GREEN BAY, Wis.--(BUSINESS WIRE)--Oct. 19, 2004--Associated
Banc-Corp (NASDAQ:ASBC) earned $.57 per diluted share in the quarter
ended Sept. 30, 2004, up 9.6 percent compared to $.52 per diluted
share for the same period in 2003, and $.58 per diluted share for the
second quarter of 2004.
Return on average assets was 1.60 percent in the third quarter
2004 compared to 1.53 percent in the third quarter of 2003, and 1.67
percent in the second quarter of 2004. Third quarter return on average
equity was 17.76 percent compared to 17.75 percent in the year-earlier
quarter and 18.87 percent in second quarter of 2004.
For the nine months ended Sept. 30, 2004, diluted earnings per
share were $1.68, up 8.4 percent from $1.55 per diluted share in the
same period in 2003. Return on average assets was 1.62 percent
year-to-date and return on average equity was 18.00 percent, compared
to 1.54 percent and 17.82 percent, respectively, for the nine months
ended Sept. 30, 2003.
"Our third quarter results reflect progress on our strategy to
diversify revenue. In addition, expenses remain well controlled, and
improvements in our asset quality did not require a loan loss
provision in the third quarter. Our progress has allowed us to
overcome the industry-wide decline in mortgage banking revenue
relative to the year-earlier period, resulting in continued bottom
line improvement," Associated President and CEO Paul Beideman said.
Net income was $63.4 million for the quarter that ended Sept. 30,
2004. This compares to $58.4 million for the third quarter of 2003 and
$64.5 million for second quarter 2004. On a year-to-date basis, net
income was $187.4 million, up 8.3 percent from $173.0 million for the
comparable period of 2003.
The comparisons between 2004 and 2003 continue to be affected by
significantly lower refinancing activity throughout the mortgage
banking industry that began most notably in the fourth quarter 2003,
impacting both mortgage banking revenue and mortgage servicing rights
expense. Gains on sales of mortgage loans have moved in line with the
lower mortgage production, generally reducing mortgage banking
revenue. On the other hand, loan prepayment speeds, a key valuation
factor, have varied between the comparable periods, impacting the
recorded value of the mortgage servicing asset. Mortgage servicing
rights expense included a $2.0 million valuation reserve addition for
third quarter 2004 (compared to no valuation adjustment for the third
quarter 2003), and a $2.2 million valuation reserve recovery for the
nine months of 2004 (compared to $15.8 million additional valuation
reserve for the comparable 2003 period).
For the comparable third quarter periods, mortgage banking revenue
was down $15.1 million and mortgage servicing rights expense was up
$1.8 million, for a net unfavorable pre-tax impact of $16.9 million.
For the comparable nine-month periods, mortgage banking revenue was
down $48.6 million while mortgage servicing rights expense was down
$18.4 million, for a net unfavorable pre-tax impact of $30.2 million.
On a sequential quarter basis, mortgage banking revenue was down
compared to the second quarter of 2004 by $2.5 million (influenced
mostly by lower volumes) and mortgage servicing rights expense was up
$8.3 million (increased mostly by lower valuation due to faster
prepayment speeds), for a net unfavorable pre-tax impact of $10.8
million.
Also, Associated's acquisition of Jabas Group, Inc., one of
Wisconsin's leading employee benefit firms, on April 1, 2004, affects
the comparison of retail commission income and noninterest expenses
between third quarter and year-to-date periods. Associated's
acquisition of CFG Insurance on April 1, 2003 affects year-to-date
comparisons.
Associated Banc-Corp's net interest income rose to $133.2 million
in the third quarter, compared to $129.0 million in the third quarter
of 2003 and $131.9 million in the second quarter of 2004. For the
first nine months of 2004, net interest income was $394.2 million, up
2.7 percent compared to $383.6 million for the same period of 2003.
The net interest margin was 3.76 percent for the third quarter of
2004, compared to 3.78 percent for third quarter of 2003 and 3.80
percent for the second quarter of 2004. For the comparable nine-month
periods, the net interest margin was 3.79 percent compared to 3.82
percent last year.
Total loans at the end of the third quarter 2004 were $10.8
billion, up 5.3 percent from $10.3 billion a year earlier, including
6.5 percent growth in commercial loans and 14.9 percent growth in home
equity loans. Since June 30, 2004, total loans increased 10.3 percent
on an annualized basis, led by 12.8 percent annualized growth in
commercial loans.
