ASB 10-K & 10-Q changes, risk factors and insider trading

An investment in our common stock is subject to risks inherent to our business. The material risks and uncertainties that management believes affect us are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference herein. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors. See also, Special Note Regarding Forward-Looking Statements and Risk Factors Summary.

Our success depends, to a certain extent, upon global, domestic and local economic and political conditions, as well as governmental monetary policies. Conditions such as changes in interest rates, money supply, levels of employment and other factors beyond our control may have a negative impact on economic activity. Any contraction of economic activity, including an economic recession, may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings. In particular, interest rates are highly sensitive to many factors that are beyond our control, including global, domestic and local economic conditions and the policies of various governmental and regulatory agencies and, specifically, the Federal Reserve. Throughout 2022 and 2023, the FOMC raised the target range for the federal funds rate on eleven separate occasions, citing factors including the hardships caused by the ongoing Russia-Ukraine conflict, continued global supply chain disruptions and imbalances, and increased inflationary pressure. In the third and fourth quarters of 2024, however, the FOMC pivoted and lowered the federal funds rate from 5.50% to 4.50% based principally on reduced levels of inflation and labor market factors. At its January 29, 2025 meeting, theThe FOMC decidedcontinued to maintain the target range forlower the federal funds rate atseveral 4.25%times in 2025, with the federal funds rate reaching a target range of 3.50% to 4.50%.3.75% at the FOMC’s December 10, 2025 meeting. The FOMC maintained these rates at its January 28, 2026 meeting.

As of December 31, 2024,2025, various economic indicators suggested that real GDP had expanded solidly throughout 2024.2025. The unemployment rate had increased, on net, but remained low relative to historic norms. Consumer price inflation, as measured by the 12-month change in the price index for personal consumption expenditures, had moved lowerdecreased compared to its peak level in 2023, approaching the Federal Reserve’s 2two percent inflation objective. Against the backdrop of restrictive monetary policy, theThe U.S. economy had stronger-than-expectedstrong GDP growth, loosingloosening of tight labor markets and fallingslowed inflation in 2024. While this positive growth may continue in 2025, some economists are projecting that, due to emerging policy risks such as stricter immigration policies and trade tariffs, the U.S. economy may be flat or experience a modest decrease in gross domestic output in 2025. For instance, the U.S. Bureau of Economic Analysis projects that real GDP will decrease modestly in 2025. Any such downturn in economic output, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.

As a result of the economic and geopolitical factors discussed above, financial institutions also face heightened credit risk, among other forms of risk. Of note, because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral, which, in turn, can adversely affect the value of our loan and investment portfolios. Adverse economic developments, specifically including inflation-related impacts, may have a negative effect on the ability of our borrowers to make timely repayments of their loans or to finance future home purchases. According to the Federal Reserve's November 2024 Financial Stability Report, several economic indicators suggest that CRE prices still remain high relative to fundamentals while market delinquency rates are elevated. However, theThe outlook for CRE remainsis dependent on the broader economic environment and, specifically,and how major subsectors respond to a highthe interest rate environment and continued higher prices for commodities, goods and services. In any case, creditCredit performance over the medium- and long-term is susceptible to economic and market forces and therefore forecasts remain uncertain; however, some degree of instability in the CRE markets is expected in the coming quarters as loans continue to be refinanced in markets with higher vacancy rates under current economic conditions. Instability and uncertainty in the commercial and residential real estate markets, as well as in the broader commercial and retail credit markets, could have a material adverse effect on our financial condition and results of operations.rates.

The above and other potential tariffsTariffs and trade restrictions may cause the prices of our customers' products to increase, which could reduce demand for such products, or reduce our customers' margins, and adversely impact their revenues, financial results, and ability to service debt. This in turn could adversely affect our financial condition and results of operations. In addition, toTo the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future. At this time, it remains unclear what the U.S. government or foreign governments will or will not do within respectresponse to additional tariffs that may be imposed or international trade agreements and policies.

All borrowers have the potential to default, and our remedies in the event of such default (such as seizure and/or sale of collateral, legal actions, and guarantees) may not fully satisfy the debt owed to us. We maintain an ACLL, which is a reserve established through a provision for credit losses charged to expense, that represents management’s best estimate of probable credit losses over the life of the loan within the existing portfolio of loans. The ACLL, in the judgment of management, is necessary to reserve for estimated credit losses and risks inherent in the loan portfolio. The level of the ACLL reflects management’s continuing evaluation of industry concentrations; specific credit risks; loan loss experience; current loan portfolio quality; present economic, political, and regulatory conditions; and unidentified losses inherent in the current loan portfolio. The determination of the appropriate level of the ACLL inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks using existing qualitative and quantitative information, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, and other factors, both within and outside of our control, may require an increase in the ACLL. In addition, bankBank regulatory agencies periodically review our ACLL and may require an increase in the provision for credit losses or the recognition of additional loan charge offs, based on judgments different than those of management. An increase in the ACLL would result in a decrease in net income, and possibly risk-based capital, and could have a material adverse effect on our financial condition and results of operations.

