ZIONS BANCORPORATION NATIONAL ASSOCIATION UT
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
ZION$64.76-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0000109380-24-000061
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0000109380-25-000040
Item 7. 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 396 previous paragraphs and 418 current paragraphs.
121 unchanged; 180 reworded; 103 added; 91 removed; 4 previous and 14 current paragraphs rearranged.
Tables are not compared: 44 previous and 60 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 (103)
Current report
Marketing —we invest in marketing strategies to strengthen our local brands, attract new clients, deepen existing relationships, and enhance customer engagement;
Current report
Our financial performance for 2024, relative to the prior year, reflected growth in net earnings and diluted earnings per share (“EPS”), with modest deterioration in adjusted pre-provision net revenue. Diluted EPS was $4.95, compared with $4.35 in 2023, and benefited from a lower provision for credit losses, higher noninterest income, and lower noninterest expenses.
Current report
◦Average interest-bearing liabilities increased $4.2 billion, or 8%, as an increase in average interest-bearing deposits was partially offset by a decrease in average borrowed funds.
Current report
◦Total deposits increased $1.3 billion, or 2%, primarily due to an increase in interest-bearing deposits, partially offset by a decrease in noninterest-bearing deposits. Customer deposits (excluding brokered deposits) increased $663 million, or 1%.
Current report
•Customer-related noninterest income increased $19 million, or 3%, driven largely by increases in capital markets fees and commercial account fees, partially offset by decreases in loan-related fees and card fees. Increases in noncustomer-related noninterest income were primarily due to increases in net securities gains and credit valuation adjustments (“CVA”)on client-related interest rate swaps, partially offset by a decline in dividends on FHLB stock.
Current report
•Noninterest expense decreased $51 million, or 2%. Deposit insurance and regulatory expense decreased $78 million, largely due to a $90 million accrual associated with the FDIC special assessment during the prior year. This decrease was partially offset by increases in technology, telecom, and information processing expense, and salaries and employee benefits expense. The efficiency ratio was 64.2%, compared with 62.9%, due to an increase in adjusted noninterest expense.
Current report
•Net loan and lease charge-offs totaled $60 million, or 0.10%, of average loans and leases, compared with $36 million, or 0.06%, in 2023. The increase in charge-offs was largely due to a single commercial and industrial loan. The ratio of allowance for credit losses (“ACL”) to total loans and leases was 1.25%, compared with 1.26%.
Current report
•Nonperforming assets totaled $298 million, or 0.50%, of total loans and leases and other real estate owned (“OREO”), compared with $228 million, or 0.39%. The increase in nonperforming assets was primarily due to a small number of loans in the commercial and industrial and term commercial real estate (“CRE”) portfolios.
Current report
•Classified loans totaled $2.9 billion, or 4.83%, of total loans and leases, compared with $825 million, or 1.43%. The increase in classified loans was primarily in the multifamily and industrial CRE loan portfolios, largely due to an increased emphasis in risk grading on current cash flows, and less emphasis on the adequacy of collateral values and the strength of guarantors and sponsors. The increase in classified loans was also attributable to weaker performance, particularly for 2021 and 2022 construction loan vintages, as borrowers missed projections due to longer-than-anticipated lease-up periods, rent concessions, elevated costs, and higher interest rates.
Current report
•Total borrowed funds, consisting primarily of secured borrowings, decreased $139 million, or 3%, as a decline in security repurchase agreements was partially offset by an increase in long-term debt. The increase in long-term debt was due to the issuance of $500 million of 6.82% Fixed-to-Floating Subordinated Notes due 2035, partially offset by the redemption of $88 million of 6.95% Fixed-to-Floating Subordinated Notes due 2028 during the fourth quarter of 2024.
Current report
•Preferred stock decreased $374 million due to the redemption of the outstanding shares of our Series G, I, and J preferred stock during the fourth quarter of 2024.
Current report
1 Includes interest income recoveries of $6 million, $4 million, and $9 million for the respective years ended.
Current report
2 Taxable-equivalent rates used where applicable.
Current report
Net interest income remained relatively flat year over year, as higher yields on interest-earning assets were offset by increased funding costs. Net interest income was also impacted by increases in average interest-earning assets and interest-bearing liabilities. The NIM was 3.00% in 2024, compared with 3.02% in 2023.
Current report
The following chart presents the changes in yields on average interest-earning assets:
Current report
The following chart presents the changes in rates paid on average interest-bearing liabilities:
Current report
The total cost of deposits increased 60 basis points, and the rate paid on total deposits and interest-bearing liabilities increased 41 basis points in 2024, reflecting the higher interest rate environment and a decrease in noninterest-bearing deposits. The rate paid on total borrowed funds decreased 4 basis points.
Current report
Average interest-earning assets increased $480 million, or 1%, from the prior year, as growth in average loans and leases and average money market investments, was partially offset by a decline in average securities.
Current report
Average loans and leases increased $1.8 billion, or 3%, to $58.5 billion, primarily due to growth in average consumer and commercial real estate loans. Average securities decreased $2.0 billion, or 9%, to $19.6 billion, primarily due to principal reductions.
Current report
Average interest-bearing liabilities increased $4.2 billion, or 8%, from the prior year, largely driven by an increase in average interest-bearing deposits, and decreases in average noninterest-bearing deposits and average borrowed funds.