Total deposits were $9.7 billion as of Sept. 30, 2004, up from
$9.6 billion for both Sept. 30, 2003 and June 30, 2004. Demand
deposits increased 3.5 percent from a year ago, and grew at a 9.9
percent annualized rate from June 30 to Sept. 30, 2004.
No provision for loan losses was required for the third quarter of
2004, a result of sustained improvement in asset quality trends and an
adequate level of allowance for loan losses. The allowance for loan
losses of $175.0 million represented 1.62 percent of total loans at
Sept. 30, 2004, compared to 1.71 percent at Sept. 30, 2003, while for
the same periods nonperforming loans declined 26.9 percent from $125.2
million to $91.5 million.
Net charge-offs have been declining as well. On a year-to-date
basis net charge-offs were $13.7 million, down 41.9 percent from $23.5
million for the comparable nine-month period of 2003. Quarterly net
charge-offs were $3.0 million, $5.6 million and $8.3 million for third
quarter 2004, second quarter 2004 and third quarter 2003,
respectively.
On a year-to-date basis, the provision for loan losses was $11.1
million compared to $37.2 million for the nine-month period of 2003,
and net charge-offs were $13.7 million (or 0.17 percent of average
loans, annualized) versus $23.5 million (or 0.29 percent) for the
comparable period of 2003.
For the third consecutive quarter, nonperforming loans to total
loans were below 0.90 percent and nonperforming assets to total assets
were below 0.70 percent. Nonperforming loans were $91.5 million, or
0.84 percent of loans at Sept. 30, 2004, compared to 0.81 percent for
second quarter 2004 and 1.22 percent for third quarter 2003.
Nonperforming assets were $96.0 million, or 0.59 percent of total
assets at Sept. 30, 2004, compared to 0.60 percent for second quarter
2004 and 0.87 percent for third quarter 2003.
Excluding mortgage banking revenue, noninterest income was $46.5
million for third quarter 2004, up from $40.3 million for the third
quarter of 2003, and comparable to $46.5 million for second quarter
2004. Compared to the third quarter of 2003, insurance and brokerage
retail commissions increased $5.1 million, primarily due to the
inclusion of Jabas and $0.8 million higher fixed annuity sales
commissions. Credit card and other nondeposit fees were up $0.8
million, or 15.1 percent, particularly from stronger credit card fees.
Trust service fees were up $0.8 million, or 11.0 percent, in line with
the growth in assets under management.
On a year-to-date basis, noninterest income excluding mortgage
banking revenue was $136.9 million, or 13.5 percent higher than $120.7
million for the first nine months of 2003. The increase was led by
retail commission revenues that nearly doubled as a result of the
Jabas and CFG acquisitions and increased annuities sales commissions,
as well as solid growth in trust fees and service charges on deposit
accounts.
Excluding mortgage servicing rights expense, noninterest expense
was $89.0 million for third quarter 2004, down 2.8 percent from $91.6
million for the comparable 2003 period, and down 3.2 percent from
$92.0 million for second quarter 2004. Despite the inclusion of Jabas
operating expenses, declines have been achieved in most noninterest
expense categories.
On a year-to-date basis, noninterest expense excluding mortgage
servicing rights expense was $267.9 million for the first nine months
of 2004, only 0.8 percent higher than $265.7 million for the
comparative period last year. The efficiency ratio improved to 48.58
percent, compared to 49.47 percent for the first nine months of 2003.
"We are continuing to invest in our capabilities to diversify
Associated's revenue streams. We see positive momentum in our
fee-based businesses, and our investments in our people are beginning
to show results as the pace of commercial and retail lending improves,
along with growth in demand deposits. We are also creating positive
operating leverage by continuing our focus on expense control.
"Given the current trends in our business, we remain confident
that we can meet or exceed the consensus of analysts' estimates for
our 2004 earnings," Beideman said.
"Additionally, we look forward to the vote of First Federal
Capital Corp shareholders on Oct. 20. We feel very positive about the
benefits of this combination. Integration planning continues to
progress well, and we remain on target for a systems conversion and
integration in the first quarter of 2005," Beideman said. Upon a
successful shareholder vote, the company expects to close the
transaction at the end of October.
Associated did not repurchase any shares in the third quarter
under its current authorizations. Year-to-date repurchases through
Sept. 30 total 0.7 million shares at $28.91 average cost per share.
The company will host a conference call for investors and analysts
at 3 p.m. CDT today. The toll-free dial-in number is 877-654-5513.
Participants should ask the operator for the Associated Banc-Corp
earnings call, number 1557845. An archived recording of the call will
be available for two weeks.