As of December 31, 2024,2025, approximately 64%65% of our loan portfolio consisted of commercial and industrial, real estate construction, and CRE loans (collectively, "commercial loans"). Commercial loans are generally viewed as having more inherent risk of default than residential mortgage loans or other consumer loans. Further, the commercial loan balance per borrower is typically larger than that for residential mortgage loans and other consumer loans, implying higher potential losses on an individual loan basis. Because our loan portfolio contains a number of commercial loans with significant balances, the deterioration of one or a few of these loans could cause a significant increase in nonaccrual loans, which could have a material adverse effect on our financial condition and results of operations.

Our policy generally has been to originate CRE loans primarily in the states in which the Bank operates. At December 31, 2024,2025, CRE loans, including owner occupied, investor, and real estate construction loans, totaled $8.4 billion, or 28%,27%, of our total loan portfolio and 195%183% of total risk-based capital. As a result of our growth in this portfolio over the past several years and planned future growth, these loans require more ongoing evaluation and monitoring and we are continuously enhancing risk management policies, procedures and controls as needed. CRE loans generally involve a greater degree of credit risk than residential mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by CRE often depend upon the successful operation and management of the properties and the businesses that operate from within them, repayment of such loans maycan be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulation. CRE markets have been facing downward pressure since 2022 due in large part to increased interest rates and declining property values. Although CRE markets showed signs of stabilization in 2024, the prospects for the CRE markets and property valuation remain uncertain. Accordingly, the federal banking agencies have continued to express concerns about weaknesses in the current CRE market and have applied increased regulatory scrutiny to institutions with CRE loan portfolios that are fast growing or large relative to the institutions' total capital. Our failure to adequately maintain appropriate risk management policies, procedures and controls in response to regulatory expectations could adversely affect our ability to increase this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio as well as enhanced regulatory scrutiny and regulatory expectations for increased capital. At December 31, 2024, nonaccrual CRE loans totaled $18 million, or less than 1% of our total portfolio of CRE loans.

In deciding whether to extend credit or enter into other transactions, we may rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports, and other financial information. We may also rely on representations of those customers, counterparties, or other third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading financial statements, credit reports, or other financial information could cause us to enter into unfavorable transactions, which could have a material adverse effect on our financial condition and results of operations.

We settle funds on behalf of financial institutions, other businesses and consumers and receive funds from clients, card issuers, payment networks and consumers on a daily basis for a variety of transaction types. Transactions we facilitate include wire transfers, debit card, credit card and electronic bill payment transactions, supporting consumers, financial institutions and other businesses. These payment activities rely upon the technology infrastructure that facilitates the verification of activity with counterparties and the facilitation of the payment. If the continuity of operations or integrity of processing were compromised, thisit could result in a financial loss to usus. due to a failure in payment facilitation. In addition, weWe may issue credit to consumers, financial institutions or other businesses as part of the funds settlement. A default on this credit by a counterparty could result in a financial loss to us.

A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require us to incur substantial expenses which may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, futureFuture laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before lending against or initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations.

The ease and speed of the electronic withdrawals may accelerate this process. If a significant portion of our deposits were to be withdrawn within a short period of time such that additional sources of funding would be required to meet withdrawal demands, the Corporation may be unable to obtain funding at favorable terms, which may have an adverse effect on our net interest margin. Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates, such as the present period. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits. This spread may be exacerbated by higher prevailing interest rates. In addition, becauseBecause our AFS investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated. Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window and the FHLB system in order to manage our liquidity risk. For additional information regarding uninsured deposits and liquidity, see sections Deposits and Customer Funding and Liquidity of Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

Credit ratings are subject to ongoing review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as factors not under our control. Other factors that influence our credit ratings include changes to the rating agencies’ methodologies for our industry or certain security types; the rating agencies’ assessment of the general operating environment for financial services companies; our relative positions in the markets in which we compete; our various risk exposures and risk management policies and activities; pending litigation and other contingencies; our reputation; our liquidity position, diversity of funding sources and funding costs; the current and expected level and volatility of our earnings; our capital position and capital management practices; our corporate governance; current or future regulatory and legislative initiatives; and the agencies’ views on whether the U.S. government would provide meaningful support to the Corporation or its subsidiaries in a crisis. Rating agencies could make adjustments to our credit ratings at any time, and there can be no assurance that they will maintain our ratings at current levels or that downgrades will not occur.

In August 2023, Moody’s and S&P Global Ratings each downgraded our long-term issuer credit ratings, and the ratings remained unchanged as of December 31, 2024.2025. Any additional downgrade in our credit ratings could potentially adversely affect the cost and other terms upon which we are able to borrow or obtain funding, increase our cost of capital and/or limit our access to capital markets. Credit rating downgrades or negative watch warnings could also negatively impact our reputation and the perception of the Corporation by lenders, investors and other third parties, which could also impair our ability to compete in certain markets or engage in certain transactions. In particular, holders of deposits which exceed FDIC insurance limits may perceive such a downgrade or warning negatively and withdraw all or a portion of such deposits. While certain aspects of a credit rating downgrade are quantifiable, the impact that such a downgrade would have on our liquidity, business and results of operations in future periods is inherently uncertain and would depend on a number of interrelated factors, including, among other things, the magnitude of the downgrade, the rating relative to peers, the rating assigned by the relevant agency pre-downgrade, individual client behavior and future mitigating actions we might take.

Our earnings and cash flows are largely dependent upon our net interest income. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets.

