What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-04 compared with 2023-05-04 · 351 added, 206 removed, 1322 unchanged (30% of the section changed)

8 unchanged sentences

Net loans 16,797,854 16,152,995

Loans held for sale (including $ 684,000 and $ — of residential mortgage loans carried at fair value at March 31, 2023 and December 31, 2022, respectively)

Loans held for sale (including $ 1,566,000 and $ — of residential mortgage loans carried at fair value at June 30, 2023 and December 31, 2022, respectively)

Investment securities:

Available for sale debt, at fair value (amortized cost of $ 11,833,736,000 and $ 13,738,206,000 at

March 31, 2023 and December 31, 2022, respectively, and allowance for credit losses of $ —

at both March 31, 2023 and December 31, 2022)

June 30, 2023 and December 31, 2022, respectively, and allowance for credit losses of $ —

at both June 30, 2023 and December 31, 2022)

10,414,625 12,238,316

25 unchanged sentences

Common stock, $ 5 par value

Authorized 140,000,000 ;

issued 125,863,879 shares at March 31, 2023 and December 31, 2022

Authorized 190,000,000 at June 30, 2023 and 140,000,000 at December 31, 2022;

issued 125,863,879 shares at June 30, 2023 and December 31, 2022

629,319 629,319

1 unchanged sentence

Retained earnings 211,358 31,620

Treasury stock of 883,736 shares at March 31, 2023

Treasury stock of 868,125 shares at June 30, 2023

and 605,142 shares at December 31, 2022, 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) 2023 2022 2023 2022

20 unchanged sentences

NON-INTEREST INCOME

Trust fees 45,328 47,811

Bank card transaction fees 49,725 43,873 96,379 85,918

Trust fees 47,265 46,792 92,593 94,603

Deposit account charges and other fees 22,633 25,564 44,385 47,871

9 unchanged sentences

Net occupancy 12,995 12,503 25,754 24,799

Marketing 6,368 5,836 11,839 12,180

Equipment 4,864 4,734 9,714 9,302

Supplies and communication 4,625 4,361 9,215 9,074

Marketing 5,471 6,344

Other 24,611 16,193 48,521 30,951

12 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) 2023 2022 2023 2022

13 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2023 and 2022

Three Months Ended June 30, 2023 and 2022

Commerce Bancshares, Inc.

1 unchanged sentence

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

Balance March 31, 2023

$ 629,319 $ 2,919,060 $ 117,313 $ ( 59,670 ) $ ( 940,498 ) $ 16,888 $ 2,682,412

Net income 127,789 2,674 130,463

Other comprehensive income (loss) ( 95,797 ) ( 95,797 )

Distributions to non-controlling interest ( 1,692 ) ( 1,692 )

Purchases of treasury stock ( 318 ) ( 318 )

Issuance under stock purchase and equity

compensation plans ( 1,599 ) 1,599 —

Stock-based compensation 3,904 3,904

Cash dividends paid on common stock

($ 0.270 per share)

( 33,744 ) ( 33,744 )

Balance June 30, 2023

$ 629,319 $ 2,921,365 $ 211,358 $ ( 58,389 ) $ ( 1,036,295 ) $ 17,870 $ 2,685,228

Balance March 31, 2022

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

Net Income 115,794 4,359 120,153

Other comprehensive income (loss) ( 332,494 ) ( 332,494 )

Distributions to non-controlling interest ( 654 ) ( 654 )

Purchases of treasury stock ( 57,350 ) ( 57,350 )

Issuance under stock purchase and equity

compensation plans ( 55 ) 55 —

Stock-based compensation 4,191 4,191

Cash dividends paid on common stock

($ .252 per share)

( 31,935 ) ( 31,935 )

Balance June 30, 2022

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

See accompanying notes to consolidated financial statements.

Commerce Bancshares, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six Months Ended June 30, 2023 and 2022

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, 2022

9 unchanged sentences

( 67,503 ) ( 67,503 )

Balance March 31, 2023

Balance June 30, 2023

$ 629,319 $ 2,921,365 $ 211,358 $ ( 58,389 ) $ ( 1,036,295 ) $ 17,870 $ 2,685,228

9 unchanged sentences

( 64,078 ) ( 64,078 )

Balance March 31, 2022

Balance June 30, 2022

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31

For the Six Months Ended June 30

(In thousands) 2023 2022

16 unchanged sentences

Other changes, net ( 108,044 ) 30,464

Net cash provided by operating activities 116,057 124,514

Net cash provided by (used in) operating activities 220,888 286,170

INVESTING ACTIVITIES:

Cash paid in acquisition, net of cash received ( 6,197 ) —

Distributions received from equity-method investment 1,434 400

4 unchanged sentences

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

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

Purchases of premises and equipment ( 51,904 ) ( 28,985 )

5 unchanged sentences

Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase 36,287 ( 788,671 )

FHLB short-term borrowings 2,250,000 —

Repayments of FHLB borrowings ( 1,250,000 ) —

Net increase (decrease) in other borrowings ( 4,059 ) ( 6,535 )

2 unchanged sentences

Cash dividends paid on common stock ( 67,503 ) ( 64,078 )

Net cash used in financing activities ( 181,971 ) ( 1,308,194 )

Net cash provided by (used in) financing activities 678,808 ( 2,711,763 )

Increase (decrease) in cash, cash equivalents and restricted cash 2,040,543 ( 3,225,034 )

Cash, cash equivalents and restricted cash at beginning of year 897,801 4,296,954

Cash, cash equivalents and restricted cash at March 31

Cash, cash equivalents and restricted cash at June 30

$ 2,938,344 $ 1,071,920

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 at March 31, 2022.

The Company had no restricted cash at March 31, 2023.

This balance is included in other assets in the consolidated balance sheets and totaled $ 200 thousand at June 30, 2023 and $ 5.4 million at June 30, 2022.

Commerce Bancshares, Inc.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023 (Unaudited)

June 30, 2023 (Unaudited)

Principles of Consolidation and Presentation

9 unchanged sentences

Management has evaluated subsequent events for potential recognition or disclosure.

The results of operations for the three months ended March 31, 2023 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, 2023 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.

