~~0000007789us-gaap:FiduciaryAndTrustMemberasb:CorporateandCommercialSpecialtyMember2022-01-012022-03-31~~0000007789asb:OtherDebtAndOtherEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended: ~~March 31,~~June 30, 2022


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

Commission file number: 001-31343

Associated Banc-Corp

(Exact name of registrant as specified in its charter)


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


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

(920) 491-7500

(Registrant’s telephone number, including area code)

(not applicable)

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

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


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

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

Yes ☑ No ☐

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

Yes ☑ No ☐

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

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Yes ☐ No ☑

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of registrant’s common stock, par value $0.01 per share, at ~~April~~July 25, 2022 was ~~150,043,865.~~150,305,412.


ASSOCIATED BANC-CORP
Table of Contents


ASSOCIATED BANC-CORP
Commonly Used Acronyms and Abbreviations
The following listing provides a reference of common acronyms and abbreviations used throughout the document:





ACLL			Allowance for Credit Losses on Loans

AFS			Available for Sale
ALCO			Asset / Liability Committee
ARRC			Alternative Reference Rate Committee
ASC			Accounting Standards Codification
Associated / the Company / Corporation / our / we			Associated Banc-Corp collectively with all of its subsidiaries and affiliates

ASU			Accounting Standards Update
the Bank			Associated Bank, National Association

Basel III			International framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquidity
bp			basis point(s)

CDs			Certificates of Deposit
CDIs			Core Deposit Intangibles
CECL			Current Expected Credit Losses
CET1			Common Equity Tier 1


~~CFPB~~			~~Consumer Financial Protection Bureau~~
CRA			Community Reinvestment Act
CRE			Commercial Real Estate
~~Dodd-Frank Act~~			~~Dodd-Frank Wall Street Reform and Consumer Protection Act~~
EAR			Earnings at Risk


Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Board of Governors of the Federal Reserve System
FFELP			Federal Family Education Loan Program
FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation
FICO			Fair Isaac Corporation, provider of a broad-based risk score to aid in credit decisions
FNMA			Federal National Mortgage Association

FOMC			Federal Open Market Committee
FTEs			Full-time equivalent employees
FTP			Funds Transfer Pricing
GAAP			Generally Accepted Accounting Principles
GNMA			Government National Mortgage Association
GSEs			Government-Sponsored Enterprises
HTM			Held to Maturity




LIBOR			London Interbank Offered Rate
LOCOM			Lower of Cost or Market
LTV			Loan-to-Value


MSRs			Mortgage Servicing Rights
MVE			Market Value of Equity
Net Free Funds			Noninterest-bearing sources of funds
NII			Net Interest Income
NPAs			Nonperforming Assets


OREO			Other Real Estate Owned


Parent Company			Associated Banc-Corp individually
PPP			Paycheck Protection Program


RAP			Retirement Account Plan - the Corporation's noncontributory defined benefit retirement plan
Repurchase Agreements			Securities sold under agreements to repurchase
Restricted Stock Awards			Restricted common stock and restricted common stock units to certain key employees
Retirement Eligible Colleagues			Colleagues whose retirement meets the early retirement or normal retirement definitions under the applicable equity compensation plan
ROCET1			Return on Common Equity Tier 1
Rockefeller			Rockefeller Capital Management
S&P			Standard & Poor's
SBA			Small Business Administration
SEC			U.S. Securities and Exchange Commission
Series C Preferred Stock			The Corporation's 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference $1,000 per share
Series D Preferred Stock			The Corporation's 5.375% Non-Cumulative Perpetual Preferred Stock, Series D, liquidation preference $1,000 per share
Series E Preferred Stock			The Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series E, liquidation preference $1,000 per share
Series F Preferred Stock			The Corporation's 5.625% Non-Cumulative Perpetual Preferred Stock, Series F, liquidation preference $1,000 per share
SOFR			Secured Overnight Finance Rate

TBA			To-Be-Announced
TDRs			Troubled Debt Restructurings
~~UDAAPs~~			~~Unfair, Deceptive, or Abusive Acts or Practices~~
Whitnell			Whitnell & Co.
YTD			Year-to-Date

Table of Contents


PART I - FINANCIAL INFORMATION

ITEM 1.			Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets


		Mar 31, 2022		Dec 31, 2021			Jun 30, 2022		Dec 31, 2021
(In Thousands, except share and per share data)	(In Thousands, except share and per share data)	(Unaudited)		(Audited)		(In Thousands, except share and per share data)	(Unaudited)		(Audited)
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	334,138	$	343,831	Cash and due from banks	$	397,364	$	343,831
Interest-bearing deposits in other financial institutions	Interest-bearing deposits in other financial institutions	166,929		681,684		Interest-bearing deposits in other financial institutions	436,887		681,684

Investment securities AFS, at fair value		2,780,803		4,332,015
Investment securities HTM, net, at amortized cost		3,939,855		2,238,947
Federal funds sold and securities purchased under agreements to resell						Federal funds sold and securities purchased under agreements to resell	32,820		—
AFS investment securities, at fair value						AFS investment securities, at fair value	2,677,511		4,332,015
HTM investment securities, net, at amortized cost						HTM investment securities, net, at amortized cost	3,945,206		2,238,947
Equity securities	Equity securities	18,560		18,352		Equity securities	19,039		18,352
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	168,281		168,281		Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	237,616		168,281
Residential loans held for sale	Residential loans held for sale	91,582		136,638		Residential loans held for sale	42,676		136,638

Commercial loans held for sale						Commercial loans held for sale	44,721		—
Loans	Loans	24,531,926		24,224,949		Loans	26,494,698		24,224,949
Allowance for loan losses	Allowance for loan losses	(279,058)		(280,015)		Allowance for loan losses	(280,771)		(280,015)
Loans, net	Loans, net	24,252,867		23,944,934		Loans, net	26,213,927		23,944,934
Tax credit and other investments	Tax credit and other investments	284,561		293,733		Tax credit and other investments	275,165		293,733

Premises and equipment, net	Premises and equipment, net	387,550		385,173		Premises and equipment, net	387,633		385,173
Bank and corporate owned life insurance	Bank and corporate owned life insurance	679,538		680,021		Bank and corporate owned life insurance	675,347		680,021
Goodwill	Goodwill	1,104,992		1,104,992		Goodwill	1,104,992		1,104,992
Other intangible assets, net	Other intangible assets, net	55,890		58,093		Other intangible assets, net	53,687		58,093
Mortgage servicing rights, net(a)	Mortgage servicing rights, net(a)	67,015		54,862		Mortgage servicing rights, net(a)	76,570		54,862

Interest receivable	Interest receivable	83,120		80,528		Interest receivable	95,426		80,528
Other assets	Other assets	540,218		582,168		Other assets	519,403		582,168
Total assets	Total assets	$	34,955,900	$	35,104,253	Total assets	$	37,235,990	$	35,104,253
Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	$	8,315,699	$	8,504,077	Noninterest-bearing demand deposits	$	8,085,702	$	8,504,077
Interest-bearing deposits	Interest-bearing deposits	20,089,710		19,962,353		Interest-bearing deposits	20,490,874		19,962,353
Total deposits	Total deposits	28,405,409		28,466,430		Total deposits	28,576,577		28,466,430
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	368,768		319,532		Federal funds purchased and securities sold under agreements to repurchase	682,839		319,532
Commercial paper	Commercial paper	30,593		34,730		Commercial paper	22,781		34,730

FHLB advances	FHLB advances	1,537,948		1,621,047		FHLB advances	3,258,039		1,621,047
Other long-term funding	Other long-term funding	249,797		249,324		Other long-term funding	249,820		249,324

Allowance for unfunded commitments	Allowance for unfunded commitments	38,776		39,776		Allowance for unfunded commitments	36,776		39,776
Accrued expenses and other liabilities	Accrued expenses and other liabilities	376,322		348,560		Accrued expenses and other liabilities	449,776		348,560
Total liabilities	Total liabilities	$	31,007,613	$	31,079,399	Total liabilities	$	33,276,608	$	31,079,399
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Preferred equity	Preferred equity	$	193,195	$	193,195	Preferred equity	$	193,195	$	193,195
Common equity	Common equity					Common equity
Common stock	Common stock	$	1,752	$	1,752	Common stock	$	1,752	$	1,752
Surplus	Surplus	1,708,104		1,713,851		Surplus	1,710,319		1,713,851
Retained earnings	Retained earnings	2,715,118		2,672,601		Retained earnings	2,768,736		2,672,601
Accumulated other comprehensive (loss)	Accumulated other comprehensive (loss)	(137,024)		(10,317)		Accumulated other comprehensive (loss)	(182,788)		(10,317)
Treasury stock, at cost	Treasury stock, at cost	(532,858)		(546,229)		Treasury stock, at cost	(531,832)		(546,229)
Total common equity	Total common equity	3,755,092		3,831,658		Total common equity	3,766,187		3,831,658
Total stockholders’ equity	Total stockholders’ equity	3,948,287		4,024,853		Total stockholders’ equity	3,959,382		4,024,853
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	34,955,900	$	35,104,253	Total liabilities and stockholders’ equity	$	37,235,990	$	35,104,253
Preferred shares authorized (par value $1.00 per share)	Preferred shares authorized (par value $1.00 per share)	750,000		750,000		Preferred shares authorized (par value $1.00 per share)	750,000		750,000
Preferred shares issued and outstanding	Preferred shares issued and outstanding	200,000		200,000		Preferred shares issued and outstanding	200,000		200,000
Common shares authorized (par value $0.01 per share)	Common shares authorized (par value $0.01 per share)	250,000,000		250,000,000		Common shares authorized (par value $0.01 per share)	250,000,000		250,000,000
Common shares issued	Common shares issued	175,216,409		175,216,409		Common shares issued	175,216,409		175,216,409
Common shares outstanding	Common shares outstanding	150,037,780		149,342,641		Common shares outstanding	150,126,419		149,342,641

Numbers may not sum due to rounding.

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

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Income (Unaudited)


		Three Months Ended Mar 31,				Three Months Ended Jun 30,				Six Months Ended Jun 30,
(In Thousands, except per share data)	(In Thousands, except per share data)	2022		2021			(In Thousands, except per share data)	2022		2021		2022		2021
Interest income	Interest income						Interest income
Interest and fees on loans	Interest and fees on loans	$	167,697	$	174,049		Interest and fees on loans	$	199,876	$	174,228	$	367,573	$	348,277
Interest and dividends on investment securities	Interest and dividends on investment securities						Interest and dividends on investment securities
Taxable	Taxable	16,472		7,014			Taxable	18,317		8,840		34,789		15,855
Tax-exempt	Tax-exempt	16,108		14,162			Tax-exempt	16,379		14,366		32,487		28,528
Other interest	Other interest	1,993		1,694			Other interest	2,420		1,826		4,413		3,521
Total interest income	Total interest income	202,270		196,920			Total interest income	236,991		199,260		439,261		396,180
Interest expense	Interest expense						Interest expense
Interest on deposits	Interest on deposits	3,571		5,909			Interest on deposits	8,019		4,609		11,591		10,519
Interest on federal funds purchased and securities sold under agreements to repurchase	Interest on federal funds purchased and securities sold under agreements to repurchase	38		26			Interest on federal funds purchased and securities sold under agreements to repurchase	406		30		444		55
Interest on other short-term funding	Interest on other short-term funding	1		6			Interest on other short-term funding	1		7		2		13
Interest on FHLB advances	Interest on FHLB advances	8,182		9,493			Interest on FHLB advances	9,689		9,524		17,871		19,017
Interest on long-term funding	Interest on long-term funding	2,730		5,585			Interest on long-term funding	2,730		5,575		5,460		11,160
Total interest expense	Total interest expense	14,522		21,018			Total interest expense	20,845		19,745		35,367		40,764
Net interest income	Net interest income	187,747		175,902			Net interest income	216,146		179,515		403,893		355,416
Provision for credit losses	Provision for credit losses	(3,990)		(23,004)			Provision for credit losses	(2)		(35,004)		(3,992)		(58,009)
Net interest income after provision for credit losses	Net interest income after provision for credit losses	191,737		198,906			Net interest income after provision for credit losses	216,148		214,519		407,886		413,425
Noninterest income	Noninterest income						Noninterest income
Wealth management fees	Wealth management fees	22,404		22,414			Wealth management fees	21,332		22,706		43,735		45,120
Service charges and deposit account fees	Service charges and deposit account fees	16,856		14,855			Service charges and deposit account fees	16,506		15,549		33,363		30,404
Card-based fees	Card-based fees	9,926		9,743			Card-based fees	11,442		10,982		21,368		20,725
Other fee-based revenue	Other fee-based revenue	3,766		4,596			Other fee-based revenue	4,360		4,244		8,126		8,840
Capital markets, net	Capital markets, net	8,646		8,118			Capital markets, net	8,010		5,696		16,656		13,814
Mortgage banking, net	Mortgage banking, net	8,391		23,925			Mortgage banking, net	6,145		8,128		14,536		32,054
Bank and corporate owned life insurance	Bank and corporate owned life insurance	2,071		2,702			Bank and corporate owned life insurance	4,106		3,088		6,177		5,791

Asset gains, net		188		4,809
Asset gains (losses), net							Asset gains (losses), net	1,677		(14)		1,865		4,796
Investment securities gains (losses), net	Investment securities gains (losses), net	21		(39)			Investment securities gains (losses), net	(8)		24		12		(16)
Gains on sale of branches, net(a)	Gains on sale of branches, net(a)	—		1,002			Gains on sale of branches, net(a)	—		36		—		1,038
Other	Other	2,198		3,216			Other	1,888		3,004		4,086		6,221
Total noninterest income	Total noninterest income	74,467		95,343			Total noninterest income	75,458		73,443		149,925		168,786
Noninterest expense	Noninterest expense						Noninterest expense
Personnel	Personnel	104,811		104,026			Personnel	112,666		106,994		217,477		211,020
Technology	Technology	21,485		20,740			Technology	21,223		20,236		42,707		40,975
Occupancy	Occupancy	16,080		16,156			Occupancy	14,151		14,679		30,231		30,835
Business development and advertising	Business development and advertising	4,954		4,395			Business development and advertising	5,655		4,970		10,610		9,366
Equipment	Equipment	4,960		5,518			Equipment	4,960		5,481		9,920		10,999
Legal and professional	Legal and professional	5,087		6,530			Legal and professional	4,873		6,661		9,960		13,191
Loan and foreclosure costs	Loan and foreclosure costs	2,014		2,220			Loan and foreclosure costs	1,476		2,671		3,490		4,891
FDIC assessment	FDIC assessment	5,100		4,750			FDIC assessment	5,400		3,600		10,500		8,350
Other intangible amortization	Other intangible amortization	2,203		2,236			Other intangible amortization	2,203		2,203		4,405		4,439

Other	Other	6,597		8,775			Other	8,815		6,979		15,412		15,755
Total noninterest expense	Total noninterest expense	173,292		175,347			Total noninterest expense	181,420		174,475		354,712		349,821
Income before income taxes	Income before income taxes	92,912		118,903			Income before income taxes	110,187		113,487		203,099		232,389
Income tax expense	Income tax expense	18,650		24,602			Income tax expense	23,363		22,480		42,013		47,082
Net income	Net income	74,262		94,301			Net income	86,824		91,007		161,086		185,307
Preferred stock dividends	Preferred stock dividends	2,875		5,207			Preferred stock dividends	2,875		4,875		5,750		10,082
Net income available to common equity	Net income available to common equity	$	71,387	$	89,094		Net income available to common equity	$	83,949	$	86,131	$	155,336	$	175,226
Earnings per common share	Earnings per common share						Earnings per common share
Basic	Basic	$	0.48	$	0.58		Basic	$	0.56	$	0.56	$	1.04	$	1.14
Diluted	Diluted	$	0.47	$	0.58		Diluted	$	0.56	$	0.56	$	1.03	$	1.13
Average common shares outstanding	Average common shares outstanding						Average common shares outstanding
Basic	Basic	148,781		152,355			Basic	149,083		152,042		148,933		152,198
Diluted	Diluted	150,492		153,688			Diluted	150,203		153,381		150,265		153,473

Numbers may not sum due to rounding.

(a) Includes the deposit premium on the sale of branches net of miscellaneous costs to sell. See Note 2 Acquisitions and Dispositions for additional details on the branch sales.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Comprehensive Income (Unaudited)


		Three Months Ended Mar 31,				Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021			($ in Thousands)	2022		2021		2022		2021

Net income	Net income	$	74,262	$	94,301		Net income	$	86,824	$	91,007	$	161,086	$	185,307
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax						Other comprehensive income (loss), net of tax
Investment securities AFS
Net unrealized (losses)		(103,284)		(23,979)
AFS investment securities							AFS investment securities
Net unrealized gains (losses)							Net unrealized gains (losses)	(65,038)		7,978		(168,321)		(16,002)
Unrealized (losses) on AFS securities transferred to HTM securities	Unrealized (losses) on AFS securities transferred to HTM securities	(67,604)		—			Unrealized (losses) on AFS securities transferred to HTM securities	—		—		(67,604)		—
Amortization of net unrealized losses on AFS securities transferred to HTM securities	Amortization of net unrealized losses on AFS securities transferred to HTM securities	1,108		518			Amortization of net unrealized losses on AFS securities transferred to HTM securities	3,273		645		4,381		1,163
Reclassification adjustment for net losses (gains) realized in net income	Reclassification adjustment for net losses (gains) realized in net income	(21)		39			Reclassification adjustment for net losses (gains) realized in net income	8		(24)		(12)		16

Income tax benefit		43,098		5,851
Other comprehensive (loss) on AFS securities		(126,702)		(17,571)
Income tax (expense) benefit							Income tax (expense) benefit	15,998		(2,277)		59,096		3,574
Other comprehensive income (loss) on AFS securities							Other comprehensive income (loss) on AFS securities	(45,758)		6,322		(172,460)		(11,249)
Defined benefit pension and postretirement obligations	Defined benefit pension and postretirement obligations						Defined benefit pension and postretirement obligations
Amortization of prior service cost	Amortization of prior service cost	(81)		(37)			Amortization of prior service cost	(81)		(37)		(163)		(74)
Amortization of actuarial loss	Amortization of actuarial loss	74		1,050			Amortization of actuarial loss	74		1,050		147		2,100

Income tax (expense) benefit	Income tax (expense) benefit	2		(253)			Income tax (expense) benefit	2		(253)		4		(506)
Other comprehensive income (loss) on pension and postretirement obligations	Other comprehensive income (loss) on pension and postretirement obligations	(6)		760			Other comprehensive income (loss) on pension and postretirement obligations	(6)		760		(12)		1,519
Total other comprehensive (loss)		(126,708)		(16,811)
Total other comprehensive income (loss)							Total other comprehensive income (loss)	(45,764)		7,082		(172,472)		(9,729)
Comprehensive income (loss)	Comprehensive income (loss)	$	(52,445)	$	77,490		Comprehensive income (loss)	$	41,060	$	98,088	$	(11,386)	$	175,578

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


(In Thousands, except per share data)	(In Thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total		(In Thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
Balance, December 31, 2021	Balance, December 31, 2021	$	193,195	$	1,752	$	1,713,851	$	2,672,601	$	(10,317)	$	(546,229)	$	4,024,853	Balance, December 31, 2021	$	193,195	$	1,752	$	1,713,851	$	2,672,601	$	(10,317)	$	(546,229)	$	4,024,853
Change in accounting principle(a)	Change in accounting principle(a)	—		—		—		1,713		—		—		1,713		Change in accounting principle(a)	—		—		—		1,713		—		—		1,713
Total shareholder's equity at beginning of period, as adjusted	Total shareholder's equity at beginning of period, as adjusted	193,195		1,752		1,713,851		2,674,314		(10,317)		(546,229)		4,026,566		Total shareholder's equity at beginning of period, as adjusted	193,195		1,752		1,713,851		2,674,314		(10,317)		(546,229)		4,026,566
Comprehensive income (loss)	Comprehensive income (loss)															Comprehensive income (loss)
Net income	Net income	—		—		—		74,262		—		—		74,262		Net income	—		—		—		74,262		—		—		74,262
Other comprehensive (loss)	Other comprehensive (loss)	—		—		—		—		(126,708)		—		(126,708)		Other comprehensive (loss)	—		—		—		—		(126,708)		—		(126,708)
Comprehensive (loss)	Comprehensive (loss)													(52,445)		Comprehensive (loss)													(52,445)
Common stock issued	Common stock issued															Common stock issued
Stock-based compensation plans, net	Stock-based compensation plans, net	—		—		(11,911)		—		—		18,565		6,654		Stock-based compensation plans, net	—		—		(11,911)		—		—		18,565		6,654

Purchase of treasury stock, stock-based compensation plans	Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(5,193)		(5,193)		Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(5,193)		(5,193)
Cash dividends	Cash dividends															Cash dividends
Common stock, $0.20 per share	Common stock, $0.20 per share	—		—		—		(30,583)		—		—		(30,583)		Common stock, $0.20 per share	—		—		—		(30,583)		—		—		(30,583)
Preferred stock(b)	Preferred stock(b)	—		—		—		(2,875)		—		—		(2,875)		Preferred stock(b)	—		—		—		(2,875)		—		—		(2,875)

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

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

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

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

Stock-based compensation expense, net																Stock-based compensation expense, net	—		—		3,986		—		—		—		3,986
Balance, June 30, 2022																Balance, June 30, 2022	$	193,195	$	1,752	$	1,710,319	$	2,768,736	$	(182,788)	$	(531,832)	$	3,959,382

Numbers may not sum due to rounding.

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

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

(In Thousands, except per share data) Preferred Equity Common Stock Surplus Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock Total
Balance, December 31, 2020 $ 353,512 $ 1,752 $ 1,720,329 $ 2,458,920 $ 12,618 $ (456,198) $ 4,090,933
Comprehensive income (loss)
Net income — — — 94,301 — — 94,301
Other comprehensive (loss) — — — — (16,811) — (16,811)
Comprehensive income 77,490
Common stock issued
Stock-based compensation plans, net — — (16,986) — — 27,542 10,556
Purchase of treasury stock, open market purchases — — — — — (17,973) (17,973)
Purchase of treasury stock, stock-based compensation plans — — — — — (3,593) (3,593)
Cash dividends
Common stock, $0.18 per share — — — (27,870) — — (27,870)
Preferred stock(a)
— — — (5,207) — — (5,207)
Stock-based compensation expense, net — — 3,444 — — — 3,444
Balance, March 31, 2021 $ 353,512 $ 1,752 $ 1,706,786 $ 2,520,144 $ (4,193) $ (450,222) $ 4,127,780

Table of Contents


(In Thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
Balance, December 31, 2020	$	353,512	$	1,752	$	1,720,329	$	2,458,920	$	12,618	$	(456,198)	$	4,090,933


Comprehensive income (loss)
Net income	—		—		—		94,301		—		—		94,301
Other comprehensive (loss)	—		—		—		—		(16,811)		—		(16,811)

Comprehensive income													77,490
Common stock issued
Stock-based compensation plans, net	—		—		(16,986)		—		—		27,542		10,556


Purchase of treasury stock, open market purchases	—		—		—		—		—		(17,973)		(17,973)
Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(3,593)		(3,593)
Cash dividends
Common stock, $0.18 per share	—		—		—		(27,870)		—		—		(27,870)
Preferred stock(a)	—		—		—		(5,207)		—		—		(5,207)


Stock-based compensation expense, net	—		—		3,444		—		—		—		3,444



Balance, March 31, 2021	$	353,512	$	1,752	$	1,706,786	$	2,520,144	$	(4,193)	$	(450,222)	$	4,127,780

Comprehensive income:
Net income	—		—		—		91,007		—		—		91,007
Other comprehensive income	—		—		—		—		7,082		—		7,082
Comprehensive income													98,088
Common stock issued:
Stock-based compensation plans, net	—		—		(3,632)		—		—		11,250		7,618


Purchase of treasury stock, open market purchases	—		—		—		—		—		(29,972)		(29,972)
Purchase of treasury stock, stock-based compensation plans	—		—		—		—		—		(856)		(856)
Cash dividends:
Common stock, $0.18 per share	—		—		—		(27,822)		—		—		(27,822)
Preferred stock(b)	—		—		—		(4,875)		—		—		(4,875)

Redemption of preferred stock	(63,313)		—		—		(1,687)		—		—		(65,000)


Stock-based compensation expense, net	—		—		5,092		—		—		—		5,092

Balance, June 30, 2021	$	290,200	$	1,752	$	1,708,246	$	2,576,766	$	2,889	$	(469,801)	$	4,110,052

Numbers may not sum due to rounding.

(a) Series C, $0.3828125 per share; Series D, $0.3359375 per share; Series E, $0.3671875 per share; and Series F, $0.3515625 per share.

(b) Series C, $0.3197115 per share; Series D, $0.3359375 per share; Series E, $0.3671875 per share; and Series F, $0.3515625 per share.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


		Three Months Ended Mar 31,					Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021		($ in Thousands)	2022		2021
Cash Flow From Operating Activities	Cash Flow From Operating Activities					Cash Flow From Operating Activities
Net income	Net income	$	74,262	$	94,301	Net income	$	161,086	$	185,307
Adjustments to reconcile net income to net cash provided by (used in) operating activities	Adjustments to reconcile net income to net cash provided by (used in) operating activities					Adjustments to reconcile net income to net cash provided by (used in) operating activities
Provision for credit losses	Provision for credit losses	(3,990)		(23,004)		Provision for credit losses	(3,992)		(58,009)
Depreciation and amortization	Depreciation and amortization	11,680		12,038		Depreciation and amortization	22,741		24,200
Change in MSRs valuation(a)	Change in MSRs valuation(a)	(9,451)		(10,578)		Change in MSRs valuation(a)	(19,400)		(10,239)

Amortization of other intangible assets	Amortization of other intangible assets	2,203		2,236		Amortization of other intangible assets	4,405		4,439
Amortization and accretion on earning assets, funding, and other, net	Amortization and accretion on earning assets, funding, and other, net	5,338		7,941		Amortization and accretion on earning assets, funding, and other, net	10,315		10,796
Net amortization of tax credit investments	Net amortization of tax credit investments	8,535		8,301		Net amortization of tax credit investments	17,072		16,552
Losses (gains) on sales of investment securities, net	Losses (gains) on sales of investment securities, net	(21)		39		Losses (gains) on sales of investment securities, net	(12)		16
Asset (gains), net	Asset (gains), net	(188)		(4,809)		Asset (gains), net	(1,865)		(4,796)
(Gains) on sale of branch, net	(Gains) on sale of branch, net	—		(1,002)		(Gains) on sale of branch, net	—		(1,038)
(Gain) loss on mortgage banking activities, net	(Gain) loss on mortgage banking activities, net	4,183		(10,326)		(Gain) loss on mortgage banking activities, net	3,036		(24,008)
Mortgage loans originated and acquired for sale	Mortgage loans originated and acquired for sale	(252,113)		(412,645)		Mortgage loans originated and acquired for sale	(403,951)		(889,315)
Proceeds from sales of mortgage loans held for sale	Proceeds from sales of mortgage loans held for sale	296,089		400,135		Proceeds from sales of mortgage loans held for sale	500,410		884,581

Changes in certain assets and liabilities	Changes in certain assets and liabilities					Changes in certain assets and liabilities
(Increase) decrease in interest receivable	(Increase) decrease in interest receivable	(2,592)		3,797		(Increase) decrease in interest receivable	(14,898)		8,466
(Decrease) in interest payable		(1,917)		(8,694)
(Decrease) in expense payable		(46,737)		(12,818)
(Increase) decrease in net derivative position		152,545		69,829
(Decrease) increase in interest payable						(Decrease) increase in interest payable	1,501		(4,907)
(Decrease) increase in expense payable						(Decrease) increase in expense payable	(24,791)		11,274
Decrease in net derivative position						Decrease in net derivative position	231,332		56,833

Net change in other assets and other liabilities	Net change in other assets and other liabilities	8,292		43,027		Net change in other assets and other liabilities	6,051		20,049
Net cash provided by operating activities	Net cash provided by operating activities	246,119		157,768		Net cash provided by operating activities	489,039		230,202
Cash Flow From Investing Activities	Cash Flow From Investing Activities					Cash Flow From Investing Activities
Net decrease (increase) in loans	Net decrease (increase) in loans	(305,878)		274,733		Net decrease (increase) in loans	(2,271,051)		478,170
Purchases of	Purchases of					Purchases of
AFS securities	AFS securities	(409,376)		(809,140)		AFS securities	(502,912)		(1,162,109)
HTM securities	HTM securities	(135,301)		(37,215)		HTM securities	(202,271)		(81,368)
Federal Home Loan Bank and Federal Reserve Bank stocks and equity securities	Federal Home Loan Bank and Federal Reserve Bank stocks and equity securities	(1)		(1)		Federal Home Loan Bank and Federal Reserve Bank stocks and equity securities	(69,339)		(1)
Premises, equipment, and software, net of disposals	Premises, equipment, and software, net of disposals	(17,141)		(6,477)		Premises, equipment, and software, net of disposals	(33,373)		(19,706)

Proceeds from	Proceeds from					Proceeds from
Sales of AFS and equity securities	Sales of AFS and equity securities	742		51,295		Sales of AFS and equity securities	1,069		158,743

Prepayments, calls, and maturities of AFS securities	Prepayments, calls, and maturities of AFS securities	167,986		419,235		Prepayments, calls, and maturities of AFS securities	296,179		699,584
Prepayments, calls, and maturities of HTM securities	Prepayments, calls, and maturities of HTM securities	51,206		97,196		Prepayments, calls, and maturities of HTM securities	111,796		195,107
Sales, prepayments, calls, and maturities of other assets	Sales, prepayments, calls, and maturities of other assets	18,012		8,525		Sales, prepayments, calls, and maturities of other assets	23,523		12,421
Net cash received in business segment sale	Net cash received in business segment sale	—		2,484		Net cash received in business segment sale	—		2,415
Net change in tax credit and alternative investments	Net change in tax credit and alternative investments	(10,293)		(12,990)		Net change in tax credit and alternative investments	(34,186)		(34,200)

Net cash (used in) investing activities		(640,045)		(12,354)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	(2,680,566)		249,056
Cash Flow From Financing Activities	Cash Flow From Financing Activities					Cash Flow From Financing Activities
Net increase (decrease) in deposits		(60,949)		1,225,867
Net increase in deposits						Net increase in deposits	110,280		813,098
Net decrease in deposits due to branch sales	Net decrease in deposits due to branch sales	—		(31,083)		Net decrease in deposits due to branch sales	—		(31,083)
Net increase (decrease) in short-term funding	Net increase (decrease) in short-term funding	45,098		(62,639)		Net increase (decrease) in short-term funding	351,358		(26,112)
Net increase in short-term FHLB advances	Net increase in short-term FHLB advances	320,000		—		Net increase in short-term FHLB advances	2,045,000		—
Repayment of long-term FHLB advances	Repayment of long-term FHLB advances	(414,578)		(2,954)		Repayment of long-term FHLB advances	(408,870)		(18,049)
Proceeds from long-term FHLB advances	Proceeds from long-term FHLB advances	11,506		251		Proceeds from long-term FHLB advances	916		5,251

(Repayment) proceeds of finance lease principal	(Repayment) proceeds of finance lease principal	399		(37)		(Repayment) proceeds of finance lease principal	348		(1,035)

Proceeds from issuance of common stock for stock-based compensation plans	Proceeds from issuance of common stock for stock-based compensation plans	6,654		10,556		Proceeds from issuance of common stock for stock-based compensation plans	6,793		18,174

Redemption of preferred shares						Redemption of preferred shares	—		(65,000)

Purchase of treasury stock, open market purchases	Purchase of treasury stock, open market purchases	—		(17,973)		Purchase of treasury stock, open market purchases	—		(47,945)
Purchase of treasury stock, stock-based compensation plans	Purchase of treasury stock, stock-based compensation plans	(5,193)		(3,593)		Purchase of treasury stock, stock-based compensation plans	(6,078)		(4,450)
Cash dividends on common stock	Cash dividends on common stock	(30,583)		(27,870)		Cash dividends on common stock	(60,914)		(55,693)
Cash dividends on preferred stock	Cash dividends on preferred stock	(2,875)		(5,207)		Cash dividends on preferred stock	(5,750)		(10,082)
Net cash provided by (used in) financing activities		(130,521)		1,085,319
Net cash provided by financing activities						Net cash provided by financing activities	2,033,084		577,074
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	(524,447)		1,230,732		Net increase (decrease) in cash and cash equivalents	(158,444)		1,056,332
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,025,515		716,048		Cash and cash equivalents at beginning of period	1,025,515		716,048
Cash and cash equivalents at end of period(b)	Cash and cash equivalents at end of period(b)	$	501,068	$	1,946,780	Cash and cash equivalents at end of period(b)	$	867,071	$	1,772,379

Numbers may not sum due to rounding.

(a) On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value. For all prior periods, MSRs were carried at LOCOM.

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

910

Table of Contents

ASSOCIATED BANC-CORP

Consolidated Statements of Cash Flows (Unaudited)


		Three Months Ended Mar 31,					Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021		($ in Thousands)	2022		2021
Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information					Supplemental disclosures of cash flow information
Cash paid for interest	Cash paid for interest	$	16,267	$	29,258	Cash paid for interest	$	33,533	$	44,782
Cash (received from) income and franchise taxes	Cash (received from) income and franchise taxes	(1,471)		(114)		Cash (received from) income and franchise taxes	2,432		54,179
Loans and bank premises transferred to OREO	Loans and bank premises transferred to OREO	426		15,426		Loans and bank premises transferred to OREO	1,817		18,535
Capitalized mortgage servicing rights	Capitalized mortgage servicing rights	3,042		3,348		Capitalized mortgage servicing rights	5,231		7,488
Loans transferred into held for sale from portfolio, net		2,644		5,582
Loans transferred from held for sale into portfolio, net						Loans transferred from held for sale into portfolio, net	4,149		9,970
Transfer of AFS securities to HTM securities	Transfer of AFS securities to HTM securities	1,621,990		—		Transfer of AFS securities to HTM securities	1,621,990		—
Unsettled trades to purchase securities	Unsettled trades to purchase securities	4,246		3,000		Unsettled trades to purchase securities	1,450		—

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Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Notes to Consolidated Financial Statements

These interim consolidated financial statements have been prepared according to the rules and regulations of the SEC and, therefore, certain information and footnote disclosures normally presented in accordance with GAAP have been omitted or abbreviated. The information contained on the consolidated financial statements and footnotes in Associated Banc-Corp's 2021 Annual Report on Form 10-K should be referred to in connection with the reading of these unaudited interim consolidated financial statements.

Note 1 Basis of Presentation

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

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

Note 2 Acquisitions and Dispositions

Acquisitions:

The Corporation did not have any acquisitions during the first ~~three~~six months of 2022 or during 2021.

Dispositions:

2021

On March 1, 2021, the Corporation closed on the sale of its wealth management subsidiary, Whitnell, to Rockefeller for a purchase price of $8 million. Associated reported a first quarter 2021 pre-tax gain of $2 million, included in asset gains, net on the consolidated statements of income, in conjunction with the sale.

On February 26, 2021, the Bank completed the sale of ~~one~~1 branch located in Monroe, Wisconsin to Summit Credit Union. Under the terms of the transaction, the Bank sold $31 million in total deposits and no0 loans. The Bank received an approximately 4% purchase premium on deposits transferred.

Note 3 Summary of Significant Accounting Policies

The accounting and reporting policies of the Corporation conform to U.S. GAAP and to general practice within the financial services industry. A discussion of these policies can be found in Note 1 Summary of Significant Accounting Policies included in the Corporation’s 2021 Annual Report on Form 10-K. As a result of the irrevocable election to account for MSRs under the fair value measurement methodology, as permitted under ASC 860-50-35-3, there has been a change to the Corporation's significant accounting policies since December 31, 2021, which is described below.

Mortgage Servicing Rights

The Corporation sells residential mortgage loans in the secondary market and typically retains the rights to service the loans sold. Upon sale, a MSRs asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs asset under the fair value measurement method. As a result of the change, a cumulative effect adjustment of $2 million, increasing retained earnings on the consolidated balance sheets, was recognized. Under this methodology, changes in the fair value are recognized in earnings as they occur through mortgage banking, net on the consolidated statements of income.

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MSRs are not traded in active markets. A cash flow model is used to determine fair value. Key assumptions and estimates, including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, used by this model are based on current market sources. Assumptions used to value MSRs are considered significant unobservable inputs. A separate third-party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults and other relevant factors. Fair value estimates from outside sources are received periodically to corroborate the results of the valuation model.

New Accounting Pronouncements Adopted

There were no applicable material accounting pronouncements adopted by the Corporation since December 31, 2021.

Future Accounting Pronouncements

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


Standard	Description	Date of anticipated adoption	Effect on financial statements

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

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Note 4 Earnings Per Common Share

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


		Three Months Ended Mar 31,				Three Months Ended Jun 30,		Six Months Ended Jun 30,
(In Thousands, except per share data)	(In Thousands, except per share data)	2022		2021			(In Thousands, except per share data)	2022		2021		2022		2021
Net income	Net income	$	74,262	$	94,301		Net income	$	86,824	$	91,007	$	161,086	$	185,307
Preferred stock dividends	Preferred stock dividends	(2,875)		(5,207)			Preferred stock dividends	(2,875)		(4,875)		(5,750)		(10,082)
Net income available to common equity	Net income available to common equity	$	71,387	$	89,094		Net income available to common equity	$	83,949	$	86,131	$	155,336	$	175,226
Common shareholder dividends	Common shareholder dividends	(30,372)		(27,661)			Common shareholder dividends	(30,126)		(27,620)		(60,499)		(55,280)
Unvested share-based payment awards	Unvested share-based payment awards	(211)		(209)			Unvested share-based payment awards	(205)		(203)		(415)		(412)
Undistributed earnings	Undistributed earnings	$	40,804	$	61,224		Undistributed earnings	$	53,618	$	58,309	$	94,422	$	119,533
Undistributed earnings allocated to common shareholders	Undistributed earnings allocated to common shareholders	$	40,548	$	60,836		Undistributed earnings allocated to common shareholders	$	53,257	$	57,887	$	93,807	$	118,722
Undistributed earnings allocated to unvested share-based payment awards	Undistributed earnings allocated to unvested share-based payment awards	256		387			Undistributed earnings allocated to unvested share-based payment awards	361		422		615		810
Undistributed earnings	Undistributed earnings	$	40,804	$	61,224		Undistributed earnings	$	53,618	$	58,309	$	94,422	$	119,533
Basic	Basic						Basic
Distributed earnings to common shareholders	Distributed earnings to common shareholders	$	30,372	$	27,661		Distributed earnings to common shareholders	$	30,126	$	27,620	$	60,499	$	55,280
Undistributed earnings allocated to common shareholders	Undistributed earnings allocated to common shareholders	40,548		60,836			Undistributed earnings allocated to common shareholders	53,257		57,887		93,807		118,722
Total common shareholders earnings, basic	Total common shareholders earnings, basic	$	70,920	$	88,497		Total common shareholders earnings, basic	$	83,383	$	85,506	$	154,306	$	174,002
Diluted	Diluted						Diluted
Distributed earnings to common shareholders	Distributed earnings to common shareholders	$	30,372	$	27,661		Distributed earnings to common shareholders	$	30,126	$	27,620	$	60,499	$	55,280
Undistributed earnings allocated to common shareholders	Undistributed earnings allocated to common shareholders	40,548		60,836			Undistributed earnings allocated to common shareholders	53,257		57,887		93,807		118,722
Total common shareholders earnings, diluted	Total common shareholders earnings, diluted	$	70,920	$	88,497		Total common shareholders earnings, diluted	$	83,383	$	85,506	$	154,306	$	174,002
Weighted average common shares outstanding	Weighted average common shares outstanding	148,781		152,355			Weighted average common shares outstanding	149,083		152,042		148,933		152,198
Effect of dilutive common stock awards	Effect of dilutive common stock awards	1,711		1,333			Effect of dilutive common stock awards	1,121		1,339		1,332		1,275

Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	150,492		153,688			Diluted weighted average common shares outstanding	150,203		153,381		150,265		153,473
Basic earnings per common share	Basic earnings per common share	$	0.48	$	0.58		Basic earnings per common share	$	0.56	$	0.56	$	1.04	$	1.14
Diluted earnings per common share	Diluted earnings per common share	$	0.47	$	0.58		Diluted earnings per common share	$	0.56	$	0.56	$	1.03	$	1.13

Anti-dilutive common stock options of approximately ~~2 million and~~ 3 million for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 ~~respectively,~~ were excluded from the earnings per common share calculation.

