Risk Factors Update Summary

• Cumulative effect adjustment from the adoption of ASU 2022 - 02 (TDR), net of tax. This adjustment resulted in a $544 million decrease in net income.
• The Company increased its interest rate derivatives not designated as hedging instruments by $60.6 million.
• Non-performing loans increased from $139 million in 2022 to $300 million in 2023.
• Year-end total loans increased from $39,196,485 to $42,131,831.
• Increase in mortgage loans held-for-sale measured at fair value from $292.7 million to $299 million.
• Mortgage banking revenue decreased by $72.1 million in 2023 compared to 2022 due to lower originations.
• A new Policy on Recoupment of Incentive Compensation was adopted, effective October 26, 2023.
• Total loans increased significantly from $39,196,485 to $42,131,831, a change of $2,935,346.
• Goodwill for the wealth management unit increased by $2.6 million due to an acquisition.
• Net interest income increased by $43 million in 2023 compared to 2022, primarily due to a $3.6 billion increase in average earning assets.
• The company added climate change and environmental sustainability matters to risk factors.
• Total average earning assets increased by $2.8 billion in 2023 compared to 2022, a 6% rise.
• Amended Restated Credit Agreement dated December 12, 2022, with lenders, increased to $10 million.
• The Recovery Period for recoupment is the three completed fiscal years preceding the Financial Restatement.
• Increase in deposit accounts, net. There was a significant increase of $2,494,619 in deposit accounts.
• The Policy applies to all Executives and their beneficiaries, executors, administrators, and legal representatives.
• Deposits increased from $42.9 billion to $45.4 billion, with non-interest-bearing deposits decreasing from $12.7 billion to $10.4 billion.
• Specialty finance segment's goodwill increased by $1.6 million to $526 million in 2023.
• Mortgage-backed securities increased from $2,447,332 to $3,064,182, a change of $616,850.
• Trust and asset management fees decreased in 2023 compared to 2022, impacting non-interest income.
• Net charge-offs as a percentage of the provision for credit losses decreased from 0.73% to 0.11%.
• Decrease in cost of servicing from $343 to $393 per loan.
• The Company added $8.4 million in commodity derivative transactions not designated as hedging instruments.
• Provision for credit losses increased to $114.4 million in 2023 from $78.6 million in 2022, primarily due to higher charge-offs.
• Total commercial loans increased from $22,500,111 to $24,176,217, a significant rise of $1,676,106.
• The company increased the allowance for credit losses from $299.7 million in 2021 to $427.6 million in 2023.
• Total acquisition-related intangible assets increased by $6.2 million to $89.6 million in 2023.
• Mortgage servicing rights valuation adjustment decreased by $26.0 million in 2023 compared to 2022.
• Increase in individually assessed loans classified as Level 3 from $90.2 million to $91 million.
• Net charge-offs as a percentage of loans at the end of the year decreased from 0.94% to 0.73%.
• Non-accrual loans decreased from $110,597 to $100,697, showing an improvement of $9,900.
• Commercial loans increased by $151 million in 2023 compared to 2022, reflecting business growth.
• Mortgage banking revenue decreased by $117.3 million in 2023 compared to 2022, mainly due to unfavorable fair value adjustments of MSRs.
• The allowance for credit losses increased from $270,173 to $344,235.
• Exceptions to recoupment include compensation received before serving as an Executive or during a non-executive period.
• The Company may use legal or equitable remedies to recoup erroneously awarded Incentive-Based Compensation.
• Incentive-Based Compensation subject to recovery includes stock price, total shareholder return, and performance-based awards.
• Allowance for credit losses decreased from $357,448 to $299,653, a decrease of $57,795.
• Net charge-offs increased significantly from $20.3 million in 2022 to $45.5 million in 2023.
• Increase in loans, net. Loans increased by $1,581 million from $2,636 million to $4,217 million.
• The Company increased its foreign currency derivatives by $81.9 million from 2022 to 2023.
• The company reduced the carrying balance of PPP loans from $28 million in 2022 to $11.9 million in 2023.
• First Amendment to Credit Agreement dated July 17, 2023, increased borrowing capacity by $5 million.
• Net Cash Provided by Financing Activities. Net cash provided by financing activities increased by $230,408 million.
• Allowance for loan losses as a percentage of loans at the end of the year increased from 0.82% to 1.18%.
• Total assets increased from $52.9 billion to $56.3 billion, with total liabilities and shareholders' equity increasing from $50.1 billion to $56.3 billion.
• Increase in net cash provided by operating activities from $172.2 million to $305.8 million.
• Commercial loan portfolio decreased from $12.5 billion in 2022 to $11.8 billion in 2023.
• Second Amendment to Credit Agreement dated December 11, 2023, increased interest rate by 1%.
• The company's net income increased from $509.7 million in 2022 to $622.6 million in 2023.
• Average commercial real estate loans increased by $1.2 billion in 2023 compared to 2022, a 13% rise.
• Deferred income taxes decreased by $19.7 million to $(19.7) million in 2023.
• The Company's total derivatives increased by $21.1 million from 2022 to 2023.
• Total non-performing loans decreased from $100,697 to $74,438, a reduction of $26,259.
• The Company shall not indemnify Executives or pay for insurance related to losses under this Policy.
• Production revenue decreased by $3.1 million in 2023 compared to 2022 due to lower gain on sale margin.
• Non-interest expense increased by $135.2 million in 2023, primarily driven by higher software, salary, and employee benefits expenses.
• Loans increased from $39.2 billion at December 31, 2022, to $42.1 billion at December 31, 2023, reflecting significant growth.
• The Company's net credit exposure decreased by $14.9 million from 2022 to 2023.
• Total revenue from contracts with customers increased by $2.7 million to $220.4 million in 2023.
• Increase in net income applicable to common shares from $594.7 million to $481.7 million.
• Unrealized losses on equity securities with readily determinable fair value. The unrealized losses decreased by $1,148 million.
• Total non-performing assets decreased from $110,597 to $78,709, a decrease of $31,888.
• Increase in total assets at the end of the year from $44.4 billion to $56.3 billion.
• Total gross deferred tax assets decreased by $12.5 million to $324.5 million in 2023.
• Net realized gains on investment securities. Net realized gains on investment securities increased by $218 million.
• The Company reclassified $11.9 million from accumulated other comprehensive income to interest income.
• Net interest margin increased to 3.66% in 2023 from 3.15% in 2022, primarily due to higher yields on loans and a shift in earning asset mix.
• Net charge-offs decreased from $31,779 to $20,276, showing a decrease of $11,503.
• Increase in net interest income from $1.4 billion to $1.8 billion.
• Stock options outstanding decreased by 7,563 shares to 13,100 shares in 2023.
• Decrease in securities purchased under resale agreements. There was a decrease of $700 million in securities purchased under resale agreements.
• The Company's gross amounts recognized for derivatives decreased by $10.7 million from 2022 to 2023.
• Net charge-offs increased slightly to $45 million in 2023 from $20 million in 2022, with commercial and commercial real estate loans being the main contributors.
• Recoveries increased from $11,503 to $13,569, indicating a positive change of $2,066.
• Allowance for credit losses increased from $357,448 to $427,265, a significant increase of $69,817.