Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issues its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of June 30, ~~2019,~~2022, the aggregate market value of common stock outstanding held by nonaffiliates of the registrant was approximately ~~$2,910,285,653~~$3,765,571,733 based on the closing price of the registrant’s common stock on the NASDAQ Global Select Market on that date.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Portions of the Company's Definitive Proxy Statement on Schedule 14A (the “Proxy Statement”) to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on April ~~28, 2020,~~26, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K.

UMB Financial Corporation (together with its consolidated subsidiaries, unless the context requires otherwise, the Company) is a financial holding company that is headquartered in Kansas City, Missouri. The Company provides banking services and asset servicing to its customers in the United States and around the globe.

The Company was organized as a corporation under Missouri law in 1967 and is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the BHCA) and a financial holding company under the Gramm-Leach-Bliley Act of 1999, as amended (the GLBA). The Company currently owns all of the outstanding stock of one national bank and several nonbank subsidiaries.

The Company’s national bank, UMB Bank, National Association (the Bank), has its principal office in Missouri and also has branches in Arizona, Colorado, Illinois, Kansas, Nebraska, Oklahoma, and Texas. The Bank offers a full complement of banking products and other services to commercial, retail, government, and correspondent-bank customers, including a wide range of asset-management, trust, ~~bank-card,~~bankcard, and cash-management services.

The Company also owns UMB Fund Services, Inc. (UMBFS), which is a significant nonbank subsidiary that has offices in Milwaukee, Wisconsin, Chadds Ford, Pennsylvania, and Ogden, Utah. UMBFS provides fund accounting, transfer agency, and other services to mutual fund and alternative-investment groups.

~~Until November 17, 2017,~~Prior to March 31, 2021, the Company also owned ~~Scout Investments, Inc. (Scout)~~Prairie Capital Management, LLC (PCM), which ~~is an institutional asset-management company that offered domestic~~provided investment management services and ~~international~~alternative investments in hedge funds and private equity ~~strategies through~~funds. The Company sold its ~~Scout Asset Management Division~~membership interests in PCM during the first quarter of 2021.

For over two years, the Company has experienced the impacts of the COVID-19 global pandemic (the COVID-19 pandemic, or the pandemic). Such impacts have included significant volatility in the global stock and fixed income ~~strategies through~~markets, the enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the American Rescue Plan Act of 2021, both authorizing the Paycheck Protection Program (PPP) administered by the Small Business Administration, and a variety of rulings from the Company’s banking regulators.

The Company continues to actively monitor developments related to COVID-19 and its ~~Reams Asset Management division. On November 17, 2017,~~impact to its business, customers, employees, counterparties, vendors, and service providers. The COVID-19 pandemic has necessitated certain actions related to the way the Company ~~closed on~~operates its business. The Company is carefully monitoring the ~~sale~~activities of ~~Scout~~its vendors and other third-party service providers to ~~Carillon Tower Advisers, Inc., a Florida corporation, for a purchase price~~mitigate the risks associated with any potential service disruptions. The length of ~~approximately $172.5million, after giving effect to customary purchase price adjustments.~~

~~On a full-time equivalent basis at December 31, 2019,~~time the Company may be required to operate under such circumstances and future degrees of disruption remain uncertain. While the Company has not experienced material adverse disruptions to its ~~subsidiaries employed 3,670 persons.~~internal operations due to the pandemic, it continues to review evolving risks and developments.

The Company’s products and services are grouped into ~~four~~three segments: Commercial Banking, Institutional Banking, and Personal ~~Banking, and Healthcare Services.~~Banking.

These segments and their financial results are described in detail in (i) the section of Management’s Discussion and Analysis of Financial Condition and Results of Operations entitled Business Segments, which can be found in Part II, Item 7 ~~pages 34 through 36,~~ of this report and (ii) Note 12, “Business Segment Reporting,” in the Notes to the Consolidated Financial Statements, which can be found in Part II, Item 8 ~~pages 90 through 91~~ of this report.

The Company faces intense competition in each of its business segments and in all of the markets and geographic regions that the Company serves. Competition comes from both traditional and non-traditional financial-services providers, including banks, savings associations, finance companies, investment advisors, asset managers, mutual funds, private-equity firms, hedge funds, brokerage firms, mortgage-banking companies, credit-card companies, insurance companies, trust companies, securities processing companies, and credit unions. Increasingly, financial-technology (fintech) companies are partnering with financial-services providers to compete with the Company for lending, payments, and other business. Many of the Company’s competitors are not subject to the same kind or degree of supervision and regulation as the Company.

Competition is based on a number of factors. Banking customers are generally influenced by convenience, interest rates and pricing, personal experience, quality and availability of products and other services, lending limits, transaction execution, and reputation. Investment advisory services compete primarily on returns, expenses, third-party ratings, and the reputation and performance of managers. Asset servicing competes primarily on price, quality

of services, and reputation. The Company and its competitors are all impacted to varying degrees by the overall economy and health of the financial markets.

The Company’s ability to successfully compete in its chosen markets and regions also depends on its ability to attract, retain, and motivate talented employees, to invest in technology and infrastructure, and to innovate, all while effectively managing its expenses. The Company expects that competition will likely intensify in the future.

The Company is dedicated to creating the Unparalleled Customer Experience, and its associates are critical to achieving this mission. As part of the Company’s efforts to recruit and retain top talent, it strives to offer competitive compensation and benefits programs, while fostering a culture rooted in inclusion of a diverse mix of associates who are empowered to be part of something more. The Company believes its associates, customers, and communities mutually benefit by its focus on providing opportunities for its associates to make an impact at work and in its communities. On a full-time equivalent basis at December 31, 2022, the Company and its subsidiaries employed 3,770 associates across the country.

Compensation and Benefits Program. The Company’s compensation program is designed to allow it to attract, reward, and retain talented individuals who contribute significant value to the organization. The Company’s compensation programs reward performance, reserving the highest rewards for the highest performers. The Company’s incentive plans are intended to promote the interests of the Company and its shareholders by providing associates with incentives and rewards to encourage them to continue in service of the Company. The Company provides employees with compensation packages that include base salary, annual short-term incentive bonuses, and long-term equity awards tied to management, growth, and protection of the business of the Company. In addition to cash and equity compensation, the Company offers a robust benefits program that includes medical, dental, and vision insurance, health savings accounts and a variety of insurance options, including pet, life, and long-term care. Additionally, the Company also offers associates benefits including paid time off, paid volunteer time off, paid parental leave, adoption assistance, a 401(k) plan, as well as profit sharing and an employee stock ownership plan. The Company strives to engage and encourage associates to act and take personal responsibility for improving their health and well-being, as well as the health and well-being of their families. To assist associates with their goals, the Company offers wellness incentives and wellness coaches for strategic wellness support strategies.

Diversity and Inclusion. The Company believes that an equitable and inclusive environment with diverse teams produces more creative solutions, results in better products and services, and is crucial to its efforts to attract and retain key talent. The Company’s talent acquisition team focuses on building recruitment marketing strategies that are designed to identify and attract diverse associates. The Company’s business resource groups (BRGs) also play a vital role in deepening the recruitment pipeline of diverse talent and refer candidates to the Company on a regular basis. BRGs are structured to engage associates who share common interests, including associates from traditionally underrepresented groups. Nearly 20% of the Company’s associates participate in one or more BRGs.

Community Involvement. For more than a century, the Company has maintained a commitment to the prosperity of each community it serves. In addition to providing financial products built for the needs of its customers, the Company builds strong community partnerships through associate volunteerism, associate financial

giving, and corporate philanthropy. The Company encourages associates to give back to their local communities through various programs and initiatives, including paid volunteer time off and matching charitable gift programs.

For more information on the Company’s diversity and inclusion and community involvement initiatives, please see its Corporate Citizenship Report available at www.umb.com/corporatecitizenship. Information on the Company’s website is not incorporated by reference into this report and should not be considered part of this document.

In addition to the impact of general economic conditions, the Company’s business, results of operations, financial condition, capital, liquidity, and prospects are significantly affected by government monetary and fiscal policies that are announced or implemented in the United States and abroad.

A sizeable influence is exerted, in particular, by the policies of the Board of Governors of the Federal Reserve System (the FRB), which influences monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. Among the FRB’s policy tools are (1) open market operations (that is, purchases or sales of securities in the open market to adjust the supply of reserve balances in order to achieve targeted federal funds rates or to put pressure on longer-term interest rates in order to achieve more desirable levels of economic activity and job creation), (2) the discount rate charged on loans by the Federal Reserve Banks, (3) the level of reserves required to be held by depository institutions against specified deposit liabilities, (4) the interest paid or charged on balances maintained with the Federal Reserve Banks by depository institutions, including balances used to satisfy their reserve requirements, and (5) other deposit and loan facilities.

The FRB and its policies have a substantial impact on the availability and demand for loans and deposits, the rates, and other aspects of pricing for loans and deposits, and the conditions in equity, fixed income, currency, and other markets in which the Company operates. Policies announced or implemented by other central banks around the world have a meaningful effect as well and sometimes may be coordinated with those of the FRB.

Tax and other fiscal policies, moreover, impact not only general economic conditions but also give rise to incentives or disincentives that affect how the Company and its customers prioritize objectives, operate businesses, and deploy resources.

The Company is subject to regulatory frameworks in the United States at federal, State, and local levels. In addition, the Company is subject to the direct supervision of various government authorities charged with overseeing the kinds of financial activities conducted by its business segments.

This section summarizes ~~some pertinent~~certain provisions of the principal laws and regulations that apply to the Company. The descriptions, however, are not complete and are qualified in their entirety by the full text and judicial or administrative interpretations of those laws and regulations and other laws and regulations that affect the Company.

The Company is a bank holding company under the BHCA and a financial holding company under the GLBA. As a result, the Company—including all of its businesses and operations—is subject to the regulation, supervision, and examination of the FRB and to restrictions on permissible activities. This framework of regulation, supervision, and examination is intended primarily for the protection and benefit of depositors and other customers of the Bank, the Deposit Insurance Fund (the DIF) of the Federal Deposit Insurance Corporation (the FDIC), the banking and financial systems as a whole, and the broader economy, not for the protection or benefit of the Company’s shareholders or its non-deposit creditors.

Many of the Company’s subsidiaries are also subject to separate or related forms of regulation, supervision, and examination, including: (1) the Bank, by the Office of the Comptroller of the Currency (the OCC) under the National Banking Acts, the FDIC under the Federal Deposit Insurance Act (the FDIA), and the Consumer Financial Protection Bureau (the CFPB) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act); (2) UMBFS, UMB Distribution Services, LLC, and UMB Financial Services, Inc., ~~and Prairie Capital Management, LLC,~~ by the Securities and Exchange Commission (the SEC) and State regulatory authorities under

Distribution Services, LLC and UMB Financial Services, Inc., by the Financial Industry Regulatory Authority (FINRA); and (3) UMB Insurance, Inc., by State regulatory authorities under applicable State insurance laws. These regulatory schemes, like those overseen by the FRB, are designed to protect public or private interests that often are not aligned with those of the Company’s shareholders or non-deposit creditors.

The FRB possesses extensive authorities and powers to regulate the conduct of the Company’s businesses and operations. If the FRB were to take the position that the Company or any of its subsidiaries have violated any law or commitment or engaged in any unsafe or unsound practice, formal or informal corrective or enforcement actions could be taken by the FRB against the Company, its subsidiaries, and institution-affiliated parties (such as directors, officers, and agents). These enforcement actions could include an imposition of civil monetary penalties and could directly affect not only the Company, its subsidiaries, and institution-affiliated parties but also the Company’s counterparties, shareholders, and creditors and its commitments, arrangements, or other dealings with them. The OCC has similarly expansive authorities and powers over the Bank and its subsidiaries, as does the CFPB over matters involving consumer financial laws. The SEC, FINRA, and other domestic or foreign government authorities also have an array of means at their disposal to regulate and enforce matters within their jurisdiction that could impact the Company’s businesses and operations.

Under the BHCA, bank holding companies and their subsidiaries are generally limited to the business of banking and to closely related activities that are incidental to banking.

As a bank holding company that has elected to become a financial holding company under the GLBA, the Company is also able—directly or indirectly through its subsidiaries—to engage in activities that are financial in nature, that are incidental to a financial activity, or that are complementary to a financial activity and do not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. Activities that are financial in nature include: (1) underwriting, dealing in, or making a market in securities, (2) providing financial, investment, or economic advisory services, (3) underwriting insurance, and (4) merchant banking.

The Company’s ability to directly or indirectly engage in these banking and financial activities, however, is subject to conditions and other limits imposed by law or the FRB and, in some cases, requires the approval of the FRB or other government authorities. These conditions or other limits may arise due to the particular type of activity or, in other cases, may apply to the Company’s business more generally. Examples of the former are the substantial restrictions on the timing, amount, form, substance, interconnectedness, and management of the Company’s merchant banking investments. An example of the latter is a condition that, in order for the Company to engage in broader financial activities, its depository institutions must remain “well capitalized” and “well managed” under applicable banking laws and must receive at least a “satisfactory” rating under the Community Reinvestment Act (CRA).

Under amendments to the BHCA promulgated by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 and the Dodd-Frank Act, the Company may acquire banks outside of its home State of Missouri, subject to specified limits and may establish new branches in other States to the same extent as banks chartered in those States. Under the BHCA, however, the Company must procure the prior approval of the FRB and possibly other government authorities to directly or indirectly acquire ownership or control of five percent or more of any class of voting securities of, or substantially all of the assets of, an unaffiliated bank, savings association, or bank holding company. In deciding whether to approve any acquisition or branch, the FRB, the OCC, and other government authorities will consider public or private interests that may not be aligned with those of the Company’s shareholders or non-deposit creditors. The FRB also has the power to require the Company to divest any depository institution that cannot maintain its “well capitalized” or “well managed” status.

The FRB maintains a targeted policy that requires a bank holding company to inform and consult with the staff of the FRB sufficiently in advance of (1) declaring and paying a dividend that could raise safety and soundness concerns (for example, a dividend that exceeds earnings in the period for which the dividend is being paid), (2) redeeming or repurchasing regulatory capital instruments when the holding company is experiencing financial weaknesses, or (3) redeeming or repurchasing common stock or perpetual preferred stock that would result in a net reduction as of the end of the quarter in the amount of those equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.

Requirements Affecting the Relationships among the Company, Its Subsidiaries, and Other Affiliates

The Company is a legal entity separate and distinct from the Bank, UMBFS, and its other subsidiaries but receives the vast majority of its revenue in the form of dividends from those subsidiaries. Without the approval of the OCC, however, dividends payable by the Bank in any calendar year may not exceed the lesser of (1) the current year’s net income combined with the retained net income of the two preceding years and (2) undivided profits. In addition, under the Basel III capital-adequacy standards described below under the heading “Capital-Adequacy Standards,” the Bank is currently required to maintain a capital conservation buffer in excess of its minimum risk-based capital ratios and will be restricted in declaring and paying dividends whenever the buffer is breached. The authorities and powers of the FRB, the OCC, and other government authorities to prevent any unsafe or unsound practice also could be employed to further limit the dividends that the Bank or the Company’s other subsidiaries may declare and pay to the Company.

The Dodd-Frank Act requires a bank holding company like the Company to serve as a source of financial strength for its depository-institution subsidiaries and to commit resources to support those subsidiaries in circumstances when the Company might not otherwise elect to do so. The functional regulator of any nonbank subsidiary of the Company, however, may prevent that subsidiary from directly or indirectly contributing its financial support, and if that were to preclude the Company from serving as an adequate source of financial strength, the FRB may instead require the divestiture of depository-institution subsidiaries and impose operating restrictions pending such a divestiture.

A number of laws, principally Sections 23A and 23B of the Federal Reserve Act (the FRA), and the FRB’s Regulation W, also exist to prevent the Company and its nonbank subsidiaries from taking improper advantage of the benefits afforded to the Bank as a depository institution, including its access to federal deposit insurance and the discount window. These laws generally require the Bank and its subsidiaries to deal with the Company and its nonbank subsidiaries only on market terms and, in addition, impose restrictions on the Bank and its subsidiaries in directly or indirectly extending credit to or engaging in other covered transactions with the Company or its nonbank subsidiaries. The Dodd-Frank Act extended the restrictions to derivatives and securities lending transactions and expanded the restrictions for transactions involving hedge funds or private-equity funds that are owned or sponsored by the Company or its nonbank subsidiaries.

In addition, under the Volcker Rule, the Company is subject to extensive limits on proprietary trading and on owning or sponsoring hedge funds and private-equity funds. The limits on proprietary trading are largely directed toward purchases or sales of financial instruments by a banking entity as principal primarily for the purpose of short-term resale, a benefit from actual or expected short-term price movements, or the realization of short-term arbitrage profits. The limits on owning or sponsoring hedge funds and private-equity funds are designed to ensure that banking entities generally maintain only small positions in managed or advised funds and are not exposed to significant losses arising directly or indirectly from them. The Volcker Rule also provides for increased capital charges, quantitative limits, rigorous compliance programs, and other restrictions on permitted proprietary trading and fund activities, including a prohibition on transactions with a covered fund that would constitute a covered transaction under Sections 23A and 23B of the FRA.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) was enacted in May 2018, amending requirements previously established in the Dodd-Frank Act, including stress testing and enhanced prudential standards. Bank holding companies with assets of less than $100 billion, including the Company, are no longer subject to the requirement to conduct forward-looking, company-run stress testing, including publishing a summary of results. The Company continues to run internal stress tests as a component of ~~our~~its comprehensive risk management and capital planning process. In addition, the EGRRCPA increased the statutory asset threshold above which the Federal Reserve is required to apply enhanced prudential standards from $50 billion to $250 billion (subject to certain discretion by the Federal Reserve to apply any enhanced prudential standard requirement to any bank holding company with between $100 billion and $250 billion in total consolidated assets that would otherwise be exempt under EGRRCPA). The Company remains exempt from applying the enhanced prudential standards.

The FRB and the OCC have adopted risk-based capital and leverage guidelines that require the capital-to-assets ratios of bank holding companies and national banks, respectively, to meet specified minimum standards.

The risk-based capital ratios are based on a banking organization’s risk-weighted asset amounts (RWAs), which are generally determined under the standardized approach applicable to the Company and the Bank by (1) assigning on-balance-sheet exposures to broad risk-weight categories according to the counterparty or, if relevant, the guarantor or collateral (with higher risk weights assigned to categories of exposures perceived as representing greater risk) and (2) multiplying off-balance-sheet exposures by specified credit conversion factors to calculate credit equivalent amounts and assigning those credit equivalent amounts to the relevant risk-weight categories. The leverage ratio, in contrast, is based on an institution’s average on-balance-sheet exposures alone.

The capital ratios for the Company and the Bank as of December 31, ~~2019,~~2022, are set forth below:

These capital-to-assets ratios also play a central role in prompt corrective action (PCA), which is an enforcement framework used by the federal banking agencies to constrain the activities of banking organizations based on their levels of regulatory capital. Five categories have been established using thresholds for the total risk-based capital ratio, the tier 1 risk-based capital ratio, the common-equity tier 1 risk-based capital ratio, and the leverage ratio: (1) well capitalized, (2) adequately capitalized, (3) undercapitalized, (4) significantly undercapitalized, and (5) critically undercapitalized. While bank holding companies are not subject to the PCA framework, the FRB is empowered to compel a holding company to take measures—such as the execution of financial or performance guarantees—when prompt corrective action is required in connection with one of its depository-institution subsidiaries. At December 31, ~~2019,~~2022, the Bank was categorized as well capitalized under the PCA framework.

Basel III, including revisions to the global Basel III capital framework (commonly known as Basel IV), includes a number of more rigorous provisions applicable only to banking organizations that are larger or more internationally active than the Company and the Bank. These include, for example, a supplementary leverage ratio incorporating off-balance-sheet exposures, a liquidity coverage ratio, and a net stable funding ratio. These standards may be informally applied or considered by the FRB and the OCC in their regulation, supervision, and examination of the Company and the Bank.

The deposits of the Bank are insured by the FDIC in the standard insurance amount of $250 thousand per depositor for each account ownership category. This insurance is funded through assessments on the Bank and other insured depository institutions. Under the Dodd-Frank Act, each institution’s assessment base is determined based on its average consolidated total assets less average tangible equity, and there is a scorecard method for calculating assessments that combines CAMELS (an acronym that refers to the five components of a bank’s condition that are addressed: capital adequacy, asset quality, management, earnings, and liquidity) ratings and specified forward-looking financial measures to determine each institution’s risk to the DIF. The Dodd-Frank Act also requires the FDIC, in setting assessments, to offset the effect of increasing its reserve for the DIF on institutions with consolidated assets of less than $10 billion. The result of this revised approach to deposit-insurance assessments is generally an increase in costs, on an absolute or relative basis, for institutions with consolidated assets of $10 billion or more.

If an insured depository institution such as the Bank were to become insolvent or if other specified events were to occur relating to its financial condition or the propriety of its actions, the FDIC may be appointed as conservator or receiver for the institution. In that capacity, the FDIC would have the power to (1) transfer assets and liabilities of the institution to another person or entity without the approval of the institution’s creditors, (2) require that its claims process be followed and to enforce statutory or other limits on damages claimed by the institution’s creditors, (3) enforce the institution’s contracts or leases according to their terms, (4) repudiate or disaffirm the institution’s contracts or leases, (5) seek to reclaim, recover, or recharacterize transfers of the institution’s assets or to exercise control over assets in which the institution may claim an interest, (6) enforce statutory or other injunctions, and (7) exercise a wide range of other rights, powers, and authorities, including those that could impair the rights and interests of all or some of the institution’s creditors. In addition, the administrative expenses of the conservator or receiver could be afforded priority over all or some of the claims of the institution’s creditors, and

under the FDIA, the claims of depositors (including the FDIC as subrogee of depositors) would enjoy priority over the claims of the institution’s unsecured creditors.

The FDIA also provides that an insured depository institution can be held liable for any loss incurred or expected to be incurred by the FDIC in connection with another commonly controlled insured depository institution that is in default or in danger of default. This cross-guarantee liability is generally superior in right of payment to claims of the institution’s holding company and its affiliates.

As a public company, the Company is subject to the Securities Act of 1933, as amended (the Securities Act), the Securities Exchange Act of 1934, as amended (the Exchange Act), the Sarbanes-Oxley Act of 2002, and other federal and State securities laws. In addition, because the Company’s common stock is listed with The NASDAQ Stock Market LLC (NASDAQ), the Company is subject to the listing rules of that exchange.

The Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the Bank Secrecy Act), the USA PATRIOT Act of 2001, and related laws require all financial institutions, including banks and broker-dealers, to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. These laws include a variety of recordkeeping and reporting requirements (such as currency and suspicious activity reporting) as well as know-your-customer and due-diligence rules.

Under the CRA, the Bank has a continuing and affirmative obligation to help meet the credit needs of its local communities—including low- and moderate-income neighborhoods—consistent with safe and sound banking practices. The CRA does not create specific lending programs but does establish the framework and criteria by which the OCC regularly assesses the Bank’s record in meeting these credit needs. The Bank’s ratings under the CRA are taken into account by the FRB and the OCC when considering merger or other specified applications that the Company or the Bank may submit from time to time.

The Bank is subject as well to a vast array of consumer-protection laws, such as qualified-mortgage and other mortgage-related rules under the jurisdiction of the CFPB. Lending limits, restrictions on tying arrangements, limits on permissible interest-rate charges, and other laws governing the conduct of banking or fiduciary activities are also applicable to the Bank. In addition, the GLBA imposes on the Company and its subsidiaries a number of obligations relating to financial privacy.

~~The information required by Guide 3, “Statistical Disclosure by Bank Holding Companies,” has been included in Part II, Items 6, 7, and 7A, pages 21 through 55, of this report.~~

Executive Officers of the Registrant. The following are the executive officers of the Company, each of whom is appointed annually, and there are no arrangements or understandings between any of the executive officers and any other person pursuant to which such person was elected as an executive officer.

The Company makes available free of charge on its website at www.umb.com/investor, its annual report on Form 10-K, quarterly reports on Form 10-Q, proxy statements, current reports on Form 8-K and amendments to such reports, as soon as reasonably practicable after it electronically files or furnishes such material with or to the SEC. Information on the Company’s website is not incorporated by reference into this report and should not be considered part of this document. These reports can also be found on the SEC website at www.sec.gov.

Financial-services companies routinely encounter and address risks and uncertainties. In the following paragraphs, the Company describes some of the principal risks and uncertainties that could adversely affect its business, results of operations, financial condition (including capital and liquidity), or prospects or the value of or return on an investment in the Company. These risks and uncertainties, however, are not the only ones faced by the Company. Other risks and uncertainties that are not presently known to the Company that it has failed to identify, or that it currently considers immaterial may adversely affect the Company as well. Except where otherwise noted, the risk factors address risks and uncertainties that may affect the Company as well as its subsidiaries. These risk factors should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations (which can be found in Part II, Item 7 of this ~~report beginning on page 22)~~report) and the Notes to the Consolidated Financial Statements (which can be found in Part II, Item 8 of this ~~report beginning~~report).

The COVID-19 pandemic is affecting the Company and its customers, counterparties, employees, and third-party service providers, and the continued impacts on ~~page 56).~~its business, financial position, results of operations, and prospects could potentially be significant. The spread of COVID-19 over the past two years has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. The extent of the impact of the ongoing COVID-19 pandemic on the Company’s capital, liquidity, and other financial positions and on its business, results of operations, and prospects will depend on a number of evolving factors, including:

The COVID-19 pandemic could cause the Company to experience higher credit losses in its lending portfolio, impairment of its goodwill and other financial assets, reduced demand for its products and services, and other negative impacts on its financial position, results of operations, and prospects. Sustained adverse effects of the COVID-19 pandemic may also prevent the Company from satisfying its minimum regulatory capital ratios and other supervisory requirements, failing to be able to sustain the paying of dividends to its shareholders, or result in downgrades in its credit ratings.

Because of the current expected credit loss (CECL) accounting standard, the Company’s financial results may be negatively affected as soon as weak or deteriorating economic conditions are forecasted and alter its expectations for credit losses. In addition, due to the expansion of the time horizon over which it is required to estimate future credit losses under CECL, the Company may experience increased volatility in its future provisions for credit losses.

The levels of, or changes in, interest rates could affect the Company’s business or performance. The Company’s business, results of operations, and financial condition are highly dependent on net interest income, which is the difference between interest income on earning assets (such as loans and investments) and interest expense on deposits and borrowings. Net interest income is significantly affected by market interest rates, which in turn are influenced by monetary and fiscal policies, general economic conditions, the regulatory environment, competitive pressures, and expectations about future changes in interest rates. The policies and regulations of the federal government, in general, and the FRB, in particular, have a substantial impact on market interest rates. See “Government Monetary and Fiscal Policies” in Part I, Item 1 of this report, ~~beginning on page 4,~~ which is incorporated by reference herein. Additionally, the Company has a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that are either directly or indirectly dependent on the London Interbank Offered Rate (LIBOR). In 2017, the U.K. Financial Conduct Authority announced that LIBOR is to be transitioned to alternative ~~rates during the next four years.~~rates. U.S. regulatory authorities ~~have~~ voiced similar support for phasing out LIBOR. The transition from LIBOR could create considerable costs and additional risk. Certain LIBOR rates will continue to be published until June 30, 2023 for existing LIBOR-indexed financial instruments, however no new LIBOR-indexed financial instruments can be originated after December 31, 2021. The Alternative Reference Rates Committee (ARRC) has proposed that the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York represents the best alternative to LIBOR for use in derivatives and other financial contracts that are currently indexed to LIBOR. The Company discontinued entering into new LIBOR-indexed financial instruments effective December 31, 2021. The majority of existing LIBOR-indexed contracts will revert to SOFR. The remainder will be individually negotiated to a mutual preferred replacement index. Since proposed alternative rates are calculated differently, payments under contracts referencing new rates will

differ from those referencing LIBOR. Although ~~we are~~the Company is currently unable to assess what the ultimate impact of the transition from LIBOR will be, failure to adequately manage the transition could have a material adverse effect on ~~our~~its business, financial condition and results of operations.

The impact of interest rate changes on the Company’s funding costs may differ from some peers given the Company’s concentration of funding from commercial and institutional sources. These deposits, which often include the benefit of other ancillary revenues, are generally more price-sensitive than consumer funding sources. In a rising rate environment, the Company may experience a sharper decline in low-cost funding sources or an increase in cost of deposits due to its customer profile. However, the expectation of higher earning asset growth and the benefit of higher interest rates on our earning assets may help mitigate any impact.

The Company may be adversely affected by policies, regulations, or events that have the effect of altering the difference between long-term and short-term interest rates (commonly known as the yield curve), depressing the interest rates associated with its earning assets to levels near the rates associated with its interest expense, or changing the spreads among different interest-rate indices. In addition, a rapid change in interest rates could result in interest expense increasing faster than interest income because of differences in the maturities of the Company’s assets and liabilities. Further, if laws impacting taxation and interest rates materially change, or if new laws are enacted, certain of the Company’s services and products, including municipal bonds, may be subject to less favorable tax treatment or otherwise adversely impacted. The level of and changes in market interest rates—and, as a result, these risks and uncertainties—are beyond the Company’s control. The dynamics among these risks and uncertainties are also challenging to assess and manage. For example, while the highly accommodative monetary policy currently adopted by the FRB may benefit the Company to some degree by spurring economic activity among

its customers, such a policy may ultimately cause the Company more harm by inhibiting its ability to grow or sustain net interest income.

The Company’s customers and counterparties also may be negatively impacted by the levels of, or changes in, interest rates, which could increase the risk of delinquency or default on obligations to the Company. The levels of, or changes in, interest rates, moreover, may have an adverse effect on the value of the Company’s investment portfolio, which includes long-term municipal bonds with fixed interest rates, and other financial instruments, the return on or demand for loans, the prepayment speed of loans (including, without limitation, the pace of pay-downs expected or forecasted for commercial real estate and construction loans), the cost or availability of deposits or other funding sources, or the purchase or sale of investment securities.

See “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk” in Part II, Item 7A of this report ~~beginning on page 49~~ for a discussion of how the Company monitors and manages interest-rate risk.

Weak or deteriorating economic conditions, more liberal origination or underwriting standards, or financial or systemic shocks could increase the Company’s credit risk and adversely affect its lending or other banking businesses and the value of its loans or investment securities. The Company’s business and results of operations depend significantly on general economic conditions. When those conditions are weak or deteriorating in any of the markets or regions where the Company operates, its business or performance could be adversely affected. The Company’s lending and other banking businesses, in particular, are susceptible to weak or deteriorating economic conditions, which could result in reduced loan demand or utilization rates and at the same time increased delinquencies or defaults. These kinds of conditions also could dampen the demand for products and other services in the Company’s investment-management, asset-servicing, insurance, brokerage, or related businesses. Increased delinquencies or defaults could result as well from the Company adopting—for strategic, competitive, or other reasons—more liberal origination or underwriting standards for extensions of credit or other dealings with its customers or counterparties. If delinquencies or defaults on the Company’s loans or investment securities increase, their value and the income derived from them could be adversely affected, and the Company could incur administrative and other costs in seeking a recovery on its claims and any collateral. Weak or deteriorating economic conditions also may negatively impact the market value and liquidity of the Company’s investment securities, and the Company may be required to record additional impairment charges if investment securities suffer a decline in value that is determined to ~~be other-than-temporary.~~have resulted from a credit loss. In addition, to the extent that loan charge-offs exceed estimates, an increase to the amount of provision expense related to the allowance for ~~loan~~credit losses would reduce the Company’s income. See “Quantitative and Qualitative Disclosures About Market Risk—Credit Risk Management” in Part II, Item 7A of this report ~~beginning on page 53~~ for a discussion of how the Company monitors and manages credit risk. A financial or systemic shock and a failure of a significant counterparty or a significant group of counterparties could negatively impact the Company, possibly to a severe degree, due to its role as a financial intermediary and the interconnectedness of the financial system.

A meaningful part of the Company’s loan portfolio is secured by real estate and, as a result, could be negatively impacted by deteriorating or volatile real-estate markets or associated environmental liabilities. At December 31, ~~2019, 45.4 percent~~2022, 49.2% of the Company’s aggregate loan portfolio—comprised of commercial real-estate loans (representing ~~32.2 percent~~36.2% of the aggregate loan portfolio)~~, residential~~ and consumer real-estate loans (representing ~~6.9 percent of the aggregate loan portfolio), and construction real-estate loans (representing 6.3 percent~~13.0% of the aggregate loan portfolio)—was primarily secured by interests in real estate located in the States where the Company operates.

Other credit extended by the Company may be secured in part by real estate as well. Real-estate values in the markets where this collateral is located may be different from, and in some instances worse than, real-estate values in other markets or in the United States as a whole and may be affected by general economic conditions and a variety of other factors outside of the control of the Company or its customers. Any deterioration or volatility in these real-estate markets could result in increased delinquencies or defaults, could adversely affect the value of the loans and the income to be derived from them, could give rise to unreimbursed recovery costs, and could reduce the demand for new or additional credit and related banking products and other services, all to the detriment of the Company’s business and performance. In addition, if hazardous or toxic substances were found on any real estate that the Company acquires in foreclosure or otherwise, the Company may incur substantial liability for compliance and remediation costs, personal injury, or property damage.

Challenging business, economic, or market conditions could adversely affect the Company’s fee-based banking, investment-management, asset-servicing, or other businesses. The Company’s fee-based banking, investment-management, asset-servicing, and other businesses are driven by wealth creation in the economy, robust market activity, monetary and fiscal stability, and positive investor, business, and consumer sentiment. Economic downturns, market disruptions, high unemployment or underemployment, unsustainable debt levels, depressed ~~real-estate~~real-

estate markets, industry consolidations, or other challenging business, economic, or market conditions could adversely affect these businesses and their results. If the funds or other groups that are clients of UMBFS were to encounter similar difficulties, UMBFS’s revenue could suffer. The Company’s bank-card revenue is driven primarily by transaction volumes in business, healthcare, and consumer spending that generate interchange fees, and any of these conditions could dampen those volumes. Other fee-based banking businesses that could be adversely affected include trading, asset management, custody, trust, and cash and treasury management.

The Company’s investment-management and asset-servicing businesses could be negatively impacted by declines in assets under management or administration or by shifts in the mix of assets under management or administration. The revenues of the Company’s investment-management businesses are highly dependent on advisory fee income. These businesses generally earn higher fees on equity-based or alternative investments and strategies and lower fees on fixed income investments and strategies. Advisory-fee income may be negatively impacted by an absolute decline in assets under management or by a shift in the mix of assets under management from equities or alternatives to fixed income. Such a decline or shift could be caused or influenced by any number of factors, such as underperformance in absolute or relative terms, loss of key advisers or other talent, changes in investing preferences or trends, market downturns or volatility, drops in investor confidence, reputational damage, increased competition, or general economic conditions. Any of these factors also could affect clients of UMBFS, and if this were to cause a decline in assets under administration at UMBFS or an adverse shift in the mix of those assets, the performance of UMBFS could suffer.

To the extent that the Company continues to maintain a sizeable portfolio of available-for-sale investment securities, its income may be adversely affected and its reported equity more volatile. As of December 31, ~~2019,~~2022, the Company’s securities portfolio totaled approximately ~~$8.7~~$13.2 billion, which represented approximately ~~32.8 percent~~34.4% of its total assets. Regulatory restrictions and the Company’s investment policies generally result in the acquisition of securities with lower yields than loans. For the year-ended December 31, ~~2019,~~2022, the weighted average yield of the Company’s securities portfolio was ~~2.6 percent~~2.33% as compared to ~~5.0 percent~~4.30% for its loan portfolio. Accordingly, to the extent that the Company is unable to effectively deploy its funds to originate or acquire loans or other assets with higher yields than those of its investment securities, the Company’s income may be negatively impacted. Additionally, approximately ~~$7.4~~$7.0 billion, or ~~85.4 percent,~~52.9%, of the Company’s investment securities are classified as available for sale and reported at fair value. Unrealized gains or losses on these securities are excluded from earnings and reported in other comprehensive income, which in turn affects the Company’s reported equity. As a result, to the extent that the Company continues to maintain a significant portfolio of available-for-sale securities, its reported equity may experience greater volatility.

Cyber incidents and other security breaches at the Company, at the Company’s service providers or counterparties, or in the business community or markets may negatively impact the Company’s business or performance. In the ordinary course of its business, the Company collects, stores, and transmits sensitive, confidential, or proprietary data and other information, including intellectual property, business information, funds-transfer instructions, and the personally identifiable information of its customers and employees. The secure processing, storage, maintenance, and transmission of this information is critical to the Company’s operations and reputation, and if any of this information were mishandled, misused, improperly accessed, lost, held hostage or stolen or if the Company’s operations were disrupted, the Company could suffer significant financial, business, reputational, regulatory, or other damage. For example, despite security measures, the Company’s information technology and

infrastructure may be breached or rendered inaccessible through cyber-attacks, ransomware and other computer viruses or malware, pretext calls, electronic phishing, or other means. These risks and uncertainties are rapidly evolving and increasing in complexity, and the Company’s failure to effectively mitigate them could negatively impact its business and operations.

Risks and exposures related to cybersecurity attacks have increased as a result of the COVID-19 pandemic and the related increased reliance on remote working, and are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats and the expanding use of technology-based products and services by the Company and its customers. The Company can provide no assurances that the safeguards it has in place or may implement in the future will prevent all unauthorized infiltrations or breaches and that the Company will not suffer losses related to a security breach in the future, which losses may be material.

Service providers and counterparties also present a source of risk to the Company if their own security measures or other systems or infrastructure were to be breached, rendered inaccessible or otherwise fail. Likewise, a cyber-attack or other security breach affecting the business community, the markets, or parts of them may cycle or

cascade through the financial system and adversely affect the Company or its service providers or counterparties. Many of these risks and uncertainties are beyond the Company’s control.

Even when an attempted cyber incident or other security breach is successfully avoided or thwarted, the Company may need to expend substantial resources in doing so, may be required to take actions that could adversely affect customer satisfaction or behavior, and may be exposed to reputational damage. If a breach were to occur, moreover, the Company could be exposed to contractual claims, regulatory actions, and litigation by private plaintiffs, and would additionally suffer reputational harm. Despite the Company’s efforts to safeguard the integrity of systems and controls and to manage third-party risk, the Company may not be able to anticipate or implement effective measures to prevent all security breaches or all risks to the sensitive, confidential, or proprietary information that it or its service providers or counterparties collect, store, or transmit.

The trading volume in the Company’s common stock at times may be low, which could adversely affect liquidity and stock price. Although the Company’s common stock is listed for trading on the NASDAQ Global Select Market, the trading volume in the stock may at times be low and, in relative terms, less than that of other financial-services companies. A public trading market that is deep, liquid, and orderly depends on the presence in the marketplace of a large number of willing buyers and sellers and narrow bid-ask spreads. These market features, in turn, depend on a number of factors, such as the individual decisions of investors and general economic and market conditions, over which the Company has no control. During any period of lower trading volume in the Company’s common stock, the stock price could be more volatile, and the liquidity of the stock could suffer.

The Company operates in a highly regulated industry, and its business or performance could be adversely affected by the legal, regulatory and supervisory frameworks applicable to it, changes in those frameworks, and other legal and regulatory risks and uncertainties. The Company is subject to expansive legal and regulatory frameworks in the United States—at the federal, State, and local levels—and in the foreign jurisdictions where its business segments operate. In addition, the Company is subject to the direct supervision of government authorities charged with overseeing the taxation of domestic companies and the kinds of financial activities conducted by the Company in its business segments. These legal, regulatory, and supervisory frameworks are often designed to protect public or private interests that differ from the interests of the Company’s shareholders or non-deposit creditors. See “Government Monetary and Fiscal Policies” and “Regulation and Supervision” in Part I, Item 1 of this report, ~~beginning on page 4,~~ which is incorporated by reference herein. ~~We believe~~The Company believes that government scrutiny of all financial-services companies has increased, fundamental changes have been made to the banking, securities, and other laws that govern financial services (with the Dodd-Frank Act and Basel III being two of the more prominent examples), and a host of related business practices have been reexamined and reshaped. As a result, the Company expects to continue devoting increased time and resources to risk management, compliance, and regulatory change management. Risks also exist that government authorities could judge the Company’s business or other practices as unsafe, unsound, or otherwise unadvisable and bring formal or informal corrective or enforcement actions against it, including fines or other penalties and directives to change its products or other services. For practical or other reasons, the Company may not be able to effectively defend itself against these actions, and they in turn could give rise to litigation by private plaintiffs. Further, if the laws, rules, and regulations materially adversely affect the Company, including any changes that would negatively impact the tax treatment of the Company, the Company’s products and services or the Company’s shareholders, the Company may be adversely impacted. All of these and other regulatory risks and uncertainties could adversely affect the Company’s reputation, business, results of operations, financial condition, or prospects.

Regulatory or supervisory requirements, future growth, operating results, or strategic plans may prompt the Company to raise additional capital, but that capital may not be available at all or on favorable terms and, if raised, may be dilutive. The Company is subject to safety-and-soundness and capital-adequacy standards under applicable law and to the direct supervision of government authorities. See “Regulation and Supervision” in Part I, Item 1 of this ~~report beginning on page 4.~~report. If the Company is not or is at risk of not satisfying these standards or applicable supervisory requirements—whether due to inadequate operating results that erode capital, future growth that outpaces the accumulation of capital through earnings, or otherwise—the Company may

be required to raise capital, restrict dividends, or limit originations of certain types of commercial and mortgage loans. If the Company is required to limit originations of certain types of commercial and mortgage loans, it would thereby reduce the amount of credit available to borrowers and limit opportunities to earn interest income from the loan portfolio. The Company also may be compelled to raise capital if regulatory or supervisory requirements change. In addition, the Company may elect to raise capital for strategic reasons even when it is not required to do so. The Company’s ability to raise capital on favorable terms or at all will depend on general economic and market conditions, which are outside of its control, and on the Company’s operating and financial performance. Accordingly, the Company

cannot be assured of its ability to raise capital when needed or on favorable terms. An inability to raise capital when needed or on favorable terms could damage the performance and value of its business, prompt regulatory intervention, and harm its reputation, and if the condition were to persist for any appreciable period of time, its viability as a going concern could be threatened. If the Company is able to raise capital and does so by issuing common stock or convertible securities, the ownership interest of ~~our~~its existing stockholders could be diluted, and the market price of ~~our~~its common stock could decline.

The market price of the Company’s common stock could be adversely impacted by banking, antitrust, or corporate laws that have or are perceived as having an anti-takeover effect. Banking and antitrust laws, including associated regulatory-approval requirements, impose significant restrictions on the acquisition of direct or indirect control over any bank holding company, including the Company. Acquisition of ten percent or more of any class of voting stock of a bank holding company or depository institution, including shares of ~~our~~its common stock, generally creates a rebuttable presumption that the acquirer “controls” the bank holding company or depository institution. Also, a bank holding company must obtain the prior approval of the Federal Reserve before, among other things, acquiring direct or indirect ownership or control of more than 5 percent of the voting shares of any bank, including ~~our bank.~~the Bank.

In addition, a non-negotiated acquisition of control over the Company may be inhibited by provisions of the Company’s restated articles of incorporation and bylaws that have been adopted in conformance with applicable corporate law, such as the ability to issue shares of preferred stock and to determine the rights, terms, conditions and privileges of such preferred stock without stockholder approval. If any of these restrictions were to operate or be perceived as operating to hinder or deter a potential acquirer for the Company, the market price of the Company’s common stock could suffer.

The Company’s business relies on systems, employees, service providers, and counterparties, and failures or errors by any of them, intellectual property disputes, or other operational risks could adversely affect the Company. The Company engages in a variety of businesses in diverse markets and relies on hosted and on-premises systems, employees, service providers, and counterparties to properly oversee, administer, and process a high volume of ~~transactions.~~transactions and otherwise support our day-to-day operations. This gives rise to meaningful operational risk—including the risk of fraud by employees or outside parties, unauthorized access to its premises or systems, errors in processing, failures of technology, breaches of internal controls or compliance safeguards, inadequate integration of acquisitions, human error, unavailability of systems and services, and other breakdowns in business continuity plans. In addition, service providers utilizing technology or other intellectual property in connection with our services may make allegations of patent infringement or other intellectual property rights violations. Depending on the scope of the claim, the Company may have to engage in protracted litigation, which is often time-consuming, expensive and can be disruptive to the Company’s operations. If the Company were found to have infringed an intellectual property right, it may be required to pay substantial damages or royalties to a third-party, not all of which may be covered by insurance policies or subject to indemnification by the Company’s service provider. These amounts could have a material adverse effect on the Company’s business, financial condition and results of operations.

Significant financial, business, reputational, regulatory, or other harm could come to the Company as a result of these or related risks and uncertainties. For example, the Company could be negatively impacted if financial, accounting, data-processing, or other systems were to fail or not fully perform their functions. The Company also could be adversely affected if key personnel or a significant number of employees were to become unavailable due to a pandemic, natural disaster, war, act of terrorism, accident, or other reason. These same risks arise as well in connection with the systems and employees of the service providers and counterparties on whom the Company depends as well as their own third-party service providers and counterparties. See “Quantitative and Qualitative Disclosures About Market Risk—Operational Risk” in Part II, Item 7A of this report ~~beginning on page 55~~ for a discussion of how the Company monitors and manages operational risk.

The soundness of other financial institutions could adversely affect us. The soundness of other financial institutions could adversely affect ~~us.~~the Company. Financial services institutions are interrelated because of trading, clearing, counterparty and other relationships. WeThe Company routinely ~~execute~~executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, payment processors, and other institutional clients, which may result in payment obligations to usthe Company or to ~~our~~its clients due to products ~~we have~~it has arranged. Many of these transactions expose usthe Company to credit and market risk that may cause ~~our~~its counterparty or client to default. In addition, ~~we are~~the Company is exposed to market risk when the collateral ~~we hold~~it

holds cannot be realized or is liquidated at prices not sufficient to recover the full amount of the secured obligation. Any losses arising from such occurrences could materially and adversely affect ~~our~~the Company’s business, results of operations or financial condition.

The Company is heavily reliant on technology, and a failure or delay in effectively implementing technology initiatives or anticipating future technology needs or demands could adversely affect the Company’s business or performance. Like most financial-services companies, the Company significantly depends on technology to deliver its products and other services and to otherwise conduct business. To remain technologically competitive and operationally efficient, the Company invests in system upgrades, new solutions, and other technology initiatives, including for both internally and externally hosted solutions. Many of these initiatives ~~have a~~are of significant duration, are tied to critical systems, and require substantial internal and external resources. Although the Company takes steps to mitigate the risks and uncertainties associated with these initiatives, there is no guarantee that they will be implemented on time, within budget, or without negative operational or customer impact. The Company also may not succeed in anticipating its future technology needs, the technology demands of its customers, or the competitive landscape for technology. In addition, the Company relies upon the expertise and support of service providers to help implement, maintain and/or service certain of its core technology solutions. If the Company cannot effectively manage these service providers, the service parties fail to materially perform, or the Company was to falter in any of the other noted areas, its business or performance could be negatively impacted.

Negative publicity outside of the Company’s control, or its failure to successfully manage issues arising from its conduct or in connection with the financial-services industry generally, could damage the Company’s reputation and adversely affect its business or performance. The performance and value of the Company’s business could be negatively impacted by any reputational harm that it may suffer. This harm could arise from negative publicity outside of its control or its failure to adequately address issues arising from its own conduct or in connection with the financial-services industry generally. Risks to the Company’s reputation could arise in any number of contexts—for example, cyber incidents and other security breaches, mergers and acquisitions, lending or investment-management practices, actual or potential conflicts of interest, failures to prevent money laundering, corporate governance, and unethical behavior and practices committed by Company employees or competitors in the financial services industry.

The Company faces intense competition from other financial-services and financial-services technology companies, and competitive pressures could adversely affect the Company’s business or performance. The Company faces intense competition in each of its business segments and in all of its markets and geographic regions, and the Company expects competitive pressures to intensify in the future—especially in light of recent legislative and regulatory initiatives, technological innovations that alter the barriers to entry, current economic and market conditions, and government monetary and fiscal policies. Competition with financial-services technology companies, or technology companies partnering with financial-services companies, may be particularly intense, due to, among other things, differing regulatory environments. See “Competition” in Part I, Item 1 of this ~~report beginning on page 3.~~report. Competitive pressures may drive the Company to take actions that the Company might otherwise eschew, such as lowering the interest rates or fees on loans or raising the interest rates on deposits in order to keep or attract high-quality customers. These pressures also may accelerate actions that the Company might otherwise elect to defer, such as substantial investments in technology or infrastructure. The Company has certain businesses that utilize wholesale models which can lead to customer concentrations for those businesses that, if negatively impacted by new entrants, competitive pressures, or consolidations, could affect the Company’s fee income. Whatever the reason, actions that the Company takes in response to competition may adversely affect its results of operations and financial condition. These consequences could be exacerbated if the Company is not successful in introducing new products and other services, achieving market acceptance of its products and other services, developing and maintaining a strong customer base, or prudently managing expenses.

The Company’s internal controls, risk-management and compliance programs or functions may not be effective in identifying and mitigating risk and loss. The Company maintains standards on internal controls (including over financial reporting), and related disclosures which are regularly reviewed by management, as well as an enterprise risk-management program that is designed to identify, quantify, monitor, report, and control the risks that it faces. These include interest-rate risk, credit risk, liquidity risk, market risk, operational risk, reputational risk, and compliance risk. The Company also maintains a compliance program to identify, measure, assess, and report on its adherence to applicable law, policies, and procedures. While the Company assesses and improves these controls and programs on an ongoing basis, there can be no assurance that its frameworks or models for risk management, compliance, and related controls will effectively mitigate risk and limit losses in its business. If conditions or circumstances arise that expose flaws or gaps in the Company’s risk-management or compliance programs or if its

controls break down, the performance and value of the Company’s business could be adversely affected. The Company could be negatively impacted as well if, despite adequate programs being in place, its risk-management or compliance personnel are ineffective in executing them and mitigating risk and loss.

Liquidity is essential to the Company and its business or performance could be adversely affected by constraints in, or increased costs for, funding. The Company defines liquidity as the ability to fund increases in assets and meet obligations as they come due, all without incurring unacceptable losses. Banks are especially vulnerable to liquidity risk because of their role in the maturity transformation of demand or short-term deposits into longer-term loans or other extensions of credit. The Company, like other financial-services companies, relies to a significant extent on external sources of funding (such as deposits and borrowings) for the liquidity needed to conduct its business. A number of factors beyond the Company’s control, however, could have a detrimental impact on the availability or cost of that funding and thus on its liquidity. These factors include market disruptions, changes in its credit ratings or the sentiment of its investors, the state of the regulatory environment and monetary and fiscal policies, declines in the value of its investment securities, the loss of substantial deposits or customer relationships, financial or systemic shocks, significant counterparty failures, and reputational damage. Unexpected declines or limits on the dividends declared and paid by the Company’s subsidiaries also could adversely affect its liquidity position. While the Company’s policies and controls are designed to ensure that it maintains adequate liquidity to conduct its business in the ordinary course even in a stressed environment, there can be no assurance that its liquidity position will never become compromised. In such an event, the Company may be required to sell assets at a loss in order to continue its operations. This could damage the performance and value of its business, prompt regulatory intervention, and harm its reputation, and if the condition were to persist for any appreciable period of time, its viability as a going concern could be threatened. See “Quantitative and Qualitative Disclosures About Market Risk—Liquidity Risk” in Part II, Item 7A of this report ~~beginning on page 54~~ for a discussion of how the Company monitors and manages liquidity risk.

