ASSOCIATED BANC-CORP

Previous wording

•Diluted earnings per common share of $1.13 in 2023 decreased $1.21, or 52%, from 2022, mainly as a result of one-time items related to the balance sheet repositioning the Corporation announced in the fourth quarter of 2023 and the FDIC special assessment.

Current wording

•Diluted earnings per common share of $0.72 in 2024 decreased $0.41, or 36%, from 2023, mainly as a result of nonrecurring items related to the balance sheet repositioning the Corporation announced in the fourth quarter of 2024 in addition to the issuance of 13.8 million common shares during the fourth quarter of 2024.

Previous wording

•Average loans of $29.5 billion for the full year of 2023 increased $3.3 billion, or 13%, from a year ago, driven by increases in all major loan categories. For 2024, the Corporation expects period end loan growth of 4% to 6%.

Current wording

•Average loans of $29.7 billion for the full year of 2024 increased $163 million, or 1%, from a year ago, driven by increases in auto finance and commercial and business lending, partially offset by a decrease in residential mortgage.

Previous wording

•Average deposits of $31.3 billion for the full year of 2023 increased $2.6 billion, or 9%, from a year ago, driven by increases in time deposits, network transaction deposits, interest-bearing demand deposits, and savings deposits, partially offset by decreases in noninterest-bearing demand deposits and money market deposits. For 2024, the Corporation expects period end core customer deposit growth of 3% to 5%.

Current wording

•Average deposits of $33.4 billion for the full year of 2024 increased $2.0 billion, or 7%, from a year ago, driven by increases in time deposits, interest-bearing demand deposits, savings deposits, and network transaction deposits, partially offset by decreases in noninterest-bearing demand deposits and money market deposits.

Previous wording

•Net interest income of $1.0 billion in 2023 increased $82 million, or 9%, from 2022. Net interest margin of 2.81% in 2023 decreased 10 bp from 2.91% in 2022. The increase in net interest income was driven by growth of earning assets while margin compressed as a result of a shift in mix within deposits into higher cost funding from noninterest-bearing demand deposits. For 2024, the Corporation expects net interest income growth of 2% to 4%.

Current wording

•Net interest income of $1.0 billion in 2024 increased $8 million, or 1%, from 2023. Net interest margin of 2.78% in 2024 decreased 3 bp from 2.81% in 2023. The increase in net interest income was driven by growth of earning assets while margin compressed as a result of a shift in mix within deposits into higher cost funding from noninterest-bearing demand deposits.

Previous wording

Interest rate spread and net interest margin are utilized to measure and explain changes in net interest income. Interest rate spread is the difference between the yield on earning assets and the rate paid on interest-bearing liabilities that fund those assets. The net interest margin is expressed as the percentage of net interest income to average earning assets. The net interest margin exceeds the interest rate spread because net free funds, principally noninterest-bearing demand deposits and stockholders’ equity, also support earning assets. To compare tax-exempt asset yields to taxable yields, the yield on tax-exempt loans and investment securities is computed on a fully tax-equivalent basis. Net interest income, interest rate spread, and net interest margin are discussed on a fully tax-equivalent basis.

Current wording

The net interest margin is expressed as the percentage of net interest income to average earning assets. The net interest margin exceeds the interest rate spread because net free funds, principally noninterest-bearing demand deposits and stockholders’ equity, also support earning assets. To compare tax-exempt asset yields to taxable yields, the yield on tax-exempt loans and investment securities is computed on a fully tax-equivalent basis. Net interest income, interest rate spread, and net interest margin are discussed on a fully tax-equivalent basis.

