GREEN BAY, Wis.--(BUSINESS WIRE)--Oct. 16, 2003--Associated
Banc-Corp (NASDAQ:ASBC) earned $.79 per diluted share in the quarter
that ended Sept. 30, 2003, a 12.9 percent increase from $.70 per
diluted share for the same period in 2002. Net income was $58.4
million, compared to $53.5 million for the comparable quarter of 2002.
Return on average assets was 1.53 percent in the third quarter
2003 compared to 1.47 percent in the third quarter of 2002. Return on
average equity was 17.75 percent compared to 16.73 percent in the
year-earlier quarter.
For the nine months ended Sept. 30, 2003, diluted earnings per
share were $2.32, up 11.5 percent from $2.08 per diluted share in the
same period in 2002. Return on average assets was 1.54 percent and
return on average equity was 17.82 percent, compared to 1.49 percent
and 17.28 percent, respectively, for the nine months ended Sept. 30,
2002.
"We are pleased with our third quarter performance," Associated
President and CEO Paul Beideman said. "Specifically, Associated's
financial results in the third quarter reflect the continued strong
contribution of our mortgage banking activity as well as solid growth
in our transaction account deposits and home equity lines of credit,"
Beideman said.
Net interest income was $129.0 million for the third quarter,
compared to $128.4 million in the year-earlier period, and $127.2
million for the second quarter of 2003. The net interest margin for
third quarter 2003 was 3.78 percent, down from 3.96 percent a year ago
and nearly unchanged from 3.79 percent for second quarter 2003. For
the first nine months of 2003, net interest income was $383.6 million,
up 3 percent compared to $371.6 million for the same period of 2002.
Net interest margin was 3.82 percent for the first nine months of
2003, compared to 3.94 percent for the same period in 2002.
Total loans for the third quarter 2003 averaged $10.8 billion, an
increase of $685 million or 7 percent compared to the third quarter a
year earlier, and up 3 percent from the second quarter 2003, on an
annualized basis.
Total deposits averaged $9.5 billion for the third quarter 2003,
up $538 million or 6 percent compared to the third quarter last year,
and up 16 percent from the second quarter 2003, on an annualized
basis. Transaction account (demand, savings, interest-bearing demand
and money market account) deposits were $6.2 billion, up 13 percent on
average over the comparable third quarter of 2002, and up an
annualized 22 percent over the second quarter 2003. Time deposits
averaged $3.3 billion for the third quarter 2003, versus $3.4 billion
for the comparable quarter last year, while up from $3.2 billion for
second quarter 2003.
The provision for loan losses was $12.1 million for the third
quarter of 2003, compared to $12.8 million for the same quarter last
year, and unchanged from $12.1 million for the second quarter of 2003.
For the first nine months of 2003, the provision for loan losses was
$37.2 million, compared to $36.1 million for the same period last
year. The allowance for loan losses was 1.71 percent of total loans at
Sept. 30, 2003, 1.54 percent at Sept. 30, 2002, and 1.66 percent at
June 30, 2003.
Net chargeoffs for the third quarter of 2003 were $8.3 million,
compared to net chargeoffs of $6.3 million for third quarter 2002, and
$10.1 million for the second quarter of 2003. For the nine months that
ended Sept. 30, 2003, annualized net chargeoffs were 0.29 percent of
average loans, the same as in the comparable period last year.
Nonperforming assets were $131.5 million as of Sept. 30, 2003,
compared to $131.9 million as of June 30, 2003 and up from $103.7
million a year ago.
"We are staying close to our customers to help them manage through
the current soft economic environment and to support them as they plan
for the future. This is the most effective way for Associated to
manage its credit quality," Beideman said.
Noninterest income grew to $63.9 million for the third quarter,
compared to $58.7 million in the same period of 2002. The 9 percent
increase between the comparable quarters was primarily attributable to
increases in mortgage banking revenue, retail commission income
(attributable mostly to Associated's acquisition of CFG Insurance
Services on April 1, 2003), and service charges on deposit accounts,
offset partly by a decrease in credit card and other nondeposit fees
(primarily from lower merchant fees resulting from the March 2003 sale
of the company's merchant processing business). In comparison to
second quarter 2003, noninterest income declined $6.3 million, with
$5.2 million attributable to a decline in mortgage banking income.
