
1-4 family construction	$	(33	)	$	515		$	—		$	16		$	(49	)	$	235		$	31
All other construction	(236		)	863			(22		)	(235		)	21			(95		)	(69		)
Real estate construction	$	(269	)	$	1,378		$	(22	)	$	(219	)	$	(28	)	$	140		$	(38	)
Ratios:
Ratios
Allowance for loan losses to total loans	1.36 %			1.42		%	1.36		%	1.35		%	1.44		%	1.47		%	1.42		%	1.32		%	1.36		%	1.32		%	1.35		%	1.40		%	1.39		%	1.36		%
Allowance for loan losses to net charge offs (Annualized)	3.6x			8.8x			3.7x			3.2x			4.1x			8.9x			8.3x
Allowance for loan losses to net charge offs (annualized)																						7.2x			3.6x			6.6x			5.6x			12.3x			7.6x			3.7x


~~(A)~~(a)	Includes the allowance for loan losses and the allowance for unfunded commitments.


~~(B)~~(b)	Includes the provision for loan losses and the provision for unfunded commitments.

~~TABLE 11:~~

Table 11 Annualized net (charge offs) recoveries ~~(A)~~^(a)


	YTD														YTD
(in basis points)	September 30, 2016		September 30, 2015		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		Sep 2017		Sep 2016		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016

Net loan (charge offs) recoveries:
Net loan (charge offs) recoveries
Commercial and industrial	(103	)	(29	)	(98	)	(114	)	(97	)	(31	)	(31	)	(52	)	(103	)	(58	)	(69	)	(28	)	(40	)	(98	)
Commercial real estate — owner occupied	(3	)	(19	)	(7	)	(1	)	(2	)	(12	)	21		1		(3	)	1		2		1		(10	)	(7	)
Commercial and business lending	(91	)	(28	)	(87	)	(100	)	(85	)	(28	)	(24	)	(46	)	(91	)	(51	)	(60	)	(24	)	(36	)	(87	)
Commercial real estate — investor	N\M		1		(6	)	(7	)	15		(8	)	(6	)	(2	)	N/M		1		(2	)	(6	)	N/M		(6	)
Real estate construction	(3	)	17		(1	)	(7	)	(1	)	5		(1	)	(1	)	(3	)	(4	)	(1	)	N/M		(3	)	(1	)
Commercial real estate lending	N\M		5		(5	)	(7	)	11		(5	)	(5	)	(2	)	N/M		(1	)	(1	)	(4	)	(1	)	(5	)
Total commercial	(56	)	(16	)	(55	)	(64	)	(48	)	(19	)	(17	)	(28	)	(56	)	(31	)	(36	)	(16	)	(22	)	(55	)
Residential mortgage	(6	)	(9	)	(3	)	(5	)	(8	)	(5	)	(11	)	(1	)	(6	)	N/M		(3	)	(1	)	(7	)	(3	)
Home equity revolving lines of credit	(9	)	(30	)	2		13		(41	)	(13	)	(24	)
Home equity loans junior liens	(14	)	(81	)	34		15		(83	)	(195	)	(104	)
Home equity	(10	)	(38	)	5		13		(46	)	(36	)	(35	)	2		(10	)	(4	)	2		8		(21	)	5
Other consumer	(72	)	(73	)	(67	)	(78	)	(72	)	(69	)	(75	)	(95	)	(72	)	(97	)	(98	)	(90	)	(80	)	(67	)
Total consumer	(10	)	(18	)	(6	)	(7	)	(17	)	(13	)	(18	)	(5	)	(10	)	(5	)	(7	)	(4	)	(12	)	(6	)
Total net charge offs	(38	)	(16	)	(36	)	(42	)	(36	)	(17	)	(17	)	(19	)	(38	)	(20	)	(25	)	(11	)	(18	)	(36	)
Commercial real estate-investor and Real estate construction net charge off detail:
Multi-family	N\M		(1	)	N\M		N\M		N\M		N\M		(2	)
Non-owner occupied	1		1		(9	)	(9	)	21		(11	)	(8	)
Commercial real estate — investor	N\M		1		(6	)	(7	)	15		(8	)	(6	)
1-4 family construction	(1	)	22		N\M		2		(6	)	29		4
All other construction	(4	)	16		(1	)	(11	)	1		(5	)	(3	)
Real estate construction	(3	)	17		(1	)	(7	)	(1	)	5		(1	)


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

N/M = Not Meaningful

At September 30, ~~2016,~~2017, the allowance for credit losses was ~~$298~~$301 million, compared to ~~$286~~$304 million at December 31, 2016 and $298 million at September 30, ~~2015 and $299 million at December 31, 2015.~~2016. At September 30, ~~2016,~~2017, the allowance for loan losses to total loans was ~~1.36%~~1.32% and covered ~~93%~~131.37% of nonaccrual loans, compared to ~~1.42%~~1.39% and ~~178%~~101.10%, respectively, at December 31, 2016 and 1.36% and 92.97%, respectively, at September 30, ~~2015 and 1.47% and 154%, respectively, at December 31, 2015.~~2016. Management believes the level of allowance for loan losses to be appropriate at September 30, ~~2016 and 2015 and December 31, 2015.~~2017.

~~Key contributors~~Notable Contributions to the ~~increase~~Change in ~~the allowance~~Allowance for ~~credit losses and the related provision~~Credit Loss

Total loans increased $877 million (4%) for ~~credit losses during~~ the first nine months of 2017, including a $1.0 billion (13%) increase in total consumer. Compared to September 30, 2016, ~~were:~~total loans increased $1.1 billion (5%), including a $1.3 billion (17%) increase in total consumer and a $53 million (1%) increase in commercial real estate lending, which was partially offset by a $253 million (3%) decrease in commercial and business lending. See section Loans for additional information on the changes in the loan portfolio and see section Credit Risk for discussion about credit risk management for each loan type.

~~Net charge offs of $56~~Total nonaccrual loans decreased $65 million for the first nine months of ~~2016 increased $33~~2017 and decreased $79 million from ~~the comparable period in 2015,~~September 30, 2016, primarily due to ~~the charge off of three large~~migration in general commercial related credits and oil and gas related credits, respectively. See also Note 7 Loans, of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.

Potential problem loans decreased $92 million from December 31, 2016 and decreased $182 million from September 30, 2016, primarily due to improvements in general commercial related credits and migration in oil and gas related credits, respectively. See Table 9, for additional information on the changes in potential problem loans.

Net charge offs decreased $27 million from the first nine months of 2016, primarily due to decrease in the charge offs of oil and gas credits. See ~~Tables~~Table 10 and Table 11 for additional information regarding the activity in the allowance for loan losses.

Total loans increased $1.1 billion (6%) during the first nine months of 2016, including a $505 million (7%) increase in commercial and business lending, a $448 million (10%) increase in commercial real estate lending, and a $176 million (2%) increase in total consumer. Compared to September 30, 2015, total loans increased $1.3 billion (7%), including a $537 million (12%) increase in commercial real estate lending, a $519 million (7%) increase in commercial and business lending and a $263 million (4%) increase in total consumer. See section “Loans” for additional information on the changes in the loan portfolio and see section “Credit Risk” for discussion about credit risk management for each loan type.

Total nonaccrual loans increased $112 million from year-end 2015 primarily due to the risk migration of oil and gas related credits. Nonaccrual loans increased $142 million from September 30, 2015, also principally related to the risk

migration within the oil and gas loan portfolio. See also Note 7, “Loans,” of the notes to consolidated financial statements and section “Nonaccrual Loans, Potential Problem Loans, and Other Real Estate Owned” for additional disclosures on the changes in asset quality.

Potential problem loans increased $139 million from December 31, 2015 and increased $177 million from September 30, 2015, primarily due to the risk migration on general commercial and oil and gas related credits. See Table 9 for additional information on the changes in potential problem loans.

The allowance for loan losses attributable to oil and gas related credits (included within the commercial and industrial allowance for loan losses) was ~~$38~~$30 million at September 30, ~~2016,~~2017, compared to ~~$42~~$38 million at both December 31, ~~2015~~2016 and ~~$29 million at~~ September 30, ~~2015.~~2016. See also Oil and gas lending ~~with~~within the ~~"Credit Risk"~~Credit Risk section for additional ~~information.~~

~~The allowance for unfunded commitments of~~ ~~$28 million~~ ~~increased $4 million during the first nine months of 2016, driven by risk rating migration and new volumes.~~

disclosure.