As of January 29,28, 2025,2026, the date of the FOMC's most recent meeting, the target range for the federal funds rate was 4.25%3.50% to 4.50%,3.75%, which is down from the recent peak of 5.25% to 5.50% prior to the FOMC meeting in September 2024. ItDespite direct pressure from the President and the anticipated change in the Chair of the Federal Reserve, it remains uncertain whether the FOMC will further reduce the target range for the federal funds rate to stimulate economic activity and promote job growth or leave the rate at its relatively elevatedcurrent level for an additional prolonged period of time. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings. The Corporation's interest rate risk profile is such that, generally, a higher yield curve adds to income while a lower yield curve has a negative impact on earnings. Our most significant interest rate risk may result from timing differences in the maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, and the potential exercise of explicit or embedded options.

Although management believes it has implemented effective asset and liability management strategies, including the potential use of derivatives as hedging instruments, to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations, and any related economic downturn,impact, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations. Also, ourOur interest rate risk modeling techniques and assumptions may not fully predict or capture the impact of actual interest rate changes on our balance sheet.

Changes in interest rates can impact our mortgage-related revenues and net revenues associated with our mortgage activities.revenues. A decline in mortgage rates generally increases the demand for mortgage loans as borrowers refinance, but also generally leads to accelerated payoffs. Conversely, in a constant or increasing rate environment, we would expect fewer loans to be refinanced and a decline in payoffs. Although we use models to assess the impact of interest rates on mortgage-related revenues, the estimates of revenues produced by these models are dependent on estimates and assumptions of future loan demand, prepayment speeds and other factors which may differ from actual subsequent experience.

The Corporation maintains an investment portfolio consisting of various high qualityhigh-quality liquid fixed-income securities. The total carrying value of the AFS securities portfolio, which includes FHLB and Federal Reserve Bank stocks,portfolio was $8.5$5.4 billion as of December 31, 2024,2025, and the estimated duration of the aggregate portfolio was approximately 5.33.2 years. The nature of fixed-income securities is such that changes in market interest rates impact the value of these assets.

The Corporation earns revenue from the fees it receives for originating mortgage loans and for servicing mortgage loans. When rates rise, the demand for mortgage loans tends to fall, reducing the revenue the Corporation receives from loan originations. At the same time, revenue from MSRs can increase through increases in fair value. When rates fall, mortgage originations tend to increase and the value of MSRs tends to decline, also with some offsetting revenue effect. Even though the origination of mortgage loans can act as a “natural hedge,” the hedge is not perfect, either in amount or timing. For example, the negative effect on revenue from a decrease in the fair value of residential MSRs is immediate, but any offsetting revenue benefit from more originations and the MSRs relating to the new loans would be recognized during the month of origination. It is also possible that even if interest rates were to fall, mortgage originations may also fall or any increase in mortgage originations may not be enough to offset the decrease in the MSRs value caused by the lower rates.

The Corporation typically uses derivatives and other instruments to hedge its mortgage banking interest rate risk. The Corporation generally does not hedge all of its risks and the fact that hedges are used does not mean they will be successful. Hedging is a complex process, requiring sophisticated models and constant monitoring. The Corporation could incur significant losses from its hedging activities. There may be periods where the Corporation elects not to use derivatives and other instruments to hedge mortgage banking interest rate risk, which could also cause the Corporation to incur substantial losses.

The Parent Company is a separate and distinct legal entity from its banking and other subsidiaries. A substantial portion of the Parent Company’s cash flow comes from dividends from its subsidiaries. These dividends are the principal source of funds to pay dividends on the Parent Company’s common and preferred stock, and to pay interest and principal on the Parent Company’s debt. Various federal and/or applicable state laws and regulations limit the amount of dividends that the Bank and certain of our nonbanking subsidiaries may pay to us. Also, ourOur right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In the event the Bank subsidiary is unable to pay dividends to us, we may not be able to service debt, pay obligations, or pay dividends on our common and preferred stock. The inability to receive dividends from the Bank couldwould have a material adverse effect on our business, financial condition, and results of operations.

We operate in many different businesses in diverse markets and rely on the ability of our employees and systems to process transactions. Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside the Corporation, the execution of unauthorized transactions, errors relating to transaction processing and technology, breaches of our internal control systems or failures of those of our suppliers or counterparties, compliance failures, cyber-attacks,cyber-attacks or other security breaches, technology failures, or unforeseen problems encountered while implementing new computer systems or upgrades to existing systems, business continuation and disaster recovery issues, and other external events. In recent periods, the OCC has observed an increased incidence of check fraud, wire fraud, peer-to-peer payment fraud, and the use of AI technology to facilitate the perpetration of social engineering and impersonation schemes and identity theft. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes the potential legal actions that could arise as a result of an operational deficiency or as a result of noncompliance with applicable regulatory standards, adverse business decisions or their implementation, and customer attrition due to potential negative publicity. The occurrence of any of these events could cause us to suffer financial loss, face regulatory action and suffer damage to our reputation.