18 unchanged sentences

The Company may renegotiate the terms of existing loans for a variety of reasons.

When refinancing or restructuring a loan, the Company evaluates where the borrower is experiencing financial difficulty.

When refinancing or restructuring a loan, the Company evaluates whether the borrower is experiencing financial difficulty.

In making this determination, the Company considers whether the borrower is currently in default on any of its debt.

In addition, the Company evaluates whether it is probable that the borrower would be in payment default on any of its debt in the foreseeable future without the modification and if the borrower (without the current modification) could obtain equivalent financing from another creditor at a market rate for

similar debt.

Modifications of loans to borrowers in these situations may indicate that the borrower is facing financial difficulty.

2 unchanged sentences

Loans and Allowance for Credit Losses

Major classifications within the Company’s held for investment loan portfolio at March 31, 2023 and December 31, 2022 are as follows:

Major classifications within the Company’s held for investment loan portfolio at June 30, 2023 and December 31, 2022 are as follows:

(In thousands)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Business $ 5,906,493 $ 5,661,725

8 unchanged sentences

Total loans $ 16,956,539 $ 16,303,131

Accrued interest receivable totaled $ 61.9 million and $ 55.5 million at March 31, 2023 and December 31, 2022, respectively, and was included within other assets on the consolidated balance sheets.

For the three months ended March 31, 2023, the Company wrote-off accrued interest by reversing interest income of $ 34 thousand and $ 1.1 million in the Commercial and Personal Banking portfolios, respectively.

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

At March 31, 2023, loans of $ 3.3 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 $ 63.9 million and $ 55.5 million at June 30, 2023 and December 31, 2022, respectively, and was included within other assets on the consolidated balance sheets.

For the three months ended June 30, 2023, the Company wrote-off accrued interest by reversing interest income of $ 43 thousand and $ 1.1 million in the Commercial and Personal Banking portfolios, respectively.

Similarly, for the six months ended June 30, 2023, the Company wrote-off accrued interest of $ 77 thousand and $ 2.2 million in the Commercial and Personal Banking portfolios, respectively.

For the three months ended June 30, 2022, the Company reversed interest income of $ 26 thousand and $ 762 thousand in the Commercial and Personal Banking portfolios, respectively, and in the six months ended June 30, 2022, reversed $ 55 thousand and $ 1.7 million in the Commercial and Personal Banking portfolios.

At June 30, 2023, loans of $ 3.3 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 $ 3.1 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings.

12 unchanged sentences

The forecast adjusted loss rate is applied to the amortized cost of loans over the remaining contractual lives, adjusted for expected prepayments.

The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed.

Credit cards and certain similar consumer lines of credit do not have stated

maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances.

The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications unless there is a reasonable expectation

that a troubled debt restructuring will be executed.

Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances.

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 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, 2023 and December 31, 2022 are discussed below.

Key Assumption March 31, 2023 December 31, 2022

Overall economic forecast • Mild recession to start 3rd quarter of 2023

The assumptions utilized in estimating the Company’s allowance for credit losses at June 30, 2023 and March 31, 2023 are discussed below.

Key Assumption June 30, 2023 March 31, 2023

Overall economic forecast • Mild recession in the second half of 2023

• Assume the Federal Reserve will pause increasing interest rates through year end

• Mild recession is expected to weaken employment

• Mild recession to start 3rd quarter of 2023

• Assume the Federal Reserve will continue raising interest rates

• Mild recession is expected to weaken employment

• Continued high inflation and higher cost of borrowing create a mild recession in 2023 with stalled job growth and possible job losses

• Assumes interest rates hikes will taper

Reasonable and supportable period and related reversion period • Reasonable and supportable period of one year

• Reversion to historical average loss within 2 quarters using straight-line method

• Reversion to historical average loss within two quarters using straight-line method

• Reasonable and supportable period of one year

• Reversion to historical average loss within 2 quarters using straight-line method

• Reversion to historical average loss within two quarters using straight-line method

Forecasted macro-economic variables • Unemployment rate ranges from 3.9% to 5.3% during the supportable forecast period

1 unchanged sentence

• BBB corporate yield from 4.9% to 5.5%

• House Price Index from 280.2 to 282.0

• Housing Price Index from 282.1 to 284.5

• Unemployment rate ranges from 3.7% to 5.3% during the supportable forecast period

• Real GDP growth ranging from (.9)% to 1.3%

• Real GDP growth ranges from (.48)% to 2.0%

• BBB corporate yield from 5.3% to 5.8%

• House Price Index from 280.9 to 284.6

• Housing Price Index from 280.2 to 282.0

Prepayment assumptions Commercial loans

10 unchanged sentences

• Changes in the composition of the loan portfolios

• Certain portfolios sensitive to pandemic economic uncertainties

• Certain stressed industries within the portfolio

• Certain portfolios sensitive to unusually high rate of inflation and supply chain issues

9 unchanged sentences

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

The current forecast projects a mild recession to start in the third quarter of 2023 as the economy continues to face high inflation, higher interest rates and a weaker job market.

The impacts of the market's response to unusual events or trends including high inflation, supply chain stresses, trends in health conditions and changes in the geopolitical environment could significantly modify economic projections used in the estimation of the ACL.

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, 2023 and 2022, respectively, follows:

For the Three Months Ended March 31, 2023

The current forecast projects a mild recession in the second half of 2023 as the economy continues to face high inflation, higher interest rates and a weaker job market.

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the three and six months ended June 30, 2023 and 2022, respectively, follows:

For the Three Months Ended June 30, 2023

For the Six Months Ended June 30, 2023

(In thousands) Commercial Personal Banking

Commercial Personal Banking

ALLOWANCE FOR CREDIT LOSSES ON LOANS

4 unchanged sentences

Net loan charge-offs (recoveries) 45 6,451 6,496 271 12,992 13,263

Balance March 31, 2023 $ 108,615 $ 50,702 $ 159,317

Balance June 30, 2023 $ 108,024 $ 50,661 $ 158,685 $ 108,024 $ 50,661 $ 158,685

LIABILITY FOR UNFUNDED LENDING COMMITMENTS

1 unchanged sentence

Provision for credit losses on unfunded lending commitments 737 ( 130 ) 607 ( 3,901 ) 16 ( 3,885 )

Balance March 31, 2023 $ 27,105 $ 1,523 $ 28,628

Balance June 30, 2023 $ 27,842 $ 1,393 $ 29,235 $ 27,842 $ 1,393 $ 29,235

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 135,866 $ 52,054 $ 187,920 $ 135,866 $ 52,054 $ 187,920

For the Three Months Ended March 31, 2022

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

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, 2023 and December 31, 2022.

