ASSOCIATED BANC CORP 
By GREEN BAY, Wis., Jan. 19, 2012 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $40 million, or $0.23 per common share, for the quarter ended December 31, 2011. This compares to net income to common shareholders of $34 million, or $0.20 per common share, for the quarter ended September 30, 2011, and net income to common shareholders of $7 million, or $0.04 per common share, for the quarter ended December 31, 2010.
For the year ended December 31, 2011, the Company reported net income to common shareholders of $115 million, or $0.66 per common share. This compares to a net loss to common shareholders of $30 million, or $0.18 per common share for the year ended December 31, 2010.
"We are pleased with the results and accomplishments achieved over the past year. We have been serving our customers for 150 years and remain committed to meeting their needs. We believe that results from the fourth quarter reflect both our core franchise strength and our ability to deliver value to customers and shareholders," said President and CEO Philip B. Flynn.
HIGHLIGHTS
-- Quarterly net income to common shareholders improved by 17%, or $6
million from the prior quarter
-- Full year 2011 net income to common shareholders of $115 million
-- Loan balances increased by a net $528 million, or 4%, during the fourth
quarter to $14.0 billion; loans grew in each major portfolio during the
fourth quarter, including:
-- Commercial and business lending grew $386 million
-- Commercial real estate lending increased $112 million
-- Residential mortgage loans grew $111 million
-- Loans increased by $1.4 billion, or 11%, during 2011
-- Credit metrics continued to improve during the fourth quarter;
nonaccrual loans declined $47 million, or 12%, from the prior quarter to
$357 million, the lowest level in eight quarters, while net charge offs
were down 25% from the prior quarter
-- Nonaccruals have declined 38% from $574 million at the fourth
quarter of 2010
-- Net charge offs of $151 million for full year 2011 declined 69% from
full year 2010
FOURTH QUARTER 2011 FINANCIAL RESULTS
Loans
At December 31, 2011, the Company's loan portfolio was $14.0 billion, up $528 million, or 4%, from $13.5 billion at September 30, 2011, and up $1.4 billion, or 11%, from $12.6 billion a year ago. Total commercial loans grew $498 million on a linked-quarter basis, with strong growth coming from both the commercial and industrial (C&I) and commercial real estate (CRE) portfolios. The retail loan and residential mortgage portfolios grew by a net $29 million from the third quarter, with a $111 million increase in residential mortgage partially offset by a decrease in the home equity loan book of $67 million.
Deposits
Total deposits of $15.1 billion at the end of the fourth quarter were up 2% from $14.8 billion at the end of the third quarter. The net deposit growth during the quarter included a $217 million, or 6% increase, in demand deposits and a $226 million, or 11% increase, in interest-bearing demand deposits.
Net Interest Income and Net Interest Margin
Fourth quarter net interest income was $152 million. Consistent with the Company's strategy of funding loan growth primarily through securities run-off, net interest income from loans grew quarter over quarter while interest income from securities continued to contract. The net interest margin for the fourth quarter was 3.21%, a decline of 2 basis points from the prior quarter. Yields on earning assets compressed by 7 basis points quarter over quarter, while the cost of interest-bearing liabilities declined by 5 basis points; contributing to the modest reduction in overall net interest margin.
Noninterest Income and Expense
Noninterest income for the quarter was $74 million, up $2 million, or 3%, from the third quarter. Card-based and other nondeposit revenues declined by $4 million from the prior quarter, primarily due to the expected phased-in impact of the Durbin amendment. Mortgage banking income increased by $5 million from the third quarter, driven by higher mortgage production, lower valuation expense on mortgage servicing rights, and a $3 million gain on sale of $94 million of portfolio mortgages.
Personnel and occupancy expenses remained relatively flat from the prior quarter. However, total noninterest expense for the quarter ended December 31, 2011 was $175 million, up $13 million, or 8%, from the third quarter, primarily attributable to a $10 million change in losses other than loans. The largest contributor to losses other than loans related to additional litigation reserves established for the previously disclosed settlement of a legal matter. Other drivers of the increase in noninterest expense include increased data processing expense and increased business development and advertising expenses. Offsetting the net income impact of the losses other than loans was a reversal of certain prior years' tax reserves as a result of the expiration of the statute of limitations.
In December, the Company announced plans to consolidate 21 retail branches during the first and second quarters of 2012 as part of its footprint enhancement strategy. All of the impacted branches are within close proximity to other remaining Associated locations, in most cases within two miles, and the Company remains committed to continuing to invest throughout its three-state footprint. The consolidations are expected to increase the deposits per branch in the remaining locations while allowing the Company to service the impacted markets more efficiently.
Key Credit Metrics
The Company reported another quarter of improving credit metrics with nonaccrual loans down 12% to $357 million from $403 million at September 30, 2011, and down 38% from $574 million at December 31, 2010. Net charge offs were $23 million for the fourth quarter, down 25% from $30 million for the third quarter of 2011, and down 79% from $108 million for the fourth quarter of 2010. Fourth quarter provision for loan losses was $1 million, down from $4 million for the third quarter of 2011, and down from $63 million for the fourth quarter of 2010. The Company's allowance for loan losses was $378 million, representing an allowance equal to 2.70% of loans, and covered over 105% of nonaccrual loans at December 31, 2011.
Capital Ratios
The Company's capital position remains very strong, with a Tier 1 common equity ratio of 12.24% at December 31, 2011, compared to 12.26% a year ago. The Company's capital ratios continue to be in excess of "well-capitalized" regulatory benchmarks, and also exceed the proposed Basel III guidelines.
"We are pleased with the solid results of this quarter and with our progress throughout the year," Flynn continued. "We believe that our recent success is a result of our customer centric focus and of the investments we have made to strengthen our core businesses. Despite the challenging environment, we remain optimistic and are committed to building shareholder value through our long-term strategy for growth at Associated."
FOURTH QUARTER 2011 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 19, 2012. Interested parties can listen to the call live on the Internet through the investor relations section of the company's website, http://investor.associatedbank.com/ or by dialing 877-348-9354. The slide presentation for the call will be available on the company's website just prior to the call. The number for international callers is 253-237-1160. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2011 earnings call, or conference ID number 37612937.
An audio archive of the webcast will be available on the company's website for one month following the call. A replay of the call will be available starting at 7:00 p.m. CT on January 19, 2012 through 11:00 p.m. CT on February 19, 2012 by dialing 855-859-2056 and entering the conference ID number 37612937. The replay number for international callers is 404-537-3406.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NASDAQ: ASBC) has total assets of $22 billion and is one of the top 50 financial services holding companies operating in the United States. Headquartered in Green Bay, Wis., Associated has approximately 270 banking locations serving more than 150 communities throughout Wisconsin, Illinois and Minnesota. The company offers a full range of banking services and other financial products and services. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD LOOKING STATEMENTS
Statements made in this document that are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "should," "will," "intend," "outlook," or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the Company's most recent Annual Report filed on Form 10-K as updated by the Company's most recent Form 10-Q.