If the Company’s subsidiaries are unable to make dividend payments or distributions to the Company, it may be unable to satisfy its obligations to counterparties or creditors or make dividend payments to its stockholders. The Company is a legal entity separate and distinct from its bank and nonbank subsidiaries and depends on dividend payments and distributions from those subsidiaries to fund its obligations to counterparties and creditors and its dividend payments to stockholders. See “Regulation and Supervision—Requirements Affecting the Relationships among the Company, Its Subsidiaries, and Other Affiliates” in Part I, Item 1 of this ~~report beginning on page 6.~~report. Any of the Company’s subsidiaries, however, may be unable to make dividend payments or distributions to the Company, including as a result of a deterioration in the subsidiary’s performance, investments in the subsidiary’s own future growth, or regulatory or supervisory requirements. If any subsidiary were unable to remain viable as a going concern, moreover, the Company’s right to participate in a distribution of assets would be subject to the prior claims of the subsidiary’s creditors (including, in the case of the Bank, its depositors and the FDIC).

An inability to attract, retain, or motivate qualified employees could adversely affect the Company’s business or performance. Skilled employees are the Company’s most important resource, and competition for talented people is intense. Even though compensation is among the Company’s highest expenses, it may not be able to locate and hire the best people, keep them with the Company, or properly motivate them to perform at a high level. Recent scrutiny of compensation practices, especially in the financial-services industry, has made this only more difficult. In addition, some parts of the Company’s business are particularly dependent on key personnel, including investment management, asset servicing, and commercial lending. If the Company were to lose and find itself unable to replace these personnel or other skilled employees or if the competition for talent drove its compensation costs to unsustainable levels, the Company’s business, results of operations, and financial condition could be negatively impacted.

The Company is subject to a variety of litigation and other proceedings, which could adversely affect its business or performance. The Company is involved from time to time in a variety of judicial, alternative-dispute, and other proceedings arising out of its business or operations. The Company establishes reserves for claims when appropriate under generally accepted accounting principles, but costs often can be incurred in connection with a matter before any reserve has been created. The Company also maintains insurance policies to mitigate the cost of litigation and other proceedings, but these policies have deductibles, limits, and exclusions that may diminish their value or efficacy. Despite the Company’s efforts to appropriately reserve for claims and insure its business and operations, the actual costs associated with resolving a claim may be substantially higher than amounts reserved or covered. Substantial legal claims, even if not meritorious, could have a detrimental impact on the Company’s business, results of operations, and financial condition and could cause reputational harm.

Changes in accounting standards could impact the Company’s financial statements and reported earnings. Accounting standard-setting bodies, such as the Financial Accounting Standards Board, periodically change the financial accounting and reporting standards that affect the preparation of the Company’s Consolidated Financial Statements. These changes are beyond the Company’s control and could have a meaningful impact on its Consolidated Financial Statements.

The Company’s selection of accounting methods, assumptions, and estimates could impact its financial statements and reported earnings. To comply with generally accepted accounting principles, management must sometimes exercise judgment in selecting, determining, and applying accounting methods, assumptions, and estimates. This can arise, for example, in the determination of the allowance for ~~loan losses or the determination of the fair value of assets or liabilities.~~credit losses. Furthermore, accounting methods, assumptions and estimates are part of acquisition purchase accounting and the calculation of the fair value of assets and liabilities that have been purchased, including credit-impaired loans. The judgments required of management can involve difficult, subjective, or complex matters with a high degree of uncertainty, and several different judgments could be reasonable under the circumstances and yet result in significantly different results being reported. See “Critical Accounting Policies and Estimates” in Part II, Item 7 of this ~~report beginning on page 47.~~report. If management’s judgments are later determined to have been inaccurate, the Company may experience unexpected losses that could be substantial.

The Company’s ability to ~~successfully make~~engage in opportunistic mergers and acquisitions is subject to significant risks, including the risk that government authorities will not provide the requisite approvals, the risk that integrating acquisitions may be more difficult, costly, or time consuming than expected, and the risk that the value of acquisitions may be less than anticipated. The Company may make opportunistic acquisitions of other financial-services companies or businesses from time to time. These acquisitions may be subject to regulatory approval, and there can be no assurance that the Company will be able to obtain that approval in a timely manner or at all. Even when the Company is able to obtain regulatory approval, the failure of other closing conditions to be satisfied or waived could delay the completion of an acquisition for a significant period of time or prevent it from occurring altogether. Any failure or delay in closing an acquisition could adversely affect the Company’s reputation, business, results of operations, financial condition, or prospects.

Additionally, acquisitions involve numerous risks and uncertainties, including lower-than-expected performance or higher-than-expected costs, difficulties related to integration, diversion of management’s attention from other business activities, changes in relationships with customers or counterparties, and the potential loss of key employees. An acquisition also could be dilutive to the Company’s current stockholders if preferred stock, common stock, or securities convertible into preferred stock or common stock were issued to fully or partially pay or fund the purchase price. The Company, moreover, may not be successful in identifying acquisition candidates, integrating acquired companies or businesses, or realizing the expected value from acquisitions. There is significant competition for valuable acquisition targets, and the Company may not be able to acquire other companies or businesses on attractive terms or at all. There can be no assurance that the Company will pursue future acquisitions, and the Company’s ability to grow and successfully compete in its markets and regions may be impaired if it chooses not to pursue, or is unable to successfully complete, acquisitions.

~~We face~~The Company faces risks in connection with ~~our~~its strategic undertakings and new business initiatives. ~~We are~~The Company is engaged, and may in the future engage, in strategic activities including acquisitions, joint ventures, partnerships, investments or other business growth initiatives or undertakings. There can be no assurance that wethe Company will successfully identify appropriate opportunities, that weit will be able to negotiate or finance such activities or that such activities, if undertaken, will be successful. ~~We are~~The Company is focused on ~~our~~its long-term growth and ~~have~~has undertaken various strategic activities and business initiatives, some of which may involve activities that are new to ~~us.~~it. For example, in the future wethe Company may engage in or focus on new lines of business, financial technologies, and other activities that are outside of ~~our~~its current product offerings. These new initiatives may subject usthe Company to, among other risks, increased business, reputational and operational risk, as well as more complex legal, regulatory and compliance costs and risks. ~~Our~~Its ability to execute strategic activities and new business initiatives successfully will depend on a variety of factors. These factors likely will vary based on the nature of the activity but may include ~~our~~the Company’s success in integrating an acquired company or a new internally-developed growth initiative into ~~our~~its business, operations, services, products, personnel and systems, operating effectively with any partner with whom ~~we elect~~it elects to do business, meeting applicable regulatory requirements and obtaining applicable regulatory licenses or other approvals, hiring or retaining key employees, achieving anticipated synergies, meeting management's expectations, actually realizing the anticipated benefits of the activities, and overall general market conditions. ~~Our~~The Company’s ability to address these matters successfully cannot be assured. In addition, ~~our~~its strategic efforts may divert resources or management's attention from ongoing business operations and may subject usthe

Company to additional regulatory scrutiny and potential liability. If ~~we do~~the Company does not successfully execute a strategic undertaking, it could adversely affect ~~our~~its business, financial condition, results of operations, reputation or growth prospects.

Expectations around Environmental, Social and Governance practices, as well as climate change, and related legislative and regulatory initiatives may result in additional risk and operational changes and expenditures that could significantly impact the Company’s business.Companies are facing increased scrutiny from customers, regulators and other stakeholders with respect to their environmental, social and governance (ESG) practices and disclosures. Institutional investors, and investor advocacy groups, in particular, are increasingly focused on these matters, and expectations in many of these areas can vary widely. In addition, increased ESG related compliance costs could result in increases to the Company’s overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards, and fluctuations in these standards, could negatively impact the Company’s reputation, ability to do business with certain partners, and its stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.

In addition to regulatory and investor expectations on environmental matters in general, the current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased. In recent years, governments across the world have entered into international agreements to attempt to reduce global temperatures, in part by limiting greenhouse gas emissions. The United States Congress, state legislatures and federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change. These agreements and measures may result in the imposition of taxes and fees, the required purchase of emission credits, and the implementation of significant operational changes, each of which may require the Company to expend significant capital and incur compliance, operating, maintenance and remediation costs. Given the lack of empirical data on the credit and other financial risks posed by climate change, it is impossible to predict how climate change may impact the Company’s financial condition and operations; however, as a banking organization, the physical effects of climate change may present certain unique risks to the Company. For example, weather disasters, shifts in local climates and other disruptions related to climate change may adversely affect the value of real properties securing the Company’s loans, which could diminish the value of the Company’s loan portfolio. Such events may also cause reductions in regional and local economic activity that may have an adverse effect on the Company’s customers, which could limit the Company’s ability to raise and invest capital in these areas and communities, each of which could have a material adverse effect on the Company’s financial condition and results of operations.

There are no unresolved comments from the staff of the SEC required to be disclosed herein as of the date of this report.

The Company's headquarters building is located at 1010 Grand Boulevard in downtown Kansas City, Missouri. The building opened in July 1986 and all 250,000 square feet are occupied by departments and customer service functions of the Bank, as well as administrative offices offor the Company.

Other main facilities of the Bank in downtown Kansas City, Missouri are located at 928 Grand Boulevard ~~(185,000~~(215,000 square feet)~~; 906 Grand Boulevard (140,000 square feet);~~ and 1008 Oak Street ~~(180,000~~(200,000 square feet). ~~Both the 928 Grand and 906 Grand buildings house administrative support functions.~~ The 928 Grand building ~~is connected to~~houses administrative support functions for the ~~1010 Grand building by an enclosed elevated pedestrian walkway.~~Bank. The 1008 Oak building, which opened during ~~the second quarter of~~ 1999, houses the Company’s operations and data processing functions.

The Bank leases ~~49,400~~48,771 square feet in the Hertz Building located at 2 South Broadway in the heart of the commercial sector of downtown St. Louis, Missouri. This location has a full-service banking center and is home to ~~some operational and~~ administrative support ~~functions.~~functions for the Bank.

The Bank also leases ~~40,666~~34,681 square feet on the first, second, and fifth floors of the 1670 Broadway building located in the financial district of downtown Denver, Colorado. The location has a full-service banking center and is home to ~~additional~~ operational and administrative support ~~functions.~~functions for the Bank.

As of December 31, ~~2019,~~2022, the Bank operated a total of 9389 banking centers.

UMBFS leases ~~approximately 88,944~~85,164 square feet at 235 West Galena Street in Milwaukee, Wisconsin, for its fund services ~~operations headquarters.~~operations. Additionally, UMBFS leases ~~37,300~~18,655 square feet at 2225 Washington Boulevard in Ogden, Utah, and ~~6,300~~8,339 square feet inat 223 Wilmington West Chester Pike in Chadds Ford, Pennsylvania.

Additional information with respect to properties, premises and equipment is presented in Note 1, “Summary of Significant Accounting Policies,” and Note 8, “Premises, Equipment, and Leases,” in the Notes to the Consolidated Financial Statements in Item 8 ~~pages 64 and 82~~ of this report, and is hereby incorporated by reference herein.

In the normal course of business, the Company and its subsidiaries are named defendants in various legal proceedings. In the opinion of management, after consultation with legal counsel, none of these proceedings are expected to have a material effect on the financial position, results of operations, or cash flows of the Company.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common stock is traded on the NASDAQ Global Select Stock Market under the symbol "UMBF." As of February ~~21, 2020,~~16, 2023, the Company had ~~2,081~~1,324 shareholders of record.

The following table provides information about common stock repurchase activity by the Company during the quarter ended December 31, ~~2019:~~2022:

On April ~~23, 2019,~~26, 2022, the Company’s Board of Directors (the Board) authorized the repurchase of up to two million shares of the Company’s common stock, which will terminate on April ~~22, 2020~~25, 2023 (a Repurchase Authorization). The Company has not made any repurchases other than through this Repurchase Authorization. The Company is not currently engaging in repurchases. In the future, it may determine to resume repurchases. All share purchases pursuant to a Repurchase Authorization are intended to be within the scope of Rule 10b-18 promulgated under the Exchange Act. Rule 10b-18 provides a safe harbor for purchases in a given day if the Company satisfies the manner, timing and volume conditions of the rule when purchasing its own shares of common stock.

The performance graph below compares the cumulative total shareholder return on UMB Financial Corporation Common Stock with the cumulative total return on the equity securities of companies included in the Standard & Poor’s 500 Stock Index and the ~~SNL U.S. Bank~~S&P US BMI Banks Index, measured at the last trading day of each year shown. The graph assumes an investment of $100 on December 31, ~~2014~~2017 and reinvestment of dividends. The performance graph represents past performance and should not be considered to be an indication of future performance.

For a discussion of factors that may materially affect the comparability of the information below, please see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, pages 22 through 49, of this report.

2019

2018

2017

2016

2015

EARNINGS

Interest income

$
862,892

$
731,961

$
616,912

$
523,031

$
430,681

Interest expense

191,987

121,515

57,999

27,708

18,614

Net interest income

670,905

610,446

558,913

495,323

412,067

Provision for loan losses

32,850

70,750

41,000

32,500

15,500

Noninterest income

426,770

401,698

423,562

402,511

370,659

Noninterest expense

778,860

717,800

705,129

666,745

638,938

Net income from continuing operations

243,600

196,260

182,976

153,634

96,558

AVERAGE BALANCES

Assets

$
23,784,625

$
20,999,877

$
20,396,428

$
19,592,685

$
17,786,442

Loans and loans held for sale

12,764,623

11,606,544

10,843,642

9,992,874

8,425,107

Total investment securities

8,374,244

7,413,776

7,632,965

7,665,012

7,330,246

Interest-bearing due from banks

584,756

419,768

351,293

410,163

664,752

Deposits

19,304,368

16,984,547

15,938,669

15,338,741

14,078,290

Long-term debt

85,918

79,189

76,299

81,905

58,571

Shareholders' equity

2,451,847

2,194,788

2,080,847

1,983,749

1,805,856

YEAR-END BALANCES

Assets

$
26,561,355

$
23,351,119

$
21,771,583

$
20,682,532

$
19,094,245

Loans and loans held for sale

13,439,525

12,181,342

11,281,973

10,545,662

9,431,350

Total investment securities

8,717,502

7,848,149

7,639,543

7,690,108

7,568,870

Interest-bearing due from banks

1,225,491

1,047,830

1,351,760

715,823

522,877

Deposits

21,603,244

19,281,260

18,023,000

16,570,614

15,092,752

Long-term debt

97,490

82,671

79,281

76,772

86,070

Shareholders' equity

2,606,440

2,228,470

2,181,531

1,962,384

1,893,694

PER SHARE DATA

Earnings from continuing operations - basic

$
4.99

$
3.98

$
3.72

$
3.15

$
2.05

Earnings from continuing operations - diluted

4.96

3.94

3.67

3.12

2.03

Cash dividends

1.21

1.17

1.04

0.99

0.95

Dividend payout ratio

24.25
%

29.40
%

27.96
%

31.43
%

46.34
%
Book value

$
53.09

$
45.37

$
43.72

$
39.51

$
38.34

Market price

High

71.97

82.14

81.55

81.11

58.84

Low

59.88

57.00

62.27

39.55

45.14

Close

68.64

60.97

71.92

77.12

46.55

Return on average assets

1.02
%

0.93
%

0.90
%

0.78
%

0.54
%
Return on average equity

9.94

8.94

8.79

7.74

5.35

Average equity to average assets

10.31

10.45

10.20

10.12

10.15

Total risk-based capital ratio

13.26

13.95

14.04

12.87

12.80

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis highlights the material changes in the results of operations and changes in financial condition for each of the three years in the period ended December 31, ~~2019.~~2022. It should be read in conjunction with the accompanying Consolidated Financial Statements, Notes to Consolidated Financial Statements, and other financial statistics appearing elsewhere in this Annual Report on Form 10-K. Results of operations for the periods included in this review are not necessarily indicative of results to be attained during any future period.

From time to time the Company has made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey the Company’s expectations, intentions, or forecasts about future events, circumstances, results, or aspirations.

This report, including any information incorporated by reference in this report, contains forward-looking statements. The Company also may make forward-looking statements in other documents that are filed or furnished with the SEC. In addition, the Company may make forward-looking statements orally or in writing to investors, analysts, members of the media, or others.

All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond the Company’s control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. While no list of assumptions, risks, or uncertainties could be complete, some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements include:

Any forward-looking statement made by the Company or on its behalf speaks only as of the date that it was made. The Company does not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that the Company may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or Current Report on Form 8-K.

For over two years, the Company has experienced the impacts of the COVID-19 global pandemic (the COVID-19 pandemic, or the pandemic). Such impacts have included significant volatility in the global stock and fixed income markets, the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act of 2021, the Paycheck Protection Program (PPP) administered by the Small Business Administration, and a variety of rulings from the Company’s banking regulators.

The Company continues to actively monitor developments related to COVID-19 and its impact to its business, customers, employees, counterparties, vendors, and service providers. During 2022, the Company’s results of operations included continued maintenance of the allowance for credit losses (ACL) at a level appropriate given the state of key macroeconomic variables utilized in the econometric models. Additionally, the Company continued to see impacts of the volatile equity and debt markets in its fee-based businesses, as well as the impacts of the recent interest rate increases in net interest income.

The COVID-19 pandemic has necessitated certain actions related to the way the Company operates its business. The Company is carefully monitoring the activities of its vendors and other third-party service providers to mitigate the risks associated with any potential service disruptions. The length of time it may be required to operate under such circumstances and future degrees of disruption remain uncertain. While the Company has not experienced material adverse disruptions to its internal operations due to the pandemic, it continues to review evolving risks and developments.

The Company focuses on the following four core ~~strategic~~financial objectives. Management believes these ~~strategic~~ objectives will guide its efforts to achieve its vision, to deliver the ~~unparalleled customer experience,~~Unparalleled Customer Experience, all while seeking to improve net income and strengthen the balance sheet while undertaking prudent risk ~~management.~~management.

The first ~~strategic~~financial objective is to continuously improve operating efficiencies. The Company has focused on identifying efficiencies that simplify ~~our~~its organizational and reporting structures, streamline ~~back office~~back-office functions and take advantage of synergies and newer technologies among various platforms and distribution networks. The Company has identified and expects to continue identifying ongoing efficiencies through the normal course of business that, when combined with increased revenue, will contribute to improved operating leverage. For ~~2019,~~2022, total revenue increased ~~8.5 percent,~~14.4%, and noninterest expense ~~also~~ increased ~~8.5 percent,~~7.7%, as compared to the previous year. Revenue for 2022 included a $66.2 million gain realized on the sale of the Company’s Visa Inc. Class B common shares. Revenue for 2021 included a loss on the Company’s investment in Tattooed Chef, Inc. (TTCF) of $15.4 million. The Company continues to invest in technological advances that it believes will help management drive

operating leverage in the future through improved data analysis and automation. The Company also continues to evaluate core systems and will invest in enhancements that it believes will yield operating efficiencies.

The second ~~strategic~~financial objective is to increase net interest income through profitable loan and deposit growth and the optimization of the balance sheet. For ~~2019,~~2022, net interest income increased ~~$60.5~~$98.3 million, or ~~9.9 percent,~~12.1%, as compared to the previous year. The Company has shown increased net interest income through the effects of increased ~~loan volumes~~volume and ~~the~~ mix of average earning assets, coupled with higher interest rates. This increase was partially offset by ~~changing~~higher interest-bearing deposit rates and lower PPP income. There was a decrease of $37.7 million in interest ~~rate environment.~~income for loans recorded under the PPP in 2022 as compared to 2021. Average earning assets increased $2.1 billion, or 6.2%, compared to 2021. Average loan balances increased ~~$1.2~~$2.2 billion ~~or 10.0 percent,~~and average securities increased $1.8 billion, partially offset by a decrease in average interest-bearing due from banks of $1.7 billion from prior year. Average PPP loans decreased $755.1 million as compared to 2021. The funding for these assets was driven primarily by a ~~16.6 percent~~2.8% increase in average interest-bearing ~~liabilities.~~liabilities and 17.9% increase in noninterest-bearing deposits. Net interest margin, on a tax-equivalent basis, ~~decreased nine~~increased 13 basis points compared to the same period in ~~2018.~~2021 in large part due to an increase in the benefit of free funds with the increase in short-term interest rates, coupled with the repricing of earning assets. This increase was partially offset by lower liquidity and the repricing of interest-bearing liabilities. Net interest spread contracted by 22 basis points during the same period.

The third ~~strategic~~financial objective is to grow the Company’s revenue from noninterest sources. The Company seeks to grow noninterest revenues throughout all economic and interest rate cycles, while positioning itself to benefit in periods of economic growth. Noninterest income increased ~~$25.1~~$87.1 million, or ~~6.2 percent,~~18.6%, to ~~$426.8~~$554.2 million for the year ended December 31, ~~2019,~~2022, compared to the same period in ~~2018. This~~2021. The increase for 2022 was driven by a ~~combination~~$66.2 million gain realized on the sale of ~~revenues~~the Company’s Visa Inc. Class B common shares, coupled with a loss of $15.4 million on the Company’s investment in ~~trading~~TTCF recognized in 2021. The increase was also driven by increased 12b-1 and ~~investment banking, brokerage, trust and securities processing, company-owned life insurance, and derivative~~money market income. These changes are discussed in greater detail below under Noninterest income. AtFor the year ended December 31, ~~2019,~~2022, noninterest income represented ~~38.9 percent~~37.8% of total revenues, as compared to ~~39.7 percent at December 31, 2018.~~36.4% for 2021.

The fourth ~~strategic~~financial objective is effective capital management. The Company places a significant emphasis on maintaining a strong capital position, which management believes promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and

acquisition opportunities. The Company continues to maximize shareholder value through a mix of reinvesting in organic growth, evaluating acquisition opportunities that complement the Company’s strategies, increasing dividends over time, and appropriately utilizing a share repurchase program. At December 31, ~~2019,~~2022, the Company had a total risk-based capital ratio of ~~13.26 percent~~12.50% and ~~$2.6~~$2.7 billion in total shareholders’ equity, ~~an increase~~a decrease of ~~$378.0~~$478.3 million, or ~~17.0 percent,~~15.2%, compared to total shareholders’ equity at December 31, ~~2018.~~2021, driven by increased accumulated other comprehensive losses. The Company repurchased 68333,185 thousand shares of common stock at an average price of ~~$66.19~~$96.03 per share during ~~2019~~2022 and declared ~~$59.6~~$72.6 million in dividends, which represents a ~~2.3 percent~~7.9% increase compared to dividends declared during ~~2018.~~2021.

The Company recorded consolidated net income ~~from continuing operations~~ of ~~$243.6~~$431.7 million for the year ended December 31, ~~2019.~~2022. This represents a ~~24.1 percent~~22.3% increase over ~~2018. Income from continuing operations~~2021. Net income for ~~2018~~2021 was ~~$196.3~~$353.0 million, or an increase of ~~7.3 percent~~23.2% compared to ~~2017.~~2020. Basic earnings per share ~~from continuing operations~~ for the year ended December 31, ~~2019,~~2022, were ~~$4.99~~$8.93 per share compared to ~~$3.98~~$7.31 per share in ~~2018,~~2021, an increase of ~~25.4 percent.~~22.2%. Basic earnings per share ~~from continuing operations~~ were ~~$3.72~~$5.95 per share in ~~2017,~~2020, or an increase of ~~7.0 percent~~22.9% from ~~2017~~2020 to ~~2018.~~2021. Fully diluted earnings per share increased 22.4% from ~~continuing operations increased 25.9 percent from 2018~~2021 to ~~2019,~~2022 and increased ~~7.4 percent~~22.1% from ~~2017~~2020 to ~~2018.~~ 2021. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2022 were 1.15% and 15.83%, respectively, compared to 1.00% and 11.43%, respectively, for the year ended December 31, 2021. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2020 were 1.00% and 10.21%, respectively.

The Company’s net interest income increased to ~~$670.9~~$913.8 million in ~~2019~~2022 compared to ~~$610.4~~$815.5 million in ~~2018~~2021 and ~~$558.9~~$731.2 million in ~~2017.~~2020. In total, net interest income increased $98.3 million, as compared to 2021, primarily driven by a favorable volume variance ~~partially~~of $109.6 million, offset by ~~an unfavorable~~a $11.3 million rate ~~variance, resulted in a $60.5 million increase in net interest income in 2019, compared to 2018.~~variance. See Table ~~2 on page 28.~~2. The favorable volume variance on earning assets was predominantly driven by ~~the~~an increase of $2.1 billion, or 6.2%, in average earning assets. In 2022, average loan balances increased $2.2 billion and average securities balances increased $1.8 billion, partially offset by a decrease of ~~$1.2~~$1.7 billion ~~or 10.0 percent, for 2019~~in average interest-bearing due from banks, as compared to ~~the same period in 2018.~~2021. Net interest margin, on a fully tax-equivalent basis ~~decreased~~(FTE), increased to ~~3.12 percent~~2.63% for ~~2019,~~2022, compared to ~~3.21 percent~~2.50% for the same period in ~~2018, as~~2021, driven by the benefit of free funds, higher asset yields, offset by increased cost of interest-bearing liabilities. Net interest spread contracted by 22 basis points during the ~~Company’s interest-bearing liabilities increased at a greater pace than the yields on interest-earning assets.~~same period. The Company has seen an increase in the benefit from interest-free funds as compared to ~~2018.~~2021 driven by the increase in short-term interest rates. The impact of this benefit increased 1035 basis points compared to ~~2018~~2021 and is illustrated on Table ~~3 on page 29.~~3. The magnitude and duration of this impact will be largely dependent upon the FRB’s policy decisions and market movements. See Table 2018 in Item 7A ~~on page 50~~ for an illustration of the impact of an interest rate increase or decrease on net interest income as of December 31, ~~2019.~~2022.

The provision for ~~loan loss~~credit losses totaled ~~$32.9~~$37.9 million for the year ended December 31, ~~2019,~~2022, which is ~~a decrease~~an increase of ~~$37.9~~$17.9 million, or ~~53.6 percent,~~89.5%, compared to the same period in ~~2018.~~2021. This ~~decrease was driven primarily by higher provision~~change is the result of applying the CECL methodology for computing the allowance for credit losses, coupled with the impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to ~~cover~~ the ~~loss related to a single factoring credit relationship recorded in 2018.~~prior period. See further discussion in “Provision and Allowance for ~~Loan~~Credit Losses” ~~on page 29.~~in this report.

The Company had an increase of ~~$25.1~~$87.1 million, or ~~6.2 percent,~~18.6%, in noninterest income in ~~2019,~~2022, as compared to ~~2018,~~2021, and a decrease of ~~$21.9~~$93.0 million, or ~~5.2 percent,~~16.6%, in ~~2018,~~2021, compared to ~~2017.~~2020. The increase in ~~2019~~2022 is primarily driven by increased investment securities gains, net of $53.4 million and brokerage fees of $30.8 million. The decrease in 2021 is primarily attributable to ~~trading and~~a decrease of $115.6 million in investment ~~banking, brokerage,~~securities gains, net, offset by an increase in trust and securities processing company-owned life insurance, and derivative income. The change in company-owned life insurance income is offset by a proportionate change in deferred compensation expense recorded in noninterest expense.of $29.5 million. The change in noninterest income in ~~2019~~2022 from ~~2018,~~2021, and ~~2018~~2021 from ~~2017~~2020 is illustrated in Table ~~6 on page 32.~~6.

Noninterest expense increased in ~~2019~~2022 by ~~$61.1~~$64.5 million, or ~~8.5 percent,~~7.7%, compared to ~~2018~~2021 and increased by ~~$12.7~~$11.6 million, or ~~1.8 percent,~~1.4%, in ~~2018~~2021 compared to ~~2017.~~2020. The increase in ~~2019~~2022 is primarily driven by increases in salary and employee benefits expense, processing fees, other miscellaneous expense, bankcard expense, marketing and business development expense, and legal and consulting expense. The increase in 2021 is primarily driven by increases in processing fees and salary and employee benefit expense, offset by lower operating losses and equipment expense. The increase in noninterest expense in ~~2019~~2022 from ~~2018,~~2021, and ~~2018~~2021 from ~~2017~~2020 is illustrated in Table ~~7 on page 33.~~7.

Net interest income is a significant source of the Company’s earnings and represents the amount by which interest income on earning assets exceeds the interest expense paid on liabilities. The volume of interest earning assets and the related funding sources, the overall mix of these assets and liabilities, and the interest rates paid on each affect net interest income. Table 2 summarizes the change in net interest income resulting from changes in volume and rates for ~~2019, 2018~~2022, 2021 and ~~2017.~~2020.

Net interest margin, presented in Table 1, ~~on page 26,~~ is calculated as net interest income on a fully ~~tax- equivalent~~tax-equivalent basis ~~(FTE)~~ as a percentage of average earning assets. Net interest income is presented on a tax-equivalent basis to adjust for the tax-exempt status of earnings from certain loans and investments, which are primarily obligations of state and local governments. A critical component of net interest income and related net interest margin is the percentage of earning assets funded by interest-free sources. Table 3 analyzes net interest margin for the three years ended December 31, ~~2019, 2018~~2022, 2021 and ~~2017.~~2020. Net interest income, average balance sheet amounts and the corresponding yields earned and rates paid for the years ~~2017~~2020 through ~~2019~~2022 are presented in Table 1 below.

The following table presents, for the periods indicated, the average earning assets and resulting yields, as well as the average interest-bearing liabilities and resulting yields, expressed in both dollars and rates.

	2019								2018								2022								2021
	Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾			Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾			Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾			Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾
ASSETS
Loans and loans held for sale (FTE) ^{(2) (3)}	$	12,764.6		$	637.9		5.00	%	$	11,606.5		$	559.4		4.82	%	$	18,823.8		$	810.1		4.30	%	$	16,629.9		$	619.3		3.72	%
Securities:
Taxable		4,524.9			106.1		2.34			3,858.8			83.3		2.16			9,616.7			192.1		2.00			7,422.4			127.6		1.72
Tax-exempt (FTE)		3,797.0			113.7		3.00			3,505.6			94.1		2.68			3,885.1			122.8		3.16			4,247.0			124.5		2.93
Total securities		8,321.9			219.8		2.64			7,364.4			177.4		2.41			13,501.8			314.9		2.33			11,669.4			252.1		2.16
Federal funds sold and resell agreements		535.4			13.8		2.59			178.8			4.8		2.69			965.9			19.1		1.98			1,234.5			10.1		0.81
Interest-bearing due from banks		584.8			12.9		2.20			419.8			7.9		1.88			2,408.5			18.6		0.77			4,063.1			5.4		0.13
Other earning assets (FTE)		52.3			2.5		4.79			49.3			2.5		4.97			12.1			0.6		4.96			23.5			1.0		4.33
Total earning assets (FTE)		22,259.0			886.9		3.98			19,618.8			752.0		3.83			35,712.1			1,163.3		3.26			33,620.4			887.9		2.64
Allowance for loan losses		(107.4	)							(100.9	)
Allowance for credit losses																		(184.1	)							(204.7	)
Cash and due from banks		454.6								396.1								420.0								460.1
Other assets		1,178.4								1,085.8								1,631.0								1,452.8
Total assets	$	23,784.6							$	20,999.8							$	37,579.0							$	35,328.6

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand and savings deposits	$	12,161.8		$	138.7		1.14	%	$	10,113.3		$	80.9		0.80	%	$	17,333.0		$	162.2		0.94	%	$	16,982.9		$	24.1		0.14	%
Time deposits under $250,000		366.3			5.6		1.53			355.3			3.8		1.07			95.0			0.7		0.74			242.0			0.8		0.33
Time deposits of $250,000 or more		644.1			9.9		1.54			687.4			7.4		1.08			635.5			4.6		0.72			453.2			1.5		0.33
Total interest bearing deposits		13,172.2			154.2		1.17			11,156.0			92.1		0.83
Total interest-bearing deposits																		18,063.5			167.5		0.93			17,678.1			26.4		0.15
Borrowed funds		85.9			5.2		6.10			79.2			4.7		5.93			309.2			15.5		5.00			270.5			12.7		4.68
Federal funds purchased and repurchase agreements		1,657.3			32.6		1.96			1,559.1			24.7		1.59
Total interest bearing liabilities		14,915.4			192.0		1.29			12,794.3			121.5		0.95
Noninterest bearing demand deposits		6,132.2								5,828.5
Federal funds purchased																		249.7			5.2		2.10			163.8			—		0.04
Securities sold under agreements to repurchase																		2,527.4			35.5		1.40			2,454.3			6.9		0.28
Total interest-bearing liabilities																		21,149.8			223.7		1.06			20,566.7			46.0		0.22
Noninterest-bearing demand deposits																		13,264.1								11,254.8
Other		285.2								182.2								438.8								418.0
Total		21,332.8								18,805.0								34,852.7								32,239.5
Total shareholders' equity		2,451.8								2,194.8								2,726.3								3,089.1
Total liabilities and shareholders' equity	$	23,784.6							$	20,999.8							$	37,579.0							$	35,328.6
Net interest income (FTE)				$	694.9							$	630.5							$	939.6							$	841.9
Net interest spread (FTE)							2.69	%							2.88	%							2.20	%							2.42	%
Net interest margin (FTE)							3.12	%							3.21	%							2.63	%							2.50	%

	2017								2020
	Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾			Average Balance			Interest Income/ Expense ⁽¹⁾		Rate Earned/ Paid ⁽¹⁾
ASSETS
Loans and loans held for sale (FTE) ^{(2) (3)}	$	10,843.6		$	461.3		4.25	%	$	15,126.1		$	586.0		3.87	%
Securities:
Taxable		3,918.0			73.1		1.87			5,256.7			105.7		2.01
Tax-exempt (FTE)		3,658.0			112.5		3.08			4,226.4			126.3		2.99
Total securities		7,576.0			185.6		2.45			9,483.1			232.0		2.45
Federal funds sold and resell agreements		190.0			3.7		1.95			1,099.4			11.8		1.08
Interest-bearing due from banks		351.3			3.9		1.10			1,218.9			3.8		0.31
Other earning assets (FTE)		57.0			1.9		3.28			37.1			1.6		4.28
Total earning assets (FTE)		19,017.9			656.4		3.45			26,964.6			835.2		3.10
Allowance for loan losses		(97.2	)
Allowance for credit losses										(184.5	)
Cash and due from banks		379.6								440.5
Other assets		1,096.1								1,347.5
Total assets	$	20,396.4							$	28,568.1

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand and savings deposits	$	8,819.4		$	27.6		0.31	%	$	14,446.2		$	49.1		0.34	%
Time deposits under $250,000		373.6			2.8		0.75			488.3			5.0		1.02
Time deposits of $250,000 or more		809.5			6.0		0.74			402.0			4.1		1.02
Total interest bearing deposits		10,002.5			36.4		0.36
Total interest-bearing deposits										15,336.5			58.2		0.38
Borrowed funds		76.3			3.7		4.85			137.0			7.3		5.30
Federal funds purchased and repurchase agreements		2,095.1			17.9		0.85
Total interest bearing liabilities		12,173.9			58.0		0.48
Noninterest bearing demand deposits		5,936.2
Federal funds purchased										60.3			0.2		0.26
Securities sold under agreements to repurchase										1,963.5			11.6		0.59
Total interest-bearing liabilities										17,497.3			77.3		0.44
Noninterest-bearing demand deposits										7,845.6
Other		205.5								420.2
Total		18,315.6								25,763.1
Total shareholders' equity		2,080.8								2,805.0
Total liabilities and shareholders' equity	$	20,396.4							$	28,568.1
Net interest income (FTE)				$	598.4							$	757.9
Net interest spread (FTE)							2.97	%							2.66	%
Net interest margin (FTE)							3.15	%							2.81	%

This analysis attributes changes in net interest income either to changes in average balances or to changes in average interest rates for earning assets and interest-bearing liabilities. The change in net interest income that is due to both volume and interest rate has been allocated to volume and interest rate in proportion to the relationship of the absolute dollar amount of the change in each. All interest rates are presented on a tax-equivalent basis and give effect to tax-exempt interest income net of the disallowance of interest expense for federal income tax purposes, related to certain tax-free assets. The loan average balances and rates include nonaccrual loans.

Average Volume	Average Volume			Average Rate							Increase (Decrease)							Average Volume			Average Rate							Increase (Decrease)
2019		2018		2019			2018			2019 vs. 2018	Volume		Rate			Total
2022																		2022	2021		2022			2021			2022 vs. 2021	Volume			Rate			Total
										Change in interest earned on:																	Change in interest earned on:
$	12,764,623	$	11,606,544		5.00	%		4.82	%	Loans	$	57,315	$	21,179		$	78,494	18,823,810	$	16,629,867		4.30	%		3.72	%	Loans	$	87,505		$	103,229		$	190,734
										Securities:																	Securities:
	4,524,955		3,858,829		2.34			2.16		Taxable		15,206		7,514			22,720	9,616,691		7,422,432		2.00			1.72		Taxable		41,676			22,820			64,496
	3,796,983		3,505,602		3.00			2.68		Tax-exempt		6,539		9,114			15,653	3,885,153		4,246,943		3.16			2.93		Tax-exempt		(10,751	)		9,636			(1,115	)
	535,393		178,801		2.59			2.69		Federal funds and resell agreements		9,227		(192	)		9,035	965,911		1,234,533		1.98			0.81		Federal funds and resell agreements		(2,599	)		11,660			9,061
	584,756		419,768		2.20			1.88		Interest-bearing due from banks		3,477		1,495			4,972	2,408,468		4,063,089		0.77			0.13		Interest-bearing due from banks		(3,034	)		16,199			13,165
	52,306		49,345		4.79			4.97		Trading securities		146		(89	)		57	12,076		23,480		4.96			4.33		Trading securities		(492	)		149			(343	)
	22,259,016		19,618,889		3.98			3.83		Total		91,910		39,021			130,931	35,712,109		33,620,344		3.26			2.64		Total		112,305			163,693			275,998
										Change in interest incurred on:																	Change in interest incurred on:
	13,172,181		11,156,002		1.17			0.83		Interest-bearing deposits		18,745		43,346			62,091	18,063,498		17,678,122		0.93			0.15		Interest-bearing deposits		589			140,552			141,141
	1,657,283		1,559,149		1.96			1.59		Federal funds and repurchase agreements		1,635		6,181			7,816	249,663		163,744		2.10			0.04		Federal funds purchased		56			5,109			5,165
	85,920		79,191		6.10			5.93		Borrowed Funds		419		146			565	2,527,426		2,454,290		1.40			0.28		Securities sold under agreements to repurchase		211			28,393			28,604
																		309,204		270,498		5.00			4.68		Borrowed Funds		1,895			917			2,812
$	14,915,384	$	12,794,342		1.29	%		0.95	%	Total		20,799		49,673			70,472	21,149,791	$	20,566,654		1.06	%		0.22	%	Total		2,751			174,971			177,722
										Net interest income	$	71,111	$	(10,652	)	$	60,459										Net interest income	$	109,554		$	(11,278	)	$	98,276

Average Volume	Average Volume			Average Rate							Increase (Decrease)							Average Volume			Average Rate							Increase (Decrease)
2018		2017		2018			2017			2018 vs. 2017	Volume			Rate		Total
2021																		2021	2020		2021			2020			2021 vs. 2020	Volume			Rate			Total
										Change in interest earned on:																	Change in interest earned on:
$	11,606,544	$	10,843,642		4.82	%		4.25	%	Loans	$	33,952		$	64,098	$	98,050	16,629,867	$	15,126,110		3.72	%		3.87	%	Loans	$	56,636		$	(23,320	)	$	33,316
										Securities:																	Securities:
	3,858,829		3,918,001		2.16			1.87		Taxable		(1,119	)		11,327		10,208	7,422,432		5,256,715		1.72			2.01		Taxable		38,880			(16,956	)		21,924
	3,505,602		3,657,951		2.68			3.08		Tax-exempt		245			747		992	4,246,943		4,226,363		2.93			2.99		Tax-exempt		689			(2,204	)		(1,515	)
	178,801		190,074		2.69			1.95		Federal funds and resell agreements		(230	)		1,338		1,108	1,234,533		1,099,447		0.81			1.08		Federal funds and resell agreements		1,336			(3,128	)		(1,792	)
	419,768		351,293		1.88			1.10		Interest-bearing due from banks		870			3,169		4,039	4,063,089		1,218,919		0.13			0.31		Interest-bearing due from banks		4,757			(3,084	)		1,673
	49,345		57,013		4.97			3.28		Trading securities		(264	)		916		652	23,480		37,086		4.33			4.28		Trading securities		(592	)		19			(573	)
	19,618,889		19,017,974		3.83			3.45		Total		33,454			81,595		115,049	33,620,344		26,964,640		2.64			3.10		Total		101,706			(48,673	)		53,033
										Change in interest incurred on:																	Change in interest incurred on:
	11,156,002		10,002,497		0.83			0.36		Interest-bearing deposits		4,635			51,112		55,747	17,678,122		15,336,492		0.15			0.38		Interest-bearing deposits		7,804			(39,606	)		(31,802	)
	1,559,149		2,095,111		1.59			0.85		Federal funds and repurchase agreements		(5,483	)		12,314		6,831	163,744		60,314		0.04			0.26		Federal funds purchased		119			(206	)		(87	)
	79,191		76,301		5.93			4.90		Borrowed Funds		147			791		938	2,454,290		1,963,499		0.28			0.59		Securities sold under agreements to repurchase		2,414			(7,180	)		(4,766	)
																		270,498		136,957		4.68			5.30		Borrowed Funds		6,337			(941	)		5,396
$	12,794,342	$	12,173,909		0.95	%		0.48	%	Total		(701	)		64,217		63,516	20,566,654	$	17,497,262		0.22	%		0.44	%	Total		16,674			(47,933	)		(31,259	)
										Net interest income	$	34,155		$	17,378	$	51,533										Net interest income	$	85,032		$	(740	)	$	84,292

The Company experienced an increase in net interest income of ~~$60.5~~$98.3 million, or ~~9.9 percent,~~12.1%, for the year ended December 31, ~~2019,~~2022, compared to ~~2018.~~2021. This follows an increase of ~~$51.5~~$84.3 million, or ~~9.2 percent,~~11.5%, for the year ended December 31, ~~2018,~~2021, compared to ~~2017.~~2020. Average earning assets for the year ended December 31, ~~2019~~2022 increased by ~~$2.6~~$2.1 billion, or ~~13.5 percent,~~6.2%, compared to the same period in ~~2018.~~2021. Net interest margin, on a tax-equivalent basis, ~~decreased~~increased to ~~3.12 percent~~2.63% for ~~2019~~2022 compared to ~~3.21 percent~~2.50% in ~~2018.~~2021.

The Company funds a significant portion of its balance sheet with noninterest-bearing demand deposits. Noninterest-bearing demand deposits represented ~~32.1 percent, 34.6 percent~~40.6%, 45.9% and ~~37.9 percent~~36.5% of total outstanding deposits atas of December 31, ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively. The decrease in 2022 is driven by the increase in short-term interest rates. As illustrated in Table 3, the impact from these interest-free funds was 43 basis points in ~~2019,~~2022, as compared to 33eight basis points in ~~2018~~2021 and 1815 basis points in ~~2017.~~2020.

The Company ~~has~~ experienced an increase in net interest income during ~~2019~~2022 due to a volume variance of ~~$71.1~~$109.6 million, offset by a negative rate variance of ~~$10.7~~$11.3 million. The average rate on earning assets during ~~2019~~2022 has increased by 1562 basis points, while the average rate on interest-bearing liabilities increased by 3484 basis points, resulting in a 1922 basis-point decrease in spread. The volume of loans has increased from an average of ~~$11.6~~$16.6 billion in ~~2018~~2021 to an average of ~~$12.8~~$18.8 billion in ~~2019.~~2022, driven by organic loan growth. The volume of interest-bearing liabilities increased from $20.6 billion in 2021 to $21.1 billion in 2022. The Company expects to see continued volatility in the economic markets and governmental responses to inflation, geopolitical tensions, supply chain constraints, and the COVID-19 pandemic. These changing economic conditions and governmental responses could have impacts on the balance sheet and income statement of the Company in 2023. Loan-related earning assets tend to generate a higher spread than those earned in the Company’s investment portfolio. By design, the Company’s investment portfolio is moderate in duration and liquid in its composition of assets.

During ~~2020,~~2023, approximately $1.1 billion of ~~available for sale~~available-for-sale securities are expected to have principal repayments. This includes approximately ~~$333~~$235 million which will have principal repayments during the first quarter of ~~2020.~~2023. The ~~available for sale~~available-for-sale investment portfolio had an average life of ~~70.9~~62.3 months, ~~56.8~~67.6 months, and ~~51.7~~70.1 months as of December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively.

The ~~allowance for loan losses (ALL)~~ACL represents management’s judgment of ~~the~~total expected losses ~~inherent~~included in the Company’s loan portfolio as of the balance sheet date. ~~An analysis~~The Company’s process for recording the ACL is ~~performed quarterly to determine~~based on the ~~appropriate balance~~evaluation of the ~~ALL.~~Company’s lifetime historical loss experience, management’s understanding of the credit quality inherent in the loan portfolio, and the impact of the current economic environment, coupled with reasonable and supportable economic forecasts.

A mathematical calculation of an estimate is made to assist in determining the adequacy and reasonableness of management’s recorded ACL. To develop the estimate, the Company follows the guidelines in Accounting Standards Codification (ASC) Topic 326, Financial Instruments – Credit Losses (ASC 326). The ~~analysis reflects~~estimate reserves for assets held at amortized cost and any related credit deterioration in the Company’s available-for-sale debt security portfolio. Assets held at amortized cost include the Company’s loan ~~quality trends, including~~ book and held-to-maturity security portfolio.

The process involves the ~~levels~~consideration of quantitative and trends related to non-accrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries, among other factors. After the balance sheet analysis is performed for the ALL, the provision for loan losses is computed as the amount required to adjust the ALLqualitative factors relevant to the ~~appropriate level.~~specific segmentation of loans. These factors have been established over decades of financial institution experience and include economic observation and loan loss characteristics. This process is designed to produce a lifetime estimate of the losses, at a reporting date, that includes evaluation of historical loss experience, current economic conditions, reasonable and supportable forecasts, and the qualitative framework outlined by the Office of the Comptroller of the Currency in the published 2020 Interagency Policy Statement. This process allows management to take a holistic view of the recorded ACL reserve and ensure that all significant and pertinent information is considered.

The Company considers a variety of factors to ensure the safety and soundness of its estimate including a strong internal control framework, extensive methodology documentation, credit underwriting standards which encompass the Company’s desired risk profile, model validation, and ratio analysis. If the Company’s total ACL estimate, as determined in accordance with the approved ACL methodology, is either outside a reasonable range based on review of economic indicators or by comparison of historical ratio analysis, the ACL estimate is an outlier and management will investigate the underlying reason(s). Based on that investigation, issues or factors that previously had not been considered may be identified in the estimation process, which may warrant adjustments to estimated credit losses.

The ending result of this process is a recorded consolidated ACL that represents management’s best estimate of the total expected losses included in the loan portfolio, held-to-maturity securities, and credit deterioration in available-for-sale securities.

Table 4 presents the components of the allowance by loan portfolio segment. The Company manages the ~~ALL~~ACL against the risk in the entire loan portfolio and therefore, the allocation of the ~~ALL~~ACL to a particular loan segment may change in the future. Management of the Company believes the present ~~ALL~~ACL is adequate considering the Company’s loss experience, delinquency trends and current economic conditions. Future economic conditions and borrowers’ ability to meet their obligations, however, are uncertainties which could affect the Company’s ~~ALL~~ACL and/or need to change its current level of provision. For more information on loan portfolio segments and ~~ALL~~ACL methodology refer to Note 3, “Loans and Allowance for ~~Loan~~Credit Losses,” in the Notes to the Consolidated Financial Statements.

This table presents an allocation of the allowance for ~~loan~~credit losses on loans and percent of loans to total loans by loan portfolio segment, which represents the ~~inherent probable loss~~total expected losses derived by both quantitative and qualitative methods. The amounts presented are not necessarily indicative of actual future charge-offs in any particular category and are subject to change.

Table 5 presents a ~~five-year~~ summary of the Company’s ~~ALL.~~ACL for the years ended December 31, 2022 and 2021. Also, please see “Quantitative and Qualitative Disclosures About Market ~~Risk—~~Risk – Credit Risk Management” ~~on page 53~~ in this report for information relating to nonaccrual, past due, restructured loans, and other credit risk matters. For more information on loan portfolio segments and ~~ALL~~ACL methodology refer to Note 3, “Loans and Allowance for ~~Loan~~Credit Losses,” in the Notes to the Consolidated Financial Statements.

As illustrated in Table 5 below, the ~~ALL~~ACL decreased as a percentage of total loans to ~~0.76 percent~~0.91% as of December 31, ~~2019,~~2022, compared to ~~0.85 percent~~1.13% as of December 31, ~~2018.~~2021. The provision for ~~loan loss~~credit losses, including provision for off-balance sheet credit exposures, totaled ~~$32.9~~$37.9 million for the year ended December 31, ~~2019,~~2022, which is ~~a decrease~~an increase of ~~$37.9~~$17.9 million, or ~~53.6 percent,~~89.5%, compared to the same period in ~~2018. This decrease was driven by higher provision to cover the loss related to a single factoring credit relationship in 2018.~~2021. The provision for ~~loan~~credit losses, including provision for off-balance sheet credit exposures, totaled ~~$70.8 million and $41.0~~$20.0 million for the ~~years~~year ended December 31, ~~2018~~2021. This increase is the result of the impacts of loan growth, portfolio metric changes, and ~~2017, respectively.~~changes in macro-economic metrics in the current period as compared to the prior period.

