# COMMUNITY FINANCIAL SYSTEM, INC. (CBU) FY 2024 MD&A Verbatim Item 7 Management's Discussion and Analysis from COMMUNITY FINANCIAL SYSTEM, INC.'s 10-K for fiscal year 2024. SEC filing source: https://www.sec.gov/Archives/edgar/data/723188/000141057825000247/cbu-20241231x10k.htm Accession: 0001410578-25-000247 Filing date: 2025-02-28 Report date: 2024-12-31 Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Company profile: /company/CBU/ All MD&A years: /company/CBU/mda/ Previous year: /company/CBU/mda/fy2023/ (FY 2023) Next year: /company/CBU/mda/fy2025/ (FY 2025) Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) primarily reviews the financial condition and results of operations of the Company for the past two years, although in some circumstances a period longer than two years is covered in order to comply with SEC disclosure requirements or to more fully explain long-term trends. The following discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements and related notes that appear on pages 84 through 151. All references in the discussion to the financial condition and results of operations refer to the consolidated position and results of the Company and its subsidiaries taken as a whole. Unless otherwise noted, all earnings per share (“EPS”) figures disclosed in the MD&A refer to diluted EPS. The term “this year” and equivalent terms refer to results in calendar year 2024, “last year” and equivalent terms refer to calendar year 2023, and all references to income statement results correspond to full-year activity unless otherwise noted. This MD&A contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements are provided under the caption “Forward-Looking Statements” on page 76. Critical Accounting Policies and Estimates As a result of the complex and dynamic nature of the Company’s business, management must exercise judgment in selecting and applying the most appropriate accounting policies for its various areas of operations. The policy decision process not only ensures compliance with the current accounting principles generally accepted in the United States of America (“GAAP”), but also reflects management’s discretion with regard to choosing the most suitable methodology for reporting the Company’s financial performance. It is management’s opinion that the accounting estimates covering certain aspects of the business have more significance than others due to the relative importance of those areas to overall performance, or the level of subjectivity in the selection process. These estimates affect the reported amounts of assets and liabilities as well as disclosures of revenues and expenses during the reporting period. Actual results could meaningfully differ from these estimates. Management considers its critical accounting estimates those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial condition or results of operations. Management believes that the critical accounting estimates include the allowance for credit losses; actuarial assumptions associated with the pension, post-retirement and other employee benefit plans; and the carrying value of goodwill and other intangible assets. A summary of the accounting policies used by management is disclosed in Note A, “Summary of Significant Accounting Policies”, starting on page 89. 38 Table of Contents Allowance for Credit Losses The allowance for credit losses (“ACL”) represents management’s judgment of an estimated amount of lifetime losses expected to be incurred on outstanding loans at the balance sheet date. This is estimated using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. The determination of the appropriateness of the ACL is complex and applies significant and highly subjective estimates. The ACL is measured on a collective (pooled) basis for loan segments that share similar risk characteristics, including collateral type, credit ratings/scores, size, duration, interest rate structure, origination vintage and payment structure. The Company utilizes three methods for calculating the ACL: cumulative loss, vintage loss and line loss. Historical credit loss experience provides the basis for the estimation of expected future credit losses in all three methodologies. Qualitative adjustments are made for differences in loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, acquisition status, current levels of delinquencies, net charge-offs and risk ratings, as well as actual and forecasted macroeconomic variables. Macroeconomic data includes unemployment rates, changes in collateral values such as home prices, commercial real estate prices including office property-specific price forecasts, office property-specific vacancy rates, automobile prices, gross domestic product, and median household income net of inflation. Management utilizes judgment in determining and applying the qualitative factors and weighting the economic scenarios used, which include baseline, upside and downside forecasts. During 2024, the Company updated the ACL model to add 2023 results into the historical data used for calculating the quantitative and qualitative factors as part of the annual model update procedures; updated the ACL model to incorporate office property-specific price forecasts and office property-specific vacancy forecasts to provide greater precision to the model; applied an additional qualitative overlay to the factor for volume and size of business lending loans and risk rating trends to capture future loss expectations in that portfolio; and utilized the current quarter levels of risk ratings in the qualitative factor calculation, rather than a four-quarter average, to more precisely capture the risk profile of the current business lending portfolio. One of the most significant estimates and judgments influencing the results of the ACL calculation is the macroeconomic forecasts. Changes in these economic forecasts could significantly affect the estimated expected credit losses and lead to materially different amounts from one period to the next. To illustrate the sensitivity of the ACL calculation to these economic forecasts, management performed a hypothetical sensitivity analysis using a weighting of 100% to the downside forecast, rather than the existing weighting of baseline, upside, and downside of 40%, 30%, and 30%, respectively. The scenario-weighted average unemployment rate and GDP growth forecasts used in the ACL model at December 31, 2024 were 4.8% and 1.8%, respectively, compared to 4.5% and 1.7% at December 31, 2023, respectively. The hypothetical downside forecast includes assumptions of a weakening economy represented by a cumulative decline in real GDP of 2.6%, enhanced geopolitical tensions, elevated inflation, a peak unemployment rate of 8.3% and an average unemployment rate of 6.9%. The Company calculated that this hypothetical scenario would increase the ACL and provision for credit losses as of and for the year ended December 31, 2024 by approximately $4.7 million, and decrease net income by $3.5 million (net of tax). This change is reflective of the sensitivity of the various economic factors used in the ACL model. The resulting difference is not intended to represent an expected increase in allowance levels, as future conditions are uncertain and there are several other quantitative and qualitative factors that will also fluctuate concurrent with changing economic conditions, which would affect the results of the ACL calculation. The impact that the economic factors have on the model is affected by the upside or downside severity of the scenarios used, the product type mix, and the interaction of the economic factors with other quantitative and qualitative factors in the model, as changes in any particular factor or input may not occur at the same rate or be directionally consistent across all loan segments. Improvements in one factor may offset deterioration in other factors, both qualitative and quantitative. The third party downside economic forecast used in the hypothetical scenario described does not predict a severe economic downturn, but rather a moderate recessionary environment. The Company’s geographic distribution of loans primarily outside of major metropolitan areas, combined with low statistical correlation between its historical losses and national economic indicators, results in changes to the allowance that are less significant as compared to economic metric-based modeling that is more directly correlated, and therefore sensitive to fluctuations in historical and projected national economic activity. Further details regarding the methodologies applied to estimate the various components of the ACL are provided in Note A, “Summary of Significant Accounting Policies”, starting on page 89. 39 Table of Contents Pension, Post-Retirement and Other Employee Benefit Plans The Company provides a qualified defined benefit pension to eligible employees and retirees, other post-retirement health and life insurance benefits to certain retirees, an unfunded supplemental pension plan for certain key executives and an unfunded stock balance plan for certain of its nonemployee directors. The benefit obligations for the pension and post-retirement benefits plans require significant management judgment. The assumptions used in calculating the benefit obligation include the discount rate, expected return on plan assets, rate of compensation increase and interest crediting rates. The discount rate was determined based upon the yield on high-quality fixed income investments expected to be available during the period to maturity of the pension benefits. The expected long-term rate of return was estimated by taking into consideration asset allocation, long-term capital market assumptions, reviewing historical returns on the type of assets held and current economic factors. Mortality tables are also utilized in calculating the benefit obligation, the selection of which is based on management judgment. The Company analyzed the sensitivity of the discount rate and the expected long-term rate of return on plan assets on the pension benefit obligation and net periodic pension cost. At December 31, 2024, a decrease in the discount rate of 100 basis points would increase the pension benefit obligation by $11.6 million, while an increase in the discount rate of 100 basis points would decrease the pension benefit obligation by $9.8 million. For the year ended December 31, 2024, a decrease in the discount rate of 100 basis points would reduce the net periodic pension income by $1.2 million, while an increase in the discount rate of 100 basis points would increase the net periodic pension income by $0.7 million. A decrease in the expected long-term rate of return on plan assets of 100 basis points would reduce the net periodic pension income by $2.6 million, while an increase of 100 basis points would increase net periodic pension income by $2.6 million. Further detail on the assumptions used and a comparison between 2024 and 2023 assumptions is included in Note J, “Pension and Other Benefit Plans”, starting on page 123. Goodwill and Other Intangible Assets The initial carrying value of goodwill is impacted by the initial carrying value of intangible assets including core deposit intangibles, customer relationship intangibles and acquired loans that are recorded at their fair value as of the date of acquisition. Management judgment and estimates are involved in determining the initial and ongoing carrying value of goodwill and other intangible assets. Initial and ongoing carrying values require the assessment of fair value based on discounted cash flow modeling techniques and inputs such as discount rates, required equity market premiums, peer volatility indicators and company-specific risk indicators. Core deposit intangibles and customer relationship intangibles are amortized on either an accelerated or straight-line basis over periods ranging from seven to 20 years, based on management judgment. The Company evaluates goodwill for impairment on an annual basis and performs a quarterly analysis to determine if any triggering events have occurred that would require an interim evaluation. In accordance with FASB ASC 350, the Company evaluates whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, and performs either a qualitative or quantitative assessment, depending on circumstances and management judgment. The qualitative assessment requires significant management judgment, and if the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is not less than its carrying value, no quantitative analysis is necessary. The inputs for the qualitative analysis that require management judgment include macroeconomic conditions, industry and market conditions, financial performance of the reporting unit and other relevant events that affect the fair value of a reporting unit. During 2024, the Company performed qualitative goodwill analyses for all of the Company’s operating segments. The inputs for the qualitative analyses that require management judgment include macroeconomic conditions, industry and market conditions, financial performance of the operating unit and other relevant factors that affect the fair value of a reporting unit, including an assessment of the quantitative goodwill analysis performed as of October 1, 2023. Based on the Company’s annual qualitative impairment analysis of goodwill as of October 1, 2024, it was determined that it was more likely than not that the fair value of each reporting unit was in excess of its respective carrying value, therefore goodwill was not impaired. The Company also performs sensitivity analyses around assumptions for key inputs including the discount rates in order to assess the reasonableness of the assumptions utilized. A 100 basis point increase in the discount rates used in each operating segment model would reduce estimated entity level fair value in total by approximately $275.1 million at the October 1, 2023 valuation date and was determined it would more likely than not result in no impairment of goodwill, as each reporting unit’s fair value would still exceed its carrying value. 40 Table of Contents Supplemental Reporting of Non-GAAP Results of Operations The Company also provides supplemental reporting of its results on an “operating” or “tangible” basis. During the first quarter of 2024, the Company modified the presentation of its non-GAAP operating results to exclude amortization of intangible assets which the Company believes better reflects core performance across its segments and enhances comparability to both banking and non-banking organizations. The prior period has been recast to conform to the current period presentation. Results on an “operating” basis exclude the after-tax effects of acquisition expenses, acquisition-related contingent consideration adjustments, litigation accrual, restructuring expenses, gain on debt extinguishment, loss on sales of investment securities, unrealized gain (loss) on equity securities and amortization of intangible assets. Results on a “tangible” basis exclude goodwill and intangible asset balances, net of accumulated amortization and applicable deferred tax amounts. Although these items are non-GAAP measures, the Company’s management believes this information helps investors and analysts measure underlying core performance and improves comparability to other organizations that have not engaged in acquisitions or restructuring activities. In addition, the Company provides supplemental reporting for “operating pre-tax, pre-provision net revenues,” which excludes the provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, litigation accrual, restructuring expenses, gain on debt extinguishment, loss on sales of investment securities, unrealized gain (loss) on equity securities and amortization of intangible assets from income before income taxes. Although operating pre-tax, pre-provision net revenue is a non-GAAP measure, the Company’s management believes this information helps investors and analysts measure and compare the Company’s performance through a credit cycle by excluding the volatility in the provision for credit losses associated with the impact of CECL, helps investors and analysts measure underlying core performance and improves comparability to other organizations that have not engaged in acquisitions or restructuring activities. The Company also provides supplemental reporting of its interest income, net interest income and net interest margin on a fully tax-equivalent (“FTE”) basis, which includes an adjustment to interest income and net interest income that represents taxes that would have been paid had nontaxable investment securities and loans been taxable. Although fully tax-equivalent interest income, net interest income and net interest margin are non-GAAP measures, the Company’s management believes this information helps enhance comparability of the performance of assets that have different tax liabilities. Reconciliations of GAAP amounts with corresponding non-GAAP amounts are presented in Table 20. Executive Summary The Company’s business philosophy is to operate as a diversified financial services enterprise providing a broad array of banking and other financial services, including employee benefit services, insurance services and wealth management services, to retail, commercial, institutional and governmental customers. The Company’s banking subsidiary is Community Bank, N.A. (the “Bank” or “CBNA”). The Company’s Benefit Plans Administrative Services, Inc. (“BPAS”) subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration and actuarial consulting services to customers on a national scale. In addition, the Company offers comprehensive financial planning, trust administration and wealth management services through its Wealth Management Group operating unit and insurance services through its OneGroup NY, Inc. (“OneGroup”) operating unit. The Company’s core operating objectives are: (i) maintain diverse revenue streams to achieve positive operating results in all four of the Company’s business units: banking and corporate, employee benefit services, insurance services, and wealth management services, (ii) utilize technology to deliver customer-responsive products and services and improve efficiencies, (iii) increase the noninterest component of total revenues through both organic and acquisition strategies, (iv) optimize the branch network and digital banking delivery systems, primarily through disciplined acquisition strategies, de novo expansions and divestitures/consolidations, (v) build profitable loan and deposit volume using both organic and acquisition strategies, and (vi) manage an investment securities portfolio to complement the Company’s loan and deposit strategies and mitigate interest rate and liquidity risk and optimize net interest income generation. Significant factors reviewed by management to evaluate achievement of the Company’s operating objectives and results and financial condition include, but are not limited to: net income and earnings per share; return on assets and equity; components of net interest margin; noninterest revenues; noninterest expenses; asset quality metrics; loan and deposit growth; capital management; performance of individual banking and financial services units; performance of specific product lines and customers; liquidity and interest rate sensitivity; enhancements to customer products and services and their underlying performance characteristics; technology advancements; market share; peer comparisons; the performance of recently acquired businesses and the performance of recently opened and consolidated branch offices. 41 Table of Contents The Company reported net income of $182.5 million for the year ended December 31, 2024 that was $50.6 million, or 38.3%, above the prior year, while earnings per share of $3.44 for the year was $0.99, or 40.4%, above the prior year. The increases in net income and earnings per share included the impact of a $52.3 million pre-tax realized loss on sales of investment securities in the first quarter of 2023 as part of a balance sheet repositioning. Net income and earnings per share were also negatively impacted in 2023 by certain notable noninterest expense items including a litigation accrual associated with a threatened collective and class action matter that was settled in 2024, higher FDIC insurance costs due to a higher base assessment rate effective beginning 2023 and the impact of a special assessment, elevated fraud expenses and restructuring costs linked to a retail workforce optimization strategy. Additionally, acquisition-related contingent consideration adjustments were elevated as result of an increase in probability of achievement of the earn-out objectives associated with previous acquisitions. Excluding these items, the increase in noninterest expenses from 2023 was driven primarily by higher salaries and employee benefits reflective of merit and market-related increases in employee wages, higher employee medical benefit costs and acquisitions between the periods which increased the number of employees in the financial services businesses, partially offset by the impact of the previously announced retail banking customer service workforce optimization plan. The provision for credit losses also increased from 2023 as the Company built reserves reflective of some degradation in certain asset quality metrics, an increase in loans outstanding and continued macroeconomic uncertainty primarily concerning the business real estate lending portfolio. Income taxes increased in 2024, driven primarily by an increase in net income. Net interest income increased to $449.1 million in 2024, an $11.8 million, or 2.7%, increase from the prior year, marking the eighteenth consecutive year of net interest income growth. The increase in 2024 was primarily due to increases in the yield on average interest-earning assets and average loan balances, partially offset by higher funding costs. Noninterest revenues also increased in 2024, with record results in all four operating segments of banking, employee benefit services, insurance services and wealth management services. Net interest margin for full year 2024 of 3.04% and fully tax-equivalent net interest margin, a non-GAAP measure, of 3.07% both decreased seven basis points from the prior year period. The yield on average interest earning assets increased 51 basis points compared to the prior year, as the yields on average loans, investments and interest-earning cash equivalents all improved. The Company’s total cost of funds increased 61 basis points from the prior year as the rate paid on interest-bearing deposits and borrowings both increased. The Company’s average and ending interest-earning assets both increased year-over-year reflective of strong organic loan growth. Average and ending deposits also increased primarily driven by higher governmental deposit balances, reflective of competitive offerings and expansion of its governmental deposit relationship base due in part to the Company’s business development efforts. Average and ending external borrowings in 2024 increased from 2023 as the Company secured certain fixed rate Federal Home Loan Bank (“FHLB”) term borrowings during the year to support the funding of continued loan growth that resulted in earning asset growth that outpaced deposit growth. Asset quality remained solid throughout 2024. Although the nonperforming and delinquency ratios increased from 2023 levels, primarily driven by the downgrade of certain business loans from accruing to nonaccrual status, and the full year net charge-off ratio increased slightly from the level one year earlier, these metrics remained below the Company’s 10-year historical averages. Operating net income, a non-GAAP measure, of $193.9 million, increased $1.2 million, or 0.6%, compared to the prior year, while operating earnings per share, a non-GAAP measure, of $3.65 increased $0.08, or 2.2%, from last year. Operating pre-tax, pre-provision net revenue (“PPNR”), a non-GAAP measure, of $273.6 million, increased $17.2 million, or 6.7%, compared to 2023, while operating PPNR per share, a non-GAAP measure, of $5.15, increased $0.39, or 8.2%, compared to the prior year demonstrating improvement in the Company’s core operating performance between the periods. 42 Table of Contents Net Income and Profitability Net income for 2024 was $182.5 million, an increase of $50.6 million, or 38.3%, from 2023. Earnings per share for 2024 was $3.44, an increase of $0.99, or 40.4%, from 2023’s results. Net income and earnings per share for 2023 were unfavorably impacted by certain notable non-operating items including a $52.3 million pre-tax realized loss on the sales of investment securities, a $5.8 million litigation accrual associated with a threatened collective and class action matter that was settled in 2024, $3.3 million of acquisition-related contingent consideration adjustments associated with potential future contingent consideration payments for the FBD and TGA acquisitions completed in 2021, and $1.2 million of restructuring expenses linked to a retail workforce optimization strategy. Operating net income, a non-GAAP measure, of $193.9 million, increased $1.2 million, or 0.6%, compared to the prior year, while operating earnings per share, a non-GAAP measure, of $3.65 increased $0.08, or 2.2%, from last year. Operating PPNR, a non-GAAP measure, of $273.6 million, increased $17.2 million, or 6.7%, compared to 2023, while operating PPNR per share, a non-GAAP measure, of $5.15, increased $0.39, or 8.2%, compared to the prior year demonstrating improvement in the Company’s noncredit-related operating performance between the periods. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures. Net income for 2023 was $131.9 million, a decrease of $56.2 million, or 29.9%, from 2022. Earnings per share for 2023 was $2.45, down $1.01, or 29.2%, from 2022’s results. Net income and earnings per share for 2023 were unfavorably impacted by certain notable non-operating items as noted above. This is compared to 2022 in which the Company incurred $5.0 million of acquisition expenses and a $3.9 million acquisition-related provision for credit losses related to the Elmira acquisition and $0.3 million of acquisition-related contingent consideration adjustments. Operating net income, a non-GAAP measure, of $192.7 million decreased $14.0 million, or 6.8%, compared to the prior year, while operating PPNR, a non-GAAP measure, of $256.4 million decreased $18.7 million, or 6.8%, compared to 2022. Operating earnings per share, a non-GAAP measure, of $3.57 decreased $0.23, or 6.1%, compared to the prior year, while operating PPNR per share, a non-GAAP measure, of $4.76 decreased $0.30, or 5.9%, compared to 2022. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures. Table 1: Condensed Income Statements ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,"],["(000\u2019s omitted, except per share data)","","2024","","2023","","2022"],["Net interest income","\u200b","$","449,117","","$","437,285","","$","420,630"],["Provision for credit losses","\u200b","","22,773","\u200b","","11,203","\u200b","","14,773"],["Loss on sales of investment securities","\u200b","","(487)","\u200b","","(52,329)","\u200b","","0"],["Unrealized gain (loss) on equity securities","\u200b","","1,231","\u200b","","(47)","\u200b","","(44)"],["Gain on debt extinguishment","\u200b","","0","\u200b","","242","\u200b","","0"],["Other noninterest revenues","\u200b","","296,442","\u200b","","266,968","\u200b","","258,769"],["Acquisition-related contingent consideration adjustment","\u200b","\u200b","244","\u200b","\u200b","3,280","\u200b","\u200b","(300)"],["Acquisition expenses","\u200b","","213","\u200b","","63","\u200b","","5,021"],["Restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","1,163","\u200b","\u200b","0"],["Litigation accrual","\u200b","\u200b","138","\u200b","\u200b","5,800","\u200b","\u200b","0"],["Other noninterest expenses","\u200b","","486,230","\u200b","","462,379","\u200b","","419,547"],["Income before taxes","\u200b","","236,705","\u200b","","168,231","\u200b","","240,314"],["Income taxes","\u200b","","54,224","\u200b","","36,307","\u200b","","52,233"],["Net income","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Diluted weighted average common shares outstanding","\u200b","","53,098","\u200b","","53,908","\u200b","","54,361"],["Diluted earnings per share","\u200b","$","3.44","\u200b","$","2.45","\u200b","$","3.46"]] [[/GREPCENT_TABLE]] ​ 43 Table of Contents The Company operates four businesses: Banking, Employee Benefit Services, Insurance Services and Wealth Management Services. These businesses are aggregated into the following four reportable segments: Banking and Corporate, Employee Benefit Services, Insurance Services and Wealth Management Services. The Banking and Corporate segment provides a wide array of lending and depository-related products and services to individuals, businesses, and governmental units with branch locations in Upstate New York as well as Northeastern Pennsylvania, Vermont and Western Massachusetts. In addition to these general intermediation services, the Banking and Corporate segment provides treasury management solutions and payment processing services. The Banking and Corporate segment also holds and manages the Company’s investment and borrowing portfolios and includes certain banking support and corporate overhead-related expenses. Employee Benefit Services, consisting of BPAS and its subsidiaries, provides the following on a national basis: employee benefit trust, collective investment fund, retirement plan and health savings account administration, fund administration, transfer agency, actuarial, and health and welfare consulting services. BPAS services more than 6,100 benefit plans with approximately 910,000 plan participants and supports $117.3 billion in employee benefit trust assets as of December 31, 2024. In addition, BPAS employs 459 professionals serving clients in every U.S. state plus the Commonwealth of Puerto Rico, and occupies 16 offices located in New York, Pennsylvania, Massachusetts, New Jersey, Texas, Minnesota, South Dakota, Washington, Florida and Puerto Rico. The Insurance Services segment includes the operating subsidiary OneGroup, a full-service insurance agency offering personal and commercial lines of insurance and other risk management products and services. The Insurance Services segment includes 267 employees and 22 customer service facilities in New York, Pennsylvania, Massachusetts, South Carolina and Florida. Wealth Management Services include trust services provided by Nottingham Trust, a division of CBNA, broker-dealer and investment advisory services provided by Community Investment Services, Inc. (“CISI”), The Carta Group, Inc. (“Carta Group”) and OneGroup Wealth Partners, Inc. (“Wealth Partners”), as well as asset management provided by Nottingham Advisors, Inc. (“Nottingham”). The Wealth Management Services segment includes 113 employees and assets under management or administration of $13.2 billion at the end of 2024. For additional financial information on the Company’s segments, refer to Note S – Segment Information in the Notes to Consolidated Financial Statements. The primary factors explaining full year 2024 financial performance are discussed in the remaining sections of this document and are summarized by segment as follows: BANKING AND CORPORATE [[GREPCENT_TABLE]] [["\u25cf","Banking and corporate net interest income increased $10.7 million, or 2.5%. This was the result of a 51 basis point increase in the average yield on interest-earning assets and a $672.7 million increase in average interest-earning assets, partially offset by an $871.7 million increase in average interest-bearing liabilities and a 77 basis point increase in the average rate on interest-bearing liabilities. Average loans grew $849.0 million, driven by organic growth in all loan categories, and the yield on loans increased 59 basis points from the prior year, primarily due to market-related increases in interest rates on new loan originations, as well as higher average yields on floating and adjustable-rate loans held in the portfolio. Also contributing to the growth in interest income was an increase in the average yield on investments including cash equivalents of nine basis points, offset by a $176.3 million decrease in the average book value of investments, including cash equivalents, driven primarily by the maturities of certain lower-yielding available-for-sale investment securities during the year. The increase in interest expense was driven by an increase in average interest-bearing deposit balances of $585.7 million, an increase in average borrowings of $286.0 million and a 60 basis point increase in the cost of funds to 1.36%."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["\u25cf","The provision for credit losses of $22.8 million increased $11.6 million from the prior year\u2019s provision of $11.2 million, reflective of organic loan growth, some degradation of certain asset quality metrics, and relatively stable economic forecasts. Net charge -offs of $10.1 million were $4.3 million higher than 2023, as net charge-offs increased in all portfolios except for consumer mortgage, but remained below 10-year historical averages. This resulted in an annual net charge-off ratio (net charge-offs / total average loans) of 0.10%, which was four basis points higher than the prior year, but one basis point below the 10-year historical average of 0.11%. Year-end nonperforming loans as a percentage of total loans and nonperforming assets as a percentage of loans and other real estate owned increased 14 and 16 basis points, respectively, as compared to December 31, 2023 levels, primarily attributable to an increase in nonperforming business lending loan balances. Additional information on trends and policy related to asset quality is provided in the asset quality section on pages 67 through 70."]] [[/GREPCENT_TABLE]] 44 Table of Contents [[GREPCENT_TABLE]] [["\u25cf","Banking and corporate noninterest revenues, excluding realized and unrealized gains and losses on investment securities and gain on debt extinguishment, of $78.1 million for 2024 increased by $8.2 million from 2023\u2019s level. The increase was reflective of customer interest rate swap fee revenues associated with the Company\u2019s implementation of this product offering in 2024, an increase in mortgage banking revenues, increases in deposit service fees, and an increase in fee revenues from commercial real estate transaction advisory and placement services."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["\u25cf","Banking and corporate noninterest expenses, excluding amortization of intangible assets, acquisition-related expenses, litigation accrual and restructuring expenses, increased $8.4 million, or 2.7%, in 2024, driven by a $3.7 million, or 2.1%, increase in salaries and employee benefits and a $3.6 million, or 7.5%, increase in data processing and communications along with increases in occupancy and equipment, business development and marketing and other expenses, partially offset by a decrease in legal and professional fees."]] [[/GREPCENT_TABLE]] EMPLOYEE BENEFIT SERVICES [[GREPCENT_TABLE]] [["\u25cf","Employee benefit services total revenues for 2024 of $137.4 million increased $14.5 million, or 11.8%, from the prior year level, including a $0.9 million increase in net interest income due to increases in market interest rates on interest-earning cash and a $13.6 million, or 11.2%, increase in noninterest revenues from the prior year level, driven by new business and a year-over-year increase in the total participants under administration, along with growth in asset-based fee revenues due to market appreciation."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["\u25cf","Employee benefit services noninterest expenses for 2024 totaled $81.6 million. This represented an increase from 2023 of $8.5 million, or 11.7%, and was primarily attributable to an $8.2 million, or 14.8%, increase in salaries and employee benefits that was impacted by an increase in the number of employees as a result of the CPD acquisition."]] [[/GREPCENT_TABLE]] ​ INSURANCE SERVICES [[GREPCENT_TABLE]] [["\u25cf","Insurance services total revenue for 2024 of $50.5 million increased $3.2 million, or 6.7%, from the prior year level as net interest income was consistent with the prior year and noninterest revenues increased $3.2 million, or 6.6%, from the prior year level. The increase in insurance services revenue was due to organic and acquisition-related growth between the periods."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["\u25cf","Insurance services noninterest expenses of $43.1 million increased $4.4 million, or 11.4%, from 2023, primarily due to a $4.3 million, or 14.1%, increase in salaries and employee benefits reflective of merit and market-related increases in personnel costs, acquisition activities, and the continued buildout of resources to support an expanding revenue base."]] [[/GREPCENT_TABLE]] WEALTH MANAGEMENT SERVICES [[GREPCENT_TABLE]] [["\u25cf","Wealth management services total revenue for 2024 of $38.7 million increased $5.0 million, or 14.9%, from 2023, reflective of more favorable investment market conditions that drove increases in assets under management between the periods and an increase in investment advisory customer accounts."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["\u25cf","Wealth management services noninterest expenses of $28.1 million increased $3.1 million, or 12.2%, from 2023, primarily due to a $2.8 million, or 13.6%, increase in salaries and employee benefits reflective of merit and market-related increases in personnel costs and higher commission-based compensation driven by the increase in revenues."]] [[/GREPCENT_TABLE]] 45 Table of Contents Selected Profitability and Other Measures Return on average assets, return on average equity, dividend payout and average equity to average asset ratios for the years indicated are as follows: ​ Table 2: Selected Ratios ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2024","","2023","","2022"],["Return on average assets","","1.14","%","0.87","%","1.21","%"],["Return on average equity","","10.76","%","8.27","%","10.85","%"],["Dividend payout ratio","","52.6","%","72.4","%","49.9","%"],["Average equity to average assets","","10.60","%","10.47","%","11.14","%"]] [[/GREPCENT_TABLE]] ​ As displayed in Table 2, the 2024 return on average assets ratio increased 27 basis points, while the return on average equity ratio increased 249 basis points as compared to 2023. The increase in the return on average assets was the result of an increase in net income that was impacted by a $52.3 million pre-tax realized loss on sales of investment securities in the prior year, partially offset by an increase in average assets driven by strong organic loan growth. The return on average equity ratio increased in 2024 as net income increased, which was impacted by the aforementioned loss on sales of investment securities, while average equity increased driven by an increase in retained earnings and a decrease in the average accumulated other comprehensive loss related to the Company’s investment securities portfolio. The return on average assets ratio in 2023 decreased 34 basis points from 2022, while the return on average equity ratio decreased 258 basis points as compared to 2022, primarily as a result of a decrease in net income impacted by the aforementioned loss on sales of investment securities. This was partially offset by a decrease in average assets, primarily related to the sales and maturities of certain lower-yielding available-for-sale investment securities, partially offset by strong organic loan growth during the year. The return on average equity ratio decreased in 2023 as net income decreased, which was impacted by the aforementioned loss on sales of investment securities, which was only partially offset by a decrease in average equity due primarily to an increase in the average accumulated other comprehensive loss related to the Company’s investment securities portfolio. The return on average assets adjusted to exclude acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, loss on sales of investment securities, unrealized gain (loss) on equity securities, litigation accrual, gain on debt extinguishment and amortization of intangibles (“operating return on average assets”), a non-GAAP measure, decreased five basis points to 1.21% in 2024, as compared to 1.26% in 2023. The return on average equity adjusted to exclude acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, loss on sales of investment securities, unrealized gain (loss) on equity securities, litigation accrual, gain on debt extinguishment and amortization of intangibles (“operating return on average equity”), a non-GAAP measure, decreased 65 basis points to 11.43% in 2024, from 12.08% in 2023. See Table 20 beginning on page 77 for Reconciliation of GAAP to Non-GAAP Measures. The dividend payout ratio for 2024 of 52.6% decreased from 72.4% in 2023 driven by a 38.3% increase in net income and a 0.5% increase in dividends declared. The increase in dividends declared in 2024 was a result of a 2.2% increase in the dividends declared per share, partially offset by a 1.2% decrease in common shares outstanding as a result of share repurchases during the year. The dividend payout ratio for 2023 of 72.4% increased from 49.9% in 2022 driven by a 29.9% decrease in net income, which was impacted by the aforementioned loss on sales of investment securities, and a 1.7% increase in dividends declared. The increase in dividends declared in 2023 was a result of a 2.3% increase in the dividends declared per share, partially offset by a 0.8% decrease in common shares outstanding as a result of share repurchases during the year. The average equity to average assets ratio increased in 2024 due to an increase in average equity driven by the aforementioned increase in retained earnings and decrease in the average accumulated other comprehensive loss related to the Company’s investment securities portfolio, partially offset by an increase in average assets primarily driven by strong organic loan growth. During 2024, average equity increased 6.3% while average assets increased 4.9%. In 2023, the average equity to average assets ratio decreased in comparison to 2022 as average equity decreased 7.9% driven by an increase in the average accumulated other comprehensive loss related to the Company’s investment securities portfolio, while average assets decreased 2.1% due to the sales and maturities of certain lower-yielding available-for-sale investment securities, partially offset by strong organic loan growth during the year. 46 Table of Contents Net Interest Income Net interest income is the amount by which interest, dividends and fees on interest-earning assets (loans, investments and cash equivalents) exceeds the cost of funds, which consists primarily of interest paid to the Company’s depositors and interest paid on borrowings. Net interest margin is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities as a percentage of interest-earning assets. Net interest income totaled $449.1 million in 2024, an increase of $11.8 million, or 2.7%, from the prior year. As disclosed in Table 3, fully tax-equivalent net interest income, a non-GAAP measure, totaled $452.8 million in 2024, an increase of $11.3 million, or 2.6%, from the prior year. The increase is a result of a 51 basis point increase in the yield on average interest-earning assets and a $676.8 million, or 4.8%, increase in average interest-earning asset balances, partially offset by a 76 basis point increase in the rate paid on average interest-bearing liabilities and an $871.4 million, or 9.0%, increase in average interest-bearing liability balances. As reflected in Table 4, the favorable impact of the increases in the yield on average interest-earning assets ($74.4 million) and average interest-earnings asset balances ($27.2 million) were partially offset by the unfavorable impacts of the increases in the rate paid on average interest-bearing liabilities ($80.2 million) and average interest-bearing liability balances ($10.1 million). The 2024 net interest margin decreased seven basis points to 3.04% from 3.11% reported in 2023, while the fully tax-equivalent net interest margin, a non-GAAP measure, also decreased seven basis points to 3.07% from the 3.14% reported in the prior year. These decreases were the result of a 76 basis point increase in the rate paid on average interest-bearing liabilities, partially offset by a 51 basis point increase in the yield on interest-earning assets and a higher proportion of those assets being comprised of higher yielding loan balances due to strong organic loan growth. The increases in the yield on interest-earnings assets and rate on interest-bearing liabilities were primarily due to the impact of higher market rates during most of 2024. The 5.43% yield on average loans in 2024 increased 59 basis points as compared to 4.84% in 2023 reflective of higher interest rates on new and adjustable rate loans during the year. The yield on investments, including cash equivalents, of 2.15% in 2024 was 10 basis points higher than 2023 primarily due to higher yields on investment purchases during the year and the favorable impact higher market rates had on the yield earned on cash equivalents. The cost of interest-bearing liabilities was 1.84% during 2024 as compared to 1.08% for 2023. The increased cost reflects the 72 basis point increase in the rate paid on average deposits due in part to a shift in deposit mix as customers responded to changes in market interest rates by moving funds into higher yielding account types and the 83 basis point higher average rate paid on borrowings in 2024 that included the impact of $250.0 million of FHLB term borrowings secured during 2024. The 2023 net interest margin increased 22 basis points to 3.11% from 2.89% reported in 2022, while the fully tax-equivalent net interest margin, a non-GAAP measure, also increased 22 basis points to 3.14% from the 2.92% reported in 2022. These increases were the result of an 80 basis point increase in the yield on interest-earning assets and a higher proportion of those assets being comprised of loan balances due to strong organic loan growth and the sales and maturities of certain lower-yielding available-for-sale investment securities between the periods, partially offset by an 84 basis point increase in the rate paid on average interest-bearing liabilities. The increases in the yield on interest-earnings assets and rate on interest-bearing liabilities was primarily due to the impact of higher market rates during 2023, including a 100 basis point increase in the Federal Funds rate during the year as a result of the Federal Reserve Bank’s efforts to lower elevated inflation, with that movement and other market factors also contributing to average three, five and 10-year treasury rates all rising by more than 100 basis points. The 4.84% yield on loans in 2023 increased 67 basis points as compared to 4.17% in 2022 due to market-related increases in interest rates on new loans, a significant increase in variable and adjustable-rate loan yields driven by rising market interest rates, including the prime rate and the Secured Overnight Financing Rate, as well as a high level of new loan originations. The yield on investments, including cash equivalents, of 2.05% in 2023 was 33 basis points higher than 2022 primarily due to the impact of the sales and maturities of certain lower-yielding available-for-sale investment securities during the year along with an increase in market rates, including the impact that had on the yield earned on cash equivalents. The cost of interest-bearing liabilities was 1.08% during 2023 as compared to 0.24% for 2022. The increased cost reflects the 55 basis point increase in the rate paid on average deposits and the 136 basis point higher average rate paid on borrowings in 2023. 