While secondary market mortgage production for the third quarter of
2003 was a record $1.4 billion, volatility in long-term interest rates
throughout the quarter reduced gains on mortgage loans sold. Further,
the recent increase in long-term interest rates has reduced mortgage
refinancing applications and may result in lower mortgage origination
volume and lower mortgage banking revenue in the fourth quarter of
2003.
Noninterest expense for the third quarter of 2003 declined
slightly to $97.8 million, compared to $98.2 million for the third
quarter of 2002. Mortgage servicing rights expense decreased $9.2
million between the comparable third quarter periods, primarily as a
function of slower prepayment speeds; comparable previous quarters'
results included impairment of mortgage servicing rights related to
high levels of loan prepayment. Personnel expense was $54.8 million
for the third quarter of 2003, up $7.2 million, from the year-earlier
quarter, due mostly to the addition of CFG personnel, and merit and
incentive increases between the years. In comparison to second quarter
2003, noninterest expense was down $6.1 million, led primarily by
these same factors. Mortgage servicing rights expense was down $8.8
million, offset partly by increases in personnel, data processing and
other costs, between the third and second quarters of 2003.
"Our 2003 earnings growth goal of 10 percent was predicated on an
improving economy, moderate interest rate increases, and increased
confidence among consumers and businesses. Although these improvements
have not materialized to the degree we expected, we remain optimistic
that we will, nevertheless, meet our income goal," Beideman said.
The company repurchased approximately 0.7 million shares of its
common stock during the third quarter of 2003 at an average cost of
$37.46 per share. Associated repurchased 1.9 million shares in the
first nine months of 2003 at an average cost of $35.72 per share.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified multibank holding company with total assets of $15.1
billion. Associated has more than 200 banking offices serving more
than 150 communities in Wisconsin, Illinois, and Minnesota. The
company offers a full range of traditional banking services and a
variety of other financial products and services. More information
about Associated Banc-Corp is available at www.AssociatedBank.com.
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," or similar expressions.
Outcomes related to such statements are subject to numerous risk
factors and uncertainties including those listed in the company's
Annual Report filed on Form 10-K.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
September December
30, 31,
(in thousands) 2003 2002 % Change
---------------------------------------------------------------------
Assets
Cash and due from banks $ 340,042$ 430,691 (21.0%)
Interest-bearing deposits in other
financial institutions 6,180 5,502 12.3%
Federal funds sold and securities
purchased
under agreements to resell 19,950 8,820 126.2%
Securities available for sale, at
fair value 3,415,574 3,362,669 1.6%
Loans held for sale 390,332 305,836 27.6%
Loans 10,289,242 10,303,225 (0.1%)
Allowance for loan losses (176,223) (162,541) 8.4%
------------ ------------
Loans, net 10,113,019 10,140,684 (0.3%)
Premises and equipment 131,873 132,713 (0.6%)
Goodwill 224,388 212,112 5.8%
Other intangible assets 58,565 41,565 40.9%
Other assets 414,246 402,683 2.9%
------------ ------------
Total assets $15,114,169$15,043,275 0.5%
============ ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $ 1,804,596$ 1,773,699 1.7%
Interest-bearing deposits,
excluding Brokered CDs 7,673,766 7,117,503 7.8%
Brokered CDs 156,994 233,650 (32.8%)
------------ ------------
Total deposits 9,635,356 9,124,852 5.6%
Short-term borrowings 2,049,833 2,389,607 (14.2%)
Long-term debt 1,806,316 1,906,845 (5.3%)
Company-obligated mandatorily
redeemable
preferred securities 186,788 190,111 (1.7%)
Accrued expenses and other
liabilities 134,928 159,677 (15.5%)
------------ ------------
Total liabilities 13,813,221 13,771,092 0.3%
Stockholders' Equity
Preferred stock - -
Common stock 736 755 (2.5%)
Surplus 580,823 643,956 (9.8%)
Retained earnings 695,076 607,944 14.3%
Accumulated other comprehensive
income 36,310 60,313 (39.8%)
Deferred compensation (1,744) - N/M
Treasury stock at cost (10,253) (40,785) (74.9%)
------------ ------------
Total stockholders' equity 1,300,948 1,272,183 2.3%
----------- -----------
Total liabilities and
stockholders' equity $15,114,169$15,043,275 0.5%
============ ============
N/M - Not meaningful.
