What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-06 compared with 2024-05-08 · 385 added, 216 removed, 1290 unchanged (32% of the section changed)

8 unchanged sentences

Net loans 17,004,508 17,043,084

Loans held for sale (including $ 1,185,000 and $ 1,585,000 of residential mortgage loans carried at fair value at March 31, 2024 and December 31, 2023, respectively)

Loans held for sale (including $ 2,186,000 and $ 1,585,000 of residential mortgage loans carried at fair value at June 30, 2024 and December 31, 2023, respectively)

Investment securities:

Available for sale debt, at fair value (amortized cost of $ 9,608,044,000 and $ 10,904,765,000 at

March 31, 2024 and December 31, 2023, respectively, and allowance for credit losses of $ —

at both March 31, 2024 and December 31, 2023)

June 30, 2024 and December 31, 2023, respectively, and allowance for credit losses of $ —

at both June 30, 2024 and December 31, 2023)

8,534,271 9,684,760

26 unchanged sentences

Authorized 190,000,000 ;

issued 131,064,418 shares at both March 31, 2024 and December 31, 2023

issued 131,064,418 shares at both June 30, 2024 and December 31, 2023

655,322 655,322

1 unchanged sentence

Retained earnings 235,299 53,183

Treasury stock of 1,092,341 shares at March 31, 2024

Treasury stock of 1,781,315 shares at June 30, 2024

and 611,546 shares at December 31, 2023, 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) 2024 2023 2024 2023

35 unchanged sentences

Equipment 5,091 4,864 10,101 9,714

Supplies and communication 4,744 4,590

Marketing 5,356 6,368 9,392 11,839

Supplies and communication 4,636 4,625 9,380 9,215

Other 21,584 20,424 48,946 39,691

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) 2024 2023 2024 2023

13 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2024 and 2023

Three Months Ended June 30, 2024 and 2023

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, 2023

Balance March 31, 2024

$ 655,322 $ 3,148,649 $ 130,706 $ ( 59,674 ) $ ( 931,027 ) $ 19,913 $ 2,963,889

9 unchanged sentences

( 34,960 ) ( 34,960 )

Balance March 31, 2024

Balance June 30, 2024

$ 655,322 $ 3,153,107 $ 235,299 $ ( 98,176 ) $ ( 807,817 ) $ 20,600 $ 3,158,335

Balance December 31, 2022

Balance March 31, 2023

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

3 unchanged sentences

Purchases of treasury stock ( 318 ) ( 318 )

Sale of non-controlling interest of subsidiary 46 ( 46 ) —

Issuance under stock purchase and equity

4 unchanged sentences

( 33,744 ) ( 33,744 )

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

2 unchanged sentences

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six Months Ended June 30, 2024 and 2023

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, 2023

$ 655,322 $ 3,162,622 $ 53,183 $ ( 35,599 ) $ ( 891,412 ) $ 20,114 $ 2,964,230

Net income 252,216 4,678 256,894

Other comprehensive income (loss) 83,595 83,595

Distributions to non-controlling interest ( 4,192 ) ( 4,192 )

Purchases of treasury stock ( 80,543 ) ( 80,543 )

Issuance under stock purchase and equity compensation plans ( 17,966 ) 17,966 —

Stock-based compensation 8,451 8,451

Cash dividends paid on common stock ($ .540 per share)

( 70,100 ) ( 70,100 )

Balance June 30, 2024

$ 655,322 $ 3,153,107 $ 235,299 $ ( 98,176 ) $ ( 807,817 ) $ 20,600 $ 3,158,335

Balance December 31, 2022

$ 629,319 $ 2,932,959 $ 31,620 $ ( 41,743 ) $ ( 1,086,864 ) $ 16,286 $ 2,481,577

Net income 247,241 3,775 251,016

Other comprehensive income (loss) 50,569 50,569

Distributions to non-controlling interest ( 2,145 ) ( 2,145 )

Purchases of treasury stock ( 36,563 ) ( 36,563 )

Sale of non-controlling interest of subsidiary 46 ( 46 ) —

Issuance under stock purchase and equity compensation plans ( 19,917 ) 19,917 —

Stock-based compensation 8,277 8,277

Cash dividends paid on common stock ($ .514 per share)

( 67,503 ) ( 67,503 )

Balance June 30, 2023

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

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) 2024 2023

18 unchanged sentences

INVESTING ACTIVITIES:

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

Distributions received from equity-method investment — 1,434

12 unchanged sentences

Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase ( 357,416 ) 36,287

FHLB short-term borrowings — 2,250,000

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

Net increase (decrease) in other borrowings 2,580 ( 4,059 )

4 unchanged sentences

Cash, cash equivalents and restricted cash at beginning of year 2,687,283 897,801

Cash, cash equivalents and restricted cash at March 31

Cash, cash equivalents and restricted cash at June 30

$ 2,544,790 $ 2,938,344

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 $ 71 thousand at March 31, 2024.

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

This balance is included in other assets in the consolidated balance sheets and totaled $ 41 thousand at June 30, 2024.

The Company had $ 200 thousand restricted cash at June 30, 2023.

Commerce Bancshares, Inc.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited)

June 30, 2024 (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 month period ended March 31, 2024 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, 2024 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, 2024 and December 31, 2023 are as follows:

Major classifications within the Company’s held for investment loan portfolio at June 30, 2024 and December 31, 2023 are as follows:

(In thousands)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Business $ 6,090,724 $ 6,019,036

8 unchanged sentences

Total loans $ 17,163,065 $ 17,205,479

Accrued interest receivable totaled $ 72.8 million and $ 71.9 million at March 31, 2024 and December 31, 2023, respectively, and was included within other assets on the consolidated balance sheets.

For the three months ended March 31, 2024, the Company wrote-off accrued interest by reversing interest income of $ 94 thousand and $ 1.6 million in the Commercial and Personal Banking portfolios, respectively.

Similarly, for the three months ended March 31, 2023, the Company reversed interest income of $ 34 thousand and $ 1.1 million in the Commercial and Personal Banking portfolios, respectively.

At March 31, 2024, loans of $ 3.6 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 $ 71.9 million at both June 30, 2024 and December 31, 2023, and was included within other assets on the consolidated balance sheets.

For the three months ended June 30, 2024, the Company wrote-off accrued interest by reversing interest income of $ 341 thousand and $ 1.6 million in the Commercial and Personal Banking portfolios, respectively.

