GREEN BAY, Wis.--(BUSINESS WIRE)--April 21, 2005--Associated
Banc-Corp (Nasdaq:ASBC) earned 59 cents per diluted share in the first
quarter of 2005, up 11 percent from 53 cents earned in the first
quarter of 2004. Net income for the first quarter was $77.5 million,
up 30 percent compared to first quarter 2004 of $59.6 million.
In comparison, diluted earnings per share and net income for the
fourth quarter of 2004 were 57 cents and $70.9 million, respectively.
Associated's acquisition of First Federal Capital Corp., a $4
billion thrift, on Oct. 29, 2004, affects comparisons to past periods.
Additionally, the acquisition of Jabas Group, Inc., an employee
benefits firm, on April 1, 2004 affects the comparison of retail
commission income and noninterest expenses between first quarter
periods.
For the first quarter of 2005, return on average assets was 1.54
percent, compared to 1.49 percent and 1.57 percent for fourth and
first quarters of 2004, respectively. Return on average equity for the
first quarter of 2005 was 15.52 percent, compared to 15.46 percent for
the previous quarter and 17.37 percent for the year-earlier quarter.
Comparably, return on average tangible equity (which is a non-GAAP
measure that excludes average goodwill and other intangible assets
from average equity) was 24.13 percent, 22.47 percent and 21.13
percent for the same respective quarter periods. Book value per share
rose to $15.61 as of March 31, 2005, up 23 percent compared to a year
earlier.
"Our first quarter performance reflects the success of the First
Federal integration and progress on several of our strategic
initiatives," said Paul S. Beideman, president and CEO of Associated
Banc-Corp. "While we were primarily focused on the First Federal
conversion, we saw overall loan growth, solid asset quality
performance, and growth in several categories of noninterest income,"
he said.
Associated's net interest income for the first quarter of 2005 was
$165.9 million, compared to $158.5 million for fourth quarter 2004 and
$129.1 million in the year-earlier quarter. The increase is due
predominantly to higher average balance sheet volumes.
Net interest margin was 3.68 percent, compared to 3.74 percent and
3.80 percent for fourth and first quarters of 2004, respectively. The
flattening of the yield curve and competitive pricing pressures have
substantially offset the benefits to the margin from interest rate
increases that began in the second half of 2004 and continue into
2005.
Period end loans at March 31, 2005 were $13.9 billion, up slightly
from Dec. 31, 2004 and up 33 percent over a year earlier. Quarterly
average loan balances, a key driver to net interest income, were up 35
percent annualized compared to fourth quarter 2004 and up 34 percent
between first quarter periods. Adjusting for balances acquired with
First Federal, average loan growth was sustained at approximately 6
percent annualized compared to both fourth and first quarters of 2004.
Period end deposits at March 31, 2005 were $12.2 billion, compared
to $12.8 billion at year-end 2004 and $9.7 billion a year ago. On
average, deposits were $12.4 billion for first quarter 2005, compared
to $11.7 billion (up 24 percent annualized) and $9.6 billion (up 29
percent) for fourth and first quarters of 2004, respectively.
Adjusting for balances acquired with First Federal, average deposits
for first quarter 2005 were down approximately 6 percent annualized
compared to fourth quarter 2004, and up approximately 1 percent over
first quarter 2004 averages.
The decline in deposits from the fourth quarter is the result of
usual seasonal trends, driven largely by escrow deposits which
accumulate throughout the year, are dispersed at year-end and re-build
as the year progresses. On average, escrow deposits declined by $0.2
billion between fourth quarter 2004 and first quarter 2005. In
addition, the fourth quarter of 2004 experienced a large increase in
municipal and institutional deposits which were withdrawn by the end
of the first quarter of 2005, totaling approximately $0.3 billion.
Asset quality indicators remained strong and resolution to problem
credits continued. First quarter 2005 net charge-offs were $2.2
million (0.06 percent of average loans), compared to $3.6 million
(0.11 percent) for fourth quarter 2004, and $5.1 million (0.20
percent) for first quarter 2004. Nonperforming loans at March 31, 2005
were $102.9 million, representing 0.74 percent of loans, compared to
0.83 percent of loans at year-end 2004 and 0.89 percent of loans at
March 31, 2004. The provision for loan losses was $2.3 million, $3.6
million, and $5.2 million, for first quarter 2005, fourth quarter
2004, and first quarter 2004, respectively.
