GREEN BAY, Wis.--(BUSINESS WIRE)--July 21, 2005--Associated
Banc-Corp (NASDAQ:ASBC) earned $.60 per diluted share in the quarter
ended June 30, 2005, compared to $.59 per diluted share for the first
quarter of 2005, and $.58 per diluted share for second quarter 2004.
For the six months ended June 30, 2005, diluted earnings per share
were $1.19, up 7.2 percent from $1.11 per diluted share in the same
period in 2004.
For second quarter 2005, return on average assets (ROAA) was 1.52
percent, return on average equity (ROAE) was 15.41 percent and book
value per share was $15.77, compared to 1.54 percent, 15.52 percent,
and $15.61, respectively, for the first quarter of 2005.
Comparatively, for second quarter 2004 ROAA was 1.67 percent, ROAE was
18.87 percent, and book value per share was $12.53. For the first half
of 2005, ROAA was 1.53 percent and ROAE was 15.47 percent, compared to
1.62 percent and 18.12 percent, respectively, for the six months ended
June 30, 2004.
"Our second quarter results reflect solid loan growth, core fee
income growth, and asset quality that remains strong. We are
aggressively managing our costs in a challenging rate and competitive
pricing environment," Associated President and CEO Paul Beideman said.
Associated's acquisition of First Federal Capital Corp on Oct. 29,
2004 affects comparisons between the years, as 2005 results include
the balance sheet and operations of the $4 billion thrift, while the
comparable 2004 periods do not. First Federal's operations were
successfully integrated onto Associated's systems in February 2005.
Additionally, the April 1, 2004 acquisition of Jabas Group, Inc., an
employee benefits firm, affects the comparison of retail commission
income and noninterest expenses between the year-to-date periods, as
only three months of Jabas are included in the first half of 2004.
Finally, the changes in net mortgage banking income impact the
comparison of noninterest income between prior periods, particularly
from movements in the value of the mortgage servicing rights (MSR)
asset.
Net income was $78.0 million for the second quarter of 2005. This
compares to $77.5 million for the quarter ended March 31, 2005, and
$64.5 million for the second quarter of 2004. On a year-to-date basis,
net income was $155.5 million, up 25 percent from $124.1 million for
the comparable period of 2004.
Associated's net interest income for the second quarter of 2005
was $166.7 million, compared to $165.9 million for first quarter 2005,
and $131.9 million in the year-earlier quarter. For the first half of
2005, net interest income was $332.6 million, up from $261.0 million
for the comparable year-to-date period of 2004. The increase is due
predominantly to higher average balance sheet volumes.
Net interest margin for the second quarter was 3.63 percent,
compared to 3.68 percent for first quarter 2005 and 3.80 percent for
second quarter 2004. On a year-to-date basis, the net interest margin
was 3.65 percent, versus 3.80 percent for the comparable period last
year. The trend in the net interest margin is primarily from the
impact of the continued flattening of the yield curve, and competitive
pricing pressures.
Period end loans at June 30, 2005 were $14.1 billion, compared to
$13.9 billion at March 31, 2005 (up 4 percent on an annualized basis),
with loan growth primarily in commercial (up 7 percent annualized) and
home equity (up 14 percent annualized). Quarterly average loan
balances, a key driver to net interest income, were $14.1 billion for
second quarter 2005, up 3 percent annualized compared to first quarter
2005, and up 32 percent between second quarter periods, including the
First Federal acquisition.
Period end deposits at June 30, 2005 were $12.1 billion, down
slightly from $12.2 billion at March 31, 2005, primarily from
decreases in interest-bearing transaction accounts and other time
deposits offset partly by increases in noninterest-bearing demand
deposits and institutional CDs. Deposits were up 26 percent over a
year earlier, including the acquisition of First Federal. On average,
deposits were $12.1 billion for second quarter 2005, compared to $12.4
billion for first quarter (down 9 percent annualized). Between the
comparable second quarters, average deposits were up 24 percent.
"The decline in deposits since March 31, 2005, is primarily from
seasonal movements in municipal deposits and lower non-brokered time
deposits," Beideman said. "We are encouraged by the growth in our
demand deposits, increasing over 17 percent on an annualized basis
since March 31, and by our deposit growth strategies for the second
half of 2005."
Asset quality remained steady, with second quarter net charge-offs
of $3.6 million, compared to net charge-offs of $2.2 million for first
quarter 2005 and $5.6 million for second quarter 2004. For the first
half of 2005, net charge-offs were $5.7 million (0.08 percent of
average loans), versus $10.7 million (0.20 percent of average loans)
for the first half of 2004. The provision for loan losses approximated
the related net charge-off levels for each of the comparative
quarterly and year-to-date periods. Nonperforming loans at June 30,
2005 were $112.5 million, representing 0.80 percent of loans, compared
to $102.9 million or 0.74 percent of loans at March 31, 2005, and 0.81
percent of loans at June 30, 2004. The $9.6 million increase in
nonperforming loans since March 31 was predominantly attributable to
the addition of one large commercial real estate credit.
