ASSOCIATED BANC-CORP
For the period ended Jun 30, 2024. Filed Jul 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 30, 2024
ASB$30.36-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 194 previous paragraphs and 208 current paragraphs.
137 unchanged; 49 reworded; 18 added; 5 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 22 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Back to table of contents
Current report
Income Statement Analysis
Current report
Net Interest Income
Current report
Table 2 Net Interest Income Analysis
Current report
•Mortgage banking, net decreased $6 million from the first six months of 2023, mainly driven by net valuation adjustments of the MSRs asset.
Current report
•Bank and corporate owned life insurance increased $2 million from the first six months of 2023, primarily driven by an increase in claims.
Current report
•Personnel expense increased $10 million from the first six months of 2023, primarily driven by increases in salary and incentive expense along with an increase in health insurance expense.
Current report
Noninterest income for the second quarter of 2024 was $65 million, effectively flat with the first quarter of 2024 (see Table 3).
Current report
Comparable Quarter Results
Current report
The Corporation reported net income of $116 million for the second quarter of 2024, compared to net income of $87 million for the second quarter of 2023, the increase primarily due to an income tax benefit booked during the second quarter of 2024. Net income available to common equity was $113 million for the second quarter of 2024, or $0.75 for basic earnings per common share and $0.74 for diluted earnings per common share. Comparatively, net income available to common equity for the second quarter of 2023 was $84 million, or $0.56 for both basic and diluted earnings per share (see Table 1).
Current report
Fully tax-equivalent net interest income for the second quarter of 2024 was $260 million, $2 million, or 1%, lower than the second quarter of 2023. The net interest margin between the comparable quarters was down 5 bp, to 2.75% in the second quarter of 2024. The decreases in net interest income and net interest margin were due to interest-bearing liability costs rising at a faster rate of growth than earning asset revenues as a result of deposit funding pressures. Average earning assets increased $428 million, or 1%, to $38.0 billion in the second quarter of 2024. Average loans increased $141 million, primarily driven by growth within auto finance and commercial lending, partially offset by a decrease in residential mortgage lending. On the funding side, average interest-bearing deposits increased $2.3 billion, or 9%, from the second quarter of 2023, due to increases in nearly all deposit categories, partially offset by a decrease in money market deposits. Average short and long-term funding decreased $896 million, or 19%, primarily driven by lower FHLB advances (see Table 2).
Current report
The provision for credit losses was $23 million for the second quarter of 2024, compared to a provision of $22 million for the second quarter of 2023 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.
Current report
Noninterest income for the second quarter of 2024 was $65 million, down approximately $384,000, or 1%, compared to the second quarter of 2023 (see Table 3).
Current report
Noninterest expense for the second quarter of 2024 was $196 million, up $5 million, or 3%, from the second quarter of 2023, driven primarily by increases in personnel and technology expense, partially offset by decreases in FDIC assessment and other expense (see Table 4).
Current report
The Corporation recognized an income tax benefit of $13 million for the second quarter of 2024, compared to an income tax expense of $24 millionfor the second quarter of 2023. See section Income Taxes for a more detailed discussion.
Current report
•Average loans decreased $245 million from the three months ended June 30, 2023, and decreased $165 million from the six months ended June 30, 2023, driven by a decrease in residential mortgage lending, partially offset by an increase in auto finance lending.
Current report
•Average deposits increased $254 million from the three months ended June 30, 2023, and increased $112 million from the six months ended June 30, 2023, driven by increases in time deposits and savings deposits, partially offset by decreases in noninterest-bearing demand deposits and money market deposits.
Current report
•Total revenue decreased $27 million from the three months ended June 30, 2023, and decreased $71 million from the six months ended June 30, 2023, primarily driven by increased interest expense.
Removed paragraphs (5)
Previous report
•Personnel expense increased $3 million from the first three months of 2023, largely as a result of increased fringe benefit expense.