Note 5 Stock-Based Compensation

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

A summary of the Corporation’s stock option activity for the ~~three~~six months ended ~~March 31,~~June 30, 2022 is presented below:


Stock Options	Stock Options	Shares(a)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)		Stock Options	Shares(a)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)
Outstanding at December 31, 2021	Outstanding at December 31, 2021	4,814	$	20.72	5.96 years	$	12,532	Outstanding at December 31, 2021	4,814	$	20.72	5.96 years	$	12,532

Exercised	Exercised	(362)	17.65					Exercised	367	17.64

Outstanding at March 31, 2022		4,452	$	20.97	5.85 years	$	11,138
Options Exercisable at March 31, 2022		3,775	$	21.29	5.52 years	$	8,661
Outstanding at June 30, 2022								Outstanding at June 30, 2022	4,447	$	20.97	5.56 years	$	1,770
Options Exercisable at June 30, 2022								Options Exercisable at June 30, 2022	3,805	$	21.28	5.24 years	$	1,341

(a) In thousands

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For ~~both~~ the ~~three~~six months ended ~~March 31,~~June 30, 2022, ~~and 2021,~~ the intrinsic value of stock options exercised was $3 ~~million.~~million compared to $6 million for the six months ended June 30, 2021. For the ~~three~~six months ended ~~March 31,~~June 30, 2022, the total fair value of stock options vested was $2 million compared to $3 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021.

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The Corporation recognized compensation expense for the vesting of stock options of approximately ~~$241,000~~$469,000 for the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to approximately ~~$403,000~~$755,000 for the ~~three~~six months ended ~~March 31,~~June 30, 2021. Compensation expense for the ~~first quarter of~~six months ended June 30, 2022 related to accelerated vesting of stock options for retirement eligible colleagues was immaterial. At ~~March 31,~~June 30, 2022, the Corporation had ~~$1 million~~approximately $855,000 of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2024.

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

The following table summarizes information about the Corporation’s restricted stock awards activity for the ~~three~~six months ended ~~March 31,~~June 30, 2022:


Restricted Stock Awards	Restricted Stock Awards	Shares(a)	Weighted Average Grant Date Fair Value		Restricted Stock Awards	Shares(a)	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	Outstanding at December 31, 2021	2,635	$	19.87	Outstanding at December 31, 2021	2,635	$	19.87
Granted	Granted	650	23.69		Granted	673	23.44
Vested	Vested	(618)	23.73		Vested	754	23.16
Forfeited	Forfeited	(1)	21.97		Forfeited	22	21.35
Outstanding at March 31, 2022		2,666	$	20.70
Outstanding at June 30, 2022					Outstanding at June 30, 2022	2,532	$	20.64

(a) In thousands

The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the grant's award agreement. Performance-based restricted stock awards granted during 2021 and 2022 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during 2021 and 2022 will vest ratably over a period of four years. Expense for restricted stock awards of $6$10 million was recorded for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and $3$8 million was recorded for the ~~three~~six months ended ~~March 31,~~June 30, 2021. Included in compensation expense for the first ~~three~~six months of 2022 was $3 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had ~~$31~~$27 million of unrecognized compensation costs related to restricted stock awards at ~~March 31,~~June 30, 2022 that are expected to be recognized over the remaining requisite service periods that extend predominately through the first quarter of 2026.

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

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Note 6 Investment Securities

Investment securities are designated as AFS, HTM, or equity on the consolidated balance sheets at the time of purchase. The amortized cost and fair values of AFS and HTM securities at ~~March 31,~~June 30, 2022 were as follows:


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

Investment securities AFS
AFS investment securities										AFS investment securities
U. S. Treasury securities	U. S. Treasury securities	$	124,328	$	—	$	(8,196)	$	116,132	U. S. Treasury securities	$	124,365	$	—	$	(11,256)	$	113,109
Agency securities	Agency securities	15,000		—		(800)		14,200		Agency securities	15,000		—		(1,041)		13,959
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	368,831		3,764		(195)		372,401		Obligations of state and political subdivisions (municipal securities)	361,712		648		(3,518)		358,842
Residential mortgage-related securities	Residential mortgage-related securities									Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	1,993,893		937		(100,011)		1,894,819		FNMA / FHLMC	1,959,641		547		(148,585)		1,811,603
GNMA	GNMA	59,470		166		(726)		58,909		GNMA	87,779		—		(1,542)		86,238

Commercial mortgage-related securities	Commercial mortgage-related securities									Commercial mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	19,290		496		—		19,786		FNMA / FHLMC	19,207		—		(601)		18,606
GNMA	GNMA	128,019		18		(1,278)		126,760		GNMA	108,153		—		(2,473)		105,680
Asset backed securities	Asset backed securities									Asset backed securities
FFELP	FFELP	173,068		—		(4,090)		168,978		FFELP	168,357		—		(7,092)		161,264
SBA	SBA	5,865		33		(53)		5,845		SBA	5,287		40		(45)		5,281

Other debt securities	Other debt securities	3,000		—		(27)		2,973		Other debt securities	3,000		—		(71)		2,929
Total investment securities AFS		$	2,890,763	$	5,416	$	(115,376)	$	2,780,803
Investment securities HTM
Total AFS investment securities										Total AFS investment securities	$	2,852,501	$	1,234	$	(176,224)	$	2,677,511
HTM investment securities										HTM investment securities
U. S. Treasury securities	U. S. Treasury securities	$	998	$	—	$	(34)	$	964	U. S. Treasury securities	$	998	$	—	$	(44)	$	955
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	1,696,536		32,201		(80,896)		1,647,842		Obligations of state and political subdivisions (municipal securities)	1,717,627		4,002		(161,116)		1,560,514
Residential mortgage-related securities	Residential mortgage-related securities									Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	956,470		35,739		(72,418)		919,790		FNMA / FHLMC	967,421		34,108		(125,444)		876,085
GNMA	GNMA	44,742		116		(643)		44,215		GNMA	42,248		37		(1,637)		40,649
Private-label	Private-label	384,016		13,460		(28,955)		368,521		Private-label	375,638		12,693		(54,490)		333,841
Commercial mortgage-related securities	Commercial mortgage-related securities									Commercial mortgage-related securities
FNMA/FHLMC	FNMA/FHLMC	764,775		17,620		(88,784)		693,610		FNMA/FHLMC	762,086		16,835		(131,851)		647,070
GNMA	GNMA	92,383		1,032		(3,456)		89,959		GNMA	79,250		799		(4,970)		75,079
Total investment securities HTM		$	3,939,920	$	100,167	$	(275,186)	$	3,764,901
Total HTM investment securities										Total HTM investment securities	$	3,945,269	$	68,474	$	(479,551)	$	3,534,192

During the first quarter of 2022, the Corporation redesignated approximately $1.6 billion of mortgage-related securities from AFS to HTM. The reclassification of these investment securities was accounted for at fair value. Management elected to transfer these investment securities as the Corporation has the positive intent and ability to hold these investment securities to maturity. See Note 16 for additional information on the unrealized losses on investment securities transferred from AFS to HTM.

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The amortized cost and fair values of AFS and HTM securities at December 31, 2021 were as follows:
($ in Thousands) Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
(Losses) Fair Value
Investment securities AFS
U. S. Treasury securities $ 124,291 $ — $ (1,334) $ 122,957
Agency securities 15,000 — (103) 14,897
Obligations of state and political subdivisions (municipal securities) 381,517 18,940 — 400,457
Residential mortgage-related securities
FNMA / FHLMC 2,709,399 3,729 (21,249) 2,691,879
GNMA 66,189 1,591 — 67,780
Private-label 332,028 31 (2,335) 329,724
Commercial mortgage-related securities
FNMA / FHLMC 357,240 2,686 (9,302) 350,623
GNMA 165,439 1,360 — 166,799
Asset backed securities
FFELP 177,974 475 (1,123) 177,325
SBA 6,594 39 (54) 6,580
Other debt securities 3,000 — (6) 2,994
Total investment securities AFS $ 4,338,671 $ 28,850 $ (35,506) $ 4,332,015
Investment securities HTM
U. S. Treasury securities $ 1,000 $ 1 $ — $ 1,001
Obligations of state and political subdivisions (municipal securities) 1,628,759 113,179 (1,951) 1,739,988
Residential mortgage-related securities
FNMA / FHLMC 34,347 1,792 — 36,139
GNMA 48,053 1,578 — 49,631
Commercial mortgage-related securities
FNMA / FHLMC 425,937 122 (6,659) 419,400
GNMA 100,907 1,799 (200) 102,506
Total investment securities HTM $ 2,239,003 $ 118,471 $ (8,809) $ 2,348,664

~~Table of Contents~~


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


AFS investment securities
U. S. Treasury securities	$	124,291	$	—	$	(1,334)	$	122,957
Agency securities	15,000		—		(103)		14,897
Obligations of state and political subdivisions (municipal securities)	381,517		18,940		—		400,457
Residential mortgage-related securities
FNMA / FHLMC	2,709,399		3,729		(21,249)		2,691,879
GNMA	66,189		1,591		—		67,780
Private-label	332,028		31		(2,335)		329,724
Commercial mortgage-related securities
FNMA / FHLMC	357,240		2,686		(9,302)		350,623
GNMA	165,439		1,360		—		166,799
Asset backed securities
FFELP	177,974		475		(1,123)		177,325
SBA	6,594		39		(54)		6,580
Other debt securities	3,000		—		(6)		2,994
Total AFS investment securities	$	4,338,671	$	28,850	$	(35,506)	$	4,332,015
HTM investment securities
U. S. Treasury securities	$	1,000	$	1	$	—	$	1,001
Obligations of state and political subdivisions (municipal securities)	1,628,759		113,179		(1,951)		1,739,988
Residential mortgage-related securities
FNMA / FHLMC	34,347		1,792		—		36,139
GNMA	48,053		1,578		—		49,631
Commercial mortgage-related securities
FNMA / FHLMC	425,937		122		(6,659)		419,400
GNMA	100,907		1,799		(200)		102,506
Total HTM investment securities	$	2,239,003	$	118,471	$	(8,809)	$	2,348,664

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The expected maturities of AFS and HTM securities at ~~March 31,~~June 30, 2022, are shown below:


		AFS					HTM						AFS					HTM
($ in Thousands)	($ in Thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value			($ in Thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due in one year or less	Due in one year or less	$	5,167	$	5,171		$	18,432	$	18,503		Due in one year or less	$	6,905	$	6,895		$	15,582	$	15,627
Due after one year through five years	Due after one year through five years	89,914		87,185			34,156		34,343			Due after one year through five years	98,473		94,572			34,915		35,027
Due after five years through ten years	Due after five years through ten years	378,692		374,733			163,456		164,057			Due after five years through ten years	361,344		350,609			169,413		167,713
Due after ten years	Due after ten years	37,386		38,617			1,481,489		1,431,903			Due after ten years	37,355		36,762			1,498,715		1,343,101
Total debt securities	Total debt securities	511,159		505,706			1,697,534		1,648,806			Total debt securities	504,077		488,839			1,718,625		1,561,468
Residential mortgage-related securities	Residential mortgage-related securities											Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	1,993,893		1,894,819			956,470		919,790			FNMA / FHLMC	1,959,641		1,811,603			967,421		876,085
GNMA	GNMA	59,470		58,909			44,742		44,215			GNMA	87,779		86,238			42,248		40,649
Private-label	Private-label	—		—			384,016		368,521			Private-label	—		—			375,638		333,841
Commercial mortgage-related securities	Commercial mortgage-related securities											Commercial mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	19,290		19,786			764,775		693,610			FNMA / FHLMC	19,207		18,606			762,086		647,070
GNMA	GNMA	128,019		126,760			92,383		89,959			GNMA	108,153		105,680			79,250		75,079
Asset backed securities	Asset backed securities											Asset backed securities
FFELP	FFELP	173,068		168,978			—		—			FFELP	168,357		161,264			—		—
SBA	SBA	5,865		5,845			—		—			SBA	5,287		5,281			—		—

Total investment securities	Total investment securities	$	2,890,763	$	2,780,803		$	3,939,920	$	3,764,901		Total investment securities	$	2,852,501	$	2,677,511		$	3,945,269	$	3,534,192
Ratio of fair value to amortized cost	Ratio of fair value to amortized cost			96.2		%			95.6		%	Ratio of fair value to amortized cost			93.9		%			89.6		%

Table of Contents

On a quarterly basis, the Corporation refreshes the credit quality of each HTM security. The following table summarizes the credit quality indicators of HTM securities at amortized cost at ~~March 31,~~June 30, 2022:


($ in Thousands)	($ in Thousands)	AAA		AA		A		Not Rated		Total		($ in Thousands)	AAA		AA		A		Not Rated		Total
U. S. Treasury securities	U. S. Treasury securities	$	998	$	—	$	—	$	—	$	998	U. S. Treasury securities	$	998	$	—	$	—	$	—	$	998
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	762,066		920,883		12,692		895		1,696,536		Obligations of state and political subdivisions (municipal securities)	799,925		908,098		8,710		894		1,717,627
Residential mortgage-related securities	Residential mortgage-related securities											Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	956,470		—		—		—		956,470		FNMA / FHLMC	967,421		—		—		—		967,421
GNMA	GNMA	44,742		—		—		—		44,742		GNMA	42,248		—		—		—		42,248
Private-label	Private-label	384,016		—		—		—		384,016		Private-label	375,638		—		—		—		375,638
Commercial mortgage-related securities	Commercial mortgage-related securities											Commercial mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	764,775		—		—		—		764,775		FNMA / FHLMC	762,086		—		—		—		762,086
GNMA	GNMA	92,383		—		—		—		92,383		GNMA	79,250		—		—		—		79,250
Total HTM securities	Total HTM securities	$	3,005,450	$	920,883	$	12,692	$	895	$	3,939,920	Total HTM securities	$	3,027,567	$	908,098	$	8,710	$	894	$	3,945,269

The following table summarizes the credit quality indicators of HTM securities at amortized cost at December 31, 2021:


($ in Thousands)	AAA		AA		A		Not Rated		Total
U. S. Treasury securities	$	1,000	$	—	$	—	$	—	$	1,000
Obligations of state and political subdivisions (municipal securities)	702,399		914,591		10,873		896		1,628,759
Residential mortgage-related securities
FNMA / FHLMC	34,347		—		—		—		34,347
GNMA	48,053		—		—		—		48,053
Commercial mortgage-related securities
FNMA / FHLMC	425,937		—		—		—		425,937
GNMA	100,907		—		—		—		100,907
Total HTM securities	$	1,312,642	$	914,591	$	10,873	$	896	$	2,239,003

~~Table of Contents~~

Investment securities gains (losses), net includes proceeds from the sale of AFS investment securities. The proceeds from the sale of AFS investment securities for the three and six months ended ~~March 31,~~June 30, 2022 and 2021, are shown below:


		Three Months Ended Mar 31,				Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021			($ in Thousands)	2022		2021		2022		2021
Gross gains on AFS securities	Gross gains on AFS securities	$	21	$	36		Gross gains on AFS securities	$	—	$	386	$	21	$	421

Gross (losses) on AFS securities	Gross (losses) on AFS securities	—		(75)			Gross (losses) on AFS securities	(8)		(362)		(8)		(437)

Investment securities gains (losses), net	Investment securities gains (losses), net	21		(39)			Investment securities gains (losses), net	$	(8)	$	24	$	12	$	(16)
Proceeds from sales of investment securities AFS		$	734	$	51,295
Proceeds from sales of AFS investment securities							Proceeds from sales of AFS investment securities	$	327	$	107,412	$	1,061	$	158,708

During the second quarter of 2021, the Corporation sold $107 million of lower yielding FFELP student loan asset backed securities at an immaterial gain and reinvested the proceeds into higher yielding mortgage backed securities. During the first quarter of 2021, the Corporation sold $51 million of lower yielding U.S. Treasury and Agency securities at ~~a slight~~an immaterial loss to take advantage of the steeper yield curve by reinvesting the proceeds into similar but higher yielding, longer duration securities.

Investment securities with a carrying value of ~~$2.2~~$2.6 billion and $2.3 billion at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively, were pledged to secure certain deposits or for other purposes.

Accrued interest receivable on HTM securities totaled ~~$16~~$18 million and $15 million at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable on AFS securities totaled $8$7 million and $9 million at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. Accrued interest receivable on both HTM and AFS securities is included in interest receivable on the consolidated balance sheets. There was no interest income reversed for investments going into nonaccrual at both ~~March 31,~~June 30, 2022 and 2021.

A security is considered past due once it is 30 days past due under the terms of the agreement. At both ~~March 31,~~June 30, 2022 and December 31, 2021, the Corporation had no past due HTM securities.

The allowance for credit losses on HTM securities was approximately ~~$65,000~~$63,000 at ~~March 31,~~June 30, 2022 and approximately $55,000 at December 31, 2021, attributable entirely to the Corporation's municipal securities, included in HTM investment securities, ~~HTM,~~ net, at amortized cost on the consolidated balance sheets. The Corporation also holds U.S. Treasury, municipal and mortgage-related securities issued by the U.S. government or a GSE which are backed by the full faith and credit of the U.S. government and, as a result, no allowance for credit losses has been recorded related to these securities.

Table of Contents

The following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position, at ~~March 31,~~June 30, 2022:


		Less than 12 months					12 months or more					Total					Less than 12 months					12 months or more					Total
($ in Thousands)	($ in Thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value		($ in Thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
Investment securities AFS
AFS investment securities																AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	5	$	(7,346)	$	107,050	2	(850)		$	9,082	$	(8,196)	$	116,132	U.S. Treasury securities	5	$	(10,141)	$	104,289	2	$	(1,115)	$	8,820	$	(11,256)	$	113,109
Agency securities	Agency securities	1	(800)		14,200		—	—		—		(800)		14,200		Agency securities	1	(1,041)		13,959		—	—		—		(1,041)		13,959
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	64	(195)		35,501		—	—		—		(195)		35,501		Obligations of state and political subdivisions (municipal securities)	373	(3,518)		224,804		—	—		—		(3,518)		224,804
Residential mortgage-related securities	Residential mortgage-related securities															Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	88	(80,850)		1,617,123		8	(19,161)		235,380		(100,011)		1,852,503		FNMA / FHLMC	95	(125,142)		1,554,774		8	(23,443)		222,626		(148,585)		1,777,400
GNMA	GNMA	9	(726)		44,614		—	—		—		(726)		44,614		GNMA	17	(1,542)		86,238		—	—		—		(1,542)		86,238

GNMA commercial mortgage-related securities		31	(1,278)		113,831		—	—		—		(1,278)		113,831
Commercial mortgage-related securities																Commercial mortgage-related securities
FNMA / FHLMC																FNMA / FHLMC	1	(601)		18,606		—	—		—		(601)		18,606
GNMA																GNMA	35	(2,473)		105,680		—	—		—		(2,473)		105,680
Asset backed securities	Asset backed securities															Asset backed securities
FFELP	FFELP	7	(1,955)		110,489		8	(2,135)		58,489		(4,090)		168,978		FFELP	6	(2,905)		72,610		9	(4,187)		88,655		(7,092)		161,264
SBA	SBA	—	—		—		8	(53)		2,763		(53)		2,763		SBA	—	—		—		7	(45)		2,456		(45)		2,456
Other debt securities	Other debt securities	2	(27)		1,973		—	—		—		(27)		1,973		Other debt securities	3	(71)		2,929		—	—		—		(71)		2,929

Total	Total	207	$	(93,177)	$	2,044,781	26	$	(22,199)	$	305,713	$	(115,376)	$	2,350,494	Total	536	$	(147,433)	$	2,183,889	26	$	(28,791)	$	322,556	$	(176,224)	$	2,506,446
Investment securities HTM
HTM investment securities																HTM investment securities
U.S. Treasury securities	U.S. Treasury securities	1	$	(34)	$	964	—	$	—	$	—	$	(34)	$	964	U.S. Treasury securities	1	$	(44)	$	955	—	$	—	$	—	$	(44)	$	955
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	346	(79,571)		576,351		5	(1,325)		5,100		(80,896)		581,451		Obligations of state and political subdivisions (municipal securities)	717	(156,757)		1,127,009		9	(4,359)		11,242		(161,116)		1,138,251
Residential mortgage-related securities	Residential mortgage-related securities															Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	51	(72,418)		896,284		—	—		—		(72,418)		896,284		FNMA / FHLMC	81	(125,444)		872,561		—	—		—		(125,444)		872,561
GNMA	GNMA	46	(643)		33,468		—	—		—		(643)		33,468		GNMA	74	(1,637)		40,113		—	—		—		(1,637)		40,113
Private-label	Private-label	18	(28,955)		368,521		—	—		—		(28,955)		368,521		Private-label	18	(54,490)		333,841		—	—		—		(54,490)		333,841
Commercial mortgage-related securities	Commercial mortgage-related securities															Commercial mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	15	(79,178)		342,543		7	(9,606)		72,787		(88,784)		415,331		FNMA / FHLMC	15	(119,046)		313,359		7	(12,804)		68,980		(131,851)		382,339
GNMA	GNMA	33	(3,456)		368,244		—	—		—		(3,456)		368,244		GNMA	33	(4,970)		339,810		—	—		—		(4,970)		339,810
Total	Total	510	$	(264,255)	$	2,586,375	12	$	(10,930)	$	77,887	$	(275,186)	$	2,664,262	Total	939	$	(462,387)	$	3,027,647	16	$	(17,163)	$	80,222	$	(479,551)	$	3,107,869

Table of Contents

For comparative purposes, the following represents gross unrealized losses and the related fair value of AFS and HTM securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2021:


		Less than 12 months					12 months or more					Total					Less than 12 months					12 months or more					Total
($ in Thousands)	($ in Thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value		($ in Thousands)	Number of Securities	Unrealized (Losses)		Fair Value		Number of Securities	Unrealized (Losses)		Fair Value		Unrealized (Losses)		Fair Value
Investment securities AFS
AFS investment securities																AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	7	$	(1,334)	$	122,957	—	$	—	$	—	$	(1,334)	$	122,957	U.S. Treasury securities	7	$	(1,334)	$	122,957	—	$	—	$	—	$	(1,334)	$	122,957
Agency securities	Agency securities	1	(103)		14,897		—	—		—		(103)		14,897		Agency securities	1	(103)		14,897		—	—		—		(103)		14,897

Residential mortgage-related securities	Residential mortgage-related securities															Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	74	(21,249)		2,172,837		—	—		—		(21,249)		2,172,837		FNMA / FHLMC	74	(21,249)		2,172,837		—	—		—		(21,249)		2,172,837

Private-label	Private-label	12	(2,335)		248,617		—	—		—		(2,335)		248,617		Private-label	12	(2,335)		248,617		—	—		—		(2,335)		248,617

FNMA / FHLMC commercial mortgage-related securities	FNMA / FHLMC commercial mortgage-related securities	19	(9,302)		328,568		—	—		—		(9,302)		328,568		FNMA / FHLMC commercial mortgage-related securities	19	(9,302)		328,568		—	—		—		(9,302)		328,568
Asset backed securities	Asset backed securities															Asset backed securities
FFELP	FFELP	4	(256)		64,282		8	(867)		62,576		(1,123)		126,858		FFELP	4	(256)		64,282		8	(867)		62,576		(1,123)		126,858
SBA	SBA	—	—		—		9	(54)		3,902		(54)		3,902		SBA	—	—		—		9	(54)		3,902		(54)		3,902
Other debt securities	Other debt securities	3	(6)		2,994		—	—		—		(6)		2,994		Other debt securities	3	(6)		2,994		—	—		—		(6)		2,994

Total	Total	120	$	(34,586)	$	2,955,152	17	$	(920)	$	66,478	$	(35,506)	$	3,021,630	Total	120	$	(34,586)	$	2,955,152	17	$	(920)	$	66,478	$	(35,506)	$	3,021,630
Investment securities HTM
HTM investment securities																HTM investment securities
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	49	$	(1,951)	$	112,038	—	$	—	$	—	$	(1,951)	$	112,038	Obligations of state and political subdivisions (municipal securities)	49	$	(1,951)	$	112,038	—	$	—	$	—	$	(1,951)	$	112,038

Commercial mortgage-related securities	Commercial mortgage-related securities															Commercial mortgage-related securities
FNMA/FHLMC	FNMA/FHLMC	18	(6,272)		388,072		1	$	(387)	$	10,775	(6,659)		398,847		FNMA/FHLMC	18	(6,272)		388,072		1	(387)		10,775		(6,659)		398,847
GNMA	GNMA	5	(200)		33,468		—	—		—		(200)		33,468		GNMA	5	(200)		33,468		—	—		—		(200)		33,468
Total	Total	72	$	(8,422)	$	533,577	1	$	(387)	$	10,775	$	(8,809)	$	544,352	Total	72	$	(8,422)	$	533,577	1	$	(387)	$	10,775	$	(8,809)	$	544,352

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

Based on the Corporation’s evaluation, management does not believe any unrealized losses at ~~March 31,~~June 30, 2022 represent credit deterioration as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions. The Corporation does not intend to sell nor does it believe that it will be required to sell the securities in an unrealized loss position before recovery of their amortized cost basis.

FHLB and Federal Reserve Bank stocks: The Corporation is required to maintain Federal Reserve Bank stock and FHLB stock as a member bank of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of $151 million and $82 million at ~~both March 31,~~June 30, 2022 and December 31, ~~2021.~~2021, respectively. The Corporation had Federal Reserve Bank stock of $87 million at both ~~March 31,~~June 30, 2022 and December 31, 2021. Accrued interest receivable on FHLB stock totaled $1 million and approximately ~~$962,000 and~~ $975,000 at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. There was ~~$520,000~~no accrued interest receivable on Federal Reserve Bank stock at ~~March 31,~~both June 30, 2022 and ~~none at~~ December 31, 2021. Accrued interest receivable on both FHLB stock and Federal Reserve Bank stock is included in interest receivable on the consolidated balance sheets.

Equity Securities

Equity securities with readily determinable fair values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of CRA Qualified Investment mutual funds and other mutual funds. At ~~both March 31,~~June 30, 2022 and December 31, 2021, the Corporation had equity securities with readily determinable fair values of $6 million and $5 ~~million.~~million, respectively.

Equity securities without readily determinable fair values: The Corporation's portfolio of equity securities without readily determinable fair values, which primarily consists of approximately 78,000 Visa Class B restricted shares, was carried at $14 million at both ~~March 31,~~June 30, 2022 and December 31, 2021.

Table of Contents

Note 7 Loans

The period end loan composition was as follows:


($ in Thousands)	($ in Thousands)	Mar 31, 2022		Dec 31, 2021		($ in Thousands)	Jun 30, 2022		Dec 31, 2021
PPP	PPP	$	17,995	$	66,070	PPP	$	9,514	$	66,070
Asset-based lending & equipment finance(a)	Asset-based lending & equipment finance(a)	231,040		178,027		Asset-based lending & equipment finance(a)	263,044		178,027
Commercial and industrial	Commercial and industrial	8,102,380		8,208,289		Commercial and industrial	8,984,127		8,208,289
Commercial real estate — owner occupied	Commercial real estate — owner occupied	973,572		971,326		Commercial real estate — owner occupied	928,152		971,326
Commercial and business lending	Commercial and business lending	9,324,986		9,423,711		Commercial and business lending	10,184,836		9,423,711
Commercial real estate — investor	Commercial real estate — investor	4,469,241		4,384,569		Commercial real estate — investor	4,790,241		4,384,569
Real estate construction	Real estate construction	1,760,076		1,808,976		Real estate construction	1,775,648		1,808,976
Commercial real estate lending	Commercial real estate lending	6,229,317		6,193,545		Commercial real estate lending	6,565,889		6,193,545
Total commercial	Total commercial	15,554,303		15,617,256		Total commercial	16,750,726		15,617,256
Residential mortgage	Residential mortgage	7,609,343		7,567,310		Residential mortgage	8,002,943		7,567,310
Auto finance	Auto finance	497,523		143,045		Auto finance	847,969		143,045
Home equity	Home equity	580,867		595,615		Home equity	592,843		595,615
Other consumer	Other consumer	289,889		301,723		Other consumer	300,217		301,723
Total consumer	Total consumer	8,977,622		8,607,693		Total consumer	9,743,972		8,607,693
Total loans	Total loans	$	24,531,926	$	24,224,949	Total loans	$	26,494,698	$	24,224,949

(a) ~~Periods prior to Mar~~Dec 31, ~~2022 do~~2021 does not include equipment finance.

Accrued interest receivable on loans totaled ~~$58~~$68 million at ~~March 31,~~June 30, 2022, and $55 million at December 31, 2021, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled approximately ~~$95,000~~$44,000 and ~~$98,000~~$139,000 for the three and six months ended ~~March 31,~~June 30, 2022, respectively, and ~~March 31,~~approximately $140,000 and $238,000 for the three and six months ended June 30, 2021, respectively.

Table of Contents

The following table presents commercial and consumer loans by credit quality indicator by vintage year at ~~March 31,~~June 30, 2022:


						Term Loans Amortized Cost Basis by Origination Year(a)																			Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2022		2021		2020		2019		2018		Prior		Total		($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2022		2021		2020		2019		2018		Prior		Total
PPP:(b)	PPP:(b)																			PPP:(b)
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	—	$	—	$	16,118	$	1,782	$	—	$	—	$	—	$	17,900	Pass	$	—	$	—	$	49	$	8,527	$	891	$	—	$	—	$	—	$	9,467

Potential Problem	Potential Problem	—		—		—		—		54		—		—		—		54		Potential Problem	—		—		47		—		—		—		—		—		47
Nonaccrual		—		—		—		—		41		—		—		—		41

PPP	PPP	$	—	$	—	$	—	$	16,118	$	1,877	$	—	$	—	$	—	$	17,995	PPP	$	—	$	—	$	96	$	8,527	$	891	$	—	$	—	$	—	$	9,514
Asset-based lending & equipment finance:	Asset-based lending & equipment finance:																			Asset-based lending & equipment finance:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	27,624	$	22,962	$	116,851	$	42,930	$	1,243	$	223	$	150	$	211,982	Pass	$	—	$	19,968	$	77,441	$	100,349	$	44,012	$	977	$	192	$	8	$	242,947

Special Mention																				Special Mention	—		—		—		—		285		—		—		—		285
Potential Problem	Potential Problem	—		2,057		—		—		17,000		—		—		—		19,057		Potential Problem	—		1,563		1,500		—		16,750		—		—		—		19,813

Asset-based lending & equipment finance	Asset-based lending & equipment finance	$	—	$	29,681	$	22,962	$	116,851	$	59,930	$	1,243	$	223	$	150	$	231,040	Asset-based lending & equipment finance	$	—	$	21,531	$	78,941	$	100,349	$	61,047	$	977	$	192	$	8	$	263,044
Commercial and industrial:	Commercial and industrial:																			Commercial and industrial:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	2,113,051	$	320,013	$	2,622,986	$	802,154	$	905,744	$	582,722	$	602,568	$	7,949,237	Pass	$	—	$	2,252,288	$	1,499,191	$	2,520,309	$	695,696	$	772,615	$	541,349	$	542,828	$	8,824,277
Special Mention	Special Mention	—		11,619		—		5,900		3,226		—		—		38,777		59,521		Special Mention	—		16,663		1,500		5,242		17,308		—		—		33,509		74,222
Potential Problem	Potential Problem	37		3,793		17,540		1,369		3,540		45,200		20,584		1,372		93,396		Potential Problem	71		10,237		17,655		1,312		3,751		44,715		175		6,940		84,785
Nonaccrual	Nonaccrual	71		—		71		—		154		—		—		—		225		Nonaccrual	—		—		—		—		843		—		—		—		843
Commercial and industrial	Commercial and industrial	$	108	$	2,128,462	$	337,623	$	2,630,255	$	809,074	$	950,944	$	603,306	$	642,716	$	8,102,380	Commercial and industrial	$	71	$	2,279,187	$	1,518,346	$	2,526,863	$	717,599	$	817,331	$	541,524	$	583,277	$	8,984,127
Commercial real estate - owner occupied:	Commercial real estate - owner occupied:																			Commercial real estate - owner occupied:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	19,947	$	28,850	$	273,534	$	183,174	$	181,284	$	106,991	$	154,061	$	947,840	Pass	$	—	$	6,344	$	57,860	$	251,874	$	170,340	$	173,189	$	95,730	$	126,926	$	882,263
Special Mention	Special Mention	—		247		—		—		1,310		—		—		169		1,726		Special Mention	—		—		—		—		7,260		—		—		—		7,260
Potential Problem	Potential Problem	—		—		635		5,632		2,195		10,571		—		4,972		24,005		Potential Problem	—		211		898		8,779		3,752		9,073		5,282		10,634		38,628

Commercial real estate - owner occupied	Commercial real estate - owner occupied	$	—	$	20,194	$	29,485	$	279,166	$	186,678	$	191,855	$	106,991	$	159,202	$	973,572	Commercial real estate - owner occupied	$	—	$	6,555	$	58,757	$	260,653	$	181,352	$	182,262	$	101,012	$	137,560	$	928,152
Commercial and business lending:	Commercial and business lending:																			Commercial and business lending:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	2,160,622	$	371,825	$	3,029,488	$	1,030,039	$	1,088,271	$	689,936	$	756,778	$	9,126,959	Pass	$	—	$	2,278,600	$	1,634,541	$	2,881,059	$	910,939	$	946,782	$	637,271	$	669,762	$	9,958,954
Special Mention	Special Mention	—		11,865		—		5,900		4,537		—		—		38,946		61,248		Special Mention	—		16,663		1,500		5,242		24,853		—		—		33,509		81,767
Potential Problem	Potential Problem	37		5,850		18,175		7,001		22,788		55,771		20,584		6,344		136,513		Potential Problem	71		12,010		20,100		10,091		24,253		53,788		5,457		17,574		143,273
Nonaccrual	Nonaccrual	71		—		71		—		195		—		—		—		266		Nonaccrual	—		—		—		—		843		—		—		—		843
Commercial and business lending	Commercial and business lending	$	108	$	2,178,337	$	390,071	$	3,042,390	$	1,057,559	$	1,144,041	$	710,520	$	802,068	$	9,324,986	Commercial and business lending	$	71	$	2,307,273	$	1,656,141	$	2,896,392	$	960,888	$	1,000,570	$	642,728	$	720,844	$	10,184,836
Commercial real estate - investor:	Commercial real estate - investor:																			Commercial real estate - investor:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	90,319	$	391,108	$	1,616,587	$	704,283	$	713,819	$	308,963	$	318,092	$	4,143,170	Pass	$	38,623	$	91,473	$	1,069,896	$	1,488,158	$	731,756	$	569,142	$	274,865	$	294,879	$	4,520,168
Special Mention	Special Mention	—		—		2,750		55,652		16,289		32,847		—		6,855		114,393		Special Mention	—		—		—		69,497		—		20,906		—		212		90,615
Potential Problem	Potential Problem	—		—		21,291		21,155		28,694		25,722		28,804		5,125		130,792		Potential Problem	—		—		267		48,237		28,728		25,497		18,746		11,161		132,635
Nonaccrual	Nonaccrual	—		—		573		65,404		7,906		7,003		—		—		80,886		Nonaccrual	—		—		814		37,922		7,642		444		—		—		46,823
Commercial real estate - investor	Commercial real estate - investor	$	—	$	90,319	$	415,721	$	1,758,799	$	757,172	$	779,391	$	337,767	$	330,071	$	4,469,241	Commercial real estate - investor	$	38,623	$	91,473	$	1,070,977	$	1,643,814	$	768,126	$	615,989	$	293,611	$	306,252	$	4,790,241
Real estate construction:	Real estate construction:																			Real estate construction:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	27,848	$	105,439	$	867,680	$	517,765	$	152,883	$	45,941	$	12,395	$	1,729,950	Pass	$	—	$	27,288	$	263,216	$	962,486	$	375,197	$	65,237	$	23,355	$	11,039	$	1,727,819
Special Mention	Special Mention	—		—		—		934		11,929		16,454		—		—		29,317		Special Mention	—		—		—		941		11,929		34,274		—		—		47,144
Potential Problem	Potential Problem	—		—		—		84		116		—		—		—		200		Potential Problem	—		—		—		82		—		—		—		—		82
Nonaccrual	Nonaccrual	—		—		—		—		—		—		—		609		609		Nonaccrual	—		—		—		—		—		—		—		604		604
Real estate construction	Real estate construction	$	—	$	27,848	$	105,439	$	868,698	$	529,810	$	169,337	$	45,941	$	13,004	$	1,760,076	Real estate construction	$	—	$	27,288	$	263,216	$	963,509	$	387,126	$	99,511	$	23,355	$	11,643	$	1,775,648

Table of Contents


						Term Loans Amortized Cost Basis by Origination Year(a)																			Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2022		2021		2020		2019		2018		Prior		Total		($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2022		2021		2020		2019		2018		Prior		Total
Commercial real estate lending:	Commercial real estate lending:																			Commercial real estate lending:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	118,167	$	496,547	$	2,484,267	$	1,222,047	$	866,702	$	354,904	$	330,487	$	5,873,120	Pass	$	38,623	$	118,762	$	1,333,112	$	2,450,644	$	1,106,953	$	634,379	$	298,220	$	305,917	$	6,247,987
Special Mention	Special Mention	—		—		2,750		56,586		28,218		49,302		—		6,855		143,711		Special Mention	—		—		—		70,438		11,929		55,180		—		212		137,758
Potential Problem	Potential Problem	—		—		21,291		21,239		28,810		25,722		28,804		5,125		130,992		Potential Problem	—		—		267		48,318		28,728		25,497		18,746		11,161		132,717
Nonaccrual	Nonaccrual	—		—		573		65,404		7,906		7,003		—		609		81,495		Nonaccrual	—		—		814		37,922		7,642		444		—		604		47,427
Commercial real estate lending	Commercial real estate lending	$	—	$	118,167	$	521,160	$	2,627,496	$	1,286,982	$	948,729	$	383,708	$	343,075	$	6,229,317	Commercial real estate lending	$	38,623	$	118,762	$	1,334,193	$	2,607,322	$	1,155,252	$	715,500	$	316,966	$	317,895	$	6,565,889
Total commercial:	Total commercial:																			Total commercial:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	2,278,789	$	868,372	$	5,513,755	$	2,252,087	$	1,954,972	$	1,044,840	$	1,087,265	$	15,000,080	Pass	$	38,623	$	2,397,362	$	2,967,653	$	5,331,703	$	2,017,892	$	1,581,161	$	935,492	$	975,679	$	16,206,941
Special Mention	Special Mention	—		11,865		2,750		62,486		32,755		49,302		—		45,800		204,958		Special Mention	—		16,663		1,500		75,680		36,782		55,180		—		33,721		219,525
Potential Problem	Potential Problem	37		5,850		39,466		28,241		51,598		81,493		49,388		11,469		267,505		Potential Problem	71		12,010		20,367		58,409		52,981		79,285		24,203		28,735		275,990
Nonaccrual	Nonaccrual	71		—		644		65,404		8,101		7,003		—		609		81,761		Nonaccrual	—		—		814		37,922		8,485		444		—		604		48,270
Total commercial	Total commercial	$	108	$	2,296,504	$	911,231	$	5,669,886	$	2,344,541	$	2,092,770	$	1,094,228	$	1,145,143	$	15,554,303	Total commercial	$	38,694	$	2,426,035	$	2,990,334	$	5,503,714	$	2,116,140	$	1,716,070	$	959,695	$	1,038,739	$	16,750,726
Residential mortgage:	Residential mortgage:																			Residential mortgage:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	—	$	247,943	$	1,874,892	$	1,859,312	$	916,031	$	407,380	$	2,246,835	$	7,552,394	Pass	$	—	$	—	$	825,055	$	1,959,667	$	1,789,114	$	865,412	$	389,154	$	2,118,258	$	7,946,661
Special Mention	Special Mention	—		—		—		—		—		—		—		90		90		Special Mention	—		—		—		—		99		—		—		46		145
Potential Problem	Potential Problem	—		—		276		468		288		578		280		1,142		3,032		Potential Problem	—		—		330		462		96		754		633		1,022		3,297
Nonaccrual	Nonaccrual	—		—		979		2,160		3,102		3,955		6,946		36,684		53,827		Nonaccrual	—		—		3,839		1,925		3,497		3,928		6,295		33,355		52,840
Residential mortgage	Residential mortgage	$	—	$	—	$	249,198	$	1,877,520	$	1,862,703	$	920,564	$	414,606	$	2,284,751	$	7,609,343	Residential mortgage	$	—	$	—	$	829,224	$	1,962,054	$	1,792,807	$	870,095	$	396,082	$	2,152,682	$	8,002,943
Auto finance:	Auto finance:																			Auto finance:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	—	$	357,813	$	135,564	$	578	$	2,262	$	921	$	295	$	497,432	Pass	$	—	$	—	$	719,132	$	125,195	$	476	$	1,904	$	760	$	179	$	847,646
Special Mention	Special Mention	—		—		—		42		—		—		—		1		42		Special Mention	—		—		130		140		—		—		—		—		271

Nonaccrual	Nonaccrual	—		—		—		—		—		35		14		—		49		Nonaccrual	—		—		—		21		—		21		11		—		53
Auto finance	Auto finance	$	—	$	—	$	357,813	$	135,606	$	578	$	2,296	$	934	$	296	$	497,523	Auto finance	$	—	$	—	$	719,263	$	125,356	$	476	$	1,925	$	771	$	179	$	847,969
Home equity:	Home equity:																			Home equity:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	2,698	$	486,976	$	2,212	$	2,245	$	1,480	$	6,900	$	8,143	$	64,691	$	572,646	Pass	$	5,461	$	493,282	$	9,466	$	3,966	$	1,675	$	6,664	$	7,840	$	62,133	$	585,026
Special Mention	Special Mention	91		122		—		—		—		14		56		384		575		Special Mention	109		65		—		—		33		26		39		366		529
Potential Problem	Potential Problem	—		—		—		—		—		—		10		146		156		Potential Problem	—		—		—		—		—		35		7		146		188
Nonaccrual	Nonaccrual	171		55		—		9		119		145		328		6,834		7,490		Nonaccrual	759		8		—		15		68		165		346		6,497		7,100
Home equity	Home equity	$	2,960	$	487,152	$	2,212	$	2,254	$	1,599	$	7,058	$	8,537	$	72,054	$	580,867	Home equity	$	6,328	$	493,356	$	9,466	$	3,981	$	1,776	$	6,890	$	8,232	$	69,143	$	592,843
Other consumer:	Other consumer:																			Other consumer:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	76	$	174,209	$	1,843	$	9,113	$	3,504	$	2,109	$	340	$	98,217	$	289,335	Pass	$	111	$	190,483	$	4,065	$	6,704	$	3,204	$	1,786	$	307	$	93,134	$	299,685
Special Mention	Special Mention	4		429		—		10		12		—		—		8		459		Special Mention	1		430		—		18		—		—		—		1		449

Nonaccrual	Nonaccrual	1		49		—		—		12		6		—		28		95		Nonaccrual	15		14		—		—		29		9		5		27		83
Other consumer	Other consumer	$	80	$	174,687	$	1,843	$	9,123	$	3,528	$	2,115	$	340	$	98,253	$	289,889	Other consumer	$	127	$	190,927	$	4,065	$	6,723	$	3,233	$	1,795	$	312	$	93,162	$	300,217
Total consumer:	Total consumer:																			Total consumer:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	2,774	$	661,185	$	609,810	$	2,021,815	$	1,864,874	$	927,302	$	416,784	$	2,410,038	$	8,911,807	Pass	$	5,572	$	683,766	$	1,557,718	$	2,095,532	$	1,794,469	$	875,766	$	398,061	$	2,273,705	$	9,679,017
Special Mention	Special Mention	94		551		—		52		12		14		56		482		1,167		Special Mention	109		495		130		159		131		26		39		413		1,394
Potential Problem	Potential Problem	—		—		276		468		288		578		290		1,288		3,188		Potential Problem	—		—		330		462		96		789		640		1,168		3,486
Nonaccrual	Nonaccrual	171		103		979		2,169		3,234		4,141		7,288		43,546		61,460		Nonaccrual	774		22		3,839		1,961		3,594		4,123		6,657		39,880		60,075
Total consumer	Total consumer	$	3,040	$	661,840	$	611,065	$	2,024,504	$	1,868,408	$	932,034	$	424,418	$	2,455,354	$	8,977,622	Total consumer	$	6,455	$	684,283	$	1,562,017	$	2,098,113	$	1,798,292	$	880,705	$	405,397	$	2,315,166	$	9,743,972
Total loans:	Total loans:																			Total loans:
Risk rating:	Risk rating:																			Risk rating:
Pass~~(c)~~	Pass~~(c)~~	$	2,774	$	2,939,973	$	1,478,182	$	7,535,570	$	4,116,960	$	2,882,275	$	1,461,624	$	3,497,303	$	23,911,887	Pass~~(c)~~	$	44,195	$	3,081,128	$	4,525,371	$	7,427,234	$	3,812,361	$	2,456,927	$	1,333,552	$	3,249,384	$	25,885,958
Special Mention	Special Mention	94		12,417		2,750		62,538		32,767		49,315		56		46,283		206,125		Special Mention	109		17,158		1,630		75,838		36,913		55,206		39		34,134		220,919
Potential Problem	Potential Problem	37		5,850		39,742		28,709		51,886		82,071		49,678		12,757		270,693		Potential Problem	71		12,010		20,697		58,871		53,077		80,074		24,843		29,903		279,475
Nonaccrual	Nonaccrual	242		103		1,623		67,573		11,335		11,143		7,288		44,154		143,221		Nonaccrual	774		22		4,653		39,883		12,079		4,567		6,657		40,484		108,345
Total loans	Total loans	$	3,148	$	2,958,343	$	1,522,296	$	7,694,390	$	4,212,949	$	3,024,804	$	1,518,646	$	3,600,497	$	24,531,926	Total loans	$	45,149	$	3,110,318	$	4,552,351	$	7,601,827	$	3,914,431	$	2,596,775	$	1,365,091	$	3,353,905	$	26,494,698

(a) Revolving loans converted to term loans are also reported in their year of origination.

