
																1Q18 Change vs
($ in Thousands)	1Q18			4Q17			3Q17			2Q17			1Q17			4Q17			1Q17
Insurance commissions and fees	$	22,648		$	19,186		$	19,815		$	20,853		$	21,620			18	%		5	%
Service charges and deposit account fees		16,420			15,773			16,268			16,030			16,356			4	%		—	%
Card-based and loan fees		13,422			13,840			12,619			13,764			12,465			(3	)%		8	%
Trust and asset management fees		13,369			13,125			12,785			12,346			11,935			2	%		12	%
Brokerage commissions and fees		7,273			6,864			4,392			4,346			4,333			6	%		68	%

Total corefee-based revenue		73,132			68,788			65,879			67,339			66,709			6	%		10	%
Mortgage banking income		8,219			5,507			9,147			7,692			7,273			49	%		13	%
Mortgage servicing rights (expense)		1,849			2,337			2,563			2,665			2,694			(21	)%		(31	)%

Mortgage banking, net		6,370			3,169			6,585			5,027			4,579			101	%		39	%
Capital markets, net		5,306			7,107			4,610			4,042			3,883			(25	)%		37	%
Bank and corporate owned life insurance		3,187			3,156			6,580			3,899			2,615			1	%		22	%
Other		2,492			2,777			2,254			2,213			2,279			(10	)%		9	%

Subtotal		90,487			84,997			85,908			82,520			80,065			6	%		13	%
Asset gains(losses), net		(107	)		(528	)		(16	)		(466	)		(234	)		(80	)%		(54	)%
Investment securities gains(losses), net		—			75			3			356			—			(100	)%		N/M

Total noninterest income	$	90,380		$	84,544		$	85,895		$	82,410		$	79,831			7	%		13	%

Mortgage loans originated for sale during period	$	197,603		$	249,222		$	245,851		$	119,004		$	101,280			(21	)%		95	%
Mortgage loan settlements during period	$	187,624		$	268,254		$	187,568		$	167,550		$	196,578			(30	)%		(5	)%
Assets under management, at market value^(a)	$	10,540		$	10,555		$	9,243		$	8,997		$	8,716			0	%		21	%

N/M	= Not Meaningful

(a)	$ in millions. Excludes assets held in brokerage firms

Notable Contributions to the Change in Noninterest Income

Fee-based

~~Fee-based~~ revenue was $73 million, an increase of $6 million (10%) compared to the first three months of 2017. Within fee based revenue, brokerage commissions and fees increased $3 million (68%), primarily due to the acquisition of Whitnell & Co in the fourth quarter of 2017. In addition, trust and asset management fees increased $1 million (12%), primarily due to an increase in assets under management.

Net mortgage banking income for the first three months of 2018 was $6 million, up $2 million (39%) from the first three months of 2017, primarily due to the ~~Corporation's~~Corporation’s strategy to hold mortgages on balance sheet during the first quarter of 2017.

Noninterest Expense

Table 4 Noninterest Expense

1Q18 Change vs
($ in Thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
Personnel⁽²⁾
$ 117,685
$ 107,031
$ 108,098
$ 107,066
$ 106,782
10 % 10 %
Occupancy 15,357
13,497
12,294
12,832
15,219
14 % 1 %
Technology 17,715
17,878
15,233
15,473
14,420
(1 )% 23 %
Equipment 5,556
5,250
5,232
5,234
5,485
6 % 1 %
Business development and advertising 6,693
8,195
7,764
7,152
5,835
(18 )% 15 %
Legal and professional 5,413
6,384
6,248
5,711
4,166
(15 )% 30 %
Card Issuance and loan costs 3,304
2,836
3,330
2,974
2,620
17 % 26 %
Foreclosure / OREO expense, net 723
1,285
906
1,182
1,505
(44 )% (52 )%
FDIC assessment 8,250
7,500
7,800
8,000
8,000
10 % 3 %
Other intangible amortization 1,525
500
450
496
513
205 % 197 %
Acquisition related costs ⁽¹⁾
20,605
—
—
—
—
N/M
N/M
Other⁽²⁾
10,140
11,343
10,072
10,196
9,146
(11 )% 11 %
Total noninterest expense $ 212,965
$ 181,699
$ 177,427
$ 176,316
$ 173,691
17 % 23 %

~~N/M = Not Meaningful~~

~~(1) Includes Bank Mutual acquisition-related costs only.~~

(2) During the first quarter of 2018, the Corporation adopted a new accounting standard related to the presentation of net periodic pension cost and net periodic postretirement benefit cost which required the disaggregation of the service cost component from the other components of net benefit cost and net periodic postretirement benefit cost. Under this new accounting standard, the other components of net benefit cost and net periodic postretirement benefit cost were reclassified from personnel expense to other noninterest expense. All prior periods have been restated to reflect this change in presentation.


											1Q18 Change vs
($ in Thousands)	1Q18		4Q17		3Q17		2Q17		1Q17		4Q17			1Q17
Personnel⁽²⁾	$	117,685	$	107,031	$	108,098	$	107,066	$	106,782		10	%		10	%
Occupancy		15,357		13,497		12,294		12,832		15,219		14	%		1	%
Technology		17,715		17,878		15,233		15,473		14,420		(1	)%		23	%
Equipment		5,556		5,250		5,232		5,234		5,485		6	%		1	%
Business development and advertising		6,693		8,195		7,764		7,152		5,835		(18	)%		15	%
Legal and professional		5,413		6,384		6,248		5,711		4,166		(15	)%		30	%
Card Issuance and loan costs		3,304		2,836		3,330		2,974		2,620		17	%		26	%
Foreclosure / OREO expense, net		723		1,285		906		1,182		1,505		(44	)%		(52	)%
FDIC assessment		8,250		7,500		7,800		8,000		8,000		10	%		3	%
Other intangible amortization		1,525		500		450		496		513		205	%		197	%
Acquisition related costs⁽¹⁾		20,605		—		—		—		—		N/M			N/M
Other⁽²⁾		10,140		11,343		10,072		10,196		9,146		(11	)%		11	%

Total noninterest expense	$	212,965	$	181,699	$	177,427	$	176,316	$	173,691		17	%		23	%

N/M	= Not Meaningful

(1)	Includes Bank Mutual acquisition-related costs only.

(2)

During the first quarter of 2018, the Corporation adopted a new accounting standard related to the presentation of net periodic pension cost and net periodic postretirement benefit cost which required the disaggregation of the service cost component from the other components of net benefit cost and net periodic postretirement benefit cost. Under this new accounting standard, the other components of net benefit cost and net periodic postretirement benefit cost were reclassified from personnel expense to other noninterest expense. All prior periods have been restated to reflect this change in presentation.

Notable Contributions to the Change in Noninterest Expense

Personnel expense (which includes salary-related expenses and fringe benefit expenses) was $118 million for the first three months of 2018, up $11 million (10%) from the first three months of 2017, primarily driven by the additional cost of Bank Mutual staff.

All other nonpersonnel noninterest expense on a combined basis was $95 million, up $25 million compared to the first three months of 2017. The increase was primarily driven by $21 million of acquisition related costs pertaining to Bank Mutual. In addition, technology expense increased $3 million (23%) from the first three months of 2017, driven by investments in technology solutions that meet evolving customer needs and improve operational efficiency.

Income Taxes

The Corporation recognized income tax expense of $18 million for the three months ended March 31, 2018, compared to income tax expense of $21 million for the three months ended March 31, 2017. The change in income tax expense was due primarily to a decrease in federal corporate income tax rates from 35% to 21% coupled with an increase inpre-tax book income. The effective tax rate was 20.43% for the first three months of 2018, compared to an effective tax rate of 27.31% for the first three months of 2017.

Income tax expense recorded in the consolidated statements of income involves the interpretation and application of certain accounting pronouncements and federal and state tax laws and regulations, and is, therefore, considered a critical accounting policy. The Corporation is subject to examination by various taxing authorities. Examination by taxing authorities may impact the amount of tax expense and / or reserve for uncertainty in income taxes if their interpretations differ from those of management, based on their judgments about information available to them at the time of their examinations. See section Critical Accounting Policies, in the Corporation’s 2017 Annual Report on Form10-K for additional information on income taxes.

Balance Sheet Analysis

At March 31, 2018, total assets were $33.4 billion, up $2.9 billion (9%) from December 31, 2017 and up $4.3 billion (15%) from March 31, 2017. On February 1, 2018, the Corporation added $2.8 billion of assets as a result of the Bank Mutual acquisition.

Loans of $22.8 billion at March 31, 2018 were up $2.0 billion (10%) from December 31, 2017 and were up $2.7 billion (13%) from March 31, 2017. On February 1, 2018, the Corporation added $1.9 billion of loans as a result of the Bank Mutual acquisition. See section Loans for additional information on loans.

At March 31, 2018, total deposits of $23.8 billion were up $1.0 billion (5%) from December 31, 2017 and were up $2.0 billion (9%) from March 31, 2017. On February 1, 2018, the Corporation assumed $1.8 billion of deposits as a result of the Bank Mutual acquisition. These inflows were partially offset by seasonal deposit outflows. See section Deposits and Customer Funding for additional information on deposits.

Short and long-term funding of $5.4 billion increased $1.3 billion (32%) from December 31, 2017 and increased $1.5 billion (40%) from March 31, 2017. During the quarter, the Corporation reduced network transaction deposits with lower costs, fixed rate, short-term FHLB advances.

Loans

Table 5 Period End Loan Composition

March 31, 2018^(a)
December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
($ in Thousands)
Commercial and industrial $ 6,756,983
30 % $ 6,399,693
31 % $ 6,534,660
31 % $ 6,571,000
32 % $ 6,300,646
31 %
Commercial real estate — owner occupied 900,913
4 % 802,209
4 % 827,064
4 % 845,336
4 % 878,391
4 %
Commercial and business lending 7,657,896
34 % 7,201,902
35 % 7,361,724
35 % 7,416,336
36 % 7,179,037
35 %
Commercial real estate — investor 4,077,671
18 % 3,315,254
16 % 3,345,536
16 % 3,329,585
16 % 3,415,355
17 %
Real estate construction 1,579,778
7 % 1,451,684
7 % 1,552,135
8 % 1,651,805
8 % 1,553,205
8 %
Commercial real estate lending 5,657,449
25 % 4,766,938
23 % 4,897,671
24 % 4,981,390
24 % 4,968,560
25 %
Total commercial 13,315,345
58 % 11,968,840
58 % 12,259,395
59 % 12,397,726
60 % 12,147,597
60 %
Residential mortgage 8,197,223
36 % 7,546,534
36 % 7,408,471
35 % 7,115,457
34 % 6,715,282
33 %
Home equity 923,470
4 % 883,804
4 % 890,130
4 % 897,111
4 % 911,969
5 %
Other consumer 374,453
2 % 385,813
2 % 373,464
2 % 372,775
2 % 372,835
2 %
Total consumer 9,495,146
42 % 8,816,151
42 % 8,672,065
41 % 8,385,343
40 % 8,000,086
40 %
Total loans $ 22,810,491
100 % $ 20,784,991
100 % $ 20,931,460
100 % $ 20,783,069
100 % $ 20,147,683
100 %
^(a)Includes $15 million of purchased credit-impaired loans


	March 31, 2018^(a)					December 31, 2017					September 30, 2017					June 30, 2017					March 31, 2017
	Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total
	($ in Thousands)
Commercial and industrial	$	6,756,983		30	%	$	6,399,693		31	%	$	6,534,660		31	%	$	6,571,000		32	%	$	6,300,646		31	%
Commercial real estate — owner occupied		900,913		4	%		802,209		4	%		827,064		4	%		845,336		4	%		878,391		4	%

Commercial and business lending		7,657,896		34	%		7,201,902		35	%		7,361,724		35	%		7,416,336		36	%		7,179,037		35	%
Commercial real estate — investor		4,077,671		18	%		3,315,254		16	%		3,345,536		16	%		3,329,585		16	%		3,415,355		17	%
Real estate construction		1,579,778		7	%		1,451,684		7	%		1,552,135		8	%		1,651,805		8	%		1,553,205		8	%

Commercial real estate lending		5,657,449		25	%		4,766,938		23	%		4,897,671		24	%		4,981,390		24	%		4,968,560		25	%

Total commercial		13,315,345		58	%		11,968,840		58	%		12,259,395		59	%		12,397,726		60	%		12,147,597		60	%
Residential mortgage		8,197,223		36	%		7,546,534		36	%		7,408,471		35	%		7,115,457		34	%		6,715,282		33	%
Home equity		923,470		4	%		883,804		4	%		890,130		4	%		897,111		4	%		911,969		5	%
Other consumer		374,453		2	%		385,813		2	%		373,464		2	%		372,775		2	%		372,835		2	%

Total consumer		9,495,146		42	%		8,816,151		42	%		8,672,065		41	%		8,385,343		40	%		8,000,086		40	%

Total loans	$	22,810,491		100	%	$	20,784,991		100	%	$	20,931,460		100	%	$	20,783,069		100	%	$	20,147,683		100	%

^(a)	Includes $15 million of purchased credit-impaired loans

The Corporation has long-term guidelines relative to the proportion of Commercial and Business, Commercial Real Estate, and Consumer loans within the overall loan portfolio, with each targeted to represent30-40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2017 and the first three months of 2018. Furthermore, certainsub-asset classes within the respective portfolios were further defined and dollar limitations were placed on thesesub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

Credit Risk

An active credit risk management process is used for commercial loans to ensure that sound and consistent credit decisions are made. Credit risk is controlled by detailed underwriting procedures, comprehensive loan administration, and periodic review of borrowers’ outstanding loans and commitments. Borrower relationships are formally reviewed and graded on an ongoing basis for early identification of potential problems. Further analysis by customer, industry, and geographic location are performed to monitor trends, financial performance, and concentrations. See Note 7 Loans, for additional information on managing overall credit quality.