Previous report
•FHLB advances were $1.3 billion at March 31, 2024, down $607 million, or 31%, from December 31, 2023, and down$3.7 billion, or 73%, from March 31, 2023. BTFP funding was $500 million at March 31, 2024, which was used to pay down FHLB advances during the quarter. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.
Previous report
Noninterest income for the first quarter of 2024 was $65 million, up $196 million from the fourth quarter of 2023, primarily due to one-time items related to the balance sheet repositioning announced in the fourth quarter of 2023 (see Table 3).
Previous report
dividends.
Previous report
•Total revenue decreased $45 million from the three months ended March 31, 2023, primarily driven by increased interest expense as a result of holding more brokered CDs and other short term funding.
Reworded paragraphs (49)
Previous wording
•Average loans of $29.4 billion increased $523 million, or 2%, from the first three months of 2023, driven primarily by increases in auto finance and real estate construction loans, partially offset by a decrease in residential mortgage loans.
Current wording
•Average loans of $29.5 billion increased $331 million, or 1%, from the first six months of 2023, driven primarily by increases in auto finance and commercial lending, partially offset by a decrease in residential mortgage lending.
Previous wording
•Average deposits of $33.3 billion increased $3.4 billion, or 11%, from the first three months of 2023, driven primarily by increases in brokered CDs and other time deposits, partially offset by decreases in noninterest bearing demand and money market deposits.
Current wording
•Average deposits of $32.9 billion increased $2.4 billion, or 8%, from the first six months of 2023, driven primarily by an increase in time deposits, partially offset by decreases in noninterest-bearing demand deposits and money market deposits.
Previous wording
•Net interest income of $258 million decreased $16 million, or 6%, from the first three months of 2023, and net interest margin was 2.79% compared to 3.07% for the first three months of 2023. The decreases in net interest income and net interest margin were driven by increases in interest bearing liabilities outpacing the increase in earning assets and higher costs associated with those interest bearing liabilities.
Current wording
•Net interest income of $514 million decreased $17 million, or 3%, from the first six months of 2023, and net interest margin was 2.77%, compared to 2.93% for the first six months of 2023. The decreases in net interest income and net interest margin were driven by increases in interest bearing liabilities outpacing the increase in earning assets and higher costs associated with those interest bearing liabilities.
Previous wording
•Provision for credit losses was $24 million, compared to a provision of $18 million for the first three months of 2023, driven by a mix of portfolio loan growth, nominal credit movement, and general macroeconomic trends.
Current wording
•Provision for credit losses was $47 million, compared to a provision of $40 million for the first six months of 2023, driven by nominal credit movement coupled with general macroeconomic trends.
Previous wording
•Noninterest income of $65 million increased $3 million, or 5%, from the first three months of 2023, driven by an increase in investment securities gains (losses), net primarily as a result of the sale of the Corporation's remaining Visa B shares in the first quarter of 2024, as well as higher wealth management fees.
Current wording
•Noninterest income of $130 million increased $3 million, or 2%, from the first six months of 2023, driven by an increase in investment securities gains (losses), net primarily as a result of the sale of the Corporation's remaining Visa B shares in the first quarter of 2024, higher wealth management fees, and an increase in bank and corporate owned life insurance claims. These increases were partially offset by a decrease in mortgage banking, net, as a result of net valuation adjustments of the MSRs asset.
Previous wording
•Noninterest expense of $198 million increased $10 million, or 5%, from the first three months of 2023, primarily driven by an increase in FDIC expense related to the special assessment.
Current wording
•Noninterest expense of $394 million increased $15 million, or 4%, from the first six months of 2023, primarily driven by increases in personnel, technology, and FDIC assessment expense, the latter due to the special assessment, partially offset by a decrease in other expense.
Previous wording
•Fully tax-equivalent net interest income and net interest income were $17 million, or 6%, and $16 million, or 6%, lower than the first three months of 2023, respectively. Since March 31, 2023, the Federal Reserve increased the federal funds target interest rate 50 bp, which contributed to the yield on earning assets increasing by 70 bp and the cost of interest-bearing liabilities increasing 107 bp from the first three months of 2023. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.