In the normal course of our business, we collect, process,share, use, store and retainotherwise process sensitive and confidential client and customer informationinformation, including personal information, on our behalf and on behalf of other third parties. Despite the security measures we have in place, our facilitiesfacilities, systems and systemsnetworks may be vulnerable to cyber-attacks, security breaches, acts of vandalism, theft, computer viruses, malware, ransomware, denial of service attacks, phishing or other social engineering attacks, credential stuffing, account takeovers, misplaced or lost data, programming and/or human errors, software or hardware failures, or other similar events.

We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business. Operational risk related to cyber-attacks is increasing as cyber-attacks evolve and have a greater and more pervasive economic impact. In addition to cyber-attacks or other security breaches involving the thefttheft, loss, destruction, gathering, monitoring, dissemination, misappropriation, misuse, alteration, or unauthorized disclosure of or unauthorized access to sensitive and confidential information,information (including personal information), hackers have engaged in attacks against large financial institutions, designed to disrupt key business services, such as customer-facing web sites. Critical infrastructure sectors, including financial services, increasingly have been the targets of cyber-attacks, including attacks emanating from foreign countries. Cyber-attacks involving large financial institutions, including distributed denial of service attacks designed to disrupt external customer-facing services, cyber-attacks carried out by terrorists, nation statestates, cyber-attacksnation-state supported actors, organized criminal groups or “hacktivists”, and ransomware attacks designed to deny organizations access to key internal resources or systems or other critical data, as well as targeted social engineering and phishing email and text message attacks designed to allow unauthorized persons to obtain access to an institution’s information systems and data or that of its customers, are becoming more common and increasingly sophisticated.

Cyber-attacks continue to evolve and become more pervasive throughout the financial services sector. In particular, there has been an observed increase in the number of distributed denial of service and ransomware attacks against the financial sector, for which the increase is believed to be partially attributable to politically motivated attacks as well as financial demands coupled with extortion. Further, threat actors continue to exploit publicly known software vulnerabilities and weak authentication controls used by large numbers of banking organizations in order to conduct malicious cyber activities. These types of attacks have resulted in increased supply chain and third-party risk. Such cybersecurity threats may see their frequency increased, and effectiveness enhanced, by the use of AI.

We also face risks related to cyber-attacks and other security breaches in connection with card transactions that typically involve the transmission of sensitive information (including personal information) regarding our customers through various third parties. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other third-party service providers to conduct other aspects of our business operations and face similar risks relating to them. We cannot be sure that such third-party information security protocols are sufficient to withstand a cyber-attack or other security breach.

Cybersecurity risks for financial institutions also have evolved as a result of the increased interconnectedness of operating environments and the use of new technologies, devices and delivery channels to transmit data and conduct financial transactions. The adoption of new products, services and delivery channels contribute to a more complex operating environment, which enhances operational risk and presents the potential for additional structural vulnerabilities. As such, a single cyber-attack is now able to compromise hundreds of organizations and affect a significant number of consumers. In addition, theThe adoption of hybrid and remote work environments followingin the COVID-19past pandemicseveral years presents institutions with additional cybersecurity vulnerabilities and risks.

The Corporation endeavors to regularly evaluatesevaluate its systems and controls and implementsimplement upgrades as necessary. The additional cost to the Corporation of our cybersecurity monitoring and protection systems and controls includes the cost of hardware and software, third party technology providers, consulting and forensic testing firms, insurance premium costs and legal fees,fees in addition toand the incremental cost of our personnel who focus a substantial portion of their responsibilities on cybersecurity.

Any attempted or successful cyber-attack or other security breach involving the misappropriation,theft, loss, leakdestruction, gathering, monitoring, dissemination, misappropriation, misuse, alteration, or other unauthorized disclosure of or unauthorized access to sensitive or confidential client or customer information,information (including personal information), confidential and proprietary information relating to our bank and operations, unauthorized access to our information systems or networks or that of our third-party service providers, or unauthorized access to other data that compromises our ability to function could severely damage our reputation, erode confidence in the security of our systems,systems and networks, products and services, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business. Any attempted or successful cyber-attack may also subject the Corporation to regulatory investigations, litigation (including class action litigation) or enforcement, or require the payment of regulatory fines or penalties or undertaking costly remediation efforts with respect to third parties affected by a cybersecurity incident, all or any of which could adversely affect the Corporation’s business, financial condition or results of operations and damage its reputation. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

The Corporation may be subject to the data risks and cybersecurity vulnerabilities of the acquired company until the Corporation has sufficient time to fully integrate the acquiree’s customers and operations. Although the Corporation conductsendeavors to conduct comprehensive due diligence of cybersecurity policies, procedures and controls of our acquisition counterparties, and the Corporation maintainsendeavors to maintain adequate policies, procedures, controls and information security protocols to facilitate a successful integration, there can be no assurance that such measures, controls and protocols are sufficient to withstand a cyber-attack or other security breach with respect to the companies we acquire, particularly during the period of time between closing and final integration.

The Corporation is a bank holding company headquartered in Wisconsin, providing a broad array of banking and nonbanking products and services to businesses and consumers primarily within our three-statefour-state footprint. The Corporation’s primary sources of revenue, through the Bank, are net interest income (predominantly from loans and investment securities) and noninterest income (principally fees and other revenue from financial services provided to customers or ancillary services tied to loans and deposits).

