What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-05 · 283 added, 175 removed, 1213 unchanged (27% of the section changed)

8 unchanged sentences

Net loans 15,548,588 15,026,315

Loans held for sale (including $ 3,901,000 and $ 5,570,000 of residential mortgage loans carried at fair value at March 31, 2022 and December 31, 2021, respectively)

Loans held for sale (including $ 1,036,000 and $ 5,570,000 of residential mortgage loans carried at fair value at June 30, 2022 and December 31, 2021, respectively)

Investment securities:

Available for sale debt, at fair value (amortized cost of $ 14,783,369,000 and $ 14,419,133,000 at

March 31, 2022 and December 31, 2021, respectively, and allowance for credit losses of $ —

at March 31, 2022 and December 31, 2021, respectively)

June 30, 2022 and December 31, 2021, respectively, and allowance for credit losses of $ —

at both June 30, 2022 and December 31, 2021)

13,700,308 14,450,027

3 unchanged sentences

Total investment securities 13,951,038 14,699,511

Federal funds sold and short-term securities purchased under agreements to resell — 2,800

Federal funds sold 26,000 2,800

Securities purchased under agreements to resell 1,450,000 1,625,000

20 unchanged sentences

Authorized 140,000,000 ;

issued 122,160,705 shares

issued 122,160,705 shares at June 30, 2022 and December 31, 2021

610,804 610,804

1 unchanged sentence

Retained earnings 262,363 92,493

Treasury stock of 1,034,382 shares at March 31, 2022

Treasury stock of 1,881,806 shares at June 30, 2022

and 476,392 shares at December 31, 2021, at cost

10 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(In thousands, except per share data) 2022 2021 2022 2021

50 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(In thousands) 2022 2021 2022 2021

3 unchanged sentences

Pension loss amortization

322 438 645 875

Unrealized losses on cash flow hedge derivatives ( 4,615 ) ( 4,525 ) ( 9,153 ) ( 8,911 )

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2022 and 2021

Three Months Ended June 30, 2022 and 2021

Commerce Bancshares, Inc.

1 unchanged sentence

Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest Total

Balance December 31, 2021

Balance March 31, 2022

$ 610,804 $ 2,678,025 $ 178,504 $ ( 72,293 ) $ ( 434,400 ) $ 12,762 $ 2,973,402

9 unchanged sentences

( 31,935 ) ( 31,935 )

Balance March 31, 2022

Balance June 30, 2022

$ 610,804 $ 2,682,161 $ 262,363 $ ( 129,588 ) $ ( 766,894 ) $ 16,467 $ 2,675,313

Balance December 31, 2020

Balance March 31, 2021

$ 589,352 $ 2,420,393 $ 173,173 $ ( 39,080 ) $ 168,752 $ 4,795 $ 3,317,385

9 unchanged sentences

( 30,760 ) ( 30,760 )

Balance March 31, 2021

Balance June 30, 2021

$ 589,352 $ 2,424,157 $ 304,739 $ ( 53,018 ) $ 220,390 $ 8,210 $ 3,493,830

2 unchanged sentences

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six Months Ended June 30, 2022 and 2021

Commerce Bancshares, Inc.

(In thousands, except per share data)

Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest Total

Balance December 31, 2021

$ 610,804 $ 2,689,894 $ 92,493 $ ( 32,973 ) $ 77,080 $ 11,026 $ 3,448,324

Net income 233,948 6,231 240,179

Other comprehensive loss ( 843,974 ) ( 843,974 )

Distributions to non-controlling interest ( 790 ) ( 790 )

Purchases of treasury stock ( 113,205 ) ( 113,205 )

Issuance of stock under purchase and equity compensation plans ( 16,142 ) 16,590 448

Stock-based compensation 8,409 8,409

Cash dividends on common stock ($ .530 per share)

( 64,078 ) ( 64,078 )

Balance June 30, 2022

$ 610,804 $ 2,682,161 $ 262,363 $ ( 129,588 ) $ ( 766,894 ) $ 16,467 $ 2,675,313

Balance December 31, 2020

$ 589,352 $ 2,436,288 $ 73,000 $ ( 32,970 ) $ 331,377 $ 2,925 $ 3,399,972

Net income 293,298 6,180 299,478

Other Comprehensive Loss ( 110,987 ) ( 110,987 )

Distributions to non-controlling interest ( 895 ) ( 895 )

Purchases of treasury stock ( 39,887 ) ( 39,887 )

Issuance of stock under purchase and equity compensation plans ( 19,854 ) 19,839 ( 15 )

Stock-based compensation 7,723 7,723

Cash dividends on common stock ($ .500 per share)

( 61,559 ) ( 61,559 )

Balance June 30, 2021

589,352 2,424,157 304,739 ( 53,018 ) 220,390 8,210 3,493,830

See accompanying notes to consolidated financial statements.

Commerce Bancshares, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31

For the Six Months Ended June 30

(In thousands) 2022 2021

13 unchanged sentences

Increase (decrease) in interest payable 247 ( 2,809 )

Increase in income taxes payable 28,657 28,105

Increase (decrease) in income taxes payable ( 1,855 ) 19,095

Other changes, net 30,464 ( 6,632 )

5 unchanged sentences

Purchases of investment securities (A) ( 1,894,221 ) ( 2,707,024 )

Net increase in loans ( 287,328 ) ( 72,497 )

Net (increase) decrease in loans ( 518,899 ) 678,554

Securities purchased under agreements to resell ( 200,000 ) ( 450,000 )

Repayments of securities purchased under agreements to resell 375,000 —

Purchases of premises and equipment ( 28,985 ) ( 21,944 )

4 unchanged sentences

Net decrease in certificates of deposit ( 437,030 ) ( 98,436 )

Net decrease in federal funds purchased and securities sold under agreements to repurchase ( 705,506 ) ( 160,273 )

Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase ( 788,671 ) 219,845

Net increase (decrease) in other borrowings ( 6,535 ) 1,392

5 unchanged sentences

Cash, cash equivalents and restricted cash at beginning of year 4,296,954 2,208,328

Cash, cash equivalents and restricted cash at March 31

Cash, cash equivalents and restricted cash at June 30

$ 1,071,920 $ 2,546,336

5 unchanged sentences

Restricted cash is comprised of cash collateral posted by the Company to secure interest rate swap agreements.

This balance is included in other assets in the consolidated balance sheets and totaled $ 18.2 million and $ 24.5 million at March 31, 2022 and 2021, respectively.

This balance is included in other assets in the consolidated balance sheets and totaled $ 5.4 million and $ 20.6 million at June 30, 2022 and 2021, respectively.

Commerce Bancshares, Inc.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 (Unaudited)

June 30, 2022 (Unaudited)

Principles of Consolidation and Presentation

6 unchanged sentences

Certain reclassifications were made to 2021 data to conform to current year presentation.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period.

Actual results could differ significantly from those estimates.

Management has evaluated subsequent events for potential recognition or disclosure.

The results of operations for the three month period ended March 31, 2022 are not necessarily indicative of results to be attained for the full year or any other interim period.