(b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans.

~~(c) Accruing TDRs are included in pass unless otherwise rated as special mention.~~

Table of Contents

The following table presents commercial and consumer loans by credit quality indicator by vintage year at December 31, 2021:


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2021		2020		2019		2018		2017		Prior		Total
PPP:(b)
Risk rating:
Pass	$	—	$	—	$	44,921	$	18,610	$	—	$	—	$	—	$	—	$	63,531
Special Mention	—		—		212		281		—		—		—		—		493
Potential Problem	—		—		2,000		—		—		—		—		—		2,000
Nonaccrual	—		—		—		46		—		—		—		—		46
PPP	$	—	$	—	$	47,134	$	18,936	$	—	$	—	$	—	$	—	$	66,070
Commercial and industrial:(c)
Risk rating:
Pass	$	2,084	$	2,371,605	$	2,631,753	$	852,758	$	986,300	$	710,491	$	177,568	$	493,876	$	8,224,351
Special Mention	—		7,068		5,900		1,695		—		—		—		2,811		17,474
Potential Problem	2,706		26,387		23,415		19,960		46,296		20,924		104		1,172		138,258
Nonaccrual	76		—		5,996		161		52		24		—		—		6,233
Commercial and industrial	$	4,867	$	2,405,059	$	2,667,064	$	874,575	$	1,032,647	$	731,439	$	177,671	$	497,860	$	8,386,316
Commercial real estate - owner occupied:
Risk rating:
Pass	$	10,092	$	30,869	$	261,418	$	178,424	$	187,073	$	110,169	$	54,538	$	117,011	$	939,503
Special Mention	—		226		—		4,628		—		—		—		245		5,100
Potential Problem	—		526		5,953		4,721		10,047		727		2,204		2,546		26,723

Commercial real estate - owner occupied	$	10,092	$	31,621	$	267,371	$	187,773	$	197,120	$	110,896	$	56,742	$	119,802	$	971,326
Commercial and business lending:
Risk rating:
Pass	$	12,176	$	2,402,474	$	2,938,092	$	1,049,792	$	1,173,373	$	820,660	$	232,106	$	610,887	$	9,227,385
Special Mention	—		7,294		6,112		6,604		—		—		—		3,056		23,066
Potential Problem	2,706		26,913		31,368		24,681		56,343		21,651		2,307		3,718		166,981
Nonaccrual	76		—		5,996		207		52		24		—		—		6,279
Commercial and business lending	$	14,958	$	2,436,680	$	2,981,569	$	1,081,284	$	1,229,767	$	842,335	$	234,414	$	617,662	$	9,423,711
Commercial real estate - investor:
Risk rating:
Pass	$	37,430	$	105,521	$	1,650,936	$	685,423	$	867,606	$	414,079	$	139,320	$	230,452	$	4,093,337
Special Mention	—		—		57,163		27,384		33,016		72		—		6,781		124,416
Potential Problem	—		—		21,309		9,860		22,243		34,591		3,564		14,573		106,138
Nonaccrual	—		—		45,502		8,158		6,820		—		—		197		60,677
Commercial real estate - investor	$	37,430	$	105,521	$	1,774,910	$	730,825	$	929,685	$	448,741	$	142,883	$	252,003	$	4,384,569
Real estate construction:
Risk rating:
Pass	$	—	$	31,773	$	843,664	$	614,469	$	204,337	$	48,647	$	2,229	$	12,212	$	1,757,331
Special Mention	—		—		2,203		11,929		—		15,885		41		2		30,060
Potential Problem	—		—		37		120		21,251		—		—		—		21,408
Nonaccrual	—		—		—		—		—		—		—		177		177
Real estate construction	$	—	$	31,773	$	845,903	$	626,518	$	225,588	$	64,532	$	2,270	$	12,392	$	1,808,976
Commercial real estate lending:
Risk rating:
Pass	$	37,430	$	137,294	$	2,494,600	$	1,299,893	$	1,071,943	$	462,726	$	141,549	$	242,664	$	5,850,668
Special Mention	—		—		59,366		39,313		33,016		15,957		41		6,784		154,476
Potential Problem	—		—		21,345		9,980		43,494		34,591		3,564		14,573		127,546
Nonaccrual	—		—		45,502		8,158		6,820		—		—		374		60,855
Commercial real estate lending	$	37,430	$	137,294	$	2,620,814	$	1,357,343	$	1,155,273	$	513,273	$	145,153	$	264,395	$	6,193,545

Table of Contents


						Term Loans Amortized Cost Basis by Origination Year(a)																			Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2021		2020		2019		2018		2017		Prior		Total		($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2021		2020		2019		2018		2017		Prior		Total
Total commercial:	Total commercial:																			Total commercial:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	49,606	$	2,539,768	$	5,432,693	$	2,349,685	$	2,245,316	$	1,283,386	$	373,655	$	853,551	$	15,078,053	Pass	$	49,606	$	2,539,768	$	5,432,693	$	2,349,685	$	2,245,316	$	1,283,386	$	373,655	$	853,551	$	15,078,053
Special Mention	Special Mention	—		7,294		65,478		45,917		33,016		15,957		41		9,840		177,543		Special Mention	—		7,294		65,478		45,917		33,016		15,957		41		9,840		177,543
Potential Problem	Potential Problem	2,706		26,913		52,713		34,660		99,837		56,241		5,871		18,291		294,527		Potential Problem	2,706		26,913		52,713		34,660		99,837		56,241		5,871		18,291		294,527
Nonaccrual	Nonaccrual	76		—		51,498		8,365		6,872		24		—		374		67,134		Nonaccrual	76		—		51,498		8,365		6,872		24		—		374		67,134
Total commercial	Total commercial	$	52,388	$	2,573,974	$	5,602,382	$	2,438,627	$	2,385,040	$	1,355,608	$	379,567	$	882,057	$	15,617,256	Total commercial	$	52,388	$	2,573,974	$	5,602,382	$	2,438,627	$	2,385,040	$	1,355,608	$	379,567	$	882,057	$	15,617,256
Residential mortgage:	Residential mortgage:																			Residential mortgage:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	—	$	1,771,447	$	1,945,029	$	974,188	$	428,459	$	673,447	$	1,716,419	$	7,508,989	Pass	$	—	$	—	$	1,771,447	$	1,945,029	$	974,188	$	428,459	$	673,447	$	1,716,419	$	7,508,989
Special Mention	Special Mention	—		—		—		—		—		285		—		461		746		Special Mention	—		—		—		—		—		285		—		461		746
Potential Problem	Potential Problem	—		—		475		332		404		265		81		658		2,214		Potential Problem	—		—		475		332		404		265		81		658		2,214
Nonaccrual	Nonaccrual	—		—		1,993		2,911		4,479		6,224		6,019		33,734		55,362		Nonaccrual	—		—		1,993		2,911		4,479		6,224		6,019		33,734		55,362
Residential mortgage	Residential mortgage	$	—	$	—	$	1,773,915	$	1,948,272	$	979,071	$	435,233	$	679,547	$	1,751,272	$	7,567,310	Residential mortgage	$	—	$	—	$	1,773,915	$	1,948,272	$	979,071	$	435,233	$	679,547	$	1,751,272	$	7,567,310
Auto finance:	Auto finance:																			Auto finance:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	—	$	—	$	137,952	$	707	$	2,675	$	1,200	$	352	$	107	$	142,993	Pass	$	—	$	—	$	137,952	$	707	$	2,675	$	1,200	$	352	$	107	$	142,993

Nonaccrual	Nonaccrual	—		—		—		—		36		15		—		—		52		Nonaccrual	—		—		—		—		36		15		—		—		52
Auto finance	Auto finance	$	—	$	—	$	137,952	$	707	$	2,711	$	1,216	$	352	$	107	$	143,045	Auto finance	$	—	$	—	$	137,952	$	707	$	2,711	$	1,216	$	352	$	107	$	143,045
Home equity:	Home equity:																			Home equity:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	6,728	$	498,970	$	1,216	$	1,401	$	7,640	$	8,742	$	7,660	$	61,251	$	586,880	Pass	$	6,728	$	498,970	$	1,216	$	1,401	$	7,640	$	8,742	$	7,660	$	61,251	$	586,880
Special Mention	Special Mention	133		100		—		102		4		—		—		638		844		Special Mention	133		100		—		102		4		—		—		638		844
Potential Problem	Potential Problem	6		—		6		—		—		13		—		146		165		Potential Problem	6		—		6		—		—		13		—		146		165
Nonaccrual	Nonaccrual	925		35		9		92		211		305		302		6,772		7,726		Nonaccrual	925		35		9		92		211		305		302		6,772		7,726
Home equity	Home equity	$	7,792	$	499,104	$	1,232	$	1,595	$	7,856	$	9,059	$	7,962	$	68,807	$	595,615	Home equity	$	7,792	$	499,104	$	1,232	$	1,595	$	7,856	$	9,059	$	7,962	$	68,807	$	595,615
Other consumer:	Other consumer:																			Other consumer:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	443	$	180,312	$	9,297	$	4,987	$	2,884	$	371	$	265	$	103,075	$	301,191	Pass	$	443	$	180,312	$	9,297	$	4,987	$	2,884	$	371	$	265	$	103,075	$	301,191
Special Mention	Special Mention	7		351		—		4		—		—		—		7		363		Special Mention	7		351		—		4		—		—		—		7		363

Nonaccrual	Nonaccrual	6		120		—		14		7		—		19		11		170		Nonaccrual	6		120		—		14		7		—		19		11		170
Other consumer	Other consumer	$	456	$	180,783	$	9,297	$	5,005	$	2,890	$	371	$	284	$	103,093	$	301,723	Other consumer	$	456	$	180,783	$	9,297	$	5,005	$	2,890	$	371	$	284	$	103,093	$	301,723
Total consumer:	Total consumer:																			Total consumer:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	7,171	$	679,353	$	1,919,912	$	1,952,124	$	987,387	$	438,771	$	681,725	$	1,880,781	$	8,540,053	Pass	$	7,171	$	679,353	$	1,919,912	$	1,952,124	$	987,387	$	438,771	$	681,725	$	1,880,781	$	8,540,053
Special Mention	Special Mention	140		451		—		106		4		285		—		1,106		1,952		Special Mention	140		451		—		106		4		285		—		1,106		1,952
Potential Problem	Potential Problem	6		—		481		332		404		277		81		804		2,379		Potential Problem	6		—		481		332		404		277		81		804		2,379
Nonaccrual	Nonaccrual	931		154		2,003		3,017		4,733		6,545		6,340		40,517		63,309		Nonaccrual	931		154		2,003		3,017		4,733		6,545		6,340		40,517		63,309
Total consumer	Total consumer	$	8,248	$	679,959	$	1,922,396	$	1,955,579	$	992,528	$	445,878	$	688,145	$	1,923,208	$	8,607,693	Total consumer	$	8,248	$	679,959	$	1,922,396	$	1,955,579	$	992,528	$	445,878	$	688,145	$	1,923,208	$	8,607,693
Total loans:	Total loans:																			Total loans:
Risk rating:	Risk rating:																			Risk rating:
Pass~~(d)~~	Pass~~(d)~~	$	56,777	$	3,219,121	$	7,352,605	$	4,301,809	$	3,232,703	$	1,722,157	$	1,055,380	$	2,734,332	$	23,618,106	Pass~~(d)~~	$	56,777	$	3,219,121	$	7,352,605	$	4,301,809	$	3,232,703	$	1,722,157	$	1,055,380	$	2,734,332	$	23,618,106
Special Mention	Special Mention	140		7,745		65,478		46,023		33,021		16,241		41		10,946		179,495		Special Mention	140		7,745		65,478		46,023		33,021		16,241		41		10,946		179,495
Potential Problem	Potential Problem	2,713		26,913		53,194		34,992		100,240		56,519		5,952		19,095		296,905		Potential Problem	2,713		26,913		53,194		34,992		100,240		56,519		5,952		19,095		296,905
Nonaccrual	Nonaccrual	1,006		154		53,501		11,382		11,605		6,569		6,340		40,891		130,443		Nonaccrual	1,006		154		53,501		11,382		11,605		6,569		6,340		40,891		130,443
Total loans	Total loans	$	60,636	$	3,253,933	$	7,524,778	$	4,394,206	$	3,377,569	$	1,801,486	$	1,067,713	$	2,805,265	$	24,224,949	Total loans	$	60,636	$	3,253,933	$	7,524,778	$	4,394,206	$	3,377,569	$	1,801,486	$	1,067,713	$	2,805,265	$	24,224,949

(a) Revolving loans converted to term loans are also reported in their year of origination.

~~(d) Accruing TDRs are included in pass unless otherwise rated as special mention.~~

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

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

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

The following table presents loans by past due status at ~~March 31,~~June 30, 2022:


		Accruing													Accruing
($ in Thousands)	($ in Thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(a)(b)		Total		($ in Thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(a)(b)		Total
PPP	PPP	$	17,953	$	—	$	1	$	—	$	41	$	17,995	PPP	$	8,039	$	1,361	$	113	$	—	$	—	$	9,514
Asset-based lending & equipment finance	Asset-based lending & equipment finance	231,040		—		—		—		—		231,040		Asset-based lending & equipment finance	263,044		—		—		—		—		263,044
Commercial and industrial	Commercial and industrial	8,100,945		923		162		125		225		8,102,380		Commercial and industrial	8,982,984		106		61		133		843		8,984,127
Commercial real estate - owner occupied	Commercial real estate - owner occupied	973,374		198		—		—		—		973,572		Commercial real estate - owner occupied	928,152		—		—		—		—		928,152
Commercial and business lending	Commercial and business lending	9,323,311		1,121		163		125		266		9,324,986		Commercial and business lending	10,182,219		1,467		174		133		843		10,184,836
Commercial real estate - investor	Commercial real estate - investor	4,388,355		—		—		—		80,886		4,469,241		Commercial real estate - investor	4,737,934		5,484		—		—		46,823		4,790,241
Real estate construction	Real estate construction	1,759,467		—		—		—		609		1,760,076		Real estate construction	1,775,044		—		—		—		604		1,775,648
Commercial real estate lending	Commercial real estate lending	6,147,823		—		—		—		81,495		6,229,317		Commercial real estate lending	6,512,978		5,484		—		—		47,427		6,565,889
Total commercial	Total commercial	15,471,134		1,121		163		125		81,761		15,554,303		Total commercial	16,695,197		6,952		174		133		48,270		16,750,726
Residential mortgage	Residential mortgage	7,550,015		4,867		90		544		53,827		7,609,343		Residential mortgage	7,944,365		5,213		102		423		52,840		8,002,943
Auto finance	Auto finance	496,526		906		42		—		49		497,523		Auto finance	845,010		2,635		271		—		53		847,969
Home equity	Home equity	569,170		3,632		575		—		7,490		580,867		Home equity	582,782		2,448		514		—		7,100		592,843
Other consumer	Other consumer	287,636		707		525		926		95		289,889		Other consumer	297,770		807		557		999		83		300,217
Total consumer	Total consumer	8,903,347		10,112		1,232		1,470		61,460		8,977,622		Total consumer	9,669,928		11,104		1,444		1,422		60,075		9,743,972
Total loans	Total loans	$	24,374,481	$	11,233	$	1,396	$	1,595	$	143,221	$	24,531,926	Total loans	$	26,365,125	$	18,055	$	1,618	$	1,555	$	108,345	$	26,494,698

(a)Of the total nonaccrual loans, ~~$98~~$65 million, or ~~69%~~60%, were current with respect to payment at ~~March 31,~~June 30, 2022.

(b) No interest income was recognized on nonaccrual loans for the three and six months ended ~~March 31,~~June 30, 2022. In addition, there were ~~$24~~$15 million of nonaccrual loans for which there was no related ACLL at ~~March 31,~~June 30, 2022.

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The following table presents loans by past due status at December 31, 2021:


	Accruing
($ in Thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(a)(b)		Total
PPP	$	65,941	$	40	$	43	$	—	$	46	$	66,070
Asset-based lending	178,027		—		—		—		—		178,027
Commercial and industrial(c)	8,201,272		579		54		151		6,233		8,208,289
Commercial real estate - owner occupied	971,163		163		—		—		—		971,326
Commercial and business lending	9,416,403		781		97		151		6,279		9,423,711
Commercial real estate - investor	4,323,276		142		474		—		60,677		4,384,569
Real estate construction	1,807,178		1,618		2		—		177		1,808,976
Commercial real estate lending	6,130,454		1,759		477		—		60,855		6,193,545
Total commercial	15,546,857		2,541		573		151		67,134		15,617,256
Residential mortgage	7,505,654		5,500		669		126		55,362		7,567,310
Auto finance	142,982		11		—		—		52		143,045
Home equity	584,177		2,867		844		—		7,726		595,615
Other consumer	298,261		1,835		472		986		170		301,723
Total consumer	8,531,074		10,213		1,985		1,111		63,309		8,607,693
Total loans	$	24,077,931	$	12,754	$	2,558	$	1,263	$	130,443	$	24,224,949

(a) Of the total nonaccrual loans, $84 million, or 65%, were current with respect to payment at December 31, 2021.

(b) No interest income was recognized on nonaccrual loans for the year ended December 31, 2021. In addition, there were $9 million of nonaccrual loans for which there was no related ACLL at December 31, 2021.

Troubled Debt Restructurings

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty.

The following table presents nonaccrual and performing restructured loans by loan portfolio:


		Mar 31, 2022				Dec 31, 2021				Jun 30, 2022		Dec 31, 2021
($ in Thousands)	($ in Thousands)	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)			($ in Thousands)	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)

Commercial and industrial	Commercial and industrial	$	7,426	$	—	$	8,687	$	—		Commercial and industrial	$	13,882	$	—	$	8,687	$	—
Commercial real estate — owner occupied	Commercial real estate — owner occupied	473		—		967		—			Commercial real estate — owner occupied	421		—		967		—
Commercial real estate — investor	Commercial real estate — investor	2,045		3,042		12,866		3,093			Commercial real estate — investor	943		4,266		12,866		3,093
Real estate construction	Real estate construction	183		44		242		45			Real estate construction	179		43		242		45
Residential mortgage	Residential mortgage	16,644		15,336		16,316		13,483			Residential mortgage	15,829		16,854		16,316		13,483

Home equity	Home equity	2,486		931		2,648		806			Home equity	2,246		1,009		2,648		806
Other consumer	Other consumer	747		—		803		—			Other consumer	753		—		803		—
Total restructured loans	Total restructured loans	$	30,003	$	19,352	$	42,530	$	17,426		Total restructured loans	$	34,253	$	22,172	$	42,530	$	17,426

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

The Corporation had a recorded investment of $7$9 million in loans modified as TDRs during the ~~three~~six months ended ~~March 31,~~June 30, 2022, of which $1 million were in accrual status, included in pass or special mention based on their risk rating within the credit quality tables, and $6$8 million were in nonaccrual within the credit quality tables, pending a sustained period of repayment. The following table provides the number of loans modified in a TDR by loan portfolio, the recorded investment, and unpaid principal balance for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021:


		Three months ended Mar 31, 2022					Three months ended Mar 31, 2021						Six Months Ended June 30, 2022					Six Months Ended June 30, 2021
($ in Thousands)	($ in Thousands)	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		($ in Thousands)	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)

Commercial and industrial												Commercial and industrial	2	$	275	$	275	2	$	128	$	129

Commercial real estate — investor	Commercial real estate — investor	—	$	—	$	—	4	$	1,693	$	1,693	Commercial real estate — investor	1	$	553	$	573	4	$	1,690	$	1,690

Residential mortgage	Residential mortgage	24	6,421		6,502		20	3,876		3,902		Residential mortgage	35	8,149		8,315		37	7,424		7,450
Home equity	Home equity	3	80		101		1	430		430		Home equity	8	291		312		4	566		603

Total loans modified	Total loans modified	27	$	6,500	$	6,603	25	$	5,999	$	6,025	Total loans modified	46	$	9,267	$	9,474	47	$	9,808	$	9,871

(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 three months ended March 31, 2022, there were no restructured loan~~

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combination of these concessions. During the six months ended June 30, 2022, restructured loan modifications of commercial loans ~~but when such modifications do occur, they~~ primarily ~~include~~included maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the ~~three~~six months ended ~~March 31,~~June 30, 2022.

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, and the recorded investment in these restructured loans as of ~~March 31,~~June 30, 2022 and 2021:


		Three months ended Mar 31, 2022			Three months ended Mar 31, 2021				Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
($ in Thousands)	($ in Thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		($ in Thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment

Residential mortgage	Residential mortgage	1	$	884	1	$	97	Residential mortgage	4	$	1,178	1	$	97

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

The Corporation analyzes loans for classification as a probable TDR. This analysis includes identifying customers that are showing possible liquidity issues in the near term without reasonable access to alternative sources of capital. At ~~March 31,~~June 30, 2022, the Corporation had no loans meeting this classification compared to $7 million at December 31, 2021.

Allowance for Credit Losses on Loans

The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. The expected lifetime credit losses are the product of multiplying the Corporation's estimates of probability of default, loss given default, and the individual loan level exposure at default on an undiscounted basis. A main factor in the determination of the ACLL is the economic forecast. The Corporation utilized Moody's baseline forecast, updated during ~~February~~May 2022 and reviewed against the June 2022 forecast for material updates, in the allowance model. The forecast is applied over a 2 year reasonable and supportable period with straight-line reversion to the historical losses over the second year of the period. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 12 for additional information on the change in the allowance for unfunded commitments.

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The following table presents a summary of the changes in the ACLL by portfolio segment for the ~~three~~six months ended ~~March 31,~~June 30, 2022:


($ in Thousands)	($ in Thousands)	Dec 31, 2021		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		Mar 31, 2022		ACLL / Loans		($ in Thousands)	Dec 31, 2021		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		Jun 30, 2022		ACLL / Loans
Allowance for loan losses	Allowance for loan losses															Allowance for loan losses
PPP	PPP	$	51	$	—	$	—	$	—	$	(39)	$	11			PPP	$	51	$	—	$	—	$	—	$	(45)	$	6
Asset-based lending & equipment finance	Asset-based lending & equipment finance	4,182		—		—		—		901		5,083				Asset-based lending & equipment finance	4,182		—		—		—		450		4,632
Commercial and industrial	Commercial and industrial	85,624		(1,104)		2,958		1,854		(5,485)		81,993				Commercial and industrial	85,624		(1,895)		3,305		1,410		5,018		92,052
Commercial real estate — owner occupied	Commercial real estate — owner occupied	11,473		—		3		3		(349)		11,127				Commercial real estate — owner occupied	11,473		—		7		7		(1,074)		10,406
Commercial and business lending	Commercial and business lending	101,330		(1,104)		2,961		1,857		(4,973)		98,214				Commercial and business lending	101,330		(1,895)		3,312		1,417		4,349		107,096
Commercial real estate — investor	Commercial real estate — investor	72,803		—		—		—		558		73,361				Commercial real estate — investor	72,803		—		—		—		(8,412)		64,391
Real estate construction	Real estate construction	37,643		—		32		32		2,082		39,757				Real estate construction	37,643		—		33		33		(1,537)		36,139
Commercial real estate lending	Commercial real estate lending	110,446		—		32		32		2,640		113,118				Commercial real estate lending	110,446		—		33		33		(9,949)		100,531
Total commercial	Total commercial	211,776		(1,104)		2,993		1,889		(2,333)		211,332				Total commercial	211,776		(1,895)		3,346		1,450		(5,600)		207,626
Residential mortgage	Residential mortgage	40,787		(43)		331		288		(3,974)		37,101				Residential mortgage	40,787		(138)		646		508		(2,444)		38,851
Auto finance	Auto finance	1,999		(23)		26		4		4,188		6,190				Auto finance	1,999		(60)		49		(10)		8,440		10,428
Home equity	Home equity	14,011		(125)		440		315		(995)		13,331				Home equity	14,011		(195)		971		776		(1,496)		13,291
Other consumer	Other consumer	11,441		(733)		282		(451)		114		11,104				Other consumer	11,441		(1,531)		564		(967)		100		10,574
Total consumer	Total consumer	68,239		(924)		1,079		155		(667)		67,727				Total consumer	68,239		(1,924)		2,230		306		4,600		73,145
Total loans	Total loans	$	280,015	$	(2,028)	$	4,072	$	2,044	$	(3,000)	$	279,058			Total loans	$	280,015	$	(3,819)	$	5,576	$	1,757	$	(1,000)	$	280,771
Allowance for unfunded commitments	Allowance for unfunded commitments															Allowance for unfunded commitments

Asset-based lending & equipment finance	Asset-based lending & equipment finance	$	857	$	—	$	—	$	—	$	(62)	$	796			Asset-based lending & equipment finance	$	857	$	—	$	—	$	—	$	(124)	$	733
Commercial and industrial	Commercial and industrial	17,601		—		—		—		(2,694)		14,907				Commercial and industrial	17,601		—		—		—		(2,949)		14,652
Commercial real estate — owner occupied	Commercial real estate — owner occupied	208		—		—		—		(64)		144				Commercial real estate — owner occupied	208		—		—		—		(94)		114
Commercial and business lending	Commercial and business lending	18,667		—		—		—		(2,820)		15,847				Commercial and business lending	18,667		—		—		—		(3,167)		15,500
Commercial real estate — investor	Commercial real estate — investor	936		—		—		—		(302)		634				Commercial real estate — investor	936		—		—		—		(287)		649
Real estate construction	Real estate construction	15,586		—		—		—		2,415		18,001				Real estate construction	15,586		—		—		—		901		16,487
Commercial real estate lending	Commercial real estate lending	16,522		—		—		—		2,114		18,636				Commercial real estate lending	16,522		—		—		—		614		17,136
Total commercial	Total commercial	35,189		—		—		—		(707)		34,482				Total commercial	35,189		—		—		—		(2,553)		32,636

Home equity	Home equity	2,592		—		—		—		(68)		2,523				Home equity	2,592		—		—		—		(150)		2,441
Other consumer	Other consumer	1,995		—		—		—		(225)		1,770				Other consumer	1,995		—		—		—		(296)		1,698
Total consumer	Total consumer	4,587		—		—		—		(293)		4,293				Total consumer	4,587		—		—		—		(447)		4,140
Total loans	Total loans	$	39,776	$	—	$	—	$	—	$	(1,000)	$	38,776			Total loans	$	39,776	$	—	$	—	$	—	$	(3,000)	$	36,776
Allowance for credit losses on loans	Allowance for credit losses on loans															Allowance for credit losses on loans
PPP	PPP	$	51	$	—	$	—	$	—	$	(39)	$	11	0.06	%	PPP	$	51	$	—	$	—	$	—	$	(45)	$	6	0.06	%
Asset-based lending & equipment finance	Asset-based lending & equipment finance	5,040		—		—		—		839		5,879		2.54	%	Asset-based lending & equipment finance	5,040		—		—		—		325		5,365		2.04	%
Commercial and industrial	Commercial and industrial	103,225		(1,104)		2,958		1,854		(8,179)		96,900		1.20	%	Commercial and industrial	103,225		(1,895)		3,305		1,410		2,069		106,704		1.19	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	11,681		—		3		3		(413)		11,270		1.16	%	Commercial real estate — owner occupied	11,681		—		7		7		(1,167)		10,520		1.13	%
Commercial and business lending	Commercial and business lending	119,997		(1,104)		2,961		1,857		(7,793)		114,061		1.22	%	Commercial and business lending	119,997		(1,895)		3,312		1,417		1,182		122,595		1.20	%
Commercial real estate — investor	Commercial real estate — investor	73,739		—		—		—		256		73,995		1.66	%	Commercial real estate — investor	73,739		—		—		—		(8,699)		65,040		1.36	%
Real estate construction	Real estate construction	53,229		—		32		32		4,497		57,758		3.28	%	Real estate construction	53,229		—		33		33		(636)		52,627		2.96	%
Commercial real estate lending	Commercial real estate lending	126,968		—		32		32		4,754		131,754		2.12	%	Commercial real estate lending	126,968		—		33		33		(9,335)		117,667		1.79	%
Total commercial	Total commercial	246,965		(1,104)		2,993		1,889		(3,039)		245,814		1.58	%	Total commercial	246,965		(1,895)		3,346		1,450		(8,153)		240,262		1.43	%
Residential mortgage	Residential mortgage	40,787		(43)		331		288		(3,974)		37,101		0.49	%	Residential mortgage	40,787		(138)		646		508		(2,444)		38,851		0.49	%
Auto finance	Auto finance	1,999		(23)		26		4		4,188		6,190		1.24	%	Auto finance	1,999		(60)		49		(10)		8,440		10,428		1.23	%
Home equity	Home equity	16,603		(125)		440		315		(1,063)		15,855		2.73	%	Home equity	16,603		(195)		971		776		(1,647)		15,732		2.65	%
Other consumer	Other consumer	13,436		(733)		282		(451)		(111)		12,874		4.44	%	Other consumer	13,436		(1,531)		564		(967)		(196)		12,273		4.09	%
Total consumer	Total consumer	72,825		(924)		1,079		155		(961)		72,020		0.80	%	Total consumer	72,825		(1,924)		2,230		306		4,153		77,284		0.79	%
Total loans	Total loans	$	319,791	$	(2,028)	$	4,072	$	2,044	$	(4,000)	$	317,835	1.30	%	Total loans	$	319,791	$	(3,819)	$	5,576	$	1,757	$	(4,000)	$	317,547	1.20	%

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The following table presents a summary of the changes in the ACLL by portfolio segment for the year ended December 31, 2021:


($ in Thousands)	Dec 31, 2020		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		Dec 31, 2021		ACLL / Loans
Allowance for loan losses
PPP	$	531	$	—	$	—	$	—	$	(480)	$	51
Asset-based lending	2,077		—		412		412		1,693		4,182
Commercial and industrial(a)	140,716		(21,564)		8,152		(13,412)		(41,680)		85,624
Commercial real estate — owner occupied	11,274		—		120		120		80		11,473
Commercial and business lending	154,598		(21,564)		8,684		(12,880)		(40,388)		101,330
Commercial real estate — investor	93,435		(14,346)		3,162		(11,184)		(9,448)		72,803
Real estate construction	59,193		(5)		126		121		(21,672)		37,643
Commercial real estate lending	152,629		(14,351)		3,288		(11,063)		(31,120)		110,446
Total commercial	307,226		(35,915)		11,972		(23,943)		(71,508)		211,776
Residential mortgage	42,996		(880)		841		(38)		(2,170)		40,787
Auto finance	174		(22)		31		9		1,816		1,999
Home equity	18,849		(668)		2,854		2,186		(7,024)		14,011
Other consumer	14,456		(3,168)		1,267		(1,901)		(1,113)		11,441
Total consumer	76,475		(4,738)		4,993		256		(8,492)		68,239
Total loans	$	383,702	$	(40,652)	$	16,965	$	(23,687)	$	(80,000)	$	280,015
Allowance for unfunded commitments

Asset-based lending	$	901	$	—	$	—	$	—	$	(43)	$	857
Commercial and industrial(a)	21,411		—		—		—		(3,809)		17,601
Commercial real estate — owner occupied	266		—		—		—		(58)		208
Commercial and business lending	22,577		—		—		—		(3,911)		18,667
Commercial real estate — investor	636		—		—		—		300		936
Real estate construction	18,887		—		—		—		(3,301)		15,586
Commercial real estate lending	19,523		—		—		—		(3,001)		16,522
Total commercial	42,101		—		—		—		(6,912)		35,189


Home equity	3,118		—		—		—		(526)		2,592
Other consumer	2,557		—		—		—		(563)		1,995
Total consumer	5,675		—		—		—		(1,088)		4,587
Total loans	$	47,776	$	—	$	—	$	—	$	(8,000)	$	39,776
Allowance for credit losses on loans
PPP	$	531	$	—	$	—	$	—	$	(480)	$	51	0.08	%
Asset-based lending	2,978		—		412		412		1,649		5,040		2.83	%
Commercial and industrial(a)	162,126		(21,564)		8,152		(13,412)		(45,490)		103,225		1.26	%
Commercial real estate — owner occupied	11,539		—		120		120		22		11,681		1.20	%
Commercial and business lending	177,175		(21,564)		8,684		(12,880)		(44,299)		119,997		1.27	%
Commercial real estate — investor	94,071		(14,346)		3,162		(11,184)		(9,148)		73,739		1.68	%
Real estate construction	78,080		(5)		126		121		(24,972)		53,229		2.94	%
Commercial real estate lending	172,152		(14,351)		3,288		(11,063)		(34,121)		126,968		2.05	%
Total commercial	349,327		(35,915)		11,972		(23,943)		(78,419)		246,965		1.58	%
Residential mortgage	42,996		(880)		841		(38)		(2,170)		40,787		0.54	%
Auto finance	174		(22)		31		9		1,816		1,999		1.40	%
Home equity	21,967		(668)		2,854		2,186		(7,550)		16,603		2.79	%
Other consumer	17,013		(3,168)		1,267		(1,901)		(1,676)		13,436		4.45	%
Total consumer	82,150		(4,738)		4,993		256		(9,581)		72,825		0.85	%
Total loans	$	431,478	$	(40,652)	$	16,965	$	(23,687)	$	(88,000)	$	319,791	1.32	%

(a) Includes equipment finance.

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Note 8 Goodwill and Other Intangible Assets

Goodwill

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

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The Corporation conducted its most recent annual impairment testing in May ~~2021,~~2022, 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 it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There have been no events since the May ~~2021~~2022 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2021 or the first ~~three~~six months of 2022.

The Corporation had goodwill of $1.1 billion at both ~~March 31,~~June 30, 2022 and December 31, 2021.