2019

2018

2017

2016

2015

Allowance-beginning of year

$
103,635

$
100,604

$
91,649

$
81,143

$
76,140

Provision for loan losses

32,850

70,750

41,000

32,500

15,500

Charge-offs:

Commercial

(36,716
)

(64,371
)

(27,985
)

(12,788
)

(5,239
)
Consumer

Credit card

(8,011
)

(8,601
)

(8,681
)

(8,436
)

(8,555
)
Other

(909
)

(1,143
)

(948
)

(843
)

(1,103
)
Real estate

(444
)

(3,428
)

(992
)

(6,756
)

(214
)
Total charge-offs

(46,080
)

(77,543
)

(38,606
)

(28,823
)

(15,111
)
Recoveries:

Commercial

7,746

6,753

3,522

3,596

1,824

Consumer

Credit card

2,006

1,728

1,540

1,730

1,802

Other

509

898

533

518

667

Real estate

1,122

445

966

985

321

Total recoveries

11,383

9,824

6,561

6,829

4,614

Net charge-offs

(34,697
)

(67,719
)

(32,045
)

(21,994
)

(10,497
)
Allowance-end of year

$
101,788

$
103,635

$
100,604

$
91,649

$
81,143

Average loans, net of unearned interest

$
12,759,387

$
11,604,633

$
10,841,486

$
9,986,151

$
8,423,997

Loans at end of year, net of unearned
interest

13,431,722

12,178,150

11,280,514

10,540,383

9,430,761

Allowance to loans at year-end

0.76
%

0.85
%

0.89
%

0.87
%

0.86
%
Allowance as a multiple of net charge-offs

2.93x

1.53x

3.14x

4.17x

7.73x

Net charge-offs to:

Provision for loan losses

105.62
%

95.72
%

78.16
%

67.67
%

67.72
%
Average loans

0.27

0.58

0.30

0.22

0.12

	2022			2021
Allowance – January 1	$	196,711		$	218,583
Provision for credit losses		37,400			23,000
Charge-offs:
Commercial		(37,269	)		(13,981	)
Specialty lending		—			(31,945	)
Commercial real estate		(29	)		(1,198	)
Consumer real estate		(57	)		(96	)
Consumer		(800	)		(2,424	)
Credit cards		(6,150	)		(6,011	)
Leases and other		—			(8	)
Total charge-offs		(44,305	)		(55,663	)
Recoveries:
Commercial and industrial		1,550			6,694
Specialty lending		433			187
Commercial real estate		385			1,560
Consumer real estate		131			142
Consumer		126			223
Credit cards		1,812			1,967
Leases and other		—			18
Total recoveries		4,437			10,791
Net charge-offs		(39,868	)		(44,872	)
Allowance for credit losses – end of period	$	194,243		$	196,711
Allowance for credit losses on loans	$	191,836		$	194,771
Allowance for credit losses on held-to-maturity securities		2,407			1,940
Loans at end of year, net of unearned interest		21,031,189			17,170,871
Held-to-maturity securities at end of period		5,861,599			1,480,416
Total assets at amortized cost		26,892,788			18,651,287
Average loans, net of unearned interest		18,822,416			16,618,350
Allowance for credit losses on loans to loans at end of period		0.91	%		1.13	%
Allowance for credit losses – end of period to total assets at amortized cost		0.72	%		1.05	%
Allowance as a multiple of net charge-offs	4.87x			4.38x
Net charge-offs to average loans		0.21	%		0.27	%

A key objective of the Company is the growth of noninterest income to provide a diverse source of revenue not directly tied to interest rates. Fee-based services are typically non-credit related and are not generally affected by fluctuations in interest rates. Noninterest income increased in ~~2019~~2022 by ~~$25.1~~$87.1 million, or ~~6.2 percent,~~18.6%, compared to ~~2018~~2021 and decreased in ~~2018~~2021 by ~~$21.9~~$93.0 million, or ~~5.2 percent,~~16.6%, compared to ~~2017.~~2020. The increase in ~~2019~~2022 is primarily attributable to ~~trading~~an increase in investment securities gains, net, coupled with an increase in brokerage fee income and ~~investment banking, brokerage,~~ trust and securities processing ~~company-owned life insurance, and derivative~~income. These were partially offset by a decrease in other miscellaneous income. The decrease in ~~2018~~2021 is primarily attributable to ~~trading~~a decrease in investment securities gains, net, and ~~investment banking,~~brokerage income, partially offset by increased fund services income, corporate trust income, and ~~securities processing,~~ bankcard income. Changes in Noninterest income ~~gains on sales of available-for-sale securities, and service charges on deposit accounts.~~are presented in Table 6 below.

The Company’s fee-based services offer multiple products and services, which management believes will more closely align with customer product demands. The Company is currently emphasizing fee-based services including trust and securities processing, bankcard, securities trading and brokerage and cash and treasury management. Management believes that it can offer these products and services both efficiently and profitably, as most have common platforms and support structures.

	Year Ended December 31,						Dollar Change						Percent Change						Year Ended December 31,						Dollar Change						Percent Change
	2019		2018		2017		19-18			18-17			19-18			18-17			2022		2021		2020		22-21			21-20			22-21			21-20
Trust and securities processing	$	176,913	$	172,163	$	176,646	$	4,750		$	(4,483	)		2.8	%		(2.5	)%	$	237,207	$	224,126	$	194,646	$	13,081		$	29,480			5.8	%		15.1	%
Trading and investment banking		23,466		15,584		23,183		7,882			(7,599	)		50.6			(32.8	)		23,201		30,939		32,945		(7,738	)		(2,006	)		(25.0	)		(6.1	)
Service charges on deposit accounts		82,748		84,287		87,680		(1,539	)		(3,393	)		(1.8	)		(3.9	)		85,167		86,056		83,879		(889	)		2,177			(1.0	)		2.6
Insurance fees and commissions		1,634		1,292		1,972		342			(680	)		26.5			(34.5	)		1,338		1,309		1,369		29			(60	)		2.2			(4.4	)
Brokerage fees		31,261		25,807		23,208		5,454			2,599			21.1			11.2			43,019		12,171		24,350		30,848			(12,179	)		253.5			(50.0	)
Bankcard fees		66,727		68,520		73,030		(1,793	)		(4,510	)		(2.6	)		(6.2	)		73,451		64,576		60,544		8,875			4,032			13.7			6.7
Gains on sales of securities available for sale, net		3,218		578		4,192		2,640			(3,614	)	>100.0				(86.2	)
Investment securities gains, net																				58,444		5,057		120,634		53,387			(115,577	)		1,055.7			(95.8	)
Other		40,803		33,467		33,651		7,336			(184	)		21.9			(0.5	)		32,406		42,941		41,799		(10,535	)		1,142			(24.5	)		2.7
Total noninterest income	$	426,770	$	401,698	$	423,562	$	25,072		$	(21,864	)		6.2	%		(5.2	)%	$	554,233	$	467,175	$	560,166	$	87,058		$	(92,991	)		18.6	%		(16.6	)%

Noninterest income and the year-over-year changes in noninterest income are summarized in Table 6 above. The dollar change and percent change columns highlight the respective net increase or decrease in the categories of noninterest income in ~~2019~~2022 compared to ~~2018,~~2021, and in ~~2018~~2021 compared to ~~2017.~~2020.

Trust and securities processing income consists of fees earned on personal and corporate trust accounts, custody of securities services, trust investments and wealth management services, and mutual fund assets servicing. This income category increased by ~~$4.8~~$13.1 million, or ~~2.8 percent~~5.8% in ~~2019,~~2022, compared to ~~2018,~~2021, and ~~decreased~~increased by ~~$4.5~~$29.5 million, or ~~2.5 percent,~~15.1%, in ~~2018,~~2021, compared to ~~2017.~~2020. During ~~2019,~~2022, fund services income increased $12.9 million and corporate trust ~~revenue~~income increased ~~$6.9~~$6.5 million, partially offset by a decrease in wealth management income of ~~$1.4 million in fee income from~~$6.3 million. During 2021, fund services ~~fees. During 2018, fee~~ income ~~from fund services fees decreased $7.5~~increased $27.5 million and ~~wealth management services decreased $1.0 million. These decreases were offset by an increase in~~ corporate trust income increased $5.8 million, offset by a decrease in wealth management income of ~~$4.0 million~~$3.8 million. The recent volatile markets have impacted the income in this category. Since trust and securities processing fees are primarily asset-based, which are highly correlated to the change in market value of the assets, the related income will be affected by changes in the securities markets. Management continues to emphasize sales of services to both new and existing clients as ~~compared to 2017.~~well as increasing and improving the distribution channels.

Trading and investment banking income ~~increased $7.9~~decreased $7.7 million, or ~~50.6 percent,~~25.0%, in ~~2019~~2022 compared to ~~2018~~2021 and decreased ~~$7.6~~$2.0 million, or ~~32.8 percent,~~6.1%, in ~~2018~~2021 compared to ~~2017.~~2020. These decreases were driven by lower trading volume and lower market values.

Service charges on deposits income decreased $0.9 million, or 1.0%, in 2022 compared to 2021 and increased $2.2 million, or 2.6%, in 2021 compared to 2020. The decrease in 2022 compared to 2021 was driven by decreased healthcare services income, partially offset by increased consumer service charge income. The increase in ~~2019~~2021 compared to ~~2018 and the decrease in 2018 compared to 2017~~2020 was driven by increased ~~and decreased bond trading income, respectively.~~ corporate service charge income.

Brokerage fees increased ~~$5.5~~$30.8 million, or ~~21.1 percent,~~253.5%, in ~~2019~~2022 compared to ~~2018~~2021 and ~~increased $2.6~~decreased $12.2 million, or ~~11.2 percent,~~50.0%, in ~~2018~~2021 compared to ~~2017 primarily~~2020. The increase in 2022 compared to 2021 was driven by increased 12b-1 and money market fees driven by the increase in short-term interest rates. The decrease in 2021 compared to 2020 was due to ~~an increase in~~lower money market and 12b-1 income driven by ~~an increase~~a decrease in volume and interest rates.

Bankcard fees ~~decreased $1.8~~increased $8.9 million, or ~~2.6 percent,~~13.7%, in ~~2019~~2022 compared to ~~2018,~~2021, and ~~decreased $4.5~~increased $4.0 million, or ~~6.2 percent,~~6.7%, in ~~2018~~2021 compared to ~~2017. The decrease in 2019 compared to 2018 was~~2020. These increases were primarily driven by increased ~~rebate expense. The decrease in 2018 compared to 2017 was driven~~interchange income, offset by increased rewards and rebate ~~expense, partially offset by~~expense.

~~Gains on sales of securities available for sale increased $2.6~~$53.4 million in ~~2019~~2022 compared to ~~2018 and~~2021 but decreased ~~by $3.6~~$115.6 million in ~~2018~~2021 compared to ~~2017.~~2020. The ~~Company’s goal in~~increase for 2022 was driven by a $66.2 million gain realized on the ~~management~~sale of ~~its available-for-sale securities portfolio is to maximize return within~~

the Company’s ~~parameters~~Visa Inc. Class B common shares, coupled with a loss of ~~liquidity goals, interest rate risk~~$15.4 million on the Company’s investment in TTCF recognized in 2021. The decrease in 2021 was driven by the $108.8 million gain on the Company’s investment in TTCF in 2020 and ~~credit risk. This can result~~the loss of $15.4 million in ~~differences from period to period in the amount of realized gains.~~2021 noted above.

Other noninterest income ~~increased $7.3~~decreased $10.5 million, or ~~21.9 percent,~~24.5%, in ~~2019~~2022 compared to ~~2018~~2021 and ~~decreased $0.2~~increased $1.1 million, or ~~0.5 percent,~~2.7%, in ~~2018~~2021 compared to ~~2017.~~2020. The ~~increase from 2018 to 2019~~decrease in 2022 was primarily driven by ~~an increase in~~ ~~company-owned life insurance and derivative income.~~ ~~The decrease from 2017 to 2018 was primarily due to a decrease~~market value changes in company-owned life insurance ~~income, partially offset~~income. The increase in 2021 was primarily driven by ~~gains~~the gain on ~~sales~~sale of ~~assets. Changes~~the Company’s membership interests in ~~company-owned life insurance are offset by proportionate changes in deferred compensation expense noted below.~~PCM during the first quarter of 2021.

Noninterest expense increased in ~~2019~~2022 by ~~$61.1~~$64.5 million, or ~~8.5 percent,~~7.7%, compared to ~~2018~~2021 and increased in ~~2018~~2021 by ~~$12.7~~$11.6 million, or ~~1.8 percent,~~1.4%, compared to ~~2017.~~2020. From ~~2018~~2021 to ~~2019~~2022 the ~~increases were~~increase was driven by increases in salary and employee benefits expense, processing fees, other miscellaneous expense, bankcard expense, and ~~equipment~~marketing and business development expense. ~~The main drivers of~~From 2020 to 2021 the increase ~~from~~

~~2017 to 2018 were legal~~was driven by processing fees and ~~consulting expense, salaries~~salary and employee benefits expense, ~~processing fees,~~offset by other miscellaneous expense and equipment expense. Table 7 below summarizes the components of noninterest expense and the respective year-over-year changes for each category.

	Year Ended December 31,						Dollar Change						Percent Change						Year Ended December 31,						Dollar Change						Percent Change
	2019		2018		2017		19-18			18-17			19-18			18-17			2022		2021		2020		22-21			21-20			22-21			21-20
Salaries and employee benefits	$	461,445	$	419,091	$	413,830	$	42,354		$	5,261			10.1	%		1.3	%	$	524,431	$	504,442	$	495,464	$	19,989		$	8,978			4.0	%		1.8	%
Occupancy, net		47,771		45,239		44,462		2,532			777			5.6			1.7			48,848		47,345		47,476		1,503			(131	)		3.2			(0.3	)
Equipment		79,086		75,184		72,008		3,902			3,176			5.2			4.4			74,259		78,398		85,719		(4,139	)		(7,321	)		(5.3	)		(8.5	)
Supplies and services		18,699		16,103		17,173		2,596			(1,070	)		16.1			(6.2	)		13,590		14,986		15,537		(1,396	)		(551	)		(9.3	)		(3.5	)
Marketing and business development		26,257		24,372		21,469		1,885			2,903			7.7			13.5			25,699		18,533		14,679		7,166			3,854			38.7			26.3
Processing fees		52,198		46,977		42,331		5,221			4,646			11.1			11.0			82,227		67,563		54,213		14,664			13,350			21.7			24.6
Legal and consulting		31,504		29,859		23,406		1,645			6,453			5.5			27.6			39,095		32,406		29,765		6,689			2,641			20.6			8.9
Bankcard		17,750		17,514		19,471		236			(1,957	)		1.3			(10.1	)		26,367		19,145		18,954		7,222			191			37.7			1.0
Amortization of other intangible assets		5,506		5,764		7,326		(258	)		(1,562	)		(4.5	)		(21.3	)		5,037		4,757		6,517		280			(1,760	)		5.9			(27.0	)
Regulatory fees		11,489		12,695		15,527		(1,206	)		(2,832	)		(9.5	)		(18.2	)		15,378		11,894		10,279		3,484			1,615			29.3			15.7
Other		27,155		25,002		28,126		2,153			(3,124	)		8.6			(11.1	)		43,188		34,167		43,402		9,021			(9,235	)		26.4			(21.3	)
Total noninterest expense	$	778,860	$	717,800	$	705,129	$	61,060		$	12,671			8.5	%		1.8	%	$	898,119	$	833,636	$	822,005	$	64,483		$	11,631			7.7	%		1.4	%

Salaries and employee benefits expense increased ~~$42.4~~$20.0 million, or ~~10.1 percent,~~4.0%, in ~~2019~~2022 compared to ~~2018~~2021 and ~~$5.3~~$9.0 million, or ~~1.3 percent,~~1.8%, in ~~2018~~2021 compared to ~~2017.~~2020. In ~~2019, employee benefits expense increased $16.1 million, or 23.8 percent, driven by higher deferred compensation expense. Salary~~2022, salary and wage expense increased ~~$14.4~~$17.5 million, or ~~5.3 percent,~~5.9% and bonus and commission expense increased ~~$11.9~~$4.4 million, or ~~14.6 percent. These increases are~~3.5%, driven by ~~increased employee headcount, and increased bonus and sales commission expense tied to~~ business volumes and revenue growth, and ~~overall~~higher company performance. ~~In 2018, salary and wage~~These increases were offset by a decrease in employee benefits expense ~~increased $11.1~~of $1.9 million, or ~~4.3 percent, and~~2.3%. In 2021, bonus and commission expense increased $8.7 million, or 7.5%, driven by business volumes and revenue growth, and higher company performance. Salary and wage expense increased $1.7 million, or ~~2.2 percent.~~0.6%. These increases were offset by ~~decreased~~a decrease in employee ~~benefit~~benefits expense of ~~$7.6~~$1.4 million, or ~~10.1 percent,~~1.7%.

Equipment expense decreased $4.1 million, or 5.3%, in 2022 compared to 2021, and decreased $7.3 million, or 8.5%, from 2020 to 2021. The decreases in both years were driven by lower ~~deferred compensation expense.~~software expense related to a transition to cloud-based computing solutions.

~~Equipment~~Marketing and business development expense increased $7.2 million, or 38.7%, in 2022 compared to 2021, and increased $3.9 million, or ~~5.2 percent,~~26.3%, in 2021 compared to 2020. The increases in both years were driven by the timing of advertising and ~~$3.2~~business development projects and higher travel expenses as compared to the prior year.

Processing fees expense increased $14.7 million, or ~~4.4 percent~~21.7%, in ~~2019~~2022 compared to 2021, and ~~2018, respectively. This increase is~~increased $13.4 million, or 24.6%, in 2021 compared to 2020. The increases in 2022 and 2021 were primarily driven by ~~increased computer hardware~~the transition to cloud computing solutions and ~~software expenses for the~~ ongoing investments in digital channel and integrated platform solutions to support business growth and the continued modernization of ~~the Company’s core systems in both years.~~

Processing fees expense increased $5.2 million, or 11.1 percent, in 2019 compared to 2018, and increased $4.6 million, or 11.0 percent, in 2018 compared to 2017. The increases in 2019 and 2018 are primarily driven by ongoing investments in digital channel and integrated platform solutions to support business growth and the continued modernization of the Company’s core systems.

Legal and consulting expense increased ~~$1.6~~$6.7 million, or ~~5.5 percent,~~20.6%, in ~~2019~~2022 compared to ~~2018~~2021 and ~~$6.5~~increased $2.6 million, or ~~27.6 percent,~~8.9%, in ~~2018~~2021 compared to ~~2017. This~~2020. These increases were primarily driven by higher consulting expense due to the timing of multiple projects.

Bankcard expense increased $7.2 million, or 37.7%, in 2022 compared to 2021 and increased $0.2 million, or 1.0%, in 2021 compared to 2020. The increase in ~~2019~~2022 compared to 2021 was driven by an increase of $1.4 million in legal and professional services expense. The increase in 2018 was driven by an increase of $5.4 million in consulting expense and an increase of $1.1 million in legal and professional services expense.higher card administration costs coupled with higher fraud losses.

Other noninterest expense increased ~~$2.2~~$9.0 million, or ~~8.6 percent,~~26.4%, in 2022 compared to 2021 and decreased ~~$3.1~~$9.2 million, or ~~11.1 percent,~~21.3%, in ~~2019 and 2018, respectively.~~2021 compared to 2020. The increase in ~~2019 is primarily~~2022 was driven by higher operational losses ~~offset by lower other real estate~~ and ~~repossession expenses.~~increased charitable contributions expense. The decrease in ~~2018~~2021 was driven by lower operational losses, ~~compared to 2017.~~partially offset by higher charitable contributions expense.

Income tax expense ~~for continuing operations~~ totaled ~~$42.4~~$100.3 million, ~~$27.3~~$76.0 million, and ~~$53.4~~$52.4 million in ~~2019, 2018,~~2022, 2021, and ~~2017~~2020 respectively. These amounts equate to effective tax rates of ~~14.8 percent, 12.2 percent,~~18.9%, 17.7%, and ~~22.6 percent~~15.5% for ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively. The ~~decrease~~increase in the effective tax rate from ~~2017~~2021 to ~~2018 was~~2022 is primarily a

~~result of the Tax Cuts and Jobs Act (the Tax Act), which lowered the federal corporate income tax rate to 21 percent from 35 percent, effective January 1, 2018. The decrease in 2018 is also~~ attributable to a ~~discrete tax benefit~~smaller portion of ~~$5.1 million related to 2017 federal provision-to-return adjustments. Of this amount, $5.0 million was due to~~pre-tax income being earned from tax-exempt municipal securities. The increase in the remeasurement of deferred tax assets and liabilities upon completion of the 2017 federal tax return during the fourth quarter of 2018. There was no corresponding adjustment in 2019, resulting in a higher effective tax rate ~~for 2019.~~ from 2020 to 2021 is primarily attributable to a smaller portion of pre-tax income being earned from tax-exempt municipal securities and higher state and local income taxes.

For further information on income taxes refer to Note ~~17,~~16, “Income Taxes,” in the Notes to the Consolidated Financial Statements.

The Company has strategically aligned its operations into the following ~~four~~three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking ~~and Healthcare Services~~ (collectively, the Business Segments). Senior executive officers regularly evaluate Business Segment financial results produced by the Company’s internal reporting system in deciding how to allocate resources and assess performance for individual Business Segments. The management accounting system assigns balance sheet and income statement items to each Business Segment using methodologies that are refined on an ongoing basis.For comparability purposes, amounts in all periods are based on methodologies in effect at December 31, 2022. Previously reported results have been reclassified in this Form 10-K to conform to the Company’s current organizational structure.

For the year ended December 31, ~~2019,~~2022, Commercial Banking net income ~~from continuing operations~~ increased ~~by $49.9~~$4.6 million, or ~~41.3 percent,~~1.6%, to ~~$170.7~~$286.3 million compared to the same period in ~~2018.~~2021. Net interest income increased ~~$32.0~~$16.0 million, or ~~8.4 percent,~~2.8%, for the year ended December 31, ~~2019,~~2022, compared to the same period last year, primarily driven by strong loan growth, earning asset mix changes, and the increase in short-term interest rates. Provision for credit losses increased $17.3 million as compared to 2021, driven by loan growth, portfolio metric changes, and changes in macro-economic metrics in 2022 as compared to 2021. Noninterest income increased $38.2 million, or 45.2%, over the same period in 2021. This increase was primarily due to an allocated portion of the gain on the sale of Visa Inc. Class B

common shares, partially offset by the decline in company-owned life insurance for the year ended December 31, 2022 as compared to the prior year. Additionally, there were increases of $9.7 million in other investment security gains and $4.6 million in other income, driven by the gain on the sale of the Company’s factoring loan portfolio, and $3.8 million in bankcard income, primarily due to increased interchange income. Noninterest expense increased $26.5 million, or 8.6%, as compared to the same period in ~~2018, primarily driven by strong loan growth, increased interest rates, and earning asset mix changes. Provision for loan losses decreased by $37.7 million as compared to 2018.~~ 2021. This ~~decrease~~increase was driven by ~~the increased provision~~a $17.3 million increase in 2018 to cover the loss related to a single factoring credit relationship, and is consistent with our methodology, which considers the inherent risk in our loan portfolio, as well as other qualitative factors, such as macroeconomic conditions, loan growth, loan impairment changes, loan risk grading changes, and net charge-off levels. Noninterest income increased $6.7 million, or 8.9 percent, over the same period in 2018 primarily driven by an increase of $4.9 million in company-owned life insurance income and $3.3 million in derivative income, partially offset by a decrease in other noninterest income of $1.8 million due to the write-down of investments in certain small business investments. Noninterest expense increased $13.6 million, or 5.4 percent, to $267.3 million. This increase is primarily due to increased technology, service, and overhead expenses, ~~of $6.8 million,~~ an increase of ~~$4.4~~$3.1 million in marketing and business development, an increase of $2.1 million in salary and employee ~~benefit~~benefits expense, an increase of $1.5 million in regulatory fees, an increase of $0.9 million in bankcard expense, and an increase of ~~$1.0~~$0.9 million in ~~legal and consulting expense.~~operational losses as compared to 2021.

For the year ended December 31, ~~2019,~~2022, Institutional Banking net income ~~from continuing operations~~ increased ~~$4.3~~$75.2 million, or ~~9.9 percent,~~133.7%, compared to the same period last year. Net interest income increased ~~$13.6~~$72.0 million, or ~~20.4 percent,~~82.2%, compared to the same period last year, due to an increase in funds transfer pricing ~~driven by higher~~due to the increase in interest rates. Provision for loan losses declined $0.4 million, or 27.0 percent, consistent with our methodology, which considers the inherent risk in our loan portfolio, as well as other qualitative factors, such as macroeconomic conditions, loan growth, loan impairment changes, loan risk grading changes, and net charge-off levels. Noninterest income increased ~~$22.3~~$50.3 million, or ~~12.9 percent. This increase was driven by an increase in bond trading fees of $7.6 million~~18.4%, primarily due to ~~higher trading volume, an increase~~increases of ~~$6.2~~$31.1 million in brokerage fees, ~~due to increased 12b-1 and money market revenue, and an increase of $6.1~~$12.9 million ~~trust and securities pricing due to increased~~in fund services income, $6.5 million in corporate trust ~~income. Additionally, there was~~income, $3.0 million in bankcard fees, and an allocated portion of the gain on the sale of Visa Inc. Class B common shares. These increases were partially offset by decreases of $7.7 million and $3.0 million in bond trading income and service charges on deposits, respectively, coupled with a ~~$1.3 million increase~~decline in ~~income from~~ company-owned life ~~insurance.~~insurance compared to the same period last year. Noninterest expense increased ~~$29.8~~$28.8 million, or ~~15.7 percent,~~9.9% as compared to 2021. This increase was primarily driven by ~~an increase~~increases of ~~$13.2~~$18.3 million in salary and employee benefits ~~expense. This increase was driven by increased employee headcount, and increased bonus and sales commission~~ expense, ~~tied to business volumes and revenue growth. Additionally, there was an increase of~~ ~~$8.7~~$4.7 million in bankcard expense, $4.5 million in technology, service, and overhead ~~expense for investments to support growth across the segment’s lines of business, and increased other noninterest expense of $3.5~~expenses, $2.6 million ~~primarily due to operational losses~~ in ~~2019. Increases in legal and consulting expense and~~ marketing and business development, ~~expense~~and $1.1 million in processing fees. These increases were partially offset by a decrease of ~~$1.3~~$2.6 million ~~and $1.0 million, respectively, also contributed to the variance.~~in operational losses.

For the year ended December 31, ~~2019,~~2022, Personal Banking net income ~~from continuing operations~~ decreased ~~$14.3~~$1.1 million, or 7.5%, as compared to the same period last year. Net interest income increased ~~$7.0~~$10.2 million, or ~~5.6 percent,~~6.9%, compared to the same period last year due to increased loan balances and the impact of higher short-term interest rates. Provision for credit losses increased $0.7 million for the period, driven by loan ~~losses remained flat.~~growth, portfolio metric changes, and changes in macro-economic metrics in 2022 as compared to 2021. Noninterest income decreased ~~$5.6~~$1.5 million, or ~~4.8 percent,~~ 1.3%,

primarily driven by ~~a decrease~~decreases of ~~$3.1~~$6.2 million in wealth management income, $3.9 million on gains on ~~sales~~the sale of ~~other assets due to large gains~~mortgage loans, and ~~recoveries recorded in 2018, a decrease of $2.5~~$3.3 million in ~~equity earnings on alternative investments, and a decrease of $1.4 million in trust services revenue.~~investment security gains. These decreases were partially offset by an increase in noninterest income due to an allocated portion of ~~$2.2 million~~the gain on the sale of Visa Inc. Class B common shares, partially offset by the decline in company-owned life insurance. Noninterest expense increased ~~$17.7~~$9.2 million, or ~~7.8 percent,~~3.9%, primarily due to ~~an increase~~increases of ~~$14.0~~$8.5 million in ~~technology, service, and overhead expense for investments to support growth across the segment’s lines of business, an increase of $2.7 million in salary and employee benefits expense, and an increase of $1.7 million in supplies and services expense.~~

For the year ended December 31, 2019, Healthcare Services income from continuing operations increased $7.5 million, or 35.0 percent, compared to the same period last year. Net interest income increased $7.9 million, or 20.4 percent, compared to the same period last year, due to an increase in number of accounts and deposits, coupled with increased funds transfer pricing credits on deposits from higher interest rates. The impact of higher interest rates increased competitive pressures from traditional and non-traditional participants, and industry consolidation will likely impact the future levels of net interest income in this segment. Noninterest income increased $1.7 million, or 4.8 percent, compared to the same period last year, driven by higher company-owned life insurance and bankcard fee income. Noninterest expense remained flat with an increase of $1.8 million in technology, service, and overhead expenses, $4.6 million in processing fees, $1.5 million in bankcard expense, ~~for investments to support growth across the segment’s lines of business~~,and $1.1 million in operational losses, partially offset by a decrease of ~~$1.4~~$5.7 million in ~~salary~~salaries and employee ~~benefits expense due to reduced headcount, and a decrease of $0.4 million in processing fees expense.~~benefits.

Loans represent the Company’s largest source of interest income. Loan balances held for investment increased by ~~$1.3~~$3.9 billion, or ~~10.3 percent,~~22.5%, in ~~2019.~~2022. This increase was primarily driven by an increase of ~~$614.4 million,~~$1.9 billion, or ~~16.5 percent,~~26.8%, in commercial loans, $1.3 billion, or 21.5%, in commercial real estate loans, ~~$613.6~~and $403.2 million, or ~~11.7 percent,~~17.4% in ~~commercial loans, and $225.8 million, or 31.9 percent in residential~~consumer real estate loans. ~~These increases were partially offset by decreases of $91.0 million, or 34.8 percent in factoring~~

Commercial & industrial loans and ~~$88.5 million, or 23.2 percent in asset-based loans.~~

December 31,

2019

2018

2017

2016

2015

Commercial

$
5,842,002

$
5,228,402

$
4,553,040

$
4,410,806

$
4,205,736

Asset-based

292,231

380,738

336,614

225,878

219,244

Factoring

170,560

261,591

221,672

139,902

90,686

Commercial - credit card

182,238

166,334

172,291

146,735

125,361

Real estate - construction

842,346

792,565

717,849

741,804

416,568

Real estate - commercial

4,328,724

3,714,280

3,563,630

3,165,922

2,662,772

Leases

1,978

5,248

23,967

39,532

41,857

Total business-related

11,660,079

10,549,158

9,589,063

8,870,579

7,762,224

Real estate - residential

933,276

707,504

638,591

548,350

492,227

Real estate - HELOC

478,151

545,721

648,379

711,794

729,963

Consumer - credit card

226,742

230,982

252,697

270,098

291,570

Consumer - other

133,474

144,785

151,783

139,562

154,777

Total consumer-related

1,771,643

1,628,992

1,691,450

1,669,804

1,668,537

Loans before allowance and loans held for sale

13,431,722

12,178,150

11,280,513

10,540,383

9,430,761

Allowance for loan losses

(101,788
)

(103,635
)

(100,604
)

(91,649
)

(81,143
)
Net loans

13,329,934

12,074,515

11,179,909

10,448,734

9,349,618

Loans held for sale

7,803

3,192

1,460

5,279

589

Net loans and loans held for sale

$
13,337,737

$
12,077,707

$
11,181,369

$
10,454,013

$
9,350,207

As a % of total loans and loans held for sale

Commercial

43.47
%

42.92
%

40.36
%

41.84
%

44.60
%
Asset-based

2.17

3.12

2.98

2.14

2.32

Factoring

1.27

2.15

1.96

1.33

0.96

Commercial - credit card

1.36

1.37

1.53

1.39

1.33

Real estate – construction

6.27

6.51

6.36

7.03

4.42

Real estate – commercial

32.21

30.49

31.59

30.02

28.23

Leases

0.01

0.04

0.21

0.37

0.44

Total business-related

86.76

86.60

84.99

84.12

82.30

Real estate - residential

6.94

5.81

5.65

5.20

5.22

Real estate - HELOC

3.56

4.48

5.75

6.75

7.74

Consumer - credit card

1.69

1.89

2.24

2.56

3.09

Consumer - other

0.99

1.19

1.35

1.32

1.64

Total consumer-related

13.18

13.37

14.99

15.83

17.69

Loans held for sale

0.06

0.03

0.02

0.05

0.01

Total loans and loans held for sale

100.00
%

100.00
%

100.00
%

100.00
%

100.00
%

~~Included in Table 12 is a five-year breakdown of loans by type. Business-related~~commercial real estate loans continue to represent the largest ~~segment~~segments of the Company’s loan portfolio, comprising approximately ~~86.8 percent~~43.8% and ~~86.6 percent~~36.2%, respectively, of total loans and loans held for sale at the end of ~~2019~~2022 and ~~2018, respectively.~~ 42.3% and 36.5%, respectively, of total loans and loans held for sale at the end of 2021.

Commercial loans represent the largest percent of total loans. Commercial loans at December 31, ~~2019~~2022 have increased ~~$613.6 million,~~$1.9 billion, or ~~11.7 percent,~~26.8%, as compared to December 31, ~~2018,~~2021, to ~~43.5 percent~~43.8% of total loans. Commercial loans represented ~~42.9 percent~~42.3% of total loans at December 31, ~~2018.~~2021.

As a percentage of total loans, commercial real estate ~~and construction real estate loans now comprise 38.5 percent~~comprises 36.2% of total loans compared to ~~37.0 percent~~36.5% in ~~2018.~~2021. Commercial real estate loans increased ~~$614.4 million,~~$1.3 billion, or ~~16.5 percent, and construction real estate loans increased $49.8 million, or 6.3 percent,~~21.5%, compared to ~~2018.~~2021. Generally, these loans are made for investment and real estate development or working capital orand business expansion purposes and are primarily secured by real estate with a maximum loan-to-value of ~~80 percent.~~80%. Most of these properties are ~~owner-occupied and/or~~non-owner occupied and have ~~other collateral or~~ guarantees as additional security.

~~Residential~~Consumer real estate loans increased ~~$225.8~~$403.2 million, or ~~31.9 percent, and~~17.4%, compared to 2021. These loans represented ~~6.9 percent of total loans. HELOC loans decreased $67.6 million, or 12.4 percent, and represent 3.6 percent of total loans.~~

~~Asset-based loans decreased $88.5 million, or 23.2 percent, and represented 2.2 percent~~12.9% of total loans as of December 31, ~~2019. Factoring loans decreased $91.0 million, or 34.8 percent, and represented 1.3 percent of total loans~~2022, compared to 13.5% as of December 31, ~~2019.~~2021.

For further information on loan portfolio segments refer to Note 3, “Loans and Allowance for Credit Losses,” in the Notes to the Consolidated Financial Statements.

Nonaccrual, past due and restructured loans are discussed under “Quantitative and Qualitative Disclosure about Market Risk – Credit Risk Management” in Item 7A ~~on page 53~~ of this report.

The Company’s investment portfolio contains trading, available-for-sale (AFS), and held-to-maturity (HTM) securities as well as FRB stock, Federal Home Loan Bank (FHLB) stock, and other miscellaneous investments. Investment securities totaled ~~$8.7~~$13.2 billion as of December 31, ~~2019~~2022 and ~~$7.8~~$13.8 billion as of December 31, ~~2018~~2021 and comprised ~~35.1 percent~~36.5% and ~~36.3 percent~~33.8% of the Company’s earning assets, respectively, as of those dates.

During 2022, securities with an amortized cost of $4.1 billion and a fair value of $3.8 billion were transferred from the AFS classification to the HTM classification as the Company has the positive intent and ability to hold these securities to maturity. The transfers of securities were made at fair value at the time of transfer. See further information in Note 4, “Securities” in the Notes to the Consolidated Financial Statements.

The Company’s AFS securities portfolio comprised ~~85.4 percent~~52.9% of the Company’s investment securities portfolio at December 31, ~~2019,~~2022, compared to ~~83.4 percent~~86.7% at ~~year-end 2018.~~December 31, 2021. The Company’s AFS securities portfolio provides liquidity as a result of the composition and average life of the underlying securities. This liquidity can be used to fund loan growth or to offset the outflow of traditional funding sources. The average life of the AFS securities portfolio ~~increased~~decreased from ~~56.8~~67.6 months at December 31, ~~2018~~2021 to ~~70.9~~62.3 months at December 31, ~~2019 due to portfolio mix changes, extension in the portfolio related to slower projected prepayments, and buying longer tenor securities.~~2022. In addition to providing a potential source of liquidity, the AFS securities portfolio can be used as a tool to manage interest rate

sensitivity. The Company’s goal in the management of its AFS securities portfolio is to maximize return within the Company’s parameters of liquidity goals, interest rate risk and credit risk.

Management expects collateral pledging requirements for public funds, loan demand, and deposit funding to be the primary factors impacting changes in the level of AFS securities. There were ~~$5.8~~$10.3 billion of AFS securities pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase agreements at December 31, ~~2019. Of this amount, securities with a market value of $481.2 million at December 31, 2019 were pledged at the Federal Reserve Discount Window but were unencumbered as of that date.~~2022.

The Company’s HTM securities portfolio consists of U.S. agency-backed securities, mortgage-backed securities, general obligation bonds, and private placement ~~bonds, which are issued primarily to refinance existing revenue bonds in the healthcare and education sectors.~~bonds. The Company’s HTM portfolio, net of the ACL totaled ~~$1.1~~$5.9 billion as of December 31, ~~2019, a decrease~~2022, an increase of ~~$54.5 million, or 4.7 percent,~~$4.4 billion from December 31, ~~2018.~~2021. The average life of the HTM portfolio was ~~6.3~~9.3 years at December 31, ~~2019,~~2022, compared to ~~6.9~~5.2 years at December 31, ~~2018.~~2021.

The securities portfolio generates the Company’s second largest component of interest income. The AFS, HTM, and ~~HTM~~Other securities portfolios achieved an average yield on a tax-equivalent basis of ~~2.64 percent~~2.33% for ~~2019,~~2022, compared to ~~2.41 percent~~2.16% in ~~2018, and 2.45 percent in 2017.~~2021. Securities available for sale had a net unrealized ~~gain~~loss of ~~$123.4~~$771.6 million at year-end, compared to a net unrealized ~~loss~~gain of ~~$127.3~~$153.9 million the preceding year. This market value change primarily reflects the impact of a ~~larger portfolio size, longer~~shorter average life and ~~declining~~increasing market interest rates

as of December 31, ~~2019,~~2022, compared to December 31, ~~2018.~~2021. These amounts are reflected, on an after-tax basis, in the Company’s Accumulated other comprehensive income (loss) in shareholders’ equity, as an unrealized ~~gain~~loss of ~~$93.7~~$514.6 million at year-end ~~2019,~~2022, compared to an unrealized ~~loss~~gain of ~~$96.0~~$118.5 million for ~~2018.~~2021. The AFS securities portfolio contains securities that have unrealized losses ~~and are not deemed to be other-than-temporarily impaired~~ (see the table of these securities in Note 4, “Securities,” in the Notes to the Consolidated Financial ~~Statements on page 77 of this document)~~Statements). The unrealized losses in the Company’s investments ~~in direct obligations of U.S. Treasury obligations, U.S. government agencies, federal agency mortgage-backed securities, and municipal securities~~ were caused by changes in interest rates, and not from a decline in credit of the underlying issuers. The U.S. Treasury, U.S. Agency, and Government Sponsored Entity (GSE) mortgage-backed securities are all considered to be agency-backed securities with no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. The changes in fair value in the agency-backed portfolios are solely driven by change in interest rates caused by changing economic conditions. The Company has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates. As of December 31, 2022, the Company does not believe the decline in value in these portfolios is related to credit impairments and instead is due to increasing market interest rates. For the State and political subdivision portfolio, the majority of the Company’s holdings are in general obligation bonds, which have a very low historical default rate due to issuers generally having unlimited taxing authority to service the debt. For the State and political, Corporates, and Collateralized loan obligations portfolios, the Company has a robust process for monitoring credit risk, including both pre-purchase and ongoing post-purchase credit reviews and analysis. The Company monitors credit ratings of all bond issuers in these segments and reviews available financial data, including market and sector trends. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of ~~fair value. The Company expects to recover its cost basis in the securities and does not consider these investments to be other-than-temporarily impaired at~~amortized cost. As of December 31, ~~2019.~~2022, there is no ACL related to the Company’s available-for-sale securities as the decline in fair value did not result from credit issues.

Included in Tables 1311 and 1412 are analyses of the ~~cost,~~ fair value and average yield (tax-equivalent basis) of securities available for sale and securities held to maturity.

The table below provides detailed information for Other securities at December 31, 2022 and 2021:

~~Other marketable~~Equity securities with readily determinable fair values are generally traded on an exchange and ~~non-marketable~~market prices are readily available. Equity securities ~~include PCM alternative investments~~without readily determinable fair values are generally carried at cost less impairment. Unrealized gains or losses on equity securities with and without readily determinable fair values are recognized in ~~hedge funds and private equity funds, which are accounted for as equity-method investments. The~~the Investment Securities gains, net line of the Company’s Consolidated Statements of Income.

For further information on the Company’s investment securities, refer to Note 4, “Securities,” in ~~other marketable securities was fully distributed during 2019. As of December 31, 2018,~~ the ~~fair value of other marketable securities included alternative investment securities of $4.4 million. The fair value of other non-marketable securities includes~~Notes to the ~~alternative investment securities fair value of $7.0 million and $5.8 million at December 31, 2019 and December 31, 2018, respectively.~~ Consolidated Financial Statements.

Federal funds transactions essentially are overnight loans between financial institutions, which allow for either the daily investment of excess funds or the daily borrowing of another institution’s funds in order to meet short-term liquidity needs. The net borrowed position was ~~$28.9~~$55.5 million at December 31, ~~2019~~2022 compared to ~~$6.2~~$12.6 million at December 31, ~~2018.~~2021.

The Bank buys and sells federal funds as agent for non-affiliated banks. Because the transactions are pursuant to agency arrangements, these transactions do not appear on the balance sheet and averaged ~~$239.2~~$262.9 million in ~~2019~~2022 and ~~$171.3~~$394.7 million in ~~2018.~~2021.

At December 31, ~~2019,~~2022, the Company held securities purchased under agreements to resell of ~~$1.6 billion~~$951.6 million compared to ~~$626.5 million~~$1.2 billion at December 31, ~~2018.~~2021. The Company uses these instruments as short-term secured investments, in lieu of selling federal funds, or to acquire securities required for collateral purposes. Balances will fluctuate based on the Company’s liquidity and investment decisions as well as the Company’s correspondent bank borrowing levels. These investments averaged ~~$533.1~~$959.2 million in ~~2019~~2022 and ~~$172.1 million~~$1.2 billion in ~~2018.~~2021.

The Company also maintains an active securities trading inventory. The average holdings in the securities trading inventory in ~~2019~~2022 were ~~$52.3~~$12.1 million, compared to ~~$49.3~~$23.5 million in ~~2018,~~2021, and were recorded at fair market value. As discussed in “Quantitative and Qualitative Disclosures About Market Risk – Trading Account” in Part II, Item 7A, ~~on page 52,~~ the Company offsets the trading account securities by the sale of exchange-traded financial futures contracts, with both the trading account and futures contracts marked to market daily.

Interest-bearing due from banks totaled $1.2 billion as of December 31, ~~2019~~2022 compared to ~~$1.0~~$8.8 billion as of December 31, ~~2018~~2021 and includes amounts due from the FRB and interest-bearing accounts held at other financial institutions. The amount due from the FRB averaged ~~$560.9 million~~$2.3 billion and ~~$396.0 million~~$4.0 billion during the years ended December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. The ~~increase~~decrease in the FRB balance from ~~2018~~2021 to ~~2019~~2022 is primarily due to ~~an increase~~a decrease in ~~public fund and institutional~~ deposit balances. The interest-bearing accounts held at other financial institutions totaled ~~$29.3~~$121.7 million and ~~$18.8~~$41.2 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively.

Deposits represent the Company’s primary funding source for its asset base. In addition to the core deposits garnered by the Company’s retail branch structure, the Company continues to focus on its cash management services, as well as its asset management and mutual fund servicing businesses in order to attract and retain additional core deposits. Deposits totaled ~~$21.6~~$32.6 billion at December 31, ~~2019~~2022 and ~~$19.3~~$35.6 billion at December 31, ~~2018, an increase~~2021, a decrease of ~~$2.3~~$3.0 billion, or ~~12.0 percent.~~8.3%. Deposits averaged ~~$19.3~~$31.3 billion in ~~2019,~~2022, and ~~$17.0~~$28.9 billion in ~~2018.~~2021.

Noninterest-bearing demand deposits averaged ~~$6.1~~$13.3 billion in ~~2019~~2022 and ~~$5.8~~$11.3 billion in ~~2018.~~2021. These deposits represented ~~31.8 percent~~42.3% of average deposits in ~~2019,~~2022, compared to ~~34.3 percent~~38.9% in ~~2018.~~2021. The Company’s large commercial customer base provides a significant source of noninterest-bearing deposits. Many of these commercial accounts do not earn interest; however, they receive an earnings credit to offset the cost of other services provided by the Company.

As of December 31, 2022, there were $24.7 billion of uninsured deposits, as compared to $27.4 billion as of December 31, 2021.

Repurchase agreements are transactions involving the exchange of investment funds by the customer for securities by the Company, under an agreement to repurchase the same issues at an agreed-upon price and date. Securities sold under agreements to repurchase and federal funds purchased totaled $1.9 billion at December 31, 2019, and $1.5 billion at December 31, 2018. These agreements averaged $1.7 billion in 2019 and $1.6 billion in 2018. The Company enters into these transactions with its downstream correspondent banks, commercial customers, and various trust, mutual fund, and local government relationships.

advances. The Company’s borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. Based on the collateral pledged, the Company had $1.2 billion of borrowing capacity at the FHLB at December 31, 2019. The Company had no outstanding advances at FHLB Des Moines as of December 31, 2019.

2019

2018

2017

Amount

Rate

Amount

Rate

Amount

Rate

At December 31:

Federal funds purchased

$
31,873

1.48
%

$
6,679

2.42
%

$
11,334

1.27
%
Repurchase agreements

1,864,635

1.52

1,512,241

2.08

1,249,370

1.10

Other

—

—

—

—

—

—

Total

$
1,896,508

1.52
%

$
1,518,920

2.09
%

$
1,260,704

1.10
%
Average for year:

Federal funds purchased

$
123,870

2.13
%

$
301,503

2.54
%

$
879,857

1.37
%
Repurchase agreements

1,533,413

1.95

1,257,646

1.53

1,215,254

0.76

Other

3

—

3

—

3

—

Total

$
1,657,286

1.96
%

$
1,559,152

1.59
%

$
2,095,114

0.85
%
Maximum month-end balance:

Federal funds purchased

$
147,239

$
631,578

$
1,737,252

Repurchase agreements

1,864,635

1,512,241

1,475,361

Other

—

—

—

Long-term debt totaled $97.5 million at December 31, 2019. The majority of the Company’s long-term debt was assumed from the acquisition of Marquette and consists of debt obligations payable to four unconsolidated trusts (Marquette Capital Trust I, Marquette Capital Trust II, Marquette Capital Trust III, and Marquette Capital Trust IV) that previously issued trust preferred securities. These long-term debt obligations had an aggregate contractual balance of $103.1 million and had a carrying value of $70.4 million at December 31, 2019. Interest rates on trust preferred securities are tied to the three-month LIBOR with spreads ranging from 133 basis points to 160 basis points, and reset quarterly. The trust preferred securities have maturity dates ranging from January 2036 to September 2036. For further information on long-term debt refer to Note 9, “Borrowed Funds,” in the Notes to the Consolidated Financial Statements.

The Company places a significant emphasis on the maintenance of a strong capital position, which it believes promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and acquisition opportunities. Higher levels of liquidity, however, bear corresponding costs, measured in terms of lower yields on short-term, more liquid earning assets, and higher expenses for extended liability maturities. The Company manages capital for each subsidiary based upon the subsidiary’s respective risks and growth opportunities as well as regulatory requirements.

Total shareholders’ equity ~~increased $378.0~~decreased $478.3 million, or ~~17.0 percent~~15.2% to ~~$2.6~~$2.7 billion at December 31, ~~2019~~2022 as compared to December 31, ~~2018.~~2021. The decrease in shareholders’ equity from 2021 to 2022 is largely due to a decrease in Accumulated other comprehensive income (AOCI) related to the increase in losses on the securities portfolio driven by increased market interest rates.

The Board authorized, at its April ~~23, 2019,~~26, 2022, April ~~24, 2018,~~27, 2021, and April ~~25, 2017~~28, 2020 meetings, the repurchase of up to two million shares of the Company’s common stock during the twelve months following each meeting (each a Repurchase Authorization). During ~~2019~~2022 and ~~2018,~~2021, the Company acquired ~~67,923~~333,185 shares and ~~1,136,594~~67,671 shares, respectively, of its common stock pursuant to the applicable Repurchase Authorization. During 2018, the Company entered into an agreement with Bank of America Merrill Lynch (BAML) to repurchase an aggregate of $50.0 million of the Company’s common stock through an accelerated share repurchase agreement (the ASR). Under the ASR, the Company repurchased a total of 780,321 shares and the ASR was entered into pursuant to the April 24, 2018 Repurchase Authorization. The Company has not made any repurchase of its securities other than pursuant to the Repurchase Authorizations.

Through the Company’s relationship with the FHLB of Des Moines, the Company owns $10.0 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. The Company’s borrowing capacity with the FHLB was $1.2 billion as of December 31, 2019. The Company had no outstanding FHLB advances at FHLB of Des Moines as of December 31, 2019.

Risk-based capital guidelines established by regulatory agencies set minimum capital standards based on the level of risk associated with a financial institution’s assets. The Company has implemented the Basel III regulatory capital rules adopted by the FRB. Basel III capital rules include a minimum ratio of common equity tier 1 capital to risk-weighted assets of ~~4.5 percent~~4.5% and a minimum tier 1 risk-based capital ratio of ~~6 percent.~~6%. A financial institution’s total capital is also required to equal at least ~~8 percent~~8% of risk-weighted assets.

The risk-based capital guidelines indicate the specific risk weightings by type of asset. Certain off-balance sheet items (such as standby letters of credit and binding loan commitments) are multiplied by credit conversion factors to translate them into balance sheet equivalents before assigning them specific risk weightings. The Company is also required to maintain a leverage ratio equal to or greater than ~~4 percent.~~4%. The leverage ratio is tier 1 core

capital to total average assets less goodwill and intangibles. The Company's capital position as of December 31, ~~2019~~2022 is summarized in the table below and exceeded regulatory requirements.

~~For further discussion of capital and liquidity, see the “Quantitative and Qualitative Disclosures about Market Risk – Liquidity Risk” in Item 7A on page 54 of this report.~~

This table computes risk-based capital in accordance with current regulatory guidelines. These guidelines as of December 31, ~~2019,~~2022, excluded net unrealized gains or losses on securities available for sale and net unrealized losses on securities held to maturity transferred from the available-for-sale category from the computation of regulatory capital and the related risk-based capital ratios.