47 Table of Contents Total interest income increased by $102.1 million, or 18.9%, while as shown in Table 3, total FTE-basis interest income, a non-GAAP measure, increased by $101.6 million, or 18.6%, in 2024 compared to the prior year. Average loans increased $849.0 million, or 9.2%, in 2024. This increase was driven by organic growth in all of the Company’s five main portfolios - business lending, consumer mortgage, consumer indirect, home equity and consumer direct. Loan interest income and fees increased $100.6 million, or 22.6%, while FTE-basis loan interest income and fees, a non-GAAP measure, increased $100.7 million, or 22.6%, in 2024 as compared to 2023. These increases were attributable to the aforementioned higher average loan balances and the impact of a 59 basis point higher loan yield primarily due to higher interest rates on new and adjustable rate loans during the year. Investment and interest-earning cash interest income in 2024 was $1.5 million, or 1.6%, higher than the prior year as a result of a 10 basis point increase in the average investment yield including cash equivalents and a $46.8 million increase in average cash equivalent balances, partially offset by a $219.0 million decrease in the average book basis balance of investments. Total interest income in 2023 increased by $97.7 million, or 22.0%, while total FTE-basis interest income, a non-GAAP measure, increased by $97.8 million, or 21.8%, in comparison to 2022. A higher yield on interest-earning assets created $112.7 million of incremental interest income, while a lower average interest-earning asset balance had an unfavorable impact of $14.9 million on interest income in 2023. Average loans increased $1.17 billion, or 14.6%, in 2023. This increase was driven by increases in the average balance of the business lending, consumer indirect, consumer mortgage and home equity portfolios due to strong organic growth and the impact of the Elmira acquisition in May 2022, partially offset by a decrease in the average balance of the consumer direct portfolio. Loan interest income and fees increased $110.1 million, or 32.9%, while FTE-basis loan interest income and fees, a non-GAAP measure, increased $110.2 million, or 32.8%, in 2023 as compared to 2022. These increases were attributable to the aforementioned higher average loan balances and the impact of a 67 basis point higher loan yield due to market-related increases in interest rates on new loans and a significant increase in floating and adjustable-rate loan yields driven by rising market interest rates, including the treasury and prime rates during 2023. Investment and interest-earning cash interest income in 2023 was $12.4 million, or 11.4%, lower than the prior year as a result of a $1.34 billion decrease in the average book basis balance of investments and a $304.7 million decrease in average cash equivalents, partially offset by a 33 basis point increase in the average investment yield including cash equivalents. The higher average investment yield and the lower average book balance of investments was reflective of the sales and maturities of certain lower-yielding available-for-sale investment securities during 2023. Total interest expense increased by $90.3 million to $194.4 million in 2024 from $104.1 million in 2023. As shown in Table 4, higher interest rates on interest-bearing liabilities resulted in an increase in interest expense of $80.2 million, while higher average interest-bearing liability balances resulted in a $10.1 million increase in interest expense. Interest expense as a percentage of average interest-earning assets for 2024 increased 58 basis points to 1.32% from 0.74% in the prior year. The rate on interest-bearing deposits of 1.66% was 72 basis points higher than 2023, primarily due to an increase in certain product rates in response to changes in market interest rates during the year and a higher proportion of average money market and time deposit balances that carry a higher average rate than interest checking and savings deposits. The rate on borrowings increased 83 basis points to 3.80% in 2024, primarily due to the aforementioned increase in market interest rates. Total average funding balances (deposits and borrowings) in 2024 increased $603.4 million, or 4.5%. Average deposits increased $317.4 million, driven by an increase in average time and money market deposit balances partially offset by decreases in average demand, interest checking and savings deposit balances. Average non-time deposit balances decreased $439.1 million, or 3.8%, and accounted for 84.6% of total average deposits in 2024 compared to 90.1% in 2023, reflective of shifts to higher-rate time and money market deposit accounts in the higher interest rate environment during most of 2024. Average time deposit balances increased $756.6 million year-over-year and represented 15.4% of total average deposits for 2024 compared to 9.9% in 2023. Average external borrowings increased $286.0 million, or 45.3%, in 2024 as compared to 2023, primarily due to increases in average FHLB term borrowings of $360.1 million and Federal Reserve short-term borrowings of $54.1 million, partially offset by decreases in average overnight borrowings of $97.8 million and average securities sold under agreement to repurchase (“customer repurchase agreements”) of $33.9 million. The increase in average FHLB term borrowings was due to the Company securing $250.0 million of fixed rate borrowings in the second and third quarters of 2024 to meet the Company’s funding needs, including to support strong loan growth. ​ 48 Table of Contents Total interest expense increased by $81.0 million to $104.1 million in 2023 from $23.1 million in 2022. As shown in Table 4, higher interest rates on interest-bearing liabilities resulted in an increase in interest expense of $80.9 million, while higher average interest-bearing liability balances resulted in a $0.1 million increase in interest expense between 2022 and 2023. Interest expense as a percentage of average earning assets for 2023 increased 58 basis points to 0.74% from 0.16% in 2022. The rate on interest-bearing deposits of 0.94% was 78 basis points higher than 2022, primarily due to an increase in certain product rates in response to changes in market interest rates during 2023 and a higher proportion of average time deposit balances that generally carry a higher average rate than interest checking, savings and money market deposits. The rate on borrowings increased 136 basis points from 2022 to 2.97% in 2023, primarily due to the aforementioned increase in market interest rates. Total average funding balances (deposits and borrowings) in 2023 decreased $196.3 million, or 1.4%. Average deposits decreased $328.7 million, driven by a decrease in average non-time deposit balances partially offset by an increase in average time deposit balances. Average non-time deposit balances decreased $680.5 million, or 5.5%, and accounted for 90.1% of total average deposits in 2023 compared to 93.0% in 2022, due in part to outflows driven by higher customer expenditure levels in the inflationary environment, increased rate competition from other banks and non-depository financial institutions and shifts to higher-rate time deposit accounts in the rising interest rate environment. Average time deposit balances increased $351.8 million year-over-year and represented 9.9% of total average deposits for 2023 compared to 7.0% in 2022. Average external borrowings increased $132.5 million, or 26.5%, in 2023 as compared to 2022, primarily due to increases in average FHLB term borrowings of $127.8 million and average overnight borrowings of $9.5 million. The increase in average FHLB term borrowings was due to the Company securing $400.0 million of fixed rate borrowings in the third and fourth quarters of 2023 to meet the Company’s funding needs, including to support strong loan growth. 49 Table of Contents The following table sets forth information related to average interest-earning assets and average interest-bearing liabilities and their associated yields and rates for the periods indicated. Interest income and yields are on a fully tax-equivalent (“FTE”) basis using a marginal income tax rate of 25.0% for 2024, 24.4% in 2023 and 24.3% in 2022. Average balances are computed by totaling the daily ending balances in a period and dividing by the number of days in that period. Loan interest income and yields include amortization of deferred loan income and costs, loan prepayment, late and other fees and the accretion of acquired loan purchase discounts and premiums. Average loan balances include acquired loan purchase discounts and premiums, nonaccrual loans and loans held for sale. Table 3: Average Balance Sheet ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended December 31, 2024","\u200b","Year Ended December 31, 2023","\u200b","Year Ended December 31, 2022","\u200b"],["\u200b","\u200b","Average","\u200b","\u200b","\u200b","\u200b","Avg. Yield/Rate","\u200b","Average","\u200b","\u200b","\u200b","\u200b","Avg. Yield/Rate","\u200b","Average","\u200b","\u200b","\u200b","\u200b","Avg. Yield/Rate","\u200b"],["(000's omitted except yields and rates)","","Balance","","Interest","","Paid","","Balance","","Interest","","Paid","","Balance","","Interest","","Paid"],["Interest-earning assets:","\u200b","","\u200b","","","\u200b","","","","","\u200b","","","\u200b","","","","","\u200b","","","\u200b"],["Cash equivalents","\u200b","$","102,690","\u200b","$","5,290","","5.15","%","$","55,881","\u200b","$","2,775","","4.97","%","$","360,542","\u200b","$","1,495","","0.41","%"],["Taxable investment securities (1)","\u200b","","4,136,337","\u200b","","80,444","","1.94","%","","4,294,210","\u200b","","79,593","","1.85","%","","5,639,310","\u200b","","93,876","","1.66","%"],["Nontaxable investment securities (1)","\u200b","","453,676","\u200b","","14,993","","3.30","%","","514,802","\u200b","","17,395","","3.38","%","","506,503","\u200b","","16,787","","3.31","%"],["Loans (net of unearned discount)(2)","\u200b","","10,062,177","\u200b","","546,522","","5.43","%","","9,213,168","\u200b","","445,867","","4.84","%","","8,042,310","\u200b","","335,645","","4.17","%"],["Total interest-earning assets","\u200b","","14,754,880","\u200b","","647,249","","4.39","%","","14,078,061","\u200b","","545,630","","3.88","%","","14,548,665","\u200b","","447,803","","3.08","%"],["Noninterest-earning assets","\u200b","","1,235,817","\u200b","","\u200b","","\u200b","\u200b","","1,164,823","\u200b","","\u200b","","\u200b","\u200b","","1,018,474","\u200b","","\u200b","","\u200b","\u200b"],["Total assets","\u200b","$","15,990,697","\u200b","","\u200b","","\u200b","\u200b","$","15,242,884","\u200b","","\u200b","","\u200b","\u200b","$","15,567,139","\u200b","","\u200b","","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest-bearing liabilities:","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b"],["Interest checking, savings and money market deposits","\u200b","$","7,600,646","\u200b","","82,999","","1.09","%","$","7,771,827","\u200b","","52,629","","0.68","%","$","8,194,558","\u200b","","8,030","","0.10","%"],["Time deposits","\u200b","","2,037,315","\u200b","","76,521","","3.76","%","","1,280,751","\u200b","","32,708","","2.55","%","","928,990","\u200b","","7,014","","0.76","%"],["Customer repurchase agreements","\u200b","\u200b","271,359","\u200b","\u200b","4,584","\u200b","1.69","%","\u200b","305,213","\u200b","\u200b","3,094","\u200b","1.01","%","\u200b","307,528","\u200b","\u200b","998","\u200b","0.32","%"],["Overnight borrowings","\u200b","","86,770","\u200b","","4,851","","5.59","%","","184,581","\u200b","","9,349","","5.06","%","","175,080","\u200b","","6,518","","3.72","%"],["FHLB and other borrowings","\u200b","","505,130","\u200b","","22,813","","4.52","%","","140,816","\u200b","","6,285","","4.46","%","","13,051","\u200b","","386","","2.96","%"],["Federal Reserve short-term borrowings","\u200b","\u200b","54,098","\u200b","\u200b","2,643","\u200b","4.88","%","\u200b","0","\u200b","\u200b","0","\u200b","0.00","%","\u200b","0","\u200b","\u200b","0","\u200b","0.00","%"],["Subordinated notes payable","\u200b","","0","\u200b","","0","","0.00","%","","765","\u200b","","38","","4.96","%","","3,264","\u200b","","153","","4.67","%"],["Total interest-bearing liabilities","\u200b","","10,555,318","\u200b","","194,411","","1.84","%","","9,683,953","\u200b","","104,103","","1.08","%","","9,622,471","\u200b","","23,099","","0.24","%"],["Noninterest-bearing liabilities:","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b"],["Noninterest checking deposits","\u200b","","3,580,297","\u200b","","\u200b","","\u200b","\u200b","","3,848,261","\u200b","","\u200b","","\u200b","\u200b","","4,106,029","\u200b","","\u200b","","\u200b","\u200b"],["Other liabilities","\u200b","","159,288","\u200b","","\u200b","","\u200b","\u200b","","114,946","\u200b","","\u200b","","\u200b","\u200b","","105,118","\u200b","","\u200b","","\u200b","\u200b"],["Shareholders' equity","\u200b","","1,695,794","\u200b","","\u200b","","\u200b","\u200b","","1,595,724","\u200b","","\u200b","","\u200b","\u200b","","1,733,521","\u200b","","\u200b","","\u200b","\u200b"],["Total liabilities and shareholders' equity","\u200b","$","15,990,697","\u200b","","\u200b","","\u200b","\u200b","$","15,242,884","\u200b","","\u200b","","\u200b","\u200b","$","15,567,139","\u200b","","\u200b","","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest earnings","\u200b","","","\u200b","$","452,838","","\u200b","\u200b","","","\u200b","$","441,527","","\u200b","\u200b","","","\u200b","$","424,704","","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest spread","\u200b","","","\u200b","","\u200b","","2.52","%","","","\u200b","","\u200b","","2.77","%","","","\u200b","","\u200b","","2.81","%"],["Net interest spread (FTE) (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2.55","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2.80","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2.84","%"],["Net interest margin on interest-earning assets","\u200b","","","\u200b","","\u200b","","3.04","%","","","\u200b","","\u200b","","3.11","%","","","\u200b","","\u200b","","2.89","%"],["Net interest margin on interest-earning assets (FTE) (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","3.07","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","3.14","%","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","2.92","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fully tax-equivalent adjustment (3)","\u200b","","","\u200b","$","3,721","","","\u200b","","","\u200b","$","4,242","","","\u200b","","","\u200b","$","4,074","","","\u200b"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Averages for investment securities are based on amortized cost basis and the yields do not give effect to changes in fair value that is reflected as a component of noninterest-earning assets, shareholders\u2019 equity and deferred taxes."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(2)","Includes nonaccrual loans. The impact of interest and fees not recognized on nonaccrual loans was immaterial."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(3)","The FTE adjustment represents taxes that would have been paid had nontaxable investment securities and loans been taxable. The adjustment enhances the comparability of the performance of assets that have different tax liabilities."]] [[/GREPCENT_TABLE]] ​ 50 Table of Contents As discussed above and disclosed in Table 4 below, the change in net interest income (FTE basis) may be analyzed by segregating the volume and rate components of the changes in interest income and interest expense for each underlying category. Table 4: Rate/Volume ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","2024 Compared to 2023","\u200b","2023 Compared to 2022"],["\u200b","\u200b","Increase (Decrease) Due to Change in (1)","\u200b","","Increase (Decrease) Due to Change in (1)"],["(000\u2019s omitted)","","Volume","","Rate","","Net Change","","Volume","","Rate","","Net Change"],["Interest earned on:","\u200b","\u200b","","","\u200b","","","\u200b","","\u200b","\u200b","","","\u200b","","","\u200b"],["Cash equivalents","\u200b","$","2,408","\u200b","$","107","\u200b","$","2,515","\u200b","$","(2,254)","\u200b","$","3,534","\u200b","$","1,280"],["Taxable investment securities","\u200b","","(2,988)","\u200b","","3,839","\u200b","","851","\u200b","","(24,113)","\u200b","","9,830","\u200b","","(14,283)"],["Nontaxable investment securities","\u200b","","(2,027)","\u200b","","(375)","\u200b","","(2,402)","\u200b","","277","\u200b","","331","\u200b","","608"],["Loans (net of unearned discount)","\u200b","","43,247","\u200b","","57,408","\u200b","","100,655","\u200b","","52,586","\u200b","","57,636","\u200b","","110,222"],["Total interest-earning assets (2)","\u200b","","27,156","\u200b","","74,463","\u200b","","101,619","\u200b","","(14,902)","\u200b","","112,729","\u200b","","97,827"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Interest paid on:","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b"],["Interest checking, savings and money market deposits","\u200b","","(1,184)","\u200b","","31,554","\u200b","","30,370","\u200b","","(435)","\u200b","","45,034","\u200b","","44,599"],["Time deposits","\u200b","","24,382","\u200b","","19,431","\u200b","","43,813","\u200b","","3,524","\u200b","","22,170","\u200b","","25,694"],["Customer repurchase agreements","\u200b","\u200b","(376)","\u200b","\u200b","1,866","\u200b","\u200b","1,490","\u200b","\u200b","(8)","\u200b","\u200b","2,104","\u200b","\u200b","2,096"],["Overnight borrowings","\u200b","","(5,385)","\u200b","","887","\u200b","","(4,498)","\u200b","","371","\u200b","","2,460","\u200b","","2,831"],["FHLB and other borrowings","\u200b","","16,452","\u200b","","76","\u200b","","16,528","\u200b","","5,608","\u200b","","291","\u200b","","5,899"],["Federal Reserve short-term borrowings","\u200b","\u200b","2,643","\u200b","\u200b","0","\u200b","\u200b","2,643","\u200b","\u200b","0","\u200b","\u200b","0","\u200b","\u200b","0"],["Subordinated notes payable","\u200b","","(38)","\u200b","","0","\u200b","","(38)","\u200b","","(115)","\u200b","","0","\u200b","","(115)"],["Total interest-bearing liabilities (2)","\u200b","","10,117","\u200b","","80,191","\u200b","","90,308","\u200b","","152","\u200b","","80,852","\u200b","","81,004"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest earnings (2)","\u200b","$","20,913","\u200b","$","(9,602)","\u200b","$","11,311","\u200b","$","(14,047)","\u200b","$","30,870","\u200b","$","16,823"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of such change in each component."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(2)","Changes due to volume and rate are computed from the respective changes in average balances and rates of the totals; they are not a summation of the changes of the components."]] [[/GREPCENT_TABLE]] 51 Table of Contents Noninterest Revenues The Company’s sources of noninterest revenues are of four primary types: 1) general banking services related to loans, including mortgage banking, deposits, customer interest rate swap fees, commercial real estate transaction advisory and placement services, and other core customer activities typically provided through the branch network and digital banking channels (performed by CBNA); 2) employee benefit trust, collective investment fund, transfer agency, actuarial, benefit plan administration and recordkeeping services (performed by BPAS and its subsidiaries); 3) wealth management services, comprised of trust services (performed by the Nottingham Trust division within CBNA), broker-dealer and investment advisory products and services (performed by Community Investment Services Inc. (“CISI”), OneGroup Wealth Partners, Inc. and The Carta Group, Inc.) and asset management services (performed by Nottingham Advisors, Inc.); and 4) insurance and risk management products and services (performed by OneGroup). Additionally, the Company has other transactions that impact noninterest revenues, including realized and unrealized gains or losses on investment securities and gains or losses on debt extinguishment. Table 5: Noninterest Revenues ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,","\u200b"],["(000\u2019s omitted except ratios)","","2024","","2023","","2022","\u200b"],["Employee benefit services","\u200b","$","130,981","\u200b","$","117,961","\u200b","$","115,408","\u200b"],["Insurance services","\u200b","\u200b","50,249","\u200b","\u200b","47,094","\u200b","\u200b","39,810","\u200b"],["Wealth management services","\u200b","\u200b","36,668","\u200b","\u200b","31,941","\u200b","\u200b","31,667","\u200b"],["Deposit service charges and fees","\u200b","","31,566","\u200b","","28,921","\u200b","","33,970","\u200b"],["Debit interchange and ATM fees","\u200b","\u200b","26,717","\u200b","\u200b","25,768","\u200b","\u200b","26,578","\u200b"],["Mortgage banking","\u200b","\u200b","4,421","\u200b","\u200b","595","\u200b","\u200b","390","\u200b"],["Other banking revenues","\u200b","","15,840","\u200b","","14,688","\u200b","","10,946","\u200b"],["Subtotal","\u200b","","296,442","\u200b","\u200b","266,968","\u200b","\u200b","258,769","\u200b"],["Loss on sales of investment securities","\u200b","\u200b","(487)","\u200b","\u200b","(52,329)","\u200b","\u200b","0","\u200b"],["Gain on debt extinguishment","\u200b","","0","\u200b","","242","\u200b","","0","\u200b"],["Unrealized gain (loss) on equity securities","\u200b","","1,231","\u200b","","(47)","\u200b","","(44)","\u200b"],["Total noninterest revenues","\u200b","$","297,186","\u200b","$","214,834","\u200b","$","258,725","\u200b"],["Noninterest revenues/total revenues","\u200b","\u200b","39.8","%","\u200b","32.9","%","\u200b","38.1","%"],["Operating noninterest revenues/operating revenues (FTE ) (non-GAAP) (1)","\u200b","","39.6","%","","37.7","%","\u200b","37.9","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Operating noninterest revenues, a non-GAAP measure, excludes loss on sales of investment securities, gain on debt extinguishment and unrealized gain (loss) on equity securities from total noninterest revenues. Operating revenues, a non-GAAP measure, is defined as net interest income on a FTE basis plus noninterest revenues, excluding loss on sales of investment securities, gain on debt extinguishment, and unrealized gain (loss) on equity securities. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures."]] [[/GREPCENT_TABLE]] ​ As displayed in Table 5, total noninterest revenues increased $82.4 million, or 38.3%, to $297.2 million in 2024 as compared to 2023 primarily due to revenue growth in all four of the Company’s business units and a $52.3 million pre-tax realized loss on the sale of certain available-for-sale securities in connection with a strategic balance sheet repositioning executed during the first quarter of 2023. Noninterest revenues for 2024 included a $1.2 million unrealized gain on equity securities primarily associated with the conversion of certain Visa Class B shares to Visa Class C shares and a $0.5 million realized loss on sales of investment securities associated with the sales of certain available-for-sale investment securities. Total operating noninterest revenues, a non-GAAP measure, increased $29.5 million, or 11.0%, to $296.4 million in 2024 as compared to 2023. The increase was comprised of increases in employee benefit services revenues, banking noninterest revenues, wealth management services revenues and insurance services revenues. Operating noninterest revenues, a non-GAAP measure, increased $8.2 million, or 3.2%, to $267.0 million in 2023 as compared to 2022. The increase was comprised of increases in insurance services revenues, employee benefit services revenues and wealth management services revenues, partially offset by a decrease in banking noninterest revenues. 52 Table of Contents Noninterest revenues as a percent of total revenues (defined as net interest income plus noninterest revenues) was 39.8% in 2024, an increase from 32.9% in 2023. Operating noninterest revenues as a percent of operating revenues (FTE basis), a non-GAAP measure, were 39.6% in 2024, an increase from 37.7% in the prior year. The current year increase was due to the 11.0% increase in operating noninterest revenues, a non-GAAP measure, as mentioned above that was larger than the 2.6% increase in fully tax-equivalent net interest income, a non-GAAP measure, driven by strong organic loan growth. The decrease in this ratio from 37.9% in 2022 to 37.7% in 2023 was due to a 4.0% increase in fully tax-equivalent net interest income, a non-GAAP measure, driven by a higher net interest margin and strong organic loan growth, while operating noninterest revenues, a non-GAAP measure, increased by the 3.2% mentioned above. Banking noninterest revenues, comprised of deposit service charges and fees, debit interchange and ATM fees, mortgage banking and other banking revenues, totaled $78.5 million in 2024, an increase of $8.6 million, or 12.3%, from the prior year. The increase was driven by increases in mortgage banking revenues ($3.8 million), deposit service charges and fees ($2.7 million), other banking revenues ($1.2 million) and debit interchange and ATM fees ($0.9 million). The increase in mortgage banking revenues reflected higher sales volumes of secondary market eligible residential mortgage loans and an increase in the value of mortgage servicing rights. The increases in other banking revenues were associated with higher customer interest rate swap fee revenues due to the recent implementation of this product offering and other commercial banking-related fees, including an increase in commercial real estate transaction advisory and placement revenues generated by Axiom which was acquired in March 2023. Banking noninterest revenues totaled $70.0 million in 2023, a decrease of $1.9 million, or 2.7%, from 2022. The decrease was driven by decreases in deposit service charges and fees ($5.0 million) and debit interchange and ATM fees ($0.8 million), partially offset by increases in other banking revenues ($3.7 million) and mortgage banking revenues ($0.2 million). The decrease in deposit service charges and fees was reflective of the Company’s implementation of certain deposit fee changes, including the elimination of nonsufficient and unavailable funds fees on personal accounts late in the fourth quarter of 2022. Debit interchange and ATM fees were unfavorably impacted by fluctuations in annual card-related promotional income, while other banking revenues benefitted from incremental revenues from the first quarter 2023 acquisition of Axiom. As disclosed in Table 5, noninterest revenue from financial services (noninterest revenues from employee benefit services, insurance services, and wealth management services) increased $20.9 million, or 10.6%, in 2024 to $217.9 million. Financial services revenues represented 73% of total noninterest revenues in 2024 compared to 92% of total noninterest revenues in 2023, which included the impact of the loss on sales of investment securities. Financial services revenues accounted for 74% of total operating noninterest revenues, a non-GAAP measure, in both 2024 and 2023. Employee benefit services generated revenue of $131.0 million in 2024 that reflected growth of $13.0 million, or 11.0%, primarily related to new business and increases in the total participants under administration, growth in asset-based fee revenues, resulting from market appreciation and the acquisition of certain assets of Creative Plan Designs Limited (“CPD”), a provider of employee benefit plan design, administration and consulting, on February 1, 2024. Ending employee benefit trust assets were $117.3 billion at December 31, 2024. Employee benefit services generated revenue of $118.0 million in 2023 that reflected growth of $2.6 million, or 2.2%, from 2022 primarily related to new business and a year-over-year increase in the total participants under administration, along with a modest increase from market appreciation. Employee benefit trust assets within the Company’s employee benefit services segment increased $17.3 billion to $124.8 billion at the end of 2023 as compared to 2022 due to the factors above. Insurance services revenues increased $3.2 million, or 6.7%, in 2024 due to organic and acquired growth in commissions revenues. Insurance services revenues increased $7.3 million, or 18.3%, in 2023 attributable to a strong premium market and organic expansion, along with growth resulting from acquisitions between the periods. Wealth management services revenues increased $4.7 million, or 14.8%, in 2024 as investment advisory customer accounts increased and more favorable investment market conditions drove an increase in the value of assets under management between the periods. Assets under management and administration within the wealth management businesses increased $1.4 billion to $13.2 billion at December 31, 2024 as compared to one year earlier, a new year-end record. Wealth management services revenues increased $0.3 million, or 0.9%, in 2023 as more favorable investment market conditions drove increases in assets under management between the periods. Assets under management and administration within the Company’s wealth management services segment were $11.8 billion at the end of 2023, an increase of $4.5 billion from year-end 2022. Assets under management and administration included approximately $3.3 billion and $3.1 billion of intercompany assets under management and administration at the end of 2024 and 2023, respectively, associated with certain employee benefit trust accounts. 