Investor Contact:
Tim Sedabres, Vice President, Finance
920-491-7059
Media Contact:
Autumn Latimore, Senior Vice President, Public Relations Director
414-278-1860
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
December September Seql December
31, 30, Qtr June 30, March 31, 31, Comp Qtr
(in thousands) 2011 2011 $Change 2011 2011 2010 $Change
-------------- ---- ---- ------- ---- ---- ---- -------
Assets
Cash and due from
banks $454,958 $410,644 $44,314 $314,682 $299,040 $319,487 $135,471
Interest-bearing
deposits in other
financial
institutions 154,562 250,648 (96,086) 777,675 498,094 546,125 (391,563)
Federal funds sold
and securities
purchased
under agreements to
resell 7,075 4,180 2,895 2,400 2,015 2,550 4,525
Securities available
for sale, at fair
value 4,937,483 5,453,816 (516,333) 5,742,034 5,883,541 6,101,341 (1,163,858)
Federal Home Loan
Bank and Federal
Reserve Bank stocks,
at cost 191,188 191,128 60 191,075 191,017 190,968 220
Loans held for sale 249,195 201,142 48,053 84,323 85,493 144,808 104,387
Loans 14,031,071 13,503,507 527,564 13,089,589 12,655,322 12,616,735 1,414,336
Allowance for loan
losses (378,151) (399,723) 21,572 (425,961) (454,461) (476,813) 98,662
-------- -------- ------ -------- -------- -------- ------
Loans, net 13,652,920 13,103,784 549,136 12,663,628 12,200,861 12,139,922 1,512,998
Premises and
equipment, net 223,736 208,301 15,435 192,506 186,329 190,533 33,203
Goodwill 929,168 929,168 - 929,168 929,168 929,168 -
Other intangible
assets, net 67,574 67,970 (396) 74,872 85,200 88,044 (20,470)
Other assets 1,056,358 1,081,868 (25,510) 1,076,112 1,112,807 1,132,650 (76,292)
--------- --------- ------- --------- --------- --------- -------
Total assets $21,924,217 $21,902,649 $21,568 $22,048,475 $21,473,565 $21,785,596 138,621
=========== =========== ======= =========== =========== =========== =======
Liabilities and
Stockholders'
Equity
Noninterest-bearing
deposits $3,928,792 $3,711,570 $217,222 $3,218,722 $3,285,604 $3,684,965 243,827
Interest-bearing
deposits, excl
Brokered CDs 10,958,915 10,867,013 91,902 10,530,658 10,413,994 11,097,788 (138,873)
Brokered CDs 202,948 203,827 (879) 316,670 324,045 442,640 (239,692)
------- ------- ---- ------- ------- ------- --------
Total deposits 15,090,655 14,782,410 308,245 14,066,050 14,023,643 15,225,393 (134,738)
Short-term funding 2,514,485 2,531,776 (17,291) 3,255,670 2,547,805 1,747,382 767,103
Long-term funding 1,177,071 1,477,408 (300,337) 1,484,174 1,484,177 1,413,605 (236,534)
Accrued expenses and
other liabilities 276,212 260,436 15,776 243,433 223,226 240,425 35,787
------- ------- ------ ------- ------- ------- ------
Total liabilities 19,058,423 19,052,030 6,393 19,049,327 18,278,851 18,626,805 431,618
Stockholders' Equity
Preferred equity 63,272 63,272 - 258,051 515,238 514,388 (451,116)
Common stock 1,746 1,746 - 1,745 1,744 1,739 7
Surplus 1,586,401 1,585,208 1,193 1,581,594 1,576,903 1,573,372 13,029
Retained earnings 1,148,773 1,111,080 37,693 1,079,076 1,055,344 1,041,666 107,107
Accumulated other
comprehensive
income 65,602 89,313 (23,711) 79,345 45,731 27,626 37,976
Treasury stock - - - (663) (246) - -
--- --- ---- ---- --- ---
Total stockholders'
equity 2,865,794 2,850,619 15,175 2,999,148 3,194,714 3,158,791 (292,997)
--------- --------- ------ --------- --------- --------- --------
Total liabilities
and stockholders'
equity $21,924,217 $21,902,649 $21,568 $22,048,475 $21,473,565 $21,785,596 $138,621
=========== =========== ======= =========== =========== =========== ========
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three For The Year
Months Ended Ended,
December 31, Quarter December 31, Year-to-Date
------------ ------------
(in thousands, except per
share amounts) 2011 2010 $Change % Change 2011 2010 $Change % Change
------------------------- ---- ---- ------- -------- ---- ---- ------- --------
Interest Income
Interest and fees on loans $149,832 $146,444 $3,388 2.3% $582,739 $608,487 $(25,748) (4.2%)
Interest and dividends on
investment securities:
Taxable 22,855 32,420 (9,565) (29.5%) 123,371 155,031 (31,660) (20.4%)
Tax-exempt 7,344 8,150 (806) (9.9%) 29,937 33,915 (3,978) (11.7%)
Other interest 1,251 2,078 (827) (39.8%) 5,575 8,693 (3,118) (35.9%)
----- ----- ---- ----- ----- ------
Total interest income 181,282 189,092 (7,810) (4.1%) 741,622 806,126 (64,504) (8.0%)
Interest Expense
Interest on deposits 14,954 23,039 (8,085) (35.1%) 65,748 106,023 (40,275) (38.0%)
Interest on short-term
borrowings 2,156 2,288 (132) (5.8%) 12,411 7,983 4,428 55.5%
Interest on long-term
funding 12,347 12,905 (558) (4.3%) 50,632 58,341 (7,709) (13.2%)
------ ------ ---- ------ ------ ------
Total interest expense 29,457 38,232 (8,775) (23.0%) 128,791 172,347 (43,556) (25.3%)
------ ------ ------ ------- ------- -------
Net Interest Income 151,825 150,860 965 0.6% 612,831 633,779 (20,948) (3.3%)
Provision for loan losses 1,000 63,000 (62,000) (98.4%) 52,000 390,010 (338,010) (86.7%)
----- ------ ------- ------ ------- --------
Net interest income after
provision for
loan losses 150,825 87,860 62,965 71.7% 560,831 243,769 317,062 130.1%
Noninterest Income
Trust service fees 9,511 9,518 (7) (0.1%) 39,145 37,853 1,292 3.4%
Service charges on deposit
accounts 17,783 20,390 (2,607) (12.8%) 75,908 96,740 (20,832) (21.5%)
Card-based and other
nondeposit fees 11,269 15,842 (4,573) (28.9%) 57,905 59,299 (1,394) (2.4%)
Retail commissions 14,881 14,441 440 3.0% 62,784 61,256 1,528 2.5%
------ ------ --- ------ ------ -----
Total core fee-based
revenue 53,444 60,191 (6,747) (11.2%) 235,742 255,148 (19,406) (7.6%)
Mortgage banking, net 9,677 13,229 (3,552) (26.9%) 12,723 33,136 (20,413) (61.6%)
Capital market fees, net 3,950 5,187 (1,237) (23.8%) 8,711 6,072 2,639 43.5%