At March 31, 2005, the allowance for loan losses was $189.9
million. The allowance for loan losses to total loans was 1.36 percent
and covered 184 percent of nonperforming loans at March 31,2005,
compared to 1.37 percent and 165 percent, respectively, at year-end
2004, and 1.69 percent and 190 percent, respectively, at March 31,
2004.
As mentioned earlier, quarterly comparisons of noninterest income
and noninterest expense are particularly affected by the timing of
acquisitions, with fourth quarter 2004 including only two months of
First Federal activity and first quarter 2004 carrying no First
Federal or Jabas activity.
Noninterest income was strong at $71.4 million for first quarter
2005, up $12.3 million (21 percent) over fourth quarter 2004 and up
$25.2 million (55 percent) over first quarter last year. Excluding a
non-recurring gain from the dissolution of stock in a regional ATM
network of approximately $4 million, recorded in other income during
first quarter 2005, noninterest income was up 14 percent and 46
percent over fourth and first quarters of 2004, respectively.
Net mortgage banking income (gross mortgage banking income less
mortgage servicing rights (MSR) expense) was $9.9 million for first
quarter 2005, up $3.8 million over fourth quarter 2004. The increase
was the net result of lower MSR expense and higher servicing fees,
offset in part by lower gains on sales and other fees.
Including First Federal, the average portfolio serviced for others
increased, resulting in a $1.0 million (18 percent) increase to
servicing fees between fourth quarter 2004 and first quarter 2005.
Rising mortgage interest rates slowed secondary mortgage production
(down 21 percent to $337 million compared to fourth quarter 2004),
lowering resultant gains on sales and other related fees by $1.7
million. However, rising rates also slowed prepayment speeds, a
predominant valuation factor, increasing the value of the MSR asset
and requiring less valuation reserve. Consequently, MSR expense was
$4.5 million lower than fourth quarter 2004, including a $4.0 million
valuation reserve reversal in first quarter 2005 compared to a $1.0
million valuation reserve addition in fourth quarter 2004.
At March 31, 2005, the net MSR asset was $78.2 million,
representing 82 basis points of the $9.53 billion portfolio serviced
for others, compared to 80 basis points at Dec. 31, 2004.
Service charges on deposit accounts were $18.7 million, up $1.7
million (10 percent) over fourth quarter 2004, and credit card and
other nondeposit fees were $9.1 million, up $0.9 million (11 percent),
both due largely to the increased deposit base and card base from
First Federal. Retail commissions were $14.7 million, up $2.0 million
(16 percent) over fourth quarter 2004, from the seasonal increase in
profit sharing/contingency income from insurance carriers and
increased sales.
Noninterest expense was $121.2 million for first quarter 2005, up
$11.3 million (10 percent) over fourth quarter 2004 and up $34.4
million (40 percent) over first quarter last year, influenced by the
timing of the First Federal and Jabas acquisitions. During the first
quarter, $3 million of noninterest expenses recorded in various
categories were specifically attributable to the integration
activities and conversion of First Federal onto Associated's operating
systems in mid-February. As a result of the conversion, Associated is
now positioned to phase-in anticipated cost savings through the
remainder of 2005.
Personnel expense was $73.0 million in the first quarter, up $7.8
million or 12 percent over fourth quarter 2004, including the extra
month of First Federal's employee base, merit increases between years,
increased overtime, and the usual first quarter increases in personnel
taxes. Occupancy expense of $9.9 million was up $1.6 million (19
percent) compared to fourth quarter 2004, including seasonal increases
in utilities and snow removal costs. All other noninterest expense
categories combined were up $1.9 million (5 percent) over fourth
quarter 2004, a combination of increased expenses related to the extra
month of First Federal and conversion and integration costs, offset in
part with controlled discretionary spending.
The efficiency ratio remained favorable at 49.73 percent, 49.07
percent, and 48.40 percent for first quarter 2005, fourth quarter 2004
and first quarter 2004, respectively.
"Our successful integration of First Federal positions us well for
the future as we capture synergies and sell our expanded product line
to First Federal customers," Beideman said.
