Associated Banc-Corp (ASBC)

income, as appropriate. On the date the derivative contract is entered into, the Corporation designates the derivative as a fair value hedge (i.e., a hedge of the fair value of a recognized asset or liability), a cash flow hedge (i.e., a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability), or a free-standing derivative instrument. For a derivative designated as a fair value hedge, the changes in the fair value of the derivative instrument and the changes in the fair value of the hedged asset or liability are recognized in current period earnings as an increase or decrease to the carrying value of the hedged item on the balance sheet and in the related income statement account. For a derivative designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative instrument are recorded in other comprehensive income and the ineffective portions of changes in the fair value of a derivative instrument are recognized in current period earnings as an adjustment to the related income statement account. Amounts within accumulated other comprehensive income are reclassified into earnings in the period the hedged item affects earnings. If a derivative is designated as a free-standing derivative instrument, changes in fair value are reported in current period earnings.

 

To qualify for and maintain hedge accounting, the Corporation must meet formal documentation and effectiveness evaluation requirements both at the hedge’s inception and on an ongoing basis. The application of the hedge accounting policy requires strict adherence to documentation and effectiveness testing requirements, judgment in the assessment of hedge effectiveness, identification of similar hedged item groupings, and measurement of changes in the fair value of hedged items. If it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Corporation discontinues hedge accounting prospectively. When hedge accounting is discontinued on a fair value hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation continues to carry the derivative on the consolidated balance sheet at its fair value and no longer adjusts the hedged asset or liability for changes in fair value. The adjustment to the carrying amount of the hedged asset or liability is amortized over the remaining life of the hedged item, beginning no later than when hedge accounting ceases. When hedge accounting is discontinued on a cash flow hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation records the changes in the fair value of the derivative in earnings rather than through accumulated other comprehensive income and when the cash flows associated with the hedged item are realized, the gain or loss is reclassified out of other comprehensive income and included in the same income statement account of the item being hedged.

 

The Corporation measures the effectiveness of its hedges, where applicable, at inception and each quarter on an on-going basis. For a fair value hedge, the cumulative change in the fair value of the hedge instrument attributable to the risk being hedged versus the cumulative fair value change of the hedged item attributable to the risk being hedged is considered to be the “ineffective” portion, which is recorded as an increase or decrease in the related income statement classification of the item being hedged (i.e., net interest income). For a cash flow hedge, the ineffective portions of changes in the fair value are recognized immediately in the related income statement account. See Note 15 for additional information on derivative financial instruments and hedging activities.

 

 

Derivative instruments, including derivative instruments
embedded in other contracts, are carried at fair value on the
consolidated balance sheets with changes in the fair value
recorded to earnings or accumulated other comprehensive

income, as appropriate. On the date the derivative contract is
entered into, the Corporation designates the derivative as a
fair value hedge (i.e., a hedge of the fair value of a
recognized asset or liability), a cash flow hedge (i.e., a hedge
of the variability of cash flows to be received or paid related
to a recognized asset or liability), or a free-standing
derivative instrument. For a derivative designated as a fair
value hedge, the changes in the fair value of the derivative
instrument and the changes in the fair value of the hedged asset
or liability are recognized in current period earnings as an
increase or decrease to the carrying value of the hedged item on
the balance sheet and in the related income statement account.
For a derivative designated as a cash flow hedge, the effective
portions of changes in the fair value of the derivative
instrument are recorded in other comprehensive income and the
ineffective portions of changes in the fair value of a
derivative instrument are recognized in current period earnings
as an adjustment to the related income statement account.
Amounts within accumulated other comprehensive income are
reclassified into earnings in the period the hedged item affects
earnings. If a derivative is designated as a free-standing
derivative instrument, changes in fair value are reported in
current period earnings.