The results of operations for the six month period ended June 30, 2022 are not necessarily indicative of results to be attained for the full year or any other interim period.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission.

1 unchanged sentence

Loans and Allowance for Credit Losses

Major classifications within the Company’s held for investment loan portfolio at March 31, 2022 and December 31, 2021 are as follows:

Major classifications within the Company’s held for investment loan portfolio at June 30, 2022 and December 31, 2021 are as follows:

(In thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Business $ 5,441,592 $ 5,303,535

8 unchanged sentences

Total loans $ 15,686,627 $ 15,176,359

Accrued interest receivable totaled $ 32.1 million and $ 25.9 million at March 31, 2022 and December 31, 2021, respectively, and was included within other assets on the consolidated balance sheets.

For the three months ended March 31, 2022, the Company wrote-off accrued interest by reversing interest income of $ 29 thousand and $ 899 thousand in the Commercial and Personal Banking portfolios, respectively.

Similarly, for the three months ended March 31, 2021, the Company wrote-off accrued interest of $ 125 thousand and $ 2.0 million in the Commercial and Personal Banking portfolios, respectively.

At March 31, 2022, loans of $ 3.2 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits.

Accrued interest receivable totaled $ 36.1 million and $ 25.9 million at June 30, 2022 and December 31, 2021, respectively, and was included within other assets on the consolidated balance sheets.

For the three months ended June 30, 2022, the Company wrote-off accrued interest by reversing interest income of $ 26 thousand and $ 762 thousand in the Commercial and Personal Banking portfolios, respectively.

Similarly, for the six months ended June 30, 2022, the Company wrote-off accrued interest of $ 55 thousand and $ 1.7 million in the Commercial and Personal Banking portfolios, respectively.

At June 30, 2022, loans of $ 3.1 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits.

Additional loans of $ 1.3 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings.

15 unchanged sentences

Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.

Key model assumptions in the Company’s allowance for credit loss model include the economic forecast, the reasonable and supportable period, forecasted macro-economic variables, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions.

The assumptions utilized in estimating the Company’s allowance for credit losses at March 31, 2022 and December 31, 2021 are discussed below.

Key Assumption March 31, 2022 December 31, 2021

Overall economic forecast • Improving health situation supports positive economic momentum in the short term

Key assumptions in the Company’s allowance for credit loss model include the economic forecast, the reasonable and supportable period, forecasted macro-economic variables, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions.

The assumptions utilized in estimating the Company’s allowance for credit losses at June 30, 2022 and March 31, 2022 are discussed below.

Key Assumption June 30, 2022 March 31, 2022

Overall economic forecast • Positive economic momentum faced with continued COVID challenges, supply constraints and high inflation

• Continued monetary policy tightening to rein in inflation

• Uncertainties related to supply chain issues and the timing and likelihood of a recession

• Improving health situation supports positive economic momentum in the short term

• Projects significant monetary policy tightening to rein in inflation

1 unchanged sentence

• Uncertainties related to supply chain issues

• Continued recovery from the Global Coronavirus Recession (GCR)

• Assumes improving health conditions

• Assumes gradual easing of supply constraints

• Continued uncertainty regarding the health crisis

• Uncertainty regarding rising inflation

Reasonable and supportable period and related reversion period • One year for commercial and personal banking loans

6 unchanged sentences

• Unemployment rate ranging from 3.6% to 3.4% during the supportable forecast period

• Real GDP growth ranges from 5.0% to 3.4%

• Prime rate of 3.25% through the second quarter of 2022, increasing to 3.5% by the end of 2022

• Real GDP growth ranging from 2.6% to 3.7%

• Prime rate from 4.0% to 5.2%

Prepayment assumptions Commercial loans

13 unchanged sentences

• Loans downgraded to special mention, substandard, or non-accrual status

Added net reserves using qualitative processes related to:

• Loans originated in our expansion markets, loans that are designated as shared national credits, and certain portfolios sensitive to pandemic economic uncertainties

Added qualitative factors related to:

• Certain portfolios sensitive to pandemic economic uncertainties

• Changes in the composition of the loan portfolios

• Uncertainty related to unusually high rate of inflation, geopolitical environment, and supply chain issues

• Loans downgraded to special mention, substandard, or non-accrual status

2 unchanged sentences

The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment.

The forecasted macro-economic environment continuously changes which can cause fluctuations in estimated expected losses.

The current forecast projects a continued recovery of the COVID-19 related health situation, which is expected to create positive economic momentum.

However, the higher inflation and Russia's invasion of Ukraine has created greater uncertainty in the forecast.

The geopolitical environment, trends in health conditions, and ongoing supply constraints could significantly modify economic projections used in the estimation of the allowance for credit losses.

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the three months ended March 31, 2022 and 2021, respectively, follows:

For the Three Months Ended March 31, 2022

The forecasted macro-economic environment continuously changes which can cause fluctuations in estimated expected credit losses.

The current forecast projects a continued positive economic momentum faced with pandemic complications, high inflation, supply chain constraints, and uncertainty related to the Russian invasion of Ukraine.

The geopolitical environment, trends in health conditions and impacted supply constraints could significantly modify economic projections used in the estimation of the allowance for credit losses and liability for unfunded lending commitments.

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the six months ended June 30, 2022 and 2021, respectively, follows:

For the Three Months Ended June 30, 2022

For the Six Months Ended June 30, 2022

(In thousands) Commercial Personal Banking

Commercial Personal Banking

ALLOWANCE FOR CREDIT LOSSES ON LOANS

4 unchanged sentences

Net loan charge-offs (recoveries) 18 3,940 3,958 88 8,518 8,606

Balance March 31, 2022 $ 94,827 $ 39,883 $ 134,710

Balance June 30, 2022 $ 99,525 $ 38,514 $ 138,039 $ 99,525 $ 38,514 $ 138,039

LIABILITY FOR UNFUNDED LENDING COMMITMENTS

1 unchanged sentence

Provision for credit losses on unfunded lending commitments ( 163 ) 38 ( 125 ) 346 357 703

Balance March 31, 2022 $ 23,780 $ 1,252 $ 25,032

Balance June 30, 2022 $ 23,617 $ 1,290 $ 24,907 $ 23,617 $ 1,290 $ 24,907

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 123,142 $ 39,804 $ 162,946 $ 123,142 $ 39,804 $ 162,946

For the Three Months Ended March 31, 2021

For the Three Months Ended June 30, 2021

For the Six Months Ended June 30, 2021

(In thousands) Commercial Personal Banking

Commercial Personal Banking

ALLOWANCE FOR CREDIT LOSSES ON LOANS

4 unchanged sentences

Net loan charge-offs ( 4,994 ) 5,693 699 ( 4,977 ) 15,628 10,651

Balance March 31, 2021 $ 119,623 $ 80,904 $ 200,527

Balance June 30, 2021 $ 98,038 $ 74,357 $ 172,395 $ 98,038 $ 74,357 $ 172,395

LIABILITY FOR UNFUNDED LENDING COMMITMENTS

1 unchanged sentence

Provision for credit losses on unfunded lending commitments ( 18,163 ) ( 59 ) ( 18,222 ) ( 13,909 ) ( 190 ) ( 14,099 )

Balance March 31, 2021 $ 41,513 $ 917 $ 42,430

Balance June 30, 2021 $ 23,350 $ 858 $ 24,208 $ 23,350 $ 858 $ 24,208

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 121,388 $ 75,215 $ 196,603 $ 121,388 $ 75,215 $ 196,603

1 unchanged sentence

The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day.