•Average loans of $29.7$30.6 billion for the full year of 20242025 increased $163$892.7 million, or 1%,3%, from a year ago,2024, driven primarily by increases in auto finance and commercial and business lending,lending and auto finance loans, partially offset by a decrease in residential mortgage.mortgage lending due to the mortgage portfolio sale announced as part of the balance sheet repositioning in the fourth quarter of 2024.

•Average deposits of $33.4$34.8 billion for the full year of 20242025 increased $2.0$1.5 billion, or 7%,4%, from a year ago,2024, driven by increases in timeall deposits,deposit interest-bearingtypes, demand deposits, savings deposits, and network transaction deposits, partially offset by decreases in noninterest-bearing demand deposits andexcept money market deposits.and brokered CDs.

•Net interest income of $1.0$1.2 billion in 20242025 increased $8$153.9 million, or 1%,15%, from 2023.2024. Net interest margin of 2.78%3.03% in 20242025 decreasedincreased 325 bp from 2.81%2.78% in 2023.2024. The increaseincreases in net interest income wasand net interest margin were driven by growthdecreases in interest expense for interest-bearing deposits and the balance sheet repositioning announced in the fourth quarter of earning2024 assetswhich whilesold marginlower compressedyielding asresidential amortgage resultloans ofand ainvestment shift in mix within deposits into higher cost funding from noninterest-bearing demand deposits.securities.

•Provision for credit losses was $85$54.0 million in 2025, compared to $85.0 million in 2024, compareddriven toby $83nominal millioncredit inmovement 2023.coupled with general macroeconomic trends.

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

Table 2 Rate/VolumeNet Interest Income Analysis(a)

(bc) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.21%.

(a) $ inIn millions. Excludes assets held in brokerage accounts.

•The 2024 lossLoss on the mortgage portfolio sale wasdecreased the$123.4 resultmillion offrom an2024 announceddriven by a nonrecurring $130.4 million loss on sale of $723 million of residential mortgages relatedrecognized toin 2024 following the balance sheet repositioning inannounced during the fourth quarter of 20242024, and thean saleadditional closed$7.0 million loss that was recognized in January2025 2025.upon completion of the sale.

•Investment securities (losses) gains, net decreasedimproved $144.2 million from 2023,2024, driven primarily by thea nonrecurring $148.2 million net loss on a sale of lowerinvestments yielding AFS securitiesassociated with a carrying value of $1.1 billion at a net loss of $148 million, related to the balance sheet repositioning inannounced during the fourth quarter of 2024.

•Personnel costsexpense increased $33.8 million from 2023,2024 largely driven by continued investment in our colleagues as thewe Corporation continuescontinue to execute on our growth strategy.

The Corporation recognized income tax expense of $11$103.1 million for 2024,2025, compared to income tax expense of $23$11.3 million for 2023.2024. The Corporation's effective tax rate was 8.41%17.85% for 2024,2025, compared to an effective tax rate of 11.21%8.41% for 2023.2024. The decreaseincrease in income tax expense and lowerhigher effective tax rate during 20242025 were primarily due to a strategic reallocation of the investment portfolio and the adoption of a legal entity rationalization plan that resulted in the recognition of deferred tax benefits ofin $352024 million,and partiallyincreased offsetnet byincome ain deferred tax asset valuation allowance of $33 million related to certain capital loss carryovers.2025.

•◦AFS investment securities,securities at fair value increasedwere $981$5.4 billion at December 31, 2025, up $816.1 million, or 27%,18%, tofrom $4.6December billion,31, while2024. HTMRegulatory investmentstocks securities,were net,$252.5 million at amortizedDecember cost31, decreased2025, byup $121$72.8 million, or 3%,41%, tofrom $3.7December billion.31, 2024. See section Investment Securities Portfolio and Note 2 Investment Securities of the notes to the consolidated financial statements for additional informationdetails on thethese Corporation's portfolio of investment securities.changes.

•At◦Loans of $31.2 billion at December 31, 2024, total loans2025 were $29.8up $1.4 billion, up $552 million, or 2%,5%, from December 31, 2023,2024 primarily due to increases of $924 million, or 9%, in commercial and business lending and $554 million, or 25%, in auto finance,finance partiallyloans, offset by a decrease of $817 million, or 10%, in residential mortgage as a result of a nonrecurring mortgage portfolio sale related to the balance sheet repositioning announced in the fourth quarter of 2024 and the sale closed in January 2025, which was the primary driver of a $614 million increase in residential loans held for sale, and a decrease of $185 million, or 3%, in CRE lending.loans. See section Loans and Note 3 Loans of the notes to consolidated financial statements for additional information on loans.details.

•At◦Short-term funding was $307.9 million at December 31, 2024,2025, otherdown long-term funding of $838 million was up $296$162.5 million, or 55%,35%, asfrom December 31, 2024. FHLB advances were $3.3 billion at December 31, 2025, up $1.4 billion, or 76%, from December 31, 2024. These changes were due to a resultmix ofshift thein issuancefunding ofaway seniorfrom debt.federal funds purchased to short-term FHLB advances. See section Other Funding Sources and Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details on funding.details.

•Average loans of $31.3$33.6 billion increased $1.2$3.3 billion, or 4%,11%, from the first threesix months of 2025, driven primarily by anthe increaseAmerican National acquisition and continued organic growth in commercial and business lending,lending auto finance, and real estate construction; partially offset by decreases in residential mortgage and other commercial real estate - investor.portfolio.