The loan portfolio is widely diversified by types of borrowers, industry groups, and market areas within our branch footprint. Significant loan concentrations are considered to exist when there are amounts loaned to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At March 31, 2018, no significant concentrations existed in the Corporation’s portfolio in excess of 10% of total loans.

Commercial and business lending: The commercial and business lending classification primarily includes commercial loans to large corporations, middle market companies and small businesses and lease financing. At March 31, 2018, the largest industry group within the commercial and business lending category were manufacturing and wholesale trade, which represented 8% of total loans and 25% of the total commercial and business lending portfolio. The next largest industry group within the commercial and business lending category included the power and utilities portfolio, which represented 5% of total loans and represented 14% of the total commercial and business lending portfolio at March 31, 2018. The credit risk related to commercial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any. Currently, a higher risk segment of the commercial and business lending portfolio is loans to borrowers supporting oil and gas exploration and production, which are further discussed under oil and gas lending below.

Oil and gas lending:The Corporation provides reserve based loans to oil and gas exploration and production firms. At March 31, 2018, the oil and gas portfolio was comprised of 56 credits, totaling $657 million of outstanding balances. The ~~Corporation's~~Corporation’s oil and gas lending team is based in Houston and focuses on serving the funding needs of small andmid-sized companies in the upstream oil and gas business. The oil and gas loans are generally first lien, reserve-based, and borrowing base dependent lines of credit. A small portion of the portfolio is in a second lien position to which the Corporation also holds the first lien position. The portfolio is diversified across all major U.S. geographic basins. The portfolio is diversified by product line with approximately 60% in oil and 40% in gas at March 31, 2018. Borrowing basere-determinations for the portfolio are completed at least twice a year and are based on detailed engineering reports and discounted cash flow analysis.

The following table summarizes information about the ~~Corporation's~~Corporation’s oil and gas loan portfolio.

Table 6 Oil and Gas Loan Portfolio

March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017
($ in Millions)
Pass $ 548
$ 483
$ 446
$ 411
$ 405
Special mention —
—
—
39
8
Potential problem 40
40
39
37
78
Nonaccrual 69
77
92
114
134
Total oil and gas related loans $ 657
$ 600
$ 577
$ 601
$ 625
Quarter net charge offs $ 4
$ 25
$ 8
$ 12
$ 6
Oil and gas related allowance $ 19
$ 27
$ 30
$ 33
$ 42
Oil and gas related allowance ratio 2.9 % 4.5 % 5.2 % 5.4 % 6.7 %


	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
	($ in Millions)
Pass	$	548		$	483		$	446		$	411		$	405
Special mention		—			—			—			39			8
Potential problem		40			40			39			37			78
Nonaccrual		69			77			92			114			134

Total oil and gas related loans	$	657		$	600		$	577		$	601		$	625
										��
Quarter net charge offs	$	4		$	—		$	8		$	12		$	6
Oil and gas related allowance	$	19		$	27		$	30		$	33		$	42
Oil and gas related allowance ratio		2.9	%		4.5	%		5.2	%		5.4	%		6.7	%

During 2017, the market stabilized leading to improvements across the oil and gas portfolio. At March 31, 2018, nonaccrual oil and gas related loans totaled approximately $69 million, representing 11% of the oil and gas loan portfolio, a decrease of $8 million from December 31, 2017.

Commercial real estate - investor: Commercial real estate-investor is comprised of loans secured by variousnon-owner occupied or investor income producing property types. At March 31, 2018, the two largest property type exposures within the commercial real estate-investor portfolio were loans secured by multi-family properties, which represented 7% of total loans and 36% of the total commercial real estate-investor portfolio and loans secured by retail properties which represented 4% of total loans and 24% of the total commercial real estate-investor portfolio. Credit risk is managed in a similar manner to commercial and business lending by employing sound underwriting guidelines, lending primarily to borrowers in local markets and businesses, periodically evaluating the underlying collateral, and formally reviewing the borrower’s financial soundness and relationship on an ongoing basis.

Real estate construction: Real estate construction loans are primarily short-term or interim loans that provide financing for the acquisition or development of commercial income properties, multi-family projects or residential development, both single family and condominium. Real estate construction loans are made to developers and project managers who are generally well known to the Corporation and have prior successful project experience. The credit risk associated with real estate construction loans is generally confined to specific geographic areas but is also influenced by general economic conditions. The Corporation controls the credit risk on these types of loans by making loans in familiar markets to developers, reviewing the merits of individual projects, controlling loan structure, and monitoring project progress and construction advances.

The Corporation’s current lending standards for commercial real estate and real estate construction lending are determined by property type and specifically address many criteria, including: maximum loan amounts, maximumloan-to-value (“LTV”), requirements forpre-leasing and / or presales, minimum borrower equity, and maximum loan to cost. Currently, the maximum standard for LTV is 80%, with lower limits established for certain higher risk types, such as raw land that has a 50% LTV maximum. The Corporation’s LTV guidelines are in compliance with regulatory supervisory limits. In most cases, for real estate construction loans, the loan amounts include interest reserves, which are built into the loans and sized to fund loan payments through construction and lease up and / or sell out.

Table 7 Commercial Loan Distribution and Interest Rate Sensitivity

March 31, 2018
Within 1 Year ^(a)
1-5 Years After 5 Years Total % of Total
($ in Thousands)
Commercial and industrial $ 5,998,575
$ 555,894
$ 202,514
$ 6,756,983
51 %
Commercial real estate — investor 3,217,012
762,322
98,338
4,077,671
31 %
Commercial real estate — owner occupied 458,193
296,889
145,832
900,913
7 %
Real estate construction 1,428,741
113,082
37,954
1,579,778
12 %
Total $ 11,102,520
$ 1,728,186
$ 484,638
$ 13,315,345
100 %
Fixed rate $ 4,604,032
$ 983,927
$ 371,720
$ 5,959,679
45 %
Floating or adjustable rate 6,498,490
744,259
112,917
7,355,666
55 %
Total $ 11,102,522
$ 1,728,186
$ 484,637
$ 13,315,345
100 %
Percent by maturity distribution 83 % 13 % 4 % 100 %


March 31, 2018	Within 1 Year ^(a)			1-5 Years			After 5 Years			Total			% of Total
	($ in Thousands)
Commercial and industrial	$	5,998,575		$	555,894		$	202,514		$	6,756,983			51	%
Commercial real estate — investor		3,217,012			762,322			98,338			4,077,671			31	%
Commercial real estate — owner occupied		458,193			296,889			145,832			900,913			7	%
Real estate construction		1,428,741			113,082			37,954			1,579,778			12	%

Total	$	11,102,520		$	1,728,186		$	484,638		$	13,315,345			100	%

Fixed rate	$	4,604,032		$	983,927		$	371,720		$	5,959,679			45	%
Floating or adjustable rate		6,498,490			744,259			112,917			7,355,666			55	%

Total	$	11,102,522		$	1,728,186		$	484,637		$	13,315,345			100	%

Percent by maturity distribution		83	%		13	%		4	%		100	%


(a)	Demand loans, past due loans, and overdrafts are reported in the “Within 1 Year” category.

The total commercial loans that were floating or adjustable rate was $7.4 billion (55%) at March 31, 2018. Including the $4.6 billion of fixed rate loans due within one year, 90% of the commercial loan portfolio noted above matures,re-prices, or resets within one year.

Residential mortgages: Residential mortgage loans are primarily first lien home mortgages with a maximum loan to collateral value without credit enhancement (e.g. private mortgage insurance) of 80%. At March 31, 2018, the residential mortgage portfolio was comprised of $2.9 billion of fixed-rate residential real estate mortgages and $5.3 billion of variable-rate residential real estate mortgages, compared to $2.6 billion of fixed-rate mortgages and $4.9 billion variable-rate mortgages at December 31, 2017. The residential mortgage portfolio is focused primarily in our three-state branch footprint, with approximately 88% of the outstanding loan balances in our branch footprint at March 31, 2018. The majority of the on balance sheet residential mortgage portfolio consists of hybrid, adjustable rate mortgage loans with initial fixed rate terms of 3, 5, 7, or 10 years.

Based upon outstanding balances at March 31, 2018, the following table presents the next contractual repricing year for the ~~Corporation's~~Corporation’s adjustable rate mortgage portfolio.

Table 8 Adjustable Rate Mortgage Repricing^(a)


	$ in Thousands		% to Total
2018	$	388,772		7	%
2019		584,096		11	%
2020		636,717		12	%
2021		741,288		14	%
2022		813,785		15	%
Thereafter		2,106,599		41	%

Total adjustable rate mortgages	$	5,271,257		100	%


(a)	Based on contractual loan terms for 3/1, 5/1, 7/1, and 10/1 adjustable rate mortgages; does not factor in early prepayments or amortization.

The Corporation also generally retains certain fixed-rate residential real estate mortgages in its loan portfolio, including retail and private banking jumbo mortgages andCRA-related mortgages. As part of management’s historical practice of originating and servicing residential mortgage loans, generally the Corporation’s 30 year, agency conforming, fixed-rate residential real estate mortgage loans were sold in the secondary market with servicing rights retained. Subject to management’s analysis of the current interest rate environment, among other market factors, the Corporation may choose to retain 30 year mortgage loan production on its balance sheet.

The Corporation’s underwriting and risk-based pricing guidelines for residential mortgage loans include minimum borrower FICO and maximum LTV of the property securing the loan. Residential mortgage products generally are underwritten using FHLMC and FNMA secondary marketing guidelines.

Home equity:Home equity consists of both home equity lines of credit andclosed-end home equity loans. The Corporation’s credit risk monitoring guidelines for home equity is based on an ongoing review of loan delinquency status, as well as a quarterly review of FICO score deterioration and property devaluation. The Corporation does not routinely obtain appraisals on performing loans to update LTV ratios after origination; however, the Corporation monitors the local housing markets by reviewing the various home price indices and incorporates the impact of the changing market conditions in its ongoing credit monitoring process. For junior lien home equity loans, the Corporation is unable to track the performance of the first lien loan if it does not own or service the first lien loan. However, the Corporation obtains a refreshed FICO score on a quarterly basis and monitors this as part of its assessment of the home equity portfolio.

The Corporation’s underwriting and risk-based pricing guidelines for home equity lines and loans consist of a combination of both borrower FICO and the original cumulative LTV against the property securing the loan. Currently, our policy sets the maximum acceptable LTV at 90% and the minimum acceptable FICO at 670. The ~~Corporation's~~Corporation’s current home equity line of credit offering is priced based on floating rate indices and generally allows 10 years of interest-only payments followed by a20-year amortization of the outstanding balance. The Corporation has significantly curtailed its offerings of fixed-rate, closed end home equity loans. The loans in the ~~Corporation's~~Corporation’s portfolio generally have an original term of 20 years with principal and interest payments required.

Based upon outstanding balances at March 31, 2018, the following table presents the periods when home equity lines of credit revolving periods are scheduled to end.

Table 9 Home Equity Line of Credit - Revolving Period End Dates


	$ in Thousands		% of Total
Less than 5 years	$	93,578		9	%
5 to 10 years		287,038		29	%
Over 10 years		617,525		62	%

Total home equity revolving lines of credit	$	998,141		100	%

Other consumer:Other consumer consists of student loans, short-term and other personal installment loans and credit cards. The Corporation had $181 million and $183 million of student loans at March 31, 2018, and December 31, 2017, respectively, the majority of which are government guaranteed. Credit risk fornon-government guaranteed student, short-term and personal installment loans and credit cards is influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral. Risks of loss are generally on smaller average balances per loan spread over many borrowers. Once charged off, there is usually less opportunity for recovery of these smaller consumer loans. Credit risk is primarily controlled by reviewing the creditworthiness of the borrowers, monitoring payment histories, and taking appropriate collateral and guarantee positions. The student loan portfolio is inrun-off and no new student loans are being originated.

Nonperforming Assets

Management is committed to a proactive nonaccrual and problem loan identification philosophy. This philosophy is implemented through the ongoing monitoring and review of all pools of risk in the loan portfolio to ensure that problem loans are identified quickly and the risk of loss is minimized. Table 10 provides detailed information regarding nonperforming assets, which include nonaccrual loans and other real estate owned, and other nonperforming assets.