Associated Banc-Corp has more than 200 banking offices serving
more than 150 communities in Wisconsin, Illinois, and Minnesota.
Following the integration of First Federal, the company will have
approximately 300 offices. 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.
Tables follow.
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpSeptember 30, December 31, September 30,
(in thousands) 2004 2003 % Change 2003 % Change
----------------------------------------------------------------------
Assets
Cash and due
from banks $286,799 $389,140 (26.3%) $340,042 (15.7%)
Interest-bearing
deposits in
other
financial
institutions 10,381 7,434 39.6% 6,180 68.0%
Federal funds
sold and
securities
purchased
under agreements
to resell 63,105 3,290 1818.1% 19,950 216.3%
Securities
available for
sale, at fair
value 4,166,760 3,773,784 10.4% 3,415,574 22.0%
Loans held for
sale 72,266 104,336 (30.7%) 390,332 (81.5%)
Loans 10,830,627 10,291,810 5.2% 10,289,242 5.3%
Allowance for
loan losses (175,007) (177,622) (1.5%) (176,223) (0.7%)
------------ ------------ ------------
Loans, net 10,655,620 10,114,188 5.4% 10,113,019 5.4%
Premises and
equipment 131,288 131,315 (0.0%) 131,873 (0.4%)
Goodwill 232,564 224,388 3.6% 224,388 3.6%
Intangible
assets 69,863 63,509 10.0% 58,565 19.3%
Other assets 447,115 436,510 2.4% 414,246 7.9%
------------ ------------ ------------
Total
assets $16,135,761 $15,247,894 5.8% $15,114,169 6.8%
============ ============ ============
Liabilities and
Stockholders'
Equity
Noninterest-
bearing
deposits $1,867,905 $1,814,446 2.9% $1,804,596 3.5%
Interest-bearing
deposits,
excluding
Brokered CDs 7,623,042 7,813,267 (2.4%) 7,673,766 (0.7%)
Brokered CDs 186,326 165,130 12.8% 156,994 18.7%
------------ ------------ ------------
Total
deposits 9,677,273 9,792,843 (1.2%) 9,635,356 0.4%
Short-term
borrowings 2,956,626 1,928,876 53.3% 2,049,833 44.2%
Long-term
funding 1,911,797 2,034,160 (6.0%) 1,993,104 (4.1%)
Accrued expenses
and other
liabilities 136,600 143,588 (4.9%) 134,928 1.2%
------------ ------------ ------------
Total
liabilities 14,682,296 13,899,467 5.6% 13,813,221 6.3%
Stockholders'
Equity
Preferred
stock - - -
Common stock 1,105 734 50.5% 736 50.1%
Surplus 585,274 575,975 1.6% 580,823 0.8%
Retained
earnings 824,909 724,356 13.9% 695,076 18.7%
Accumulated
other
comprehensive
income 49,265 52,089 (5.4%) 36,310 35.7%
Deferred
compensation (1,981) (1,981) 0.0% (1,744) 13.6%
Treasury
stock, at
cost (5,107) (2,746) 86.0% (10,253) (50.2%)
------------ ------------ ------------
Total
stockholders'
equity 1,453,465 1,348,427 7.8% 1,300,948 11.7%
------------ ------------ ------------
Total
liabilities
and
stockholders'
equity $16,135,761 $15,247,894 5.8% $15,114,169 6.8%
============ ============ ============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three For The Nine
Months Ended, Months Ended,
September 30, September 30,
------------------- -------------------
(in thousands, except % %
per share amounts) 2004 2003 Change 2004 2003 Change
----------------------------------------------------------------------
Interest Income
Interest and
fees on loans $142,389 $145,246 (2.0%) $415,090 $441,527 (6.0%)
Interest and
dividends on
investment
securities and
deposits with
other financial
institutions
Taxable 31,590 26,710 18.3% 93,389 79,430 17.6%
Tax-exempt 10,255 9,825 4.4% 30,757 29,822 3.1%
Interest on federal
funds sold and
securities purchased
under agreements
to resell 241 38 534.2% 336 127 164.6%
-------- -------- -------- --------
Total interest
income 184,475 181,819 1.5% 539,572 550,906 (2.1%)
Interest Expense
Interest on
deposits 27,191 30,327 (10.3%) 81,401 93,875 (13.3%)
Interest on
short-term
borrowings 10,262 6,757 51.9% 24,042 23,766 1.2%
