GREEN BAY, Wis.--(BUSINESS WIRE)--Jan. 20, 2005--Associated
Banc-Corp (Nasdaq:ASBC) earned $2.25 per diluted share in 2004, up 10
percent from 2003. Net income for 2004 was $258.3 million, up 13
percent from $228.7 million in 2003.
Associated's acquisition of First Federal Capital Corp. on Oct.
29, 2004, affects comparisons to past periods, adding the balance
sheet of a $4 billion thrift and two months of operations in 2004.
Additionally, the acquisitions of Jabas Group, Inc., an employee
benefits firm, on April 1, 2004, and of CFG Insurance Services, Inc.,
on April 1, 2003, also affect the comparison of retail commission
income and noninterest expenses.
Net income for the fourth quarter of 2004 was $70.9 million, up 27
percent from $55.6 million in the fourth quarter of 2003. Fourth
quarter earnings per diluted share were 57 cents, up 14 percent from
the 50 cents per diluted share earned in the fourth quarter of 2003.
Return on average assets (ROA) and equity (ROE) for 2004 were 1.58
percent and 17.22 percent, respectively. This compares to ROA of 1.53
percent and ROE of 17.58 percent in 2003. Book value per share rose to
$15.55 as of Dec. 31, 2004, up 27 percent compared to a year earlier.
Return on average tangible equity (which is a non-GAAP measure
that excludes the average of goodwill and other intangible assets from
average equity) was 22.11 percent for 2004 compared to 21.56 percent
for 2003.
"We are pleased with our results in 2004, both organizationally
and in terms of EPS growth, which is in line with our long-term goal,"
said Paul S. Beideman, president and CEO of Associated Banc-Corp. "We
have made investments in our people to improve customer service. We
continue to make progress on our strategy to diversify revenue by
optimizing performance across our businesses. In 2004 we overcame the
industry-wide decline in mortgage banking revenue relative to 2003,
and posted our seventh consecutive year of record earnings," Beideman
said.
Associated's net interest income for 2004, which includes two
months' contribution from First Federal, was $552.6 million, up 8
percent from 2003's $510.8 million. Net interest margin for 2004 was
3.80 percent, compared to 3.84 percent for 2003.
For the fourth quarter of 2004 the net interest margin was 3.74
percent versus 3.81 percent for the comparable quarter of 2003, and
down 2 basis points from the third quarter of 2004. While the Federal
Reserve raised rates five times since mid-year 2004, the longer-term
rates have increased at a slower pace. This flattening of the yield
curve put downward pressure on the margin especially in the second
half of 2004.
Period end loans at Dec. 31, 2004 were $13.9 billion, up 35
percent over year-end 2003. Excluding First Federal, total loans grew
8 percent, despite residential mortgage loans declining 2 percent.
Commercial loans and home equity were strategically emphasized in 2004
and, excluding First Federal, grew 11 percent and 22 percent,
respectively, between year-end 2004 and 2003, with strong momentum in
the second half of the year.
The mix of loans at Dec. 31, 2004, including First Federal, was 59
percent commercial (versus 63 percent last year), 20 percent
residential mortgage (versus 19 percent last year), 13 percent home
equity (compared to 11 percent) and 8 percent installment loans
(versus 7 percent last year).
Period end deposits at year-end 2004 were $12.8 billion, up 31
percent over the prior year end, with minimal shift in deposit mix.
Excluding First Federal, deposits grew 3 percent.
In 2004 net charge-offs were $17.3 million or 0.15 percent of
average loans, as compared to $31.7 million or 0.30 percent of average
loans for 2003. Nonperforming loans at Dec. 31, 2004 were $115.0
million or 0.83 percent of loans, as compared to $121.5 million or
1.18 percent of loans a year ago. The provision for loan losses for
2004 was $14.7 million, compared to $46.8 million for 2003. The
provision for loan losses was reduced given improved asset quality
trends and the favorable resolution of problem credits in 2004.