	Risk-Weighted Category												Risk-Weighted Category
	0%		20%		50%		100%		150%		Total		0%		20%		50%		100%		150%		Total
Risk-Weighted Assets
Loans held for sale	$	—	$	—	$	7,803	$	—	$	—	$	7,803	$	—	$	—	$	1,978	$	—	$	—	$	1,978
Loans and leases		14,893		47,906		852,433		12,458,073		58,417		13,431,722		62,586		57,770		2,385,357		18,450,411		75,065		21,031,189
Securities available for sale		576,150		6,546,107		16,409		185,484		—		7,324,150		2,204,211		5,165,476		7,203		401,060		—		7,777,950
Securities held to maturity		—		25,742		1,090,360		—		—		1,116,102		489,066		4,473,882		1,145,687		—		—		6,108,635
Federal funds and resell agreements		—		3,000		—		—		—		3,000		—		7,000		—		—		—		7,000
Trading securities		—		1,638		21,764		22,216		—		45,618		580		7,558		8,038		1,804		—		17,980
Cash and due from banks		1,288,534		409,915		—		—		—		1,698,449		1,129,382		550,405		—		—		—		1,679,787
All other assets		23,511		21,514		32,365		994,720		—		1,072,110		33,981		30,250		35,164		1,715,602		—		1,814,997
Category totals	$	1,903,088	$	7,055,822	$	2,021,134	$	13,660,493	$	58,417	$	24,698,954	$	3,919,806	$	10,292,341	$	3,583,427	$	20,568,877	$	75,065	$	38,439,516

Risk-weighted totals	$	—	$	1,411,164	$	1,010,567	$	13,660,493	$	87,626	$	16,169,850	$	—	$	2,058,468	$	1,791,714	$	20,568,877	$	112,598	$	24,531,657
Off-balance-sheet items ⁽³⁾		—		289,120		23,497		2,413,168		—		2,725,785		—		64,090		86,383		4,732,651		49,497		4,932,621
Total risk-weighted assets	$	—	$	1,700,284	$	1,034,064	$	16,073,661	$	87,626	$	18,895,635	$	—	$	2,122,558	$	1,878,097	$	25,301,528	$	162,095	$	29,464,278

For further discussion of regulatory capital requirements, see Note 10, “Regulatory Requirements” within the Notes to Consolidated Financial Statements under Item ~~8 on pages 85 through 86.~~8.

Securities sold under agreements to repurchase and federal funds purchased totaled $2.2 billion at December 31, 2022, and $3.2 billion at December 31, 2021. Repurchase agreements and federal funds purchased averaged $2.8 billion in 2022 and $2.6 billion in 2021. The Company enters into these transactions with its downstream correspondent banks, commercial customers, and various trust, mutual fund, and local government relationships.

The Company is a member bank with the FHLB of Des Moines, and through this relationship, the Company owns $10.0 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s ~~main~~borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. Based on the collateral pledged, the Company had $1.9 billion of borrowing capacity at the FHLB at December 31, 2022. The Company had no outstanding advances at FHLB Des Moines as of December 31, 2022.

To enhance general working capital needs, the Company has a revolving line of credit with Wells Fargo Bank, N.A. which allows the Company to borrow up to $30.0 million for general working capital purposes. The interest rate applied to borrowed balances will be at the Company’s option, either 1.4% above SOFR or 1.75% below the prime rate on the date of an advance. The Company pays a 0.4% unused commitment fee for unused portions of the line of credit. The Company had no advances outstanding at December 31, 2022.

Long-term debt totaled $381.3 million at December 31, 2022, compared to $271.5 million at December 31, 2021. In September 2022, the Company issued $110.0 million in aggregate subordinated notes due in September 2032. The Company received $107.9 million, after deducting underwriting discounts and commissions and offering expenses, and used the proceeds from the offering for general corporate purposes, including, among other uses, contributing Tier 1 capital into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of 6.25% and an effective rate of 6.64% due to issuance costs, with an interest rate reset date of September 2027.

In September 2020, the Company issued $200.0 million in aggregate subordinated notes due in September 2030. The Company received $197.7 million, after deducting underwriting discounts and commissions and offering expenses, and used the proceeds from the offering for general corporate purposes, including, among other uses, contributing Tier 1 capital into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of 3.70% and an effective rate of 3.93%, due to issuance costs, with an interest rate reset date of September 2025.

The remainder of the Company’s long-term debt was assumed from the acquisition of Marquette Financial Companies in 2015 and consists of debt obligations payable to four unconsolidated trusts (Marquette Capital Trust I, Marquette Capital Trust II, Marquette Capital Trust III, and Marquette Capital Trust IV) that previously issued trust preferred securities. These long-term debt obligations had an aggregate contractual balance of $103.1 million and had a carrying value of $74.6 million at December 31, 2022 and $73.2 million at December 31, 2021. Interest rates on trust preferred securities are tied to the three-month LIBOR with spreads ranging from 133 basis points to 160 basis points and reset quarterly. The trust preferred securities have maturity dates ranging from January 2036 to September 2036. For further information on long-term debt refer to Note 9, “Borrowed Funds,” in the Notes to the Consolidated Financial Statements.

The Company has material off-balance sheet arrangements ~~are~~in the form of loan commitments, commercial and standby letters of credit, futures contracts and forward exchange contracts, which have maturity dates rather than payment due dates. These commitments and contingent liabilities are not required to be recorded on the Company’s balance sheet. Since commitments associated with letters of credit and lending and financing arrangements may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements. See Table 1917 below, as well as Note 15, “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements under Item 8 ~~on pages 95 through 97~~ for detailed information and further discussion of these arrangements. Management does not anticipate any material losses from its off-balance sheet arrangements.

COMMITMENTS, ~~CONTRACTUAL OBLIGATIONS~~MATERIAL CASH REQUIREMENTS AND OFF-BALANCE SHEET ARRANGEMENTS (in thousands)

The table below details the ~~contractual obligations~~commitments, material cash requirements, and off-balance sheet arrangements for the Company as of December 31, ~~2019~~2022 and includes principal payments only. The Company has no capital leases or long-term purchase obligations.

As of December 31, ~~2019, our~~2022, the Company’s total liabilities for unrecognized tax benefits were ~~$5.8~~$9.4 million. The Company cannot reasonably estimate the settlement of these liabilities. Therefore, these liabilities have been excluded from the table above. See Note ~~17,~~16, “Income Taxes,” in the Notes to the Consolidated Financial Statements for information regarding the liabilities associated with unrecognized tax benefits.

For further discussion of capital and liquidity, see the “Quantitative and Qualitative Disclosures about Market Risk – Liquidity Risk” in Item 7A of this report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to customers and suppliers, allowance for ~~loan~~credit losses, bad debts, investments, financing operations, long-lived assets, taxes, other contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which have formed the basis for making such judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Under different assumptions or conditions, actual results may differ from the recorded estimates.

Management believes that the Company’s critical accounting policies and estimates are those relating ~~to:~~to the allowance for ~~loan losses and fair value measurements.~~ credit losses.

The Company’s ~~allowance for loan losses~~ACL represents management’s judgment of the ~~loan~~total expected losses included in the Company’s assets held at amortized cost. The Company’s process for recording the ACL is based on the evaluation of the Company’s lifetime historical loss experience, management’s understanding of the credit quality inherent in the loan ~~portfolio.~~portfolio, and the impact of the current economic environment, coupled with reasonable and supportable economic forecasts.

A mathematical calculation of an estimate is made to assist in determining the adequacy and reasonableness of management’s recorded ACL. To develop the estimate, the Company follows the guidelines in ASC Topic 326, Financial Instruments – Credit Losses. The ~~allowance is reviewed quarterly, considering both~~estimate reserves for assets held at amortized cost, which include the Company’s loan and held-to-maturity security portfolios.

The estimation process involves the consideration of quantitative and qualitative factors ~~such as~~relevant to the specific segmentation of loans. These factors have been established over decades of financial institution experience and include economic observation and loan loss characteristics. This process is designed to produce a lifetime estimate of the losses, at a reporting date, that is based on evaluation of historical ~~trends, internal risk ratings, migration analysis, concentrations of credit,~~loss experience, current economic conditions, ~~loan growth~~reasonable and ~~individual impairment testing.~~

~~Larger commercial loans are individually reviewed for potential impairment. For these loans, if management deems it probable that~~supportable forecasts, and the borrower cannot meet its contractual obligations with respect to payment or timing such loans are deemed to be impaired under current accounting standards. Such loans are then reviewed for potential impairment based on management’s estimatequalitative framework outlined by the Office of the borrower’s ability to repay the loan given the availability of cash flows, collateral and other legal options. Any allowance related to the impairment of an individually impaired loan is based on the present value of discounted expected future cash flows, the fair valueComptroller of the ~~underlying collateral, or~~Currency in the ~~fair value~~published 2020 Interagency Policy Statement. This process allows management to take a holistic view of the ~~loan. Based on this analysis, some loans~~recorded ACL reserve and ensure that ~~are classified as impaired do not have a specific allowance as the discounted expected future cash flows or the fair value of the underlying collateral exceeds the Company’s basis~~all significant and pertinent information is considered in ~~the impaired loan.~~its estimate.

The Company ~~also maintains an~~considers a variety of factors to ensure the safety and soundness of its estimate including a strong internal control framework, extensive methodology documentation, credit underwriting standards which encompass the Company’s desired risk ~~grading system for other loans not subject to individual impairment. An~~profile, model validation, and ratio analysis. If the Company’s total ACL estimate, ofas determined in accordance with the ~~inherent loan losses on such risk-graded loans~~approved ACL methodology, is either outside a reasonable range based on review of economic indicators or by comparison of historical ratio analysis, the ACL estimate is an outlier and management will investigate the underlying reason(s). Based on that investigation, issues or factors that previously had not been considered may be identified in the estimation process, which may warrant adjustments to estimated credit losses.

The ending result of this process is a ~~migration analysis which computes the net charge-off experience related to each risk category.~~

An estimate of inherent losses is computed on remaining loans based on the type of loan. Each type of loan is segregated into a pool based on the nature of such loans. This includes remaining commercial loansrecorded consolidated ACL that have a low risk grade, as well as other homogenous loans. Homogenous loans include automobile loans, credit card loans and other consumer loans. Allowances are established for each pool based on the loan type using historical loss rates, certain statistical measures and loan growth.

Anrepresents management’s best estimate of the total ~~inherent loss is based on the above three computations. From this an adjustment can be made based on other factors management considers to be important in evaluating the probable~~expected losses included in the ~~portfolio such as general economic conditions,~~ loan ~~trends, risk~~and held-to-maturity security portfolios considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. While management utilizes its best judgment and ~~loan administration~~information available, the ultimate adequacy of the ACL is dependent upon a variety of factors beyond the Company’s control, including the performance of its portfolios, the economy, and changes in ~~internal policies.~~ interest rates. As such, significant downturns in circumstances relating to loan quality and economic conditions could result in a requirement for additional allowance. Likewise, an upturn in loan quality and improved economic conditions may allow a reduction in the required allowance. In either instance, unanticipated changes could have a significant impact on the Company’s Provision for credit losses and ACL reported in its Consolidated Income Statements and Consolidated Balance Sheets, respectively.

For more information on loan portfolio segments, the Company’s ACL methodology, and ~~ALL methodology~~management’s assumptions in estimating the ACL, refer to the section captioned “Allowance for Credit Losses” within Note 3, “Loans and Allowance for ~~Loan~~Credit Losses,” in the Notes to the Consolidated Financial Statements.

Fair value is measured in accordance with GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value include the market approach, income approach and cost approach. The market approach uses prices or relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach involves discounting future amounts to a single present amount and is based on current market expectations about those future amounts. The cost approach is based on the amount that currently would be required to replace the service capacity of the asset.

GAAP establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows:

~~Level 1~~ ~~- Quoted prices (unadjusted) in active markets for identical assets or liabilities that are available at the measurement date.~~

~~Level 2~~ - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

~~Level 3~~ - Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include the Company’s own financial data such as internally developed pricing models and discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment.

The Company’s fair value measurements involve various valuation techniques and models, which involve inputs that are observable, when available, and the most significant of which include available-for-sale and trading securities measured at fair value on a recurring basis.

Fair value pricing information obtained from third party data providers and pricing services for investment securities is reviewed for appropriateness on a periodic basis. The third party service providers are also analyzed to understand and evaluate the valuation methodologies utilized. This review includes an analysis of current market prices compared to pricing provided by the third party pricing service to assess the relative accuracy of the data provided.

New accounting policies adopted by the Company are discussed in Note 2, “Recently Adopted Accounting Pronouncements” in the Notes to the Consolidated Financial Statements. The expected impact of accounting pronouncements recently issued or proposed but not yet required to be adopted are discussed below.

~~Credit Losses~~In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This update replaces the current incurred loss methodology for recognizing credit losses with a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This amendment broadens the information that an entity must consider in developing its expected credit loss estimates. Additionally, the update amends the accounting for credit losses for available-for-sale debt securities and purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. This update requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s loan portfolio. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment requires the use of the modified retrospective approach for adoption.

The Company’s implementation plan included a cross-functional working group, including our credit, finance, and risk management departments, to address the adoption and implementation of this amendment. Based on analysis performed by the Company, the Day 1 impact of adopting ASU 2016-13 will be immaterial to the Consolidated Financial Statements. The Company estimates the cumulative effect adjustment, net of tax, to be approximately $7.0 million, an increase to the allowance for loan losses of approximately 10 percent and a decrease to the common equity tier 1 capital ratio of approximately four basis points.

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange prices, commodity prices, or equity prices. Financial instruments that are subject to market risk can be classified either as held for trading or held for purposes other than trading.

The Company is subject to market risk primarily through the effect of changes in interest rates of its assets held for purposes other than trading. The following discussion of interest rate risk, however, combines instruments held for trading and instruments held for purposes other than trading because the instruments held for trading represent such a small portion of the Company’s portfolio that the interest rate risk associated with them is immaterial.

In the banking industry, a major risk exposure is changing interest rates. To minimize the effect of interest rate changes to net interest income and exposure levels to economic losses, the Company manages its exposure to changes in interest rates through asset and liability management within guidelines established by its Asset Liability Committee (ALCO) and approved by the Board. The ALCO is responsible for approving and ensuring compliance with asset/liability management policies, including interest rate exposure. The Company’s primary method for measuring and analyzing consolidated interest rate risk is the Net Interest Income Simulation Analysis. The Company also uses a Net Portfolio Value model to measure market value risk under various rate change scenarios and a gap analysis to measure maturity and repricing relationships between interest-earning assets and interest-bearing liabilities at specific points in time. On a limited basis, the Company uses hedges such as swaps, rate floors, and futures contracts to manage interest rate risk on certain loans, trading securities, trust preferred securities, and deposits. See further information in Note 1817 “Derivatives and Hedging Activities” in the Notes to the Company’s Consolidated Financial Statements.

Overall, the Company attempts to manage interest rate risk by positioning the balance sheet to maximize net interest income while maintaining an acceptable level of interest rate and credit risk, remaining mindful of the relationship among profitability, liquidity, interest rate risk and credit risk.

The Company’s primary interest rate risk tool, the Net Interest Income Simulation Analysis, measures interest rate risk and the effect of interest rate changes on net interest income and net interest margin. This analysis

incorporates all of the Company’s assets and liabilities together with assumptions that reflect the current interest rate environment. Through these simulations, management estimates the impact on net interest income of a ~~300 basis point~~300-basis-point upward or a ~~200 basis point~~100-basis-point downward gradual change (e.g. ramp) and immediate change (e.g. shock) of market interest rates over a ~~two year~~two-year period. In ramp scenarios, rates change gradually for a ~~one year~~one-year period and remain constant in year two. In shock scenarios, rates change immediately and the change is sustained for the remainder of the two year scenario horizon. Assumptions are made to project rates for new loans and deposits based on historical analysis, management outlook and repricing strategies. Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other market changes. The results of these simulations can be significantly influenced by assumptions utilized and management evaluates the sensitivity of the simulation results on a regular basis.

Table 2018 shows the net interest income percentage increase or decrease over the next ~~twelve~~twelve- and ~~twenty-four month~~twenty-four-month periods as of December 31, ~~2019~~2022 and ~~2018~~2021 based on hypothetical changes in interest rates and a constant sized balance sheet with runoff being replaced.

The Company is positioned ~~slightly liability sensitive~~relatively neutral to changes in interest rates in the next year. Net interest income is predicted to increase in all upward rate shock scenarios and decrease in all upward rate ramp ~~scenarios and in the 300 bps upward shock scenario.~~scenarios. In down rate scenarios, net interest income is predicted to decrease in shock scenarios and increase in ~~all scenarios except in the down 200 bps shock scenario.~~ramp scenarios. The ~~decrease~~largest change in net interest income relative to base in ~~rising~~either rate shock or ramp scenarios is ~~due to the cost of paying liabilities increasing more~~less than ~~yields on earning assets are projected to increase. Net interest income~~5% in ~~the down 100 bps scenario is higher due to earning asset yields decreasing less relative to changes in market rates than liability expense.~~year one. In year ~~two, the Company returns to a slightly asset sensitive position. Year~~ two, net interest income is predicted to rise in all increasing rate scenarios and decrease in falling rate scenarios. The Company’s ability to price deposits ~~in a rising rate environment~~ consistent with ~~our~~its history is a key assumption in these scenarios.

The Company also evaluates its interest rate sensitivity position in an attempt to maintain a balance between the amount of interest-bearing assets and interest-bearing liabilities which are expected to mature or reprice at any

point in time. While a traditional repricing mismatch analysis (gap analysis) provides a snapshot of interest rate risk, it does not take into consideration that assets and liabilities with similar repricing characteristics may not, in fact, reprice at the same time or the same degree. Also, it does not necessarily predict the impact of changes in general levels of interest rates on net interest income.

Table 2119 is a static gap analysis, which presents the Company’s assets and liabilities, based on their repricing or maturity characteristics and reflecting principal amortization. Table 2220 presents the break-out of fixed and variable rate loans by repricing or maturity characteristics for each loan class.

	1-90			91-180			181-365						1-5			Over 5						1-90			91-180			181-365						1-5			Over 5
	Days			Days			Days			Total			Years			Years			Total			Days			Days			Days			Total			Years			Years			Total
December 31, 2019 Earning assets
December 31, 2022 Earning assets
Loans	$	7,728.5		$	425.8		$	653.1		$	8,807.4		$	3,479.6		$	1,152.5		$	13,439.5		$	12,635.3		$	748.9		$	1,196.5		$	14,580.7		$	4,571.3		$	1,881.2		$	21,033.2
Securities		1,634.9			266.5			495.1			2,396.5			3,052.5			3,222.9			8,671.9			929.3			397.7			613.6			1,940.6			5,377.7			5,899.4			13,217.7
Federal funds sold and resell agreements		1,578.3			—			—			1,578.3			—			—			1,578.3			958.6			—			—			958.6			—			—			958.6
Other		1,271.2			—			—			1,271.2			—			—			1,271.2			1,197.1			—			—			1,197.1			—			—			1,197.1
Total earning assets	$	12,212.9		$	692.3		$	1,148.2		$	14,053.4		$	6,532.1		$	4,375.4		$	24,960.9		$	15,720.3		$	1,146.6		$	1,810.1		$	18,677.0		$	9,949.0		$	7,780.6		$	36,406.6
% of total earning assets		48.9	%		2.8	%		4.6	%		56.3	%		26.2	%		17.5	%		100.0	%		43.2	%		3.1	%		5.0	%		51.3	%		27.3	%		21.4	%		100.0	%
Funding sources
Interest-bearing demand and savings	$	2,513.4		$	1,879.7		$	3,759.4		$	8,152.5		$	431.0		$	4,848.9		$	13,432.4		$	18,461.6		$	—		$	—		$	18,461.6		$	—		$	—		$	18,461.6
Time deposits		571.2			299.4			202.0			1,072.6			147.0			6.8			1,226.4			474.3			173.9			161.2			809.4			103.0			4.7			917.1
Federal funds purchased and repurchase agreements		1,896.5			—			—			1,896.5			—			—			1,896.5			2,222.2			—			—			2,222.2			—			—			2,222.2
Borrowed funds		70.5			—			—			70.5			1.7			25.3			97.5			74.6			—			—			74.6			306.7			—			381.3
Noninterest-bearing sources		4,685.3			86.2			159.6			4,931.1			811.2			2,565.8			8,308.1			5,238.9			282.2			520.6			6,041.7			2,967.2			5,415.5			14,424.4
Total funding sources	$	9,736.9		$	2,265.3		$	4,121.0		$	16,123.2		$	1,390.9		$	7,446.8		$	24,960.9		$	26,471.6		$	456.1		$	681.8		$	27,609.5		$	3,376.9		$	5,420.2		$	36,406.6
% of total earning assets		39.0	%		9.1	%		16.5	%		64.6	%		5.6	%		29.8	%		100.0	%		72.7	%		1.2	%		1.9	%		75.8	%		9.3	%		14.9	%		100.0	%
Interest sensitivity gap	$	2,476.0		$	(1,573.0	)	$	(2,972.8	)	$	(2,069.8	)	$	5,141.2		$	(3,071.4	)				$	(10,751.3	)	$	690.5		$	1,128.3		$	(8,932.5	)	$	6,572.1		$	2,360.4
Cumulative gap		2,476.0			903.0			(2,069.8	)		(2,069.8	)		3,071.4			—						(10,751.3	)		(10,060.8	)		(8,932.5	)		(8,932.5	)		(2,360.4	)		—
As a % of total earning assets		9.9	%		3.6	%		(8.3	)%		(8.3	)%		12.3	%		—	%					(29.5	)%		(27.6	)%		(24.5	)%		(24.5	)%		(6.5	)%		—	%
Ratio of earning assets to funding sources		1.25			0.31			0.28			0.87			4.70			0.59						0.59			2.51			2.65			0.68			2.95			1.44
Cumulative ratio of earning assets to funding sources
2019		1.25			1.08			0.87			0.87			1.18			1.00
2018		1.24			1.09			0.92			0.92			1.21			1.00
2022																							0.59			0.63			0.68			0.68			0.92			1.00
2021																							1.44			1.27			1.04			1.04			1.25			1.00

This table details loan maturities by variable and fixed rates as of December 31, ~~2019~~2022 (in thousands):

Due in one
year or less

Due after
one year
through five
years

Due after
five years

Total

Variable Rate

Commercial

$
4,083,891

$
130,454

$
6,103

$
4,220,448

Asset-based

290,300

—

—

290,300

Factoring

170,560

—

—

170,560

Commercial – Credit Card

182,238

—

—

182,238

Real Estate – Construction

647,856

21,705

2,429

671,990

Real Estate – Commercial

1,623,029

218,277

26,896

1,868,202

Real Estate – Residential

34,881

109,689

34,381

178,951

Real Estate – HELOC

321,569

106,556

287

428,412

Consumer – Credit Card

224,039

2,703

—

226,742

Consumer – Other

88,209

154

—

88,363

Leases

1,978

—

—

1,978

Total variable rate loans

7,668,550

589,538

70,096

8,328,184

Fixed Rate

Commercial

402,558

1,016,567

202,429

1,621,554

Asset-based

—

1,931

—

1,931

Factoring

—

—

—

—

Commercial – Credit Card

—

—

—

—

Real Estate – Construction

32,389

103,395

34,572

170,356

Real Estate – Commercial

591,557

1,507,503

361,462

2,460,522

Real Estate – Residential

88,704

205,986

467,438

762,128

Real Estate – HELOC

4,641

29,817

15,281

49,739

Consumer – Credit Card

—

—

—

—

Consumer – Other

18,995

24,835

1,281

45,111

Leases

—

—

—

—

Total fixed rate loans

1,138,844

2,890,034

1,082,463

5,111,341

Total loans and loans held for sale

$
8,807,394

$
3,479,572

$
1,152,559

$
13,439,525

	Due in one year or less		Due after one year through five years		Due after five years through fifteen years		Due after fifteen years		Total
Variable Rate
Commercial and industrial	$	6,180,115	$	15,362	$	626	$	—	$	6,196,103
Specialty lending		602,706		—		—		—		602,706
Commercial real estate		4,012,740		106,329		11,738		—		4,130,807
Consumer real estate		297,029		248,932		562,379		—		1,108,340
Consumer		64,118		64		—		—		64,182
Credit cards		430,114		1,558		—		—		431,672
Leases and other		258,137		217		—		—		258,354
Total variable rate loans		11,844,959		372,462		574,743		—		12,792,164

Fixed Rate
Commercial and industrial		1,183,657		1,650,996		168,853		6,377		3,009,883
Specialty lending		—		—		—		—		—
Commercial real estate		1,299,512		1,883,108		302,636		23		3,485,279
Consumer real estate		202,586		590,812		614,158		209,351		1,616,907
Consumer		28,530		51,983		971		—		81,484
Credit cards		—		—		—		—		—
Leases and other		21,455		21,965		4,030		—		47,450
Total fixed rate loans		2,735,740		4,198,864		1,090,648		215,751		8,241,003
Total loans and loans held for sale	$	14,580,699	$	4,571,326	$	1,665,391	$	215,751	$	21,033,167

The Bank carries taxable governmental securities in a trading account that is maintained in accordance with Board-approved policy and procedures. The policy limits the amount and type of securities that can be carried in the trading account and requires compliance with any limits under applicable law and regulations and mandates the use of a value-at-risk methodology to manage price volatility risks within financial parameters. The risk associated with the carrying of trading securities is offset by the sale of exchange-traded financial futures contracts, with both the trading account and futures contracts marked to market daily. This account had a balance of ~~$45.6~~$18.0 million as of December 31, ~~2019,~~2022, compared to ~~$61.0~~$31.9 million as of December 31, ~~2018.~~2021.

The Company is subject to market risk primarily through the effect of changes in interest rates of its assets held for purposes other than trading. The discussion in Table 2119 above of interest rate risk, however, combines instruments held for trading and instruments held for purposes other than trading, because the instruments held for trading represent such a small portion of the Company’s portfolio that the interest rate risk associated with them is immaterial.

The Company has minimal foreign currency risk as a result of foreign exchange contracts. See Note 10, “Commitments, Contingencies and Guarantees” in the Notes to the Consolidated Financial Statements.

Credit risk represents the risk that a customer or counterparty may not perform in accordance with contractual terms. The Company utilizes a centralized credit administration function, which provides information on the Bank’s risk levels, delinquencies, an internal risk grading system and overall credit exposure. Loan requests are centrally

reviewed to ensure the consistent application of the loan policy and standards. In addition, the Company has an internal loan review staff that operates independently of the Bank. This review team performs periodic examinations of the Bank’s loans for credit quality, documentation and loan administration. The respective regulatory authority of the Bank also reviews loan portfolios.

A primary indicator of credit quality and risk management is the level of nonperforming loans. Nonperforming loans include both nonaccrual loans and restructured loans on nonaccrual. The Company’s nonperforming loans ~~increased $13.3~~decreased $73.0 million to ~~$56.3~~$19.3 million at December 31, ~~2019,~~2022, compared to December 31, ~~2018. This increase was primarily driven by four credits between $2 and $6 million each from two different industries which were placed on non-accrual during 2019.~~2021. There was an immaterial amount of interest recognized on nonperforming loans during ~~2019, 2018,~~2022, 2021, and ~~2017.~~2020.

The Company had ~~$2.9 million and $3.3 million~~$68 thousand of other real estate owned as of December 31, ~~2019 and 2018, respectively.~~2022. Loans past due more than 90 days and still accruing interest totaled ~~$2.1~~$1.6 million as of December 31, ~~2019,~~2022, compared to ~~$6.0~~$2.6 million as of December 31, ~~2018.~~2021.

A loan is generally placed on nonaccrual status when payments are past due 90 days or more and/or when management has considerable doubt about the borrower’s ability to repay on the terms originally contracted. The accrual of interest is discontinued and recorded thereafter only when actually received in cash.

Certain loans are restructured to provide a reduction or deferral of interest or principal due to deterioration in the financial condition of the respective borrowers. The Company had ~~$19.8~~$5.2 million of restructured loans at December 31, ~~2019~~2022 and ~~$21.1~~$7.3 million at December 31, ~~2018.~~2021.

During 2019, the Company had net charge-offs of $34.7 million, a decrease of $33.0 million as compared to the same period in 2018. This decrease is largely attributable to a $48.1 million loss recognized on a single factoring credit relationship during 2018.

	December 31,															December 31,
	2019			2018			2017			2016			2015			2022			2021
Nonaccrual loans	$	36,909		$	22,376		$	37,731		$	41,765		$	45,589		$	16,838		$	85,207
Restructured loans on nonaccrual		19,438			20,642			21,411			28,494			15,563			2,431			7,093
Total non-performing loans		56,347			43,018			59,142			70,259			61,152			19,269			92,300
Other real estate owned		2,935			3,338			1,501			194			3,307			68			—
Total non-performing assets	$	59,282		$	46,356		$	60,643		$	70,453		$	64,459		$	19,337		$	92,300

Loans past due 90 days or more	$	2,069		$	6,009		$	3,091		$	3,365		$	7,324		$	1,617		$	2,633
Restructured loans accruing		392			411			19,603			24,013			21,029			2,790			189
Allowance for loans losses		101,788			103,635			100,604			91,649			81,143
Allowance for credit losses on loans																	191,836			194,771
Ratios
Non-performing loans as a % of loans		0.42	%		0.35	%		0.52	%		0.67	%		0.65	%		0.09	%		0.54	%
Non-performing assets as a % of loans plus other real estate owned		0.44			0.38			0.54			0.67			0.68			0.09			0.54
Non-performing assets as a % of total assets		0.22			0.20			0.28			0.34			0.34			0.05			0.22
Loans past due 90 days or more as a % of loans		0.02			0.05			0.03			0.03			0.08			0.01			0.02
Allowance for Loan Losses as a % of loans		0.76			0.85			0.89			0.87			0.86
Allowance for Loan Losses as a multiple of non-performing loans	1.81x			2.41x			1.70x			1.30x			1.33x
Allowance for credit losses on loans as a % of loans																	0.91			1.13
Allowance for credit losses on loans as a multiple of non-performing loans																9.96x			2.11x

Net charge-offs for the year ended December 31, 2022 were $39.9 million, compared to $44.9 million for the year ended December 31, 2021.

Liquidity represents the Company’s ability to meet financial commitments through the maturity and sale of existing assets or availability of additional funds. The Company believes that the most important factor in the preservation of liquidity is maintaining public confidence that facilitates the retention and growth of a large, stable supply of core deposits and wholesale funds. Ultimately, the Company believes public confidence is generated through profitable operations, sound credit quality and a strong capital position. The primary source of liquidity for the Company is regularly scheduled payments on and maturity of assets, which include ~~$7.4~~$7.0 billion of high-quality securities available for sale. The liquidity of the Company and the Bank is also enhanced by its activity in the federal funds market and by its core deposits. Additionally, management believes it can raise debt or equity capital on favorable terms in the future, should the need arise.

Another factor affecting liquidity is the amount of deposits and customer repurchase agreements that have pledging requirements. All customer repurchase agreements require collateral in the form of a security. The U.S. Government, other public entities, and certain trust depositors require the Company to pledge securities if their deposit balances are greater than the FDIC-insured deposit limitations. These pledging requirements affect liquidity risk in that the related security cannot otherwise be disposed due to the pledging restriction. At December 31, ~~2019, $5.8~~2022, $10.3 billion, or ~~77.5 percent,~~80.3%, of ~~the~~ securities ~~available-for-sale~~ were pledged or used as collateral, compared to ~~$5.7~~$10.2 billion, or ~~87.1 percent,~~75.8%, at December 31, ~~2018. However of~~2021. Of these amounts, securities with a market value of ~~$481.2~~$171.2 million at December 31, ~~2019 and $1.0 billion at December 31, 2018,~~2021, were pledged at the Federal Reserve Discount Window but were unencumbered as of ~~those dates.~~that date.

The Company also has other commercial commitments that may impact liquidity. These commitments include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The total amount of these commercial commitments at December 31, ~~2019~~2022 was ~~$10.9~~$17.4 billion. Since many of these commitments expire without being drawn upon, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Company.

The Company’s cash requirements consist primarily of dividends to shareholders, debt service, operating expenses, and treasury stock purchases. Management fees and dividends received from bank and non-bank subsidiaries traditionally have been sufficient to satisfy these requirements and are expected to be sufficient in the future. The Bank is subject to various rules regarding payment of dividends to the Company. For the most part, the Bank can pay dividends at least equal to its current year’s earnings without seeking prior regulatory approval. The

Company also uses cash to inject capital into the Bank and its non-Bank subsidiaries to maintain adequate capital as well as to fund strategic initiatives.

In September 2022, the Company issued $110.0 million in aggregate subordinated notes due in September 2032. The Company received $107.9 million, after deducting underwriting discounts and commissions and offering expenses, and used the proceeds from the offering for general corporate purposes, including, among other uses, contributing Tier 1 capital into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of 6.25% and an effective rate of 6.64%, due to issuance costs, with an interest rate reset date of September 2027.

To enhance general working capital needs, the Company has a revolving line of credit with Wells Fargo Bank, N.A. which allows the Company to borrow up to ~~$50.0~~$30.0 million for general working capital purposes. The interest rate applied to borrowed balances will be at the Company’s option, either ~~1.00 percent~~1.4% above ~~LIBOR~~SOFR or ~~1.75 percent~~1.75% below the prime rate on the date of an advance. The Company pays a ~~0.3 percent~~0.4% unused commitment fee for unused portions of the line of credit. The Company had no advances outstanding at December 31, ~~2019.~~2022.

The Company is a member bank of the FHLB. The Company owns $10.0 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company has access to borrow up to ~~$1.2~~$1.9 billion through advances at the FHLB of Des Moines but had no outstanding FHLB Des Moines advances as of December 31, ~~2019.~~2022.

Operational risk generally refers to the risk of loss resulting from the Company’s operations, including those operations performed for the Company by third parties. This would include but is not limited to the risk of fraud by employees or persons outside the Company, the execution of unauthorized transactions by employees or others, errors relating to transaction processing, breaches of the internal control system and compliance requirements, and unplanned interruptions in service. This risk of loss also includes the potential legal or regulatory actions that could arise as a result of an operational deficiency, or as a result of noncompliance with applicable regulatory standards.

The Company operates in many markets and relies on the ability of its employees and systems to properly process a high number of transactions. In the event of a breakdown in internal control systems, improper operation of systems or improper employee actions, the Company could suffer financial loss, face regulatory action and suffer damage to its reputation. In order to address this risk, management maintains a system of internal controls with the objective of providing proper transaction authorization and execution, safeguarding of assets from misuse or theft, and ensuring the reliability of financial and other data.

The Company maintains systems of internal controls that provide management with timely and accurate information about the Company’s operations. These systems have been designed to manage operational risk at appropriate levels given the Company’s financial strength, the environment in which it operates, and considering factors such as competition and regulation. The Company has also established procedures that are designed to ensure that policies relating to conduct, ethics and business practices are followed on a uniform basis. In certain cases, the Company has experienced losses from operational risk. Such losses have included the effects of operational errors that the Company has discovered and included as expense in the statement of income. While there can be no assurance that the Company will not suffer such losses in the future, management continually monitors and works to improve its internal controls, systems and corporate-wide processes and procedures.

We have audited the accompanying consolidated balance sheets of UMB Financial Corporation and subsidiaries (the Company) as of December 31, ~~2019~~2022 and ~~2018,~~2021, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2019,~~2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2019~~2022 and ~~2018,~~2021, and the results of its operations and its cash flows for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2019,~~2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2019,~~2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February ~~27, 2020~~23, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex ~~judgment.~~judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

~~Assessment of the allowance~~Allowance for ~~loan~~credit losses ~~related to~~on certain loans ~~collectively~~ evaluated ~~for impairment~~on a collective basis

As discussed in ~~notes~~Notes 1 and 3 to the consolidated financial statements, the ~~Company has recorded an~~Company’s total allowance for ~~loan~~credit losses aton loans was $191.8 million as of December 31, ~~2019~~2022, a substantial portion of ~~$101.8 million. The Company’s~~which related to the allowance for ~~loan~~credit losses ~~includes a general valuation allowance~~ for loans ~~collectively~~ evaluated on a collective basis for ~~impairment that~~the commercial and industrial, commercial real estate, and consumer credit card loan segments (the collective ACL). The collective ACL includes the measure of expected credit losses on a pool basis for loans where similar risk characteristics exist and is determined using relevant available information from internal and external sources related to historical credit loss experience, current conditions, and reasonable and supportable economic forecasts. The Company uses probability of default (PD) and loss given default (LGD) models for the commercial and industrial segment, commercial real estate segment, and revolver activity within the consumer credit card segment. For the commercial and industrial segment and revolver portion of the consumer credit card segment, the collective ACL is calculated by modeling PD over future periods multiplied by historical LGD multiplied by contractual exposure at default minus any modeled prepayments and charge offs. For the commercial real estate segment,

the collective ACL is calculated by modeling PD over future periods based on peer bank data. The PD loss rate is then multiplied by historical LGD multiplied by contractual exposure at default minus any modeled prepayments and charge offs. Primary risk drivers are segment specific and include macro-economic variables, risk ratings of the individual loans within the commercial and industrial and commercial real estate loan segments, and credit score ratings of individual card holders within the consumer credit card segment. After the reasonable and supportable forecast periods, the Company reverts to historical loss experience for ~~loans with similar characteristics, adjusted for trends, general economic conditions~~each portfolio using a cliff or straight-line reversion method. A portion of the collective ACL is comprised of qualitative factors which represent adjustments to historical loss experience including concentrations of credit and ~~other qualitative risk factors both~~results of internal ~~and external to the Company.~~loan review.

We identified the assessment of the ~~allowance for loan losses for loans collectively evaluated for impairment (general valuation allowance)~~collective ACL as a critical audit matter. ~~The assessment required~~A high degree of audit effort, including specialized skills and knowledge, and ~~there~~subjective and complex auditor judgment was ~~subjectivity~~involved in ~~performing procedures in order to evaluate~~ the ~~(1) general valuation allowance methodology, (2) key assumptions, and~~assessment of the ~~inputs to those key assumptions, utilized to determine~~collective ACL. Specifically, the ~~general valuation allowance, which included risk ratings of commercial loans,~~assessment encompassed the evaluation of the ~~time~~

~~span~~collective ACL methodology, including the methods and models used to ~~charge-off,~~estimate (1) the PD and ~~determination of~~LGD and historical loss rates ~~for adversely-rated loans;~~ and ~~(3) adjustments in accordance with~~their significant assumptions, including recovery rates, portfolio segmentation, average prepayment rates, the economic forecast scenario, macro-economic variables, the reasonable and supportable forecast periods, lengths of time and methods of reversion, risk ratings on commercial and industrial and commercial real estate loans, and credit score ratings and the estimated life of the credit card receivables on consumer credit card loans, and (2) the qualitative ~~framework.~~ factors and their significant assumptions, including concentrations of credit and results of internal loan review. The assessment also included an evaluation of the conceptual soundness and performance of the PD and LGD and historical loss rate models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address ~~the~~this critical audit ~~matter included~~matter. We evaluated the ~~following. We~~design and tested the operating effectiveness of certain internal controls ~~over (1)~~related to the measurement of the collective ACL, including controls related to the:

•development and approval of the ~~general valuation allowance~~collective ACL methodology ~~(2)~~

•development of ~~key assumptions~~the qualitative factors, including concentrations of credit and results of internal loan review

•analysis of the ~~evaluation of inputs into~~overall ACL results, trends, and ratios.

We evaluated the ~~key assumptions; and (3)~~Company’s process to develop the ~~determination of qualitative risk factor adjustments. We tested~~collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, ~~in the determination of the key assumptions,~~ and ~~evaluated~~considered the relevance and reliability of ~~those sources of data. We~~such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted ~~in assessing:~~in:

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL by evaluating the:

	December 31,						December 31,
	2019			2018			2022			2021
ASSETS
Loans	$	13,431,722		$	12,178,150		$	21,031,189		$	17,170,871
Allowance for loan losses		(101,788	)		(103,635	)
Allowance for credit losses on loans								(191,836	)		(194,771	)
Net loans		13,329,934			12,074,515			20,839,353			16,976,100
Loans held for sale		7,803			3,192			1,978			1,277
Securities:
Available for sale		7,447,362			6,542,800
Held to maturity (fair value of $1,082,345 and $1,070,532, respectively)		1,116,102			1,170,646
Available for sale (amortized cost of $7,777,950 and $11,822,584, respectively)								7,006,347			11,976,514
Held to maturity, net of allowance for credit losses of $2,407 and $1,940, respectively (fair value of $5,280,659 and $1,442,391, respectively)								5,859,192			1,478,476
Trading securities		45,618			61,011			17,980			31,875
Other securities		108,420			73,692			349,758			327,098
Total investment securities		8,717,502			7,848,149
Total securities								13,233,277			13,813,963
Federal funds sold and securities purchased under agreements to resell		1,578,345			627,001			958,597			1,216,357
Interest-bearing due from banks		1,225,491			1,047,830			1,179,105			8,841,906
Cash and due from banks		472,958			645,123			500,682			413,821
Premises and equipment, net		300,334			283,879			263,649			270,933
Accrued income		124,508			110,168			189,231			131,102
Goodwill		180,867			180,867			207,385			174,518
Other intangibles, net		27,597			15,003			78,724			14,416
Other assets		596,016			515,392			1,060,480			839,091
Total assets	$	26,561,355		$	23,351,119		$	38,512,461		$	42,693,484
LIABILITIES
Deposits:
Noninterest-bearing demand	$	6,944,465		$	6,680,070		$	13,260,363		$	16,342,642
Interest-bearing demand and savings		13,432,415			11,454,442			18,461,632			18,405,644
Time deposits under $250,000		611,587			593,904			379,087			403,660
Time deposits of $250,000 or more		614,777			552,844			538,051			447,981
Total deposits		21,603,244			19,281,260			32,639,133			35,599,927
Federal funds purchased and repurchase agreements		1,896,508			1,518,920			2,222,167			3,238,435
Long-term debt		97,490			82,671			381,311			271,544
Accrued expenses and taxes		232,200			177,731			239,624			249,492
Other liabilities		125,473			62,067			363,133			188,662
Total liabilities		23,954,915			21,122,649			35,845,368			39,548,060
SHAREHOLDERS’ EQUITY
Common stock, $1.00 par value; 80,000,000 shares authorized; 55,056,730 shares issued, 49,097,606 and 49,117,222 shares outstanding, respectively		55,057			55,057
Common stock, $1.00 par value; 80,000,000 shares authorized; 55,056,730 shares issued, 48,319,404 and 48,430,805 shares outstanding, respectively								55,057			55,057
Capital surplus		1,073,764			1,054,601			1,125,949			1,110,520
Retained earnings		1,672,438			1,488,421			2,536,086			2,176,998
Accumulated other comprehensive income (loss), net		83,180			(95,782	)
Treasury stock, 5,959,124 and 5,939,508 shares, at cost, respectively		(277,999	)		(273,827	)
Accumulated other comprehensive (loss) income, net								(702,735	)		126,314
Treasury stock, 6,737,326 and 6,625,925 shares, at cost, respectively								(347,264	)		(323,465	)
Total shareholders' equity		2,606,440			2,228,470			2,667,093			3,145,424
Total liabilities and shareholders' equity	$	26,561,355		$	23,351,119		$	38,512,461		$	42,693,484

	Year Ended December 31,							Year Ended December 31,
	2019		2018			2017		2022		2021		2020
INTEREST INCOME
Loans	$	637,845	$	559,351		$	461,301	$	810,007	$	619,273	$	585,957
Securities:
Taxable interest		106,053		83,333			73,125		192,121		127,625		105,701
Tax-exempt interest		90,064		74,411			73,419		97,190		98,305		99,820
Total securities income		196,117		157,744			146,544		289,311		225,930		205,521
Federal funds and resell agreements		13,843		4,808			3,700		19,109		10,048		11,840
Interest-bearing due from banks		12,882		7,910			3,871		18,582		5,417		3,744
Trading securities		2,205		2,148			1,496		511		854		1,427
Total interest income		862,892		731,961			616,912		1,137,520		861,522		808,489
INTEREST EXPENSE
Deposits		154,192		92,101			36,354		167,553		26,412		58,214
Federal funds and repurchase agreements		32,553		24,737			17,906		40,703		6,934		11,787
Other		5,242		4,677			3,739		15,467		12,655		7,259
Total interest expense		191,987		121,515			57,999		223,723		46,001		77,260
Net interest income		670,905		610,446			558,913		913,797		815,521		731,229
Provision for loan losses		32,850		70,750			41,000
Net interest income after provision for loan losses		638,055		539,696			517,913
Provision for credit losses									37,900		20,000		130,500
Net interest income after provision for credit losses									875,897		795,521		600,729
NONINTEREST INCOME
Trust and securities processing		176,913		172,163			176,646		237,207		224,126		194,646
Trading and investment banking		23,466		15,584			23,183		23,201		30,939		32,945
Service charges on deposit accounts		82,748		84,287			87,680		85,167		86,056		83,879
Insurance fees and commissions		1,634		1,292			1,972		1,338		1,309		1,369
Brokerage fees		31,261		25,807			23,208		43,019		12,171		24,350
Bankcard fees		66,727		68,520			73,030		73,451		64,576		60,544
Gains on sales of securities available for sale, net		3,218		578			4,192
Investment securities gains, net									58,444		5,057		120,634
Other		40,803		33,467			33,651		32,406		42,941		41,799
Total noninterest income		426,770		401,698			423,562		554,233		467,175		560,166
NONINTEREST EXPENSE
Salaries and employee benefits		461,445		419,091			413,830		524,431		504,442		495,464
Occupancy, net		47,771		45,239			44,462		48,848		47,345		47,476
Equipment		79,086		75,184			72,008		74,259		78,398		85,719
Supplies and services		18,699		16,103			17,173		13,590		14,986		15,537
Marketing and business development		26,257		24,372			21,469		25,699		18,533		14,679
Processing fees		52,198		46,977			42,331		82,227		67,563		54,213
Legal and consulting		31,504		29,859			23,406		39,095		32,406		29,765
Bankcard		17,750		17,514			19,471		26,367		19,145		18,954
Amortization of other intangible assets		5,506		5,764			7,326		5,037		4,757		6,517
Regulatory fees		11,489		12,695			15,527		15,378		11,894		10,279
Other		27,155		25,002			28,126		43,188		34,167		43,402
Total noninterest expense		778,860		717,800			705,129		898,119		833,636		822,005
Income before income taxes		285,965		223,594			236,346		532,011		429,060		338,890
Income tax expense		42,365		27,334			53,370		100,329		76,042		52,388
Income from continuing operations		243,600		196,260			182,976
Discontinued Operations
(Loss) income from discontinued operations before taxes		—		(917	)		101,226
Income tax (benefit) expense		—		(170	)		37,097
(Loss) income from discontinued operations		—		(747	)		64,129
NET INCOME	$	243,600	$	195,513		$	247,105	$	431,682	$	353,018	$	286,502





PER SHARE DATA
Net income – basic								$	8.93	$	7.31	$	5.95
Net income – diluted									8.86		7.24		5.93
Dividends									1.49		1.38		1.25
Weighted average shares outstanding – basic									48,340,922		48,271,462		48,137,791
Weighted average shares outstanding – diluted									48,747,399		48,738,292		48,343,750

	Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total			Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance January 1, 2017	$	55,057	$	1,033,419		$	1,142,887		$	(57,542	)	$	(211,437	)	$	1,962,384
Balance January 1, 2020																		$	55,057	$	1,073,764		$	1,672,438		$	83,180		$	(277,999	)	$	2,606,440
Cumulative effect adjustments ⁽¹⁾																			—		—			(7,039	)		—			—			(7,039	)
Adjusted balance – January 1, 2020																			55,057		1,073,764			1,665,399			83,180			(277,999	)		2,599,401
Total comprehensive income		—		—			247,105			12,017			—			259,122			—		—			286,502			235,160			—			521,662
Dividends ($1.04 per share)		—		—			(51,882	)		—			—			(51,882	)
Dividends ($1.25 per share)																			—		—			(60,655	)		—			—			(60,655	)
Purchase of treasury stock																			—		616			—			—			(64,382	)		(63,766	)
Forfeitures of equity awards, net of issuances																			—		624			—			—			(16	)		608
Recognition of equity-based compensation																			—		14,512			—			—			—			14,512
Sale of treasury stock																			—		201			—			—			414			615
Exercise of stock options																			—		733			—			—			3,838			4,571
Balance December 31, 2020																		$	55,057	$	1,090,450		$	1,891,246		$	318,340		$	(338,145	)	$	3,016,948
Total comprehensive income (loss)																			—		—			353,018			(192,026	)		—			160,992
Dividends ($1.38 per share)																			—		—			(67,266	)		—			—			(67,266	)
Purchase of treasury stock		—		—			—			—			(15,276	)		(15,276	)		—		—			—			—			(5,506	)		(5,506	)
Issuances of equity awards, net of forfeitures		—		(2,871	)		—			—			3,343			472			—		(4,605	)		—	��		—			5,299			694
Recognition of equity based compensation		—		12,844			—			—			—			12,844
Recognition of equity-based compensation																			—		20,514			—			—			—			20,514
Sale of treasury stock		—		608			—			—			512			1,120			—		316			—			—			283			599
Exercise of stock options		—		2,095			—			—			10,652			12,747			—		3,845			—			—			14,604			18,449
Balance December 31, 2017	$	55,057	$	1,046,095		$	1,338,110		$	(45,525	)	$	(212,206	)	$	2,181,531
Balance December 31, 2021																		$	55,057	$	1,110,520		$	2,176,998		$	126,314		$	(323,465	)	$	3,145,424
Total comprehensive income (loss)		—		—			195,513			(50,257	)		—			145,256			—		—			431,682			(829,049	)		—			(397,367	)
Reclassification of certain tax effects ⁽¹⁾		—		—			12,917			—			—			12,917
Dividends ($1.17 per share)		—		—			(58,264	)		—			—			(58,264	)
Dividends ($1.49 per share)																			—		—			(72,594	)		—			—			(72,594	)
Purchase of treasury stock		—		(2,807	)		—			—			(73,700	)		(76,507	)		—		—			—			—			(31,997	)		(31,997	)
Issuances of equity awards, net of forfeitures		—		(2,004	)		—			—			2,499			495			—		(6,143	)		—			—			6,822			679
Recognition of equity based compensation		—		10,579			—			—			—			10,579
Recognition of equity-based compensation																			—		20,812			—			—			—			20,812
Sale of treasury stock		—		524			—			—			538			1,062			—		351			—			—			245			596
Exercise of stock options		—		2,214			—			—			9,042			11,256			—		409			—			—			1,131			1,540
Cumulative effect adjustments ⁽²⁾		—		—			145			—			—			145
Balance December 31, 2018	$	55,057	$	1,054,601		$	1,488,421		$	(95,782	)	$	(273,827	)	$	2,228,470
Total comprehensive income		—		—			243,600			178,962			—			422,562
Dividends ($1.21 per share)		—		—			(59,583	)		—			—			(59,583	)
Purchase of treasury stock		—		—			—			—			(4,496	)		(4,496	)
Forfeitures of equity awards, net of issuances		—		3,820			—			—			(3,204	)		616
Recognition of equity based compensation		—		14,234			—			—			—			14,234
Sale of treasury stock		—		344			—			—			487			831
Exercise of stock options		—		765			—			—			3,041			3,806
Balance December 31, 2019	$	55,057	$	1,073,764		$	1,672,438		$	83,180		$	(277,999	)	$	2,606,440
Balance December 31, 2022																		$	55,057	$	1,125,949		$	2,536,086		$	(702,735	)	$	(347,264	)	$	2,667,093

Year Ended December 31,

2019

2018

2017

OPERATING ACTIVITIES

Net income

$
243,600

$
195,513

$
247,105

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for loan losses

32,850

70,750

41,000

Net amortization (accretion) of premiums and discounts from acquisition

215

(398
)

(1,906
)
Depreciation and amortization

56,258

53,116

54,875

Deferred income tax (benefit) expense

(153
)

(20,261
)

59,738

Net decrease (increase) in trading securities and other earning assets

16,084

(9,889
)

(10,805
)
Gains on sales of securities available for sale, net

(3,218
)

(578
)

(4,192
)
Gains on sales of assets

(374
)

(2,721
)

(103,346
)
Amortization of securities premiums, net of discount accretion

34,960

43,773

48,101

Originations of loans held for sale

(216,334
)

(59,687
)

(65,163
)
Gains on sales of loans held for sale, net

(1,370
)

(1,183
)

(1,561
)
Proceeds from sales of loans held for sale

213,093

59,138

70,543

Equity based compensation

14,850

11,074

13,316

Net tax benefit related to equity compensation plans

766

2,364

3,612

Changes in:

Accrued income

(14,340
)

(11,305
)

(9,201
)
Accrued expenses and taxes

76,846

(13,747
)

(40,806
)
Other assets and liabilities, net

(112,308
)

(18,862
)

25,216

Net cash provided by operating activities

341,425

297,097

326,526

INVESTING ACTIVITIES

Proceeds from maturities of securities held to maturity

208,009

114,550

87,595

Proceeds from sales of securities available for sale

411,981

95,525

578,517

Proceeds from maturities of securities available for sale

1,255,025

1,017,230

1,198,834

Purchases of securities held to maturity

(198,748
)

(33,158
)

(236,832
)
Purchases of securities available for sale

(2,346,999
)

(1,486,578
)

(1,585,395
)
Net increase in loans

(1,284,818
)

(970,399
)

(770,727
)
Net (increase) decrease in fed funds sold and resell agreements

(951,344
)

(435,400
)

132,726

Net cash activity from acquisitions and divestitures

(18,498
)

(8,907
)

164,561

Net (increase) decrease in interest bearing balances due from other financial institutions

(10,447
)

9,389

45,752

Purchases of premises and equipment

(72,313
)

(57,940
)

(36,447
)
Proceeds from sales of premises and equipment

5,536

5,379

3,037

Purchases of bank-owned and company-owned life insurance

—

—

(62,800
)
Proceeds from bank-owned and company-owned life insurance death benefit

2,187

16

2,601

Net cash used in investing activities

(3,000,429
)

(1,750,293
)

(478,578
)
FINANCING ACTIVITIES

Net increase in demand and savings deposits

2,242,368

1,402,119

1,307,843

Net increase (decrease) in time deposits

79,616

(129,159
)

144,543

Net increase (decrease) in fed funds purchased and repurchase agreements

377,588

258,216

(596,233
)
Proceeds from long-term debt

18,602

4,000

3,003

Repayment of long-term debt

(4,826
)

(1,653
)

(1,524
)
Cash dividends paid

(59,436
)

(58,279
)

(51,876
)
Proceeds from exercise of stock options and sales of treasury shares

4,637

12,318

13,867

Purchases of treasury stock

(4,496
)

(76,507
)

(15,276
)
Net cash provided by financing activities

2,654,053

1,411,055

804,347

(Decrease) increase in cash and cash equivalents

(4,951
)

(42,141
)

652,295

Cash and cash equivalents at beginning of year

1,674,121

1,716,262

1,063,967

Cash and cash equivalents at end of year

$
1,669,170

$
1,674,121

$
1,716,262

Supplemental disclosures:

Income taxes paid

$
2,245

$
63,127

$
45,749

Total interest paid

189,582

115,163

56,820

	Year Ended December 31,
	2022			2021			2020
OPERATING ACTIVITIES
Net income	$	431,682		$	353,018		$	286,502
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		37,900			20,000			130,500
Net amortization of premiums and discounts from acquisition		1,340			535			251
Depreciation and amortization		54,022			55,747			62,803
Amortization of debt issuance costs		556			450			131
Deferred income tax benefit		(6,308	)		(12,724	)		(4,836	)
Net decrease (increase) in trading securities and other earning assets		13,895			(10,329	)		10,598
Gains on investment securities, net		(58,444	)		(5,057	)		(120,634	)
Gains on sales of assets		(3,063	)		(2,666	)		(797	)
Amortization of securities premiums, net of discount accretion		45,184			53,467			44,302
Originations of loans held for sale		(47,639	)		(137,337	)		(128,123	)
Gains on sales of loans held for sale, net		(1,195	)		(5,128	)		(3,964	)
Proceeds from sales of loans held for sale		48,133			147,896			133,182
Equity based compensation		21,491			21,208			15,120
Changes in:
Accrued income		(58,222	)		4,587			(15,384	)
Accrued expenses and taxes		(10,995	)		(51,740	)		91,693
Other assets and liabilities, net		301,217			102,155			(127,746	)
Net cash provided by operating activities		769,554			534,082			373,598
INVESTING ACTIVITIES
Securities held to maturity:
Maturities, calls and principal repayments		460,413			198,783			193,629
Purchases		(990,648	)		(664,661	)		(92,141	)
Securities available for sale:
Sales		—			372,644			315,890
Maturities, calls and principal repayments		1,114,560			1,743,809			2,455,185
Purchases		(1,205,396	)		(5,080,172	)		(4,373,394	)
Equity securities with readily determinable fair values:
Sales		46,379			79,013			—
Maturities, calls and principal repayments		—			—			50,047
Purchases		(1,085	)		(6,376	)		(75,177	)
Equity securities without readily determinable fair values:
Sales		194			14			—
Maturities, calls and principal repayments		172			2,514			16,735
Purchases		(29,660	)		(77,709	)		(9,145	)
Payment of low-income housing tax credit (LIHTC) investment commitments		(35,854	)		(15,410	)		(42,995	)
Net increase in loans		(3,952,154	)		(1,117,707	)		(2,693,761	)
Net decrease (increase) in fed funds sold and resell agreements		257,760			433,978			(71,990	)
Net cash activity from acquisitions and divestitures		548,624			18,431			24
Net (increase) decrease in interest-bearing balances due from other financial institutions		(13,705	)		7,146			(13,835	)
Purchases of bank premises and equipment		(51,716	)		(33,687	)		(60,216	)
Proceeds from sales of bank premises and equipment		6,731			3,900			8,568
Purchases of bank-owned and company-owned life insurance		—			(100,000	)		(100,000	)
Proceeds from bank-owned and company-owned life insurance death benefit		—			—			1,489
Net cash used in investing activities		(3,845,385	)		(4,235,490	)		(4,491,087	)

UMB Financial Corporation is a bank holding company, which offers a wide range of banking and other financial services to its customers through its branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Iowa, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, Wisconsin, Delaware, and ~~Wisconsin.~~New York. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also impact reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Following is a summary of the more significant accounting policies to assist the reader in understanding the financial presentation.