The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at March 31, 2022 and December 31, 2021.

The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at June 30, 2022 and December 31, 2021.

(In thousands)

2 unchanged sentences

90 Days Past Due and Still Accruing Non-accrual

March 31, 2022

June 30, 2022

Business $ 5,432,582 $ 2,278 $ 418 $ 6,314 $ 5,441,592

19 unchanged sentences

Total $ 15,116,475 $ 39,001 $ 11,726 $ 9,157 $ 15,176,359

At March 31, 2022, the Company had $ 4.9 million in non-accrual business loans that had no allowance for credit loss.

At June 30, 2022, the Company had $ 4.5 million in non-accrual business loans that had no allowance for credit loss.

At December 31, 2021, the Company had $ 5.3 million in non-accrual business loans that had no allowance for credit loss.

The Company did not record any interest income on non-accrual loans during the three months ended March 31, 2022 and 2021, respectively.

The Company did not record any interest income on non-accrual loans during the three and six months ended June 30, 2022 and 2021, respectively.

Credit quality indicators

15 unchanged sentences

In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan.

The risk category of loans in the Commercial portfolio as of March 31, 2022 and December 31, 2021 are as follows:

The risk category of loans in the Commercial portfolio as of June 30, 2022 and December 31, 2021 are as follows:

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2022

June 30, 2022

Pass $ 668,983 $ 1,026,985 $ 562,836 $ 456,621 $ 206,448 $ 337,860 $ 2,129,662 $ 5,389,395

53 unchanged sentences

$ 2,917,439 $ 1,869,035 $ 1,223,303 $ 555,494 $ 408,432 $ 593,927 $ 1,913,008 $ 9,480,638

The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of March 31, 2022 and December 31, 2021 below:

The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of June 30, 2022 and December 31, 2021 below:

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2022

June 30, 2022

Real estate-personal

19 unchanged sentences

Current to 90 days past due $ 6,809 $ — $ — $ — $ — $ — $ — $ 6,809

Over 90 days past due 5 — — — — — — 5

Total Overdrafts:

41 unchanged sentences

The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan.

The following table presents the amortized cost basis of collateral-dependent loans as of March 31, 2022 and December 31, 2021.

The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2022 and December 31, 2021.

(In thousands) Business Assets Oil & Gas Assets Total

March 31, 2022

June 30, 2022

Business $ 1,465 $ 2,194 $ 3,659

9 unchanged sentences

often underwritten with other collateral considerations.

These loans totaled $ 183.4 million at March 31, 2022 and $ 185.6 million at December 31, 2021.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 181.8 million at March 31, 2022 and $ 186.6 million at December 31, 2021.

These loans totaled $ 186.0 million at June 30, 2022 and $ 185.6 million at December 31, 2021.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 186.6 million at June 30, 2022 and $ 186.6 million at December 31, 2021.

As the healthcare loans are guaranteed by the hospital, customer FICO scores are not obtained for these loans.

The personal real estate loans and consumer loans excluded below totaled less than 7 % of the Personal Banking portfolio.

For the remainder of loans in the Personal Banking portfolio, the table below shows the percentage of balances outstanding at March 31, 2022 and December 31, 2021 by FICO score.

For the remainder of loans in the Personal Banking portfolio, the table below shows the percentage of balances outstanding at June 30, 2022 and December 31, 2021 by FICO score.

Personal Banking Loans

1 unchanged sentence

Real Estate - Personal Consumer Revolving Home Equity Consumer Credit Card

March 31, 2022

June 30, 2022

Under 600 1.2 % 1.7 % 1.5 % 3.3 %

21 unchanged sentences

Other consumer loans classified as troubled debt restructurings consist of various other workout arrangements with consumer customers.

(In thousands) March 31, 2022 December 31, 2021

(In thousands) June 30, 2022 December 31, 2021

Accruing restructured loans:

12 unchanged sentences

During the period covered by the CARES Act, if it was deemed that the loan modification was not short-term, not COVID-19 related or the customer does not meet the criteria under the guidance to be scoped out of troubled debt restructuring classification, the Company evaluated the loan modifications under its existing framework and accounted for the modification as a troubled debt restructuring.

The table below shows the balance of troubled debt restructurings by loan classification at March 31, 2022, in addition to the outstanding balances of these restructured loans which the Company considers to have been in default at any time during the past twelve months.

The table below shows the balance of troubled debt restructurings by loan classification at June 30, 2022, in addition to the outstanding balances of these restructured loans which the Company considers to have been in default at any time during the past twelve months.

For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal.

(In thousands) March 31, 2022 Balance 90 days past due at any time during previous 12 months

(In thousands) June 30, 2022 Balance 90 days past due at any time during previous 12 months

Business $ 15,955 $ —

18 unchanged sentences

If an accruing troubled debt restructuring defaults, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begin.

The Company had commitments of $ 17.7 million at March 31, 2022 to lend additional funds to borrowers with restructured loans.

Additionally, the Company had commitments at March 31, 2022 of $ 24.0 million related to letters of credit with an internal risk rating below substandard.

The Company had commitments of $ 15.2 million at June 30, 2022 to lend additional funds to borrowers with restructured loans.

Additionally, the Company had commitments at June 30, 2022 of $ 24.0 million related to letters of credit with an internal risk rating below substandard.

Loans held for sale

3 unchanged sentences

(FHLMC) and Federal National Mortgage Association (FNMA).

At March 31, 2022, the fair value of these loans was $ 3.9 million, and the unpaid principal balance was $ 3.9 million.

At June 30, 2022, the fair value of these loans was $ 1.0 million, and the unpaid principal balance was $ 1.0 million.

The Company also designates certain student loan originations as held for sale.

1 unchanged sentence

The loans are intended to be sold in the secondary market, and the Company maintains contracts with Sallie Mae to sell the loans within 210 days after the last disbursement to the student.

These loans are carried at lower of cost or fair value, which at March 31, 2022 totaled $ 5.0 million.

At March 31, 2022, none of the loans held for sale were on non-accrual status or 90 days past due and still accruing interest.

These loans are carried at lower of cost or fair value, which at June 30, 2022 totaled $ 5.4 million.

At June 30, 2022, none of the loans held for sale were on non-accrual status or 90 days past due and still accruing interest.

Foreclosed real estate/repossessed assets

The Company’s holdings of foreclosed real estate totaled $ 296 thousand and $ 115 thousand at March 31, 2022 and December 31, 2021, respectively.

Personal property acquired in repossession, generally autos, totaled $ 1.3 million and $ 1.1 million at March 31, 2022 and December 31, 2021, respectively.