Table 10 Nonperforming Assets


	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
	($ in Thousands)
Nonperforming assets
Commercial and industrial	$	102,667		$	112,786		$	122,284		$	141,475		$	164,891
Commercial real estate — owner occupied		20,636			22,740			15,598			15,800			17,925

Commercial and business lending		123,303			135,526			137,882			157,275			182,816
Commercial real estate — investor		15,574			4,729			3,543			7,206			8,273
Real estate construction		1,219			974			1,540			1,717			1,247

Commercial real estate lending		16,793			5,703			5,083			8,923			9,520

Total commercial		140,096			141,229			142,965			166,198			192,336
Residential mortgage		55,100			53,632			54,654			51,975			54,183
Home equity		13,218			13,514			12,639			13,482			13,212
Other consumer		139			171			259			233			260

Total consumer		68,456			67,317			67,552			65,690			67,655

Total nonaccrual loans		208,553			208,546			210,517			231,888			259,991
Commercial real estate owned		7,511			6,735			5,098			4,825			5,599
Residential real estate owned		5,806			5,873			3,385			2,957			1,941
Bank properties real estate owned		3,601			—			—			—			—

Other real estate owned (“OREO”)		16,919			12,608			8,483			7,782			7,540
Other nonperforming assets		7,117			7,418			7,418			7,418			7,418

Total nonperforming assets (“NPAs”)	$	232,589		$	228,572		$	226,418		$	247,088		$	274,949

Accruing loans past due 90 days or more
Commercial	$	505		$	418		$	308		$	248		$	258
Consumer		2,888			1,449			1,303			1,287			1,462

Total accruing loans past due 90 days or more	$	3,393		$	1,867		$	1,611		$	1,535		$	1,720

Restructured loans (accruing)
Commercial	$	47,460		$	48,735		$	51,259		$	50,634		$	51,274
Consumer		29,041			25,883			25,919			26,691			27,785

Total restructured loans (accruing)	$	76,501		$	74,618		$	77,178		$	77,325		$	79,059

Nonaccrual restructured loans (included in nonaccrual loans)	$	23,827		$	23,486		$	33,520		$	51,715		$	78,902
Ratios
Nonaccrual loans to total loans		0.91	%		1.00	%		1.01	%		1.12	%		1.29	%
NPAs to total loans plus OREO		1.02	%		1.10	%		1.08	%		1.19	%		1.36	%
NPAs to total assets		0.70	%		0.75	%		0.75	%		0.83	%		0.94	%
Allowance for loan losses to nonaccrual loans		123.26	%		127.49	%		131.37	%		121.22	%		108.72	%

Table 11 Nonperforming Assets (continued)

March 31,
2018 December 31,
2017 September 30,
2017 June 30,
2017 March 31,
2017
($ in Thousands)
Accruing loans 30-89 days past due
Commercial and industrial $ 880
$ 271
$ 1,378
$ 1,255
$ 1,675
Commercial real estate — owner occupied 511
48
1,522
1,284
970
Commercial and business lending 1,391
319
2,900
2,539
2,645
Commercial real estate — investor 240
374
1,109
899
1,122
Real estate construction 490
251
700
135
431
Commercial real estate lending 730
625
1,809
1,034
1,553
Total commercial 2,121
944
4,709
3,573
4,198
Residential mortgage 15,133
9,552
8,870
9,165
7,243
Home equity 5,868
6,825
7,191
5,924
4,512
Other consumer 1,811
2,007
1,686
1,746
1,658
Total consumer 22,812
18,384
17,747
16,835
13,413
Total accruing loans 30-89 days past due $ 24,934
$ 19,328
$ 22,456
$ 20,408
$ 17,611
Potential problem loans
Commercial and industrial $ 196,766
$ 113,778
$ 153,779
$ 142,607
$ 218,930
Commercial real estate — owner occupied 34,410
41,997
57,468
60,724
58,994
Commercial and business lending 231,176
155,775
211,247
203,331
277,924
Commercial real estate — investor 46,970
19,291
46,770
48,569
49,217
Real estate construction 1,695
—
118
8,901
10,141
Commercial real estate lending 48,665
19,291
46,888
57,470
59,358
Total commercial 279,841
175,066
258,135
260,801
337,282
Residential mortgage 2,155
1,616
650
1,576
2,155
Home equity 188
195
124
208
220
Total consumer 2,343
1,811
774
1,784
2,375
Total potential problem loans $ 282,184
$ 176,877
$ 258,909
$ 262,585
$ 339,657


	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017
	($ in Thousands)
Accruing loans30-89 days past due
Commercial and industrial	$	880	$	271	$	1,378	$	1,255	$	1,675
Commercial real estate — owner occupied		511		48		1,522		1,284		970

Commercial and business lending		1,391		319		2,900		2,539		2,645
Commercial real estate — investor		240		374		1,109		899		1,122
Real estate construction		490		251		700		135		431

Commercial real estate lending		730		625		1,809		1,034		1,553

Total commercial		2,121		944		4,709		3,573		4,198
Residential mortgage		15,133		9,552		8,870		9,165		7,243
Home equity		5,868		6,825		7,191		5,924		4,512
Other consumer		1,811		2,007		1,686		1,746		1,658

Total consumer		22,812		18,384		17,747		16,835		13,413

Total accruing loans30-89 days past due	$	24,934	$	19,328	$	22,456	$	20,408	$	17,611

Potential problem loans
Commercial and industrial	$	196,766	$	113,778	$	153,779	$	142,607	$	218,930
Commercial real estate — owner occupied		34,410		41,997		57,468		60,724		58,994

Commercial and business lending		231,176		155,775		211,247		203,331		277,924
Commercial real estate — investor		46,970		19,291		46,770		48,569		49,217
Real estate construction		1,695		—		118		8,901		10,141

Commercial real estate lending		48,665		19,291		46,888		57,470		59,358

Total commercial		279,841		175,066		258,135		260,801		337,282
Residential mortgage		2,155		1,616		650		1,576		2,155
Home equity		188		195		124		208		220

Total consumer		2,343		1,811		774		1,784		2,375

Total potential problem loans	$	282,184	$	176,877	$	258,909	$	262,585	$	339,657

Nonaccrual loans:Nonaccrual loans are considered to be one indicator of potential future loan losses. See Note 7 Loans, of the notes to consolidated financial statements for additional nonaccrual loan disclosures. The ratio of nonaccrual loans to total loans at March 31, 2018 was 0.91%, as compared to 1.00% at December 31, 2017 and 1.29% at March 31, 2017. See also sections Credit Risk and Allowance for Credit Losses.

Accruing loans past due 90 days or more:Loans past due 90 days or more but still accruing interest are classified as such where the underlying loans are both well secured (the collateral value is sufficient to cover principal and accrued interest) and are in the process of collection. Accruing loans 90 days or more past due at March 31, 2018 increased $2 million from both December 31, 2017 and March 31, 2017 as a result of the acquisition of Bank Mutual.

Restructured loans: Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See also Note 7 Loans, of the notes to consolidated financial statements for additional restructured loans disclosures.

Potential problem loans:The level of potential problem loans is another predominant factor in determining the relative level of risk in the loan portfolio and in determining the appropriate level of the allowance for loan losses. Potential problem loans are generally defined by management to include loans rated as substandard by management but that are not considered impaired (i.e., nonaccrual loans and accruing troubled debt restructurings); however, there are circumstances present to create doubt as to the ability of the borrower to comply with present repayment terms. The decision of management to include performing loans in potential problem loans does not necessarily mean that the Corporation expects losses to occur, but that management recognizes a higher degree of risk associated with these loans.

OREO:Management actively seeks to ensure OREO properties held are monitored to minimize the Corporation’s risk of loss.

Other nonperforming assets:The asset represents the ~~Bank's~~Bank’s ownership interest in a profit participation agreement in an entity created to own certain oil and gas assets obtained as a result of bankruptcy and liquidation of a borrower in partial satisfaction of their loan.

Allowance for Credit Losses

Credit risks within the loan portfolio are inherently different for each loan type. Credit risk is controlled and monitored through the use of lending standards, a thorough review of potential borrowers, and ongoing review of loan payment performance. Active asset quality administration, including early problem loan identification and timely resolution of problems, aids in the management of credit risk and minimization of loan losses. Credit risk management for each loan type is discussed in the section entitled Credit Risk. See Note 7 Loans, for additional disclosures on the allowance for credit losses.

To assess the appropriateness of the allowance for loan losses, an allocation methodology is applied by the Corporation which focuses on evaluation of many factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, consideration of historical loan loss and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the level of potential problem loans, the risk characteristics of the various classifications of loans, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions, the fair value of underlying collateral, and other qualitative and quantitative factors which could affect potential credit losses. Assessing these factors involves significant judgment. Because each of the criteria used is subject to change, the allowance for loan losses is not necessarily indicative of the trend of future loan losses in any particular category. Therefore, management considers the allowance for loan losses a critical accounting policy—See section Critical Accounting Policies, in the Corporation’s 2017 Annual Report on Form10-K for additional information on the allowance for loan losses. See section, Nonperforming Assets, for a detailed discussion on asset quality. See also Note 7 Loans, of the notes to consolidated financial statements for additional allowance for loan losses disclosures. Table 5 provides information on loan growth and period end loan composition, Table 10 provides additional information regarding nonperforming assets, and Table 12 and Table 13 provide additional information regarding activity in the allowance for loan losses.

The methodology used for the allocation of the allowance for loan losses at March 31, 2018 and December 31, 2017 was generally comparable, whereby the Corporation segregated its loss factors (used for both criticized andnon-criticized loans) into a component primarily based on historical loss rates and a component primarily based on other qualitative factors that are probable to affect loan collectability. The allocation methodology consists of the following components: First, a valuation allowance estimate is established for specifically identified commercial and consumer loans determined by the Corporation to be impaired, using discounted cash flows, estimated fair value of underlying collateral, and / or other data available. Second, management allocates the allowance for loan losses with loss factors, for criticized loan pools by loan type as well as fornon-criticized loan pools by loan type, primarily based on historical loss rates after considering loan type, historical loss and delinquency experience, and industry statistics. Loans that have been criticized are considered to have a higher risk of default thannon-criticized loans, as circumstances were present to support the lower loan grade, warranting higher loss factors. The loss factors applied in the methodology are periodicallyre-evaluated and adjusted to reflect changes in historical loss levels or other risks. Lastly, management allocates allowance for loan losses to absorb unrecognized losses that may not be provided for by the other components due to other factors evaluated by management, such as limitations within the credit risk grading process, known current economic or business conditions that may not yet show in trends, industry or other concentrations with current issues that impose higher inherent risks than are reflected in the loss factors, and other relevant considerations. The total allowance is available to absorb losses from any segment of the loan portfolio.

Table 12 Allowance for Credit Losses

March 31,
2018 December 31,
2017 September 30,
2017 June 30,
2017 March 31,
2017
($ in Thousands)
Allowance for Loan Losses
Balance at beginning of period $ 265,880
$ 276,551
$ 281,101
$ 282,672
$ 278,335
Provision for loan losses 500
—
6,000
11,000
10,000
Charge offs (12,155 ) (14,289 ) (14,727 ) (15,376 ) (11,854 )
Recoveries 2,832
3,618
4,177
2,805
6,191
Net charge offs (9,323 ) (10,671 ) (10,550 ) (12,571 ) (5,663 )
Balance at end of period $ 257,058
$ 265,880
$ 276,551
$ 281,101
$ 282,672
Allowance for Unfunded Commitments
Balance at beginning of period $ 24,400
$ 24,400
$ 25,400
$ 24,400
$ 25,400
Provision for unfunded commitments (500 ) —
(1,000 ) 1,000
(1,000 )
Amount recorded at acquisition 2,436
—
—
—
—
Balance at end of period $ 26,336
$ 24,400
$ 24,400
$ 25,400
$ 24,400
Allowance for credit losses^(a)
$ 283,394
$ 290,280
$ 300,951
$ 306,501
$ 307,072
Provision for credit losses^(b)
—
—
5,000
12,000
9,000
Net loan (charge offs) recoveries
Commercial and industrial $ (6,599 ) $ (8,212 ) $ (9,442 ) $ (11,046 ) $ (4,368 )
Commercial real estate — owner occupied (1,025 ) (246 ) 13
43
19
Commercial and business lending (7,624 ) (8,458 ) (9,429 ) (11,003 ) (4,349 )
Commercial real estate — investor 8
(164 ) 55
(126 ) (514 )
Real estate construction 189
(365 ) (150 ) (26 ) 11
Commercial real estate lending 197
(529 ) (95 ) (152 ) (503 )
Total commercial (7,427 ) (8,987 ) (9,524 ) (11,155 ) (4,852 )
Residential mortgage (131 ) (966 ) (26 ) (564 ) (128 )
Home equity (677 ) 330
(87 ) 54
173
Other consumer (1,088 ) (1,048 ) (913 ) (906 ) (856 )
Total consumer (1,896 ) (1,684 ) (1,026 ) (1,416 ) (811 )
Total net charge offs $ (9,323 ) $ (10,671 ) $ (10,550 ) $ (12,571 ) $ (5,663 )
Ratios
Allowance for loan losses to total loans 1.13 % 1.28 % 1.32 % 1.35 % 1.40 %
Allowance for loan losses to net charge offs (annualized) 6.8x
6.3x
6.6x
5.6x
12.3x


	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
	($ in Thousands)
Allowance for Loan Losses
Balance at beginning of period	$	265,880		$	276,551		$	281,101		$	282,672		$	278,335
Provision for loan losses		500			—			6,000			11,000			10,000
Charge offs		(12,155	)		(14,289	)		(14,727	)		(15,376	)		(11,854	)
Recoveries		2,832			3,618			4,177			2,805			6,191

Net charge offs		(9,323	)		(10,671	)		(10,550	)		(12,571	)		(5,663	)

Balance at end of period	$	257,058		$	265,880		$	276,551		$	281,101		$	282,672

Allowance for Unfunded Commitments
Balance at beginning of period	$	24,400		$	24,400		$	25,400		$	24,400		$	25,400
Provision for unfunded commitments		(500	)		—			(1,000	)		1,000			(1,000	)
Amount recorded at acquisition		2,436			—			—			—			—

Balance at end of period	$	26,336		$	24,400		$	24,400		$	25,400		$	24,400

Allowance for credit losses^(a)	$	283,394		$	290,280		$	300,951		$	306,501		$	307,072
Provision for credit losses^(b)		—			—			5,000			12,000			9,000
Net loan (charge offs) recoveries
Commercial and industrial	$	(6,599	)	$	(8,212	)	$	(9,442	)	$	(11,046	)	$	(4,368	)
Commercial real estate — owner occupied		(1,025	)		(246	)		13			43			19

Commercial and business lending		(7,624	)		(8,458	)		(9,429	)		(11,003	)		(4,349	)
Commercial real estate — investor		8			(164	)		55			(126	)		(514	)
Real estate construction		189			(365	)		(150	)		(26	)		11

Commercial real estate lending		197			(529	)		(95	)		(152	)		(503	)

Total commercial		(7,427	)		(8,987	)		(9,524	)		(11,155	)		(4,852	)
Residential mortgage		(131	)		(966	)		(26	)		(564	)		(128	)
Home equity		(677	)		330			(87	)		54			173
Other consumer		(1,088	)		(1,048	)		(913	)		(906	)		(856	)

Total consumer		(1,896	)		(1,684	)		(1,026	)		(1,416	)		(811	)

Total net charge offs	$	(9,323	)	$	(10,671	)	$	(10,550	)	$	(12,571	)	$	(5,663	)

Ratios
Allowance for loan losses to total loans		1.13	%		1.28	%		1.32	%		1.35	%		1.40	%
Allowance for loan losses to net charge offs (annualized)		6.8	x		6.3	x		6.6	x		5.6	x		12.3	x


(a)	Includes the allowance for loan losses and the allowance for unfunded commitments.


