Short and Long-Term Funding

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Short and Long-Term Funding

The following table presents the components of short-term funding (funding with original contractual maturities of one year or less), and long-term funding (funding with original contractual maturities greater than one year):

($ in thousands)	December 31, 2023		December 31, 2022
Short-term funding
Federal funds purchased	$	220,160	$	344,170
Securities sold under agreements to repurchase	106,620		240,969
Federal funds purchased and securities sold under agreements to repurchase	326,780		585,139
Commercial paper	—		20,798
Total short-term funding	$	326,780	$	605,937
Long-term funding
Corporation subordinated notes, at par	$	550,000	$	250,000
Discount and capitalized costs	(7,748)		(544)
Subordinated debt fair value hedge(a)	(1,366)		(1,855)
Finance leases	383		469
Total long-term funding	$	541,269	$	248,071
Total short and long-term funding, excluding FHLB advances	$	868,049	$	854,007
FHLB advances
Short-term FHLB advances	$	740,000	$	3,125,000
Long-term FHLB advances	1,209,907		1,209,170
FHLB advances fair value hedge(a)	(9,713)		(14,308)
Total FHLB advances	$	1,940,194	$	4,319,861
Total short and long-term funding	$	2,808,243	$	5,173,869

(a) For additional information on the fair value hedges, see Note 14.

Securities Sold Under Agreement to Repurchase

The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts (i.e., there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities).

The Corporation utilizes repurchase agreements to facilitate the needs of its customers. The fair value of securities pledged to secure repurchase agreements may decline. At December 31, 2023, the Corporation had pledged securities valued at 191% of the gross outstanding balance of repurchase agreements to manage this risk.

The remaining contractual maturity of the securities sold under agreements to repurchase on the consolidated balance sheets as of December 31, 2023 and 2022 are presented in the following table:

	Overnight and Continuous
($ in thousands)	December 31, 2023		December 31, 2022
Repurchase agreements
Agency mortgage-related securities	$	106,620	$	240,969

Long-Term Funding

Subordinated Notes

In November 2014, the Corporation issued $250 million of 10-year subordinated notes, due January 2025, and callable October 2024. The subordinated notes have a fixed coupon interest rate of 4.25% and were issued at a discount.

In February 2023, the Corporation issued $300 million of 10-year subordinated notes, due March 1, 2033 and redeemable (i) on the reset date of March 1, 2028 and any interest payment date thereafter, (ii) at any time on or after the three month period prior to the maturity date, and (iii) upon the occurrence of a Regulatory Capital Treatment Event (as defined in the Global Note). The subordinated notes have a fixed coupon interest rate of 6.625% until the reset date, after which the rate will be equal to the Five-Year U.S. Treasury Rate as of the reset date plus 2.812% per annum. The notes were issued at a discount.

Finance Leases

Finance leases are used in conjunction with branch operations. See Note 7 for additional disclosure regarding the Corporation’s leases.

FHLB Advances

Under agreements with the FHLB of Chicago, FHLB advances are secured by pledging qualifying collateral of the subsidiary bank (such as residential mortgage, residential mortgage loans held for sale, home equity, CRE and investment securities). At December 31, 2023, the Corporation had $10.5 billion of total collateral capacity, primarily supported by pledged consumer and CRE loans and investment securities. At December 31, 2023, the FHLB advances had maturity or call dates ranging from 2024 through 2029, and had a weighted average interest rate of 4.93%, compared to 4.06% at December 31, 2022. The Corporation prepaid $400 million in long-term FHLB advances during the first quarter of 2022 with no prepayment fee.

The table below summarizes the expected maturities of the Corporation’s long-term funding at December 31, 2023:

($ in thousands)	Long Term Funding
Year
2024	$	248,884
2025	394,797
2026	604,540
2027	671
2028	198,966
Beyond 2028	293,605
Total long-term funding	$	1,741,463