ASSOCIATED BANC-CORP

Previous 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.

Current wording

•Average loans of $29.5 billion increased $135 million from the first nine months of 2023, driven primarily by increases in auto finance and commercial lending, partially offset by a decrease in residential mortgage lending resulting from the Corporation's balance sheet repositioning.

Previous 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.

Current wording

•Net interest income of $777 million decreased $9 million, or 1%, from the first nine months of 2023, and net interest margin was 2.77%, compared to 2.86% for the first nine months of 2023. The decreases in net interest income and net interest margin were driven by the growth of interest bearing liabilities outpacing the growth of earning assets, paired with a smaller rate spread.

Previous 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.

Current wording

•Provision for credit losses was $68 million, compared to a provision of $62 million for the first nine months of 2023, driven by nominal credit movement coupled with general macroeconomic trends.

Previous 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.

Current wording

•Noninterest income of $197 million increased $3 million, or 2%, from the first nine months of 2023, driven by higher wealth management fees, an increase in bank and corporate owned life insurance, and an increase in investment securities gains (losses), net, the latter resulting from the sale of the Corporation's remaining Visa B shares in the first quarter of 2024. These increases were partially offset by a decrease in mortgage banking, net, as a result of net valuation adjustments of the MSRs asset.

Previous 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.

Current wording

•Noninterest expense of $594 million increased $20 million, or 3%, from the first nine months of 2023, primarily driven by increases in personnel, technology, and FDIC assessment expense, the latter due to the special assessment, partially offset by decreases in other expense and occupancy expense.

Previous 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.

Current wording

•Fully tax-equivalent net interest income and net interest income were $12 million, or 2%, and $9 million, or 1%, lower than the first nine months of 2023, respectively. The elevated interest rate environment has resulted in the yield on earning assets increasing by 49 bp and the cost of interest-bearing liabilities increasing 60 bp from the first nine months of 2023. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.

Previous 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.

Current wording

•Average loans increased $135 million from the first nine months of 2023, and average investments and other short-term investments increased $381 million, or 5%, from the first nine months of 2023.

Previous 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.

Current wording

• Average interest-bearing liabilities increased $1.6 billion, or 6%, compared to the first nine months of 2023. Average interest-bearing deposits increased $3.0 billion, or 13%, from the first nine months of 2023, primarily driven by increases in time deposits, interest-bearing demand deposits, savings deposits, and network transaction deposits, partially offset by a decrease in money market deposits. Average total short and long-term funding decreased $1.4 billion, or 31%, from the first nine months of 2023, primarily driven by a decrease in FHLB advances of $1.9 billion, or 50%, partially offset by an increase in other short-term funding related to the utilization of the BTFP. Average noninterest-bearing demand deposits decreased $1.0 billion, or 15%, versus the first nine months of 2023.

Previous wording

•Wealth management fees increased $4 million from the first six months of 2023, mainly driven by increased assets under management.

Current wording

•Wealth management fees increased $7 million from the first nine months of 2023, mainly driven by increased assets under management.

Previous wording

•Mortgage banking, net decreased $6 million from the first six months of 2023, mainly driven by net valuation adjustments of the MSRs asset.

Current wording

•Mortgage banking, net, decreased $11 million from the first nine months of 2023, mainly driven by net valuation adjustments of the MSRs asset.

Previous wording

•Bank and corporate owned life insurance increased $2 million from the first six months of 2023, primarily driven by an increase in claims.

Current wording

•Bank and corporate owned life insurance increased $4 million from the first nine months of 2023, driven by net favorable valuation changes on policies and an increased number of claims.

Previous 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.

Current wording

•Investment securities gains (losses), net, increased $4 million from the first nine months of 2023, as a result of the sale of the Corporation's remaining Visa B shares.

Previous 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.

Current wording

•FDIC expense increased $4 million from the first nine months of 2023, primarily driven by adjustments to the FDIC's special assessment applied to the Bank.

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 $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.

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 $27 million for the nine months ended September 30, 2024, compared to income tax expense of $70 million for the nine months ended September 30, 2023. The Corporation's effective tax rate from continuing operations was 8.79% and 20.43% for the nine months ended September 30, 2024, and 2023, respectively. The decreases in income tax expense and lower effective tax rate during the first nine months of 2024 were primarily due to a strategic reallocation of the investment portfolio and adoption of a legal entity rationalization plan that resulted in the recognition of deferred tax benefits of approximately $33 million.