53 Table of Contents Noninterest Expenses As shown in Table 6, noninterest expenses of $486.8 million in 2024 were $14.1 million, or 3.0%, higher than 2023, reflective of increases in salaries and employee benefits, data processing and communications expenses, occupancy and equipment expenses, business development and marketing expenses and acquisition expenses. These increases were partially offset by decreases in legal and professional fees, amortization of intangible assets, restructuring expenses, acquisition-related contingent consideration adjustments and litigation expenses. ​ Noninterest expenses of $472.7 million in 2023 were $48.4 million, or 11.4%, higher than 2022, reflective of an accrual associated with the expected settlement of a threatened collective and class action matter, an increase in salaries and employee benefits, primarily driven by merit and market-related increases in employee wages, higher employee medical expenses and certain executive retirement expenses, as well as increases in other expenses, acquisition-related contingent consideration adjustment, data processing and communications expenses, business development and marketing expenses, legal and professional fees, restructuring expenses and occupancy and equipment expenses. These increases were partially offset by decreases in acquisition expenses and amortization of intangible assets. The increase in other expenses included the impact of a higher FDIC insurance base assessment rate, an FDIC special assessment and elevated customer-related fraud losses. ​ Noninterest expenses as a percent of average assets for 2024 was 3.04%, a decrease of six basis points from 3.10% in 2023 and 31 basis points higher than 2.73% in 2022. Operating noninterest expenses (non-GAAP) as a percent of average assets, a non-GAAP measure, for 2024 was 2.95%, which was consistent with the 2023 level and 35 basis points higher than 2.60% in 2022. The changes in these ratios for 2024 were due to a 3.0% increase in noninterest expenses and a 5.4% increase in operating noninterest expenses, a non-GAAP measure, while average assets increased by 4.9%, primarily due to organic loan growth. The increases in these ratios for 2023 were due to a 11.4% increase in noninterest expenses and a 10.8% increase in operating noninterest expenses, a non-GAAP measure, while average assets declined by 2.1%, primarily due to the sales and maturities of certain lower-yielding available-for-sale investment securities. ​ The GAAP efficiency ratio expresses the level of noninterest expenses as a percentage of total revenues (net interest income plus total noninterest revenues). The Company also utilizes the operating efficiency ratio, a non-GAAP measure, which is a performance measurement tool widely used by banks and is defined by the Company as operating noninterest expenses, a non-GAAP measure, divided by fully-tax equivalent operating revenues, a non-GAAP measure. Lower ratios correlate to better operating efficiency. ​ The 2024 GAAP efficiency ratio of 65.2% decreased 7.3 percentage points from the 2023 GAAP efficiency ratio as noninterest expenses increased 3.0% while total revenues increased 14.4% including the impact of the loss on sales of investment securities in 2023. The 2023 GAAP efficiency ratio of 72.5% increased 10.0 percentage points from the 2022 GAAP efficiency ratio as noninterest expenses increased 11.4% while total revenues decreased 4.0% primarily as a result of the loss on sales of investment securities in connection with the Company’s first quarter balance sheet repositioning. The 2024 operating efficiency ratio, a non-GAAP measure, of 63.0% was 0.2 percentage points lower than the 2023 non-GAAP operating efficiency ratio of 63.2% as the 5.4% increase in operating noninterest expenses, a non-GAAP measure, grew at a slower pace than the 5.8% increase in fully tax-equivalent operating revenues, a non-GAAP measure, comprised of a 2.6% increase in fully tax-equivalent net interest income, a non-GAAP measure and an 11.0% increase in operating noninterest revenues, a non-GAAP measure. The 2023 non-GAAP operating efficiency ratio of 63.2% was 4.0 percentage points higher than the 2022 non-GAAP operating efficiency ratio of 59.2% as the 10.8% increase in operating noninterest expenses, a non-GAAP measure, grew at a faster pace than the 3.7% increase in fully tax-equivalent operating revenues, a non-GAAP measure, comprised of a 4.0% increase in fully tax-equivalent net interest income, a non-GAAP measure and a 3.2% increase in operating noninterest revenues, a non-GAAP measure. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures. ​ 54 Table of Contents Table 6: Noninterest Expenses ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,","\u200b"],["(000\u2019s omitted)","","2024","","2023","","2022","\u200b"],["Salaries and employee benefits","\u200b","$","300,779","\u200b","$","281,803","\u200b","$","257,339"],["Data processing and communications","\u200b","","61,843","\u200b","","57,585","\u200b","\u200b","54,099","\u200b"],["Occupancy and equipment","\u200b","","43,658","\u200b","","42,550","\u200b","\u200b","42,413","\u200b"],["Business development and marketing","\u200b","","16,059","\u200b","","15,731","\u200b","\u200b","13,095","\u200b"],["Legal and professional fees","\u200b","","15,323","\u200b","","15,921","\u200b","\u200b","14,018","\u200b"],["Amortization of intangible assets","\u200b","","14,259","\u200b","","14,511","\u200b","\u200b","15,214","\u200b"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","244","\u200b","\u200b","3,280","\u200b","\u200b","(300)","\u200b"],["Acquisition expenses","\u200b","","213","\u200b","","63","\u200b","\u200b","5,021","\u200b"],["Restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","1,163","\u200b","\u200b","0","\u200b"],["Litigation accrual","\u200b","\u200b","138","\u200b","\u200b","5,800","\u200b","\u200b","0","\u200b"],["Other","\u200b","","34,309","\u200b","","34,278","\u200b","\u200b","23,369","\u200b"],["Total noninterest expenses","\u200b","$","486,825","\u200b","$","472,685","\u200b","$","424,268","\u200b"],["Noninterest expenses/average assets","\u200b","\u200b","3.04","%","\u200b","3.10","%","\u200b","2.73","%"],["Operating noninterest expenses(1) /average assets (non-GAAP)","\u200b","","2.95","%","","2.95","%","\u200b","2.60","%"],["Efficiency ratio (GAAP)","\u200b","\u200b","65.2","%","\u200b","72.5","%","\u200b","62.5","%"],["Operating efficiency ratio (non-GAAP)(2)","\u200b","","63.0","%","","63.2","%","\u200b","59.2","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Operating noninterest expenses, a non-GAAP measure, is calculated as total noninterest expenses less acquisition expenses, acquisition-related contingent consideration adjustment, litigation accrual, restructuring expenses and amortization of intangible assets. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(2)","Operating efficiency ratio, a non-GAAP measure, is calculated as operating noninterest expenses as defined in footnote (1) above divided by net interest income on a FTE basis plus noninterest revenues excluding loss on sales of investment securities, gain on debt extinguishment and unrealized gain (loss) on equity securities. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures."]] [[/GREPCENT_TABLE]] Salaries and employee benefits increased $19.0 million, or 6.7%, in 2024, driven by merit and market-related increases in employee wages, higher medical benefit costs and acquisitions between the periods which increased the number of employees in the financial services businesses, partially offset by the impact of the previously announced retail banking customer service workforce optimization plan. Salaries and employee benefits increased $24.5 million, or 9.5%, in 2023, driven by merit and market-related increases in employee wages, higher employee medical expenses and certain executive retirement expenses. There was a net decrease in full-time equivalent employees during 2023, primarily due to the impact of the fourth quarter 2023 retail workforce optimization, which resulted in $1.2 million of related severance payments recognized as restructuring expenses. Total full-time equivalent staff at the end of 2024 was 2,698 compared to 2,669 at December 31, 2023 and 2,803 at the end of 2022. Total non-personnel, noninterest expenses, excluding amortization of intangible assets, acquisition-related expenses, restructuring expenses and litigation accrual, increased $5.1 million, or 3.1%, in 2024, reflective of increases in data processing and communications expenses, occupancy and equipment expenses, business development and marketing expenses, partially offset by a decrease in legal and professional fees. The increase in data processing and communications expenses is reflective of the Company’s continued investment in customer-facing and back-office technologies including additional technology to enhance its detection and prevention of customer payment-related fraud. Occupancy and equipment expenses increased due to increased rent paid on leased properties, partially offset by the effects of branch consolidations undertaken in 2023 and 2024. Business development and marketing expenses increased due to the Company’s investment in digital marketing initiatives and higher levels of targeted advertisements intended to generate deposit inflows. 55 Table of Contents Total non-personnel, noninterest expenses, excluding acquisition-related expenses, restructuring expenses and litigation accrual, increased $18.4 million, or 11.3%, in 2023, reflective of increases in other expenses, data processing and communications expenses, business development and marketing expenses, legal and professional fees and occupancy and equipment expenses, partially offset by a decrease in amortization of intangible assets. Other expenses were up $10.5 million, or 66.8%, in 2023 primarily driven by higher FDIC insurance expenses due to a higher base assessment rate and a $1.5 million accrual for a special assessment, the impact of elevated customer-related fraud losses and a reduced pension-related benefit. The Company is investing in additional technology to enhance its detection and prevention of customer payment-related fraud. The increase in data processing and communications expenses is reflective of the Company’s continued investment in customer-facing and back-office digital technologies. Business development and marketing expenses increased due to the Company’s investment in digital marketing initiatives and higher levels of targeted advertisements intended to generate deposit inflows. Legal and professional fees were up primarily as a result of legal fees associated with various matters, including the lawsuit previously mentioned. Occupancy and equipment expenses increased due to inflationary pressures, partially offset by the effects of branch consolidations undertaken in 2022 and 2023. Acquisition-related expenses for 2023 totaled $3.3 million, primarily comprised of acquisition-related contingent consideration adjustments associated with potential future contingent consideration payments for the FBD and TGA acquisitions completed in 2021. Acquisition-related expenses for 2022 totaled $4.7 million, comprised of $5.0 million associated with the Elmira acquisition that was completed during the second quarter and a $0.3 million benefit from acquisition-related contingent consideration associated with potential future payments for the FBD and TGA acquisitions completed in 2021. Income Taxes The Company estimates its income tax expense based on the amount it expects to owe the respective taxing authorities, plus the impact of deferred tax items. Taxes are discussed in more detail in Note I of the Consolidated Financial Statements beginning on page 121. Accrued taxes represent the net estimated amount due or to be received from taxing authorities. In estimating accrued taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions, taking into account statutory, judicial and regulatory guidance in the context of the Company’s tax position. If the final resolution of taxes payable differs from its estimates due to regulatory determination or legislative or judicial actions, adjustments to tax expense may be required. The effective income tax rate for 2024 was 22.9%, compared to 21.6% in 2023 and 21.7% in 2022. The increase in the effective income tax rate for 2024 compared to the effective tax rate for 2023 is primarily attributable to an increase in pre-tax income due to the realized losses on sales of investment securities in 2023 as well as a higher proportion of income from fully taxable sources. The decrease in the effective income tax rate for 2023, compared to the effective tax rate for 2022, is primarily attributable to a decrease in pre-tax income due to the 2023 realized loss on sales of investment securities. Excluding the impact of tax benefits related to stock-based compensation activity and amortization of income tax credit investments, the effective tax rate for full year 2024 was 19.0%, down from 21.0% for full year 2023, driven by the recognition of certain solar energy income tax credits during the fourth quarter of 2024. Shareholders’ Equity and Regulatory Capital Shareholders’ equity ended 2024 at $1.76 billion, up $64.9 million, or 3.8%, from the end of 2023. This increase reflects net income of $182.5 million, stock-based compensation of $8.3 million, the issuance of shares through employee stock plans of $7.1 million and a decrease in accumulated other comprehensive loss of $8.8 million, partially offset by common stock dividends declared of $96.0 million and common stock repurchased of $45.8 million. The change in accumulated other comprehensive loss was primarily driven by a positive $9.6 million adjustment in the overfunded status of the Company’s employee retirement plans, offset by $0.8 million of additional other comprehensive loss related to the Company’s available-for-sale investment portfolio. The change in the other comprehensive loss related to the Company’s available-for-sale investment portfolio includes a net decrease in the after-tax market value adjustment on the available-for-sale investment portfolio due to movements in medium to long-term interest rates and the volume and rates associated with the security purchases, sales and maturities that occurred in 2024. Shares outstanding decreased by 0.7 million during the year due to the repurchase of 1.0 million shares during 2024, partially offset by share issuances under employee stock plans and deferred compensation arrangements. 56 Table of Contents Shareholders’ equity ended 2023 at $1.70 billion, up $146.2 million, or 9.4%, from the end of 2022. This increase reflects net income of $131.9 million, stock-based compensation of $9.3 million, the issuance of shares through employee stock plans of $1.0 million and a decrease in accumulated other comprehensive loss of $129.5 million, partially offset by common stock dividends declared of $95.5 million and common stock repurchased of $30.0 million. The change in accumulated other comprehensive loss was primarily driven by $125.4 million of other comprehensive income related to the Company’s available-for-sale investment portfolio, including a net decrease in the after-tax market value adjustment on the available-for-sale investment portfolio due to movements in medium to long-term interest rates, as well as the volume and rates associated with the security purchases, sales and maturities that occurred in 2023 and the recognition of the loss on sales of available-for-sale investment securities related to the Company’s first quarter balance sheet repositioning. The change in accumulated other comprehensive loss also reflected a positive $4.1 million adjustment in the overfunded status of the Company’s employee retirement plans. Shares outstanding decreased by 0.4 million during the year due to the repurchase of 0.6 million shares during 2023, partially offset by share issuances under employee stock plans and deferred compensation arrangements. The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s dividend paying ability and financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets and certain liabilities and off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. The Company and the Bank are required to maintain a “capital conservation buffer,” composed entirely of common equity Tier 1 capital, in addition to minimum risk-based capital ratios. The required capital conservation buffer is 2.5% as of December 31, 2024, 2023 and 2022. Therefore, to satisfy both the minimum risk-based capital ratios and the capital conservation buffer as of December 31, 2024, 2023 and 2022, the Company and the Bank must maintain: (i)  Common equity Tier 1 capital to total risk-weighted assets (“Common equity tier 1 capital ratio”) of at least 7.0%, (ii) Tier 1 capital to total risk-weighted assets (“Tier 1 risk-based capital ratio”) of at least 8.5%, and (iii)Total capital (Tier 1 capital plus Tier 2 capital) to total risk-weighted assets (“Total risk-based capital ratio”) of at least 10.5%. In addition, the Company and Bank must maintain a ratio of ending Tier 1 capital to adjusted quarterly average assets (“Tier 1 leverage ratio”) of at least 5.0% to be considered “well capitalized” under the regulatory framework for prompt corrective action. As of December 31, 2024, 2023 and 2022, the Company and Bank meet all applicable capital adequacy requirements to be considered “well capitalized”. As of December 31, 2024, 2023 and 2021, the regulatory capital ratios for the Company and Bank are presented in Table 7 below. Table 7: Regulatory Ratios [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31, 2024","\u200b","December 31, 2023","","December 31, 2022"],["\u200b","\u200b","Community Financial","\u200b","Community","\u200b","Community Financial","\u200b","Community","\u200b","Community Financial","\u200b","Community","\u200b"],["\u200b","","System, Inc.","","Bank, N.A.","","System, Inc.","","Bank, N.A.","","System, Inc.","","Bank, N.A.","\u200b"],["Tier 1 leverage ratio","\u200b","9.19","%","7.69","%","9.34","%","7.70","%","8.79","%","7.26","%"],["Common equity tier 1 capital ratio","","14.23","%","11.96","%","14.75","%","12.11","%","15.71","%","12.86","%"],["Tier 1 risk-based capital ratio","","14.23","%","11.96","%","14.76","%","12.11","%","15.71","%","12.86","%"],["Total risk-based capital ratio","","15.01","%","12.74","%","15.46","%","12.82","%","16.40","%","13.56","%"]] [[/GREPCENT_TABLE]] ​ 57 Table of Contents The Company’s tier 1 leverage ratio, a primary measure for which regulators have established a 5% minimum for an institution to be considered “well-capitalized,” decreased 15 basis points from the prior year to end the year at 9.19%. The decrease in the tier 1 leverage ratio as compared to 2023 was the result of an increase in average assets, excluding intangibles and the market value adjustment on available-for-sale investment securities, of 5.4%, primarily due to organic loan growth, while shareholders’ equity, excluding intangibles and other comprehensive income or loss items, increased 3.7%, as the impact of net earnings retention outweighed share repurchases during the year. For additional financial information on the Company’s regulatory capital, refer to Note O – Regulatory Matters in the Notes to Consolidated Financial Statements. The shareholders’ equity-to-assets ratio was 10.76% at the end of 2024 compared to 10.92% at the end of 2023. The decrease was due to assets increasing by 5.3% driven primarily by organic loan growth, while shareholders’ equity increased 3.8%, as the impact of net earnings retention outweighed share repurchases during the year. The tangible equity-to-assets ratio, a non-GAAP and regulatory reporting measure, was 5.83% at the end of 2024 versus 5.75% one year earlier. See Table 20 for Reconciliation of GAAP to Non-GAAP Measures. The increase was due to tangible common shareholders’ equity increasing by 7.2% in 2024 primarily due to a $50.6 million increase in net income and an $8.8 million decrease in accumulated other comprehensive loss, while tangible assets increased 5.6% from the prior year, reflective of organic loan growth. The Company manages organic and acquired growth in a manner that enables it to continue to maintain and grow its capital base over time and maintain its ability to take advantage of future strategic growth opportunities. Cash dividends declared on common stock in 2024 of $96.0 million represented an increase of 0.5% over the prior year. This growth was a result of a $0.04 increase in dividends per share for the year, partially offset by a 1.2% decrease in outstanding shares. Dividends per share for 2024 of $1.82 represents a 2.2% increase from $1.78 in 2023, a result of quarterly dividends per share increasing from $0.44 to $0.45 in the third quarter of 2023 and from $0.45 to $0.46 in the third quarter of 2024. The 2024 increase in quarterly dividends marked the 32nd consecutive year of dividend increases for the Company. The dividend payout ratio for 2024 was 52.6% compared to 72.4% in 2023, and 49.9% in 2022. The dividend payout ratio decreased during 2024 as dividends declared increased 0.5% while net income increased 38.3% from 2023, primarily driven by the loss on sales of investment securities recognized in the first quarter of 2023. The Company’s ability to pay dividends to its shareholders is subject to laws and regulations imposing restrictions on the amount of dividends that may be declared and paid. Dividend payments by the Company are dependent on a number of factors, including the earnings and financial condition of the Company and the Bank and the ability of the Company to receive dividends from the Bank, and are subject to the limitations referred to in Note O: Regulatory Matters. Liquidity Liquidity risk is a measure of the Company’s ability to raise cash when needed at a reasonable cost and minimize any loss. The Company maintains appropriate liquidity levels in both normal operating conditions as well as stressed environments. The Company must be capable of meeting all obligations to its customers at any time and, therefore, the active management of its liquidity position remains an important management objective. The Bank has appointed the Asset Liability Committee (“ALCO”) to manage liquidity risk using policy guidelines and limits on indicators of potential liquidity risk. The indicators are monitored using a scorecard with three risk level limits. These risk indicators measure core liquidity and funding needs, capital at risk and change in available funding sources. The risk indicators are monitored using such metrics as the core basic surplus ratio, unencumbered securities to average assets, free loan collateral to average assets, loans to deposits, deposits to total funding and borrowings to total funding ratios. Given the uncertain nature of the Company’s customers’ demands, as well as the Company’s desire to take advantage of earnings enhancement opportunities, the Company must have adequate sources of on and off-balance sheet funds available that can be utilized when needed. Accordingly, in addition to the liquidity provided by balance sheet cash flows, liquidity must be supplemented with additional sources such as borrowings from the FHLB and the FRB and credit lines from correspondent banks. Other funding alternatives may also be appropriate from time to time, including wholesale and retail repurchase agreements, large certificates of deposit and the brokered CD market. The primary sources of funds are deposits, which totaled $13.44 billion at December 31, 2024. The primary sources of non-deposit funds are customer repurchase agreements and FHLB and FRB overnight advances and term borrowings. At December 31, 2024, there were $261.6 million of customer repurchase agreements, $118.0 million of overnight borrowings, and $610.6 million of FHLB term borrowings outstanding. 