At June 30, 2005, the allowance for loan losses was $190.0
million. The allowance for loan losses to total loans was 1.35 percent
and covered 169 percent of nonperforming loans at June 30, 2005,
compared to 1.36 percent and 184 percent, respectively, at the end of
first quarter 2005, and 1.69 percent and 207 percent, respectively, at
June 30, 2004.
Noninterest income was $68.4 million for second quarter 2005,
compared to $71.4 million for first quarter 2005, and $57.9 million
for second quarter 2004, with year-to-date noninterest income at
$139.8 million or 34 percent higher than the six-month period in 2004.
Changes in net mortgage banking income (gross mortgage banking income
less MSR expense), particularly from movements in the value of the MSR
asset, impact the comparison of noninterest income between the various
periods. Excluding net mortgage banking income, noninterest income was
$66.1 million for second quarter 2005, up 7 percent over $61.5 million
for first quarter 2005, and up 42 percent over $46.5 million for
second quarter 2004. For the six months ended June 30, 2005,
noninterest income excluding net mortgage banking income was $127.5
million, or 41 percent higher than $90.4 million for the first half of
2004.
Net mortgage banking income was $2.4 million for second quarter
2005, down $7.5 million from first quarter 2005, and down $9.0 million
compared to second quarter 2004. On a year-to-date basis, net mortgage
banking income was $12.3 million for 2005, down $1.4 million compared
to last year.
Quarterly MSR expense was impacted primarily by changes in
estimated prepayment speeds and related movements in the estimated
fair value of the MSR asset. MSR expense of $8.3 million (including a
valuation reserve addition of $2.5 million) for second quarter 2005
was $6.5 million higher than first quarter 2005 (which included a
valuation recovery of $4.0 million), and was $10.7 million higher than
second quarter 2004 (which included a valuation recovery of $6.7
million). At June 30, 2005, the net MSR asset was $74.1 million,
representing 78 basis points of the $9.48 billion portfolio serviced
for others, compared to 82 basis points and 81 basis points at March
31, 2005, and June 30, 2004, respectively.
Quarterly service charges on deposit accounts of $22.2 million
were up 19 percent over first quarter 2005 and up 69 percent over
second quarter 2004. Trust service fees of $9.0 million for second
quarter 2005 grew 8 percent and 11 percent over first quarter 2005 and
second quarter 2004, respectively. Quarterly retail commissions of
$15.4 million experienced growth of 5 percent over first quarter 2005
and 17 percent over second quarter 2004.
Noninterest expense was $116.3 million for second quarter 2005,
down $4.9 million (4 percent) versus first quarter 2005, and up $24.3
million (27 percent) over second quarter last year. On a year-to-date
basis, noninterest expense was $237.6 million, or 33 percent higher
than the comparable six-month period last year.
Personnel expense was $66.9 million in second quarter 2005, down
$6.1 million (8 percent) from first quarter 2005. This was largely due
to reduced personnel costs associated with a 5 percent decline in
average full time equivalent employees, notably attributable to First
Federal cost savings. Personnel expense for second quarter was up
$13.3 million (25 percent) over second quarter 2004 which did not
include First Federal. All other noninterest expenses combined were
$49.4 million for second quarter 2005, up 2 percent over $48.3 million
for first quarter 2005.
The efficiency ratio remained low at under 50 percent for all
quarter and year-to-date periods presented.
"As evidenced by our expense run rates and efficiency ratio, we
were successful in achieving our planned cost savings associated with
the First Federal acquisition." Beideman said. "We now look forward to
continuing the implementation of our strategic priorities and
realizing the potential in our enhanced distribution system."
"Given current trends in our business, continued loan growth, and
our demonstrated cost control, coupled with a steepening of the yield
curve, we anticipate we can meet consensus earnings estimates for
2005," Beideman added. "However, intense competition for deposits and
the challenging revenue environment could negatively impact these
results."
Aided by an accelerated share buyback in May 2005, Associated
repurchased 2.1 million shares of its common stock in the second
quarter under all repurchase authorizations, at an average price of
$33.10 per share, bringing year-to-date common stock repurchases to
2.5 million shares at a $33.05 average price per share. Also, during
the second quarter, the company paid a dividend of 27 cents per share,
up 8 percent from the year-earlier dividend.
Associated's pending acquisition of State Financial Services Corp
(Nasdaq:SFSW), a $1.5 billion financial services company based in
Milwaukee, is scheduled for vote by State Financial shareholders on
August 24, 2005.
Associated 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, or for call ID number 7915708. A taped play-back of the
call will be available through July 29 by calling 800-642-1687.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified multibank holding company with total assets of $21
billion. Associated has more than 300 banking offices serving more
than 170 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 to be filed on Form 10-K.
