Company: ASB
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000007789-25-000013
Chunk: 77

Company: ASSOCIATED BANC-CORP
Filing Date: 2025-02-12
Form: 10-K
Item: Item 8
Chunk 77
---
 2023, respectively. Cash is often pledged as collateral for derivatives that are not centrally cleared. The Corporation's required cash collateral was immaterial at December 31, 2024, compared to $5 million at December 31, 2023. See Note 17 for fair value information and disclosures and see Note 1 for the Corporation's accounting policy for derivative and hedging activities.

124

Fair Value HedgesFair value hedges of interest rate risk: The Corporation is exposed to changes in the fair value of its fixed-rate debt due to changes in benchmark interest rates. The Corporation uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rates. Interest rate swaps designated as fair value hedges involve receiving payment of fixed-rate amounts from a counterparty in exchange for the Corporation paying variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.Fair value hedges of foreign currency exchange rate risk: The Corporation is exposed to changes in the fair value of its foreign currency denominated loans due to changes in foreign currency exchange rates. The Corporation uses foreign currency exchange forward contracts to manage its exposure to changes in fair value on these foreign currency denominated loans.Cash Flow HedgesThe Corporation's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve receiving fixed-rate amounts from a counterparty in exchange for the Corporation making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. These items, along with the net interest from the derivative, are reported in the same income statement line as the interest income from the floating-rate assets.Non-Designated HedgesDerivatives to Accommodate Customer NeedsDerivatives not designated as hedges may be used to manage the Corporation's exposure to interest or foreign exchange rate movements, or to provide a service to customers, but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes. The Corporation executes interest rate swaps or forward currency exchange forwards with commercial lending customers to facilitate their respective risk management strategies. These derivative contracts with customers are simultaneously offset by derivative contracts that the Corporation executes with a third party, such that the Corporation minimizes its net risk exposure resulting from such