58 Table of Contents The Company’s primary sources of available liquidity include unrestricted cash and cash equivalents, borrowing capacity at the FHLB and FRB, as well as net unpledged investment securities that could be sold, subject to market conditions, or used to collateralize additional funding. Table 13 below details the available sources of liquidity at December 31, 2024. In addition, there was $25.0 million available in an unsecured line of credit with a correspondent bank at December 31, 2024. The Company’s sources of immediately available liquidity of $5.77 billion as of December 31, 2024 represent approximately 246% of the Company’s estimated uninsured deposits (deposits in excess of FDIC limits), net of collateralized and intercompany deposits (“net estimated uninsured deposits”), estimated to be approximately $2.35 billion. The increase in the Company’s sources of immediately available liquidity from the end of 2023 was primarily due to the Company pledging additional loans with the FRB. Table 8: Sources of Liquidity [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000's omitted)","","2024","","2023"],["Unrestricted cash and cash equivalents","\u200b","$","191,894","\u200b","$","190,962","\u200b"],["FHLB borrowing capacity","\u200b","","1,185,087","\u200b","","1,370,085","\u200b"],["FRB borrowing capacity","\u200b","","2,670,278","\u200b","","1,106,806","\u200b"],["Net unpledged investment securities","\u200b","","1,726,680","\u200b","","2,165,590","\u200b"],["Total sources of liquidity","\u200b","$","5,773,939","\u200b","$","4,833,443","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net estimated uninsured deposits","\u200b","$","2,347,825","\u200b","$","2,184,635","\u200b"],["Total sources of liquidity/net estimated uninsured deposits","\u200b","\u200b","246","%","\u200b","221","%"]] [[/GREPCENT_TABLE]] ​ The Company’s primary approach to measuring short-term liquidity is known as the Basic Surplus/Deficit model. It is used to calculate liquidity over two time periods: first, the amount of cash that could be made available within 30 days (calculated as liquid assets less estimated short-term liabilities as a percentage of average assets); and second, a projection of subsequent cash availability over an additional 60 days. As of December 31, 2024, this ratio was 8.2% for the 30-day period and 7.7% for the 90-day period, excluding the Company’s capacity to borrow additional funds from the FHLB and other sources. This compares to a target minimum ratio of 7.5% for both the 30-day and 90-day period ratio. Including the added FHLB & FRB borrowing capacity, the 30-day and 90-day period ratios were 31.8% and 31.3%, respectively. This is considered to be a sufficient amount of liquidity based on the Company’s internal policy requirements of 15.0%. To measure intermediate risk over the next twelve months, the Company reviews a sources and uses projection. As of December 31, 2024, there is sufficient liquidity available during the next year to cover projected cash outflows. In addition, stress tests on the cash flows are performed for various scenarios ranging from high probability events with a low impact on the liquidity position to low probability events with a high impact on the liquidity position. The results of the stress tests as of December 31, 2024 indicate the Company has sufficient sources of liquidity for the next year in all simulated stressed scenarios. To measure longer-term liquidity, a baseline projection of growth in interest-earning assets and interest-bearing liabilities for five years is made to reflect how liquidity levels could change over time. This five-year measure reflects ample liquidity for loan and other asset growth over the next five years. 59 Table of Contents The possibility of a funding crisis exists at all financial institutions. A funding crisis would most likely result from a shock to the financial system which disrupts orderly short-term funding operations or from a significant tightening of monetary policy that limits the national money supply. Accordingly, management has addressed this issue by formulating a Liquidity Contingency Plan, which has been reviewed and approved by both the Company’s Board of Directors (the “Board”) and the Company’s ALCO. The plan addresses the actions that the Company would take in response to both a short-term and long-term funding crisis. Triggers within the plan and liquidity risk monitor are not by themselves definitive indicators of insufficient liquidity, but rather a mechanism for management to monitor conditions and possibly provide advance warning which could avert or reduce the impact of a crisis. Liquidity triggers are set based on a variety of factors, including Company history, trends, and current operating performance, industry observations, and, as warranted, changes in internal and external economic factors. Indicators include: core liquidity and funding needs such as the core basic surplus, unencumbered securities to average assets, and free FHLB and FRB loan collateral to average assets; heightened funding needs indicators such as average loans to average deposits, average governmental and nongovernmental deposits to total funding, and average borrowings to total funding; capital at risk indicators including regulatory ratios; asset quality indicators; and decrease in funds availability indicators which are a combination of internal and external factors such as increased restrictions on borrowing or downturns in the credit market. The Company has established three risk levels for these liquidity triggers that inform the response based on the severity of the circumstances. Responses vary from an assessment of possible funding deficiencies with no impact on normal business operations to immediate action required due to impending funding problems. For more information regarding the risk factor associated with the possibility of a funding crisis, refer to the discussion under the heading “Item 1A. Risk Factors” beginning on page 17. Intangible Assets The changes in intangible assets by reportable segment for the year ended December 31, 2024 are summarized as follows: Table 9: Intangible Assets ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","\u200b","\u200b","","Additions /","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["\u200b","\u200b","Balance at","\u200b","Adjustments /","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","","Balance at"],["(000\u2019s omitted)","","December 31, 2023","","Transfers(1)","","Amortization","","Impairment","","December 31, 2024"],["Banking and Corporate Segment","\u200b","\u200b","","","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Goodwill","\u200b","$","732,598","\u200b","$","0","\u200b","$","0","\u200b","$","0","\u200b","$","732,598"],["Core deposit intangibles","\u200b","","8,159","\u200b","","0","\u200b","","3,011","\u200b","","0","\u200b","","5,148"],["Other intangibles","\u200b","\u200b","958","\u200b","\u200b","0","\u200b","\u200b","234","\u200b","\u200b","0","\u200b","\u200b","724"],["Total Banking and Corporate Segment","\u200b","","741,715","\u200b","","0","\u200b","","3,245","\u200b","","0","\u200b","","738,470"],["Employee Benefit Services Segment","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","","\u200b","","\u200b"],["Goodwill","\u200b","","85,384","\u200b","","3,909","\u200b","","0","\u200b","","0","\u200b","","89,293"],["Other intangibles","\u200b","","26,883","\u200b","","3,332","\u200b","","6,901","\u200b","","0","\u200b","","23,314"],["Total Employee Benefit Services Segment","\u200b","","112,267","\u200b","","7,241","\u200b","","6,901","\u200b","","0","\u200b","","112,607"],["Insurance Services Segment","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b","","","\u200b","","\u200b"],["Goodwill","\u200b","","23,976","\u200b","","3,920","\u200b","","0","\u200b","","0","\u200b","","27,896"],["Other intangibles","\u200b","","14,430","\u200b","","6,848","\u200b","","3,390","\u200b","","0","\u200b","","17,888"],["Total Insurance Services Segment","\u200b","","38,406","\u200b","","10,768","\u200b","","3,390","\u200b","","0","\u200b","","45,784"],["Wealth Management Services Segment","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Goodwill","\u200b","\u200b","3,438","\u200b","\u200b","0","\u200b","\u200b","0","\u200b","\u200b","0","\u200b","\u200b","3,438"],["Other intangibles","\u200b","\u200b","2,161","\u200b","\u200b","(266)","\u200b","\u200b","723","\u200b","\u200b","0","\u200b","\u200b","1,172"],["Total Wealth Management Segment","\u200b","\u200b","5,599","\u200b","\u200b","(266)","\u200b","\u200b","723","\u200b","\u200b","0","\u200b","\u200b","4,610"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total","\u200b","$","897,987","\u200b","$","17,743","\u200b","$","14,259","\u200b","$","0","\u200b","$","901,471"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Includes additions to goodwill of $8.3 million and other intangibles of $12.5 million for the year ended December 31, 2024."]] [[/GREPCENT_TABLE]] ​ 60 Table of Contents Intangible assets at the end of 2024 totaled $901.5 million, an increase of $3.5 million from the prior year due to the addition of $8.3 million of goodwill and $12.3 million of other intangibles arising from acquisition activity, partially offset by $14.3 million of amortization during the year and $2.8 million related to the sale of a customer list to a former employee. The additional goodwill and other intangibles recorded in 2024 resulted from the OneGroup and BPA acquisitions during 2024. Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. Goodwill at December 31, 2024 totaled $853.2 million, comprised of $732.6 million related to banking acquisitions and $120.6 million arising from the acquisition of financial services businesses. Goodwill is subject to periodic impairment analysis to determine whether the carrying value of the identified businesses exceeds their fair value, which would necessitate a write-down of goodwill. The Company completed its qualitative goodwill impairment analyses as of October 1, 2024 and determined that no adjustments were necessary for the banking or financial services businesses. The qualitative analysis included assessments of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events and changes in share price, as well as analyzing previous quantitative goodwill impairment analyses performed as of October 1, 2023. The Company determined that the inputs, assumptions and conclusions reached remained appropriate for the purpose of the 2024 qualitative analysis, and as it was determined that it was more likely than not that no impairment existed, and therefore a quantitative analysis for 2024 was not necessary. Furthermore, during 2024, 2023 and 2022, the Company performed a quarterly analysis to determine if triggering events occurred that would necessitate an interim qualitative or quantitative assessment of goodwill or other intangible impairment. No triggering event or impairment was noted during these interim analyses. Core deposit intangibles represent the value of acquired non-time deposits in excess of funding that could have been obtained in the capital markets. Core deposit intangibles are amortized on an accelerated basis over eight years. The recognition of customer relationship intangibles was determined based on a methodology that calculates the present value of the projected future net income derived from the acquired customer base. These customer relationship intangibles are being amortized on an accelerated basis over periods ranging from eight to twelve years. Loans Gross loans outstanding of $10.43 billion as of December 31, 2024 increased $727.8 million, or 7.5%, compared to December 31, 2023, driven by increases in all loan categories due to net organic growth. The loan-to-deposit ratio was 77.6% as of December 31, 2024 compared to 75.1% at December 31, 2023. The increase in the loan-to-deposit ratio was driven by the aforementioned organic loan growth while ending deposits increased $513.6 million, or 4.0%. Gross loans outstanding of $9.70 billion as of December 31, 2023 increased $895.2 million, or 10.2%, compared to December 31, 2022, driven by increases in all loan categories due to net organic growth. The compounded annual growth rate (“CAGR”) for the Company’s total loan portfolio between 2021 and 2024 was 12.3%. The greatest overall expansion occurred in consumer indirect at a 14.1% CAGR, followed by business lending, which grew at a 13.6% CAGR, consumer mortgage at a 10.9% CAGR, consumer direct at a 7.7% CAGR, and home equity at a 6.2% CAGR. The Company’s loan growth over past three years was primarily organic. The weighting of the components of the Company’s loan portfolio enables it to be highly diversified. Approximately 57% of loans outstanding at the end of 2024 were made to consumers borrowing on an installment, line of credit or residential mortgage loan basis while 43% of loans outstanding at the end of 2024 were associated with business lending. 61 Table of Contents Mortgages on commercial property combined with general-purpose business lending to commercial, industrial, non-profit and governmental customers and vehicle dealer floor plan financing is characterized as the Company’s business lending activity. The total business lending portfolio increased $420.8 million, or 10.3%, in 2024 due to net organic growth. During 2024, business non-real estate loans, including commercial and industrial lending, increased $140.6 million, or 14.0%, owner-occupied commercial real estate (“CRE”) increased $112.0 million, or 14.9%, multifamily increased $104.3 million, or 16.8%, and non-owner occupied CRE increased $63.9 million, or 3.7%. While certain macroeconomic concerns still persist related to non-owner occupied and multifamily commercial real estate, the Company’s exposure to these portfolios remains diverse both geographically and by property type, and relatively low at 16% of total assets, 24% of total loans and 198% of total bank-level regulatory capital. Commercial real estate lending represents 74.7% of the total business lending portfolio at December 31, 2024 while business non-real estate lending represents the remaining 25.3% of total business lending. The Company’s largest non-owner occupied commercial real estate lending concentration by property type is multifamily at 21.5% of total CRE lending, followed by office and commercial construction at 11.7% and 11.0%, respectively. The Company’s largest owner-occupied lending concentration by industry is retail trade at 8.7% of total CRE lending, followed by arts, entertainment and recreation at 2.6%, and health care and social assistance at 2.5%. These collateral and industry statistics combined with no metropolitan statistical area (“MSA”) accounting for more than 14% of the CRE portfolio and a very low level of commercial real estate lending being conducted in major metropolitan areas, demonstrate the Company’s diversity in the business lending portfolio, as there are no significant property type, industry or geographic concentrations. See Table 10 below for concentrations of CRE lending by borrower type and Table 11 below for concentrations of CRE by property location. The business loan balance increases are reflective of continued high demand for multi-family housing, expansion of internal resources and proactive business development and pricing in the Company’s market areas, as well as the Company’s strong liquidity profile relative to competitors that creates opportunities to gain market share. The Company strives to generate growth in its business portfolio in a manner that adheres to its goals of maintaining strong asset quality and producing profitable margins. The Company intends the composition of its growth in its business lending portfolio over 2025 to be proportionally higher for business non-real estate lending than commercial real estate lending compared to what was experienced by the Company over the past several years, in order to keep CRE loans’ share of the total business portfolio relatively constant. The Company continues to invest in additional personnel, technology and business development resources to further strengthen its capabilities in this important product category. To assist business lending customers in managing their interest rate risk, the Company enters into interest rate swaps which have associated interest rate and credit risk; for additional detail on the Company’s use of interest rate swaps, see Note R beginning on page 144 of this Form 10-K. 62 Table of Contents The following table presents the concentration by borrower type of the Company’s CRE loan balances as of December 31, 2024 and 2023: Table 10: Concentrations of CRE Lending by Borrower Type ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31, 2024","\u200b","December 31, 2023","\u200b"],["\u200b","\u200b","Amortized","\u200b","Percentage of","","Amortized","\u200b","Percentage of","\u200b"],["(000\u2019s omitted, except percentages)","","Cost","","Total","","Cost","","Total","\u200b"],["Multifamily and non-owner occupied CRE by property type:","\u200b","\u200b","","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Multifamily","\u200b","$","724,114","","21.5","%","$","619,794","\u200b","20.0","%"],["Commercial Construction","\u200b","","395,482","","11.7","%","\u200b","342,926","\u200b","11.1","%"],["Office","\u200b","","368,387","","11.0","%","\u200b","342,881","\u200b","11.1","%"],["Lodging","\u200b","","336,221","","10.0","%","\u200b","315,066","\u200b","10.2","%"],["Retail","\u200b","","256,351","","7.6","%","\u200b","262,545","\u200b","8.5","%"],["Other Lessors of CRE","\u200b","","200,215","","6.0","%","\u200b","244,986","\u200b","7.9","%"],["Warehouse/Industrial","\u200b","","149,722","","4.5","%","\u200b","129,022","\u200b","4.2","%"],["Nursing/Assisted Living","\u200b","","56,159","","1.7","%","\u200b","60,925","\u200b","2.0","%"],["Residential Construction","\u200b","","4,278","","0.1","%","\u200b","4,480","\u200b","0.1","%"],["All Other","\u200b","","8,284","","0.2","%","\u200b","8,367","\u200b","0.4","%"],["Total multifamily and non-owner occupied CRE","\u200b","","2,499,213","","74.3","%","\u200b","2,330,992","\u200b","75.5","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Owner-occupied CRE by industry:","\u200b","","","","","\u200b","\u200b","\u200b","\u200b","","\u200b"],["Retail Trade","\u200b","","293,208","","8.7","%","\u200b","220,379","\u200b","7.1","%"],["Arts, Entertainment and Recreation","\u200b","\u200b","87,709","\u200b","2.6","%","\u200b","46,386","\u200b","1.5","%"],["Health Care and Social Assistance","\u200b","","85,151","","2.5","%","\u200b","91,032","\u200b","3.0","%"],["Real Estate Rental and Leasing","\u200b","","81,802","","2.4","%","\u200b","78,931","\u200b","2.6","%"],["Other Services","\u200b","","81,688","","2.4","%","\u200b","72,325","\u200b","2.3","%"],["Agriculture and Forestry","\u200b","\u200b","51,602","\u200b","1.5","%","\u200b","52,546","\u200b","1.7","%"],["Manufacturing","\u200b","","49,558","","1.5","%","\u200b","54,178","\u200b","1.8","%"],["Accommodation and Food Services","\u200b","","39,385","","1.2","%","\u200b","40,101","\u200b","1.3","%"],["Wholesale Trade","\u200b","","25,312","","0.8","%","\u200b","23,975","\u200b","0.8","%"],["Construction","\u200b","","16,791","","0.5","%","\u200b","16,162","\u200b","0.5","%"],["Transportation and Warehousing","\u200b","","11,547","","0.3","%","\u200b","11,385","\u200b","0.4","%"],["Professional, Scientific and Technical Services","\u200b","","7,603","","0.2","%","\u200b","9,244","\u200b","0.3","%"],["Educational Services","\u200b","","4,618","","0.1","%","\u200b","4,684","\u200b","0.2","%"],["All Other","\u200b","","28,809","","1.0","%","\u200b","31,446","\u200b","1.0","%"],["Total owner occupied CRE","\u200b","","864,783","","25.7","%","\u200b","752,774","\u200b","24.5","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total CRE","\u200b","$","3,363,996","","100.0","%","$","3,083,766","\u200b","100.0","%"]] [[/GREPCENT_TABLE]] ​ 63 Table of Contents The following table presents the geographic concentrations of the Company’s CRE loan balances by property location (MSA) as of December 31, 2024 and 2023: Table 11: Concentrations of CRE by Property Location ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2024","\u200b","Multifamily CRE","\u200b","Owner occupied CRE","\u200b","Non-owner occupied CRE","\u200b","Total CRE","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","\u200b","Percentage","\u200b"],["\u200b","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b"],["(000\u2019s omitted, except percentages)","","Cost","","CRE","","Cost","","CRE","","Cost","","CRE","","Cost","","CRE"],["MSA:","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b"],["Albany-Schenectady-Troy, NY","\u200b","$","104,274","\u200b","3.1","%","$","104,162","\u200b","3.1","%","$","250,019","\u200b","7.4","%","$","458,455","\u200b","13.6","%"],["Burlington-South Burlington, VT","\u200b","\u200b","172,602","\u200b","5.1","%","\u200b","38,500","\u200b","1.1","%","\u200b","153,102","\u200b","4.6","%","\u200b","364,204","\u200b","10.8","%"],["Rochester, NY","","\u200b","30,391","","0.9","%","\u200b","101,207","","3.0","%","\u200b","144,261","","4.3","%","\u200b","275,859","","8.2","%"],["Buffalo-Cheektowaga, NY","","\u200b","37,587","","1.1","%","\u200b","59,919","","1.8","%","\u200b","172,484","","5.1","%","\u200b","269,990","","8.0","%"],["Syracuse, NY","","\u200b","12,372","","0.4","%","\u200b","71,519","","2.1","%","\u200b","145,796","","4.3","%","\u200b","229,687","","6.8","%"],["Scranton Wilkes-Barre, PA","","\u200b","61,857","","1.8","%","\u200b","60,603","","1.8","%","\u200b","101,573","","3.0","%","\u200b","224,033","","6.6","%"],["Utica-Rome, NY","","\u200b","39,294","","1.2","%","\u200b","35,885","","1.1","%","\u200b","63,696","","1.9","%","\u200b","138,875","","4.2","%"],["Ithaca, NY","","\u200b","30,966","","0.9","%","\u200b","12,132","","0.4","%","\u200b","23,481","","0.7","%","\u200b","66,579","","2.0","%"],["All Other MSA - NY(1)(2)","","\u200b","87,605","","2.6","%","\u200b","60,698","","1.8","%","\u200b","107,881","","3.2","%","\u200b","256,184","","7.6","%"],["All Other MSA - PA(1)(2)","","\u200b","17,017","","0.5","%","\u200b","63,142","","1.9","%","\u200b","97,908","","2.9","%","\u200b","178,067","","5.3","%"],["All Other MSA(1)","","\u200b","50,505","","1.5","%","\u200b","43,928","","1.3","%","\u200b","249,527","","7.4","%","\u200b","343,960","","10.2","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non-MSAs:","","\u200b","\u200b","","","","\u200b","\u200b","","","","\u200b","\u200b","","","","\u200b","\u200b","","","\u200b"],["NY","","\u200b","53,690","","1.6","%","\u200b","161,967","","4.8","%","\u200b","198,312","","5.9","%","\u200b","413,969","","12.3","%"],["All Other Non-MSA","","\u200b","25,954","","0.8","%","\u200b","51,121","","1.5","%","\u200b","67,059","","2.1","%","\u200b","144,134","","4.4","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total","\u200b","$","724,114","","21.5","%","$","864,783","","25.7","%","$","1,775,099","","52.8","%","$","3,363,996","","100.0","%"]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["December 31, 2023","\u200b","Multifamily CRE","\u200b","Owner occupied CRE","\u200b","Non-owner occupied CRE","\u200b","Total CRE","\u200b"],["\u200b","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","Percentage","\u200b","\u200b","\u200b","Percentage","\u200b"],["\u200b","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b","Amortized","\u200b","of Total","\u200b"],["(000\u2019s omitted, except percentages)","","Cost","","CRE","","Cost","","CRE","","Cost","","CRE","","Cost","","CRE","\u200b"],["MSA:","\u200b","","\u200b","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b","","\u200b","","\u200b","\u200b"],["Albany-Schenectady-Troy, NY","\u200b","$","52,006","\u200b","1.7","%","$","90,177","\u200b","2.9","%","$","267,913","\u200b","8.7","%","$","410,096","\u200b","13.3","%"],["Burlington-South Burlington, VT","\u200b","\u200b","156,418","\u200b","5.1","%","\u200b","44,862","\u200b","1.5","%","\u200b","144,620","\u200b","4.7","%","\u200b","345,900","\u200b","11.3","%"],["Rochester, NY","","\u200b","24,797","\u200b","0.8","%","\u200b","75,958","","2.5","%","\u200b","148,831","\u200b","4.8","%","\u200b","249,586","","8.1","%"],["Buffalo-Cheektowaga, NY","","\u200b","34,294","\u200b","1.1","%","\u200b","44,939","","1.5","%","\u200b","147,422","\u200b","4.8","%","\u200b","226,655","","7.4","%"],["Syracuse, NY","","\u200b","12,453","\u200b","0.4","%","\u200b","73,836","","2.4","%","\u200b","143,448","\u200b","4.7","%","\u200b","229,737","","7.5","%"],["Scranton Wilkes-Barre, PA","","\u200b","61,461","\u200b","2.0","%","\u200b","46,802","","1.5","%","\u200b","101,553","\u200b","3.3","%","\u200b","209,816","","6.8","%"],["Utica-Rome, NY","","\u200b","41,126","\u200b","1.3","%","\u200b","38,689","","1.3","%","\u200b","48,585","\u200b","1.6","%","\u200b","128,400","","4.2","%"],["Ithaca, NY","","\u200b","33,810","\u200b","1.1","%","\u200b","8,365","","0.3","%","\u200b","23,552","\u200b","0.8","%","\u200b","65,727","","2.2","%"],["Glens Falls, NY","","\u200b","44,922","\u200b","1.5","%","\u200b","2,524","","0.1","%","\u200b","11,884","\u200b","0.4","%","\u200b","59,330","","2.0","%"],["All Other MSA - NY(1)(2)","","\u200b","44,269","\u200b","1.4","%","\u200b","40,915","","1.3","%","\u200b","98,807","\u200b","3.2","%","\u200b","183,991","","5.9","%"],["All Other MSA - PA(1)(2)","","\u200b","9,668","\u200b","0.3","%","\u200b","45,611","","1.5","%","\u200b","93,013","\u200b","3.0","%","\u200b","148,292","","4.8","%"],["All Other MSA(1)","","\u200b","23,355","\u200b","0.8","%","\u200b","28,407","","0.9","%","\u200b","220,789","\u200b","7.2","%","\u200b","272,551","","8.9","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non-MSAs:","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["NY","","\u200b","53,550","\u200b","1.7","%","\u200b","156,934","","5.1","%","\u200b","210,085","\u200b","6.8","%","\u200b","420,569","","13.6","%"],["All Other Non-MSA","","\u200b","27,665","\u200b","0.8","%","\u200b","54,755","","1.7","%","\u200b","50,696","\u200b","1.5","%","\u200b","133,116","","4.0","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total","\u200b","$","619,794","\u200b","20.0","%","$","752,774","","24.5","%","$","1,711,198","\u200b","55.5","%","$","3,083,766","","100.0","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","The MSAs within these captions are individually less than 2% of total CRE exposure."