 

To qualify for and maintain hedge accounting, the Corporation
must meet formal documentation and effectiveness evaluation
requirements both at the hedge’s inception and on an
ongoing basis. The application of the hedge accounting policy
requires strict adherence to documentation and effectiveness
testing requirements, judgment in the assessment of hedge
effectiveness, identification of similar hedged item groupings,
and measurement of changes in the fair value of hedged items. If
it is determined that a derivative is not highly effective as a
hedge or that it has ceased to be a highly effective hedge, the
Corporation discontinues hedge accounting prospectively. When
hedge accounting is discontinued on a fair value hedge because
it is determined that the derivative no longer qualifies as an
effective hedge, the Corporation continues to carry the
derivative on the consolidated balance sheet at its fair value
and no longer adjusts the hedged asset or liability for changes
in fair value. The adjustment to the carrying amount of the
hedged asset or liability is amortized over the remaining life
of the hedged item, beginning no later than when hedge
accounting ceases. When hedge accounting is discontinued on a
cash flow hedge because it is determined that the derivative no
longer qualifies as an effective hedge, the Corporation records
the changes in the fair value of the derivative in earnings
rather than through accumulated other comprehensive income and
when the cash flows associated with the hedged item are
realized, the gain or loss is reclassified out of other
comprehensive income and included in the same income statement
account of the item being hedged.

 

The Corporation measures the effectiveness of its hedges, where
applicable, at inception and each quarter on an on-going basis.
For a fair value hedge, the cumulative change in the fair value
of the hedge instrument attributable to the risk being hedged
versus the cumulative fair value change of the hedged item
attributable to the risk being hedged is considered to be the
“ineffective” portion, which is recorded as an
increase or decrease in the related income statement
classification of the item being hedged (i.e., net interest
income). For a cash flow hedge, the ineffective portions of
changes in the fair value are recognized immediately in the
related income statement account. See Note 15 for
additional information on derivative financial instruments and
hedging activities.

 

as an increase or decrease to the carrying value of the hedged item on the balance sheet and in the related income statement account. For a derivative designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative instrument are recorded in other comprehensive income and the ineffective portions of changes in the fair value of a derivative instrument are recognized in current period earnings as an adjustment to the related income statement account. Amounts within accumulated other comprehensive income are reclassified into earnings in the period the hedged item affects earnings. If a derivative is designated as a free-standing derivative instrument, changes in fair value are reported in current period earnings.

 

To qualify for and maintain hedge accounting, the Corporation must meet formal documentation and effectiveness evaluation requirements both at the hedge’s inception and on an ongoing basis. The application of the hedge accounting policy requires strict adherence to documentation and effectiveness testing requirements, judgment in the assessment of hedge effectiveness, identification of similar hedged item groupings, and measurement of changes in the fair value of hedged items. If it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Corporation discontinues hedge accounting prospectively. When hedge accounting is discontinued on a fair value hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation continues to carry the derivative on the consolidated balance sheet at its fair value and no longer adjusts the hedged asset or liability for changes in fair value. The adjustment to the carrying amount of the hedged asset or liability is amortized over the remaining life of the hedged item, beginning no later than when hedge accounting ceases. When hedge accounting is discontinued on a cash flow hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation records the changes in the fair value of the derivative in earnings rather than through accumulated other comprehensive income and when the cash flows associated with the hedged item are realized, the gain or loss is reclassified out of other comprehensive income and included in the same income statement account of the item being hedged.

 

The Corporation measures the effectiveness of its hedges, where applicable, at inception and each quarter on an on-going basis. For a fair value hedge, the cumulative change in the fair value of the hedge instrument attributable to the risk being hedged versus the cumulative fair value change of the hedged item attributable to the risk being hedged is considered to be the “ineffective” portion, which is recorded as an increase or decrease in the related income statement classification of the item being hedged (i.e., net interest income). For a cash flow hedge, the ineffective portions of changes in the fair value are recognized immediately in the related income statement account.

 

 

Derivative instruments, including derivative instruments
embedded in other contracts, are carried at fair value on the
consolidated balance sheets with changes in the fair value
recorded to earnings or accumulated other comprehensive income,
as appropriate. On the date the derivative contract is entered
into, the Corporation designates the derivative as a fair value
hedge (i.e., a hedge of the fair value of a recognized asset or
liability), a cash flow hedge (i.e., a hedge of the variability
of cash flows to be received or paid related to a recognized
asset or liability), or a free-standing derivative instrument.
For a derivative designated as a fair value hedge, the changes
in the fair value of the derivative instrument and the changes
in the fair value of the hedged asset or liability are
recognized in current period earnings

as an increase or decrease to the carrying value of the hedged
item on the balance sheet and in the related income statement
account. For a derivative designated as a cash flow hedge, the
effective portions of changes in the fair value of the
derivative instrument are recorded in other comprehensive income
and the ineffective portions of changes in the fair value of a
derivative instrument are recognized in current period earnings
as an adjustment to the related income statement account.
Amounts within accumulated other comprehensive income are
reclassified into earnings in the period the hedged item affects
earnings. If a derivative is designated as a free-standing
derivative instrument, changes in fair value are reported in
current period earnings.