September
30,
(in thousands) 2002 % Change
---------------------------------------------------------------------
Assets
Cash and due from banks $ 404,660 (16.0%)
Interest-bearing deposits in other
financial institutions 5,451 13.4%
Federal funds sold and securities purchased
under agreements to resell 109,650 (81.8%)
Securities available for sale, at fair value 3,432,758 (0.5%)
Loans held for sale 379,136 3.0%
Loans 10,086,510 2.0%
Allowance for loan losses (155,288) 13.5%
------------
Loans, net 9,931,222 1.8%
Premises and equipment 133,596 (1.3%)
Goodwill 212,112 5.8%
Other intangible assets 39,869 46.9%
Other assets 396,248 4.5%
------------
Total assets $15,044,702 0.5%
============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 1,740,932 3.7%
Interest-bearing deposits, excluding Brokered
CDs 7,018,506 9.3%
Brokered CDs 187,915 (16.5%)
------------
Total deposits 8,947,353 7.7%
Short-term borrowings 2,630,285 (22.1%)
Long-term debt 1,830,260 (1.3%)
Company-obligated mandatorily redeemable
preferred securities 186,739 0.0%
Accrued expenses and other liabilities 179,374 (24.8%)
------------
Total liabilities 13,774,011 0.3%
Stockholders' Equity
Preferred stock -
Common stock 759 (3.0%)
Surplus 655,540 (11.4%)
Retained earnings 581,145 19.6%
Accumulated other comprehensive income 76,644 (52.6%)
Deferred compensation - N/M
Treasury stock at cost (43,397) (76.4%)
------------
Total stockholders' equity 1,270,691 2.4%
------------
Total liabilities and stockholders' equity $15,044,702 0.5%
============
N/M - Not meaningful.
---------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three
Months Ended,
September 30,
-------------------
(in thousands, except per share amounts) 2003 2002 % Change
---------------------------------------------------------------------
Interest Income
Interest and fees on loans $145,246$158,886 (8.6%)
Interest and dividends on investment
securities
and deposits with other financial
institutions
Taxable 26,710 30,918 (13.6%)
Tax-exempt 9,825 9,916 (0.9%)
Interest on federal funds sold and
securities
purchased under agreements to resell 38 45 (15.6%)
--------- ---------
Total interest income 181,819 199,765 (9.0%)
Interest Expense
Interest on deposits 30,327 39,336 (22.9%)
Interest on short-term borrowings 6,757 13,039 (48.2%)
Interest on long-term debt and capital
securities 15,759 19,032 (17.2%)
--------- ---------
Total interest expense 52,843 71,407 (26.0%)
--------- ---------
Net Interest Income 128,976 128,358 0.5%
Provision for loan losses 12,118 12,831 (5.6%)
--------- ---------
Net interest income after provision for
loan losses 116,858 115,527 1.2%
Noninterest Income
Trust service fees 7,001 6,722 4.2%
Service charges on deposit accounts 13,338 12,261 8.8%
Mortgage banking 23,635 20,468 15.5%
Credit card and other nondeposit fees 5,435 7,045 (22.9%)
Retail commissions 6,830 3,635 87.9%
Bank owned life insurance income 3,532 3,545 (0.4%)
Asset sale gains, net 871 658 32.4%
Investment securities gains, net 1 374 N/M
Other 3,245 3,948 (17.8%)
--------- ---------
Total noninterest income 63,888 58,656 8.9%
Noninterest Expense
Personnel expense 54,795 47,581 15.2%
Occupancy 7,101 6,553 8.4%
Equipment 3,178 3,909 (18.7%)
Data processing 6,322 5,420 16.6%
Business development and advertising 4,113 3,728 10.3%
Stationery and supplies 1,651 1,395 18.4%
FDIC expense 353 384 (8.1%)
Mortgage servicing rights expense 4,199 13,372 (68.6%)
Other intangible amortization 871 576 51.2%
Loan expense 1,806 3,967 (54.5%)
Other 13,382 11,298 18.4%
--------- ---------
Total noninterest expense 97,771 98,183 (0.4%)
--------- ---------
Income before income taxes 82,975 76,000 9.2%
Income tax expense 24,589 22,528 9.1%
--------- ---------
Net Income $ 58,386$ 53,472 9.2%
========= =========
Earnings Per Share:
Basic $ 0.79$ 0.71 11.3%
Diluted $ 0.79$ 0.70 12.9%
Average Shares Outstanding:
Basic 73,473 75,158 (2.2%)
Diluted 74,323 76,047 (2.3%)
N/M - Not meaningful.