The allowance for loan losses was $189.8 million, or 1.37 percent
of total loans at Dec. 31, 2004, and covered 165 percent of
nonperforming loans. At Dec. 31, 2003 the allowance was $177.6
million, or 1.73 percent of total loans, and covered 146 percent of
nonperforming loans.
The comparison of noninterest income between 2004 and 2003 was
affected by significantly less net mortgage banking income (down $33.2
million or 62 percent between 2004 and 2003). Secondary mortgage
production was $1.6 billion for 2004, down 62 percent compared to
2003, influencing a $46.0 million or 55 percent decline in gross
mortgage banking income between the years. Netted against gross
mortgage banking income is mortgage servicing rights expense which was
down $12.8 million. The favorable change to this expense was due to
slower loan prepayment speeds in 2004, a key valuation factor,
increasing the recorded value of the mortgage servicing asset and
requiring less valuation reserve. At Dec. 31, 2004, the net mortgage
servicing rights asset represented 0.80 percent of the $9.5 billion
mortgage portfolio serviced for others.
Noninterest income excluding net mortgage banking income was
$189.9 million for 2004, up $26.5 million, or 16 percent, compared to
$163.4 million for 2003. Retail commissions of $47.2 million led the
increase, up $21.6 million compared to last year, predominantly from
both organic and acquired growth in insurance revenues. Service
charges on deposits of $56.2 million were up $5.8 million (12
percent), aided by fee increases in early 2004 and the addition of
First Federal. Trust income of $31.8 million and credit card and other
nondeposit fees of $26.2 million also grew, up $2.2 million (7
percent) and $2.5 million (11 percent), respectively, over last year.
Included in net investment securities losses for fourth quarter
2004 was an other-than-temporary impairment charge of $2.2 million
taken on Associated's holdings of FHLMC preferred stock securities
(bringing their carrying value to $8.4 million), offset partially by
gains on sales of Sallie Mae stock of $1.5 million.
Noninterest expenses were a critical focus during 2004 and
remained well-controlled, rising $18.8 million or 5 percent
year-over-year to $377.9 million, including the CFG, Jabas and First
Federal acquisitions. Excluding only First Federal, noninterest
expense for 2004 would have been approximately $359 million, unchanged
from last year.
"Associated is well-positioned for sustained growth, through our
diverse revenue sources. We now have the opportunity to leverage our
increased distribution capacity as a result of the acquisition of
First Federal. We are on track to consolidate the First Federal
operating systems in February," Beideman said.
He added, "We are confident that we can meet or exceed consensus
earnings estimates for 2005, assuming a stable or growing economy.
Positive loan growth momentum and anticipated rate increases by the
Federal Reserve with a steepening of the yield curve are expected to
improve net interest income. Full year contributions in 2005 from the
Jabas and First Federal acquisitions will enhance the bottom line. We
also expect to realize further cost efficiencies following our first
quarter 2005 integration of First Federal into Associated."
The company paid dividends of 98 cents per share in 2004, up from
89 cents in 2003, making 2004 Associated's 34th consecutive year of
increasing dividends.
Associated repurchased approximately 1.1 million shares of its
common stock in 2004 at an average cost of $30.43 per share during
2004, compared to 3.1 million shares at $24.11 average cost per share
during 2003. Associated starts 2005 with authorizations to repurchase
approximately 6 million shares.
Associated will host a conference call for investors and analysts
at 3 p.m. CST 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 3275588. A taped play-back of the
call will be available through Feb. 3 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 150 communities in Wisconsin, Illinois, and Minnesota. The
company offers a full range of traditional banking services and a
variety of other financial products and services. More information
about Associated Banc-Corp is available at www.AssociatedBank.com.
Statements made in this document that are not purely historical
are forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995. This includes any statements regarding
management's plans, objectives, or goals for future operations,
products or services, and forecasts of its revenues, earnings, or
other measures of performance. Forward-looking statements are based on
current management expectations and, by their nature, are subject to
risks and uncertainties. These statements may be identified by the use
of words such as "believe," "expect," "anticipate," "plan,"
"estimate," "should," "will," "intend," or similar expressions.