(b)	Includes the provision for loan losses and the provision for unfunded commitments.

Table 13 Annualized net (charge offs) recoveries^(a)


(in basis points)	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
Net loan (charge offs) recoveries
Commercial and industrial		(41	)		(51	)		(58	)		(69	)		(28	)
Commercial real estate — owner occupied		(48	)		(12	)		1			2			1

Commercial and business lending		(42	)		(47	)		(51	)		(60	)		(24	)
Commercial real estate — investor		N/M			(2	)		1			(2	)		(6	)
Real estate construction		5			(10	)		(4	)		(1	)		N/M

Commercial real estate lending		1			(4	)		(1	)		(1	)		(4	)

Total commercial		(24	)		(30	)		(31	)		(36	)		(16	)
Residential mortgage		(1	)		(5	)		N/M			(3	)		(1	)
Home equity		(28	)		15			(4	)		2			8
Other consumer		(115	)		(109	)		(97	)		(98	)		(90	)

Total consumer		(8	)		(8	)		(5	)		(7	)		(4	)

Total net charge offs		(17	)		(20	)		(20	)		(25	)		(11	)


(a)	Annualized ratio of net charge offs to average loans by loan type.

~~N/M = Not Meaningful~~

N/M	= Not Meaningful

At March 31, 2018, the allowance for credit losses was $283 million, compared to $290 million at December 31, 2017 and $307 million at March 31, 2017. At March 31, 2018, the allowance for loan losses to total loans was 1.13% and covered 123.26% of nonaccrual loans, compared to 1.28% and 127.49%, respectively, at December 31, 2017 and 1.40% and 108.72%, respectively, at March 31, 2017. Management believes the level of allowance for loan losses to be appropriate at March 31, 2018.

Notable Contributions to the Change in Allowance for Credit Loss

Total loans increased $2.0 billion (10%) for the first three months of 2018, including a $679 million (8%) increase in total consumer. Compared to March 31, 2017, total loans increased $2.7 billion (13%), including a $1.5 billion (19%) increase in total consumer, a $689 million (14%) increase in commercial real estate lending, and a $479 million (7%) increase in commercial and business lending. See section Loans for additional information on the changes in the loan portfolio and see section Credit Risk for discussion about credit risk management for each loan type.

Total nonaccrual loans were relatively unchanged for the first three months of 2018, but decreased $51 million from March 31, 2017, primarily due to migration in the oil and gas related credits. See also Note 7 Loans, of the notes to consolidated financial statements and section Nonperforming Assets for additional disclosures on the changes in asset quality.

Potential problem loans increased $105 million from December 31, 2017 primarily due to the downward migration of general commercial related credits and the addition of Bank Mutual loans. However, potential problem loans decreased $57 million from March 31, 2017, primarily due to improvements in general commercial related credits and migration in oil and gas related credits, respectively. See Table 10, for additional information on the changes in potential problem loans.

Net charge offs decreased $1 million from December 31, 2017, but increased $4 million from the first three months of 2017, primarily due to an increase in charge offs outside the oil and gas portfolio. See Table 12 and Table 13 for additional information regarding the activity in the allowance for loan losses.

The allowance for loan losses attributable to oil and gas related credits (included within the commercial and industrial allowance for loan losses) was $19 million at March 31, 2018, compared to $27 million at December 31, 2017 and $42 million at March 31, 2017. See also Oil and gas lending within the Credit Risk section for additional disclosure.

Deposits and Customer Funding

Table 14 Period End Deposit and Customer Funding Composition

($ in Thousands) March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017
Amount % of
Total Amount % of
Total Amount % of
Total Amount % of
Total Amount % of
Total
Noninterest-bearing demand $ 5,458,473
23 % $ 5,478,416
24 % $ 5,177,734
23 % $ 5,038,162
23 % $ 5,338,212
25 %
Savings 1,883,638
8 % 1,524,992
7 % 1,544,037
7 % 1,552,820
7 % 1,530,155
7 %
Interest-bearing demand 4,719,566
20 % 4,603,157
20 % 4,990,891
22 % 3,858,739
18 % 4,736,236
22 %
Money market 9,086,553
38 % 8,830,328
39 % 8,299,512
37 % 9,228,129
43 % 8,608,523
39 %
Brokered CDs 44,503
— % 18,609
— % 3,554
— % 131,184
1 % 54,993
— %
Other time 2,632,869
11 % 2,330,460
10 % 2,317,723
11 % 1,809,146
8 % 1,559,916
7 %
Total deposits $ 23,825,602
100 % $ 22,785,962
100 % $ 22,333,451
100 % $ 21,618,180
100 % $ 21,828,035
100 %
Customer funding^(a)
297,289
250,332
324,042
360,131
448,502

Total deposits and customer funding $ 24,122,891
$ 23,036,294
$ 22,657,493
$ 21,978,311
$ 22,276,537

Network transaction deposits^(b)
$ 2,244,739
$ 2,520,968
$ 2,622,787
$ 3,220,956
$ 3,417,380

Net deposits and customer funding(total deposits and customer funding, excluding Brokered CDs and network transaction deposits)
$ 21,833,649
$ 20,496,717
$ 20,031,152
$ 18,626,171
$ 18,804,164

Time deposits of more than $250,000 $ 906,727
$ 1,056,172
$ 1,009,097
$ 477,043
$ 244,641

~~(a) Securities sold under agreement to repurchase and commercial paper.~~

~~(b) Included above in interest-bearing demand and money market.~~


($ in Thousands)	March 31, 2018					December 31, 2017					September 30, 2017					June 30, 2017					March 31, 2017
	Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total
Noninterest-bearing demand	$	5,458,473		23	%	$	5,478,416		24	%	$	5,177,734		23	%	$	5,038,162		23	%	$	5,338,212		25	%
Savings		1,883,638		8	%		1,524,992		7	%		1,544,037		7	%		1,552,820		7	%		1,530,155		7	%
Interest-bearing demand		4,719,566		20	%		4,603,157		20	%		4,990,891		22	%		3,858,739		18	%		4,736,236		22	%
Money market		9,086,553		38	%		8,830,328		39	%		8,299,512		37	%		9,228,129		43	%		8,608,523		39	%
Brokered CDs		44,503		—	%		18,609		—	%		3,554		—	%		131,184		1	%		54,993		—	%
Other time		2,632,869		11	%		2,330,460		10	%		2,317,723		11	%		1,809,146		8	%		1,559,916		7	%

Total deposits	$	23,825,602		100	%	$	22,785,962		100	%	$	22,333,451		100	%	$	21,618,180		100	%	$	21,828,035		100	%
Customer funding^(a)		297,289					250,332					324,042					360,131					448,502

Total deposits and customer funding	$	24,122,891				$	23,036,294				$	22,657,493				$	21,978,311				$	22,276,537

Network transaction deposits^(b)	$	2,244,739				$	2,520,968				$	2,622,787				$	3,220,956				$	3,417,380

Net deposits and customer funding(total deposits and customer funding, excluding Brokered CDs and network transaction deposits)	$	21,833,649				$	20,496,717				$	20,031,152				$	18,626,171				$	18,804,164

Time deposits of more than $250,000	$	906,727				$	1,056,172				$	1,009,097				$	477,043				$	244,641

(a)	Securities sold under agreement to repurchase and commercial paper.

(b)	Included above in interest-bearing demand and money market.

Deposits are the Corporation’s largest source of funds.

Total deposits increased $1.0 billion (5%) from December 31, 2017 primarily due to the acquisition of Bank Mutual partially offset by seasonal deposit outflows and increased $2.0 billion (9%) from March 31, 2017.

Non-maturity deposit accounts, comprised of savings, money market, and demand (both interest and noninterest-bearing demand) accounts accounted for 89% of our total deposits at March 31, 2018.

Included in the above amounts were $2.2 billion of network deposits, primarily sourced from other financial institutions and intermediaries. These represented 9% of our total deposits at March 31, 2018.

Liquidity

The objective of liquidity risk management is to ensure that the Corporation has the ability to generate sufficient cash or cash equivalents in a timely and cost effective manner to satisfy the cash flow requirements of depositors and borrowers and to meet its other commitments as they become due. The Corporation’s liquidity risk management process is designed to identify, measure, and manage the Corporation’s funding and liquidity risk to meet its daily funding needs in the ordinary course of business, as well as to address expected and unexpected changes in its funding requirements. The Corporation engages in various activities to manage its liquidity risk, including diversifying its funding sources, stress testing, and holding readily-marketable assets which can be used as a source of liquidity, if needed.

The Corporation performs dynamic scenario analysis in accordance with industry best practices. Measures have been established to ensure the Corporation has sufficient high quality short-term liquidity to meet cash flow requirements under stressed scenarios. In addition, the Corporation also reviews static measures such as deposit funding as a percent of total assets and liquid asset levels. Strong capital ratios, credit quality, and core earnings are also essential to maintaining cost effective access to wholesale funding markets. At March 31, 2018, the Corporation was in compliance with its internal liquidity objectives and has sufficient asset-based liquidity to meet its obligations under a stressed scenario.

The Corporation maintains diverse and readily available liquidity sources, including:

Investment securities are an important tool to the Corporation’s liquidity objective, and can be pledged or sold to enhance liquidity, if necessary. See Note 6 Investment Securities of the notes to consolidated financial statements for additional information on the ~~Corporation's~~Corporation’s investment securities portfolio, including investment securities pledged.

The Bank pledges eligible loans to both the Federal Reserve Bank and the FHLB as collateral to establish lines of credit and borrow from these entities. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances against the collateral. Also, the collateral is used to enable the FHLB to issue letters of credit in favor of public fund depositors of the Bank. As of March 31, 2018, the Bank had $2.4 billion available for future advances. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of March 31, 2018, the Bank had $2.2 billion available for discount window borrowings.

The Parent Company has a $200 million commercial paper program, of which, $82 million was outstanding as of March 31, 2018.

Dividends and service fees from subsidiaries, as well as the proceeds from issuance of capital, are funding sources for the Parent Company.

The Parent Company has filed a shelf registration statement with the SEC under which the Parent Company may, from time to time, offer shares of the Corporation’s common stock in connection with acquisitions of businesses, assets or securities of other companies.

The Parent Company also has filed a universal shelf registration statement with the SEC, under which the Parent Company may offer the following securities, either separately or in units: debt securities, preferred stock, depositary shares, common stock, and warrants.

The Bank may also issue institutional certificates of deposit, network transaction deposits, and brokered certificates of deposit.

Credit ratings relate to the Corporation’s ability to issue debt securities and the cost to borrow money, and should not be viewed as an indication of future stock performance or a recommendation to buy, sell, or hold securities. Adverse changes in these factors could result in a negative change in credit ratings and impact not only the ability to raise funds in the capital markets but also the cost of these funds. The credit ratings of the Parent Company and Associated Bank at March 31, 2018 are displayed below.

Table 15 Credit Ratings



	Moody’s			S&P^(a)
Associated Bank short-term deposits		P-1	-		—
Associated Bank long-term		A1			BBB+
Corporation short-term		P-2	-		—
Corporation long-term		Baa1			BBB
Outlook		Stable			Stable

~~(a) Standard and Poor's.~~

(a)	Standard and Poor’s.

For the three months ended March 31, 2018, net cash provided by operating activities and financing activities was $43 million and $24 million, respectively, while investing activities used net cash of $350 million, for a net decrease in cash and cash equivalents of $283 million sinceyear-end 2017. At March 31, 2018, assets of $33.4 billion increased $2.9 billion compared toyear-end 2017. On the funding side, deposits of $23.8 billion increased by $1.0 billion when compared toyear-end 2017.

For the three months ended March 31, 2017, net cash provided by operating activities was $162 million, while financing and investing activities used net cash of $82 million and $32 million, respectively, for a net increase in cash and cash equivalents of $47 million sinceyear-end 2016. During the first three months of 2017, assets of $29.1 billion were relatively unchanged compared toyear-end 2016. On the funding side, deposits of $21.8 billion were also relatively unchanged compared toyear-end 2016.

Quantitative and Qualitative Disclosures about Market Risk

Market risk and interest rate risk are managed centrally. Market risk is the potential for loss arising from adverse changes in the fair value of fixed income securities, equity securities, other earning assets and derivative financial instruments as a result of changes in interest rates or other factors. Interest rate risk is the potential for reduced net interest income resulting from adverse changes in the level of interest rates. As a financial institution that engages in transactions involving an array of financial products, the Corporation is exposed to both market risk and interest rate risk. In addition to market risk, interest rate risk is measured and managed through a number of methods. The Corporation uses financial modeling simulation techniques that measure the sensitivity of future earnings due to changing rate environments to measure interest rate risk.

Policies established by the Corporation’s Asset / Liability Committee (“ALCO”) and approved by the Board of Directors are intended to limit these risks. The Board has delegatedday-to-day responsibility for managing market and interest rate risk to ALCO. The primary objectives of market risk management is to minimize any adverse effect that changes in market risk factors may have on net interest income and to offset the risk of price changes for certain assets recorded at fair value.

Interest Rate Risk

The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by the Board of Directors. These limits and guidelines reflect our risk appetite for interest rate risk over both short-term and long-term horizons. No limit breaches occurred during the first three months of 2018.