For The Nine Months
Ended,
September 30,
-------------------
(in thousands, except per share amounts) 2003 2002 % Change
---------------------------------------------------------------------
Interest Income
Interest and fees on loans $441,527$468,556 (5.8%)
Interest and dividends on investment
securities
and deposits with other financial
institutions
Taxable 79,430 97,149 (18.2%)
Tax-exempt 29,822 29,884 (0.2%)
Interest on federal funds sold and
securities
purchased under agreements to resell 127 339 (62.5%)
--------- ---------
Total interest income 550,906 595,928 (7.6%)
Interest Expense
Interest on deposits 93,875 133,125 (29.5%)
Interest on short-term borrowings 23,766 40,534 (41.4%)
Interest on long-term debt and capital
securities 49,640 50,716 (2.1%)
--------- ---------
Total interest expense 167,281 224,375 (25.4%)
--------- ---------
Net Interest Income 383,625 371,553 3.2%
Provision for loan losses 37,210 36,085 3.1%
--------- ---------
Net interest income after provision for
loan losses 346,415 335,468 3.3%
Noninterest Income
Trust service fees 21,427 21,815 (1.8%)
Service charges on deposit accounts 37,611 33,874 11.0%
Mortgage banking 78,583 42,709 84.0%
Credit card and other nondeposit fees 18,023 20,211 (10.8%)
Retail commissions 17,540 14,136 24.1%
Bank owned life insurance income 10,373 10,284 0.9%
Asset sale gains, net 203 1,030 (80.3%)
Investment securities gains, net 702 374 N/M
Other 14,795 11,526 28.4%
--------- ---------
Total noninterest income 199,257 155,959 27.8%
Noninterest Expense
Personnel expense 158,275 141,339 12.0%
Occupancy 21,367 19,340 10.5%
Equipment 9,612 11,126 (13.6%)
Data processing 17,542 15,527 13.0%
Business development and advertising 11,029 10,300 7.1%
Stationery and supplies 4,964 5,225 (5.0%)
FDIC expense 1,078 1,158 (6.9%)
Mortgage servicing rights expense 28,818 20,143 43.1%
Other intangible amortization 2,091 1,674 24.9%
Loan expense 6,104 10,280 (40.6%)
Other 38,967 35,674 9.2%
--------- ---------
Total noninterest expense 299,847 271,786 10.3%
--------- ---------
Income before income taxes 245,825 219,641 11.9%
Income tax expense 72,777 62,363 16.7%
--------- ---------
Net Income $173,048$157,278 10.0%
========= =========
Earnings Per Share:
Basic $ 2.34$ 2.10 11.4%
Diluted $ 2.32$ 2.08 11.5%
Average Shares Outstanding:
Basic 73,892 74,748 (1.1%)
Diluted 74,596 75,666 (1.4%)
N/M - Not meaningful.