He added, "While the rate environment and competition for loans
and deposits are challenging, we're confident that our strategies will
allow us to meet consensus earnings estimates for 2005."
Associated repurchased 0.4 million shares of its common stock in
the first quarter, at an average price of $32.76 per share. Also,
during the first quarter, the company paid a dividend of 25 cents per
share, up 10 percent from the year-earlier dividend.
On March 21, 2005, Associated signed a definitive agreement to
acquire State Financial Services Corp (Nasdaq:SFSW) in an all-stock
transaction, whereby State Financial shareholders receive 1.20 shares
of Associated common stock for each share of State Financial common
stock they hold. Based on Associated's closing share price on March
18, 2005, the transaction is valued at approximately $278 million. At
March 31, 2005, State Financial is a $1.5 billion financial services
company based in Milwaukee, with 29 banking branches in Southeastern
Wisconsin and Northeastern Illinois.
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 5626644. A taped play-back of the
call will be available through April 28 by calling 800-642-1687.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified multibank holding company with total assets of $20.5
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-CorpMarch 31, December 31,
(in thousands) 2005 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $ 327,487 $ 389,311 (15.9%)
Interest-bearing deposits in other
financial institutions 14,202 13,321 6.6%
Federal funds sold and securities
purchased under agreements
to resell 15,655 55,440 (71.8%)
Securities available for sale, at
fair value 4,835,134 4,815,344 0.4%
Loans held for sale 79,975 64,964 23.1%
Loans 13,923,196 13,881,887 0.3%
Allowance for loan losses (189,917) (189,762) 0.1%
------------ ------------
Loans, net 13,733,279 13,692,125 0.3%
Premises and equipment 180,315 184,944 (2.5%)
Goodwill 679,993 679,993 0.0%
Intangible assets 119,381 119,440 (0.0%)
Other assets 517,021 505,254 2.3%
------------ ------------
Total assets $20,502,442 $20,520,136 (0.1%)
============ ============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 2,156,592 $ 2,347,611 (8.1%)
Interest-bearing deposits,
excluding Brokered CDs 9,819,201 10,077,069 (2.6%)
Brokered CDs 218,111 361,559 (39.7%)
------------ ------------
Total deposits 12,193,904 12,786,239 (4.6%)
Short-term borrowings 2,778,161 2,926,716 (5.1%)
Long-term funding 3,332,804 2,604,540 28.0%
Accrued expenses and other
liabilities 172,502 185,222 (6.9%)
------------ ------------
Total liabilities 18,477,371 18,502,717 (0.1%)
Stockholders' Equity
Preferred stock - -
Common stock 1,300 1,300 0.0%
Surplus 1,128,148 1,127,205 0.1%
Retained earnings 898,578 858,847 4.6%
Accumulated other comprehensive
income 10,505 41,205 (74.5%)
Deferred compensation (3,814) (2,122) 79.7%
Treasury stock, at cost (9,646) (9,016) 7.0%
------------ ------------
Total stockholders' equity 2,025,071 2,017,419 0.4%
------------ ------------
Total liabilities and
stockholders' equity $20,502,442 $20,520,136 (0.1%)
============ ============
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpMarch 31,
(in thousands) 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $ 323,686 1.2%
Interest-bearing deposits in other
financial institutions 17,057 (16.7%)
Federal funds sold and securities
purchased under agreements to resell 7,000 123.6%
Securities available for sale, at fair value 3,883,470 24.5%
Loans held for sale 120,699 (33.7%)
Loans 10,486,610 32.8%
Allowance for loan losses (177,717) 6.9%
------------
Loans, net 10,308,893 33.2%
Premises and equipment 130,028 38.7%
Goodwill 224,388 203.0%
Intangible assets 59,899 99.3%
Other assets 435,748 18.7%
------------
Total assets $15,510,868 32.2%
============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 1,755,485 22.8%