The major sources of ournon-trading interest rate risk are timing differences in the maturity andre-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, and the potential exercise of explicit or embedded options. We measure these risks and their impact by identifying and quantifying exposures through the use of sophisticated simulation and valuation models which are employed by management to understand net interest income (NII) at risk, interest rate sensitive earnings at risk (EAR), and market value of equity (MVE) at risk. The Corporation’s interest rate risk profile is such that a higher or steeper yield curve adds to income while a flatter yield curve is relatively neutral, and a lower or inverted yield curve generally has a negative impact on earnings. Based on current rate expectations for a flattening yield curve, our earnings at risk profile is neutral at March 31, 2018. While the modeled outcome of instantaneous and sustained parallel rate shocks of 100 bps or more indicate asset sensitivity, which would provide increased earnings, we see a low probability of a sustained parallel shift occurring in the near term.

For further discussion of the ~~Corporation's~~Corporation’s interest rate risk and corresponding key assumptions, see the Interest Rate Risk section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Corporation’s 2017 Annual Report on Form10-K.

The sensitivity analysis included below is measured as a percentage change in NII and EAR due to instantaneous moves in benchmark interest rates from a baseline scenario. We evaluate the sensitivity using: 1) a dynamic forecast incorporating expected growth in the balance sheet, and 2) a static forecast where the current balance sheet is held constant.

Table 16 Estimated % Change in Net Interest Income Over 12 Months


	Estimated % Change in Rate Sensitive Earnings at Risk (EAR) Over 12 Months
	Dynamic Forecast March 31, 2018			Static Forecast March 31, 2018			Dynamic Forecast December 31, 2017			Static Forecast December 31, 2017
Instantaneous Rate Change
100 bp increase in interest rates		2.6	%		1.7	%		2.5	%		2.7	%
200 bp increase in interest rates		5.0	%		3.3	%		4.6	%		4.9	%

At March 31, 2018, the MVE profile indicates a decline in net balance sheet value due to instantaneous upward changes in rates.

Table 17 Market Value of Equity Sensitivity


	March 31, 2018			December 31, 2017
Instantaneous Rate Change
100 bp increase in interest rates		(3.4	)%		(3.1	)%
200 bp increase in interest rates		(6.9	)%		(6.7	)%

While an instantaneous and severe shift in interest rates was used in this analysis to provide an estimate of exposure under an extremely adverse scenario, the Corporation believes that a gradual shift in interest rates would have a much more modest impact. Since MVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in MVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, MVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.

The above NII, EAR, and MVE measures do not include all actions that management may undertake to manage this risk in response to anticipated changes in interest rates.

Contractual Obligations, Commitments,Off-Balance Sheet Arrangements, and Contingent Liabilities

Table 18 Contractual Obligations and Other Commitments


March 31, 2018	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
	($ in Thousands)
Time deposits	$	1,893,417	$	643,818	$	138,198	$	1,939	$	2,677,372
Short-term funding		2,146,374		—		—		—		2,146,374
Long-term funding		1,500,010		499,987		150,451		1,082,890		3,233,338
Operating leases		9,815		18,572		13,881		22,447		64,715
Commitments to extend credit		4,589,376		2,654,980		1,381,952		167,822		8,794,130

Total	$	10,138,992	$	3,817,357	$	1,684,482	$	1,275,098	$	16,915,929

The Corporation utilizes a variety of financial instruments in the normal course of business to meet the financial needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments include lending-related commitments and derivative instruments. A discussion of the Corporation’s derivative instruments at March 31, 2018, is included in Note 10, Derivative and Hedging Activities, of the notes to consolidated financial statements. A discussion of the Corporation’s lending-related commitments is included in Note 12, Commitments,Off-Balance Sheet Arrangements, Legal Proceedings and Regulatory Matters, of the notes to consolidated financial statements. See also Note 9, Short and Long-Term Funding, of the notes to consolidated financial statements for additional information on the Corporation’s short-term and long-term funding.

Table 18 summarizes significant contractual obligations and other commitments at March 31, 2018, at those amounts contractually due to the recipient, including any premiums or discounts, hedge basis adjustments, or other similar carrying value adjustments.

Capital

Management actively reviews capital strategies for the Corporation and each of its subsidiaries in light of perceived business risks, future growth opportunities, industry standards, and compliance with regulatory requirements. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, stability of earnings, changing competitive forces, economic condition in markets served, and strength of management. At March 31, 2018, the capital ratios of the Corporation and its banking subsidiaries were in excess of regulatory minimum requirements. The Corporation’s capital ratios are summarized in Table 19.

Table 19 Capital Ratios

1Q18 4Q17 3Q17 2Q17 1Q17
($ in Thousands)
Risk-based Capital ^(a)

Common equity Tier 1 $ 2,473,677
$ 2,171,508
$ 2,144,325
$ 2,130,238
$ 2,085,309
Tier 1 capital 2,632,912
2,331,245
2,304,037
2,289,831
2,244,863
Total capital 3,164,362
2,848,851
2,823,097
2,808,049
2,757,310
Total risk-weighted assets 23,535,483
21,544,463
21,657,286
21,590,134
21,128,672
Common equity Tier 1 capital ratio 10.51 % 10.08 % 9.90 % 9.87 % 9.87 %
Tier 1 capital ratio 11.19 % 10.82 % 10.64 % 10.61 % 10.62 %
Total capital ratio 13.45 % 13.22 % 13.04 % 13.01 % 13.05 %
Tier 1 leverage ratio 8.48 % 8.02 % 7.93 % 8.09 % 8.05 %
Selected Equity and Performance Ratios
Total stockholders’ equity / assets 11.13 % 10.62 % 10.66 % 10.72 % 10.80 %
Dividend payout ratio ^(b)
36.59 % 45.16 % 29.27 % 33.33 % 33.33 %


	1Q18			4Q17			3Q17			2Q17			1Q17
	($ in Thousands)
Risk-based Capital^(a)
Common equity Tier 1	$	2,473,677		$	2,171,508		$	2,144,325		$	2,130,238		$	2,085,309
Tier 1 capital		2,632,912			2,331,245			2,304,037			2,289,831			2,244,863
Total capital		3,164,362			2,848,851			2,823,097			2,808,049			2,757,310
Total risk-weighted assets		23,535,483			21,544,463			21,657,286			21,590,134			21,128,672
Common equity Tier 1 capital ratio		10.51	%		10.08	%		9.90	%		9.87	%		9.87	%
Tier 1 capital ratio		11.19	%		10.82	%		10.64	%		10.61	%		10.62	%
Total capital ratio		13.45	%		13.22	%		13.04	%		13.01	%		13.05	%
Tier 1 leverage ratio		8.48	%		8.02	%		7.93	%		8.09	%		8.05	%
Selected Equity and Performance Ratios
Total stockholders’ equity / assets		11.13	%		10.62	%		10.66	%		10.72	%		10.80	%
Dividend payout ratio^(b)		36.59	%		45.16	%		29.27	%		33.33	%		33.33	%

(a)

The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The Corporation follows Basel III, subject to certain transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies. See Table 20 for a reconciliation of common equity Tier 1 and average common equity Tier 1.


(b)	Ratio is based upon basic earnings per common share.

Non-GAAP Measures

Table 20Non-GAAP Measures

Quarter Ended
March 31,
2018 December 31,
2017 September 30,
2017 June 30,
2017 March 31,
2017
($ in Thousands)
Selected Equity and Performance Ratios ^{(a) (b)}

Tangible common equity / tangible assets 7.22 % 7.07 % 7.08 % 7.11 % 7.10 %
Return on average equity 7.96 % 6.17 % 8.10 % 7.35 % 7.31 %
Return on average tangible common equity 11.99 % 9.16 % 12.20 % 11.06 % 11.07 %
Return on average Common equity Tier 1 11.39 % 8.77 % 11.73 % 10.63 % 10.61 %
Return on average assets 0.88 % 0.66 % 0.86 % 0.80 % 0.79 %
Average stockholders' equity / average assets 11.00 % 10.73 % 10.63 % 10.84 % 10.85 %
Tangible Common Equity and Common Equity Tier 1 Reconciliation ^{(a) (b)}

Common equity $ 3,552,846
$ 3,077,514
$ 3,043,672
$ 3,031,573
$ 2,984,865
Goodwill and other intangible assets, net (1,232,870 ) (991,819 ) (986,086 ) (986,536 ) (987,032 )
Tangible common equity 2,319,977
2,085,695
2,057,586
2,045,037
1,997,833
Less: Accumulated other comprehensive income / loss 107,673
62,758
54,288
53,470
56,344
Less: Deferred tax assets/deferred tax liabilities, net 46,027
23,055
32,451
31,731
31,132
Common equity Tier 1 $ 2,473,677
$ 2,171,508
$ 2,144,325
$ 2,130,238
$ 2,085,309
Tangible Assets Reconciliation ^(a)

Total assets $ 33,366,505
$ 30,483,594
$ 30,064,547
$ 29,769,025
$ 29,109,857
Goodwill and other intangible assets, net (1,232,870 ) (991,819 ) (986,086 ) (986,536 ) (987,032 )
Tangible assets $ 32,133,636
$ 29,491,775
$ 29,078,461
$ 28,782,489
$ 28,122,825
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation ^{(a) (b)}

Common equity $ 3,377,388
$ 3,056,077
$ 3,024,918
$ 3,005,209
$ 2,963,462
Goodwill and other intangible assets, net (1,107,503 ) (991,955 ) (986,342 ) (986,826 ) (987,135 )
Tangible common equity 2,269,885
2,064,121
2,038,576
2,018,383
1,976,327
Less: Accumulated other comprehensive income / loss 89,105
61,937
49,164
50,148
54,234
Less: Deferred tax assets/deferred tax liabilities, net 30,943
29,386
31,935
31,294
31,188
Average common equity Tier 1 $ 2,389,933
$ 2,155,444
$ 2,119,675
$ 2,099,825
$ 2,061,749
Efficiency Ratio Reconciliation ^(c)

Federal Reserve efficiency ratio 70.76 % 66.93 % 63.92 % 66.69 % 66.39 %
Fully tax-equivalent adjustment (0.66 )% (1.30 )% (1.21 )% (1.30 )% (1.30 )%
Other intangible amortization (0.51 )% (0.18 )% (0.16 )% (0.18 )% (0.20 )%
Fully tax-equivalent efficiency ratio 69.60 % 65.45 % 62.55 % 65.21 % 64.89 %


	Quarter Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
	($ in Thousands)
Selected Equity and Performance Ratios^{(a) (b)}
Tangible common equity / tangible assets		7.22	%		7.07	%		7.08	%		7.11	%		7.10	%
Return on average equity		7.96	%		6.17	%		8.10	%		7.35	%		7.31	%
Return on average tangible common equity		11.99	%		9.16	%		12.20	%		11.06	%		11.07	%
Return on average Common equity Tier 1		11.39	%		8.77	%		11.73	%		10.63	%		10.61	%
Return on average assets		0.88	%		0.66	%		0.86	%		0.80	%		0.79	%
Average stockholders’ equity / average assets		11.00	%		10.73	%		10.63	%		10.84	%		10.85	%
Tangible Common Equity and Common Equity Tier 1 Reconciliation^{(a) (b)}
Common equity	$	3,552,846		$	3,077,514		$	3,043,672		$	3,031,573		$	2,984,865
Goodwill and other intangible assets, net		(1,232,870	)		(991,819	)		(986,086	)		(986,536	)		(987,032	)

Tangible common equity		2,319,977			2,085,695			2,057,586			2,045,037			1,997,833
Less: Accumulated other comprehensive income / loss		107,673			62,758			54,288			53,470			56,344
Less: Deferred tax assets/deferred tax liabilities, net		46,027			23,055			32,451			31,731			31,132

Common equity Tier 1	$	2,473,677		$	2,171,508		$	2,144,325		$	2,130,238		$	2,085,309

Tangible Assets Reconciliation^(a)
Total assets	$	33,366,505		$	30,483,594		$	30,064,547		$	29,769,025		$	29,109,857
Goodwill and other intangible assets, net		(1,232,870	)		(991,819	)		(986,086	)		(986,536	)		(987,032	)

Tangible assets	$	32,133,636		$	29,491,775		$	29,078,461		$	28,782,489		$	28,122,825

Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation^{(a) (b)}
Common equity	$	3,377,388		$	3,056,077		$	3,024,918		$	3,005,209		$	2,963,462
Goodwill and other intangible assets, net		(1,107,503	)		(991,955	)		(986,342	)		(986,826	)		(987,135	)

Tangible common equity		2,269,885			2,064,121			2,038,576			2,018,383			1,976,327
Less: Accumulated other comprehensive income / loss		89,105			61,937			49,164			50,148			54,234
Less: Deferred tax assets/deferred tax liabilities, net		30,943			29,386			31,935			31,294			31,188

Average common equity Tier 1	$	2,389,933		$	2,155,444		$	2,119,675		$	2,099,825		$	2,061,749

Efficiency Ratio Reconciliation^(c)
Federal Reserve efficiency ratio		70.76	%		66.93	%		63.92	%		66.69	%		66.39	%
Fullytax-equivalent adjustment		(0.66	)%		(1.30	)%		(1.21	)%		(1.30	)%		(1.30	)%
Other intangible amortization		(0.51	)%		(0.18	)%		(0.16	)%		(0.18	)%		(0.20	)%

Fullytax-equivalent efficiency ratio		69.60	%		65.45	%		62.55	%		65.21	%		64.89	%


(a)	The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net, which is anon-GAAP financial measure. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.

(b)

(c)

The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fullytax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fullytax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. Management believes the fullytax-equivalent efficiency ratio, which adjusts net interest income for thetax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable andtax-exempt sources.

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information on the shares repurchased during the first quarter of 2018.