The Company’s holdings of foreclosed real estate totaled $ 296 thousand and $ 115 thousand at June 30, 2022 and December 31, 2021, respectively.

Personal property acquired in repossession, generally autos, totaled $ 1.1 million at both June 30, 2022 and December 31, 2021.

Upon acquisition, these assets are recorded at fair value less estimated selling costs at the date of foreclosure, establishing a new cost basis.

1 unchanged sentence

Investment Securities

Investment securities consisted of the following at March 31, 2022 and December 31, 2021.

(In thousands) March 31, 2022 December 31, 2021

Investment securities consisted of the following at June 30, 2022 and December 31, 2021.

(In thousands) June 30, 2022 December 31, 2021

Available for sale debt securities $ 13,700,308 $ 14,450,027

9 unchanged sentences

$ 13,951,038 $ 14,699,511

(1) Accrued interest receivable totaled $ 41.4 million and $ 39.5 million at March 31, 2022 and December 31, 2021, respectively, and was included within other assets on the consolidated balance sheets.

(1) Accrued interest receivable totaled $ 41.5 million and $ 39.5 million at June 30, 2022 and December 31, 2021, respectively, and was included within other assets on the consolidated balance sheets.

The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer.

This portfolio includes the Company's holdings of Visa Class B shares, which have a carrying value of zero, as there have not been observable price changes in orderly transactions for identical or similar investments of the same issuer.

During the three months ended March 31, 2022, the Company did not record any impairment or other adjustments to the carrying amount of its portfolio of equity securities with no readily determinable fair value.

During the six months ended June 30, 2022, the Company did not record any impairment or other adjustments to the carrying amount of its portfolio of equity securities with no readily determinable fair value.

Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, equity method investments, and investments in portfolio concerns held by the Company's private equity subsidiary.

6 unchanged sentences

The majority of the Company’s investment portfolio is comprised of available for sale debt securities, which are carried at fair value with changes in fair value reported in other comprehensive income (OCI).

A summary of the available for sale debt securities by maturity groupings as of March 31, 2022 is shown below.

A summary of the available for sale debt securities by maturity groupings as of June 30, 2022 is shown below.

The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as FHLMC, FNMA, and Government National Mortgage Association (GNMA), in addition to non-agency mortgage-backed securities, which have no guarantee but are collateralized by commercial and residential mortgages.

32 unchanged sentences

government and federal agency obligations include U.S.

Treasury inflation-protected securities, which totaled $ 399.4 million, at fair value, at March 31, 2022.

Treasury inflation-protected securities, which totaled $ 383.7 million, at fair value, at June 30, 2022.

Interest paid on these securities increases with inflation and decreases with deflation, as measured by the Consumer Price Index.

6 unchanged sentences

Credit impairment is determined using input factors such as cash flow projections, contractual payments required, expected delinquency rates, credit support from other tranches, prepayment speeds, collateral loss severity rates (including loan to values), and various other information related to the underlying collateral.

At March 31, 2022, the fair value of securities on this watch list was $ 13.1 million compared to $ 13.4 million at December 31, 2021.

Significant inputs to the cash flow model used at March 31, 2022 to quantify credit losses were primarily credit support agreements, as the securities on the Company's watch list at March 31, 2022 were securities backed by government-guaranteed student loans and are expected to perform as contractually required.

As of March 31, 2022, the Company did not identify any securities for which a credit loss exists, and for the three months ended March 31, 2022 and 2021, the Company did not recognize a credit loss expense on any available for sale debt securities.

The table below summarizes debt securities available for sale in an unrealized loss position, aggregated by length of loss period, for which an allowance for credit losses has not been recorded at March 31, 2022 and December 31, 2021.

At June 30, 2022, the fair value of securities on this watch list was $ 106.4 million compared to $ 13.4 million at December 31, 2021.

Significant inputs to the cash flow model used at June 30, 2022 to quantify credit losses were primarily credit support agreements, as the securities on the Company's watch list at June 30, 2022 were securities backed by government-guaranteed student loans and are expected to perform as contractually required.

As of June 30, 2022, the Company did not identify any securities for which a credit loss exists, and for the six months ended June 30, 2022 and 2021, the Company did not recognize a credit loss expense on any available for sale debt securities.

Unrealized losses on these available for sale securities have not been recognized into income because after review, the securities were deemed not to be impaired.

6 unchanged sentences

Losses Fair Value Unrealized

March 31, 2022

June 30, 2022

government and federal agency obligations $ 609,636 $ 20,883 $ — $ — $ 609,636 $ 20,883

19 unchanged sentences

Total $ 8,581,829 $ 118,680 $ 465,833 $ 14,249 $ 9,047,662 $ 132,929

The entire available for sale debt portfolio included $ 12.2 billion of securities that were in a loss position at March 31, 2022, compared to $ 9.0 billion at December 31, 2021.

The total amount of unrealized loss on these securities was $ 690.1 million at March 31, 2022, an increase of $ 557.1 million compared to the unrealized loss at December 31, 2021.

The entire available for sale debt portfolio included $ 12.4 billion of securities that were in a loss position at June 30, 2022, compared to $ 9.0 billion at December 31, 2021.

The total amount of unrealized loss on these securities was $ 1.1 billion at June 30, 2022, an increase of $ 959.2 million compared to the unrealized loss at December 31, 2021.

Securities with significant unrealized losses are discussed in the "Allowance for credit losses on available for sale debt securities" section above.

For debt securities classified as available for sale, the following table shows the amortized cost, fair value, and allowance for credit losses of securities available for sale at March 31, 2022 and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type.

For debt securities classified as available for sale, the following table shows the amortized cost, fair value, and allowance for credit losses of securities available for sale at June 30, 2022 and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type.

(In thousands)

1 unchanged sentence

Losses Allowance for Credit Losses Fair Value

March 31, 2022

June 30, 2022

government and federal agency obligations $ 1,125,536 $ 4,475 $ ( 20,883 ) $ — $ 1,109,128

20 unchanged sentences

The following table presents proceeds from sales of securities and the components of investment securities gains and losses which have been recognized in earnings.

For the Three Months Ended March 31

For the Six Months Ended June 30

(In thousands) 2022 2021

Proceeds from sales of securities:

Available for sale debt securities

Other investments

$ 1,745 $ 9,292

Total proceeds

1 unchanged sentence

Investment securities gains (losses), net:

Available for sale debt securities:

Losses realized on sales $ ( 9,582 ) $ —

Equity securities:

Fair value adjustments, net

$ ( 287 ) $ ( 35 )

Gains realized on sales

Losses realized on sales

Fair value adjustments, net 23,083 25,031

Total investment securities gains, net $ 8,192 $ 26,657

Net gains on investment securities for the three months ended March 31, 2022 were mainly comprised of net losses of $ 287 thousand on equity investments, offset by net gains in fair value of $ 7.5 million on private equity investments, due to fair value adjustments.

At March 31, 2022, securities totaling $ 5.2 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $ 6.4 billion at December 31, 2021.

Securities pledged under agreements pursuant to which the collateral may be sold or re-pledged by the secured parties approximated $ 201.0 million, while the remaining securities were pledged under agreements pursuant to which the secured

parties may not sell or re-pledge the collateral.