Similarly, for the six months ended June 30, 2024, the Company wrote off accrued interest of $ 435 thousand and $ 3.1 million in the Commercial and Personal Banking portfolios, respectively.

For the three months ended June 30, 2023, the Company reversed interest income of $ 43 thousand and $ 1.1 million in the Commercial and Personal Banking portfolios, respectively, and in the six months ended June 30, 2023, reversed $ 77 thousand and $ 2.2 million in the Commercial and Personal Banking portfolios, respectively.

At June 30, 2024, loans of $ 3.6 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 $ 2.9 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings.

16 unchanged sentences

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, 2024 and December 31, 2023 are discussed below.

Key Assumption March 31, 2024 December 31, 2023

Overall economic forecast • Economic strength is visible in the strong labor market

The assumptions utilized in estimating the Company’s allowance for credit losses at June 30, 2024 and March 31, 2024 are discussed below.

Key Assumption June 30, 2024 March 31, 2024

Overall economic forecast • Economic growth expected to slightly cool with no significant rise in layoffs or unemployment rate

• Inflation expected to moderate

• Expectations the Federal Reserve will start cutting rates in September 2024

• Economic strength is visible in the strong labor market

• Fiscal policy is forecasted to be a modest drag on GDP

• There are expectations that the Federal Reserve will start cutting rates in 2nd quarter 2024

• The US economy is projected to slow at the start of 2024, but not enter a recession

• Impacts of tighter monetary and fiscal policy creates uncertainty

• Consumer spending is expected to decrease

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

16 unchanged sentences

Commercial loans

• 5% for most loan pools

• Pools ranging from 0% to 5%

Personal banking loans

3 unchanged sentences

• Changes in the composition of the loan portfolios

• Certain stressed industries within the portfolio

• Certain industries experiencing stress or emerging concerns within the portfolio

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

6 unchanged sentences

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

• Certain portfolios where the model assumptions do not capture all identified loss risk

The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded.

2 unchanged sentences

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

The current forecast projects low unemployment and positive GDP.

It is expected the Federal Reserve will start cutting rates in the 2nd quarter of 2024.

The current forecast projects continued low unemployment.

It is expected that the Federal Reserve will start cutting rates in September of 2024 and fiscal policy will be maintained.

Updated information on inflation and labor market trends could impact the Federal Reserve's decision on the timing and degree of rate reductions.

The market's response to these events along with other economic, political, and social developments regionally, nationally, and even globally could significantly modify economic projections used in the estimation of the allowance for credit losses.

The upcoming presidential election could result in policy changes that might also impact the estimation of the allowance for credit losses.

Potential changes in any one economic variable may or may not affect the overall allowance because a variety of economic variables and inputs are considered in estimating the allowance, and changes in those variables and inputs may not occur at the same rate, may not be consistent across product types, and may have offsetting impacts to other changing variables and inputs.

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments for the three months ended March 31, 2024 and 2023, respectively, follows:

For the Three Months Ended March 31, 2024

A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments for the three and six months ended June 30, 2024 and 2023, respectively, follows:

For the Three Months Ended June 30, 2024

For the Six Months Ended June 30, 2024

(In thousands) Commercial Personal Banking

Commercial Personal Banking

ALLOWANCE FOR CREDIT LOSSES ON LOANS

4 unchanged sentences

Net loan charge-offs (recoveries) 614 9,143 9,757 496 18,138 18,634

Balance March 31, 2024 $ 105,464 $ 55,001 $ 160,465

Balance June 30, 2024 $ 107,217 $ 51,340 $ 158,557 $ 107,217 $ 51,340 $ 158,557

LIABILITY FOR UNFUNDED LENDING COMMITMENTS

1 unchanged sentence

Provision for credit losses on unfunded lending commitments ( 2,273 ) ( 108 ) ( 2,381 ) ( 4,546 ) 5 ( 4,541 )

Balance March 31, 2024 $ 21,636 $ 1,450 $ 23,086

Balance June 30, 2024 $ 19,363 $ 1,342 $ 20,705 $ 19,363 $ 1,342 $ 20,705

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 126,580 $ 52,682 $ 179,262 $ 126,580 $ 52,682 $ 179,262

For the Three Months Ended March 31, 2023

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

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, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

(In thousands)

2 unchanged sentences

90 Days Past Due and Still Accruing Non-accrual

March 31, 2024

June 30, 2024

Business $ 6,088,607 $ 1,048 $ 565 $ 504 $ 6,090,724

19 unchanged sentences

Total $ 17,080,238 $ 96,065 $ 21,864 $ 7,312 $ 17,205,479

At March 31, 2024, the Company had $ 3.7 million in non-accrual loans that had no allowance for credit loss, compared to $ 4.3 million in non-accrual loans that had no allowance for credit loss at December 31, 2023.

The Company did not record any interest income on non-accrual loans during the three months ended March 31, 2024 and 2023, respectively.

At June 30, 2024, the Company had $ 2.5 million in non-accrual loans that had no allowance for credit loss, compared to $ 4.3 million in non-accrual loans that had no allowance for credit loss at December 31, 2023.

The Company did not record any interest income on non-accrual loans during the six months ended June 30, 2024 and 2023, 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, 2024 and December 31, 2023 are as follows:

The risk category of loans in the Commercial portfolio as of June 30, 2024 and December 31, 2023 are as follows:

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2024

June 30, 2024

Pass $ 691,447 $ 1,182,142 $ 735,569 $ 465,466 $ 205,221 $ 413,412 $ 2,208,477 $ 5,901,734

4 unchanged sentences

$ 699,052 $ 1,208,959 $ 755,538 $ 494,434 $ 212,311 $ 426,186 $ 2,294,244 $ 6,090,724

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ 200 $ 245 $ 40 $ — $ — $ 17 $ 664 $ 1,166

1 unchanged sentence

Pass $ 119,192 $ 431,040 $ 578,818 $ 205,023 $ 3,495 $ 3,137 $ 38,393 $ 1,379,098

Special mention 582 — — — — — — 582

Substandard — — 17,417 — — — — 17,417

1 unchanged sentence

$ 119,192 $ 431,040 $ 596,235 $ 205,023 $ 3,495 $ 3,137 $ 38,393 $ 1,396,515

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ — $ — $ — $ — $ — $ — $ — $ —

6 unchanged sentences

$ 333,226 $ 734,055 $ 859,131 $ 515,550 $ 442,603 $ 575,308 $ 112,666 $ 3,572,539

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ — $ — $ — $ — $ — $ — $ — $ —

6 unchanged sentences

$ 1,151,470 $ 2,374,054 $ 2,210,904 $ 1,215,007 $ 658,409 $ 1,004,631 $ 2,445,303 $ 11,059,778

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ 200 $ 245 $ 40 $ — $ — $ 17 $ 664 $ 1,166

31 unchanged sentences

Gross write-offs for the year ended December 31, 2023 $ — $ 2,260 $ 57 $ 41 $ — $ 134 $ 1,393 $ 3,885

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, 2024 and December 31, 2023 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, 2024 and December 31, 2023 below.