Bank owned life insurance
income 3,820 4,509 (689) (15.3%) 14,896 15,761 (865) (5.5%)
Asset sale gains (losses),
net 525 514 11 2.1% (2,849) (2,004) (845) 42.2%
Investment securities gains
(losses), net (310) (1,883) 1,573 (83.5%) (1,112) 24,917 (26,029) (104.5%)
Other 2,750 2,950 (200) (6.8%) 14,358 12,493 1,865 14.9%
----- ----- ---- ------ ------ -----
Total noninterest income 73,856 84,697 (10,841) (12.8%) 282,469 345,523 (63,054) (18.2%)
Noninterest Expense
Personnel expense 89,785 83,912 5,873 7.0% 358,295 323,249 35,046 10.8%
Occupancy 13,796 12,899 897 7.0% 55,939 49,937 6,002 12.0%
Equipment 5,286 4,899 387 7.9% 19,873 18,371 1,502 8.2%
Data processing 9,080 7,047 2,033 28.8% 32,475 29,714 2,761 9.3%
Business development and
advertising 6,904 4,870 2,034 41.8% 23,038 18,385 4,653 25.3%
Other intangible
amortization 1,179 1,206 (27) (2.2%) 4,714 4,919 (205) (4.2%)
Loan expense 3,469 2,735 734 26.8% 12,008 9,965 2,043 20.5%
Legal and professional fees 4,651 5,353 (702) (13.1%) 18,205 20,439 (2,234) (10.9%)
Losses other than loans 11,890 7,470 4,420 59.2% 17,921 14,793 3,128 21.1%
Foreclosure/OREO expense 7,493 9,860 (2,367) (24.0%) 30,743 33,844 (3,101) (9.2%)
FDIC expense 6,136 11,095 (4,959) (44.7%) 28,484 46,377 (17,893) (38.6%)
Other 14,982 15,497 (515) (3.3%) 58,178 60,327 (2,149) (3.6%)
------ ------ ---- ------ ------ ------
Total noninterest expense 174,651 166,843 7,808 4.7% 659,873 630,320 29,553 4.7%
------- ------- ----- ------- ------- ------
Income (Loss) before income
taxes 50,030 5,714 44,316 N/M 183,427 (41,028) 224,455 N/M
Income tax expense
(benefit) 8,905 (8,294) 17,199 N/M 43,728 (40,172) 83,900 N/M
----- ------ ------ ------ ------- ------
Net income (loss) 41,125 14,008 27,117 193.6% $139,699 $(856) $140,555 N/M
Preferred stock dividends
and discount 1,300 7,400 (6,100) (82.4%) 24,830 29,531 (4,701) (15.9%)
----- ----- ------ ------ ------ ------
Net income (loss) available
to common equity $39,825 $6,608 $33,217 N/M $114,869 $(30,387) $145,256 N/M
======= ====== ======= ======== ======== ========
Earnings (Loss) Per Common
Share:
Basic $0.23 $0.04 $0.19 N/M $0.66 $(0.18) $0.84 N/M
Diluted $0.23 $0.04 $0.19 N/M $0.66 $(0.18) $0.84 N/M
Average Common Shares
Outstanding:
Basic 173,523 173,068 455 0.3% 173,370 171,230 2,140 1.3%
Diluted 173,523 173,072 451 0.3% 173,372 171,230 2,142 1.3%
N/M = Not meaningful
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
Sequential Qtr Comparable Qtr
(in thousands, except per
share amounts) 4Q11 3Q11 $Change % Change 2Q11 1Q11 4Q10 $Change % Change
------------------------- ---- ---- ------- -------- ---- ---- ---- ------- --------
Interest Income
Interest and fees on loans $149,832 $145,778 $4,054 2.8% $144,358 $142,771 $146,444 $3,388 2.3%
Interest and dividends on
investment securities:
Taxable 22,855 30,513 (7,658) (25.1%) 35,351 34,652 32,420 (9,565) (29.5%)
Tax-exempt 7,344 7,376 (32) (0.4%) 7,504 7,713 8,150 (806) (9.9%)
Other interest 1,251 1,428 (177) (12.4%) 1,438 1,458 2,078 (827) (39.8%)
----- ----- ---- ----- ----- ----- ----
Total interest income 181,282 185,095 (3,813) (2.1%) 188,651 186,594 189,092 (7,810) (4.1%)
Interest Expense
Interest on deposits 14,954 15,644 (690) (4.4%) 16,901 18,249 23,039 (8,085) (35.1%)
Interest on short-term
borrowings 2,156 3,039 (883) (29.1%) 3,637 3,579 2,288 (132) (5.8%)
Interest on long-term funding 12,347 13,252 (905) (6.8%) 13,990 11,043 12,905 (558) (4.3%)
------ ------ ---- ------ ------ ------ ----
Total interest expense 29,457 31,935 (2,478) (7.8%) 34,528 32,871 38,232 (8,775) (23.0%)
------ ------ ------ ------ ------ ------ ------
Net Interest Income 151,825 153,160 (1,335) (0.9%) 154,123 153,723 150,860 965 0.6%
Provision for loan losses 1,000 4,000 (3,000) (75.0%) 16,000 31,000 63,000 (62,000) (98.4%)
----- ----- ------ ------ ------ ------ -------
Net interest income after
provision for
loan losses 150,825 149,160 1,665 1.1% 138,123 122,723 87,860 62,965 71.7%
Noninterest Income
Trust service fees 9,511 9,791 (280) (2.9%) 10,012 9,831 9,518 (7) (0.1%)
Service charges on deposit
accounts 17,783 19,949 (2,166) (10.9%) 19,112 19,064 20,390 (2,607) (12.8%)
Card-based and other
nondeposit fees 11,269 15,291 (4,022) (26.3%) 15,747 15,598 15,842 (4,573) (28.9%)
Retail commissions 14,881 15,047 (166) (1.1%) 16,475 16,381 14,441 440 3.0%
------ ------ ---- ------ ------ ------ ---
Total core fee-based revenue 53,444 60,078 (6,634) (11.0%) 61,346 60,874 60,191 (6,747) (11.2%)
Mortgage banking, net 9,677 4,521 5,156 114.0% (3,320) 1,845 13,229 (3,552) (26.9%)
Capital market fees, net 3,950 3,273 677 20.7% (890) 2,378 5,187 (1,237) (23.8%)
Bank owned life insurance
income 3,820 3,990 (170) (4.3%) 3,500 3,586 4,509 (689) (15.3%)
Asset sale gains (losses), net 525 (1,179) 1,704 (144.5%) (209) (1,986) 514 11 2.1%
Investment securities losses,
net (310) (744) 434 (58.3%) (36) (22) (1,883) 1,573 (83.5%)
Other 2,750 1,737 1,013 58.3% 4,364 5,507 2,950 (200) (6.8%)
----- ----- ----- ----- ----- ----- ----
Total noninterest income 73,856 71,676 2,180 3.0% 64,755 72,182 84,697 (10,841) (12.8%)
Noninterest Expense
Personnel expense 89,785 90,377 (592) (0.7%) 89,203 88,930 83,912 5,873 7.0%
Occupancy 13,796 14,205 (409) (2.9%) 12,663 15,275 12,899 897 7.0%
Equipment 5,286 4,851 435 9.0% 4,969 4,767 4,899 387 7.9%
Data processing 9,080 7,887 1,193 15.1% 7,974 7,534 7,047 2,033 28.8%
Business development and
advertising 6,904 5,539 1,365 24.6% 5,652 4,943 4,870 2,034 41.8%
Other intangible amortization 1,179 1,179 - 0.0% 1,178 1,178 1,206 (27) (2.2%)
Loan expense 3,469 2,600 869 33.4% 2,983 2,956 2,735 734 26.8%
Legal and professional fees 4,651 4,289 362 8.4% 4,783 4,482 5,353 (702) (13.1%)