Other Intangible Assets

The Corporation has CDIs and historically had other intangible assets, ~~and CDIs that~~both of which are amortized. For CDIs and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows:


($ in Thousands)	($ in Thousands)	Three months ended Mar 31, 2022		Year Ended Dec 31, 2021		($ in Thousands)	Six Months Ended June 30, 2022		Year Ended Dec 31, 2021
Core deposit intangibles	Core deposit intangibles					Core deposit intangibles
Gross carrying amount at the beginning of period	Gross carrying amount at the beginning of period	$	88,109	$	88,109	Gross carrying amount at the beginning of period	$	88,109	$	88,109

Accumulated amortization	Accumulated amortization	(32,219)		(30,016)		Accumulated amortization	(34,422)		(30,016)
Net book value	Net book value	$	55,890	$	58,093	Net book value	$	53,687	$	58,093
Amortization during the period	Amortization during the period	$	2,203	$	8,811	Amortization during the period	$	4,405	$	8,811
Other intangibles	Other intangibles					Other intangibles
Gross carrying amount at the beginning of period	Gross carrying amount at the beginning of period	$	—	$	2,000	Gross carrying amount at the beginning of period	$	—	$	2,000

Reductions due to sale	Reductions due to sale	—		(1,317)		Reductions due to sale	—		(1,317)
Accumulated amortization	Accumulated amortization	—		(683)		Accumulated amortization	—		(683)
Net book value	Net book value	$	—	$	—	Net book value	$	—	$	—
Amortization during the period	Amortization during the period	$	—	$	33	Amortization during the period	$	—	$	33

Mortgage Servicing Rights

The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs ~~are accounted for~~ under the fair value measurement method, with any change in fair value being recognized through earnings in ~~mortgage banking, net on the consolidated statements of income.~~

On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs asset under the fair value measurement methodology. Under this methodology, changes in the fair value are recognized in earnings as they occur, through mortgage banking, net on the consolidated statements of income. MSRs are not traded in active markets. As a result, a cash flow model is used to determine fair value. Key assumptions and estimates, projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, are used in measuring the fair value of the MSRs asset. These assumptions are considered significant unobservable inputs. See Note 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 MSRs asset.

~~Table of Contents~~

A summary of changes in the balance of the MSRs asset under the fair value measurement method for the ~~quarter~~six months ended ~~March 31,~~June 30, 2022 is as follows:


($ in Thousands)	~~Three months ended Mar 31,~~Six Months Ended June 30, 2022
Mortgage servicing rights
Mortgage servicing rights at beginning of period	$	54,862
Cumulative effect of accounting methodology change	2,296
Balance at beginning of period, adjusted	$	57,158
Additions	~~3,042~~5,231
Paydowns	~~(2,637)~~(5,220)
Valuation:
Change in fair value model assumptions	~~2,345~~6,034
Changes in fair value of asset	~~7,106~~13,366


Mortgage servicing rights at end of period	$	~~67,015~~76,570





Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)	$	~~6,972,242~~6,910,382
Mortgage servicing rights to servicing portfolio	~~0.96~~1.11		%

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Prior to January 1, 2022, the Corporation accounted for its MSRs under the amortization methodology. Under this methodology the Corporation evaluated its MSRs asset for impairment at minimum on a quarterly basis. Impairment was 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 fell, prepayment speeds were usually faster and the value of the MSRs asset generally decreased, requiring additional valuation reserve. Conversely, as mortgage interest rates rose, prepayment speeds were usually slower and the value of the MSRs asset generally increased, requiring less valuation reserve. A valuation allowance was established, through a charge to earnings, to the extent the amortized cost of the MSRs exceeded the estimated fair value by stratification. An other-than-temporary impairment (i.e., recoverability was considered remote when considering interest rates and loan pay off activity) was recognized as a write-down of the MSRs asset and the related valuation allowance (to the extent a valuation allowance was available) and then against earnings. A direct write-down permanently reduced the carrying value of the MSRs asset and valuation allowance, precluding subsequent recoveries.

A summary of changes in the balance of the MSRs asset and the MSRs valuation allowance under the amortization method for the year ended December 31, 2021 is as follows:


($ in Thousands)	Year Ended Dec 31, 2021
Mortgage servicing rights
Mortgage servicing rights at beginning of period	$	59,967

Additions	16,151
Amortization	(19,436)
Mortgage servicing rights at end of period	$	56,682
Valuation allowance at beginning of period	$	(18,006)
~~(Additions) recoveries,~~Recoveries, net	16,186
Valuation allowance at end of period	$	(1,820)
Mortgage servicing rights, net	$	54,862
Fair value of mortgage servicing rights	$	57,259
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)	$	6,994,834
Mortgage servicing rights, net to servicing portfolio	0.78		%
Mortgage servicing rights expense(a)	$	3,250

(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 on the consolidated statements of income.

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The projections of amortization expense for CDIs and decay for MSRs are based on existing asset balances, the current interest rate environment, and prepayment speeds as of ~~March 31,~~June 30, 2022. The actual expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for amortizing intangible assets:


($ in Thousands)	($ in Thousands)	Core Deposit Intangibles		Mortgage Servicing Rights		($ in Thousands)	Core Deposit Intangibles		Mortgage Servicing Rights
Nine months ended December 31, 2022		$	6,608	$	8,956
Six months ended December 31, 2022						Six months ended December 31, 2022	$	4,405	$	6,511
2023	2023	8,811		11,320		2023	8,811		12,413
2024	2024	8,811		9,663		2024	8,811		10,884
2025	2025	8,811		8,227		2025	8,811		9,535
2026	2026	8,811		6,874		2026	8,811		8,275
2027	2027	8,811		5,913		2027	8,811		7,198
Beyond 2027	Beyond 2027	5,227		16,062		Beyond 2027	5,227		21,752
Total Estimated Amortization Expense	Total Estimated Amortization Expense	$	55,890	$	67,015	Total Estimated Amortization Expense	$	53,687	$	76,570

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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):


($ in Thousands)	($ in Thousands)	Mar 31, 2022		Dec 31, 2021		($ in Thousands)	Jun 30, 2022		Dec 31, 2021
Short-Term Funding	Short-Term Funding					Short-Term Funding
Federal funds purchased	Federal funds purchased	$	100,060	$	120	Federal funds purchased	$	409,180	$	120
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	268,708		319,412		Securities sold under agreements to repurchase	273,659		319,412
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	368,768		319,532		Federal funds purchased and securities sold under agreements to repurchase	682,839		319,532
Commercial paper	Commercial paper	30,593		34,730		Commercial paper	22,781		34,730
Total short-term funding	Total short-term funding	$	399,361	$	354,262	Total short-term funding	$	705,620	$	354,262
Long-Term Funding	Long-Term Funding					Long-Term Funding

Corporation subordinated notes, at par, due 2025	Corporation subordinated notes, at par, due 2025	$	250,000	$	250,000	Corporation subordinated notes, at par, due 2025	$	250,000	$	250,000

Capitalized costs	Capitalized costs	(765)		(839)		Capitalized costs	(691)		(839)
Finance leases	Finance leases	562		163		Finance leases	511		163
Total long-term funding	Total long-term funding	249,797		249,324		Total long-term funding	249,820		249,324

Total short and long-term funding, excluding FHLB advances	Total short and long-term funding, excluding FHLB advances	$	649,158	$	603,587	Total short and long-term funding, excluding FHLB advances	$	955,440	$	603,587
FHLB Advances	FHLB Advances					FHLB Advances
Short-term FHLB advances	Short-term FHLB advances	$	320,000	$	—	Short-term FHLB advances	$	2,045,000	$	—
Long-term FHLB advances	Long-term FHLB advances	1,217,948		1,621,047		Long-term FHLB advances	1,213,039		1,621,047
Total FHLB advances	Total FHLB advances	$	1,537,948	$	1,621,047	Total FHLB advances	3,258,039		1,621,047

Total short and long-term funding	Total short and long-term funding	$	2,187,106	$	2,224,633	Total short and long-term funding	$	4,213,479	$	2,224,633

Securities Sold Under Agreements to Repurchase

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

The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of its customers. The fair value of securities pledged to secure repurchase agreements may decline. At ~~March 31,~~June 30, 2022, the Corporation ~~has~~had pledged securities valued at ~~129%~~133% of the gross outstanding balance of repurchase agreements to manage this risk.

The remaining contractual maturity of the securities sold under agreements to repurchase on the consolidated balance sheets as of ~~March 31,~~June 30, 2022 and December 31, 2021 are presented in the following table:
Overnight and Continuous
($ in Thousands) March 31, 2022 December 31, 2021
Repurchase agreements
Agency mortgage-related securities $ 268,708 $ 319,412

~~Table of Contents~~


	Overnight and Continuous
($ in Thousands)	Jun 30, 2022		Dec 31, 2021
Repurchase agreements
Agency mortgage-related securities	$	273,659	$	319,412

Long-Term Funding

Subordinated Notes

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

Finance Leases

Finance leases are used in conjunction with branch operations. See Note 18 for additional disclosure regarding the Corporation’s leases.

FHLB Advances

The Corporation prepaid $400 million in long-term FHLB advances during the first quarter of 2022 atwith no ~~cost.~~prepayment fee.

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Note 10 Derivative and Hedging Activities

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

The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Corporation is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. To mitigate the counterparty risk, contracts generally contain language outlining collateral pledging requirements for each counterparty. For non-centrally cleared derivatives, collateral must be posted when the market value exceeds certain mutually agreed upon threshold limits. Securities and cash are often pledged as collateral. The Corporation pledged ~~$76~~$73 million and $71 million of investment securities as collateral at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. At ~~March 31,~~June 30, 2022, the Corporation posted ~~$6 million of~~immaterial required cash collateral compared to $11 million at December 31, 2021.

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

Derivatives to Accommodate Customer Needs

The Corporation facilitates customer borrowing activity by entering into various derivative contracts which are designated as free standing derivative contracts. Free standing derivative products are entered into primarily for the benefit of commercial customers seeking to manage their exposures to interest rate risk, foreign currency, and until early 2022, commodity prices. As of the end of the first quarter of 2022, the Corporation no longer had any outstanding commodity contracts. These derivative contracts are not designated against specific assets and liabilities on the consolidated balance sheets or forecasted transactions and, therefore, do not qualify for hedge accounting treatment. Such derivative contracts are carried at fair value in other assets and accrued expenses and other liabilities on the consolidated balance sheets with changes in the fair value recorded as a component of capital markets, net, and typically include interest rate-related instruments (swaps and caps), foreign currency exchange forwards, and until the end of the first quarter of 2022, 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

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

Commodity contracts: As of the end of the first quarter of 2022, the Corporation no longer had any outstanding commodity contracts. Historically, commodity contracts were entered into primarily for the benefit of commercial customers seeking to manage their exposure to fluctuating commodity prices. The Corporation mitigated its risk by then entering into an offsetting commodity derivative contract.

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Mortgage Derivatives

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

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

The following table presents the total notional amounts and gross fair values of the ~~Company’s~~Corporation’s derivatives, as well as the balance sheet netting adjustments as of ~~March 31,~~June 30, 2022 and December 31, 2021. The derivative assets and liabilities are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid as of ~~March 31,~~June 30, 2022 and December 31, 2021. The resulting net derivative asset and liability fair values are included in other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets.


		Mar 31, 2022								Dec 31, 2021											Jun 30, 2022								Dec 31, 2021
		Asset				Liability				Asset				Liability							Asset				Liability				Asset				Liability
($ in Thousands)	($ in Thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		($ in Thousands)			Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Not designated as hedging instruments	Not designated as hedging instruments																	Not designated as hedging instruments
Interest rate-related instruments	Interest rate-related instruments	$	4,090,770	$	31,728	$	4,130,770	$	112,029	$	3,874,781	$	83,626	$	3,874,781	$	26,231	Interest rate-related instruments			$	4,116,939	$	34,184	$	4,116,939	$	173,955	$	3,874,781	$	83,626	$	3,874,781	$	26,231
Foreign currency exchange forwards	Foreign currency exchange forwards	506,185		1,986		501,213		1,815		490,057		5,490		478,745		5,441		Foreign currency exchange forwards			509,404		4,190		498,773		3,764		490,057		5,490		478,745		5,441
Commodity contracts	Commodity contracts	—		—		—		—		3,894		1,264		3,910		1,248		Commodity contracts			—		—		—		—		3,894		1,264		3,910		1,248
Mortgage banking(a)(b)	Mortgage banking(a)(b)	114,909		4,796		197,000		234		133,990		2,647		245,016		—		Mortgage banking(a)(b)			76,824		1,033		105,000		113		133,990		2,647		245,016		—

Gross derivatives before netting	Gross derivatives before netting			$	38,511			$	114,078			$	93,026			$	32,921	Gross derivatives before netting					$	39,407			$	177,833			$	93,026			$	32,921
Less: Legally enforceable master netting agreements	Less: Legally enforceable master netting agreements	2,514				2,514				2,143				2,143		Less: Legally enforceable master netting agreements			4,369				4,369				2,143				2,143
Less: Cash collateral pledged/received	Less: Cash collateral pledged/received	7,816				987				1,313				11,357		Less: Cash collateral pledged/received			22,756				—				1,313				11,357
Total derivative instruments, after netting	Total derivative instruments, after netting	$	28,181			$	110,577			$	89,570			$	19,421	Total derivative instruments, after netting			$	12,281			$	173,464			$	89,570			$	19,421

(a) The notional amount of the mortgage derivative asset includes interest rate lock commitments, while the notional amount of the mortgage derivative liability includes forward commitments.
(b) At March 31, 2022, the mortgage derivative asset includes $5 million of forward commitments fair value, while the mortgage derivative liability includes approximately $224,000 of interest rate lock commitments fair value. At December 31, 2021, the mortgage derivative asset included approximately $30,000 of forward commitments fair value.

The Corporation terminated its $500 million fair value hedge during the fourth quarter of 2019. At ~~March 31,~~June 30, 2022, the amortized cost basis of the closed portfolios which had previously been used in the terminated hedging relationship was ~~$390~~$362 million and is included in loans on the consolidated balance sheets. This amount includes $2 million of hedging adjustments on the discontinued hedging relationships.

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The table below identifies the effect of fair value hedge accounting on the Corporation's consolidated statements of income for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:


		Location and Amount of Gain or (Loss) Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships					Location and Amount of Gain or (Loss) Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
		Three months ended Mar 31,						Three months ended Jun 30,		Six Months Ended Jun 30,
		2022		2021					2022	2021	2022		2021
($ in Thousands)	($ in Thousands)	Interest Income										($ in Thousands)	Interest Income				Interest Income
Total amounts of income presented on the consolidated statements of income in which the effects of the fair value hedge is recorded	Total amounts of income presented on the consolidated statements of income in which the effects of the fair value hedge is recorded	$	(179)		$	(485)								Total amounts of income presented on the consolidated statements of income in which the effects of the fair value hedge is recorded	$	(129)	$	(352)	$	(308)	$	(837)
The effects of fair value hedging: (Loss) on fair value hedging relationships in Subtopic 815-20	The effects of fair value hedging: (Loss) on fair value hedging relationships in Subtopic 815-20													The effects of fair value hedging: (Loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts	Interest contracts													Interest contracts
Hedged items	Hedged items	(179)			(485)									Hedged items	(129)		(352)		(308)		(837)

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The table below identifies the effect of derivatives not designated as hedging instruments on the Corporation's consolidated statements of income for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:
Consolidated Statements of Income Category of
Gain / (Loss)
Recognized in Income Three Months Ended Mar 31,
($ in Thousands) 2022 2021
Derivative Instruments
Interest rate-related instruments — customer and mirror, net Capital markets, net $ 573 $ 2,938
Interest rate-related instruments — MSRs hedge Mortgage banking, net $ (3,666) $ —
Foreign currency exchange forwards Capital markets, net 123 143
Commodity contracts Capital markets, net (16) (621)
Interest rate lock commitments (mortgage) Mortgage banking, net (2,842) (2,708)
Forward commitments (mortgage) Mortgage banking, net (4,757) (6,300)


	Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income	Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)		2022		2021		2022		2021
Derivative Instruments
Interest rate-related instruments — customer and mirror, net	Capital markets, net	$	8	$	(950)	$	581	$	1,989
Interest rate-related instruments — MSRs hedge	Mortgage banking, net	(5,346)		—		(9,012)		—
Foreign currency exchange forwards	Capital markets, net	254		(25)		377		118
Commodity contracts	Capital markets, net	—		(512)		(16)		(1,132)
Interest rate lock commitments (mortgage)	Mortgage banking, net	1,210		(373)		(1,631)		(3,081)
Forward commitments (mortgage)	Mortgage banking, net	4,885		4,685		128		(1,616)

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Note 11 Balance Sheet Offsetting

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

The Corporation enters into interest rate-related instruments to facilitate the interest rate risk management strategies of commercial customers and foreign exchange forwards to manage customers' exposure to fluctuating foreign exchange rates. The Corporation mitigates these risks by entering into equal and offsetting agreements with highly rated third-party financial institutions. Historically, the Corporation entered into commodity contracts to manage commercial customers' exposure to fluctuating commodity prices. As of the end of the first quarter of 2022, the Corporation no longer had any outstanding commodity contracts. The Corporation is party to master netting arrangements with its financial institution counterparties that create single net settlements of all legal claims or obligations to pay or receive the net amount of settlement of the individual interest and foreign exchange agreements. Collateral, usually in the form of investment securities and cash, is posted by the counterparty with net liability positions in accordance with contract thresholds. Derivatives subject to a legally enforceable master netting agreement are reported with assets and liabilities offset resulting in a net position which is further offset by any cash and investment securities collateral, and is reported in other assets and accrued expenses and other liabilities, on the face of the consolidated balance sheets. See Note 10 for additional information on the Corporation’s derivative and hedging activities.

The following table presents the interest rate and foreign exchange assets and liabilities subject to an enforceable master netting arrangement as of ~~March 31,~~June 30, 2022 and interest rate, commodity, and foreign exchange assets and liabilities subject to an enforceable master netting arrangement as of December 31, 2021. The interest and foreign exchange agreements the Corporation has with its commercial customers and the commodity agreements the Corporation had with its commercial customers are not subject to an enforceable master netting arrangement and are therefore excluded from this table:


		Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets				Net Amounts Presented on the Consolidated Balance Sheets					Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets			Net Amounts Presented on the Consolidated Balance Sheets
($ in Thousands)	($ in Thousands)			Derivative Liabilities Offset		Cash Collateral Received				($ in Thousands)	Gross Amounts Recognized				Cash Collateral Received		Net Amounts Presented on the Consolidated Balance Sheets
Derivative assets	Derivative assets
March 31, 2022		$	15,021	$	(2,514)	$	(7,816)	$	4,691
June 30, 2022												June 30, 2022	$	27,214	$	(4,369)		$	(22,756)	$	89
December 31, 2021	December 31, 2021	3,567		(2,143)		(1,313)		111				December 31, 2021	3,567		(2,143)		(1,313)	111

		Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets				Net Amounts Presented on the Consolidated Balance Sheets					Gross Amounts Recognized		Gross Amounts Subject to Master Netting Arrangements Offset on the Consolidated Balance Sheets			Net Amounts Presented on the Consolidated Balance Sheets
($ in Thousands)	($ in Thousands)			Derivative Assets Offset		Cash Collateral Pledged				($ in Thousands)	Gross Amounts Recognized				Cash Collateral Pledged		Net Amounts Presented on the Consolidated Balance Sheets
Derivative liabilities	Derivative liabilities
March 31, 2022		$	3,535	$	(2,514)	$	(987)	$	34
June 30, 2022												June 30, 2022	$	4,618	$	(4,369)		$	—	$	249
December 31, 2021	December 31, 2021	15,620		(2,143)		(11,357)		2,120				December 31, 2021	15,620		(2,143)		(11,357)	2,120

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

The Corporation utilizes a variety of financial instruments in the normal course of business to meet the financial needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments include lending-related and other commitments (see below) as well as derivative instruments (see Note 10). The following is a summary of lending-related commitments:
($ in Thousands) Mar 31, 2022 Dec 31, 2021
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(a)(b)
$ 10,973,357 $ 10,848,136
Commercial letters of credit(a)
9,827 5,992
Standby letters of credit(c)
257,039 248,292


($ in Thousands)	Jun 30, 2022		Dec 31, 2021
Commitments to extend credit, excluding commitments to originate residential mortgage loans held for sale(a)(b)	$	11,483,648	$	10,848,136
Commercial letters of credit(a)	5,152		5,992
Standby letters of credit(c)	274,324		248,292

(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 0
no current fair value, or the fair value is based on fees currently charged to enter into similar agreements and was not material at ~~March 31,~~June 30, 2022 or December 31, 2021.

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

(c) The Corporation has established a liability of $3 million and $2 million for ~~both March 31,~~June 30, 2022 and December 31, 2021, respectively, 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

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collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the customer. Since a significant portion of commitments to extend credit are subject to specific restrictive loan covenants or may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. An allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded commitments (including unfunded loan commitments and letters of credit).

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


($ in Thousands)	($ in Thousands)	Three months ended Mar 31, 2022		Year Ended Dec 31, 2021		($ in Thousands)	Six Months Ended June 30, 2022		Year Ended December 31, 2021
Allowance for Unfunded Commitments	Allowance for Unfunded Commitments					Allowance for Unfunded Commitments
Balance at beginning of period	Balance at beginning of period	$	39,776	$	47,776	Balance at beginning of period	$	39,776	$	47,776

Provision for unfunded commitments	Provision for unfunded commitments	(1,000)		(8,000)		Provision for unfunded commitments	(3,000)		(8,000)

Balance at end of period	Balance at end of period	$	38,776	$	39,776	Balance at end of period	$	36,776	$	39,776

Lending-related commitments include commitments to extend credit, commitments to originate residential mortgage loans held for sale, commercial letters of credit, and standby letters of credit. Commitments to extend credit are legally binding agreements to lend to customers at predetermined interest rates, as long as there is no violation of any condition established in the contracts. Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments on residential mortgage loans and TBA securities are considered derivative instruments, and the fair value of these commitments is recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets. The Corporation’s derivative and hedging activity is further described in Note 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 invests in qualified affordable housing projects, historic projects, new market projects, and opportunity zone funds for the purpose of community reinvestment and obtaining tax credits and other tax benefits. Return on the Corporation's investment in these projects and funds comes in the form of the tax credits and tax losses that pass through to the Corporation, and deferral or elimination of capital gain recognition for tax purposes. The aggregate carrying value of these investments at ~~March 31,~~June 30, 2022 was ~~$259~~$250 million, compared to $268 million at December 31, 2021, included in tax credit and other investments on the consolidated balance sheets. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects.

Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits. The Corporation recognized additional income tax expense attributable to the amortization of

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investments in qualified affordable housing projects of $16 million for both the six months ended June 30, 2022 and June 30, 2021, and $8 million for both the three months ended ~~March 31,~~June 30, 2022 and ~~2021, respectively.~~June 30, 2021. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled ~~$253~~$245 million at ~~March 31,~~June 30, 2022 and $262 million at December 31, 2021.

The Corporation’s unfunded equity contributions relating to investments in ~~federal and state~~ qualified affordable housing and ~~federal and state~~ historic projects are recorded in accrued expenses and other liabilities on the consolidated balance sheets. The Corporation’s remaining unfunded equity contributions totaled ~~$69~~$44 million at ~~March 31,~~June 30, 2022 and $80 million at December 31, 2021.

For the ~~three~~six months ended ~~March 31,~~June 30, 2022 and the year ended December 31, 2021, the Corporation did 0tnot record any impairment related to qualified affordable housing investments.

The Corporation has principal investment commitments to provide capital-based financing to private companies through either direct investment in specific companies or through investment funds and partnerships. The timing of future cash requirements to fund such principal investment commitments is generally dependent on the investment cycle, whereby privately held companies are funded by private equity investors and ultimately sold, merged, or taken public through an initial offering, which can vary based on overall market conditions, as well as the nature and type of industry in which the companies operate. The Corporation also invests in loan pools that support CRA loans. The timing of future cash requirements to fund these pools is dependent upon loan demand, which can vary over time. The aggregate carrying value of these investments was $25 million at both ~~March 31,~~June 30, 2022 and December 31, 2021, included in tax credit and other investments on the consolidated balance sheets.

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Legal Proceedings

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

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

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

A lawsuit, Evans et al v. Associated Banc-Corp et al, was filed in the United States District Court for the Eastern District of Wisconsin - Green Bay Division on January 13, 2021 by one current and one former participant in the Associated Banc-Corp 401(k) and Employee Stock Ownership Plan (the “Plan”) as representatives of a putative class. The plaintiffs alleged that Associated Banc-Corp, the Associated Banc-Corp Plan Administrative Committee, and current and past members of such committee during the relevant time period (the “Defendants”) breached their fiduciary duties with respect to the Plan in violation of Employee Retirement Income Security Act of 1974, as amended, by applying an imprudent and inappropriate preference for products associated with Associated Banc-Corp within the Plan, and that the Defendants failed to monitor or control the recordkeeping expenses paid to Associated Trust Company, N.A. On March 18, 2021, the Defendants filed a motion to dismiss. On April 8, 2021, the plaintiffs filed an amended complaint which dropped the record keeping claim, added Associated Trust Company N.A. and Kellogg Asset Management, LLC as defendants, and alleged various breaches of fiduciary duty related to the selection and monitoring of, and the fees charged by, proprietary collective investment trusts. The plaintiffs, in part, seek an accounting and disgorgement of certain profits, as well as certain equitable restitution and equitable monetary relief. The Corporation intends to vigorously defend against 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 this lawsuit.

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Regulatory Matters

A variety of consumer products, including mortgage and deposit products, and certain fees and charges related to such products, have come under increased regulatory scrutiny. It is possible that regulatory authorities could bring enforcement actions, including civil money penalties, or take other actions against the Corporation 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.

Operational Matters

In November 2021, we became aware that during several routine purges of old documents, certain documents that were more than seven years old relating to active accounts were inadvertently purged from our electronic database. The active account documents that were inadvertently purged related to (1) certain customer documents obtained as part of bank acquisitions, and (2) certain customer documents that were transferred to a new cold storage system without correct retention coding. Both the acquisitions and the transfer occurred years ago. The majority of the documents inadvertently purged were signature cards. We have undertaken measures to replace (if possible) or otherwise lessen the impact on customers of any inadvertently purged documents. While the impact on the Company of this incident has been immaterial to date, and we are not aware of any material adverse customer impact, it is not possible at this time for management to reasonably estimate the amount of any potential loss related to this incident.

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Mortgage Repurchase Reserve

The Corporation sells residential mortgage loans to investors in the normal course of business. Residential mortgage loans sold to others are predominantly conventional residential first lien mortgages originated under the Corporation's usual underwriting procedures, and are most often sold on a nonrecourse basis, primarily to the GSEs. The Corporation’s agreements to sell residential mortgage loans in the normal course of business usually require certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability. Subsequent to being sold, if a material underwriting deficiency or documentation defect is discovered, the Corporation may be obligated to repurchase the loan or reimburse the GSEs for losses incurred (collectively, “make whole requests”). The make whole requests and any related risk of loss under the representations and warranties are largely driven by borrower performance. Additionally, beginning in the third quarter of 2021, qualifying residential mortgage loans guaranteed by U.S. government agencies have been sold into GNMA pools.

As a result of make whole requests, the Corporation has repurchased loans with aggregate principal balances of $2$3 million and $8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and the year ended December 31, 2021, respectively. There were no loss reimbursement and settlement claims paid in the ~~three~~six months ended ~~March 31,~~June 30, 2022, and approximately $114,000 of such claims were paid for the year ended December 31, 2021. Make whole requests during 2021 and the first ~~three~~six months of 2022 generally arose from loans ~~sold~~originated during the period of January 1, 2017 to December 31, 2021. Since January 1, 2017, loans sold totaled ~~$7.2~~$7.4 billion at the time of sale, and consisted primarily of loans sold to GSEs. As of ~~March 31,~~June 30, 2022, $4.6 billion of loans originated since January 1, 2017 remain outstanding.

The balance in the mortgage repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Corporation could incur from repurchasing a loan, as well as loss reimbursements, indemnifications, and other settlement resolutions. The mortgage repurchase reserve, included in accrued expenses and other liabilities on the consolidated balance sheets, was $1 million at both ~~March 31,~~June 30, 2022 and December 31, 2021.

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 ~~March 31,~~June 30, 2022 and December 31, 2021, there were $8$7 million and $10 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 ~~March 31,~~June 30, 2022 and December 31, 2021, there were ~~$23~~$22 million and $24 million, respectively, of such residential mortgage loans with credit risk recourse, upon which there have been immaterial historical losses to the Corporation.

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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).

The valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis are described in the Fair Value Measurements note in the Corporation’s 2021 Annual Report on Form 10-K. There has been one significant change to the methodologies for assets and liabilities measured at fair value on a recurring basis:

Mortgage Servicing Rights: The Corporation sells residential mortgage loans in the secondary market and typically retains the rights to service the loans sold. Upon sale, a MSRs asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs asset under the fair value measurement method. Under this methodology, changes in the fair value are recognized in earnings as they occur through mortgage banking, net on the consolidated statements of income.

Table of Contents

The table below presents the Corporation’s financial instruments measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2022 and December 31, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall:


($ in Thousands)	($ in Thousands)	Fair Value Hierarchy	Mar 31, 2022		Dec 31, 2021		($ in Thousands)	Fair Value Hierarchy	Jun 30, 2022		Dec 31, 2021
Assets	Assets						Assets
Investment securities AFS
AFS investment securities							AFS investment securities
U.S. Treasury securities	U.S. Treasury securities	Level 1	$	116,132	$	122,957	U.S. Treasury securities	Level 1	$	113,109	$	122,957
Agency securities	Agency securities	Level 2	14,200		14,897		Agency securities	Level 2	13,959		14,897
Obligations of state and political subdivisions (municipal securities)	Obligations of state and political subdivisions (municipal securities)	Level 2	372,401		400,457		Obligations of state and political subdivisions (municipal securities)	Level 2	358,842		400,457
Residential mortgage-related securities	Residential mortgage-related securities						Residential mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	Level 2	1,894,819		2,691,879		FNMA / FHLMC	Level 2	1,811,603		2,691,879
GNMA	GNMA	Level 2	58,909		67,780		GNMA	Level 2	86,238		67,780
Private-label	Private-label	Level 2	—		329,724		Private-label	Level 2	—		329,724
Commercial mortgage-related securities	Commercial mortgage-related securities						Commercial mortgage-related securities
FNMA / FHLMC	FNMA / FHLMC	Level 2	19,786		350,623		FNMA / FHLMC	Level 2	18,606		350,623
GNMA	GNMA	Level 2	126,760		166,799		GNMA	Level 2	105,680		166,799
Asset backed securities	Asset backed securities						Asset backed securities
FFELP	FFELP	Level 2	168,978		177,325		FFELP	Level 2	161,264		177,325
SBA	SBA	Level 2	5,845		6,580		SBA	Level 2	5,281		6,580
Other debt securities	Other debt securities	Level 2	2,973		2,994		Other debt securities	Level 2	2,929		2,994

Total investment securities AFS		Level 1	$	116,132	$	122,957
Total investment securities AFS		Level 2	2,664,671		4,209,058
Total AFS investment securities							Total AFS investment securities	Level 1	$	113,109	$	122,957
Total AFS investment securities							Total AFS investment securities	Level 2	2,564,402		4,209,058

Equity securities with readily determinable fair values	Equity securities with readily determinable fair values	Level 1	5,025		4,810		Equity securities with readily determinable fair values	Level 1	5,502		4,810
Residential loans held for sale	Residential loans held for sale	Level 2	91,582		136,638		Residential loans held for sale	Level 2	42,676		136,638
Mortgage servicing rights, net(a)	Mortgage servicing rights, net(a)	Level 3	67,015		N/A		Mortgage servicing rights, net(a)	Level 3	76,570		N/A
Interest rate-related instruments(b)	Interest rate-related instruments(b)	Level 2	31,728		83,626		Interest rate-related instruments(b)	Level 2	34,184		83,626
Foreign currency exchange forwards(b)	Foreign currency exchange forwards(b)	Level 2	1,986		5,490		Foreign currency exchange forwards(b)	Level 2	4,190		5,490

Commodity contracts(b)	Commodity contracts(b)	Level 2	—		1,264		Commodity contracts(b)	Level 2	—		1,264

Interest rate lock commitments to originate residential mortgage loans held for sale	Interest rate lock commitments to originate residential mortgage loans held for sale	Level 3	—		2,617		Interest rate lock commitments to originate residential mortgage loans held for sale	Level 3	986		2,617
Forward commitments on residential mortgage loans	Forward commitments on residential mortgage loans	Level 3	4,796		30		Forward commitments on residential mortgage loans	Level 3	—		30
Forward commitments on TBA securities							Forward commitments on TBA securities	Level 3	47		—
Liabilities	Liabilities						Liabilities
Interest rate-related instruments(b)	Interest rate-related instruments(b)	Level 2	$	112,029	$	26,231	Interest rate-related instruments(b)	Level 2	$	173,955	$	26,231
Foreign currency exchange forwards(b)	Foreign currency exchange forwards(b)	Level 2	1,815		5,441		Foreign currency exchange forwards(b)	Level 2	3,764		5,441
Commodity contracts(b)	Commodity contracts(b)	Level 2	—		1,248		Commodity contracts(b)	Level 2	—		1,248

Interest rate lock commitments to originate residential mortgage loans held for sale		Level 3	224		—
Forward commitments on TBA securities		Level 3	9		—

Forward commitments on residential mortgage loans							Forward commitments on residential mortgage loans	Level 3	113		—

(a) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value on a recurring basis.
(b) Figures are presented gross before netting. See Note 10 and Note 11 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the
same counterparty where there is a legally enforceable master netting agreement in place.

The table below presents a rollforward of the consolidated balance sheets amounts for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and the year ended December 31, 2021, for the Corporation's mortgage derivatives measured on a recurring basis and classified within Level 3 of the fair value hierarchy:


($ in Thousands)	($ in Thousands)	Interest rate lock commitments to originate residential mortgage loans held for sale		Forward commitments on residential mortgage loans and TBA securities		Total		($ in Thousands)	Interest rate lock commitments to originate residential mortgage loans held for sale		Forward commitments on residential mortgage loans and TBA securities		Total
Balance December 31, 2020	Balance December 31, 2020	$	9,624	$	2,046	$	7,579	Balance December 31, 2020	$	9,624	$	2,046	$	7,579
New production	New production	53,686		(3,281)		56,966		New production	53,686		(3,281)		56,966
Closed loans / settlements	Closed loans / settlements	(53,477)		3,740		(57,217)		Closed loans / settlements	(53,477)		3,740		(57,217)
Other	Other	(7,216)		(2,535)		(4,680)		Other	(7,216)		(2,535)		(4,680)
Mortgage derivative (loss)		(7,007)		(2,076)		(4,932)
Change in mortgage derivative								Change in mortgage derivative	(7,007)		(2,076)		(4,932)

Balance December 31, 2021	Balance December 31, 2021	$	2,617	$	(30)	$	2,647	Balance December 31, 2021	$	2,617	$	(30)	$	2,647
New production	New production	$	5,002	$	(887)	$	5,890	New production	$	7,237	$	(1,083)	$	8,320
Closed loans / settlements	Closed loans / settlements	(455)		9,099		(9,554)		Closed loans / settlements	637		20,035		(19,398)
Other	Other	(7,389)		(12,969)		5,580		Other	(9,505)		(18,856)		9,351
Mortgage derivative gain (loss)		(2,842)		(4,757)		1,916
Change in mortgage derivative								Change in mortgage derivative	(1,631)		96		(1,727)

Balance March 31, 2022		$	(224)	$	(4,787)	$	4,563
Balance June 30, 2022								Balance June 30, 2022	$	986	$	66	$	920

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~~The closing ratio on interest rate lock commitments to originate residential mortgage loans held for sale is a Level 3 measurement, and was 79% at March 31, 2022.~~

The following table presents the carrying value of equity securities without readily determinable fair values as of ~~March 31,~~June 30, 2022 that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable. Also shown are the cumulative upward and downward adjustments for the Corporation's equity securities without readily determinable fair values as of ~~March 31,~~June 30, 2022:


($ in Thousands)
Equity securities without readily determinable fair values
Carrying value as of December 31, 2021	$	13,542

Additions	14
Sales	(8)

Carrying value as of ~~March 31,~~June 30, 2022	$	~~13,535~~13,538

Cumulative upward carrying value changes between January 1, 2018 and ~~March 31,~~June 30, 2022	$	13,444
Cumulative downward carrying value changes/impairment between January 1, 2018 and ~~March 31,~~June 30, 2022	$	—

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

Consolidated Statements of Income
Category of Adjustment
Recognized in Income

($ in Thousands)

Fair Value Hierarchy

Fair Value

Adjustment Recognized on the Consolidated Statements of Income(c)

($ in Thousands)

Fair Value Hierarchy

Fair Value

Consolidated Statements of Income Category of Adjustment Recognized in Income

Adjustment Recognized on the Consolidated Statements of Income(c)

March 31, 2022

June 30, 2022

Assets

Individually evaluated loans(a)

Level 3

43,882

Provision for credit losses

(397)

Individually evaluated loans(a)

Level 3

35,906

Provision for credit losses

(2,260)

OREO(b)

Level 2

985

Other noninterest expense / provision for credit losses(d)

102

OREO(b)

Level 2

2,098

Other noninterest expense / provision for credit losses(d)

496

December 31, 2021

Assets

Individually evaluated loans(a)

Level 3

69,917

Provision for credit losses

(3,045)

Individually evaluated loans(a)

Level 3

69,917

Provision for credit losses

(3,045)

OREO(b)

Level 2

21,299

Other noninterest expense / provision for credit losses(d)

7,345

OREO(b)

Level 2

21,299

Other noninterest expense / provision for credit losses(d)

7,345

Mortgage servicing rights(e)

Level 3

57,259

Mortgage banking, net

16,186

Mortgage servicing rights(e)

Level 3

57,259

Mortgage banking, net

16,186

(a) Includes probable TDRs which are individually analyzed, net of the related ~~ACLL.~~ACLL, of which there were none at June 30, 2022.
(b) If the fair value of the collateral exceeds the carrying amount of the asset, no charge off or adjustment is necessary, the asset is not considered to be carried at fair value, and is therefore not included in the table.
(c) Includes the full year impact on the consolidated statements of ~~income~~income.
(d) When a property's value is written down at the time it is transferred to OREO, the charge off is booked to the provision for credit losses. When a property is already in OREO and subsequently written down, the charge off is booked to other noninterest expense.
(e) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value on a recurring basis.