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, 2023 and December 31, 2022.

(In thousands)

2 unchanged sentences

90 Days Past Due and Still Accruing Non-accrual

March 31, 2023

June 30, 2023

Business $ 5,896,412 $ 4,847 $ 502 $ 4,732 $ 5,906,493

19 unchanged sentences

Total $ 16,229,187 $ 49,808 $ 15,830 $ 8,306 $ 16,303,131

At March 31, 2023, the Company had $ 3.5 million in non-accrual business loans that had no allowance for credit loss, compared to $ 3.8 million in non-accrual business loans that had no allowance for credit loss at December 31, 2022.

The Company did not record any interest income on non-accrual loans during the three months ended March 31, 2023 and 2022, respectively.

At June 30, 2023, the Company had $ 2.9 million in non-accrual business loans that had no allowance for credit loss, compared to $ 3.8 million in non-accrual business loans that had no allowance for credit loss at December 31, 2022.

The Company did not record any interest income on non-accrual loans during the six months ended June 30, 2023 and 2022, 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, 2023 and December 31, 2022 are as follows:

The risk category of loans in the Commercial portfolio as of June 30, 2023 and December 31, 2022 are as follows:

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2023

June 30, 2023

Pass $ 1,136,860 $ 1,058,237 $ 631,119 $ 325,640 $ 303,589 $ 315,781 $ 2,001,024 $ 5,772,250

4 unchanged sentences

$ 1,159,621 $ 1,075,104 $ 664,119 $ 349,113 $ 304,529 $ 333,104 $ 2,020,903 $ 5,906,493

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ 41 $ — $ — $ 558 $ 599

5 unchanged sentences

$ 228,564 $ 594,720 $ 497,885 $ 66,877 $ 27,103 $ 3,102 $ 33,532 $ 1,451,783

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ — $ — $ — $ — $ —

6 unchanged sentences

$ 483,249 $ 1,163,672 $ 559,391 $ 499,239 $ 376,466 $ 455,321 $ 83,884 $ 3,621,222

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ — $ — $ — $ — $ —

6 unchanged sentences

$ 1,871,434 $ 2,833,496 $ 1,721,395 $ 915,229 $ 708,098 $ 791,527 $ 2,138,319 $ 10,979,498

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ 41 $ — $ — $ 558 $ 599

28 unchanged sentences

$ 3,096,706 $ 2,060,412 $ 1,219,682 $ 834,144 $ 393,625 $ 566,436 $ 2,258,796 $ 10,429,801

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, 2023 and December 31, 2022 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, 2023 and December 31, 2022 below.

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2023

June 30, 2023

Real estate-personal

4 unchanged sentences

$ 256,814 $ 480,557 $ 559,355 $ 747,437 $ 277,518 $ 648,533 $ 10,385 $ 2,980,599

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ 18 $ — $ — $ — $ 18 $ — $ 36

3 unchanged sentences

$ 317,628 $ 393,165 $ 307,187 $ 162,971 $ 77,978 $ 70,418 $ 781,258 $ 2,110,605

Gross write-offs for the three months ended March 31, 2023 $ — $ 519 $ 505 $ 279 $ 127 $ 159 $ 270 $ 1,859

Gross write-offs for the six months ended June 30, 2023

$ 61 $ 1,265 $ 996 $ 492 $ 173 $ 238 $ 505 $ 3,730

Revolving home equity

3 unchanged sentences

$ — $ — $ — $ — $ — $ — $ 303,845 $ 303,845

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ — $ — $ — $ — $ —

4 unchanged sentences

$ — $ — $ — $ — $ — $ — $ 574,755 $ 574,755

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ — $ — $ — $ — $ — $ — $ 11,637 $ 11,637

Current to 90 days past due $ 7,237 $ — $ — $ — $ — $ — $ — $ 7,237

Over 90 days past due — — — — — — — —

Total Overdrafts:

$ 7,237 $ — $ — $ — $ — $ — $ — $ 7,237

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ 1,884 $ — $ — $ — $ — $ — $ — $ 1,884

5 unchanged sentences

$ 581,679 $ 873,722 $ 866,542 $ 910,408 $ 355,496 $ 718,951 $ 1,670,243 $ 5,977,041

Gross write-offs for the three months ended March 31, 2023

Gross write-offs for the six months ended June 30, 2023

$ 1,945 $ 1,283 $ 996 $ 492 $ 173 $ 256 $ 12,142 $ 17,287

35 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, 2023 and December 31, 2022.

The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2023 and December 31, 2022.

(In thousands) Business Assets Oil & Gas Assets Total

March 31, 2023

June 30, 2023

Business $ 1,598 $ 1,508 $ 3,106

9 unchanged sentences

loans for which FICO scores are not obtained because the loans generally pertain to commercial customer activities and are often underwritten with other collateral considerations.

These loans totaled $ 178.1 million at March 31, 2023 and $ 179.2 million at December 31, 2022.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 195.5 million at March 31, 2023 and $ 197.5 million at December 31, 2022.

These loans totaled $ 173.0 million at June 30, 2023 and $ 179.2 million at December 31, 2022.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 198.7 million at June 30, 2023 and $ 197.5 million at December 31, 2022.

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, 2023 and December 31, 2022 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, 2023 and December 31, 2022 by FICO score.

Personal Banking Loans

1 unchanged sentence

Real Estate - Personal Consumer Revolving Home Equity Consumer Credit Card

March 31, 2023

June 30, 2023

Under 600 1.7 % 2.5 % 1.6 % 4.2 %

18 unchanged sentences

Other consumer loans modified to borrowers experiencing financial difficulty consist of various other workout arrangements with consumer customers.

The following table presents the amortized cost at March 31, 2023 of loans that were modified during the three months ended March 31, 2023.