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(2)","The MSAs within these captions include certain counties in adjacent states with a high degree of economic and social integration to the respective city based in New York or Pennsylvania."]] [[/GREPCENT_TABLE]] 64 Table of Contents The consumer mortgage portfolio is comprised of fixed (95%) and adjustable rate (5%) residential lending. Consumer mortgages increased $204.8 million, or 6.2%, between the end of 2023 and the end of 2024, driven by organic growth, and includes the impact of $58.8 million of secondary market sales. Over the past year, the Company produced net organic growth in the consumer mortgage segment due to the Company’s competitive product offerings, recruitment of additional mortgage loan originators and proactive business development efforts, while also benefitting from the comparatively stable housing market conditions in the Company’s primary markets relative to the national environment. Home equity loans increased $30.9 million, or 6.9%, between the end of 2023 and the end of 2024, in part a result of lower levels of payoffs and paydowns related to consumer mortgage refinancing in the higher interest rate environment during the year. Consumer mortgages increased $272.5 million, or 9.0%, between the end of 2022 and the end of 2023, driven by organic growth, and includes the impact of selling $6.1 million of consumer mortgage production in the secondary market. Home equity loans increased $12.5 million, or 2.9%, between the end of 2022 and the end of 2023. The growth in consumer mortgages and home equity loans was driven by the same factors indicated above that influenced the growth in 2024. Consumer installment loans, both those originated directly in the branches and online (referred to as “consumer direct”) and indirectly in automobile, marine, and recreational vehicle dealerships (referred to as “consumer indirect”), increased $71.3 million, or 3.8%, from one year ago, including a $64.2 million, or 3.8%, increase in consumer indirect loans and $7.1 million, or 3.8%, increase in consumer direct loans. The increases were primarily due to the Company offering competitive pricing, benefitting from reduced participation by certain competitors and capturing an increased share of the sales volumes that existed in its market area and dealer network, which resulted in growth in the Company’s consumer installment portfolio. During 2023, consumer installment loans increased $171.4 million, or 10.0%, from one year prior, including a $163.8 million, or 10.6%, increase in consumer indirect loans and a $7.6 million, or 4.3%, increase in consumer direct loans, reflective of the same factors noted above. Although the consumer indirect loan market is highly competitive, the Company is focused on maintaining a profitable in-market and contiguous market indirect portfolio, while continuing to pursue the expansion of its dealer network. Consumer direct loans have provided a key source of credit to the Company’s retail customers across its branch network for an extended period of time, and the Company is committed to continuing to offer competitive loan products in this segment. Despite the strong competition the Company faces from the financing subsidiaries of vehicle manufacturers and other financial intermediaries, the Company will continue to strive to grow these key portfolios through varying market conditions over the long term. 65 Table of Contents As shown in Table 12, 73.3% of the Company’s loan portfolio is tied to fixed interest rates while 26.7% is tied to floating or adjustable interest rates. In addition, 18.0% of the Company’s loan portfolio matures in one year or less, 39.6% matures between one to five years, 33.5% matures between five and 15 years, and 8.9% matures after 15 years. The following table shows the maturities and type of interest rates for loans as of December 31, 2024: Table 12: Maturity Distribution of Loans (1) [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Maturing in","\u200b","Maturing After","\u200b","Maturing After","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","One Year or","\u200b","One but Within","\u200b","Five but Within","\u200b","Maturing After","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","Less","","Five Years","","Fifteen Years","","Fifteen Years","","Total"],["CRE - Multifamily","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","19,744","\u200b","$","152,298","\u200b","$","205,643","\u200b","$","317","\u200b","$","378,002"],["Floating or adjustable interest rates","\u200b","\u200b","33,771","\u200b","\u200b","142,584","\u200b","\u200b","163,733","\u200b","\u200b","6,024","\u200b","\u200b","346,112"],["Total","\u200b","$","53,515","\u200b","$","294,882","\u200b","$","369,376","\u200b","$","6,341","\u200b","$","724,114"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["CRE - owner occupied","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","32,037","\u200b","$","181,304","\u200b","$","100,207","\u200b","$","81","\u200b","$","313,629"],["Floating or adjustable interest rates","\u200b","\u200b","57,301","\u200b","\u200b","193,343","\u200b","\u200b","282,951","\u200b","\u200b","17,559","\u200b","\u200b","551,154"],["Total","\u200b","$","89,338","\u200b","$","374,647","\u200b","$","383,158","\u200b","$","17,640","\u200b","$","864,783"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["CRE - non-owner occupied","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","166,056","\u200b","$","298,269","\u200b","$","336,557","\u200b","$","0","\u200b","$","800,882"],["Floating or adjustable interest rates","\u200b","\u200b","338,442","\u200b","\u200b","301,813","\u200b","\u200b","319,136","\u200b","\u200b","14,826","\u200b","\u200b","974,217"],["Total","\u200b","$","504,498","\u200b","$","600,082","\u200b","$","655,693","\u200b","$","14,826","\u200b","$","1,775,099"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Commercial & industrial and other business loans","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","174,814","\u200b","$","260,423","\u200b","$","96,374","\u200b","$","25,078","\u200b","$","556,689"],["Floating or adjustable interest rates","\u200b","\u200b","298,196","\u200b","\u200b","195,981","\u200b","\u200b","81,912","\u200b","\u200b","8,404","\u200b","\u200b","584,493"],["Total","\u200b","$","473,010","\u200b","$","456,404","\u200b","$","178,286","\u200b","$","33,482","\u200b","$","1,141,182"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Consumer mortgage","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","243,935","\u200b","$","853,595","\u200b","$","1,449,614","\u200b","$","776,115","\u200b","$","3,323,259"],["Floating or adjustable interest rates","\u200b","\u200b","9,625","\u200b","\u200b","42,103","\u200b","\u200b","77,522","\u200b","\u200b","37,271","\u200b","\u200b","166,521"],["Total","\u200b","$","253,560","\u200b","$","895,698","\u200b","$","1,527,136","\u200b","$","813,386","\u200b","$","3,489,780"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Consumer indirect","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","406,871","\u200b","$","1,248,647","\u200b","$","112,124","\u200b","$","13","\u200b","$","1,767,655"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Consumer direct","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","59,640","\u200b","$","122,464","\u200b","$","9,663","\u200b","$","0","\u200b","$","191,767"],["Floating or adjustable interest rates","\u200b","\u200b","37","\u200b","\u200b","11","\u200b","\u200b","512","\u200b","\u200b","0","\u200b","\u200b","560"],["Total","\u200b","$","59,677","\u200b","$","122,475","\u200b","$","10,175","\u200b","$","0","\u200b","$","192,327"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Home equity","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Fixed interest rates","\u200b","$","28,352","\u200b","$","106,895","\u200b","$","153,080","\u200b","$","26,053","\u200b","$","314,380"],["Floating or adjustable interest rates","\u200b","","9,480","\u200b","","30,152","\u200b","","110,968","\u200b","","12,445","\u200b","","163,045"],["Total","\u200b","$","37,832","\u200b","$","137,047","\u200b","$","264,048","\u200b","$","38,498","\u200b","$","477,425"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total loans","\u200b","$","1,878,301","\u200b","$","4,129,882","\u200b","$","3,499,996","\u200b","$","924,186","\u200b","$","10,432,365"]] [[/GREPCENT_TABLE]] (1)Scheduled repayments are reported in the maturity category in which the payment is due. ​ 66 Table of Contents Asset Quality The Company places a loan on nonaccrual status when the loan becomes 90 days past due, or sooner if management concludes collection of principal and interest is doubtful, except when, in the opinion of management, it is well-collateralized and in the process of collection. Nonperforming loans, defined as nonaccruing loans and accruing loans 90 days or more past due, ended 2024 at $73.4 million. This represents an increase of $18.8 million from $54.6 million of nonperforming loans at the end of 2023. The ratio of nonperforming loans to total loans at December 31, 2024 of 0.70% increased 14 basis points from the prior year’s level. The ratio of nonperforming assets (which includes other real estate owned, or “OREO”, in addition to nonperforming loans) to total loans plus OREO increased to 0.73% at year-end 2024, up 16 basis points from one year earlier. At December 31, 2024, OREO consisted of 44 residential properties with a total value of $2.8 million. This compares to 21 residential properties with a total value of $1.1 million and one commercial property with a value of $0.1 million at December 31, 2023. The increase in OREO for 2024 as compared to 2023 was primarily driven by the Company working through a backlog of foreclosures that arose due to pandemic-related moratoriums that have since been lifted. The increases in nonperforming loans, the ratio of nonperforming loans to total loans and the ratio of nonperforming assets to total loans plus OREO were primarily attributable to an increase in nonaccrual business lending loan balances. The Company has reviewed individually assessed loans and recorded a reserve for three loans comprised of two lending relationships. It was determined that the discounted collateral value exceeded the loan balance on all other individually assessed loans. ​ Approximately 54% of nonperforming loan balances at December 31, 2024 are related to the business lending portfolio, which is comprised of business loans broadly diversified by collateral and industry type. Of the nonperforming loans in the business lending portfolio, multifamily represents 31% of the balances, non-owner occupied commercial real estate represents 30% of the balances, owner-occupied commercial real estate represents 19% of the balances, and other business non-real estate loans represents 20% of the balances. ​ Approximately 40% of the nonperforming loan balances at December 31, 2024 are related to the consumer mortgage portfolio. Collateral values of residential properties within most of the Company’s market areas have generally remained stable or increased over the past several years. Although high levels of inflation has had some adverse impact on consumers, the unemployment rate remains low and this has contributed to the credit performance in the consumer mortgage loan portfolio remaining favorable. The remaining 6% of nonperforming loan balances relate to consumer installment and home equity loans, with home equity nonperforming loan levels being driven by the same factors identified for consumer mortgages. Nonperforming loan levels in the consumer installment category are typically very low in comparison to the other portfolios because they are generally charged off before they reach non-performing status, and consequently the increase in the amount of non-performing consumer installment loans at the end of 2024 as compared to one year earlier was nominal. The allowance for credit losses to nonperforming loans ratio, a general measure of coverage adequacy, was 108% at the end of 2024 compared to 122% at year-end 2023 and 183% at December 31, 2022. The decrease in this ratio from one year ago was primarily driven by the increase in nonperforming business loans previously mentioned. ​ Total delinquencies, defined as loans 30 days or more past due or in nonaccrual status, ended 2024 at 1.24% of total loans outstanding, compared to 1.06% at the end of 2023. There was an increase in delinquencies for all loan portfolios except home equity for 2024 as compared to 2023. As of year-end 2024, delinquency ratios for business lending, consumer installment loans, consumer mortgages and home equity loans were 0.98%, 1.30%, 1.56%, and 1.08%, respectively. Within the business lending loan portfolio, the delinquency ratios at December 31, 2024 for multifamily was 1.73%, owner-occupied commercial real estate was 0.97%, non-owner occupied commercial real estate was 0.69%, and other commercial and industrial loans was 0.99%. Year-end 2023 delinquency rates for business lending, consumer installment loans, consumer mortgages and home equity loans were 0.61%, 1.20%, 1.49%, and 1.42%, respectively. Within the business lending loan portfolio, the delinquency ratios at December 31, 2023 for non-owner occupied commercial real estate was 1.18%, owner-occupied commercial real estate was 0.46%, other commercial and industrial loans was 0.12% and there were no delinquent multifamily loans. Delinquency levels, particularly in the 30 to 89 days category, tend to be somewhat volatile due to their seasonal characteristics and measurement at a point in time, and therefore management believes that it is useful to evaluate this ratio over a longer time period. The average quarter-end delinquency ratio for total loans in 2024 was 1.05%, as compared to an average of 0.88% in 2023, and 0.80% in 2022. ​ 67 Table of Contents The Company’s senior management, special asset officers and business lending management review all delinquent and nonaccrual loans and OREO regularly in order to identify deteriorating situations, monitor known problem credits and discuss any needed changes to collection efforts, if warranted. Based on this analysis, a relationship may be assigned a special assets officer or other senior lending officer to review the loan, meet with the borrowers, assess the collateral and recommend an action plan. This plan could include foreclosure, restructuring loans, issuing demand letters or other actions. The Company’s larger criticized credits are also reviewed on a quarterly basis by senior management, senior credit administration management, special assets officers and business lending management to monitor their status and discuss relationship management plans. Business lending management reviews the criticized business loan portfolio on a monthly basis. ​ The Company will occasionally modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, payment delay, interest rate reduction or a combination thereof. During the year ended December 31, 2024, the Company modified 19 loans with total outstanding balances of $26.9 million that were considered to be modified loans to borrowers experiencing financial difficulty. ​ Allowance for credit losses and loan net charge-off ratios for the past two years are as follows: Table 13: Loan Ratios ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,"],["\u200b","","2024","","2023"],["Allowance for credit losses/total loans","\u200b","0.76","%","0.69","%"],["Allowance for credit losses/nonperforming loans","","108","%","122","%"],["Nonaccrual loans/total loans","","0.64","%","0.50","%"],["Allowance for credit losses/nonaccrual loans","","119","%","137","%"],["Net charge-offs to average loans outstanding:","","","","","\u200b"],["Business lending","","0.06","%","0.01","%"],["Consumer mortgage","","0.01","%","0.02","%"],["Consumer indirect","","0.29","%","0.22","%"],["Consumer direct","","0.95","%","0.65","%"],["Home equity","","0.03","%","0.02","%"],["Total loans","","0.10","%","0.06","%"]] [[/GREPCENT_TABLE]] ​ Total net charge-offs in 2024 were $10.1 million, $4.3 million more than the prior year due to an increase in net charge-offs in all loan portfolios except for consumer mortgage. Net charge-offs in 2023 of $5.8 million were $2.5 million more than the prior year due to an increase in net charge-offs in all loan portfolios. Due to the significant increases in average loan balances over time as a result of acquisitions and organic growth, management believes that net charge-offs as a percent of average loans (“net charge-off ratio”) offers the most meaningful representation of charge-off trends. The total net charge-off ratio of 0.10% for 2024 was four basis points higher than the ratio from 2023 and six basis points higher than the ratio from 2022. Gross charge-offs as a percentage of average loans were 0.18% in 2024, as compared to 0.14% in 2023, and 0.13% in 2022, as management continues to focus on maintaining conservative underwriting standards. Recoveries were $7.9 million in 2024, representing 51% of average gross charge-offs for the latest two years, compared to 61% in 2023 and 73% in 2022, reflective of the continued effectiveness of the Company’s repossession and disposition capabilities. Business loan net charge-offs increased in 2024, totaling $2.7 million, for a net charge-off ratio of 0.06% of average business loans outstanding, compared to net charge-offs of $0.3 million, or 0.01% of average business loans outstanding, for 2023. Consumer installment loan net charge-offs increased to $6.9 million this year from $4.8 million in 2023, with a net charge-off ratio of 0.36% in 2024 and 0.26% in 2023. Consumer mortgage net charge-offs decreased to $0.3 million in 2024 compared to $0.6 million in 2023 with a net charge-off ratio of 0.01% and 0.02% in 2024 and 2023, respectively. Home equity had net charge-offs of $0.2 million, or 0.03%, in 2024 compared to net charge-offs of $0.1 million, or 0.02%, in 2023. 68 Table of Contents Management continually evaluates the credit quality of the Company’s loan portfolio and conducts a formal review of the adequacy of the allowance for credit losses on a quarterly basis. The primary components of the review process that are used to determine proper allowance levels are collectively evaluated and individually assessed loan loss allocations. Measurement of individually assessed loan loss allocations is typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to repay. Business loans with outstanding balances that are greater than $0.5 million are individually assessed for specific loan loss allocations. Consumer mortgages, consumer installment and home equity loans are considered smaller balance homogeneous loans and are evaluated collectively. The Company considers qualifying loans to require an individually assessment when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. Management estimates the allowance for credit losses balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected future credit losses. Adjustments are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, size and credit quality of acquired loans, delinquency level, risk ratings or term of loans as well as actual and forecasted macroeconomic trends, including unemployment rates and changes in property values such as home prices, commercial real estate prices, including office-specific property prices, automobile prices, office-specific property vacancy rates, gross domestic product, median household income net of inflation and other relevant factors in comparison to longer-term performance. Multiple economic scenarios are utilized to encompass a range of economic outcomes and include baseline, upside and downside forecasts, which are weighted in the calculation. The segments of the Company’s loan portfolio are disaggregated into classes that allow management to monitor risk and performance. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist, including collateral type, credit ratings/scores, size, duration, interest rate structure, origination vintage and payment structure. In addition to these risk characteristics, the Company considers the portion of acquired loans to the overall segment balance, the change in the volume and terms of originations, differences between the losses incurred in the period used for quantitative modeling and a longer timeframe that includes the Great Recession of 2008 (the “Great Recession”), as well as recent delinquency, charge-off and risk rating trends compared to historical time periods. The Company measures the allowance for credit losses using either the cumulative loss rate method, the line loss method, or the vintage loss rate method, dependent on the loan portfolios’ characteristics. The allowance for credit losses level computed from the collectively evaluated and individually assessed loan loss allocation methods are combined with unallocated allowances, if any, to derive the required allowance for credit losses to be reflected on the consolidated statements of condition. The provision for credit losses is calculated by subtracting the previous period allowance for credit losses, net of the interim period net charge-offs, from the current required allowance level. This provision is then recorded in the income statement for that period. Members of senior management and the Board’s Audit Committee review the adequacy of the allowance for credit losses quarterly. Acquired loans are reviewed at their acquisition date to determine whether they have experienced a more-than-insignificant credit deterioration since origination. Loans that meet that definition according to the Company’s policy are referred to as purchased credit deteriorated (“PCD”) loans. PCD loans are initially recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded in the provision for credit losses. For acquired loans that are not deemed PCD at acquisition (“non-PCD”), a fair value adjustment is recorded that includes both credit and interest rate considerations. A provision for credit losses is also recorded at acquisition for the credit considerations on non-PCD loans. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans are the same as originated loans and subsequent changes to the allowance for credit losses are recorded as provision for, or reversal of, credit losses. As of December 31, 2024, the net purchase discount related to the $895.4 million of remaining non-PCD acquired loan balances was approximately $17.6 million, or 1.96% of that portfolio. 69 Table of Contents The allowance for credit losses increased to $79.1 million at the end of 2024 from $66.7 million as of year-end 2023. During 2024, economic forecasts remained stable while the Company experienced organic loan growth and a slight degradation in certain asset quality metrics, which drove the increase in the allowance for credit losses. The Company recorded a provision for credit losses of $22.8 million during 2024, which was $11.6 million higher than the prior year. While certain national trends persist related to commercial real estate, in particular the office and multifamily sectors, the Company determined that its exposure is primarily located in geographical areas that show stable or increasing demand and have vacancy rates below the national average. The Company has also performed internal reviews of its commercial real estate portfolio, which includes a review of the type of collateral, the status of the loan, office commercial real estate-specific balances, percent of total capital, levels of delinquencies, charge-offs, nonperforming loans and classified and criticized loans, and weighted average risk ratings. Based on these reviews, management determined that the commercial real estate loan portfolio was performing in line with expectations. Refer to Note D: Loans and Allowance for Credit Losses in the notes to the consolidated financial statements for a discussion of management’s methodology used to estimate the allowance for credit losses. The allowance for credit losses increased to $66.7 million at the end of 2023 from $61.1 million as of year-end 2022. During 2023, economic forecasts remained stable and the Company experienced organic loan growth. The Company recorded a provision for credit losses of $11.2 million during 2023. The ratio of the allowance for credit losses to total loans of 0.76% for year-end 2024 was seven basis points higher than the level at the end of 2023, due to the factors noted previously. The ratio at year-end 2023 was consistent with the level at the end of 2022 due to stable economic forecasts and asset quality metrics. Management considers the year-end 2024 and 2023 allowance for credit losses to be adequate. The provision for credit losses as a percentage of average loans was 0.23% in 2024 as compared to 0.12% in 2023 and 0.18% in 2022. The provision for credit losses was 225% of net charge-offs in 2024 versus 193% in 2023 and 443% in 2022. The following table sets forth the allocation of the allowance for credit losses by loan category as of the end of the years indicated, as well as the proportional share of each category’s loan balance to total loans. This allocation is based on management’s assessment, as of a given point in time, of the risk characteristics of each of the component parts of the total loan portfolio and is subject to change when the risk factors of each component part change. The allocation is not indicative of the specific amount of future net charge-offs that will be incurred in each of the loan categories, nor should it be taken as an indicator of future loss trends. The allocation of the allowance to each category does not restrict the use of the allowance to absorb losses in any category. Table 14: Allowance for Credit Losses by Loan Type ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","December 31, 2024","","December 31, 2023"],["\u200b","\u200b","Allowance","\u200b","Percent of","\u200b","Allowance","\u200b","Percent of","\u200b"],["\u200b","\u200b","for Credit","\u200b","Total Loan","\u200b","for Credit","\u200b","Total Loan","\u200b"],["(000\u2019s omitted except for ratios)","","Losses","","Balances","","Losses","","Balances"],["Business lending","\u200b","$","37,201","","43.2","%","$","26,854","","42.1","%"],["Consumer mortgage","\u200b","","15,017","","33.5","%","","15,333","","33.9","%"],["Consumer indirect","\u200b","","20,895","","16.9","%","","18,585","","17.5","%"],["Consumer direct","\u200b","","3,453","","1.8","%","","3,269","","1.9","%"],["Home equity","\u200b","","1,548","","4.6","%","","1,628","","4.6","%"],["Unallocated","\u200b","","1,000","","0.0","%","","1,000","","0.0","%"],["Total","\u200b","$","79,114","","100.0","%","$","66,669","","100.0","%"]] [[/GREPCENT_TABLE]] ​ As demonstrated in Table 14, the consumer direct and indirect installment loan portfolios carry higher credit risk than the business lending, consumer mortgage and home equity portfolios and therefore the Company allocates a higher proportional allowance to these portfolios. The unallocated allowance is maintained for potential inherent losses in the specific portfolios that are not captured due to model imprecision. The unallocated allowance of $1.0 million at year-end 2024 was consistent with 2023. The changes in year-over-year allowance allocations reflect management’s continued refinement of its loss estimation techniques. However, given the inherent imprecision in the many estimates used in the determination of the allocated portion of the allowance, management remained conservative in the approaches used to establish the overall allowance for credit losses. Management considers the allocated and unallocated portions of the allowance for credit losses to be prudent and reasonable. 