•Average deposits of $35.2$37.8 billion increased $327.5$3.3 million,billion, or 1%,9%, from the first threesix months of 2025, drivenprimarily due to the American National acquisition, as well as organic growth in noninterest bearing demand, savings and other time deposits, partially offset by increasesa decrease in all deposit types except brokered CDs, interest-bearing demand, and money market.CDs.

•Net interest income of $307.2$677.2 million increased $21.2$91.3 million, or 7%,16%, from the first threesix months of 2025, and net interest margin was 3.03%,3.10%, compared to 2.97%3.01% for the first threesix months of 2025. The increases in net interest income and net interest margin were driven by increasesthe average balancesacquisition of interestAmerican earningNational assetsin the second quarter of 2026 as well as organic growth in commercial and business lending alongside a decreasemix shift in ratesdeposits forto interest-bearinglower liabilities.cost products.

•Provision for credit losses was $11.0$30.4 million compared to $13.0$31.0 million for the first threesix months of 2025, driven by nominal credit movement coupled with general macroeconomic trends. Provision for credit losses was relatively unchanged from the first six months of 2025, as credit losses associated with acquired seasoned loans were largely reflected through purchase accounting following the adoption of ASU 2025-08.

•Noninterest income of $75.9$156.3 million increased $17.1$30.5 million, or 29%,24%, from the first threesix months of 2025, primarily due to higher wealth management fees and mortgagecapital bankingmarkets revenue asin welladdition asto the absence of a nonrecurring loss on mortgage portfolio sale that was recognized in the first quarter of 2025 in connection with the completion of balance sheet repositioning announced in the fourth quarter of 2024.

•Fully tax-equivalent net interest income and net interest income increased $21.1$91.1 million and $21.2$91.3 million, or 7%,15% and 16%, as compared to the first threesix months of 2025, respectively. The average yield on earning assets decreased 2522 bp and the cost of interest-bearing liabilities decreased 3937 bp from the first threesix months of 2025. The increase in net interest income was primarily driven by highergrowth in average earning assets alongresulting withfrom anthe improvedAmerican interestNational rateacquisition spread.in Assetthe second quarter of 2026. In addition, asset yields benefittedbenefited from ana continued focus to shift the asset mix shift away from lower yieldinglower-yielding residential mortgages totoward higher yieldinghigher-yielding commercial and industrial loans, while interestrates bearingpaid liabilityon ratesinterest-bearing liabilities decreased asalongside thea interestmix rateshift environmentin declined.deposits to lower cost products. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.

•Average earning assets increased $2.1$4.7 billion, or 5%,12%, from the first threesix months of 2025. Average loans increased $1.2$3.3 billion, or 4%,11%, from the first threesix months of 2025, driven by loans acquired from American National as well as increases in commercial and industrialindustrial, auto finance, and autoreal estate construction loans, partially offset by decreasesa decrease in residential mortgage loans as a result of the completion of the Corporation's mortgage portfolio sale in the first quarter of 2025 as part of the balance sheet repositioning announced in the fourth quarter of 2024 and CRE - investor loans.2024. Average investments increased $895.1$1.4 million,billion, or 10%,15%, from the first threesix months of 2025 due to continued investment in the Corporation'sAmerican AFSNational portfolio and increased regulatory stock holdings.acquisition.

• Average interest-bearing liabilities increased $1.7$3.6 billion, or 5%,11%, compared to the first threesix months of 2025. Average interest-bearing deposits decreasedincreased $31.7$2.4 million,billion, or 8% from the first threesix months of 2025. This was primarily driven by the acquisition of American National along with increases in other time deposits and savings, partially offset by a $787.0 million or 18% decrease in brokered CDs, offset by increases in savings, money market and other time deposits.CDs. Average total funding increased $1.8$1.3 billion, or 68%,38%, from the first threesix months of 2025, primarily driven by an increase in FHLB advances.advances to prepare for and execute the acquisition of American National and fund continued loan growth. Average noninterest-bearing demand deposits increased $359.2$889.1 million, or 6%,16%, driven by deposits acquired from the American National acquisition and organic growth from the first threesix months of 2025.

•Wealth management fees increased $2.7$5.9 million from the first threesix months of 2025, primarily due to anincreased increaseassets inunder revenues related to our trust services business.management.

•MortgageService bankingcharges incomeand deposit account fees increased $2.3$4.0 million from the first threesix months of 2025, due to an increase in theoverdraft valuationand ofbusiness ourdemand mortgagedeposit servicingaccount rights assets compared to the related hedges.fees.

•LossCapital onmarkets, mortgagenet portfolioincreased sale decreased $7.0$3.9 million from the first threesix months of 2025, dueprimarily tofrom theincreased balancesyndication sheetfees repositioningand completedinterest duringrate the first quarter of 2025.swaps.

•Personnel expense increased $11.3$45.5 million from the first threesix months of 2025, primarily driven by nonrecurring increases in healthseverance careand benefitretention costsbonuses paired with ongoing increased salaries and annual incentive accruals basedprimarily onfrom increasedthe FTEsAmerican inNational incentiveacquisition, eligibleand roles.elevated health care benefit costs.