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total

March 31, 2024

June 30, 2024

Real estate-personal

4 unchanged sentences

$ 206,562 $ 418,760 $ 434,120 $ 513,237 $ 675,399 $ 797,810 $ 9,294 $ 3,055,182

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ — $ 30 $ 96 $ — $ — $ 3 $ — $ 129

3 unchanged sentences

$ 247,399 $ 445,060 $ 284,139 $ 206,744 $ 97,514 $ 78,802 $ 785,951 $ 2,145,609

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ 14 $ 1,182 $ 1,246 $ 722 $ 253 $ 175 $ 1,240 $ 4,832

5 unchanged sentences

$ — $ — $ — $ — $ — $ — $ 331,381 $ 331,381

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ — $ — $ — $ — $ — $ — $ — $ —

4 unchanged sentences

$ — $ — $ — $ — $ — $ — $ 566,925 $ 566,925

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ — $ — $ — $ — $ — $ — $ 15,462 $ 15,462

2 unchanged sentences

$ 4,190 $ — $ — $ — $ — $ — $ — $ 4,190

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ 1,444 $ — $ — $ — $ — $ — $ — $ 1,444

5 unchanged sentences

$ 458,151 $ 863,820 $ 718,259 $ 719,981 $ 772,913 $ 876,612 $ 1,693,551 $ 6,103,287

Gross write-offs for the three months ended March 31, 2024

Gross write-offs for the six months ended June 30, 2024

$ 1,458 $ 1,212 $ 1,342 $ 722 $ 253 $ 178 $ 16,702 $ 21,867

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, 2024 and December 31, 2023.

The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2024 and December 31, 2023.

(In thousands) Business Assets Real Estate Oil & Gas Assets Total

March 31, 2024

June 30, 2024

Real estate - business $ — $ 15,023 $ — $ 15,023

Personal Banking:

Real estate - personal — 549 — 549

Revolving home equity — 1,977 — 1,977

10 unchanged sentences

Excluded from the table below are certain personal real estate 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 $ 168.8 million at March 31, 2024 and $ 168.9 million at December 31, 2023.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 210.4 million at March 31, 2024 and $ 211.3 million at December 31, 2023.

These loans totaled $ 170.1 million at June 30, 2024 and $ 168.9 million at December 31, 2023.

The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $ 220.5 million at June 30, 2024 and $ 211.3 million at December 31, 2023.

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, 2024 and December 31, 2023 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, 2024 and December 31, 2023 by FICO score.

Personal Banking Loans

1 unchanged sentence

Real Estate - Personal Consumer Revolving Home Equity Consumer Credit Card

March 31, 2024

June 30, 2024

Under 600 2.1 % 2.3 % 2.0 % 4.9 %

18 unchanged sentences

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

The following tables present the amortized cost at March 31, 2024 of loans that were modified during the three months ended March 31, 2024 and the amortized cost of at March 31, 2023 of loans that were modified during the three months ended March 31, 2023.

For the Three Months Ended March 31, 2024

The following tables present the amortized cost at June 30, 2024 of loans that were modified during the three and six months ended June 30, 2024 and the amortized cost of 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, 2024

(Dollars in thousands)

1 unchanged sentence

Total % of Total Loan Category

March 31, 2024

June 30, 2024

Business $ 19,335 $ — $ — $ — $ — $ 19,335 0.3 %

5 unchanged sentences

Total $ 64,918 $ 1,704 $ 1,154 $ — $ 44 $ 67,820 0.4 %

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2024

June 30, 2024

Business $ 30,575 $ — $ — $ — $ — $ 30,575 0.5 %

Real estate – business 47,787 — — — — 47,787 1.3

Personal Banking:

Real estate – personal 309 3,975 — — — 4,284 0.1

Consumer — — 58 — 44 102 —

Consumer credit card — — 1,958 — — 1,958 0.3

Total $ 78,671 $ 3,975 $ 2,016 $ — $ 44 $ 84,706 0.5 %

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

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.

As a result, a change to the allowance for credit losses is generally not recorded upon modification.

As a result, a change to the allowance for credit losses is generally not recorded upon

modification.

For modifications to loans made to borrowers experiencing financial difficulty that are placed on non-accrual status, the Company determines the allowance for credit losses on an individual evaluation, using the same process that it utilizes for other loans on non-accrual status.

3 unchanged sentences

For those loans, the allowance for credit losses is estimated using discounted expected cash flows or the fair value of collateral.

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 tables summarize the financial impact of loan modifications and payment deferrals during the three months ended March 31, 2024 and March 31, 2023.

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 tables summarize the financial impact of loan modifications and payment deferrals during the three and six months ended June 30, 2024 and June 30, 2023.

Term Extension

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Business Extended maturity by a weighted average of 6 months.

4 unchanged sentences

Real estate – personal Extended maturity by a weighted average of 3 months.

Extended maturity by a weighted average of 7 months.

Consumer Added 10 years to the life of loans.

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Business Extended maturity by a weighted average of 6 months.

Extended maturity by a weighted average of 9 months.

Real estate – business Extended maturity by a weighted average of 10 months.

Extended maturity by a weighted average of 14 months.

Personal Banking:

Real estate – personal Extended maturity by a weighted average of 6 months.

Extended maturity by a weighted average of 7 months.

Consumer Added 10 years to the life of loans.

Payment Delay

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Personal Banking:

Real estate – personal Deferred certain payments by a weighted average of 4 years .

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

Deferred certain payments by a weighted average of 28 years .

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

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Real estate – personal Deferred certain payments by a weighted average of 6 years .

Deferred certain payments by a weighted average of 20 years .