Deposits and Customer Funding

~~TABLE 12:~~Table 12 Period End Deposit and Customer Funding Composition


($ in Thousands)	September 30, 2016				June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Noninterest-bearing demand	$	5,337,677	24	%	$	5,039,336	25	%	$	5,272,685	26	%	$	5,562,466	27	%	$	4,657,261	23	%	$	5,177,734	23	%	$	5,038,162	23	%	$	5,338,212	25	%	$	5,392,208	25	%	$	5,337,677	24	%
Savings	1,441,187		7	%	1,451,801		7	%	1,426,951		7	%	1,334,420		6	%	1,346,407		6	%	1,544,037		7	%	1,552,820		7	%	1,530,155		7	%	1,431,494		7	%	1,441,187		7	%
Interest-bearing demand	4,548,390		21	%	3,789,138		19	%	3,698,941		18	%	3,445,000		17	%	3,416,429		17	%	4,990,891		22	%	3,858,739		18	%	4,736,236		22	%	4,687,656		21	%	4,548,390		21	%
Money market	8,894,357		41	%	8,448,543		42	%	8,718,841		42	%	9,102,977		43	%	9,516,503		46	%	8,299,512		37	%	9,228,129		43	%	8,608,523		39	%	8,770,963		40	%	8,894,357		41	%
Brokered CDs	44,373		—	%	46,268		—	%	41,440		—	%	42,443		—	%	42,689		—	%	3,554		—	%	131,184		1	%	54,993		—	%	52,725		—	%	44,373		—	%
Other time	1,481,728		7	%	1,517,764		7	%	1,526,602		7	%	1,520,359		7	%	1,579,106		8	%	2,317,723		11	%	1,809,146		8	%	1,559,916		7	%	1,553,402		7	%	1,481,728		7	%
Total deposits	$	21,747,712	100	%	$	20,292,850	100	%	$	20,685,460	100	%	$	21,007,665	100	%	$	20,558,395	100	%	$	22,333,451	100	%	$	21,618,180	100	%	$	21,828,035	100	%	$	21,888,448	100	%	$	21,747,712	100	%
Customer funding(a)	477,607				464,880				508,262				383,568				524,630				255,975				262,318				326,823				300,197				477,607
Total deposits and customer funding	$	22,225,319			$	20,757,730			$	21,193,722			$	21,391,233			$	21,083,025			$	22,589,426			$	21,880,498			$	22,154,858			$	22,188,645			$	22,225,319
Network transaction deposits ~~(1)~~(b)	$	3,730,513			$	3,141,214			$	3,399,054			$	3,174,911			$	3,207,867			$	2,622,787			$	3,220,956			$	3,417,380			$	3,895,467			$	3,730,513
Total deposits and customer funding, excluding Brokered CDs and network transaction deposits	$	18,450,433			$	17,570,248			$	17,753,228			$	18,173,879			$	17,832,469
Net deposits and customer funding(total deposits and customer funding, excluding Brokered CDs and network transaction deposits)																					$	19,963,085			$	18,528,358			$	18,682,485			$	18,240,453			$	18,450,433
Time deposits of more than $250,000	$	149,214			$	151,133			$	144,294			$	127,120			$	169,146			$	1,009,097			$	477,043			$	244,641			$	234,537			$	149,214
(1) Included above in interest-bearing demand and money market.

(a) Repurchase sweep agreements with customers from deposit accounts.

(b) Included above in interest-bearing demand and money market.

Deposits are the Corporation’s largest source of funds.

Total deposits increased ~~$740~~$445 million ~~(4%~~(2%) from December 31, ~~2015, primarily due to an increase in interest-bearing demand deposits. Total deposits~~2016, and increased ~~$1.2 billion (6%~~$586 million (3%) from September 30, ~~2015, primarily due to an increase in noninterest-bearing and interest-bearing demand deposits.~~2016.

Non-maturity ~~deposits, which excludes brokered CDs~~deposit accounts, comprised of savings, money market, and ~~other time deposits,~~demand (both interest and noninterest-bearing demand) accounts accounted for ~~93%~~90% of our total deposits at September 30, ~~2016.~~2017.

Included in the above amounts were ~~$3.7~~$2.6 billion of network deposits, primarily sourced from other financial institutions and intermediaries. These represented ~~17%~~12% of our total deposits at September 30, ~~2016.~~2017.

Other time deposits increased $764 million (49%) from December 31, 2016, primarily due to an increase to CDs issued to public entities.

Liquidity

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

The Corporation performs dynamic scenario analysis in accordance with industry best practices. Measures have been established to ensure the Corporation has sufficient high quality short-term liquidity to meet cash flow requirements under stressed scenarios. In addition the Corporation also reviews static measures such as deposit funding as a percent of total assets and liquid asset levels. Strong capital ratios, credit quality, and core earnings are also essential to maintaining cost effective access to wholesale funding markets. At September 30, ~~2016,~~2017, the Corporation was in compliance with its internal liquidity objectives and has sufficient asset-based liquidity to meet its obligations under a stressed scenario.

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

Investment securities are an important tool to the Corporation’s liquidity objective, and can be pledged or sold to enhance liquidity, if necessary. See also Note 6 ~~“Investment~~Investment Securities” of the notes to consolidated financial statements for additional information on the Corporation's investment securities portfolio, including investment securities pledged.

The Bank pledges eligible loans to both the Federal Reserve Bank and the FHLB as collateral to establish lines of credit and borrow from these entities. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances against the collateral. ~~The~~Also, the collateral is ~~also~~ used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Bank. As of September 30, ~~2016,~~2017, the Bank had ~~$2.8~~$2.6 billion available for future advances. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of September 30, ~~2016,~~2017, the Bank had ~~$1.7~~$2.2 billion available for discount window borrowings.

The Parent Company has a $200 million commercial paper program, of which, ~~$91~~$68 million was outstanding as of September 30, ~~2016.~~2017.

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

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

The Parent Company also has filed a universal shelf registration statement with the SEC, under which the Parent Company may offer the following securities, either separately or in units: debt securities, preferred stock, depositary shares, common stock, and warrants.

The Bank may also issue institutional certificates of deposit, network transaction deposits, and brokered certificates of deposit.

Credit ratings relate to the Corporation’s ability to issue debt securities and the cost to borrow money, and should not be viewed as an indication of future stock performance or a recommendation to buy, sell, or hold securities. Adverse changes in these factors could result in a negative change in credit ratings and impact not only the ability to raise funds in the capital markets but also the cost of these funds. The credit ratings of the Parent Company and the Bank at September 30, ~~2016~~2017 are displayed below.

~~TABLE 13:~~Table 13 Credit Ratings



	Moody’s	S&P*&P^(a)
Bank short-term deposits	P-1	-
Bank long-term	A1	BBB+
Corporation short-term	P-2	-
Corporation long-term	Baa1	BBB
Outlook	Negative	Stable
* - Standard and Poor's

(a) Standard and Poor's.

For the nine months ended September 30, 2017, net cash provided by operating activities and financing activities was $316 million and $717 million, respectively, while investing activities used net cash of $1.2 billion, for a net decrease in cash and cash equivalents of $151 million since year-end 2016. At September 30, 2017, assets of $30.1 billion increased $925 million compared to year-end 2016. On the funding side, deposits of $22.3 billion increased by $445 million when compared to year-end 2016.

For the nine months ended September 30, 2016, net cash provided by operating and financing activities was ~~$408~~$416 million and $1.2 billion, respectively, while investing activities used net cash of $1.5 billion, for a net increase in cash and cash equivalents of $137 million since year-end 2015. During the first nine months of 2016, assets increased to $29.2 billion (up $1.4 billion or 5%) compared to year-end 2015, primarily due to an increase in loans. On the funding side, deposits and short-term funding increased $740 million and $406 million, respectively. ~~The Corporation also repurchased $20 million of common stock and paid cash dividends to stockholders of $56 million during the first nine months of 2016.~~

For the nine months ended September 30, 2015, net cash provided by operating and financing activities was $224 million and $427 million, respectively, while investing activities used net cash of $1.3 billion, for a net decrease in cash and cash equivalents

of $622 million since year-end 2014. During the first nine months of 2015, loans and investment securities increased $931 million and $207 million, respectively. On the funding side, deposits increased $1.8 billion, while long-term funding decreased $1.2 billion. The Corporation also repurchased $93 million of common stock and paid cash dividends to stockholders of $51 million during the first nine months of 2015.

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 Asset / Liability Committee (“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 is 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 our risk appetite for interest rate risk over both short-term and long-term horizons. No limit breaches occurred during the first nine months of ~~2016.~~2017.

The major sources of our 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 net interest income ~~("NII")~~(NII) at risk, interest rate sensitive earnings at risk ~~("EAR")~~(EAR), and market value of equity ~~("MVE")~~(MVE) at risk. These measures show that our interest rate risk profile was slightly asset sensitive at September 30, ~~2016.~~2017.

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 ~~2015~~2016 Annual Report on Form 10-K.

The sensitivity analysis included below is measured as a percentage change in NII and EAR due to instantaneous moves in benchmark interest rates from a baseline scenario. We evaluate the sensitivity using: 1) a dynamic forecast incorporating expected growth in the balance sheet, ~~("Dynamic Forecast"),~~ and 2) a static forecast where the current balance sheet is held ~~constant ("Static Forecast").~~constant.

~~TABLE 14:~~Table 14 Estimated % Change in Net Interest Income Over 12 Months


	Estimated % Change in Rate Sensitive Earnings at Risk Over 12 Months								Estimated % Change in Rate Sensitive Earnings at Risk (EAR) Over 12 Months
	Dynamic Forecast September 30, 2016		Static Forecast September 30, 2016		Dynamic Forecast December 31, 2015		Static Forecast December 31, 2015		Dynamic Forecast September 30, 2017		Static Forecast September 30, 2017		Dynamic Forecast December 31, 2016		Static Forecast December 31, 2016
Instantaneous Rate Change
100 bp increase in interest rates	1.9	%	2.0	%	1.6	%	2.1	%	2.3	%	2.4	%	1.4	%	1.5	%
200 bp increase in interest rates	3.6	%	3.8	%	3.0	%	4.4	%	4.2	%	4.5	%	2.7	%	2.9	%

At September 30, ~~2016,~~2017, the MVE profile indicates a decline in net balance sheet value due to instantaneous upward changes in rates.

~~TABLE 15:~~Table 15 Market Value of Equity Sensitivity


	September 30, 2016		December 31, 2015		September 30, 2017		December 31, 2016
Instantaneous Rate Change
100 bp increase in interest rates	(1.9	)%	(1.7	)%	(2.9	)%	(2.9	)%
200 bp increase in interest rates	(4.6	)%	(3.7	)%	(6.3	)%	(6.0	)%

While an instantaneous and severe shift in interest rates was used in this analysis to provide an estimate of exposure under an extremely adverse scenario, the Corporation believes that a gradual shift in interest rates would have a much more modest impact. 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~~changing product spreads that could mitigate the adverse impact of changes in interest rates.