Previous 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.

Current wording

•At September 30, 2024, total assets were $42.2 billion, up $1.2 billion, or 3%, from December 31, 2023, and up $573 million, or 1%, from September 30, 2023.

Previous 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.

Current wording

•Interest bearing deposits in other financial institutions were $408 million at September 30, 2024, down $17 million, or 4%, from December 31, 2023, and up $85 million, or 26%, from September 30, 2023.

Previous 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.

Current wording

•AFS investment securities, at fair value were $4.2 billion at September 30, 2024, up $552 million, or 15%, from December 31, 2023, and up $661 million, or 19%, from September 30, 2023. HTM investment securities, net, at amortized cost were $3.8 billion at September 30, 2024, down $91 million, or 2%, from December 31, 2023, and down $131 million, or 3%, from September 30, 2023. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.

Previous 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.

Current wording

•Loans of $30.0 billion at September 30, 2024 were up$775 million, or 3%, from December 31, 2023, and down$202 million, or 1%, from September 30, 2023. See Note 6 Loans of the notes to consolidated financial statements for additional details.

Previous 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.

Current wording

•At September 30, 2024, total deposits of $33.6 billion were up $108 million from December 31, 2023, and were up $1.4 billion, or 4%, from September 30, 2023. See section Deposits and Customer Funding for additional information on deposits.

Previous 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.

Current wording

•FHLB advances were $1.9 billion at September 30, 2024, down $27 million, or 1%, from December 31, 2023, and down$1.8 billion, or 49%, from September 30, 2023. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

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 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.

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 nine months of 2024. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

Previous 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.

Current wording

At September 30, 2024, $19.8 billion, or 66%, of the loans outstanding and $16.6 billion, or 89%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

Previous wording

(b) 56% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Current wording

(b) 55% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Previous wording

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 16 states throughout the Northeast, Mid-Atlantic, and Midwestern United States. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to the Corporation pursuant to dealer agreements. The Corporation’s underwriting and pricing guidelines are based on a dual risk grade derived from a combination of FICO auto score and proprietary internal custom score. Minimum grade and FICO score standards ensure the credit risk is appropriately managed to the Corporation’s risk appetite. Further, the grade influences loan-specific parameters such as vehicle age, term, LTV, loan amount, mileage, payment and debt service thresholds, and pricing. Maximum loan terms offered are 84 months on select grades with vehicle age, mileage, and other limitations in place to qualify. The program is designed to capture primarily prime and super prime contracts. Over time, the Corporation expects roughly 60% of originations to be secured by used vehicles.

Current wording

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 16 states throughout the Northeast, Mid-Atlantic, and Midwestern United States. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to the Corporation pursuant to dealer agreements. The Corporation’s underwriting and pricing guidelines are based on a dual risk grade derived from a combination of FICO auto score and proprietary internal custom score. Minimum grade and FICO score standards ensure the credit risk is appropriately managed to the Corporation’s risk appetite. Further, the grade influences loan-specific parameters such as vehicle age, term, LTV, loan amount, mileage, payment and debt service thresholds, and pricing. Maximum loan terms offered are 84 months on select grades with vehicle age, mileage, and other limitations in place to qualify. The program is designed to capture primarily prime and super prime contracts, with approximately 60% of originations typically secured by used vehicles.

Previous 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.

Current wording

•Total loans increased $775 million, or 3%, from December 31, 2023, and decreased $202 million, or 1%, from September 30, 2023. The increase from December 31, 2023 was primarily due to growth in commercial and industrial lending and auto finance, partially offset by a decrease in real estate construction lending. The decrease from September 30, 2023 was driven by decreases in residential mortgage lending resulting from the Corporation's balance sheet repositioning and CRE - investor lending, partially offset by growth in auto finance and commercial and industrial lending. See also Note 6 Loans of the notes to consolidated financial statements for additional information on loans.

Previous 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.