Three Months Ended March 31, 2023

The following tables present the amortized cost at June 30, 2023 of loans that were modified during the three and six months ended June 30, 2023.

For the Three Months Ended June 30, 2023

(Dollars in thousands)

1 unchanged sentence

Total % of Total Loan Category

March 31, 2023

June 30, 2023

Business $ 17,097 $ — $ — $ — $ — $ 17,097 0.3 %

5 unchanged sentences

Total $ 51,340 $ 1,241 $ 739 $ 224 $ — $ 53,544 0.3 %

For the Six Months Ended June 30, 2023

(Dollars in thousands)

Term Extension Payment Delay Interest Rate Reduction Interest/Fees Forgiven Other

Total % of Total Loan Category

June 30, 2023

Business $ 18,193 $ — $ — $ — $ — $ 18,193 0.3 %

Real estate – business 49,548 — — — — 49,548 1.4

Personal Banking:

Real estate – personal 246 2,777 — — — 3,023 0.1

Consumer 31 75 21 — 55 182 —

Consumer credit card — — 1,299 487 — 1,786 0.3

Total $ 68,018 $ 2,852 $ 1,320 $ 487 $ 55 $ 72,732 0.4 %

The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical experience on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty.

6 unchanged sentences

If an accruing loan made to a borrower experiencing financial difficulty is modified and subsequently deemed uncollectible, 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 following table summarizes the financial impact of loan modifications and payment deferrals during the three months ended March 31, 2023.

The qualitative impact of forbearance and repayment plans is the deferral of payments for 3 months up to 30 years, and therefore, those modifications are excluded from the table below.

The following tables summarize the financial impact of loan modifications and payment deferrals during the three and six months ended June 30, 2023.

The qualitative impact of forbearance and repayment plans is the deferral of payments for 3 months up to 30 years, and therefore, those modifications are excluded from the tables below.

Term Extension

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Business Added a weighted average of 9 months to the life of loans.

Added a weighted average of 9 months to the life of loans.

Real estate – business Added a weighted average of 12 months to the life of loans.

Added a weighted average of 14 months to the life of loans.

Personal Banking:

Real estate – personal Added a weighted average of 7 months to the life of loans.

Added a weighted average of 7 months to the life of loans.

Consumer Added 10 years to the life of loans.

Added 10 years to the life of loans.

Payment Delay

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Personal Banking:

Real estate – personal Deferred past due monthly payments to maturity as a balloon payment.

Deferral delayed payments a weighted average of 27 years.

Consumer Deferred past due monthly payments to maturity as a balloon payment.

Deferral delayed payments a weighted average of 11 years.

Real estate – personal Deferred certain payments by a weighted average of 28 years .

Deferred certain payments by a weighted average of 20 years .

Consumer Deferred certain payments by a weighted average of 6 months .

Deferred certain payments by a weighted average of 71 months .

Interest Rate Reduction

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Personal Banking:

Consumer Reduced weighted-average contractual interest by 14 %.

Consumer credit card Reduced weighted-average contractual interest by 14 %.

Consumer Reduced contractual interest from weighted average 21% to 6%.

Reduced contractual interest from weighted average 21% to 6%.

Consumer credit card Reduced contractual interest from weighted average 21% to 6%.

Reduced contractual interest from weighted average 21% to 6%.

Forgiveness of Interest/Fees

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Personal Banking:

Consumer credit card Approximately $13 thousand of interest and fees forgiven.

The Company had commitments of $ 532 thousand at March 31, 2023 to lend additional funds to borrowers with restructured loans.

The following table provides the amortized cost basis of loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2023 and were modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through March 31, 2023.

Approximately $27 thousand of interest and fees forgiven.

The Company had commitments of $ 6.3 million at June 30, 2023 to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current reporting period.

The following table provides the amortized cost basis of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2023 and were modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through June 30, 2023.

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

In addition to the loans below, the Company charged off $ 25 thousand of consumer credit card loans during the three months ended March 31, 2023 that were modified during the period.

In addition to the loans below, the Company charged off $ 78 thousand of consumer credit card loans during the six months ended June 30, 2023 that were modified during the period.

For the Three Months Ended June 30, 2023 For the Six Months Ended June 30, 2023

(Dollars in thousands)

Interest Rate Reduction Interest/Fees Forgiven Total

March 31, 2023

Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total

June 30, 2023

Personal Banking:

Real estate – personal $ 779 $ — $ — $ 779 $ 779 $ — $ — $ 779

Consumer — 6 — 6 — 11 — 11

1 unchanged sentence

Total $ 779 $ 73 $ 78 $ 930 $ 779 $ 122 $ 78 $ 979

The following table presents the amortized cost basis at March 31, 2023 of loans that have been modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through March 31, 2023.

The following table presents the amortized cost basis at June 30, 2023 of loans that have been modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through June 30, 2023.

(In thousands)

1 unchanged sentence

90 Days Past Due Total

March 31, 2023

June 30, 2023

Business $ 18,193 $ — $ — $ 18,193

8 unchanged sentences

Restructured loans are placed on non-accrual status if the Company does not believe it probable that amounts due under the contractual terms will be collected.

Commercial performing restructured loans are primarily comprised of certain

business, construction and business real estate loans classified as substandard but renewed at rates judged to be non-market.

Commercial performing restructured loans are primarily comprised of certain business, construction and business real estate loans classified as substandard but renewed at rates judged to be non-market.

These loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis.

15 unchanged sentences

The Company elected to extend its application of this guidance through December 31, 2021.

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.

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 December 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.

26 unchanged sentences

The loans are primarily sold to Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA).

At March 31, 2023, the fair value of these loans was $ 684 thousand, and the unpaid principal balance was $ 666 thousand.

At June 30, 2023, the fair value of these loans was $ 1.6 million, and the unpaid principal balance was $ 1.6 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, 2023 totaled $ 5.3 million.

At March 31, 2023, 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, 2023 totaled $ 4.9 million.

At June 30, 2023, 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 $ 167 thousand and $ 96 thousand at March 31, 2023 and December 31, 2022, respectively, and included in those amounts were $ 167 thousand and $ 96 thousand at March 31, 2023 and December 31, 2022, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession.