Current wording
•Fully tax-equivalent net interest income and net interest income were $20 million, or 4%, and $17 million, or 3%, lower than the first six months of 2023, respectively. Since June 30, 2023, the Federal Reserve increased the federal funds target interest rate 25 bp, which, in combination with the full impact of rate increases during the first six months of 2023 affecting 2024, contributed to the yield on earning assets increasing by 59 bp and the cost of interest-bearing liabilities increasing 80 bp from the first six months of 2023. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.
Previous wording
•Average loans increased $523 million, or 2%, from the first three months of 2023, and average investments and other short-term investments increased $492 million, or 6%, from the first three months of 2023.
Current wording
•Average loans increased $331 million, or 1%, from the first six months of 2023, and average investments and other short-term investments increased $389 million, or 5%, from the first six months of 2023.
Previous wording
• Average interest-bearing liabilities increased $2.5 billion, or 9%, compared to the first three months of 2023. Average interest-bearing deposits increased $4.9 billion, or 22%, from the first three months of 2023, primarily driven by increases in time deposits, interest-bearing demand deposits, network transaction deposits, and savings deposits, partially offset by a decrease in money market deposits. Average noninterest-bearing demand deposits decreased $1.5 billion, or 20%, versus the first three months of 2023. Average FHLB advances decreased $2.7 billion, or 64%, from the first three months of 2023, partially offset by an increase in other short-term funding related to utilizing the BTFP.
Current wording
• Average interest-bearing liabilities increased $2.0 billion, or 7%, compared to the first six months of 2023. Average interest-bearing deposits increased $3.6 billion, or 15%, from the first six months of 2023, primarily driven by increases in time deposits, interest-bearing demand deposits, savings deposits, and network transaction deposits, partially offset by a decrease in money market deposits. Average noninterest-bearing demand deposits decreased $1.2 billion, or 17%, versus the first six months of 2023. Average FHLB advances decreased $2.0 billion, or 51%, from the first six months of 2023, partially offset by an increase in other short-term funding related to the utilization of the BTFP.
Previous wording
•Wealth management fees increased $2 million from the first three months of 2023, mainly driven by increased assets under management.
Current wording
•Wealth management fees increased $4 million from the first six months of 2023, mainly driven by increased assets under management.
Previous wording
•Investment securities gains (losses), net increased $4 million from the first three months of 2023, as a result of the sale of the Corporation's remaining Visa B shares.
Current wording
•Investment securities gains (losses), net increased $4 million from the first six months of 2023, as a result of the sale of the Corporation's remaining Visa B shares.
Previous wording
•Technology expense increased $3 million from the first three months of 2023, driven by digital investments tied to our strategic initiatives.
Current wording
•Technology expense increased $6 million from the first six months of 2023, driven by digital investments tied to our strategic initiatives.
Previous wording
•FDIC expense increased $7 million from the first three months of 2023, primarily driven by the special assessment applied to the Corporation and other banks relating to the FDIC's increased estimated loss attributable to the protection of depositors at Silicon Valley Bank and Signature Bank.
Current wording
•FDIC expense increased $5 million from the first six months of 2023, primarily driven by the special assessment applied to the Bank relating to the FDIC's increased estimated loss attributable to the protection of depositors at Silicon Valley Bank and Signature Bank.
Previous wording
The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of $20 million for the three months ended March 31, 2024, compared to income tax expense of $27 million for the three months ended March 31, 2023. The Corporation's effective tax rate from continuing operations was 19.78% and 20.92% for the three months ended March 31, 2024, and 2023, respectively. The decreases in income tax expense and effective tax rate during the first three months of 2024 were primarily driven by a decrease in pretax income partially offset by an increase in nondeductible expenses. The Corporation expects a full year effective tax rate of 19 to 21%, assuming no change in the statutory corporate tax rate.