Outcomes related to such statements are subject to numerous risk
factors and uncertainties including those listed in the company's
Annual Report to be filed on Form 10-K.
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpDecember 31, December 31,
(in thousands) 2004 2003 % Change
----------------------------------------------------------- ---------
Assets
Cash and due from banks $ 389,311 $ 389,140 0.0%
Interest-bearing deposits in
other financial institutions 13,321 7,434 79.2%
Federal funds sold and securities
purchased under agreements
to resell 55,440 3,290 1585.1%
Securities available for sale, at
fair value 4,815,344 3,773,784 27.6%
Loans held for sale 64,964 104,336 (37.7%)
Loans 13,881,887 10,291,810 34.9%
Allowance for loan losses (189,762) (177,622) 6.8%
------------ ------------
Loans, net 13,692,125 10,114,188 35.4%
Premises and equipment 184,944 131,315 40.8%
Goodwill 685,378 224,388 205.4%
Intangible assets 119,440 63,509 88.1%
Other assets 499,869 436,510 14.5%
------------ ------------
Total assets $20,520,136 $15,247,894 34.6%
============ ============
Liabilities and
Stockholders' Equity
Noninterest-bearing deposits $ 2,347,611 $ 1,814,446 29.4%
Interest-bearing deposits,
excluding Brokered CDs 10,077,069 7,813,267 29.0%
Brokered CDs 361,559 165,130 119.0%
------------ ------------
Total deposits 12,786,239 9,792,843 30.6%
Short-term borrowings 2,926,716 1,928,876 51.7%
Long-term funding 2,604,540 2,034,160 28.0%
Accrued expenses and other
liabilities 185,222 143,588 29.0%
------------ ------------
Total liabilities 18,502,717 13,899,467 33.1%
Stockholders' Equity
Preferred stock - -
Common stock 1,300 734 77.1%
Surplus 1,127,205 575,975 95.7%
Retained earnings 858,847 724,356 18.6%
Accumulated other comprehensive
income 41,205 52,089 (20.9%)
Deferred compensation (2,122) (1,981) 7.1%
Treasury stock, at cost (9,016) (2,746) 228.3%
------------ ------------
Total stockholders' equity 2,017,419 1,348,427 49.6%
------------ ------------
Total liabilities and
stockholders' equity $20,520,136 $15,247,894 34.6%
============ ============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three For The Year
Months Ended, Ended,
December 31, December 31,
------------------- -------------------
(in thousands, except
per share amounts) % %
2004 2003 Change 2004 2003 Change
----------------------------------------------------------------------
Interest Income
Interest and
fees on loans $179,612 $137,289 30.8% $594,702 $578,816 2.7%
Interest and
dividends on
investment
securities
and deposits
with other
financial
institutions
Taxable 37,631 29,194 28.9% 131,020 108,624 20.6%
Tax-exempt 10,047 9,939 1.1% 40,804 39,761 2.6%
Interest on
federal funds
sold and
securities
purchased under
agreements to
resell 260 36 622.2% 596 163 265.6%
--------- --------- --------- ---------
Total interest
income 227,550 176,458 29.0% 767,122 727,364 5.5%
Interest Expense
Interest on
deposits 36,835 29,247 25.9% 118,236 123,122 (4.0%)
Interest on
short-term
borrowings 14,898 5,390 176.4% 38,940 29,156 33.6%
Interest on
long-term
funding 17,360 14,684 18.2% 57,319 64,324 (10.9%)
--------- --------- --------- ---------
Total interest
expense 69,093 49,321 40.1% 214,495 216,602 (1.0%)
--------- --------- --------- ---------
Net Interest
Income 158,457 127,137 24.6% 552,627 510,762 8.2%
Provision for
loan losses 3,603 9,603 (62.5%) 14,668 46,813 (68.7%)