Personal property acquired in repossession, generally autos, totaled $ 1.4 million and $ 1.6 million at March 31, 2023 and December 31, 2022, respectively.

The Company’s holdings of foreclosed real estate totaled $ 94 thousand and $ 96 thousand at June 30, 2023 and December 31, 2022, respectively, and included in those amounts were $ 94 thousand and $ 96 thousand at June 30, 2023 and December 31, 2022, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession.

Personal property acquired in repossession, generally autos, totaled $ 1.9 million and $ 1.6 million at June 30, 2023 and December 31, 2022, respectively.

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, 2023 and December 31, 2022.

(In thousands) March 31, 2023 December 31, 2022

Investment securities consisted of the following at June 30, 2023 and December 31, 2022.

(In thousands) June 30, 2023 December 31, 2022

Available for sale debt securities $ 10,414,625 $ 12,238,316

9 unchanged sentences

$ 10,714,348 $ 12,519,177

(1) Accrued interest receivable totaled $ 32.7 million and $ 38.8 million at March 31, 2023 and December 31, 2022, respectively, and was included within other assets on the consolidated balance sheets.

(1) Accrued interest receivable totaled $ 29.8 million and $ 38.8 million at June 30, 2023 and December 31, 2022, 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, 2023, 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, 2023, 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 accumulated other comprehensive income (AOCI).

A summary of the available for sale debt securities by maturity groupings as of March 31, 2023 is shown below.

A summary of the available for sale debt securities by maturity groupings as of June 30, 2023 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.

Also included are certain other asset-backed securities, which are primarily collateralized by credit cards, automobiles, student loans, and commercial loans.

Also included are certain other asset-backed securities, which are primarily

collateralized by credit cards, automobiles, student loans, and commercial loans.

These securities differ from traditional debt securities primarily in that they may have uncertain maturity dates and are priced based on estimated prepayment rates on the underlying collateral.

29 unchanged sentences

government and federal agency obligations include U.S.

Treasury inflation-protected securities, which totaled $ 402.3 million, at fair value, at March 31, 2023.

Treasury inflation-protected securities, which totaled $ 395.4 million, at fair value, at June 30, 2023.

Interest earned on these securities increases with inflation and decreases with deflation, as measured by the non-seasonally adjusted Consumer Price Index (CPI-U).

7 unchanged sentences

Securities not analyzed using the cash flow model are analyzed by reviewing risk ratings, credit support agreements, and industry knowledge to project future cash flows and any possible credit impairment.

At March 31, 2023, the fair value of securities on this watch list was $ 676.0 million compared to $ 1.3 billion at December 31, 2022.

At June 30, 2023, the fair value of securities on this watch list was $ 1.6 billion compared to $ 1.3 billion at December 31, 2022.

The majority of the securities included on the Company's watch list in the current quarter were experiencing unrealized loss positions due to the significant increase in interest rates and were analyzed outside of the cash flow model.

At March 31, 2023, the securities on the Company's watch list that were not deemed to be solely related to increasing interest rates were securities backed by government-guaranteed student loans and are expected to perform as contractually required.

As of March 31, 2023, the Company did not identify any securities for which a credit loss exists, and for the three months ended March 31, 2023 and 2022, 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, 2023 and December 31, 2022.

At June 30, 2023, the securities on the Company's watch list that were not deemed to be solely related to increasing interest rates were securities backed by government-guaranteed student loans and are expected to perform as contractually required.

As of June 30, 2023, the Company did not identify any securities for which a credit loss exists, and for the six months ended June 30, 2023 and 2022, 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.

The unrealized losses on these securities are primarily attributable to changes in interest rates and current market conditions.

At March 31, 2023, the Company does not intend to sell the securities, nor is it anticipated that it would be required to sell any of these securities at a loss.

At June 30, 2023, the Company does not intend to sell the securities, nor is it anticipated that it would be required to sell any of these securities at a loss.

Less than 12 months 12 months or longer Total

3 unchanged sentences

Losses Fair Value Unrealized

March 31, 2023

June 30, 2023

government and federal agency obligations $ 355,274 $ 15,192 $ 590,541 $ 23,977 $ 945,815 $ 39,169

19 unchanged sentences

Total $ 4,402,724 $ 250,660 $ 7,625,021 $ 1,249,972 $ 12,027,745 $ 1,500,632

The entire available for sale debt portfolio included $ 11.0 billion of securities that were in a loss position at March 31, 2023, compared to $ 12.0 billion at December 31, 2022.

The total amount of unrealized loss on these securities was $ 1.3 billion at March 31, 2023, a decrease of $ 188.7 million compared to the unrealized loss at December 31, 2022.

The entire available for sale debt portfolio included $ 10.4 billion of securities that were in a loss position at June 30, 2023, compared to $ 12.0 billion at December 31, 2022.

The total amount of unrealized loss on these securities was $ 1.4 billion at June 30, 2023, a decrease of $ 81.2 million compared to the unrealized loss at December 31, 2022.

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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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, 2023

June 30, 2023

government and federal agency obligations $ 984,984 $ — $ ( 39,169 ) $ — $ 945,815

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) 2023 2022

7 unchanged sentences

Available for sale debt securities:

Gains realized on sales $ 143 $ —

Losses realized on sales ( 8,587 ) ( 9,582 )

3 unchanged sentences

Gains realized on sales

Losses realized on sales

Fair value adjustments, net 11,341 23,083

Total investment securities gains (losses), net $ 3,086 $ 8,192

Net losses on investment securities for the three months ended March 31, 2023 were mainly comprised of losses of $ 3.1 million on sales of available for sale securities, and net losses in fair value of $ 127 thousand on equity investments, offset by net gains in private equity securities due to sales and fair value adjustments of $ 658 thousand and $ 2.3 million, respectively.

At March 31, 2023, securities totaling $ 8.1 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 $ 4.7 billion at December 31, 2022.

Net losses on investment securities for the six months ended June 30, 2023 were mainly comprised of net losses of $ 8.4 million on sales of available for sale securities, and net losses in fair value of $ 690 thousand on equity investments, offset by net gains in private equity securities due to sales and fair value adjustments of $ 879 thousand and $ 11.3 million, respectively.

At June 30, 2023, securities totaling $ 8.1 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 $ 4.7 billion at December 31, 2022.

Securities pledged under agreements pursuant to which the collateral may be sold or re-pledged by the secured parties approximated $ 206.4 million, while the remaining securities were pledged under agreements pursuant to which the secured parties may not sell or re-pledge the collateral.

3 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In thousands)

4 unchanged sentences

Total $ 27,878 $ ( 16,812 ) $ — $ 11,066 $ 53,457 $ ( 41,823 ) $ — $ 11,634

Aggregate amortization expense on intangible assets was $ 356 thousand and $ 609 thousand for the three month periods ended March 31, 2023 and 2022, respectively.

Aggregate amortization expense on intangible assets was $ 353 thousand and $ 501 thousand for the three month periods ended June 30, 2023 and 2022, respectively, and $ 709 thousand and $ 1.1 million for the six month periods ended June 30, 2023 and 2022, 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, 2023.

This expense is based on existing asset balances and the interest rate environment as of June 30, 2023.

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.

1 unchanged sentence

During the first quarter of 2023, the Company wrote off $ 25.7 million of core deposit intangible assets that were fully amortized.

Other c hanges in the carrying amount of goodwill and other intangible assets for the three month period ended March 31, 2023 are as follows:

During the second quarter of 2023, the Company acquired L.J.

Hart & Company, a municipal bond underwriter and advisor, and the acquisition resulted in goodwill of $ 7.5 million.

C hanges in the carrying amount of goodwill and other intangible assets for the six month period ended June 30, 2023 are as follows:

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

1 unchanged sentence

$ 138,921 $ 3,600 $ 705 $ 10,929

Acquisition 7,450 — — —

Originations, net of disposals — — — 141

Amortization — — ( 132 ) ( 577 )

Balance March 31, 2023 $ 138,921 $ 3,600 $ 639 $ 10,679

Goodwill allocated to the Company’s operating segments at March 31, 2023 and December 31, 2022 is shown below.

(In thousands)

Balance June 30, 2023 $ 146,371 $ 3,600 $ 573 $ 10,493

Goodwill allocated to the Company’s operating segments at June 30, 2023 and December 31, 2022 is shown below.

(In thousands) June 30, 2023 December 31, 2022

Consumer segment $ 70,721 $ 70,721

9 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, 2023, that net liability was $ 4.9 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 $ 625.9 million at March 31, 2023.

A portion of this amount has been conveyed to others.

At June 30, 2023, 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 $ 601.2 million at June 30, 2023.

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, 2023, believes sufficient collateral is available to cover potential swap losses.

The Company monitors overall borrower collateral and at June 30, 2023, 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, 2023, the fair value of the Company's guarantee liabilities for RPAs was $ 148 thousand, and the notional amount of the underlying swaps was $ 419.9 million.

At June 30, 2023, the fair value of the Company's guarantee liabilities for RPAs was $ 88 thousand, and the notional amount of the underlying swaps was $ 411.6 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.

5 unchanged sentences

The Company also leases office space to third parties, and these leases are classified as operating leases.

The leases may include options to renew or expand the leased space, and currently the leases have remaining terms of 3 months to 16 years.

The leases may include options to renew or expand the leased space, and currently the leases have remaining terms of 1 month to 15 years.

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) 2023 2022 2023 2022

1 unchanged sentence

Operating leases (a)

3,483 2,158 5,816 4,342

Total lease income $ 11,024 $ 7,272 $ 20,112 $ 14,703

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for the three month periods ended March 31, 2023 and 2022 .

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for both of the three month periods ended June 30, 2023 and 2022 and $38 thousand for both the six month periods ended June 30, 2023 and 2022.

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) 2023 2022 2023 2022

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 2023, 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 2023, 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) 2023 2022 2023 2022

15 unchanged sentences

Diluted income per common share $ 1.02 $ .92 $ 1.97 $ 1.84

Unexercised stock appreciation rights of 216 thousand and 125 thousand for the three month periods ended March 31, 2023 and 2022, 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 427 thousand and 177 thousand for the three month periods ended June 30, 2023 and 2022, respectively, and 264 thousand and 151 thousand for the six month periods ended June 30, 2023 and 2022, respectively, were excluded from the computation of diluted income per common share because their inclusion would have been anti-dilutive.

In the Annual Meeting of the Shareholders, held on April 19, 2023, a proposal to increase the shares of the Company's common stock authorized for issuance under its articles of incorporation was approved.

13 unchanged sentences

Current period other comprehensive income (loss), net of tax 60,584 539 ( 10,554 ) 50,569

Balance March 31, 2023

Balance June 30, 2023

$ ( 1,064,331 ) $ ( 16,647 ) $ 44,683 $ ( 1,036,295 )

6 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 )

18 unchanged sentences

Consumer Commercial Wealth Segment Totals Other/Elimination Consolidated Totals

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Net interest income $ 101,552 $ 116,462 $ 17,024 $ 235,038 $ 14,500 $ 249,538

4 unchanged sentences

Income before income taxes $ 37,222 $ 82,714 $ 31,065 $ 151,001 $ 15,452 $ 166,453

Three Months Ended March 31, 2022

Six Months Ended June 30, 2023

Net interest income $ 198,406 $ 232,628 $ 34,564 $ 465,598 $ 35,563 $ 501,161

4 unchanged sentences

Income before income taxes $ 74,747 $ 163,188 $ 61,900 $ 299,835 $ 19,984 $ 319,819

Three Months Ended June 30, 2022

Net interest income $ 90,561 $ 110,182 $ 19,222 $ 219,965 $ 12,420 $ 232,385

Provision for loan losses ( 3,910 ) ( 63 ) 23 ( 3,950 ) ( 3,212 ) ( 7,162 )

Non-interest income 28,340 56,815 53,983 139,138 289 139,427

Investment securities gains (losses), net — — — — 1,029 1,029

Non-interest expense ( 77,629 ) ( 91,316 ) ( 36,491 ) ( 205,436 ) ( 8,069 ) ( 213,505 )

Income before income taxes $ 37,362 $ 75,618 $ 36,737 $ 149,717 $ 2,457 $ 152,174

Six Months Ended June 30, 2022

Net interest income $ 177,379 $ 219,135 $ 38,091 $ 434,605 $ 6,566 $ 441,171

Provision for credit losses ( 8,413 ) ( 145 ) ( 3 ) ( 8,561 ) 11,257 2,696

Non-interest income 54,755 110,466 107,189 272,410 ( 1,214 ) 271,196

Investment securities gains (losses), net — — — — 8,192 8,192

Non-interest expense ( 152,453 ) ( 180,822 ) ( 72,779 ) ( 406,054 ) ( 13,099 ) ( 419,153 )

Income before income taxes $ 71,268 $ 148,634 $ 72,498 $ 292,400 $ 11,702 $ 304,102

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.