Losses other than loans 11,890 1,659 10,231 N/M (1,925) 6,297 7,470 4,420 59.2%
Foreclosure/OREO expense 7,493 7,662 (169) (2.2%) 9,527 6,061 9,860 (2,367) (24.0%)
FDIC expense 6,136 6,906 (770) (11.1%) 7,198 8,244 11,095 (4,959) (44.7%)
Other 14,982 15,006 (24) (0.2%) 14,681 13,509 15,497 (515) (3.3%)
------ ------ --- ------ ------ ------ ----
Total noninterest expense 174,651 162,160 12,491 7.7% 158,886 164,176 166,843 7,808 4.7%
------- ------- ------ ------- ------- ------- -----
Income before income taxes 50,030 58,676 (8,646) (14.7%) 43,992 30,729 5,714 44,316 N/M
Income tax expense (benefit) 8,905 17,337 (8,432) (48.6%) 9,610 7,876 (8,294) 17,199 N/M
----- ------ ------ ----- ----- ------ ------
Net income 41,125 41,339 (214) (0.5%) 34,382 22,853 14,008 27,117 193.6%
Preferred stock dividends and
discount 1,300 7,305 (6,005) (82.2%) 8,812 7,413 7,400 (6,100) (82.4%)
----- ----- ------ ----- ----- ----- ------
Net income available to common
equity $39,825 $34,034 $5,791 17.0% $25,570 $15,440 $6,608 $33,217 N/M
======= ======= ====== ======= ======= ====== =======
Earnings Per Common Share:
Basic $0.23 $0.20 $0.03 15.0% $0.15 $0.09 $0.04 $0.19 N/M
Diluted $0.23 $0.20 $0.03 15.0% $0.15 $0.09 $0.04 $0.19 N/M
Average Common Shares
Outstanding:
Basic 173,523 173,418 105 0.1% 173,323 173,213 173,068 455 0.3%
Diluted 173,523 173,418 105 0.1% 173,327 173,217 173,072 451 0.3%
N/M = Not meaningful.
Selected Quarterly Information
Associated Banc-Corp
(in thousands, except per
share and full time 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
equivalent employee data) YTD 2011 YTD 2010 2011 2011 2011 2011 2010
------------------------- -------- -------- -------- -------- -------- -------- --------
Summary of Operations
Net interest income $612,831 $633,779 $151,825 $153,160 $154,123 $153,723 $150,860
Provision for loan losses 52,000 390,010 1,000 4,000 16,000 31,000 63,000
Asset sale gains (losses),
net (2,849) (2,004) 525 (1,179) (209) (1,986) 514
Investment securities gains
(losses), net (1,112) 24,917 (310) (744) (36) (22) (1,883)
Noninterest income
(excluding securities &
asset gains) 286,430 322,610 73,641 73,599 65,000 74,190 86,066
Noninterest expense 659,873 630,320 174,651 162,160 158,886 164,176 166,843
Income (loss) before income
taxes 183,427 (41,028) 50,030 58,676 43,992 30,729 5,714
Income tax expense (benefit) 43,728 (40,172) 8,905 17,337 9,610 7,876 (8,294)
Net income (loss) 139,699 (856) 41,125 41,339 34,382 22,853 14,008
Net income (loss) available
to common equity 114,869 (30,387) 39,825 34,034 25,570 15,440 6,608
Taxable equivalent
adjustment 21,374 23,635 5,307 5,295 5,332 5,440 5,721
Per Common Share Data
Net income (loss):
Basic $0.66 $(0.18) $0.23 $0.20 $0.15 $0.09 $0.04
Diluted 0.66 (0.18) 0.23 0.20 0.15 0.09 0.04
Dividends 0.04 0.04 0.01 0.01 0.01 0.01 0.01
Market Value:
High $15.36 $16.10 $11.78 $14.17 $15.02 $15.36 $15.49
Low 8.95 11.48 9.15 8.95 13.06 13.83 12.57
Close 11.17 15.15 11.17 9.30 13.90 14.85 15.15
Book value 16.15 15.28 16.15 16.07 15.81 15.46 15.28
Tangible book value 10.68 9.77 10.68 10.59 10.33 9.97 9.77
Performance Ratios
(annualized)
Earning assets yield 3.92% 4.03% 3.81% 3.88% 4.00% 4.01% 3.89%
Interest-bearing
liabilities rate 0.85 1.06 0.78 0.83 0.91 0.89 0.98
Net interest margin 3.26 3.20 3.21 3.23 3.29 3.32 3.13
Return on average assets 0.65 (0.00) 0.75 0.75 0.64 0.43 0.25
Return on average equity 4.66 (0.03) 5.71 5.49 4.63 2.92 1.74
Return on average Tier 1
common equity (1) 6.71 (1.95) 8.96 7.83 6.07 3.76 1.59
Efficiency ratio (2) 71.68 64.32 75.68 69.88 70.79 70.36 68.76
Effective tax rate (benefit) 23.84 97.91 17.80 29.55 21.84 25.63 (145.13)
Dividend payout ratio (3) 6.06 22.22 4.35 5.00 6.67 11.11 25.00
Average Balances
Assets $21,588,620 $22,625,065 $21,755,870 $21,729,187 $21,526,155 $21,336,858 $22,034,041
Earning assets 19,442,263 20,568,495 19,506,627 19,530,007 19,431,292 19,297,866 19,950,784
Interest-bearing liabilities 15,120,824 16,304,220 15,095,689 15,215,517 15,261,514 14,907,465 15,476,002
Loans (4) 13,278,848 13,186,712 14,043,585 13,376,928 13,004,904 12,673,844 12,587,702
Deposits 14,401,127 16,946,301 14,893,469 14,405,311 14,052,689 14,245,614 16,452,473
Short and long-term funding 4,100,825 2,452,610 3,857,252 4,227,319 4,434,500 3,883,122 2,311,016
Common stockholders' equity 2,730,643 2,670,953 2,792,823 2,765,023 2,704,909 2,657,956 2,681,813
Stockholders' equity 2,997,290 3,183,572 2,856,095 2,987,178 2,976,840 3,172,636 3,195,657
Common stockholders' equity
/assets 12.65% 11.81% 12.84% 12.72% 12.57% 12.46% 12.17%
Stockholders' equity /
assets 13.88% 14.07% 13.13% 13.75% 13.83% 14.87% 14.50%
At Period End
Assets $21,924,217 $21,902,649 $22,048,475 $21,473,565 $21,785,596
Loans 14,031,071 13,503,507 13,089,589 12,655,322 12,616,735
Allowance for loan losses 378,151 399,723 425,961 454,461 476,813
Goodwill 929,168 929,168 929,168 929,168 929,168
Mortgage servicing rights,
net 48,152 47,370 53,093 62,243 63,909
Other intangible assets 19,422 20,600 21,779 22,957 24,135
Deposits 15,090,655 14,782,410 14,066,050 14,023,643 15,225,393
Short and long-term funding 3,691,556 4,009,184 4,739,844 4,031,982 3,160,987
Stockholders' equity 2,865,794 2,850,619 2,999,148 3,194,714 3,158,791
Stockholders' equity /
assets 13.07% 13.01% 13.60% 14.88% 14.50%
Tangible common equity /
tangible assets (5) 8.84% 8.77% 8.49% 8.42% 8.12%
Tangible equity/tangible
assets (6) 9.14% 9.07% 9.71% 10.93% 10.59%
Tier 1 common equity /risk-
weighted assets (7) 12.24% 12.44% 12.61% 12.65% 12.26%
Tier 1 leverage ratio 9.81% 9.62% 10.46% 11.65% 11.19%
Tier 1 risk-based capital
ratio 14.08% 14.35% 16.03% 18.08% 17.58%
Total risk-based capital
ratio 15.53% 15.81% 17.50% 19.56% 19.05%