Consumer Deferred certain payments by a weighted average of 71 months .

Interest Rate Reduction

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Personal Banking:

Consumer Reduced weighted-average contractual interest rate from average 23% to 6%.

Reduced weighted-average contractual interest rate from 20% to 6%.

Consumer credit card Reduced weighted-average contractual interest rate from average 23% to 6%.

Reduced weighted-average contractual interest rate from 20% to 6%.

Consumer Reduced contractual interest rate from average 22% to 6%.

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

Consumer credit card Reduced contractual interest rate from average 22% to 6%.

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

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Personal Banking:

Consumer Reduced contractual interest rate from average 22% to 6%.

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

Consumer credit card Reduced contractual interest rate from average 22% to 6%.

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

Forgiveness of Interest/Fees

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Personal Banking:

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

The Company had commitments of $ 2.4 million and $ 28.4 million at March 31, 2024 and December 31, 2023, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of an interest rate reduction;

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Personal Banking:

Consumer credit card Approximately $27 thousand of interest and fees forgiven.

The Company had commitments of $ 7.0 million and $ 28.4 million at June 30, 2024 and December 31, 2023, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of an interest rate reduction;

an other-than-insignificant payment delay;

1 unchanged sentence

or a term extension during the current reporting period.

The following tables provide the amortized cost basis at March 31, 2024 of loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2024 and were modified within the 12 months preceding the payment default, as well as the amortized cost basis at March 31, 2023 of loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2023 and had been modified on or after January 1, 2023 (the date we adopted ASU 2022-02).

The following tables provide the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2024 and were modified within the 12 months preceding the payment default, as well as the amortized cost basis at June 30, 2023 of loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2023 and had been modified on or after January 1, 2023 (the date we adopted ASU 2022-02).

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

For the Three Months Ended March 31, 2024

(Dollars in thousands) Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total

March 31, 2024

For the Three Months Ended June 30, 2024 For the Six Months Ended June 30, 2024

(Dollars in thousands) Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total Payment Delay Interest Rate Reduction Interest/Fees Forgiven Total

June 30, 2024

Personal Banking:

3 unchanged sentences

Total $ 1,740 $ 361 $ 12 $ 2,113 $ 1,956 $ 469 $ 12 $ 2,437

For the Three Months Ended March 31, 2023

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

(Dollars in thousands)

Payment Delay 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

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

The following tables present the amortized cost basis at March 31, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months as well as the amortized cost basis at March 31, 2023 of loans to borrowers experiencing financial difficulty that had been modified on or after January 1, 2023 (the date we adopted ASU 2022-02) through March 31, 2023.

The following tables present the amortized cost basis at June 30, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months as well as the amortized cost basis at June 30, 2023 of loans to borrowers experiencing financial difficulty that had 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, 2024

June 30, 2024

Business $ 32,565 $ — $ — $ 32,565

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90 Days Past Due Total

March 31, 2023

June 30, 2023

Business $ 18,193 $ — $ — $ 18,193

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

At March 31, 2024, the fair value of these loans was $ 1.2 million, and the unpaid principal balance was $ 1.1 million.

At June 30, 2024, the fair value of these loans was $ 2.2 million, and the unpaid principal balance was $ 2.2 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, 2024 totaled $ 763 thousand.

At March 31, 2024, 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, 2024 totaled $ 448 thousand.

At June 30, 2024, 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 $ 206 thousand and $ 270 thousand at March 31, 2024 and December 31, 2023, respectively, and included in those amounts were $ 206 thousand and $ 270 thousand at March 31, 2024 and December 31, 2023, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession.

Personal property acquired in repossession, generally autos, totaled $ 2.0 million and $ 1.8 million at March 31, 2024 and December 31, 2023.

The Company’s holdings of foreclosed real estate totaled $ 143 thousand and $ 270 thousand at June 30, 2024 and December 31, 2023, respectively, and included in those amounts were $ 143 thousand and $ 270 thousand at June 30, 2024 and December 31, 2023, respectively, of foreclosed residential real estate properties held as a result of obtaining physical possession.

Personal property acquired in repossession, generally autos, totaled $ 2.2 million and $ 1.8 million at June 30, 2024 and December 31, 2023.

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

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Investment Securities

Investment securities consisted of the following at March 31, 2024 and December 31, 2023.

(In thousands) March 31, 2024 December 31, 2023

Investment securities consisted of the following at June 30, 2024 and December 31, 2023.

(In thousands) June 30, 2024 December 31, 2023

Available for sale debt securities $ 8,534,271 $ 9,684,760

8 unchanged sentences

$ 8,917,152 $ 9,948,764

(1) Accrued interest receivable totaled $ 28.2 million and $ 28.9 million at March 31, 2024 and December 31, 2023, respectively, and was included within other assets on the consolidated balance sheets.

(1) Accrued interest receivable totaled $ 26.4 million and $ 28.9 million at June 30, 2024 and December 31, 2023, respectively, and was included within other assets on the consolidated balance sheets.

Most of the Company’s investment securities are classified as available for sale debt securities, and this portfolio is discussed in more detail below.

The Company’s equity securities are also discussed below.

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

FRB stock and FHLB stock are held for debt and regulatory purposes.

Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is tied to the asset size of the borrowing bank and the level of borrowings from the FHLB.

These holdings are carried at cost.

The Company’s private equity investments are carried at estimated fair value.

Equity Securities

The Company’s equity securities portfolio includes common and preferred stock with readily determinable fair values as well as equity securities with no readily determinable fair value.

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.

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(“Visa”) Class B-1 common stock (formerly Class B common stock), which were held by Commerce Bancshares, Inc.

(the Company's parent company).

The Company’s Visa Class B-1 shares had a carrying value of zero at March 31, 2024, as there had not been observable price changes in orderly transactions for identical or similar investments of the same issuer.

During the three months ended March 31, 2024, 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.

On April 8, 2024, Visa announced the commencement of a public offering to permit the exchange of its Class B-1 common stock for a combination of shares of its Class B-2 common stock and its Class C common stock (“Exchange Offer”).

The Company tendered all of its Visa Class B-1 shares pursuant to the Exchange Offer.

On May 3, 2024, the Exchange Offer closed and the Company received notification of Visa’s acceptance of that tender.