The Company and its wholly owned subsidiaries are included in the Consolidated Financial Statements (references hereinafter to the ~~“Company”~~Company in these Notes to Consolidated Financial Statements include wholly owned subsidiaries). Intercompany accounts and transactions have been eliminated in consolidation.

Interest on loans and securities is recognized based on rate times the principal amount outstanding. This includes the impact of amortization of premiums and discounts. Interest accrual is discontinued when, in the opinion of management, the likelihood of collection becomes doubtful. ~~Other noninterest~~Noninterest income is recognized when performance obligations are satisfied.

Cash and cash equivalents include Cash and due from banks and amounts due from the FRB. Cash on hand, cash items in the process of collection, and amounts due from correspondent banks are included in Cash and due from banks. Amounts due from the FRB are interest-bearing for all periods presented and are included in the Interest-bearing due from banks line on the Company’s Consolidated Balance Sheets.

This table provides a summary of cash and cash equivalents as presented on the Consolidated Statements of Cash Flows as of December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

Also included in the Interest-bearing due from banks line, but not considered cash and cash equivalents are interest-bearing accounts held at other financial institutions, which totaled ~~$29.3~~$121.7 million and ~~$18.8~~$41.2 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively.

Loans are classified by the portfolio segments of commercial and industrial, specialty lending, commercial real estate, consumer ~~and leases. The portfolio segments are further disaggregated into the loan classes of commercial, asset-based, factoring, commercial credit card,~~ real estate, ~~– construction, real estate – commercial, real estate – residential, real estate – HELOC,~~ consumer, – credit ~~card, consumer – other,~~cards, and ~~leases.~~leases and other.

A loan is considered to be ~~impaired~~collateral dependent when management believes it is probable that it will be unable to collect all principal and interest due according to the contractual terms of the loan. If a loan is ~~impaired,~~collateral dependent, the Company records a valuation allowance equal to the carrying amount of the loan in excess of the present value of the estimated future cash flows discounted at the loan’s effective rate, based on the loan’s observable market price or the fair value of the ~~collateral if the loan is collateral dependent.~~collateral.

A loan is accounted for as a troubled debt restructuring when a concession had been granted to a debtor experiencing financial difficulties. The Company’s modifications generally include interest rate adjustments, and amortization and maturity date extensions. These modifications allow the debtor short-term cash relief to allow them to improve their financial condition. Restructured loans are considered to be collateral dependent and are individually evaluated for ~~impairment~~credit loss as part of the allowance for ~~loan~~credit loss analysis.

Loans, including those that are considered to be ~~impaired and restructured,~~collateral dependent or a troubled debt restructuring, are evaluated regularly by management. Loans are considered delinquent when payment has not been received within 30 days of its contractual due date. Loans are placed on ~~non-accrual~~nonaccrual status when the collection of interest or principal is 90 days or more past due unless the loan is adequately secured and in the process of collection. When a loan is placed on ~~non-accrual~~nonaccrual status, any interest previously accrued but not collected is reversed against current income. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Interest payments received on ~~non-accrual~~nonaccrual loans are applied to principal unless the remaining principal balance has been determined to be fully collectible.

The adequacy of the ~~allowance for loan losses~~ACL on loans is based on management’s ~~continuing~~judgment and continuous evaluation of the pertinent factors underlying the credit quality inherent in the loan portfolio. Consideration of quantitative and qualitative factors relevant to each specific segmentation of loans includes lifetime historical loss experience, the impact of the ~~loan portfolio, including actual loan loss experience,~~ current economic ~~conditions,~~environment, reasonable and supportable forecasts, and detailed analysis of ~~individual~~ loans ~~for which full collectability may not~~determined to be ~~assured, determination~~collateral dependent. The actual losses incurred over the lifetime of the ~~existence and realizable value of the collateral and guarantees securing such loans. The actual losses,~~portfolio, notwithstanding such considerations, however, could differ from the amounts estimated by management.

The Company maintains ~~a reserve, separate from the~~an allowance for ~~loan losses,~~off-balance sheet credit exposures, to address the credit risk ~~of loss associated with loan contingencies,~~to which the Company is exposed via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for off-balance sheet credit exposure is included in the Accrued expenses and taxes line item in the Consolidated Balance Sheets. In order to maintain the ~~reserve~~allowance for off-balance sheet items at an appropriate level, a provision to increase or reduce the ~~reserve~~allowance is included in the Provision for credit losses line item in the Company’s Consolidated Statements of Income. The level of the reserve will be adjusted as needed to maintain the reserve at a specified level in relation to contingent loan risk. The risk of loss arising from un-funded loan commitments has been assessed by dividing the contingencies into pools of similar loan commitments andallowance for off-balance sheet credit exposure is calculated by applying ~~two factors~~portfolio segment expected credit loss rates to ~~each pool. The gross~~the expected amount ~~of contingent exposure is first multiplied by a potential use factor to estimate the degree to which the unused commitments might reasonably be expected~~ to be used in a time of high usage. The resultant figure is then multiplied by a factor to estimate the risk of loss assuming funding of these loans. The potential loss estimates for each segment of the portfolio are added to arrive at a total potential loss estimate that is used to set the reserve.funded.

Loans held for sale are carried at the lower of aggregate cost or market value. Loan fees (net of certain direct loan origination costs) on loans held for sale are deferred until the related loans are sold or repaid. Gains or losses on loan sales are recognized at the time of sale and determined using the specific identification method.

Debt securities available for sale principally include U.S. Treasury and ~~agency~~Agency securities, ~~Government Sponsored Entity (GSE)~~GSE mortgage-backed securities, certain securities of state and political subdivisions, corporates, and ~~corporates.~~collateralized loan obligations. Debt securities classified as available for sale are measured at fair value. Unrealized holding gains and losses are excluded from earnings and reported in ~~Accumulated other comprehensive income (loss) (AOCI)~~AOCI until realized. ~~Realized gains and losses on sales are computed by the specific identification method at the time of disposition and are shown separately as a component of noninterest income.~~

Securities held to maturity are carried at amortized historical cost, net of the allowance for credit losses, based on management’s intention, and the Company’s ability to hold them to maturity. The Company classifies certain U.S. Agency securities, mortgage-backed securities, and securities of state and political subdivisions as held to maturity.

Trading securities, acquired for subsequent sale to customers, are carried at fair value. Market adjustments, fees and gains or losses on the sale of trading securities are considered to be a normal part of operations and are included in trading and investment banking income.

Securities may be transferred from the available-for-sale classification to the held-to-maturity classification when the Company has the positive intent and ability to hold these securities to maturity. Transfers of securities are made at fair value at the time of transfer. The unrealized holding gain or loss at the time of transfer is retained in AOCI and amortized over the remaining life of the securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses are recognized at the time of the transfer.

The Company accounts for certain other investments using equity-method accounting. For ~~non-marketable equity-method investments,~~equity securities without readily determinable fair values, the Company’s proportionate share of the income or loss is recognized on a one-quarter lag. When transparency in pricing exists, other investments are considered ~~marketable equity-method investments.~~

~~For marketable equity-method investments, the Company recognizes its proportionate share of income or loss as of the date of the Company’s Consolidated Financial Statements.~~ equity securities with readily determinable fair values.

Goodwill is tested for impairment annually and more frequently whenever events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. To test goodwill for impairment, the Company performs a qualitative assessment of each reporting unit. If the Company determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not greater than the carrying amount, the quantitative impairment test is not required. Otherwise, the Company compares the fair value of its reporting units to their carrying amounts to determine if an impairment exists and the amount of impairment loss. An impairment loss is measured as the excess of the carrying value of a reporting unit’s goodwill over its fair value.

~~NaN~~No goodwill impairments were recognized in ~~2019, 2018,~~2022, 2021, or ~~2017.~~2020. Other intangible assets, which relate to core deposits, non-compete agreements, and customer relationships, are amortized over ~~a period of up to 17 years and~~their useful life. Intangible assets are evaluated for impairment when events or circumstances dictate. ~~NaN~~No intangible asset impairments were recognized in ~~2019, 2018,~~2022, 2021, or ~~2017.~~2020. The Company does 0tnot have any indefinite lived intangible assets.

Premises and equipment are stated at cost less accumulated depreciation, which is computed primarily on the ~~straight line~~straight-line method. Premises are depreciated over 15 to 40 year lives, while equipment is depreciated over lives of 3 to 20 years. Gains and losses from the sale of Premises and equipment are included in Other noninterest income and Other noninterest expense, respectively.

Long-lived assets, including Premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future cash flows expected to be generated by the asset or group of assets to their current carrying value. If the carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying value exceeds fair value. ~~NaN~~No impairments were recognized in ~~2019, 2018,~~2022, 2021, or ~~2017.~~2020.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are measured based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the periods in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The provision for deferred income taxes represents the change in the deferred income tax accounts during the year excluding the tax effect of the change in net unrealized gain (loss) on securities available for ~~sale.~~sale and certain derivative items.

The Company records deferred tax assets to the extent these assets will more likely than not be realized. All available evidence is considered in making such determination, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is recorded for the portion of deferred tax assets that are not more-likely-than-not to be realized, and any changes to the valuation allowance are recorded in income tax expense.

The Company records the financial statement effects of an income tax position when it is more likely than not, based on the technical merits, that it will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured and recorded as the largest amount of tax benefit that is greater than 50

percent likely of being realized upon ultimate settlement with a taxing authority. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the tax position will be sustained. The benefit associated with previously unrecognized tax positions are generally recognized in the first period in which the more-likely-than-not threshold is met at the reporting date, the tax matter is ultimately settled

through negotiation or litigation, or when the related statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired. The recognition, derecognition and measurement of tax positions are based on management’s best judgment given the facts, ~~circumstances~~circumstance and information available at the reporting date.

The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in other noninterest expense. Accrued interest and penalties are included within the related liability lines in the Consolidated Balance Sheets. For the year ended December 31, ~~2019,~~2022, the Company has recognized an immaterial amount in interest and penalties related to the unrecognized tax benefits.

The Company records all derivatives on the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Currently, ~~four~~five of the Company’s derivatives are designated in qualifying hedging relationships. The remainder of the Company’s derivatives are not designated in qualifying hedging relationships, as the derivatives are not used to manage risks within the Company’s assets or liabilities. All changes in fair value of the Company’s non-designated derivatives and fair value hedges are recognized directly in earnings. Changes in fair value of the Company’s cash flow hedges are recognized in AOCI and are reclassified to earnings when the hedged transaction affects earnings.

Basic income per share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted year-to-date income per share includes the dilutive effect of ~~310,614, 435,800,~~406,477, 466,830, and ~~615,629~~205,959 shares issuable upon the exercise of stock options, nonvested restricted shares, and nonvested restricted stock units, granted by the Company that were outstanding at December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively.

~~Options~~Certain options, restricted stock and restricted stock units issued under employee benefit plans ~~to purchase 114,130, 125,765, and 149,413 shares of common stock~~ were ~~outstanding at December 31, 2019, 2018, and 2017, respectively, but were not included in~~excluded from the computation of diluted earnings per share because they were anti-dilutive. For the years ended December 31, 2022 and 2021, there were no outstanding stock options, restricted stock and restricted stock units excluded from the computation of diluted income per share. Outstanding options, restricted stock and restricted stock units of 198,671 for the year ended December 31, 2020, were excluded from the computation of diluted income per share because their inclusion would have been anti-dilutive.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant. For stock options, restricted stock, and service-based restricted stock unit awards, the grant date fair value is estimated using either an option-pricing model which is consistent with the terms of the award or an observed market price, if such a price exists. For performance-based restricted stock unit awards, the grant date fair value is based on the quoted price of ~~our~~the Company’s common stock on the grant date less the present value of expected dividends not received during the vesting period. Such cost is generally recognized over the vesting period during which an employee is required to provide service in exchange for the award and, in some cases, when performance metrics are met. The Company accounts for forfeitures of stock-based compensation on an actual basis as they occur.

~~Revenue Recognition~~ Credit LossesIn ~~May 2014,~~June 2016, the FASB issued ASU ~~No. 2014-09, “Revenue from Contracts with Customers.~~2016-13, “Measurement of Credit Losses on Financial Instruments.” ~~The ASU replaced most existing revenue recognition guidance in U.S. GAAP when it became effective.~~ In ~~August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date of ASU No. 2014-09 to annual reporting periods that begin after December 15, 2017. In March,~~ April and ~~May 2016,~~November 2019, the FASB issued implementation amendments to the ~~May 2014~~June 2016 ASU (collectively, the amended guidance). The amended guidance ~~affects any entity that enters into contracts~~replaced the current incurred loss methodology for

recognizing credit losses with ~~customers to transfer goods~~a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and ~~services, unless those contracts are within the scope of other standards.~~reasonable and supportable forecasts. The amended guidance ~~specifically excludes interest income,~~broadened the information that an entity must consider in developing its expected credit loss estimates. Additionally, the updates amended the accounting for credit losses for available-for-sale debt securities and purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. The amended guidance required enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as ~~other revenues associated with financial assets~~the credit quality and ~~liabilities, including loans, leases, securities, and derivatives. The amended guidance permits the use~~underwriting standards of ~~either the full retrospective approach or~~ a ~~modified retrospective approach.~~company’s loan portfolio. The Company adopted the amended guidance on January 1, 2020 using ~~the~~a modified retrospective approach on

~~January 1, 2018.~~ for adoption. Results for the reporting periods beginning after December 31, 2019 are presented under ASC Topic 326,The adoption of this guidance had no impact on the Company’s Consolidated Financial Statements, except for additional financial statement disclosures. See Note 13, “Revenue Recognition” for related disclosures.

Financial Instruments – Credit Losses ~~In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendment is intended~~, while prior period amounts continue to ~~address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments~~be presented in ~~this update were adopted on January 1, 2018.~~accordance with previously applicable GAAP. Upon adoption, the Company recorded a cumulative effect adjustment to the Company’s Consolidated Balance Sheets of ~~$132 thousand~~$9.0 million as an increase to the ~~opening balance~~allowance for credit losses and $7.0 million as a reduction to retained earnings, net of ~~total shareholders’ equity.~~deferred tax balances. See Note 3, “Loans and Allowance for Credit Losses” for related disclosures.

~~Leases~~ Troubled Debt Restructurings In ~~February 2016,~~March 2022, the FASB issued ASU No. ~~2016-02, “Leases”~~2022-02, “Financial Instruments – ~~ASC Topic 842. In January, July,~~Credit Losses: Troubled Debt Restructurings and ~~December 2018 and March 2019, the FASB issued implementation amendments to the February 2016~~Vintage Disclosures.” The ASU ~~(collectively, the amended guidance). The amended guidance changed~~eliminates the accounting ~~treatment~~guidance for troubled debt restructurings (TDR) by creditors and enhances disclosure requirements for certain loan re-financings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments also add requirements to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases, ~~in that lessees recognize most leases on-balance sheet. This increased reported assets~~disclosed by credit-quality indicator and liabilities, as lessees are required to recognize a right-of-use asset along with a lease liability, measured on a discounted basis. The amended guidance allows an entity to choose either the effective date, or the beginningclass of the earliest comparative period presented in the financial statements, as its date of initial application. The Company adopted the amended guidance on January 1, 2019, using the effective date as the date of initial application. Adoption of the amended guidance resulted in the recording of a right-of-use asset of $58.2 million and a lease liability of $63.0 million to its Consolidated Balance Sheets as of January 1, 2019. The most significant effects of the adoption of the amended guidance are additional financial statement disclosures. See Note 8, “Premises, Equipment, and Leases” for related disclosures.

~~Extinguishments of Liabilities~~ In March 2016, the FASB issued ASU No. 2016-04, “Recognition of Breakage for Certain Prepaid Stored-Value Products.” The amendment is intended to reduce the diversity in practice related to the recognition of breakage. Breakage refers to the portion of a prepaid stored-value product, such as a gift card, that goes unused wholly or partially for an indefinite period of time. This amendment requires that breakage be accounted for consistent with the breakage guidance within ASU No. 2014-09, “Revenue from Contracts with Customers.”financing receivable. The amendments in this update ~~were adopted January 1, 2018~~are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in ~~conjunction with the adoption of ASU No. 2014-09, and the adoption had no impact on the Company’s Consolidated Financial Statements.~~

~~Statement of Cash Flows~~ ~~In August 2016, the FASB issued ASU 2016-15~~, “Classification of Certain Receipts and Cash Payments.” This amendment adds to and clarifies existing guidance regarding the classification of certain cash receipts and payments in the statement of cash flows with the intent of reducing diversity in practice with respect to eight types of cash flows. The amendments in this update require full retrospective adoption. The amendments in this update were adopted on January 1, 2018 and did not have an ~~impact on the Company’s Consolidated Statement of Cash Flows.~~

~~Goodwill and Other Intangibles~~ In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” The amendment eliminates Step 2 from the goodwill impairment test. The amendment also eliminates the requirement for any reporting unit with a zero or negative carrying amount to perform a qualitative test and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments in this update were adopted on October 1, 2017.interim period. The adoption of this accounting pronouncement ~~had~~will have no impact on the ~~Company’s~~ Consolidated Financial ~~Statements.~~Statements aside from additional and revised disclosures.

~~Derivatives and Hedging~~ In August 2017, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The purpose of this updated guidance is to better align financial reporting for hedging activities with the economic objectives of those activities. The amendments in this update were adopted on January 1, 2018. Upon adoption, the Company recorded a cumulative effect adjustment to the Company’s Consolidated Balance Sheets of $13 thousand as an increase to the opening balance of total shareholders’ equity.

~~Comprehensive Income~~ In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” Under existing U.S. GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in AOCI are adjusted, certain tax effects become stranded in AOCI. This amendment allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the Tax Act), and requires certain disclosures about stranded tax effects. The amendments in this update were adopted using a security-by-security approach on January 1, 2018. Upon adoption, the Company reclassified stranded tax effects totaling $12.9 million from AOCI to retained earnings.

The Company has certain lending policies and procedures in place that are designed to minimize the level of risk within the loan portfolio. Diversification of the loan portfolio manages the risk associated with fluctuations in economic conditions. Authority levels are established for the extension of credit to ensure consistency throughout the Company. It is necessary that policies, processes, and practices implemented to control the risks of individual credit transactions and portfolio segments are sound and adhered to. The Company maintains an independent loan review department that reviews and validates the ~~credit~~ risk ~~program~~assessment on a continual basis. Management regularly evaluates the results of the loan reviews. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Commercial and industrial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Commercial loans are made based on the identified cash flows of the borrower and on the underlying collateral provided by the borrower. The cash flows of the borrower, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts from its customers. ~~Commercial credit cards are generally unsecured~~

Specialty lending loans include Asset-based and ~~are underwritten with criteria similar to commercial loans including an analysis of the borrower’s cash flow, available business capital, and overall credit-worthiness of the borrower.~~

Factoring loans. Asset-based loans are offered primarily in the form of revolving lines of credit to commercial borrowers that do not generally qualify for traditional bank financing. Asset-based loans are underwritten based primarily upon the value of the collateral pledged to secure the loan, rather than on the borrower’s general financial ~~condition as traditionally reflected by cash flow, balance sheet strength, operating results, and credit bureau ratings.~~condition. The Company utilizes pre-loan due diligence techniques, monitoring disciplines, and loan management practices common within the asset-based lending industry to underwrite ~~and manage~~ loans ~~with~~to these borrowers.

Factoring loans provide working capital through the purchase and/or financing of accounts receivable to borrowers in the transportation industry and to commercial borrowers that do not generally qualify for traditional bank financing. During the first quarter of 2022, the Company sold its factoring

loan portfolio to an alternative financing company. The sale included $82.6 million of loans, resulting in a gain of $2.4 million.

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. The Company requires that an appraisal of the collateral be made at origination and on an as-needed basis, in conformity with current market conditions and regulatory requirements. The underwriting standards address both owner and ~~non-owner occupied~~non-owner-occupied real estate.

Also included in Commercial real estate are Construction loans that are underwritten using feasibility studies, independent appraisal reviews, sensitivity analysis or absorption and lease rates, and financial analysis of the developers and property owners. Construction loans are based upon estimates of costs and value associated with the complete project. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their repayment being sensitive to interest rate changes, governmental regulation of real property, economic conditions, and the availability of long-term financing.

~~Underwriting standards for~~Consumer real estate loans, including residential real estate and home equity loans, are underwritten based on the borrower’s loan-to-value percentage, collection remedies, and overall credit history.

Consumer loans are underwritten based on the borrower’s repayment ability. The Company monitors delinquencies on all of its consumer loans and ~~leases and periodically reviews the distribution of FICO scores relative to historical periods to monitor credit risk on its credit card loans.~~leases. The underwriting and review practices

combined with the relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Consumer loans and leases that are 90 days past due or more are considered non-performing.

Credit cards include both commercial and consumer credit cards. Commercial credit cards are generally unsecured and are underwritten with criteria similar to commercial loans, including an analysis of the borrower’s cash flow, available business capital, and overall creditworthiness of the borrower. Consumer credit cards are underwritten based on the borrower’s repayment ability. The Company monitors delinquencies on all of its consumer credit cards and periodically reviews the distribution of credit scores relative to historical periods to monitor credit risk on its consumer credit card loans.

Credit risk is a potential loss resulting from nonpayment of either the primary or secondary exposure. Credit risk is mitigated with formal risk management practices and a thorough initial credit-granting process including consistent underwriting standards and approval process. Control factors or techniques to minimize credit risk include knowing the client, understanding total exposure, analyzing the client and debtor’s financial capacity, and monitoring the client’s activities. Credit risk and portions of the portfolio risk are managed through concentration considerations, average risk ratings, and other aggregate characteristics.

~~This table provides~~The following tables provide a summary of loan classes and an aging of past due loans at December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

December 31, 2019

30-89
Days Past
Due and
Accruing

Greater
than 90
Days Past
Due and
Accruing

Non-
Accrual
Loans

Total
Past Due

Current

Total
Loans

Commercial:

Commercial

$
10,491

$
250

$
25,592

$
36,333

$
5,805,669

$
5,842,002

Asset-based

—

—

—

—

292,231

292,231

Factoring

—

—

—

—

170,560

170,560

Commercial – credit card

760

52

24

836

181,402

182,238

Real estate:

Real estate – construction

3,933

—

95

4,028

838,318

842,346

Real estate – commercial

3,365

36

24,030

27,431

4,301,293

4,328,724

Real estate – residential

485

—

2,748

3,233

930,043

933,276

Real estate – HELOC

544

—

2,798

3,342

474,809

478,151

Consumer:

Consumer – credit card

1,835

1,681

803

4,319

222,423

226,742

Consumer – other

81

50

257

388

133,086

133,474

Leases

—

—

—

—

1,978

1,978

Total loans

$
21,494

$
2,069

$
56,347

$
79,910

$
13,351,812

$
13,431,722

	December 31, 2022
	30-89 Days Past Due and Accruing		Greater than 90 Days Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current		Total Loans
Loans
Commercial and industrial	$	2,456	$	2	$	11,356	$	13,814	$	9,192,172	$	9,205,986
Specialty lending		—		—		—		—		602,706		602,706
Commercial real estate		2,167		191		2,505		4,863		7,611,223		7,616,086
Consumer real estate		10		—		4,882		4,892		2,718,377		2,723,269
Consumer		613		20		61		694		144,972		145,666
Credit cards		3,529		1,404		441		5,374		426,298		431,672
Leases and other		—		—		24		24		305,780		305,804
Total loans	$	8,775	$	1,617	$	19,269	$	29,661	$	21,001,528	$	21,031,189

December 31, 2018

30-89
Days Past
Due and
Accruing

Greater
than 90
Days Past
Due and
Accruing

Non-
Accrual
Loans

Total
Past Due

Current

Total
Loans

Commercial:

Commercial

$
5,717

$
133

$
27,060

$
32,910

$
5,195,492

$
5,228,402

Asset-based

—

—

—

—

380,738

380,738

Factoring

—

—

—

—

261,591

261,591

Commercial – credit card

490

90

—

580

165,754

166,334

Real estate:

Real estate – construction

—

—

—

—

792,565

792,565

Real estate – commercial

7,385

90

11,662

19,137

3,695,143

3,714,280

Real estate – residential

246

3,750

807

4,803

702,701

707,504

Real estate – HELOC

764

—

2,776

3,540

542,181

545,721

Consumer:

Consumer – credit card

2,022

1,945

648

4,615

226,367

230,982

Consumer – other

199

1

65

265

144,520

144,785

Leases

—

—

—

—

5,248

5,248

Total loans

$
16,823

$
6,009

$
43,018

$
65,850

$
12,112,300

$
12,178,150

	December 31, 2021
	30-89 Days Past Due and Accruing		Greater than 90 Days Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current		Total Loans
Loans
Commercial and industrial	$	2,827	$	896	$	82,845	$	86,568	$	7,171,552	$	7,258,120
Specialty lending		—		—		—		—		522,362		522,362
Commercial real estate		962		—		4,688		5,650		6,261,894		6,267,544
Consumer real estate		246		489		4,210		4,945		2,315,088		2,320,033
Consumer		105		2		75		182		128,953		129,135
Credit cards		2,369		1,246		457		4,072		387,317		391,389
Leases and other		—		—		25		25		282,263		282,288
Total loans	$	6,509	$	2,633	$	92,300	$	101,442	$	17,069,429	$	17,170,871

Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Non-accrual loans include troubled debt restructurings on non-accrual status. Loan delinquency for all loans is shown in the tables above at December 31, 2019 and December 31, 2018, respectively.

The Company sold ~~residential~~consumer real estate loans with proceeds of ~~$213.1~~$48.1 million, ~~$59.1~~$147.9 million, and ~~$70.5~~$133.2 million in the secondary market without recourse during the periods ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively.

The Company has ceased the recognition of interest on loans with a carrying value of ~~$56.3~~$19.3 million and ~~$43.0~~$92.3 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. Restructured loans totaled ~~$19.8~~$5.2 million and ~~$21.1~~$7.3 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. Loans 90 days past due and still accruing interest amounted to ~~$2.1~~$1.6 million and ~~$6.0~~$2.6 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. There was an ~~immaterial~~insignificant amount of interest ~~recognized~~reversed related to loans on ~~impaired~~nonaccrual during 2022 and 2021. Nonaccrual loans ~~during 2019, 2018,~~with no related allowance for credit losses totaled $16.7 million and ~~2017.~~$85.9 million at December 31, 2022 and 2021, respectively.

The following tables provide the amortized cost of nonaccrual loans with no related allowance for credit losses by loan class at December 31, 2022 and 2021 (in thousands):

The following tables provide a summary of the amortized cost balance of each of the Company’s loan classes disaggregated by collateral type and origination year as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Loan Segment and Type	Amortized Cost Basis by Origination Year - Term Loans
Loan Segment and Type	2022		2021		2020		2019		2018		Prior						Total
Commercial and industrial:
Equipment/Accounts Receivable/Inventory	$	2,140,609	$	1,562,527	$	642,649	$	267,444	$	96,916	$	86,787	$	4,223,358	$	3,926	$	9,024,216
Agriculture		13,630		5,415		2,046		1,985		396		541		149,266		562		173,841
Overdrafts		—		—		—		—		—		—		7,929		—		7,929
Total Commercial and industrial		2,154,239		1,567,942		644,695		269,429		97,312		87,328		4,380,553		4,488		9,205,986
Specialty lending:
Asset-based lending		18,084		55,469		36,040		—		—		—		493,113		—		602,706
Total Specialty lending		18,084		55,469		36,040		—		—		—		493,113		—		602,706
Commercial real estate:
Owner-occupied		656,860		593,861		388,519		180,786		136,499		167,628		8,685		—		2,132,838
Non-owner-occupied		1,128,978		855,508		568,489		368,203		64,915		229,826		28,679		—		3,244,598
Farmland		94,989		47,092		220,796		24,057		15,963		24,162		121,054		—		548,113
5+ Multi-family		30,920		35,869		68,996		18,978		1,334		5,776		4,908		—		166,781
1-4 Family construction		61,943		15,217		—		—		—		—		19		—		77,179
General construction		628,820		719,437		43,166		15,492		—		395		39,267		—		1,446,577
Total Commercial real estate		2,602,510		2,266,984		1,289,966		607,516		218,711		427,787		202,612		—		7,616,086
Consumer real estate:
HELOC		237		—		618		224		654		5,389		339,066		981		347,169
First lien: 1-4 family		628,703		748,362		607,105		173,466		45,907		140,443		12		—		2,343,998
Junior lien: 1-4 family		13,490		8,445		5,107		2,529		940		1,504		87		—		32,102
Total Consumer real estate		642,430		756,807		612,830		176,219		47,501		147,336		339,165		981		2,723,269
Consumer:
Revolving line		467		584		—		—		—		—		58,133		1,403		60,587
Auto		9,124		6,543		4,455		2,743		335		159		—		—		23,359
Other		26,306		27,751		1,096		876		1,133		591		3,967		—		61,720
Total Consumer		35,897		34,878		5,551		3,619		1,468		750		62,100		1,403		145,666
Credit cards:
Consumer		—		—		—		—		—		—		200,348		—		200,348
Commercial		—		—		—		—		—		—		231,324		—		231,324
Total Credit cards		—		—		—		—		—		—		431,672		—		431,672
Leases and other:
Leases		—		—		—		712		—		1,224		—		—		1,936
Other		125,095		34,282		22,552		32,055		17,764		1,066		71,054		—		303,868
Total Leases and other		125,095		34,282		22,552		32,767		17,764		2,290		71,054		—		305,804
Total loans	$	5,578,255	$	4,716,362	$	2,611,634	$	1,089,550	$	382,756	$	665,491	$	5,980,269	$	6,872	$	21,031,189

	December 31, 2021
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Loan Segment and Type	Amortized Cost Basis by Origination Year - Term Loans
Loan Segment and Type	2021		2020		2019		2018		2017		Prior						Total
Commercial and industrial:
Equipment/Accounts Receivable/Inventory	$	2,400,110	$	945,383	$	356,348	$	150,892	$	115,571	$	131,900	$	2,984,740	$	247	$	7,085,191
Agriculture		12,077		5,884		3,308		640		344		1,143		130,946		—		154,342
Overdrafts		—		—		—		—		—		—		18,587		—		18,587
Total Commercial and industrial		2,412,187		951,267		359,656		151,532		115,915		133,043		3,134,273		247		7,258,120
Specialty lending:
Asset-based lending		34,552		49,373		—		—		—		—		331,282		—		415,207
Factoring		—		—		—		—		—		—		107,155		—		107,155
Total Specialty lending		34,552		49,373		—		—		—		—		438,437		—		522,362
Commercial real estate:
Owner-occupied		680,135		519,448		226,631		177,576		91,539		159,482		11,727		—		1,866,538
Non-owner-occupied		1,058,025		689,167		591,886		162,491		135,100		258,541		10,969		—		2,906,179
Farmland		61,505		273,624		34,145		16,969		19,929		34,858		38,239		999		480,268
5+ Multi-family		58,268		95,024		41,426		1,206		511		6,820		2,057		—		205,312
1-4 Family construction		53,004		4,933		17,333		—		—		—		985		—		76,255
General construction		439,973		160,553		64,283		38,505		203		256		29,219		—		732,992
Total Commercial real estate		2,350,910		1,742,749		975,704		396,747		247,282		459,957		93,196		999		6,267,544
Consumer real estate:
HELOC		248		547		327		574		646		6,363		320,410		2,523		331,638
First lien: 1-4 family		830,513		712,264		200,167		58,734		61,641		102,997		19		—		1,966,335
Junior lien: 1-4 family		9,114		6,299		3,361		1,150		820		1,299		17		—		22,060
Total Consumer real estate		839,875		719,110		203,855		60,458		63,107		110,659		320,446		2,523		2,320,033
Consumer:
Revolving line		974		—		—		—		—		—		60,049		120		61,143
Auto		9,886		7,775		5,462		1,107		479		220		—		—		24,929
Other		31,391		2,041		1,949		1,543		2,542		708		2,889		—		43,063
Total Consumer		42,251		9,816		7,411		2,650		3,021		928		62,938		120		129,135
Credit cards:
Consumer		—		—		—		—		—		—		180,296		—		180,296
Commercial		—		—		—		—		—		—		211,093		—		211,093
Total Credit cards		—		—		—		—		—		—		391,389		—		391,389
Leases and other:
Leases		—		—		814		—		739		614		—		—		2,167
Other		99,952		44,113		58,164		22,344		5,631		779		49,138		—		280,121
Total Leases and other		99,952		44,113		58,978		22,344		6,370		1,393		49,138		—		282,288
Total loans	$	5,779,727	$	3,516,428	$	1,605,604	$	633,731	$	435,695	$	705,980	$	4,489,817	$	3,889	$	17,170,871

Accrued interest on loans totaled $90.6 million and $45.2 million as of December 31, 2022 and 2021, respectively, and is included in the Accrued income line on the Company’s Consolidated Balance Sheets. The total amount of accrued interest is excluded from the amortized cost basis of loans presented above. Further, the Company has elected not to measure an allowance for credit losses for accrued interest receivable.

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grading of specified classes of loans, net charge-offs, non-performing loans, and general economic conditions.

The Company utilizes a risk grading matrix to assign a rating to each of its commercial, commercial real estate, and construction real estate loans. Changes in credit risk are monitored on a continuous basis and changes in risk ratings are made when identified. The loan ~~rankings~~ratings are summarized into the following categories: Non-watch list, Watch, Special Mention, Substandard, and ~~Substandard.~~Doubtful. Any loan not classified in one of the categories described below is considered to be a Non-watch list loan. A description of the general characteristics of the loan ~~ranking~~rating categories is as follows:

~~All other classes of loans are generally evaluated~~Commercial and ~~monitored based on payment activity. Non-performing loans include restructured loans on non-accrual and all other non-accrual loans.~~industrial

~~This table provides an analysis~~A discussion of the credit quality indicators that impact each type of collateral securing Commercial and industrial loans is included below:

Equipment, accounts receivable, and inventory General commercial and industrial loans are secured by working capital assets and non-real estate assets. The general purpose of these loans is for financing capital expenditures and current operations for commercial and industrial entities. These assets are short-term in nature. In the case of accounts receivable and inventories, the repayment of debt is reliant upon converting assets into cash or through goods and services being sold and collected. Collateral-based risk ~~profile~~is due to aged short-term assets, which can be indicative of underlying issues with the borrower and lead to the value of the collateral being overstated.

Agriculture Agricultural loans are secured by non-real estate agricultural assets. These include shorter-term assets such as equipment, crops, and livestock. The risks associated with loans to finance crops or livestock include the borrower’s ability to successfully raise and market the commodity. Adverse weather conditions and other natural perils can dramatically affect farmers’ or ranchers’ production and ability to service debt. Volatile commodity prices present another significant risk for agriculture borrowers. Market price volatility and production cost volatility can affect both revenues and expenses.

Overdrafts Commercial overdrafts are typically short-term and unsecured. Some commercial borrowers tie their overdraft obligation to their line of credit, so any draw on the line of credit will satisfy the overdraft.

Based on the factors noted above for each ~~loan class at~~type of collateral, the Company assigns risk ratings to borrowers based on their most recently assessed financial position.

The following tables provide a summary of the amortized cost balance by collateral type and risk rating as of December 31, ~~2019~~2022 and ~~December 31, 2018~~2021 (in thousands):

Commercial

Asset-based

Factoring

December 31,
2019

December 31,
2018

December 31,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Non-watch list

$
5,380,205

$
4,788,234

$
230,526

$
296,719

$
127,310

$
260,727

Watch

257,040

192,653

—

—

—

—

Special Mention

91,020

55,927

34,640

84,019

1,376

864

Substandard

113,737

191,588

27,065

—

41,874

—

Total

$
5,842,002

$
5,228,402

$
292,231

$
380,738

$
170,560

$
261,591

	December 31, 2022
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2022		2021		2020		2019		2018		Prior						Total
Equipment/Accounts Receivable/Inventory
Non-watch list – Pass	$	2,079,002	$	1,466,120	$	588,562	$	246,387	$	90,656	$	83,054	$	3,879,709	$	3,633	$	8,437,123
Watch – Pass		28,570		78,523		52,696		7,493		3,617		2,275		213,871		—		387,045
Special Mention		4,072		5,637		1,178		—		1,817		899		34,631		—		48,234
Substandard		26,698		12,247		213		13,564		826		559		92,352		293		146,752
Doubtful		2,267		—		—		—		—		—		2,795		—		5,062
Total Equipment/Accounts Receivable/Inventory	$	2,140,609	$	1,562,527	$	642,649	$	267,444	$	96,916	$	86,787	$	4,223,358	$	3,926	$	9,024,216
Agriculture
Non-watch list – Pass	$	12,252	$	5,351	$	1,693	$	1,985	$	396	$	541	$	137,759	$	—	$	159,977
Watch – Pass		550		—		206		—		—		—		8,512		562		9,830
Special Mention		828		64		147		—		—		—		1,539		—		2,578
Substandard		—		—		—		—		—		—		1,456		—		1,456
Doubtful		—		—		—		—		—		—		—		—		—
Total Agriculture	$	13,630	$	5,415	$	2,046	$	1,985	$	396	$	541	$	149,266	$	562	$	173,841

Consumer – credit card

Consumer – other

Leases

December 31,
2019

December 31,
2018

December 31,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Performing

$
225,939

$
230,334

$
132,414

$
144,720

$
1,978

$
5,248

Non-performing

803

648

1,060

65

—

—

Total

$
226,742

$
230,982

$
133,474

$
144,785

$
1,978

$
5,248

	December 31, 2021
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2021		2020		2019		2018		2017		Prior						Total
Equipment/Accounts Receivable/Inventory
Non-watch list – Pass	$	2,299,784	$	874,786	$	325,630	$	141,667	$	106,141	$	130,153	$	2,750,764	$	247	$	6,629,172
Watch – Pass		68,322		34,324		25,572		5,056		1,794		698		106,177		—		241,943
Special Mention		5,886		—		2,600		592		1,742		997		41,209		—		53,026
Substandard		25,466		3,023		2,546		3,577		1,202		52		45,053		—		80,919
Doubtful		652		33,250		—		—		4,692		—		41,537		—		80,131
Total Equipment/Accounts Receivable/Inventory	$	2,400,110	$	945,383	$	356,348	$	150,892	$	115,571	$	131,900	$	2,984,740	$	247	$	7,085,191
Agriculture
Non-watch list – Pass	$	11,512	$	5,394	$	2,608	$	212	$	344	$	1,143	$	100,630	$	—	$	121,843
Watch – Pass		500		222		328		428		—		—		6,532		—		8,010
Special Mention		—		—		372		—		—		—		1,361		—		1,733
Substandard		65		268		—		—		—		—		22,423		—		22,756
Doubtful		—		—		—		—		—		—		—		—		—
Total Agriculture	$	12,077	$	5,884	$	3,308	$	640	$	344	$	1,143	$	130,946	$	—	$	154,342

The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s judgment of inherent probable losses within the Company’s loan portfolio asA discussion of the ~~balance sheet date.~~credit quality indicators that impact each type of collateral securing Specialty loans is included below:

Asset-based lending General asset-based loans are secured by accounts receivable, inventory, equipment, and real estate. The ~~allowance~~purpose of these loans is ~~necessary~~for financing current operations for commercial customers. The repayment of debt is reliant upon collection of the accounts receivable within 30 to ~~reserve for estimated loan losses~~90 days or converting assets into cash or through goods and ~~risks inherent in the loan portfolio. Accordingly, the methodology is~~services being sold and collected. The Company tracks each individual borrower credit risk based on ~~historical loss trends. The Company’s process for determining the appropriate level of the allowance for~~their loan ~~losses is designed~~ to account for credit deterioration as it occurs. The provision for probable loan losses reflects loan quality trends, including the levels of and trends related to non-accrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries, among other factors.

The level of the allowance reflects management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific loans; however, the entire allowance is available for any loan that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including, among other things, the performance of the Company’s loan portfolio, the economy, changes in interest rates and changes in the regulatory environment.

The Company’s allowance for loan losses consists of specific valuation allowances and general valuation allowances based on historical loan loss experience for similar loans with similar characteristics and trends, general economic conditions and other qualitative risk factors both internal and external to the Company.

The allowances established for probable losses on specific loans are based on a regular analysis and evaluation of impaired loans. Loans are classified based on an internal risk grading process that evaluates the obligor’s ability to repay,collateral position. Any borrower position where the underlying value of collateral ~~if any, and~~is below the ~~economic environment and industry in which~~fair value of the ~~borrower operates. When a~~ loan is considered ~~impaired,~~out-of-margin and inherently higher risk.

Factoring During the first quarter of 2022, the Company sold its factoring loan ~~is analyzed~~portfolio to ~~determine~~an alternative financing company. Prior to the ~~need, if any, to specifically allocate a portion~~sale of this portfolio, factoring loans were secured by accounts receivable. The purpose of these loans was for financing current operations for trucking or other commercial customers. The repayment of debt was reliant upon collection of the accounts receivable within 30 to 90 days. The Company tracked each individual borrower’s credit risk based on their loan to collateral position. To assess credit risk, the portfolio was separated into two tiers and a specifically impaired category. Tier 1 were loans that had not experienced collateral coverage rates falling below an internally tracked threshold at any time during their relationship history. The internal threshold was lower than each customers’ actual contractual collateral coverage ratio. Tier 2 were loans that had experienced collateral coverage rates falling below the same internally tracked threshold during their relationship history. Loans individually evaluated were loans that had either experienced collateral coverage rates falling below an internally tracked threshold during their relationship history or had balances that were greater than an internally tracked threshold. Individually evaluated loans utilized a practical expedient for the purpose of determining the expected credit loss. Collateral dependent assets were loans placed on non-accrual and loans considered to be TDRs. The combination of these categories created an associated allowance to this portfolio of $1.0 million as of December 31, 2021.

The following table provides a summary of the amortized cost balance by risk rating for asset-based loans as of December 31, 2022 and 2021 (in thousands):

The following table provides a summary of the amortized cost balance by risk rating for factoring loans as of December 31, 2021 (in thousands):

A discussion of the credit quality indicators that impact each type of collateral securing Commercial real estate loans is included below:

Owner-occupied Owner-occupied loans are secured by commercial real estate. These loans are often longer tenured and susceptible to multiple economic cycles. The loans rely on the owner-occupied operations to service debt which cover a broad spectrum of industries. Real estate debt can carry a significant amount of leverage for a borrower to maintain.

Non-owner-occupied Non-owner-occupied loans are secured by commercial real estate. These loans are often longer tenured and susceptible to multiple economic cycles. The key element of risk in this type of lending is the cyclical nature of real estate markets. Although national conditions affect the overall real estate industry, the effect of national conditions on local markets is equally important. Factors such as unemployment rates, consumer

demand, household formation, and the level of economic activity can vary widely from state to state and among metropolitan areas. In addition to geographic considerations, markets can be defined by property type. While all sectors are influenced by economic conditions, some sectors are more sensitive to certain economic factors than others.

Farmland Farmland loans are secured by real estate used for agricultural purposes such as crop and livestock production. Assets used as collateral are long-term assets that carry the ability to have longer amortizations and maturities. Longer terms carry the risk of added susceptibility to market conditions. The limited purpose of some Agriculture-related collateral affects credit risk because such collateral may have limited or no other uses to support values when loan ~~losses~~repayment problems emerge.

5+ Multi-family 5+ multi-family loans are secured by a multi-family residential property. The primary risks associated with this type of collateral are largely driven by economic conditions. The national and local market conditions can change with unemployment rates or competing supply of multi-family housing. Tenants may not be able to ~~the loan. Specific valuation allowances are determined by analyzing~~afford their housing or have better options and this can result in increased vacancy. Rents may need to be lowered to fill apartment units. Increased vacancy and lower rental rates not only drive the borrower’s ability to repay ~~amounts owed,~~debt but also contribute to how the collateral ~~deficiencies,~~is valued.

1-4 Family construction 1-4 family construction loans are secured by 1-4 family residential real estate and are in the ~~relative~~process of construction or improvements being made. The predominant risk ~~ranking~~inherent to this portfolio is the risk associated with a borrower’s ability to successfully complete a project on time and within budget. Market conditions also play an important role in understanding the risk profile. Risk from adverse changes in market conditions from the start of ~~the loan and economic conditions affecting the borrower’s industry.~~development to completion can result in deflated collateral values.