Current wording
The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of $7 million for the six months ended June 30, 2024, compared to income tax expense of $51 million for the six months ended June 30, 2023. The Corporation's effective tax rate from continuing operations was 3.59% and 21.08% for the six months ended June 30, 2024, and 2023, respectively. The decreases in income tax expense and lower effective tax rate during the first six months of 2024 were primarily due to the planned strategic reallocation of the investment portfolio and the 2024 adoption of a legal entity rationalization plan which results in the recognition of deferred tax benefits of approximately $33 million.
Previous wording
•At March 31, 2024, total assets were $41.1 billion, up $121 million from December 31, 2023, and up $435 million, or 1%, from March 31, 2023.
Current wording
•At June 30, 2024, total assets were $41.6 billion, up $608 million, or 1%, from December 31, 2023, and up $404 million, or 1%, from June 30, 2023.
Previous wording
•Interest bearing deposits in other financial institutions were $420 million at March 31, 2024, down $5 million, or 1%, from December 31, 2023, and down $91 million, or 18%, from March 31, 2023.
Current wording
•Interest bearing deposits in other financial institutions were $485 million at June 30, 2024, up $60 million, or 14%, from December 31, 2023, and up $294 million, or 154%, from June 30, 2023.
Previous wording
•AFS investment securities, at fair value were $3.7 billion at March 31, 2024, up $123 million, or 3%, from December 31, 2023, and up $343 million, or 10%, from March 31, 2023. HTM investment securities, net, at amortized cost were $3.8 billion at March 31, 2024, down $27 million, or 1%, from December 31, 2023, and down $134 million, or 3%, from March 31, 2023. Additionally, FHLB and Federal Reserve Bank stocks, at cost were $174 million, down $55 million, or 24%, from December 31, 2023 and down $157 million, or 48%, from March 31, 2023, as a result of the paydown of FHLB advances. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.
Current wording
•AFS investment securities, at fair value were $3.9 billion at June 30, 2024, up $312 million, or 9%, from December 31, 2023, and up $408 million, or 12%, from June 30, 2023. HTM investment securities, net, at amortized cost were $3.8 billion at June 30, 2024, down $61 million, or 2%, from December 31, 2023, and down $140 million, or 4%, from June 30, 2023. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.
Previous wording
•Loans of $29.5 billion at March 31, 2024 were up$278 million, or 1%, from December 31, 2023, and up$287 million, or 1%, from March 31, 2023. See Note 6 Loans of the notes to consolidated financial statements for additional details.
Current wording
•Loans of $29.6 billion at June 30, 2024 were up$402 million, or 1%, from December 31, 2023, and down$231 million, or 1%, from June 30, 2023. See Note 6 Loans of the notes to consolidated financial statements for additional details.
Previous wording
•At March 31, 2024, total deposits of $33.7 billion were up $267 million, or 1%, from December 31, 2023, and were up $3.4 billion, or 11%, from March 31, 2023. See section Deposits and Customer Funding for additional information on deposits.
Current wording
•At June 30, 2024, total deposits of $32.7 billion were down $755 million, or 2%, from December 31, 2023, and were up $677 million, or 2%, from June 30, 2023. See section Deposits and Customer Funding for additional information on deposits.
Previous wording
•Federal funds purchased and securities sold under agreements to repurchase were $266 million at March 31, 2024, down $61 million, or 19%, from December 31, 2023, and up $57 million, or 27%, from March 31, 2023. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.
Current wording
•FHLB advances were $2.7 billion at June 30, 2024, up $733 million, or 38%, from December 31, 2023, and down$958 million, or 26%, from June 30, 2023. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.
Previous wording
The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30 to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2023 and the first three months of 2024. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.
Current wording
The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30 to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2023 and the first six months of 2024. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.
Previous wording
At March 31, 2024, $19.6 billion, or 66%, of the loans outstanding and $16.5 billion, or 90%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.