Sequential Quarter Results

The Corporation reported net income of $69 million for the first quarter of 2018, compared to net income of $50 million for the fourth quarter of 2017. Net income available to common equity was $67 million for the first quarter of 2018 or $0.41 for basic and $0.40 diluted earnings per common share. Comparatively, net income available to common equity for the fourth quarter of 2017 was $48 million, or net income of $0.31 for both basic and diluted earnings per common share, respectively (see Table 1).

Fullytax-equivalent net interest income for the first quarter of 2018 was $213 million, $20 million higher from the fourth quarter of 2017. The net interest margin in the first quarter of 2018 was up 13 bp, to 2.92%. Average earning assets increased $1.8 billion to $29.3 billion in the first quarter of 2018, with average loans up $1.2 billion, while average investments and other short-term investments were up $622 million. On the funding side, average interest-bearing deposits were up $1.5 billion, while noninterest-bearing demand deposits were down $56 million. Average short and long-term funding increased $371 million (see Table 2).

The provision for credit losses was zero for the first quarter of 2018, and the fourth quarter of 2017 (see Table 12). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses.

Noninterest income for the first quarter of 2018 increased $6 million (7%) to $90 million versus the fourth quarter of 2017.Fee-based revenue increased $4 million (6%) from the fourth quarter of 2017, primarily due to insurance commissions and fees. Mortgage banking, net, was up $3 million (101%) from the fourth quarter of 2017 as the Corporation resumed its historical practice of originating loans for sale in the secondary market.

Noninterest expense increased $31 million (17%) to $213 million. Personnel expense was $118 million for the first quarter of 2018, up $11 million (10%) from the fourth quarter of 2017. Occupancy expense increased $2 million (14%) from the fourth quarter of 2017. Legal and professional fees were $5 million, down $2 million (25%) from the fourth quarter of 2017. Bank Mutual acquisition related costs were $21 million for the first quarter of 2018.

For the first quarter of 2018, the Corporation recognized income tax expense of $18 million, compared to income tax expense of $40 million for the fourth quarter of 2017, primarily driven by the Tax Cut and Jobs Act signed into law on December 22, 2017. The effective tax rate was 20.43% and 44.34% for the first quarter of 2018 and the fourth quarter of 2017, respectively. See Income Taxes section for a detailed discussion on income taxes.

Comparable Quarter Results

The Corporation reported net income of $69 million for the first quarter of 2018, compared to $56 million for the first quarter of 2017. Net income available to common equity was $67 million for the first quarter of 2018, or $0.41 for basic earnings per common share. Comparatively, net income available to common equity for the first quarter of 2017 was $54 million, or $0.36 for basic earnings per common share (see Table 1).

Fullytax-equivalent net interest income for the first quarter of 2018 was $213 million, $27 million higher than the first quarter of 2017. The net interest margin between the comparable quarters was up 8 bp, to 2.92%, in the first quarter of 2018. Average earning assets increased $2.9 billion to $29.3 billion in the first quarter of 2018, with average loans increased $2.0 billion (predominantly due to the Bank Mutual acquisition). On the funding side, average interest-bearing deposits increased $2.1 billion, while noninterest-bearing demand deposits increased $112 million from the first quarter of 2017. Average short and long-term funding increased $643 million (see Table 2).

The provision for credit losses was zero for the first quarter of 2018, down $9 million from the first quarter of 2017. See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses.

Noninterest income for the first quarter of 2018 of $90 million was up $11 million (13%) compared to first quarter of 2017. Net mortgage banking income for the first quarter of 2018 was up $2 million (39%) compared to the first quarter of 2017. Brokerage commissions and fees was up $3 million (68%), primarily driven by increased investment advisory fees compared to the first quarter of 2017.

On a comparable quarter basis, noninterest expense increased $39 million (23%) to $213 million for the first quarter of 2018. Bank Mutual acquisition related costs were $21 million for the first quarter of 2018. Personnel expense was $118 million for the first quarter of 2018, up $11 million (10%) from the first quarter of 2017, primarily driven by the additional cost of Bank Mutual staff. Technology expense increased $3 million (24%) to $18 million in the first quarter of 2018, driven by investments in technology solutions that meet evolving customer needs and improve operational efficiency.

The Corporation recognized income tax expense of $18 million for the first quarter of 2018, compared to income tax expense of $21 million for first quarter of 2017. The effective tax rate was 20.43% and 27.31% for the first quarter of 2018 and 2017, respectively. See Income Taxes section for a detailed discussion on income taxes.

Segment Review

As discussed in Note 15 Segment Reporting of the notes to consolidated financial statements, the Corporation’s reportable segments have been determined based upon its internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer, and the distribution of those products and services are similar. The reportable segments are Corporate and Commercial Specialty; Community, Consumer and Business; and Risk Management and Shared Services.

FTP is an important tool for managing the Corporation’s balance sheet structure and measuring risk-adjusted profitability. By appropriately allocating the cost of funding and contingent liquidity to business units, the FTP process improves product pricing, which influences the volume and terms of new business and helps to optimize the risk / reward profile of the balance sheet. This process helps align the Corporation’s funding and contingent liquidity risk with its risk appetite and complements broader liquidity and interest rate risk management programs. FTP methodologies are designed to promote more resilient, sustainable business models and centralize the management of funding and contingent liquidity risks. Through FTP, the Corporation transfers these risks to a central management function that can take advantage of naturaloff-sets, centralized hedging activities, and a broader view of these risks across business units.

Comparable Quarter Segment Review

The Corporate and Commercial Specialty segment had net income of $47 million for the first quarter of 2018, up $13 million from the comparable quarter in 2017. Segment revenue increased $7 million compared to first quarter of 2017, primarily due to growth in average loan balances and increases in the Federal Reserve interest rate. The credit provision decreased $1 million to $11 million for the first quarter of 2018. Average loan balances were $11.4 billion for the first quarter of 2018, up $625 million from an average balance of $10.8 billion for first quarter of 2017. Average deposit balances were $8.1 billion for the first quarter of 2018, up $1.6 billion from the comparable quarter of 2017. Average allocated capital increased $56 million to $1.2 billion for first quarter of 2018.

The Community, Consumer, and Business segment had net income of $36 million for the first quarter of 2018, up $14 million compared to first quarter of 2017. Segment revenue increased $24 million to $178 million for the first quarter of 2018, primarily due to a $15 million increase in net interest income and $9 million increase in noninterest income. Total noninterest expense for the first quarter of 2018 was $127 million, up $11 million from the comparable quarter of 2017, primarily due to an increase in personnel expense. Average loan balances were $10.1 billion for the first quarter of 2018, up $1.0 billion from the comparable quarter of 2017. Average deposits were $13.1 billion for the first quarter of 2018, up $1.8 billion from average deposits of $11.3 billion for the comparable quarter of 2017. Average allocated capital increased $56 million compared to the first quarter of 2017.

The Risk Management and Shared Services segment had a net loss of $14 million for the first quarter of 2018. Segment revenue was $14 million in the first quarter of 2018, an increase of $9 million from the comparable quarter of 2017, primarily due to an increase in net interest income. The credit provision decreased $8 million. Total noninterest expense for the first quarter of 2018 was $47 million, up $26 million from the comparable quarter of 2017, primarily driven by $21 million of acquisition related costs and certain unallocated expenses related to Bank Mutual shared services and operations prior to system conversion in late June 2018. Average deposits were $2.5 billion for first quarter of 2018, down $1.2 billion versus the comparable quarter of 2017 primarily driven by a $1.2 billion decrease in network transaction deposits. Average allocated capital increased $215 million to $586 million for first quarter of 2018.

Critical Accounting Policies

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, goodwill impairment assessment, mortgage servicing rights valuation, and income taxes. A discussion of these policies can be found in the Critical Accounting Policies section in ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Corporation’s 2017 Annual Report on Form10-K. There have been no changes in the ~~Corporation's~~Corporation’s application of critical accounting policies since December 31, 2017.

Future Accounting Pronouncements

New accounting policies adopted by the Corporation are discussed in Note 3 Summary of Significant Accounting Policies, of the notes to consolidated financial statements. The expected impact of accounting pronouncements recently issued or proposed but not yet required to be adopted are displayed in the table below.



Standard	Description	Date of adoption	Effect on financial statements

ASU2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	The FASB issued an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting ~~unit's~~unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Entities should apply the amendment prospectively. Early adoption is permitted, including in an interim period, for impairment tests performed after January 1, 2017. The Corporation has not had to perform a step one quantitative analysis since 2012, which concluded no impairment was necessary.	2nd Quarter 2020, consistent with the ~~Corporation's~~Corporation’s annual impairment test in May of each year.	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity.

ASU2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	The FASB issued an amendment to replace the current incurred loss impairment methodology. Under the new guidance, entities will be required to measure expected credit losses by utilizing forward-looking information to assess an ~~entity's~~entity’s allowance for credit losses. The guidance also requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities should apply the amendment by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted.	1st Quarter 2020	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity. A cross-functional team has been established to assess and implement the standard.

ASU2016-02 Leases (Topic 842)	The FASB issued an amendment to provide transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment will require lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a ~~lessee's~~lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) aright-of-use asset, which is an asset that represents the ~~lessee's~~lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. ASU2018-01 amendment permits an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the ~~entity's~~entity’s adoption of Topic 842.	1st Quarter 2019	The Corporation is currently evaluating the impact on its results of operations, financial position, and liquidity. A cross-functional team has been established to assess and implement the standard.

Recent Developments

On April 24, 2018, the ~~Corporation's~~Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.15 per common share, payable on June 15, 2018, to shareholders of record at the close of business on June 1, 2018. The Board of Directors also declared a regular quarterly cash dividend of $0.3828125 per depositary share on ~~Associated's~~Associated’s 6.125% Series C Perpetual Preferred Stock, payable on June 15, 2018, to shareholders of record at the close of business on June 1, 2018. The Board of Directors also declared a regular quarterly cash dividend of $0.3359375 per depositary share on ~~Associated's~~Associated’s 5.375% Series D Perpetual Preferred Stock, payable on June 15, 2018, to shareholders of record at the close of business on June 1, 2018.

In addition, the Board of Directors authorized the repurchase of up to $100 million of the ~~Corporation's~~Corporation’s common stock. This repurchase authorization is in addition to the authority remaining under the previous program. Repurchases under such programs are subject to regulatory limitations and may occur from time to time in open market purchases, block transactions, accelerated share repurchase programs or similar facilities.

In April 2018, the Corporation entered into two pay fix and receive floating rate interest rate swaps totaling $250 million notional amount. Combining these swaps with the $250 million notional amount of swaps entered into in the first quarter of 2018, the Corporation as of April 2018 has a total of $500 million notional amount pay fix and receive floating rate interest rate swaps with the objective of synthetically converting fixed rate assets to floating rate assets that will benefit the Corporation in a rising rate environment.

PART II – OTHER INFORMATION

ITEM 6.

Exhibits

(a) Exhibits:



~~ITEM 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

~~Information required~~Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by ~~this item is set forth in Item 2 under the captions Quantitative and Qualitative Disclosures about Market Risk and Interest Rate Risk.~~



~~ITEM 4.~~	~~Controls and Procedures~~

The Corporation maintains disclosure controls and procedures as required under Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Corporation’s management, including itsPhilip B. Flynn, Chief Executive ~~Officer and~~Officer.

Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by Christopher J. Del Moral-Niles, Chief Financial ~~Officer, as appropriate, to allow timely decisions regarding required disclosure.~~

As of March 31, 2018 the Corporation’s management carried out an evaluation, under the supervision and with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on the foregoing, its Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective as of March 31, 2018.

No changes were made to the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act of 1934) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Officer.

~~PART II - OTHER INFORMATION~~



~~ITEM 1.~~	~~Legal Proceedings~~

~~The information required by this item is set forth in Part I, Item 1 under Note 12 Commitments, Off-Balance Sheet Arrangements, Legal Proceedings and Regulatory Matters.~~



~~ITEM 1A.~~	~~Risk Factors~~

~~The following risk factor supplements the Risk Factors described in the Corporation’s 2017 Annual Report on Form 10-K and should be read in conjunction therewith.~~

Unauthorized disclosure of sensitive or confidential client or customer information, whether through a cyber-attack, other breach of our computer systems or otherwise, could severely harm our business. In the normal course of our business, we collect, process and retain sensitive and confidential client and customer information on our behalf and on behalf of other third parties. Despite the security measures we have in place, our facilities and systems may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, malware, misplaced or lost data, programming and / or human errors, or other similar events.

Information security risks for financial institutions like us have increased recently in part because of new technologies, the increased use of the internet and telecommunications technologies (including mobile devices and cloud computing) to conduct financial and other business transactions, political activism, and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against large financial institutions, particularly denial of service attacks, designed to disrupt key business services, such as customer-facing web sites. Because the methods of cyber-attacks change frequently or, in some cases, are not recognized until launched, we are not able to anticipate or implement effective preventive measures against all possible security breaches and the probability of a successful attack cannot be predicted. Although we employ detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by persistent sophisticated attacks and malware designed to avoid detection.

We also face risks related to cyber-attacks and other security breaches in connection with card transactions that typically involve the transmission of sensitive information regarding our customers through various third parties. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us through no fault of our own, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other third party service providers to conduct other aspects of our business operations and face similar risks relating to them. While we conduct security assessments on our higher risk third party service providers, we cannot be sure that their information security protocols are sufficient to withstand a cyber-attack or other security breach.

The Corporation regularly evaluates its systems and controls and implements upgrades as necessary. The additional cost to the Corporation of our cyber security monitoring and protection systems and controls includes the cost of hardware and software, third party technology providers, consulting and forensic testing firms, insurance premium costs and legal fees, in addition to the incremental cost of our personnel who focus a substantial portion of their responsibilities on cyber security.