--------- --------- --------- ---------
Net interest
income after
provision for
loan losses 154,854 117,534 31.8% 537,959 463,949 16.0%
Noninterest Income
Trust service fees 8,107 8,150 (0.5%) 31,791 29,577 7.5%
Service charges
on deposit
accounts 16,943 12,735 33.0% 56,153 50,346 11.5%
Mortgage banking,
net 6,045 9,018 (33.0%) 20,331 53,484 (62.0%)
Credit card and
other nondeposit
fees 8,183 5,646 44.9% 26,181 23,669 10.6%
Retail
commissions 12,727 8,031 58.5% 47,171 25,571 84.5%
Bank owned life
insurance
income 2,525 3,417 (26.1%) 13,101 13,790 (5.0%)
Asset sale
gains, net 432 1,366 (68.4%) 1,181 1,569 (24.7%)
Investment
securities gains
(losses), net (719) - N/M 637 702 (9.3%)
Other 4,793 3,379 41.8% 13,701 18,174 (24.6%)
--------- --------- --------- ---------
Total
noninterest
income 59,036 51,742 14.1% 210,247 216,882 (3.1%)
Noninterest Expense
Personnel
expense 65,193 54,391 19.9% 224,548 208,040 7.9%
Occupancy 8,297 6,710 23.7% 29,572 28,077 5.3%
Equipment 3,855 3,206 20.2% 12,754 12,818 (0.5%)
Data processing 5,966 5,731 4.1% 23,632 23,273 1.5%
Business
development and
advertising 4,271 4,165 2.5% 14,975 15,194 (1.4%)
Stationery and
supplies 1,567 1,741 (10.0%) 5,436 6,705 (18.9%)
Other intangible
amortization 1,699 870 95.3% 4,350 2,961 46.9%
Loan expense 2,328 1,446 61.0% 6,536 7,550 (13.4%)
Other 16,791 15,125 11.0% 56,066 54,497 2.9%
--------- --------- --------- ---------
Total
noninterest
expense 109,967 93,385 17.8% 377,869 359,115 5.2%
--------- --------- --------- ---------
Income before
income taxes 103,923 75,891 36.9% 370,337 321,716 15.1%
Income tax
expense 33,069 20,282 63.0% 112,051 93,059 20.4%
--------- --------- --------- ---------
Net Income $ 70,854 $ 55,609 27.4% $258,286 $228,657 13.0%
========= ========= ========= =========
Earnings Per Share:
Basic $ 0.57 $ 0.51 11.8% $ 2.28 $ 2.07 10.1%
Diluted $ 0.57 $ 0.50 14.0% $ 2.25 $ 2.05 9.8%
Average Shares
Outstanding:
Basic 123,509 109,965 12.3% 113,532 110,617 2.6%
Diluted 125,296 111,499 12.4% 115,025 111,761 2.9%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except
per share amounts) 4Q04 3Q04 2Q04 1Q04 4Q03
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $179,612 $142,389 $137,449 $135,252 $137,289
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 37,631 31,590 30,767 31,032 29,194
Tax-exempt 10,047 10,255 10,267 10,235 9,939
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 260 241 68 27 36
--------- --------- --------- --------- ---------
Total interest
income 227,550 184,475 178,551 176,546 176,458
Interest Expense
Interest on deposits 36,835 27,191 26,656 27,554 29,247
Interest on short-term
borrowings 14,898 10,262 7,241 6,539 5,390
Interest on long-term
funding 17,360 13,806 12,775 13,378 14,684
--------- --------- --------- --------- ---------
Total interest
expense 69,093 51,259 46,672 47,471 49,321
--------- --------- --------- --------- ---------
Net Interest Income 158,457 133,216 131,879 129,075 127,137
Provision for loan
losses 3,603 - 5,889 5,176 9,603
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 154,854 133,216 125,990 123,899 117,534
Noninterest Income
Trust service fees 8,107 7,773 8,043 7,868 8,150
Service charges on
deposit accounts 16,943 13,672 13,141 12,397 12,735
Mortgage banking, net 6,045 619 11,414 2,253 9,018
Credit card and
other nondeposit
fees 8,183 6,253 6,074 5,671 5,646