In exchange for its 823,447 shares of Visa Class B-1 common stock, the Company received 411,723 shares of Visa Class B-2 common stock (which will be convertible under certain circumstances, as further described below, into Visa’s publicly traded Class A common stock at an initial rate of 1.5875 shares of Class A common for each share of Class B-2 common stock, subject to adjustment) and 163,404 shares of Visa Class C common stock which will automatically convert into four shares of Visa's Class A common stock (subject to

future adjustments for any stock splits, recapitalizations or similar transactions) upon any transfer to a person other than a Visa member or an affiliate of a Visa member.

On May 3, 2024, the Exchange Offer closed, and in exchange for its 823,447 shares of Visa Class B-1 common stock, the Company received 411,723 shares of Visa Class B-2 common stock (which will be convertible under certain circumstances, as further described below, into Visa’s publicly traded Class A common stock at an initial rate of 1.5875 shares of Class A common for each share of Class B-2 common stock, subject to adjustment) and 163,404 shares of Visa Class C common stock which will automatically convert into four shares of Visa's Class A common stock (subject to future adjustments for any stock splits, recapitalizations or similar transactions) upon any transfer to a person other than a Visa member or an affiliate of a Visa member.

As a condition of participating in the exchange, the Company entered into a Makewhole Agreement with Visa that provides for cash payments to Visa to the extent (if any) that future adjustments to the conversion ratio for the Visa Class B-2 common stock to Class A common stock cause such ratio to fall below zero.

3 unchanged sentences

Securities and Exchange Commission, both the Makewhole Agreement and the related escrow fund and transfer restrictions on Visa’s Class B-1 common stock and the new Class B-2 common stock will terminate whenever the covered litigation is ultimately resolved, at which future date outstanding shares of Visa Class B-2 common stock will be convertible into shares of its Class A common stock at the then-applicable conversion ratio.

The Makewhole Agreement also includes limited transfer restrictions, such that the Company may only transfer up to one-third of the shares of Visa Class C common stock received in the exchange within the first 45 days following May 3, 2024, and may only transfer up to two-thirds of the Class C common stock received within the first 90 days following May 3, 2024.

As a result of the exchange, the Company marked its Visa Class C common stock to fair value and recorded a gain of $ 175.5 million based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock on May 3, 2024 of $ 268.49 per share.

The Company’s Visa Class C shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A shares as evidence of orderly transactions between market participants for similar securities issued by Visa.

The Company’s Visa Class B-2 common stock will continue to be carried at cost of $ 0 as there are not observable price changes in orderly transactions for identical or similar investments of the same issuer.

Subsequent to the successful close of the Exchange Offer, the Company approved a plan to reposition a portion of its available for sale debt securities portfolio through the sale of securities with an amortized cost of approximately $ 1.0 billion.

The securities that the Company plans to sell have a yield of approximately 2.0 %, which is expected to result in a loss of approximately $ 165 million, and the Company expects to reinvest the proceeds mostly into investment securities yielding approximately 4.6 %.

The Company expects the repositioning to increase net interest income, reduce interest rate risk to lower rates, and improve the quality of the Company's pledgeable investment securities.

The timing and amount of the loss ultimately realized on the available for sale debt securities and the reinvestment assumptions may depend on many considerations, including market conditions, the future price of Visa Class A common stock, and other factors.

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.

FRB stock and FHLB stock are held for debt and regulatory purposes.

These holdings are carried at cost.

The Company's private equity investments are carried at estimated fair value.

As a result of the exchange, the Company elected the measurement alternative approach for its Visa Class C common stock and marked the stock to fair value, recording a gain based on the conversion privilege of the Visa Class C common stock and the closing price of Visa Class A common stock.

During the second quarter of 2024, the Company sold 436 thousand shares of Visa Class A common stock at an average price of $ 274.91 , resulting in proceeds of $ 119.8 million.

The Company’s remaining 54 thousand Visa Class C shares had a fair value of $ 57.2 million at June 30, 2024, and are subject to limited transfer restrictions that end on August 1, 2024.

These shares are expected to continue to be marked to fair value on a recurring basis using the Visa Class A shares as evidence of orderly transactions between market participants for similar securities issued by Visa.

The Company’s Visa Class B-2 common stock will continue to be carried at cost of $ 0 as the Company elected the measurement alternative approach for these shares as well, and there are not observable price changes in orderly transactions for identical or similar investments of the same issuer for the Visa Class B-2 shares held by the Company.

Changes in equity investments with no readily determinable fair value for each period were as follows:

Three Months Ended June 30 Six Months Ended June 30

(In thousands) 2024 2024

Balance at beginning of period $ 6,988 $ 6,978

Observable upward price adjustments 178,227 178,227

Observable downward price adjustments — —

Impairment charges — —

Sales of securities and other activity ( 119,435 ) ( 119,425 )

Balance at end of period $ 65,780 $ 65,780

Net gains and losses for the Company's equity securities portfolio for each period were as follows:

Three Months Ended June 30 Six Months Ended June 30

(In thousands) 2024 2024

Net gains (losses) recognized during the period on equity securities $ 178,164 $ 178,306

Net gains (losses) recognized during the period on equity securities sold during the period ( 119,987 ) ( 119,987 )

Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date $ 58,177 $ 58,319

Available for sale debt securities portfolio

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, 2024 is shown below.

A summary of the available for sale debt securities by maturity groupings as of June 30, 2024 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.

31 unchanged sentences

government and federal agency obligations include U.S.

Treasury inflation-protected securities, which totaled $ 396.2 million, at fair value, at March 31, 2024.

Treasury inflation-protected securities, which totaled $ 399.7 million, at fair value, at June 30, 2024.

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

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

At March 31, 2024, the fair value of securities on this watch list was $ 1.7 billion compared to $ 1.2 billion at December 31, 2023.

At June 30, 2024, the fair value of securities on this watch list was $ 1.8 billion compared to $ 1.2 billion at December 31, 2023.

Almost all 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, 2024, 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, 2024, the Company did not identify any securities for which a credit loss exists, and for the three months ended March 31, 2024 and 2023, 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, 2024 and December 31, 2023.

At June 30, 2024, 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, 2024, the Company did not identify any securities for which a credit loss exists, and for the six months ended June 30, 2024 and 2023, 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, 2024, 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, 2024, 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, 2024

June 30, 2024

government and federal agency obligations $ 647,825 $ 2,025 $ 509,058 $ 23,119 $ 1,156,883 $ 25,144

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Total $ 99,075 $ 1,784 $ 9,494,875 $ 1,218,700 $ 9,593,950 $ 1,220,484

The entire available for sale debt portfolio included $ 9.1 billion of securities that were in a loss position at March 31, 2024, compared to $ 9.6 billion at December 31, 2023.