70 Table of Contents Funding Sources The Company utilizes a variety of funding sources to support the interest-earning asset base as well as to achieve targeted growth objectives. Overall funding is comprised of three primary sources that possess a variety of maturity, stability and price characteristics: deposits of individuals, partnerships and corporations (non-governmental deposits), governmental deposits that are collateralized for amounts not covered by FDIC insurance (governmental deposits), and external borrowings. The average daily amount of deposits and the average rate paid on each of the following deposit categories are summarized below for the years indicated: Table 15: Average Deposits ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2024","","2023","","2022"],["\u200b","\u200b","Average","\u200b","Average","\u200b","Average","\u200b","Average","\u200b","Average","\u200b","Average","\u200b"],["(000\u2019s omitted, except rates)","","Balance","","Rate Paid","","Balance","","Rate Paid","","Balance","","Rate Paid","\u200b"],["Noninterest checking deposits","\u200b","$","3,580,297","","0.00","%","$","3,848,261","","0.00","%","$","4,106,029","","0.00","%"],["Interest checking deposits","\u200b","","2,861,772","","0.55","%","","3,055,443","","0.42","%","","3,326,723","","0.10","%"],["Savings deposits","\u200b","","2,229,602","","0.51","%","","2,365,379","","0.25","%","","2,403,719","","0.03","%"],["Money market deposits","\u200b","","2,509,272","","2.23","%","","2,351,005","","1.43","%","","2,464,116","","0.16","%"],["Time deposits","\u200b","","2,037,315","","3.76","%","","1,280,751","","2.55","%","","928,990","","0.76","%"],["Total deposits","\u200b","$","13,218,258","\u200b","1.21","%","$","12,900,839","\u200b","0.66","%","$","13,229,577","\u200b","0.11","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Non-governmental deposits","\u200b","$","11,351,721","\u200b","0.96","%","$","11,418,481","\u200b","0.55","%","$","11,723,081","\u200b","0.12","%"],["Governmental deposits","\u200b","\u200b","1,866,537","\u200b","2.73","%","\u200b","1,482,358","\u200b","1.51","%","\u200b","1,506,496","\u200b","0.10","%"],["Total deposits","\u200b","$","13,218,258","","1.21","%","$","12,900,839","","0.66","%","$","13,229,577","","0.11","%"]] [[/GREPCENT_TABLE]] ​ As displayed in Table 15, average total deposits in 2024 increased $317.4 million, or 2.5%, from the prior year, comprised of a $756.6 million, or 59.1%, increase in time deposits, partially offset by a $439.2 million, or 3.8%, decrease in non-time deposits. The increase in average deposits and the change in deposit mix towards a higher time deposit balance was primarily due to customers responding to changes in market interest rates by moving funds into higher yielding account types, as well as increased rate competition from other banks and non-depository financial institutions. Average total deposits in 2023 decreased $328.7 million, or 2.5%, from 2022 comprised of a $680.5 million, or 5.5%, decrease in non-time deposits, partially offset by a $351.8 million, or 37.9%, increase in time deposits. The decrease in average deposits and the change in deposit mix towards a higher time deposit balance was primarily due to higher customer expenditure levels in the inflationary environment and customers responding to changes in market interest rates. Non-governmental, non-time deposits are frequently considered to be an attractive source of funding because they are generally stable, do not need to be collateralized, carry a relatively low interest rate, generate fee income and provide a strong customer base for which a variety of loan, deposit and other financial service-related products can be cross-sold. The Company’s funding composition continues to benefit from a high level of non-governmental deposits, with an average balance of $11.35 billion, which decreased $66.8 million, or 0.6%, from 2023, and equaled 86% of total average deposits, three percentage points lower than 2023 due mostly to strong growth in governmental deposits. The Company continues to focus on expanding its core deposit relationship base through its competitive product offerings and high quality customer service. Full-year average governmental deposits increased $384.2 million, or 25.9%, during 2024 to $1.87 billion, reflective of competitive offerings and expansion of the Company’s governmental deposit relationship base due in part to additional business development efforts. Governmental deposit balances tend to be more volatile than non-governmental deposits because they are heavily impacted by the seasonality of tax collection and fiscal spending patterns, as well as the longer-term financial position of the local government entities, which can change from year to year. The Company is required to collateralize certain local governmental deposits in excess of FDIC coverage with marketable securities from its investment portfolio. Due to this stipulation, as well as the competitive bidding nature of governmental time deposits, management considers this funding source to share some of the same attributes as borrowings. However, the Company has many long-standing relationships with governmental entities throughout its markets and the deposits held by these customers have provided a relatively attractive and stable funding source over an extended period of time. 71 Table of Contents The mix of average deposits shifted as compared with the prior year as customers moved to higher yielding deposit accounts. Non-time deposits (noninterest checking, interest checking, savings and money markets) represented approximately 85% of the Company’s average deposit funding base in 2024 versus 90% last year, while time deposits this year represent approximately 15% of total average deposits compared to 10% in 2023. The cost of interest-bearing deposits of 1.66% in 2024 was 72 basis points higher than the 0.94% cost of interest-bearing deposits in 2023 as a result of the aforementioned deposit mix shift and increases in the average rates paid on interest checking, savings, money market and time deposits due to market conditions. The total cost of deposit funding, which includes noninterest checking balances, was 1.21% in 2024, a 55 basis point increase from the prior year. On a quarterly basis, the total cost of deposit funding has been stable, at 1.23% for the second, third and fourth quarters of 2024. The remaining maturities of deposits in amounts of $250,000 or more (the FDIC insurance limit) outstanding as of December 31 are as follows: Table 16: Maturity of Time Deposits in Excess of Insurance Limit of $250,000 ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023"],["Less than three months","\u200b","$","166,643","\u200b","$","52,330"],["Three months to six months","\u200b","","176,452","\u200b","","111,117"],["Six months to one year","\u200b","","211,811","\u200b","","152,050"],["Over one year","\u200b","","118,077","\u200b","","132,492"],["Total","\u200b","$","672,983","\u200b","$","447,989"]] [[/GREPCENT_TABLE]] ​ The Company’s deposit base is well diversified across customer segments, comprised of approximately 59% consumer, 26% business and 15% governmental at December 31, 2024, and broadly dispersed among its customer base as illustrated by an average deposit balance per account of under $20,000. At the end of 2024, 65% of the Company’s total deposits were in no and low rate checking and savings accounts. The total estimated amount of deposits that exceeded the $250,000 insured limit provided by the FDIC, net of collateralized and intercompany deposits, was approximately $2.35 billion at December 31, 2024. This amount is determined by adjusting the amounts reported in the Bank Call Report by subtracting intercompany deposits, which are not external customers and are therefore eliminated in consolidation, and governmental deposits which are collateralized by certain pledged investment securities. The Bank Call Report estimated uninsured deposit balances at December 31, 2024 are reported gross at $4.38 billion, which includes intercompany account balances of $279.4 million, and collateralized deposits of $1.75 billion. Estimated insured deposits, net of collateralized and intercompany deposits, represent greater than 80% of ending total deposits at December 31, 2024. These estimates are based on the determination of known deposit account balances of each depositor and the insurance guidelines provided by the FDIC. The Company did not hold any brokered deposits during 2024. Borrowing sources for the Company include the FHLB, Federal Reserve, other correspondent banks, as well as access to the brokered CD and repurchase markets through established relationships with business and governmental customers and primary market security dealers. As shown in Table 17, year-end 2024 borrowings totaled $998.9 million, an increase of $233.7 million from the $765.2 million outstanding at the end of 2023 primarily due to an increase in fixed rate FHLB term borrowings of $203.0 million, overnight borrowings of $65.0 million, and finance lease liabilities of $8.7 million, partially offset by a $43.0 million decrease in customer repurchase agreements. The Company secured $250.0 million in additional fixed rate FHLB term borrowings during 2024 to support the funding of loan growth. Borrowings averaged $917.4 million, or 6.5% of total funding liabilities for 2024, as compared to $631.4 million, or 4.7% of total funding liabilities for 2023. At the end of 2024, the Company had $391.8 million, or 40%, of contractual borrowing obligations that had remaining terms of one year or less which was higher than the $359.6 million, or 47%, at the end of 2023, due to an increase in overnight borrowings and the maturity of fixed rate FHLB term borrowings in 2025. As displayed in Table 3 on page 50, the percentage of funding from deposits in 2024 was lower than the level in 2023, primarily due to the increase in average overnight borrowings and average term borrowings in 2024 that were needed to support the funding of strong loan growth that outpaced the increase in deposit balances. The percentage of average funding derived from deposits was 93.5% in 2024 as compared to 95.3% in 2023 and 96.4% in 2022. During 2024, average deposits increased 2.5%, while average borrowings increased 45.3%. 72 Table of Contents The following table summarizes the outstanding balance of the Company’s borrowings as of December 31: Table 17: Borrowings ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023"],["Overnight borrowings","\u200b","$","118,000","\u200b","$","53,000"],["Securities sold under agreement to repurchase, short term","\u200b","\u200b","261,553","\u200b","\u200b","304,595"],["Federal Home Loan Bank borrowings","\u200b","","610,645","\u200b","","407,603"],["Finance lease liabilities","\u200b","","8,667","\u200b","","0"],["Balance at end of period","\u200b","$","998,865","\u200b","$","765,198"]] [[/GREPCENT_TABLE]] ​ Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. These commitments consist principally of unused commercial and consumer credit lines. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of an underlying contract with a third party. The credit risks associated with commitments to extend credit and standby letters of credit are essentially the same as that involved with extending loans to customers and are subject to the Company’s standard credit policies. Collateral may be required based on management’s assessment of the customer’s creditworthiness. The fair value of the standby letters of credit is considered immaterial for disclosure purposes. See Note M beginning on page 133 for further information on off-balance sheet exposures. Investments The objective of the Company’s investment portfolio is to hold low-risk, high-quality earning assets that provide favorable returns and provide another effective tool to actively manage its earning asset/funding liability position in order to maximize future net interest income opportunities. This must be accomplished within the following constraints: (a) implementing certain interest rate risk management strategies which achieve a relatively stable level of net interest income; (b) providing both the regulatory and operational liquidity necessary to conduct day-to-day business activities; (c) considering investment risk-weights as determined by the regulatory risk-based capital guidelines; and (d) generating a favorable return without undue compromise of the other requirements. The carrying value of the Company’s investment portfolio ended 2024 at $4.22 billion, an increase of $53.1 million, or 1.3%, from the end of 2023. The book value (excluding unrealized gains and losses) of the portfolio increased $76.2 million, or 1.7%, from December 31, 2023. The net unrealized loss on the available-for-sale investment portfolio was $404.6 million as of December 31, 2024, an increase of $23.0 million from the $381.6 million unrealized loss at the end of 2023. This increase is reflective of movements in medium to long-term interest rates, as well as the volume and rates associated with the securities sales and maturities that occurred during the year. During 2024, the Company purchased $152.6 million of government agency mortgage-backed securities with an average yield of 5.58%, which the Company classified as held-to-maturity. Additionally, there was $38.0 million of net accretion on investment securities in 2024. These additions were offset by proceeds of $53.4 million from sales of tax-exempt obligations of state and political subdivisions available-for-sale investment securities, proceeds of $4.1 million from sales of taxable obligations of state and political subdivisions available-for-sale investment securities, and $68.8 million of investment maturities, calls and principal payments during 2024. A realized loss of $0.5 million was recognized on the sales of $58.0 million book value tax-exempt obligations of state and political subdivisions available-for-sale investment securities during 2024. The Company also participated in a Visa Class B share exchange during the second quarter of 2024, in which half of its Visa Class B shares were converted into Visa Class C shares that are convertible (with certain timing restrictions) to NYSE-traded Visa Class A shares. The conversion of these shares generated $0.9 million of unrealized gain on equity securities. The effective duration of the securities portfolio was 6.2 years at the end of 2024, as compared to 7.0 years at year end 2023. 73 Table of Contents The carrying value of the Company’s investment portfolio ended 2023 at $4.17 billion, a decrease of $1.15 billion, or 21.6%, from the end of 2022. The book value (excluding unrealized gains and losses) of the portfolio decreased $1.29 billion, or 22.1%, from December 31, 2022. The net unrealized loss on the available-for-sale investment portfolio was $381.6 million as of December 31, 2023, a decrease of $142.0 million from the $523.6 million unrealized loss at the end of 2022. This decrease is indicative of the impact of sales, maturities, calls and principal paydowns of securities throughout 2023, as well as broader market shifts regarding the state of the economy and future interest rate levels. During 2023, the Company purchased $63.3 million of government agency mortgage-backed securities with an average yield of 5.84%, which the Company classified as held-to-maturity. Additionally, there was $39.5 million of net accretion on investment securities in 2023. During the first quarter of 2023, the Company sold $786.1 million in book value of available-for-sale U.S. Treasury and agency securities, recognizing $52.3 million of gross realized losses. The sales were completed in January and February 2023 as part of a strategic balance sheet repositioning and were unrelated to the negative developments in the banking industry that occurred in March 2023. The proceeds from these sales of $733.8 million were redeployed entirely toward paying off existing overnight borrowings. The purchases and net accretion were more than offset by the proceeds from the first quarter 2023 balance sheet repositioning and $598.0 million of investment maturities, calls and principal payments. The effective duration of the securities portfolio was 7.0 years at the end of 2023, as compared to 6.3 years at year end 2022. The investment portfolio has limited credit risk due to the composition continuing to be heavily weighted towards U.S. Treasury debentures, U.S. Agency mortgage-backed pass-throughs (MBS), U.S. Agency collateralized mortgage obligations (CMOs) and municipal bonds. The U.S. Treasury debentures, U.S. Agency mortgage-backed pass-throughs and U.S. Agency CMOs are all rated AAA (highest possible rating) by Moody’s and AA+ by Standard and Poor’s. The majority of the municipal bonds are rated A or higher. The portfolio does not include any private label MBS or CMOs. The following table sets forth the carrying value for the Company's investment securities portfolio as of December 31: Table 18: Investment Securities ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023"],["Available-for-Sale Portfolio:","\u200b","\u200b","","\u200b","\u200b"],["U.S. Treasury and agency securities","\u200b","$","2,083,786","\u200b","$","2,080,783"],["Obligations of state and political subdivisions","\u200b","","386,495","\u200b","","474,363"],["Government agency mortgage-backed securities","\u200b","","301,224","\u200b","","348,526"],["Corporate debt securities","\u200b","","7,697","\u200b","","7,394"],["Government agency collateralized mortgage obligations","\u200b","","6,512","\u200b","","8,926"],["Total available-for-sale portfolio","\u200b","\u200b","2,785,714","\u200b","","2,919,992"],["Held-to-Maturity Portfolio:","\u200b","","\u200b","\u200b","","\u200b"],["U.S. Treasury and agency securities","\u200b","\u200b","1,138,743","\u200b","\u200b","1,109,101"],["Government agency mortgage-backed securities","\u200b","\u200b","206,412","\u200b","\u200b","63,073"],["Total held-to-maturity portfolio","\u200b","\u200b","1,345,155","\u200b","\u200b","1,172,174"],["Equity and Other Securities:","\u200b","","\u200b","\u200b","\u200b","\u200b"],["Equity securities with readily determinable fair values","\u200b","","2,354","\u200b","","372"],["Federal Home Loan Bank common stock","\u200b","","45,408","\u200b","","32,526"],["Federal Reserve Bank common stock","\u200b","","33,442","\u200b","","33,568"],["Equity securities without readily determinable fair values","\u200b","\u200b","6,313","\u200b","\u200b","6,680"],["Total equity and other securities","\u200b","","87,517","\u200b","","73,146"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total investments","\u200b","$","4,218,386","\u200b","$","4,165,312"]] [[/GREPCENT_TABLE]] ​ 74 Table of Contents The following table sets forth as of December 31, 2024 the weighted-average yield of investment debt securities by maturity date and investment type: Table 19: Weighted-Average Yield of Investment Debt Securities (1) ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","\u200b","\u200b","Maturing","\u200b","Maturing After","\u200b","\u200b","\u200b","Total"],["\u200b","\u200b","Maturing","\u200b","After One Year","\u200b","Five Years But","\u200b","Maturing","\u200b","Amortized"],["\u200b","\u200b","Within One","\u200b","But Within","\u200b","Within Ten","\u200b","After","\u200b","Cost/Book"],["(000's omitted, except yields)","","Year or Less","","Five Years","","Years","","Ten Years","","Value"],["Available-for-Sale Portfolio:","","","","","","","","","","\u200b"],["U.S. Treasury and agency securities","","0.00","%","1.45","%","2.23","%","1.73","%","$","2,389,208"],["Obligations of state and political subdivisions(2)","","2.29","%","1.97","%","2.61","%","2.81","%","","428,204"],["Government agency mortgage-backed securities","","2.75","%","1.87","%","2.44","%","2.48","%","","360,102"],["Corporate debt securities","","0.00","%","0.00","%","4.05","%","0.00","%","","8,000"],["Government agency collateralized mortgage obligations","","2.87","%","1.86","%","2.76","%","2.36","%","","6,878"],["Held-to-Maturity Portfolio:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["U.S. Treasury and agency securities","\u200b","0.00","%","0.00","%","3.37","%","3.71","%","\u200b","1,138,743"],["Government agency mortgage-backed securities","\u200b","0.00","%","0.00","%","0.00","%","5.59","%","\u200b","206,412"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(1)","Weighted-average yields are an arithmetic computation of income (not fully tax-equivalent adjusted) divided by book balance; they may differ from the yield to maturity, which considers the time value of money."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["(2)","Excluding the impact of $15.9 million in book value of qualified school construction bonds in the Company's portfolio which earn income primarily through income tax credits, the weighted - average yield of obligations of state and political subdivisions maturing after one year but within five years is 2.62%."]] [[/GREPCENT_TABLE]] Impact of Inflation and Changing Prices The Company’s financial statements have been prepared in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the effect of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services. Notwithstanding this, inflation can directly affect the value of loan collateral, real estate and automobiles in particular. Inflation can also impact the Company’s noninterest expense levels to some extent, and by extension the net income it generates and the earnings it retains as capital. New Accounting Pronouncements See “New Accounting Pronouncements” Section of Note A of the notes to the consolidated financial statements on page 101 for recently issued accounting pronouncements applicable to the Company that have not yet been adopted. ​ 75 Table of Contents Forward-Looking Statements This report contains comments or information that constitute forward - looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Forward - looking statements often use words such as "anticipate," "could," "target," "expect," "estimate," "intend," "plan," "goal," "forecast," "believe," or other words of similar meaning. These statements are based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward - looking statements. Moreover, the Company's plans, objectives and intentions are subject to change based on various factors (some of which are beyond the Company's control). Factors that could cause actual results to differ from those discussed in the forward - looking statements include: (1) adverse developments in the banking industry related to bank failures and the potential impact of such developments on customer confidence and regulatory responses to these developments; (2) current and future economic and market conditions, including the effects of changes in housing or vehicle prices, higher unemployment rates, disruptions in the commercial real estate market, labor shortages, supply chain disruption, inability to obtain raw materials and supplies, U.S. fiscal debt, budget and tax matters, geopolitical matters and conflicts, and any changes in global economic growth; (3) the effect of, and changes in, monetary and fiscal policies and laws, including future changes in Federal and state statutory income tax rates and interest rate and other policy actions of the Board of Governors of the Federal Reserve System; (4) the effect of changes in the level of checking or savings account deposits on the Company's funding costs and net interest margin including the possibility of a sudden withdrawal of the Company's deposits due to rapid spread of information or disinformation regarding the Company's well - being; (5) future provisions for credit losses on loans and debt securities; (6) changes in nonperforming assets; (7) the effect of a fall in stock market or bond prices on the Company's fee income businesses, including its employee benefit services, wealth management, and insurance businesses; (8) risks related to credit quality; (9) inflation, interest rate, liquidity, market and monetary fluctuations; (10) the strength of the U.S. economy in general and the strength of the local economies where the Company conducts its business; (11) the timely development of new products and services and customer perception of the overall value thereof (including features, pricing and quality) compared to competing products and services; (12) changes in consumer spending, borrowing and savings habits; (13) technological changes and implementation and financial risks associated with transitioning to new technology - based systems involving large multi - year