Retail commissions 12,727 11,925 13,162 9,357 8,031
Bank owned life
insurance income 2,525 3,580 3,641 3,355 3,417
Asset sale gains, net 432 309 218 222 1,366
Investment
securities gains
(losses), net (719) (6) (569) 1,931 -
Other 4,793 3,034 2,742 3,132 3,379
--------- --------- --------- --------- ---------
Total
noninterest
income 59,036 47,159 57,866 46,186 51,742
Noninterest Expense
Personnel expense 65,193 53,467 53,612 52,276 54,391
Occupancy 8,297 6,939 6,864 7,472 6,710
Equipment 3,855 3,022 2,878 2,999 3,206
Data processing 5,966 5,865 6,128 5,673 5,731
Business development
and advertising 4,271 3,990 4,057 2,657 4,165
Stationery and
supplies 1,567 1,214 1,429 1,226 1,741
Other intangible
amortization 1,699 935 934 782 870
Loan expense 2,328 1,152 1,670 1,386 1,446
Other 16,791 12,447 14,415 12,413 15,125
--------- --------- --------- --------- ---------
Total
noninterest
expense 109,967 89,031 91,987 86,884 93,385
--------- --------- --------- --------- ---------
Income before income
taxes 103,923 91,344 91,869 83,201 75,891
Income tax expense 33,069 27,977 27,363 23,642 20,282
--------- --------- --------- --------- ---------
Net Income $ 70,854 $ 63,367 $ 64,506 $ 59,559 $ 55,609
========= ========= ========= ========= =========
Earnings Per Share:
Basic $ 0.57 $ 0.58 $ 0.59 $ 0.54 $ 0.51
Diluted $ 0.57 $ 0.57 $ 0.58 $ 0.53 $ 0.50
Average Shares
Outstanding:
Basic 123,509 110,137 110,116 110,294 109,965
Diluted 125,296 111,699 111,520 111,830 111,499
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except
per share & full
time equivalent
employee data) YTD 2004 YTD 2003 4th Qtr 2004 3rd Qtr 2004
----------------------------------------------------------------------
Summary of Operations
Net interest
income 552,627 510,762 158,457 133,216
Provision for
loan losses 14,668 46,813 3,603 -
Asset sale
gains, net 1,181 1,569 432 309
Investment
securities
gains (losses),
net 637 702 (719) (6)
Noninterest income
(excluding
securities &
asset gains) 208,429 214,611 59,323 46,856
Noninterest
expense 377,869 359,115 109,967 89,031
Income before
income taxes 370,337 321,716 103,923 91,344
Income taxes 112,051 93,059 33,069 27,977
Net income 258,286 228,657 70,854 63,367
Taxable equivalent
adjustment 25,528 24,903 6,342 6,395
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 2.28 $ 2.07 $ 0.57 $ 0.58
Diluted 2.25 2.05 0.57 0.57
Dividends 0.9767 0.8867 0.2500 0.2500
Market Value:
High $ 34.85 $ 28.75 $ 34.85 $ 32.19
Low 27.09 21.43 32.08 28.81
Close 33.23 28.53 33.23 32.07
Book value 15.55 12.26 15.55 13.18
----------------------------------------------------------------------
Performance Ratios
(annualized)
Net interest margin 3.80% 3.84% 3.74% 3.76%
Return on average
assets 1.58 1.53 1.49 1.60
Return on average
equity 17.22 17.58 15.46 17.76
Return on tangible
average equity (2) 22.11 21.56
Efficiency ratio (3) 48.04 47.86 49.07 47.75
Effective tax rate 30.26 28.93 31.82 30.63
Dividend payout
ratio (4) 42.84 42.83 43.86 43.10
----------------------------------------------------------------------
Average Balances
Assets $16,365,762 $14,969,860 $18,956,445 $15,730,451
Earning assets 15,202,892 13,946,832 17,437,476 14,688,914
Interest-bearing
liabilities 12,868,370 11,855,236 14,761,878 12,381,407
Loans 11,174,856 10,622,499 12,858,394 10,708,701
Deposits 10,144,528 9,299,506 11,658,646 9,621,557