Shares outstanding, end of
period 173,575 173,474 173,374 173,274 173,112
Selected trend information
Average full time equivalent
employees 5,056 4,980 4,977 4,929 4,865
Trust assets under
management, at market value $5,600,000 $5,300,000 $5,700,000 $5,900,000 $5,700,000
Mortgage loans originated
for sale during period 843,614 470,530 250,880 290,013 629,978
Mortgage portfolio serviced
for others 7,321,000 7,281,000 7,367,000 7,476,000 7,453,000
Mortgage servicing rights,
net /Portfolio serviced
for others 0.66% 0.65% 0.72% 0.83% 0.86%
Return on average Tier 1 common equity = Net income available to
common equity divided by average Tier 1 capital excluding qualifying
(1) perpetual preferred stock and qualifying trust preferred securities.
This is a non-GAAP financial measure.
Efficiency ratio = Noninterest expense divided by sum of taxable
equivalent net interest income plus noninterest income, excluding
(2) investment securities gains, net, and asset sales gains, net.
This is a non-GAAP financial measure.
(3) Ratio is based upon basic earnings per common share.
(4) Loans held for sale have been included in the average balances.
Tangible common equity to tangible assets = Common stockholders'
equity excluding goodwill and other intangible assets divided by
(5) assets excluding goodwill and other intangible assets.
This is a non-GAAP financial measure
Tangible equity to tangible assets = Stockholders' equity excluding
goodwill and other intangible assets divided by assets excluding
(6) goodwill and other intangible assets.
This is a non-GAAP financial measure.
Tier 1 common equity to risk-weighted assets = Tier 1 capital
excluding qualifying perpetual preferred stock and qualifying trust
preferred securities divided by risk-weighted assets. This is a
(7) non-GAAP financial measure.
Selected Asset Quality Information
Associated Banc-Corp
Dec11 vs Dec11 vs
Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(in thousands) 2011 2011 % Change 2011 2011 2010 % Change
-------------- -------- -------- -------- -------- -------- -------- --------
Allowance for Loan
Losses
Beginning balance $399,723 $425,961 (6.2%) $454,461 $476,813 $522,018 (23.4%)
Provision for loan
losses 1,000 4,000 (75.0%) 16,000 31,000 63,000 (98.4%)
Charge offs (34,056) (38,155) (10.7%) (52,365) (65,156) (118,368) (71.2%)
Recoveries 11,484 7,917 45.1% 7,865 11,804 10,163 13.0%
------ ----- ----- ------ ------
Net charge offs (22,572) (30,238) (25.4%) (44,500) (53,352) (108,205) (79.1%)
Ending balance $378,151 $399,723 (5.4%) $425,961 $454,461 $476,813 (20.7%)
======== ======== ======== ======== ========
Reserve for losses on
unfunded commitments $14,700 $14,900 (1.3%) $14,900 $17,800 $17,374 (15.4%)
Dec11 vs Dec11 vs
Net Charge Offs Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2011 2011 % Change 2011 2011 2010 % Change
-------- -------- -------- -------- -------- -------- --------
Commercial and
industrial $231 $3,741 (93.8%) $14,026 $4,314 $27,041 (99.1%)
Commercial real estate
-owner occupied 539 134 302.2% 4,436 1,867 11,778 (95.4%)
Lease financing 19 (1,889) (101.0%) 60 28 9,159 (99.8%)
--- ------ --- --- -----
Commercial and
business lending 789 1,986 (60.3%) 18,522 6,209 47,978 (98.4%)
Commercial real estate
-investor 2,394 10,472 (77.1%) 4,941 6,006 8,325 (71.2%)
Real estate -
construction 7,088 5,646 25.5% 6,031 11,936 31,879 (77.8%)
----- ----- ----- ------ ------
Commercial real estate
lending 9,482 16,118 (41.2%) 10,972 17,942 40,204 (76.4%)
----- ------ ------ ------ ------
Total commercial 10,271 18,104 (43.3%) 29,494 24,151 88,182 (88.4%)
Home equity 8,113 8,736 (7.1%) 8,251 14,322 14,541 (44.2%)
Installment(1) 452 764 (40.8%) 664 12,670 2,369 (80.9%)
--- --- --- ------ -----
Total retail 8,565 9,500 (9.8%) 8,915 26,992 16,910 (49.3%)
Residential mortgage 3,736 2,634 41.8% 6,091 2,209 3,113 20.0%
Total net charge offs $22,572 $30,238 (25.4%) $44,500 $53,352 $108,205 (79.1%)
======= ======= ======= ======= ========
Net Charge Offs to
Average Loans (in Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
basis points) * 2011 2011 2011 2011 2010
-------- -------- -------- -------- --------
Commercial and
industrial 3 46 180 60 364
Commercial real estate
-owner occupied 20 5 174 72 438
Lease financing 14 (1,396) 44 20 5,051
--- ------ --- --- -----
Commercial and
business lending 7 18 177 63 466
Commercial real estate
-investor 38 169 83 104 139
Real estate -
construction 502 407 454 888 1,820
Commercial real estate
lending 122 213 151 252 518
--- --- --- --- ---
Total commercial 53 98 166 142 488
Home equity 127 134 127 227 231
Installment 32 52 42 759 131
--- --- --- --- ---
Total retail 110 119 111 338 209
Residential mortgage 46 36 92 35 56
Total net charge offs 64 90 137 171 341
=== === === === ===
Dec11 vs Dec11 vs
Credit Quality Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2011 2011 % Change 2011 2011 2010 % Change
-------- -------- -------- -------- -------- -------- --------
Nonaccrual loans $356,772 $403,392 (11.6%) $467,611 $488,321 $574,356 (37.9%)
Other real estate
owned (OREO) 41,571 42,076 (1.2%) 45,712 49,019 44,330 (6.2%)
Total nonperforming
assets $398,343 $445,468 (10.6%) $513,323 $537,340 $618,686 (35.6%)
======== ======== ======== ======== ========
Loans 90 or more days
past due and still
accruing 4,925 1,220 303.7% 12,123 9,380 3,418 44.1%
Restructured loans
(accruing) 113,164 113,083 0.1% 100,343 88,193 79,935 41.6%
Allowance for loan
losses /loans 2.70% 2.96% 3.25% 3.59% 3.78%
Allowance for loan
losses /nonaccrual
loans 105.99 99.09 91.09 93.07 83.02
Nonaccrual loans /
total loans 2.54 2.99 3.57 3.86 4.55
Nonperforming assets /
total loans plus OREO 2.83 3.29 3.91 4.23 4.89
Nonperforming assets /
total assets 1.82 2.03 2.33 2.50 2.84