•Other noninterestTechnology expense decreasedincreased $4.3$9.0 million from the first threesix months of 2025, duedriven toby OREOan write downsincrease in 2025subscription that did not recur in 2026.costs.

The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of $33.2$68.9 million for the threesix months ended MarchJune 31,30, 2026, compared to income tax expense of $19.4$47.8 million for the threesix months ended MarchJune 31,30, 2025. The Corporation's effective tax rate from continuing operations was 21.75%22.06% and 16.03%18.34% for the threesix months ended MarchJune 31,30, 2026, and 2025, respectively. The increase in income tax expense of $13.8$21.0 million and higher effective tax rate during the first threesix months of 2026 as compared to the same period of 2025 waswere primarily due to athe reductionnet impact of several discrete items from 2025 that resulted in the release of a portion of the valuation allowanceallowance, thatwhich occurreddid not reoccur in 2026. Additionally, the firstCorporation threerecognized higher net income before tax for the six months ended June 30, 2026, which reduced the relative impact of 2025,any makingrecurring thatfavorable quarter’srate tax expense lower than it otherwise would have been.drivers.

•At MarchJune 31,30, 2026, total assets were $45.6$51.8 billion, up $391.1$6.6 million,billion, or 1%,15%, from December 31, 2025.

◦Cash and due from banks were $465.3$548.1 million at MarchJune 31,30, 2026, down 109.4$26.6 million, or 19%,5%, from December 31, 2025. Interest bearing deposits in other financial institutions were $920.7$1.3 millionbillion at MarchJune 31,30, 2026, downup $223.4$124.3 million, or 20%,11%, from December 31, 2025. See the Consolidated Statements of Cash Flows for detailed information on those fluctuations.

◦LoansAvailable offor $31.8sale investment securities were $6.4 billion at MarchJune 31,30, 2026 were2026, up $634.6$969.0 million,million or 2%,18%, from December 31, 20252025. Changes were primarily duedriven toby the realizationacquisition, sale, and reinvestment of the Corporation'sproceeds continuedof focus andthe investment insecurities commercialfrom andthe businessAmerican lending.National acquisition. See Note 3 Business Combinations and Note 6 LoansInvestment Securities of the notes to consolidated financial statements and Table 5 Period End Loan Composition below for additional detail.

•At MarchJune 31,30, 2026, total liabilities were $40.6$46.2 billion, up $368.6$5.9 million,billion, or 1%,15%, from December 31, 2025.

◦Federal funds purchased and securities sold under agreements to repurchase was $395.7$529.3 million at MarchJune 31,30, 2026, up $87.8$221.4 million, or 29%,72%, from December 31, 2025. FHLB advances of $3.4$4.6 billion at MarchJune 31,30, 2026 were up $153.7$1.3 million,billion, or 5%,40%, from December 31, 2025. These increases were driven by the Corporation's need for additional funding to fund the loan growth in the first quarterhalf of 2026 andas towell ensureas adequate funding levels with the anticipated completionexecution of the acquisition of American National.National acquisition. See Note 89 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

•At MarchJune 31,30, 2026, the loans to deposits ratio was 88.99%,91.32%, up from 87.65% at December 31, 2025.

The Corporation’s loan distribution and interest rate sensitivity as of MarchJune 31,30, 2026 are summarized in the following table:

At MarchJune 31,30, 2026, $22.2$24.8 billion, or 70%,68%, of the loans outstanding and $18.9$21.2 billion, or 90%,87%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

The loan portfolio is widely diversified by types of borrowers, industry groups, and market areas primarily within the Corporation's lending footprint. Significant loan concentrations are considered to exist when there are amounts loaned to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At MarchJune 31,30, 2026, no significant concentrations existed in the Corporation’s portfolio in excess of 10% of total loan exposure.

The Corporation’s current lending standards for CRE and real estate construction lending are determined by property type and specifically address many criteria, including: maximum loan amounts, maximum LTV, requirements for pre-leasing and/or presales, minimum borrower equity, and maximum loan-to-cost. Currently, the maximum standard for LTV is 80%, with lower limits established for certain higher risk types, such as raw land that has a 50% LTV maximum. Certain loans acquired through business combinations may not adhere to these underwriting standards. The Corporation’s LTV guidelines are in compliance with regulatory supervisory limits. In most cases, for real estate construction loans, the loan amounts include interest reserves, which are built into the loans and sized to fund loan payments through construction and lease up and/or sell out.

Residential mortgages: Residential mortgage loans are primarily first-lien home mortgages with a maximum loan-to-collateral value without credit enhancement (e.g. private mortgage insurance) of 80%. The residential mortgage portfolio is focused primarily in the Corporation's four-statesix-state branch footprint, with approximately 94% of the outstanding loan balances in the Corporation's branch footprint at MarchJune 31,30, 2026. The rates on adjustable rate mortgages adjust based upon the movement in the underlying index which is then added to a margin and rounded to the nearest 0.125%. That result is then subjected to any periodic caps to produce the borrower's interest rate for the coming term. Adjustable rate mortgages are typically offered with an initial fixed rate term of 5, 7 or 10 years.