The above NII, 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

~~TABLE 16:~~Table 16 Contractual Obligations and Other Commitments


September 30, 2016	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
September 30, 2017											One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
	($ in Thousands)										($ in Thousands)
Time deposits	$	821,101	$	458,912	$	241,128	$	4,960	$	1,526,101	$	1,629,556	$	539,910	$	147,989	$	3,822	$	2,321,277
Short-term funding	1,240,093		—		—		—		1,240,093		1,064,617		—		—		—		1,064,617
Long-term funding	10		1,865,021		648,990		247,614		2,761,635		250,000		1,999,377		150,000		747,908		3,147,285
Operating leases	10,417		18,635		15,931		17,968		62,951		9,711		18,780		15,469		20,940		64,900
Commitments to extend credit	4,017,722		2,881,736		1,321,510		149,462		8,370,430		4,089,838		2,753,203		1,344,723		169,077		8,356,841
Total	$	6,089,343	$	5,224,304	$	2,227,559	$	420,004	$	13,961,210	$	7,043,722	$	5,311,270	$	1,658,181	$	941,747	$	14,954,920

The Corporation utilizes a variety of financial instruments in the normal course of business to meet the financial needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments include lending-related commitments and derivative instruments. A discussion of the Corporation’s derivative instruments at September 30, ~~2016,~~2017, is included in Note 10, ~~“Derivative~~Derivative and Hedging Activities,” of the notes to consolidated financial statements. A discussion of the Corporation’s lending-related commitments is included in Note 12, ~~“Commitments,~~Commitments, Off-Balance Sheet Arrangements, ~~and~~ Legal Proceedings” and Regulatory Matters, of the notes to consolidated financial statements. See also Note 9, ~~“Short~~Short and Long-Term Funding,” of the notes to consolidated financial statements for additional information on the Corporation’s short-term and long-term funding.

Table 16 summarizes significant contractual obligations and other commitments at September 30, ~~2016,~~2017, at those amounts contractually due to the recipient, including any premiums or discounts, hedge basis adjustments, or other similar carrying value adjustments.

Capital

~~TABLE 17:~~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 condition in markets served, and strength of management. At September 30, 2017, the capital ratios of the Corporation and its banking subsidiary were in excess of regulatory minimum requirements. The Corporation’s capital ratios are summarized in Table 17.

Table 17 Capital Ratios



	3Q17			2Q17			1Q17			4Q16			3Q16
	($ in Thousands)
Risk-based Capital^(a)
Common equity Tier 1	$	2,144,325		$	2,130,238		$	2,085,309		$	2,032,587		$	1,983,770
Tier 1 capital	2,304,037			2,289,831			2,244,863			2,191,798			2,142,779
Total capital	2,823,097			2,808,049			2,757,310			2,706,760			2,656,648
Total risk-weighted assets	21,657,286			21,590,134			21,128,672			21,340,951			21,264,972
Common equity Tier 1 capital ratio	9.90		%	9.87		%	9.87		%	9.52		%	9.33		%
Tier 1 capital ratio	10.64		%	10.61		%	10.62		%	10.27		%	10.08		%
Total capital ratio	13.04		%	13.01		%	13.05		%	12.68		%	12.49		%
Tier 1 leverage ratio	7.93		%	8.09		%	8.05		%	7.83		%	7.64		%
Selected Equity and Performance Ratios
Total stockholders’ equity / assets	10.66		%	10.72		%	10.80		%	10.61		%	10.62		%
Dividend payout ratio^(b)	29.27		%	33.33		%	33.33		%	34.29		%	32.35		%

3Q16 2Q16 1Q16 4Q15 3Q15
($ in Thousands)
Risk-based Capital (1)
Common equity Tier 1 $ 1,983,770
$ 1,940,704
$ 1,902,593
$ 1,897,944
$ 1,865,289
Tier 1 capital 2,142,779
2,059,661
2,021,125
2,016,861
1,983,612
Total capital 2,656,648
2,573,941
2,526,653
2,515,861
2,481,661
Total risk-weighted assets 21,264,972
21,168,161
20,453,744
19,929,963
19,866,379
Common equity Tier 1 capital ratio 9.33 % 9.17 % 9.30 % 9.52 % 9.39 %
Tier 1 capital ratio 10.08 % 9.73 % 9.88 % 10.12 % 9.98 %
Total capital ratio 12.49 % 12.16 % 12.35 % 12.62 % 12.49 %
Tier 1 leverage ratio 7.64 % 7.43 % 7.55 % 7.60 % 7.53 %
Selected Equity and Performance Ratios
Stockholders’ equity / assets 10.62 % 10.43 % 10.58 % 10.60 % 10.76 %
Return on average assets 0.74 % 0.69 % 0.62 % 0.62 % 0.72 %

~~(1)~~(a)

The Federal Reserve establishes regulatory capital ~~adequacy~~ requirements, including well-capitalized standards for the Corporation. The ~~regulatory capital requirements effective for the~~ Corporation ~~follow~~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 our capital with the capital of other financial services companies. See Table 18 for a reconciliation of common equity Tier 1 and average common equity Tier 1.


(b)	Ratio is based upon basic earnings per common share.

~~TABLE 18:~~

Non-GAAP Measures

Table 18 Non-GAAP Measures

YTD
Sep 2016 YTD
Sep 2015 3Q16 2Q16 1Q16 4Q15 3Q15
( $ in Thousands)
Selected Equity and Performance Ratios (1) (2)
Tangible common equity / tangible assets 6.92 % 6.85 % 6.89 % 6.85 % 6.97 %
Return on average equity 6.47 % 6.76 % 7.03 % 6.19 % 5.76 % 5.77 % 6.72 %
Return on average tangible common equity 9.83 % 10.38 % 10.68 % 10.04 % 8.72 % 8.78 % 10.35 %
Return on average Common equity Tier 1 9.66 % 10.32 % 10.52 % 9.86 % 8.55 % 8.60 % 10.20 %
Tangible Common Equity Reconciliation (1)
Common equity $ 2,937,186
$ 2,909,946
$ 2,862,151
$ 2,815,867
$ 2,832,418
Goodwill and other intangible assets, net (987,853 ) (988,378 ) (988,917 ) (985,302 ) (985,822 )
Tangible common equity $ 1,949,333
$ 1,921,568
$ 1,873,234
$ 1,830,565
$ 1,846,596
Tangible Assets Reconciliation (1)
Total assets $ 29,152,764
$ 29,038,699
$ 28,178,867
$ 27,711,835
$ 27,463,766
Goodwill and other intangible assets, net (987,853 ) (988,378 ) (988,917 ) (985,302 ) (985,822 )
Tangible assets $ 28,164,911
$ 28,050,321
$ 27,189,950
$ 26,726,533
$ 26,477,944
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation (1) (2)
Common equity $ 2,876,407
$ 2,792,371
$ 2,910,691
$ 2,868,772
$ 2,849,382
$ 2,819,267
$ 2,797,630
Goodwill and other intangible assets, net (988,664 ) (981,392 ) (988,171 ) (988,699 ) (989,127 ) (985,605 ) (986,360 )
Tangible common equity 1,887,743
1,810,979
1,922,520
1,880,073
1,860,255
1,833,662
1,811,270
Less: Accumulated other comprehensive income / loss 678
(13,550 ) (2,616 ) 1,365
3,320
4,266
(6,601 )
Less: Deferred tax assets/deferred tax liabilities, net 32,474
23,183
32,712
31,803
32,906
34,199
32,767
Average common equity Tier 1 $ 1,920,895
$ 1,820,612
$ 1,952,616
$ 1,913,241
$ 1,896,481
$ 1,872,127
$ 1,837,436
Efficiency Ratio Reconciliation (3)
Federal Reserve efficiency ratio 67.51 % 69.78 % 64.40 % 69.34 % 69.01 % 70.49 % 68.85 %
Fully tax-equivalent adjustment (1.32 )% (1.38 )% (1.21 )% (1.36 )% (1.37 )% (1.52 )% (1.38 )%
Other intangible amortization (0.20 )% (0.34 )% (0.19 )% (0.21 )% (0.20 )% (0.21 )% (0.36 )%
Fully tax-equivalent efficiency ratio 65.99 % 68.06 % 63.00 % 67.77 % 67.44 % 68.76 % 67.11 %



	YTD						Quarter Ended
	Sep 2017			Sep 2016			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
	($ in Thousands)
Selected Equity and Performance Ratios^(a)(b)
Tangible common equity / tangible assets							7.08		%	7.11		%	7.10		%	6.91		%	6.92		%
Return on average equity	7.59		%	6.47		%	8.10		%	7.35		%	7.31		%	7.07		%	7.03		%
Return on average tangible common equity	11.45		%	9.83		%	12.20		%	11.06		%	11.07		%	10.78		%	10.68		%
Return on average Common equity Tier 1	11.00		%	9.66		%	11.73		%	10.63		%	10.61		%	10.45		%	10.52		%
Return on average assets	0.82		%	0.68		%	0.86		%	0.80		%	0.79		%	0.75		%	0.74		%
Average stockholders' equity / average assets	10.77		%	10.58		%	10.63		%	10.84		%	10.85		%	10.67		%	10.52		%
Tangible Common Equity and Common Equity Tier 1 Reconciliation^(a)(b)
Common equity							$	3,043,672		$	3,031,573		$	2,984,865		$	2,931,383		$	2,937,186
Goodwill and other intangible assets, net							(986,086		)	(986,536		)	(987,032		)	(987,328		)	(987,853		)
Tangible common equity							$	2,057,586		$	2,045,037		$	1,997,833		$	1,944,055		$	1,949,333
Less: Accumulated other comprehensive income / loss							54,288			53,470			56,344			54,679			1,254
Less: Deferred tax assets/deferred tax liabilities, net							32,451			31,731			31,132			33,853			33,183
Common equity Tier 1							$	2,144,325		$	2,130,238		$	2,085,309		$	2,032,587		$	1,983,770
Tangible Assets Reconciliation^(a)
Total assets							$	30,064,547		$	29,769,025		$	29,109,857		$	29,139,315		$	29,152,764
Goodwill and other intangible assets, net							(986,086		)	(986,536		)	(987,032		)	(987,328		)	(987,853		)
Tangible assets							$	29,078,461		$	28,782,489		$	28,122,825		$	28,151,987		$	28,164,911
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation^(a)(b)
Common equity	$	2,998,088		$	2,876,407		$	3,024,918		$	3,005,209		$	2,963,462		$	2,924,831		$	2,910,691
Goodwill and other intangible assets, net	(986,765		)	(988,664		)	(986,342		)	(986,826		)	(987,135		)	(987,640		)	(988,171		)
Tangible common equity	2,011,323			1,887,743			2,038,576			2,018,383			1,976,327			1,937,191			1,922,520
Less: Accumulated other comprehensive income / loss	51,163			678			49,164			50,148			54,234			27,922			(2,616		)
Less: Deferred tax assets/deferred tax liabilities, net	31,476			32,474			31,935			31,294			31,188			33,340			32,712
Average common equity Tier 1	$	2,093,962		$	1,920,895		$	2,119,675		$	2,099,825		$	2,061,749		$	1,998,453		$	1,952,616
Efficiency Ratio Reconciliation^(c)
Federal Reserve efficiency ratio	65.64		%	67.51		%	63.92		%	66.69		%	66.39		%	65.35		%	64.40		%
Fully tax-equivalent adjustment	(1.27		)%	(1.32		)%	(1.21		)%	(1.30		)%	(1.30		)%	(1.25		)%	(1.21		)%
Other intangible amortization	(0.18		)%	(0.20		)%	(0.16		)%	(0.18		)%	(0.20		)%	(0.20		)%	(0.19		)%
Fully tax-equivalent efficiency ratio	64.19		%	65.99		%	62.55		%	65.21		%	64.89		%	63.90		%	63.00		%


~~(1)~~(a)	The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net, which is a non-GAAP financial measure. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.

~~(2)~~(b)

The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The ~~regulatory capital requirements effective for the~~ Corporation ~~follow~~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 our capital with the capital of other financial services companies.

~~(3)~~(c)

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. Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.

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 condition in markets served, and strength of management. At September 30, 2016, the capital ratios of the Corporation and its banking subsidiary were in excess of regulatory minimum requirements. The Corporation’s capital ratios are summarized in Table 17.

During the first nine months of 2016, the Corporation repurchased over 1 million shares of common stock for $20 million or an average cost of $17.10 per share. On September 15, 2016, the Corporation completed the issuance of 4 million depositary shares each representing a 1/40th interest in a share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series D, for net proceeds of $97 million. In addition, on September 15, 2016, the Corporation redeemed all remaining depositary shares (2.4 million shares) each representing a 1/40th interest in a share of the 8.00% Non-Cumulative Perpetual Preferred Series B Stock for $58 million. See Part II, Item 2, ~~"Unregistered~~Unregistered Sales of Equity Securities and Use of Proceeds," for additional information on the shares repurchased during the third quarter of 2016. The repurchase of shares will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.2017.

Sequential Quarter Results

The Corporation reported net income of ~~$54~~$65 million for the third quarter of ~~2016,~~2017, compared to net income of ~~$49~~$58 million for the second quarter of ~~2016.~~2017. Net income available to common equity was ~~$52~~$63 million for the third quarter of ~~2016~~2017 or net income of ~~$0.34~~$0.41 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the second quarter of ~~2016,~~2017, was ~~$47~~$56 million, or net income of ~~$0.31~~$0.36 for both basic and diluted earnings per common share, respectively (see Table 1).

Fully tax-equivalent net interest income for the third quarter of 2017 was $195 million, $6 million higher from the second quarter of 2017. The net interest margin in the third quarter of 2017 was up 1 bp, to 2.84%. Average earning assets increased $715 million to $27.5 billion in the third quarter of 2017, with average loans up $377 million, while average investments and other short-term investments were up $338 million. On the funding side, average interest-bearing deposits were up $818 million, while noninterest-bearing demand deposits were up $100 million. Average short and long-term funding decreased $210 million (see Table 2).

The provision for credit losses was $5 million for the third quarter of 2017, down $7 million from the second quarter of 2017 (see Table 10). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses.

Noninterest income for the third quarter of 2017 increased $3 million (4%) to $86 million versus the second quarter of 2017. Fee-based revenue decreased $1 million (2%) from the second quarter of 2017, primarily due to card-based and other nondeposit fees. Mortgage banking, net, was up $2 million (31%) from the second quarter of 2017 as the Corporation resumed its historical practice of originating loans for sale in the secondary market. BOLI income was $7 million, an increase of $3 million (69%) from the second quarter of 2017, primarily due to increased policy payouts during the third quarter of 2017. (see Table 3).

Noninterest expense increased $1 million (1%) to $177 million. Personnel expense was $106 million for the third quarter of 2017, up $1 million (1%) from the second quarter of 2017. Occupancy expense decreased $1 million (4%) from the second quarter of 2017, primarily driven by the benefits from ongoing internal consolidation efforts. Legal and professional fees were $6 million, up $1 million (9%) from the second quarter of 2017, primarily driven by higher consulting fees related to the pending acquisition of Bank Mutual. All remaining noninterest expense categories on a combined basis were virtually flat compared to the second quarter of 2017 (see Table 4).

For the third quarter of 2017, the Corporation recognized income tax expense of $29 million, compared to income tax expense of $20 million for the second quarter of 2017. The effective tax rate was 30.55% and 25.58% for the third quarter of 2017 and the second quarter of 2017, respectively. See Income Taxes section for a detailed discussion on income taxes.

Comparable Quarter Results

The Corporation reported net income of $65 million for the third quarter of 2017, compared to $54 million for the third quarter of 2016. Net income available to common equity was $63 million for the third quarter of 2017, or net income of $0.41 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the third quarter of 2016, was $52 million, or net income of $0.34 for both basic and diluted earnings per common share (see Table 1).

Fully tax-equivalent net interest income for the third quarter of ~~2016~~2017 was ~~$184~~$195 million, $2 million higher than the second quarter of 2016. The Federal funds target rate remained constant at 0.50%. The net interest margin was 2.77% for the third quarter of 2016, down 4 bp from 2.81% for the second quarter of 2016. Average earning assets increased $466 million to $26.4 billion in the third quarter of 2016, with average loans up $411 million. On the funding side, average interest-bearing deposits were up $923 million (primarily due to an increase in interest-bearing demand deposits and money market deposits) (see Table 2) while average short and long-term funding was down $700 million (primarily due to the reduction in short-term FHLB advances).

The provision for credit losses was $21 million for the third quarter of 2016, up $7 million from the second quarter of 2016 (see Table 10). See discussion under sections, “Provision for Credit Losses,” “Nonaccrual Loans, Potential Problem Loans, and Other Real Estate Owned,” and “Allowance for Credit Losses.”

Noninterest income for the third quarter of 2016 increased $13 million (16%) to $95 million versus the second quarter of 2016. Fee-based revenue decreased $1 million (2%) from the second quarter of 2016, primarily due to a decrease in insurance commissions. Net mortgage banking income increased to $18 million in third quarter of 2016 versus $4 million in second quarter of 2016, primarily due to gross gains of $9 million on portfolio loan sales during the third quarter of 2016. Capital market fees were $7 million for the third quarter of 2016, an increase of $3 million compared to the second quarter of 2016, due to higher syndication and interest rate-related derivative activity (see Table 3).

Noninterest expense increased $1 million (1%) to $175 million for the third quarter of 2016. Personnel expense was $104 million for the third quarter of 2016, up $2 million (2%) from the second quarter of 2016, and included $1 million of severance. Occupancy expense increased $2 million (16%) primarily due to a lease termination charge related to planned consolidation of office space in Chicago. All remaining noninterest expense categories on a combined basis decreased $3 million compared to second quarter of 2016 (see Table 4).

For the third quarter of 2016, the Corporation recognized income tax expense of $24 million, compared to income tax expense of $21 million for second quarter of 2016. The effective tax rate was 30.52% and 30.39% for the third quarter of 2016 and the second quarter of 2016, respectively.

~~Comparable Third Quarter Results~~

The Corporation reported net income of $54 million for the third quarter of 2016, compared to $49 million for the third quarter of 2015. Net income available to common equity was $52 million for the third quarter of 2016, or net income of $0.34 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the third quarter of 2015, was $47 million, or net income of $0.31 for both basic and diluted earnings per common share (see Table 1).

~~Fully tax-equivalent net interest income for the third quarter of 2016 was $184 million, $8~~$12 million higher than the third quarter of ~~2015. The Federal funds target rate was 0.50% in third quarter of 2016 compared to 0.25% for third quarter of 2015.~~2016. The net interest margin between the comparable quarters was ~~down 5~~up 7 bp, to ~~2.77%~~2.84%, in the third quarter of ~~2016.~~2017. Average earning assets increased ~~$1.6~~$1.0 billion to ~~$26.4~~$27.5 billion in the third quarter of ~~2016,~~2017, with average loans up ~~$1.6 billion~~$846 million (predominantly due to increases in ~~commercial and~~ residential mortgage loans). On the funding side, average interest-bearing deposits increased ~~$522 million and~~$1.2 billion, while noninterest-bearing demand deposits ~~were up $588~~decreased $170 million from the third quarter of ~~2015.~~2016. Average short and long-term funding ~~increased $411~~decreased $183 million ~~(primarily FHLB advances, which was partially offset by the early redemption of $430 million of senior notes)~~ (see Table 2).

The provision for credit losses was ~~$21~~$5 million for the third quarter of ~~2016, up $13~~2017, down $16 million from the third quarter of ~~2015~~2016 (see Table 10). See discussion under ~~sections, “Provision~~sections: Provision for Credit Losses,~~” “Nonaccrual Loans, Potential Problem Loans,~~ Nonperforming Assets, and ~~Other Real Estate Owned,” and “Allowance~~Allowance for Credit Losses.”

Noninterest income for the third quarter of ~~2016 increased $15~~2017 of $86 million ~~(19%) to $95 million versus the third quarter of 2015. Net mortgage banking income increased $12 million, predominantly due to gross gains of~~was down $9 million ~~on portfolio loan sales during the~~(10%) compared to third quarter of 2016. ~~Fee-based revenue increased $2 million primarily in insurance commissions. Capital market fees were $7 million~~Net mortgage banking income for the third quarter of ~~2016, an increase of $5~~2017 was down $12 million (64%) compared to the third quarter of ~~2015,~~2016, primarily driven by portfolio loan sales in the third quarter of 2016. Capital market fees, net, was down $2 million (34%), primarily driven by decreased syndication fees compared to the third quarter of 2016. BOLI income increased $3 million (100%) from the third quarter of 2016, primarily due to ~~higher syndication and interest rate-related derivative activity~~increased policy payouts during the third quarter of 2017 (see Table 3).

On a comparable quarter basis, noninterest expense increased $4$2 million ~~(2%~~(1%) to ~~$175~~$177 million for the third quarter of ~~2016.~~2017. Personnel expense was ~~$104~~$106 million for the third quarter of ~~2016,~~2017, up $3$2 million ~~(3%~~(2%) from the third quarter of ~~2015. FDIC~~2016, primarily driven by an increase in health insurance costs and incentive plan estimates. Occupancy expense decreased $3 million (20%) compared to the third quarter of 2016, primarily driven by the benefits from ongoing internal consolidation efforts. Technology

expense increased $1 million (7%) to $15 million in the third quarter of 2017, driven by investments in technology solutions that meet evolving customer needs and improve operational efficiency. Business development and advertising expense was $9$8 million, upan increase of $3 million (48%) from the third quarter of ~~2015, reflecting growth in criticized~~2016, primarily driven by the Corporation's expanded fall advertising campaigns. Legal and ~~risk-weighted assets.~~professional fees increased $1 million (30%) from the third quarter of 2016, primarily due to the pending acquisition of Bank Mutual. All remaining noninterest expense categories on a combined were down $2 million (6%) compared to third quarter of ~~2015~~2016 (see Table 4).

The Corporation recognized income tax expense of ~~$24~~$29 million for the third quarter of ~~2016,~~2017, compared to income tax expense of ~~$22~~$24 million for third quarter of ~~2015.~~2016. The effective tax rate was ~~30.52%~~30.55% and ~~30.36%~~30.52% for the third quarter of 2017 and 2016, ~~and 2015,~~ respectively. See Income Taxes section for a detailed discussion on income taxes.

Segment Review

As discussed in Note 15 ~~“Segment~~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.

FTP is an important tool for managing the Corporation’s balance sheet structure and measuring risk-adjusted profitability. By appropriately allocating the cost of funding and contingent liquidity to business units, the FTP process improves product pricing, which influences the volume and terms of new business and helps to optimize the risk / reward profile of the balance sheet. This process helps align the Corporation’s funding and contingent liquidity risk with its risk appetite and complements broader liquidity and interest rate risk management programs. FTP methodologies are designed to promote more resilient, sustainable business models and centralize the management of funding and contingent liquidity risks. Through FTP, the Corporation transfers these risks to a central management function that can take advantage of natural off-sets, centralized hedging activities, and a broader view of these risks across business units.

Year to Date Segment Review

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. The Corporate and Commercial Specialty segment had net income of $106 million for the first nine months of 2017, up $19 million, compared to $87 million for the first nine months of ~~2016, up $2~~2016. Segment revenue increased $30 million ~~compared~~ to ~~$85~~$308 million for the first nine months of ~~2015. Segment revenue increased $12 million~~2017, compared to $278 ~~million for the first~~

~~nine months of 2016 compared to $266~~ million for the first nine months of ~~2015,~~2016, primarily due to ~~higher net interest income from the~~ growth in average loan balances and ~~the~~ interest rate ~~increase~~increases at the end of ~~2015.~~2016 and in 2017. The credit provision ~~increased $9~~decreased $6 million to ~~$39~~$33 million during the first nine months of ~~2016~~2017 due to ~~loan growth~~the migration of general commercial related credits and ~~a decrease in loan credit quality in the~~ oil and gas ~~portfolio.~~related credits. Average loan balances were ~~$10.1~~$10.8 billion for the first nine months of ~~2016,~~2017, up ~~$725~~$749 million from the first nine months of ~~2015.~~2016. Average deposit balances were ~~$5.9~~$6.8 billion for the first nine months of ~~2016,~~2017, up ~~$176~~$852 million from the first nine months of ~~2015.~~2016. Average allocated capital increased ~~$97~~$58 million to $1.1 billion for the first nine months of ~~2016~~2017, reflecting the increase in the segment’s loan balances.

The Community, Consumer, and Business segment consists of lending and deposit solutions to individuals and small to mid-sized businesses and also provides a variety of investment and fiduciary products and services. The Community, Consumer, and Business segment had net income of ~~$50~~$60 million for the first nine months of ~~2016, relatively unchanged~~2017, up $10 million from the first nine months of ~~2015.~~2016. Segment revenue increased $4$3 million to ~~$465~~$469 million for the first nine months of ~~2016,~~2017, primarily due to ~~a $7 million increase~~growth in ~~insurance commissions, which was partially offset by a $2 million decrease in trust service fees.~~average loan balances and interest rate increases. Noninterest expense ~~increased $5~~decreased $9 million to ~~$371~~$362 million for the first nine months of ~~2016,~~2017, primarily due to ~~a $3 million increase~~decreases in ~~legal and professional fees.~~personnel related expenses. Average loan balances were ~~$9.3~~$9.4 billion for the first nine months of ~~2016,~~2017, up ~~$567~~$129 million from the first nine months of ~~2015.~~2016. Average deposits were ~~$11.3~~$11.6 billion for the first nine months of ~~2016,~~2017, up ~~$534~~$248 million from the first nine months of ~~2015.~~2016. Average allocated capital decreased $9$47 million to ~~$631~~$585 million for the first nine months of ~~2016.~~2017.

The Risk Management and Shared Services segment had net income of $9$14 million for the first nine months of ~~2016, down $2~~2017, up $5 million compared to ~~$11 million for~~ the first nine months of ~~2015.~~2016. Net interest income ~~increased~~decreased $14 million, primarily due to ~~an increase~~recent changes in the ~~volume of funding provided to the Corporate and Commercial Specialty segment (as loan growth exceeded deposit growth within this segment),~~rate environment, as well as ~~a higher~~an adjustment of FTP rate assumptions that increased the interest ~~rate charged on this funding due~~income allocated to the lines of business with an offsetting decrease in the interest ~~rate increase at~~income allocated to the ~~end of 2015.~~Risk Management and Shared Services segment. Noninterest income ~~increased $8~~decreased $5 million, primarily due to ~~an increase in proceeds from BOLI policy redemptions of $3~~$6 million ~~net gains~~gain on the ~~sale~~sales of ~~assets of $3 million~~FNMA and ~~net gains on~~FHLMC securities in the ~~sale of investment securities of $2 million.~~nine months ended September 30, 2016. The credit provision improved ~~$30~~$20 million. Average earning asset balances were ~~$6.5~~$6.6 billion for the first nine months of ~~2016,~~2017, up ~~$182~~$79 million from ~~an average balance of $6.3 billion for~~ the first nine months of ~~2015, primarily in investment securities.~~2016. Average deposits were $3.5 billion for the first nine months of ~~2016, up $386~~2017, down $45 million from the first nine months of ~~2015.~~2016. Average allocated capital increased to ~~$226~~$387 million for the first nine months of ~~2016.~~2017.

Comparable Quarter Segment Review

The Corporate and Commercial Specialty segment had net income of ~~$32~~$36 million for the third quarter of ~~2016,~~2017, up $5$4 million from the comparable quarter in ~~2015.~~2016. Segment revenue increased $7$8 million compared to third quarter of ~~2015,~~2016, primarily due to ~~higher net interest income from the~~ growth in average loan ~~balances.~~balances and interest rate increases at the end of 2016 and in 2017. The credit provision decreased $2 million to $9 million for the third quarter of 2017, due to the migration of general commercial related credits and oil and gas related credits. Average loan balances were ~~$10.4~~$10.9 billion for the third quarter of ~~2016,~~2017, up ~~$969~~$481 million from an average balance of ~~$9.5~~$10.4 billion for third quarter of ~~2015.~~2016. Average deposit balances were ~~$6.2~~$7.4 billion for the third quarter of ~~2016,~~2017, up ~~$183 million~~$1.2 billion from the comparable quarter of ~~2015.~~2016. Average allocated capital increased ~~$103~~$34 million to $1.1 billion for third quarter of ~~2016, reflecting the increase in the segment's loan balances.~~2017.

The Community, Consumer, and Business Banking segment had net income of ~~$21~~$22 million for the third quarter of ~~2016,~~2017, up $5$1 million compared to ~~$16 million for~~ third quarter of ~~2015.~~2016. Segment revenue ~~increased $13~~decreased $7 million to ~~$166~~$159 million for the third quarter of ~~2016,~~2017, primarily due to ~~gross gains of $9 million on portfolio loan sales during the third quarter of 2016.~~a decrease in net mortgage banking. Total noninterest expense for third quarter of ~~2016~~2017 was ~~$127~~$120 million, ~~up $5~~down $7 million from the comparable quarter of ~~2015.~~2016, primarily due to a decrease in personnel expense. Average loan balances were ~~$9.4~~$9.6 billion for the third quarter of ~~2016,~~2017, up ~~$496~~$189 million from the comparable quarter of ~~2015.~~2016. Average deposits were ~~$11.5~~$11.8 billion for the third quarter of ~~2016,~~2017, up ~~$557~~$262 million from average deposits of ~~$11.0~~$11.5 billion for the comparable quarter of ~~2015.~~2016. Average allocated capital decreased $45 million compared to the third quarter of 2016.

The Risk Management and Shared Services segment had ~~net income~~revenue of ~~$501,000 for~~$13 million in the third quarter of ~~2016, down $5 million from the comparable quarter in 2015. Net interest income increased $4 million primarily due to~~2017, an increase ~~in the volume~~ of funding provided to the Corporate and Commercial Specialty segment (as loan growth exceeded deposit growth within this segment), as well as a higher interest rate charged on this funding due to the interest rate increase at the end of 2015.The credit provision increased $13 million due to loan growth and a decrease in loan credit quality. Average earning asset balances were $6.6 billion for third quarter of 2016, up $137$1 million from the comparable quarter of ~~2015,~~2016. The increase in noninterest income was primarily due to $3 million increased proceeds from bank owned life insurance policy payouts, which was partially offset by decreased capital market fees of $1 million and ~~average~~the loss on sale of assets of $1 million from the comparable quarter of 2016. The credit provision decreased $13 million. Average deposits were ~~$3.7~~$3.3 billion for third quarter of ~~2016, up $370~~2017, down $396 million versus the comparable quarter of ~~2015.~~2016. Average allocated capital increased $178 million to $406 million for third quarter of 2017.

Critical Accounting Policies

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, goodwill impairment assessment, mortgage servicing rights valuation, and income taxes. A discussion of these policies can be found in the "Critical Accounting Policies" section in Management's Discussion and

Analysis of Financial Condition and Results of Operations included in the Corporation’s ~~2015~~2016 Annual Report on Form 10-K. There have been no changes in the Corporation's application of critical accounting policies since December 31, ~~2015. The mortgage servicing rights valuation has been included due to the continued impact of the low interest rate environment.~~

~~Mortgage Servicing Rights Valuation:~~ The fair value of the Corporation's mortgage servicing rights asset is important to the presentation of the consolidated financial statements since the mortgage servicing rights are carried on the consolidated balance sheet at the lower of amortized cost or estimated fair value. Mortgage servicing rights do not trade in an active open market with readily observable prices. As such, like other participants in the mortgage banking business, the Corporation relies on an independent valuation from a third party which uses a discounted cash flow model to estimate the fair value of its mortgage servicing rights. The use of a discounted cash flow model involves judgment, particularly of estimated prepayment speeds of underlying mortgages serviced and the overall level of interest rates. Loan type and note interest rate are the predominant risk characteristics of the underlying loans used to stratify capitalized mortgage servicing rights for purposes of measuring impairment. The Corporation periodically reviews the assumptions underlying the valuation of mortgage servicing rights. While the Corporation believes that the values produced by the discounted cash flow model are indicative of the fair value of its mortgage servicing rights portfolio, these values can change significantly depending upon key factors, such as the then current interest rate environment, estimated prepayment speeds of the underlying mortgages serviced, and other economic conditions. The proceeds that might be received should the Corporation actually consider a sale of some or all of the mortgage servicing rights portfolio could differ from the valuation amounts reported at any point in time.

To better understand the sensitivity of the impact of prepayment speeds and refinance rates on the value of the mortgage servicing rights asset at September 30, 2016, (holding all other factors unchanged), if refinance rates were to decrease 50 bp, the estimated value of the mortgage servicing rights asset would have been approximately $11 million (or 18%) lower. Conversely, if refinance rates were to increase 50 bp, the estimated value of the mortgage servicing rights asset would have been approximately $9 million (or 16%) higher. However, the Corporation's potential recovery recognition due to valuation improvement is limited to the balance of the mortgage servicing rights valuation reserve, which was approximately $3 million at September 30, 2016. The potential recovery recognition is constrained as the Corporation has elected to use the amortization method of accounting (rather than fair value measurement accounting). Under the amortization method, mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. Therefore, the mortgage servicing right asset may only be marked up to the extent of the previously recognized valuation reserve. The Corporation believes the mortgage servicing rights asset is properly recorded in the consolidated financial statements. See Note 8, "Goodwill and Other Intangible Assets," of the notes to consolidated financial statements and section "Noninterest Income."

Future Accounting Pronouncements

New accounting policies adopted by the Corporation are discussed in Note 3 ~~“New~~Summary of Significant Accounting ~~Pronouncements Adopted,”~~Policies, of the notes to consolidated financial statements. The expected impact of accounting pronouncements recently issued or proposed but not yet required to be adopted are ~~discussed below. To the extent the adoption of new accounting standards materially affects the Corporation’s financial condition, results of operations, or liquidity, the impacts are discussed~~displayed in the ~~applicable sections of this financial review and the notes to consolidated financial statements.~~table below.

In August 2016, the FASB issued an amendment to provide clarification on where to classify cash flows involving certain cash receipts and cash payments. Under the new guidance, cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities. The new guidance also details the specific classification of contingent consideration cash payments made after a business combination depending on the timing of payments. Lastly, cash proceeds received from corporate owned life insurance policies (including BOLI) should be classified as cash inflows from investing, while the cash payments for the premiums may be classified as cash outflows for investing, operating, or a combination of both. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented. Early adoption is permitted, including in an interim period; however, all of the amendments must be adopted in the same period. The Corporation intends to adopt the accounting standard during the first quarter of 2018, as required, and is currently evaluating the impact on its results of operations, financial position, and liquidity.

In June 2016, the FASB issued an amendment to replace the current incurred loss impairment methodology. Under the new guidance, entities will be required to measure expected credit losses by utilizing forward-looking information to assess an entity's allowance for credit losses. The guidance also requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings

~~as of the beginning of the fiscal year of adoption. Early adoption is permitted.~~



Standard	Description	Date of adoption	Effect on financial statements
ASU 2017-07 Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	The FASB issued the update to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost, including a requirement that employers disaggregate the service cost component from the other components of net benefit cost. In addition, the amendments provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented and prospectively only for the capitalization component. Early adoption is permitted, but should be within the first interim period if interim financial statements are issued.	1st Quarter 2018	Upon adoption, the Corporation will have a slight change in presentation, and an immaterial impact to its results of operations, financial position, and liquidity.
ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	The FASB issued an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Entities should apply the amendment prospectively. Early adoption is permitted, including in an interim period, for impairment tests performed after January 1, 2017. The Corporation has not had to perform a step one quantitative analysis since 2012, which concluded no impairment was necessary.	2nd Quarter 2020, consistent with the Corporation's annual impairment test in May of each year.	The Corporation ~~intends to adopt the accounting standard, as required, and is currently evaluating the impact on its results of operations, financial position, and liquidity.~~ In March 2016, the FASB issued an amendment involving several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Entities should apply the amendment related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Entities should apply the amendment related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement retrospectively. The amendment requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. Early adoption is permitted. The Corporation intends to adopt the accounting standard during the first quarter of 2017, as required, with no material impact on its results of operations, financial position, and liquidity. In March 2016, the FASB issued an amendment to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Entities should apply the amendment prospectively to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted. The Corporation intends to adopt the accounting standard during the first quarter of 2017, as required, with no material impact on its results of operations, financial position, and liquidity. In February 2016, the FASB issued an amendment to provide transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment will require lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Entities ~~are~~ required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. The Corporation intends to adopt the accounting standard during the first quarter of 2019, as required, and is currently evaluating the impact on its results of operations, financial position, and liquidity. In January 2016, the FASB issued an amendment to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This amendment supersedes the guidance to classify equity securities with readily determinable fair values into different categories, requires equity securities to be measured at fair value with changes in the fair value recognized through net income, and simplifies the impairment assessment of equity investments without readily determinable fair values. The amendment requires public business entities that are required to disclose the fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion. The amendment requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option. The amendment requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendment reduces diversity in current practice by clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which should be applied prospectively to equity investments that exist as of the date of adoption. The Corporation intends to adopt the accounting standard during the first quarter of 2018, as required, and is currently evaluating the impact on its results of operations, financial position, and liquidity. In May 2014, the FASB issued an amendment to clarify the principles for recognizing revenue and to develop a common revenue standard. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In applying the revenue model to contracts within its scope, an entity should apply the following steps: (1) Identify the contract(s) with a customer, (2) Identify the performance obligations in the contract, (3) Determine the transaction price, (4) Allocate the transaction price to the performance obligations in the contract, and (5) Recognize revenue when (or as) the entity satisfies a performance obligation. The standard applies to all contracts with customers except those that are within the scope of other topics in the FASB Codification. The standard also requires significantly expanded disclosures about revenue recognition. In March 2016, the FASB issued amendments that intend to improve the operability and understandability of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. In May 2016, the FASB issued an amendment addressing clarifications to the guidance on collectability, presentation of sales taxes and other similar taxes collected, noncash consideration, and completed contracts at transition, while retaining the related principles contained in the new revenue recognition standard. In April 2016, the FASB issued an amendment clarifying guidance related to identifying performance obligations and licensing implementation guidance, while retaining the related principles contained in the new revenue recognition standard. The amendment was originally effective for annual reporting periods beginning after December 15, 2016 (including interim reporting periods within those periods); however, in July 2015, the FASB approved a one year deferral of the effective date to December 31, 2017. Early application is not permitted. The Corporation intends to adopt the accounting standard during the first quarter of 2018, as required, and is currently evaluating the impact on its results of operations, financial position, and liquidity.
ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business	The FASB issued amendments to clarify the definition of a business in order to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets versus businesses. The new standard narrows the definition of a business by adding three principal clarifications if: (1) substantially all the fair value of the gross assets in the asset group is concentrated in either a single identifiable asset or group of similar identifiable assets the transaction does not involve a business (2) the asset group does not include a minimum of an input and a substantive process, it does not represent a business, and (3) the integrated set of activities (including its inputs and processes) does not create, or have the ability to create, goods or services to customers, investment income (e,g. dividends or interest) or other revenues, it is not a business. The overall intention is to provide consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable.	1st Quarter 2018	The Corporation has evaluated adoption of the new guidance and determined it will not have a material impact on its results of operations, financial position, or liquidity.
ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash	The FASB issued an amendment to improve GAAP by providing guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, in order to reduce diversity in practice. The amendment requires that a statement of cash flow explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included in cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flow. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented. Early adoption is permitted, including in an interim period.	1st Quarter 2018	Upon adoption, the Corporation will have a slight change in presentation, and an immaterial impact to its results of operations, financial position, and liquidity.
ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	The FASB issued an amendment requiring an entity to recognize income tax consequences on an intra-entity transfer of an asset other than inventory at the time the transaction occurs. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted for all entities in the first interim period if an entity issues interim financial statements.	1st Quarter 2018	The Corporation has evaluated adoption of the new guidance and determined it will not have a material impact on its results of operations, financial position, or liquidity.
ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	The FASB issued an amendment to provide clarification on where to classify cash flows involving certain cash receipts and cash payments. Under the new guidance, cash payments for debt prepayment or debt extinguishment costs should be classified as cash outflows for financing activities. The new guidance also details the specific classification of contingent consideration cash payments made after a business combination depending on the timing of payments. Lastly, cash proceeds received from corporate owned life insurance policies (including BOLI) should be classified as cash inflows from investing, while the cash payments for the premiums may be classified as cash outflows for investing, operating, or a combination of both. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities should apply the amendment retrospectively to each period presented. Early adoption is permitted, including in an interim period; however, all of the amendments must be adopted in the same period.	1st Quarter 2018	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity.



Standard	Description	Date of adoption	Effect on financial statements
ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	The FASB issued an amendment to replace the current incurred loss impairment methodology. Under the new guidance, entities will be required to measure expected credit losses by utilizing forward-looking information to assess an entity's allowance for credit losses. The guidance also requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted.	1st Quarter 2020	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity.
ASU 2016-02 Leases (Topic 842)	The FASB issued an amendment to provide transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment will require lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted.	1st Quarter 2019	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity.
ASU 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	The FASB issued an amendment to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This amendment supersedes the guidance to classify equity securities with readily determinable fair values into different categories, requires equity securities to be measured at fair value with changes in the fair value recognized through net income, and simplifies the impairment assessment of equity investments without readily determinable fair values. The amendment requires public business entities that are required to disclose the fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion. The amendment requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option. The amendment requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendment reduces diversity in current practice by clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Entities are required to apply the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which should be applied prospectively to equity investments that exist as of the date of adoption.	1st Quarter 2018	The Corporation has evaluated adoption of the new guidance and determined it will not have a material impact on its results of operations, financial position, or liquidity.

Recent Developments

The Corporation completed its previously announced acquisition of Whitnell & Co., a wealth management family services firm based in Oak Brook, IL, on October 2, 2017. Whitnell has approximately $1.0 billion in assets under management. The acquisition is expected to increase both the Corporation’s assets under management and related run-rate revenue by more than 10%. The transaction is not expected to have a material impact on the Corporation’s 2017 earnings, but is expected to be accretive to 2018 earnings.

For recent developments on litigation related to the acquisition of Bank Mutual, see Note 12 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings and Regulatory Matters.

On October ~~25, 2016,~~24, 2017, the Corporation’s Board of Directors declared a regular quarterly cash dividend of ~~$0.12~~$0.14 per common share, payable on December 15, ~~2016,~~2017 to shareholders of record at the close of business on December 1, ~~2016.~~2017. This is an increase of $0.02 from the previous quarterly dividend of $0.12 per common share. The Board of Directors also declared a regular quarterly cash dividend of $0.3828125 per depositary share on ~~Associated Banc-Corp’s~~the Corporation’s 6.125% Series C ~~Perpetual Preferred Stock and a regular quarterly cash dividend of $0.3359375 per depositary share on Associated Banc-Corp’s 5.375% Series D~~ Perpetual Preferred Stock, payable on December 15, ~~2016,~~2017 to shareholders of record at the close of business on December 1, ~~2016. These~~2017. The Board of Directors also declared a regular quarterly cash ~~dividends have not been reflected in~~dividend of $0.3359375 per depositary share on the ~~accompanying consolidated financial statements.~~Corporation’s 5.375% Series D Perpetual Preferred Stock, payable on December 15, 2017 to shareholders of record at the close of business on December 1, 2017.



ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk

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



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 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our 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, ~~2016~~2017 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, ~~2016.~~ 2017.

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.



PART II -	OTHER INFORMATION



ITEM 1.	Legal Proceedings

The information required by this item is set forth in Part I, Item I1 under Note 12 ~~"Commitments,~~Commitments, Off-Balance Sheet Arrangements, Legal Proceedings and ~~Legal Proceedings."~~Regulatory Matters.



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

~~Following are the Corporation’s monthly common stock and depositary share purchases during~~During the third quarter of ~~2016. For additional discussion on~~2017, the ~~Corporation's~~Corporation repurchased $37 million, or approximately 1.6 million shares, of common ~~stock and depositary share purchases, see section “Capital” included under Part I, Item 2 of this document.~~stock. The repurchase details are presented in the table below.

~~Common Stock Purchases:~~

~~Total Number of~~

~~Shares Purchased(a)~~

~~Average Price~~

~~Paid per Share~~

~~Total Number of~~

~~Shares Purchased as~~

~~Part of Publicly~~

~~Announced Plans~~

~~or Programs~~

~~Maximum Number of~~

~~Shares that May Yet~~

~~Be Purchased Under~~

~~the Plans~~

~~or Programs(b)~~

~~Period~~

~~July 1, 2016 - July 31, 2016~~

—

~~August 1, 2016 - August 31, 2016~~

—

~~September 1, 2016 - September 30, 2016~~

—

~~Total~~

—



	Total Number of Shares Purchased^(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs^(b)
Period
July 1, 2017 - July 31, 2017	1,556,473	$	23.59	1,556,473	—
August 1, 2017 - August 31, 2017	13,028	23.99		13,028	—
September 1, 2017 - September 30, 2017	—	—		—	—
Total	1,569,501	$	23.59	1,569,501	2,103,093


(a)	During the third quarter of ~~2016,~~2017, the Corporation repurchased approximately ~~13,000~~7,200 common shares for minimum tax withholding settlements on equity compensation. These purchases do not count against the maximum number of shares that may yet be purchased under the ~~authorization described below.~~Board of Directors’ authorization.

(b)

On April 21, 2015, the Board of Directors authorized the repurchase of up to $125 million of the Corporation's common stock, of which approximately ~~$88~~$51 million remained available to repurchase as of September 30, ~~2016.~~2017. Using the closing stock price on September 30, ~~2016~~2017 of ~~$19.59,~~$24.25, a total of approximately ~~4.5~~2.1 million shares of common stock remained available to be repurchased under the previously approved Board ~~authorization~~authorizations as of September 30, ~~2016.~~2017.

~~Series B Preferred Stock Depositary Share Purchases:~~

~~Total Number of~~

~~Shares Purchased~~

~~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(a)~~

~~Period~~

~~July 1, 2016 - July 31, 2016~~

—

~~August 1, 2016 - August 31, 2016~~

—

~~September 1, 2016 - September 30, 2016~~

—

~~Total~~

—


~~(a)~~	In 2011, the Corporation issued 2,600,000 depositary shares, each representing a 1/40th interest in a share of the Corporation’s 8.00% Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”). On September 15, 2016, the Corporation redeemed all remaining depositary shares of the Corporation’s Series B Preferred Stock.

On August 28, 2015, the Board of Directors authorized the repurchase of up to $10 million of depositary shares of the Series C Preferred Stock, of which all remained available to repurchase as of September 30, 2017. Additionally, on July 25, 2017, the Board of Directors authorized the repurchase of up to $15 million of depositary shares of the Series D Preferred Stock, of which all remained available to repurchase as of September 30, 2017. The repurchase of shares is based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.

~~Series C Preferred Stock Depositary Share Purchases:~~

~~Total Number of~~

~~Shares Purchased~~

~~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(a)~~

~~Period~~

~~July 1, 2016 - July 31, 2016~~

—

~~August 1, 2016 - August 31, 2016~~

—

~~September 1, 2016 - September 30, 2016~~

—

~~Total~~

—

~~(a)~~

In June 2015, the Corporation issued 2,600,000 depositary shares, each representing a 1/40th interest in a share of the Corporation’s 6.125% Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”). On August 28, 2015, the Board of Directors authorized the repurchase of up to $10 million of the Series C Preferred Stock. As of September 30, 2016, $10 million remained available under this repurchase authorization as the Corporation has not yet repurchased any of the Series C Preferred Stock under this authorization. Using the closing price on September 30, 2016 of $26.41, a total of approximately 379,000 shares remained available to be repurchased under the previously approved Board authorization as of September 30, 2016.



ITEM 6.	Exhibits

~~Exhibit (3.1), Amended~~(a) Exhibits:

Exhibit (10), James K. Simons Separation Agreement and General Release dated August 4, 2017.^(a)

Exhibit (11), Statement regarding computation of per share earnings. The information required by this item is set forth in Part I, Item 1 under Note 4 Earnings Per Common Share.

Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by Philip B. Flynn, Chief Executive Officer.

Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by Christopher J. Del Moral-Niles, 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.

(a) Management contracts and ~~Restated Articles of Incorporation, incorporated by reference to Exhibit (3) to the Corporation’s Quarterly Report on Form 10-Q filed on May 8, 2006.~~arrangements.

Exhibit (3.2), Articles of Amendment to the Amended and Restated Articles of Incorporation of Associated Banc-Corp with respect to its 8.00% Perpetual Preferred Stock, Series B, dated September 12, 2011, incorporated by reference to Exhibit (3.1) to the Corporation’s Current Report on Form 8-K filed on September 15, 2011.

Exhibit (3.3), Articles of Amendment to the Amended and Restated Articles of Incorporation of Associated Banc-Corp regarding the rights and preferences of preferred stock, effective April 25, 2012, incorporated by reference to Exhibit (3.1, 4.1) to the Corporation’s Current Report on Form 8-K filed on April 25, 2012.

Exhibit (3.4), Articles of Amendment to the Amended and Restated Articles of Incorporation of Associated Banc-Corp with respect to its 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, dated June 4, 2015, incorporated by reference to Exhibit (3.1, 4.1) to the Corporation’s Current Report on Form 8-K filed on June 8, 2015.

Exhibit (3.5), Certificate Related to Series A Preferred Stock dated August 15, 2016, incorporated by reference to Exhibit (3.1) to the Corporation’s Current Report on Form 8-K filed on August 16, 2016.

Exhibit (3.6), Articles of Amendment to the Amended and Restated Articles of Incorporation of Associated Banc-Corp with respect to its 5.375% Non-Cumulative Perpetual Preferred Stock, Series D, dated September 12, 2016, incorporated by reference to Exhibit (3.1, 4.1) to the Corporation’s Current Report on Form 8-K filed on September 15, 2016.

Exhibit (4.1), Deposit Agreement among Associated Banc-Corp, Wells Fargo Bank, N.A., and the holders from time to time of the Depositary Receipts described therein, and Form of Depositary Receipt, dated as of September 15, 2016, incorporated by reference to Exhibit (4.2) to the Corporation’s Current Report on Form 8-K filed on September 15, 2016.

~~Exhibit (11), Statement regarding computation of per share earnings. The information required by this item is set forth in Part I, Item I under Note 4, "Earnings Per Common Share."~~

~~Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by Philip B. Flynn, Chief Executive Officer.~~

~~Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by Christopher J. Del Moral-Niles, 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.~~

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 ~~27, 2016~~26, 2017		/s/ Philip B. Flynn
		Philip B. Flynn
		President and Chief Executive Officer

Date: October ~~27, 2016~~26, 2017		/s/ Christopher J. Del Moral-Niles
		Christopher J. Del Moral-Niles
		Chief Financial Officer ~~and~~

Date: October 26, 2017		/s/ Tammy C. Stadler
		Tammy C. Stadler
		Principal Accounting Officer

7275



		Page
PART I. Financial Information

	Item 1. Financial Statements (Unaudited)::	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Consolidated Financial Statements	8

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4344

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	6972

	Item 4. Controls and Procedures	6973

PART II. Other Information

	Item 1. Legal Proceedings	7074

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7074

	Item 6. Exhibits	7174

	Signatures	7275



Restricted Stock	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2014	1,982,126		$	15.79
Granted	1,173,847		18.09
Vested	(709,582	)	15.62
Forfeited	(196,363	)	16.87
Outstanding at December 31, 2015	2,250,028		$	17.03
Granted	1,073,057		$	17.48
Vested	(831,433	)	16.61
Forfeited	(94,725	)	17.60
Outstanding at September 30, 2016	2,396,927		$	17.35



	Nine Months Ended September 30, 2016					Nine Months Ended September 30, 2015
	Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)		Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)
	($ in Thousands)
Commercial and industrial	10	$	2,455	$	2,517	10	$	2,410	$	3,033
Commercial real estate — owner occupied	1	117		124		4	2,847		3,007
Commercial real estate — investor	—	—		—		3	2,949		2,998
Real estate construction	1	66		91		1	5		5
Residential mortgage	56	4,676		4,922		77	7,393		7,586
Home equity	47	1,709		1,793		61	2,109		2,220
Other consumer	1	15		16		—	—		—
Total	116	$	9,038	$	9,463	156	$	17,713	$	18,849



$ in Thousands	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2015	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Charge offs	(63,368		)	(265		)	(1,495		)	(380		)	(3,035		)	(3,434		)	(2,853		)	(74,830		)
Recoveries	13,461			48			1,610			111			506			2,730			640			19,106
Net charge offs	(49,907		)	(217		)	115			(269		)	(2,529		)	(704		)	(2,213		)	(55,724		)
Provision for loan losses	57,051			(4,106		)	(2,366		)	(1,873		)	1,121			(897		)	2,070			51,000
September 30, 2016	$	137,103		$	14,357		$	40,767		$	23,124		$	26,853		$	21,954		$	5,382		$	269,540
Allowance for loan losses:
Individually evaluated for impairment	$	8,570		$	—		$	79		$	—		$	976		$	—		$	—		$	9,625
Collectively evaluated for impairment	128,533			14,357			40,688			23,124			25,877			21,954			5,382			259,915
Total allowance for loan losses	$	137,103		$	14,357		$	40,767		$	23,124		$	26,853		$	21,954		$	5,382		$	269,540
Loans:
Individually evaluated for impairment	$	203,834		$	5,719		$	7,023		$	—		$	9,389		$	650		$	—		$	226,615
Collectively evaluated for impairment	6,517,723			886,959			3,523,347			1,314,431			6,024,777			950,944			399,209			19,617,390
Total loans	$	6,721,557		$	892,678		$	3,530,370		$	1,314,431		$	6,034,166		$	951,594		$	399,209		$	19,844,005



	Nine Months Ended September 30, 2016		Year Ended December 31, 2015
	($ in Thousands)
Allowance for Unfunded Commitments:
Balance at beginning of period	$	24,400	$	24,900
Provision for unfunded commitments	4,000		(500		)
Balance at end of period	$	28,400	$	24,400



	Nine Months Ended September 30, 2016			Year Ended December 31, 2015
	($ in Thousands)
Core deposit intangibles:
Gross carrying amount	$	4,385		$	19,545
Accumulated amortization	(4,203		)	(19,152		)
Net book value	$	182		$	393
Amortization during the year	$	211		$	1,404
Other intangibles:
Gross carrying amount	$	32,410		$	31,398
Accumulated amortization	(16,690		)	(15,333		)
Net book value	$	15,720		$	16,065
Additions during the period	$	1,012		$	12,115
Amortization during the year	$	1,357		$	1,690



($ in Thousands)	Investments Securities Available For Sale				Defined Benefit Pension and Post Retirement Obligations			Accumulated Other Comprehensive Income (Loss)
Balance January 1, 2016	$	459			$	(33,075	)	$	(32,616	)
Other comprehensive income before reclassifications	59,849				—			59,849
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net	(6,201		)		—			(6,201		)
Personnel expense	—				1,531			1,531
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities)	(4,465		)		—			(4,465		)
Income tax expense	(18,768		)	��	(584		)	(19,352		)
Net other comprehensive income during period	30,415				947			31,362
Balance September 30, 2016	$	30,874			$	(32,128	)	$	(1,254	)
Balance January 1, 2015	$	18,512			$	(23,362	)	$	(4,850	)
Other comprehensive income before reclassifications	35,101				—			35,101
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net	(4,038		)		—			(4,038		)
Personnel expense	—				1,729			1,729
Income tax expense	(11,907		)		(659		)	(12,566		)
Net other comprehensive income during period	19,156				1,070			20,226
Balance September 30, 2015	$	37,668			$	(22,292	)	$	15,376

($ in Thousands)	Investments Securities Available For Sale				Defined Benefit Pension and Post Retirement Obligations			Accumulated Other Comprehensive Income (Loss)
Balance July 1, 2016	$	45,916			$	(32,463	)	$	13,453
Other comprehensive loss before reclassifications	(22,894		)		—			(22,894		)
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities loss, net	13				—			13
Personnel expense	—				541			541
Interest income (Amortization of net unrealized gains on available for sale securities transferred to held to maturity securities)	(1,441		)		—			(1,441		)
Income tax (expense) benefit	9,280				(206		)	9,074
Net other comprehensive income (loss) during period	(15,042		)		335			(14,707		)
Balance September 30, 2016	$	30,874			$	(32,128	)	$	(1,254	)
Balance July 1, 2015	$	25,282			$	(22,688	)	$	2,594
Other comprehensive income before reclassifications	22,907				—			22,907
Amounts reclassified from accumulated other comprehensive income (loss):
Investment securities gain, net	(2,796		)		—			(2,796		)
Personnel expense	—				639			639
Income tax expense	(7,725		)		(243		)	(7,968		)
Net other comprehensive income during period	12,386				396			12,782
Balance September 30, 2015	$	37,668			$	(22,292	)	$	15,376

Description

Date of adoption

Effect on financial statements

ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

The FASB issued the amendment to better align a company’s financial reporting for hedging activities with the economic objectives of those activities for both financial (e.g., interest rate) and commodity risks. The provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also contains targeted improvements to simplify the application of hedge accounting guidance. This amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Entities should apply the amendment on a modified retrospective transition method in which the cumulative effect of the change will be recognized within equity in the consolidated balance sheet as of the date of adoption. Early adoption is permitted, including in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period.

1st Quarter 2019

For the Corporation to date, all notional amounts of customer derivative transactions have been matched with a mirror derivative transaction with another counterparty. The Corporation has used, and may use again in the future, derivative instruments to hedge the variability in interest payments or protect the value of certain assets and liabilities recorded on its consolidated balance sheets from changes in interest rates. Therefore, the new ASU is not currently applicable; however, there is the potential the standard could apply in the future if such arrangements begin to occur.