Current report
Average deposits increased $1.9 billion, or 3%, to $74.8 billion. Average interest-bearing deposits increased $6.5 billion, or 15%, primarily due to customer deposit growth and migration to interest-bearing deposit products in response to the higher interest rate environment. Average noninterest-bearing deposits decreased $4.6 billion, or 16%, and represented 34% of total deposits in 2024, compared with 41% in 2023. Average borrowed funds, consisting primarily of secured borrowings, decreased $2.3 billion, or 27%, to $6.4 billion, primarily due to a decline in security repurchase agreements.
Current report
1 Taxable-equivalent rates used where applicable.
Current report
1 Taxable-equivalent rates used where applicable.
Current report
The Allowance and Provision for Credit Losses
Current report
The bar chart above illustrates the broad categories of changes in the ACL from the prior year period. To estimate current expected losses, we use econometric loss models that incorporate multiple economic scenarios, reflecting optimistic, baseline, and stressed economic conditions. The results derived from these scenarios are weighted to produce the credit loss estimate. Management may adjust the weights to reflect their assessment of current conditions and reasonable and supportable forecasts.
Current report
The second bar represents changes in these economic forecasts and current economic conditions, including management’s judgment on the weighting of the economic forecasts during the current quarter. These changes contributed to a $146 million decrease in the ACL from the prior year.
Current report
Consistent with our key corporate objectives, we focus on expanding and supporting new and existing relationships by providing high-quality products and services to our commercial, small business, and consumer customers, thereby benefiting noninterest income through enhanced service offerings.
Current report
•Capital markets fees increased $29 million, or 36%, driven by expanded real estate capital markets activity as well as increased swap fees, loan syndication fees, and foreign exchange fees.
Current report
•Loan-related fees and income decreased $9 million, or 11%, primarily due to higher gains on loan sales in the prior year and a decline in loan servicing income resulting from the sale of associated mortgage servicing rights in 2023.
Current report
•Other customer-related fees decreased $5 million, or 8%, mainly due to a decrease in miscellaneous income, including fees associated with compliance and other support services to pharmacies and healthcare providers.
Current report
Noncustomer-related noninterest income increased $4 million, or 7%, in 2024, relative to the prior year. Key drivers impacting noncustomer-related revenue included:
Current report
•Dividends and other income decreased $15 million, primarily due to a decline in dividends on FHLB stock, as well as gains in the prior year associated with the sale of bank-owned property.
Current report
Total technology spend decreased $17 million, or 4%, relative to the prior year, as the aforementioned increase in technology, telecom, and information processing expense and an increase in other technology-related expense were more than offset by a decrease in certain capitalized technology investments, as the final phase of our multi-year project to replace substantially all of our in-scope core loan and deposit banking systems was completed in July 2024.
Current report
Preferred Stock Dividends and Redemption
Current report
Preferred stock dividends totaled $41 million in 2024, $32 million in 2023, and $29 million in 2022. The increase was primarily driven by changes in the timing and rates of dividend payments for certain series of preferred stock. In December 2024, we fully redeemed the outstanding shares of our Series G, I, and J preferred stock and paid all declared and unpaid dividends. For further details, see Note 14 of the Notes to Consolidated Financial Statements.
Current report
ZIONS BANK SELECTED FINANCIAL INFORMATION
Current report
CALIFORNIA BANK AND TRUST SELECTED FINANCIAL INFORMATION
Current report
On September 23, 2024, we announced that we entered into an agreement to purchase four FirstBank Coachella Valley, California branches and their associated deposit and loan accounts. In addition to the four branches, the purchase includes approximately $700 million in deposits and $400 million in commercial and consumer loans. These amounts are subject to change. The transaction is expected to be completed in the first quarter of 2025, subject to customary closing conditions.
Current report
In January 2025, Southern California experienced devastating wildfires. We anticipate minimal credit losses due to insurance coverage and our limited residential credit exposure in the affected areas.
Current report
AMEGY BANK SELECTED FINANCIAL INFORMATION
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Removed paragraphs (91)
Previous report
During 2023, the banking industry experienced significant changes in market conditions, including a higher interest rate environment, significant fluctuations in deposit levels, and broad weakness in bank valuations due in large part to several regional banks being closed and placed into receivership with the FDIC. We employed the following strategic actions during the year as a complement to our existing, well-established risk management practices:
Previous report
•Generated customer deposit growth through a combination of competitive interest rates, customer outreach, and expanded utilization of reciprocal deposit programs in order to increase the availability of FDIC insurance;
Previous report
•Actively managed the balance sheet through an earning-asset mix change toward higher-yielding loans, while reducing the size of our lower-yielding securities and money market positions;
Previous report
•Increased total available liquidity sources, which far exceeded our level of uninsured deposits, and included the expanded use of existing collateralized funding lines;
Previous report
•Actively managed our interest rate and market risk exposures through a rebalancing of our hedges for both available-for-sale (“AFS”) securities and commercial loans;
Previous report
•Remained committed to controlling expenses, including active personnel management, while continuing to invest in technology;
Previous report
•Maintained strong credit performance, including low net charge-offs; and
Previous report
•Further strengthened our regulatory capital position through increased retained earnings and suspended share repurchase programs (beginning the second quarter of 2023 through the end of the year).