Previous wording

•Fully tax-equivalent net interest income and net interest income were both up $82 million, or 8% and 9%, respectively, compared to 2022. Average loans increased $3.3 billion, or 13%, and average investments and other short-term investments increased $744 million, or 10%, compared to 2022. The increase in net interest income was driven by a higher federal funds target rate combined with growth in all major loan categories. Since December 31, 2022, the Federal Reserve increased the federal funds target interest rate 100 bp, which contributed to the yield on earning assets increasing by 178 bp. 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 was up $3 million and net interest income was up $8 million, or 1%, compared to 2023. The higher overall rate environment has resulted in higher yields on earnings assets, which combined with the mix shift from lower to higher yielding earning asset classes, resulted in the yield on earning assets increasing by 36 bp compared to 2023, while the cost of interest-bearing liabilities increased 38 bp from 2023, largely due to an increase in higher cost average time deposits. 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 interest-bearing liabilities increased $5.3 billion, or 22%, compared to 2022. Average interest-bearing deposits increased $4.1 billion, or 20%, compared to 2022, primarily driven by increases in time deposits, network transaction deposits, interest-bearing demand deposits, and savings deposits, partially offset by a decrease in money market deposits. Average noninterest-bearing demand deposits decreased $1.5 billion, or 19%, compared to 2022. Average FHLB advances increased $957 million, or 34%, to fund balance sheet growth. The cost of interest-bearing liabilities increased 235 bp from 2022.

Current wording

•Average interest-bearing liabilities increased $1.4 billion, or 5%, compared to 2023. Average interest-bearing deposits increased $2.9 billion, or 12%, compared to 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 $1.5 billion, or 32%, from 2023, primarily driven by a decrease in FHLB advances of $1.9 billion, or 52%, as a result of using brokered CDs to pay down higher interest sources of funding, partially offset by an increase of $395 million in other short-term funding related to the utilization of the BTFP. Average noninterest-bearing demand deposits decreased $875 million, or 13%, compared to 2023.

Previous wording

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 December 31, 2023 was the Moody's baseline scenario from November 2023, which was reviewed against the December 2023 baseline scenario with no material updates made, 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.

Current wording

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 December 31, 2024 was the Moody's baseline scenario from November 2024, which was reviewed against the December 2024 baseline scenario with no material updates made, over a two-year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. See additional discussion under the sections titled Loans, Credit Risk, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Previous wording

•The one-time 2023 loss on the mortgage portfolio sale was the result of a sale of $969 million of residential mortgages, related to the balance sheet repositioning announced in the fourth quarter of 2023, the net proceeds which were used to pay down higher cost funding.

Current wording

•The 2024 loss on the mortgage portfolio sale was the result of an announced sale of $723 million of residential mortgages related to the balance sheet repositioning in the fourth quarter of 2024 and the sale closed in January 2025.

Previous wording

•Investment securities gains (losses), net decreased from 2022, driven primarily by the sale of lower yielding AFS securities with a carrying value of $715 million at a net loss of $65 million, related to the balance sheet repositioning announced in the fourth quarter of 2023, in order to reinvest in higher yielding and lower risk-weighted GNMA securities.

Current wording

•Investment securities (losses) gains, net decreased from 2023, driven primarily by the sale of lower yielding AFS securities with a carrying value of $1.1 billion at a net loss of $148 million, related to the balance sheet repositioning in the fourth quarter of 2024.

Previous wording

•FDIC assessment expense increased from 2022, primarily driven by a one-time assessment of $31 million resulting from the special assessment pursuant to systemic risk incurred by the FDIC on member banks as a result of the bank failures in the first quarter of 2023 and higher assessment rates for 2023.

Current wording

•FDIC assessment expense decreased from 2023, primarily driven by a one-time expense of $31 million in 2023, resulting from the special assessment pursuant to systemic risk incurred by the FDIC on member banks as a result of the bank failures in the first quarter of 2023, partially offset by subsequent adjustments to the special assessment during 2024.

Previous wording

The Corporation recognized income tax expense of $23 million for 2023, compared to income tax expense of $94 million for 2022. The Corporation's effective tax rate was 11.21% for 2023, compared to an effective tax rate of 20.34% for 2022. The decrease in income tax expense during 2023 was primarily driven by a decrease in income before taxes in 2023. The decrease in the effective tax rate during 2023 was primarily driven by a decrease in state tax expense and the effect of tax exempt interest.

Current wording

The Corporation recognized income tax expense of $11 million for 2024, compared to income tax expense of $23 million for 2023. The Corporation's effective tax rate was 8.41% for 2024, compared to an effective tax rate of 11.21% for 2023. The decrease in income tax expense and lower effective tax rate during 2024 were primarily due to a strategic reallocation of the investment portfolio and the adoption of a legal entity rationalization plan that resulted in the recognition of deferred tax benefits of $35 million, partially offset by a deferred tax asset valuation allowance of $33 million related to certain capital loss carryovers.

Previous wording

•Interest-bearing deposits in other financial institutions were $425 million at December 31, 2023, up $268 million, or 171%, from December 31, 2022. AFS investment securities, at fair value increased $859 million, or 31%, to $3.6 billion, while HTM investment securities, net, at amortized cost decreased by $100 million, or 3%, to $3.9 billion. See section Investment Securities Portfolio and Note 3 Investment Securities of the notes to consolidated financial statements for additional information on the Corporation's portfolio of investment securities.

Current wording

•AFS investment securities, at fair value increased $981 million, or 27%, to $4.6 billion, while HTM investment securities, net, at amortized cost decreased by $121 million, or 3%, to $3.7 billion. See section Investment Securities Portfolio and Note 2 Investment Securities of the notes to consolidated financial statements for additional information on the Corporation's portfolio of investment securities.

Previous wording

•At December 31, 2023, total loans were $29.2 billion, up $417 million, or 1%, from December 31, 2022, due to increases of $874 million, or 63%, in auto finance and $160 million, or 2%, in CRE lending, partially offset by a decrease of $647 million, or 8%, in residential mortgages as a result of a one-time mortgage portfolio sale related to the balance sheet repositioning announced in the fourth quarter of 2023. See section Loans and Note 4 Loans of the notes to consolidated financial statements for additional information on loans.

Current wording

•At December 31, 2024, total loans were $29.8 billion, up $552 million, or 2%, from December 31, 2023, primarily due to increases of $924 million, or 9%, in commercial and business lending and $554 million, or 25%, in auto finance, partially offset by a decrease of $817 million, or 10%, in residential mortgage as a result of a nonrecurring mortgage portfolio sale related to the balance sheet repositioning announced in the fourth quarter of 2024 and the sale closed in January 2025, which was the primary driver of a $614 million increase in residential loans held for sale, and a decrease of $185 million, or 3%, in CRE lending. See section Loans and Note 3 Loans of the notes to consolidated financial statements for additional information on loans.

Previous wording

•At December 31, 2023, total deposits of $33.4 billion were up $3.8 billion, or 13%, from December 31, 2022, driven by increases in brokered CDs of $3.9 billion and interest-bearing demand deposits of $1.7 billion, or 25%, partially offset by decreases in money market deposits of $1.9 billion, or 23%, and noninterest-bearing demand deposits of $1.6 billion, or 21%. See section Deposits and Customer Funding and Note 8 Deposits of the notes to consolidated financial statements for additional information on deposits.

Current wording

•At December 31, 2024, total deposits of $34.6 billion were up $1.2 billion, or 4%, from December 31, 2023, driven by increases in other time deposits of $832 million, or 29%, money market of $307 million, or 5%, savings of $298 million, or 6%, and interest-bearing demand of $281 million, or 3%, partially offset by decreases in noninterest-bearing demand of $344 million, or 6%, and brokered CDs of $171 million, or 4%. See section Deposits and Customer Funding and Note 7 Deposits of the notes to consolidated financial statements for additional information on deposits.

Previous wording

•At December 31, 2023, FHLB advances of $1.9 billion were down $2.4 billion, or 55%, from December 31, 2022, and securities sold under agreements to repurchase of $327 million were down $258 million, or 44%, as proceeds from the issuance of brokered deposits and the balance sheet repositioning were used to pay down the advances. Additionally, other long-term funding of $541 million was up $293 million, or 118%, as a result of the issuance of subordinated debt. See section Other Funding Sources and Note 9 Short and Long-Term Funding of the notes to consolidated financial statements for additional details on funding.

Current wording

•At December 31, 2024, other long-term funding of $838 million was up $296 million, or 55%, as a result of the issuance of senior debt. See section Other Funding Sources and Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details on funding.

Previous wording

During the fourth quarter of 2023, the Corporation completed a one-time mortgage portfolio sale of $969 million of residential mortgages sold at a loss of $136 million related to the balance sheet repositioning. The proceeds of this sale were used to pay down higher cost funding and increase liquidity capacity.

Current wording

During the fourth quarter of 2023, the Corporation completed a mortgage portfolio sale of $969 million of residential mortgages sold at a loss of $136 million related to the balance sheet repositioning announced during the fourth quarter of 2023. The proceeds of this sale were used to pay down higher cost funding and increase liquidity capacity.

Previous wording

At December 31, 2023, $19.5 billion, or 67%, of the total loans outstanding and $16.4 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 December 31, 2024, $20.0 billion, or 67%, of the total loans outstanding and $16.9 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

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

Current wording

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

Previous wording

(b) 58% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Current wording

(b) 59% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Previous wording

Residential mortgages: Residential mortgage loans are primarily first lien home mortgages with a maximum loan-to-collateral value without credit enhancement (e.g., private mortgage insurance) of 80%. The residential mortgage portfolio is focused primarily in the Corporation's three-state branch footprint, with approximately 88% of the outstanding loan balances in the Corporation's branch footprint at December 31, 2023. The rates on adjustable rate mortgages adjust based upon the movement in the underlying index which is then added to a margin and rounded to the nearest 0.125%. That result is then subjected to any periodic caps to produce the borrower's interest rate for the coming term. Most of the adjustable rate mortgages have an initial fixed rate term of 3, 5, 7 or 10 years.

Current wording

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 89% of the outstanding loan balances in the Corporation's branch footprint at December 31, 2024. The rates on adjustable rate mortgages adjust based upon the movement in the underlying index which is then added to a margin and rounded to the nearest 0.125%. That result is then subjected to any periodic caps to produce the borrower's interest rate for the coming term. Adjustable rate mortgages are typically offered with an initial fixed rate term of 5, 7 or 10 years.

Previous wording

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 14 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.

Previous wording

Other consumer: Other consumer consists of student loans, short-term personal installment loans, and credit cards. The Corporation had $63 million and $76 million of student loans at December 31, 2023 and 2022, respectively, the majority of which are government guaranteed. Federally guaranteed student loan payments resumed in October 2023 after over three years of payment moratoriums that began as a result of the COVID-19 pandemic. The Corporation is not originating new student loans and the student loan portfolio is in run-off. 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.

Current wording

Other consumer: Other consumer consists of student loans, short-term personal installment loans, and credit cards. Credit risk for other consumer loans 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.

Previous wording

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 nonperforming assets:

Current wording

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

Previous wording

reported for 2023 and forward will not be comparable to prior period reported amounts.

Current wording

reported for 2023 and forward will not be comparable to periods reported for 2022 and prior.

Previous wording

Restructured loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. On January 1, 2023, the Corporation adopted ASU 2022-02 prospectively. As a result, loans that were restructured prior to adoption are no longer considered TDRs, and loans restructured since January 1, 2023 are considered restructured. As a result, periods prior to 2023 are no longer comparable. See also Note 4 Loans of the notes to consolidated financial statements for additional restructured loans disclosures.

Current wording

Restructured loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See also Note 3 Loans of the notes to consolidated financial statements for additional restructured loans disclosures.

Previous wording

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 forecast the Corporation used for December 31, 2023 was the Moody's baseline scenario from November 2023, which was reviewed against the December 2023 baseline scenario with no material updates made, 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 4 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.

Current wording

To assess the appropriateness of the ACLL, the Corporation focuses on the evaluation of many factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, credit report refreshes, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the risk characteristics of the various classifications of loan segments, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, funding assumptions on lines, and other qualitative and quantitative factors which could affect potential credit losses. The forecast the Corporation used for December 31, 2024 was the Moody's baseline scenario from November 2024, which was reviewed against the December 2024 baseline scenario with no material updates made, over a two year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the ACLL is not necessarily indicative of the trend of future credit losses on loans in any particular segment. Therefore, management considers the ACLL a critical accounting estimate, see section Critical Accounting Estimates for additional information on the ACLL. See section Nonperforming Assets for a detailed discussion on asset quality. See also Note 3 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.

Previous wording

•Total loans increased $417 million, or 1%, from December 31, 2022, driven by increases in auto finance and CRE lending resulting from the Corporation's strategic initiatives, partially offset by a decrease in residential mortgage lending. See also Note 4 Loans of the notes to consolidated financial statements for additional information on loans.

Current wording

•Total loans increased $552 million, or 2%, from December 31, 2023, driven by increases in commercial and industrial lending, auto finance, and CRE-investor lending, partially offset by a decrease in residential mortgage lending, mainly due to the Corporation's balance sheet repositioning in December 2024, and real estate construction lending. See also Note 3 Loans of the notes to consolidated financial statements for additional information on loans.

Previous wording

•Total nonaccrual loans increased $38 million, or 34%, from December 31, 2022, primarily driven by increases in nonaccrual loans within the Corporation's commercial and industrial and residential mortgage portfolios, partially offset by a decrease in nonaccrual loans within the CRE-investor portfolio. See also Note 4 Loans of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.

Current wording

•Total nonaccrual loans decreased $26 million, or 17%, from December 31, 2023, primarily driven by a decrease in nonaccrual loans within the Corporation's commercial and industrial portfolio, partially offset by an increase in nonaccrual loans within the CRE-investor portfolio. See also Note 3 Loans of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.

Previous wording

•For the year ended December 31, 2023, net charge offs increased $47 million from December 31, 2022, primarily driven by an increase in charge off amounts in the Corporation's commercial and industrial portfolio. See Tables 11 and 12 for additional information regarding the activity in the ACLL.

Current wording

•For the year ended December 31, 2024, net charge offs increased $20 million, or 41%, from December 31, 2023, primarily driven by an increase in net charge offs in the Corporation's CRE-investor portfolio. See Tables 11 and 12 for additional information regarding the activity in the ACLL.

Previous wording

During the fourth quarter of 2023 as part of the balance sheet repositioning, the Corporation sold lower yielding AFS securities with a carrying value of $715 million at a net loss of $65 million and reinvested the proceeds in higher yielding and lower risk-weighted GNMA securities.

Current wording

During the fourth quarter of 2023 as part of the balance sheet repositioning, the Corporation sold lower yielding AFS securities with a carrying value of $715 million at a net loss of $65 million and reinvested the proceeds into higher yielding and lower risk-weighted GNMA securities.

Previous wording

Agency Residential and Agency Commercial Mortgage-Related Securities: Residential and commercial mortgage-related securities include predominantly GNMA, FNMA, and FHLMC MBS and CMOs. The fair value of these mortgage-related securities is subject to inherent risks, such as prepayment risk and interest rate changes. The Corporation regularly assesses the valuation of these securities.

Current wording

Agency Residential and Agency Commercial Mortgage-Related Securities: Residential and commercial mortgage-related securities include predominantly GNMA, FNMA, and FHLMC MBS and CMOs. The fair value of these mortgage-related securities is subject to inherent risks, such as prepayment risk and interest rate changes.