General ~~valuation allowances~~construction General construction loans are calculated based on the historical loss experience of specific types of loans including an evaluation of the time span and volume of the actual charge-off. The Company calculates historical loss ratios for pools of similar loans with similar characteristics based on the proportion of actual charge-offs experienced to the total population of loans in the pool. The historical loss ratios are updated based on actual charge-off experience. A valuation allowance is established for each pool of similar loans based upon the product of the historical loss ratio, time span to charge-off, and the total dollar amount of the loans in the pool. The Company’s pools of similar loans include similarly risk-graded groups of commercial loans,secured by commercial real estate ~~loans, commercial~~in process of construction or improvements being made and their repayment is dependent on the collateral’s completion. Construction lending presents unique risks not encountered in term financing of existing real estate. The predominant risk inherent to this portfolio is the risk associated with a borrower’s ability to successfully complete a project on time and within budget. Commercial properties under construction are susceptible to market and economic conditions. Demand from prospective customers may erode after construction begins because of a general economic slowdown or an increase in the supply of competing properties.

Based on the factors noted above for each type of collateral, the Company assigns risk ratings to borrowers based on their most recently assessed financial position.

The following tables provide a summary of the amortized cost balance by collateral type and risk rating as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022
														Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans

											��


Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2022		2021		2020		2019		2018			Prior						Total
Owner-occupied
Non-watch list – Pass	$	628,858	$	559,067	$	364,760	$	149,183	$	133,339		$	162,412	$	7,850	$	—	$	2,005,469
Watch – Pass		19,405		32,581		17,061		9,785		2,664			2,121		—		—		83,617
Special Mention		5,435		2,213		5,120		18,946		—			—		835		—		32,549
Substandard		3,162		—		1,578		2,872		496			3,095		—		—		11,203
Doubtful		—		—		—		—		—			—		—		—		—
Total Owner-occupied	$	656,860	$	593,861	$	388,519	$	180,786	$	136,499		$	167,628	$	8,685	$	—	$	2,132,838
Non-owner-occupied
Non-watch list – Pass	$	1,075,444	$	810,926	$	568,489	$	356,896	$	64,915		$	214,635	$	28,679	$	—	$	3,119,984
Watch – Pass		53,534		44,582		—		11,307		—			5,071		—		—		114,494
Special Mention		—		—		—		—		—			10,109		—		—		10,109
Substandard		—		—		—		—		—			—		—		—		—
Doubtful		—		—		—		—		—			11		—		—		11
Total Non-owner-occupied	$	1,128,978	$	855,508	$	568,489	$	368,203	$	64,915		$	229,826	$	28,679	$	—	$	3,244,598
Farmland
Non-watch list – Pass	$	62,357	$	36,698	$	218,704	$	17,563	$	2,830		$	20,285	$	113,385	$	—	$	471,822
Watch – Pass		20,327		6,454		1,055		101		—			2,559		395		—		30,891
Special Mention		5,505		—		1,001		—		—			—		—		—		6,506
Substandard		6,800		3,940		36		6,393		13,133			1,318		7,274		—		38,894
Doubtful		—		—		—		—		—			—		—		—		—
Total Farmland	$	94,989	$	47,092	$	220,796	$	24,057	$	15,963		$	24,162	$	121,054	$	—	$	548,113
5+ Multi-family
Non-watch list – Pass	$	30,920	$	35,869	$	68,996	$	18,978	$	1,334		$	5,776	$	4,908	$	—	$	166,781
Watch – Pass		—		—		—		—		—			—		—		—		—
Special Mention		—		—		—		—		—			—		—		—		—
Substandard		—		—		—		—		—			—		—		—		—
Doubtful		—		—		—		—		—			—		—		—		—
Total 5+ Multi-family	$	30,920	$	35,869	$	68,996	$	18,978	$	1,334		$	5,776	$	4,908	$	—	$	166,781
1-4 Family construction
Non-watch list – Pass	$	61,943	$	15,217	$	—	$	—	$	—		$	—	$	19	$	—	$	77,179
Watch – Pass		—		—		—		—		—			—		—		—		—
Special Mention		—		—		—		—		—			—		—		—		—
Substandard		—		—		—		—		—			—		—		—		—
Doubtful		—		—		—		—		—			—		—		—		—
Total 1-4 Family construction	$	61,943	$	15,217	$	—	$	—	$	—		$	—	$	19	$	—	$	77,179
General construction
Non-watch list – Pass	$	628,479	$	699,698	$	43,166	$	15,384	$	—		$	380	$	39,267	$	—	$	1,426,374
Watch – Pass		341		—		—		22		—			—		—		—		363
Special Mention		—		8,340		—		—		—			—		—		—		8,340
Substandard		—		11,399		—		—		—			15		—		—		11,414
Doubtful		—		—		—		86		—			—		—		—		86
Total General construction	$	628,820	$	719,437	$	43,166	$	15,492	$	—		$	395	$	39,267	$	—	$	1,446,577

	December 31, 2021
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2021		2020		2019		2018		2017		Prior						Total
Owner-occupied
Non-watch list – Pass	$	679,662	$	507,220	$	208,376	$	174,352	$	89,588	$	154,920	$	11,627	$	—	$	1,825,745
Watch – Pass		191		10,891		16,493		1,055		1,143		1,572		—		—		31,345
Special Mention		93		1,304		—		—		—		—		—		—		1,397
Substandard		189		33		1,762		2,169		808		2,990		100		—		8,051
Doubtful		—		—		—		—		—		—		—		—		—
Total Owner-occupied	$	680,135	$	519,448	$	226,631	$	177,576	$	91,539	$	159,482	$	11,727	$	—	$	1,866,538
Non-owner-occupied
Non-watch list – Pass	$	976,097	$	679,313	$	536,084	$	143,243	$	129,820	$	219,701	$	10,969	$	—	$	2,695,227
Watch – Pass		57,052		1,277		55,802		19,248		5,280		2,587		—		—		141,246
Special Mention		24,876		8,577		—		—		—		36,223		—		—		69,676
Substandard		—		—		—		—		—		30		—		—		30
Doubtful		—		—		—		—		—		—		—		—		—
Total Non-owner-occupied	$	1,058,025	$	689,167	$	591,886	$	162,491	$	135,100	$	258,541	$	10,969	$	—	$	2,906,179
Farmland
Non-watch list – Pass	$	40,526	$	246,955	$	26,332	$	2,147	$	19,199	$	29,136	$	28,276	$	—	$	392,571
Watch – Pass		2,263		10,177		—		823		213		4,889		—		—		18,365
Special Mention		3,800		—		6,875		13,983		517		—		8,999		—		34,174
Substandard		14,916		16,492		938		16		—		833		964		999		35,158
Doubtful		—		—		—		—		—		—		—		—		—
Total Farmland	$	61,505	$	273,624	$	34,145	$	16,969	$	19,929	$	34,858	$	38,239	$	999	$	480,268
5+ Multi-family
Non-watch list – Pass	$	58,268	$	95,024	$	41,426	$	1,206	$	511	$	6,820	$	2,057	$	—	$	205,312
Watch – Pass		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total 5+ Multi-family	$	58,268	$	95,024	$	41,426	$	1,206	$	511	$	6,820	$	2,057	$	—	$	205,312
1-4 Family construction
Non-watch list – Pass	$	53,004	$	4,933	$	17,333	$	—	$	—	$	—	$	985	$	—	$	76,255
Watch – Pass		—		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total 1-4 Family construction	$	53,004	$	4,933	$	17,333	$	—	$	—	$	—	$	985	$	—	$	76,255
General construction
Non-watch list – Pass	$	436,696	$	160,553	$	62,675	$	38,505	$	203	$	239	$	29,219	$	—	$	728,090
Watch – Pass		3,277		—		—		—		—		—		—		—		3,277
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,522		—		—		17		—		—		1,539
Doubtful		—		—		86		—		—		—		—		—		86
Total General construction	$	439,973	$	160,553	$	64,283	$	38,505	$	203	$	256	$	29,219	$	—	$	732,992

A discussion of the credit ~~card, home equity loans, consumer~~quality indicators that impact each type of collateral securing Consumer real estate loans is included below:

HELOC HELOC loans are revolving lines of credit secured by 1-4 family residential property. The primary risk is the borrower’s inability to repay debt. Revolving notes are often associated with HELOCs that can be secured by real estate without a 1st lien priority. Collateral is susceptible to market volatility impacting home values or economic downturns.

First lien: 1-4 family First lien 1-4 family loans are secured by a first lien on 1-4 family residential property. These term loans carry longer maturities and ~~consumer~~amortizations. The longer tenure exposes the borrower to multiple economic cycles, coupled with longer amortizations that result in smaller principal reduction early in the life of the loan. Collateral is susceptible to market volatility impacting home values.

Junior lien: 1-4 family Junior lien 1-4 family loans are secured by a junior lien on 1-4 family residential property. The Company’s primary risk is the borrower’s inability to repay debt and ~~other loans. The~~not being in a first lien position. Collateral is susceptible to market volatility impacting home values or economic downturns.

A borrower is considered non-performing if the Company ~~also considers~~has ceased the recognition of interest and the loan is placed on non-accrual. Charge-offs and borrower performance are tracked on a loan ~~migration analysis for criticized loans. This analysis includes an assessment~~origination vintage basis. Certain vintages, based on their maturation cycle, could be at higher risk due to collateral-based risk factors.

The following tables provide a summary of the ~~probability~~amortized cost balance by collateral type and risk rating as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2022		2021		2020		2019		2018		Prior						Total
HELOC
Performing	$	120	$	—	$	592	$	90	$	148	$	3,919	$	338,979	$	759	$	344,607
Non-performing		117		—		26		134		506		1,470		87		222		2,562
Total HELOC	$	237	$	—	$	618	$	224	$	654	$	5,389	$	339,066	$	981	$	347,169
First lien: 1-4 family
Performing	$	628,678	$	748,269	$	607,055	$	173,061	$	45,907	$	138,764	$	12	$	—	$	2,341,746
Non-performing		25		93		50		405		—		1,679		—		—		2,252
Total First lien: 1-4 family	$	628,703	$	748,362	$	607,105	$	173,466	$	45,907	$	140,443	$	12	$	—	$	2,343,998
Junior lien: 1-4 family
Performing	$	13,490	$	8,445	$	5,107	$	2,529	$	940	$	1,437	$	87	$	—	$	32,035
Non-performing		—		—		—		—		—		67		—		—		67
Total Junior lien: 1-4 family	$	13,490	$	8,445	$	5,107	$	2,529	$	940	$	1,504	$	87	$	—	$	32,102

	December 31, 2021
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2021		2020		2019		2018		2017		Prior						Total
HELOC
Performing	$	248	$	531	$	188	$	165	$	381	$	4,956	$	320,241	$	2,440	$	329,150
Non-performing		—		16		139		409		265		1,407		169		83		2,488
Total HELOC	$	248	$	547	$	327	$	574	$	646	$	6,363	$	320,410	$	2,523	$	331,638
First lien: 1-4 family
Performing	$	830,513	$	712,194	$	199,949	$	58,585	$	61,233	$	102,194	$	19	$	—	$	1,964,687
Non-performing		—		70		218		149		408		803		—		—		1,648
Total First lien: 1-4 family	$	830,513	$	712,264	$	200,167	$	58,734	$	61,641	$	102,997	$	19	$	—	$	1,966,335
Junior lien: 1-4 family
Performing	$	9,114	$	6,299	$	3,361	$	1,143	$	800	$	1,251	$	17	$	—	$	21,985
Non-performing		—		—		—		7		20		48		—		—		75
Total Junior lien: 1-4 family	$	9,114	$	6,299	$	3,361	$	1,150	$	820	$	1,299	$	17	$	—	$	22,060

A discussion of the credit quality indicators that impact each type of collateral securing Consumer loans is included below:

Revolving line Consumer Revolving lines of credit are secured by consumer assets other than real estate. The primary risk associated with this collateral is related to market volatility and the value of the underlying financial assets.

Auto Direct consumer auto loans are secured by new and used consumer vehicles. The primary risk with this collateral class is the rate at which the collateral depreciates.

Other This category includes Other consumer loans made to an individual. The primary risk for this category is for those loans where the loan is unsecured. This collateral type also includes other unsecured lending such as consumer overdrafts.

A borrower is considered non-performing if the Company has ceased the recognition of interest and the loan is placed on non-accrual. Charge-offs and borrower performance are tracked on a loan ~~will move to a loss position~~origination vintage basis. Certain vintages, based on ~~its~~their maturation cycle, could be at higher risk ~~rating.~~ due to collateral-based risk factors.

The following tables provide a summary of the amortized cost balance by collateral type and risk rating as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2022		2021		2020		2019		2018		Prior						Total
Revolving line
Performing	$	467	$	584	$	—	$	—	$	—	$	—	$	58,133	$	1,403	$	60,587
Non-performing		—		—		—		—		—		—		—		—		—
Total Revolving line	$	467	$	584	$	—	$	—	$	—	$	—	$	58,133	$	1,403	$	60,587
Auto
Performing	$	9,124	$	6,498	$	4,454	$	2,743	$	335	$	159	$	—	$	—	$	23,313
Non-performing		—		45		1		—		—		—		—		—		46
Total Auto	$	9,124	$	6,543	$	4,455	$	2,743	$	335	$	159	$	—	$	—	$	23,359
Other
Performing	$	26,291	$	27,751	$	1,096	$	876	$	1,133	$	591	$	3,967	$	—	$	61,705
Non-performing		15		—		—		—		—		—		—		—		15
Total Other	$	26,306	$	27,751	$	1,096	$	876	$	1,133	$	591	$	3,967	$	—	$	61,720

	December 31, 2021
													Amortized Cost - Revolving Loans		Amortized Cost - Revolving Loans Converted to Term Loans




Risk by Collateral	Amortized Cost Basis by Origination Year - Term Loans
Risk by Collateral	2021		2020		2019		2018		2017		Prior						Total
Revolving line
Performing	$	974	$	—	$	—	$	—	$	—	$	—	$	60,049	$	120	$	61,143
Non-performing		—		—		—		—		—		—		—		—		—
Total Revolving line	$	974	$	—	$	—	$	—	$	—	$	—	$	60,049	$	120	$	61,143
Auto
Performing	$	9,886	$	7,775	$	5,424	$	1,107	$	479	$	220	$	—	$	—	$	24,891
Non-performing		—		—		38		—		—		—		—		—		38
Total Auto	$	9,886	$	7,775	$	5,462	$	1,107	$	479	$	220	$	—	$	—	$	24,929
Other
Performing	$	31,391	$	2,025	$	1,949	$	1,525	$	2,542	$	704	$	2,889	$	—	$	43,025
Non-performing		—		16		—		18		—		4		—		—		38
Total Other	$	31,391	$	2,041	$	1,949	$	1,543	$	2,542	$	708	$	2,889	$	—	$	43,063

A discussion of the credit quality indicators that impact Credit card loans is included below:

Consumer Consumer credit card loans are revolving loans made to individuals. The primary risk associated with this collateral class is credit card debt is generally unsecured; therefore, repayment depends primarily on a borrower’s willingness and capacity to repay. The highly competitive environment for credit card lending provides consumers with ample opportunity to hold several credit cards from different issuers and to pay only minimum monthly payments on outstanding balances. In such an environment, borrowers may become over-extended and unable to repay, particularly in times of an economic downturn or a personal catastrophic event.

The consumer credit card ~~pool~~portfolio is ~~evaluated~~segmented by borrower payment activity. Transactors are defined as accounts that pay off their balance by the end of each statement cycle. Revolvers are defined as an account that

carries a balance from statement cycle to the next. These accounts incur monthly finance charges, and, sometimes, late fees. Revolvers are inherently higher risk and are tracked by credit score.

Commercial Commercial credit card loans are revolving loans made to small and commercial businesses. The primary risk associated with this collateral class is credit card debt is generally unsecured; therefore, repayment depends primarily on a borrower’s willingness and capacity to repay. Borrowers may become over-extended and unable to repay, particularly in times of an economic downturn or a catastrophic event.

The commercial credit card portfolio is segmented by current and past due payment status. A borrower is past due after 30 days. In general, commercial credit card customers do not have incentive to hold a balance resulting in paying interest on credit card debt as commercial customers will typically have other debt obligations with lower interest rates in which they can utilize for capital.

The following table provides a summary of the amortized cost balance of consumer credit cards by risk rating as of December 31, 2022 and 2021 (in thousands):

The following table provides a summary of the amortized cost balance of commercial credit cards by risk rating as of December 31, 2022 and 2021 (in thousands):

A discussion of the credit quality indicators that impact each type of collateral securing Leases and other loans is included below:

Leases Leases are either loans to individuals for household, family and other personal expenditures or are loans related to all other direct financing and leveraged leases on property for leasing to lessees other than for household, family, and other personal expenditure purposes. All leases are secured by the lease between the lessor and the lessee. These assignments grant the creditor a security interest in the rent stream from any lease, an important source of cash to pay the note in case of the borrower’s default.

Other Other loans are loans that are obligations of states and political subdivisions in the U.S., loans to non-depository financial institutions, loans for purchasing or carrying securities, or all other non-consumer loans. Risk associated with other loans is tied to the underlying collateral by each type of loan. Collateral is generally

equipment, accounts receivable, inventory, 1-4 family residential construction and susceptible to the same risks mentioned with those collateral types previously. Other risks consist of collateral that is secured by the stock of a non-depository financial institution, which can be unlisted stock with a limited market for the stock, or volatility of asset values driven by market performance.

Based on the factors noted above for each type of collateral, the Company assigns risk ratings to borrowers based on ~~delinquencies~~their most recently assessed financial position.

The following table provides a summary of the amortized cost balance by collateral type and risk rating as of December 31, 2022 and 2021 (in thousands):

The ACL is a valuation account that is deducted from loans’ and HTM securities’ amortized cost bases to present the net amount expected to be collected on the instrument. Loans and HTM securities are charged off against the ACL when management believes the balance has become uncollectible. Expected recoveries are included in the allowance and do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable economic forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses and is tracked over an economic cycle to capture a ‘through the cycle’ loss history. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in portfolio industry-based segmentation, risk rating and credit ~~scores. In addition,~~score changes, average prepayment rates, changes in environmental conditions, or other relevant factors. For economic forecasts, the Company uses the Moody’s baseline scenario. The Company has developed a ~~portion of~~dynamic reasonable and supportable forecast period that ranges from one to three years and changes based on economic conditions. Due to current economic conditions, the ~~allowance~~Company’s reasonable and supportable forecast period is ~~determined by~~one year. After the reasonable and supportable forecast period, the Company reverts to historical losses. The reversion method applied to each portfolio can either be cliff or straight-line over four quarters.

The ACL is measured on a ~~review of~~collective (pool) basis when similar risk characteristics exists. The ACL also incorporates qualitative factors ~~by management, including~~which represent adjustments to historical credit loss experience for items such as concentrations of credit ~~current economic conditions,~~ and results of internal loan ~~growth.~~

~~Generally,~~review. The Company has identified the ~~unsecured portion~~following portfolio segments and measures the allowance for credit losses using the following methods. The Company’s portfolio segmentation consists of ~~a commercial or commercial~~Commercial and industrial, Specialty lending, Commercial real estate, ~~loan~~Consumer real estate, Consumer, Credit cards, Leases and other, and Held-to-maturity securities. Multiple modeling techniques are used to measure credit losses based on the portfolio.

The ACL for Commercial & industrial and Leases and other segments are measured using a probability of default and loss given default method. Primary risk drivers within the segment are risk ratings of the individual loans along with changes of macro-economic variables such as unemployment rates, industrial production, and farm income. The ACL for commercial & industrial loans is ~~charged-off when, after analyzing~~calculated by modeling probability of default (PD) over future periods multiplied by historical loss given default rates (LGD) multiplied by contractual exposure at default minus any estimated prepayments and charge offs.

Collateral positions for Specialty lending loans are continuously monitored by the ~~borrower’s financial condition, it is determined that~~Company and the borrower is ~~incapable~~required to continually adjust the amount of ~~servicing~~collateral securing the ~~debt, little or no~~ ~~prospect~~loan. Credit losses are measured for ~~near term improvement exists, and no realistic and significant strengthening action~~any position where the amortized cost basis is ~~pending. For collateral dependent commercial or commercial real estate loans, an analysis is completed regarding~~greater than the ~~Company’s collateral position to determine if the amounts due from the borrower are in excess of the calculated current~~ fair value of the collateral. ~~Specific allocations~~The ACL for specialty lending loans is calculated by using a bottom-up approach comparing collateral values to outstanding balances.

The ACL for the Commercial real estate segment is measured using a PD and LGD method. Primary risk characteristics within the segment are risk ratings of the individual loans, along with changes of macro-economic variables, such as interest rates, CRE price index, median household income, construction activity, farm income, and vacancy rates. The ACL for commercial real estate loans is calculated by modeling PD over future periods based on peer bank data. The PD loss rate is then multiplied by historical LGD multiplied by contractual exposure at default minus any estimated prepayments and charge offs.

The ACL for the Consumer real estate and Consumer segments are measured using an origination vintage loss rate method applied to the loans’ amortized cost balance. The primary risk driver within the segments is year of origination along with changes of macro-economic variables such as unemployment and the home price index.

The Credit card segment contains both consumer and commercial credit cards. The ACL for Consumer credit cards is measured using a PD and LGD method for Revolvers and average historical loss rates across a defined lookback period for Transactors. The PD and LGD method used for Revolvers is similar in nature to the method used in the Commercial & industrial and Commercial real estate segments. Primary risk drivers within the segment are credit ratings of the individual card holders along with changes of macro-economic variables such as unemployment and retail sales. The ACL for Commercial credit cards is measured using roll-rate loss rate method based on days past due.

The ACL for the State and political HTM securities segment is measured using a loss rate method based on historical bond rating transitions. Primary risk drivers within the segment are bond ratings in the portfolio along with changes of macro-economic conditions. There is no ACL for the U.S. Agency and GSE mortgage-backed HTM securities portfolios as they are considered to be agency-backed securities with no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. For further discussion on these securities, including the aging and amortized cost balance of HTM securities, see Note 4, “Securities.”

See the credit quality indicators presented previously for a summary of current risk in the Company’s portfolio. Changes in economic forecasts will affect all portfolio segments, updated financial records from borrowers will affect portfolio segments by risk rating, updated credit scores will affect consumer credit cards, payment performance will affect consumer and commercial credit card portfolio segments, and updated bond credit ratings will affect held-to-maturity securities. The Company actively monitors all credit quality indicators for risk changes that will influence the current estimate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a TDR will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company.

Credit card receivables do not have stated maturities. In determining the estimated life of a credit card receivable, management first estimates the future cash flows expected to be received and then applies those expected future cash flows to the credit card balance. Expected credit losses for credit cards are determined by estimating the amount and timing of principal payments expected to be received as payment for the balance outstanding as of the reporting period until the expected payments have been fully allocated. The ACL is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually include loans on nonaccrual, loans classified as TDRs, or any loans specifically identified, and are excluded from the collective evaluation. When it is determined that payment of interest or recovery of all principal is questionable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for undiscounted selling costs as appropriate. All loans are classified as collateral dependent if placed on non-accrual or are considered to be a TDR.

A loan modification is considered a TDR when a concession has been granted to a debtor experiencing financial difficulties. The allowance for credit loss on a TDR is measured using the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the allowance for ~~loan losses are made for any~~credit loss is determined by discounting the expected future cash flows, including contractual payments and value of collateral ~~deficiency. If a collateral deficiency is ultimately deemed to be uncollectible,~~at termination, at the ~~amount is charged-off. Revolving commercial loans (such as commercial credit cards) which are past due 90 cumulative days are classified as a loss and charged off~~.original effective interest rate of the loan.

Generally, a consumer loan, or a portion thereof, is charged-off in accordance with regulatory guidelines which provide that such loans be charged-off when the Company becomes aware of the loss, such as from a triggering event that may include but is not limited to new information about a borrower’s intent and ability to repay the loan, bankruptcy, fraud, or death. However, the charge-off timeframe should not exceed the specified delinquency time frames, which state that closed-end retail loans (such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (such as home equity lines of credit and consumer credit cards) that become past due 180 cumulative days are classified as a loss and charged-off.

~~This table provides~~The following tables provide a rollforward of the allowance for ~~loan~~credit losses by portfolio segment for the year ended December 31, ~~2019~~2022, 2021, and 2020 (in thousands):

Year Ended December 31, 2019

Commercial

Real estate

Consumer

Leases

Total

Allowance for loan losses:

Beginning balance

$
80,888

$
13,664

$
9,071

$
12

$
103,635

Charge-offs

(36,716
)

(444
)

(8,920
)

—

(46,080
)
Recoveries

7,746

1,122

2,515

—

11,383

Provision

19,340

5,972

7,545

(7
)

32,850

Ending Balance

$
71,258

$
20,314

$
10,211

$
5

$
101,788

Ending Balance: individually evaluated for
   impairment

$
271

$
467

$
—

$
—

$
738

Ending Balance: collectively evaluated for
   impairment

70,987

19,847

10,211

5

101,050

Loans:

Ending Balance: loans

$
6,487,031

$
6,582,497

$
360,216

$
1,978

$
13,431,722

Ending Balance: individually evaluated for
   impairment

25,769

26,047

—

—

51,816

Ending Balance: collectively evaluated for
   impairment

6,461,262

6,556,450

360,216

1,978

13,379,906

	Year Ended December 31, 2022
	Commercial and industrial			Specialty lending			Commercial real estate			Consumer real estate			Consumer			Credit cards			Leases and other		Total - Loans			HTM		Total
Allowance for credit losses:
Beginning balance	$	123,732		$	1,738		$	56,265		$	3,921		$	845		$	6,075		$	2,195	$	194,771		$	1,940	$	196,711
Charge-offs		(37,269	)		—			(29	)		(57	)		(800	)		(6,150	)		—		(44,305	)		—		(44,305	)
Recoveries		1,550			433			385			131			126			1,812			—		4,437			—		4,437
Provision		48,724			(2,171	)		(17,251	)		2,153			323			5,129			26		36,933			467		37,400
Ending balance - ACL	$	136,737		$	—		$	39,370		$	6,148		$	494		$	6,866		$	2,221	$	191,836		$	2,407	$	194,243
Allowance for credit losses on off-balance sheet credit exposures:
Beginning balance	$	1,739		$	160		$	480		$	106		$	—		$	—		$	15	$	2,500		$	88	$	2,588
Provision		439			26			(62	)		18			13			—			47		481			19		500
Ending balance - ACL on off-balance sheet	$	2,178		$	186		$	418		$	124		$	13		$	—		$	62	$	2,981		$	107	$	3,088

	Year Ended December 31, 2021
	Commercial and industrial			Specialty lending			Commercial real estate			Consumer real estate			Consumer			Credit cards			Leases and other			Total - Loans			HTM			Total
Allowance for credit losses:
Beginning balance	$	122,700		$	5,219		$	61,931		$	6,586		$	1,480		$	15,786		$	2,271		$	215,973		$	2,610		$	218,583
Charge-offs		(13,981	)		(31,945	)		(1,198	)		(96	)		(2,424	)		(6,011	)		(8	)		(55,663	)		—			(55,663	)
Recoveries		6,694			187			1,560			142			223			1,967			18			10,791			—			10,791
Provision		8,319			28,277			(6,028	)		(2,711	)		1,566			(5,667	)		(86	)		23,670			(670	)		23,000
Ending balance – ACL	$	123,732		$	1,738		$	56,265		$	3,921		$	845		$	6,075		$	2,195		$	194,771		$	1,940		$	196,711
Allowance for credit losses on off-balance sheet credit exposures:
Beginning balance	$	3,859		$	287		$	447		$	145		$	381		$	—		$	414		$	5,533		$	55		$	5,588
Provision		(2,120	)		(127	)		33			(39	)		(381	)		—			(399	)		(3,033	)		33			(3,000	)
Ending balance - ACL on off-balance sheet	$	1,739		$	160		$	480		$	106		$	—		$	—		$	15		$	2,500		$	88		$	2,588

	Year Ended December 31, 2020
	Commercial and industrial			Specialty lending		Commercial real estate			Consumer real estate			Consumer			Credit cards			Leases and other			Total - Loans			HTM			Total
Allowance for credit losses:
Beginning balance	$	63,313		$	2,545	$	15,951		$	2,623		$	543		$	15,739		$	1,074		$	101,788		$	—		$	101,788
ASU 2016-13 adjustment		3,677			148		926			152			31			914			62			5,910			3,120			9,030
Adjusted beginning balance		66,990			2,693		16,877			2,775			574			16,653			1,136			107,698			3,120			110,818
Charge-offs		(8,587	)		—		(11,939	)		(219	)		(607	)		(7,326	)		(11	)		(28,689	)		—			(28,689	)
Recoveries		6,473			—		91			69			307			1,618			6			8,564			—			8,564
Provision		57,824			2,526		56,902			3,961			1,206			4,841			1,140			128,400			(510	)		127,890
Ending balance - ACL	$	122,700		$	5,219	$	61,931		$	6,586		$	1,480		$	15,786		$	2,271		$	215,973		$	2,610		$	218,583
Allowance for credit losses on off-balance sheet credit exposures:
Beginning balance	$	2,263		$	53	$	257		$	102		$	22		$	—		$	211		$	2,908		$	70		$	2,978
Provision		1,596			234		190			43			359			—			203			2,625			(15	)		2,610
Ending balance - ACL on off-balance sheet	$	3,859		$	287	$	447		$	145		$	381		$	—		$	414		$	5,533		$	55		$	5,588

The allowance for credit losses on off-balance sheet credit exposures is recorded in the Accrued expenses and taxes line of the ~~allowance for loan losses by portfolio segment for~~Company’s Consolidated Balance Sheets, see Note 15 “Commitments, Contingencies and Guarantees.”

The following tables provide the ~~year ended~~amortized cost balance of financial assets considered collateral dependent as of December 31, ~~2018~~2022 and 2021 (in thousands):

Year Ended December 31, 2018

Commercial

Real estate

Consumer

Leases

Total

Allowance for loan losses:

Beginning balance

$
81,156

$
9,312

$
10,083

$
53

$
100,604

Charge-offs

(64,371
)

(3,428
)

(9,744
)

—

(77,543
)
Recoveries

6,753

445

2,626

—

9,824

Provision

57,350

7,335

6,106

(41
)

70,750

Ending Balance

$
80,888

$
13,664

$
9,071

$
12

$
103,635

Ending Balance: individually evaluated for
   impairment

$
4,605

$
106

$
—

$
—

$
4,711

Ending Balance: collectively evaluated for
   impairment

76,283

13,558

9,071

12

98,924

Loans:

Ending Balance: loans

$
6,037,065

$
5,760,070

$
375,767

$
5,248

$
12,178,150

Ending Balance: individually evaluated for
   impairment

31,006

8,233

—

—

39,239

Ending Balance: collectively evaluated for
   impairment

6,006,059

5,751,837

375,767

5,248

12,138,911

	December 31, 2022
Loan Segment and Type	Amortized Cost of Collateral Dependent Assets		Related Allowance for Credit Losses		Amortized Cost of Collateral Dependent Assets with no related Allowance
Commercial and industrial:
Equipment/Accounts Receivable/Inventory	$	13,972	$	713	$	11,534
Agriculture		—		—		—
Total Commercial and industrial		13,972		713		11,534
Specialty lending:
Asset-based lending		—		—		—
Total Specialty lending		—		—		—
Commercial real estate:
Owner-occupied		2,204		—		2,204
Non-owner-occupied		—		—		—
Farmland		374		—		374
5+ Multi-family		—		—		—
1-4 Family construction		—		—		—
General construction		101		—		101
Total Commercial real estate		2,679		—		2,679
Consumer real estate:
HELOC		2,562		—		2,562
First lien: 1-4 family		2,253		6		1,597
Junior lien: 1-4 family		67		—		67
Total Consumer real estate		4,882		6		4,226
Consumer:
Revolving line		—		—		—
Auto		46		—		46
Other		15		—		15
Total Consumer		61		—		61
Leases and other:
Leases		—		—		—
Other		24		—		24
Total Leases and other		24		—		24
Total loans	$	21,618	$	719	$	18,524

~~This table provides a rollforward of the allowance for loan losses by portfolio segment for the year ended December 31, 2017 (in thousands):~~

~~This table provides an analysis of impaired loans by class for the year ended December 31, 2019 (in thousands):~~

As of December 31, 2019

Unpaid
Principal
Balance

Recorded
Investment
with No
Allowance

Recorded
Investment
with
Allowance

Total
Recorded
Investment

Related
Allowance

Average
Recorded
Investment

Commercial:

Commercial

$
32,301

$
20,986

$
856

$
21,842

$
271

$
31,271

Asset-based

948

948

—

948

—

190

Factoring

2,979

2,979

—

2,979

—

3,917

Commercial – credit card

—

—

—

—

—

—

Real estate:

Real estate – construction

97

95

—

95

—

19

Real estate – commercial

28,258

19,314

4,928

24,242

387

19,826

Real estate – residential

1,751

1,617

93

1,710

80

846

Real estate – HELOC

—

—

—

—

—

—

Consumer:

Consumer – credit card

—

—

—

—

—

—

Consumer – other

—

—

—

—

—

70

Leases

—

—

—

—

—

—

Total

$
66,334

$
45,939

$
5,877

$
51,816

$
738

$
56,139

~~This table provides an analysis of impaired loans by class for the year ended December 31, 2018 (in thousands):~~

As of December 31, 2018

Unpaid
Principal
Balance

Recorded
Investment
with No
Allowance

Recorded
Investment
with
Allowance

Total
Recorded
Investment

Related
Allowance

Average
Recorded
Investment

Commercial:

Commercial

$
40,402

$
16,470

$
14,536

$
31,006

$
4,605

$
43,335

Asset-based

—

—

—

—

—

—

Factoring

—

—

—

—

—

275

Commercial – credit card

—

—

—

—

—

—

Real estate:

Real estate – construction

—

—

—

—

—

55

Real estate – commercial

10,856

7,776

165

7,941

28

11,279

Real estate – residential

304

197

95

292

78

303

Real estate – HELOC

—

—

—

—

—

—

Consumer:

Consumer – credit card

—

—

—

—

—

—

Consumer – other

—

—

—

—

—

—

Leases

—

—

—

—

—

—

Total

$
51,562

$
24,443

$
14,796

$
39,239

$
4,711

$
55,247

~~This table provides an analysis of impaired loans by class for the year ended December 31, 2017 (in thousands):~~

As of December 31, 2017

Unpaid
Principal
Balance

Recorded
Investment
with No
Allowance

Recorded
Investment
with
Allowance

Total
Recorded
Investment

Related
Allowance

Average
Recorded
Investment

Commercial:

Commercial

$
84,749

$
44,525

$
16,465

$
60,990

$
6,299

$
65,385

Asset-based

—

—

—

—

—

—

Factoring

830

—

830

830

306

207

Commercial – credit card

—

—

—

—

—

—

Real estate:

Real estate – construction

108

93

—

93

—

148

Real estate – commercial

16,284

7,968

4,477

12,445

3

10,506

Real estate – residential

427

321

97

418

75

221

Real estate – HELOC

—

—

—

—

—

—

Consumer:

Consumer – credit card

—

—

—

—

—

—

Consumer – other

—

—

—

—

—

8

Leases

—

—

—

—

—

—

Total

$
102,398

$
52,907

$
21,869

$
74,776

$
6,683

$
76,475

	December 31, 2021
Loan Segment and Type	Amortized Cost of Collateral Dependent Assets		Related Allowance for Credit Losses		Amortized Cost of Collateral Dependent Assets with no related Allowance
Commercial and industrial:
Equipment/Accounts Receivable/Inventory	$	82,845	$	2,421	$	76,493
Agriculture		—		—		—
Total Commercial and industrial		82,845		2,421		76,493
Specialty lending:
Asset-based lending		—		—		—
Factoring		—		—		—
Total Specialty lending		—		—		—
Commercial real estate:
Owner-occupied		2,764		—		2,764
Non-owner-occupied		—		—		—
Farmland		487		—		487
5+ Multi-family		—		—		—
1-4 Family construction		—		—		—
General construction		1,626		—		1,626
Total Commercial real estate		4,877		—		4,877
Consumer real estate:
HELOC		2,488		—		2,488
First lien: 1-4 family		1,647		—		1,647
Junior lien: 1-4 family		75		—		75
Total Consumer real estate		4,210		—		4,210
Consumer:
Revolving line		—		—		—
Auto		38		—		38
Other		37		—		37
Total Consumer		75		—		75
Leases and other:
Leases		—		—		—
Other		25		—		25
Total Leases and other		25		—		25
Total loans	$	92,032	$	2,421	$	85,680

A loan modification is considered a ~~troubled debt restructuring (TDR)~~TDR when a concession has been granted to a debtor experiencing financial difficulties. The Company’s modifications generally include interest rate adjustments, principal reductions, and amortization and maturity date extensions. These modifications allow the debtor short-term cash relief to allow them to improve their financial condition. The Company’s restructured loans are ~~individually evaluated for impairment~~considered collateral dependent and evaluated as part of the allowance for ~~loan~~credit loss as described above in the Allowance for ~~Loan~~Credit Losses section of this note.

The Company had 0no commitments to lend to borrowers with loan modifications classified as TDRs as of December 31, ~~2019~~2022 and ~~2018.~~2021. The Company monitors loan payments on an on-going basis to determine if a loan is considered to have a payment default. Determination of payment default involves analyzing the economic conditions that exist for each customer and their ability to generate positive cash flows during the loan term. ~~During~~

For the year ended December 31, 2022, the Company had two commercial TDRs with a pre-modification loan balance of $5.1 million and a post-modification loan balance of $4.3 million. For the year ended December 31, 2021, the Company had no new TDRs. For the years ended December 31, ~~2019~~2022 and ~~2018, there were 0~~2021, the Company had no TDRs for which there was a payment default within the 12 months following the restructure date. ~~There was an immaterial amount of interest recognized on loans classified as TDRs during 2019 and 2018.~~

For the year ended December 31, 2019, the Company had 2 commercial TDRs with aggregate pre- and post-modification loan balances of $11.5 million, and 1 commercial real estate TDR with a pre- and a post-modification loan balance of $3.1 million. For the year ended December 31, 2018, the Company had 3 commercial TDRs with pre- and post-modification loan balance of $6.7 million, and 1 residential real estate TDR with a pre-modification loan balance of $93 thousand and a post-modification loan balance of $92 thousand.

This table provides detailed information about securities available for sale at December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

The following table presents contractual maturity information for securities available for sale at December 31, ~~2019~~2022 (in thousands):

Securities may be disposed of before contractual maturities due to sales by the Company or because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no sales of securities available for sale in 2022. Proceeds from the sales of securities available for sale were ~~$412.0 million, $95.5~~$372.6 million and ~~$578.5~~$315.9 million for ~~2019, 2018,~~2021 and ~~2017,~~2020, respectively. There were no gross realized gains due to securities transactions in 2022. Securities transactions resulted in gross realized gains of ~~$4.6~~$7.8 million for ~~2019, $581 thousand for 2018,~~2021 and ~~$4.2~~$7.3 million for ~~2017.~~2020. There were no gross realized losses in 2022. The gross realized losses were ~~$1.4 million for 2019, $3~~$2 thousand for ~~2018,~~2021 and ~~$10~~$274 thousand for ~~2017.~~2020.

~~Securities available for sale with a fair value of $5.8~~There were $10.3 billion and ~~$5.7~~$10.2 billion ~~at December 31, 2019 and December 31, 2018, respectively, were~~of securities pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase ~~agreements.~~agreements at December 31, 2022 and December 31, 2021, respectively. There were no securities pledged at the Federal Reserve Discount Window at December 31, 2022. Of ~~these amounts,~~the amount pledged at December 31, 2021, securities with a fair value of ~~$481.2~~$171.2 million ~~at December 31, 2019 and $1.0 billion at December 31, 2018~~ were pledged at the Federal Reserve Discount Window but were unencumbered as of ~~those dates.~~that date.

Accrued interest on securities available for sale totaled $32.1 million and $45.8 million as of December 31, 2022 and 2021, respectively, and is included in the Accrued income line on the Company’s Consolidated Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of available securities presented above. Further, the Company has elected not to measure an ACL for accrued interest receivable.

The following table shows the Company’s ~~available for sale~~available-for-sale investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

	Less than 12 months					12 months or more					Total					Less than 12 months							12 months or more							Total
2018	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
2022																Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses
Description of Securities
U.S. Treasury	$	18,775	$	(4	)	$	38,552	$	(1,552	)	$	57,327	$	(1,556	)		61	$	688,208	$	(22,731	)		4	$	55,314	$	(4,415	)		65	$	743,522	$	(27,146	)
U.S. Agencies		—		—			199		(1	)		199		(1	)		27		140,877		(4,734	)		2		30,419		(2,231	)		29		171,296		(6,965	)
Mortgage-backed		228,406		(1,256	)		3,007,233		(106,967	)		3,235,639		(108,223	)		687		1,415,169		(102,881	)		205		2,557,035		(489,994	)		892		3,972,204		(592,875	)
State and political subdivisions		371,394		(1,490	)		1,419,875		(30,000	)		1,791,269		(31,490	)		1,744		936,865		(51,427	)		273		233,679		(53,372	)		2,017		1,170,544		(104,799	)
Total temporarily-impaired debt securities available for sale	$	618,575	$	(2,750	)	$	4,465,859	$	(138,520	)	$	5,084,434	$	(141,270	)
Corporates																	86		146,615		(8,783	)		189		216,885		(24,776	)		275		363,500		(33,559	)
Collateralized loan obligations																	41		326,659		(7,820	)		1		4,785		(229	)		42		331,444		(8,049	)
Total																	2,646	$	3,654,393	$	(198,376	)		674	$	3,098,117	$	(575,017	)		3,320	$	6,752,510	$	(773,393	)

The unrealized losses in the Company’s investments ~~in U.S. treasury obligations, Government Sponsored Entity (GSE) mortgage-backed securities, state and political subdivisions, and corporates~~ were caused by changes in interest rates, and not from a decline in credit of the underlying issuers. The U.S. Treasury, U.S. Agency, and GSE mortgage-backed securities are all considered to be agency-backed securities with no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. The changes in fair value in the agency-backed portfolios are solely driven by change in interest ~~rate environment.~~rates caused by changing economic conditions. The Company ~~does~~has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates.

For the State and political subdivision portfolio, the majority of the Company’s holdings are in general obligation bonds, which have a very low historical default rate due to issuers generally having unlimited taxing authority to service the ~~intent to sell these securities~~debt. For the State and ~~does not believe it is more likely than not that~~political, Corporates, and Collateralized loan obligations portfolios, the Company ~~will be required to sell these securities before~~has a ~~recovery of amortized cost.~~robust process for monitoring credit risk, including both pre-purchase and ongoing post-purchase

credit reviews and analysis. The Company ~~expects to recover its cost basis~~monitors credit ratings of all bond issuers in ~~the securities~~these segments and ~~does not consider these investments to be other-than-temporarily impaired at~~reviews available financial data, including market and sector trends.

As of both December 31, ~~2019.~~2022 and 2021, there is no ACL related to the Company’s available-for-sale securities as the decline in fair value did not result from credit issues.

The following table ~~shows the Company’s~~provides detailed information about securities held to maturity ~~investments’ amortized cost, fair value, and gross unrealized gains and losses~~ at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively (in thousands):

The following table presents contractual maturity information for securities held to maturity at December 31, 2022 (in thousands):

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were 0no sales of securities held to maturity during ~~2019, 2018,~~2022, 2021, or ~~2017.~~2020.

During the year ended December 31, 2022, securities with an amortized cost of $4.1 billion and a fair value of $3.8 billion were transferred from the available-for-sale classification to the held-to-maturity classification as the Company has the positive intent and ability to hold these securities to maturity. The transfers of securities were made at fair value at the time of transfer. The unrealized holding gain or loss at the time of transfer is retained in AOCI and will be amortized over the remaining life of the securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses were recognized at the time of the transfers. The amortized cost balance of securities held to maturity in the tables above includes a net unamortized unrealized loss of $247.0 million at December 31, 2022.

Accrued interest on securities held to maturity totaled $27.0 million and $5.3 million as of December 31, 2022 and 2021, respectively, and is included in the Accrued income line on the Company’s Consolidated Balance Sheets. The total amount of accrued interest is excluded from the amortized cost of held-to-maturity securities presented above. Further, the Company has elected not to measure an ACL for accrued interest receivable.

The following table shows the Company’s ~~held to maturity~~held-to-maturity investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

The unrealized losses in the Company’s ~~held to maturity~~held-to-maturity portfolio were caused by changes in the interest rate environment. The U.S. Agency and GSE mortgage-backed securities are considered to be agency-backed securities with no risk of loss as they are either explicitly or implicitly guaranteed by the U.S. government. Therefore, the Company’s expected lifetime loss for these portfolios is zero and there is no ACL recorded for these portfolios. The Company has no knowledge of any underlying credit issues and the cash flows underlying the debt securities have not changed and are not expected to be impacted by changes in interest rates.

For the State and political subdivision portfolio, the Company’s holdings are in general obligation bonds as well as private placement bonds, which have very low historical default rates due to issuers generally having unlimited taxing authority to service the debt. The Company has a robust process for monitoring credit risk, including both pre-purchase and ongoing post-purchase credit reviews and analysis. The Company monitors credit ratings of all bond issuers in these segments and reviews available financial data, including market and sector trends. The underlying bonds are ~~subject to a risk-ranking process similar to~~evaluated for credit losses in conjunction with management’s estimate of the ACL based on credit rating.

The following table shows the amortized cost basis by credit rating of the Company’s ~~loan portfolio~~held-to-maturity State and evaluated for impairment if deemed necessary. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost. The Company expects to recover its cost basis in the securities and does not consider thesepolitical subdivisions bond investments ~~to be other-than-temporarily impaired as of~~at December 31, ~~2019.~~2022 and 2021 (in thousands):

Competitive held-to-maturity securities include not-for-profit enterprises that provide public functions such as housing, higher education, or healthcare, but do so in a competitive environment. It also includes project financings that can have relatively high enterprise risk, such as deals backed by revenues from sports or convention facilities or start-up transportation revenues.

Utilities are public enterprises providing essential services with a monopoly or near-monopoly over the service area. This includes environmental utilities (water, sewer, solid waste), power utilities (electric distribution and generation, gas), and transportation utilities (airports, parking, toll roads, mass transit, ports).

All held-to-maturity securities were current and not past due at December 31, 2022.

The following table presents the aging of past due held-to-maturity securities at December 31, 2021 (in thousands):

The net unrealized loss on trading securities was $26 thousand as of December 31, 2022.�� The net unrealized gain on trading securities atwas $2 thousand and $13 thousand as of December 31, ~~2019 was $1 thousand. The net unrealized loss on trading securities at December 31, 2018 was $18 thousand~~2021, and ~~the net unrealized gain on trading securities at December 31, 2017 was $188 thousand.~~2020, respectively. Net unrealized ~~gains/~~gains and losses are included in trading and investment banking income on the Consolidated Statements of Income. Securities sold not yet purchased totaled ~~$14.6~~$3.5 million and ~~$27.2~~$3.2 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively, and are classified within the Other liabilities line of the Company’s Consolidated Balance Sheets.

The table below provides detailed information for ~~Federal Reserve Bank stock and Federal Home Loan Bank stock and other~~Other securities at December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is mainly tied to the level of borrowings from the FHLB. These holdings are carried at cost. ~~Other marketable~~Equity securities with readily determinable fair values are generally traded on an exchange and ~~non-marketable~~ market prices are readily available. Equity

securities without readily determinable fair values include ~~PCM alternative investments in hedge funds and private equity funds, which are accounted for as equity-method investments. Also included in other non-marketable securities are~~ equity investments which are held by a subsidiary qualified as a Small Business Investment Company, as well as investments in low-income housing partnerships within the areas the Company serves. The Company’s investment in other marketable securities was fully distributed during 2019. As of December 31, 2018, the fair value of other marketable securities included alternative investment securities of $4.4 million. The fair value of other non-marketable securities includes alternative investment securities of $7.0 million at December 31, 2019 and $5.8 million at December 31, 2018. Unrealized gains or losses on ~~alternative investments~~equity securities with and without readily determinable fair values are recognized in the ~~Other noninterest income~~Investment securities gains, net line of the Company’s Consolidated Statements of Income.

The following table presents the components of Investment securities gains, net for the years ended December 31, 2022, 2021, and 2020 (in thousands):

During 2022, the Company sold the entirety of its Visa Inc. Class B common shares in a cash transaction which resulted in a pre-tax gain of $66.2 million. Prior to the sale, the Visa Inc. Class B shares had no carrying value on the Company’s Consolidated Balance Sheets as the Company had no historical cost basis in the shares.

The Company regularly enters into agreements for the purchase of securities with simultaneous agreements to resell (resell agreements). The agreements permit the Company to sell or repledge these securities. Resell agreements were ~~$1.6~~$951.6 million and $1.2 billion ~~and $626.5 million~~ at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. The Company obtains possession of collateral with a market value equal to or in excess of the principal amount loaned under resell agreements.

Certain executive officers and directors of the Company and the Bank, including companies in which those persons are principal holders of equity securities or are general partners, borrow in the normal course of business from the Bank. All such loans have been made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with unrelated parties. In addition, all such loans are current as to repayment terms.

For the years ~~2019~~2022 and ~~2018,~~2021, an analysis of activity with respect to such aggregate loans to related parties appears below (in thousands):

Changes in the carrying amount of goodwill for the years ended December 31, ~~2019~~2022 and December 31, ~~2018~~2021 by operating segment are as follows (in thousands):

Following are the intangible assets that continue to be subject to amortization as of December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

~~During the year ended December 31, 2019,~~On November 18, 2022, the Company acquired ~~2 corporate trust businesses with aggregate~~a healthcare savings account business, which included $383.0 million of deposits. The purchase resulted in recognition of $25.2 million of goodwill and a $67.0 million customer relationship ~~intangibles~~intangible asset.

On March 28, 2022, the Company acquired a bank branch. Included in the branch acquisition were $43.0 million in loans and $226.8 million of ~~$18.1 million.~~deposits. The purchase resulted in recognition of $7.7 million of goodwill and a $2.3 million core deposit intangible asset.

On March 31, 2021, the Company sold its membership interests in its PCM and UMB Merchant Banc, LLC subsidiaries, components of its Personal Banking segment. The sale included disposition of $6.3 million of goodwill and $1.9 million of net unamortized customer relationship intangibles.

Amortization expense for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017~~2020 was ~~$5.5~~$5.0 million, ~~$5.8~~$4.8 million, and ~~$7.3~~$6.5 million, respectively.

The following table discloses the estimated amortization expense of intangible assets in future years (in thousands):

Premises and equipment depreciation and amortization expenses were ~~$50.8~~$46.8 million in ~~2019, $47.4~~2022, $49.6 million in ~~2018,~~2021, and ~~$45.6~~$56.1 million in ~~2017. Rental and operating lease expenses were $14.8 million in both 2018 and 2017.~~

~~The Company adopted ASC 842,~~ ~~Leases, using the effective date as the date of initial application of ASC 842 and will not recast comparative financial periods.~~2020.