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

The ~~Corporation's significant Level 3 measurements which employ~~table below presents the unobservable inputs that are readily quantifiable ~~pertain~~pertaining to ~~individually evaluated loans.~~

~~The table below presents information about these inputs and further discussion is found above:~~Level 3 measurements:


March 31, 2022		Valuation Technique	Significant Unobservable Input	Range of Inputs			Weighted Average Input Applied

June 30, 2022								June 30, 2022	Valuation Technique	Significant Unobservable Input	Range of Inputs			Weighted Average Input Applied
Mortgage servicing rights								Mortgage servicing rights	Discounted cash flow	Option adjusted spread	8%	-	10%	8%
Mortgage servicing rights								Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	—%	-	100%	8%
Individually evaluated loans	Individually evaluated loans	Appraisals / Discounted cash flow	Collateral / Discount factor	21%	-	21%	21%	Individually evaluated loans	Appraisals / Discounted cash flow	Collateral / Discount factor	27%	-	29%	27%
Interest rate lock commitments to originate residential mortgage loans held for sale								Interest rate lock commitments to originate residential mortgage loans held for sale	Discounted cash flow	Closing Ratio	32%	-	100%	86%

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Fair Value of Financial Instruments

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

Fair value estimates are set forth below for the Corporation’s financial instruments:


			Mar 31, 2022				Dec 31, 2021						Jun 30, 2022				Dec 31, 2021
($ in Thousands)	($ in Thousands)	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value		($ in Thousands)	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
																					($ in Thousands)	Fair Value Hierarchy Level	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial assets	Financial assets										Financial assets
Cash and due from banks	Cash and due from banks	Level 1	$	334,138	$	334,138	$	343,831	$	343,831	Cash and due from banks	Level 1	$	397,364	$	397,364	$	343,831	$	343,831
Interest-bearing deposits in other financial institutions	Interest-bearing deposits in other financial institutions	Level 1	166,929		166,929		681,684		681,684		Interest-bearing deposits in other financial institutions	Level 1	436,887		436,887		681,684		681,684

Investment securities AFS		Level 1	116,132		116,132		122,957		122,957
Investment securities AFS		Level 2	2,664,671		2,664,671		4,209,058		4,209,058
Investment securities HTM, net		Level 1	998		964		1,000		1,001
Investment securities HTM, net		Level 2	3,938,857		3,763,872		2,237,947		2,347,608
Federal funds sold and securities purchased under agreements to resell											Federal funds sold and securities purchased under agreements to resell	Level 1	32,820		32,820		—		—
AFS investment securities											AFS investment securities	Level 1	113,109		113,109		122,957		122,957
AFS investment securities											AFS investment securities	Level 2	2,564,402		2,564,402		4,209,058		4,209,058
HTM investment securities, net											HTM investment securities, net	Level 1	998		955		1,000		1,001
HTM investment securities, net											HTM investment securities, net	Level 2	3,944,208		3,533,175		2,237,947		2,347,608

Equity securities with readily determinable fair values	Equity securities with readily determinable fair values	Level 1	5,025		5,025		4,810		4,810		Equity securities with readily determinable fair values	Level 1	5,502		5,502		4,810		4,810
Equity securities without readily determinable fair values	Equity securities without readily determinable fair values	Level 3	13,535		13,535		13,542		13,542		Equity securities without readily determinable fair values	Level 3	13,538		13,538		13,542		13,542
FHLB and Federal Reserve Bank stocks	FHLB and Federal Reserve Bank stocks	Level 2	168,281		168,281		168,281		168,281		FHLB and Federal Reserve Bank stocks	Level 2	237,616		237,616		168,281		168,281
Residential loans held for sale	Residential loans held for sale	Level 2	91,582		91,582		136,638		136,638		Residential loans held for sale	Level 2	42,676		42,676		136,638		136,638

Commercial loans held for sale											Commercial loans held for sale	Level 2	44,721		44,721		—		—
Loans, net	Loans, net	Level 3	24,252,867		23,485,798		23,944,934		23,980,330		Loans, net	Level 3	26,213,927		25,322,573		23,944,934		23,980,330
Bank and corporate owned life insurance	Bank and corporate owned life insurance	Level 2	679,538		679,538		680,021		680,021		Bank and corporate owned life insurance	Level 2	675,347		675,347		680,021		680,021

Mortgage servicing rights, net(a)	Mortgage servicing rights, net(a)	Level 3	67,015		67,015		54,862		57,259		Mortgage servicing rights, net(a)	Level 3	76,570		76,570		54,862		57,259
Derivatives (other assets)(b)	Derivatives (other assets)(b)	Level 2	33,715		33,715		90,379		90,379		Derivatives (other assets)(b)	Level 2	38,374		38,374		90,379		90,379
Interest rate lock commitments to originate residential mortgage loans held for sale (other assets)	Interest rate lock commitments to originate residential mortgage loans held for sale (other assets)	Level 3	—		—		2,617		2,617		Interest rate lock commitments to originate residential mortgage loans held for sale (other assets)	Level 3	986		986		2,617		2,617
Forward commitments to sell residential mortgage loans (other assets)		Level 3	4,796		4,796		30		30
Forward commitments on residential mortgage loans (other assets)											Forward commitments on residential mortgage loans (other assets)	Level 3	—		—		30		30
Forward commitments on TBA securities (other assets)											Forward commitments on TBA securities (other assets)	Level 3	47		47		—		—
Financial liabilities	Financial liabilities										Financial liabilities
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Level 3	$	27,116,495	$	27,116,495	$	27,119,167	$	27,119,167	Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Level 3	$	27,352,996	$	27,352,996	$	27,119,167	$	27,119,167
Time deposits(c)	Time deposits(c)	Level 2	1,288,913		1,288,913		1,347,262		1,347,262		Time deposits(c)	Level 2	1,223,581		1,223,581		1,347,262		1,347,262
Short-term funding	Short-term funding	Level 2	399,361		399,270		354,262		354,248		Short-term funding	Level 2	705,620		705,216		354,262		354,248
FHLB advances	FHLB advances	Level 2	1,537,948		1,546,821		1,621,047		1,680,814		FHLB advances	Level 2	3,258,039		3,250,216		1,621,047		1,680,814
Other long-term funding	Other long-term funding	Level 2	249,797		254,355		249,324		265,545		Other long-term funding	Level 2	249,820		250,571		249,324		265,545

Standby letters of credit(d)	Standby letters of credit(d)	Level 2	2,473		2,473		2,367		2,367		Standby letters of credit(d)	Level 2	2,617		2,617		2,367		2,367

Derivatives (accrued expenses and other liabilities)(b)	Derivatives (accrued expenses and other liabilities)(b)	Level 2	113,844		113,844		32,921		32,921		Derivatives (accrued expenses and other liabilities)(b)	Level 2	177,720		177,720		32,921		32,921
Interest rate lock commitments to originate residential mortgage loans held for sale (accrued expenses and other liabilities)		Level 3	224		224		—		—
Forward commitments on TBA securities (accrued expenses and other liabilities)		Level 3	9		9		—		—

Forward commitments on residential mortgage loans (accrued expenses and other liabilities)											Forward commitments on residential mortgage loans (accrued expenses and other liabilities)	Level 3	113		113		—		—

(a) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value.
(b) Figures are presented gross before netting. See Note 10 and Note 11 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the
same counterparty where there is a legally enforceable master netting agreement in place.
(c) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.
(d) The commitment on standby letters of credit was ~~$257~~$274 million at ~~March 31,~~June 30, 2022 and $248 million at December 31, 2021. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.

Note 14 Retirement Plans

The Corporation has a noncontributory defined benefit RAP, covering substantially all 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 to a limited group of retired employees from a previous acquisition in the Postretirement Plan. There are no other active retiree healthcare plans.

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The components of net periodic pension cost and net periodic benefit cost for the RAP and Postretirement Plan for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 were as follows:


		Three Months Ended Mar 31,				Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021			($ in Thousands)	2022		2021		2022		2021
Components of Net Periodic Benefit Cost	Components of Net Periodic Benefit Cost						Components of Net Periodic Benefit Cost
RAP	RAP						RAP
Service cost	Service cost	$	923	$	2,075		Service cost	$	923	$	2,075	$	1,847	$	4,151
Interest cost	Interest cost	1,772		1,623			Interest cost	1,772		1,623		3,545		3,245
Expected return on plan assets	Expected return on plan assets	(6,736)		(6,430)			Expected return on plan assets	(6,736)		(6,430)		(13,472)		(12,861)
Amortization of prior service cost	Amortization of prior service cost	(63)		(18)			Amortization of prior service cost	(63)		(18)		(125)		(37)
Amortization of actuarial loss	Amortization of actuarial loss	74		1,050			Amortization of actuarial loss	74		1,050		147		2,100
Total net periodic pension cost	Total net periodic pension cost	$	(4,029)	$	(1,701)		Total net periodic pension cost	$	(4,029)	$	(1,701)	$	(8,059)	$	(3,402)

Postretirement Plan	Postretirement Plan						Postretirement Plan
Interest cost	Interest cost	$	13	$	13		Interest cost	$	13	$	13	$	27	$	26
Amortization of prior service cost	Amortization of prior service cost	(19)		(19)			Amortization of prior service cost	(19)		(19)		(38)		(38)

Total net periodic benefit cost	Total net periodic benefit cost	$	(6)	$	(6)		Total net periodic benefit cost	$	(6)	$	(6)	$	(11)	$	(12)

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

The Corporation’s funding policy is to pay at least the minimum amount required by federal law and regulations, with consideration given to the maximum funding amounts allowed. The Corporation regularly reviews the funding of its RAP. There were no contributions during the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021.

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 3 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 2021 Annual Report on Form 10-K with certain exceptions. The more significant of these exceptions are described herein.

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

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

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

The provision for credit losses is allocated to segments based on the expected long-term annual net charge off rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for credit losses is determined based on an ACLL model using the methodologies described in the Corporation’s 2021 Annual

~~Table of Contents~~

Report on Form 10-K. The net effect of the credit provision is recorded in Risk Management and Shared Services. Indirect

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

A brief description of each business segment is presented below. A more in-depth discussion of these segments can be found in the Segment Reporting note in the Corporation’s 2021 Annual Report on Form 10-K.

The Corporate and Commercial Specialty segment serves a wide range of customers including larger businesses, developers, not-for-profits, municipalities, and financial institutions by providing lending and deposit solutions as well as the support to deliver, fund, and manage such banking solutions. In addition, this segment provides a variety of investment, fiduciary, and retirement planning products and services to individuals and small to mid-sized businesses. During the first quarter of 2021, the Corporation sold its wealth management subsidiary Whitnell. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses, by providing lending and deposit solutions. The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches).

Effective during the first quarter of 2022, certain support functions and a select group of banking regions were realigned into the Community, Consumer, and Business segment from the Corporate and Commercial Specialty segment.

Information about the Corporation’s segments is presented below:


		Corporate and Commercial Specialty				Corporate and Commercial Specialty
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021
Net interest income	Net interest income	$	90,633	$	89,661			Net interest income	$	111,359	$	90,039	$	201,992	$	179,700
Net intersegment interest income		8,525		4,670
Net intersegment interest income (expense)								Net intersegment interest income (expense)	(5,301)		4,324		3,224		8,994
Segment net interest income	Segment net interest income	99,158		94,331				Segment net interest income	106,058		94,363		205,216		188,694
Noninterest income(a)	Noninterest income(a)	37,790		41,828				Noninterest income(a)	39,133		37,281		76,923		79,109
Total revenue	Total revenue	136,948		136,160				Total revenue	145,191		131,643		282,139		267,803
Provision for credit losses	Provision for credit losses	12,653		16,680				Provision for credit losses	12,246		15,716		24,900		32,395
Noninterest expense	Noninterest expense	56,559		55,448				Noninterest expense	56,847		53,902		113,406		109,349
Income before income taxes	Income before income taxes	67,736		64,032				Income before income taxes	76,098		62,026		143,833		126,058
Income tax expense	Income tax expense	12,313		11,891				Income tax expense	13,919		11,214		26,232		23,106
Net income	Net income	$	55,423	$	52,141			Net income	$	62,179	$	50,812	$	117,601	$	102,953

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


		Community, Consumer, and Business				Community, Consumer, and Business
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021
Net interest income	Net interest income	$	69,544	$	71,775			Net interest income	$	76,999	$	73,477	$	146,543	$	145,253
Net intersegment interest income	Net intersegment interest income	18,833		14,889				Net intersegment interest income	30,638		15,992		49,470		30,881
Segment net interest income	Segment net interest income	88,377		86,664				Segment net interest income	107,636		89,470		196,013		176,134
Noninterest income	Noninterest income	33,207		47,331				Noninterest income	32,121		32,967		65,327		80,298
Total revenue	Total revenue	121,584		133,995				Total revenue	139,757		122,437		261,341		256,432
Provision for credit losses	Provision for credit losses	4,656		5,928				Provision for credit losses	4,924		5,279		9,580		11,207
Noninterest expense	Noninterest expense	98,660		100,353				Noninterest expense	105,139		101,735		203,802		202,086
Income before income taxes	Income before income taxes	18,267		27,714				Income before income taxes	29,695		15,424		47,959		43,139
Income tax expense	Income tax expense	3,836		5,820				Income tax expense	6,236		3,239		10,071		9,059
Net income	Net income	$	14,431	$	21,894			Net income	$	23,459	$	12,185	$	37,888	$	34,080

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

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		Risk Management and Shared Services				Risk Management and Shared Services
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021
Net interest income	Net interest income	$	27,570	$	14,465			Net interest income	$	27,789	$	15,999	$	55,358	$	30,464
Net intersegment interest (expense)		(27,358)		(19,559)
Segment net interest income		212		(5,094)
Net intersegment (expense)								Net intersegment (expense)	(25,337)		(20,316)		(52,694)		(39,875)
Segment net interest income (loss)								Segment net interest income (loss)	2,452		(4,318)		2,664		(9,412)
Noninterest income	Noninterest income	3,470		6,184				Noninterest income	4,204		3,195		7,675		9,379
Total revenue	Total revenue	3,683		1,091				Total revenue	6,656		(1,123)		10,339		(33)
Provision for credit losses	Provision for credit losses	(21,300)		(45,612)				Provision for credit losses	(17,172)		(55,999)		(38,472)		(101,610)
Noninterest expense	Noninterest expense	18,073		19,546				Noninterest expense	19,434		18,839		37,505		38,386
Income before income taxes	Income before income taxes	6,909		27,156				Income before income taxes	4,394		36,037		11,307		63,191
Income tax expense	Income tax expense	2,501		6,890				Income tax expense	3,209		8,027		5,710		14,917
Net income	Net income	$	4,409	$	20,266			Net income	$	1,186	$	28,010	$	5,597	$	48,274

Allocated goodwill	Allocated goodwill	$	—	$	—			Allocated goodwill					$	—	$	—


		Consolidated Total				Consolidated Total
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021
Net interest income	Net interest income	$	187,747	$	175,902			Net interest income	$	216,146	$	179,515	$	403,893	$	355,416
Net intersegment interest income	Net intersegment interest income	—		—				Net intersegment interest income	—		—		—		—
Segment net interest income	Segment net interest income	187,747		175,902				Segment net interest income	216,146		179,515		403,893		355,416
Noninterest income(a)	Noninterest income(a)	74,467		95,343				Noninterest income(a)	75,458		73,443		149,925		168,786
Total revenue	Total revenue	262,214		271,245				Total revenue	291,604		252,957		553,819		524,202
Provision for credit losses	Provision for credit losses	(3,990)		(23,004)				Provision for credit losses	(2)		(35,004)		(3,992)		(58,009)
Noninterest expense	Noninterest expense	173,292		175,347				Noninterest expense	181,420		174,475		354,712		349,821
Income before income taxes	Income before income taxes	92,912		118,903				Income before income taxes	110,187		113,487		203,099		232,389
Income tax expense	Income tax expense	18,650		24,602				Income tax expense	23,363		22,480		42,013		47,082
Net income	Net income	$	74,262	$	94,301			Net income	$	86,824	$	91,007	$	161,086	$	185,307

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

(a) For the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Corporation recognized a $2 million pre-tax gain on sale of Whitnell.

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Note 16 Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of accumulated other comprehensive income (loss) at ~~March 31,~~June 30, 2022 and 2021, including changes during the preceding three and six month periods as well as any reclassifications out of accumulated other comprehensive income (loss):


($ in Thousands)	($ in Thousands)	Investment Securities AFS		Defined Benefit Pension and Postretirement Obligations		Accumulated Other Comprehensive Income (Loss)		($ in Thousands)	AFS Investment Securities		Defined Benefit Pension and Postretirement Obligations		Accumulated Other Comprehensive Income (Loss)
Balance December 31, 2021	Balance December 31, 2021	$	(5,266)	$	(5,051)	$	(10,317)	Balance December 31, 2021	$	(5,266)	$	(5,051)	$	(10,317)
Other comprehensive (loss) before reclassifications	Other comprehensive (loss) before reclassifications	(103,284)		—		(103,284)		Other comprehensive (loss) before reclassifications	(168,321)		—		(168,321)
Unrealized (losses) on AFS securities transferred to HTM securities	Unrealized (losses) on AFS securities transferred to HTM securities	(67,604)		—		(67,604)		Unrealized (losses) on AFS securities transferred to HTM securities	(67,604)		—		(67,604)
Amounts reclassified from accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)							Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities (gains), net	Investment securities (gains), net	(21)		—		(21)		Investment securities (gains), net	(12)		—		(12)

Investment securities HTM, net, at amortized cost		1,108		—		1,108
HTM investment securities, net, at amortized cost								HTM investment securities, net, at amortized cost	4,381		—		4,381
Personnel expense	Personnel expense	—		(81)		(81)		Personnel expense	—		(163)		(163)
Other expense	Other expense	—		74		74		Other expense	—		147		147

Income tax benefit	Income tax benefit	43,098		2		43,100		Income tax benefit	59,096		4		59,100
Net other comprehensive (loss) during period	Net other comprehensive (loss) during period	(126,702)		(6)		(126,708)		Net other comprehensive (loss) during period	(172,460)		(12)		(172,472)
Balance March 31, 2022		$	(131,968)	$	(5,057)	$	(137,024)
Balance June 30, 2022								Balance June 30, 2022	$	(177,726)	$	(5,062)	$	(182,788)

Balance December 31, 2020	Balance December 31, 2020	$	41,325	$	(28,707)	$	12,618	Balance December 31, 2020	$	41,325	$	(28,707)	$	12,618
Other comprehensive (loss) before reclassifications	Other comprehensive (loss) before reclassifications	(23,979)		—		(23,979)		Other comprehensive (loss) before reclassifications	(16,002)		—		(16,002)

Amounts reclassified from accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)							Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities losses , net		39		—		39
Investment securities HTM, net, at amortized cost		518		—		518
Investment securities losses, net								Investment securities losses, net	16		—		16
HTM investment securities, net, at amortized cost								HTM investment securities, net, at amortized cost	1,163		—		1,163
Personnel expense	Personnel expense	—		(37)		(37)		Personnel expense	—		(74)		(74)
Other expense	Other expense	—		1,050		1,050		Other expense	—		2,100		2,100

Income tax (expense) benefit	Income tax (expense) benefit	5,851		(253)		5,598		Income tax (expense) benefit	3,574		(506)		3,068
Net other comprehensive income (loss) during period	Net other comprehensive income (loss) during period	(17,571)		760		(16,811)		Net other comprehensive income (loss) during period	(11,249)		1,519		(9,729)
Balance March 31, 2021		$	23,754	$	(27,947)	$	(4,193)
Balance June 30, 2021								Balance June 30, 2021	$	30,076	$	(27,187)	$	2,889


($ in Thousands)	AFS Investments Securities		Defined Benefit Pension and Post Retirement Obligations		Accumulated Other Comprehensive Income (Loss)
Balance March 31, 2022	$	(131,968)	$	(5,057)	$	(137,024)
Other comprehensive (loss) before reclassifications	(65,038)		—		(65,038)

Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities losses, net	8		—		8
HTM investment securities, net, at amortized cost	3,273		—		3,273
Personnel expense	—		(81)		(81)
Other expense	—		74		74
Income tax benefit	15,998		2		16,000
Net other comprehensive (loss) during period	(45,758)		(6)		(45,764)
Balance June 30, 2022	$	(177,726)	$	(5,062)	$	(182,788)

Balance March 31, 2021	$	23,754	$	(27,947)	$	(4,193)
Other comprehensive income before reclassifications	7,978		—		7,978

Amounts reclassified from accumulated other comprehensive income (loss)
Investment securities (gains), net	(24)		—		(24)
HTM investment securities, net, at amortized cost	645		—		645
Personnel expense	—		(37)		(37)
Other expense	—		1,050		1,050
Income tax (expense)	(2,277)		(253)		(2,530)
Net other comprehensive income during period	6,322		760		7,082
Balance June 30, 2021	$	30,076	$	(27,187)	$	2,889

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Note 17 Revenue from Contracts with Customers

Revenue from contracts with customers is recognized when obligations under the terms of a contract with the Corporation's customer are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We do not have any material significant payment terms as payment is received at or shortly after the satisfaction of the performance obligation.

The Corporation's disaggregated revenue by major source is presented below:


		Corporate and Commercial Specialty				Corporate and Commercial Specialty
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021
Wealth management fees	Wealth management fees	$	22,404	$	22,414			Wealth management fees	$	21,332	$	22,706	$	43,735	$	45,120
Service charges and deposit account fees	Service charges and deposit account fees	3,784		3,941				Service charges and deposit account fees	3,724		3,859		7,508		7,800
Card-based fees(a)	Card-based fees(a)	417		346				Card-based fees(a)	327		295		744		640

Other revenue	Other revenue	1,235		664				Other revenue	658		1,151		1,893		1,814
Noninterest income (in-scope of Topic 606)	Noninterest income (in-scope of Topic 606)	$	27,840	$	27,365			Noninterest income (in-scope of Topic 606)	$	26,041	$	28,010	$	53,881	$	55,375
Noninterest income (out-of-scope of Topic 606)(b)	Noninterest income (out-of-scope of Topic 606)(b)	9,950		14,464				Noninterest income (out-of-scope of Topic 606)(b)	13,092		9,271		23,042		23,734
Total noninterest income	Total noninterest income	$	37,790	$	41,828			Total noninterest income	$	39,133	$	37,281	$	76,923	$	79,109

		Community, Consumer, and Business				Community, Consumer, and Business
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021

Service charges and deposit account fees	Service charges and deposit account fees	$	13,069	$	10,900			Service charges and deposit account fees	$	12,777	$	11,683	$	25,846	$	22,583
Card-based fees(a)	Card-based fees(a)	9,524		9,414				Card-based fees(a)	11,135		10,709		20,659		20,123

Other revenue	Other revenue	1,862		3,674				Other revenue	1,770		2,801		3,632		6,476
Noninterest income (in-scope of Topic 606)	Noninterest income (in-scope of Topic 606)	$	24,455	$	23,988			Noninterest income (in-scope of Topic 606)	$	25,683	$	25,193	$	50,138	$	49,181
Noninterest income (out-of-scope of Topic 606)	Noninterest income (out-of-scope of Topic 606)	8,751		23,342				Noninterest income (out-of-scope of Topic 606)	6,438		7,774		15,189		31,116
Total noninterest income	Total noninterest income	$	33,207	$	47,331			Total noninterest income	$	32,121	$	32,967	$	65,327	$	80,298

~~Table of Contents~~


		Risk Management and Shared Services				Risk Management and Shared Services
		Three Months Ended Mar 31,					Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021

Service charges and deposit account fees	Service charges and deposit account fees	$	3	$	15			Service charges and deposit account fees	$	5	$	7	$	8	$	22
Card-based fees(a)	Card-based fees(a)	7		4				Card-based fees(a)	10		5		17		9

Other revenue	Other revenue	38		391				Other revenue	(120)		307		(81)		697
Noninterest income (in-scope of Topic 606)	Noninterest income (in-scope of Topic 606)	$	49	$	409			Noninterest income (in-scope of Topic 606)	$	(105)	$	319	$	(56)	$	728
Noninterest income (out-of-scope of Topic 606)	Noninterest income (out-of-scope of Topic 606)	3,421		5,775				Noninterest income (out-of-scope of Topic 606)	4,310		2,876		7,731		8,651
Total noninterest income	Total noninterest income	$	3,470	$	6,184			Total noninterest income	$	4,204	$	3,195	$	7,675	$	9,379

									Consolidated Total
		Consolidated Total				Three Months Ended Jun 30,			Six Months Ended Jun 30,
		Three Months Ended Mar 31,
($ in Thousands)	($ in Thousands)	2022		2021				($ in Thousands)	2022		2021		2022		2021

Wealth management fees	Wealth management fees	$	22,404	$	22,414			Wealth management fees	$	21,332	$	22,706	$	43,735	$	45,120
Service charges and deposit account fees	Service charges and deposit account fees	16,856		14,855				Service charges and deposit account fees	16,506		15,549		33,363		30,404
Card-based fees(a)	Card-based fees(a)	9,949		9,764				Card-based fees(a)	11,472		11,009		21,421		20,773

Other revenue	Other revenue	3,135		4,729				Other revenue	2,309		4,258		5,444		8,987
Noninterest income (in-scope of Topic 606)	Noninterest income (in-scope of Topic 606)	$	52,344	$	51,762			Noninterest income (in-scope of Topic 606)	$	51,619	$	53,522	$	103,963	$	105,284
Noninterest income (out-of-scope of Topic 606)(b)	Noninterest income (out-of-scope of Topic 606)(b)	22,123		43,581				Noninterest income (out-of-scope of Topic 606)(b)	23,840		19,921		45,962		63,502
Total noninterest income	Total noninterest income	$	74,467	$	95,343			Total noninterest income	$	75,458	$	73,443	$	149,925	$	168,786

(a) Certain card-based fees are out-of-scope of Topic 606.

(b) For the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Corporation recognized a $2 million pre-tax gain on the sale of Whitnell.

Table of Contents

Below is a listing of performance obligations for the Corporation's main revenue streams:


Revenue Stream			Noninterest income in-scope of Topic 606

Service charges and deposit account fees			Service charges and deposit account fees consist of monthly service fees (i.e. business analyzed fees and consumer service charges) and other deposit account related fees. The Corporation's performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Other deposit account related fees are largely transactional based, and therefore, the Corporation's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges and deposit account fees is primarily received immediately or in the following month through a direct charge to customers’ accounts.
Card-based fees(a)			Card-based fees are primarily comprised of debit and credit card income, ATM fees, and merchant services income. Debit and credit card income is primarily comprised of interchange fees earned whenever the Corporation's debit and credit cards are processed through card payment networks. ATM and merchant fees are largely transactional based, and therefore, the Corporation's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment is typically received immediately or in the following month.
Trust and asset management fees(b)			Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Corporation's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to the customers’ accounts. The Corporation's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.
Brokerage and advisory fees(b)			Brokerage and advisory fees primarily consist of investment advisory, brokerage, retirement services, and annuities. The Corporation's performance obligation for investment advisory services and retirement services is generally satisfied, and the related revenue recognized, over the period in which the services are provided. The performance obligation for annuities is satisfied upon sale of the annuity, and therefore, the related revenue is primarily recognized at the time of sale. Payment for these services are typically received immediately or in advance of the service.

(a) Certain card-based fees are out-of-scope of Topic 606.

(b) Trust and asset management fees and brokerage and advisory fees are included in wealth management fees.

Note 18 Leases

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

These leases have original terms of 1 year or longer with remaining maturities up to 4140 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any purchase options or optional periods that the Corporation is reasonably likely to extend have been included in the capitalization.

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

~~Table of Contents~~

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


		Three Months Ended Mar 31,				Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022		2021			($ in Thousands)	2022		2021		2022		2021
Operating lease costs	Operating lease costs	$	1,798	$	2,240		Operating lease costs	$	1,926	$	2,243	$	3,724	$	4,483
Finance lease costs	Finance lease costs	41		39			Finance lease costs	32		19		73		58
Operating lease cash flows	Operating lease cash flows	2,407		2,963			Operating lease cash flows	2,327		2,777		4,735		5,740
Finance lease cash flows	Finance lease cash flows	44		40			Finance lease cash flows	37		40		80		80

The lease classifications on the consolidated balance sheets were as follows:


($ in Thousands)	($ in Thousands)	Consolidated Balance Sheets Category	Mar 31, 2022		Dec 31, 2021		($ in Thousands)	Consolidated Balance Sheets Category	Jun 30, 2022		Dec 31, 2021
Operating lease right-of-use asset	Operating lease right-of-use asset	Premises and equipment	$	28,354	$	28,299	Operating lease right-of-use asset	Premises and equipment	$	26,621	$	28,299
Finance lease right-of-use asset	Finance lease right-of-use asset	Other assets	545		143		Finance lease right-of-use asset	Other assets	498		143
Operating lease liability	Operating lease liability	Accrued expenses and other liabilities	31,585		31,345		Operating lease liability	Accrued expenses and other liabilities	29,627		31,345
Finance lease liability	Finance lease liability	Other long-term funding	562		163		Finance lease liability	Other long-term funding	511		163

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


		Mar 31, 2022					Dec 31, 2021						Jun 30, 2022					Dec 31, 2021
($ in Thousands)	($ in Thousands)	Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		($ in Thousands)	Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate
Operating leases	Operating leases											Operating leases
Equipment	Equipment	$	191	1.25	0.44	%	$	192	1.50	0.45	%	Equipment	$	191	1.00	0.44	%	$	192	1.50	0.45	%
Retail and corporate offices	Retail and corporate offices	28,482		5.76	2.24	%	29,008		5.56	3.26	%	Retail and corporate offices	26,553		5.71	2.28	%	29,008		5.56	3.26	%
Land	Land	5,356		8.11	3.12	%	5,551		8.29	3.12	%	Land	5,160		7.93	3.13	%	5,551		8.29	3.12	%
Total operating leases	Total operating leases	$	34,028	6.08	2.37	%	$	34,751	5.94	3.22	%	Total operating leases	$	31,904	6.02	2.41	%	$	34,751	5.94	3.22	%
Finance leases	Finance leases											Finance leases
Retail and corporate offices	Retail and corporate offices	$	553	6.00	1.32	%	$	112	1.25	1.32	%	Retail and corporate offices	$	530	5.75	1.32	%	$	112	1.25	1.32	%
Land	Land	30		0.42	1.07	%	51		0.67	1.07	%	Land	—		0.00	—	%	51		0.67	1.07	%
Total finance leases	Total finance leases	$	583	5.70	1.31	%	$	164	1.07	1.24	%	Total finance leases	$	530	5.75	1.32	%	$	164	1.07	1.24	%

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


($ in Thousands)	($ in Thousands)	Operating Leases		Finance Leases		Total Leases		($ in Thousands)	Operating Leases		Finance Leases		Total Leases
Nine months ended December 31, 2022		$	5,692	$	98	$	5,790
Six months ended December 31, 2022								Six months ended December 31, 2022	$	3,515	$	45	$	3,560
2023	2023	6,252		92		6,344		2023	6,240		92		6,332
2024	2024	5,660		93		5,752		2024	5,650		93		5,742
2025	2025	4,363		93		4,456		2025	4,387		93		4,479
2026	2026	3,799		93		3,891		2026	3,823		93		3,915
Beyond 2026	Beyond 2026	8,263		116		8,379		Beyond 2026	8,290		116		8,406
Total lease payments	Total lease payments	$	34,028	$	583	$	34,611	Total lease payments	$	31,904	$	530	$	32,434
Less: interest	Less: interest	2,444		21		2,465		Less: interest	2,276		19		2,296
Present value of lease payments	Present value of lease payments	$	31,585	$	562	$	32,147	Present value of lease payments	$	29,627	$	511	$	30,138

As of ~~March 31,~~June 30, 2022 and December 31, 2021, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $14 million and $13 million, respectively. The leases that had not yet commenced as of ~~March 31,~~June 30, 2022 will commence between ~~April~~July 2022 and October 2023 with lease terms of 31 year to 6 years.

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

Special Note Regarding Forward-Looking Statements

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

All forward-looking statements contained in this report or which may be contained in future statements made for or on behalf of the Corporation are based upon information available at the time the statement is made and the Corporation assumes no obligation to update any forward-looking statements, except as required by federal securities law. Forward-looking statements are subject to significant risks and uncertainties, and the Corporation’s actual results may differ materially from the expected results discussed in such forward-looking statements. Factors that might cause actual results to differ from the results discussed in forward-looking statements include, but are not limited to, the risk factors in Item 1A, Risk Factors, in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021, in the Corporations Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, in Item 1A of Part 2 herein, and as may be described from time to time in the Corporation’s subsequent SEC filings.

Overview

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

Performance Summary

•Average loans of ~~$24.1~~$24.8 billion ~~decreased $366~~increased $472 million, or 1%2%, compared to the first ~~three~~six months of 2021. For 2022, the Corporation expects ~~auto finance loan growth of more than $1.2 billion and~~ commercial loan growth, including asset-based lending and equipment finance, of ~~$750 million to $1.0~~approximately $1.7 billion and auto finance loan growth of approximately $1.3 billion.

•Average deposits of ~~$28.6~~$28.4 billion increased ~~$1.8~~$1.3 billion, or 7%5%, from the first ~~three~~six months of 2021, driven primarily by increases in low cost deposits partially offset by decreases in higher cost deposits.

•Net interest income of ~~$188~~$404 million increased ~~$12~~$48 million, or 7%14%, from the first ~~three~~six months of 2021, and netnet interest margin was ~~2.42%~~2.57% compared to ~~2.39%~~2.38% for the first ~~three~~six months of ~~2021~~.2021. The increase in net interest income was driven by higher loan income in a majority of loan categories and higher investment income ~~and lower interest-bearing liability costs, partially offset by lower commercial PPP lending income.~~resulting from the Federal Reserve increasing the federal funds target interest rate 150 bp during the first six months of 2022. For 2022, the Corporation expects net interest income of more than ~~$840~~$890 million, assuming a 75 bp increase in July and a 25 bp increase at each FOMCremaining FOMC meeting this year.

•Provision for credit losses had a release of $4$4 million,, compared to a release of ~~$23~~$58 million for the first ~~three~~six months of 2021. For 2022, the Corporation expects to adjust ~~the~~ provision to reflect changes to risk grades, economic conditions, ~~loan volumes, and~~ other indications of credit ~~quality.~~quality, and loan volume.

•Noninterest income of ~~$74~~$150 million decreased ~~$21~~$19 million, or ~~22%~~11%, from the first ~~three~~six months of 2021, primarily driven by the ~~$16~~$18 million,, or ~~65%~~55%, decrease in mortgage banking, net, ~~driven by~~resulting from decreased gains on sold loans due to lower mortgage settlements, ~~and a reduction~~partially offset by an increase of $5 million in mortgage servicing fees, net that was primarily due to ~~changes~~lower levels of decay in the MSRs ~~valuation, net~~asset as a result of ~~economic hedges.~~slower prepayment speeds. For 2022, the Corporation expects noninterest income of $290 million to $300 million.

•Noninterest expense of ~~$173~~$355 million ~~decreased~~ $2 increased $5 million,, or 1%, from the first ~~three~~six months of 2021. For 2022, the Corporation expects noninterest expense will be approximately ~~$725~~$730 million to $740 million.

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Table 1 Summary Results of Operations: Trends


		Three months ended																Six months ended								Three months ended
($ in Thousands, except per share data)	($ in Thousands, except per share data)		Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021				($ in Thousands, except per share data)	Jun 30, 2022			Jun 30, 2021				Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Net income	Net income		$	74,262		$	76,877		$	88,809		$	91,007		$	94,301			Net income	$	161,086		$	185,307			$	86,824		$	74,262		$	76,877		$	88,809		$	91,007
Net income available to common equity	Net income available to common equity		71,387			74,002			84,655			86,131			89,094				Net income available to common equity	155,336			175,226				83,949			71,387			74,002			84,655			86,131
Earnings per common share - basic	Earnings per common share - basic		0.48			0.49			0.56			0.56			0.58				Earnings per common share - basic	1.04			1.14				0.56			0.48			0.49			0.56			0.56
Earnings per common share - diluted	Earnings per common share - diluted		0.47			0.49			0.56			0.56			0.58				Earnings per common share - diluted	1.03			1.13				0.56			0.47			0.49			0.56			0.56
Effective tax rate	Effective tax rate		20.07		%	16.48		%	20.61		%	19.81		%	20.69		%		Effective tax rate	20.69		%	20.26		%		21.20		%	20.07		%	16.48		%	20.61		%	19.81		%

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Income Statement Analysis

Net Interest Income

Table 2 Net Interest Income Analysis


	Six Months Ended Jun 30,
	2022						2021
($ in Thousands)	Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate
Assets
Earning assets
Loans(a)(b)(c)
Commercial PPP lending	$	28,818	$	1,624	11.36	%	$	753,778	$	18,949	5.07	%
Asset-based lending (ABL) & equipment finance(d)	223,717		3,631		3.27	%	129,461		1,966		3.06	%
Commercial and business lending (excl PPP, ABL and equipment finance)	9,082,412		121,502		2.70	%	8,357,726		106,010		2.56	%
Commercial real estate lending	6,270,743		97,119		3.12	%	6,165,433		88,455		2.89	%
Total commercial	15,605,690		223,876		2.89	%	15,406,399		215,380		2.82	%
Residential mortgage	7,766,296		113,837		2.93	%	7,911,635		110,841		2.80	%
Auto finance	498,175		8,667		3.51	%	9,319		204		4.42	%
Other retail	881,382		22,032		5.02	%	952,621		22,623		4.77	%
Total loans	24,751,542		368,412		2.99	%	24,279,974		349,049		2.89	%
Investment securities
Taxable	4,406,507		34,789		1.58	%	3,099,322		15,855		1.02	%
Tax-exempt(a)	2,405,952		40,933		3.40	%	1,927,169		35,945		3.73	%
Other short-term investments	751,407		4,413		1.18	%	1,381,370		3,521		0.51	%
Investments and other	7,563,866		80,135		2.12	%	6,407,860		55,320		1.73	%
Total earning assets	32,315,408		$	448,547	2.79	%	30,687,834		$	404,369	2.65	%
Other assets, net	3,152,445						3,345,982
Total assets	$	35,467,853					$	34,033,816
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	4,606,809	$	910	0.04	%	$	3,966,797	$	689	0.04	%
Interest-bearing demand	6,566,704		4,002		0.12	%	5,796,680		2,234		0.08	%
Money market	6,970,392		3,168		0.09	%	6,928,898		2,082		0.06	%
Network transaction deposits	755,357		1,745		0.47	%	994,016		591		0.12	%
Time deposits	1,284,037		1,766		0.28	%	1,583,725		4,923		0.63	%
Total interest-bearing deposits	20,183,299		11,591		0.12	%	19,270,116		10,519		0.11	%
Federal funds purchased and securities sold under agreements to repurchase	374,661		444		0.24	%	146,941		55		0.08	%
Commercial paper	25,545		2		0.01	%	49,026		13		0.05	%


FHLB advances	2,019,622		17,871		1.78	%	1,626,114		19,017		2.36	%
Long-term funding	249,719		5,460		4.37	%	549,402		11,160		4.06	%
Total short and long-term funding	2,669,547		23,776		1.79	%	2,371,483		30,245		2.56	%
Total interest-bearing liabilities	22,852,845		$	35,367	0.31	%	21,641,598		$	40,764	0.38	%
Noninterest-bearing demand deposits	8,224,440						7,869,320
Other liabilities	428,752						405,519
Stockholders’ equity	3,961,816						4,117,378
Total liabilities and stockholders’ equity	$	35,467,853					$	34,033,816
Interest rate spread					2.48	%					2.27	%
Net free funds					0.09	%					0.11	%
Fully tax-equivalent net interest income and net interest margin ("NIM")			$	413,179	2.57	%			$	363,605	2.38	%
Fully tax-equivalent adjustment			9,286						8,189
Net interest income			$	403,893					$	355,416

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

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

(d) Periods prior to March 31, 2022 do not include equipment finance.