---------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
---------------------------------------------------------------------
(in thousands,
except per share
data) YTD 2003 YTD 2002 3rd Qtr 2003 2nd Qtr 2003
---------------------------------------------------------------------
Summary of
Operations
Net interest
income 383,625 371,553 128,976 127,195
Provision for loan
losses 37,210 36,085 12,118 12,132
Net interest
income after
provision for
loan losses 346,415 335,468 116,858 115,063
Asset sale gains
(losses), net 203 1,030 871 (790)
Investment
securities gains
(losses), net 702 374 1 1,027
Noninterest income
(excluding
securities &
asset gains) 198,352 154,555 63,016 69,923
Noninterest
expense 299,847 271,786 97,771 103,919
Income taxes 72,777 62,363 24,589 24,635
Net income 173,048 157,278 58,386 56,669
Taxable equivalent
adjustment 18,673 18,091 6,165 6,231
---------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $ 2.34$ 2.10$ 0.79$ 0.77
Diluted 2.32 2.08 0.79 0.76
Dividends 0.99 0.90 0.34 0.34
Market Value:
High $ 38.90$ 38.25$ 38.90$ 38.41
Low 32.15 30.37 37.12 32.15
Close 37.89 31.73 37.89 36.61
Book value 17.77 17.03 17.77 17.88
---------------------------------------------------------------------
Performance Ratios
(annualized)
Net interest
margin (FTE) 3.82% 3.94% 3.78% 3.79%
Return on average
assets 1.54 1.49 1.53 1.51
Return on average
equity 17.82 17.28 17.75 17.37
Efficiency ratio
(2) 49.92 49.94 49.34 51.10
Effective tax rate 29.61 28.39 29.63 30.30
Dividend payout
ratio (basic) 42.31 42.94 43.04 44.16
---------------------------------------------------------------------
Average Balances
Assets $15,013,216$14,093,749$15,152,676$15,016,497
Earning assets 13,986,544 13,100,514 14,128,702 13,991,615
Interest-bearing
liabilities 11,928,563 11,263,140 11,955,420 11,941,877
Loans 10,712,738 9,814,880 10,813,769 10,743,430
Deposits 9,171,353 8,905,076 9,485,000 9,121,204
Stockholders'
equity 1,298,234 1,217,165 1,304,983 1,308,505
Stockholders'
equity / assets 8.65% 8.64% 8.61% 8.71%
---------------------------------------------------------------------
At Period End
Assets $15,114,169$15,218,816
Loans 10,289,242 10,387,364
Allowance for loan
losses 176,223 172,440
Deposits 9,635,356 9,453,460
Stockholders'
equity 1,300,948 1,318,246
Stockholders'
equity / assets 8.61% 8.66%
Shares
outstanding, end
of period 73,227 73,736
---------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits and stock
dividends.
(2) Efficiency ratio = Noninterest expense divided by sum of taxable
equivalent net interest income plus noninterest income, excluding
investment securities gains, net, and asset sales gains, net.
---------------------------------------------------------------------
(in thousands,
except per share
data) 1st Qtr 2003 4th Qtr 2002 3rd Qtr 2002
---------------------------------------------------------------------
Summary of Operations
Net interest income 127,454 129,713 128,358
Provision for loan losses 12,960 14,614 12,831
Net interest income after
provision for loan losses 114,494 115,099 115,527
Asset sale gains (losses), net 122 (373) 658
Investment securities gains
(losses), net (326) (801) 374
Noninterest income (excluding
securities & asset gains) 65,413 65,523 57,624
Noninterest expense 98,157 102,763 98,183
Income taxes 23,553 23,244 22,528
Net income 57,993 53,441 53,472
Taxable equivalent adjustment 6,277 5,981 5,991
---------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 0.78$ 0.72$ 0.71
Diluted 0.77 0.71 0.70
Dividends 0.31 0.31 0.31
Market Value:
High $ 35.22$ 34.21$ 36.96
Low 32.33 27.20 30.64
Close 32.33 33.94 31.73
Book value 17.41 17.13 17.03
---------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin (FTE) 3.87% 3.87% 3.96%
Return on average assets 1.58 1.42 1.47
Return on average equity 18.36 16.62 16.73
Efficiency ratio (2) 49.29 51.07 51.14
Effective tax rate 28.88 30.31 29.64
Dividend payout ratio (basic) 39.74 43.06 43.66
---------------------------------------------------------------------
Average Balances
Assets $14,867,339$14,901,747$14,460,358
Earning assets 13,836,102 13,870,491 13,427,986
Interest-bearing liabilities 11,886,642 11,792,552 11,459,673
Loans 10,578,430 10,559,154 10,128,826
Deposits 8,901,441 8,934,668 8,947,047
Stockholders' equity 1,280,950 1,275,914 1,268,355
Stockholders' equity / assets 8.62% 8.56% 8.77%
---------------------------------------------------------------------
At Period End
Assets $15,089,166$15,043,275$15,044,702
Loans 10,275,469 10,303,225 10,086,510
Allowance for loan losses 170,391 162,541 155,288
Deposits 9,060,234 9,124,852 8,947,353
Stockholders' equity 1,285,866 1,272,183 1,270,691
Stockholders' equity / assets 8.52% 8.46% 8.45%
Shares outstanding, end of
period 73,870 74,281 74,598
---------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits and stock
dividends.