Current wording
At June 30, 2024, $19.7 billion, or 66%, of the loans outstanding and $16.5 billion, or 90%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.
Previous wording
(b) 59% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).
Current wording
(b) 56% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).
Previous wording
•Total loans increased $278 million, or 1%, from December 31, 2023, and increased $287 million, or 1%, from March 31, 2023. The increase from December 31, 2023 was primarily due to growth in auto finance and commercial and business lending, partially offset by a decrease in CRE - investor lending. The increase from March 31, 2023 was driven by growth in auto finance and real estate construction lending, partially offset by a decrease in residential mortgage lending resulting from the Corporation's strategic initiatives. See also Note 6 Loans of the notes to consolidated financial statements for additional information on loans.
Current wording
•Total loans increased $402 million, or 1%, from December 31, 2023, and decreased $231 million, or 1%, from June 30, 2023. The increase from December 31, 2023 was primarily due to growth in auto finance and commercial and business lending, partially offset by a decrease in CRE - investor lending. The decrease from June 30, 2023 was driven by decreases in residential mortgage lending resulting from the Corporation's strategic initiatives and CRE - investor lending, partially offset by growth in auto finance and real estate construction lending. See also Note 6 Loans of the notes to consolidated financial statements for additional information on loans.
Previous wording
•Total nonaccrual loans increased $29 million, or 20%, from December 31, 2023, and increased $61 million, or 52%, from March 31, 2023. The increase from December 31, 2023 was driven by increases in nonaccrual loans within CRE-investor lending and commercial and industrial lending. The increase from March 31, 2023 was primarily due to increases in nonaccrual loans within commercial and industrial lending and residential mortgage lending, partially offset by a decrease in CRE-investor lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.
Current wording
•Total nonaccrual loans increased $5 million, or 4%, from December 31, 2023, and increased $23 million, or 18%, from June 30, 2023. The increase from December 31, 2023 was driven by an increase in nonaccrual loans within CRE - investor lending, partially offset by a decrease within commercial and industrial lending. The increase from June 30, 2023 was primarily due to increases in nonaccrual loans within CRE - investor, residential mortgage, and auto finance lending, partially offset by a decrease in commercial and industrial lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.
Previous wording
•YTD net charge offs increased $19 million from March 31, 2023, primarily driven by an increase in net charge offs within commercial and industrial lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.
Current wording
•YTD net charge offs increased $29 million from June 30, 2023, primarily driven by an increase in net charge offs within commercial and industrial lending and CRE - investor lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.
Previous wording
•Total deposits, which are the Corporation's largest source of funds, increased $267 million, or 1%, from December 31, 2023, and increased $3.4 billion, or 11%, from March 31, 2023, the latter primarily due to increases in brokered CDs, interest-bearing demand, other time deposits, network transaction deposits and savings, partially offset by decreases in money market and noninterest-bearing demand.
Current wording
•Total deposits, which are the Corporation's largest source of funds, decreased $755 million, or 2%, from December 31, 2023, and increased $677 million, or 2%, from June 30, 2023. The decrease was largely driven by decreases in interest-bearing demand, brokered CDs, and noninterest-bearing demand, partially offset by increases in savings and other time deposits, while the increase was driven by interest-bearing demand, other time deposits, and savings, partially offset by decreases in money market and noninterest-bearing demand.
Previous wording
•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 22.9% of total deposits at March 31, 2024, compared to 22.7% at December 31, 2023 and 26.2% at March 31, 2023.
Current wording
•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 21.9% of total deposits at June 30, 2024, compared to 22.7% at December 31, 2023 and 22.1% at June 30, 2023.
Previous wording
•Lines of credit with the Federal Reserve Bank and FHLB, which require eligible loan and investment collateral to be pledged. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of March 31, 2024, the Bank had $7.0 billion available for future funding. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of March 31, 2024, the Bank had $1.4 billion available for discount window borrowings.