Table of Contents

Table 2 Net Interest Income Analysis


		Three Months Ended																			Three Months Ended
		Mar 31, 2022						Dec 31, 2021						Mar 31, 2021							Jun 30, 2022						Mar 31, 2022						Jun 30, 2021
($ in Thousands)	($ in Thousands)	Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		($ in Thousands)	Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate		Average Balance		Interest Income / Expense		Average Yield / Rate
Assets	Assets																			Assets
Earning assets	Earning assets																			Earning assets
Loans(a)(b)(c)	Loans(a)(b)(c)																			Loans(a)(b)(c)
Commercial PPP lending	Commercial PPP lending	$	43,774	$	1,277	11.83	%	$	115,074	$	5,055	17.43	%	$	806,699	$	8,900	4.47	%	Commercial PPP lending	$	14,026	$	346	9.91	%	$	43,774	$	1,277	11.83	%	$	701,440	$	10,048	5.75	%
Asset-based lending (ABL) & equipment finance (d)	Asset-based lending (ABL) & equipment finance (d)	202,836		1,449		2.90	%	125,507		971		3.07	%	137,862		1,072		3.15	%	Asset-based lending (ABL) & equipment finance(d)	244,369		2,181		3.58	%	202,836		1,449		2.90	%	121,153		894		2.96	%
Commercial and business lending (excl PPP, ABL and equipment finance)	Commercial and business lending (excl PPP, ABL and equipment finance)	8,815,676		52,754		2.43	%	8,715,796		53,401		2.43	%	8,399,439		53,019		2.56	%	Commercial and business lending (excl PPP, ABL and equipment finance)	9,346,218		68,748		2.95	%	8,815,676		52,754		2.43	%	8,316,472		52,992		2.56	%
Commercial real estate lending	Commercial real estate lending	6,177,062		43,886		2.88	%	6,134,049		45,040		2.91	%	6,171,202		44,315		2.91	%	Commercial real estate lending	6,363,395		53,233		3.36	%	6,177,062		43,886		2.88	%	6,159,728		44,139		2.87	%
Total commercial	Total commercial	15,239,348		99,366		2.64	%	15,090,427		104,468		2.75	%	15,515,202		107,307		2.80	%	Total commercial	15,968,007		124,509		3.13	%	15,239,348		99,366		2.64	%	15,298,792		108,073		2.83	%
Residential mortgage	Residential mortgage	7,671,329		55,403		2.89	%	7,751,337		54,952		2.84	%	7,962,691		55,504		2.79	%	Residential mortgage	7,860,220		58,434		2.97	%	7,671,329		55,403		2.89	%	7,861,139		55,337		2.82	%
Auto finance	Auto finance	305,202		2,649		3.52	%	53,120		587		4.39	%	10,190		111		4.43	%	Auto finance	689,027		6,017		3.50	%	305,202		2,649		3.52	%	8,458		93		4.42	%
Other retail	Other retail	881,859		10,662		4.87	%	900,369		11,188		4.95	%	975,266		11,519		4.75	%	Other retail	880,910		11,370		5.17	%	881,859		10,662		4.87	%	930,224		11,104		4.78	%
Total loans	Total loans	24,097,738		168,081		2.81	%	23,795,253		171,195		2.86	%	24,463,349		174,442		2.88	%	Total loans	25,398,163		200,331		3.16	%	24,097,738		168,081		2.81	%	24,098,614		174,607		2.90	%
Investment securities	Investment securities																			Investment securities
Taxable	Taxable	4,363,733		16,472		1.51	%	4,067,612		13,317		1.31	%	2,976,469		7,014		0.94	%	Taxable	4,448,811		18,317		1.65	%	4,363,733		16,472		1.51	%	3,220,825		8,840		1.10	%
Tax-exempt(a)	Tax-exempt(a)	2,384,601		20,296		3.40	%	2,257,106		19,617		3.48	%	1,900,346		17,844		3.76	%	Tax-exempt(a)	2,427,068		20,637		3.40	%	2,384,601		20,296		3.40	%	1,953,696		18,101		3.71	%
Other short-term investments	Other short-term investments	1,154,939		1,993		0.70	%	1,592,840		2,031		0.51	%	991,844		1,694		0.69	%	Other short-term investments	352,310		2,420		2.75	%	1,154,939		1,993		0.70	%	1,766,615		1,826		0.41	%
Investments and other	Investments and other	7,903,273		38,761		1.96	%	7,917,558		34,965		1.76	%	5,868,659		26,553		1.81	%	Investments and other	7,228,189		41,374		2.29	%	7,903,273		38,761		1.96	%	6,941,135		28,767		1.66	%
Total earning assets	Total earning assets	32,001,010		$	206,842	2.60	%	31,712,810		$	206,160	2.59	%	30,332,008		$	200,994	2.67	%	Total earning assets	32,626,351		$	241,705	2.97	%	32,001,010		$	206,842	2.60	%	31,039,749		$	203,375	2.62	%
Other assets, net	Other assets, net	3,199,172						3,303,349						3,352,135						Other assets, net	3,106,232						3,199,172						3,339,898
Total assets	Total assets	$	35,200,182					$	35,016,159					$	33,684,143					Total assets	$	35,732,583					$	35,200,182					$	34,379,647
Liabilities and Stockholders' equity	Liabilities and Stockholders' equity																			Liabilities and Stockholders' equity
Interest-bearing liabilities	Interest-bearing liabilities																			Interest-bearing liabilities
Interest-bearing deposits	Interest-bearing deposits																			Interest-bearing deposits
Savings	Savings	$	4,529,991	$	380	0.03	%	$	4,367,233	$	369	0.03	%	$	3,810,321	$	332	0.04	%	Savings	$	4,682,783	$	530	0.05	%	$	4,529,991	$	380	0.03	%	$	4,121,553	$	357	0.03	%
Interest-bearing demand	Interest-bearing demand	6,722,038		1,025		0.06	%	6,506,438		1,015		0.06	%	5,713,270		1,178		0.08	%	Interest-bearing demand	6,413,077		2,977		0.19	%	6,722,038		1,025		0.06	%	5,879,173		1,057		0.07	%
Money market	Money market	7,030,945		965		0.06	%	6,892,803		927		0.05	%	6,875,730		1,059		0.06	%	Money market	6,910,505		2,203		0.13	%	7,030,945		965		0.06	%	6,981,482		1,023		0.06	%
Network transaction deposits	Network transaction deposits	734,895		265		0.15	%	838,255		239		0.11	%	1,080,109		327		0.12	%	Network transaction deposits	775,593		1,480		0.77	%	734,895		265		0.15	%	908,869		264		0.12	%
Time deposits	Time deposits	1,313,101		937		0.29	%	1,381,092		1,127		0.32	%	1,658,568		3,014		0.74	%	Time deposits	1,255,292		829		0.26	%	1,313,101		937		0.29	%	1,509,705		1,909		0.51	%
Total interest-bearing deposits	Total interest-bearing deposits	20,330,970		3,571		0.07	%	19,985,821		3,677		0.07	%	19,137,998		5,909		0.13	%	Total interest-bearing deposits	20,037,250		8,019		0.16	%	20,330,970		3,571		0.07	%	19,400,781		4,609		0.10	%
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	293,915		38		0.05	%	293,948		40		0.05	%	136,144		26		0.08	%	Federal funds purchased and securities sold under agreements to repurchase	454,519		406		0.36	%	293,915		38		0.05	%	157,619		30		0.08	%
Commercial paper	Commercial paper	27,963		1		0.01	%	44,250		2		0.01	%	42,774		6		0.05	%	Commercial paper	23,154		1		0.01	%	27,963		1		0.01	%	55,209		7		0.05	%

FHLB advances	FHLB advances	1,610,983		8,182		2.06	%	1,621,097		8,514		2.08	%	1,631,895		9,493		2.36	%	FHLB advances	2,423,771		9,689		1.60	%	1,610,983		8,182		2.06	%	1,620,397		9,524		2.36	%
Long-term funding	Long-term funding	249,632		2,730		4.38	%	249,223		2,730		4.38	%	549,585		5,585		4.07	%	Long-term funding	249,805		2,730		4.37	%	249,632		2,730		4.38	%	549,222		5,575		4.06	%
Total short and long-term funding	Total short and long-term funding	2,182,492		10,951		2.03	%	2,208,518		11,286		2.03	%	2,360,397		15,109		2.58	%	Total short and long-term funding	3,151,249		12,826		1.63	%	2,182,492		10,951		2.03	%	2,382,446		15,136		2.55	%
Total interest-bearing liabilities	Total interest-bearing liabilities	22,513,462		$	14,522	0.26	%	22,194,339		$	14,963	0.27	%	21,498,395		$	21,018	0.40	%	Total interest-bearing liabilities	23,188,499		$	20,845	0.36	%	22,513,462		$	14,522	0.26	%	21,783,227		$	19,745	0.36	%
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	8,316,399						8,416,525						7,666,561						Noninterest-bearing demand deposits	8,133,492						8,316,399						8,069,851
Other liabilities	Other liabilities	383,528						401,433						415,195						Other liabilities	473,478						383,528						395,950
Stockholders’ Equity	Stockholders’ Equity	3,986,792						4,003,863						4,103,991						Stockholders’ Equity	3,937,114						3,986,792						4,130,618
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	35,200,182					$	35,016,159					$	33,684,143					Total liabilities and stockholders’ equity	$	35,732,583					$	35,200,182					$	34,379,647
Interest rate spread	Interest rate spread					2.34	%					2.32	%					2.27	%	Interest rate spread					2.61	%					2.34	%					2.26	%
Net free funds	Net free funds					0.08	%					0.08	%					0.12	%	Net free funds					0.10	%					0.08	%					0.11	%
Fully tax-equivalent net interest income and net interest margin ("NIM")	Fully tax-equivalent net interest income and net interest margin ("NIM")			$	192,320	2.42	%			$	191,197	2.40	%			$	179,976	2.39	%	Fully tax-equivalent net interest income and net interest margin ("NIM")			$	220,860	2.71	%			$	192,320	2.42	%			$	183,629	2.37	%
Fully tax-equivalent adjustment	Fully tax-equivalent adjustment			4,573						4,434						4,074				Fully tax-equivalent adjustment			4,713						4,573						4,115
Net interest income	Net interest income			$	187,747					$	186,763					$	175,902			Net interest income			$	216,146					$	187,747					$	179,515

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

(d) Periods prior to ~~the first quarter of~~March 31, 2022 do not include equipment finance.

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Notable Contributions to the Change in Net Interest Income

•~~Net interest income and fully~~Fully tax-equivalent net interest income ~~was $12~~and net interest income were $50 million, or 7%14%, and $48 million, or 14%, higher than the first ~~three~~six months of ~~2021.~~2021, respectively. Average investments and other short-term investments increased ~~$2.0~~$1.2 billion, or ~~35%~~18%. The increase in net interest income was driven by higher loan income in a majority of loan categories and higher investment income ~~and lower interest-bearing liability~~resulting from the Federal Reserve increasing the federal funds target interest rate 150 bp during the first six months of 2022, which resulted in the yield on earning assets increasing by 14 bp. Additionally, interest bearing liabilities costs ~~partially offset by lower commercial PPP lending income.~~decreased from the first six months of 2021. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.

• Average interest-bearing liabilities were up ~~$1.0~~$1.2 billion, or 5%6%, compared to the first ~~three~~six months of 2021. Interest-bearing deposits increased ~~$1.2 billion,~~$913 million, or 6%5%, primarily driven by an increase in low cost deposits partially offset by decreases in higher cost deposits. Average noninterest-bearing demand deposits were up ~~$650~~$355 million, or 8%5%, versus the first ~~three~~six months of 2021.

• The cost of interest-bearing liabilities decreased 147 bp from the first ~~three~~six months of 2021, primarily attributable to a favorable mix with lower cost core deposit balances and lower cost short term FHLB advances increasing and higher cost deposits and long-term funding decreasing.

•~~The Federal Reserve raised the federal funds target interest to a range of 0.25% to 0.50% in March 2022, which was the first change since the first quarter of 2020.~~

Provision for Credit Losses

The provision for credit losses is predominantly a function of the Corporation’s reserving methodology and judgments as to other qualitative and quantitative factors used to determine the appropriate level of the ACLL, which focuses on changes in the size and character of the loan portfolio, changes in levels of individually evaluated and other nonaccrual loans, historical losses and delinquencies in each portfolio category, the risk inherent in specific loans, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, and other factors which could affect potential credit losses. The forecast the Corporation used for ~~March 31,~~June 30, 2022 was the Moody's baseline forecast from ~~February~~May 2022 which was reviewed against the June 2022 forecast for material updates, over a 2 year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. See additional discussion under the sections titled, Loans, Credit Risk, Nonperforming Assets, and Allowance for Credit Losses on Loans.

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Noninterest Income

Table 3 Noninterest Income


		Three months ended									Changes vs					Six months ended						Three months ended										Changes vs
($ in Thousands, except as noted)	($ in Thousands, except as noted)		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2021		Mar 31, 2021		($ in Thousands, except as noted)	Jun 30, 2022		Jun 30, 2021		YTD % Change		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2022		Jun 30, 2021
Wealth management fees(a)	Wealth management fees(a)		$	22,404	$	22,625	$	22,110	$	22,706	$	22,414	(1)	%	—	%	Wealth management fees(a)	$	43,735	$	45,120	(3)	%	$	21,332	$	22,404	$	22,625	$	22,110	$	22,706	(5)	%	(6)	%
Service charges and deposit account fees	Service charges and deposit account fees		16,856		17,039		16,962		15,549		14,855		(1)	%	13	%	Service charges and deposit account fees	33,363		30,404		10	%	16,506		16,856		17,039		16,962		15,549		(2)	%	6	%
Card-based fees	Card-based fees		9,926		11,176		11,113		10,982		9,743		(11)	%	2	%	Card-based fees	21,368		20,725		3	%	11,442		9,926		11,176		11,113		10,982		15	%	4	%
Other fee-based revenue	Other fee-based revenue		3,766		4,316		3,929		4,244		4,596		(13)	%	(18)	%	Other fee-based revenue	8,126		8,840		(8)	%	4,360		3,766		4,316		3,929		4,244		16	%	3	%
Total fee-based revenue	Total fee-based revenue		52,952		55,157		54,113		53,480		51,608		(4)	%	3	%	Total fee-based revenue	106,592		105,089		1	%	53,641		52,952		55,157		54,113		53,480		1	%	—	%
Capital markets, net	Capital markets, net		8,646		9,674		7,114		5,696		8,118		(11)	%	7	%	Capital markets, net	16,656		13,814		21	%	8,010		8,646		9,674		7,114		5,696		(7)	%	41	%
Mortgage servicing fees, net(b)	Mortgage servicing fees, net(b)		1,830		795		323		(155)		(1,397)		130	%	N/M		Mortgage servicing fees, net(b)	3,712		(1,552)		N/M		1,882		1,830		795		323		(155)		3	%	N/M
Gains and fair value adjustments on loans held for sale	Gains and fair value adjustments on loans held for sale		785		3,290		8,341		8,623		14,744		(76)	%	(95)	%	Gains and fair value adjustments on loans held for sale	421		23,367		(98)	%	(363)		785		3,290		8,341		8,623		N/M

Changes in mortgage servicing rights valuation, net of economic hedge(c)	Changes in mortgage servicing rights valuation, net of economic hedge(c)		5,776		3,955		1,993		(340)		10,578		46	%	(45)	%	Changes in mortgage servicing rights valuation, net of economic hedge(c)	10,403		10,239		2	%	4,627		5,776		3,955		1,993		(340)		(20)	%	N/M
Mortgage banking, net	Mortgage banking, net		8,391		8,041		10,657		8,128		23,925		4	%	(65)	%	Mortgage banking, net	14,536		32,054		(55)	%	6,145		8,391		8,041		10,657		8,128		(27)	%	(24)	%
Bank and corporate owned life insurance	Bank and corporate owned life insurance		2,071		4,704		2,760		3,088		2,702		(56)	%	(23)	%	Bank and corporate owned life insurance	6,177		5,791		7	%	4,106		2,071		4,704		2,760		3,088		98	%	33	%

Other	Other		2,198		2,941		2,205		3,004		3,216		(25)	%	(32)	%	Other	4,086		6,221		(34)	%	1,888		2,198		2,941		2,205		3,004		(14)	%	(37)	%
Subtotal	Subtotal		74,258		80,517		76,848		73,397		89,570		(8)	%	(17)	%	Subtotal	148,048		162,968		(9)	%	73,790		74,258		80,517		76,848		73,397		(1)	%	1	%
Asset gains (losses), net	Asset gains (losses), net		188		985		5,228		(14)		4,809		(81)	%	(96)	%	Asset gains (losses), net	1,865		4,796		(61)	%	1,677		188		985		5,228		(14)		N/M
Investment securities gains(losses), net	Investment securities gains(losses), net		21		—		—		24		(39)		N/M				Investment securities gains(losses), net	12		(16)		N/M		(8)		21		—		—		24		N/M
Gain on the sale of branches, net(d)	Gain on the sale of branches, net(d)		—		—		—		36		1,002		N/M		(100)	%	Gain on the sale of branches, net(d)	—		1,038		(100)	%	—		—		—		—		36		N/M		(100)	%
Total noninterest income	Total noninterest income		$	74,467	$	81,502	$	82,076	$	73,443	$	95,343	(9)	%	(22)	%	Total noninterest income	$	149,925	$	168,786	(11)	%	$	75,458	$	74,467	$	81,502	$	82,076	$	73,443	1	%	3	%
Mortgage loans originated for sale during period	Mortgage loans originated for sale during period		$	252,113	$	404,398	$	455,842	$	476,670	$	412,645	(38)	%	(39)	%	Mortgage loans originated for sale during period	$	403,951	$	889,315	(55)	%	$	151,838	$	252,113	$	404,398	$	455,842	$	476,670	(40)	%	(68)	%
Mortgage loan settlements during period	Mortgage loan settlements during period		296,089		426,785		463,425		484,446		400,135		(31)	%	(26)	%	Mortgage loan settlements during period	500,410		884,581		(43)	%	204,321		296,089		426,785		463,425		484,446		(31)	%	(58)	%

Assets under management, at market value(e)	Assets under management, at market value(e)		12,937		13,679		13,148		13,141		12,553		(5)	%	3	%	Assets under management, at market value(e)							11,561		12,937		13,679		13,148		13,141		(11)	%	(12)	%

N/M = Not Meaningful
(a) Includes trust, asset management, brokerage, and annuity fees.
(b) Includes mortgage origination and servicing fees, net of MSRs amortization/decay.
(c) On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value. For all prior periods, MSRs were carried at LOCOM.
(d) Includes the deposit premium on the sale of branches net of miscellaneous costs to sell. See Note 2 Acquisitions and Dispositions of the notes to the consolidated financial statements for additional details on the branch sales.
(e) $ in millions. Excludes assets held in brokerage accounts.

Notable Contributions to the Change in Noninterest Income

•Mortgage banking, net decreased ~~$16~~$18 million from the first ~~three~~six months of 2021, driven by decreased gains on sold loans due to lower mortgage settlements ~~and a reduction~~offset partially by an increase in mortgage servicing fees, net of $5 million primarily due to ~~changes~~lower levels of decay in the MSRs ~~valuation,~~asset as a result of slower prepayment speeds.

•Service charges and deposit account fees increased $3 million from the first six months of 2021 as a result of higher overdraft and non-sufficient funds fees. On July 20, 2022, the Corporation eliminated non-sufficient funds fees, overdraft protection transfer fees, and continuous overdraft fees and reduced the daily limit of overdraft fee occurrences from 4 to 2.

•Capital markets, net increased $3 million from the first six months of ~~economic hedges.~~2021 as a result of higher interest rate swap revenue.

•Asset gains (losses), net decreased $5$3 million from the first ~~three~~six months of 2021, due to a gain of $2 million from the sale of Whitnell and higher gains from private equity investments during the first ~~three~~six months of 2021.

•Service charges and deposit account fees increased $2 million from the first three months of 2021 as a result of higher overdraft and insufficient funds fees. See Recent Developments for additional details on the Corporation's announcement related to overdraft and insufficient funds fees.

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Noninterest Expense

Table 4 Noninterest Expense


		Three months ended									Change vs					Six months ended						Three months ended										Change vs
($ in Thousands)	($ in Thousands)		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2021		Mar 31, 2021		($ in Thousands)	Jun 30, 2022		Jun 30, 2021		YTD % Change		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2022		Jun 30, 2021
Personnel	Personnel		$	104,811	$	107,787	$	107,880	$	106,994	$	104,026	(3)	%	1	%	Personnel	$	217,477	$	211,020	3	%	$	112,666	$	104,811	$	107,787	$	107,880	$	106,994	7	%	5	%
Technology	Technology		21,485		20,787		19,927		20,236		20,740		3	%	4	%	Technology	42,707		40,975		4	%	21,223		21,485		20,787		19,927		20,236		(1)	%	5	%
Occupancy	Occupancy		16,080		16,863		15,814		14,679		16,156		(5)	%	—	%	Occupancy	30,231		30,835		(2)	%	14,151		16,080		16,863		15,814		14,679		(12)	%	(4)	%
Business development and advertising	Business development and advertising		4,954		5,627		6,156		4,970		4,395		(12)	%	13	%	Business development and advertising	10,610		9,366		13	%	5,655		4,954		5,627		6,156		4,970		14	%	14	%
Equipment	Equipment		4,960		4,905		5,200		5,481		5,518		1	%	(10)	%	Equipment	9,920		10,999		(10)	%	4,960		4,960		4,905		5,200		5,481		—	%	(10)	%
Legal and professional	Legal and professional		5,087		4,428		4,304		6,661		6,530		15	%	(22)	%	Legal and professional	9,960		13,191		(24)	%	4,873		5,087		4,428		4,304		6,661		(4)	%	(27)	%
Loan and foreclosure costs	Loan and foreclosure costs		2,014		1,636		1,616		2,671		2,220		23	%	(9)	%	Loan and foreclosure costs	3,490		4,891		(29)	%	1,476		2,014		1,636		1,616		2,671		(27)	%	(45)	%
FDIC assessment	FDIC assessment		5,100		4,800		5,000		3,600		4,750		6	%	7	%	FDIC assessment	10,500		8,350		26	%	5,400		5,100		4,800		5,000		3,600		6	%	50	%
Other intangible amortization	Other intangible amortization		2,203		2,203		2,203		2,203		2,236		—	%	(1)	%	Other intangible amortization	4,405		4,439		(1)	%	2,203		2,203		2,203		2,203		2,203		—	%	—	%

Other	Other		6,597		13,173		9,793		6,979		8,775		(50)	%	(25)	%	Other	15,412		15,755		(2)	%	8,815		6,597		13,173		9,793		6,979		34	%	26	%
Total noninterest expense	Total noninterest expense		$	173,292	$	182,210	$	177,892	$	174,475	$	175,347	(5)	%	(1)	%	Total noninterest expense	$	354,712	$	349,821	1	%	$	181,420	$	173,292	$	182,210	$	177,892	$	174,475	5	%	4	%
Average FTEs(a)	Average FTEs(a)		4,018		3,992		4,010		3,990		4,020		1	%	—	%	Average FTEs(a)	4,060		4,005		1	%	4,101		4,018		3,992		4,010		3,990		2	%	3	%

~~N/M = Not Meaningful~~
(a) Average FTEs without overtime

Notable Contributions to the Change in Noninterest Expense

•Personnel expense increased $6 million from the first six months of 2021, largely as a result of increased FTEs due to hiring related to previously announced initiatives.

•Legal and professional expenses decreased $1$3 million from the first ~~three~~six months of 2021 as a result of lower consulting costs associated with mortgage activity.

•~~Other expenses decreased $2 million from the first three months of 2021, primarily driven by a reduction in pension expense.~~

Income Taxes

The Corporation recognized income tax expense of ~~$19~~$42 million for the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to income tax expense of ~~$25~~$47 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021. The Corporation's effective tax rate was ~~20.07%~~20.69% for the first ~~three~~six months of 2022, compared to an effective tax rate of ~~20.69%~~20.26% for the first ~~three~~six months of 2021. The decrease in income tax expense during the first ~~three~~six months of 2022 was primarily driven by a decrease in income before tax. The ~~decrease~~increase in the effective tax rate was primarily driven by an increase in ~~tax-exempt interest income.~~state tax expense. The Corporation expects a full year effective tax rate of ~~19% to~~approximately 21%, assuming no change in the statutory corporate tax rate.

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

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Balance Sheet Analysis

•At ~~March 31,~~June 30, 2022, total assets were ~~$35.0~~$37.2 billion, ~~down $148 million~~up $2.1 billion, or 6%, from December 31, 2021 and up ~~$381 million,~~$3.1 billion, or 1%9%, from ~~March 31,~~June 30, 2021.

•Interest bearing deposits in other financial institutions were ~~$167~~$437 million at ~~March 31,~~June 30, 2022, down ~~$515~~$245 million, or ~~76%~~36%, from December 31, 2021 and down ~~$1.4 billion,~~$903 million, or ~~90%~~67%, from ~~March 31,~~June 30, 2021, due to the deployment of excess liquidity into investment securities purchases and loan growth.

•~~Investment~~AFS investment securities, ~~AFS,~~ at fair value were ~~$2.8~~$2.7 billion at ~~March 31,~~June 30, 2022, down ~~$1.6~~$1.7 billion, or ~~36%~~38%, from December 31, 2021, and down ~~$576~~$646 million, or ~~17%~~19%, from ~~March 31,~~June 30, 2021. ~~Investment~~HTM investment securities, ~~HTM,~~ net, at amortized cost were $3.9 billion at ~~March 31,~~June 30, 2022, up $1.7 billion, or 76%, from December 31, 2021 and up $2.1 billion, or ~~112%~~119%, from ~~March 31,~~June 30, 2021, driven by the deployment of cash into higher yielding assets and a $1.6 billion transfer of AFS investment securities, ~~AFS,~~ at fair value, to HTM investment securities, ~~HTM,~~ net, at amortized cost during the first quarter of 2022. See Note 6 Investment Securities of the notes to consolidated financial statements for additional details.

•Loans of ~~$24.5~~$26.5 billion at ~~March 31,~~June 30, 2022 were up $~~307 million~~2.3 billion, or 1%9%, from December 31, 2021 and up $~~370 million,~~2.5 billion, or 2%11%, from ~~March 31,~~June 30, 2021. See Note 7 Loans of the notes to consolidated financial statements for additional details.

•At ~~March 31,~~June 30, 2022, total deposits of ~~$28.4~~$28.6 billion were ~~down $61~~up $110 million from December 31, 2021 and were up ~~$728 million~~$1.3 billion, or 3%5%, from ~~March 31,~~June 30, 2021.~~Government stimulus programs and changed savings habits have led to customers holding higher deposit balances.~~ See section Deposits and Customer Funding for additional information on deposits.

•Other long-term funding was $250 million at ~~March 31,~~June 30, 2022 and $249 million at December 31, 2021, and was down ~~$300~~$299 million, or ~~55%~~54%, from ~~March 31,~~June 30, 2021, primarily driven by the redemption of the Bank's senior notes on July 13, 2021.

•FHLB advances were $3.3 billion at June 30, 2022, up $1.6 billion, or 101%, from both December 31, 2021 and June 30, 2021, and federal funds purchased and securities sold under agreements to repurchase were $683 million at June 30, 2022, up $363 million, or 114%, from December 31, 2021, and up $512 million from June 30, 2021, mainly due to loan growth. See Note 9 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

•Preferred equity was $193 million at ~~March 31,~~both June 30, 2022 and December 31, 2021, and was down ~~$160~~$97 million, or ~~45%~~33%, from ~~March 31,~~June 30, 2021, as a result of ~~the redemption of the Corporation's Series C Preferred Stock during the second quarter of 2021 and~~ the redemption of the Corporation's Series D Preferred Stock during the third quarter of 2021.

Loans

Table 5 Period End Loan Composition


		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021					Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
($ in Thousands)	($ in Thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		($ in Thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
PPP	PPP	$	17,995	—	%	$	66,070	—	%	$	182,121	1	%	$	405,482	2	%	$	836,566	3	%	PPP	$	9,514	—	%	$	17,995	—	%	$	66,070	—	%	$	182,121	1	%	$	405,482	2	%
Asset-based lending & equipment finance(a)	Asset-based lending & equipment finance(a)	231,040		1	%	178,027		1	%	111,027		—	%	105,726		—	%	137,537		1	%	Asset-based lending & equipment finance(a)	263,044		1	%	231,040		1	%	178,027		1	%	111,027		—	%	105,726		—	%
Commercial and industrial	Commercial and industrial	8,102,380		33	%	8,208,289		34	%	7,816,432		33	%	7,803,393		33	%	7,526,964		31	%	Commercial and industrial	8,984,127		34	%	8,102,380		33	%	8,208,289		34	%	7,816,432		33	%	7,803,393		33	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	973,572		4	%	971,326		4	%	879,554		4	%	880,755		4	%	883,237		4	%	Commercial real estate — owner occupied	928,152		4	%	973,572		4	%	971,326		4	%	879,554		4	%	880,755		4	%
Commercial and business lending	Commercial and business lending	9,324,986		38	%	9,423,711		39	%	8,989,133		38	%	9,195,355		38	%	9,384,303		39	%	Commercial and business lending	10,184,836		38	%	9,324,986		38	%	9,423,711		39	%	8,989,133		38	%	9,195,355		38	%
Commercial real estate — investor	Commercial real estate — investor	4,469,241		18	%	4,384,569		18	%	4,296,489		18	%	4,300,651		18	%	4,260,706		18	%	Commercial real estate — investor	4,790,241		18	%	4,469,241		18	%	4,384,569		18	%	4,296,489		18	%	4,300,651		18	%
Real estate construction	Real estate construction	1,760,076		7	%	1,808,976		7	%	1,834,871		8	%	1,880,897		8	%	1,882,299		8	%	Real estate construction	1,775,648		7	%	1,760,076		7	%	1,808,976		7	%	1,834,871		8	%	1,880,897		8	%
Commercial real estate lending	Commercial real estate lending	6,229,317		25	%	6,193,545		26	%	6,131,360		26	%	6,181,549		26	%	6,143,004		25	%	Commercial real estate lending	6,565,889		25	%	6,229,317		25	%	6,193,545		26	%	6,131,360		26	%	6,181,549		26	%
Total commercial	Total commercial	15,554,303		63	%	15,617,256		64	%	15,120,493		64	%	15,376,904		64	%	15,527,307		64	%	Total commercial	16,750,726		63	%	15,554,303		63	%	15,617,256		64	%	15,120,493		64	%	15,376,904		64	%
Residential mortgage	Residential mortgage	7,609,343		31	%	7,567,310		31	%	7,590,895		32	%	7,638,372		32	%	7,685,218		32	%	Residential mortgage	8,002,943		30	%	7,609,343		31	%	7,567,310		31	%	7,590,895		32	%	7,638,372		32	%
Auto finance	Auto finance	497,523		2	%	143,045		1	%	6,739		—	%	7,817		—	%	9,165		—	%	Auto finance	847,969		3	%	497,523		2	%	143,045		1	%	6,739		—	%	7,817		—	%

Home equity	Home equity	580,867		2	%	595,615		2	%	608,566		3	%	631,783		3	%	651,647		3	%	Home equity	592,843		2	%	580,867		2	%	595,615		2	%	608,566		3	%	631,783		3	%
Other consumer	Other consumer	289,889		1	%	301,723		1	%	294,979		1	%	292,660		1	%	288,990		1	%	Other consumer	300,217		1	%	289,889		1	%	301,723		1	%	294,979		1	%	292,660		1	%
Total consumer	Total consumer	8,977,622		37	%	8,607,693		36	%	8,501,180		36	%	8,570,632		36	%	8,635,020		36	%	Total consumer	9,743,972		37	%	8,977,622		37	%	8,607,693		36	%	8,501,180		36	%	8,570,632		36	%
Total loans	Total loans	$	24,531,926	100	%	$	24,224,949	100	%	$	23,621,673	100	%	$	23,947,536	100	%	$	24,162,328	100	%	Total loans	$	26,494,698	100	%	$	24,531,926	100	%	$	24,224,949	100	%	$	23,621,673	100	%	$	23,947,536	100	%

(a) Periods prior to ~~the first quarter of~~March 31, 2022 do not include equipment finance.

The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30 to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2021 and the first ~~three~~six months of 2022. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

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The Corporation’s loan distribution and interest rate sensitivity as of ~~March 31,~~June 30, 2022 are summarized in the following table:

Table 6 Loan Distribution and Interest Rate Sensitivity


($ in Thousands)	($ in Thousands)	Within 1 Year(a)		1-5 Years		5-15 Years		Over 15 Years		Total		% of Total		($ in Thousands)	Within 1 Year(a)		1-5 Years		5-15 Years		Over 15 Years		Total		% of Total
PPP	PPP	$	1,640	$	16,355	$	—	$	—	$	17,995	—	%	PPP	$	762	$	8,752	$	—	$	—	$	9,514	—	%
Asset-based lending & equipment finance	Asset-based lending & equipment finance	176,817		40,122		14,101		—		231,040		1	%	Asset-based lending & equipment finance	172,885		45,130		45,029		—		263,044		1	%
Commercial and industrial	Commercial and industrial	7,579,861		419,869		84,386		18,264		8,102,380		33	%	Commercial and industrial	8,403,145		450,789		105,220		24,972		8,984,127		34	%
Commercial real estate — owner occupied	Commercial real estate — owner occupied	548,348		301,720		122,925		578		973,572		4	%	Commercial real estate — owner occupied	523,377		292,090		111,254		1,430		928,152		4	%
Commercial real estate — investor	Commercial real estate — investor	4,040,023		277,790		151,149		280		4,469,241		18	%	Commercial real estate — investor	4,394,743		250,521		143,394		1,583		4,790,241		18	%
Real estate construction	Real estate construction	1,704,706		45,061		3,143		7,166		1,760,076		7	%	Real estate construction	1,717,452		45,392		3,543		9,261		1,775,648		7	%
Commercial - adjustable	Commercial - adjustable	8,321,120		147,966		12,970		6,769		8,488,825		35	%	Commercial - adjustable	9,083,007		100,371		12,127		8,660		9,204,165		35	%
Commercial - fixed	Commercial - fixed	5,730,275		952,951		362,734		19,519		7,065,479		29	%	Commercial - fixed	6,129,357		992,305		396,314		28,586		7,546,561		28	%
Residential mortgage - adjustable	Residential mortgage - adjustable	367,114		594,375		1,454,319		271		2,416,079		10	%	Residential mortgage - adjustable	324,248		628,309		1,573,688		155,750		2,681,995		10	%
Residential mortgage - fixed	Residential mortgage - fixed	29,390		97,088		601,445		4,465,341		5,193,263		21	%	Residential mortgage - fixed	35,061		81,033		254,987		4,949,868		5,320,948		20	%
Auto finance	Auto finance	294		93,605		403,624		—		497,523		2	%	Auto finance	288		20,490		827,191		—		847,969		3	%
Home equity	Home equity	22,315		67,747		97,668		393,137		580,867		2	%	Home equity	545,872		16,283		13,367		17,321		592,843		2	%
Other consumer	Other consumer	53,423		47,647		156,294		32,526		289,889		1	%	Other consumer	173,190		48,276		36,700		42,050		300,217		1	%
Total loans	Total loans	$	14,523,931	$	2,001,378	$	3,089,053	$	4,917,562	$	24,531,926	100	%	Total loans	$	16,291,022	$	1,887,067	$	3,114,374	$	5,202,234	$	26,494,698	100	%
Fixed-rate	Fixed-rate	$	5,760,092	$	1,125,296	$	750,299	$	4,888,686	$	12,524,372	51	%	Fixed-rate	$	6,232,983	$	1,153,906	$	697,833	$	5,019,768	$	13,104,489	49	%
Floating or adjustable rate	Floating or adjustable rate	8,763,840		876,083		2,338,755		28,877		12,007,554		49	%	Floating or adjustable rate	10,058,040		733,161		2,416,542		182,466		13,390,209		51	%
Total	Total	$	14,523,931	$	2,001,378	$	3,089,053	$	4,917,562	$	24,531,926	100	%	Total	$	16,291,022	$	1,887,067	$	3,114,374	$	5,202,234	$	26,494,698	100	%

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

At ~~March 31,~~June 30, 2022, ~~$17.8~~$19.6 billion, or ~~72%~~74%, of the loans outstanding and ~~$14.2~~$15.3 billion, or ~~91%~~92%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

Credit Risk

An active credit risk management process is used for commercial loans to ensure that sound and consistent credit decisions are made. Credit risk is controlled by detailed underwriting procedures, comprehensive loan administration, and periodic review of borrowers’ outstanding loans and commitments. Borrower relationships are formally reviewed and graded on an ongoing basis for early identification of potential problems. Further analysis by customer, industry, and geographic location are performed to monitor trends, financial performance, and concentrations. See Note 7 Loans of the notes to consolidated financial statements for additional information on managing overall credit quality.

The loan portfolio is widely diversified by types of borrowers, industry groups, and market areas within the Corporation's 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 ~~March 31,~~June 30, 2022, no significant concentrations existed in the Corporation’s portfolio in excess of 10% of total loan exposure.

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

Table 7 Largest Commercial and Industrial Industry Group Exposures, by NAICS Subsector
March 31, 2022 NAICS Subsector Outstanding Balance Total Exposure % of Total Loan Exposure
Credit Intermediation and Related Activities(a)
522 $ 1,130,942 $ 2,773,669 8 %
Real Estate(b)
531 1,510,493 2,735,180 8 %
Utilities(c)
221 1,827,305 2,019,958 6 %


June 30, 2022	NAICS Subsector	Outstanding Balance		Total Exposure		% of Total Loan Exposure
Real Estate(a)	531	$	1,725,081	$	3,160,552	8	%
Credit Intermediation and Related Activities(b)	522	1,037,994		2,511,829		7	%
Utilities(c)	221	2,100,956		2,383,329		6	%
Merchant Wholesalers, Durable Goods	423	453,912		769,019		2	%

(a) Includes REIT lines

(b) Includes mortgage warehouse lines

~~(b) Includes REIT lines~~

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

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

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The credit risk related to commercial 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.

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

Table 8 Largest Commercial Real Estate Investor Property Type Exposures


March 31, 2022		% of Total Loan Exposure		% of Total Commercial Real Estate - Investor Loan Exposure
June 30, 2022						June 30, 2022	% of Total Loan Exposure		% of Total Commercial Real Estate - Investor Loan Exposure
Multi-Family	Multi-Family	4	%	29	%	Multi-Family	4	%	32	%
Office	Office	3	%	24	%	Office	3	%	24	%
Industrial	Industrial	3	%	23	%	Industrial	3	%	22	%

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

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

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

Table 9 Largest Real Estate Construction Property Type Exposures


March 31, 2022		% of Total Loan Exposure		% of Total Real Estate Construction Loan Exposure
June 30, 2022						June 30, 2022	% of Total Loan Exposure		% of Total Real Estate Construction Loan Exposure
Multi-Family	Multi-Family	4	%	34	%	Multi-Family	4	%	35	%
Single Family	Single Family	3	%	24	%	Single Family	3	%	24	%
Industrial	Industrial	3	%	23	%	Industrial	3	%	22	%

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

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

Residential mortgages: Residential mortgage loans are primarily first lien home mortgages with a maximum loan-to-collateral value without credit enhancement (e.g. private mortgage insurance) of 80%. The residential mortgage portfolio is focused primarily in the Corporation's three-state branch footprint, with approximately 87% of the outstanding loan balances in the Corporation's branch footprint at ~~March 31,~~June 30, 2022. The majority of the on balance sheet residential mortgage portfolio consists of constant maturity treasury based, hybrid, adjustable rate mortgage loans with initial fixed rate terms of 3, 5, 7, or 10 years. The rates on ~~these~~adjustable rate mortgages adjust based upon the movement in the underlying index which is then added to a margin and rounded to the nearest 0.125%. That result is then subjected to any periodic caps to produce the borrower's interest rate for the coming term. Most of the adjustable rate mortgages have an initial fixed rate term of 3, 5, 7 or 10 years.

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

~~Table of~~ ~~Contents~~

current interest rate environment, among other market factors, the Corporation may choose to retain mortgage loan production on its balance sheet. See section Loans for additional information on loans.

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

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

The Corporation’s underwriting and risk-based pricing guidelines for home equity lines of credit and loans consist of a combination of both borrower FICO score and the original cumulative LTV against the property securing the loan. Currently, the Corporation's policy sets the maximum acceptable LTV at 90% ~~and the minimum acceptable FICO score at 670.~~. The Corporation's current home equity line of credit offering is priced based on floating rate indices and generally allows 10 years of interest-only payments followed by a 20-year amortization of the outstanding balance. The loans in the Corporation's portfolio generally have an original term of 20 years with principal and interest payments required. See section Loans for additional information on loans.

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 13 states throughout the Northeast, Mid-Atlantic and Midwestern United States. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to the Corporation pursuant to dealer agreements. The Corporation’s underwriting and pricing guidelines are based on a dual risk grade derived from a combination of FICO auto score and proprietary internal custom score. Minimum grade and FICO score standards ensure the credit risk is appropriately managed to the Corporation’s risk appetite. Further, the grade influences loan-specific parameters such as vehicle age, term, LTV, loan amount, mileage, payment and debt service thresholds, and pricing. Maximum loan terms offered are 84 months on select grades with vehicle age, mileage, and other limitations in place to qualify. The program is designed to capture primarily prime and super prime contracts. Over time, the Corporation expects roughly 60% of originations to be secured by used vehicles.

Other consumer: Other consumer consists of student loans, short-term personal installment loans, and credit cards. The Corporation had ~~$96~~$91 million and $101 million of student loans at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively, the majority of which are government guaranteed. Currently, there is federal student loan relief in effect through August 31, 2022. Credit risk for non-government guaranteed student loans, short-term personal installment loans, and credit cards is influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral. Risks of loss are generally on smaller average balances per loan spread over many borrowers. Once charged off, there is usually less opportunity for recovery of these smaller consumer loans. Credit risk is primarily controlled by reviewing the creditworthiness of the borrowers, monitoring payment histories, and taking appropriate collateral and guarantee positions. The student loan portfolio is in run-off and no new student loans are being originated.