Previous report
Our financial performance for 2023 relative to the prior year reflected an increase in deposits, lower net interest income, stabilization of the net interest margin (“NIM”), loan growth, and strong credit quality, as well as higher noninterest expense and provision for credit losses.
Previous report
◦Average interest-bearing liabilities increased $9.7 billion, or 23%, primarily due to increases in average interest-bearing deposits and average borrowed funds. These increases were offset by a decrease of $10.2 billion, or 26%, in average noninterest-bearing deposits, as customers migrated to interest-bearing products in response to the higher interest rate environment.
Previous report
◦Total deposits increased $3.3 billion, or 5%, primarily due to a $12.8 billion increase in interest-bearing deposits, partially offset by a $9.5 billion decrease in noninterest-bearing demand deposits. Customer deposits (excluding brokered deposits) remained relatively stable at $70.5 billion and included approximately $6.8 billion of reciprocal deposit products. The loan-to-deposit ratio remained flat at 77%.
Previous report
•Customer-related noninterest income increased $6 million, or 1%, primarily due to increases in commercial account fees and wealth management fees, partially offset by a decrease in retail and business banking fees resulting from a change in our overdraft and non-sufficient funds practices effected during the third quarter of 2022. Increases in noncustomer-related noninterest income were due largely to an increase in dividends on FHLB stock, as well as the gain on sale of a bank-owned property in the second quarter of 2023.
Previous report
•Noninterest expense increased $219 million, or 12%, primarily due to an increase in deposit insurance and regulatory expense, driven largely by a $90 million accrual associated with the FDIC special assessment in the fourth quarter of 2023. Noninterest expense was also impacted by higher salaries and benefits (including severance) and technology, telecom, and information processing expenses.
Previous report
•Credit quality remained strong, as net loan and lease charge-offs were $36 million, or 0.06% of average loans in 2023, compared with net charge-offs of $39 million, or 0.07% of average loans, in 2022. Classified loans decreased $104 million, or 11%. Nonperforming assets increased $79 million, or 53%, primarily due to one commercial and industrial loan totaling $31 million, and two suburban office commercial real estate loans totaling $46 million.
Previous report
Net interest income decreased $82 million, or 3%, in 2023, relative to the prior year, as higher earning asset yields were offset by higher funding costs. The NIM was 3.02%, compared with 3.06%.
Previous report
The rate paid on average interest-bearing liabilities was 2.91% in 2023, compared with 0.44% in the prior year, and the cost of total deposits was 1.46%, compared with 0.09% in the prior year, also reflecting the higher interest rate environment, and the impact of the change in deposit composition away from noninterest-bearing deposits. The rate paid on total borrowed funds was 5.11%, compared with 3.27%, for the same time periods.
Previous report
Net interest income was also impacted by a reduction in interest-earning assets and an increase in interest-bearing liabilities. Average interest-earning assets decreased $1.7 billion, or 2%, from the prior year, driven by declines in average securities and average money market investments. The decrease in average securities was primarily due to principal reductions. These decreases were partially offset by an increase of $4.1 billion in average loans and leases.
Previous report
Average interest-bearing liabilities increased $9.7 billion, or 23%, primarily due to increases in average interest-bearing deposits and average borrowed funds. These increases were offset by a decline of $10.2 billion, or 26%, in average noninterest-bearing deposits, as customers migrated to interest-bearing products in response to the higher interest rate environment.
Previous report
The following charts further illustrate the changes in average interest-earning assets and average interest-bearing liabilities:
Previous report
Average loans and leases increased $4.1 billion, or 8%, to $56.7 billion, primarily due to growth in average consumer and commercial loans. Average securities decreased $3.8 billion, or 15%, to $21.7 billion, primarily due to principal reductions. During the fourth quarter of 2022, we transferred approximately $10.7 billion fair value ($13.1 billion amortized cost) of mortgage-backed AFS securities to the held-to-maturity (“HTM”) category.
Previous report
Average deposits decreased $5.6 billion, or 7%, to $72.9 billion, driven largely by the reduction in noninterest-bearing deposits. Average noninterest-bearing deposits as a percentage of total deposits decreased to 41% in 2023, compared with 51% during 2022. Our loan-to-deposit ratio was 77%, compared with 78% in the prior year.
Previous report
Average borrowed funds, consisting primarily of secured borrowings, increased $5.2 billion, or 149%, to $8.7 billion, due largely to a shift in wholesale funding needs as a result of fluctuations in deposit levels during 2023.
Previous report
Provision for Credit Losses
Previous report
The bar chart above illustrates the broad categories of change in the ACL from the prior year period. The second bar represents changes in economic forecasts and current economic conditions, which increased the ACL by $33 million from the prior year period.
Previous report
Consistent with our key corporate objectives, we continue to deepen existing relationships with our commercial, small business, capital markets, affluent, and retail customers by providing high-quality treasury management products, capital market solutions, wealth management advisory services, and depository account services.
Previous report
•Wealth management fee income increased $3 million, or 5%, reflecting growth in assets and increased wealth and advisory services. Our assets under management were $13.3 billion at December 31, 2023.