Stockholders'
equity 1,499,606 1,300,990 1,822,715 1,419,600
Stockholders'
equity / assets 9.16% 8.69% 9.62% 9.02%
Goodwill and
other intangible
assets $ 331,638 $ 240,445
----------------------------------------------------------------------
At Period End
Assets $20,520,136 $16,135,761
Loans 13,881,887 10,830,627
Allowance for
loan losses 189,762 175,007
Goodwill 685,378 232,564
Mortgage
servicing
rights, net 76,247 45,555
Other intangible
assets 43,193 24,308
Deposits 12,786,239 9,677,273
Stockholders'
equity 2,017,419 1,453,465
Stockholders'
equity / assets 9.83% 9.01%
Shares outstanding,
end of period 129,770 110,281
Shares repurchased
during period 376 -
Average per share
cost of shares
repurchased
during period $ 33.25 $ -
Year-to-date
shares repurchased
during period 1,073 697
YTD average per
share cost of
shares repurchased
during period $ 30.43 $ 28.91
----------------------------------------------------------------------
Selected trend information
Average full time
equivalent employees 4,746 3,979
Trust assets under
management, at
market value $4,600,000 $4,400,000
Mortgage loans
originated for sale 427,951 253,917
Portfolio serviced for
others 9,543,000 6,011,000
Mortgage servicing
rights, net /
Portfolio
serviced for
others 0.80% 0.76%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except per share
& full time equivalent
employee data) 2nd Qtr 2004 1st Qtr 2004 4th Qtr 2003
----------------------------------------------------------------------
Summary of Operations
Net interest income 131,879 129,075 127,137
Provision for loan losses 5,889 5,176 9,603
Asset sale gains, net 218 222 1,366
Investment securities gains
(losses), net (569) 1,931 -
Noninterest income (excluding
securities & asset gains) 58,217 44,033 50,376
Noninterest expense 91,987 86,884 93,385
Income before income taxes 91,869 83,201 75,891
Income taxes 27,363 23,642 20,282
Net income 64,506 59,559 55,609
Taxable equivalent adjustment 6,387 6,404 6,230
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 0.59 $ 0.54 $ 0.51
Diluted 0.58 0.53 0.50
Dividends 0.2500 0.2267 0.2267
Market Value:
High $ 30.13 $ 30.37 $ 28.75
Low 27.09 28.08 25.87
Close 29.63 29.86 28.53
Book value 12.53 12.67 12.26
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin 3.80% 3.80% 3.81%
Return on average assets 1.67 1.57 1.49
Return on average equity 18.87 17.37 16.85
Efficiency ratio (3) 46.82 48.40 50.82
Effective tax rate 29.78 28.42 26.73
Dividend payout ratio (4) 42.37 41.98 44.44
----------------------------------------------------------------------
Average Balances
Assets $15,498,005 $15,261,277 $14,852,390
Earning assets 14,480,701 14,185,569 13,828,992
Interest-bearing liabilities 12,231,733 12,083,003 11,637,646
Loans 10,685,542 10,433,411 10,354,726
Deposits 9,701,945 9,585,074 9,679,789
Stockholders' equity 1,374,632 1,378,804 1,309,167
Stockholders' equity / assets 8.87% 9.03% 8.81%
----------------------------------------------------------------------
At Period End
Assets $15,502,556 $15,510,868 $15,247,894
Loans 10,556,603 10,486,610 10,291,810
Allowance for loan losses 177,980 177,717 177,622
Goodwill 232,528 224,388 224,388
Mortgage servicing rights, net 48,735 39,649 42,477
Other intangible assets 25,242 20,250 21,032
Deposits 9,583,592 9,702,758 9,792,843
Stockholders' equity 1,378,894 1,395,293 1,348,427
Stockholders' equity / assets 8.89% 9.00% 8.84%