The total amount of unrealized loss on these securities was $ 1.2 billion at March 31, 2024, an increase of $ 27.1 million compared to the unrealized loss at December 31, 2023.

The entire available for sale debt portfolio included $ 8.0 billion of securities that were in a loss position at June 30, 2024, compared to $ 9.6 billion at December 31, 2023.

The total amount of unrealized loss on these securities was $ 1.1 billion at June 30, 2024, a decrease of $ 144.4 million compared to the unrealized loss at December 31, 2023.

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, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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, 2024

June 30, 2024

government and federal agency obligations $ 1,661,224 $ 1,747 $ ( 25,144 ) $ — $ 1,637,827

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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) 2024 2023

2 unchanged sentences

$ 1,015,845 $ 1,101,782

Equity securities

Other investments

4 unchanged sentences

Available for sale debt securities:

Gains realized on sales $ — $ 143

Losses realized on sales ( 187,543 ) ( 8,587 )

Equity securities:

Fair value adjustments, net

Gains (losses) on equity securities, net 178,306 ( 690 )

Gains realized on sales

Losses realized on sales

Fair value adjustments, net 12,777 11,341

Total investment securities gains (losses), net $ 2,974 $ 3,086

Net losses on investment securities for the three months ended March 31, 2024 were mainly comprised of net losses of $ 8.5 million on sales of available for sale securities, partially offset by net gains in fair value of $ 142 thousand on equity investments, net gains of $ 969 thousand on sales of private equity securities, and net gains in private equity securities due to fair value adjustments of $ 7.1 million.

At March 31, 2024, securities totaling $ 6.6 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 $ 7.5 billion at December 31, 2023.

Net gains on investment securities for the six months ended June 30, 2024 were mainly comprised of net gains of $ 178.3 million on equity investments and net gains in fair value of $ 12.8 million recorded on private equity investments.

These gains were largely offset by net losses of $ 187.5 million on sales of available for sale securities.

Subsequent to the successful close of the Exchange Offer in early May 2024, the Company approved and executed a plan to reposition a portion of its available for sale debt securities portfolio through the sale of securities with an amortized cost of $ 1.2 billion.

The securities that the Company sold had a yield of approximately 2.1 %, which resulted in a loss of $ 179.1 million, and the Company reinvested $ 928.8 million of the proceeds into U.S.

Treasury securities yielding approximately 4.6 %.

Pledged securities

At June 30, 2024, securities totaling $ 6.5 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 $ 7.5 billion at December 31, 2023.

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In thousands)

4 unchanged sentences

Total $ 19,109 $ ( 8,908 ) $ — $ 10,201 $ 19,273 $ ( 8,694 ) $ — $ 10,579

Aggregate amortization expense on intangible assets was $ 331 thousand and $ 356 thousand for the three month periods ended March 31, 2024 and 2023, respectively.

Aggregate amortization expense on intangible assets was $ 320 thousand and $ 353 thousand for the three month periods ended June 30, 2024 and 2023, respectively, and $ 651 thousand and $ 709 thousand for the six month periods ended June 30, 2024 and 2023, 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, 2024.

This expense is based on existing asset balances and the interest rate environment as of June 30, 2024.

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 other intangible assets for the three month period ended March 31, 2024 are as follows:

Changes in the carrying amount of goodwill and other intangible assets for the six month period ended June 30, 2024 are as follows:

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

3 unchanged sentences

Amortization — — ( 106 ) ( 545 )

Balance March 31, 2024 $ 146,539 $ 3,600 $ 405 $ 9,913

Goodwill allocated to the Company’s operating segments at March 31, 2024 and December 31, 2023 is shown below.

(In thousands) March 31, 2024 December 31, 2023

Balance June 30, 2024 $ 146,539 $ 3,600 $ 352 $ 9,849

Goodwill allocated to the Company’s operating segments at June 30, 2024 and December 31, 2023 is shown below.

(In thousands) June 30, 2024 December 31, 2023

Consumer segment $ 70,721 $ 70,721

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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, 2024, that net liability was $ 3.9 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 $ 634.5 million at March 31, 2024.

At June 30, 2024, that net liability was $ 3.6 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 $ 633.6 million at June 30, 2024.

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, 2024, believes sufficient collateral is available to cover potential swap losses.

The Company monitors overall borrower collateral and at June 30, 2024, 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, 2024, the fair value of the Company's guarantee liabilities for RPAs was $ 106 thousand, and the notional amount of the underlying swaps was $ 464.9 million.

At June 30, 2024, the fair value of the Company's guarantee liabilities for RPAs was $ 83 thousand, and the notional amount of the underlying swaps was $ 455.7 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.

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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 15 years.

The leases may include options to renew or expand the leased space, and currently the leases have remaining terms of 1 month to 14 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) 2024 2023 2024 2023

1 unchanged sentence

Operating leases (a)

4,260 3,483 8,392 5,816

Total lease income $ 13,303 $ 11,024 $ 26,447 $ 20,112

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for both of the three month periods ended March 31, 2024 and 2023.

(a) Includes rent from Tower Properties Company, a related party, of $ 19 thousand for both of the three month periods ended June 30, 2024 and 2023, and $ 38 thousand for both the six month periods ended June 30, 2024 and 2023.

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) 2024 2023 2024 2023

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

During the first three months of 2024, 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 2024, 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) 2024 2023 2024 2023

15 unchanged sentences

Diluted income per common share $ 1.07 $ .97 $ 1.93 $ 1.88

Unexercised stock appreciation rights of 353 thousand and 226 thousand for the three month periods ended March 31, 2024 and 2023, 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 411 thousand and 450 thousand for the three month periods ended June 30, 2024 and 2023, respectively, and 382 thousand and 277 thousand for the six month periods ended June 30, 2024 and 2023, 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 109,675 353 ( 26,433 ) 83,595

Balance March 31, 2024

Balance June 30, 2024

$ ( 805,326 ) $ ( 13,243 ) $ 10,752 $ ( 807,817 )

6 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

The Commercial segment provides corporate lending (including the Small Business Banking product line within the branch network), leasing, and international services, along with business and governmental deposit products and commercial cash management services.