Interest-bearing deposits, excluding
Brokered CDs 7,716,290 27.3%
Brokered CDs 230,983 (5.6%)
------------
Total deposits 9,702,758 25.7%
Short-term borrowings 2,516,270 10.4%
Long-term funding 1,749,418 90.5%
Accrued expenses and other
liabilities 147,129 17.2%
------------
Total liabilities 14,115,575 30.9%
Stockholders' Equity
Preferred stock -
Common stock 1,105 17.6%
Surplus 582,559 93.7%
Retained earnings 755,627 18.9%
Accumulated other comprehensive income 66,526 (84.2%)
Deferred compensation (1,981) 92.5%
Treasury stock, at cost (8,543) 12.9%
------------
Total stockholders' equity 1,395,293 45.1%
------------
Total liabilities and
stockholders' equity $15,510,868 32.2%
============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three
Months Ended,
March 31,
-------------------
(in thousands, except per share amounts) 2005 2004 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $200,309 $135,252 48.1%
Interest and dividends on investment
securities and deposits with other
financial institutions
Taxable 41,034 31,032 32.2%
Tax-exempt 9,723 10,235 (5.0%)
Interest on federal funds sold and
securities purchased under agreements
to resell 82 27 203.7%
--------- ---------
Total interest income 251,148 176,546 42.3%
Interest Expense
Interest on deposits 44,433 27,554 61.3%
Interest on short-term borrowings 17,169 6,539 162.6%
Interest on long-term funding 23,638 13,378 76.7%
--------- ---------
Total interest expense 85,240 47,471 79.6%
--------- ---------
Net Interest Income 165,908 129,075 28.5%
Provision for loan losses 2,327 5,176 (55.0%)
--------- ---------
Net interest income after provision for
loan losses 163,581 123,899 32.0%
Noninterest Income
Trust service fees 8,328 7,868 5.8%
Service charges on deposit accounts 18,665 12,397 50.6%
Mortgage banking, net 9,884 2,254 338.5%
Credit card and other nondeposit fees 9,111 5,671 60.7%
Retail commissions 14,705 9,357 57.2%
Bank owned life insurance income 2,168 3,355 (35.4%)
Asset sale gains (losses), net (302) 222 N/M
Investment securities gains, net - 1,931 N/M
Other 8,814 3,132 181.4%
--------- ---------
Total noninterest income 71,373 46,187 54.5%
Noninterest Expense
Personnel expense 72,985 52,276 39.6%
Occupancy 9,888 7,472 32.3%
Equipment 4,018 2,999 34.0%
Data processing 6,293 5,673 10.9%
Business development and advertising 3,939 2,657 48.2%
Stationery and supplies 1,844 1,226 50.4%
Other intangible amortization 1,994 782 155.0%
Other 20,281 13,799 47.0%
--------- ---------
Total noninterest expense 121,242 86,884 39.5%
--------- ---------
Income before income taxes 113,712 83,202 36.7%
Income tax expense 36,242 23,642 53.3%
--------- ---------
Net Income $ 77,470 $ 59,560 30.1%
========= =========
Earnings Per Share:
Basic $ 0.60 $ 0.54 11.1%
Diluted $ 0.59 $ 0.53 11.3%
Average Shares Outstanding:
Basic 129,781 110,294 17.7%
Diluted 131,358 111,830 17.5%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except 1Q05 4Q04 3Q04 2Q04 1Q04
per share amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $200,309 $179,612 $142,389 $137,449 $135,252
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 41,034 37,631 31,590 30,767 31,032
Tax-exempt 9,723 10,047 10,255 10,267 10,235
Interest on federal
funds sold and
securities purchased
under agreements
to resell 82 260 241 68 27
--------- --------- --------- --------- ---------
Total interest
income 251,148 227,550 184,475 178,551 176,546
Interest Expense
Interest on deposits 44,433 36,835 27,191 26,656 27,554
Interest on
short-term borrowings 17,169 14,898 10,262 7,241 6,539
Interest on
long-term funding 23,638 17,360 13,806 12,775 13,378
--------- --------- --------- --------- ---------
Total interest
expense 85,240 69,093 51,259 46,672 47,471
--------- --------- --------- --------- ---------
Net Interest Income 165,908 158,457 133,216 131,879 129,075