Net charge offs /
average loans
(annualized) 0.64 0.90 1.37 1.71 3.41
Year-to-date net
charge offs /average
loans 1.13 1.32 1.54 1.71 3.69
Nonaccrual loans by
type:
Commercial and
industrial $56,075 $61,256 (8.5%) $71,183 $76,780 $99,845 (43.8%)
Commercial real estate
-owner occupied 35,718 47,202 (24.3%) 59,725 57,168 59,317 (39.8%)
Lease financing 10,644 11,667 (8.8%) 12,898 15,270 17,080 (37.7%)
------ ------ ------ ------ ------
Commercial and
business lending 102,437 120,125 (14.7%) 143,806 149,218 176,242 (41.9%)
Commercial real estate
-investor 99,352 97,691 1.7% 133,770 129,379 164,610 (39.6%)
Real estate -
construction 41,806 72,300 (42.2%) 72,782 84,903 94,929 (56.0%)
------ ------ ------ ------ ------
Commercial real estate
lending 141,158 169,991 (17.0%) 206,552 214,282 259,539 (45.6%)
------- ------- ------- ------- -------
Total commercial 243,595 290,116 (16.0%) 350,358 363,500 435,781 (44.1%)
Home equity 46,907 46,119 1.7% 46,777 49,618 51,712 (9.3%)
Installment 2,715 3,195 (15.0%) 3,724 4,949 10,544 (74.3%)
----- ----- ----- ----- ------
Total retail 49,622 49,314 0.6% 50,501 54,567 62,256 (20.3%)
Residential mortgage 63,555 63,962 (0.6%) 66,752 70,254 76,319 (16.7%)
------ ------ ------ ------ ------
Total nonaccrual loans $356,772 $403,392 (11.6%) $467,611 $488,321 $574,356 (37.9%)
======== ======== ======== ======== ========
* Annualized.
(1) Charge offs for the three months ended March 31, 2011, include
$10 million of write-downs related to installment loans transferred
to held for sale.
Selected Asset Quality Information (continued)
Associated Banc-Corp
Dec11 vs Dec11 vs
Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(in thousands) 2011 2011 % Change 2011 2011 2010 % Change
-------------- -------- -------- -------- -------- -------- -------- --------
Restructured loans
(accruing)
Commercial and industrial $22,552 $23,020 (2.0%) $22,760 $16,047 $9,980 126.0%
Commercial real estate -
owner occupied 8,138 5,439 49.6% 1,579 382 382 N/M
Lease financing - - 0.0% - - - 0.0%
--- --- --- --- ---
Commercial and business
lending 30,690 28,459 7.8% 24,339 16,429 10,362 196.2%
Commercial real estate -
investor 43,417 43,453 (0.1%) 34,612 33,784 15,230 185.1%
Real estate -
construction 10,977 10,707 2.5% 10,706 7,859 22,532 (51.3%)
------ ------ ------ ----- ------
Commercial real estate
lending 54,394 54,160 0.4% 45,318 41,643 37,762 44.0%
------ ------ ------ ------ ------
Total commercial 85,084 82,619 3.0% 69,657 58,072 48,124 76.8%
Home equity 8,950 10,556 (15.2%) 11,453 11,630 11,741 (23.8%)
Installment 1,015 965 5.2% 1,017 1,149 692 46.7%
----- --- ----- ----- ---
Total retail 9,965 11,521 (13.5%) 12,470 12,779 12,433 (19.9%)
Residential mortgage 18,115 18,943 (4.4%) 18,216 17,342 19,378 (6.5%)
Total restructured loans
(accruing) $113,164 $113,083 0.1% $100,343 $88,193 $79,935 41.6%
======== ======== ======== ======= =======
Restructured loans in
nonaccrual loans (not
included above) $87,493 $80,063 9.3% $71,084 $49,352 $35,939 143.4%
Dec11 vs Dec11 vs
Loans Past Due 30-89 Days Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2011 2011 % Change 2011 2011 2010 % Change
-------- -------- -------- -------- -------- -------- --------
Commercial and industrial $8,743 $6,255 39.8% $7,581 $36,205 $33,013 (73.5%)
Commercial real estate -
owner occupied 7,092 29,409 (75.9%) 33,753 21,820 9,295 (23.7%)
Lease financing 104 507 (79.5%) 79 135 132 (21.2%)
--- --- --- --- ---
Commercial and business
lending 15,939 36,171 (55.9%) 41,413 58,160 42,440 (62.4%)
Commercial real estate -
investor 4,970 70,136 (92.9%) 27,487 18,717 37,191 (86.6%)
Real estate -
construction 996 5,493 (81.9%) 13,217 3,410 8,016 (87.6%)
--- ----- ------ ----- -----
Commercial real estate
lending 5,966 75,629 (92.1%) 40,704 22,127 45,207 (86.8%)
----- ------ ------ ------ ------
Total commercial 21,905 111,800 (80.4%) 82,117 80,287 87,647 (75.0%)
Home equity 12,189 18,165 (32.9%) 14,818 14,808 13,886 (12.2%)
Installment 2,592 1,956 32.5% 3,851 2,714 9,624 (73.1%)
----- ----- ----- ----- -----
Total retail 14,781 20,121 (26.5%) 18,669 17,522 23,510 (37.1%)
Residential mortgage 7,224 12,114 (40.4%) 12,573 7,940 8,722 (17.2%)
Total loans past due
30-89 days $43,910 $144,035 (69.5%) $113,359 $105,749 $119,879 (63.4%)
======= ======== ======== ======== ========
Dec11 vs Dec11 vs
Potential Problem Loans Sep11 Dec10
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2011 2011 % Change 2011 2011 2010 % Change
-------- -------- -------- -------- -------- -------- --------
Commercial and industrial $153,306 $207,351 (26.1%) $229,407 $348,949 $354,284 (56.7%)
Commercial real estate -
owner occupied 136,366 140,406 (2.9%) 145,622 172,662 193,819 (29.6%)
Lease financing 158 507 (68.8%) 1,399 1,705 2,617 (94.0%)
--- --- ----- ----- -----
Commercial and business
lending 289,830 348,264 (16.8%) 376,428 523,316 550,720 (47.4%)
Commercial real estate -
investor 230,206 252,331 (8.8%) 236,434 292,714 298,959 (23.0%)
Real estate -
construction 27,649 37,155 (25.6%) 63,186 70,824 91,618 (69.8%)
------ ------ ------ ------ ------
Commercial real estate
lending 257,855 289,486 (10.9%) 299,620 363,538 390,577 (34.0%)
------- ------- ------- ------- -------
Total commercial 547,685 637,750 (14.1%) 676,048 886,854 941,297 (41.8%)
Home equity 5,451 4,975 9.6% 4,515 4,737 3,057 78.3%
Installment 233 272 (14.3%) 216 230 703 (66.9%)
--- --- --- --- ---
Total retail 5,684 5,247 8.3% 4,731 4,967 3,760 51.2%
Residential mortgage 13,037 16,550 (21.2%) 18,575 19,710 18,672 (30.2%)
------ ------ ------ ------ ------
Total potential problem
loans $566,406 $659,547 (14.1%) $699,354 $911,531 $963,729 (41.2%)
======== ======== ======== ======== ========
N/M - Not meaningful.