The Corporation’s underwriting and risk-based pricing guidelines for home equity lines of credit and loans consist of a combination of both borrower FICO score and the original cumulative LTV against the property securing the loan. Currently, the Corporation's policy sets the maximum acceptable LTV at 90%. Certain loans acquired through business combinations may not adhere to these underwriting standards. The Corporation's current home equity line of credit offering is priced based on floating rate indices and generally allows 10 years of interest-only payments followed by a 20-year amortization of the outstanding balance. The loans in the Corporation's portfolio generally have an original term of 20 years with principal and interest payments required.

Indirect Auto: The Corporation currently purchases retail auto sales contracts via a network of approved auto dealerships across 1622 states throughout the Northeast, Mid-Atlantic, Midwest, and MidwesternGreat Plains regions of the United States. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to the Corporation pursuant to dealer agreements. The Corporation’s underwriting and pricing guidelines are based on a dual risk grade derived from a combination of FICO auto score and proprietary internal custom score. Minimum grade and FICO score standards ensure the credit risk is appropriately managed to the Corporation’s risk appetite. Further, the grade influences loan-specific parameters such as vehicle age, term, LTV, loan amount, mileage, payment and debt service thresholds, and pricing. Maximum loan terms offered are 84 months on select grades with vehicle age, mileage, and other limitations in place to qualify. The program is designed to capture primarily prime and super prime contracts.

Other consumer: Other consumer consists of studentcredit loans,cards, short-termrecreational personalvehicles, installmentrevolving loans,credit plans, and creditstudent cards.loans. Credit risk for other consumer loans is influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral. Risks of loss are generally on smaller average balances per loan spread over many borrowers. Once charged off, there is usually less opportunity for recovery of these smaller consumer loans. Credit risk is primarily controlled by reviewing the creditworthiness of the borrowers, monitoring payment histories, and taking appropriate collateral and guarantee positions.

To assess the appropriateness of the ACLL, the Corporation focuses on the evaluation of many factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, credit report refreshes, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the risk characteristics of the various classifications of loan segments, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions and economic forecasts, the fair value of underlying collateral, funding assumptions on lines, and other qualitative and quantitative factors which could affect potential credit losses. The forecast the Corporation used for MarchJune 31,30, 2026 was the Moody's baseline scenario from FebruaryMay 2026, which was reviewed against the MarchJune 2026 baseline scenario with no material updates made, over a two year reasonable and supportable period with straight-line reversion to historical losses over the second year of the period. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the ACLL is not necessarily indicative of the trend of future credit losses on loans in any particular segment. Therefore, management considers the ACLL a critical accounting estimate, see section Critical Accounting Estimates in the Corporation's 2025 Annual Report on Form 10-K for additional information on the ACLL. See section Nonperforming Assets for a detailed discussion on asset quality. See also Note 67 Loans of the notes to consolidated financial statements for additional ACLL disclosures. Table 5 provides information on loan growth and period end loan composition, Table 10 provides additional information regarding NPAs, and Table 11 and Table 12 provide additional information regarding activity in the ACLL.

The loan segmentation used in calculating the ACLL at MarchJune 31,30, 2026 and December 31, 2025 was generally comparable. The methodology to calculate the ACLL consists of the following components: a valuation allowance estimate is established for commercial and consumer loans determined by the Corporation to be individually evaluated, using discounted cash flows, estimated fair value of underlying collateral, and/or other data available. Loans are segmented for criticized loan pools by loan type as well as for non-criticized loan pools by loan type, primarily based on risk rating rates after considering loan type, historical loss and delinquency experience, credit quality, and industry classifications. Loans that have been criticized are considered to have a higher risk of default than non-criticized loans, as circumstances were present to support the lower loan grade, warranting higher loss factors. Additionally, management allocates ACLL to absorb losses that may not be provided for by the other components due to qualitative factors evaluated by management, such as limitations within the credit risk grading process, known current economic or business conditions that may not yet show in trends, industry or other concentrations with current issues that impose higher inherent risks than are reflected in the loss factors, and other relevant considerations. The total allowance is available to absorb losses from any segment of the loan portfolio.

•Total nonaccrual loans increased $10.2$49.5 million, or 10%,49%, from December 31, 2025, and decreasedincreased $24.2$37.0 million, or 18%,33%, from MarchJune 31,30, 2025. The increase from December 31, 2025 was primarily driven by an organic increase in commercial and industrial and auto finance lending, partially offset by decreases in home equity and residential mortgage lending. Additionally, nonaccrual loans acquired from American National contributed to the increase. The increase from June 30, 2025 was primarily driven by nonaccrual loans acquired from American National. There were also organic increases in commercial and industrial and auto finance lending, partially offset by decreases in CRE - investor, residential mortgagemortgage, and home equity lending. The decrease from March 31, 2025 was primarily driven by decreases in CRE - investor and residential mortgage lending, partially offset by increases in commercial and industrial and auto finance lending. See Note 67 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

•YTD net charge offs decreasedincreased $3.4$7.0 million from MarchJune 31,30, 2025, primarily driven by decreasesnet withincharge commercialoffs andof industrialloans andacquired CREfrom -American investor, partially offset by an increase in auto finance lending.National. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Management believes the level of ACLL to be appropriate at MarchJune 31,30, 2026.

(ba) Includes repurchase agreements.

(cb) This is a non-GAAP financial measure. See Table 19 Non-GAAP Measures for a reconciliation to GAAP financial measures.