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpJune 30, December 31,
(in thousands) 2005 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $412,212 $389,311 5.9%
Interest-bearing deposits in other
financial institutions 11,236 13,321 (15.7%)
Federal funds sold and securities
purchased under agreements to resell 44,325 55,440 (20.0%)
Securities available for sale, at
fair value 4,794,983 4,815,344 (0.4%)
Loans held for sale 112,077 64,964 72.5%
Loans 14,054,345 13,881,887 1.2%
Allowance for loan losses (190,024) (189,762) 0.1%
------------- -------------
Loans, net 13,864,321 13,692,125 1.3%
Premises and equipment 179,667 184,944 (2.9%)
Goodwill 679,993 679,993 0.0%
Intangible assets 113,010 119,440 (5.4%)
Other assets 543,948 505,254 7.7%
------------- -------------
Total assets $20,755,772 $20,520,136 1.1%
============= =============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,250,482 $2,347,611 (4.1%)
Interest-bearing deposits,
excluding Brokered CDs 9,356,368 10,077,069 (7.2%)
Brokered CDs 491,781 361,559 36.0%
------------- -------------
Total deposits 12,098,631 12,786,239 (5.4%)
Short-term borrowings 2,775,508 2,926,716 (5.2%)
Long-term funding 3,690,453 2,604,540 41.7%
Accrued expenses and other
liabilities 176,062 185,222 (4.9%)
------------- -------------
Total liabilities 18,740,654 18,502,717 1.3%
Stockholders' Equity
Preferred stock - -
Common stock 1,280 1,300 (1.5%)
Surplus 1,062,702 1,127,205 (5.7%)
Retained earnings 938,309 858,847 9.3%
Accumulated other comprehensive
income 22,269 41,205 (46.0%)
Deferred compensation (3,814) (2,122) 79.7%
Treasury stock, at cost (5,628) (9,016) (37.6%)
------------- -------------
Total stockholders' equity 2,015,118 2,017,419 (0.1%)
------------- -------------
Total liabilities and
stockholders' equity $20,755,772 $20,520,136 1.1%
============= =============
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpJune 30,
(in thousands) 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $309,804 33.1%
Interest-bearing deposits in other
financial institutions 11,353 (1.0%)
Federal funds sold and securities purchased
under agreements to resell 39,245 12.9%
Securities available for sale, at fair value 3,799,842 26.2%
Loans held for sale 69,891 60.4%
Loans 10,556,603 33.1%
Allowance for loan losses (177,980) 6.8%
-------------
Loans, net 10,378,623 33.6%
Premises and equipment 129,401 38.8%
Goodwill 232,528 192.4%
Intangible assets 73,977 52.8%
Other assets 457,892 18.8%
-------------
Total assets $15,502,556 33.9%
=============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $1,822,716 23.5%
Interest-bearing deposits, excluding
Brokered CDs 7,497,441 24.8%
Brokered CDs 263,435 86.7%
-------------
Total deposits 9,583,592 26.2%
Short-term borrowings 2,588,103 7.2%
Long-term funding 1,827,326 102.0%
Accrued expenses and other liabilities 124,641 41.3%
-------------
Total liabilities 14,123,662 32.7%
Stockholders' Equity
Preferred stock -
Common stock 1,105 15.8%
Surplus 584,853 81.7%
Retained earnings 791,432 18.6%
Accumulated other comprehensive income 15,305 45.5%
Deferred compensation (1,981) 92.5%
Treasury stock, at cost (11,820) (52.4%)
-------------
Total stockholders' equity 1,378,894 46.1%
-------------
Total liabilities and stockholders' equity $15,502,556 33.9%
=============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended,
June 30,
---------------------------
(in thousands, except per share
amounts) 2005 2004 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $213,420 $137,449 55.3%
Interest and dividends on investment
securities and deposits with other
financial institutions
Taxable 41,834 30,767 36.0%
Tax-exempt 9,507 10,267 (7.4%)
Interest on federal funds sold and
securities purchased under
agreements to resell 182 68 167.6%
------------- -------------
Total interest income 264,943 178,551 48.4%
Interest Expense
Interest on deposits 48,087 26,656 80.4%
Interest on short-term borrowings 21,731 7,241 200.1%
Interest on long-term funding 28,451 12,775 122.7%
------------- -------------
Total interest expense 98,269 46,672 110.6%
------------- -------------
Net Interest Income 166,674 131,879 26.4%
Provision for loan losses 3,671 5,889 (37.7%)
------------- -------------
Net interest income after
provision for loan losses 163,003 125,990 29.4%
Noninterest Income
Trust service fees 8,967 8,043 11.5%
Service charges on deposit
accounts 22,215 13,141 69.1%
Mortgage banking, net 2,376 11,413 (79.2%)
Credit card and other nondeposit
fees 8,790 6,074 44.7%
Retail commissions 15,370 13,162 16.8%
Bank owned life insurance income 2,311 3,641 (36.5%)
Asset sale gains (losses), net 539 218 N/M
Investment securities gains
(losses), net 1,491 (569) N/M
Other 6,367 2,742 132.2%
------------- -------------
Total noninterest income 68,426 57,865 18.3%
Noninterest Expense
Personnel expense 66,934 53,612 24.8%
Occupancy 9,374 6,864 36.6%
Equipment 4,214 2,878 46.4%
Data processing 6,728 6,128 9.8%
Business development and
advertising 4,153 4,057 2.4%
Stationery and supplies 1,644 1,429 15.0%
Other intangible amortization 2,292 934 145.4%
Other 20,995 16,085 30.5%
------------- -------------
Total noninterest expense 116,334 91,987 26.5%
------------- -------------
Income before income taxes 115,095 91,868 25.3%
Income tax expense 37,059 27,363 35.4%
------------- -------------
Net Income $78,036 $64,505 21.0%
============= =============
Earnings Per Share:
Basic $0.60 $0.59 1.7%
Diluted $0.60 $0.58 3.4%
Average Shares Outstanding:
Basic 128,990 110,116 17.1%
Diluted 130,463 111,520 17.0%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Six Months Ended,
June 30,
---------------------------
(in thousands, except per share
amounts) 2005 2004 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $413,729 $272,701 51.7%
Interest and dividends on investment
securities and deposits with other
financial institutions
Taxable 82,868 61,799 34.1%
Tax-exempt 19,230 20,502 (6.2%)
Interest on federal funds sold and
securities purchased under
agreements to resell 264 95 177.9%
------------- -------------
Total interest income 516,091 355,097 45.3%
Interest Expense
Interest on deposits 92,520 54,210 70.7%
Interest on short-term borrowings 38,900 13,780 182.3%
Interest on long-term funding 52,089 26,153 99.2%
------------- -------------
Total interest expense 183,509 94,143 94.9%
------------- -------------
Net Interest Income 332,582 260,954 27.4%
Provision for loan losses 5,998 11,065 (45.8%)
------------- -------------
Net interest income after
provision for
loan losses 326,584 249,889 30.7%
Noninterest Income
Trust service fees 17,295 15,911 8.7%
Service charges on deposit
accounts 40,880 25,538 60.1%
Mortgage banking, net 12,260 13,667 (10.3%)
Credit card and other nondeposit
fees 17,901 11,745 52.4%
Retail commissions 30,075 22,519 33.6%
Bank owned life insurance income 4,479 6,996 (36.0%)
Asset sale gains (losses), net 237 440 (46.1%)
Investment securities gains
(losses), net 1,491 1,362 9.5%
Other 15,181 5,874 158.4%
------------- -------------
Total noninterest income 139,799 104,052 34.4%
Noninterest Expense
Personnel expense 139,919 105,888 32.1%
Occupancy 19,262 14,336 34.4%
Equipment 8,232 5,877 40.1%
Data processing 13,021 11,801 10.3%
Business development and
advertising 8,092 6,714 20.5%
Stationery and supplies 3,488 2,655 31.4%
Other intangible amortization 4,286 1,716 149.8%
Other 41,276 29,884 38.1%
------------- -------------
Total noninterest expense 237,576 178,871 32.8%
------------- -------------
Income before income taxes 228,807 175,070 30.7%
Income tax expense 73,301 51,005 43.7%
------------- -------------
Net Income $155,506 $124,065 25.3%
============= =============
Earnings Per Share:
Basic $1.20 $1.13 6.2%
Diluted $1.19 $1.11 7.2%
Average Shares Outstanding:
Basic 129,383 110,205 17.4%
Diluted 130,868 111,647 17.2%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except 2Q05 1Q05 4Q04 3Q04 2Q04
per share amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees
on loans $213,420 $200,309 $179,612 $142,389 $137,449
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 41,834 41,034 37,631 31,590 30,767
Tax-exempt 9,507 9,723 10,047 10,255 10,267
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 182 82 260 241 68
--------- --------- --------- --------- ---------
Total interest
income 264,943 251,148 227,550 184,475 178,551
Interest Expense
Interest on deposits 48,087 44,433 36,835 27,191 26,656
Interest on short-
term borrowings 21,731 17,169 14,898 10,262 7,241
Interest on long-term
funding 28,451 23,638 17,360 13,806 12,775
--------- --------- --------- --------- ---------
Total interest
expense 98,269 85,240 69,093 51,259 46,672
--------- --------- --------- --------- ---------
Net Interest Income 166,674 165,908 158,457 133,216 131,879
Provision for loan
losses 3,671 2,327 3,603 - 5,889
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 163,003 163,581 154,854 133,216 125,990
Noninterest Income
Trust service fees 8,967 8,328 8,107 7,773 8,043
Service charges on
deposit accounts 22,215 18,665 16,943 13,672 13,141
Mortgage banking, net 2,376 9,884 6,046 618 11,413
Credit card and other
nondeposit fees 8,790 9,111 8,183 6,253 6,074
Retail commissions 15,370 14,705 12,727 11,925 13,162
Bank owned life
insurance income 2,311 2,168 2,525 3,580 3,641
Asset sale gains
(losses), net 539 (302) 432 309 218
Investment securities
gains (losses), net 1,491 - (719) (6) (569)
Other 6,367 8,814 4,793 3,034 2,742
--------- --------- --------- --------- ---------
Total noninterest
income 68,426 71,373 59,037 47,158 57,865
Noninterest Expense
Personnel expense 66,934 72,985 65,193 53,467 53,612