Shares outstanding, end of
period 110,048 110,168 109,966
Shares repurchased during
period 205 492 212
Average per share cost of
shares repurchased during
period $ 27.93 $ 29.32 $ 28.18
Year-to-date shares repurchased
during period 697 492 3,091
YTD average per share cost of
shares repurchased during
period $ 28.91 $ 29.32 $ 24.11
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,010 4,024 4,098
Trust assets under management,
at market value $4,300,000 $4,300,000 $4,100,000
Mortgage loans originated for
sale 579,020 359,791 524,118
Portfolio serviced for others 6,010,000 5,904,000 5,928,000
Mortgage servicing rights,
net / Portfolio serviced for
others 0.81% 0.67% 0.72%
----------------------------------------------------------------------
(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
December 31,
-----------------------------
(in thousands) 2004 2003 % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $175,007 $176,223 (0.7%)
Balance related to acquisition 14,750 - N/M
Provision for loan losses 3,603 9,603 (62.5%)
Charge offs (5,710) (10,476) (45.5%)
Recoveries 2,112 2,272 (7.0%)
-------------------
Net charge offs (3,598) (8,204) (56.1%)
-------------------
Ending Balance $189,762 $177,622 6.8%
===================
Year ended
December 31,
-----------------------------
(in thousands) 2004 2003 % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $177,622 $162,541 9.3%
Balance related to acquisition 14,750 - N/M
Provision for loan losses 14,668 46,813 (68.7%)
Charge offs (22,202) (37,107) (40.2%)
Recoveries 4,924 5,375 (8.4%)
-------------------
Net charge offs (17,278) (31,732) (45.6%)
-------------------
Ending Balance $189,762 $177,622 6.8%
===================
----------------------------------------------------------------------
Credit Quality
4Q04
Dec 31, Sept 30, vs 3Q04
2004 2004 % Change
-----------------------------
Nonaccrual loans $112,761 $81,124 39.0%
Loans 90 or more days past due and
still accruing 2,153 10,309 (79.1%)
Restructured loans 37 39 (5.1%)
-------------------
Total nonperforming loans 114,951 91,472 25.7%
Other real estate owned 3,915 4,526 (13.5%)
-------------------
Total nonperforming assets 118,866 95,998 23.8%
===================
Provision for loan losses 3,603 - N/M
Net charge offs 3,598 2,973 21.0%
Allowance for loan losses / loans 1.37% 1.62%
Allowance for loan losses /
nonperforming loans 165.08 191.32
Nonperforming loans / total loans 0.83 0.84
Nonperforming assets / total assets 0.58 0.59
Net charge offs / average loans
(annualized) 0.11 0.11
Year-to-date net charge offs / average
loans 0.15 0.17
4Q04
June 30, Mar 31, Dec 31, vs 4Q03
2004 2004 2003 % Change
----------------------------------------
Nonaccrual loans $80,622 $88,313 $113,944 (1.0%)
Loans 90 or more days past
due and still accruing 5,207 5,258 7,495 (71.3%)
Restructured loans 40 42 43 (14.0%)
-----------------------------
Total nonperforming loans 85,869 93,613 121,482 (5.4%)
Other real estate owned 6,613 7,199 5,457 (28.3%)
-----------------------------
Total nonperforming
assets 92,482 100,812 126,939 (6.4%)
=============================
Provision for loan losses 5,889 5,176 9,603 (62.5%)
Net charge offs 5,626 5,081 8,204 (56.1%)
Allowance for loan losses /
loans 1.69% 1.69% 1.73%
Allowance for loan losses /
nonperforming loans 207.27 189.84 146.21
Nonperforming loans / total
loans 0.81 0.89 1.18