Current wording

•Total nonaccrual loans decreased $21 million, or 14%, from December 31, 2023, and decreased $40 million, or 24%, from September 30, 2023. The decreases from both December 31, 2023 and September 30, 2023 were driven by decreases in nonaccrual loans within commercial and industrial lending, partially offset by increases within CRE - investor lending and CRE - owner occupied lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

Previous 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.

Current wording

•YTD net charge offs increased $23 million from September 30, 2023, primarily driven by increases within commercial and industrial lending and CRE - investor lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Previous 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.

Current wording

•Total deposits, which are the Corporation's largest source of funds, increased $108 million from December 31, 2023, and increased $1.4 billion, or 4%, from September 30, 2023. The increase from September 30, 2023 was largely driven by increases in interest-bearing demand, other time deposits and brokered CDs, partially offset by decreases in money market and noninterest-bearing demand deposits.

Previous 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.

Current wording

•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 22.3% of total deposits at September 30, 2024, compared to 22.7% at December 31, 2023 and 22.6% at September 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 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.

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 September 30, 2024, the Bank had $6.2 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 September 30, 2024, the Bank had $3.0 billion available for discount window borrowings.

Previous 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%.

Current wording

For the nine months ended September 30, 2024, net cash provided by operating and financing activities was $373 million and $843 million, respectively, while net cash used in investing activities was $1.2 billion, for a net increase in cash and cash equivalents of $43 million since year-end 2023. At September 30, 2024, assets of $42.2 billion increased $1.2 billion, or 3%, from year-end 2023, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $33.6 billion increased $108 million from year-end 2023, short-term funding increased $590 million, or 181%, and other long-term funding increased $303 million, or 56%, the latter primarily driven by the Corporation's issuance of senior notes in August 2024.

Previous 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.

Current wording

For the nine months ended September 30, 2023, net cash provided by operating and financing activities was $378 million and $1.9 billion, respectively, while net cash used in investing activities was $2.2 billion, for a net increase in cash and cash equivalents of $91 million since year-end 2022. At September 30, 2023, assets of $41.6 billion increased $2.2 billion, or 6%, from year-end 2022, primarily due to loan growth and increases in AFS securities. On the funding side, deposits of $32.1 billion increased $2.5 billion, or 8%, from year-end 2022, FHLB advances decreased $587 million, or 14%, while other long-term funding increased $281 million, or 113%, the latter due to the issuance of subordinated debt.

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 six 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 nine 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 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.

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 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.

Previous 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.

Current wording

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the third quarter of 2024.

Previous wording

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 wording

The Corporation reported net income of $88 million for the third quarter of 2024, compared to net income of $116 million for the second quarter of 2024, the decrease primarily due to an income tax benefit recorded during the second quarter of 2024. Net income available to common equity was $85 million for the third quarter of 2024, or $0.56 for both basic and diluted earnings per common share. Comparatively, net income available to common equity for the second quarter of 2024 was $113 million, or $0.75 for basic earnings per common share and $0.74 for diluted earnings per common share (see Table 1).

Previous 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).

Current wording

Fully tax-equivalent net interest income for the third quarter of 2024 was $266 million, $6 million, or 2%, higher than the second quarter of 2024. The net interest margin in the third quarter of 2024 was up 3 bp to 2.78%. Average earning assets increased $193 million, or 1%, to $38.2 billion in the third quarter of 2024. Average loans increased $55 million, primarily driven by growth within the auto finance portfolio, partially offset by a decrease in commercial lending. On the funding side, average total interest-bearing deposits increased $751 million, or 3%, driven primarily by increases in time deposits and interest-bearing demand deposits, partially offset by a decrease in money market deposits. Average FHLB advances decreased $682 million, or 28%, largely due to the increase in average deposits (see Table 2).

Previous 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.

Current wording

The provision for credit losses was $21 million for the third quarter of 2024 and $23 million for the second quarter of 2024 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Previous wording

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 wording

Noninterest expense for the third quarter of 2024 was $201 million, up $5 million, or 2%, from the second quarter of 2024, driven primarily by an increase in other expense (see Table 4).

Previous 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.

Current wording

For the third quarter of 2024, the Corporation recognized income tax expense of $20 million, compared to an income tax benefit of $13 million for the second quarter of 2024. See section Income Taxes for a more detailed discussion.