Previous report
•Retail and business banking fees decreased $7 million, or 10%, primarily due to changes in our overdraft and non-sufficient funds practices, which were effected in the third quarter of 2022.
Previous report
•Capital markets fees decreased $2 million, or 2%, primarily due to reduced customer swap and loan syndication fees.
Previous report
Noninterest expense increased $219 million, or 12%, in 2023, relative to the prior year, primarily due to a $119 million increase in deposit insurance and regulatory expense, driven largely by a $90 million accrual associated with the FDIC special assessment during the fourth quarter of 2023, as well as an increased FDIC insurance base rate beginning in 2023.
Previous report
In November 2023, the FDIC issued a final rule to implement a special assessment pursuant to a systemic risk determination to recover the costs associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in early 2023. Using an assessment base equal to the estimated amount of uninsured deposits above $5 billion at December 31, 2022, the FDIC is expected to collect a tax-deductible special assessment from banks at an annual rate of approximately 13.4 bps for an anticipated eight quarterly assessment periods, beginning with the first quarter of 2024.
Previous report
Total technology spend increased $32 million, or 7%, relative to the prior year, driven largely by the aforementioned increases in technology, telecom, and information processing expense, as well as higher technology-related compensation and investments in resiliency.
Previous report
Preferred Stock Dividends
Previous report
Preferred stock dividends totaled $32 million in 2023, and $29 million in both 2022 and 2021. See further details in Note 14 of the Notes to Consolidated Financial Statements.
Previous report
SELECTED SEGMENT INFORMATION
Previous report
Zions Bank’s income before income taxes decreased $76 million, or 20%, during 2023. The decrease was due to a $45 million decrease in net interest income and a $62 million increase in noninterest expense, partially offset by a $23 million decrease in the provision for credit losses and an $8 million increase in noninterest income. The loan portfolio increased $852 million during 2023, including increases of $557 million and $424 million in consumer and commercial loans, respectively, and a decrease of $129 million in CRE loans. The ratio of ACL to net loans and leases decreased to 1.10% at December 31, 2023, compared with 1.17%. Nonperforming assets decreased $10 million, or 28%, from the prior year. Total deposits decreased 3% in 2023.
Previous report
CB&T’s income before income taxes decreased $32 million, or 10%, during 2023. The decrease was due to a $48 million increase in noninterest expense, partially offset by an $8 million increase in noninterest income, a $5 million decrease in the provision for credit losses, and a $3 million increase in net interest income. The loan portfolio increased $291 million during 2023, including increases of $243 million and $164 million in consumer and CRE loans, respectively, and a decrease of $116 million in commercial loans. The ratio of ACL to net loans and leases increased to 1.15% at December 31, 2023, compared with 0.93%. Nonperforming assets increased $57 million from the prior year, driven largely by two suburban office commercial real estate loans totaling $46 million. Total deposits increased 2% in 2023.
Previous report
Amegy’s income before income taxes decreased $93 million, or 30%, during 2023. The decrease was due to a $60 million decrease in net interest income, a $49 million increase in noninterest expense, and a $10 million increase in the provision for credit losses, partially offset by a $26 million increase in noninterest income. The loan portfolio increased $237 million during 2023, including increases of $171 million and $156 million in CRE and consumer loans, respectively, and a decrease of $90 million in commercial loans. The ratio of ACL to net loans and leases increased to 1.08% at December 31, 2023, compared with 1.01%. Nonperforming assets decreased $24 million, or 41%, from the prior year. Total deposits increased 9% in 2023.
Previous report
NBAZ’s income before income taxes decreased $4 million, or 4%, during 2023. The decrease was due to a $22 million increase in noninterest expense and an $8 million decrease in noninterest income, partially offset by a $19 million increase in net interest income and a $7 million decrease in the provision for credit losses. The loan portfolio increased $509 million during 2023, including increases of $259 million, $177 million, and $73 million in CRE, consumer, and commercial loans, respectively. The ratio of ACL to net loans and leases increased to 1.02% at December 31, 2023, compared with 0.81%. Nonperforming assets increased $6 million from the prior year. Total deposits decreased 6% in 2023.
Previous report
NSB’s income before income taxes decreased $53 million, or 70%, during 2023. The decrease was due to a $38 million increase in the provision for credit losses, a $20 million increase in noninterest expense, and a $3 million decrease in noninterest income, partially offset by an $8 million increase in net interest income. The loan portfolio increased $158 million during 2023, including increases of $104 million and $56 million in consumer and CRE loans, respectively, and a decrease of $2 million in commercial loans. The ratio of ACL to net loans and leases increased to 1.95% at December 31, 2023, compared with 0.90%. Nonperforming assets increased $37 million from the prior year. Total deposits increased 1% in 2023.
Previous report
In July 2022, NSB purchased three Northern Nevada City National Bank branches and their associated deposit, credit card, and loan accounts. In addition to the three branches, the purchase included approximately $430 million in deposits and $95 million in commercial and consumer loans.
Showing the first 40 of 91 passages. Open the source sections for the rest.
Reworded paragraphs (180)
Previous wording
We conduct our operations primarily through seven separately managed and geographically defined affiliates, each with its own local branding and management team. Our affiliate banks are supported by an enterprise operating segment (referred to as the “Other” segment) that provides governance and risk management, allocates capital, establishes strategic objectives, and includes centralized technology, back-office functions, and certain lines of business not operated through our affiliate banks.