This segment also includes both merchant and commercial bank card products as well as the Capital Markets Group, which sells fixed income securities and provides securities safekeeping and accounting services to its business and correspondent bank customers.

This segment also includes both merchant and commercial bank card products as well as the Commercial Tradable Products division, which sells fixed income securities, underwrites municipal bonds, and provides securities safekeeping and accounting services to its business and correspondent bank customers.

The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment management, and brokerage services.

9 unchanged sentences

Consumer Commercial Wealth Other/Elimination Consolidated Totals

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Net interest income $ 124,715 $ 125,189 $ 21,269 $ ( 8,924 ) $ 262,249

4 unchanged sentences

Income before income taxes $ 59,796 $ 90,398 $ 41,970 $ ( 12,120 ) $ 180,044

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

Net interest income $ 254,391 $ 251,876 $ 45,424 $ ( 40,443 ) $ 511,248

Provision for credit losses ( 17,925 ) ( 766 ) 4 8,432 ( 10,255 )

Non-interest income 50,335 128,954 117,999 3,804 301,092

Investment securities gains (losses), net — — — 2,974 2,974

Non-interest expense ( 162,526 ) ( 199,574 ) ( 78,453 ) ( 37,358 ) ( 477,911 )

Income before income taxes $ 124,275 $ 180,490 $ 84,974 $ ( 62,591 ) $ 327,148

Three Months Ended June 30, 2023

Net interest income $ 141,235 $ 128,018 $ 25,393 $ ( 45,108 ) $ 249,538

Provision for loan losses ( 6,430 ) ( 90 ) — 49 ( 6,471 )

3 unchanged sentences

Income before income taxes $ 77,024 $ 94,288 $ 39,384 $ ( 44,243 ) $ 166,453

Six Months Ended June 30, 2023

Net interest income $ 285,695 $ 265,145 $ 53,418 $ ( 103,097 ) $ 501,161

Provision for credit losses ( 12,736 ) ( 483 ) ( 13 ) ( 4,695 ) ( 17,927 )

Non-interest income 49,834 123,093 107,457 4,833 285,217

Investment securities gains (losses), net — — — 3,086 3,086

Non-interest expense ( 160,682 ) ( 192,094 ) ( 80,107 ) ( 18,835 ) ( 451,718 )

Income before income taxes $ 162,111 $ 195,661 $ 80,755 $ ( 118,708 ) $ 319,819

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, in 2023, interest expense on the Company's brokered certificates of deposit was included in this column, as the Company's brokered certificates of deposit were not allocated to a segment.

There were no brokered certificates of deposit in 2024.

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.

3 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.

With the exception of the interest rate floors (discussed below), the Company's derivative instruments are accounted for as free-standing derivatives, and changes in their fair value are recorded in current earnings.

The Company's derivatives are accounted for as freestanding derivatives, and with the exception of the interest rate floors, changes in their fair value are recorded in current earnings.

(In thousands)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Interest rate swaps $ 2,300,300 $ 2,166,393

15 unchanged sentences

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

As of March 31, 2024, the Company held four interest rate floors indexed to 1-month SOFR to hedge the risk of declining interest rates on certain floating rate commercial loans.

As of June 30, 2024, the Company held four interest rate floors indexed to 1-month SOFR to hedge the risk of declining interest rates on certain floating rate commercial loans.

The floors have a combined notional value of $2.0 billion and are forward-starting.

11 unchanged sentences

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, 2024, net deferred losses on the interest rate floors totaled $ 21.9 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet.

As of March 31, 2024, it is expected that $ 10.7 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months for the outstanding interest rate floors.

As of June 30, 2024, net deferred losses on the interest rate floors totaled $ 25.8 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet.

As of June 30, 2024, it is expected that $ 10.7 million

(pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months for the outstanding interest rate floors.

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,

2024, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 45.7 million (pre-tax), which will be reclassified into interest income over the next 2.7 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at March 31, 2024 that is expected to be reclassified into income within the next 12 months is $ 21.7 million.

As of June 30, 2024, the total realized gains on the monetized cash flow hedges remaining in AOCI was $ 40.1 million (pre-tax), which will be reclassified into interest income over the next 2.5 years.

The estimated amount of net gains related to the cash flow hedges remaining in AOCI at June 30, 2024 that is expected to be reclassified into income within the next 12 months is $ 21.2 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.

9 unchanged sentences

In prior years, certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swap.

There was no reduction to positive or negative fair values of cleared swaps at March 31, 2024 and December 31, 2023.

There was no reduction to positive or negative fair values of cleared swaps at June 30, 2024 and December 31, 2023.

Asset Derivatives Liability Derivatives

31, 2024 Dec.

31, 2023 Mar.

31, 2024 Dec.

June 30, 2024 Dec.

31, 2023 June 30, 2024 Dec.

(In thousands )

19 unchanged sentences

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

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ ( 6,502 ) $ ( 131 ) $ ( 6,371 ) Total $ 2,888 $ 7,098 $ ( 4,210 )

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2024

Derivatives in cash flow hedging relationships:

1 unchanged sentence

Total $ ( 29,367 ) $ ( 10,108 ) $ ( 19,259 ) Total $ 5,877 $ 14,297 $ ( 8,420 )

For the Three Months Ended June 30, 2023

Derivatives in cash flow hedging relationships:

Interest rate floors $ ( 14,748 ) $ — $ ( 14,748 ) Interest and fees on loans $ 4,165 $ 7,455 $ ( 3,290 )

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

For the Six Months Ended June 30, 2023

Derivatives in cash flow hedging relationships:

Interest rate floors $ ( 5,523 ) $ — $ ( 5,523 ) Interest and fees on loans $ 8,550 $ 14,899 $ ( 6,349 )

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

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) 2024 2023 2024 2023

22 unchanged sentences

Pledged Net Amount

March 31, 2024

June 30, 2024

Derivatives subject to master netting agreements

29 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, 2024

June 30, 2024

Total resale agreements, subject to master netting arrangements

7 unchanged sentences

2,647,510 — 2,647,510 — ( 2,647,510 ) —

The table below shows the remaining contractual maturities of repurchase agreements outstanding at March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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, 2024

June 30, 2024

Repurchase agreements, secured by:

18 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 $ 4.3 million and $ 4.4 million in the three months ended March 31, 2024 and 2023 respectively.