Any successful cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information or that compromises our ability to function could severely damage our reputation, erode confidence in the security of our systems, products and services, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business. Any successful cyber-attack may also subject the Corporation to regulatory investigations, litigation or enforcement, or require the payment of regulatory fines or penalties or undertaking costly remediation efforts with respect to third parties affected by a cyber security incident, all or any of which could adversely affect the Corporation’s business, financial condition or results of operations and damage its reputation.

From time to time, the Corporation engages in acquisitions, including acquisitions of depository institutions such as our recent acquisition of Bank Mutual. The integration of core systems and processes for such transactions often occurs well after the closing, which may create elevated risk of cyber incidents. The Corporation may be subject to the data risks and cyber security vulnerabilities of the acquired company until the Corporation has sufficient time to fully integrate the acquired company’s

customers and operations. Although the Corporation conducts comprehensive due diligence of cyber-security policies, procedures and controls of our acquisition counterparties, and the Corporation maintains adequate policies, procedures, controls and information security protocols to facilitate an successful integration, there can be no assurance that such measures, controls and protocols are sufficient to withstand a cyber-attack or other security breach with respect to the companies we acquire, particularly during the period of time between closing and final integration.



~~ITEM 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~During the first quarter of 2018, the Corporation repurchased $26 million, or approximately 1.1 million shares, of common stock. The repurchase details are presented in the table below.~~

~~Common Stock Purchases~~

Total Number of
Shares Purchased^(a)
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^(b)
Period
January 1, 2018 - January 31, 2018 —
$ —
—
—
February 1, 2018 - February 28, 2018 1,108,000
23.90
1,108,000
—
March 1, 2018 - March 31, 2018 —
—
—
—
Total 1,108,000
$ 23.90
1,108,000
977,867


~~(a)~~	During the first quarter of 2018, the Corporation repurchased approximately 214,000 common shares for minimum tax withholding settlements on equity compensation. These purchases do not count against the maximum number of shares that may yet be purchased under the Board of Directors’ authorization.

~~(b)~~

On April 21, 2015, the Board of Directors authorized the repurchase of up to $125 million of the Corporation's common stock, of which approximately $24 million remained available to repurchase as of March 31, 2018. Using the closing stock price on March 31, 2018 of $24.85, a total of approximately 1 million shares of common stock remained available to be repurchased under the previously approved Board authorizations as of March 31, 2018.

~~During the first quarter of 2018, the Corporation repurchased $78 thousand, or 3,140 shares of preferred stock. The repurchase details are presented in the table below.~~

~~Series D Preferred Stock Depository Share Purchases~~

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^(a)
Period
January 1, 2018 - January 31, 2018 —
$ —
—
—
February 1, 2018 - February 28, 2018 —
—
—
—
March 1, 2018 - March 31, 2018 3,140
24.89
3,140
—
Total 3,140
$ 24.89
3,140
597,591

~~(a)~~

On July 25, 2017, the Board of Directors authorized the repurchase of up to $15 million of the depository shares of the Series D Preferred Stock, of which approximately $14.9 million remained available to repurchase as of March 31, 2018. Using the closing stock price on March 31, 2018 of $24.97, a total of approximately 598,000 shares of Series D Preferred stock remained available to be repurchased under the previously approved Board authorizations as of March 31, 2018.

On August 28, 2015, the Board of Directors authorized the repurchase of up to $10 million of depositary shares of the Series C Preferred Stock, of which all remained available to repurchase as of March 31, 2018. The repurchase of shares is based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.



~~ITEM 6.~~	~~Exhibits~~

~~(a) Exhibits:~~

~~Exhibit (11), Statement regarding computation of per share earnings. The information required by this item is set forth in Part I, Item 1 under Note 4 Earnings Per Common Share.~~

~~Exhibit (31.1), Certification Under Section 302 of Sarbanes-Oxley by Philip B. Flynn, Chief Executive Officer.~~

~~Exhibit (31.2), Certification Under Section 302 of Sarbanes-Oxley by Christopher J. Del Moral-Niles, Chief Financial Officer.~~

~~Exhibit (32), Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley.~~

Exhibit (101), Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Changes in Stockholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		ASSOCIATED BANC-CORP (Registrant)

Date: May 4, 2018


	~~ASSOCIATED BANC-CORP~~
	~~(Registrant)~~

~~Date: April 30, 2018~~	/s/ Philip B. Flynn
		Philip B. Flynn
	President and Chief Executive Officer

Date: ~~April 30,~~May 4, 2018

		/s/ Christopher J. Del ~~Moral-Niles~~Moral – Niles
		Christopher J. Del Moral-Niles
	Chief Financial Officer

Date: ~~April 30,~~May 4, 2018

		/s/ Tammy C. Stadler
		Tammy C. Stadler
	Principal Accounting Officer



Wisconsin		39-1098068
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

433 Main Street Green Bay, Wisconsin		54301
(Address of principal executive offices)		(Zip Code)


Large accelerated filer		☒	Accelerated filer	☐

~~Large accelerated filer~~ þ		~~Accelerated filer~~ ¨
Non-accelerated filer
~~Non-accelerated filer~~ ¨	~~Smaller reporting company~~ ¨
~~(Do~~☐ (Do not check if a smaller reporting company)
Smaller reporting company
~~Emerging growth company~~ ¨	☐



		~~Page~~
~~PART I. Financial Information~~

	~~Item 1. Financial Statements (Unaudited):~~	3

	~~Consolidated Balance Sheets~~	3

	~~Consolidated Statements of Income~~	4

	~~Consolidated Statements of Comprehensive Income~~	5

	~~Consolidated Statements of Changes in Stockholders’ Equity~~	6

	~~Consolidated Statements of Cash Flows~~	7

	~~Notes to Consolidated Financial Statements~~	9

	~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	48

	~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~	72

	~~Item 4. Controls and Procedures~~	72

~~PART II. Other Information~~

	~~Item 1. Legal Proceedings~~	73

	~~Item 1A. Risk Factors~~	73

	~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~	74

	~~Item 6. Exhibits~~	75

	~~Signatures~~	76



	March 31, 2018			December 31, 2017
	(Unaudited)			(Audited)
	(In Thousands, except share and per share data)
Assets
Cash and due from banks	$	328,260		$	483,666
Interest-bearing deposits in other financial institutions	94,918			199,702
Federal funds sold and securities purchased under agreements to resell	10,000			32,650
Investment securities held to maturity, at amortized cost	2,443,203			2,282,853
Investment securities available for sale, at fair value	4,485,875			4,043,446
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	233,216			165,331
Residential loans held for sale	103,953			85,544
Commercial loans held for sale	6,091			—
Loans	22,810,491			20,784,991
Allowance for loan losses	(257,058		)	(265,880		)
Loans, net	22,553,433			20,519,111
Bank and corporate owned life insurance	657,841			591,057
Tax credit and other investments	142,368			147,099
Trading assets	102,890			69,675
Premises and equipment, net	381,327			330,963
Goodwill	1,153,156			976,239
Mortgage servicing rights, net	66,407			58,384
Other intangible assets, net	79,714			15,580
Other assets	523,855			482,294
Total assets	$	33,366,505		$	30,483,594
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	5,458,473		$	5,478,416
Interest-bearing deposits	18,367,129			17,307,546
Total deposits	23,825,602			22,785,962
Federal funds purchased and securities sold under agreements to repurchase	283,954			324,815
Other short-term funding	1,862,420			351,467
Long-term funding	3,233,338			3,397,450
Trading liabilities	100,247			67,660
Accrued expenses and other liabilities	348,246			318,797
Total liabilities	29,653,806			27,246,151
Stockholders’ Equity
Preferred equity	159,853			159,929
Common equity
Common stock	1,741			1,618
Surplus	1,823,800			1,454,188
Retained earnings	1,859,068			1,819,230
Accumulated other comprehensive income (loss)	(107,673		)	(62,758		)
Treasury stock, at cost	(24,089		)	(134,764		)
Total common equity	3,552,847			3,077,514
Total stockholders’ equity	3,712,699			3,237,443
Total liabilities and stockholders’ equity	$	33,366,505		$	30,483,594
Preferred shares issued	165,000			165,000
Preferred shares authorized (par value $1.00 per share)	750,000			750,000
Common shares issued	174,107,786			161,751,975
Common shares authorized (par value $0.01 per share)	250,000,000			250,000,000
Treasury shares of common stock	1,925,673			8,908,448



	Three Months Ended March 31,
	2018			2017
	($ in Thousands)
Net income	$	69,456		$	56,270
Other comprehensive income, net of tax
Investment securities available for sale
Net unrealized gains (losses)	(41,834		)	3,152
Net unrealized gain (loss) on available for sale securities transferred to held to maturity securities	—			(5,264		)
Amortization of net unrealized gain (loss) on available for sale securities transferred to held to maturity securities	(297		)	(1,027		)
Reclassification from OCI due to change in accounting principle	(84		)	—
Reclassification of certain tax effects from OCI	(8,419		)	—
Income tax (expense) benefit	10,635			1,195
Other comprehensive income (loss) on investment securities available for sale	(40,000		)	(1,944		)
Defined benefit pension and postretirement obligations
Amortization of prior service cost	(38		)	(38		)
Amortization of actuarial loss (gains)	465			488
Reclassification of certain tax effects from OCI	(5,235		)	—
Income tax (expense) benefit	(107		)	(171		)
Other comprehensive income (loss) on pension and postretirement obligations	(4,915		)	279
Total other comprehensive income (loss)	(44,915		)	(1,665		)
Comprehensive income	$	24,541		$	54,605



þ☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~For the quarterly period ended March 31, 2018~~



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~For the transition period from to~~



~~PART I - FINANCIAL INFORMATION~~
~~ITEM 1.~~	~~Financial Statements:~~


⁽²⁾	~~Includes Bank Mutual acquisition-related costs only.~~



	Purchase Accounting Adjustments			February 1, 2018
	($ in Thousands)
Assets
Cash and cash equivalents	$	—		$	78,052
Investment securities	(6,238		)	452,867
Federal Home Loan Bank stock, at cost	—			20,026
Loans	(48,533		)	1,875,386
Premises and equipment, net	11,172			50,930
Bank owned life insurance	(24		)	65,390
Goodwill				166,870
Core deposit intangibles (included in other intangible assets, net on the face of the Consolidated Balance Sheet)	58,100			58,100
Other real estate owned	(246		)	4,403
Others assets	$	5,098		$	37,151
Total assets				$	2,809,175
Liabilities
Deposits	$	2,498		$	1,840,950
Other borrowings	935			430,946
Other liabilities	$	2,148		$	55,591
Total liabilities				$	2,327,487

Total consideration paid				$	481,688



	For the Three Months Ended March 31,
	2018			2017
	(In Thousands, except per share data)
Net income	$	69,456		$	56,270
Preferred stock dividends	(2,339		)	(2,330		)
Net income available to common equity	$	67,117		$	53,940
Common shareholder dividends	(25,572		)	(18,251		)
Unvested share-based payment awards	(138		)	(117		)
Undistributed earnings	$	41,407		$	35,572
Undistributed earnings allocated to common shareholders	41,225			35,294
Undistributed earnings allocated to unvested share-based payment awards	182			278
Undistributed earnings	$	41,407		$	35,572
Basic
Distributed earnings to common shareholders	$	25,572		$	18,251
Undistributed earnings allocated to common shareholders	41,225			35,294
Total common shareholders earnings, basic	$	66,797		$	53,545
Diluted
Distributed earnings to common shareholders	$	25,572		$	18,251
Undistributed earnings allocated to common shareholders	41,225			35,294
Total common shareholders earnings, diluted	$	66,797		$	53,545
Weighted average common shares outstanding	163,520			150,815
Effect of dilutive common stock awards	2,038			2,216
Effect of dilutive common stock warrants	874			838
Diluted weighted average common shares outstanding	166,432			153,869
Basic earnings per common share	$	0.41		$	0.36
Diluted earnings per common share	$	0.40		$	0.35



	2018		2017
Dividend yield	2.50	%	2.00	%
Risk-free interest rate	2.60	%	2.00	%
Weighted average expected volatility	22.00	%	25.00	%
Weighted average expected life	5.75 years		5.5 years
Weighted average per share fair value of options	$4.47		$5.30



Stock Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value^(a)
Outstanding at December 31, 2017	5,118,687		$	18.02	6.48	$	38,028
Granted	938,740		24.50
Assumed from Bank Mutual acquisition	370,051		14.35
Exercised	(529,869	)	17.37
Forfeited or expired	(24,130	)	23.35
Outstanding at March 31, 2018	5,873,479		$	18.86	6.80	$	35,879
Options Exercisable at March 31, 2018	3,659,277		$	16.72	5.55	$	30,009



Restricted Stock	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017	2,026,071		$	19.68
Granted	570,341		24.63
Vested	(498,988	)	17.97
Forfeited	(5,799	)	20.16
Outstanding at March 31, 2018	2,091,625		$	21.86


~~(a)~~	~~$ in Thousands~~



December 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value


	($ in Thousands)
Investment securities available for sale
U. S. Treasury securities	$	1,003	$	—	$	(7	)	$	996
Residential mortgage-related securities
FNMA / FHLMC	457,680		9,722		(2,634		)	464,768
GNMA	1,944,453		275		(31,378		)	1,913,350
Private-label	1,067		—		(8		)	1,059
GNMA commercial mortgage-related securities	1,547,173		5		(33,901		)	1,513,277
FFELP asset backed securities	144,322		867		(13		)	145,176
Other debt securities	3,200		—		(12		)	3,188
Other equity securities	1,519		127		(14		)	1,632
Total investment securities available for sale	$	4,100,417	$	10,996	$	(67,967	)	$	4,043,446
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	$	1,281,320	$	13,899	$	(3,177	)	$	1,292,042
Residential mortgage-related securities
FNMA / FHLMC	40,995		398		(489		)	40,904
GNMA	414,440		2,700		(6,400		)	410,740
GNMA commercial mortgage-related securities	546,098		9,546		(15,756		)	539,888
Total investment securities held to maturity	$	2,282,853	$	26,543	$	(25,822	)	$	2,283,574