(2) Efficiency ratio = Noninterest expense divided by sum of taxable
equivalent net interest income plus noninterest income, excluding
investment securities gains, net, and asset sales gains, net.
---------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp Three months ended
September 30,
-----------------------------------
(in thousands,
except per share data) 2003 2002 % Change
---------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $ 172,440$ 148,733 15.9%
Balance related to acquisitions - - -
Provision for loan losses 12,118 12,831 (5.6%)
Charge offs (9,340) (7,508) 24.4%
Recoveries 1,005 1,232 (18.4%)
------------ ------------
Net charge offs (8,335) (6,276) 32.8%
------------ ------------
Ending Balance $ 176,223$ 155,288 13.5%
============ ============
---------------------------------------------------------------------
Credit Quality 3rd Qtr 2003 2nd Qtr 2003 % Change
------------ ------------ ---------
Nonaccrual loans $ 114,067$ 110,820 2.9%
Loans 90 or more days past due
and still accruing (1) 11,055 6,311 75.2%
Restructured loans 44 46 (4.3%)
------------ ------------
Total nonperforming loans 125,166 117,177 6.8%
Other real estate owned 6,380 14,707 (56.6%)
------------ ------------
Total nonperforming assets 131,546 131,884 (0.3%)
============ ============
Net charge offs 8,335 10,083 (17.3%)
Allowance for loan losses / loans 1.71% 1.66%
Allowance for loan losses /
nonperforming loans 140.79 147.16
Nonperforming loans / total loans 1.22 1.13
Nonperforming assets / total
assets 0.87 0.87
Net charge offs / average loans
(annualized) 0.31 0.38
Year-to-date net charge offs /
average loans 0.29 0.29
---------------------------------------------------------------------
Period End Loan Composition
Sept 30, Dec 31,
2003 2002 % Change
------------ ------------ ---------
Commercial, financial &
agricultural $ 2,186,214$ 2,213,986 (1.3%)
Real estate - construction 1,035,674 910,581 13.7%
Commercial real estate 3,240,757 3,128,826 3.6%
Lease financing 37,193 38,352 (3.0%)
------------ ------------
Commercial 6,499,838 6,291,745 3.3%
Residential mortgage 2,166,187 2,430,746 (10.9%)
Home equity 912,142 864,631 5.5%
------------ ------------
Residential real estate 3,078,329 3,295,377 (6.6%)
Consumer 711,075 716,103 (0.7%)
------------ ------------
Total loans $10,289,242$10,303,225 (0.1%)
============ ============
---------------------------------------------------------------------
Period End Deposit Composition
Sept 30, Dec 31, 2002
2003 % Change
------------ ------------ ---------
Demand $ 1,804,596$ 1,773,699 1.7%
Savings 924,036 895,855 3.1%
Interest-bearing demand 2,086,964 1,468,193 42.1%
Money market 1,559,769 1,754,313 (11.1%)
Brokered CDs 156,994 233,650 (32.8%)
Other time deposits 3,102,997 2,999,142 3.5%
------------ ------------
Total deposits $ 9,635,356$ 9,124,852 5.6%
============ ============
---------------------------------------------------------------------
N/M = Not Meaningful
(1) Does not include guaranteed student loans. Guaranteed student
loans 90+ days past due and still accruing totaled $14.1 million
as of September 30, 2003.