Net gains on investment securities for the six months ended June 30, 2022 were mainly comprised of losses of $ 9.6 million on sales of available for sale securities, net losses of $ 4.3 million on sales of private equity investments, and net losses in fair value of $ 1.0 million on equity investments, offset by net gains in fair value of $ 23.1 million on private equity investments, due to fair value adjustments.

At June 30, 2022, securities totaling $ 5.3 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $ 6.4 billion at December 31, 2021.

Securities pledged under agreements pursuant to which the collateral may be sold or re-pledged by the secured parties approximated $ 209.9 million, while the remaining securities were pledged under agreements pursuant to which the secured parties may not sell or re-pledge the collateral.

Except for obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeded 10 % of stockholders’ equity.

1 unchanged sentence

The following table presents information about the Company's intangible assets which have estimable useful lives.

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(In thousands)

4 unchanged sentences

Total $ 53,229 $ ( 40,976 ) $ — $ 12,253 $ 52,140 $ ( 39,866 ) $ ( 304 ) $ 11,970

Aggregate amortization expense on intangible assets was $ 609 thousand and $ 951 thousand for the three month periods ended March 31, 2022 and 2021.

Aggregate amortization expense on intangible assets was $ 501 thousand and $ 745 thousand for the three month periods ended June 30, 2022 and 2021, respectively, and $ 1.1 million and $ 1.7 million for the six month periods ended June 30, 2022 and 2021, respectively.

The following table shows the estimated annual amortization expense for the next five fiscal years.

This expense is based on existing asset balances and the interest rate environment as of March 31, 2022.

This expense is based on existing asset balances and the interest rate environment as of June 30, 2022.

The Company’s actual amortization expense in any given period may be different from the estimated amounts depending upon the acquisition of intangible assets, changes in mortgage interest rates, prepayment rates and other market conditions.

(In thousands)

Changes in the carrying amount of goodwill and net other intangible assets for the three month period ended March 31, 2022 are as follows:

Changes in the carrying amount of goodwill and net other intangible assets for the six month period ended June 30, 2022 are as follows:

(In thousands) Goodwill Easement Core Deposit Premium Mortgage Servicing Rights

4 unchanged sentences

Impairment recovery — — — 304

Balance March 31, 2022 $ 138,921 $ 3,600 $ 925 $ 11,360

Goodwill allocated to the Company’s operating segments at March 31, 2022 and December 31, 2021 is shown below.

Balance June 30, 2022 $ 138,921 $ 3,600 $ 846 $ 11,407

Goodwill allocated to the Company’s operating segments at June 30, 2022 and December 31, 2021 is shown below.

(In thousands)

10 unchanged sentences

Upon issuance of standby letters of credit, the Company recognizes a liability for the fair value of the obligation undertaken, which is estimated to be equivalent to the amount of fees received from the customer over the life of the agreement.

At March 31, 2022, that net liability was $ 4.2 million, which will be accreted into income over the remaining life of the respective commitments.

The contractual amount of these letters of credit, which represents the maximum potential future payments guaranteed by the Company, was $ 502.1 million at March 31, 2022.

At June 30, 2022, that net liability was $ 4.0 million, which will be accreted into income over the remaining life of the respective commitments.

The contractual amount of these letters of credit, which represents the maximum potential future payments guaranteed by the Company, was $ 504.0 million at June 30, 2022.

The Company periodically enters into credit risk participation agreements (RPAs) as a guarantor to other financial institutions, in order to mitigate those institutions’ credit risk associated with interest rate swaps with third parties.

2 unchanged sentences

The third parties usually have other borrowing relationships with the Company.

The Company monitors overall borrower collateral and at March 31, 2022, believes sufficient collateral is available to cover potential swap losses.

The Company monitors overall borrower collateral and at June 30, 2022, believes sufficient collateral is available to cover potential swap losses.

The RPAs are carried at fair value throughout their term with all changes in fair value, including those due to a change in the third party’s creditworthiness, recorded in current earnings.

The terms of the RPAs, which correspond to the terms of the underlying swaps, range from 2 years to 15 years.

At March 31, 2022, the fair value of the Company's guarantee liabilities for RPAs was $ 126 thousand, and the notional amount of the underlying swaps was $ 347.9 million.

At June 30, 2022, the fair value of the Company's guarantee liabilities for RPAs was $ 162 thousand, and the notional amount of the underlying swaps was $ 366.2 million.

The maximum potential future payment guaranteed by the Company cannot be readily estimated but is dependent upon the fair value of the interest rate swaps at the time of default.

7 unchanged sentences

The following table provides the components of lease income.

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(in thousands) 2022 2021 2022 2021

1 unchanged sentence

Operating leases (a)

2,158 1,930 4,342 4,004

Total lease income $ 7,272 $ 7,725 $ 14,703 $ 15,920

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for the three month periods ended March 31, 2022 and 2021 .

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for the three month periods ended June 30, 2022 and 2021, and $ 38 thousand for the six months ended June 30, 2022 and 2021 .

The amount of net pension cost is shown in the table below:

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(In thousands) 2022 2021 2022 2021

6 unchanged sentences

All benefits accrued under the Company’s defined benefit pension plan have been frozen since January 1, 2011.

During the first three months of 2022, the Company made no funding contributions to its defined benefit pension plan and made minimal funding contributions to a supplemental executive retirement plan (the CERP), which carries no segregated assets.

During the first six months of 2022, the Company made no funding contributions to its defined benefit pension plan and made minimal funding contributions to a supplemental executive retirement plan (the CERP), which carries no segregated assets.

Common Stock *

4 unchanged sentences

Nonvested share-based awards are further discussed in Note 13.

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(In thousands, except per share data) 2022 2021 2022 2021

15 unchanged sentences

Diluted income per common share $ .96 $ 1.32 $ 1.93 $ 2.38

Unexercised stock appreciation rights of 119 thousand and 54 thousand for the three month periods ended March 31, 2022 and 2021, respectively, were excluded from the computation of diluted income per common share because their inclusion would have been anti-dilutive.

Unexercised stock appreciation rights of 168 thousand and 76 thousand for the three month periods ended June 30, 2022 and 2021, respectively, and 144 thousand and 53 thousand for the six month periods ended June 30, 2022 and 2021, respectively, were excluded from the computation of diluted income per common share because their inclusion would have been anti-dilutive.

* All prior year share and per share amounts in this note have been restated for the 5% common stock dividend distributed in December 2021.