Provision for loan
losses 2,327 3,603 - 5,889 5,176
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 163,581 154,854 133,216 125,990 123,899
Noninterest Income
Trust service fees 8,328 8,107 7,773 8,043 7,868
Service charges on
deposit accounts 18,665 16,943 13,672 13,141 12,397
Mortgage banking,
net 9,884 6,046 618 11,413 2,254
Credit card and
other nondeposit
fees 9,111 8,183 6,253 6,074 5,671
Retail commissions 14,705 12,727 11,925 13,162 9,357
Bank owned life
insurance income 2,168 2,525 3,580 3,641 3,355
Asset sale gains
(losses), net (302) 432 309 218 222
Investment
securities gains
(losses), net - (719) (6) (569) 1,931
Other 8,814 4,793 3,034 2,742 3,132
--------- --------- --------- --------- ---------
Total noninterest
income 71,373 59,037 47,158 57,865 46,187
Noninterest Expense
Personnel expense 72,985 65,193 53,467 53,612 52,276
Occupancy 9,888 8,297 6,939 6,864 7,472
Equipment 4,018 3,855 3,022 2,878 2,999
Data processing 6,293 5,966 5,865 6,128 5,673
Business development
and advertising 3,939 4,271 3,990 4,057 2,657
Stationery and
supplies 1,844 1,567 1,214 1,429 1,226
Other intangible
amortization 1,994 1,699 935 934 782
Other 20,281 19,119 13,599 16,085 13,799
--------- --------- --------- --------- ---------
Total noninterest
expense 121,242 109,967 89,031 91,987 86,884
--------- --------- --------- --------- ---------
Income before income
taxes 113,712 103,924 91,343 91,868 83,202
Income tax expense 36,242 33,069 27,977 27,363 23,642
--------- --------- --------- --------- ---------
Net Income $ 77,470 $ 70,855 $ 63,366 $ 64,505 $ 59,560
========= ========= ========= ========= =========
Earnings Per Share:
Basic $ 0.60 $ 0.57 $ 0.58 $ 0.59 $ 0.54
Diluted $ 0.59 $ 0.57 $ 0.57 $ 0.58 $ 0.53
Average Shares
Outstanding:
Basic 129,781 123,509 110,137 110,116 110,294
Diluted 131,358 125,296 111,699 111,520 111,830
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except 1st Qtr 4th Qtr 3rd Qtr
per share & full time 2005 2004 2004
equivalent employee data)
----------------------------------------------------------------------
Summary of Operations
Net interest income 165,908 158,457 133,216
Provision for loan losses 2,327 3,603 -
Asset sale gains (losses), net (302) 432 309
Investment securities gains
(losses), net - (719) (6)
Noninterest income (excluding
securities & asset gains) 71,675 59,324 46,855
Noninterest expense 121,242 109,967 89,031
Income before income taxes 113,712 103,924 91,343
Income taxes 36,242 33,069 27,977
Net income 77,470 70,855 63,366
Taxable equivalent adjustment 6,222 6,342 6,395
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 0.60 $ 0.57 $ 0.58
Diluted 0.59 0.57 0.57
Dividends 0.2500 0.2500 0.2500
Market Value:
High $ 33.50 $ 34.85 $ 32.19
Low 30.60 32.08 28.81
Close 31.23 33.23 32.07
Book value 15.61 15.55 13.18
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin 3.68% 3.74% 3.76%
Return on average assets 1.54 1.49 1.60
Return on average equity 15.52 15.46 17.76
Return on tangible average
equity (2) 24.13 22.47 21.69
Efficiency ratio (3) 49.73 49.07 47.75
Effective tax rate 31.87 31.82 30.63
Dividend payout ratio (4) 41.67 43.86 43.10
----------------------------------------------------------------------
Average Balances
Assets $20,467,698 $18,956,445 $15,730,451
Earning assets 18,756,555 17,437,618 14,688,914
Interest-bearing liabilities 16,139,002 14,761,878 12,381,407
Loans 13,977,621 12,858,394 10,708,701
Deposits 12,359,040 11,658,646 9,621,557
Stockholders' equity 2,024,265 1,822,715 1,419,600
Stockholders' equity / assets 9.89% 9.62% 9.02%
----------------------------------------------------------------------
At Period End
Assets $20,502,442 $20,520,136 $16,135,761
Loans 13,923,196 13,881,887 10,830,627
Allowance for loan losses 189,917 189,762 175,007
Goodwill 679,993 679,993 232,564