The stock-based compensation expense charged against income was $ 4.2 million and $ 3.9 million in the three months ended June 30, 2024 and 2023 respectively, and $ 8.5 million and $ 8.3 million in the six months ended June 30, 2024 and 2023, 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, 2024, 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, 2024, and changes during the six month period then ended, is presented below.

Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 27,582 ) 59.87

Nonvested at March 31, 2024 1,234,401 $ 57.99

Nonvested at June 30, 2024 1,210,714 $ 58.03

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 2024 is presented below.

A summary of SAR activity during the first six months of 2024 is presented below.

(Dollars in thousands, except per share data)

7 unchanged sentences

Exercised ( 67,213 ) 31.76

Outstanding at March 31, 2024

Outstanding at June 30, 2024

1,062,314 $ 48.54 5.1 years $ 9,679

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, 2024, approximately 63 % 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, 2024, approximately 63 % 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) 2024 2023 2024 2023

Bank card transaction fees $ 46,930 $ 46,654

Trust fees $ 52,291 $ 47,265 $ 103,396 $ 92,593

Bank card transaction fees 47,477 49,725 94,407 96,379

Deposit account charges and other fees 25,325 22,633 49,476 44,385

9 unchanged sentences

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

The following table presents the opening and closing receivable balances for the three month periods ended March 31, 2024 and 2023 for the Company’s significant revenue from contracts with customers.

(In thousands) March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022

The following table presents the opening and closing receivable balances for the six month periods ended June 30, 2024 and 2023 for the Company’s significant revenue from contracts with customers.

(In thousands) June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022

Bank card transaction fees $ 15,824 $ 18,069 $ 16,321 $ 17,254

20 unchanged sentences

Instruments Measured at Fair Value on a Recurring Basis

The table below presents the March 31, 2024 and December 31, 2023 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 2024 or the year ended December 31, 2023.

The table below presents the June 30, 2024 and December 31, 2023 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 2024 or the year ended December 31, 2023.

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant Unobservable Inputs

March 31, 2024

June 30, 2024

Residential mortgage loans held for sale $ 2,186 $ — $ 2,186 $ —

45 unchanged sentences

State and Municipal Obligations Private Equity

For the three months ended March 31, 2024

For the three months ended June 30, 2024

Balance March 31, 2024 $ 956 $ 183,706 $ 184,662

Total gains or losses (realized/unrealized):

Included in earnings — 5,677 5,677

Included in other comprehensive income * ( 4 ) — ( 4 )

Discount accretion 1 — 1

Purchases of private equity investments — 1,470 1,470

Sale/pay down of private equity investments — ( 12,564 ) ( 12,564 )

Capitalized interest/dividends — 32 32

Balance at June 30, 2024 $ 953 $ 178,321 $ 179,274

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, 2024

$ — $ 5,677 $ 5,677

*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, 2024

$ ( 4 ) $ — $ ( 4 )

For the six months ended June 30, 2024

Balance January 1, 2024

$ 947 $ 176,667 $ 177,614

Total gains or losses (realized/unrealized):

1 unchanged sentence

Included in other comprehensive income * 5 — 5

Discount accretion 1 — 1

Purchases of private equity investments — 10,947 10,947

1 unchanged sentence

Capitalized interest/dividends — ( 106 ) ( 106 )

Balance at June 30, 2024 $ 953 $ 178,321 $ 179,274

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, 2024

$ — $ 11,002 $ 11,002

*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, 2024

Fair Value Measurements Using

Significant Unobservable Inputs

(In thousands)

State and Municipal Obligations Private Equity

For the three months ended June 30, 2023

Balance at March 31, 2023

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, 2024 $ — $ 7,100 $ 7,100

*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, 2024 $ 9 $ — $ 9

For the three months ended March 31, 2023

$ 914 $ 163,418 $ 164,332

Total gains or losses (realized/unrealized):

Included in earnings — 9,090 9,090

Included in other comprehensive income * 5 — 5

Discount accretion 1 — 1

Purchases of private equity investments — 224 224

Balance at June 30, 2023 $ 920 $ 172,732 $ 173,652

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 $ 9,090

*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

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 )

Balance at March 31, 2023 $ 914 $ 163,418 $ 164,332

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

Balance at June 30, 2023 $ 920 $ 172,732 $ 173,652

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 $ 11,341

*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 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

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

1 unchanged sentence

(In thousands) Investment Securities Gains (Losses), Net

For the three months ended March 31, 2024

For the three months ended June 30, 2024

Total gains or losses included in earnings $ 5,677

Change in unrealized gains or losses relating to assets still held at March 31, 2024

For the three months ended March 31, 2023

Change in unrealized gains or losses relating to assets still held at June 30, 2024

For the six months ended June 30, 2024

Total gains or losses included in earnings $ 12,777

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, 2024

For the three months ended June 30, 2023

Total gains or losses included in earnings $ 9,090

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

For the six months ended June 30, 2023

Total gains or losses included in earnings $ 11,341

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

Level 3 Inputs

The Company's Level 3 measurements at March 31, 2024, which employ unobservable inputs that are readily quantifiable, pertain to investments in portfolio concerns held by the Company's private equity subsidiaries.

The Company's Level 3 measurements at June 30, 2024, which employ unobservable inputs that are readily quantifiable, pertain to investments in portfolio concerns held by the Company's private equity subsidiaries.

Information about these inputs is presented in the table below.

4 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 2024 and 2023, and still held as of March 31, 2024 and 2023, 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, 2024 and 2023.

For assets measured at fair value on a nonrecurring basis during the first six months of 2024 and 2023, and still held as of June 30, 2024 and 2023, 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, 2024 and 2023.

Fair Value Measurements Using

3 unchanged sentences

Significant Unobservable Inputs

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

March 31, 2024

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

June 30, 2024

Collateral dependent loans $ 15,081 $ — $ — $ 15,081 $ ( 2,850 )

March 31, 2023

Equity securities 58,376 — 57,185 1,191 58,241

June 30, 2023

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

6 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, 2024 and December 31, 2023:

Carrying Amount Estimated Fair Value at March 31, 2024

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, 2024 and December 31, 2023:

Carrying Amount Estimated Fair Value at June 30, 2024

(In thousands)

67 unchanged sentences

Legal and Regulatory Proceedings

The Company has various legal proceedings pending at March 31, 2024, arising in the normal course of business.

The Company has various legal proceedings pending at June 30, 2024, 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