contracts; (14) the ability of the Company to maintain the security, including cybersecurity, of its financial, accounting, technology, data processing and other operating systems, facilities and data, including customer data; (15) effectiveness of the Company's risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, the Company's ability to manage its credit or interest rate risk, the sufficiency of its allowance for credit losses and the accuracy of the assumptions or estimates used in preparing the Company's financial statements and disclosures; (16) failure of third parties to provide various services that are important to the Company's operations; (17) any acquisitions or mergers that might be considered or consummated by the Company and the costs and factors associated therewith, including differences in the actual financial results of the acquisition or merger compared to expectations and the realization of anticipated cost savings and revenue enhancements; (18) the ability to maintain and increase market share and control expenses; (19) the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of the Company and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, service fees, risk management, securities, capital requirements and other aspects of the financial services industry; (20) changes in the Company's organization, compensation and benefit plans and in the availability of, and compensation levels for, employees in its geographic markets; (21) the outcome of pending or future litigation and government proceedings; (22) the effect of opening new branches to expand the Company's geographic footprint, including the cost associated with opening and operating the branches and the uncertainty surrounding their success including the ability to meet expectations for future deposit and loan levels and commensurate revenues; (23) the effects of natural disasters could create economic and financial disruption; (24) the effects from changes in governmental leadership which expose the Company and its customers to a variety of political, economic, and regulatory risks, including the risk of changes in laws (including labor, trade, tax and other laws) and the potential for disruption in governmental agencies, services provided by the government, and funding of government sponsored projects; (25) other risk factors outlined in the Company's filings with the SEC from time to time; and (26) the success of the Company at managing the risks of the foregoing. ​ The foregoing list of important factors is not all-inclusive. For more information about factors that could cause actual results to differ materially from the Company’s expectations, refer to “Item 1A Risk Factors” above. Any forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date on which such statement is made. If the Company does update or correct one or more forward-looking statements, investors and others should not conclude that the Company will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. ​ 76 Table of Contents Reconciliation of GAAP to Non-GAAP Measures Table 20: GAAP to Non-GAAP Reconciliations ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023","","2022"],["Operating pre-tax, pre-provision net revenue (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net income (GAAP)","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081"],["Income taxes","\u200b","","54,223","\u200b","","36,307","\u200b","","52,233"],["Income before income taxes","\u200b","","236,704","\u200b","","168,231","\u200b","","240,314"],["Provision for credit losses","\u200b","","22,773","\u200b","","11,203","\u200b","","14,773"],["Pre-tax, pre-provision net revenue (non-GAAP)","\u200b","","259,477","\u200b","","179,434","\u200b","","255,087"],["Acquisition expenses","\u200b","","213","\u200b","","63","\u200b","","5,021"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","244","\u200b","\u200b","3,280","\u200b","\u200b","(300)"],["Restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","1,163","\u200b","\u200b","0"],["Litigation accrual","\u200b","\u200b","138","\u200b","\u200b","5,800","\u200b","\u200b","0"],["Loss on sales of investment securities","\u200b","\u200b","487","\u200b","\u200b","52,329","\u200b","\u200b","0"],["Gain on debt extinguishment","\u200b","","0","\u200b","","(242)","\u200b","","0"],["Unrealized (gain) loss on equity securities","\u200b","","(1,231)","\u200b","","47","\u200b","","44"],["Amortization of intangible assets","\u200b","\u200b","14,259","\u200b","\u200b","14,511","\u200b","\u200b","15,214"],["Operating pre-tax, pre-provision net revenue (non-GAAP)","\u200b","$","273,587","\u200b","$","256,385","\u200b","$","275,066"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating pre-tax, pre-provision net revenue per share (non-GAAP)","\u200b","","","\u200b","","","\u200b"],["Diluted earnings per share (GAAP)","\u200b","$","3.44","\u200b","$","2.45","\u200b","$","3.46"],["Income taxes","\u200b","","1.02","\u200b","","0.67","\u200b","","0.96"],["Income before income taxes","\u200b","","4.46","\u200b","","3.12","\u200b","","4.42"],["Provision for credit losses","\u200b","","0.43","\u200b","","0.21","\u200b","","0.27"],["Pre-tax, pre-provision net revenue per share (non-GAAP)","\u200b","","4.89","\u200b","","3.33","\u200b","","4.69"],["Acquisition expenses","\u200b","","0.00","\u200b","","0.00","\u200b","","0.09"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","0.00","\u200b","\u200b","0.06","\u200b","\u200b","0.00"],["Restructuring expenses","\u200b","\u200b","0.00","\u200b","\u200b","0.02","\u200b","\u200b","0.00"],["Litigation accrual","\u200b","\u200b","0.00","\u200b","\u200b","0.11","\u200b","\u200b","0.00"],["Loss on sales of investment securities","\u200b","","0.01","\u200b","","0.97","\u200b","","0.00"],["Gain on debt extinguishment","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b","\u200b","0.00"],["Unrealized (gain) loss on equity securities","\u200b","","(0.02)","\u200b","","0.00","\u200b","","0.00"],["Amortization of intangible assets","\u200b","\u200b","0.27","\u200b","\u200b","0.27","\u200b","\u200b","0.28"],["Operating pre-tax, pre-provision net revenue per share (non-GAAP)","\u200b","$","5.15","\u200b","$","4.76","\u200b","$","5.06"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating net income (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net income (GAAP)","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081"],["Acquisition expenses","\u200b","\u200b","213","\u200b","\u200b","63","\u200b","\u200b","5,021"],["Tax effect of acquisition expenses","\u200b","\u200b","(40)","\u200b","\u200b","(13)","\u200b","\u200b","(1,091)"],["Subtotal (non-GAAP)","\u200b","\u200b","182,654","\u200b","\u200b","131,974","\u200b","\u200b","192,011"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","244","\u200b","\u200b","3,280","\u200b","\u200b","(300)"],["Tax effect of acquisition-related contingent consideration adjustments","\u200b","\u200b","(46)","\u200b","\u200b","(689)","\u200b","\u200b","65"],["Subtotal (non-GAAP)","\u200b","\u200b","182,852","\u200b","\u200b","134,565","\u200b","\u200b","191,776"],["Acquisition-related provision for credit losses","\u200b","\u200b","0","\u200b","\u200b","0","\u200b","\u200b","3,927"],["Tax effect of acquisition-related provision for credit losses","\u200b","\u200b","0","\u200b","\u200b","0","\u200b","\u200b","(853)"],["Subtotal (non-GAAP)","\u200b","\u200b","182,852","\u200b","\u200b","134,565","\u200b","\u200b","194,850"],["Litigation accrual","\u200b","\u200b","138","\u200b","\u200b","5,800","\u200b","\u200b","0"],["Tax effect of litigation accrual","\u200b","\u200b","(26)","\u200b","\u200b","(1,218)","\u200b","\u200b","0"],["Subtotal (non-GAAP)","\u200b","\u200b","182,964","\u200b","\u200b","139,147","\u200b","\u200b","194,850"],["Restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","1,163","\u200b","\u200b","0"],["Tax effect of restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","(244)","\u200b","\u200b","0"],["Subtotal (non-GAAP)","\u200b","\u200b","182,964","\u200b","\u200b","140,066","\u200b","\u200b","194,850"],["Loss on sales of investment securities","\u200b","\u200b","487","\u200b","\u200b","52,329","\u200b","\u200b","0"],["Tax effect of loss on sales of investment securities","\u200b","\u200b","(93)","\u200b","\u200b","(10,989)","\u200b","\u200b","0"],["Subtotal (non-GAAP)","\u200b","\u200b","183,358","\u200b","\u200b","181,406","\u200b","\u200b","194,850"],["Gain on debt extinguishment","\u200b","\u200b","0","\u200b","\u200b","(242)","\u200b","\u200b","0"],["Tax effect of gain on debt extinguishment","\u200b","\u200b","0","\u200b","\u200b","51","\u200b","\u200b","0"],["Subtotal (non-GAAP)","\u200b","\u200b","183,358","\u200b","\u200b","181,215","\u200b","\u200b","194,850"],["Unrealized (gain) loss on equity securities","\u200b","\u200b","(1,231)","\u200b","\u200b","47","\u200b","\u200b","44"],["Tax effect of unrealized (gain) loss on equity securities","\u200b","\u200b","234","\u200b","\u200b","(10)","\u200b","\u200b","(10)"],["Subtotal (non-GAAP)","\u200b","\u200b","182,361","\u200b","\u200b","181,252","\u200b","\u200b","194,884"],["Amortization of intangible assets","\u200b","\u200b","14,259","\u200b","\u200b","14,511","\u200b","\u200b","15,214"],["Tax effect of amortization of intangible assets","\u200b","\u200b","(2,709)","\u200b","\u200b","(3,047)","\u200b","\u200b","(3,307)"],["Operating net income (non-GAAP)","\u200b","$","193,911","\u200b","$","192,716","\u200b","$","206,791"]] [[/GREPCENT_TABLE]] ​ 77 Table of Contents [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000's omitted)","","2024","","2023","","2022"],["Operating diluted earnings per share (non-GAAP)","","\u200b","","","\u200b","","","\u200b"],["Diluted earnings per share (GAAP)","\u200b","$","3.44","\u200b","$","2.45","\u200b","$","3.46","\u200b"],["Acquisition expenses","\u200b","","0.00","\u200b","","0.00","\u200b","","0.09","\u200b"],["Tax effect of acquisition expenses","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b","\u200b","(0.02)","\u200b"],["Subtotal (non-GAAP)","\u200b","\u200b","3.44","\u200b","\u200b","2.45","\u200b","\u200b","3.53","\u200b"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","0.00","\u200b","\u200b","0.06","\u200b","\u200b","0.00","\u200b"],["Tax effect of acquisition-related contingent consideration adjustments","\u200b","\u200b","0.00","\u200b","\u200b","(0.01)","\u200b","\u200b","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","","3.44","\u200b","","2.50","\u200b","","3.53","\u200b"],["Acquisition-related provision for credit losses","\u200b","","0.00","\u200b","","0.00","\u200b","","0.07","\u200b"],["Tax effect of acquisition-related provision for credit losses","\u200b","","0.00","\u200b","","0.00","\u200b","","(0.02)","\u200b"],["Subtotal (non-GAAP)","\u200b","","3.44","\u200b","","2.50","\u200b","","3.58","\u200b"],["Litigation accrual","\u200b","","0.00","\u200b","","0.11","\u200b","","0.00","\u200b"],["Tax effect of litigation accrual","\u200b","\u200b","0.00","\u200b","\u200b","(0.03)","\u200b","\u200b","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","\u200b","3.44","\u200b","\u200b","2.58","\u200b","\u200b","3.58","\u200b"],["Restructuring expenses","\u200b","\u200b","0.00","\u200b","\u200b","0.02","\u200b","\u200b","0.00","\u200b"],["Tax effect of restructuring expenses","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","\u200b","3.44","\u200b","\u200b","2.60","\u200b","\u200b","3.58","\u200b"],["Loss on sales of investment securities","\u200b","\u200b","0.01","\u200b","\u200b","0.97","\u200b","\u200b","0.00","\u200b"],["Tax effect of loss on sales of investment securities","\u200b","","0.00","\u200b","","(0.21)","\u200b","","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","","3.45","\u200b","","3.36","\u200b","","3.58","\u200b"],["Gain on debt extinguishment","\u200b","","0.00","\u200b","","0.00","\u200b","","0.00","\u200b"],["Tax effect of gain on debt extinguishment","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","\u200b","3.45","\u200b","\u200b","3.36","\u200b","\u200b","3.58","\u200b"],["Unrealized (gain) loss on equity securities","\u200b","\u200b","(0.02)","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b"],["Tax effect of unrealized (gain) loss on equity securities","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b","\u200b","0.00","\u200b"],["Subtotal (non-GAAP)","\u200b","","3.43","\u200b","","3.36","\u200b","","3.58","\u200b"],["Amortization of intangible assets","\u200b","\u200b","0.27","\u200b","\u200b","0.27","\u200b","\u200b","0.28","\u200b"],["Tax effect of amortization of intangible assets","\u200b","","(0.05)","\u200b","","(0.06)","\u200b","","(0.06)","\u200b"],["Operating diluted earnings per share (non-GAAP)","\u200b","$","3.65","\u200b","$","3.57","\u200b","$","3.80","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Return on assets","\u200b","","\u200b","\u200b","","","\u200b","","","\u200b"],["Net income (GAAP)","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081","\u200b"],["Average total assets","\u200b","","15,990,697","\u200b","","15,242,884","\u200b","","15,567,139","\u200b"],["Return on assets (GAAP)","\u200b","","1.14","%","","0.87","%","","1.21","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating return on assets (non-GAAP)","\u200b","","\u200b","\u200b","","","\u200b","","","\u200b"],["Operating net income (non-GAAP)","\u200b","$","193,911","\u200b","$","192,716","\u200b","$","206,791","\u200b"],["Average total assets","\u200b","","15,990,697","\u200b","","15,242,884","\u200b","","15,567,139","\u200b"],["Operating return on assets (non-GAAP)","\u200b","","1.21","%","","1.26","%","","1.33","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Return on equity","\u200b","","\u200b","\u200b","","","\u200b","","","\u200b"],["Net income (GAAP)","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081","\u200b"],["Average total equity","\u200b","","1,695,794","\u200b","","1,595,724","\u200b","","1,733,521","\u200b"],["Return on equity (GAAP)","\u200b","","10.76","%","","8.27","%","","10.85","%"]] [[/GREPCENT_TABLE]] ​ 78 Table of Contents ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023","","2022"],["Operating return on equity (non-GAAP)","","\u200b","","","\u200b","","","\u200b"],["Operating net income (non-GAAP)","\u200b","$","193,911","\u200b","$","192,716","\u200b","$","206,791","\u200b"],["Average total equity","\u200b","\u200b","1,695,794","\u200b","\u200b","1,595,724","\u200b","\u200b","1,733,521","\u200b"],["Operating return on equity (non-GAAP)","\u200b","\u200b","11.43","%","\u200b","12.08","%","\u200b","11.93","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest margin","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest income","\u200b","$","449,117","\u200b","$","437,285","\u200b","$","420,630","\u200b"],["Total average interest-earning assets","\u200b","\u200b","14,754,880","\u200b","\u200b","14,078,061","\u200b","\u200b","14,548,665","\u200b"],["Net interest margin","\u200b","\u200b","3.04","%","\u200b","3.11","%","\u200b","2.89","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest margin (FTE) (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest income","\u200b","$","449,117","\u200b","$","437,285","\u200b","$","420,630","\u200b"],["Fully tax-equivalent adjustment (non-GAAP)","\u200b","\u200b","3,721","\u200b","\u200b","4,242","\u200b","\u200b","4,074","\u200b"],["Fully tax-equivalent net interest income (non-GAAP)","\u200b","\u200b","452,838","\u200b","\u200b","441,527","\u200b","\u200b","424,704","\u200b"],["Total average interest-earning assets","","\u200b","14,754,880","\u200b","\u200b","14,078,061","\u200b","\u200b","14,548,665","\u200b"],["Net interest margin (FTE) (non-GAAP)","\u200b","\u200b","3.07","%","\u200b","3.14","%","\u200b","2.92","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating noninterest revenues (non-GAAP)","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Noninterest revenues (GAAP)","\u200b","$","297,186","\u200b","$","214,834","\u200b","$","258,725","\u200b"],["Loss on sales of investment securities","\u200b","\u200b","487","\u200b","\u200b","52,329","\u200b","\u200b","0","\u200b"],["Gain on debt extinguishment","\u200b","\u200b","0","\u200b","\u200b","(242)","\u200b","\u200b","0","\u200b"],["Unrealized (gain) loss on equity securities","\u200b","\u200b","(1,231)","\u200b","\u200b","47","\u200b","\u200b","44","\u200b"],["Total operating noninterest revenues (non-GAAP)","\u200b","$","296,442","\u200b","$","266,968","\u200b","$","258,769","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating noninterest expenses (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Noninterest expenses (GAAP)","\u200b","$","486,825","\u200b","$","472,685","\u200b","$","424,268","\u200b"],["Acquisition expenses","\u200b","\u200b","(213)","\u200b","\u200b","(63)","\u200b","\u200b","(5,021)","\u200b"],["Acquisition-related contingent consideration adjustments","\u200b","\u200b","(244)","\u200b","\u200b","(3,280)","\u200b","\u200b","300","\u200b"],["Restructuring expenses","\u200b","\u200b","0","\u200b","\u200b","(1,163)","\u200b","\u200b","0","\u200b"],["Litigation accrual","\u200b","\u200b","(138)","\u200b","\u200b","(5,800)","\u200b","\u200b","0","\u200b"],["Amortization of intangible assets","\u200b","\u200b","(14,259)","\u200b","\u200b","(14,511)","\u200b","\u200b","(15,214)","\u200b"],["Total operating noninterest expenses (non-GAAP)","\u200b","$","471,971","\u200b","$","447,868","\u200b","$","404,333","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating revenues (non-GAAP)","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net interest income (GAAP)","\u200b","$","449,117","\u200b","$","437,285","\u200b","$","420,630","\u200b"],["Noninterest revenues (GAAP)","\u200b","","297,186","\u200b","","214,834","\u200b","","258,725","\u200b"],["Total revenues (GAAP)","\u200b","","746,303","\u200b","","652,119","\u200b","","679,355","\u200b"],["Loss on sales of investment securities","\u200b","\u200b","487","\u200b","\u200b","52,329","\u200b","\u200b","0","\u200b"],["Gain on debt extinguishment","\u200b","\u200b","0","\u200b","\u200b","(242)","\u200b","\u200b","0","\u200b"],["Unrealized (gain) loss on equity securities","\u200b","\u200b","(1,231)","\u200b","\u200b","47","\u200b","\u200b","44","\u200b"],["Total operating revenues (non-GAAP)","\u200b","$","745,559","\u200b","$","704,253","\u200b","$","679,399","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Noninterest revenues/total revenues","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total noninterest revenues (GAAP) \u2013 numerator","\u200b","$","297,186","\u200b","$","214,834","\u200b","$","258,725","\u200b"],["Total revenues (GAAP) \u2013 denominator","\u200b","","746,303","\u200b","","652,119","\u200b","","679,355","\u200b"],["Noninterest revenues/total revenues (GAAP)","\u200b","\u200b","39.8","%","\u200b","32.9","%","\u200b","38.1","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating noninterest revenues/operating revenues (FTE) (non-GAAP)","\u200b","","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total operating noninterest revenues (non-GAAP) \u2013 numerator","\u200b","$","296,442","\u200b","$","266,968","\u200b","$","258,769","\u200b"],["Total operating revenues (non-GAAP)","\u200b","\u200b","745,559","\u200b","\u200b","704,253","\u200b","\u200b","679,399","\u200b"],["Fully tax-equivalent adjustment (non-GAAP)","\u200b","\u200b","3,721","\u200b","\u200b","4,242","\u200b","\u200b","4,074","\u200b"],["Total operating revenues (FTE) (non-GAAP) \u2013 denominator","\u200b","\u200b","749,280","\u200b","\u200b","708,495","\u200b","\u200b","683,473","\u200b"],["Operating noninterest revenues/operating revenues (FTE) (non-GAAP)","\u200b","\u200b","39.6","%","\u200b","37.7","%","\u200b","37.9","%"]] [[/GREPCENT_TABLE]] ​ 79 Table of Contents ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023","","2022","\u200b"],["Efficiency ratio (GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total noninterest expenses (GAAP) \u2013 numerator","\u200b","$","486,825","\u200b","$","472,685","\u200b","$","424,268","\u200b"],["Total revenues (GAAP) \u2013 denominator","\u200b","","746,303","\u200b","","652,119","\u200b","","679,355","\u200b"],["Efficiency ratio (GAAP)","\u200b","\u200b","65.2","%","\u200b","72.5","%","\u200b","62.5","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating efficiency ratio (non-GAAP)","\u200b","","","\u200b","","","\u200b","","","\u200b"],["Total operating noninterest expenses (non-GAAP) \u2013 numerator","\u200b","$","471,971","\u200b","$","447,868","\u200b","$","404,333","\u200b"],["Total operating revenues (FTE) (non-GAAP) \u2013 denominator","\u200b","","749,280","\u200b","","708,495","\u200b","","683,473","\u200b"],["Operating efficiency ratio (non-GAAP)","\u200b","\u200b","63.0","%","\u200b","63.2","%","\u200b","59.2","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Return on tangible equity (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net income (GAAP)","\u200b","$","182,481","\u200b","$","131,924","\u200b","$","188,081","\u200b"],["Average shareholders\u2019 equity","\u200b","\u200b","1,695,794","\u200b","\u200b","1,595,724","\u200b","\u200b","1,733,521","\u200b"],["Average goodwill and intangible assets, net","\u200b","\u200b","(902,681)","\u200b","\u200b","(900,058)","\u200b","\u200b","(891,647)","\u200b"],["Average deferred taxes on goodwill and intangible assets, net","\u200b","\u200b","44,908","\u200b","\u200b","45,664","\u200b","\u200b","45,145","\u200b"],["Average tangible common equity (non-GAAP)","\u200b","\u200b","838,021","\u200b","\u200b","741,330","\u200b","\u200b","887,019","\u200b"],["Return on tangible equity (non-GAAP)","\u200b","\u200b","21.78","%","\u200b","17.80","%","\u200b","21.20","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating return on tangible equity (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Operating net income (non-GAAP)","\u200b","$","193,911","\u200b","$","192,716","\u200b","$","206,791","\u200b"],["Average tangible common equity (non-GAAP)","\u200b","","838,021","\u200b","","741,330","\u200b","","887,019","\u200b"],["Operating return on tangible equity (non-GAAP)","\u200b","\u200b","23.14","%","\u200b","26.00","%","\u200b","23.31","%"]] [[/GREPCENT_TABLE]] ​ 80 Table of Contents [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["(000\u2019s omitted)","","2024","","2023","","2022"],["Total tangible assets (non-GAAP)","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total assets (GAAP)","\u200b","$","16,386,044","\u200b","$","15,555,753","\u200b","$","15,835,651","\u200b"],["Goodwill and intangible assets, net","\u200b","","(901,471)","\u200b","","(897,987)","\u200b","","(902,837)","\u200b"],["Deferred taxes on goodwill and intangible assets, net","\u200b","","44,618","\u200b","","45,198","\u200b","","46,130","\u200b"],["Total tangible assets (non-GAAP)","\u200b","$","15,529,191","\u200b","$","14,702,964","\u200b","$","14,978,944","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total tangible common equity (non-GAAP)","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Shareholders\u2019 equity (GAAP)","\u200b","$","1,762,835","\u200b","$","1,697,937","\u200b","$","1,551,705","\u200b"],["Goodwill and intangible assets, net","\u200b","","(901,471)","\u200b","","(897,987)","\u200b","","(902,837)","\u200b"],["Deferred taxes on goodwill and intangible assets, net","\u200b","","44,618","\u200b","","45,198","\u200b","","46,130","\u200b"],["Total tangible common equity (non-GAAP)","\u200b","$","905,982","\u200b","$","845,148","\u200b","$","694,998","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Shareholders\u2019 equity-to-assets ratio at year end","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Total shareholders' equity (GAAP) - numerator","\u200b","$","1,762,835","\u200b","$","1,697,937","\u200b","$","1,551,705","\u200b"],["Total assets (GAAP) - denominator","\u200b","\u200b","16,386,044","\u200b","\u200b","15,555,753","\u200b","\u200b","15,835,651","\u200b"],["Shareholders\u2019 equity-to-assets ratio at year end (GAAP)","\u200b","\u200b","10.76","%","\u200b","10.92","%","\u200b","9.80","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Tangible equity-to-tangible assets ratio at year end (non-GAAP)","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Total tangible common equity (non-GAAP) - numerator","\u200b","$","905,982","\u200b","$","845,148","\u200b","$","694,998","\u200b"],["Total tangible assets (non-GAAP) - denominator","\u200b","\u200b","15,529,191","\u200b","\u200b","14,702,964","\u200b","\u200b","14,978,944","\u200b"],["Tangible equity-to-tangible assets ratio at year end (non-GAAP)","\u200b","","5.83","%","","5.75","%","","4.64","%"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Book value (GAAP)","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Total shareholders\u2019 equity (GAAP) \u2013 numerator","\u200b","$","1,762,835","\u200b","$","1,697,937","\u200b","$","1,551,705","\u200b"],["Period end common shares outstanding \u2013 denominator","\u200b","\u200b","52,668","\u200b","\u200b","53,327","\u200b","\u200b","53,737","\u200b"],["Book value (GAAP)","\u200b","$","33.47","\u200b","$","31.84","\u200b","$","28.88","\u200b"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Tangible book value (non-GAAP)","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Total tangible common equity (non-GAAP) \u2013 numerator","\u200b","$","905,982","\u200b","$","845,148","\u200b","$","694,998","\u200b"],["Period end common shares outstanding \u2013 denominator","\u200b","\u200b","52,668","\u200b","\u200b","53,327","\u200b","\u200b","53,737","\u200b"],["Tangible book value (non-GAAP)","\u200b","$","17.20","\u200b","$","15.85","\u200b","$","12.93","\u200b"]] [[/GREPCENT_TABLE]] ​ ​