Interest on
long-term
funding 13,806 15,759 (12.4%) 39,959 49,640 (19.5%)
-------- -------- -------- --------
Total interest
expense 51,259 52,843 (3.0%) 145,402 167,281 (13.1%)
-------- -------- -------- --------
Net Interest
Income 133,216 128,976 3.3% 394,170 383,625 2.7%
Provision for
loan losses - 12,118 (100.0%) 11,065 37,210 (70.3%)
-------- -------- -------- --------
Net interest
income after
provision for
loan losses 133,216 116,858 14.0% 383,105 346,415 10.6%
Noninterest Income
Trust service
fees 7,773 7,001 11.0% 23,684 21,427 10.5%
Service charges
on deposit
accounts 13,672 13,338 2.5% 39,210 37,611 4.3%
Mortgage banking 6,593 21,671 (69.6%) 24,664 73,284 (66.3%)
Credit card and
other nondeposit
fees 6,253 5,435 15.1% 17,998 18,023 (0.1%)
Retail commissions 11,925 6,830 74.6% 34,444 17,540 96.4%
Bank owned life
insurance income 3,580 3,532 1.4% 10,576 10,373 2.0%
Asset sale gains, net 309 871 (64.5%) 749 203 269.0%
Investment
securities gains
(losses), net (6) 1 (700.0%) 1,356 702 93.2%
Other 3,034 3,245 (6.5%) 8,908 14,795 (39.8%)
-------- -------- -------- --------
Total noninterest
income 53,133 61,924 (14.2%) 161,589 193,958 (16.7%)
Noninterest
Expense
Personnel
expense 53,467 53,080 0.7% 159,355 153,649 3.7%
Occupancy 6,939 7,101 (2.3%) 21,275 21,367 (0.4%)
Equipment 3,022 3,178 (4.9%) 8,899 9,612 (7.4%)
Data processing 5,865 6,322 (7.2%) 17,666 17,542 0.7%
Business
development and
advertising 3,990 4,113 (3.0%) 10,704 11,029 (2.9%)
Stationery and
supplies 1,214 1,651 (26.5%) 3,869 4,964 (22.1%)
Mortgage
servicing rights
expense 5,975 4,199 42.3% 10,379 28,818 (64.0%)
Other intangible
amortization 935 871 7.3% 2,651 2,091 26.8%
Loan expense 1,152 1,806 (36.2%) 4,208 6,104 (31.1%)
Other 12,447 13,486 (7.7%) 39,275 39,372 (0.2%)
-------- -------- -------- --------
Total noninterest
expense 95,006 95,807 (0.8%) 278,281 294,548 (5.5%)
-------- -------- -------- --------
Income before
income taxes 91,343 82,975 10.1% 266,413 245,825 8.4%
Income tax
expense 27,977 24,589 13.8% 78,982 72,777 8.5%
-------- -------- -------- --------
Net Income $63,366 $58,386 8.5% $187,431 $173,048 8.3%
======== ======== ======== ========
Earnings Per
Share:
Basic $0.58 $0.53 9.4% $1.70 $1.56 9.0%
Diluted $0.57 $0.52 9.6% $1.68 $1.55 8.4%
Average Shares
Outstanding:
Basic 110,137 110,209 (0.1%) 110,182 110,837 (0.6%)
Diluted 111,699 111,485 0.2% 111,614 111,894 (0.2%)
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except 3Q04 2Q04 1Q04 4Q03 3Q03
per share amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $142,389 $137,449 $135,252 $137,289 $145,246
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 31,590 30,767 31,032 29,194 26,710
Tax-exempt 10,255 10,267 10,235 9,939 9,825
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 241 68 27 36 38
--------- --------- --------- --------- ---------
Total interest
income 184,475 178,551 176,546 176,458 181,819
Interest Expense
Interest on deposits 27,191 26,656 27,554 29,247 30,327
Interest on short-
term borrowings 10,262 7,241 6,539 5,390 6,757
Interest on long-term
funding 13,806 12,775 13,378 14,684 15,759
--------- --------- --------- --------- ---------
Total interest
expense 51,259 46,672 47,471 49,321 52,843
--------- --------- --------- --------- ---------
Net Interest Income 133,216 131,879 129,075 127,137 128,976
Provision for loan
losses - 5,889 5,176 9,603 12,118
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 133,216 125,990 123,899 117,534 116,858
Noninterest Income
Trust service fees 7,773 8,043 7,868 8,150 7,001
Service charges on
deposit accounts 13,672 13,141 12,397 12,735 13,338
Mortgage banking 6,593 9,045 9,026 9,753 21,671
Credit card and other
nondeposit fees 6,253 6,074 5,671 5,646 5,435