 

To qualify for and maintain hedge accounting, the Corporation
must meet formal documentation and effectiveness evaluation
requirements both at the hedge’s inception and on an
ongoing basis. The application of the hedge accounting policy
requires strict adherence to documentation and effectiveness
testing requirements, judgment in the assessment of hedge
effectiveness, identification of similar hedged item groupings,
and measurement of changes in the fair value of hedged items. If
it is determined that a derivative is not highly effective as a
hedge or that it has ceased to be a highly effective hedge, the
Corporation discontinues hedge accounting prospectively. When
hedge accounting is discontinued on a fair value hedge because
it is determined that the derivative no longer qualifies as an
effective hedge, the Corporation continues to carry the
derivative on the consolidated balance sheet at its fair value
and no longer adjusts the hedged asset or liability for changes
in fair value. The adjustment to the carrying amount of the
hedged asset or liability is amortized over the remaining life
of the hedged item, beginning no later than when hedge
accounting ceases. When hedge accounting is discontinued on a
cash flow hedge because it is determined that the derivative no
longer qualifies as an effective hedge, the Corporation records
the changes in the fair value of the derivative in earnings
rather than through accumulated other comprehensive income and
when the cash flows associated with the hedged item are
realized, the gain or loss is reclassified out of other
comprehensive income and included in the same income statement
account of the item being hedged.

 

The Corporation measures the effectiveness of its hedges, where
applicable, at inception and each quarter on an on-going basis.
For a fair value hedge, the cumulative change in the fair value
of the hedge instrument attributable to the risk being hedged
versus the cumulative fair value change of the hedged item
attributable to the risk being hedged is considered to be the
“ineffective” portion, which is recorded as an
increase or decrease in the related income statement
classification of the item being hedged (i.e., net interest
income). For a cash flow hedge, the ineffective portions of
changes in the fair value are recognized immediately in the
related income statement account.

 

changes in the fair value of a derivative instrument are recognized in current period earnings as an adjustment to the related income statement account. Amounts within accumulated other comprehensive income are reclassified into earnings in the period the hedged item affects earnings. If a derivative is designated as a free-standing derivative instrument, changes in fair value are reported in current period earnings.

 

To qualify for and maintain hedge accounting, the Corporation must meet formal documentation and effectiveness evaluation requirements both at the hedge’s inception and on an ongoing basis. The application of the hedge accounting policy requires strict adherence to documentation and effectiveness testing requirements, judgment in the assessment of hedge effectiveness, identification of similar hedged item groupings, and measurement of changes in the fair value of hedged items. If it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Corporation discontinues hedge accounting prospectively. When hedge accounting is discontinued on a fair value hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation continues to carry the derivative on the balance sheet at its fair value and no longer adjusts the hedged asset or liability for changes in fair value. The adjustment to the carrying amount of the hedged asset or liability is amortized over the remaining life of the hedged item, beginning no later than when hedge accounting ceases. When hedge accounting is discontinued on a cash flow hedge because it is determined that the derivative no longer qualifies as an effective hedge, the Corporation records the changes in the fair value of the derivative in earnings rather than through accumulated other comprehensive income and when the cash flows associated with the hedged item are realized, the gain or loss is reclassified out of other comprehensive income and included in the same income statement account of the item being hedged.

 

The Corporation measures the effectiveness of its hedges, where applicable, at inception and each quarter on an on-going basis. For a fair value hedge, the cumulative change in the fair value of the hedge instrument attributable to the risk being hedged versus the cumulative fair value change of the hedged item attributable to the risk being hedged is considered to be the “ineffective” portion, which is recorded as an increase or decrease in the related income statement classification of the item being hedged (i.e., net interest income). For a cash flow hedge, the ineffective portions of changes in the fair value are recognized immediately in the related income statement account.