Mortgage servicing rights, net 78,182 76,247 45,555
Other intangible assets 41,199 43,193 24,308
Deposits 12,193,904 12,786,239 9,677,273
Stockholders' equity 2,025,071 2,017,419 1,453,465
Stockholders' equity / assets 9.88% 9.83% 9.01%
Shares outstanding, end of
period 129,697 129,770 110,281
Shares repurchased during
period 411 376 -
Average per share cost of
shares repurchased during
period $ 32.76 $ 33.25 $ -
Year-to-date shares repurchased
during period 411 1,073 697
YTD average per share cost of
shares repurchased during
period $ 32.76 $ 30.43 $ 28.91
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 5,132 4,746 3,979
Trust assets under management,
at market value $ 4,700,000 $ 4,600,000 $ 4,400,000
Mortgage loans originated for
sale 337,406 427,951 253,917
Portfolio serviced for others 9,528,000 9,543,000 6,011,000
Mortgage servicing rights,
net / Portfolio serviced for
others 0.82% 0.80% 0.76%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except 2nd Qtr 1st Qtr
per share & full time 2004 2004
equivalent employee data)
----------------------------------------------------------------------
Summary of Operations
Net interest income 131,879 129,075
Provision for loan losses 5,889 5,176
Asset sale gains (losses), net 218 222
Investment securities gains
(losses), net (569) 1,931
Noninterest income (excluding
securities & asset gains) 58,216 44,034
Noninterest expense 91,987 86,884
Income before income taxes 91,868 83,202
Income taxes 27,363 23,642
Net income 64,505 59,560
Taxable equivalent adjustment 6,387 6,404
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 0.59 $ 0.54
Diluted 0.58 0.53
Dividends 0.2500 0.2267
Market Value:
High $ 30.13 $ 30.37
Low 27.09 28.08
Close 29.63 29.86
Book value 12.53 12.67
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin 3.80% 3.80%
Return on average assets 1.67 1.57
Return on average equity 18.87 17.37
Return on tangible average equity (2) 23.15 21.13
Efficiency ratio (3) 46.82 48.40
Effective tax rate 29.78 28.42
Dividend payout ratio (4) 42.37 41.98
----------------------------------------------------------------------
Average Balances
Assets $15,498,005 $15,261,277
Earning assets 14,480,701 14,185,569
Interest-bearing liabilities 12,231,733 12,083,003
Loans 10,685,542 10,433,411
Deposits 9,701,945 9,585,074
Stockholders' equity 1,374,632 1,378,804
Stockholders' equity / assets 8.87% 9.03%
----------------------------------------------------------------------
At Period End
Assets $15,502,556 $15,510,868
Loans 10,556,603 10,486,610
Allowance for loan losses 177,980 177,717
Goodwill 232,528 224,388
Mortgage servicing rights, net 48,735 39,649
Other intangible assets 25,242 20,250
Deposits 9,583,592 9,702,758
Stockholders' equity 1,378,894 1,395,293
Stockholders' equity / assets 8.89% 9.00%
Shares outstanding, end of period 110,048 110,168
Shares repurchased during period 205 492
Average per share cost of shares
repurchased during period $ 27.93 $ 29.32
Year-to-date shares repurchased
during period 697 492
YTD average per share cost of
shares repurchased during period $ 28.91 $ 29.32
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,010 4,024
Trust assets under management, at
market value $4,300,000 $4,300,000
Mortgage loans originated for
sale 579,020 359,791
Portfolio serviced for others 6,010,000 5,904,000
Mortgage servicing rights,
net / Portfolio serviced for others 0.81% 0.67%
----------------------------------------------------------------------
(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.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp Three months ended
March 31,
---------------------------
(in thousands) 2005 2004 % Change
----------------------------------------- --------- ------------------
Allowance for Loan Losses
Beginning balance $189,762 $177,622 6.8%
Provision for loan losses 2,327 5,176 (55.0%)