-------------------------------------------- ------------ ---------
Financial Summary and Comparison
Associated Banc-Corp Nine months ended
September 30,
-----------------------------------
(in thousands,
except per share data) 2003 2002 % Change
---------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $ 162,541$ 128,204 26.8%
Balance related to acquisitions - 11,985 N/M
Provision for loan losses 37,210 36,085 3.1%
Charge offs (26,631) (24,295) 9.6%
Recoveries 3,103 3,309 (6.2%)
------------ ------------
Net charge offs (23,528) (20,986) 12.1%
------------ ------------
Ending Balance $ 176,223$ 155,288 13.5%
============ ============
---------------------------------------------------------------------
Credit Quality 1st Qtr 4th Qtr 2002 3rd Qtr
2003 2002
------------ ------------ ---------
Nonaccrual loans $ 90,384$ 94,132$ 93,250
Loans 90 or more days past due and
still accruing (1) 3,425 3,912 5,981
Restructured loans 844 1,258 1,110
------------ ------------ ---------
Total nonperforming loans 94,653 99,302 100,341
Other real estate owned 12,949 11,448 3,331
------------ ------------ ---------
Total nonperforming assets 107,602 110,750 103,672
============ ============ =========
Net charge offs 5,110 7,361 6,276
Allowance for loan losses / loans 1.66% 1.58% 1.54%
Allowance for loan losses /
nonperforming loans 180.02 163.68 154.76
Nonperforming loans / total loans 0.92 0.96 0.99
Nonperforming assets / total
assets 0.71 0.74 0.69
Net charge offs / average loans
(annualized) 0.20 0.28 0.25
Year-to-date net charge offs /
average loans 0.20 0.28 0.29
---------------------------------------------------------------------
Period End Loan Composition
Sept 30,
2002 % Change
------------ ----------
Commercial, financial &
agricultural $ 2,175,931 0.5%
Real estate - construction 850,287 21.8%
Commercial real estate 3,082,890 5.1%
Lease financing 36,274 2.5%
------------
Commercial 6,145,382 5.8%
Residential mortgage 2,381,120 (9.0%)
Home equity 831,169 9.7%
------------
Residential real estate 3,212,289 (4.2%)
Consumer 728,839 (2.4%)
------------
Total loans $10,086,510 2.0%
============
---------------------------------------------------------------------
Period End Deposit Composition
Sept 30,
2002 % Change
------------ ----------
Demand $ 1,740,932 3.7%
Savings 916,039 0.9%
Interest-bearing demand 1,212,672 72.1%
Money market 1,760,334 (11.4%)
Brokered CDs 187,915 (16.5%)
Other time deposits 3,129,461 (0.8%)
------------
Total deposits $ 8,947,353 7.7%
============
---------------------------------------------------------------------
N/M = Not Meaningful
(1) Does not include guaranteed student loans. Guaranteed student
loans 90+ days past due and still accruing totaled $14.1 million
as of September 30, 2003.
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Nine months ended September 30,
2003
---------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
------------ ------------ -------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,455,171$ 249,509 5.10%
Residential real estate 3,547,875 154,138 5.80
Consumer 709,692 38,660 7.28
------------ ------------
Total loans 10,712,738 442,307 5.48
Investments and other 3,273,806 127,272 5.18
------------ ------------
Total earning assets 13,986,544 569,579 5.41
Other assets, net 1,026,672
------------
Total assets $15,013,216
============
Interest-bearing liabilities:
Savings deposits $ 930,105$ 3,997 0.57%
Interest-bearing demand deposits 1,708,600 10,995 0.86
Money market deposits 1,640,707 11,694 0.95
Time deposits, excluding Brokered
CDs 3,062,576 64,825 2.83
------------ ------------
Total interest-bearing
deposits, excluding Brokered
CDs 7,341,988 91,511 1.67
Brokered CDs 184,494 2,364 1.71
------------ ------------
Total interest-bearing deposits 7,526,482 93,875 1.67
Wholesale funding 4,402,081 73,406 2.20
------------ ------------
Total interest-bearing liabilities 11,928,563 167,281 1.87
Noninterest-bearing demand 1,644,871
Other liabilities 141,548
Stockholders' equity 1,298,234
------------
Total liabilities and stockholders'
equity $15,013,216
============
------------
Net interest income and rate spread(1) $ 402,298 3.54%
===========
Net interest margin (1) 3.82%
Taxable equivalent adjustment $ 18,673
===========
------------------------------------------------- ------------ -------
Three months ended September 30,
2003
---------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
------------ ------------ -------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,565,202$ 83,321 4.97%
Residential real estate 3,541,464 49,538 5.55