Retail commissions 11,925 13,162 9,357 8,031 6,830
Bank owned life
insurance income 3,580 3,641 3,355 3,417 3,532
Asset sale gains, net 309 218 222 1,366 871
Investment securities
gains (losses), net (6) (569) 1,931 - 1
Other 3,034 2,742 3,132 3,379 3,245
--------- --------- --------- --------- ---------
Total noninterest
income 53,133 55,497 52,959 52,477 61,924
Noninterest Expense
Personnel expense 53,467 53,612 52,276 54,391 53,080
Occupancy 6,939 6,864 7,472 6,710 7,101
Equipment 3,022 2,878 2,999 3,206 3,178
Data processing 5,865 6,128 5,673 5,731 6,322
Business development
and advertising 3,990 4,057 2,657 4,165 4,113
Stationery and
supplies 1,214 1,429 1,226 1,741 1,651
Mortgage servicing
rights expense 5,975 (2,368) 6,772 735 4,199
Other intangible
amortization 935 934 782 870 871
Loan expense 1,152 1,670 1,386 1,446 1,806
Other 12,447 14,415 12,413 15,125 13,486
--------- --------- --------- --------- ---------
Total noninterest
expense 95,006 89,619 93,656 94,120 95,807
--------- --------- --------- --------- ---------
Income before income
taxes 91,343 91,868 83,202 75,891 82,975
Income tax expense 27,977 27,363 23,642 20,282 24,589
--------- --------- --------- --------- ---------
Net Income $63,366 $64,505 $59,560 $55,609 $58,386
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.58 $0.59 $0.54 $0.51 $0.53
Diluted $0.57 $0.58 $0.53 $0.50 $0.52
Average Shares
Outstanding:
Basic 110,137 110,116 110,294 109,965 110,209
Diluted 111,699 111,520 111,830 111,499 111,485
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except
per share & full
time equivalent
employee data) YTD 2004 YTD 2003 3rd Qtr 2004 2nd Qtr 2004
----------------------------------------------------------------------
Summary of Operations
Net interest
income 394,170 383,625 133,216 131,879
Provision for loan
losses 11,065 37,210 - 5,889
Asset sale gains,
net 749 203 309 218
Investment securities
gains (losses), net 1,356 702 (6) (569)
Noninterest income
(excluding securities
& asset gains) 159,484 193,053 52,830 55,848
Noninterest
expense 278,281 294,548 95,006 89,619
Income before
income taxes 266,413 245,825 91,343 91,868
Income taxes 78,982 72,777 27,977 27,363
Net income 187,431 173,048 63,366 64,505
Taxable equivalent
adjustment 19,186 18,673 6,395 6,387
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $1.70 $1.56 $0.58 $0.59
Diluted 1.68 1.55 0.57 0.58
Dividends 0.7267 0.6600 0.2500 0.2500
Market Value:
High $32.19 $25.93 $32.19 $30.13
Low 27.09 21.43 28.81 27.09
Close 32.07 25.26 32.07 29.63
Book value 13.18 11.84 13.18 12.53
----------------------------------------------------------------------
Performance Ratios
(annualized)
Net interest
margin 3.79% 3.82% 3.76% 3.80%
Return on average
assets 1.62 1.54 1.60 1.67
Return on average
equity 18.00 17.82 17.76 18.87
Efficiency ratio
(2) 48.58 49.47 49.37 46.17
Effective tax rate 29.65 29.61 30.63 29.78
Dividend payout
ratio (3) 42.72 42.31 43.10 42.37
----------------------------------------------------------------------
Average Balances
Assets $15,495,898 $15,013,216 $15,730,451 $15,498,005
Earning assets 14,452,594 13,986,544 14,688,914 14,480,701
Interest-bearing
liabilities 12,232,593 11,928,563 12,381,407 12,231,733
Loans 10,609,581 10,712,738 10,708,701 10,685,542
Deposits 9,636,138 9,171,353 9,621,557 9,701,945
Stockholders'
equity 1,391,116 1,298,234 1,419,600 1,374,632
Stockholders'
equity / assets 8.98% 8.65% 9.02% 8.87%
----------------------------------------------------------------------
At Period End
Assets $16,135,761 $15,502,556
Loans 10,830,627 10,556,603
Allowance for loan
losses 175,007 177,980
Goodwill 232,564 232,528
Mortgage servicing
rights, net 45,555 48,735
Other intangible
assets 24,308 25,242