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Nonperforming Assets

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

Table 10 Nonperforming Assets


($ in Thousands)	($ in Thousands)	Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			($ in Thousands)	Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Nonperforming assets	Nonperforming assets																Nonperforming assets
PPP	PPP	$	41		$	46		$	—		$	—		$	—		PPP	$	—		$	41		$	46		$	—		$	—

Commercial and industrial	Commercial and industrial	225			6,233			8,497			18,380			33,192			Commercial and industrial	843			225			6,233			8,497			18,380
Commercial real estate — owner occupied	Commercial real estate — owner occupied	—			—			7			7			7			Commercial real estate — owner occupied	—			—			—			7			7
Commercial and business lending	Commercial and business lending	266			6,279			8,504			18,387			33,200			Commercial and business lending	843			266			6,279			8,504			18,387
Commercial real estate — investor	Commercial real estate — investor	80,886			60,677			61,504			63,003			58,485			Commercial real estate — investor	46,823			80,886			60,677			61,504			63,003
Real estate construction	Real estate construction	609			177			247			247			327			Real estate construction	604			609			177			247			247
Commercial real estate lending	Commercial real estate lending	81,495			60,855			61,751			63,250			58,813			Commercial real estate lending	47,427			81,495			60,855			61,751			63,250
Total commercial	Total commercial	81,761			67,134			70,256			81,637			92,012			Total commercial	48,270			81,761			67,134			70,256			81,637
Residential mortgage	Residential mortgage	53,827			55,362			56,678			56,795			61,256			Residential mortgage	52,840			53,827			55,362			56,678			56,795
Auto finance	Auto finance	49			52			67			56			36			Auto finance	53			49			52			67			56
Home equity	Home equity	7,490			7,726			7,838			8,517			9,792			Home equity	7,100			7,490			7,726			7,838			8,517
Other consumer	Other consumer	95			170			222			131			195			Other consumer	83			95			170			222			131
Total consumer	Total consumer	61,460			63,309			64,806			65,498			71,280			Total consumer	60,075			61,460			63,309			64,806			65,498
Total nonaccrual loans	Total nonaccrual loans	143,221			130,443			135,062			147,135			163,292			Total nonaccrual loans	108,345			143,221			130,443			135,062			147,135
Commercial real estate owned	Commercial real estate owned	861			984			1,005			1,318			2,092			Commercial real estate owned	957			861			984			1,005			1,318
Residential real estate owned	Residential real estate owned	2,209			3,666			2,126			2,438			1,501			Residential real estate owned	3,042			2,209			3,666			2,126			2,438
Bank properties real estate owned(a)	Bank properties real estate owned(a)	15,123			24,969			30,724			20,244			20,995			Bank properties real estate owned(a)	13,880			15,123			24,969			30,724			20,244
OREO	OREO	18,194			29,619			33,855			24,000			24,588			OREO	17,879			18,194			29,619			33,855			24,000

Repossessed assets																	Repossessed assets	102			—			—			—			—
Total nonperforming assets	Total nonperforming assets	$	161,414		$	160,062		$	168,917		$	171,135		$	187,880		Total nonperforming assets	$	126,327		$	161,414		$	160,062		$	168,917		$	171,135

Accruing loans past due 90 days or more	Accruing loans past due 90 days or more																Accruing loans past due 90 days or more
Commercial	Commercial	$	125		$	151		$	98		$	203		$	190		Commercial	$	133		$	125		$	151		$	98		$	203
Consumer	Consumer	1,470			1,111			932			1,099			1,485			Consumer	1,422			1,470			1,111			932			1,099
Total accruing loans past due 90 days or more	Total accruing loans past due 90 days or more	$	1,595		$	1,263		$	1,029		$	1,302		$	1,675		Total accruing loans past due 90 days or more	$	1,555		$	1,595		$	1,263		$	1,029		$	1,302
Restructured loans (accruing)	Restructured loans (accruing)																Restructured loans (accruing)
Commercial	Commercial	$	10,127		$	22,763		$	25,582		$	26,353		$	27,356		Commercial	$	15,425		$	10,127		$	22,763		$	25,582		$	26,353
Consumer	Consumer	19,876			19,768			18,917			15,582			13,464			Consumer	18,828			19,876			19,768			18,917			15,582
Total restructured loans (accruing)	Total restructured loans (accruing)	$	30,003		$	42,530		$	44,499		$	41,935		$	40,820		Total restructured loans (accruing)	$	34,253		$	30,003		$	42,530		$	44,499		$	41,935
Nonaccrual restructured loans (included in nonaccrual loans)	Nonaccrual restructured loans (included in nonaccrual loans)	$	19,352		$	17,426		$	15,226		$	17,237		$	17,624		Nonaccrual restructured loans (included in nonaccrual loans)	$	22,172		$	19,352		$	17,426		$	15,226		$	17,237
Ratios	Ratios																Ratios
Nonaccrual loans to total loans	Nonaccrual loans to total loans	0.58		%	0.54		%	0.57		%	0.61		%	0.68		%	Nonaccrual loans to total loans	0.41		%	0.58		%	0.54		%	0.57		%	0.61		%
NPAs to total loans plus OREO		0.66		%	0.66		%	0.71		%	0.71		%	0.78		%
NPAs to total loans plus OREO and repossessed assets																	NPAs to total loans plus OREO and repossessed assets	0.48		%	0.66		%	0.66		%	0.71		%	0.71		%
NPAs to total assets	NPAs to total assets	0.46		%	0.46		%	0.49		%	0.50		%	0.54		%	NPAs to total assets	0.34		%	0.46		%	0.46		%	0.49		%	0.50		%

Allowance for credit losses on loans to nonaccrual loans	Allowance for credit losses on loans to nonaccrual loans	221.92		%	245.16		%	246.02		%	247.45		%	247.23		%	Allowance for credit losses on loans to nonaccrual loans	293.09		%	221.92		%	245.16		%	246.02		%	247.45		%

6062

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Table 10 Nonperforming Assets (continued)


($ in Thousands)	($ in Thousands)	Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		($ in Thousands)	Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021
Accruing loans 30-89 days past due	Accruing loans 30-89 days past due											Accruing loans 30-89 days past due
PPP	PPP	$	1	$	83	$	568	$	—	$	—	PPP	$	1,475	$	1	$	83	$	568	$	—

Commercial and industrial	Commercial and industrial	1,085		632		1,229		258		526		Commercial and industrial	167		1,085		632		1,229		258
Commercial real estate — owner occupied	Commercial real estate — owner occupied	198		163		30		47		—		Commercial real estate — owner occupied	—		198		163		30		47
Commercial and business lending	Commercial and business lending	1,284		878		1,827		306		526		Commercial and business lending	1,642		1,284		878		1,827		306
Commercial real estate — investor	Commercial real estate — investor	—		616		17,021		391		5,999		Commercial real estate — investor	5,484		—		616		17,021		391
Real estate construction	Real estate construction	—		1,620		—		117		977		Real estate construction	—		—		1,620		—		117
Commercial real estate lending	Commercial real estate lending	—		2,236		17,021		509		6,976		Commercial real estate lending	5,484		—		2,236		17,021		509
Total commercial	Total commercial	1,284		3,114		18,848		814		7,502		Total commercial	7,126		1,284		3,114		18,848		814
Residential mortgage	Residential mortgage	4,957		6,169		7,095		5,015		3,973		Residential mortgage	5,315		4,957		6,169		7,095		5,015
Auto finance	Auto finance	949		11		10		38		24		Auto finance	2,906		949		11		10		38

Home equity	Home equity	4,207		3,711		2,931		2,472		2,352		Home equity	2,961		4,207		3,711		2,931		2,472
Other consumer	Other consumer	1,232		2,307		1,272		1,036		1,246		Other consumer	1,365		1,232		2,307		1,272		1,036
Total consumer	Total consumer	11,345		12,198		11,308		8,562		7,594		Total consumer	12,547		11,345		12,198		11,308		8,562
Total accruing loans 30-89 days past due	Total accruing loans 30-89 days past due	$	12,629	$	15,312	$	30,156	$	9,376	$	15,097	Total accruing loans 30-89 days past due	$	19,673	$	12,629	$	15,312	$	30,156	$	9,376

Potential problem loans	Potential problem loans											Potential problem loans
PPP(b)	PPP(b)	$	54	$	2,000	$	4,160	$	8,695	$	22,398	PPP(b)	$	47	$	54	$	2,000	$	4,160	$	8,695
Asset-based lending & equipment finance(c)	Asset-based lending & equipment finance(c)	19,057		17,697		—		—		—		Asset-based lending & equipment finance(c)	19,813		19,057		17,697		—		—
Commercial and industrial	Commercial and industrial	93,396		120,561		124,990		77,064		122,143		Commercial and industrial	84,785		93,396		120,561		124,990		77,064
Commercial real estate — owner occupied	Commercial real estate — owner occupied	24,005		26,723		21,241		17,828		15,965		Commercial real estate — owner occupied	38,628		24,005		26,723		21,241		17,828
Commercial and business lending	Commercial and business lending	136,513		166,981		150,391		103,587		160,506		Commercial and business lending	143,273		136,513		166,981		150,391		103,587
Commercial real estate — investor	Commercial real estate — investor	130,792		106,138		78,962		71,613		85,752		Commercial real estate — investor	132,635		130,792		106,138		78,962		71,613
Real estate construction	Real estate construction	200		21,408		19,187		16,465		13,977		Real estate construction	82		200		21,408		19,187		16,465
Commercial real estate lending	Commercial real estate lending	130,992		127,546		98,150		88,078		99,728		Commercial real estate lending	132,717		130,992		127,546		98,150		88,078
Total commercial	Total commercial	267,505		294,527		248,541		191,665		260,234		Total commercial	275,990		267,505		294,527		248,541		191,665
Residential mortgage	Residential mortgage	3,032		2,214		2,374		3,024		2,524		Residential mortgage	3,297		3,032		2,214		2,374		3,024

Home equity	Home equity	156		165		171		1,558		1,729		Home equity	188		156		165		171		1,558

Total consumer	Total consumer	3,188		2,379		2,546		4,583		4,254		Total consumer	3,486		3,188		2,379		2,546		4,583
Total potential problem loans	Total potential problem loans	$	270,693	$	296,905	$	251,087	$	196,248	$	264,488	Total potential problem loans	$	279,475	$	270,693	$	296,905	$	251,087	$	196,248

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

Nonaccrual loans: Nonaccrual loans are considered to be one indicator of potential future loan losses. See Note 7 Loans of the notes to consolidated financial statements for additional nonaccrual loan disclosures. See also sections Credit Risk and Allowance for Credit Losses on Loans.

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

Restructured loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See also Note 7 Loans of the notes to consolidated financial statements for additional restructured loans disclosures.

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

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

Table of Contents

Allowance for Credit Losses on Loans

Credit risks within the loan portfolio are inherently different for each loan type. Credit risk is controlled and monitored through the use of lending standards, a thorough review of potential borrowers, and ongoing review of loan payment performance. Active asset quality administration, including early problem loan identification and timely resolution of problems, aids in the management of credit risk and the minimization of loan losses. Credit risk management for each loan type is discussed in the section entitled Credit Risk. See Note 7 Loans of the notes to consolidated financial statements for additional disclosures on the ACLL.

To assess the appropriateness of the ACLL, the Corporation focuses on the evaluation of many factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, credit report refreshes, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the level of potential problem loans, the risk characteristics of the various classifications of loan segments, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, funding assumptions on lines, and other qualitative and quantitative factors which could affect potential credit losses. The Corporation utilized the Moody's baseline forecast for ~~February~~May 2022 which was compared to the June 2022 forecast for material updates, in the allowance model. The forecast is applied over a 2 year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the ACLL is not necessarily indicative of the trend of future credit losses on loans in any particular segment. Therefore, management considers the ACLL a critical accounting estimate, see section Critical Accounting Estimates for additional information on the ACLL. See section Nonperforming Assets for a detailed discussion on asset quality. See also Note 7 Loans of the notes to consolidated financial statements for additional ACLL disclosures. Table 5 provides information on loan growth and period end loan composition, Table 10 provides additional information regarding NPAs, and Table 11 and Table 12 provide additional information regarding activity in the ACLL.

The loan segmentation used in calculating the ACLL at ~~March 31,~~June 30, 2022 and December 31, 2021 was generally comparable. The methodology to calculate the ACLL consists of the following components: a valuation allowance estimate is established for commercial and consumer loans determined by the Corporation to be individually evaluated, using discounted cash flows, estimated fair value of underlying collateral, and/or other data available. Loans are segmented for criticized loan pools by loan type as well as for non-criticized loan pools by loan type, primarily based on historical loss rates after considering loan type, historical loss and delinquency experience, credit quality, and industry classifications. Loans that have been criticized are considered to have a higher risk of default than non-criticized loans, as circumstances were present to support the lower loan grade, warranting higher loss factors. ~~The loss factors applied in the methodology are periodically re-evaluated and adjusted to reflect changes in historical loss levels or other risks.~~ Additionally, management allocates ACLL to absorb losses that may not be provided for by the other components due to qualitative factors evaluated by management, such as limitations within the credit risk grading process, known current economic or business conditions that may not yet show in trends, industry or other concentrations with current issues that impose higher inherent risks than are reflected in the loss factors, and other relevant considerations. The total allowance is available to absorb losses from any segment of the loan portfolio.

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Table 11 Allowance for Credit Losses on Loans


		Quarter Ended															YTD					Quarter Ended
($ in Thousands)	($ in Thousands)		Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			($ in Thousands)	Jun 30, 2022			Jun 30, 2021			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Allowance for Loan Losses	Allowance for Loan Losses																	Allowance for Loan Losses
Balance at beginning of period	Balance at beginning of period		$	280,015		$	290,997		$	318,811		$	352,938		$	383,702		Balance at beginning of period	$	280,015		$	383,702		$	279,058		$	280,015		$	290,997		$	318,811		$	352,938

Provision for loan losses	Provision for loan losses		(3,000)			(4,500)			(20,000)			(29,500)			(26,000)			Provision for loan losses	(1,000)			(55,500)			2,000			(3,000)			(4,500)			(20,000)			(29,500)

Charge offs	Charge offs		(2,028)			(8,869)			(10,929)			(7,681)			(13,174)			Charge offs	(3,819)			(20,855)			(1,791)			(2,028)			(8,869)			(10,929)			(7,681)
Recoveries	Recoveries		4,072			2,387			3,115			3,054			8,410			Recoveries	5,576			11,464			1,504			4,072			2,387			3,115			3,054
Net (charge offs) recoveries	Net (charge offs) recoveries		2,044			(6,482)			(7,814)			(4,628)			(4,764)			Net (charge offs) recoveries	1,757			(9,391)			(287)			2,044			(6,482)			(7,814)			(4,628)
Balance at end of period	Balance at end of period		$	279,058		$	280,015		$	290,997		$	318,811		$	352,938		Balance at end of period	$	280,771		$	318,811		$	280,771		$	279,058		$	280,015		$	290,997		$	318,811
Allowance for Unfunded Commitments	Allowance for Unfunded Commitments																	Allowance for Unfunded Commitments
Balance at beginning of period	Balance at beginning of period		$	39,776		$	41,276		$	45,276		$	50,776		$	47,776		Balance at beginning of period	$	39,776		$	47,776		$	38,776		$	39,776		$	41,276		$	45,276		$	50,776

Provision for unfunded commitments	Provision for unfunded commitments		(1,000)			(1,500)			(4,000)			(5,500)			3,000			Provision for unfunded commitments	(3,000)			(2,500)			(2,000)			(1,000)			(1,500)			(4,000)			(5,500)

Balance at end of period	Balance at end of period		$	38,776		$	39,776		$	41,276		$	45,276		$	50,776		Balance at end of period	$	36,776		$	45,276		$	36,776		$	38,776		$	39,776		$	41,276		$	45,276
Allowance for credit losses on loans	Allowance for credit losses on loans		$	317,835		$	319,791		$	332,273		$	364,087		$	403,714		Allowance for credit losses on loans	$	317,547		$	364,087		$	317,547		$	317,835		$	319,791		$	332,273		$	364,087
Provision for credit losses on loans	Provision for credit losses on loans		(4,000)			(6,000)			(24,000)			(35,000)			(23,000)			Provision for credit losses on loans	(4,000)			(58,000)			—			(4,000)			(6,000)			(24,000)			(35,000)
Net loan (charge offs) recoveries	Net loan (charge offs) recoveries																	Net loan (charge offs) recoveries

Asset-based lending & equipment finance(a)	Asset-based lending & equipment finance(a)		$	—		$	27		$	91		$	261		$	33		Asset-based lending & equipment finance(a)	$	—		$	294		$	—		$	—		$	27		$	91		$	261
Commercial and industrial	Commercial and industrial		1,854			(6,669)			(9,149)			1,072			1,334			Commercial and industrial	1,410			2,406			(444)			1,854			(6,669)			(9,149)			1,072
Commercial real estate — owner occupied	Commercial real estate — owner occupied		3			4			106			5			4			Commercial real estate — owner occupied	7			9			4			3			4			106			5
Commercial and business lending	Commercial and business lending		1,857			(6,638)			(8,951)			1,338			1,370			Commercial and business lending	1,417			2,709			(440)			1,857			(6,638)			(8,951)			1,338
Commercial real estate — investor	Commercial real estate — investor		—			109			181			(5,589)			(5,886)			Commercial real estate — investor	—			(11,475)			—			—			109			181			(5,589)
Real estate construction	Real estate construction		32			52			18			23			29			Real estate construction	33			52			2			32			52			18			23
Commercial real estate lending	Commercial real estate lending		32			162			199			(5,566)			(5,857)			Commercial real estate lending	33			(11,423)			2			32			162			199			(5,566)
Total commercial	Total commercial		1,889			(6,476)			(8,752)			(4,228)			(4,487)			Total commercial	1,450			(8,715)			(439)			1,889			(6,476)			(8,752)			(4,228)
Residential mortgage	Residential mortgage		288			(6)			300			(223)			(109)			Residential mortgage	508			(332)			220			288			(6)			300			(223)
Auto finance	Auto finance		4			(11)			8			3			9			Auto finance	(10)			12			(14)			4			(11)			8			3

Home equity	Home equity		315			546			959			337			344			Home equity	776			681			461			315			546			959			337
Other consumer	Other consumer		(451)			(534)			(329)			(517)			(521)			Other consumer	(967)			(1,038)			(516)			(451)			(534)			(329)			(517)
Total consumer	Total consumer		155			(6)			938			(400)			(277)			Total consumer	306			(676)			151			155			(6)			938			(400)
Total net (charge offs) recoveries	Total net (charge offs) recoveries		$	2,044		$	(6,482)		$	(7,814)		$	(4,628)		$	(4,764)		Total net (charge offs) recoveries	$	1,757		$	(9,391)		$	(287)		$	2,044		$	(6,482)		$	(7,814)		$	(4,628)

Ratios	Ratios																	Ratios

Allowance for credit losses on loans to total loans	Allowance for credit losses on loans to total loans		1.30		%	1.32		%	1.41		%	1.52		%	1.67		%	Allowance for credit losses on loans to total loans	1.20		%	1.52		%	1.20		%	1.30		%	1.32		%	1.41		%	1.52		%

Allowance for credit losses on loans to net charge offs (annualized)	Allowance for credit losses on loans to net charge offs (annualized)		N/M			12.4x			10.7x			19.6x			20.9x			Allowance for credit losses on loans to net charge offs (annualized)	N/M			19.2x			N/M						12.4x			10.7x			19.6x
Loan Evaluation Method for ACLL	Loan Evaluation Method for ACLL																	Loan Evaluation Method for ACLL
Individually evaluated for impairment	Individually evaluated for impairment		$	13,625		$	15,194		$	19,913		$	29,352		$	43,262		Individually evaluated for impairment							$	10,068		$	13,625		$	15,194		$	19,913		$	29,352
Collectively evaluated for impairment	Collectively evaluated for impairment		304,210			304,597			312,359			334,734			360,452			Collectively evaluated for impairment							307,480			304,210			304,597			312,359			334,734
Total ACLL	Total ACLL		$	317,835		$	319,791		$	332,273		$	364,087		$	403,714		Total ACLL							$	317,547		$	317,835		$	319,791		$	332,273		$	364,087
Loan Balance	Loan Balance																	Loan Balance
Individually evaluated for impairment	Individually evaluated for impairment		$	110,445		$	115,643		$	131,484		$	141,817		$	180,006		Individually evaluated for impairment							$	81,457		$	110,445		$	115,643		$	131,484		$	141,817
Collectively evaluated for impairment	Collectively evaluated for impairment		24,421,481			24,109,306			23,490,189			23,805,719			23,982,321			Collectively evaluated for impairment							26,413,241			24,421,481			24,109,306			23,490,189			23,805,719
Total loan balance	Total loan balance		$	24,531,926		$	24,224,949		$	23,621,673		$	23,947,536		$	24,162,328		Total loan balance							$	26,494,698		$	24,531,926		$	24,224,949		$	23,621,673		$	23,947,536

N/M = Not Meaningful

(a) Periods prior to ~~the first quarter of~~March 31, 2022 do not include equipment finance.

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


		Quarter Ended						YTD			Quarter Ended
(In basis points)	(In basis points)		Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021		(In basis points)	Jun 30, 2022	Jun 30, 2021	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021
Net loan (charge offs) recoveries	Net loan (charge offs) recoveries								Net loan (charge offs) recoveries

Asset-based lending & equipment finance(b)	Asset-based lending & equipment finance(b)		—	9	36	87	10		Asset-based lending & equipment finance(b)	—	46	—	—	9	36	87
Commercial and industrial	Commercial and industrial		10	(34)	(47)	6	7		Commercial and industrial	4	6	(2)	10	(34)	(47)	6
Commercial real estate — owner occupied	Commercial real estate — owner occupied		—	—	5	—	—		Commercial real estate — owner occupied	—	—	—	—	—	5	—
Commercial and business lending	Commercial and business lending		8	(29)	(40)	6	6		Commercial and business lending	3	6	(2)	8	(29)	(40)	6
Commercial real estate — investor	Commercial real estate — investor		—	1	2	(52)	(55)		Commercial real estate — investor	—	(54)	—	—	1	2	(52)
Real estate construction	Real estate construction		1	1	—	1	1		Real estate construction	—	1	—	1	1	—	1
Commercial real estate lending	Commercial real estate lending		—	1	1	(36)	(38)		Commercial real estate lending	—	(37)	—	—	1	1	(36)
Total commercial	Total commercial		5	(17)	(23)	(11)	(12)		Total commercial	2	(11)	(1)	5	(17)	(23)	(11)
Residential mortgage	Residential mortgage		2	—	2	(1)	(1)		Residential mortgage	1	(1)	1	2	—	2	(1)
Auto finance	Auto finance		1	(9)	43	15	37		Auto finance	—	27	(1)	1	(9)	43	15
Home equity	Home equity		22	36	61	21	21		Home equity	27	21	32	22	36	61	21
Other consumer	Other consumer		(62)	(71)	(44)	(72)	(72)		Other consumer	(66)	(72)	(70)	(62)	(71)	(44)	(72)
Total consumer	Total consumer		1	—	4	(2)	(1)		Total consumer	1	(2)	1	1	—	4	(2)
Total net (charge offs) recoveries	Total net (charge offs) recoveries		3	(11)	(13)	(8)	(8)		Total net (charge offs) recoveries	1	(8)	—	3	(11)	(13)	(8)

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

(b) Periods prior to ~~the first quarter of~~March 31, 2022 do not include equipment finance.

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

•Potential problem loans decreased ~~$26~~$17 million, or 9%6%, from December 31, 2021, and increased $6$83 million, or 2%42%, from ~~March 31,~~June 30, 2021. The decrease from December 31, 2021 was primarily driven by commercial and industrial and real estate construction lending, partially offset by ~~an increase~~increases in CRE-investor and CRE-owner occupied lending. The increase from ~~March 31,~~June 30, 2021 was primarily driven by increases in CRE-investor, ~~asset-based,~~CRE-owner occupied, and ~~CRE-owner occupied~~asset-based lending. These increases were partially offset by ~~decreases~~a decrease in ~~commercial and industrial, PPP, and~~ real estate construction lending. See Table 10 for additional information regarding potential problem loans.

•Total nonaccrual loans ~~increased $13~~decreased $22 million, or ~~10%~~17%, from December 31, 2021, and decreased ~~$20~~$39 million, or ~~12%~~26%, from ~~March 31,~~June 30, 2021. The ~~increase~~decrease from December 31, 2021 was primarily due to ~~an increase~~decreases in CRE-investor ~~lending, which was partially offset by a decrease in~~and commercial and industrial lending. The decrease from ~~March 31,~~June 30, 2021 was primarily driven by decreases in commercial and industrial, CRE-investor, and residential mortgage ~~and home equity lending. These decreases were partially offset by an increase in CRE-investor~~ lending. See Note 7 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

•~~Net~~YTD net charge offs (recoveries) decreased $7$11 million from ~~March 31,~~June 30, 2021 to a recovery position, primarily driven by no charge offs in the CRE-investor portfolio in the current period, combined with net recoveries in the commercial and industrial, ~~portfolio.~~home equity, and residential mortgage portfolios. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Management believes the level of ACLL to be appropriate at ~~March 31,~~June 30, 2022.

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Deposits and Customer Funding

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

Table 13 Period End Deposit and Customer Funding Composition


		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021					Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021
($ in Thousands)	($ in Thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		($ in Thousands)	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Noninterest-bearing demand	Noninterest-bearing demand	$	8,315,699	29	%	$	8,504,077	30	%	$	8,170,105	29	%	$	7,999,143	29	%	$	8,496,194	31	%	Noninterest-bearing demand	$	8,085,702	28	%	$	8,315,699	29	%	$	8,504,077	30	%	$	8,170,105	29	%	$	7,999,143	29	%
Savings	Savings	4,661,232		16	%	4,410,198		15	%	4,278,453		15	%	4,182,651		15	%	4,032,830		15	%	Savings	4,708,156		16	%	4,661,232		16	%	4,410,198		15	%	4,278,453		15	%	4,182,651		15	%
Interest-bearing demand	Interest-bearing demand	6,616,767		23	%	7,019,782		25	%	6,407,844		23	%	5,969,285		22	%	5,748,353		21	%	Interest-bearing demand	6,789,722		24	%	6,616,767		23	%	7,019,782		25	%	6,407,844		23	%	5,969,285		22	%
Money market	Money market	7,522,797		26	%	7,185,111		25	%	7,583,978		27	%	7,640,825		28	%	7,838,437		28	%	Money market	7,769,415		27	%	7,522,797		26	%	7,185,111		25	%	7,583,978		27	%	7,640,825		28	%
Time deposits	Time deposits	1,288,913		5	%	1,347,262		5	%	1,410,886		5	%	1,472,395		5	%	1,561,352		6	%	Time deposits	1,223,581		4	%	1,288,913		5	%	1,347,262		5	%	1,410,886		5	%	1,472,395		5	%

Total deposits	Total deposits	$	28,405,409	100	%	$	28,466,430	100	%	$	27,851,266	100	%	$	27,264,299	100	%	$	27,677,166	100	%	Total deposits	$	28,576,577	100	%	$	28,405,409	100	%	$	28,466,430	100	%	$	27,851,266	100	%	$	27,264,299	100	%
Customer funding(a)	Customer funding(a)	299,301				354,142				322,081				226,160				182,228				Customer funding(a)	296,440				299,301				354,142				322,081				226,160
Total deposits and customer funding	Total deposits and customer funding	$	28,704,710			$	28,820,572			$	28,173,348			$	27,490,459			$	27,859,394			Total deposits and customer funding	$	28,873,017			$	28,704,710			$	28,820,572			$	28,173,348			$	27,490,459
Network transaction deposits(b)	Network transaction deposits(b)	$	762,680			$	766,965			$	929,174			$	871,603			$	1,054,634			Network transaction deposits(b)	$	891,902			$	762,680			$	766,965			$	929,174			$	871,603

Net deposits and customer funding (total deposits and customer funding, excluding network transaction deposits)	Net deposits and customer funding (total deposits and customer funding, excluding network transaction deposits)	$	27,942,029			$	28,053,607			$	27,244,174			$	26,618,856			$	26,804,761			Net deposits and customer funding (total deposits and customer funding, excluding network transaction deposits)	27,981,114				27,942,029				28,053,607				27,244,174				26,618,856

Time deposits of more than $250,000	Time deposits of more than $250,000	$	209,208			$	215,100			$	223,075			$	232,035			$	246,037			Time deposits of more than $250,000	180,705				209,208				215,100				223,075				232,035

(a) Securities sold under agreement to repurchase and commercial paper.
(b) Included above in interest-bearing demand and money market.

•Total deposits, which are the Corporation's largest source of funds, ~~decreased $61~~increased $110 million from December 31, 2021, and increased ~~$728 million,~~$1.3 billion, or 3%5%, from ~~March 31, 2021, driven by a change in customer savings habits.~~June 30, 2021.

•Time deposits decreased ~~$58~~$124 million, or 4%9%, from December 31, 2021, and decreased ~~$272~~$249 million, or 17%, from ~~March 31,~~June 30, 2021, due to ~~higher priced~~the maturity of time ~~deposits rolling off as they mature.~~

•Network deposits, primarily sourced from other financial institutions and intermediaries, represented 3% of the Corporation's total deposits at March 31, 2022. Network deposits decreased $4 million, or 1%, from December 31, 2021, and decreased $292 million, or 28%, from March 31, 2021.deposits.

Liquidity

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

The Corporation performs dynamic scenario analysis in accordance with industry best practices. Measures have been established to ensure the Corporation has sufficient high quality short-term liquidity to meet cash flow requirements under stressed scenarios. In addition, the Corporation also reviews static measures such as deposit funding as a percentage of total assets and liquid asset levels. Strong capital ratios, credit quality, and core earnings are also essential to maintaining cost effective access to wholesale funding markets. At ~~March 31,~~June 30, 2022, the Corporation was in compliance with its internal liquidity objectives and had sufficient asset-based liquidity to meet its obligations under a stressed scenario.

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

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

•Pledgeable loan collateral, which is eligible collateral with both the Federal Reserve Bank and the FHLB under established lines of credit. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of ~~March 31,~~June 30, 2022, the Bank had ~~$3.9~~$1.3 billion available for future funding. The Federal Reserve Bank also establishes a collateral value

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of assets to support borrowings from the discount window. As of ~~March 31,~~June 30, 2022, the Bank had ~~$742~~$645 million available for discount window borrowings.

•A $200 million Parent Company commercial paper program, of which ~~$31~~$23 million was outstanding as of ~~March 31,~~June 30, 2022.

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

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

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

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

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

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 ~~March 31,~~June 30, 2022 are displayed below:

Table 14 Credit Ratings


	Moody’s	S&P
Bank short-term deposits	P-1	-
Bank long-term deposits/issuer	A1	BBB+
Corporation commercial paper	P-2	-
Corporation long-term senior debt/issuer	Baa1	BBB
Outlook	Negative	Stable

For the ~~three~~six months ended ~~March 31,~~June 30, 2022, net cash provided by operating and financing activities was ~~$246~~$489 million and $2.0 billion, respectively, while net cash used in investing ~~and financing~~ activities was ~~$640 million and $131 million, respectively,~~$2.7 billion, for a net decrease in cash and cash equivalents of ~~$524~~$158 million since year-end 2021. At ~~March 31,~~June 30, 2022, assets of ~~$35.0~~$37.2 billion ~~decreased $148 million~~increased $2.1 billion, or 6%, from year-end ~~2021.~~2021, primarily due to loan growth. On the funding side, deposits of ~~$28.4~~$28.6 billion ~~decreased $61~~increased $110 million from year-end ~~2021.~~2021 and FHLB advances increased $1.6 billion to fund loan growth.

For the ~~three~~six months ended ~~March 31,~~June 30, 2021, net cash provided by operating, investing, and financing activities was ~~$158~~$230 million, $249 million, and ~~$1.1 billion,~~$577 million, respectively, ~~while net cash used in investing activities was $12 million,~~ for a net increase in cash and cash equivalents of ~~$1.2~~$1.1 billion from year-end 2020. At ~~March 31,~~June 30, 2021, assets of ~~$34.6~~$34.2 billion increased ~~$1.2 billion,~~$733 million, or 3%2%, from year-end 2020, primarily driven by a ~~$1.3~~$1.0 billion increase in interest-bearing deposits in other financial institutions, partially offset by a ~~$289~~$504 million, or 1%2%, decrease in loans. On the funding side, deposits of ~~$27.7~~$27.3 billion increased ~~$1.2 billion,~~$782 million, or 5%3%, from year-end 2020 related to deposit inflows from government stimulus programs.

Quantitative and Qualitative Disclosures about Market Risk

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

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

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Interest Rate Risk

The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by the Board of Directors. These limits and guidelines reflect the Corporation's risk appetite for interest rate risk over both short-term and long-term horizons. No interest rate limit breaches occurred during the first ~~three~~six months of 2022.

The major sources of the Corporation's non-trading interest rate risk are timing differences in the maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, and the potential exercise of explicit or embedded options. We measure these risks and their impact by identifying and quantifying exposures through the use of sophisticated simulation and valuation models which are employed by management to understand NII at risk, interest rate sensitive EAR, and MVE at risk. The Corporation’s interest rate risk profile is such that a higher or steeper yield curve adds to income while a flatter yield curve is relatively neutral, and a lower or inverted yield curve generally has a negative impact on earnings. The Corporation's EAR profile is asset sensitive at ~~March 31,~~June 30, 2022.

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 2021 Annual Report on Form 10-K.

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

While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact.

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


		Mar 31, 2022				Dec 31, 2021					Jun 30, 2022				Dec 31, 2021
		Dynamic Forecast		Static Forecast		Dynamic Forecast		Static Forecast			Dynamic Forecast		Static Forecast		Dynamic Forecast		Static Forecast
Gradual Rate Change	Gradual Rate Change									Gradual Rate Change
100 bp increase in interest rates	100 bp increase in interest rates	5.1	%	5.9	%	5.0	%	5.4	%	100 bp increase in interest rates	5.4	%	4.1	%	5.0	%	5.4	%
200 bp increase in interest rates	200 bp increase in interest rates	10.4	%	11.9	%	10.6	%	11.7	%	200 bp increase in interest rates	10.8	%	8.2	%	10.6	%	11.7	%

At ~~March 31,~~June 30, 2022, the MVE profile indicates a decrease in net balance sheet value due to instantaneous upward changes in rates.

Table 16 Market Value of Equity Sensitivity


		Mar 31, 2022		Dec 31, 2021			Jun 30, 2022		Dec 31, 2021
Instantaneous Rate Change	Instantaneous Rate Change					Instantaneous Rate Change
100 bp increase in interest rates	100 bp increase in interest rates	(3.0)	%	(1.8)	%	100 bp increase in interest rates	(3.0)	%	(1.8)	%
200 bp increase in interest rates	200 bp increase in interest rates	(5.6)	%	(3.7)	%	200 bp increase in interest rates	(6.0)	%	(3.7)	%

Since MVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in MVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, MVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changes in product spreads that could mitigate the adverse impact of changes in interest rates.

The 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.

In 2014, the Financial Stability Oversight Council and Financial Stability Board raised concerns about the reliability and robustness of LIBOR and called for the development of alternative interest rate benchmarks. The ARRC, through authority from the Federal Reserve, has selected the SOFR as the alternative rate and developed a paced transition plan which addresses the risk that LIBOR may not exist beyond June 2023.

As part of the Corporation's efforts to limit exposure to LIBOR based loans, performing borrowers can modify or refinance their residential mortgage loans to a fixed interest rate or an adjustable rate mortgage tied to the one-year treasury adjusted to a constant maturity of one year with an appropriate margin. This provides the Bank and borrower with greater certainty around the loan structure. The Bank has not booked a LIBOR adjustable rate mortgage since the first quarter of 2020.

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Additionally, the Corporation has been monitoring its volume of commercial credits and derivatives tied to LIBOR. In 2021, the Corporation began prioritizing SOFR, Prime and Ameribor as the preferred alternative reference rates and ceased booking LIBOR based commitments after the end of 2021. Loans with a maturity after June 2023 are being reviewed and monitored to

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ensure there is appropriate fallback language in place when LIBOR is no longer published. Loans with a maturity date before that time should naturally mature and be re-underwritten with an appropriate alternative index rate.

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

The following table summarizes significant contractual obligations and other commitments at ~~March 31,~~June 30, 2022, at those amounts contractually due to the recipient, including any unamortized premiums or discounts, hedge basis adjustments, or other similar carrying value adjustments.

Table 17 Contractual Obligations and Other Commitments


($ in Thousands)	($ in Thousands)	Note Reference	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total		($ in Thousands)	Note Reference	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
Time deposits	Time deposits		$	1,026,754	$	215,668	$	46,487	$	5	$	1,288,913	Time deposits		$	987,686	$	191,715	$	44,175	$	5	$	1,223,581
Short-term funding	Short-term funding	9	399,361		—		—		—		399,361		Short-term funding	9	705,620		—		—		—		705,620
FHLB advances	FHLB advances	9	330,270		633		1,005,006		202,039		1,537,948		FHLB advances	9	2,050,140		400,633		605,227		202,039		3,258,039

Other long-term funding	Other long-term funding	9	114		249,411		180		92		249,797		Other long-term funding	9	84		249,485		181		69		249,820

Operating leases	Operating leases	18	6,722		10,528		7,349		6,985		31,585		Operating leases	18	6,112		10,106		7,219		6,191		29,627

Total	Total		$	1,763,220	$	476,240	$	1,059,023	$	209,122	$	3,507,604	Total		$	3,749,642	$	851,939	$	656,802	$	208,304	$	5,466,687

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 derivatives and lending-related commitments. Additional discussion of these instruments can be found in Note 10 Derivative and Hedging Activities and Note 12 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings, Regulatory Matters and Operational Matters of the notes to consolidated financial statements, respectively. The Corporation also has obligations under its retirement plans as described in Note 14 Retirement Plans of the notes to the consolidated financial statements.

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Capital

Management actively reviews capital strategies for the Corporation and each of its subsidiaries in light of perceived business risks, future growth opportunities, industry standards, and compliance with regulatory requirements. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, stability of earnings, changing competitive forces, economic condition in markets served, and strength of management. At ~~March 31,~~June 30, 2022, the capital ratios of the Corporation and its banking subsidiaries were in excess of regulatory minimum requirements. The Corporation’s capital ratios are summarized in the following table.

Table 18 Capital Ratios


		Quarter Ended															YTD				Quarter Ended
($ in Thousands)	($ in Thousands)		Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			($ in Thousands)	Jun 30, 2022		Jun 30, 2021		Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Risk-based Capital(a)	Risk-based Capital(a)																	Risk-based Capital(a)
CET1	CET1		$	2,837,789		$	2,808,289		$	2,779,943		$	2,790,392		$	2,759,473		CET1					$	2,896,675		$	2,837,789		$	2,808,289		$	2,779,943		$	2,790,392
Tier 1 capital	Tier 1 capital		3,030,579			3,001,074			2,972,622			3,080,015			3,112,239			Tier 1 capital					3,089,593			3,030,579			3,001,074			2,972,622			3,080,015
Total capital	Total capital		3,448,108			3,570,026			3,550,556			3,655,411			3,682,720			Total capital					3,506,864			3,448,108			3,570,026			3,550,556			3,655,411
Total risk-weighted assets	Total risk-weighted assets		27,780,642			27,242,735			26,303,703			26,072,881			25,640,395			Total risk-weighted assets					29,863,512			27,780,642			27,242,735			26,303,703			26,072,881
Modified CECL transitional amount	Modified CECL transitional amount		67,276			89,702			92,822			100,776			110,683			Modified CECL transitional amount					67,276			67,276			89,702			92,822			100,776
CET1 capital ratio	CET1 capital ratio		10.22		%	10.31		%	10.57		%	10.70		%	10.76		%	CET1 capital ratio					9.70		%	10.22		%	10.31		%	10.57		%	10.70		%
Tier 1 capital ratio	Tier 1 capital ratio		10.91		%	11.02		%	11.30		%	11.81		%	12.14		%	Tier 1 capital ratio					10.35		%	10.91		%	11.02		%	11.30		%	11.81		%
Total capital ratio	Total capital ratio		12.41		%	13.10		%	13.50		%	14.02		%	14.36		%	Total capital ratio					11.74		%	12.41		%	13.10		%	13.50		%	14.02		%
Tier 1 leverage ratio	Tier 1 leverage ratio		8.86		%	8.83		%	8.81		%	9.23		%	9.53		%	Tier 1 leverage ratio					8.87		%	8.86		%	8.83		%	8.81		%	9.23		%
Selected Equity and Performance Ratios	Selected Equity and Performance Ratios																	Selected Equity and Performance Ratios
Total stockholders’ equity / assets	Total stockholders’ equity / assets		11.30		%	11.47		%	11.60		%	12.03		%	11.94		%	Total stockholders’ equity / assets					10.63		%	11.30		%	11.47		%	11.60		%	12.03		%
Dividend payout ratio(b)	Dividend payout ratio(b)		41.67		%	40.82		%	35.71		%	32.14		%	31.03		%	Dividend payout ratio(b)	38.46	%	31.58	%	35.71		%	41.67		%	40.82		%	35.71		%	32.14		%
Return on average assets	Return on average assets		0.86		%	0.87		%	1.01		%	1.06		%	1.14		%	Return on average assets	0.92	%	1.10	%	0.97		%	0.86		%	0.87		%	1.01		%	1.06		%
Annualized noninterest expense / average assets	Annualized noninterest expense / average assets		2.00		%	2.06		%	2.03		%	2.04		%	2.11		%	Annualized noninterest expense / average assets	2.02	%	2.07	%	2.04		%	2.00		%	2.06		%	2.03		%	2.04		%

(a) The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain
transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and
composition of the Corporation's capital with the capital of other financial services companies.
(b) Ratio is based upon basic earnings per common share.