Charge offs (5,683) (6,062) (6.3%)
Recoveries 3,511 981 257.9%
--------- ---------
Net charge offs (2,172) (5,081) (57.3%)
--------- ---------
Ending Balance $189,917 $177,717 6.9%
========= =========
----------------------------------------------------------------------
Credit Quality 1Q05 vs
4Q04
Mar 31, 2005Dec 31, 2004 % Change
------------- ------------ ---------
Nonaccrual loans $ 99,835 $ 112,761 (11.5%)
Loans 90 or more days past due
and still accruing 3,068 2,153 42.5%
Restructured loans 36 37 (2.7%)
------------- ------------
Total nonperforming loans 102,939 114,951 (10.4%)
Other real estate owned 4,019 3,915 2.7%
------------- ------------
Total nonperforming assets 106,958 118,866 (10.0%)
============= ============
Provision for loan losses 2,327 3,603 (35.4%)
Net charge offs 2,172 3,598 (39.6%)
Allowance for loan losses / loans 1.36% 1.37%
Allowance for loan losses /
nonperforming loans 184.49 165.08
Nonperforming loans / total loans 0.74 0.83
Nonperforming assets / total
assets 0.52 0.58
Net charge offs / average loans
(annualized) 0.06 0.11
Year-to-date net charge offs /
average loans 0.06 0.15
Credit Quality
1Q05 vs
Sept 30, June 30, Mar 31, 1Q04
2004 2004 2004 % Change
-------- -------- -------- ---------
Nonaccrual loans $81,124 $80,622 $88,313 13.0%
Loans 90 or more days past due
and still accruing 10,309 5,207 5,258 (41.7%)
Restructured loans 39 40 42 (14.3%)
-------- -------- --------
Total nonperforming loans 91,472 85,869 93,613 10.0%
Other real estate owned 4,526 6,613 7,199 (44.2%)
-------- -------- --------
Total nonperforming assets 95,998 92,482 100,812 6.1%
======== ======== ========
Provision for loan losses - 5,889 5,176 (55.0%)
Net charge offs 2,973 5,626 5,081 (57.3%)
Allowance for loan losses / loans 1.62% 1.69% 1.69%
Allowance for loan losses /
nonperforming loans 191.32 207.27 189.84
Nonperforming loans / total loans 0.84 0.81 0.89
Nonperforming assets / total
assets 0.59 0.60 0.65
Net charge offs / average loans
(annualized) 0.11 0.21 0.20
Year-to-date net charge offs /
average loans 0.17 0.20 0.20
----------------------------------------------------------------------
Period End Loan Composition 1Q05 vs
4Q04
Mar 31, 2005Dec 31, 2004 % Change
------------ ------------ ----------
Commercial, financial &
agricultural $ 2,852,462 $ 2,803,333 1.8%
Real estate - construction 1,569,013 1,459,629 7.5%
Commercial real estate 3,813,465 3,933,131 (3.0%)
Lease financing 50,181 50,718 (1.1%)
------------ ------------
Commercial 8,285,121 8,246,811 0.5%
Home equity (a) 1,744,676 (b) 1,866,485 (6.5%)
Installment 1,048,510 1,054,011 (0.5%)
------------ ------------
Retail 2,793,186 2,920,496 (4.4%)
Residential mortgage 2,844,889 (b) 2,714,580 4.8%
------------ ------------
Total loans $13,923,196 $13,881,887 0.3%
============ ============
Period End Loan Composition
1Q05 vs
Sept 30, June 30, Mar 31, 1Q04
2004 2004 2004 % Change
------------ ------------ ------------ ---------
Commercial, financial
& agricultural $ 2,479,764 $ 2,247,779 $ 2,123,846 34.3%
Real estate -
construction 1,152,990 1,118,284 1,094,597 43.3%
Commercial real
estate 3,242,009 3,292,783 3,368,660 13.2%
Lease financing 49,423 48,979 45,998 9.1%
------------ ------------ ------------
Commercial 6,924,186 6,707,825 6,633,101 24.9%
Home equity (a) 1,290,436 1,231,077 1,204,541 44.8%
Installment 672,806 666,305 679,903 54.2%
------------ ------------ ------------
Retail 1,963,242 1,897,382 1,884,444 48.2%
Residential
mortgage 1,943,199 1,951,396 1,969,065 44.5%
------------ ------------ ------------
Total loans $10,830,627 $10,556,603 $10,486,610 32.8%
============ ============ ============
(a) Home equity includes home equity lines and residential mortgage
junior liens.
(b) At conversion, approximately $150 million of loan balances were
reclassified from home equity to residential mortgage.