11 unchanged sentences

Current period other comprehensive income (loss), net of tax ( 835,466 ) 645 ( 9,153 ) ( 843,974 )

Balance March 31, 2022

Balance June 30, 2022

$ ( 812,292 ) $ ( 20,023 ) $ 65,421 $ ( 766,894 )

1 unchanged sentence

$ 263,801 $ ( 25,118 ) $ 92,694 $ 331,377

Other comprehensive income (loss) before reclassifications to current earnings ( 211,569 ) — — ( 211,569 )

Other comprehensive loss before reclassifications to current earnings ( 137,270 ) — — ( 137,270 )

Amounts reclassified to current earnings from accumulated other comprehensive income — 1,166 ( 11,881 ) ( 10,715 )

2 unchanged sentences

Current period other comprehensive income (loss), net of tax ( 102,951 ) 875 ( 8,911 ) ( 110,987 )

Balance March 31, 2021

Balance June 30, 2021

$ 160,850 $ ( 24,243 ) $ 83,783 $ 220,390

16 unchanged sentences

Consumer Commercial Wealth Segment Totals Other/Elimination Consolidated Totals

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Net interest income $ 83,633 $ 109,646 $ 19,226 $ 212,505 $ 19,880 $ 232,385

4 unchanged sentences

Income before income taxes $ 35,227 $ 75,070 $ 36,745 $ 147,042 $ 5,132 $ 152,174

Three Months Ended March 31, 2021

Six Months Ended June 30, 2022

Net interest income $ 163,529 $ 219,176 $ 38,094 $ 420,799 $ 20,372 $ 441,171

4 unchanged sentences

Income before income taxes $ 65,985 $ 148,645 $ 72,507 $ 287,137 $ 16,965 $ 304,102

Three Months Ended June 30, 2021

Net interest income $ 80,807 $ 114,185 $ 17,654 $ 212,646 $ ( 4,664 ) $ 207,982

Provision for loan losses ( 5,664 ) 4,952 ( 4 ) ( 716 ) 46,371 45,655

Non-interest income 36,905 52,259 52,505 141,669 ( 2,526 ) 139,143

Investment securities gains, net — — — — 16,804 16,804

Non-interest expense ( 73,915 ) ( 82,619 ) ( 34,049 ) ( 190,583 ) ( 7,543 ) ( 198,126 )

Income before income taxes $ 38,133 $ 88,777 $ 36,106 $ 163,016 $ 48,442 $ 211,458

Six Months Ended June 30, 2021

Net interest income $ 158,746 $ 224,750 $ 35,111 $ 418,607 $ ( 4,877 ) $ 413,730

Provision for credit losses ( 15,565 ) 4,925 1 ( 10,639 ) 62,526 51,887

Non-interest income 75,153 102,987 103,490 281,630 ( 6,442 ) 275,188

Investment securities gains, net — — — — 26,657 26,657

Non-interest expense ( 144,284 ) ( 161,900 ) ( 67,092 ) ( 373,276 ) ( 17,423 ) ( 390,699 )

Income before income taxes $ 74,050 $ 170,762 $ 71,510 $ 316,322 $ 60,441 $ 376,763

The information presented above was derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Company.

11 unchanged sentences

These contractual amounts, along with other terms of the derivative, are used to determine amounts to be exchanged between counterparties and are not a measure of loss exposure.

At March 31, 2022, the Company’s derivative instruments are accounted for as free-standing derivatives, and changes in their fair value are recorded in current earnings.

At June 30, 2022, the Company’s derivative instruments are accounted for as free-standing derivatives, and changes in their fair value are recorded in current earnings.

(In thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Interest rate swaps $ 2,091,114 $ 2,229,419

3 unchanged sentences

Mortgage loan commitments

19,638 21,787

Mortgage loan forward sale contracts — 1,165

10 unchanged sentences

During the year ended December 31, 2020, the Company monetized three interest rate floors that were previously classified as cash flow hedges with a combined notional balance of $ 1.5 billion and an asset fair value of $ 163.2 million.

As of March 31, 2022, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 93.4 million (pre-tax), which will be reclassified into interest income over the next 4.7 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at March 31, 2022 that is expected to be reclassified into income within the next 12 months is $ 24.4 million.

As of June 30, 2022, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 87.2 million (pre-tax), which will be reclassified into interest income over the next 4.5 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at June 30, 2022 that is expected to be reclassified into income within the next 12 months is $ 24.2 million.

The Company also contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps through risk participation agreements.

8 unchanged sentences

The Company's policy is to present its derivative assets and derivative liabilities on a gross basis in its consolidated balance sheets, and these are reported in other assets and other liabilities.

Certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swaps, such that at March 31, 2022 in the table below, the positive fair values of cleared swaps were reduced by $ 11.3 million and the negative fair values of cleared swaps were reduced by $ 5.5 million.

Certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swaps, such that at June 30, 2022 in the table below, the positive fair values of cleared swaps were reduced by $ 16.3 million and the negative fair values of cleared swaps were reduced by $ 929 thousand.

At December 31, 2021, positive fair values of cleared swaps were reduced by $ 587 thousand and the negative fair values of cleared swaps were reduced by $ 29.7 million.

Asset Derivatives Liability Derivatives

31, 2022 Dec.

31, 2021 Mar.

31, 2022 Dec.

June 30, 2022 Dec.

31, 2021 June 30, 2022 Dec.

(In thousands )

13 unchanged sentences

(In thousands) Total Included Component Excluded Component Total Included Component Excluded Component

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ — $ — $ — Total $ ( 6,154 ) $ ( 7,687 ) $ 1,533

For the Three Months Ended March 31, 2021

For the Six Months Ended June 30, 2022

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ — $ — $ — Total $ ( 12,204 ) $ ( 15,253 ) $ 3,049

For the Three Months Ended June 30, 2021

Derivatives in cash flow hedging relationships:

Interest rate floors $ — $ — $ — Interest and fees on loans $ ( 6,033 ) $ ( 7,566 ) $ 1,533

Total $ — $ — $ — Total $ ( 6,033 ) $ ( 7,566 ) $ 1,533

For the Six Months Ended June 30, 2021

Derivatives in cash flow hedging relationships:

Interest rate floors $ — $ — $ — Interest and fees on loans $ ( 11,881 ) $ ( 14,930 ) $ 3,049

Total $ — $ — $ — Total $ ( 11,881 ) $ ( 14,930 ) $ 3,049

Location of Gain or (Loss) Recognized in Consolidated Statements of Income Amount of Gain or (Loss) Recognized in Income on Derivatives

For the Three Months Ended March 31

For the Three Months Ended June 30 For the Six Months Ended June 30

(In thousands) 2022 2021 2022 2021

23 unchanged sentences

Pledged Net Amount

March 31, 2022

June 30, 2022

Derivatives subject to master netting agreements

20 unchanged sentences

financing transactions), not as true sales and purchases of the underlying collateral securities.

Some of the resale and repurchase agreements were transacted under master netting arrangements that contain a conditional right of offset, such as

close-out netting, upon default.

Some of the resale and repurchase agreements were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default.

The security collateral accepted or pledged in resale and repurchase agreements with other financial institutions may be sold or re-pledged by the secured party, but is usually delivered to and held by third party trustees.

3 unchanged sentences

These repurchase and resale agreements have the same principal amounts, inception dates, and maturity dates and have been offset against each other in the consolidated balance sheets, as permitted under the netting provisions of ASC 210-20-45.

The collateral swaps totaled $ 200.0 million at March 31, 2022 and $ 400.0 million at December 31, 2021.