Occupancy 9,374 9,888 8,297 6,939 6,864
Equipment 4,214 4,018 3,855 3,022 2,878
Data processing 6,728 6,293 5,966 5,865 6,128
Business development
and advertising 4,153 3,939 4,271 3,990 4,057
Stationery and
supplies 1,644 1,844 1,567 1,214 1,429
Other intangible
amortization 2,292 1,994 1,699 935 934
Other 20,995 20,281 19,119 13,599 16,085
--------- --------- --------- --------- ---------
Total noninterest
expense 116,334 121,242 109,967 89,031 91,987
--------- --------- --------- --------- ---------
Income before income
taxes 115,095 113,712 103,924 91,343 91,868
Income tax expense 37,059 36,242 33,069 27,977 27,363
--------- --------- --------- --------- ---------
Net Income $78,036 $77,470 $70,855 $63,366 $64,505
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.60 $0.60 $0.57 $0.58 $0.59
Diluted $0.60 $0.59 $0.57 $0.57 $0.58
Average Shares
Outstanding:
Basic 128,990 129,781 123,509 110,137 110,116
Diluted 130,463 131,358 125,296 111,699 111,520
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except YTD 2005 YTD 2004 2nd Qtr 2005 1st Qtr 2005
per share & full
time equivalent
employee data)
----------------------------------------------------------------------
Summary of
Operations
Net interest income 332,582 260,954 166,674 165,908
Provision for loan
losses 5,998 11,065 3,671 2,327
Asset sale gains
(losses), net 237 440 539 (302)
Investment
securities gains
(losses), net 1,491 1,362 1,491 -
Noninterest income
(excluding
securities & asset
gains) 138,071 102,250 66,396 71,675
Noninterest expense 237,576 178,871 116,334 121,242
Income before income
taxes 228,807 175,070 115,095 113,712
Income taxes 73,301 51,005 37,059 36,242
Net income 155,506 124,065 78,036 77,470
Taxable equivalent
adjustment 12,396 12,791 6,174 6,222
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $1.20 $1.13 $0.60 $0.60
Diluted 1.19 1.11 0.60 0.59
Dividends 0.5200 0.4767 0.2700 0.2500
Market Value:
High $33.89 $30.37 $33.89 $33.50
Low 30.11 27.09 30.11 30.60
Close 33.58 29.63 33.58 31.23
Book value 15.77 12.53 15.77 15.61
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets yield 5.60% 5.11% 5.71% 5.51%
Interest-bearing
liabilities rate 2.27% 1.55% 2.42% 2.13%
Net interest margin 3.65% 3.80% 3.63% 3.68%
Return on average
assets 1.53 1.62 1.52 1.54
Return on average
equity 15.47 18.12 15.41 15.52
Return on tangible
average equity (2) 24.00 22.13 23.88 24.13
Efficiency ratio (3) 49.18 47.57 48.63 49.73
Effective tax rate 32.04 29.13 32.20 31.87
Dividend payout
ratio (4) 43.33 42.18 45.00 41.67
----------------------------------------------------------------------
Average Balances
Assets $20,521,530 $15,379,641 $20,574,770 $20,467,698
Earning assets 18,837,181 14,333,135 18,916,921 18,756,555
Interest-bearing
liabilities 16,173,550 12,157,368 16,207,719 16,139,002
Loans 14,031,228 10,559,476 14,084,246 13,977,621
Deposits 12,213,580 9,643,509 12,069,719 12,359,040
Stockholders' equity 2,027,615 1,376,718 2,030,929 2,024,265
Stockholders' equity
/ assets 9.88% 8.95% 9.87% 9.89%
----------------------------------------------------------------------
At Period End
Assets $20,755,772 $20,502,442
Loans 14,054,345 13,923,196
Allowance for loan
losses 190,024 189,917
Goodwill 679,993 679,993
Mortgage servicing
rights, net 74,103 78,182
Other intangible
assets 38,907 41,199
Deposits 12,098,631 12,193,904
Stockholders' equity 2,015,118 2,025,071
Stockholders' equity
/ assets 9.71% 9.88%
Tangible equity /
tangible assets (5) 6.47% 6.59%
Shares outstanding,
end of period 127,818 129,697
Shares repurchased
during period 2,111 411
Average per share cost of shares repurchased
during period $33.10 $32.76
Year-to-date shares repurchased
during period 2,522 411
YTD average per share cost of shares
repurchased during period $33.05 $32.76
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,889 5,132
Trust assets under management,
at market value $4,800,000 $4,700,000
Mortgage loans
originated for sale 385,677 337,406
Portfolio serviced
for others 9,479,000 9,528,000
Mortgage servicing rights, net / Portfolio
serviced for others 0.78% 0.82%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except 4th Qtr 2004 3rd Qtr 2004 2nd Qtr 2004
per share & full
time equivalent
employee data)
----------------------------------------------------------------------
Summary of Operations
Net interest income 158,457 133,216 131,879
Provision for loan losses 3,603 - 5,889
Asset sale gains (losses), net 432 309 218
Investment securities gains
(losses), net (719) (6) (569)
Noninterest income (excluding
securities & asset gains) 59,324 46,855 58,216
Noninterest expense 109,967 89,031 91,987
Income before income taxes 103,924 91,343 91,868
Income taxes 33,069 27,977 27,363
Net income 70,855 63,366 64,505
Taxable equivalent adjustment 6,342 6,395 6,387