Previous wording

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.

Current wording

Equity Securities with Readily Determinable Fair Values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of mutual funds.

Previous wording

Equity Securities without Readily Determinable Fair Values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of Visa Class B restricted shares that the Corporation received in 2008 as part of Visa's initial public offering, along with an investment in a private SBA loan fund.

Current wording

Equity Securities without Readily Determinable Fair Values: The Corporation's portfolio of equity securities without readily determinable fair values primarily consists of an investment in a private loan fund, and historically, Visa Class B restricted shares, the latter which the Corporation sold all remaining shares during the first quarter of 2024.

Previous wording

•Total deposits, which are the Corporation's largest source of funds, increased $3.8 billion, or 13%, from December 31, 2022.

Current wording

•Total deposits, which are the Corporation's largest source of funds, increased $1.2 billion, or 4%, from December 31, 2023.

Previous wording

•Uninsured deposits were $14.8 billion and $16.4 billion at December 31, 2023 and 2022, respectively. Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 22.7%of total deposits at December 31, 2023, compared to 30.1% at December 31, 2022 and 32.8%at December 31, 2021.

Current wording

•Uninsured deposits were $15.5 billion and $14.8 billion at December 31, 2024 and 2023, respectively. Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 23.0% of total deposits at December 31, 2024, compared to 22.7% at December 31, 2023 and 30.1% at December 31, 2022.

Previous wording

Short-Term Funding: Short-term funding is comprised of short-term FHLB advances (with original contractual maturities less than one year), federal funds purchased, securities sold under agreements to repurchase, and historically, commercial paper. Many short-term funding sources are secured with collateral, expected to be reissued, and, therefore, do not represent an immediate need for cash. The organization manages to a multitude of liquidity risk limits which consider availability of short-term funding sources across a spectrum of stress scenarios, among other risk-based assumptions. Short-term funding sources at December 31, 2023 were $1.1 billion, a decrease of $2.7 billion, or 71%, from December 31, 2022, driven by a $2.4 billion, or

Current wording

Short-Term Funding: Short-term funding is comprised of short-term FHLB advances (with original contractual maturities less than one year), federal funds purchased, securities sold under agreements to repurchase, and historically, commercial paper. Many short-term funding sources are secured with collateral, expected to be reissued, and, therefore, do not represent an immediate need for cash. The organization manages to a multitude of liquidity risk limits which consider availability of short-term funding sources across a spectrum of stress scenarios, among other risk-based assumptions. Short-term funding sources at December 31, 2024 were $1.7 billion, an increase of $654 million, or 61%, from December 31, 2023, driven by a $510 million, or 69%, increase in short-term FHLB advances.

Previous wording

Long-Term Funding: Long-term funding is comprised of long-term FHLB advances (with original contractual maturities greater than one year), subordinated notes, and finance leases. Long-term funding at December 31, 2023 was $1.7 billion, an increase of $299 million, or 21%, from December 31, 2022, driven by the issuance of $300 million in aggregate principal amount of subordinated notes during the first quarter of 2023.

Current wording

Long-Term Funding: Long-term funding is comprised of long-term FHLB advances (with original contractual maturities greater than one year), senior notes, subordinated notes, and finance leases. Long-term funding at December 31, 2024 was $1.4 billion, a decrease of $300 million, or 17%, from December 31, 2023, driven by a $598 million, or 49%, decrease in long-term FHLB advances, partially offset by the issuance of $300 million in aggregate principal amount of senior notes during the third quarter of 2024.

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 December 31, 2023, the Bank had $6.0 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 December 31, 2023, 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 December 31, 2024, the Bank had $7.1 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 December 31, 2024, the Bank had $2.8 billion available for discount window borrowings.

Previous wording

•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.

Current wording

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