The collateral swaps totaled $ 200.0 million at June 30, 2022 and $ 400.0 million at December 31, 2021.

The following table shows the extent to which resale agreement assets and repurchase agreement liabilities with the same counterparty have been offset on the consolidated balance sheets, in addition to the extent to which they could potentially be offset.

4 unchanged sentences

(In thousands) Gross Amount Recognized Gross Amounts Offset in the Balance Sheet Net Amounts Presented in the Balance Sheet Financial Instruments Available for Offset Securities Collateral Received/Pledged Unsecured Amount

March 31, 2022

June 30, 2022

Total resale agreements, subject to master netting arrangements

7 unchanged sentences

3,379,582 ( 400,000 ) 2,979,582 — ( 2,979,582 ) —

The table below shows the remaining contractual maturities of repurchase agreements outstanding at March 31, 2022 and December 31, 2021, in addition to the various types of marketable securities that have been pledged by the Company as collateral for these borrowings.

The table below shows the remaining contractual maturities of repurchase agreements outstanding at June 30, 2022 and December 31, 2021, in addition to the various types of marketable securities that have been pledged by the Company as collateral for these borrowings.

Remaining Contractual Maturity of the Agreements

(In thousands) Overnight and continuous Up to 90 days Greater than 90 days Total

March 31, 2022

June 30, 2022

Repurchase agreements, secured by:

16 unchanged sentences

Historically, most of the awards have been issued during the first quarter of each year.

The stock-based compensation expense that has been charged against income was $ 4.2 million and $ 3.9 million in the three months ended March 31, 2022 and 2021, respectively.

The stock-based compensation expense charged against income was $ 4.2 million and $ 3.8 million in the three months ended June 30, 2022 and 2021, respectively, and $ 8.4 million and $ 7.7 million in the six months ended June 30, 2022 and 2021, respectively.

Nonvested stock awards granted generally vest in 4 to 7 years and contain restrictions as to transferability, sale, pledging, or assigning, among others, prior to the end of the vesting period.

Dividend and voting rights are conferred upon grant.

A summary of the status of the Company’s nonvested share awards as of March 31, 2022, and changes during the three month period then ended, is presented below.

A summary of the status of the Company’s nonvested share awards as of June 30, 2022, and changes during the six month period then ended, is presented below.

Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 18,367 ) 59.80

Nonvested at March 31, 2022 1,103,656 $ 60.44

Nonvested at June 30, 2022 1,090,738 $ 60.62

SARs are granted with exercise prices equal to the market price of the Company’s stock at the date of grant.

7 unchanged sentences

Expected term

A summary of SAR activity during the first three months of 2022 is presented below.

A summary of SAR activity during the first six months of 2022 is presented below.

(Dollars in thousands, except per share data)

7 unchanged sentences

Exercised ( 30,216 ) 44.26

Outstanding at March 31, 2022

Outstanding at June 30, 2022

955,047 $ 48.62 5.7 years $ 17,024

Revenue from Contracts with Customers

Revenue from contracts with customers is recognized to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

For the three months ended March 31, 2022, approximately 61 % of the Company’s total revenue was comprised of net interest income, which is not within the scope of this guidance.

ASC 606 "Revenue from Contracts with Customers" requires revenue recognition for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

For the six months ended June 30, 2022, approximately 62 % of the Company’s total revenue was comprised of net interest income, which is not within the scope of this guidance.

Of the remaining revenue, those items that were subject to this guidance mainly included fees for bank card, trust, deposit account services and consumer brokerage services.

The following table disaggregates non-interest income subject to ASC 606 by major product line.

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

(In thousands) 2022 2021 2022 2021

9 unchanged sentences

(1) This revenue is not within the scope of ASC 606, and includes fees relating to capital market activities, loan fees and sales, derivative instruments, standby letters of credit and various other transactions.

For bank card transaction fees, the majority of debit and credit card fees are earned in the Consumer segment, while corporate card and merchant fees are earned in the Commercial segment.

For bank card transaction fees, nearly all of debit and credit card fees are earned in the Consumer segment, while corporate card and merchant fees are earned in the Commercial segment.

The Consumer and Commercial segments contribute approximately 40 % and 60 %, respectively, of the Company's deposit account charge revenue.

All trust fees and consumer brokerage services income are earned in the Wealth segment.

The following table presents the opening and closing receivable balances for the three month periods ended March 31, 2022 and 2021 for the Company’s significant revenue categories subject to ASC 606.

(In thousands) March 31, 2022 December 31, 2021 March 31, 2021 December 31, 2020

All trust fees and nearly all consumer brokerage services income are earned in the Wealth segment.

The following table presents the opening and closing receivable balances for the six month periods ended June 30, 2022 and 2021 for the Company’s significant revenue categories subject to ASC 606.

(In thousands) June 30, 2022 December 31, 2021 June 30, 2021 December 31, 2020

Bank card transaction fees $ 14,598 $ 16,424 $ 13,248 $ 14,199

20 unchanged sentences

Instruments Measured at Fair Value on a Recurring Basis

The table below presents the March 31, 2022 and December 31, 2021 carrying values of assets and liabilities measured at fair value on a recurring basis.

There were no transfers among levels during the first three months of 2022 or the year ended December 31, 2021.

The table below presents the June 30, 2022 and December 31, 2021 carrying values of assets and liabilities measured at fair value on a recurring basis.

There were no transfers among levels during the first six months of 2022 or the year ended December 31, 2021.

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant Unobservable Inputs

March 31, 2022

June 30, 2022

Residential mortgage loans held for sale $ 1,036 $ — $ 1,036 $ —

46 unchanged sentences

Derivatives Total

For the three months ended March 31, 2022

For the three months ended June 30, 2022

Balance March 31, 2022 $ 1,902 $ 153,411 $ 221 $ 155,534

Total gains or losses (realized/unrealized):

Included in earnings — 15,633 ( 131 ) 15,502

Included in other comprehensive income * ( 87 ) — — ( 87 )

Discount accretion 1 — — 1

Purchases of private equity investments — 822 — 822

Sale/pay down of private equity investments — ( 8,095 ) — ( 8,095 )

Purchase of risk participation agreement — — 314 314

Sale of risk participation agreements — — ( 250 ) ( 250 )

Balance June 30, 2022 $ 1,816 $ 161,771 $ 154 $ 163,741

Total gains or losses for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022

$ — $ 15,633 $ 148 $ 15,781

*Total gains or losses for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022

$ ( 87 ) $ — $ — $ ( 87 )

For the six months ended June 30, 2022

Balance January 1, 2022

7 unchanged sentences

Purchase of risk participation agreement — — 459 459

Sale of risk participation agreement — — ( 250 ) ( 250 )

Balance June 30, 2022 $ 1,816 $ 161,771 $ 154 $ 163,741

Total gains or losses for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022

$ — $ 23,033 $ 136 $ 23,169

*Total gains or losses for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022

$ ( 170 ) $ — $ — $ ( 170 )

Fair Value Measurements Using

Significant Unobservable Inputs

(In thousands)

State and Municipal Obligations Private Equity

Derivatives Total

For the three months ended June 30, 2021

Balance March 31, 2021

Total gains or losses for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2022