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.57 $0.58 $0.59
Diluted 0.57 0.57 0.58
Dividends 0.2500 0.2500 0.2500
Market Value:
High $34.85 $32.19 $30.13
Low 32.08 28.81 27.09
Close 33.23 32.07 29.63
Book value 15.55 13.18 12.53
----------------------------------------------------------------------
Performance Ratios (annualized)
Earning assets yield 5.31% 5.14% 5.09%
Interest-bearing liabilities
rate 1.85% 1.64% 1.53%
Net interest margin 3.74% 3.76% 3.80%
Return on average assets 1.49 1.60 1.67
Return on average equity 15.46 17.76 18.87
Return on tangible average
equity (2) 22.47 21.69 23.15
Efficiency ratio (3) 49.07 47.75 46.82
Effective tax rate 31.82 30.63 29.78
Dividend payout ratio (4) 43.86 43.10 42.37
----------------------------------------------------------------------
Average Balances
Assets $18,956,445 $15,730,451 $15,498,005
Earning assets 17,437,618 14,688,914 14,480,701
Interest-bearing liabilities 14,761,878 12,381,407 12,231,733
Loans 12,858,394 10,708,701 10,685,542
Deposits 11,658,646 9,621,557 9,701,945
Stockholders' equity 1,822,715 1,419,600 1,374,632
Stockholders' equity / assets 9.62% 9.02% 8.87%
----------------------------------------------------------------------
At Period End
Assets $20,520,136 $16,135,761 $15,502,556
Loans 13,881,887 10,830,627 10,556,603
Allowance for loan losses 189,762 175,007 177,980
Goodwill 679,993 232,564 232,528
Mortgage servicing rights, net 76,247 45,555 48,735
Other intangible assets 43,193 24,308 25,242
Deposits 12,786,239 9,677,273 9,583,592
Stockholders' equity 2,017,419 1,453,465 1,378,894
Stockholders' equity / assets 9.83% 9.01% 8.89%
Tangible equity / tangible
assets (5) 6.54% 7.54% 7.35%
Shares outstanding, end of
period 129,770 110,281 110,048
Shares repurchased during period 376 - 205
Average per share cost of shares
repurchased during period $33.25 $- $27.93
Year-to-date shares repurchased
during period 1,073 697 697
YTD average per share cost of
shares repurchased during
period $30.43 $28.91 $28.91
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,746 3,979 4,010
Trust assets under management,
at market value $4,600,000 $4,400,000 $4,300,000
Mortgage loans originated for
sale 427,951 253,917 579,020
Portfolio serviced for others 9,543,000 6,011,000 6,010,000
Mortgage servicing rights, net /
Portfolio serviced for others 0.80% 0.76% 0.81%
----------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits and stock
dividends.
(2) Return on tangible average equity = Net income divided by average
equity excluding average goodwill and other intangible assets.
This is a non-GAAP financial measure.
(3) 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.
(4) Ratio is based upon basic earnings per share.
(5) Tangible equity to tangible assets = Stockholders' equity
excluding goodwill and other intangible assets divided by assets
excluding goodwill and other intangible assets. This is a non-GAAP
financial measure.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp Three months ended
June 30,
------------------------------------
(in thousands) 2005 2004 % Change
--------------------------------- ------------------------------------
Allowance for Loan Losses
Beginning balance $189,917 $177,717 6.9%
Provision for loan losses 3,671 5,889 (37.7%)
Charge offs (5,650) (6,660) (15.2%)
Recoveries 2,086 1,034 101.7%
------------- ------------
Net charge offs (3,564) (5,626) (36.7%)
------------- ------------
Ending Balance $190,024 $177,980 6.8%
============= ============
Six months ended
June 30,
------------------------------------
2005 2004 % Change
--------------------------------- ------------------------------------
Allowance for Loan Losses
Beginning balance $189,762 $177,622 6.8%
Provision for loan losses 5,998 11,065 (45.8%)
Charge offs (11,333) (12,722) (10.9%)
Recoveries 5,597 2,015 177.8%
------------- ------------
Net charge offs (5,736) (10,707) (46.4%)
------------- ------------
Ending Balance $190,024 $177,980 6.8%
============= ============
----------------------------------------------------------------------
Credit Quality
2Q05 vs
June 30, Mar 31, 1Q05
2005 2005 % Change
----------------------------
Nonaccrual loans $109,698 $99,835 9.9%
Loans 90 or more days past due and still
accruing 2,806 3,068 (8.5%)
Restructured loans 35 36 (2.8%)
--------- --------
Total nonperforming loans 112,539 102,939 9.3%
Other real estate owned 3,685 4,019 (8.3%)
--------- --------
Total nonperforming assets 116,224 106,958 8.7%
========= ========
Provision for loan losses 3,671 2,327 57.8%
Net charge offs 3,564 2,172 64.1%
Allowance for loan losses / loans 1.35% 1.36%
Allowance for loan losses / nonperforming
loans 168.85 184.49
Nonperforming loans / total loans 0.80 0.74
Nonperforming assets / total assets 0.56 0.52
Net charge offs / average loans
(annualized) 0.10 0.06
Year-to-date net charge offs / average
loans 0.08 0.06
Credit Quality
2Q05 vs
Dec 31, Sept 30, June 30, 2Q04
2004 2004 2004 % Change
-------------------------------------
Nonaccrual loans $112,761 $81,124 $80,622 36.1%
Loans 90 or more days past due
and still accruing 2,153 10,309 5,207 (46.1%)
Restructured loans 37 39 40 (12.5%)
--------- -------- --------
Total nonperforming loans 114,951 91,472 85,869 31.1%
Other real estate owned 3,915 4,526 6,613 (44.3%)
--------- -------- --------
Total nonperforming assets 118,866 95,998 92,482 25.7%
========= ======== ========
Provision for loan losses 3,603 - 5,889 (37.7%)
Net charge offs 3,598 2,973 5,626 (36.7%)
Allowance for loan losses /
loans 1.37% 1.62% 1.69%
Allowance for loan losses /
nonperforming loans 165.08 191.32 207.27
Nonperforming loans / total
loans 0.83 0.84 0.81
Nonperforming assets / total
assets 0.58 0.59 0.60
Net charge offs / average loans
(annualized) 0.11 0.11 0.21
Year-to-date net charge offs /
average loans 0.15 0.17 0.20
----------------------------------------------------------------------
Period End Loan Composition 2Q05 vs
1Q05
June 30, 2005Mar 31, 2005 % Change
------------------------------------
Commercial, financial &
agricultural $3,086,737 $2,852,462 8.2%
Real estate - construction 1,640,941 1,569,013 4.6%
Commercial real estate 3,650,491 3,813,465 (4.3%)
Lease financing 53,270 50,181 6.2%
------------- ------------
Commercial 8,431,439 8,285,121 1.8%
Home equity (a) 1,806,236 1,744,676 3.5%
Installment 1,025,621 1,048,510 (2.2%)
------------- ------------
Retail 2,831,857 2,793,186 1.4%
Residential mortgage 2,791,049 2,844,889 (1.9%)
------------- ------------
Total loans $14,054,345 $13,923,196 0.9%
============= ============
Period End Loan Composition
2Q05 vs
Dec 31, Sept 30, June 30, 2Q04
2004 2004 2004 % Change
------------------------------------------------
Commercial, financial
& agricultural $2,803,333 $2,479,764 $2,247,779 37.3%
Real estate -
construction 1,459,629 1,152,990 1,118,284 46.7%
Commercial real
estate 3,933,131 3,242,009 3,292,783 10.9%
Lease financing 50,718 49,423 48,979 8.8%
------------ ------------ ------------
Commercial 8,246,811 6,924,186 6,707,825 25.7%
Home equity (a) 1,866,485 1,290,436 1,231,077 46.7%
Installment 1,054,011 672,806 666,305 53.9%
------------ ------------ ------------
Retail 2,920,496 1,963,242 1,897,382 49.3%
Residential
mortgage 2,714,580 1,943,199 1,951,396 43.0%
------------ ------------ ------------
Total loans $13,881,887 $10,830,627 $10,556,603 33.1%
============ ============ ============
(a) Home equity includes home equity lines and residential mortgage
junior liens.
----------------------------------------------------------------------
Period End Deposit Composition 2Q05 vs
1Q05
June 30, 2005Mar 31, 2005 % Change
------------------------------------
Demand $2,250,482 $2,156,592 4.4%
Savings 1,117,922 1,137,120 (1.7%)
Interest-bearing demand 2,227,188 2,485,548 (10.4%)
Money market 2,094,796 2,112,490 (0.8%)
Brokered CDs 491,781 218,111 125.5%
Other time deposits 3,916,462 4,084,043 (4.1%)
------------- ------------
Total deposits $12,098,631 $12,193,904 (0.8%)
============= ============
Period End Deposit Composition
2Q05 vs
Dec 31, Sept 30, June 30, 2Q04
2004 2004 2004 % Change
------------ ----------- ----------- ---------
Demand $2,347,611 $1,867,905 $1,822,716 23.5%
Savings 1,116,158 936,975 948,755 17.8%
Interest-bearing demand 2,854,880 2,334,072 2,355,287 (5.4%)
Money market 2,083,717 1,516,423 1,477,513 41.8%
Brokered CDs 361,559 186,326 263,435 86.7%
Other time deposits 4,022,314 2,835,572 2,715,886 44.2%
------------ ----------- -----------
Total deposits $12,786,239 $9,677,273 $9,583,592 26.2%
============ =========== ===========
----------------------------------------------------------------------
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Six months ended June 30, 2005
---------------------------------
Interest Average
Average Income/ Yield/
(in thousands) Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,328,884 $241,201 5.76%
Residential mortgage 2,857,510 79,361 5.56
Retail 2,844,834 94,025 6.64
------------ -----------
Total loans 14,031,228 414,587 5.90
Investments and other 4,805,953 113,900 4.74
------------ -----------
Total earning assets 18,837,181 528,487 5.60
Other assets, net 1,684,349
------------
Total assets $20,521,530
============
Interest-bearing liabilities:
Savings deposits $1,126,486 $2,053 0.37%
Interest-bearing demand deposits 2,475,344 13,423 1.09
Money market deposits 2,111,396 16,682 1.59
Time deposits, excluding Brokered
CDs 4,038,479 56,151 2.80
------------ -----------
Total interest-bearing deposits,
excluding Brokered CDs 9,751,705 88,309 1.83
Brokered CDs 301,901 4,211 2.81
------------ -----------
Total interest-bearing deposits 10,053,606 92,520 1.86
Wholesale funding 6,119,944 90,989 2.96