Deposits 9,677,273 9,583,592
Stockholders'
equity 1,453,465 1,378,894
Stockholders'
equity / assets 9.01% 8.89%
Shares
outstanding, end
of period 110,281 110,048
Shares repurchased
during period - 205
Average per share
cost of shares
repurchased
during period $- $27.93
Year-to-date
shares
repurchased
during period 697 697
YTD average per
share cost of
shares
repurchased
during period $28.91 $28.91
----------------------------------------------------------------------
Selected trend
information
Average full time
equivalent
employees 3,979 4,010
Trust assets under
management, at
market value $4,400,000 $4,300,000
Mortgage loans
originated for
sale 253,917 579,020
Portfolio serviced
for others 6,011,000 6,010,000
Mortgage servicing
rights, net /
Portfolio
serviced for
others 0.76% 0.81%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except per share
& full time equivalent
employee data) 1st Qtr 2004 4th Qtr 2003 3rd Qtr 2003
----------------------------------------------------------------------
Summary of Operations
Net interest income 129,075 127,137 128,976
Provision for loan losses 5,176 9,603 12,118
Asset sale gains, net 222 1,366 871
Investment securities gains
(losses), net 1,931 - 1
Noninterest income (excluding
securities & asset gains) 50,806 51,111 61,052
Noninterest expense 93,656 94,120 95,807
Income before income taxes 83,202 75,891 82,975
Income taxes 23,642 20,282 24,589
Net income 59,560 55,609 58,386
Taxable equivalent adjustment 6,404 6,230 6,165
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.54 $0.51 $0.53
Diluted 0.53 0.50 0.52
Dividends 0.2267 0.2267 0.2267
Market Value:
High $30.37 $28.75 $25.93
Low 28.08 25.87 24.75
Close 29.86 28.53 25.26
Book value 12.67 12.26 11.84
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin 3.80% 3.81% 3.78%
Return on average assets 1.57 1.49 1.53
Return on average equity 17.37 16.85 17.75
Efficiency ratio (2) 50.28 51.02 48.83
Effective tax rate 28.42 26.73 29.63
Dividend payout ratio (3) 41.98 44.44 42.77
----------------------------------------------------------------------
Average Balances
Assets $15,261,277 $14,852,390 $15,152,676
Earning assets 14,185,569 13,828,992 14,128,702
Interest-bearing liabilities 12,083,003 11,637,646 11,955,420
Loans 10,433,411 10,354,726 10,813,769
Deposits 9,585,074 9,679,789 9,485,000
Stockholders' equity 1,378,804 1,309,167 1,304,983
Stockholders' equity / assets 9.03% 8.81% 8.61%
----------------------------------------------------------------------
At Period End
Assets $15,510,868 $15,247,894 $15,114,169
Loans 10,486,610 10,291,810 10,289,242
Allowance for loan losses 177,717 177,622 176,223
Goodwill 224,388 224,388 224,388
Mortgage servicing rights, net 39,649 42,477 36,663
Other intangible assets 20,250 21,032 21,902
Deposits 9,702,758 9,792,843 9,635,356
Stockholders' equity 1,395,293 1,348,427 1,300,948
Stockholders' equity / assets 9.00% 8.84% 8.61%
Shares outstanding, end of
period 110,168 109,966 109,840
Shares repurchased during
period 492 212 1,090
Average per share cost of
shares repurchased during
period $29.32 $28.18 $24.97
Year-to-date shares repurchased
during period 492 3,091 2,880
YTD average per share cost of
shares repurchased during
period $29.32 $24.11 $23.81
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,024 4,098 4,173
Trust assets under management,
at market value $4,300,000 $4,100,000 $3,800,000
Mortgage loans originated for
sale 359,791 524,118 1,422,747
Portfolio serviced for others 5,904,000 5,928,000 5,587,000
Mortgage servicing rights, net
/ Portfolio serviced for
others 0.67% 0.72% 0.66%
----------------------------------------------------------------------
(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.
(3) Ratio is based upon basic earnings per share.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp
Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
(in thousands) 2004 2003 % Change 2004 2003 % Change
------------- --------------------------- ---------------------------
Allowance for
Loan Losses
Beginning
balance $177,980 $172,440 3.2% $177,622 $162,541 9.3%
Provision for
loan losses - 12,118 (100.0%) 11,065 37,210 (70.3%)
Charge offs (3,770) (9,340) (59.6%) (16,492) (26,631) (38.1%)
Recoveries 797 1,005 (20.7%) 2,812 3,103 (9.4%)
------------------ ------------------
Net charge
offs (2,973) (8,335) (64.3%) (13,680) (23,528) (41.9%)
------------------ ------------------
Ending
Balance $175,007 $176,223 (0.7%) $175,007 $176,223 (0.7%)
================== ==================
----------------------------------------------------------------------
Credit Quality
Sept 30, June 30, 3Q04 vs 2Q04
2004 2004 % Change
------------------------------------
Nonaccrual loans $81,124 $80,622 0.6%
Loans 90 or more days past due and
still accruing 10,309 5,207 98.0%
Restructured loans 39 40 (2.5%)
------------------------
Total nonperforming loans 91,472 85,869 6.5%
Other real estate owned 4,526 6,613 (31.6%)
------------------------
Total nonperforming assets 95,998 92,482 3.8%
========================
Provision for loan losses - 5,889 (100.0%)
Net charge offs 2,973 5,626 (47.2%)
Allowance for loan losses / loans 1.62% 1.69%
Allowance for loan losses /
nonperforming loans 191.32 207.27
Nonperforming loans / total loans 0.84 0.81
Nonperforming assets / total
assets 0.59 0.60
Net charge offs / average loans
(annualized) 0.11 0.21
Year-to-date net charge offs /
average loans 0.17 0.20
----------------------------------------------------------------------
Credit Quality
Mar 31, Dec 31, Sept 30, 3Q04 vs 3Q03
2004 2003 2003 % Change
------------------------------------------------
Nonaccrual loans $88,313 $113,944 $114,067 (28.9%)
Loans 90 or more days
past due and still
accruing 5,258 7,495 11,055 (6.7%)
Restructured loans 42 43 44 (11.4%)
------------------------------------
Total
nonperforming
loans 93,613 121,482 125,166 (26.9%)
Other real estate
owned 7,199 5,457 6,380 (29.1%)
------------------------------------
Total
nonperforming
assets 100,812 126,939 131,546 (27.0%)
====================================
Provision for loan
losses 5,176 9,603 12,118 (100.0%)
Net charge offs 5,081 8,204 8,335 (64.3%)
Allowance for loan
losses / loans 1.69% 1.73% 1.71%
Allowance for loan
losses /
nonperforming loans 189.84 146.21 140.79
Nonperforming loans /
total loans 0.89 1.18 1.22
Nonperforming assets /
total assets 0.65 0.83 0.87
Net charge offs /
average loans
(annualized) 0.20 0.31 0.31
Year-to-date net
charge offs / average
loans 0.20 0.30 0.29
----------------------------------------------------------
Period End Loan Composition
Sept 30, June 30, 3Q04 vs 2Q04
2004 2004 % Change
------------------------------------
Commercial, financial &
agricultural $2,479,764 $2,247,779 10.3%
Real estate - construction 1,152,990 1,118,284 3.1%
Commercial real estate 3,242,009 3,292,783 (1.5%)
Lease financing 49,423 48,979 0.9%
------------------------
Commercial 6,924,186 6,707,825 3.2%
Residential mortgage 2,185,732 2,170,984 0.7%
Home equity 1,047,902 1,011,489 3.6%
------------------------
Residential real estate 3,233,634 3,182,473 1.6%
Consumer 672,807 666,305 1.0%
------------------------
Total loans $10,830,627 $10,556,603 2.6%
========================
Home equity, Consumer, & junior
mortgage loans $1,963,242 $1,897,381 3.5%
----------------------------------------------------------------------
Period End Loan
Composition
Mar 31, Dec 31, Sept 30, 3Q04 vs 3Q03
2004 2003 2003 % Change
------------------------------------------------
Commercial, financial
& agricultural $2,123,846 $2,116,463 $2,186,214 13.4%
Real estate -
construction 1,094,597 1,077,731 1,035,674 11.3%
Commercial real estate 3,368,660 3,246,954 3,240,757 0.0%
Lease financing 45,998 38,968 37,193 32.9%
------------------------------------
Commercial 6,633,101 6,480,116 6,499,838 6.5%
Residential mortgage 2,166,035 2,145,227 2,166,187 0.9%
Home equity 1,007,572 968,744 912,142 14.9%
------------------------------------
Residential real
estate 3,173,607 3,113,971 3,078,329 5.0%
Consumer 679,902 697,723 711,075 (5.4%)
------------------------------------
Total loans $10,486,610 $10,291,810 $10,289,242 5.3%
====================================
Home equity, Consumer,
& junior mortgage
loans $1,884,444 $1,836,033 $1,796,102 9.3%
----------------------------------------------------------