$ 7,970 $ 94,257 $ 1,636 $ 103,863

*Total gains or losses for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2022

Total gains or losses (realized/unrealized):

Included in earnings — 16,666 ( 420 ) 16,246

Included in other comprehensive income * 18 — — 18

Discount accretion 3 — — 3

Purchases of private equity investments — 5,656 — 5,656

Sale/pay down of private equity investments — ( 356 ) — ( 356 )

Capitalized interest/dividends — 23 — 23

Purchase of risk participation agreement — — 445 445

Sale of risk participation agreement — — ( 32 ) ( 32 )

Balance June 30, 2021 $ 7,991 $ 116,246 $ 1,629 $ 125,866

Total gains or losses for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2021

$ — $ 16,666 $ 1,434 $ 18,100

For the three months ended March 31, 2021

*Total gains or losses for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2021

$ 18 $ — $ — $ 18

For the six months ended June 30, 2021

Balance January 1, 2021

4 unchanged sentences

Discount accretion 6 — — 6

Purchases of private equity investments — 5,656 — 5,656

Sale/pay down of private equity investments — ( 8,832 ) — ( 8,832 )

Capitalized interest/dividends — 23 — 23

Purchase of risk participation agreement — — 445 445

Sale of risk participation agreement — — ( 130 ) ( 130 )

Balance March 31, 2021 $ 7,970 $ 94,257 $ 1,636 $ 103,863

Total gains or losses for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2021

Balance June 30, 2021 $ 7,991 $ 116,246 $ 1,629 $ 125,866

Total gains or losses for the six months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2021

$ — $ 25,031 $ 1,629 $ 26,660

*Total gains or losses for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2021

*Total gains or losses for the six months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2021

$ 17 $ — $ — $ 17

* Included in "net unrealized gains (losses) on other securities" in the consolidated statements of comprehensive income.

* Included in "net unrealized gains (losses) on available for sale debt securities" in the consolidated statements of comprehensive income.

Gains and losses included in earnings for the Level 3 assets and liabilities in the previous table are reported in the following line items in the consolidated statements of income:

(In thousands) Loan Fees and Sales Other Non-Interest Income Investment Securities Gains (Losses), Net Total

For the three months ended March 31, 2022

For the three months ended June 30, 2022

Total gains or losses included in earnings $ ( 49 ) $ ( 82 ) $ 15,633 $ 15,502

Change in unrealized gains or losses relating to assets still held at March 31, 2022

Change in unrealized gains or losses relating to assets still held at June 30, 2022

$ 230 $ ( 82 ) $ 15,633 $ 15,781

For the three months ended March 31, 2021

For the six months ended June 30, 2022

Total gains or losses included in earnings $ ( 534 ) $ ( 92 ) $ 23,083 $ 22,457

Change in unrealized gains or losses relating to assets still held at March 31, 2021

Change in unrealized gains or losses relating to assets still held at June 30, 2022

$ 230 $ ( 94 ) $ 23,033 $ 23,169

For the three months ended June 30, 2021

Total gains or losses included in earnings $ ( 35 ) $ ( 385 ) $ 16,666 $ 16,246

Change in unrealized gains or losses relating to assets still held at June 30, 2021

$ 1,820 $ ( 386 ) $ 16,666 $ 18,100

For the six months ended June 30, 2021

Total gains or losses included in earnings $ ( 1,407 ) $ ( 20 ) $ 25,031 $ 23,604

Change in unrealized gains or losses relating to assets still held at June 30, 2021

$ 1,820 $ ( 191 ) $ 25,031 $ 26,660

Level 3 Inputs

The Company's significant Level 3 measurements, which employ unobservable inputs that are readily quantifiable, pertain to auction rate securities (ARS), investments in portfolio concerns held by the Company's private equity subsidiaries, and held for sale residential mortgage loan commitments.

ARS are included in state and municipal securities and totaled $ 1.9 million at March 31, 2022, while private equity investments, included in other securities, totaled $ 153.4 million.

ARS are included in state and municipal securities and totaled $ 1.8 million at June 30, 2022, while private equity investments, included in other securities, totaled $ 161.8 million.

Information about these inputs is presented in the table below.

8 unchanged sentences

Instruments Measured at Fair Value on a Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis during the first three months of 2022 and 2021, and still held as of March 31, 2022 and 2021, the following table provides the adjustments to fair value recognized during the respective periods, the level of valuation inputs used to determine each adjustment, and the carrying value of the related individual assets or portfolios at March 31, 2022 and 2021.

For assets measured at fair value on a nonrecurring basis during the first six months of 2022 and 2021, and still held as of June 30, 2022 and 2021, the following table provides the adjustments to fair value recognized during the respective periods, the level of valuation inputs used to determine each adjustment, and the carrying value of the related individual assets or portfolios at June 30, 2022 and 2021.

Fair Value Measurements Using

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Significant Unobservable Inputs

Total Gains (Losses) Recognized During the Three Months Ended March 31

March 31, 2022

Total Gains (Losses) Recognized During the Six Months Ended June 30

June 30, 2022

Mortgage servicing rights 11,407 — — 11,407 304

Long-lived assets 484 — — 484 ( 965 )

March 31, 2021

Collateral dependent loans $ 11,233 $ — $ — $ 11,233 $ ( 2,926 )

June 30, 2021

Mortgage servicing rights 9,376 — — 9,376 1,299

Long- lived assets 984 — — 984 ( 276 )

The Company's significant Level 3 measurements that are measured on a nonrecurring basis pertain to the Company's mortgage servicing rights retained on certain fixed rate personal real estate loan originations.

Mortgage servicing rights are included in other intangible assets-net on the consolidated balance sheets, and information about these inputs is presented in the table below.

Mortgage servicing rights are included in other intangible assets-net on the consolidated balance sheets, and information about these inputs at June 30, 2022 is presented in the table below.

Quantitative Information about Level 3 Fair Value Measurements Weighted

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Changes in assumptions could significantly affect the estimates.

The estimated fair values of the Company’s financial instruments and the classification of their fair value measurement within the valuation hierarchy are as follows at March 31, 2022 and December 31, 2021:

Carrying Amount Estimated Fair Value at March 31, 2022

The estimated fair values of the Company’s financial instruments and the classification of their fair value measurement within the valuation hierarchy are as follows at June 30, 2022 and December 31, 2021:

Carrying Amount Estimated Fair Value at June 30, 2022

(In thousands)

15 unchanged sentences

Investment securities 13,947,188 1,115,258 12,623,559 208,371 13,947,188

Federal funds sold 26,000 26,000 — — 26,000

Securities purchased under agreements to resell 1,450,000 — — 1,423,660 1,423,660

50 unchanged sentences

Legal and Regulatory Proceedings

The Company has various legal proceedings pending at March 31, 2022, arising in the normal course of business.

The Company has various legal proceedings pending at June 30, 2022, arising in the normal course of business.

While some matters pending against the Company specify damages claimed by plaintiffs, others do not seek a specified amount of damages or are at early stages of the legal process.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements