ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES

9 Months Ended

Sep. 30, 2025

ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES

The ACL is maintained for credit losses expected in the existing loan and lease portfolio and is presented as a reserve against loans and leases on the Consolidated Balance Sheets. Loan and lease losses are charged off against the ACL, with recoveries of amounts previously charged off credited to the ACL. Provisions for credit losses are charged to operations based on management’s periodic evaluation of the appropriate level of the ACL.

Following is a summary of changes in the ACL, by loan and lease class:

TABLE 5.1


(in millions)	Balance at Beginning of Period		Charge- Offs		Recoveries		Net (Charge- Offs) Recoveries		Provision for Credit Losses		Balance at End of Period
Three Months Ended September 30, 2025
Commercial real estate	$	179.5	$	(9.2)	$	0.4	$	(8.8)	$	7.4	$	178.1
Commercial and industrial	88.3		(9.2)		1.0		(8.2)		14.9		95.0
Commercial leases	21.6		—		—		—		1.7		23.3
Other	4.6		(1.4)		0.2		(1.2)		1.2		4.6
Total commercial loans and leases	294.0		(19.8)		1.6		(18.2)		25.2		301.0
Direct installment	26.6		(0.1)		0.1		—		(0.6)		26.0
Residential mortgages	95.4		(0.5)		0.1		(0.4)		(0.8)		94.2
Indirect installment	9.3		(1.6)		0.6		(1.0)		0.8		9.1
Consumer lines of credit	6.8		(0.2)		0.1		(0.1)		0.3		7.0
Total consumer loans	138.1		(2.4)		0.9		(1.5)		(0.3)		136.3
Total allowance for credit losses on loans and leases	432.1		(22.2)		2.5		(19.7)		24.9		437.3
Allowance for unfunded loan commitments	21.0		—		—		—		(0.9)		20.1
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments	$	453.1	$	(22.2)	$	2.5	$	(19.7)	$	24.0	$	457.4

Nine Months Ended September 30, 2025
Commercial real estate	$	166.9	$	(19.8)	$	1.0	$	(18.8)	$	30.0	$	178.1
Commercial and industrial	85.6		(31.6)		6.0		(25.6)		35.0		95.0
Commercial leases	22.9		(0.2)		—		(0.2)		0.6		23.3
Other	4.3		(3.6)		0.7		(2.9)		3.2		4.6
Total commercial loans and leases	279.7		(55.2)		7.7		(47.5)		68.8		301.0
Direct installment	29.1		(0.7)		0.4		(0.3)		(2.8)		26.0
Residential mortgages	95.9		(2.3)		0.3		(2.0)		0.3		94.2
Indirect installment	9.5		(5.5)		1.8		(3.7)		3.3		9.1
Consumer lines of credit	8.6		(0.8)		0.3		(0.5)		(1.1)		7.0
Total consumer loans	143.1		(9.3)		2.8		(6.5)		(0.3)		136.3
Total allowance for credit losses on loans and leases	422.8		(64.5)		10.5		(54.0)		68.5		437.3
Allowance for unfunded loan commitments	21.4		—		—		—		(1.3)		20.1
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments	$	444.2	$	(64.5)	$	10.5	$	(54.0)	$	67.2	$	457.4