	Available for Sale					Held to Maturity
	Amortized Cost		Fair Value			Amortized Cost		Fair Value
	($ in Thousands)
Due in one year or less	$	2,002	$	1,995		$	44,019	$	44,261
Due after one year through five years	2,200		2,188			221,411		219,411
Due after five years through ten years	—		—			346,521		341,147
Due after ten years	—		—			812,974		807,638
Total debt securities	4,202		4,183			1,424,925		1,412,456
Residential mortgage-related securities
FNMA / FHLMC	427,480		430,073			76,069		74,631
GNMA	2,364,339		2,310,306			410,275		400,861
Private-label	1,051		1,044			—		—
GNMA commercial mortgage-related securities	1,497,573		1,448,369			531,934		519,248
FFELP asset backed securities	288,519		290,300			—		—
Equity securities	1,599		1,599			—		—
Total investment securities	$	4,584,763	$	4,485,875		$	2,443,203	$	2,407,197
Ratio of Fair Value to Amortized Cost			97.8		%			98.5		%



	Less than 12 months						12 months or more						Total
March 31, 2018	Number of Securities	Unrealized Losses			Fair Value		Number of Securities	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
	($ in Thousands)
Investment securities available for sale
U.S. Treasury securities	1	$	(7	)	$	995	—	$	—		$	—	$	(7	)	$	995
Residential mortgage-related securities
FNMA / FHLMC	12	(1,389		)	94,231		9	(3,349		)	135,316		(4,738		)	229,547
GNMA	65	(25,956		)	1,590,545		26	(28,098		)	718,971		(54,054		)	2,309,516
Private-label	—	—			—		1	(7		)	1,044		(7		)	1,044
GNMA commercial mortgage-related securities	28	(9,895		)	385,319		76	(39,309		)	1,063,082		(49,204		)	1,448,401
FFELP asset backed securities	6	(54		)	86,988		—	—			—		(54		)	86,988
Other debt securities	1	(12		)	188		—	—			—		(12		)	188
Total	113	$	(37,313	)	$	2,158,266	112	$	(70,763	)	$	1,918,413	$	(108,076	)	$	4,076,679
Investment securities held to maturity
Obligations of state and political subdivisions (municipal securities)	821	$	(9,876	)	$	523,716	132	$	(6,703	)	$	122,632	$	(16,579	)	$	646,348
Residential mortgage-related securities
FNMA / FHLMC	19	(939		)	54,122		10	(725		)	15,230		(1,665		)	69,352
GNMA	58	(7,239		)	279,707		18	(4,385		)	113,561		(11,624		)	393,268
GNMA commercial mortgage-related securities	2	(837		)	49,711		23	(20,857		)	469,538		(21,694		)	519,249
Total	900	$	(18,891	)	$	907,256	183	$	(32,670	)	$	720,961	$	(51,561	)	$	1,628,217



	March 31, 2018^(a)		December 31, 2017
	($ in Thousands)
Commercial and industrial	$	6,756,983	$	6,399,693
Commercial real estate — owner occupied	900,913		802,209
Commercial and business lending	7,657,896		7,201,902
Commercial real estate — investor	4,077,671		3,315,254
Real estate construction	1,579,778		1,451,684
Commercial real estate lending	5,657,449		4,766,938
Total commercial	13,315,345		11,968,840
Residential mortgage	8,197,223		7,546,534
Home equity	923,470		883,804
Other consumer	374,453		385,813
Total consumer	9,495,146		8,816,151
Total loans	$	22,810,491	$	20,784,991
^(a)Includes $15 million of purchased credit-impaired loans



	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due^(a)		Nonaccrual^(b)		Total
	($ in Thousands)
Commercial and industrial	$	6,653,188	$	793	$	87	$	248	$	102,667	$	6,756,983
Commercial real estate - owner occupied	879,766		511		—		—		20,636		900,913
Commercial and business lending	7,532,954		1,304		87		248		123,303		7,657,896
Commercial real estate - investor	4,061,600		240		—		257		15,574		4,077,671
Real estate construction	1,578,069		220		270		—		1,219		1,579,778
Commercial real estate lending	5,639,669		460		270		257		16,793		5,657,449
Total commercial	13,172,623		1,764		357		505		140,096		13,315,345
Residential mortgage	8,125,707		9,876		5,257		1,283		55,100		8,197,223
Home equity	904,305		4,485		1,383		79		13,218		923,470
Other consumer	370,977		1,058		753		1,526		139		374,453
Total consumer	9,400,989		15,419		7,393		2,888		68,456		9,495,146
Total	$	22,573,612	$	17,184	$	7,750	$	3,393	$	208,553	$	22,810,491


~~(a)~~	~~The recorded investment in loans past due 90 days or more and still accruing totaled $3 million at March 31, 2018 (the same as the reported balances for the accruing loans noted above).~~


~~(b)~~	~~Of the total nonaccrual loans,~~ ~~$159 million~~ ~~or 76% were current with respect to payment at March 31, 2018.~~


~~(b)~~	~~Of the total nonaccrual loans,~~ ~~$135 million~~ ~~or 65% were current with respect to payment at December 31, 2017.~~



	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	76,452	$	81,091	$	18,778	$	77,130	$	312
Commercial real estate — owner occupied	16,264		16,617		2,043		22,978		47
Commercial and business lending	92,716		97,708		20,821		100,108		359
Commercial real estate — investor	18,582		18,619		2,721		16,559		464
Real estate construction	458		532		82		461		7
Commercial real estate lending	19,040		19,151		2,803		17,020		471
Total commercial	111,756		116,859		23,624		117,128		830
Residential mortgage	38,438		40,851		6,635		40,475		431
Home equity	10,762		11,383		3,719		10,238		136
Other consumer	1,066		1,069		116		1,067		1
Total consumer	50,266		53,303		10,470		51,780		568
Total loans^(a)	$	162,022	$	170,162	$	34,094	$	168,908	$	1,398
Loans with no related allowance
Commercial and industrial	$	52,389	$	76,720	$	—	$	55,897	$	(348	)
Commercial real estate — owner occupied	6,225		7,276		—		2,403		—
Commercial and business lending	58,614		83,996		—		58,300		(348		)
Commercial real estate — investor	1,805		1,853		—		—		—
Real estate construction	—		—		—		—		—
Commercial real estate lending	1,805		1,853		—		—		—
Total commercial	60,419		85,849		—		58,300		(348		)
Residential mortgage	10,425		10,871		—		6,317		39
Home equity	212		212		—		639		1
Other consumer	—		—		—		—		—
Total consumer	10,637		11,083		—		6,956		40
Total loans^(a)	$	71,056	$	96,932	$	—	$	65,256	$	(308	)
Total
Commercial and industrial	$	128,841	$	157,811	$	18,778	$	133,027	$	(36	)
Commercial real estate — owner occupied	22,489		23,893		2,043		25,381		47
Commercial and business lending	151,330		181,704		20,821		158,408		11
Commercial real estate — investor	20,387		20,472		2,721		16,559		464
Real estate construction	458		532		82		461		7
Commercial real estate lending	20,845		21,004		2,803		17,020		471
Total commercial	172,175		202,708		23,624		175,428		482
Residential mortgage	48,863		51,722		6,635		46,792		470
Home equity	10,974		11,595		3,719		10,877		137
Other consumer	1,066		1,069		116		1,067		1
Total consumer	60,903		64,386		10,470		58,736		608
Total loans^(a)	$	233,078	$	267,094	$	34,094	$	234,164	$	1,090


~~(a)~~	~~The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 74% of the unpaid principal balance at March 31, 2018.~~



	March 31, 2018				December 31, 2017
	Performing Restructured Loans		Nonaccrual Restructured Loans^(a)		Performing Restructured Loans		Nonaccrual Restructured Loans^(a)
	($ in Thousands)
Commercial and industrial	$	29,580	$	886	$	30,047	$	1,776
Commercial real estate — owner occupied	3,892		—		3,989		—
Commercial real estate — investor	13,683		1,007		14,389		—
Real estate construction	305		152		310		157
Residential mortgage	19,902		18,640		17,068		18,991
Home equity	8,098		3,117		7,705		2,537
Other consumer	1,041		25		1,110		25
Total	$	76,501	$	23,827	$	74,618	$	23,486


~~(a)~~	~~Nonaccrual restructured loans have been included within nonaccrual loans.~~



	Three Months Ended March 31, 2018					Three Months Ended March 31, 2017
	Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)		Number of Loans	Recorded Investment^(a)		Unpaid Principal Balance^(b)
	($ in Thousands)
Commercial and industrial	2	$	92	$	92	20	$	52,326	$	60,546
Commercial real estate — owner occupied	—	—		—		1	204		204
Commercial real estate — investor	1	1,007		1,037		1	733		744
Residential mortgage	11	1,807		1,807		16	1,301		1,322
Home equity	17	1,044		1,060		15	347		347
Other consumer	2	8		11		—	—		—
Total	33	$	3,958	$	4,007	53	$	54,911	$	63,163


~~(a)~~	~~Represents post-modification outstanding recorded investment.~~


~~(b)~~	~~Represents pre-modification outstanding recorded investment.~~



	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	($ in Thousands)
Residential mortgage	4	467		6	383
Home equity	12	954		2	26
Total	16	$	1,421	8	$	409



($ in Thousands)	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor		Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2017	$	123,068		$	10,352		$	41,059	$	34,370		$	29,607		$	22,126		$	5,298		$	265,880
Charge offs	(8,067		)	(1,042		)	—		(47		)	(493		)	(1,250		)	(1,256		)	(12,155		)
Recoveries	1,468			17			8		236			362			573			168			2,832
Net Charge offs	(6,599		)	(1,025		)	8		189			(131		)	(677		)	(1,088		)	(9,323		)
Provision for loan losses	1,377			2,520			1,215		(6,125		)	536			241			736			500
March 31, 2018	$	117,847		$	11,847		$	42,282	$	28,434		$	30,012		$	21,690		$	4,946		$	257,058
Allowance for loan losses
Individually evaluated for impairment	$	18,778		$	2,043		$	2,721	$	82		$	6,635		$	3,719		$	116		$	34,094
Collectively evaluated for impairment	99,069			9,804			39,561		28,352			23,377			17,971			4,830			222,964
Acquired and accounted for under ASC 310-30^(a)	—			—			—		—			—			—			—			—
Total allowance for loan losses	$	117,847		$	11,847		$	42,282	$	28,434		$	30,012		$	21,690		$	4,946		$	257,058
Loans
Individually evaluated for impairment	$	128,841		$	22,489		$	20,387	$	458		$	48,863		$	10,974		$	1,066		$	233,078
Collectively evaluated for impairment	6,625,314			876,631			4,048,532		1,579,065			8,147,224			912,421			373,388			22,562,575
Acquired and accounted for under ASC 310-30^(a)	2,828			1,793			8,752		255			1,136			74			—			14,838
Total loans	$	6,756,983		$	900,913		$	4,077,671	$	1,579,778		$	8,197,223		$	923,470		$	374,453		$	22,810,491


~~(a)~~	~~Loans acquired in business combinations and accounted for under ASC Subtopic 310-30 "Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality."~~



($ in Millions)	Three Months Ended March 31, 2018			Year Ended December 31, 2017
Balance at beginning of period	$	27		$	38
Charge offs	(4		)	(25		)
Recoveries	—			—
Net Charge offs	(4		)	(25		)
Provision for loan losses	(4		)	14
Balance at end of period	$	19		$	27
Allowance for loan losses
Individually evaluated for impairment	$	10		$	5
Collectively evaluated for impairment	9			22
Total allowance for loan losses	$	19		$	27
Loans
Individually evaluated for impairment	$	69		$	77
Collectively evaluated for impairment	588			523
Total loans	$	657		$	600


~~(a)~~	~~Represents the accretable difference that is relieved when a loan exits the PCI population due to full payoff, full charge-off, or transfer to repossessed assets, etc.~~


~~(a)~~	Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net in the consolidated statements of income.



Estimated Amortization Expense	Core Deposit Intangibles		Other Intangibles		Mortgage Servicing Rights
	($ in Thousands)
Nine Months Ended December 31, 2018	$	4,358	$	2,045	$	7,115
2019	5,810		2,428		9,324
2020	5,810		2,311		8,078
2021	5,810		2,287		6,977
2022	5,810		2,263		6,035
2023	5,810		2,244		5,234
Beyond 2023	23,724		9,004		23,954
Total Estimated Amortization Expense	$	57,132	$	22,582	$	66,717



	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
March 31, 2018					($ in Thousands)
Repurchase agreements
Agency mortgage-related securities	$	214,869	$	—	$	—	$	—	$	214,869
Total	$	214,869	$	—	$	—	$	—	$	214,869
December 31, 2017
Repurchase agreements
Agency mortgage-related securities	$	182,865	$	—	$	—	$	—	$	182,865
Total	$	182,865	$	—	$	—	$	—	$	182,865

~~Standard~~

~~Description~~

~~Date of adoption~~

~~Effect on financial statements~~

~~ASU 2018-02 Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~

The FASB issued the amendment to allow a reclassification from accumulated other comprehensive income to retained earnings, the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted and should be applied in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate related to the Act is recognized.

~~1st Quarter 2018~~

The Corporation has elected to early adopt this Update. During the quarter, the Corporation reclassified approximately $14 million from accumulated other comprehensive income to retained earnings as a result of the Tax Cuts and Jobs Act. No material impact to its results of operations, financial position, and liquidity. See Consolidated Statements of Comprehensive Income and the Statement of Changes in Stockholders' Equity.