Net Interest Income
Analysis -Taxable
Equivalent Basis
Associated Banc-Corp Year ended December 31, 2011 Year ended December 31, 2010
---------------------------- ----------------------------
Average Interest Average Average Interest Average
Income / Yield / Income / Yield /
Balance Expense Rate Balance Expense Rate
------- --------- -------- ------- --------- --------
(in thousands)
Earning assets:
Loans: (1) (2) (3)
Commercial $7,274,728 $315,151 4.33% $7,790,554 $339,595 4.36%
Residential mortgage 2,819,702 116,207 4.12 2,059,156 99,163 4.82
Retail 3,184,418 154,793 4.86 3,337,002 173,015 5.18
--------- ------- --------- -------
Total loans 13,278,848 586,151 4.41 13,186,712 611,773 4.64
Investment securities 5,497,297 171,270 3.12 5,439,729 209,295 3.85
Other short-term
investments 666,118 5,575 0.84 1,942,054 8,693 0.45
------- ----- --------- -----
Investments and other 6,163,415 176,845 2.87 7,381,783 217,988 2.95
Total earning assets 19,442,263 762,996 3.92 20,568,495 829,761 4.03
Other assets, net 2,146,357 2,056,570
Total assets $21,588,620 $22,625,065
=========== ===========
Interest-bearing
liabilities:
Savings deposits $987,198 $1,091 0.11% $898,019 $1,176 0.13%
Interest-bearing demand
deposits 1,947,506 3,429 0.18 2,780,525 6,314 0.23
Money market deposits 5,147,437 16,385 0.32 6,374,071 33,417 0.52
Time deposits, excluding
Brokered CDs 2,647,632 41,257 1.56 3,251,667 60,280 1.85
--------- ------ --------- ------
Total interest-bearing
deposits, excluding
Brokered CDs 10,729,773 62,162 0.58 13,304,282 101,187 0.76
Brokered CDs 290,226 3,586 1.24 547,328 4,836 0.88
------- ----- ------- -----
Total interest-bearing
deposits 11,019,999 65,748 0.60 13,851,610 106,023 0.77
Short and long-term
funding 4,100,825 63,043 1.54 2,452,610 66,324 2.70
--------- ------ --------- ------
Total interest-bearing
liabilities 15,120,824 128,791 0.85 16,304,220 172,347 1.06
Noninterest-bearing demand
deposits 3,381,128 3,094,691
Other liabilities 89,378 42,582
Stockholders' equity 2,997,290 3,183,572
Total liabilities and
stockholders' equity $21,588,620 $22,625,065
=========== ===========
Net interest income and
rate spread (1) $634,205 3.07% $657,414 2.97%
======== ========
Net interest margin (1) 3.26% 3.20%
Taxable equivalent
adjustment $21,374 $23,635
======= =======
Net Interest Income
Analysis -Taxable
Equivalent Basis
Three months ended December Three months ended December
Associated Banc-Corp 31, 2011 31, 2010
---------------------------- ----------------------------
Average Interest Average Average Interest Average
Income / Yield / Income / Yield /
Balance Expense Rate Balance Expense Rate
------- --------- -------- ------- --------- --------
(in thousands)
Earning assets:
Loans: (1) (2) (3)
Commercial $7,728,803 $82,424 4.23% $7,161,913 $81,120 4.50%
Residential mortgage 3,216,466 31,643 3.93 2,214,502 24,887 4.49
Retail 3,098,316 36,666 4.71 3,211,287 41,267 5.11
--------- ------ --------- ------
Total loans 14,043,585 150,733 4.27 12,587,702 147,274 4.65
Investment securities 5,020,429 34,605 2.76 5,598,564 45,461 3.25
Other short-term
investments 442,613 1,251 1.13 1,764,518 2,078 0.48
------- ----- --------- -----
Investments and other 5,463,042 35,856 2.63 7,363,082 47,539 2.58
Total earning assets 19,506,627 186,589 3.81 19,950,784 194,813 3.89
Other assets, net 2,249,243 2,083,257
Total assets $21,755,870 $22,034,041
=========== ===========
Interest-bearing
liabilities:
Savings deposits $1,017,271 $230 0.09% $908,625 $319 0.14%
Interest-bearing demand
deposits 2,152,518 1,115 0.21 2,733,728 1,345 0.20
Money market deposits 5,308,174 3,649 0.27 6,027,526 7,202 0.47
Time deposits, excluding
Brokered CDs 2,557,120 9,256 1.44 3,057,052 12,986 1.69
--------- ----- --------- ------
Total interest-bearing
deposits, excluding
Brokered CDs 11,035,083 14,250 0.51 12,726,931 21,852 0.68
Brokered CDs 203,354 704 1.37 438,055 1,187 1.07
------- --- ------- -----
Total interest-bearing
deposits 11,238,437 14,954 0.53 13,164,986 23,039 0.69
Short and long-term
funding 3,857,252 14,503 1.50 2,311,016 15,193 2.62
--------- ------ --------- ------
Total interest-bearing
liabilities 15,095,689 29,457 0.78 15,476,002 38,232 0.98
Noninterest-bearing demand
deposits 3,655,032 3,287,487
Other liabilities 149,054 74,895
Stockholders' equity 2,856,095 3,195,657
Total liabilities and
stockholders' equity $21,755,870 $22,034,041
=========== ===========
Net interest income and
rate spread (1) $157,132 3.03% $156,581 2.91%
======== ========
Net interest margin (1) 3.21% 3.13%
Taxable equivalent
adjustment $5,307 $5,721
(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis
using a tax rate of 35% for all periods presented and is net of the effects of certain
disallowed interest deductions.
(2) Nonaccrual loans and loans held for sale have been included in the average balances.
(3) Interest income includes net loan fees.