Current wording
•Lines of credit with the Federal Reserve Bank and FHLB, which require eligible loan and investment collateral to be pledged. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of June 30, 2024, the Bank had $5.2 billion available for future funding. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of June 30, 2024, the Bank had $2.3 billion available for discount window borrowings.
Previous wording
For the three months ended March 31, 2024, net cash provided by operating and financing activities was $155 million and $49 million, respectively, while net cash used in investing activities was $275 million, for a net decrease in cash and cash equivalents of $72 million since year-end 2023. At March 31, 2024, assets of $41.1 billion increased $121 million from year-end 2023. On the funding side, deposits of $33.7 billion increased $267 million, or 1%, from year-end 2023, short-term funding increased $439 million, or 134%, and FHLB advances decreased $607 million, or 31%.
Current wording
For the six months ended June 30, 2024, net cash provided by operating and financing activities was $268 million and $422 million, respectively, while net cash used in investing activities was $655 million, for a net increase in cash and cash equivalents of $35 million since year-end 2023. At June 30, 2024, assets of $41.6 billion increased $608 million, or 1%, from year-end 2023, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $32.7 billion decreased $755 million, or 2%, from year-end 2023, short-term funding increased $533 million, or 163%, and FHLB advances increased $733 million, or 38%.
Previous wording
For the three months ended March 31, 2023, net cash provided by operating and financing activities was $47 million and $1.2 billion, respectively, while net cash used in investing activities was $1.1 billion, for a net increase in cash and cash equivalents of $201 million since year-end 2022. At March 31, 2023, assets of $40.7 billion increased $1.3 billion, or 3%, from year-end 2022, primarily due to increases in AFS Securities, loan growth and cash balances. On the funding side, deposits of $30.3 billion increased $696 million, or 2%, from year-end 2022, FHLB advances increased $666 million, or 15%, and other long-term funding increased $296 million, or 119%, the latter due to the issuance of subordinated debt.
Current wording
For the six months ended June 30, 2023, net cash provided by operating and financing activities was $179 million and $1.6 billion, respectively, while net cash used in investing activities was $1.8 billion, for a net increase in cash and cash equivalents of $8 million since year-end 2022. At June 30, 2023, assets of $41.2 billion increased $1.8 billion, or 5%, from year-end 2022, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $32.0 billion increased $2.4 billion, or 8%, from year-end 2022, FHLB advances decreased $689 million, or 16%, and other long-term funding increased $286 million, or 115%, the latter due to the issuance of subordinated debt.
Previous wording
While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact. No EAR breaches occurred during the first three months of 2024.
Current wording
While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact. No EAR breaches occurred during the first six months of 2024.
Previous wording
Since MVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in MVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, MVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changes in product spreads that could mitigate the adverse impact of changes in interest rates. The MVE measure in the 200 bp increase in interest rates scenario is outside of the policy limit, which has been reported to the Corporation's Board.
Current wording
Since MVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in MVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, MVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changes in product spreads that could mitigate the adverse impact of changes in interest rates. The MVE measures in the 100 bp and 200 bp increase in interest rates scenarios are both outside of policy limits, which have been reported to the Corporation's Board.
Previous wording
See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the first quarter of 2024.
Current wording
See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the second quarter of 2024.
Previous wording
The Corporation reported net income of $81 million for the first quarter of 2024, compared to net loss of $91 million for the fourth quarter of 2023, due to the balance sheet repositioning executed in the fourth quarter of 2023. Net income available to common equity was $78 million for the first quarter of 2024, or $0.52 for both basic and diluted earnings per common share. Comparatively, net loss available to common equity for the fourth quarter of 2023 was $94 million, or a loss of $0.63 for basic and $0.62 for diluted earnings per common share (see Table 1).