----------------------------------------------------------------------
Period End Deposit Composition 1Q05 vs
4Q04
Mar 31, 2005Dec 31, 2004 % Change
------------- ------------ ---------
Demand $ 2,156,592 $ 2,347,611 (8.1%)
Savings 1,137,120 1,116,158 1.9%
Interest-bearing demand 2,485,548 2,854,880 (12.9%)
Money market 2,112,490 2,083,717 1.4%
Brokered CDs 218,111 361,559 (39.7%)
Other time deposits 4,084,043 4,022,314 1.5%
------------- ------------
Total deposits $12,193,904 $12,786,239 (4.6%)
============= ============
Period End Deposit Composition
1Q05 vs
Sept 30, June 30, Mar 31, 1Q04
2004 2004 2004 % Change
----------- ----------- ----------- ---------
Demand $1,867,905 $1,822,716 $1,755,485 22.8%
Savings 936,975 948,755 918,608 23.8%
Interest-bearing demand 2,334,072 2,355,287 2,375,492 4.6%
Money market 1,516,423 1,477,513 1,542,875 36.9%
Brokered CDs 186,326 263,435 230,983 (5.6%)
Other time deposits 2,835,572 2,715,886 2,879,315 41.8%
----------- ----------- -----------
Total deposits $9,677,273 $9,583,592 $9,702,758 25.7%
=========== =========== ===========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Three months ended March 31, 2005
---------------------------------
Interest Average
Average Income / Yield /
(in thousands) Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 8,265,444 $ 115,902 5.61%
Residential mortgage 2,836,893 39,418 5.58
Retail 2,875,284 45,378 6.40
------------------------
Total loans 13,977,621 200,698 5.77
Investments and other 4,778,934 56,672 4.75
------------------------
Total earning assets 18,756,555 257,370 5.51
Other assets, net 1,711,143
------------
Total assets $20,467,698
============
Interest-bearing liabilities:
Savings deposits $ 1,119,263 $ 1,012 0.37%
Interest-bearing demand deposits 2,602,085 6,746 1.05
Money market deposits 2,116,014 7,396 1.42
Time deposits, excluding
Brokered CDs 4,071,934 27,247 2.71
------------------------
Total interest-bearing deposits,
excluding Brokered CDs 9,909,296 42,401 1.74
Brokered CDs 318,529 2,032 2.59
------------------------
Total interest-bearing deposits 10,227,825 44,433 1.76
Wholesale funding 5,911,177 40,807 2.76
------------------------
Total interest-bearing liabilities 16,139,002 85,240 2.13
Noninterest-bearing demand 2,131,215
Other liabilities 173,216
Stockholders' equity 2,024,265
------------
Total liabilities and
stockholders' equity $20,467,698
============
-----------
Net interest income and
rate spread (1) $ 172,130 3.38%
===========
Net interest margin (1) 3.68%
Taxable equivalent adjustment $ 6,222
===========
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Three months ended March 31, 2004
---------------------------------
Interest Average
Average Income / Yield /
(in thousands) Balance Expense Rate
----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,532,215 $ 79,787 4.83%
Residential mortgage 2,041,383 29,109 5.71
Retail 1,859,813 26,619 5.75
------------------------
Total loans 10,433,411 135,515 5.17
Investments and other 3,752,158 47,435 5.06
------------------------
Total earning assets 14,185,569 182,950 5.14
Other assets, net 1,075,708
------------
Total assets $15,261,277
============
Interest-bearing liabilities:
Savings deposits $ 898,526 $ 841 0.38%
Interest-bearing demand deposits 2,364,013 4,700 0.80
Money market deposits 1,577,010 3,163 0.81
Time deposits, excluding
Brokered CDs 2,937,071 18,412 2.52
------------------------
Total interest-bearing deposits,
excluding Brokered CDs 7,776,620 27,116 1.40
Brokered CDs 144,345 438 1.22
------------------------
Total interest-bearing deposits 7,920,965 27,554 1.40
Wholesale funding 4,162,038 19,917 1.90
------------------------
Total interest-bearing liabilities 12,083,003 47,471 1.57
Noninterest-bearing demand 1,664,109
Other liabilities 135,361
Stockholders' equity 1,378,804
------------
Total liabilities and stockholders'
equity $15,261,277
============
-----------
Net interest income and
rate spread (1) $ 135,479 3.57%
===========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $ 6,404
===========
----------------------------------------------------------------------
(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