6 unchanged sentences

Included in this category’s net interest income are earnings of the investment portfolio, which are not allocated to a segment.

Additionally, interest expense on the Company's brokered deposits is included in this column, as the Company's brokered deposits are not allocated to a segment.

The performance measurement of the operating segments is based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution.

5 unchanged sentences

(In thousands)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Interest rate swaps $ 2,161,392 $ 1,981,821

4 unchanged sentences

Mortgage loan commitments

Mortgage loan forward sale contracts 3,290 —

Forward TBA contracts 4,000 —

8 unchanged sentences

The Company maintains debt ratings and capital well above these minimum requirements.

As of March 31, 2023, the Company holds three interest rate floors with a combined notional value of $ 1.5 billion to hedge the risk of declining interest rates on certain floating rate commercial loans.

As of June 30, 2023, the Company holds three interest rate floors with a combined notional value of $ 1.5 billion to hedge the risk of declining interest rates on certain floating rate commercial loans.

The first floor was purchased during the third quarter of 2022, has a purchased strike rate of 2.50%, is forward-starting beginning on January 1, 2024 and matures on January 1, 2030.

5 unchanged sentences

The premium paid for these floors totaled $ 61.7 million.

As of March 31, 2023, the maximum length of time over which the Company is hedging its exposure to lower rates is approximately 6 years.

As of June 30, 2023, the maximum length of time over which the Company is hedging its exposure to lower rates is approximately 6.5 years.

These interest rate floors qualified and were designated as cash flow hedges and were assessed for effectiveness using regression analysis.

The change in the fair value of these interest rate floors is recorded in AOCI, net of the amortization of the premiums paid, which are recorded against interest and fees on loans in the consolidated statements of income.

As of March 31, 2023, net deferred gains on the interest rate floors totaled $ 6.8 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet.

As of March 31, 2023, it is expected that $ 7.3 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months.

As of June 30, 2023, net deferred losses on the interest rate floors totaled $ 8.0 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet.

As of June 30, 2023, it is expected that $ 7.4 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months.

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, 2023, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 69.0 million (pre-tax), which will be reclassified into interest income over the next 3.7 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at March 31, 2023 that is expected to be reclassified into income within the next 12 months is $ 23.3 million.

As of June 30, 2023, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 63.1 million (pre-tax), which will be reclassified into interest income over the next 3.5 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at June 30, 2023 that is expected to be reclassified into income within the next 12 months is $ 23.0 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.

10 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, 2023 in the table below, the positive fair values of cleared swaps were reduced by $ 11.4 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, 2023 in the table below, the positive fair values of cleared swaps were reduced by $ 878 thousand.

At December 31, 2022, positive fair values of cleared swaps were reduced by $ 27.8 million.

Asset Derivatives Liability Derivatives

31, 2023 Dec.

31, 2022 Mar.

31, 2023 Dec.

June 30, 2023 Dec.

31, 2022 June 30, 2023 Dec.

(In thousands )

9 unchanged sentences

Mortgage loan commitments 58 — — —

Mortgage loan forward sale contracts — — ( 1 ) —

Forward TBA contracts 22 — — —

7 unchanged sentences

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

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ ( 14,748 ) $ — $ ( 14,748 ) Total $ 4,165 $ 7,455 $ ( 3,290 )

For the Three Months Ended March 31, 2022

For the Six Months Ended June 30, 2023

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ ( 5,523 ) $ — $ ( 5,523 ) Total $ 8,550 $ 14,899 $ ( 6,349 )

For the Three Months Ended June 30, 2022

Derivatives in cash flow hedging relationships:

Interest rate floors $ — $ — $ — Interest and fees on loans $ 6,154 $ 7,687 $ ( 1,533 )

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

For the Six Months Ended June 30, 2022

Derivatives in cash flow hedging relationships:

Interest rate floors $ — $ — $ — Interest and fees on loans $ 12,204 $ 15,253 $ ( 3,049 )

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

The gain and loss recognized through various derivative instruments on the consolidated statements of income are shown in the table below.

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) 2023 2022 2023 2022

11 unchanged sentences

Also shown is collateral received or pledged in the form of other financial instruments, which is generally cash or marketable securities.

The collateral amounts in this table are limited to the outstanding balances of the related asset or liability (after netting is applied);

The collateral amounts in this table are limited to the outstanding balances of the related asset or liability (after

netting is applied);

thus, amounts of excess collateral are not shown.

5 unchanged sentences

Collateral positions are valued daily, and adjustments to amounts received and pledged by the Company are made as appropriate to maintain proper collateralization for these transactions.

Swap derivative

transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.

Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.

Gross Amounts Not Offset in the Balance Sheet

1 unchanged sentence

Pledged Net Amount

March 31, 2023

June 30, 2023

Derivatives subject to master netting agreements

26 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, 2023 and December 31, 2022.

The collateral swaps totaled $ 200.0 million at June 30, 2023 and December 31, 2022.

At June 30, 2023, the Company had posted collateral of $ 206.2 million in marketable securities, consisting of agency mortgage-backed bonds, and had accepted $ 209.7 million in agency mortgage-backed bonds.

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, 2023

June 30, 2023

Total resale agreements, subject to master netting arrangements

7 unchanged sentences

2,881,874 ( 200,000 ) 2,681,874 — ( 2,681,874 ) —

The table below shows the remaining contractual maturities of repurchase agreements outstanding at March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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, 2023

June 30, 2023

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 charged against income was $ 4.4 million and $ 4.2 million in the three months ended March 31, 2023 and 2022, respectively.