Consumer 707,103 12,657 7.10
------------ ------------
Total loans 10,813,769 145,516 5.30
Investments and other 3,314,933 42,468 5.12
------------ ------------
Total earning assets 14,128,702 187,984 5.26
Other assets, net 1,023,974
------------
Total assets $15,152,676
============
Interest-bearing liabilities:
Savings deposits $ 935,402$ 1,113 0.47%
Interest-bearing demand deposits 1,938,111 4,070 0.83
Money market deposits 1,586,092 3,430 0.86
Time deposits, excluding Brokered
CDs 3,120,919 21,213 2.70
------------ ------------
Total interest-bearing
deposits, excluding Brokered
CDs 7,580,524 29,826 1.56
Brokered CDs 146,670 501 1.36
------------ ------------
Total interest-bearing deposits 7,727,194 30,327 1.56
Wholesale funding 4,228,226 22,516 2.09
------------ ------------
Total interest-bearing liabilities 11,955,420 52,843 1.75
Noninterest-bearing demand 1,757,806
Other liabilities 134,467
Stockholders' equity 1,304,983
------------
Total liabilities and stockholders'
equity $15,152,676
============
------------
Net interest income and rate spread(1) $ 135,141 3.51%
============
Net interest margin (1) 3.78%
Taxable equivalent adjustment $ 6,165
============
----------------------------------------------------------------------
(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 (continued)
Associated Banc-Corp
Nine months ended September 30,
2002
---------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
------------ ------------ -------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 5,839,172$ 261,173 5.90%
Residential real estate 3,268,018 165,944 6.77
Consumer 707,690 42,286 7.98
------------ ------------
Total loans 9,814,880 469,403 6.34
Investments and other 3,285,634 144,616 5.87
------------ ------------
Total earning assets 13,100,514 614,019 6.22
Other assets, net 993,235
------------
Total assets $14,093,749
============
Interest-bearing liabilities:
Savings deposits $ 881,727$ 5,147 0.78%
Interest-bearing demand deposits 1,053,748 6,268 0.80
Money market deposits 1,913,528 19,458 1.36
Time deposits, excluding Brokered
CDs 3,330,936 97,622 3.92
------------ ------------
Total interest-bearing
deposits, excluding Brokered
CDs 7,179,939 128,495 2.39
Brokered CDs 287,199 4,630 2.16
------------ ------------
Total interest-bearing
deposits 7,467,138 133,125 2.38
Wholesale funding 3,796,002 91,250 3.17
------------ ------------
Total interest-bearing liabilities 11,263,140 224,375 2.65
Noninterest-bearing demand 1,437,938
Other liabilities 175,506
Stockholders' equity 1,217,165
------------
Total liabilities and stockholders'
equity $14,093,749
============
------------
Net interest income and rate spread(1) $ 389,644 3.57%
============
Net interest margin (1) 3.94%
Taxable equivalent adjustment $ 18,091
============
---------------------------------------------------------------------
Three months ended September 30,
2002
---------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
------------ ------------ -------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,072,648$ 89,715 5.80%
Residential real estate 3,333,818 55,546 6.62
Consumer 722,360 13,893 7.62
------------ ------------
Total loans 10,128,826 159,154 6.20
Investments and other 3,299,160 46,602 5.65
------------ ------------
Total earning assets 13,427,986 205,756 6.06
Other assets, net 1,032,372
------------
Total assets $14,460,358
============
Interest-bearing liabilities:
Savings deposits $ 914,804$ 1,819 0.79%
Interest-bearing demand deposits 1,192,154 2,841 0.95
Money market deposits 1,840,435 5,991 1.29
Time deposits, excluding Brokered
CDs 3,187,992 27,229 3.39
------------ ------------
Total interest-bearing
deposits, excluding Brokered
CDs 7,135,385 37,880 2.11
Brokered CDs 246,676 1,456 2.34
------------ ------------
Total interest-bearing
deposits 7,382,061 39,336 2.11
Wholesale funding 4,077,612 32,071 3.09
------------ ------------
Total interest-bearing liabilities 11,459,673 71,407 2.46
Noninterest-bearing demand 1,564,986
Other liabilities 167,344
Stockholders' equity 1,268,355
------------
Total liabilities and stockholders'
equity $14,460,358
============
------------
Net interest income and rate spread(1) $ 134,349 3.60%
============
Net interest margin (1) 3.96%
Taxable equivalent adjustment $ 5,991
============
---------------------------------------------------------------------
(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.
CONTACT: Associated Banc-Corp
Investors:
Joe Selner, 920-491-7120
or
Associated Banc-Corp
Media:
Jon Drayna, 920-491-7006
SOURCE: Associated Banc-Corp