Current wording
The Corporation reported net income of $116 million for the second quarter of 2024, compared to net income of $81 million for the first quarter of 2024, the increase primarily due to an income tax benefit booked during the second quarter of 2024. Net income available to common equity was $113 million for the second quarter of 2024, or $0.75 for basic earnings per common share and $0.74 for diluted earnings per common share. Comparatively, net income available to common equity for the first quarter of 2024 was $78 million, or $0.52 for both basic and diluted earnings per common share (see Table 1).
Previous wording
Fully tax-equivalent net interest income for the first quarter of 2024 was $262 million, $4 million, or 1%, higher than the fourth quarter of 2023. The net interest margin in the first quarter of 2024 was up 10 bp to 2.79%. The increases in net interest income and net interest margin were due to a full quarter of benefit from the balance sheet repositioning announced during the fourth quarter of 2023. Average earning assets decreased $678 million, or 2%, to $37.6 billion in the first quarter of 2024. Average loans decreased $583 million, or 2%, driven primarily by a decrease in residential mortgages and partially offset by growth in auto finance. On the funding side, average total interest-bearing deposits increased $1.4 billion, or 5%, due to increases in time deposits, interest-bearing demand, savings, and network transaction deposits, partially offset by a decrease in money market. Average FHLB advances decreased $1.9 billion, or 56%, due to deposit growth, paydowns with the proceeds of the mortgage portfolio sale in the fourth quarter of 2023, and the utilization of the BTFP (see Table 2).
Current wording
Fully tax-equivalent net interest income for the second quarter of 2024 was $260 million, $1 million lower than the first quarter of 2024. The net interest margin in the second quarter of 2024 was down 4 bp to 2.75%. Average earning assets increased $401 million, or 1%, to $38.0 billion in the second quarter of 2024. Average loans increased $211 million, or 1%, primarily driven by growth within the commercial and business lending and auto finance portfolios. On the funding side, average total interest-bearing deposits decreased $468 million, or 2%, driven by decreases in time deposits, interest-bearing demand deposits and money market deposits, partially offset by an increase in savings account balances. Average FHLB advances increased $892 million, or 58%, largely due to the decrease in average deposits (see Table 2).
Previous wording
The provision for credit losses was $24 million for the first quarter of 2024 and $21 million for the fourth quarter of 2023 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.
Current wording
The provision for credit losses was $23 million for the second quarter of 2024 and $24 million for the first quarter of 2024 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.
Previous wording
Noninterest expense for the first quarter of 2024 was $198 million, down $42 million, or 17%, from the fourth quarter of 2023, driven primarily by the FDIC special assessment (see Table 4).
Current wording
Noninterest expense for the second quarter of 2024 was $196 million, down $2 million, or 1%, from the first quarter of 2024, driven primarily by the FDIC special assessment in the first quarter of 2024, partially offset by increases in personnel, other, and business development and advertising expense (see Table 4).
Previous wording
For the first quarter of 2024, the Corporation recognized income tax expense of $20 million, compared to income tax benefit of $47 million for the fourth quarter of 2023. See section Income Taxes for a detailed discussion on income taxes.
Current wording
For the second quarter of 2024, the Corporation recognized an income tax benefit of $13 million, compared to income tax expense of $20 million for the first quarter of 2024. See section Income Taxes for a more detailed discussion.
Previous wording
(a) The Federal Reserve establishes capital adequacy requirements for the Corporation, including CET1. For segment reporting purposes, the ROCET1 reflects return on average allocated CET1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock
Current wording
(a) The Federal Reserve establishes capital adequacy requirements for the Corporation, including CET1. For segment reporting purposes, the ROCET1 reflects return on average allocated CET1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends.
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(b) Nonaccrual loans and loans held for sale have been included in the average balances.
Current report — wording carried from elsewhere
(c) Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
Current report — wording carried from elsewhere
(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 Corporations capital with the capital of other financial services companies.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
(a) The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain
Previous report — wording carried elsewhere
transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor, and compare the quality and
Previous report — wording carried elsewhere
composition of the Corporation's capital with the capital of other financial services companies.