Current wording
We conduct our operations primarily through seven separately managed and geographically defined affiliates, each with its own local branding and management teams. These affiliate banks are supported by an enterprise operating segment (referred to as the “Other” segment) that provides governance and risk management, allocates capital, establishes strategic objectives, and includes centralized technology, back-office functions, and certain lines of business not operated through our affiliate banks.
Previous wording
We focus our efforts and resources to achieve our strategic growth and profitability objectives. This includes providing high-quality products and services and deepening relationships with our small business, commercial, and consumer customers. Serving as a trusted advisor for our business customers and supporting their operational needs generally affords us a major source of relatively stable deposits.
Current wording
Our efforts and resources are focused on achieving strategic growth and profitability objectives. This includes delivering high-quality products and services and strengthening relationships with our commercial, small business, and consumer customers. Serving as a trusted advisor for our business customers and supporting their operational needs generally provides us with a major source of relatively stable deposits.
Previous wording
We strive to achieve balanced growth of customers, pre-provision net revenue (“PPNR”), profitability, and shareholder returns. We focus on five strategic growth areas: small business, commercial, affluent, capital markets, and consumer.
Current wording
We strive to achieve balanced growth in customers, pre-provision net revenue (“PPNR”), profitability, and shareholder returns. Our focus is on five strategic growth areas: commercial, small business, capital markets, wealth management, and consumer.
Previous wording
To facilitate the achievement of our growth and profitability objectives, we invest in the following five key areas, referred to as “strategic enablers”:
Current wording
To achieve our growth and profitability objectives, we invest in six key areas, referred to as “strategic enablers”:
Previous wording
•People and Empowerment — we invest in training our employees and providing them the tools and resources to build their capabilities;
Current wording
People and Empowerment — we invest in training our employees and providing them with the tools and resources to build their capabilities;
Previous wording
•Technology — we invest in innovative technologies that will make us more efficient and enable us to remain competitive;
Current wording
Technology — we invest in innovative technologies to make us more efficient and enable us to remain competitive;
Previous wording
•Operational Excellence — we invest in and support ongoing improvements in how we safely and securely deliver value to our customers;
Current wording
Operational Excellence — we invest in and support ongoing improvements to safely and securely deliver value to our customers;
Previous wording
•Data and Analytics — we invest in relevant enterprise data and analytic tools to support local execution and prudent decision making.
Current wording
Data and Analytics — we invest in relevant enterprise data and analytic tools to support local execution and informed decision making.
Previous wording
This section and other sections provide information about our recent financial performance. For more information about our results of operations for 2022 compared with 2021, see the respective sections in MD&A included in our 2022 Form 10-K.
Current wording
This section and other sections provide information about our 2024 financial performance, compared with the prior year. For more information about our results of operations for 2023 compared with 2022, see the respective sections in MD&A included in our 2023 Form 10-K. Growth rates of 100% or more are considered not meaningful (“NM”) as they generally reflect a low starting point.
Previous wording
•Net interest income decreased $82 million, or 3%, as higher earning asset yields were offset by rising funding costs. The NIM decreased slightly to 3.02%, compared with 3.06%. Net interest income was also impacted by a reduction in interest-earning assets and an increase in interest-bearing liabilities.
Current wording
•Net interest income remained relatively flat, as higher earning asset yields were offset by higher funding costs. Net interest income was also impacted by increases in average interest-earning assets and interest-bearing liabilities. The net interest margin (“NIM”) decreased slightly to 3.00%, compared with 3.02%.
Previous wording
◦Average interest-earning assets decreased $1.7 billion, or 2%, driven by declines in average securities and average money market investments, partially offset by an increase in average loans and leases.
Current wording
◦Average interest-earning assets increased $480 million, or 1%, as growth in average loans and leases and average money market investments was largely offset by a decline in average securities.
Previous wording
◦Total loans and leases increased $2.1 billion, or 4%, primarily due to growth in the consumer 1-4 family residential mortgage, commercial real estate term, and commercial and industrial loan portfolios.
Current wording
◦Total loans and leases increased $1.6 billion, or 3%, primarily due to growth in the consumer 1-4 family residential mortgage, home equity credit lines, and commercial and industrial loan portfolios.
Previous wording
•The provision for credit losses was $132 million in 2023, compared with $122 million in 2022.
Current wording
•The provision for credit losses was $72 million in 2024, compared with $132 million in 2023.
Previous wording
Net interest income is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities, and represented 78% and 80% of our net revenue (net interest income plus noninterest income) during 2023 and 2022, respectively. The NIM is calculated as net interest income as a percent of average interest-earning assets.
Current wording
Net interest income, which is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities, represented 78% of our net revenue (net interest income and noninterest income) in both 2024 and 2023. The NIM is calculated as net interest income as a percentage of average interest-earning assets.
Previous wording
The yield on average interest-earning assets was 4.86% in 2023, an increase of 158 basis points, reflecting higher interest rates and a favorable mix change to higher yielding assets. The yield on average loans and leases increased 163 basis points to 5.69% in 2023, compared with 4.06% in 2022, reflecting the higher interest rate environment. The yield on average securities increased 58 basis points to 2.64% in 2023.
Current wording
The yield on average interest-earning assets increased 40 basis points in 2024, reflecting higher interest rates and a favorable mix change to higher yielding assets, as average loans and leases and average money market investments increased, while average securities decreased. The yield on average loans and leases increased 37 basis points and the yield on both average securities and average money market investments increased 19 basis points.
Previous wording
For more information on our investment securities portfolio and borrowed funds and how we manage liquidity risk, refer to the “Investment Securities Portfolio” section on page 46 and the “Liquidity Risk Management” section on page 67. For further discussion of the effects of market rates on net interest income and how we manage interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page 63.
Current wording
For more information on our investment securities portfolio and borrowed funds, and how we manage liquidity risk, refer to the “Investment Securities Portfolio” section on page 50 and the “Liquidity Risk Management” section on page 73. For further discussion on the effects of market rates on net interest income and our approach to managing interest rate risk, refer to the “Interest Rate and Market Risk Management” section on page 70.
Previous wording
The following schedule summarizes the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets and the costs of interest-bearing liabilities:
Current wording
The following schedule presents the average balances, the amount of interest earned or paid, and the applicable yields for interest-earning assets, as well as the rates paid on interest-bearing liabilities:
Previous wording
2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs. Loans include nonaccrual and restructured loans.
Current wording
2 Net of unamortized purchase premiums, discounts, and deferred loan fees and costs.
Previous wording
The following schedule presents year-over-year changes in net interest income on a fully taxable-equivalent basis for the years indicated. For purposes of calculating the yields in this schedule, the average loan balances also include the principal amounts of nonaccrual and restructured loans. Interest payments received on nonaccrual loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. In addition, interest on modified loans is generally accrued at the modified rates.
Current wording
The following schedule presents year-over-year changes in net interest income on a fully taxable-equivalent basis for the years indicated. For the yield calculations, average loan balances include the principal amounts of nonaccrual and restructured loans. Interest payments received on nonaccrual loans are not recognized as interest income, but are applied as reductions to the principal outstanding. Additionally, interest on modified loans is generally accrued at the modified rates.
Previous wording
In the analysis of changes in taxable-equivalent net interest income attributed to volume and rate, changes are allocated to volume with the following exceptions: when volume and rate both increase, the variance is allocated proportionately to both volume and rate; when the rate increases and volume decreases, the variance is allocated to rate.
Current wording
In the analysis of changes in taxable-equivalent net interest income attributed to volume and rate, changes are allocated to volume with the following exceptions: when both volume and rate increase, the variance is allocated proportionately to both volume and rate; when the rate increases and volume decreases, the variance is allocated to rate.
Previous wording
The allowance for credit losses (“ACL”) is the combination of both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
Current wording
The allowance for credit losses (“ACL”) comprises both the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents the estimated current expected credit losses related to the loan and lease portfolio as of the balance sheet date. The RULC represents the estimated reserve for current expected credit losses associated with off-balance sheet commitments. Changes in the ALLL and RULC, net of charge-offs and recoveries, are recorded as the provision for loan and lease losses and the provision for unfunded lending commitments, respectively, on the consolidated statement of income. The ACL for debt securities is estimated separately from loans and is included in “Investment securities” on the consolidated balance sheet.
Previous wording
The ACL was $729 million at December 31, 2023, compared with $636 million at December 31, 2022. The increase in the ACL reflects incremental reserves associated with portfolio-specific risks including commercial real estate, as well as deterioration in economic forecasts. The ratio of ACL to total loans and leases was 1.26% at December 31, 2023, compared with 1.14% at December 31, 2022. The provision for securities losses was less than $1 million during 2023 and 2022.
Current wording
The ACL was $741 million at December 31, 2024, compared with $729 million at December 31, 2023. The increase in the ACL primarily reflects credit quality deterioration and higher reserves associated with portfolio-specific risks including commercial real estate, partially offset by improvements in economic forecasts. The ratio of ACL to total loans and leases was 1.25% at December 31, 2024, compared with 1.26% at December 31, 2023.
Previous wording
The provision for credit losses, which is the combination of both the provision for loan and lease losses and the provision for unfunded lending commitments, was $132 million in 2023, compared with $122 million in 2022.
Current wording
The provision for credit losses, which includes both the provision for loan and lease losses and the provision for unfunded lending commitments, was $72 million in 2024, compared with $132 million in 2023. The provision for securities losses was less than $1 million during 2024 and 2023.
Previous wording
The third bar represents changes in credit quality factors and includes risk-grade migration, portfolio-specific risks, and specific reserves against loans, which, when combined, increased the ACL by $84 million, driven largely by an increased focus on certain portfolio-specific risks, including commercial real estate.
Current wording
The third bar represents changes in credit quality factors, and includes risk grade migration, portfolio-specific risks, and specific reserves against loans. Combined, these factors contributed to a $158 million increase in the ACL, driven largely by deterioration in credit quality and an increased focus on certain portfolio-specific risks, including commercial real estate.
Previous wording
The fourth bar represents loan portfolio changes, driven primarily by changes in loan balances and composition, the aging of the portfolio, and other qualitative risk factors; all of which resulted in a $24 million decrease in the ACL.
Current wording
The fourth bar represents changes in our loan portfolio composition, including changes in loan balances and mix, the aging of the portfolio, and other qualitative risk factors. During 2024, changes in loan portfolio composition offset the effects of $1.6 billion in period-ending loan growth, resulting in no significant impact on the ACL.
Previous wording
See “Credit Risk Management” on page 54 and Note 6 of the Notes to Consolidated Financial Statements for more information on how we determine the appropriate level of the ALLL and the RULC.
Current wording
See “Credit Quality” on page 66 and Note 6 of the Notes to Consolidated Financial Statements for more information on how we determine the appropriate level of the ALLL and the RULC.
Previous wording
Noninterest income represents revenue we earn from products and services that generally have no associated interest rate or yield and is classified as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, insurance-related income, and mark-to-market adjustments on certain derivatives.
Current wording
Noninterest income represents revenue earned from products and services that generally have no associated interest rate or yield and is classified as either customer-related or noncustomer-related. Customer-related noninterest income excludes items such as securities gains and losses, dividends, insurance-related income, and mark-to-market adjustments on certain derivatives.
Previous wording
Total noninterest income increased $45 million, or 7%, in 2023, relative to the prior year. Noninterest income accounted for 22% and 20% of net revenue during 2023 and 2022, respectively. The following schedule presents a comparison of the major components of noninterest income:
Current wording
Total noninterest income increased $23 million, or 3%, in 2024, relative to the prior year. Noninterest income represented 22% of our net revenue in both 2024 and 2023. The following schedule presents a comparison of the major components of noninterest income:
Previous wording
Total customer-related noninterest income increased $6 million, or 1%, in 2023, relative to the prior year. Key drivers impacting customer-related revenue included:
Current wording
Customer-related noninterest income increased $19 million, or 3%, in 2024, relative to the prior year. Key drivers impacting customer-related revenue included:
Previous wording
•Commercial account fees increased $15 million or 9%, driven by increases in treasury management sweep income, account analysis fees, and bankcard merchant fees.
Current wording
•Commercial account fees increased $8 million or 5%, largely due to an increase in account analysis fees, partially offset by decreases in merchant fees and treasury management sweep fees.
Previous wording
•Card fees decreased $3 million, or 3%, due to declines in commercial and business bankcard interchange fees.
Current wording
•Card fees decreased $5 million, or 5%, primarily due to declines in commercial and business bankcard interchange fees.
Previous wording
Total noncustomer-related noninterest income increased $39 million in 2023. Dividends and other income increased $40 million, primarily due to higher dividends on FHLB stock resulting from increased average FHLB activity stock and an increase in the associated dividend rate, when compared with the prior year, as well as a gain on sale of a bank-owned property in the second quarter of 2023. Net securities gains increased $19 million, due largely to higher losses recorded during the prior year in our Small Business Investment Company (“SBIC”) investment portfolio. Fair value and nonhedge derivative income decreased $20 million, primarily due to larger gains during the prior year related to credit valuation adjustments (“CVA”) on client-related interest rate swaps.
Current wording
•Net securities gains increased $15 million, largely due to valuation adjustments in our Small Business Investment Company (“SBIC”) investment portfolio.
Previous wording
Technology, telecom, and information processing expense increased $31 million, or 15%, primarily due to increases in software amortization expenses associated with the replacement of our core loan and deposit banking system, as well as other related application software, license, and maintenance expenses, reflecting our ongoing investments in strategic technology initiatives designed to improve our products and services and to simplify how we do business. For further discussion on the replacement of our core loan and deposit banking system, see “Premises, Equipment, and Software” on page 52.
Current wording
Noninterest expense decreased $51 million, or 2%, in 2024, primarily due to a $78 million decrease in deposit insurance and regulatory expense, driven by a $90 million accrual associated with the FDIC special assessment during the fourth quarter of 2023. Technology, telecom, and information processing expense increased $20 million, or 8%, primarily due to increases in software amortization expenses associated with the replacement of our core loan and deposit banking systems, as well as other related application software, license, and maintenance expenses. For additional information on the replacement of our core loan and deposit banking systems, see “Premises, Equipment, and Software” on page 54.
Previous wording
Salaries and benefits expense represented approximately 61% and 66% of total noninterest expense during 2023 and 2022, respectively. The following schedule presents the major components of salaries and employee benefits expense:
Current wording
Salaries and benefits expense represented approximately 63% and 61% of total noninterest expense in 2024 and 2023, respectively. The following schedule presents the major components of salaries and employee benefits expense:
Previous wording
Total salaries and benefits expense increased $40 million, or 3%, primarily due to the ongoing impact of inflationary and competitive labor market pressures on wages and benefits, a decline in deferred salaries related to fewer loan originations and reduced software development activities, and an increase in severance expense. These increases were partially offset by a decrease in incentive compensation accruals. We had 9,679 full-time equivalent employees at December 31, 2023, a decrease of approximately 3% relative to the prior year.
Current wording
Total salaries and benefits expense increased $12 million, or 1%, primarily due to a decline in capitalized salaries related to reduced software development activities, as well as higher benefits accruals, partially offset by a decrease in base salaries. Excluding the effect of capitalized salaries, total salaries and benefits expense remained relatively flat compared with the prior year. We had 9,406 full-time equivalent employees at December 31, 2024, a decrease of approximately 3% relative to the prior year.