Period End Deposit Composition
Sept 30, June 30, 3Q04 vs 2Q04
2004 2004 % Change
------------------------------------
Demand $1,867,905 $1,822,716 2.5%
Savings 936,975 948,755 (1.2%)
Interest-bearing demand 2,334,072 2,355,287 (0.9%)
Money market 1,516,423 1,477,513 2.6%
Brokered CDs 186,326 263,435 (29.3%)
Other time deposits 2,835,572 2,715,886 4.4%
------------------------
Total deposits $9,677,273 $9,583,592 1.0%
========================
Period End Deposit
Composition
Mar 31, Dec 31, Sept 30, 3Q04 vs 3Q03
2004 2003 2003 % Change
------------------------------------------------
Demand $1,755,485 $1,814,446 $1,804,596 3.5%
Savings 918,608 890,092 924,036 1.4%
Interest-bearing
demand 2,375,492 2,330,478 2,086,964 11.8%
Money market 1,542,875 1,573,678 1,559,769 (2.8%)
Brokered CDs 230,983 165,130 156,994 18.7%
Other time deposits 2,879,315 3,019,019 3,102,997 (8.6%)
------------------------------------
Total deposits $9,702,758 $9,792,843 $9,635,356 0.4%
====================================
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Nine months ended September 30, 2004
------------------------------------
Average Interest Average
(in thousands) Balance Income / Yield /
Expense Rate
------------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,668,508 $246,765 4.86%
Residential real estate 3,265,419 133,842 5.46
Consumer 675,654 35,216 6.96
------------------------
Total loans 10,609,581 415,823 5.18
Investments and other 3,843,013 142,935 4.96
------------------------
Total earning assets 14,452,594 558,758 5.12
Other assets, net 1,043,304
------------
Total assets $15,495,898
============
Interest-bearing liabilities:
Savings deposits $927,876 $2,528 0.36%
Interest-bearing demand
deposits 2,366,312 14,186 0.80
Money market deposits 1,530,856 9,247 0.81
Time deposits, excluding
Brokered CDs 2,844,147 53,227 2.50
------------------------
Total interest-bearing
deposits, excluding
Brokered CDs 7,669,191 79,188 1.38
Brokered CDs 216,371 2,213 1.37
------------------------
Total interest-bearing
deposits 7,885,562 81,401 1.38
Wholesale funding 4,347,031 64,001 1.94
------------------------
Total interest-bearing liabilities 12,232,593 145,402 1.58
Noninterest-bearing demand 1,750,576
Other liabilities 121,613
Stockholders' equity 1,391,116
------------
Total liabilities and
stockholders' equity $15,495,898
============
Net interest income and rate ------------
spread (1) $413,356 3.54%
============
Net interest margin (1) 3.79%
Taxable equivalent adjustment $19,186
============
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Nine months ended September 30, 2003
------------------------------------
Average Interest Average
(in thousands) 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 5.79
Consumer 709,692 38,660 7.28
------------------------
Total loans 10,712,738 442,307 5.47
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
============
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Three months ended September 30,
2004
------------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
------------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,787,476 $85,971 4.96%
Residential real estate 3,251,564 44,886 5.49
Consumer 669,661 11,775 6.99
------------------------
Total loans 10,708,701 142,632 5.25
Investments and other 3,980,213 48,238 4.85
------------------------
Total earning assets 14,688,914 190,870 5.14
Other assets, net 1,041,537
------------
Total assets $15,730,451
============
Interest-bearing liabilities:
Savings deposits $945,881 $844 0.35%
Interest-bearing demand
deposits 2,338,492 4,615 0.79
Money market deposits 1,516,812 3,294 0.86
Time deposits, excluding
Brokered CDs 2,771,249 17,488 2.51
------------------------
Total interest-bearing
deposits, excluding
Brokered CDs 7,572,434 26,241 1.38
Brokered CDs 235,844 950 1.60
------------------------
Total interest-bearing
deposits 7,808,278 27,191 1.39
Wholesale funding 4,573,129 24,068 2.07
------------------------
Total interest-bearing liabilities 12,381,407 51,259 1.64
Noninterest-bearing demand 1,813,279
Other liabilities 116,165
Stockholders' equity 1,419,600
------------
Total liabilities and
stockholders' equity $15,730,451
============
Net interest income and rate ------------
spread (1) $139,611 3.50%
============
Net interest margin (1) 3.76%
Taxable equivalent adjustment $6,395
============
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
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.
CONTACT: Associated Banc-Corp
Joe Selner (Investors), 920-491-7120
or
Jon Drayna (Media), 920-491-7006
SOURCE: Associated Banc-Corp