------------ -----------
Total interest-bearing liabilities 16,173,550 183,509 2.27
Noninterest-bearing demand 2,159,974
Other liabilities 160,391
Stockholders' equity 2,027,615
------------
Total liabilities and stockholders'
equity $20,521,530
============
-----------
Net interest income and rate spread (1) $344,978 3.33%
===========
Net interest margin (1) 3.65%
Taxable equivalent adjustment $12,396
===========
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Six months ended June 30, 2004
----------------------------------
Interest Average
Average Income/ Yield/
(in thousands) Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,608,371 $160,794 4.82%
Residential mortgage 2,072,470 58,410 5.64
Retail 1,878,635 53,986 5.77
------------ -----------
Total loans 10,559,476 273,190 5.15
Investments and other 3,773,659 94,698 5.02
------------ -----------
Total earning assets 14,333,135 367,888 5.11
Other assets, net 1,046,506
------------
Total assets $15,379,641
============
Interest-bearing liabilities:
Savings deposits $918,775 $1,684 0.37%
Interest-bearing demand deposits 2,380,375 9,571 0.81
Money market deposits 1,537,955 5,952 0.78
Time deposits, excluding Brokered
CDs 2,880,996 35,739 2.49
------------ -----------
Total interest-bearing deposits,
excluding Brokered CDs 7,718,101 52,946 1.38
Brokered CDs 206,527 1,264 1.23
------------ -----------
Total interest-bearing deposits 7,924,628 54,210 1.38
Wholesale funding 4,232,740 39,933 1.87
------------ -----------
Total interest-bearing liabilities 12,157,368 94,143 1.55
Noninterest-bearing demand 1,718,881
Other liabilities 126,674
Stockholders' equity 1,376,718
------------
Total liabilities and stockholders'
equity $15,379,641
============
-----------
Net interest income and rate spread (1) $273,745 3.56%
===========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $12,791
===========
----------------------------------------------------------------------
Three months ended June 30, 2005
----------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,391,627 $125,299 5.91%
Residential mortgage 2,877,900 39,942 5.55
Retail 2,814,719 48,648 6.92
------------ -----------
Total loans 14,084,246 213,889 6.04
Investments and other 4,832,675 57,228 4.74
------------ -----------
Total earning assets 18,916,921 271,117 5.71
Other assets, net 1,657,849
------------
Total assets $20,574,770
============
Interest-bearing liabilities:
Savings deposits $1,133,629 $1,041 0.37%
Interest-bearing demand deposits 2,349,997 6,677 1.14
Money market deposits 2,106,829 9,287 1.77
Time deposits, excluding Brokered
CDs 4,005,390 28,903 2.89
------------ -----------
Total interest-bearing deposits,
excluding Brokered CDs 9,595,845 45,908 1.92
Brokered CDs 285,456 2,179 3.06
------------ -----------
Total interest-bearing deposits 9,881,301 48,087 1.95
Wholesale funding 6,326,418 50,182 3.14
------------ -----------
Total interest-bearing liabilities 16,207,719 98,269 2.42
Noninterest-bearing demand 2,188,418
Other liabilities 147,704
Stockholders' equity 2,030,929
------------
Total liabilities and stockholders'
equity $20,574,770
============
-----------
Net interest income and rate spread (1) $172,848 3.29%
===========
Net interest margin (1) 3.63%
Taxable equivalent adjustment $6,174
===========
Three months ended June 30, 2004
----------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,684,527 $81,007 4.80%
Residential mortgage 2,103,558 29,301 5.58
Retail 1,897,457 27,367 5.79
------------ -----------
Total loans 10,685,542 137,675 5.13
Investments and other 3,795,159 47,263 4.98
------------ -----------
Total earning assets 14,480,701 184,938 5.09
Other assets, net 1,017,304
------------
Total assets $15,498,005
============
Interest-bearing liabilities:
Savings deposits $939,025 $843 0.36%
Interest-bearing demand deposits 2,396,737 4,871 0.82
Money market deposits 1,498,900 2,790 0.75
Time deposits, excluding Brokered
CDs 2,824,920 17,327 2.47
------------ -----------
Total interest-bearing deposits,
excluding Brokered CDs 7,659,582 25,831 1.36
Brokered CDs 268,709 825 1.24
------------ -----------
Total interest-bearing deposits 7,928,291 26,656 1.35
Wholesale funding 4,303,442 20,016 1.85
------------ -----------
Total interest-bearing liabilities 12,231,733 46,672 1.53
Noninterest-bearing demand 1,773,654
Other liabilities 117,986
Stockholders' equity 1,374,632
------------
Total liabilities and stockholders'
equity $15,498,005
============
-----------
Net interest income and rate spread (1) $138,266 3.56%
===========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $6,387
===========
----------------------------------------------------------------------
(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
Media:
Jon Drayna, 920-491-7006
SOURCE: Associated Banc-Corp