Previous wording
The efficiency ratio was 62.9%, compared with 58.8%, primarily due to a decline in adjusted taxable-equivalent revenue. For information on non-GAAP financial measures, see page 77.
Current wording
Adjusted noninterest expense increased $39 million, or 2%. The efficiency ratio was 64.2%, compared with 62.9%, due to the aforementioned increase in adjusted noninterest expense. For information on non-GAAP financial measures, see page 83.
Previous wording
Consistent with our strategic objectives, we invest in technologies that will make us more efficient and enable us to remain competitive. We generally consider these investments as technology spend, which represents expenditures associated with technology-related investments, operations, systems, and infrastructure, and includes current period expenses presented on the consolidated statement of income, as well as capitalized investments, net of related amortization and depreciation, presented on the consolidated balance sheet. Technology spend is reported as a combination of the following:
Current wording
Consistent with our key corporate objectives, we invest in technology initiatives designed to improve our products and services, make us more efficient, and enable us to remain competitive. We report these investments as technology spend, which includes the following:
Previous wording
•Technology, telecom, and information processing expense — includes expenses related to application software licensing and maintenance, related amortization, telecommunications, and data processing;
Current wording
•Technology, telecom, and information processing expense — includes current period expenses presented on the consolidated statement of income related to application software licensing and maintenance, telecommunications, and data processing, less related non-cash amortization and depreciation;
Previous wording
•Technology investments — includes capitalized technology infrastructure equipment, hardware, and purchased or internally developed software, less related amortization or depreciation.
Current wording
•Technology investments — includes capitalized technology infrastructure equipment, hardware, and software (both purchased and internally developed).
Previous wording
The following schedule summarizes the income tax expense and effective tax rates for the periods presented:
Current wording
The following schedule presents the income tax expense and effective tax rates for the periods presented:
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Current report — wording carried from elsewhere
1 For information on non-GAAP financial measures, see page 83.
Current report — wording carried from elsewhere
•Fair value and nonhedge derivative income increased $4 million due to credit valuation adjustments on client-related interest rate swaps.
Current report — wording carried from elsewhere
Investments in technology initiatives, low-income housing, and municipal securities during 2024, 2023, and 2022, generated tax credits and nontaxable income, which benefited the effective tax rate for each respective year. Additionally, the effective tax rate for 2024 benefited from a reduction in the reserve for uncertain tax positions related to credits on technology initiatives, as various statutes of limitations expired.
Current report — wording carried from elsewhere
Our affiliate banks are supported by an enterprise operating segment (referred to as the “Other” segment) that provides governance and risk management, allocates capital, establishes strategic objectives, and includes centralized technology, back-office functions, and certain lines of business not operated through our affiliate banks. The cost of centrally provided services is allocated to each business segment based on estimated or actual usage of those services. Capital is allocated according to the risk-weighted assets held by each business segment.
Current report — wording carried from elsewhere
The following schedule presents the composition of our loan and lease portfolio:
Current report — wording carried from elsewhere
The following schedule presents the composition of our commercial lending portfolio:
Current report — wording carried from elsewhere
The following schedule presents the composition of our commercial real estate lending portfolio:
Current report — wording carried from elsewhere
The following schedule presents the composition of our office CRE loan portfolio and other related credit quality metrics:
Current report — wording carried from elsewhere
Observed changes in deposit behavior have been incorporated into our deposit models used for managing interest rate risk. These changes give more weight to the recently observed behavior and have increased both the deposit beta for interest-bearing products and the percentage of noninterest-bearing deposits assumed to migrate to interest-bearing products. Changes to models are independently reviewed by our Model Risk Management function.
Current report — wording carried from elsewhere
The following schedule presents deposit duration assumptions discussed previously:
Current report — wording carried from elsewhere
We maintain disaster recovery and business continuity plans to support operations in the event of natural or other disasters. Furthermore, we mitigate certain operational risks through insurance, including errors and omissions and professional liability insurance.
Current report — wording carried from elsewhere
Absent any sales or credit impairment of the AFS securities, the unrealized losses will not be recognized in earnings. We do not intend to sell any securities with unrealized losses. Although changes in AOCI are reflected in shareholders’ equity, they are currently excluded from regulatory capital and therefore do not impact our regulatory ratios.
Current report — wording carried from elsewhere
Regulation on page 9. For more information about our investment securities portfolio and related unrealized gains and losses, see Note 5 of the Notes to Consolidated Financial Statements.
Current report — wording carried from elsewhere
The following schedule presents our capital amounts, capital ratios, and other selected performance ratios:
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Previous report — wording carried elsewhere
The following schedule summarizes selected financial information of our business segments. Ratios are calculated based on amounts in thousands.
Previous report — wording carried elsewhere
The following schedule summarizes our total investments and extensions of credit to municipalities:
Previous report — wording carried elsewhere
See “Liquidity Risk Management” on page 67 for additional information on liquidity, including the ratio of available liquidity to uninsured deposits.
Previous report — wording carried elsewhere
Risk Management Framework. For example, we have documented control self-assessments related to financial reporting under the 2013 framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and the FDICIA.