The Company primarily has leases of real estate, including buildings, or portions of buildings, used for bank branches or general office operations. These leases have remaining lease terms that range from less than one year to 2825 years and most leases include one or more options to renew, with renewal terms that can extend the lease term from one month to 4035 years or more. The exercise of lease renewal options is at the Company’s sole discretion. No renewal options were included in the Company’s calculation of its lease liabilities or right of use assets since it is not reasonably certain that the Company will exercise these options. ~~NaN~~No leases include options to purchase the leased property. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. An insignificant number of leases include variable lease payments that are based on the Consumer Price Index (CPI). For the calculation of the lease liability and right of use asset for these leases, the Company has included lease payments based on CPI as of the effective date of ASC 842. The Company has made the election not to separate lease and non-lease components for existing real estate leases when determining consideration within the lease contract. All of the Company’s lease agreements are classified as operating leases under ASC 842.

As of December 31, ~~2019, a~~2022 and 2021, right-of-use ~~asset~~assets of ~~$66.8~~$54.6 million and a$57.1 million, respectively, were included as part of Other assets on the Company’s Consolidated Balance Sheets. In addition, lease ~~liability~~liabilities of ~~$73.0~~$63.5 million and $64.6 million were included as part of Other ~~assets and Other~~ liabilities ~~respectively,~~ on the Company’s Consolidated Balance ~~Sheets.~~

Sheets as of December 31, 2022 and 2021, respectively. For the ~~year~~years ended December 31, ~~2019,~~2022, 2021, and 2020, lease expense of ~~$12.3~~$11.9 million, $11.8 million, and $12.8 million, respectively, was recognized as part of Occupancy expense on the Company’s Consolidated Statements of Income. For the ~~year~~years ended December 31, ~~2019,~~2022, 2021, and 2020, cash payments of ~~$12.1~~$12.9 million, $12.6 million, and $12.3 million, respectively, were made for leases included in the measurement of lease liabilities and are classified as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. For the ~~year~~years ended December 31, ~~2019,~~2022 and 2021, leased assets obtained in exchange for new operating lease liabilities were ~~$19.2 million.~~$11.3 million and $2.4 million, respectively. As of December 31, ~~2019,~~2022 and 2021, the weighted average remaining lease ~~term~~terms of the Company’s leases ~~was 8.6~~were 7.0 years and 7.5 years, respectively, and the weighted average discount ~~rate was 3.06 percent.~~rates were 2.96% and 2.74%, respectively.

As of December 31, ~~2019,~~2022, future minimum lease payments under non-cancelable operating leases were as follows (in thousands):

The adoption of the lease standard using the effective date as of the date of initial application requires the inclusion of the disclosure for periods prior to adoption, which is included in the table below.

~~Minimum future rental commitments as of December 31, 2018, for all non-cancelable operating leases were as follows (in thousands):~~

~~Aggregate annual repayments~~The aggregate contractual repayment of long-term debt atof $413.1 million is due after December 31, ~~2019, are as follows (in thousands):~~2027.

The Company assumed long-term debt obligations from the acquisition of Marquette ~~and consists~~consisting of debt obligations payable to four unconsolidated trusts (Marquette Capital Trust I, Marquette Capital Trust II, Marquette

Capital Trust III, and Marquette Capital Trust IV) that previously issued trust preferred securities. These long-term debt obligations had an aggregate contractual balance of $103.1 million and had a carrying value of ~~$70.4~~$74.6 million as of December 31, ~~2019.~~ 2022. Interest rates on trust preferred securities are tied to the three-month LIBOR rate with spreads ranging from 133 basis points to 160 basis points and reset quarterly. The trust preferred securities have maturity dates ranging from January 2036 to September 2036.

In September 2020, the Company issued $200.0 million of 3.70% fixed-to-fixed rate subordinated notes that mature on September 17, 2030. The notes bear interest at the rate of 3.70% per annum, payable semi-annually on each March 17 and September 17. The Company may redeem the notes, in whole or in part, on September 17, 2025, or on any interest payment date thereafter. Unamortized debt issuance costs related to these notes totaled $1.2 million as of December 31, 2022. Proceeds from the issuance of the notes were used for general corporate purposes, including contributing Tier 1 capital into the Bank.

In .September 2022, the Company issued $110.0 million of 6.25% fixed-to-fixed rate subordinated notes that mature on September 28, 2032. The notes bear interest at the rate of 6.25% per annum, payable semi-annually on each March 28 and September 28. The Company may redeem the notes, in whole or in part, on September 28, 2027, or on any interest payment date thereafter. Unamortized debt issuance costs related to these notes totaled $2.0 million as of December 31, 2022. Proceeds from the issuance of the notes were used for general corporate purposes, including contributing Tier 1 capital into the Bank.

The Company is a member bank of the FHLB of Des Moines. Through this relationship, the Company purchased $10.0 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. The Company’s borrowing capacity with the FHLB was ~~$1.2~~$1.9 billion as of December 31, ~~2019.~~2022. The Company had 0no outstanding FHLB advances at FHLB Des Moines as of December 31, ~~2019.~~2022.

The Company has a revolving line of credit with Wells Fargo Bank, N.A. which allows the Company to borrow up to ~~$50.0~~$30.0 million for general working capital purposes. The interest rate applied to borrowed balances will be at the Company’s option either ~~1.00 percent~~1.40% above ~~LIBOR~~Term SOFR or ~~1.75 percent~~1.75% below the prime rate on the date of an advance. The Company pays ~~0.3 percent~~0.4% unused commitment fee for unused portions of the line of credit. The Company currently has 0no outstanding balance on this line of credit.

The Company enters into sales of securities with simultaneous agreements to repurchase (repurchase agreements). The Company utilizes repurchase agreements to facilitate the needs of customers and to facilitate secured short-term funding needs. Repurchase agreements are stated at the amount of cash received in connection with the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with the Company’s safekeeping agents. The amounts received under these agreements represent short-term borrowings. The amount outstanding at December 31, ~~2019,~~2022, was ~~$1.9~~$2.2 billion, ~~(with~~with accrued interest payable of ~~$220 thousand).~~$1.4 million. The amount outstanding at December 31, ~~2018,~~2021, was ~~$1.5~~$3.2 billion, ~~(with~~with accrued interest payable of ~~$174 thousand).~~$245 thousand.

The carrying amounts and market values of the securities and the related repurchase liabilities and weighted average interest rates of the repurchase liabilities (grouped by maturity of the repurchase agreements) were as follows as of December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

The table below presents the remaining contractual maturities of repurchase agreements outstanding at December 31, ~~2019~~2022 and ~~2018,~~2021, in addition to the various types of marketable securities that have been pledged as collateral for these borrowings (in thousands):

Payment of dividends by the Bank to the parent company is subject to various regulatory restrictions. For national banks, the governing regulatory agency must approve the declaration of any dividends generally in excess of the sum of net income for that year and retained net income for the preceding two years.

The Bank maintains a reserve balance with the FRB as required by law. During ~~2019,~~2022, this amount averaged ~~$560.9 million,~~$2.3 billion, compared to ~~$396.0 million~~$4.0 billion in ~~2018.~~2021.

At December 31, ~~2019,~~2022, the Company is required to have minimum common equity tier 1, tier 1, and total capital ratios of 4.5%, 6.0% and 8.0%, respectively. The Company’s actual ratios at that date were ~~12.33%~~10.62%, ~~12.33%~~10.62% and ~~13.26%~~12.50%, respectively. The Company is required to have a minimum leverage ratio of 4.0%, and the leverage ratio at December 31, ~~2019,~~2022, was ~~9.37%~~8.43%.

As of December 31, ~~2019,~~2022, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized the Bank must maintain total risk-based, tier 1 risk-based, common equity tier 1, and tier 1 leverage ratios of 10.0%, 8.0%, 6.5%, and 5.0%, respectively. There are no conditions or events that have occurred since the receipt of the most recent notification that management believes have changed the Bank’s categorization.

In addition, under amendments to the BHCA introduced by the Dodd-Frank Act and commonly known as the Volcker Rule, the Company and its subsidiaries are subject to extensive limits on proprietary trading and on owning or sponsoring hedge funds and private-equity funds. The limits on proprietary trading are largely focused on purchases or sales of financial instruments by a banking entity as principal primarily for the purpose of short-term resale, benefitting from actual or expected short-term price movements, or realizing short-term arbitrage profits. The limits on owning or sponsoring hedge funds and private-equity funds are designed to ensure that banking entities generally maintain only small positions in managed or advised funds and are not exposed to significant losses arising directly or indirectly from them. The Volcker Rule also provides for increased capital charges, quantitative limits, rigorous compliance programs, and other restrictions on permitted proprietary trading and fund activities, including a prohibition on transactions with a covered fund that would constitute a covered transaction under Sections 23A and 23B of the Federal Reserve Act. The fund activities of the Company and its subsidiaries are in conformance with the Volcker Rule.

Actual capital amounts as well as required and well-capitalized common equity tier 1, tier 1, total and tier 1 leverage ratios as of December 31, ~~2019~~2022 and ~~2018~~2021 for the Company and the Bank are as follows (in thousands):

	2019															2022
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions					Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Common Equity Tier 1 Capital:
UMB Financial Corporation	$	2,330,533		12.33	%	$	850,304		4.50	%	$	N/A		N/A	%	$	3,129,030		10.62	%	$	1,325,893		4.50	%	$	N/A		N/A	%
UMB Bank, n. a.		2,128,608		11.36			843,544		4.50			1,218,453		6.50			3,184,837		10.88			1,317,571		4.50			1,903,158		6.50
Tier 1 Capital:
UMB Financial Corporation		2,330,533		12.33			1,133,738		6.00		N/A		N/A				3,129,030		10.62			1,767,857		6.00		N/A		N/A
UMB Bank, n. a.		2,128,608		11.36			1,124,726		6.00			1,499,635		8.00			3,184,837		10.88			1,756,762		6.00			2,342,349		8.00
Total Capital:
UMB Financial Corporation		2,505,397		13.26			1,511,651		8.00		N/A		N/A				3,682,619		12.50			2,357,142		8.00		N/A		N/A
UMB Bank, n. a.		2,233,100		11.91			1,499,635		8.00			1,874,543		10.00			3,359,158		11.47			2,342,349		8.00			2,927,936		10.00
Tier 1 Leverage:
UMB Financial Corporation		2,330,533		9.37			995,000		4.00		N/A		N/A				3,129,030		8.43			1,483,953		4.00		N/A		N/A
UMB Bank, n. a.		2,128,608		8.62			987,983		4.00			1,234,978		5.00			3,184,837		8.46			1,506,443		4.00			1,883,054		5.00

	2018															2021
Common Equity Tier 1 Capital:
UMB Financial Corporation	$	2,142,469		12.89	%	$	748,009		4.50	%	$	N/A		N/A	%	$	2,885,576		12.05	%	$	1,077,971		4.50	%	$	N/A		N/A	%
UMB Bank, n. a.		1,921,615		11.65			742,322		4.50			1,072,243		6.50			2,734,377		11.53			1,067,154		4.50			1,541,444		6.50
Tier 1 Capital:
UMB Financial Corporation		2,142,469		12.89			997,346		6.00		N/A		N/A				2,885,576		12.05			1,437,295		6.00		N/A		N/A
UMB Bank, n. a.		1,921,615		11.65			989,763		6.00			1,319,683		8.00			2,734,377		11.53			1,422,872		6.00			1,897,162		8.00
Total Capital:
UMB Financial Corporation		2,318,145		13.95			1,329,794		8.00		N/A		N/A				3,324,284		13.88			1,916,393		8.00		N/A		N/A
UMB Bank, n. a.		2,027,962		12.29			1,319,683		8.00			1,649,604		10.00			2,902,996		12.24			1,897,162		8.00			2,371,453		10.00
Tier 1 Leverage:
UMB Financial Corporation		2,142,469		9.87			867,879		4.00		N/A		N/A				2,885,576		7.61			1,517,616		4.00		N/A		N/A
UMB Bank, n. a.		1,921,615		8.85			868,916		4.00			1,086,145		5.00			2,734,377		7.26			1,506,293		4.00			1,882,866		5.00

The Company has a discretionary noncontributory ~~profit sharing~~profit-sharing plan, which features an employee stock ownership plan. This plan is for the benefit of substantially all eligible officers and employees of the Company and its subsidiaries. The Company ~~has accrued and anticipates making a discretionary payment~~recognized expense related to such contributions of $2.0 million, ~~in March~~$2.5 million, and $2.0 million for the years ended December 31, 2022, 2021, and 2020, ~~for 2019. A $1.5 million contribution was paid in 2019, for 2018. A $4.0 million contribution was paid in 2018, for 2017.~~respectively.

The Company has a qualified 401(k) profit sharing plan that permits participants to make contributions by salary deduction, to which the Company makes matching contributions. ~~In 2018, the Company changed the timing of matching contributions from annually to every pay period. As a result, the~~The Company recognized expense related to matching contributions of ~~$10.6~~$13.6 million, ~~$8.8~~$11.4 million, and ~~$6.9~~$11.0 million for the years ended December 31, ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively.

The Company recognized ~~$1.3~~$20.6 million, ~~$1.5~~$18.6 million, and ~~$2.5~~$10.5 million in expense related to outstanding restricted stock ~~options~~unit grants for the years ended December 31, 2022, 2021 and ~~$6.9 million, $8.2~~2020, respectively. The Company recognized $196 thousand, $1.9 million, and ~~$10.4~~$3.4 million in expense related to outstanding restricted stock grants for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively. The Company also recognized ~~$6.0 million~~$40 thousand and ~~$807~~$596 thousand in expense related to outstanding ~~restricted~~ stock ~~unit grants~~options for the years ended December 31, ~~2019~~2021 and ~~2018,~~2020, respectively. The Company ~~had $671 thousand of unrecognized compensation expense related to the outstanding stock options, $6.1 million of unrecognized compensation~~did not recognize any expense related to outstanding ~~restricted~~ stock ~~and $9.7~~options for the year ended December 31, 2022. The Company had $18.2 million of unrecognized compensation expense related to outstanding restricted stock unit grants at December 31, ~~2019.~~2022.

At the April 26, 2005 shareholders’ meeting, the shareholders of the Company approved the UMB Financial Corporation Long-Term Incentive Compensation Plan (LTIP) which became effective as of January 1, 2005. The LTIP permits the issuance to selected officers of the Company service-based restricted stock grants, performance-based restricted stock grants and non-qualified stock options. Service-based restricted stock grants contain a service requirement. The performance-based restricted grants contain performance and service requirements. The non-qualified stock option grants contain a service requirement.

At the April 23, 2013 shareholders’ meeting, the shareholders of the Company approved amendments to the LTIP Plan, including increasing the number of shares of the Company’s stock reserved for issuance under the Plan from 5.25 million shares to 7.44 million shares. Additionally, the shareholders approved increasing the maximum benefits any one eligible employee may receive under the plan during any one fiscal year from $1 million to $2 million taking into account the value of all stock options and restricted stock received.

At the April 24, 2018 shareholders’ meeting, the shareholders of the Company approved the UMB Financial Corporation Omnibus Incentive Compensation Plan which became effective as of April 24, 2018 and replaced the LTIP plan. No service-based restricted stock grants, performance-based restricted stock grants or non-qualified stock options have been issued under the LTIP since 2018.

The service-based restricted stock grants issued under the LTIP contain a service requirement with varying vesting schedules. The majority of these grants issued ~~prior to~~in 2016 ~~utilize~~through 2018 utilized a vesting schedule in which 50 percent of the shares vest after three years of service, 75 percent after four years of service and 100 percent after five years of service. The majority of these grants issued in 2016 and beyond utilize a vesting schedule in which 50 percent50% of the shares vest after two years of service, ~~75 percent~~75% after three years of service and ~~100 percent~~100% after four years of service. Certain other grants ~~utilize~~utilized vesting schedules in which the grants vest ratably over the requisite service period or contain a three-year cliff vesting.

The ~~performance-based restricted stock grants contain a service and a performance requirement. The performance requirement is based on a predetermined performance requirement over a~~ ~~three-year~~ ~~period. The service requirement portion is a three-year cliff vesting. If the minimum performance requirement is not met, the participants do not receive the shares.~~

~~The~~ dividends on ~~service and performance-based~~service-based restricted stock grants are treated as two separate transactions. First, cash dividends are paid on the restricted stock. Those cash dividends are then paid to purchase additional shares of restricted stock. Dividends earned as additional shares of restricted stock have the same terms as the associated grant. The dividends paid on the stock are recorded as a reduction to retained earnings, ~~(similar~~similar to all dividend ~~transactions).~~transactions.

The table below discloses the status of the service-based restricted shares during ~~2019:~~2022:

~~As of December 31, 2019, there was $6.1 million of unrecognized compensation cost related to the nonvested shares. The cost is expected to be recognized over a period of 1.7 years.~~ Total fair value of shares vested during the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017~~2020 was ~~$8.7~~$2.5 million, ~~$14.5~~$3.2 million, and ~~$9.9 million, respectively.~~

~~The table below discloses the status of the performance-based restricted shares during 2019:~~

As of December 31, 2019, there was $2 thousand of unrecognized compensation cost related to the nonvested shares. Total fair value of shares vested during the years ended December 31, 2019, 2018 and 2017, was $3.0 million, $2.6 million, and $1.4$9.2 million, respectively.

The non-qualified stock options carry a service requirement and grants issued prior to 2016 ~~will vest 50 percent~~vested 50% after three years, ~~75 percent~~75% after four years and ~~100 percent~~100% after five years, while grants issued in 2016 ~~and beyond will vest 50 percent~~through 2018 vested 50% after two years, ~~75 percent~~75% after three years and ~~100 percent~~100% after four years.

The table below discloses the information relating to non-qualified option activity in ~~2019~~2022 under the LTIP:

The Company uses the Black-Scholes pricing model to determine the fair value of its options. The assumptions for stock-based awards in the past three years utilized in the model are shown in the table below.

The expected option life is derived from historical exercise patterns and represents the amount of time that options granted are expected to be outstanding. The expected volatility is based on historical volatilities of the Company’s stock. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

There were no options granted during ~~2019~~2022, 2021, or ~~2018. The weighted average grant-date fair value of options granted during 2017 was $17.88.~~2020. The total intrinsic value of options exercised during the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, was ~~$1.6~~$1.2 million, ~~$6.1~~$12.9 million and ~~$8.1~~$2.0 million, respectively. As of December 31, ~~2019,~~2022, there was ~~$671 thousand of~~no unrecognized compensation cost related to the nonvested options. ~~The cost is expected to be recognized over a period of 0.9 years.~~

Cash received from options exercised under all ~~share based~~share-based compensation plans was ~~$3.8~~$1.5 million, ~~$11.3~~$18.4 million, and ~~$12.7~~$4.6 million for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively. The tax benefit realized for stock options exercised was ~~$766 thousand, $2.4~~$2.2 million, $2.6 million, and ~~$3.6 million~~$345 thousand for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017,~~2020, respectively.

The Company has no specific policy to repurchase common shares to mitigate the dilutive impact of options; however, the Company has historically made adequate discretionary repurchases of common shares in an amount that exceeds stock option exercise activity. See a description of the Company’s Repurchase Authorizations in Note 14, “Common Stock and Earnings Per Share,” in the Notes to the Consolidated Financial Statements provided in Item 8 ~~page 95~~ of this report.

At the April 24, 2018 shareholders’ meeting, the shareholders of the Company approved the UMB Financial Corporation Omnibus Incentive Compensation Plan (OICP) which became effective as of April 24, 2018. The OICP permits the issuance to key employees of the Company various types of awards, including stock options, restricted stock and restricted stock units, performance awards and other stock-based awards. Service-based restricted stock unit awards contain a service requirement and the performance-based restricted stock unit awards contain performance and service requirements. The number of shares of the Company’s stock reserved for issuance under the OICP is 5.40 million shares.

The service-basedrestricted stock unit awards are payable in shares of stock and the majority contain a service requirement with a four-year graded vesting schedule in which 50% of the units are vested after two years, 75% are vested after three years, and 100% are vested after four years. Certain other grants contain a service requirement with either a two-year cliff vesting or a three-year graded vesting schedule in which ~~50 percent~~50% of the units vest after two years of service and the remaining ~~50 percent~~50% vest after three years of service.

The performance-based restricted stock unit awards are payable in shares of stock and contain a service and a performance requirement. The performance requirement is based on two predetermined performance requirements over a three-year period. The service requirement portion is a three-year cliff vesting. If the minimum performance requirement is not met, the participants do not receive the shares.

The dividends on service-based restricted stock ~~grants and service-based restricted stock~~ units are treated as two separate transactions. First, cash dividends are paid on the restricted stock ~~or stock~~ units. Those cash dividends are then paid to purchase additional shares of restricted stock ~~or stock~~ units. Dividends earned as additional shares of restricted ~~stock or~~ stock units have the same terms as the associated grant. The dividends paid on the stock are recorded as a reduction to retained earnings, ~~(similar~~similar to all dividend ~~transactions).~~transactions. Dividends are not paid on performance-based restricted stock units.

~~As of December 31, 2019, there were 0 nonvested service-based restricted stock awards outstanding, and 0 awards were granted, cancelled, or vested during 2019. As of December 31, 2019 and 2018, there was 0 unrecognized compensation cost related to restricted stock awards. Total fair value of shares vested during the year ended December 31, 2018, was $18 thousand.~~

The table below discloses the status of the service-based restricted stock units during ~~2019:~~2022:

As of December 31, ~~2019,~~2022, there was ~~$7.5~~$14.5 million of unrecognized compensation cost related to the nonvested service-based restricted stock units. The cost is expected to be recognized over a period of ~~2.9~~2.5 years. ~~There were 0~~Total fair value of units vested during ~~2019 or 2018.~~the years ended December 31, 2022, 2021, and 2020 was $11.4 million, $6.7 million, and $0.3 million, respectively.

The table below discloses the status of the performance-based restricted stock units during ~~2019:~~2022:

As of December 31, ~~2019,~~2022, there was ~~$2.2~~$3.7 million of unrecognized compensation cost related to the nonvested performance-based restricted stock units. The cost is expected to be recognized over a period of ~~1.6~~1.7 years. ~~There were 0~~The fair value of units vested during ~~2019 or 2018.~~the years ended December 31, 2022 and 2021 was $7.4 million and $2.7 million, respectively. There were no units vested during 2020.

The Company has strategically aligned its operations into the following 4three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking ~~and Healthcare Services~~ (collectively, the Business ~~Segments)~~Segments, and each, a Business Segment). ~~Senior~~The Company’s senior executive officers regularly evaluate Business Segment financial results produced by the Company’s internal reporting system in deciding how to allocate resources and assess performance for individual Business Segments. Prior to 2018, the Company had the following 3 Business Segments: Bank, Institutional Investment Management, and Asset Servicing. During 2017, the Company sold all of the outstanding stock of Scout, its institutional investment management subsidiary. As the operations of Scout are included in discontinued operations, the Company no longer presents such operations as one of its business segments. The Company’s reportable Business Segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at December 31, ~~2019.~~2022. Previously reported results have been reclassified in this filing to conform to the current organizational structure.

The following summaries provide information about the activities of each segment:

Commercial Banking serves the commercial ~~lending and leasing, capital markets,~~banking and treasury management needs of the Company’s ~~mid-market~~small to middle-market businesses ~~and governmental entities by offering various~~through a variety of products and services. Such services include commercial loans, commercial real estate financing, commercial credit cards, letters of credit, loan syndication services, and consultative ~~services, and~~services. In addition, the Company’s specialty lending group offers a variety of ~~financial options for companies that need non-traditional banking services. Capital markets services include~~business solutions including asset-based ~~financing, asset securitization,~~lending, mezzanine debt and minority equity ~~and mezzanine financing, factoring, private and public placement of senior debt, as well as merger and acquisition consulting.~~investments. Treasury management services include depository services, account reconciliation ~~services,~~and cash management tools such as, accounts payable and receivable solutions, electronic fund transfer ~~services,~~and automated payments, controlled disbursements, lockbox services, and remote deposit capture services.

Institutional Banking is a combination of banking services, fund services, ~~and~~ asset management services, and healthcare services provided to institutional clients. This segment also provides ~~mutual fund cash management, international payments,~~fixed income sales, trading and underwriting, corporate trust and escrow services, as well as correspondent banking and investment banking. Products and services include bond trading transactions, cash letter collections, investment portfolio accounting and safekeeping, reporting for asset/liability management, and Federal funds transactions.institutional custody. Institutional Banking ~~also~~ includes UMBFS, which provides fund administration and accounting, investor services and transfer agency, ~~marketing~~ and ~~distribution, custody,~~other services to mutual fund and alternative investment ~~services.~~

~~Personal Banking~~ ~~combines consumer~~groups. Healthcare services and asset management provided to personal clients. This segment combines the Company’s consumer bank with the individual investment and wealth management solutions. The range of services offered to UMB clients varies from a basic checking account to estate planning and trust services. Products and services include the Company’s bank branches, call center, internet banking and ATM

network, deposit accounts, retail credit cards, private banking, installment loans, home equity lines of credit, residential mortgages, small business loans, brokerage services, and insurance services in addition to a full spectrum of investment advisory, trust, and custody services.

~~Healthcare Services~~ provides healthcare payment solutions including custodial services for health savings accounts (HSAs) and private label, multipurpose debit cards to insurance carriers, third-party administrators, software companies, employers, and financial institutions.

Personal Banking combines consumer banking and wealth management services offered to clients and delivered through personal relationships and the Company’s bank branches, ATM network and internet banking. Products offered include deposit accounts, retail credit cards, private banking, installment loans, home equity lines of credit, and residential mortgages. The range of client services extends from a basic checking account to estate planning and trust services and includes private banking, brokerage services, and insurance services in addition to a full spectrum of investment advisory, trust, and custody services.

The following is a description of the principal activities from which the Company generates revenue that are within the scope of ASC ~~606:~~606, Revenue from Contracts with Customers:

Trust and securities processing – Trust and securities processing income consists of fees earned on personal and corporate trust accounts, custody of securities services, trust investments and wealth management services, and mutual fund and alternative asset servicing. The performance obligations related to this revenue include items such

as performing full bond trustee service administration, investment advisory services, custody and record-keeping services, and fund administrative and accounting services. These fees are part of long-term contractual agreements and the performance obligations are satisfied upon completion of service and fees are generally a fixed flat monthly rate or based on a percentage of the account’s market value per the contract with the customer. These fees are primarily recorded within the Company’s Institutional and Personal Banking segments.

Trading and investment banking – Trading and investment banking income consists of income earned related to the Company’s trading securities portfolio, including futures hedging, dividends, bond underwriting, and other securities incomes. The vast majority of this revenue is recognized in accordance with ASC 320, Debt and Equity Securities, and is out of the scope of ASC 606. A portion of trading and investment banking represents fees earned for management fees, commissions, and underwriting of corporate bond issuances. The performance obligations related to these fees include reviewing the credit worthiness of the customer, ensuring appropriate regulatory approval and participating in due diligence. The fees are fixed per the bond prospectus and the performance obligations are satisfied upon registration approval of the bonds by the applicable regulatory agencies. Revenue is recognized at the point in time upon completion of service and when approval is granted by the regulators.

Service charges on deposits – Service charges on deposit accounts represent monthly analysis fees recognized for the services related to customer deposit accounts, including account maintenance and depository transactions processing fees. Commercial Banking and Institutional Banking depository accounts charge fees in accordance with the customer’s pricing schedule while Personal Banking account holders are generally charged a flat service fee per month. Deposit service charges for the ~~Healthcare Services~~healthcare accounts included in the Institutional Banking segment are priced according to either standard pricing schedules with individual account holders or according to service agreements between the Company and employer groups or third-party administrators. The Company satisfies the performance obligation related to providing depository accounts monthly as transactions are processed and deposit service charge revenue is recorded monthly. These fees are recognized within all Business Segments.

Insurance fees and commissions – Insurance fees and commissions includes all insurance-related fees earned, including commissions for individual life, variable life, group life, health, group health, fixed annuity, and variable annuity insurance contracts. The performance obligations related to these revenues primarily represent the placement of insurance policies with the insurance company partners. The fees are based on the contracts with insurance company partners and the performance obligations are satisfied when the terms of the policy have been agreed to and the insurance policy becomes effective.

Brokerage fees – Brokerage fees represent income earned related to providing brokerage transaction services, including commissions on equity and commodity trades, and fees for investment management, advisory and administration. The performance obligations related to transaction services are executing the specified trade and are priced according to the customer’s fee schedule. Such income is recognized at a point in time as the trade occurs and the performance obligation is fulfilled. The performance obligations related to investment management, advisory and administration include allocating customer assets across a wide range of mutual funds and other investments, on-going account monitoring and re-balancing of the portfolio. These performance obligations are satisfied over time and the related revenue is calculated monthly based on the assets under management of each customer. All material performance obligations are satisfied as of the end of each accounting period.

Bankcard fees – Bankcard fees primarily represent income earned from interchange revenue from MasterCard and Visa for the Company’s processing of debit, credit, HSA, and flexible spending account transactions. Additionally, the Company earns income and incentives related to various referrals of customers to card programs. The performance obligation for interchange revenue is the processing of each transaction through the Company’s access to the banking system. This performance obligation is completed for each individual transaction and income is recognized per transaction in accordance with interchange rates established by MasterCard and Visa. The performance obligations for various referral and incentive programs include either referring customers to certain card products or issuing exclusively branded cards for certain customer segments. The pricing of these incentive

and referral programs are in accordance with the agreement with the individual card partner. These performance obligations are completed as the referrals are made or over a period of time when the Company is exclusively issuing branded cards. For the years ended December 31, ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, the Company also has approximately ~~$38.1~~$34.5 million, ~~$36.0~~$34.0 million, and ~~$27.8~~$30.0 million of expense, respectively, recorded within the Bankcard fees line on the Company’s Consolidated Statements of Income related to rebates and rewards programs that are outside of the scope of ASC 606. All material performance obligations are satisfied as of the end of each accounting period.

~~Gains on sales of~~Investment securities ~~available for sale,~~gains, net – In the regular course of business, the Company recognizes gains on the sale of ~~available for sale~~available-for-sale securities. Additionally, the Company recognizes gains and losses on equity securities with readily determinable fair values and equity securities without readily determinable fair values. These gains and losses are recognized in accordance with ASC 320, Debt and Equity Securities, and are outside of the scope of ASC 606.

Other income – The Company recognizes other miscellaneous income through a variety of other revenue streams, the most material of which include letter of credit fees, certain loan origination fees, gains on the sale of assets, ~~gains and losses on equity-method investments,~~ derivative income, and bank-owned and company-owned life insurance income. These revenue streams are outside of the scope of ASC 606 and are recognized in accordance with the applicable U.S. GAAP. The remainder of Other income is primarily earned through transactions with personal banking customers, including wire transfer service charges, stop payment charges, and fees for items like money orders and cashier’s checks. The performance obligations of these types of fees are satisfied as transactions are completed and revenue is recognized upon transaction execution according to established fee schedules with the customers.

The Company had no material contract assets, contract liabilities, or remaining performance obligations as of December 31, ~~2019~~2022 or ~~2018.~~2021. Total receivables from revenue recognized under the scope of ASC 606 were ~~$58.0~~$76.1 million and ~~$52.2~~$73.6 million as of December 31, ~~2019~~2022 and December 31, ~~2018,~~2021, respectively. These receivables are included as part of the Other assets line on the Company’s Consolidated Balance Sheets.

The following tables depict the disaggregation of revenue according to revenue stream and Business Segment for the three years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017.~~2020. As stated in Note 12, “Business Segment Reporting,” for comparability purposes, amounts in all periods are based on methodologies in effect at December 31, ~~2019~~2022 and previously reported results have been reclassified in this filing to conform to the current organizational structure.

	Year Ended December 31, 2019													Year Ended December 31, 2022
NONINTEREST INCOME	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Revenue (Expense) out of Scope of ASC 606			Total		Commercial Banking		Institutional Banking		Personal Banking		Revenue (Expense) out of Scope of ASC 606			Total
Trust and securities processing	$	—	$	113,313	$	63,600	$	—	$	—		$	176,913	$	—	$	183,724	$	53,483	$	—		$	237,207
Trading and investment banking		—		741		—		—		22,725			23,466		—		319		—		22,882			23,201
Service charges on deposit accounts		29,716		25,170		10,964		16,753		145			82,748		34,399		43,054		7,543		171			85,167
Insurance fees and commissions		—		—		1,634		—		—			1,634		—		—		1,338		—			1,338
Brokerage fees		214		23,231		7,816		—		—			31,261		230		35,141		7,648		—			43,019
Bankcard fees		60,375		4,791		21,911		16,595		(36,945	)		66,727		61,939		21,998		23,049		(33,535	)		73,451
Gains on sales of securities available for sale, net		—		—		—		—		3,218			3,218
Investment securities gains, net															—		—		—		58,444			58,444
Other		1,211		685		3,179		795		34,933			40,803		810		1,812		2,642		27,142			32,406
Total Noninterest income	$	91,516	$	167,931	$	109,104	$	34,143	$	24,076		$	426,770
Total noninterest income														$	97,378	$	286,048	$	95,703	$	75,104		$	554,233

	Year Ended December 31, 2018													Year Ended December 31, 2021
NONINTEREST INCOME	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Revenue (Expense) out of Scope of ASC 606			Total		Commercial Banking		Institutional Banking		Personal Banking		Revenue (Expense) out of Scope of ASC 606			Total
Trust and securities processing	$	—	$	107,236	$	64,927	$	—	$	—		$	172,163	$	—	$	164,480	$	59,646	$	—		$	224,126
Trading and investment banking		—		—		—		—		15,584			15,584		—		793		—		30,146			30,939
Service charges on deposit accounts		30,313		25,174		11,551		17,123		126			84,287		33,350		45,934		6,457		315			86,056
Insurance fees and commissions		—		—		1,292		—		—			1,292		—		—		1,309		—			1,309
Brokerage fees		194		17,026		8,587		—		—			25,807		107		4,069		7,995		—			12,171
Bankcard fees		59,596		5,816		22,080		16,264		(35,236	)		68,520		56,918		19,117		21,779		(33,238	)		64,576
Gains on sales of securities available for sale, net		—		—		—		—		578			578
Investment securities gains, net															—		—		—		5,057			5,057
Other		2,204		644		3,521		702		26,396			33,467		889		1,634		2,622		37,796			42,941
Total Noninterest income	$	92,307	$	155,896	$	111,958	$	34,089	$	7,448		$	401,698
Total noninterest income														$	91,264	$	236,027	$	99,808	$	40,076		$	467,175

	Year Ended December 31, 2017													Year Ended December 31, 2020
NONINTEREST INCOME	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Revenue (Expense) out of Scope of ASC 606			Total		Commercial Banking		Institutional Banking		Personal Banking		Revenue (Expense) out of Scope of ASC 606			Total
Trust and securities processing	$	—	$	110,237	$	66,409	$	—	$	—		$	176,646	$	—	$	131,249	$	63,397	$	—		$	194,646
Trading and investment banking		—		712		—		—		22,471			23,183		—		755		—		32,190			32,945
Service charges on deposit accounts		31,251		29,043		11,818		15,454		114			87,680		30,470		46,611		6,587		211			83,879
Insurance fees and commissions		—		—		1,972		—		—			1,972		—		—		1,369		—			1,369
Brokerage fees		160		14,630		8,415		3		—			23,208		245		16,075		8,030		—			24,350
Bankcard fees		53,239		6,176		22,918		17,791		(27,094	)		73,030		52,257		17,731		19,621		(29,065	)		60,544
Gains on sales of securities available for sale, net		—		—		—		—		4,192			4,192
Investment securities gains, net															—		—		—		120,634			120,634
Other		1,955		769		2,918		399		27,610			33,651		1,135		1,469		2,603		36,592			41,799
Total Noninterest income	$	86,605	$	161,567	$	114,450	$	33,647	$	27,293		$	423,562
Total noninterest income														$	84,107	$	213,890	$	101,607	$	160,562		$	560,166

The following table summarizes the share transactions for the three years ended December 31, ~~2019~~2022 (in thousands, except for share data):

The Board authorized the repurchase of up to 2 million shares of common stock annually at its ~~2017, 2018~~2020, 2021 and ~~2019~~2022 meetings. During ~~2018,~~2020, the Company entered into an agreement with BAML to repurchase an aggregate of ~~$50.0~~

$30.0 million of the Company’s common stock through an ~~ASR.~~accelerated share repurchase agreement (ASR). Under the ASR, the Company repurchased a total of ~~780,321~~653,498 shares. The final settlement of the transactions under the ASR occurred in ~~December 2018.~~the second quarter of 2020. Other than purchases pursuant to the ASR, all share purchases pursuant to the Repurchase Authorizations are intended to be within the scope of Rule 10b-18 promulgated under the Exchange Act. Rule 10b-18 provides a safe harbor for purchases in a given day if the Company satisfies the manner, timing and volume conditions of the rule when purchasing its own common shares. The Company has not made any repurchase of its securities other than pursuant to the Repurchase Authorizations.

Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share gives effect to all potential common shares that were outstanding during the year.

The shares used in the calculation of basic and diluted earnings per share, are shown below:

In the normal course of business, the Company is a party to financial instruments with off-balance-sheet risk in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, commercial letters of credit, standby letters of credit, and futures contracts. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Balance Sheets. The contract or notional amount of those instruments reflects the extent of involvement the Company has in particular classes of financial instruments. Many of the commitments expire without being drawn upon; therefore, the total amount of these commitments does not necessarily represent the future cash requirements of the Company.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit, commercial letters of credit, and standby letters of credit is

represented by the contract or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the agreement. These conditions generally include, but are not limited to, each customer being current as to repayment terms of existing loans and no deterioration in the customer’s financial condition. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The interest rate is generally a variable rate. If the commitment has a fixed interest rate, the rate is generally not set until such time as credit is extended. For credit card customers, the Company has the right to change or terminate terms or conditions of the credit card account at any time. Since a large portion of the commitments and unused credit card lines are never actually drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on an individual basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral pledged by customers varies but may include accounts receivable, inventory, real estate, plant and equipment, stock, securities and certificates of deposit.

Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, as a general rule, drafts will be drawn when the underlying transaction is consummated as intended.

Standby letters of credit are conditional commitments issued by the Company payable upon the non-performance of a customer’s obligation to a third party. The Company issues standby letters of credit for terms ranging from three months to six years. The Company generally requires the customer to pledge collateral to support the letter of credit. The maximum liability to the Company under standby letters of credit at December 31, ~~2019~~

2022 and ~~2018,~~2021, was ~~$299.9~~$437.0 million and ~~$298.9~~$365.0 million, respectively. As of December 31, ~~2019~~2022 and ~~2018,~~2021, standby letters of credit totaling ~~$3.7~~$25.5 million and ~~$36.5~~$28.6 million, respectively, were with related parties to the Company.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. The Company holds collateral supporting those commitments when deemed necessary. Collateral varies but may include such items as those described for commitments to extend credit.

Futures contracts are contracts for delayed delivery of securities or money market instruments in which the seller agrees to make delivery at a specified future date, of a specified instrument, at a specified yield. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in securities values and interest rates. Instruments used in trading activities are carried at fair value and gains and losses on futures contracts are settled in cash daily. Any changes in the fair value are recognized in trading and investment banking income.

The Company uses contracts to offset interest rate risk on specific securities held in the trading portfolio. As of December 31, ~~2019~~2022 and ~~2018,~~2021, there were 0no notional amounts outstanding for these contracts. There were 0no open futures contract positions during the ~~year~~years ended December 31, ~~2019~~2022 or ~~2018. Net futures activity resulted in gains of $5 thousand for the year ended December 31, 2019.~~2021. There was 0no net futures activity for the ~~year~~years ended December 31, ~~2018. Net futures activity for the year ended December 31, 2017 resulted in losses of $6 thousand.~~2022, 2021, or 2020. The Company controls the credit risk of its futures contracts through credit approvals, limits and monitoring procedures.

The Company also enters into foreign exchange contracts on a limited basis. For operating purposes, the Company maintains certain balances in foreign banks. Foreign exchange contracts are purchased on a monthly basis to avoid foreign exchange risk on these foreign balances. The Company will also enter into foreign exchange contracts to facilitate foreign exchange needs of customers. The Company will enter into a contract to buy or sell a foreign currency at a future date only as part of a contract to sell or buy the foreign currency at the same future date to a customer. During ~~2019,~~2022, contracts to purchase and to sell foreign currency averaged approximately ~~$18.4~~$13.8 million compared to ~~$23.9~~$21.4 million during ~~2018.~~2021. The net gains on these foreign exchange contracts for ~~2019, 2018~~2022, 2021 and ~~2017~~2020 were ~~$1.8~~$3.4 million, ~~$2.1~~$2.6 million and $1.9 million, respectively.

With respect to group concentrations of credit risk, most of the Company’s business activity is with customers in the states of Missouri, Kansas, Colorado, Oklahoma, Nebraska, Arizona, Illinois, and Texas. At December 31, ~~2019,~~2022, the Company did not have any significant credit concentrations in any particular industry.

The following table summarizes the Company’s off-balance sheet financial instruments as described above (in thousands):

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate is based on expected utilization rates by portfolio segment. Utilization rates are influenced by historical trends and current conditions. The expected utilization rates are applied to the total commitment to determine the expected amount to be funded. The allowance for off-balance sheet credit exposure is calculated by applying portfolio segment expected credit loss rates to the expected amount to be funded.

The following categories of off-balance sheet credit exposures have been identified:

Revolving Lines of Credit: includes commercial, construction, agricultural, personal, and home-equity. Risk inherent to revolving lines of credit often are related to the susceptibility of an individual or business experiencing unpredictable cash flow or financial troubles, thus leading to payment default. During these financial troubles, the borrower could have less than desirable assets collateralizing the revolving line of credit. The financial strain the borrower is experiencing could lead to drawing against the line without the ability to pay the line down.

Non-Revolving Lines of Credit: include commercial and personal. Lines that do not carry a revolving feature are generally associated with a specific expenditure or project, such as to purchase equipment or the construction of real estate. The predominate risk associated with non-revolving lines is the diversion of funds for other expenditures. If the funds get diverted, the contributory value to collateral suffers.

Letters of Credit: includes standby letters of credit. Generally, a standby letter of credit is established to provide assurance to the beneficiary that the applicant will perform certain obligations arising out of a separate transaction between the beneficiary and the applicant. These obligations might be the performance of a service or delivery of a product. If the obligations are not met, it gives the beneficiary the right to draw on the letter of credit.

The ACL for off-balance sheet credit exposures was $3.1 million and $2.6 million as of December 31, 2022 and 2021, respectively, and was recorded in the Accrued expenses and taxes line of the Company’s Consolidated Balance Sheets. Provision of $500 thousand was recorded for off-balance sheet credit exposures for the year ended December 31, 2022. A reduction of $3.0 million of provision for off-balance sheet credit exposures was recorded for the year ended December 31, 2021. Provision for off-balance sheet credit exposures is recorded in the Provision for credit losses line of the Company’s Consolidated Statements of Income.

On November 17, 2017, the Company closed the sale of all of the outstanding stock of Scout, its institutional investment management subsidiary, for $172.5 million in cash, which was subject to customary post-closing purchase adjustments. The gain recorded on the disposal of Scout was $103.6 million.

This table summarizes the components of income from discontinued operations, net of taxes, for the years ended December 31, 2019, 2018, and 2017 presented in the Consolidated Statements of Income (in thousands):

~~The components of net cash provided by operating and investing activities of discontinued operations included in the Consolidated Statements of Cash Flows are as follows (in thousands):~~

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act). The Tax Act included numerous changes to existing tax law, including among other things, a permanent reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018.

Income taxes ~~on continuing operations~~as set forth below produce effective income tax rates of ~~14.8~~ ~~percent~~18.9% in ~~2019, 12.2 percent~~2022, 17.7% in ~~2018,~~2021, and ~~22.6~~ ~~percent~~15.5% in ~~2017.~~2020. These percentages are computed by dividing ~~income~~Income tax expense by Income ~~from continuing operations~~ before income taxes.

Income tax expense ~~from continuing operations~~ includes the following components (in thousands):

Income taxes from discontinued operations produce effective income tax rates of 18.5 percent in 2018 and 36.6 percent in 2017. These percentages are computed by dividing income tax expense by Income from discontinued operations before income taxes.

~~Income tax expense from discontinued operations includes the following components (in thousands):~~

The reconciliation between the income tax expense and the amount computed by applying the statutory federal tax rate of 21% for ~~2019 and 2018 and 35% for 2017 to~~ income ~~from continuing operations~~ before income taxes is as follows (in thousands):

In preparing its tax returns, the Company is required to interpret tax laws and regulations to determine its taxable income. Periodically, the Company is subject to examinations by various taxing authorities that may give

rise to differing interpretations of these laws. Upon examination, agreement of tax liabilities between the Company and the multiple tax jurisdictions in which the Company files tax returns may ultimately be different. During 2022, the Internal Revenue Service closed the examination of tax years 2014 and 2015 with no changes to the tax returns as filed. The Company is in the examination process with ~~the Internal Revenue Service~~two state tax authorities for tax years ~~2014~~2018, 2019, and ~~2015 and with one state taxing authority for tax years 2015 and 2016.~~2020. The Company believes the aggregate amount of any additional liabilities that may result from these examinations, if any, will not have a material adverse effect on the financial condition, results of operations, or cash flows of the Company.

Deferred income taxes result from differences between the carrying value of assets and liabilities measured for financial reporting and the tax basis of assets and liabilities for income tax return purposes.

The significant components of deferred tax assets and liabilities are reflected in the following table (in thousands):

As of December 31, 2022, state net operating loss carryforwards of approximately $544 thousand are included in the miscellaneous deferred tax assets line item ~~above are state~~above. These deferred tax assets include approximately $16.5 million related to net operating ~~loss carryforwards~~losses that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods. Most of ~~approximately $1.1 million as of December 31, 2019. These~~these net operating losses expire at various times between ~~2020~~2023 and ~~2039. The~~2041 and some have an indefinite carryforward. During the year ended December 31, 2022, the Company ~~has~~released a ~~full~~portion of the state valuation allowance of $1.2 million, due to positive evidence outweighing negative evidence, specifically no longer being in a cumulative loss position in certain jurisdictions. As of December 31, 2022 and 2021, the Company had a valuation allowance of $13 thousand and $514 thousand, respectively, for ~~a majority of these~~certain state net operating losses as they are not expected to be realized. In addition, as of December 31, 2022 and 2021, the Company ~~has~~had a valuation allowance of ~~$1.2 million~~$167 thousand and $821 thousand, respectively, to reduce certain other state deferred tax assets to the amount of tax benefit management believes it will be more likely than not ~~realize.~~realized.

The net deferred tax asset at December 31, 2022 is included in the Other assets line of the Company’s Consolidated Balance Sheets while the net deferred tax liability at December 31, ~~2019~~2021 is included in the Accrued expenses and taxes ~~line of the Company’s Consolidated Balance Sheets, and the net deferred tax asset at December 31, 2018 is included in the Other assets~~ line of the Company’s Consolidated Balance Sheets.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for tax years prior to ~~2014~~2017 in the jurisdictions in which it files.

The gross amount of unrecognized tax benefits totaled ~~$5.8~~$9.4 million and ~~$4.9~~$8.8 million at December 31, ~~2019~~2022 and ~~2018,~~2021, respectively. The total amount of unrecognized tax benefits, net of associated deferred tax benefit, that would impact the effective tax rate, if recognized, would be ~~$4.6~~$7.4 million and ~~$3.8~~$7.0 million at December 31, ~~2019~~2022 and December 31, ~~2018,~~2021, respectively. The unrecognized tax benefits relate to state tax positions that have a

corresponding federal tax benefit. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, the Company does not expect this change to have a material impact on the financial condition, results of operations, or cash flows of the Company.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loans and borrowings. The Company also has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk of the Company’s assets or liabilities. The Company has entered into an offsetting position for each of these

derivative instruments with a matching instrument from another financial institution in order to minimize its net risk exposure resulting from such transactions.

The table below presents the fair value of the Company’s derivative financial instruments as of December 31, ~~2019~~2022 and ~~2018.~~2021. The Company’s derivative assets and derivative liabilities are located within Other assets and Other liabilities, respectively, on the Company’s Consolidated Balance Sheets.

Derivative fair values are determined using valuation techniques including discounted cash flow analysis on the expected cash flows from each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

This table provides a summary of the fair value of the Company’s derivative assets and liabilities as of December 31, ~~2019~~2022 and December 31, ~~2018~~2021 (in thousands):

The Company is exposed to changes in the fair value of certain of its fixed-rate assets and liabilities due to changes in the benchmark interest rate, LIBOR. Interest rate swaps designated as fair value hedges involve making fixed rate payments to a counterparty in exchange for the Company receiving variable rate payments over the life of the agreements without the exchange of the underlying notional amount. As of December 31, ~~2019 and 2018,~~2022, the Company had 1three interest rate ~~swap~~swaps that ~~was~~were designated as a fair value ~~hedge~~hedges of interest rate risk associated with the Company’s ~~fixed rate loan assets. This swap~~municipal bond securities. These swaps had a notional amount of ~~$5.3 million and $5.6~~$254.6 million as of December 31, ~~2019 and 2018, respectively.~~2022. As of December 31, 2021, the Company had 10 interest rate swaps that were designated as fair value hedges of interest rate risk associated with the Company’s municipal bond securities. These swaps had a notional amount of $1.0 billion as of December 31, 2021. During the year ended December 31, 2022, the Company terminated seven fair value hedges. In connection with these terminated hedges, $58.1 million of hedging adjustments will be amortized through the contractual maturity date of each respective hedged item.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in ~~earnings.~~Interest income in the Consolidated Statements of Income.

The Company’s objective in using interest rate derivatives is to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and floors as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of December 31, ~~2019~~2022 and ~~2018,~~2021, the Company had 2two interest rate swaps that were designated as cash flow hedges of interest rate risk associated with the Company’s variable-rate subordinated debentures issued by Marquette Capital Trusts III and IV. These swaps had an aggregate notional amount of $51.5 million at both December 31, ~~2019~~2022 and ~~2018.~~2021. Interest rate floors designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates fall below the

strike rate on the contract in exchange for an upfront premium. ~~As of December 31, 2019,~~On August 28, 2020, the Company ~~had 1~~terminated an interest rate floor with a notional amount of $750.0 ~~million that was designated as a cash flow hedge~~million. At the date of termination, the interest rate ~~risk.~~floor had a net asset fair value of $34.1 million. The ~~Company did 0t have any~~gross unrealized gain on the terminated interest rate ~~floors designated as cash flow hedges~~floor remaining in AOCI was $7.4 million, or $5.6 million net of tax, and $12.3 million, or $9.4 million net of tax, as of December 31, ~~2018.~~2022 and 2021, respectively. The unrealized gain will be reclassified into Interest income as the underlying forecasted transactions impact earnings through the original maturity of the hedged forecasted transactions. The total remaining term over which the unrealized gain will be reclassified into earnings is 1.7 years.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and is subsequently reclassified into interest expense and interest income in the period during which the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to interest rate swap derivatives will be reclassified to Interest expense as interest payments are received or paid on the Company’s ~~derivatives.~~hedged items. Amounts reported in AOCI related to interest rate floor derivatives will be reclassified to Interest income as interest payments are received or paid on the Company’s ~~derivatives.~~hedged items. The Company expects to reclassify ~~$518 thousand from AOCI to Interest expense and $2.7~~$1.2 million from AOCI as a reduction to Interest expense and $4.7 million from AOCI to Interest income during the next 12 months. As of December 31, ~~2019,~~2022, the Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of ~~16.72~~13.7 years.