The stock-based compensation expense charged against income was $ 3.9 million and $ 4.2 million in the three months ended June 30, 2023 and 2022 respectively, and $ 8.3 million and $ 8.4 million in the six months ended June 30, 2023 and 2022, 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, 2023, 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, 2023, and changes during the six month period then ended, is presented below.

Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 20,526 ) 60.58

Nonvested at March 31, 2023 1,108,917 $ 61.79

Nonvested at June 30, 2023 1,109,542 $ 61.59

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 2023 is presented below.

A summary of SAR activity during the first six months of 2023 is presented below.

(Dollars in thousands, except per share data)

5 unchanged sentences

Forfeited ( 4,011 ) 63.35

Expired ( 5,518 ) 51.82

Exercised ( 45,006 ) 26.08

Outstanding at March 31, 2023

Outstanding at June 30, 2023

984,021 $ 49.39 5.3 years $ 4,857

1 unchanged sentence

Revenue from contracts with customers, Accounting Standard Codification 606 ("ASC 606"), 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 three months ended March 31, 2023, approximately 65 % of the Company’s total revenue was comprised of net interest income, which is not within the scope of this guidance.

For the six months ended June 30, 2023, approximately 64 % 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 revenue from contracts with customers by major product line.

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

(In thousands) 2023 2022 2023 2022

12 unchanged sentences

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 three month periods ended March 31, 2023 and 2022 for the Company’s significant revenue from contracts with customers.

(In thousands) March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2021

The following table presents the opening and closing receivable balances for the six month periods ended June 30, 2023 and 2022 for the Company’s significant revenue from contracts with customers.

(In thousands) June 30, 2023 December 31, 2022 June 30, 2022 December 31, 2021

Bank card transaction fees $ 16,321 $ 17,254 $ 14,598 $ 16,424

20 unchanged sentences

Instruments Measured at Fair Value on a Recurring Basis

The table below presents the March 31, 2023 and December 31, 2022 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 2023 or the year ended December 31, 2022.

The table below presents the June 30, 2023 and December 31, 2022 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 2023 or the year ended December 31, 2022.

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant Unobservable Inputs

March 31, 2023

June 30, 2023

Residential mortgage loans held for sale $ 1,566 $ — $ 1,566 $ —

46 unchanged sentences

Derivatives Total

For the three months ended March 31, 2023

For the three months ended June 30, 2023

Balance March 31, 2023

$ 914 $ 163,418 $ ( 27 ) $ 164,305

Total gains or losses (realized/unrealized):

Included in earnings — 9,090 ( 16 ) 9,074

Included in other comprehensive income * 5 — — 5

Discount accretion 1 — — 1

Purchases of private equity investments — 224 — 224

Purchase of risk participation agreement — — 61 61

Sale of risk participation agreement — — ( 13 ) ( 13 )

Balance June 30, 2023 $ 920 $ 172,732 $ 5 $ 173,657

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, 2023

$ — $ 9,090 $ 61 $ 9,151

*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, 2023

$ 5 $ — $ — $ 5

For the six months ended June 30, 2023

Balance January 1, 2023

7 unchanged sentences

Sale/pay down of private equity investments — ( 27,492 ) — ( 27,492 )

Purchase of risk participation agreement — — 61 61

Sale of risk participation agreement — — ( 13 ) ( 13 )

Balance June 30, 2023 $ 920 $ 172,732 $ 5 $ 173,657

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, 2023

$ — $ 11,341 $ 42 $ 11,383

*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, 2023

$ 10 $ — $ — $ 10

Fair Value Measurements Using

Significant Unobservable Inputs

(In thousands)

State and Municipal Obligations Private Equity

Derivatives Total

For the three months ended June 30, 2022

Balance March 31, 2022

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, 2023

$ 1,902 $ 153,411 $ 221 $ 155,534

*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, 2023

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 agreement — — ( 250 ) ( 250 )

Balance June 30, 2022

$ 1,816 $ 161,771 $ 154 $ 163,741

For the three months ended March 31, 2022

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

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

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

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

Balance June 30, 2022

$ 1,816 $ 161,771 $ 154 $ 163,741

*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 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 )

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

1 unchanged sentence

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

For the three months ended March 31, 2023

For the three months ended June 30, 2023

Total gains or losses included in earnings $ ( 19 ) $ 3 $ 9,090 $ 9,074

Change in unrealized gains or losses relating to assets still held at March 31, 2023

Change in unrealized gains or losses relating to assets still held at June 30, 2023

$ 58 $ 3 $ 9,090 $ 9,151

For the three months ended March 31, 2022

For the six months ended June 30, 2023

Total gains or losses included in earnings $ 58 $ ( 16 ) $ 11,341 $ 11,383

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, 2023

$ 58 $ ( 16 ) $ 11,341 $ 11,383

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 June 30, 2022

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

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 June 30, 2022

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

Level 3 Inputs

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 2023 and 2022, and still held as of March 31, 2023 and 2022, 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, 2023 and 2022.

For assets measured at fair value on a nonrecurring basis during the first six months of 2023 and 2022, and still held as of June 30, 2023 and 2022, 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, 2023 and 2022.

Fair Value Measurements Using

3 unchanged sentences

Significant Unobservable Inputs

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

March 31, 2023

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

June 30, 2023

Collateral dependent loans $ 1,647 $ — $ — $ 1,647 $ 588

March 31, 2022

June 30, 2022

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

1 unchanged sentence

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 at March 31, 2023 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, 2023 is presented in the table below.

Quantitative Information about Level 3 Fair Value Measurements Weighted

17 unchanged sentences

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, 2023 and December 31, 2022:

Carrying Amount Estimated Fair Value at March 31, 2023

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, 2023 and December 31, 2022:

Carrying Amount Estimated Fair Value at June 30, 2023

(In thousands)

68 unchanged sentences

Legal and Regulatory Proceedings

The Company has various legal proceedings pending at March 31, 2023, arising in the normal course of business.

The Company has various legal proceedings pending at June 30, 2023, 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