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the ~~first~~second quarter of 2022.

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Non-GAAP Measures

Table 19 Non-GAAP Measures


		Quarter Ended															YTD					Quarter Ended
($ in Thousands)	($ in Thousands)		Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			($ in Thousands)	Jun 30, 2022			Jun 30, 2021			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Selected equity and performance ratios~~(b)~~(c)	Selected equity and performance ratios~~(b)~~(c)																	Selected equity and performance ratios~~(b)~~(c)
Tangible common equity / tangible assets	Tangible common equity / tangible assets		7.68		%	7.86		%	7.92		%	8.04		%	7.80		%	Tangible common equity / tangible assets							7.23		%	7.68		%	7.86		%	7.92		%	8.04		%
Return on average equity	Return on average equity		7.55		%	7.62		%	8.63		%	8.84		%	9.32		%	Return on average equity	8.20		%	9.08		%	8.85		%	7.55		%	7.62		%	8.63		%	8.84		%
Return on average tangible common equity	Return on average tangible common equity		11.00		%	11.09		%	12.72		%	13.19		%	14.03		%	Return on average tangible common equity	12.27		%	13.86		%	13.29		%	11.26		%	11.34		%	12.97		%	13.44		%
Return on average CET1	Return on average CET1		10.27		%	10.50		%	12.11		%	12.51		%	13.25		%	Return on average CET1	11.03		%	12.87		%	11.77		%	10.27		%	10.50		%	12.11		%	12.51		%

Return on average tangible assets	Return on average tangible assets		0.88		%	0.90		%	1.05		%	1.10		%	1.18		%	Return on average tangible assets	0.97		%	1.16		%	1.03		%	0.90		%	0.92		%	1.07		%	1.12		%
Average stockholders' equity / average assets	Average stockholders' equity / average assets		11.33		%	11.43		%	11.74		%	12.01		%	12.18		%	Average stockholders' equity / average assets	11.17		%	12.10		%	11.02		%	11.33		%	11.43		%	11.74		%	12.01		%
Tangible common equity reconciliation(a)	Tangible common equity reconciliation(a)																	Tangible common equity reconciliation(a)
Common equity	Common equity		$	3,755,092		$	3,831,658		$	3,801,766		$	3,819,852		$	3,774,268		Common equity							$	3,766,187		$	3,755,092		$	3,831,658		$	3,801,766		$	3,819,852
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net		(1,160,883)			(1,163,085)			(1,165,288)			(1,167,491)			(1,169,694)			Goodwill and other intangible assets, net							(1,158,680)			(1,160,883)			(1,163,085)			(1,165,288)			(1,167,491)
Tangible common equity	Tangible common equity		$	2,594,209		$	2,668,573		$	2,636,478		$	2,652,361		$	2,604,575		Tangible common equity							$	2,607,507		$	2,594,209		$	2,668,573		$	2,636,478		$	2,652,361
Tangible Assets Reconciliation(a)
Tangible assets reconciliation(a)																		Tangible assets reconciliation(a)
Total assets	Total assets		$	34,955,900		$	35,104,253		$	34,439,666		$	34,152,625		$	34,575,255		Total assets							$	37,235,990		$	34,955,900		$	35,104,253		$	34,439,666		$	34,152,625
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net		(1,160,883)			(1,163,085)			(1,165,288)			(1,167,491)			(1,169,694)			Goodwill and other intangible assets, net							(1,158,680)			(1,160,883)			(1,163,085)			(1,165,288)			(1,167,491)
Tangible assets	Tangible assets		$	33,795,017		$	33,941,167		$	33,274,378		$	32,985,134		$	33,405,561		Tangible assets							$	36,077,310		$	33,795,017		$	33,941,167		$	33,274,378		$	32,985,134
Average tangible common equity and average CET1 reconciliation~~(b)~~(a)	Average tangible common equity and average CET1 reconciliation~~(b)~~(a)																	Average tangible common equity and average CET1 reconciliation~~(b)~~(a)
Common equity	Common equity		$	3,793,597		$	3,810,668		$	3,807,083		$	3,788,237		$	3,750,479		Common equity	$	3,768,621		$	3,769,463		$	3,743,919		$	3,793,597		$	3,810,668		$	3,807,083		$	3,788,237
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net		(1,162,204)			(1,164,394)			(1,166,589)			(1,168,774)			(1,174,617)			Goodwill and other intangible assets, net	(1,161,114)			(1,171,679)			(1,160,035)			(1,162,204)			(1,164,394)			(1,166,589)			(1,168,774)
Tangible common equity	Tangible common equity		2,631,393			2,646,273			2,640,494			2,619,464			2,575,862			Tangible common equity	2,607,507			2,597,783			2,583,884			2,631,393			2,646,273			2,640,494			2,619,464
Modified CECL transitional amount	Modified CECL transitional amount		67,276			90,528			97,420			105,961			115,649			Modified CECL transitional amount	67,276			110,778			67,276			67,276			90,528			97,420			105,961
Accumulated other comprehensive loss (income)	Accumulated other comprehensive loss (income)		80,383			18,513			(5,320)			(3,111)			(5,337)			Accumulated other comprehensive loss (income)	125,566			(4,218)			170,253			80,383			18,513			(5,320)			(3,111)
Deferred tax assets, net	Deferred tax assets, net		39,411			39,640			39,893			39,915			40,608			Deferred tax assets, net	39,241			40,260			39,072			39,411			39,640			39,893			39,915
Average CET1	Average CET1		$	2,818,464		$	2,794,954		$	2,772,487		$	2,762,229		$	2,726,782		Average CET1	$	2,839,591		$	2,744,603		$	2,860,485		$	2,818,464		$	2,794,954		$	2,772,487		$	2,762,229
Average tangible assets reconciliation(a)	Average tangible assets reconciliation(a)																	Average tangible assets reconciliation(a)
Total assets	Total assets		$	35,200,182		$	35,016,159		$	34,759,489		$	34,379,647		$	33,684,143		Total assets	$	35,467,853		$	34,033,816		$	35,732,583		$	35,200,182		$	35,016,159		$	34,759,489		$	34,379,647
Goodwill and other intangible assets, net	Goodwill and other intangible assets, net		(1,162,204)			(1,164,394)			(1,166,589)			(1,168,774)			(1,174,617)			Goodwill and other intangible assets, net	(1,161,114)			(1,171,679)			(1,160,035)			(1,162,204)			(1,164,394)			(1,166,589)			(1,168,774)
Tangible assets	Tangible assets		$	34,037,978		$	33,851,765		$	33,592,900		$	33,210,873		$	32,509,526		Tangible assets	$	34,306,740		$	32,862,137		$	34,572,548		$	34,037,978		$	33,851,765		$	33,592,900		$	33,210,873

Efficiency ratio reconciliation(c)
Adjusted net income reconciliation(b)																		Adjusted net income reconciliation(b)
Net income																		Net income	$	161,086		$	185,307		$	86,824		$	74,262		$	76,877		$	88,809		$	91,007
Other intangible amortization, net of tax																		Other intangible amortization, net of tax	3,304			3,329			1,652			1,652			1,652			1,652			1,652
Adjusted net income																		Adjusted net income	$	164,390		$	188,637		$	88,476		$	75,914		$	78,529		$	90,461		$	92,659
Adjusted net income available to common equity reconciliation(b)																		Adjusted net income available to common equity reconciliation(b)
Net income available to common equity																		Net income available to common equity	$	155,336		$	175,226		$	83,949		$	71,387		$	74,002		$	84,655		$	86,131
Other intangible amortization, net of tax																		Other intangible amortization, net of tax	3,304			3,329			1,652			1,652			1,652			1,652			1,652
Adjusted net income available to common equity																		Adjusted net income available to common equity	$	158,640		$	178,555		$	85,601		$	73,039		$	75,654		$	86,307		$	87,784
Efficiency ratio reconciliation(d)																		Efficiency ratio reconciliation(d)
Federal Reserve efficiency ratio	Federal Reserve efficiency ratio		65.71		%	67.36		%	65.43		%	66.81		%	65.74		%	Federal Reserve efficiency ratio	63.51		%	66.26		%	61.53		%	65.71		%	67.36		%	65.43		%	66.81		%
Fully tax-equivalent adjustment	Fully tax-equivalent adjustment		(1.13)		%	(1.10)		%	(1.01)		%	(1.07)		%	(0.97)		%	Fully tax-equivalent adjustment	(1.05)		%	(1.02)		%	(0.98)		%	(1.13)		%	(1.10)		%	(1.01)		%	(1.07)		%
Other intangible amortization	Other intangible amortization		(0.84)		%	(0.82)		%	(0.83)		%	(0.87)		%	(0.82)		%	Other intangible amortization	(0.80)		%	(0.85)		%	(0.76)		%	(0.84)		%	(0.82)		%	(0.83)		%	(0.87)		%
Fully tax-equivalent efficiency ratio	Fully tax-equivalent efficiency ratio		63.76		%	65.46		%	63.61		%	64.88		%	63.96		%	Fully tax-equivalent efficiency ratio	61.68		%	64.40		%	59.80		%	63.76		%	65.46		%	63.61		%	64.88		%
Provision for unfunded commitments adjustment	Provision for unfunded commitments adjustment		0.37		%	0.55		%	1.48		%	2.14		%	(1.09)		%	Provision for unfunded commitments adjustment	0.53		%	0.47		%	0.67		%	0.37		%	0.55		%	1.48		%	2.14		%
Asset gains, net adjustment	Asset gains, net adjustment		0.05		%	0.24		%	1.29		%	—		%	1.12		%	Asset gains, net adjustment	0.21		%	0.59		%	0.34		%	0.05		%	0.24		%	1.29		%	—		%
Acquisitions, branch sales, and initiatives	Acquisitions, branch sales, and initiatives		—		%	(1.43)		%	(0.91)		%	0.01		%	0.22		%	Acquisitions, branch sales, and initiatives	—		%	0.12		%	—		%	—		%	(1.43)		%	(0.91)		%	0.01		%
Adjusted efficiency ratio	Adjusted efficiency ratio		64.18		%	64.82		%	65.46		%	67.02		%	64.21		%	Adjusted efficiency ratio	62.42		%	65.58		%	60.82		%	64.18		%	64.82		%	65.46		%	67.02		%

(a) ~~The ratio tangible~~Tangible common equity toand tangible assets ~~excludes~~exclude goodwill and other intangible assets, net. ~~This financial measure has been included as it is considered~~

(b) Adjusted net income and adjusted net income available to ~~be a critical metric with~~common equity, which ~~to analyze~~are used in the calculation of return on average tangible assets and ~~evaluate financial condition and capital strength.~~return on average tangible common equity, respectively, add back other intangible amortization, net of tax.

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

~~(c)~~(d) The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains ~~/ losses,~~(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,~~(losses), net. The adjusted efficiency ratio is noninterest expense, which excludes the provision for unfunded commitments, other intangible amortization, acquisition related costs, and announced initiatives, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net, asset gains (losses), net, and gain on sale of branches, net. Management believes the adjusted efficiency ratio is a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and provides a better measure as to how the Corporation is managing its expenses by adjusting for acquisition related costs, provision for unfunded commitments, asset gains (losses), net, branch sales, and announced initiatives.

7071

Table of Contents

Sequential Quarter Results

The Corporation reported net income of ~~$74~~$87 million for the ~~first~~second quarter of 2022, compared to net income of ~~$77~~$74 million for the ~~fourth~~first quarter of ~~2021.~~2022. Net income available to common equity was ~~$71~~$84 million for the ~~first~~second quarter of 2022, or ~~$0.48~~$0.56 for both basic and ~~$0.47 for~~ diluted earnings per common share. Comparatively, net income available to common equity for the ~~fourth~~first quarter of ~~2021~~2022 was ~~$74~~$71 million, or ~~$0.49~~$0.48 for ~~both~~ basic and $0.47 for diluted earnings per common share (see Table 1).

Fully tax-equivalent net interest income for the ~~first~~second quarter of 2022 was ~~$192~~$221 million, $1$29 million, or 1%15%, higher than the ~~fourth~~first quarter of ~~2021.~~2022. The net interest margin in the ~~first~~second quarter of 2022 was up 229 bp to ~~2.42%~~2.71%. The increase in net interest income and net interest margin was due to higher interest on earning assets due to the Federal Reserve increasing their federal funds target rate. Average earning assets increased ~~$288~~$625 million, or 1%2%, to ~~$32.0~~$32.6 billion in the ~~first~~second quarter of 2022. Average loans increased ~~$302 million,~~$1.3 billion, or 1%5%. On the funding side, FHLB advances increased $813 million, or 50%, and total interest-bearing deposits ~~increased $345~~decreased $294 million, or ~~2%, primarily driven by changing customer savings habits~~1% (see Table 2).

The provision for credit losses had a negligible release for the second quarter of 2022, compared to a release of $4 million for the first quarter of 2022 ~~compared to a release of $6 million for the fourth quarter of 2021~~ (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Noninterest income for the second quarter of 2022 was $75 million, up $1 million, or 1%, from the first quarter of 2022, ~~was $74 million, down $7 million, or 9%, from the fourth quarter of 2021,~~ driven by ~~fewer~~higher bank owned life insurance policy redemptions and ~~lower~~ card-based fees, ~~and capital markets revenue.~~partially offset by lower mortgage banking, net income (see Table 3).

Noninterest expense for the ~~first~~second quarter of 2022 was ~~$173~~$181 million, ~~down $9~~up $8 million, or 5%, from the ~~fourth~~first quarter of ~~2021,~~2022, driven by ~~a reduction in~~higher personnel ~~pension and donation~~ expenses (see Table 4).

For the ~~first~~second quarter of 2022, the Corporation recognized income tax expense of ~~$19~~$23 million, compared to income tax expense of ~~$15~~$19 million for the ~~fourth~~first quarter of ~~2021.~~2022. See Income Taxes section for a detailed discussion on income taxes.

Comparable Quarter Results

The Corporation reported net income of $87 million for the second quarter of 2022, compared to $91 million for the second quarter of 2021. Net income available to common equity was $84 million for the second quarter of 2022, or $0.56 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the second quarter of 2021 was $86 million, or $0.56 for both basic and diluted earnings per share (see Table 1).

Fully tax-equivalent net interest income for the second quarter of 2022 was $221 million, $37 million, or 20%, higher than the second quarter of 2021. The net interest margin between the comparable quarters was up 34 bp, to 2.71% in the second quarter of 2022. The increase in net interest income and net interest margin was due to higher interest on earning assets due to the Federal Reserve increasing their federal funds target rate. Average earning assets increased $1.6 billion, or 5%, to $32.6 billion in the second quarter of 2022 as average loans increased $1.3 billion, or 5%, and investments and other increased by $287 million, or 4%. On the funding side, average interest-bearing deposits increased $636 million, or 3%, from the second quarter of 2021, due to increases in lower cost deposits, partially offset by a decrease in higher cost deposits. Average short and long-term funding increased $769 million, or 32% (see Table 2), primarily driven by an increase in FHLB advances.

The provision for credit losses had a negligible release for the second quarter of 2022, compared to a release of $35 million for the second quarter of 2021, as a result of improving credit quality within the loan portfolio (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Noninterest income for the second quarter of 2022 was $75 million, up $2 million, or 3%, compared to the second quarter of 2021, primarily due to higher capital markets, net (see Table 3).

Noninterest expense increased $7 million, or 4%, to $181 million for the second quarter of 2022 primarily due to higher personnel expenses (see Table 4).

The Corporation recognized income tax expense of $23 million for the second quarter of 2022, compared to an income tax expense of $22 million for the second quarter of 2021. See section Income Taxes for a detailed discussion on income taxes.

Table of Contents

Segment Review

As discussed in Note 15 Segment Reporting of the notes to consolidated financial statements, the Corporation’s reportable segments have been determined based upon its internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer, and the distribution of those products and services are similar. The reportable segments are Corporate and Commercial Specialty; Community, Consumer and Business; and Risk Management and Shared Services.

Table 20 Selected Segment Financial Data


		Three Months Ended Mar 31,								Three Months Ended Jun 30,					Six Months Ended Jun 30,
($ in Thousands)	($ in Thousands)	2022			2021			% Change			($ in Thousands)	2022			2021			% Change		2022			2021			% Change
Corporate and Commercial Specialty	Corporate and Commercial Specialty										Corporate and Commercial Specialty
Total revenue(a)	Total revenue(a)	$	136,948		$	136,160		1	%		Total revenue(a)	$	145,191		$	131,643		10	%	$	282,139		$	267,803		5	%
Provision for credit losses	Provision for credit losses	12,653			16,680			(24)	%		Provision for credit losses	12,246			15,716			(22)	%	24,900			32,395			(23)	%
Noninterest expense	Noninterest expense	56,559			55,448			2	%		Noninterest expense	56,847			53,902			5	%	113,406			109,349			4	%
Income tax expense	Income tax expense	12,313			11,891			4	%		Income tax expense	13,919			11,214			24	%	26,232			23,106			14	%
Net income	Net income	55,423			52,141			6	%		Net income	62,179			50,812			22	%	117,601			102,953			14	%
Average earning assets	Average earning assets	14,416,342			14,050,208			3	%		Average earning assets	15,083,176			14,024,769			8	%	14,751,601			14,037,418			5	%
Average loans	Average loans	14,414,631			14,049,949			3	%		Average loans	15,079,176			14,023,611			8	%	14,748,739			14,036,707			5	%
Average deposits	Average deposits	9,411,118			8,532,903			10	%		Average deposits	8,752,899			8,646,551			1	%	9,080,190			8,590,041			6	%
Average allocated capital (Average CET1)(b)	Average allocated capital (Average CET1)(b)	1,421,007			1,397,132			2	%		Average allocated capital (Average CET1)(b)	1,515,244			1,406,646			8	%	1,468,386			1,401,915			5	%
Return on average allocated capital (ROCET1)(b)		15.82		%	15.14		%	68 bp
Return on average allocated capital(b)											Return on average allocated capital(b)	16.46		%	14.49		%	197 bp		16.15		%	14.81		%	134 bp
Community, Consumer, and Business	Community, Consumer, and Business										Community, Consumer, and Business
Total revenue	Total revenue	$	121,584		$	133,995		(9)	%		Total revenue	$	139,757		$	122,437		14	%	$	261,341		$	256,432		2	%
Provision for credit losses	Provision for credit losses	4,656			5,928			(21)	%		Provision for credit losses	4,924			5,279			(7)	%	9,580			11,207			(15)	%
Noninterest expense	Noninterest expense	98,660			100,353			(2)	%		Noninterest expense	105,139			101,735			3	%	203,802			202,086			1	%
Income tax expense	Income tax expense	3,836			5,820			(34)	%		Income tax expense	6,236			3,239			93	%	10,071			9,059			11	%
Net income	Net income	14,431			21,894			(34)	%		Net income	23,459			12,185			93	%	37,888			34,080			11	%
Average earning assets	Average earning assets	9,175,473			9,614,167			(5)	%		Average earning assets	9,784,918			9,379,435			4	%	9,481,879			9,496,153			—	%
Average loans	Average loans	9,175,473			9,614,167			(5)	%		Average loans	9,784,918			9,379,435			4	%	9,481,879			9,496,153			—	%
Average deposits	Average deposits	18,414,526			17,109,644			8	%		Average deposits	18,544,542			17,825,851			4	%	18,479,893			17,469,726			6	%
Average allocated capital (Average CET1)(b)	Average allocated capital (Average CET1)(b)	514,543			569,430			(10)	%		Average allocated capital (Average CET1)(b)	593,296			543,810			9	%	554,137			556,549			—	%
Return on average allocated capital (ROCET1)(b)		11.37		%	15.59		%	N/M
Return on average allocated capital(b)											Return on average allocated capital(b)	15.86		%	8.99		%	N/M		13.79		%	12.35		%	144 bp
Risk Management and Shared Services	Risk Management and Shared Services										Risk Management and Shared Services
Total revenue	Total revenue	$	3,683		$	1,091		N/M			Total revenue	$	6,656		$	(1,123)		N/M		$	10,339		$	(33)		N/M
Provision for credit losses	Provision for credit losses	(21,300)			(45,612)			(53)	%		Provision for credit losses	(17,172)			(55,999)			(69)	%	(38,472)			(101,610)			(62)	%
Noninterest expense	Noninterest expense	18,073			19,546			(8)	%		Noninterest expense	19,434			18,839			3	%	37,505			38,386			(2)	%
Income tax expense	Income tax expense	2,501			6,890			(64)	%		Income tax expense	3,209			8,027			(60)	%	5,710			14,917			(62)	%
Net income	Net income	4,409			20,266			(78)	%		Net income	1,186			28,010			(96)	%	5,597			48,274			(88)	%
Average earning assets	Average earning assets	8,409,195			6,667,633			26	%		Average earning assets	7,758,257			7,635,545			2	%	8,081,928			7,154,263			13	%
Average loans	Average loans	507,633			799,233			(36)	%		Average loans	534,069			695,568			(23)	%	520,924			747,114			(30)	%
Average deposits	Average deposits	821,726			1,162,012			(29)	%		Average deposits	873,301			998,231			(13)	%	847,656			1,079,669			(21)	%
Average allocated capital (Average CET1)(b)	Average allocated capital (Average CET1)(b)	882,913			760,220			16	%		Average allocated capital (Average CET1)(b)	751,945			811,773			(7)	%	817,067			786,139			4	%
Return on average allocated capital (ROCET1)(b)		0.70		%	8.03		%	N/M
Return on average allocated capital(b)											Return on average allocated capital(b)	(0.90)		%	11.43		%	N/M		(0.04)		%	9.80		%	N/M
Consolidated Total	Consolidated Total										Consolidated Total
Total revenue(a)	Total revenue(a)	$	262,214		$	271,245		(3)	%		Total revenue(a)	$	291,604		$	252,957		15	%	$	553,819		$	524,202		6	%
Return on average allocated capital (ROCET1)(b)		10.27		%	13.25		%	N/M
Return on average allocated capital(b)											Return on average allocated capital(b)	11.77		%	12.51		%	-74 bp		11.03		%	12.87		%	-184 bp

N//M = Not meaningful

(a) For the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Corporation recognized a $2 million pre-tax gain on sale of Whitnell.

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

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Notable Changes in Segment Financial Data

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

•Total revenue increased $14 million from the three and six months ended June 30, 2021 as a result of loan growth and increasing interest rates.

•Provision for credit losses decreased $4$7 million from the six months ended June 30, 2021 and decreased $3 million from the three months ended ~~March 31,~~June 30, 2021 as a result of improving credit quality.

•~~Noninterest expense~~Average loans increased $1$712 million from the six months ended June 30, 2021 and increased $1.1 billion from the three months ended June 30, 2021, primarily driven by growth within the commercial and business lending portfolio.

•Average deposits increased $490 million from the six months ended June 30, 2021 and increased $106 million from the three months ended ~~March 31, 2021, primarily driven by an increase in business development and advertising expense.~~

•Average loans increased $365 million from the three months ended March 31, 2021, primarily driven by an increase in commercial and business lending due to the new asset-based and equipment finance verticals and growth in general commercial and industrial loans.

•~~Average deposits increased $878 million from the three months ended March 31,~~June 30, 2021, primarily driven by increases in ~~interest-bearing demand deposit accounts.~~low-cost interest bearing deposits.

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

•~~Revenue decreased $12~~Total revenue increased $5 million from the six months ended June 30, 2021 and increased $17 million from the three months ended ~~March 31,~~June 30, 2021 ~~primarily driven by a decrease in mortgage banking income due to decreased gains on loans sold~~ as a result of ~~lower mortgage settlements. Additionally,~~receiving FTP credit for providing funding for the ~~valuation method for MSRs was changed effective January 1, 2022, resulting in a decrease in mortgage banking income due to impairment recoveries recognized in the three months ended March 31, 2021.~~Corporation's loan growth.

•Provision for credit losses decreased $1$2 million from the ~~three~~six months ended ~~March 31,~~June 30, 2021 as a result of improving credit quality.

•Average loans ~~decreased $439~~increased $405 million from the three months ended ~~March 31,~~June 30, 2021, driven by ~~decreases in residential mortgages and PPP loans, partially offset by an increase~~growth in auto finance ~~loans.~~lending within the consumer portfolio.

•Average deposits increased ~~$1.3~~$1.0 billion from the six months ended June 30, 2021 and increased $719 million from the three months ended ~~March 31,~~June 30, 2021 ~~primarily due to~~as a result of customers holding higher ~~savings account balances.~~deposit balances in every category except time deposits.

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

•Revenues increased $3$10 million from the six months ended June 30, 2021 and increased $8 million from the three months ended ~~March 31,~~June 30, 2021, primarily driven by ~~lower~~increased interest ~~expense~~income as a result of ~~lower network deposit balances.~~higher investment income due to the current rate environment.

•Provision for credit losses increased ~~$24~~$63 million from the six months ended June 30, 2021 and increased $39 million from the three months ended ~~March 31,~~June 30, 2021, driven by a larger provision ~~release~~releases during ~~the three months ended March 31,~~ 2021.

•Average earning assets increased ~~$1.7 billion~~$928 million from the six months ended June 30, 2021 and increased $123 million from the three months ended ~~March 31,~~June 30, 2021, driven by investment purchases throughout the past year.

•Average loans decreased ~~$292~~$226 million from the six months ended June 30, 2021 and decreased $161 million from the three months ended ~~March 31,~~June 30, 2021, primarily driven by ~~a decrease~~decreases in commercial and business lending.

•Average deposits decreased ~~$340~~$232 million from the six months ended June 30, 2021 and decreased $125 million from the three months ended ~~March 31,~~June 30, 2021, primarily driven by ~~a decrease~~decreases in network deposits.

Critical Accounting Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the ACLL and MSRs valuation. A discussion of these estimates can be found in the Critical Accounting Estimates section in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Corporation’s 2021 Annual Report on Form 10-K. There has been one change in the Corporation's application of critical

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accounting estimates since December 31, 2021 driven by the irrevocable election to account for MSRs under the fair value measurement methodology.

Mortgage Servicing Rights Valuation: We have a significant investment in MSRs. Our MSRs are primarily retained from sales in the secondary market of residential mortgage loans we have originated or purchased from correspondent lenders. MSRs are initially recognized and subsequently carried at fair value. Changes in fair value are recognized in earnings as they occur through mortgage banking, net on the consolidated statements of income.

MSRs are not traded in active markets. The fair value of MSRs is determined by discounting the projected cash flows. Certain significant assumptions and estimates used in valuing MSRs are based on current market sources including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads. Assumptions used to value our MSRs are considered significant unobservable inputs and represent our best estimate of assumptions that market participants would use to value this asset. A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults and other relevant factors. The prepayment model is updated periodically for changes in market conditions and adjusted to better correlate with actual performance of our servicing portfolio. The option-adjusted spread is added to the discount rate across all interest rate paths generated in a stochastic process, which will properly capture the embedded options for MSRs cash flows.

The assumptions used in this model are primarily based on mortgage interest rates. Evaluation of the effect of a change in one assumption without considering the effect of that change on other assumptions is not meaningful. Considering all related assumptions, we expect a 50 basis point increase in the yield curve to increase the fair value of our servicing rights by $4 million and decrease the value of the hedge by $4$3 million. Likewise, we expect a 50 basis point decrease in the yield curve to decrease the fair value of our servicing rights by $4 million and increase the value of our hedge by $4 million.

Recent Developments

On April 21, 2022, the Corporation announced plans to eliminate non-sufficient funds fees, overdraft protection transfer fees, and continuous overdraft fees and reduce the daily limit of overdraft fee occurrences from 4 to 2. The planned changes in the third quarter of 2022 are expected to reduce the total burden of overdrafts to our customers by approximately 30%.

~~On April~~July 26, 2022, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.20 per common share, payable on ~~June~~September 15, 2022 to shareholders of record at the close of business on ~~June~~September 1, 2022. The Board of Directors also declared a regular quarterly cash dividend of $0.3671875 per depositary share on Associated's 5.875% Series E Perpetual Preferred Stock, payable on ~~June~~September 15, 2022 to shareholders of record at the close of business on ~~June~~September 1, 2022. The Board of Directors also declared a regular quarterly cash dividend of $0.3515625 per depositary share on Associated's 5.625% Series F Perpetual Preferred Stock, payable on ~~June~~September 15, 2022 to shareholders of record at the close of business on ~~June~~September 1, 2022.


ITEM 3.			Quantitative and Qualitative Disclosures About Market Risk

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

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ITEM 4.			Controls and Procedures

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

As of ~~March 31,~~June 30, 2022, 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 ~~March 31,~~June 30, 2022.

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

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PART II - OTHER INFORMATION


ITEM 1.			Legal Proceedings

The information required by this item is set forth in Part I, Item 1 under Note 12 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings, Regulatory Matters and Operational Matters of the notes to consolidated financial statements.


ITEM 1A.			Risk Factors

The following risk factors supplement the Risk Factors described in the Corporation’s 2021 Annual Report on Form 10-K and in the Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and should be read in conjunction ~~therewith~~therewith.

~~Macroeconomic~~Changes and instability in economic conditions, geopolitical ~~challenges~~matters and ~~uncertainties affecting the stability~~financial markets, including a contraction of ~~regions~~economic activity, could adversely impact our business, results of operations and ~~countries around the globe, specifically including Russia~~financial condition. Our success depends, to a certain extent, upon global, domestic and ~~Ukraine, could~~local economic and political conditions, as well asgovernmental monetary policies. Conditions such as changes in interest rates, money supply, levels of employment and other factors beyond ourcontrol may have a negative impact on ~~our business, financial condition and results~~economic activity. Any contraction of ~~operations.~~ Weeconomic activity, including an economic recession, may experience negative impacts to our businesses and results of operations as a result of macroeconomic and geopolitical challenges, uncertainties and volatility occurring across the globe. For instance, the recent action of Russian military forces in Ukraine has created instability in that region and has escalated tensions between Russia and the United States and across Europe. In response to the actions taken by Russia, the United States has imposed, and is likely to continue to impose, significant financial and economic sanctions and export controls against certain Russian organizations and individuals, with similar actions being either implemented or planned by the European Union and the United Kingdom and other jurisdictions.

The actions taken by Russia in Ukraine, and any further measures that may be taken by the United States or its allies in response to such actions, could have negative impacts on global and regional financial markets and economic conditions. The United States has banned Russian imports of oil, natural gas and coal and other jurisdictions have taken, or are contemplating taking, similar actions. These dynamics are placing additional upward pressure on fuel and energy prices, which already were rising based on factors including a return to pre-pandemic levels of consumption and insufficient global production to match increasing demand. In addition, Ukraine’s ability to function as a significant supplier of commodities—including wheat, neon and platinum—used in the production of key energy, food and industrial outputs has been limited by Russia’s actions and is causing global prices in certain markets to increase. The Russia-Ukraine conflict already has been more protracted than was initially expected and, to the extent that the conflict continues for an extended period of time and/or expands into surrounding regions, global financial conditions could worsen and/or become more volatile. These developments are combining to amplify existing economic uncertainty and cause adjustments to longer-term inflation expectations which, in turn, may cause upward pressure on interest rates and adversely affect economic conditions. For additional information, see “Risk Factors—We are subject to interest rate risk, which recently has increased due to domestic and global economic instability and geopolitical developments.”

Further, the Russia-Ukraine conflict may impact our risk exposure in other areas, most notably our cybersecurity risk. On March 21, 2022, the Biden Administration issued a warning regarding the potential for Russia to engage in malicious cyber activities, specifically including attacks on critical infrastructure such as the financial sector, in response to the international economic sanctions that have been imposed against the Russian government and organizations and individuals within Russia. Institutions that provide critical services, including all members of the financial sector such as the Corporation and the Bank, have been encouraged by the Administration and their supervisors to enhance cyber-defense systems and take steps to further secure their data in anticipation of potential malicious cyber activity by the Russian government or other Russian actors. For additional information regarding the cybersecurity risks for the Corporation and the Bank, please refer to the Corporation’s 2021 Annual Report on Form 10-K.

~~Each of the developments described above, or any combination of them, could~~ adversely affect our ~~businesses, financial condition~~asset quality, deposit levels and ~~results of operations.~~

~~We are subject to~~loan demand and, therefore, our earnings. In particular, interest ~~rate risk, which recently has increased due to domestic and global economic instability and geopolitical developments.~~ ~~Our earnings and cash flows are largely dependent upon our net interest income. Interest~~ rates arehighly sensitive to many factors that are beyond our control, including global, domestic and local economic conditions and thepolicies of various governmental and regulatory agencies and, ~~in particular,~~specifically, the Federal Reserve. OnSince March ~~16,~~of 2022, theFOMC of the Federal Reserve has raised the target range for the federal funds rate ~~to 0.25% to 0.50%, which represented the first~~on three separate occasions, resulting in an increase toin the target ~~federal funds~~range from 0.00% - 0.25% that prevailed in early March of 2022 to 1.50% - 1.75% at the June 2022 FOMC meeting. At the July 2022 FOMC meeting, the target rate ~~since 2018.~~was increased again to 2.25% - 2.50%. The ~~FOMC, with particular attention being given to~~FOMC—citing specifically the hardships caused by the ongoing Russia-Ukraine conflict, continued global supply chain disruptions ~~rising energy~~ and ~~commodity prices~~imbalances, and ~~the global economic impact of the Russia-Ukraine conflict,~~ increased inflationary pressure—has signaled that it anticipates additional increases ~~may~~in the target range will be ~~appropriate if inflation pressures remain elevated or intensify.~~

~~Further increases~~appropriate. Increases to prevailing interest rates could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets. ~~Moreover, additional~~

The tightening of the Federal Reserve’s monetary policies, including repeated and aggressive increases ~~to the~~in target range for the federal funds rate ~~combined~~as noted above as well as the conclusion of the Federal Reserve’s tapering of asset purchases, together with ongoing economic and geopolitical instability, ~~raise~~increases the risk of an economic recession. Although forecasts have varied, many economists are projecting that U.S. economic growth will slow and inflation will remain elevated in the coming quarters, potentially resulting in a contraction of U.S. gross domestic output by 2023 if not earlier. Any such downturn, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.

~~The CFPB has taken steps to enhance the supervision of institutions within its jurisdiction, including the Corporation and the Bank, and has adopted strict enforcement policies in respect~~As a result of the ~~fair lending laws~~economic and geopolitical factors discussed above, financial institutions also face heightened credit risk, among other forms of risk. Of note, because we have asignificant amount of real estate loans, decreases in real estate values could adversely affect the ~~prohibition against unfair, deceptive~~value of property used as collateral, which, in turn, can adversely affect the value of our loan and ~~abusive acts and practices.~~ investment portfolios. The ~~CFPB has broad rulemaking authority to administer the provisions~~Office of the Dodd-Frank Act regarding financial institutions that offer covered financial products and services to consumers. The CFPB was directed under the Dodd-Frank Act to write rules identifying practices or acts that are unfair, deceptive or abusive in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.

~~Under the current Administration and leadership~~Comptroller of the ~~agency,~~Currency recently reported that although residential real estate values have continued to rise in many markets, the ~~CFPB~~rate of appreciation has ~~pursued~~slowed in recent quarters. Adverse economic developments, specifically including inflation-related impacts, may have a ~~more aggressive enforcement policy with respect~~negative effect on the ability of our borrowers to make timely repayments of their loans or to finance future home purchases. Moreover, while CRE values have stabilized as demand has returned to pre-pandemic levels in several markets, the outlook for CRE remains dependent on the broader economic environment and, specifically, how major subsectors respond to a ~~range of regulatory compliance matters. CFPB enforcement actions may serve as precedent~~rising interest rate environment and higher prices for ~~how~~commodities, goods and services. In each case, credit performance over the ~~CFPB interprets~~medium- and ~~enforces consumer protection laws, including UDAAPs, with respect~~long-term is susceptible to ~~all supervised institutions, which may result~~economic and market forces and therefore forecasts remain uncertain. Instability and uncertainty in the imposition of higher standards of compliance with such laws. Of note, CFPB Director Rohit Chopra has indicated that the CFPB will prioritize enforcement of the Equal Credit Opportunity Act (“ECOA”),commercial and residential real estate markets, as implemented by the CFPB’s Regulation B, which prohibits discrimination in any aspect of a credit transaction. To that end, on March 16, 2022, the CFPB revised its Supervision and Examination Manual to explicitly incorporate anti-discrimination considerations in respect of evaluations of potential UDAAPs. The CFPB’s action represents not only a continuation of the agency’s commitment to a more aggressive enforcement approach, but also a shift in supervision and examination policy and procedure that may resultwell as in the ~~commencement~~broader commercial and retail credit markets, could have a material adverse effect on our financial condition and results of ~~enforcement actions against financial institutions involving a broader range~~operations.

Table of ~~cited violations of the federal consumer financial laws and expanded allegations of UDAAPs.~~Contents

~~We have not yet determined whether this shift in enforcement policy at the CFPB will necessitate any changes to our business or result in additional compliance risk.~~


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

During the ~~first~~second quarter of 2022, the Corporation repurchased ~~$5 million~~approximately $884,000 of common stock, or approximately ~~206,000~~43,000 shares, all of which were repurchases related to tax withholding on equity compensation with no open market purchases during the quarter. The repurchase details are presented in the table below:

Common Stock Purchases
Total Number of
Shares Purchased(a)
Average Price
Paid per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans
or Programs(b)
Period
January 1, 2022 - January 31, 2022 23,385 $ 24.44 — —
February 1, 2022 - February 28, 2022 156,809 25.64 — —
March 1, 2022 - March 31, 2022 25,651 23.41 — —
Total 205,845 $ 25.23 — 3,499,381


	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

April 1, 2022 - April 30, 2022	39,864	$	20.61	—	—
May 1, 2022 - May 31, 2022	2,525	19.96		—	—
June 1, 2022 - June 30, 2022	614	18.93		—	—
Total	43,003	$	20.55	—	4,361,770

(a) During the ~~first~~second quarter of 2022, the Corporation repurchased ~~205,845~~43,003 common shares for minimum tax withholding settlements on equity compensation. These purchases do not
count against the maximum value of shares remaining available for purchase under the Board of Directors' authorization.

(b) At ~~March 31,~~June 30, 2022, there remained $80 million authorized to be repurchased in the aggregate. Approximately ~~3.5~~4.4 million shares of common stock remained available to be
repurchased under this Board authorization given the closing share price on ~~March 31,~~June 30, 2022.

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

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ITEM 6.			Exhibits

(a) Exhibits:


Exhibit (10.1), Offer Letter Agreement between Associated Banc-Corp and Derek Meyer, dated May 27, 2022, incorporated by reference to E xhibit 10.1 of the Company's Current Report on Form 8-K dated June 15, 2022.
Exhibit (10.2), Offer Letter Agreement between Associated Banc-Corp and Bryan Carson, dated May 31, 2022.
Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by Andrew J. Harmening, Chief Executive Officer.
Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by 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.
Exhibit (104), The cover page from the Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2022 has been formatted in Inline XBRL (Inline Extensible Business Reporting Language) and contained in Exhibits in 101.

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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: ~~April~~July 28, 2022						/s/ Andrew J. Harmening
						Andrew J. Harmening
						President and Chief Executive Officer

Date: ~~April~~July 28, 2022						/s/ Christopher J. Del Moral-Niles
						Christopher J. Del Moral-Niles
						Chief Financial Officer

Date: ~~April~~July 28, 2022						/s/ Tammy C. Stadler
						Tammy C. Stadler
						Chief Accounting Officer

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		Page
PART I. Financial Information

	Item 1. Financial Statements (Unaudited):	5

	Consolidated Balance Sheets	5

	Consolidated Statements of Income	6

	Consolidated Statements of Comprehensive Income	7

	Consolidated Statements of Changes in Stockholders’ Equity	8

	Consolidated Statements of Cash Flows	910

	Notes to Consolidated Financial Statements	1112

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	5051

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	7475

	Item 4. Controls and Procedures	7576

PART II. Other Information

	Item 1. Legal Proceedings	7677

	Item 1A. Risk Factors	7677

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7778

	Item 6. Exhibits	7879

	Signatures	7980