(in millions)	Balance at Beginning of Period		Charge- Offs		Recoveries		Net (Charge- Offs) Recoveries		Provision for Credit Losses		Balance at End of Period
Three Months Ended September 30, 2024
Commercial real estate	$	157.7	$	(13.8)	$	0.9	$	(12.9)	$	40.1	$	184.9
Commercial and industrial	93.5		(10.1)		6.5		(3.6)		(11.5)		78.4
Commercial leases	22.9		(0.1)		—		(0.1)		(1.2)		21.6
Other	4.0		(1.2)		0.2		(1.0)		1.0		4.0
Total commercial loans and leases	278.1		(25.2)		7.6		(17.6)		28.4		288.9
Direct installment	30.9		(0.2)		0.2		—		(1.7)		29.2
Residential mortgages	88.2		(0.1)		0.1		—		(4.0)		84.2
Indirect installment	13.1		(4.2)		0.6		(3.6)		(0.5)		9.0
Consumer lines of credit	8.5		(0.4)		0.1		(0.3)		0.7		8.9
Total consumer loans	140.7		(4.9)		1.0		(3.9)		(5.5)		131.3
Total allowance for credit losses on loans and leases	418.8		(30.1)		8.6		(21.5)		22.9		420.2
Allowance for unfunded loan commitments	21.8		—		—		—		0.6		22.4
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments	$	440.6	$	(30.1)	$	8.6	$	(21.5)	$	23.5	$	442.6
Nine Months Ended September 30, 2024
Commercial real estate	$	166.6	$	(24.1)	$	2.1	$	(22.0)	$	40.3	$	184.9
Commercial and industrial	87.8		(18.7)		9.0		(9.7)		0.3		78.4
Commercial leases	21.2		(0.3)		0.1		(0.2)		0.6		21.6
Other	3.7		(3.1)		1.1		(2.0)		2.3		4.0
Total commercial loans and leases	279.3		(46.2)		12.3		(33.9)		43.5		288.9
Direct installment	33.8		(0.8)		0.6		(0.2)		(4.4)		29.2
Residential mortgages	70.5		(0.3)		0.2		(0.1)		13.8		84.2
Indirect installment	12.8		(9.6)		2.1		(7.5)		3.7		9.0
Consumer lines of credit	9.2		(1.0)		0.6		(0.4)		0.1		8.9
Total consumer loans	126.3		(11.7)		3.5		(8.2)		13.2		131.3
Total allowance for credit losses on loans and leases	405.6		(57.9)		15.8		(42.1)		56.7		420.2
Allowance for unfunded loan commitments	21.5		—		—		—		0.9		22.4
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments	$	427.1	$	(57.9)	$	15.8	$	(42.1)	$	57.6	$	442.6

Following is a summary of changes in the AULC by portfolio segment:

TABLE 5.2


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
(in millions)
Balance at beginning of period	$	21.0	$	21.8	$	21.4	$	21.5
Provision for unfunded loan commitments and letters of credit:
Commercial portfolio	(0.8)		0.6		(1.1)		1.0
Consumer portfolio	(0.1)		—		(0.2)		(0.1)






Balance at end of period	$	20.1	$	22.4	$	20.1	$	22.4

The model used to calculate the ACL is dependent on the portfolio composition and credit quality, as well as historical experience, current conditions and forecasts of economic conditions and interest rates. Specifically, the following considerations are incorporated into the ACL calculation:

•a third-party macroeconomic forecast scenario;

•a 24-month R&S forecast period for macroeconomic factors with a reversion to the historical mean on a straight-line basis over a 12-month period; and

•the historical through-the-cycle mean was calculated using an expanded period to include a prior recessionary period.

At September 30, 2025 and December 31, 2024, we utilized a third-party consensus macroeconomic forecast reflecting the current and projected macroeconomic environment. For our ACL calculation at September 30, 2025, the macroeconomic variables that we utilized included, but were not limited to: (i) the purchase only Housing Price Index, which increases 3.4% over our R&S forecast period, (ii) a Commercial Real Estate (CRE) Price Index, which decreases 4.0% over our R&S forecast period, (iii) S&P Volatility, which increases 91.1% in 2025 and decreases 19.8% in 2026 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period. While we have not changed our ACL modeling methodology, we continually assess our key macroeconomic variables and their correlation to our historical and expected portfolio performance. During the quarter ended September 30, 2025, we changed certain macroeconomic variables used for ACL modeling purposes as we believe the new variables better correlate to our historical performance over the economic cycles. Macroeconomic variables that we utilized for our ACL calculation as of December 31, 2024 included, but were not limited to: (i) the purchase only Housing Price Index, which increases 7.4% over our R&S forecast period, (ii) a Commercial Real Estate Price Index, which increases 3.9% over our R&S forecast period, (iii) S&P Volatility, which increases 34.9% in 2025 and 2.5% in 2026 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period.

The ACL on loans and leases of $437.3 million at September 30, 2025 increased $14.5 million, or 3.4%, from December 31, 2024. Our ending ACL coverage ratio at September 30, 2025 was 1.25%, unchanged from December 31, 2024. Total provision for credit losses for the three months ended September 30, 2025 was $24.0 million, compared to $23.5 million for the same period of 2024. The third quarter of 2025 reflected net charge-offs of $19.7 million, or 0.22% annualized of average total loans, compared to $21.5 million, or 0.25% annualized, in the third quarter of 2024. Total provision for credit losses for the nine months ended September 30, 2025 was $67.1 million, compared to $57.5 million in the same period of 2024. Net charge-offs were $54.0 million, or 0.21% annualized of average total loans, during the nine months ended September 30, 2025, compared to $42.1 million, or 0.17% annualized, for the same period of 2024.