Net Interest Income Analysis - Taxable Equivalent Basis
Three months ended December 31, Three months ended September
Associated Banc-Corp 2011 30, 2011
-------------------------------- ----------------------------
Average Interest Average Average Interest Average
Income / Yield / Income / Yield /
Balance Expense Rate Balance Expense Rate
------- --------- -------- ------- --------- --------
(in thousands)
Earning assets:
Loans: (1) (2) (3)
Commercial $7,728,803 $82,424 4.23% $7,337,527 $79,161 4.28%
Residential mortgage 3,216,466 31,643 3.93 2,869,445 29,385 4.09
Retail 3,098,316 36,666 4.71 3,169,956 38,102 4.78
--------- ------ --------- ------
Total loans 14,043,585 150,733 4.27 13,376,928 146,648 4.36
Investment securities 5,020,429 34,605 2.76 5,430,677 42,314 3.12
Other short-term
investments 442,613 1,251 1.13 722,402 1,428 0.79
------- ----- ------- -----
Investments and other 5,463,042 35,856 2.63 6,153,079 43,742 2.84
--------- ------ --------- ------
Total earning assets 19,506,627 186,589 3.81 19,530,007 190,390 3.88
Other assets, net 2,249,243 2,199,180
Total assets $21,755,870 $21,729,187
=========== ===========
Interest-bearing
liabilities:
Savings deposits $1,017,271 $230 0.09% $1,013,333 $289 0.11%
Interest-bearing demand
deposits 2,152,518 1,115 0.21 2,056,082 945 0.18
Money market deposits 5,308,174 3,649 0.27 5,092,120 3,841 0.30
Time deposits, excluding
Brokered CDs 2,557,120 9,256 1.44 2,565,898 9,718 1.50
--------- ----- --------- -----
Total interest-bearing
deposits, excluding
Brokered CDs 11,035,083 14,250 0.51 10,727,433 14,793 0.55
Brokered CDs 203,354 704 1.37 260,765 851 1.29
------- --- ------- ---
Total interest-bearing
deposits 11,238,437 14,954 0.53 10,988,198 15,644 0.56
Short and long-term
funding 3,857,252 14,503 1.50 4,227,319 16,291 1.54
--------- ------ --------- ------
Total interest-bearing
liabilities 15,095,689 29,457 0.78 15,215,517 31,935 0.83
Noninterest-bearing demand
deposits 3,655,032 3,417,113
Other liabilities 149,054 109,379
Stockholders' equity 2,856,095 2,987,178
Total liabilities and
stockholders' equity $21,755,870 $21,729,187
=========== ===========
Net interest income and
rate spread (1) $157,132 3.03% $158,455 3.05%
======== ========
Net interest margin (1) 3.21% 3.23%
Taxable equivalent
adjustment $5,307 $5,295
====== ======
(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate
of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.
(2) Nonaccrual loans and loans held for sale have been included in the average balances.
(3) Interest income includes net loan fees.
Financial Summary and Comparison
Associated Banc-Corp
Dec11 vs Dec11 vs
Period End Loan Composition Sep11 Dec10
Dec 31, Sept 30, Jun 30, Dec 31,
2011 2011 % Change 2011 Mar 31, 2011 2010 % Change
-------- --------- -------- -------- ------------ -------- --------
Commercial and industrial $3,724,736 $3,360,502 10.8% $3,202,301 $2,972,651 $3,049,752 22.1%
Commercial real estate -
owner occupied 1,086,829 1,068,616 1.7% 1,030,060 1,027,826 1,049,798 3.5%
Lease financing 58,194 54,849 6.1% 54,001 56,458 60,254 (3.4%)
------ ------ ------ ------ ------
Commercial and business
lending 4,869,759 4,483,967 8.6% 4,286,362 4,056,935 4,159,804 17.1%
Commercial real estate -
investor 2,563,767 2,481,411 3.3% 2,393,626 2,354,655 2,339,415 9.6%
Real estate - construction 584,046 554,024 5.4% 533,804 525,236 553,069 5.6%
------- ------- ------- ------- -------
Commercial real estate
lending 3,147,813 3,035,435 3.7% 2,927,430 2,879,891 2,892,484 8.8%
--------- --------- --------- --------- ---------
Total commercial 8,017,572 7,519,402 6.6% 7,213,792 6,936,826 7,052,288 13.7%
Home equity 2,504,704 2,571,404 (2.6%) 2,594,029 2,576,736 2,523,057 (0.7%)
Installment 557,782 572,243 (2.5%) 589,714 605,767 695,383 (19.8%)
------- ------- ------- ------- -------
Total retail 3,062,486 3,143,647 (2.6%) 3,183,743 3,182,503 3,218,440 (4.8%)
Residential mortgage 2,951,013 2,840,458 3.9% 2,692,054 2,535,993 2,346,007 25.8%
Total loans $14,031,071 $13,503,507 3.9% $13,089,589 $12,655,322 $12,616,735 11.2%
=========== =========== =========== =========== ===========
Period End Deposit and
Customer Funding Dec11 vs Dec11 vs
Composition Sep11 Dec10
Dec 31, Sept 30, Jun 30, Dec 31,
2011 2011 % Change 2011 Mar 31, 2011 2010 % Change
-------- --------- -------- -------- ------------ -------- --------
Demand $3,928,792 $3,711,570 5.9% $3,218,722 $3,285,604 $3,684,965 6.6%
Savings 986,766 1,013,195 (2.6%) 1,007,337 973,122 887,236 11.2%
Interest-bearing demand 2,297,454 2,071,627 10.9% 1,931,519 1,755,367 1,870,664 22.8%
Money market 5,150,275 5,205,401 (1.1%) 4,982,492 4,968,510 5,434,867 (5.2%)
Brokered CDs 202,948 203,827 (0.4%) 316,670 324,045 442,640 (54.2%)
Other time deposits 2,524,420 2,576,790 (2.0%) 2,609,310 2,716,995 2,905,021 (13.1%)
Total deposits 15,090,655 14,782,410 2.1% 14,066,050 14,023,643 15,225,393 (0.9%)
Customer repo sweeps 664,624 871,619 (23.7%) 930,101 1,048,516 563,884 17.9%
Customer repo term 695,131 1,141,450 (39.1%) 1,147,938 887,434 - N/M
------- --------- --------- ------- ---
Total customer funding 1,359,755 2,013,069 (32.5%) 2,078,039 1,935,950 563,884 141.1%
Total deposits and customer
funding $16,450,410 $16,795,479 (2.1%) $16,144,089 $15,959,593 $15,789,277 4.2%
=========== =========== =========== =========== ===========
Network transaction
deposits included above in
interest-bearing demand
and money market 875,052 875,630 (0.1%) 824,003 936,688 1,144,134 (23.5%)
Brokered CDs 202,948 203,827 (0.4%) 316,670 324,045 442,640 (54.2%)
------- ------- ------- ------- -------
Total network and brokered
funding 1,078,000 1,079,457 (0.1%) 1,140,673 1,260,733 1,586,774 (32.1%)
Net customer deposits and
funding (4) 15,372,410 15,716,022 (2.2%) 15,003,416 14,698,860 14,202,503 8.2%
========== ========== ========== ========== ==========
(4) Total deposits and customer funding excluding total network and brokered funding.
N/M = Not meaningful.
SOURCE Associated Banc-Corp