The remainder of the Company’s derivatives are not designated in qualifying hedging relationships. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously offset by interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. As of December 31, ~~2019,~~2022, the Company had ~~142~~230 interest rate swaps with an aggregate notional amount of ~~$1.9~~$3.5 billion related to this program. As of December 31, ~~2018,~~2021, the Company had ~~110~~188 interest rate swaps with an aggregate notional amount of ~~$1.3~~$2.9 billion.

Effect of Derivative Instruments on the Consolidated Statements of Income and Accumulated Other Comprehensive Income

This table provides a summary of the amount of gain or loss recognized in Other noninterest expense in the Consolidated Statements of Income for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017~~2020 related to the Company’s derivative assets and liabilities (in thousands):

This table provides a summary of the effect of hedges on AOCI in the Consolidated Statements of Comprehensive Income for the years ended December 31, ~~2019, 2018,~~2022, 2021, and ~~2017~~2020 related to the Company’s derivative assets and liabilities (in thousands):

The Company has agreements with certain of its derivative counterparties that contain a provision that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

~~As of December 31, 2019, the termination value of derivatives in a net liability position, which includes accrued interest, related to these agreements was $115 thousand.~~ The Company has minimum collateral posting thresholds with certain of its derivative counterparties. As of December 31, ~~2019,~~2022, the Company had not posted ~~$400 thousand of collateral.~~any collateral as there were no derivatives in a net liability position. If the Company had breached any of these provisions at December 31, ~~2019,~~2022, it could have been required to settle its obligations under the agreements at the termination value.

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2019~~2022 and ~~2018~~2021 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.

Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

	Fair Value Measurement at December 31, 2019 Using								Fair Value Measurement at December 31, 2022 Using
Description	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
U.S. Treasury									$	580	$	580	$	—	$	—
U.S. Agencies	$	1,246	$	—	$	1,246	$	—		7,558		—		7,558		—
Mortgage-backed		392		—		392		—		—		—		—		—
State and political subdivisions		21,764		—		21,764		—		8,038		—		8,038		—
Corporates		5,649		5,649		—		—		1,024		1,024		—		—
Trading - other		16,567		16,567		—		—
Trading – other										780		780		—		—
Trading securities		45,618		22,216		23,402		—		17,980		2,384		15,596		—
U.S. Treasury		64,078		64,078		—		—		777,070		777,070		—		—
U.S. Agencies		93,021		—		93,021		—		171,296		—		171,296		—
Mortgage-backed		4,071,794		—		4,071,794		—		3,982,122		—		3,982,122		—
State and political subdivisions		3,029,917		—		3,029,917		—		1,362,407		—		1,362,407		—
Corporates		188,552		188,552		—		—		367,500		367,500		—		—
Available for sale securities		7,447,362		252,630		7,194,732		—
Collateralized loan obligations										345,952		—		345,952		—
Securities available for sale										7,006,347		1,144,570		5,861,777		—
Equity securities with readily determinable fair values										10,782		10,782		—		—
Company-owned life insurance		63,900		—		63,900		—		56,769		—		56,769		—
Bank-owned life insurance		280,709		—		280,709		—		510,293		—		510,293		—
Derivatives		55,276		—		55,276		—		48,121		—		48,121		—
Total	$	7,892,865	$	274,846	$	7,618,019	$	—	$	7,650,292	$	1,157,736	$	6,492,556	$	—
Liabilities
Derivatives	$	5,997	$	—	$	5,997	$	—	$	126,334	$	—	$	126,334	$	—
Securities sold not yet purchased		14,599		—		14,599		—		3,503		—		3,503		—
Total	$	20,596	$	—	$	20,596	$	—	$	129,837	$	—	$	129,837	$	—

Fair Value Measurement at December 31, 2018 Using

Description

December 31,
2018

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Assets

U.S. Agencies

$
3,063

$
—

$
3,063

$
—

Mortgage-backed

713

—

713

—

State and political subdivisions

37,974

—

37,974

—

Corporates

7,125

7,125

—

—

Trading - other

12,136

12,136

—

—

Trading securities

61,011

19,261

41,750

—

U.S. Treasury

247,130

247,130

—

—

U.S. Agencies

199

—

199

—

Mortgage-backed

3,812,211

—

3,812,211

—

State and political subdivisions

2,483,260

—

2,483,260

—

Available for sale securities

6,542,800

247,130

6,295,670

—

Company-owned life insurance

54,152

—

54,152

—

Bank-owned life insurance

273,553

—

273,553

—

Derivatives

9,339

—

9,339

—

Total

$
6,940,855

$
266,391

$
6,674,464

$
—

Liabilities

Derivatives

$
5,513

$
—

$
5,513

$
—

Securities sold not yet purchased

27,238

—

27,238

—

Total

$
32,751

$
—

$
32,751

$
—

	Fair Value Measurement at December 31, 2021 Using
Description	December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
U.S. Treasury	$	1,625	$	1,625	$	—	$	—
U.S. Agencies		2,159		—		2,159		—
Mortgage-backed		2,060		—		2,060		—
State and political subdivisions		21,671		—		21,671		—
Corporates		4,000		4,000		—		—
Trading – other		360		360		—		—
Trading securities		31,875		5,985		25,890		—
U.S. Treasury		69,174		69,174		—		—
U.S. Agencies		124,932		—		124,932		—
Mortgage-backed		7,965,055		—		7,965,055		—
State and political subdivisions		3,422,688		—		3,422,688		—
Corporates		317,846		317,846		—		—
Collateralized loan obligations		76,819		—		76,819		—
Securities available for sale		11,976,514		387,020		11,589,494		—
Equity securities with readily determinable fair values		64,149		64,149		—		—
Company-owned life insurance		65,245		—		65,245		—
Bank-owned life insurance		498,373		—		498,373		—
Derivatives		57,680		—		57,680		—
Total	$	12,693,836	$	457,154	$	12,236,682	$	—
Liabilities
Derivatives	$	13,944	$	—	$	13,944	$	—
Securities sold not yet purchased		3,197		—		3,197		—
Total	$	17,141	$	—	$	17,141	$	—

The following methods and assumptions were used to estimate the fair value of each class of financial instruments measured on a recurring basis:

Trading Securities Fair values for trading securities (including financial futures), are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices for similar securities.

Securities Available for Sale Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs. On an annual basis, the Company compares a sample of these prices to other independent sources for the same securities. Additionally, throughout the year, if securities are sold, comparisons are made between the pricing services prices and the market prices at which the securities were sold. Variances are analyzed, and, if appropriate, additional research is conducted with the third-party pricing services. Based on this research, the pricing services may affirm or revise their quoted price. No significant adjustments have been made to the prices provided by the pricing services. The pricing services also provide documentation on an ongoing basis that includes reference data, inputs and methodology by asset class, which is reviewed to ensure that security placement within the fair value hierarchy is appropriate.

Equity securities with readily determinable fair values Fair values are based on quoted market prices.

Company-owned Life Insurance Fair value is equal to the cash surrender value of the life insurance policies.

Bank-owned Life Insurance Fair value is equal to the cash surrender value of the life insurance policies.

Derivatives Fair values are determined using valuation techniques including discounted cash flow analysis on the expected cash flows from each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the

Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Securities sold not yet purchased Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs.

Assets measured at fair value on a non-recurring basis as of December 31, ~~2019~~2022 and ~~2018~~2021 (in thousands):

Valuation methods for instruments measured at fair value on a non-recurring basis

The following methods and assumptions were used to estimate the fair value of each class of financial instruments measured on a non-recurring basis:

~~Impaired loans~~Collateral Dependent Assets ~~While~~Collateral dependent assets are assets evaluated as part of the ~~overall loan portfolio~~ACL on an individual basis. Those assets for which there is ~~not carried~~an associated allowance are considered financial assets measured at fair value ~~adjustments~~on a non-recurring basis. Adjustments are recorded on certain ~~loans~~assets to reflect write-downs that are based on the external appraised value of the underlying collateral. The external appraisals are generally based on recent sales of comparable properties which are then adjusted for the unique characteristics of the property being valued. In the case of non-real estate collateral, reliance is placed on a variety of sources, including external estimates of value and judgments based on the experience and expertise of internal specialists within the Company’s property management group and the Company’s credit department. The valuation of ~~the~~collateral dependent assets and impaired loans isare reviewed on a quarterly basis. Because many of these inputs are not observable, the measurements are classified as Level 3.

Other real estate owned Other real estate owned consists of loan collateral which has been repossessed through foreclosure. This collateral is comprised of commercial and residential real estate and other non-real estate property, including auto, recreational and marine vehicles. Other real estate owned is recorded as held for sale initially at the fair value of the collateral less estimated selling costs. The initial valuation of the foreclosed property

is obtained through an appraisal process similar to the process described in the collateral dependent/impaired loans paragraph above. Subsequent to foreclosure, valuations are reviewed quarterly and updated periodically, and the assets may be marked down further, reflecting a new cost basis. Fair value measurements may be based upon appraisals, third-party price opinions, or internally developed pricing methods and those measurements are classified as Level 3.

Fair value disclosures require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The estimated fair value of the Company’s financial instruments at December 31, ~~2019~~2022 and ~~2018~~2021 are as follows (in thousands):

	Fair Value Measurement at December 31, 2019 Using										Fair Value Measurement at December 31, 2022 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value		Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
FINANCIAL ASSETS
Cash and short-term investments	$	3,276,794	$	1,701,449	$	1,575,345	$	—	$	3,276,794	$	2,638,384	$	1,686,787	$	951,597	$	—	$	2,638,384
Securities available for sale		7,447,362		252,630		7,194,732		—		7,447,362		7,006,347		1,144,570		5,861,777		—		7,006,347
Securities held to maturity		1,116,102		—		1,082,345		—		1,082,345
Securities held to maturity (exclusive of allowance for credit losses)												5,861,599		—		5,280,659		—		5,280,659
Trading securities		45,618		22,216		23,402		—		45,618		17,980		2,384		15,596		—		17,980
Other securities		108,420		—		108,420		—		108,420		349,758		10,782		338,976		—		349,758
Loans (exclusive of allowance for loan loss)		13,439,525		—		13,601,595		—		13,601,595
Loans (exclusive of allowance for credit losses)												21,033,167		—		20,816,899		—		20,816,899
Derivatives		55,276		—		55,276		—		55,276		48,121		—		48,121		—		48,121
FINANCIAL LIABILITIES
Demand and savings deposits		20,376,880		20,376,880		—		—		20,376,880		31,721,995		31,721,995		—		—		31,721,995
Time deposits		1,226,364		—		1,226,646		—		1,226,646		917,138		—		917,138		—		917,138
Other borrowings		1,896,508		31,873		1,864,635		—		1,896,508		2,222,167		62,480		2,159,687		—		2,222,167
Long-term debt		97,490		—		97,831		—		97,831		381,311		—		418,737		—		418,737
Derivatives		5,997		—		5,997		—		5,997		126,334		—		126,334		—		126,334
OFF-BALANCE SHEET ARRANGEMENTS
Commitments to extend credit for loans										5,908										9,260
Commercial letters of credit										113										185
Standby letters of credit										2,966										3,982

	Fair Value Measurement at December 31, 2018 Using										Fair Value Measurement at December 31, 2021 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value		Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
FINANCIAL ASSETS
Cash and short-term investments	$	2,319,954	$	1,693,453	$	626,501	$	—	$	2,319,954	$	10,472,084	$	9,255,727	$	1,216,357	$	—	$	10,472,084
Securities available for sale		6,542,800		247,130		6,295,670		—		6,542,800		11,976,514		387,020		11,589,494		—		11,976,514
Securities held to maturity		1,170,646		—		1,070,532		—		1,070,532
Securities held to maturity (exclusive of allowance for credit losses)												1,480,416		—		1,442,391		—		1,442,391
Trading securities		61,011		19,261		41,750		—		61,011		31,875		5,985		25,890		—		31,875
Other securities		73,692		—		73,692		—		73,692		327,098		64,149		262,949		—		327,098
Loans (exclusive of allowance for loan loss)		12,181,342		—		12,190,599		—		12,190,599
Loans (exclusive of allowance for credit losses)												17,172,148		—		17,506,662		—		17,506,662
Derivatives		9,339		—		9,339		—		9,339		57,680		—		57,680		—		57,680
FINANCIAL LIABILITIES
Demand and savings deposits		18,134,512		18,134,512		—		—		18,134,512		34,748,286		34,748,286		—		—		34,748,286
Time deposits		1,146,748		—		1,146,748		—		1,146,748		851,641		—		851,641		—		851,641
Other borrowings		1,518,920		6,679		1,512,241		—		1,518,920		3,238,435		12,597		3,225,838		—		3,238,435
Long-term debt		82,671		—		82,818		—		82,818		271,544		—		285,961		—		285,961
Derivatives		5,513		—		5,513		—		5,513		13,944		—		13,944		—		13,944
OFF-BALANCE SHEET ARRANGEMENTS
Commitments to extend credit for loans										5,425										7,841
Commercial letters of credit										115										179
Standby letters of credit										2,658										3,553

Cash and short-term investments The carrying amounts of cash and due from banks, federal funds sold and resell agreements are reasonable estimates of their fair values.

Securities held to maturity ~~Fair~~For U.S. Agency and mortgage-backed securities, as well as general obligation bonds in the State and political subdivision portfolio, fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs. On an annual basis, the Company compares a sample of ~~held-to-maturity securities~~these prices to other independent sources for the same securities. Variances are analyzed, and, if appropriate, additional research is conducted with the third-party pricing services. Based on this research, the pricing services may affirm or revise their quoted price. No significant adjustments have been made to the prices provided by the pricing services. The pricing services also provide documentation on an ongoing basis that includes reference data, inputs and methodology by asset class, which is reviewed to ensure that security placement within the fair value hierarchy is appropriate. For private placement bonds in the State and political subdivision portfolio, fair values are estimated by discounting the future cash flows using current market rates.

Other securities Amount consists of FRB and FHLB stock held by the Company, ~~PCM~~equity securities with readily determinable fair values, and equity securities without readily determinable fair values, including equity-method investments and other miscellaneous investments. The carrying amount of the FRB and FHLB stock equals its fair value because the shares can only be redeemed by the FRB and FHLB at their carrying amount. ~~The~~Equity securities with readily determinable fair values are measured at fair value ~~of PCM marketable equity-method investments are based on~~using quoted market ~~prices used to estimate the value of the underlying investment. The Company’s investment in other marketable~~prices. Equity securities was fully distributed during 2019. For the PCM non-marketable equity-method investments, the Company’s proportionate share of the income or loss is recognized on a one-quarter lag based on the valuation of the underlying investment(s). Other non-marketable securitieswithout readily determinable fair values are carried at cost, which approximates fair value.

Loans Fair values are estimated for portfolios with similar financial characteristics. Loans are segregated by type, such as commercial, real estate, consumer, and credit card. Each loan category is further segmented into fixed and variable interest rate categories. The fair value of loans ~~are~~is estimated by discounting the future cash flows. The discount rates used are estimated using comparable market rates for similar types of instruments adjusted to be commensurate with the credit risk, overhead costs, and optionality of such instruments.

Demand and savings deposits The fair value of demand deposits and savings accounts was the amount payable on demand at December 31, ~~2019~~2022 and ~~2018.~~2021.

Time deposits The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates that are currently offered for deposits of similar remaining maturities.

Other borrowings The carrying amounts of federal funds purchased, repurchase agreements and other short-term debt are reasonable estimates of their fair value because of the short-term nature of their maturities.Federal funds purchased are classified as Level 1 based on availability of quoted market prices and repurchase agreements and other short-term debt are classified as Level 2.

Long-term debt Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.

Other off-balance sheet instruments The fair value of loan commitments and letters of credit are determined based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the present creditworthiness of the counterparties. Neither the fees earned during the year on these instruments nor their fair value at period-end are significant to the Company’s consolidated financial position.

	Year Ended December 31,									Year Ended December 31,
	2019			2018			2017			2022			2021			2020
INCOME
Dividends and income received from subsidiaries	$	56,500		$	47,250		$	55,000		$	57,000		$	129,217		$	78,360
Service fees from subsidiaries		52,416			50,858			43,691			74,472			60,346			49,191
Other		11,249			651			10,390			55,988			12,771			9,241
Total income		120,165			98,759			109,081			187,460			202,334			136,792
EXPENSE
Salaries and employee benefits		57,487			46,707			43,716			60,094			62,109			56,919
Other		21,124			19,149			18,652			35,943			31,022			22,657
Total expense		78,611			65,856			62,368			96,037			93,131			79,576
Income before income taxes and equity in undistributed earnings of subsidiaries		41,554			32,903			46,713			91,423			109,203			57,216
Income tax expense (benefit)		12,201			(4,432	)		(1,202	)		10,958			(10,322	)		(6,230	)
Income before equity in undistributed earnings of subsidiaries		29,353			37,335			47,915			80,465			119,525			63,446
Equity in undistributed earnings of subsidiaries:
Banks		221,215			156,771			140,873			344,567			263,084			234,014
Non-Banks		(6,968	)		2,154			(5,812	)		6,650			(29,591	)		(10,958	)
Income from continuing operations		243,600			196,260			182,976
(Loss) income from discontinued operations		—			(747	)		64,129
Net income	$	243,600		$	195,513		$	247,105		$	431,682		$	353,018		$	286,502
Other comprehensive income (loss)		178,962			(50,257	)		12,017
Comprehensive income	$	422,562		$	145,256		$	259,122
Other comprehensive (loss) income											(829,049	)		(192,026	)		235,160
Comprehensive (loss) income										$	(397,367	)	$	160,992		$	521,662

	Year Ended December 31,									Year Ended December 31,
	2019			2018			2017			2022			2021			2020
OPERATING ACTIVITIES
Net income	$	243,600		$	195,513		$	247,105		$	431,682		$	353,018		$	286,502
Adjustments to reconcile net income to cash provided by operating activities:
Equity in earnings of subsidiaries		(270,747	)		(206,175	)		(146,367	)		(408,217	)		(362,709	)		(301,415	)
Dividends received from subsidiaries		56,500			47,250			96,391			57,000			129,217			78,360
Depreciation and amortization		(78	)		486			424			12			15			15
Amortization of debt issuance costs											556			450			131
Equity based compensation		14,850			11,073			13,316			21,491			21,208			15,120
Net tax benefit related to equity compensation plans		766			2,364			3,612
Gains on sales of assets		—			—			(103,715	)
Changes in other assets and liabilities, net		(7,864	)		(5,994	)		5,424			12,522			(4,049	)		(1,724	)
Net cash provided by operating activities		37,027			44,517			116,190			115,046			137,150			76,989
INVESTING ACTIVITIES
Net capital investment in subsidiaries		(331	)		(17,961	)		(37,474	)		(207,575	)		(60,264	)		(96,678	)
Net cash activity from divestitures and acquisitions		—			—			168,361
Net decrease in securities available for sale		21			1,062			1,575
Net cash (used in) provided by investing activities		(310	)		(16,899	)		132,462
Net decrease (increase) in investment securities											40,235			(11,051	)		(29,648	)
Net cash used in investing activities											(167,340	)		(71,315	)		(126,326	)
FINANCING ACTIVITIES
Cash dividends paid		(59,436	)		(58,279	)		(51,876	)		(72,030	)		(66,750	)		(60,281	)
Proceeds from short-term debt											—			—			15,000
Repayment of short-term debt											—			—			(15,000	)
Proceeds from long-term debt											110,000			—			200,000
Payment of debt issuance costs											(2,129	)		—			(2,250	)
Proceeds from exercise of stock options and sales of treasury stock		4,637			12,318			13,867			2,136			19,048			5,186
Purchases of treasury stock		(4,496	)		(76,507	)		(15,276	)		(31,997	)		(5,506	)		(63,766	)
Net cash used in financing activities		(59,295	)		(122,468	)		(53,285	)
Net cash provided by (used in) in financing activities											5,980			(53,208	)		78,889
Net (decrease) increase in cash		(22,578	)		(94,850	)		195,367			(46,314	)		12,627			29,552
Cash and cash equivalents at beginning of period		165,771			260,621			65,254			185,372			172,745			143,193
Cash and cash equivalents at end of period	$	143,193		$	165,771		$	260,621		$	139,058		$	185,372		$	172,745

~~21.~~ ~~SUMMARY OF OPERATING RESULTS BY QUARTER (unaudited) (in thousands except per share data)~~

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Disclosure Controls and Procedures At the end of the period covered by this Annual Report on Form 10-K, the Company’s Chief Executive Officer and Chief Financial Officer have each evaluated the effectiveness of the Company’s “Disclosure Controls and Procedures” (as defined in Rule 13a-15(e) of the Exchange Act) and have concluded that the Company’s Disclosure Controls and Procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.

Management’s Report on Internal Control Over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate “internal control over financial reporting,” as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Company, and effected by the Board, management and other personnel, an evaluation of the effectiveness of internal control over financial reporting was conducted based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission's Internal Control - Integrated Framework (2013).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In addition, given the Company’s size, operations and footprint, lapses or deficiencies in internal controls may occur from time to time.

Based on the evaluation under the framework in Internal Control - Integrated Framework (2013), management (with the participation of the Company’s Chief Executive Officer and Chief Financial Officer) under the oversight of the Board of Directors, has concluded that internal control over financial reporting was effective at the end of the period covered by this Annual Report on Form 10-K. KPMG LLP ~~LLP,~~, Kansas City, Missouri, (U.S. PCAOB Auditor Firm ID: 185), the independent registered public accounting firm that audited the financial statements included within this report, has issued an attestation report on the effectiveness of internal control over financial reporting at the end of the period covered by this report. KPMG LLP's attestation report is set forth below.

Changes in Internal Control Over Financial Reporting No change in the Company’s internal control over financial reporting occurred during the last quarter of the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

We have audited UMB Financial Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, ~~2019,~~2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2019,~~2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, ~~2019~~2022 and ~~2018,~~2021, the related consolidated statements of income, comprehensive income, changes in ~~shareholders'~~shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2019,~~2022, and the related notes (collectively, the consolidated financial statements), and our report dated February ~~27, 2020~~23, 2023 expressed an unqualified opinion on those consolidated financial statements.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ~~Management’s~~Management's Report on Internal Control ~~over~~Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The information required by this item relating to executive officers is included in Part I of this Annual Report on Form 10-K ~~(pages 9 and 10)~~ under the caption "Executive Officers of the ~~Registrants.~~Registrant."

The information required by this item regarding Directors is incorporated herein by reference to information to be included under the caption "Proposal #1: Election of Directors" of the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on April ~~28, 2020~~25, 2023 (the ~~2020~~2023 Annual Meeting of Shareholders), which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The information required by this item regarding the Audit Committee and the Audit Committee financial experts is incorporated herein by reference to information to be included under the caption "Corporate Governance – Committees of the Board of Directors – Audit Committee" of the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The information required by this item concerning Section 16(a) beneficial ownership reporting compliance is incorporated herein by reference to information to be included under the caption "Stock Ownership – Section 16(a) Beneficial Ownership Reporting Compliance" of the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The Company has adopted a code of ethics that applies to all directors, officers and employees, including its chief executive officer, chief financial officer and chief accounting officer. You can find the Company's code of ethics on its website by going to the following address: ~~www.umb.com/aboutumb/investorrelations.~~http://investorrelations.umb.com. Information on the Company’s website is not incorporated by reference into this report and should not be considered part of this document. The Company will post on its website any amendments or waivers to its code of ethics that are required to be disclosed under the rules of either the SEC or NASDAQ. A copy of the code of ethics will be provided, at no charge, to any person requesting the same, by written notice sent to the Company's Corporate Secretary, 6^th floor, 1010 Grand Blvd., Kansas City, Missouri 64106.

The information required by this item is incorporated herein by reference to information to be included under the Executive Compensation sections of the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated herein by reference to the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders to information to be included under the caption "Stock Ownership - Principal Shareholders," which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The information required by this item is incorporated herein by reference to the Company's Proxy Statement for the ~~2020~~2022 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after

December 31, ~~2019,~~2022, under the caption "Stock Ownership – Stock Owned by Directors, Nominees, and Executive Officers."

The following table summarizes shares authorized for issuance under the Company’s equity compensation ~~plans.~~plans as of December 31, 2022:

For additional information concerning the Company’s equity compensation plans, see Note 11, “Employee Benefits,” in the Notes to the Consolidated Financial Statements provided in Item 8 ~~pages 86 through 90~~ of this report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated herein by reference to the information to be provided under the captions “Corporate Governance – Transactions with Related Persons”, “Corporate Governance – The Board of Directors – Independent Directors” and “Corporate Governance – Committees of the Board of Directors” of the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The information required by this item is incorporated herein by reference to the information to be provided under the caption "Proposal #3: Ratification of the Corporate Audit Committee’s Engagement of KPMG LLP as UMB’s Independent Public Accounting Firm for ~~2020”~~2023” of the Company's Proxy Statement for the ~~2020~~2023 Annual Meeting of Shareholders, which will be provided to shareholders within 120 days after December 31, ~~2019.~~2022.

The following Consolidated Financial Statements of the Company are included in Item 8 of this Annual Report on Form 10-K.

Consolidated Statements of Income for the Three Years Ended December 31, ~~2019~~2022

Consolidated Statements of Comprehensive Income for the Three Years Ended December 31, ~~2019~~2022

Consolidated Statements of Changes in Shareholders' Equity for the Three Years Ended December 31, ~~2019~~2022

Consolidated Statements of Cash Flows for the Three Years Ended December 31, ~~2019~~2022

Condensed Consolidated Financial Statements for the parent company only may be found in Item 8 above. All other schedules have been omitted because the required information is presented in the Consolidated Financial Statements or in the notes thereto, the amounts involved are not significant or the required subject matter is not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, as of February ~~27, 2020.~~23, 2023.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated.

Missouri	43-0903811
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1010 Grand Boulevard, Kansas City, Missouri	64106
(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 Par Value	UMBF	The NASDAQ Global Select Market

Class	Outstanding at February ~~21, 2020~~16, 2023
Common Stock, $1.00 Par Value	~~49,087,088~~48,503,947

PART I	3

ITEM 1. BUSINESS	3

ITEM 1A. RISK FACTORS	1011

ITEM 1B. UNRESOLVED STAFF COMMENTS	1820

ITEM 2. PROPERTIES	1820

ITEM 3. LEGAL PROCEEDINGS	1821

ITEM 4. MINE SAFETY DISCLOSURES	1821

PART II	1922

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	1922

ITEM 6. ~~SELECTED FINANCIAL DATA~~[RESERVED]	21

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2224

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4948

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	56

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~111~~126

ITEM 9A. CONTROLS AND PROCEDURES	~~111~~126

ITEM 9B. OTHER INFORMATION	~~113~~128

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	128

PART III	~~113~~128

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~113~~128

ITEM 11. EXECUTIVE COMPENSATION	~~113~~128

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~113~~128

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~114~~129

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	~~114~~129

PART IV	~~115~~130

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	~~115~~130

ITEM 16. FORM 10-K SUMMARY	~~116~~131

SIGNATURES	~~117~~132

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


Name	Age	Position with Registrant

R. Brian Beaird	4649	Mr. Beaird has served as Executive Vice President, Chief Human Resources Officer since October 2019. Prior to this time, he served as Senior Vice President/Director of Associate Experience and Rewards, Director Compensation and Systems, Manager Bank Strategy and Administration, and Manager Commercial Strategy and Administration. Mr. Beaird held these positions from July 2018 until October 2019, August 2017 until July 2018, September 2015 until August 2017, and December 2011 until September 2015, respectively.
James Cornelius	5861	Mr. Cornelius has served as the President of Institutional Banking for the Bank since June 2015. Prior to this time, he served as the President of Institutional Banking and Investor services from June 2012 until June 2015.
Amy Harris	37	Ms. Harris has served as Executive Vice President and Chief Legal Officer since January 2021. Ms. Harris served the Company as Senior Vice President, Deputy General Counsel and Manager of Legal Operations from January 2020 to January 2021. She also served as Corporate Legal Counsel for the Company from October 2014 to January 2020. Prior to joining the Company, Ms. Harris worked in private practice focusing on commercial, corporate and employment cases.


Shannon A. Johnson	4043	Ms. Johnson has served as Executive Vice President and Chief Administrative Officer since October 2019. Ms. Johnson’s previous positions with the Company include Executive Vice President, Chief Human Resources Officer; Senior Vice President, Executive Director of Talent Management and Development; and Senior Vice President, Director of Talent Management. Ms. Johnson held these positions from April 2015 to October 2019, May 2011 to April 2015, and December 2009 to May 2011, respectively.
Dominic Karaba	52	Mr. Karaba has served as President Commercial Banking since September 2021. Mr. Karaba has also served as President Specialty Banking from April 2018 to September 2021 and Executive Vice President – Business Banking Director from August 2013 to April 2018. Overall, Mr. Karaba has over 15 years of experience in the banking industry.
J. Mariner Kemper	4750	Mr. Kemper has served as the President of the Company since November 2015 and as the Chairman and Chief Executive Officer of the Company since May 2004. He served as the Chairman and Chief Executive Officer of the Bank between December 2012 and January 2014, and as the Chairman of UMB Bank Colorado, n.a. (a prior subsidiary of the Company) between 2000 and 2012. He was President of UMB Bank Colorado from 1997 to 2000. Mr. Kemper is the brother of Mr. Alexander C. Kemper, who currently serves on the Company’s Board of Directors.
~~Kevin M. Macke~~Stacy King	47	~~Mr. Macke~~Ms. King has served as Executive Vice President, ~~and Director of Operations for the Bank since November 2015. In addition, beginning in January 2014 and ending in December 2015, Mr. Macke served as the~~ Chief ~~Financial~~Risk Officer of the ~~Bank.~~Company since March 2020. From May 2019 until March 2020, she served as Senior Director, Operations Management – Benefit Accounts for Willis Towers Watson. Prior to ~~this~~that time, ~~Mr. Macke~~she served as Senior Vice President, Director Healthcare Operations & Compliance; Senior Vice President/Vice President, Director Healthcare Services Risk & Compliance for the Bank; Vice President, Compliance Manager – Bank Operations & Healthcare Services; and Compliance Analyst-Corporate Risk for the Company. Ms. King held ~~several other~~these positions ~~within the Company or the Bank, including Director of Strategic Technology Initiatives with the Bank~~ from ~~November 2010 to January~~September 2018 until May 2019, October 2015 until September 2018, August 2014 until October 2015, and ~~Director of Financial Planning and Analysis with the Company from~~September 2013 until August ~~2005 to November 2010.~~2014, respectively.
Nikki Newton	4851	Mr. Newton has served as the President of Private Wealth Management of the Bank since May 2019. From January 1998 until May 2018, Mr. Newton served in various capacities with Waddell & Reed Financial, Inc. or its subsidiary, Ivy Distributors, Inc, including most recently, serving as President of Ivy Distributors, Inc. and Ivy Global from August 2017 to May 2018, and Head of Global Distribution and President of Ivy Global from January 2014 to August 2017.
David C. Odgers	5053	Mr. Odgers has served as Senior Vice President, Chief Accounting Officer of the Company since January 2020, and as the Company’s Controller since January 2014. Mr. Odgers was previously the Company’s Assistant Controller from January 2005 to January 2014.
John C. Pauls	5559	Mr. Pauls has served as Executive Vice President, General Counsel and Corporate Secretary of the Company and the Bank since June 2016. Mr. Pauls served as interim General Counsel from April 2016 until his full appointment in June of 2016. He has been with UMB for over 25 years, having served as a top legal advisor for the Company and the Bank for over 1820 years.
James D. Rine	4952	Mr. Rine ~~was named~~has served as Vice Chairman of the Company since November 2020 and President and Chief Executive Officer of the Bank insince October 2018. He served as President of Commercial Banking from December 2017 until October 2018 and as President of Commercial Banking/Western Region from October 2016 to December 2017. Prior to this time, Mr. Rine served as the President of the Kansas City Region since October 2011. Overall, Mr. Rine has over 20 years of commercial banking experience with the Bank.


Ram Shankar	4750	Mr. Shankar was named as Executive Vice President and Chief Financial Officer of the Company effective August 2016. From September 2011 until his employment with the Company commenced, he worked at First Niagara Financial Group, most recently serving as managing director where he headed financial planning and analysis and investor relations. Prior to that, Mr. Shankar spent time at FBR Capital Markets as a senior research analyst and at M&T Bank Corporation in the financial planning measurement and corporate finance/mergers & acquisitions group.


Thomas S. Terry	5659	Mr. Terry has served as Executive Vice President and Chief Credit Officer since October 2019. From January 2011 until October 2019, Mr. Terry served as Executive Vice President and Chief Lending Officer of the Company, and prior to this time, Mr. Terry served as Executive Vice President. Mr. Terry first joined UMB in 1986, and subsequently joined the Commercial Lending department in 1987 where he worked as a loan officer until 2011.
~~Brian J. Walker~~	48	Mr. Walker served as Executive Vice President and Chief Accounting Officer of the Company from June 2007, until January 2020 when, due to Mr. Walker’s announced retirement, the Company appointed a new Chief Accounting Officer, David Odgers. Mr. Walker remains with the Company in a consultative role until his retirement date of March 2, 2020. Prior to his time as Chief Accounting Officer, Mr. Walker served as Chief Financial Officer of the Company from January 2014 to October 2015. From July 2004 to June 2007, he served as a Certified Public Accountant for KPMG LLP, where he worked primarily as an auditor for financial institutions.
Abigail Wendel	4649	Ms. Wendel was named President of Consumer Banking of the Bank in September 2018. She has also served as Chief Strategy Officer for the Company from June 2015 until September 2018, and as the Director of Investor and Government Relations for the Company from February 2013 through June 2015.
Uma Wilson	44	Ms. Wilson was named Executive Vice President, Chief Information and Product Officer in September 2021. Previously she served as Executive Vice President, Director of Bank Product, Treasury Management/Card Sales and Implementation and Executive Vice President, Director of Bank Product Group. Ms. Wilson held these positions from January 2020 to September 2021 and May 2015 to January 2020, respectively.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 - October 31, 2019		48	$	66.84		48		1,996,267
November 1 - November 30, 2019		2,092		65.67		2,092		1,994,175
December 1 - December 31, 2019		320		64.55		320		1,993,855
Total		2,460	$	65.55		2,460

Index	2014		2015		2016		2017		2018		2019
UMB Financial Corporation	$	100.00	$	83.35	$	140.38	$	132.84	$	114.43	$	131.25
SNL US Banks		100.00		101.71		128.51		151.75		126.12		170.79
S&P 500 Index		100.00		101.38		113.51		138.29		132.23		173.86

	December 31,
Loan Category	2019		2018		2017		2016		2015
Commercial	$	71,258	$	80,888	$	81,156	$	71,657	$	63,847
Real estate		20,314		13,664		9,312		10,569		8,220
Consumer		10,211		9,071		10,083		9,311		8,949
Leases		5		12		53		112		127
Total allowance	$	101,788	$	103,635	$	100,604	$	91,649	$	81,143

	2022					2021
At December 31:	Allowance for credit losses		Percent of loans to total loans			Allowance for credit losses		Percent of loans to total loans
Commercial and industrial	$	136,737		43.7	%	$	123,732		42.3	%
Specialty lending		—		2.9			1,738		3.0
Commercial real estate		39,370		36.2			56,265		36.5
Consumer real estate		6,148		12.9			3,921		13.5
Consumer		494		0.7			845		0.8
Credit cards		6,866		2.1			6,075		2.3
Leases and other		2,221		1.5			2,195		1.6
Total allowance for credit losses on loans	$	191,836		100.0	%	$	194,771		100.0	%

	Year Ended December 31,				Dollar Change			Percent Change			Year Ended December 31,				Dollar Change		Percent Change
	2019		2018		19-18			19-18			2022		2021		22-21		22-21
Net interest income	$	412,232	$	380,266	$	31,966			8.4	%	$	596,031	$	579,992	$	16,039		2.8	%
Provision for loan losses		26,159		63,841		(37,682	)		(59.0	)
Provision for credit losses												32,851		15,543		17,308		111.4
Noninterest income		81,609		74,931		6,678			8.9			122,614		84,417		38,197		45.2
Noninterest expense		267,345		253,740		13,605			5.4			332,912		306,424		26,488		8.6
Income before taxes		200,337		137,616		62,721			45.6			352,882		342,442		10,440		3.0
Income tax expense		29,679		16,824		12,855			76.4			66,548		60,691		5,857		9.7
Income from continuing operations	$	170,658	$	120,792	$	49,866			41.3	%
Net income											$	286,334	$	281,751	$	4,583		1.6	%

December 31, 2019	Amortized Cost		Fair Value
U.S. Treasury	$	63,835	$	64,078
U.S. Agencies		89,867		93,021
Mortgage-backed		4,030,688		4,071,794
State and political subdivisions		2,954,276		3,029,917
Corporates		185,314		188,552
Total	$	7,323,980	$	7,447,362

December 31, 2018	Amortized Cost		Fair Value
U.S. Treasury	$	248,494	$	247,130
U.S. Agencies		200		199
Mortgage-backed		3,914,289		3,812,211
State and political subdivisions		2,507,107		2,483,260
Total	$	6,670,090	$	6,542,800

December 31, 2017	Amortized Cost		Fair Value
U.S. Treasury	$	40,092	$	38,643
U.S. Agencies		14,762		14,752
Mortgage-backed		3,719,369		3,649,243
State and political subdivisions		2,546,517		2,542,673
Corporates		13,278		13,266
Total	$	6,334,018	$	6,258,577

	U.S. Treasury Securities					U.S. Agency Securities					U.S. Treasury Securities					U.S. Agency Securities
December 31, 2019	Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield
December 31, 2022											Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield
Due in one year or less	$	33,983		2.69	%	$	—		—	%	$	39,041		3.07	%	$	57,796		2.71	%
Due after 1 year through 5 years		30,095		1.56			93,021		2.67			738,029		2.15			113,500		2.21
Due after 5 years through 10 years		—		—			—		—			—		—			—		—
Due after 10 years		—		—			—		—			—		—			—		—
Total	$	64,078		2.16	%	$	93,021		2.67	%	$	777,070		2.20	%	$	171,296		2.38	%

	Mortgage-backed Securities					State and Political Subdivisions					Mortgage-backed Securities					State and Political Subdivisions
December 31, 2019	Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield
December 31, 2022											Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield
Due in one year or less	$	13,353		2.50	%	$	218,870		2.23	%	$	11,862		2.70	%	$	63,216		3.06	%
Due after 1 year through 5 years		2,834,652		2.31			585,728		2.23			1,101,193		2.26			358,741		2.64
Due after 5 years through 10 years		1,050,939		3.03			608,959		2.61			2,827,094		1.82			504,186		2.88
Due after 10 years		172,850		2.81			1,616,360		3.75			41,973		2.42			436,264		3.30
Total	$	4,071,794		2.52	%	$	3,029,917		3.11	%	$	3,982,122		1.94	%	$	1,362,407		2.97	%

	Amortized		Fair
	Cost		Value
2019
FRB and FHLB stock	$	33,262	$	33,262
Other securities – non-marketable		69,868		75,158
Total Federal Reserve Bank stock and other	$	103,130	$	108,420

2018
FRB and FHLB stock	$	33,262	$	33,262
Other securities – marketable		—		4,385
Other securities – non-marketable		32,011		36,045
Total Federal Reserve Bank stock and other	$	65,273	$	73,692

2017
FRB and FHLB stock	$	33,262	$	33,262
Other securities – marketable		3		4,640
Other securities – non-marketable		26,606		27,995
Total Federal Reserve Bank stock and other	$	59,871	$	65,897

	Total			Total
Regulatory Capital
Shareholders’ equity	$	2,606,440		$	2,667,093
Less adjustments ⁽¹⁾		(275,907	)		461,937
Common equity Tier 1/Tier 1 capital		2,330,533			3,129,030
Additional Tier 2 capital ⁽²⁾		174,864			553,589
Total capital	$	2,505,397		$	3,682,619

	Company
Capital ratios
Common Equity Tier 1 capital to risk-weighted assets		~~12.33~~10.62	%
Tier 1 capital to risk-weighted assets		~~12.33~~10.62	%
Total capital to risk-weighted assets		~~13.26~~12.50	%
Leverage ratio (Tier 1 capital to total average assets less adjustments ⁽¹⁾)		~~9.37~~8.43	%

	Payments due by Period										Payments due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Contractual Obligations
Fed funds purchased and repurchase agreements	$	1,896,508	$	1,896,508	$	—	$	—	$	—
Material Cash Requirements
Federal funds purchased and repurchase agreements											$	2,222,167	$	2,222,167	$	—	$	—	$	—
Long-term debt obligations		97,490		11,704		11,714		1,854		72,218		384,553		—		—		—		384,553
Operating lease obligations		83,676		12,377		21,900		16,493		32,906		70,988		12,278		21,657		17,623		19,430
Time deposits		1,226,364		1,072,599		100,366		46,614		6,785		917,138		809,410		85,791		17,244		4,693
Total	$	3,304,038	$	2,993,188	$	133,980	$	64,961	$	111,909	$	3,594,846	$	3,043,855	$	107,448	$	34,867	$	408,676

	Maturities due by Period										Maturities due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Commitments, Contingencies and Guarantees
Commitments to extend credit for loans (excluding credit card loans)	$	7,409,338	$	3,234,893	$	2,130,560	$	1,198,157	$	845,728	$	12,988,231	$	5,118,670	$	4,703,332	$	2,458,066	$	708,163
Commitments to extend credit under credit card loans		3,188,905		3,188,905		—		—		—		4,008,386		4,008,386		—		—		—
Commercial letters of credit		4,460		4,460		—		—		—		3,334		3,334		—		—		—
Standby letters of credit		299,933		205,420		85,913		8,600		—		436,965		318,005		100,695		18,265		—
Forward contracts		58,287		58,287		—		—		—		32,552		32,552		��		—		—
Spot foreign exchange contracts		1,980		1,980		—		—		—		5,112		5,112		—		—		—
Total	$	10,962,903	$	6,693,945	$	2,216,473	$	1,206,757	$	845,728	$	17,474,580	$	9,486,059	$	4,804,027	$	2,476,331	$	708,163

	Hypothetical change in interest rate – Rate Ramp												Hypothetical change in interest rate – Rate Ramp
	Year One						Year Two						Year One						Year Two
	December 31, 2019			December 31, 2018			December 31, 2019			December 31, 2018			December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
(basis points)	Percentage change			Percentage change			Percentage change			Percentage change			Percentage change			Percentage change			Percentage change			Percentage change
300		(1.7	)%		5.2	%		1.2	%		11.5	%		(1.4	)%		5.9	%		10.6	%		22.1	%
200		(0.9	)		3.1			1.4			6.9			(1.1	)		3.7			7.1			14.9
100		(0.4	)		1.0			0.7			2.3			(0.4	)		1.5			3.6			7.3
Static		—			—			—			—			—			—			—			—
(100)		1.7			(3.4	)		(0.3	)		(6.4	)		0.4			(3.0	)		(3.8	)		(9.7	)
(200)		1.0		n/a				(6.3	)	n/a

	Due in one year or less		Due after one year through five years		Due after five years		Total
Variable Rate
Commercial	$	4,083,891	$	130,454	$	6,103	$	4,220,448
Asset-based		290,300		—		—		290,300
Factoring		170,560		—		—		170,560
Commercial – Credit Card		182,238		—		—		182,238
Real Estate – Construction		647,856		21,705		2,429		671,990
Real Estate – Commercial		1,623,029		218,277		26,896		1,868,202
Real Estate – Residential		34,881		109,689		34,381		178,951
Real Estate – HELOC		321,569		106,556		287		428,412
Consumer – Credit Card		224,039		2,703		—		226,742
Consumer – Other		88,209		154		—		88,363
Leases		1,978		—		—		1,978
Total variable rate loans		7,668,550		589,538		70,096		8,328,184

Fixed Rate
Commercial		402,558		1,016,567		202,429		1,621,554
Asset-based		—		1,931		—		1,931
Factoring		—		—		—		—
Commercial – Credit Card		—		—		—		—
Real Estate – Construction		32,389		103,395		34,572		170,356
Real Estate – Commercial		591,557		1,507,503		361,462		2,460,522
Real Estate – Residential		88,704		205,986		467,438		762,128
Real Estate – HELOC		4,641		29,817		15,281		49,739
Consumer – Credit Card		—		—		—		—
Consumer – Other		18,995		24,835		1,281		45,111
Leases		—		—		—		—
Total fixed rate loans		1,138,844		2,890,034		1,082,463		5,111,341
Total loans and loans held for sale	$	8,807,394	$	3,479,572	$	1,152,559	$	13,439,525

	2022								2021
	Net Charge-Offs (Recoveries)			Average Loans Outstanding		Net Charge-Offs (Recoveries) to Average Loans Outstanding			Net Charge-Offs (Recoveries)			Average Loans Outstanding		Net Charge-Offs (Recoveries) to Average Loans Outstanding
At December 31:
Commercial and industrial	$	35,719		$	8,160,147		0.44	%	$	7,287		$	7,160,288		0.10	%
Specialty lending		(433	)		525,697		(0.08	)		31,758			494,637		6.42
Commercial real estate		(356	)		6,784,082		(0.01	)		(362	)		6,161,097		(0.01	)
Consumer real estate		(74	)		2,512,597		—			(46	)		2,111,948		—
Consumer real estate		674			146,949		0.46			2,201			113,377		1.94
Credit cards		4,338			431,003		1.01			4,044			390,804		1.03
Leases and other		—			261,941		—			(10	)		186,199		(0.01	)
Total	$	39,868		$	18,822,416		0.21	%	$	44,872		$	16,618,350		0.27	%





PER SHARE DATA
Basic:
Income from continuing operations	$	4.99	$	3.98		$	3.72
(Loss) income from discontinued operations		—		(0.01	)		1.30
Net income – basic		4.99		3.97			5.02
Diluted:
Income from continuing operations		4.96		3.94			3.67
(Loss) income from discontinued operations		—		(0.01	)		1.29
Net income - diluted		4.96		3.93			4.96
Dividends		1.21		1.17			1.04
Weighted average shares outstanding – basic		48,779,263		49,334,937			49,223,661
Weighted average shares outstanding – diluted		49,089,877		49,770,737			49,839,290

FINANCING ACTIVITIES
Net (decrease) increase in demand and savings deposits		(3,636,068	)		8,573,130			5,798,276
Net increase (decrease) in time deposits		65,497			(24,454	)		(350,269	)
Net (decrease) increase in fed funds purchased and repurchase agreements		(1,016,268	)		922,938			418,989
Proceeds from short-term debt		—			—			15,000
Repayment of short-term debt		—			—			(15,000	)
Proceeds from long-term debt		110,000			—			200,000
Payment of debt issuance costs		(2,129	)		—			(2,250	)
Cash dividends paid		(72,030	)		(66,750	)		(60,281	)
Proceeds from exercise of stock options and sales of treasury shares		2,136			19,048			5,186
Purchases of treasury stock		(31,997	)		(5,506	)		(63,766	)
Net cash (used in) provided by financing activities		(4,580,859	)		9,418,406			5,945,885
(Decrease) increase in cash and cash equivalents		(7,656,690	)		5,716,998			1,828,396
Cash and cash equivalents at beginning of year		9,214,564			3,497,566			1,669,170
Cash and cash equivalents at end of year	$	1,557,874		$	9,214,564		$	3,497,566

Supplemental disclosures:
Income tax payments	$	101,952		$	92,584		$	34,068
Total interest payments		196,482			47,106			84,105
Noncash disclosures:
Acquisition of low-income housing tax credit investments	$	58,337		$	30,182		$	59,072
Commitment to fund low-income housing tax credit investments		58,337			30,182			59,072
Transfer of loans to other real estate owned		12,381			—			—
Transfer of securities from available-for-sale to held-to-maturity		3,823,670			—			—

	December 31, 2022
	Nonaccrual Loans		Amortized Cost of Nonaccrual Loans with no related Allowance
Loans
Commercial and industrial	$	11,356	$	9,447
Specialty lending		—		—
Commercial real estate		2,505		2,505
Consumer real estate		4,882		4,226
Consumer		61		61
Credit cards		441		441
Leases and other		24		24
Total loans	$	19,269	$	16,704

	Asset-based lending
Risk	December 31, 2022		December 31, 2021
In-margin	$	602,706	$	409,844
Out-of-margin		—		5,363
Total	$	602,706	$	415,207

	As of December 31, 2019
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial:
Commercial	$	32,301	$	20,986	$	856	$	21,842	$	271	$	31,271
Asset-based		948		948		—		948		—		190
Factoring		2,979		2,979		—		2,979		—		3,917
Commercial – credit card		—		—		—		—		—		—
Real estate:
Real estate – construction		97		95		—		95		—		19
Real estate – commercial		28,258		19,314		4,928		24,242		387		19,826
Real estate – residential		1,751		1,617		93		1,710		80		846
Real estate – HELOC		—		—		—		—		—		—
Consumer:
Consumer – credit card		—		—		—		—		—		—
Consumer – other		—		—		—		—		—		70
Leases		—		—		—		—		—		—
Total	$	66,334	$	45,939	$	5,877	$	51,816	$	738	$	56,139

	As of December 31, 2018
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial:
Commercial	$	40,402	$	16,470	$	14,536	$	31,006	$	4,605	$	43,335
Asset-based		—		—		—		—		—		—
Factoring		—		—		—		—		—		275
Commercial – credit card		—		—		—		—		—		—
Real estate:
Real estate – construction		—		—		—		—		—		55
Real estate – commercial		10,856		7,776		165		7,941		28		11,279
Real estate – residential		304		197		95		292		78		303
Real estate – HELOC		—		—		—		—		—		—
Consumer:
Consumer – credit card		—		—		—		—		—		—
Consumer – other		—		—		—		—		—		—
Leases		—		—		—		—		—		—
Total	$	51,562	$	24,443	$	14,796	$	39,239	$	4,711	$	55,247

	As of December 31, 2017
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial:
Commercial	$	84,749	$	44,525	$	16,465	$	60,990	$	6,299	$	65,385
Asset-based		—		—		—		—		—		—
Factoring		830		—		830		830		306		207
Commercial – credit card		—		—		—		—		—		—
Real estate:
Real estate – construction		108		93		—		93		—		148
Real estate – commercial		16,284		7,968		4,477		12,445		3		10,506
Real estate – residential		427		321		97		418		75		221
Real estate – HELOC		—		—		—		—		—		—
Consumer:
Consumer – credit card		—		—		—		—		—		—
Consumer – other		—		—		—		—		—		8
Leases		—		—		—		—		—		—
Total	$	102,398	$	52,907	$	21,869	$	74,776	$	6,683	$	76,475