Nonperforming assets / total
assets 0.60 0.65 0.83
Net charge offs / average
loans (annualized) 0.21 0.20 0.31
Year-to-date net charge offs /
average loans 0.20 0.20 0.30
----------------------------------------------------------------------
Period End Loan Composition
4Q04
Dec 31, Sept 30, vs 3Q04
2004 2004 % Change
------------------------------------
Commercial, financial &
agricultural $2,803,333 $2,479,764 13.0%
Real estate - construction 1,459,629 1,152,990 26.6%
Commercial real estate 3,933,131 3,242,009 21.3%
Lease financing 50,718 49,423 2.6%
------------ ------------
Commercial 8,246,811 6,924,186 19.1%
Residential mortgage 2,714,580 1,943,199 39.7%
Home equity (1) 1,866,485 1,290,436 44.6%
Installment 1,054,011 672,806 56.7%
------------ ------------
Retail 2,920,496 1,963,242 48.8%
------------ ------------
Total loans $13,881,887 $10,830,627 28.2%
============ ============
Period End Loan Composition
4Q04
June 30, Mar 31, Dec 31, vs 4Q03
2004 2004 2003 % Change
------------------------------------------------
Commercial, financial
& agricultural $2,247,779 $2,123,846 $2,116,463 32.5%
Real estate -
construction 1,118,284 1,094,597 1,077,731 35.4%
Commercial real estate 3,292,783 3,368,660 3,246,954 21.1%
Lease financing 48,979 45,998 38,968 30.2%
--------------------------------------
Commercial 6,707,825 6,633,101 6,480,116 27.3%
Residential
mortgage 1,951,396 1,969,065 1,975,661 37.4%
Home equity (1) 1,231,077 1,204,541 1,138,311 64.0%
Installment 666,305 679,903 697,722 51.1%
--------------------------------------
Retail 1,897,382 1,884,444 1,836,033 59.1%
--------------------------------------
Total loans $10,556,603 $10,486,610 $10,291,810 34.9%
======================================
(1) Home equity includes home equity lines and residential mortgage
junior liens.
----------------------------------------------------------------------
Period End Deposit Composition
4Q04
Dec 31, Sept 30, vs 3Q04
2004 2004 % Change
-----------------------------------
Demand $2,347,611 $1,867,905 25.7%
Savings 1,116,158 936,975 19.1%
Interest-bearing demand 2,854,880 2,334,072 22.3%
Money market 2,083,717 1,516,423 37.4%
Brokered CDs 361,559 186,326 94.0%
Other time deposits 4,022,314 2,835,572 41.9%
------------------------
Total deposits $12,786,239 $9,677,273 32.1%
========================
Period End Deposit
Composition 4Q04
June 30, Mar 31, Dec 31, vs 4Q03
2004 2004 2003 % Change
---------------------------------------------
Demand $1,822,716 $1,755,485 $1,814,446 29.4%
Savings 948,755 918,608 890,092 25.4%
Interest-bearing demand 2,355,287 2,375,492 2,330,478 22.5%
Money market 1,477,513 1,542,875 1,573,678 32.4%
Brokered CDs 263,435 230,983 165,130 119.0%
Other time deposits 2,715,886 2,879,315 3,019,019 33.2%
-----------------------------------
Total deposits $9,583,592 $9,702,758 $9,792,843 30.6%
===================================
N/M - Not meaningful.
----------------------------------------------------------------------
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Year ended December 31, 2004
-----------------------------------
Average Interest Average
(in thousands) Balance Income / Yield /
Expense Rate
-----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,928,494 $ 350,889 5.06%
Residential mortgage 2,170,600 122,453 5.64
Retail 2,075,762 122,406 5.90
-----------------------
Total loans 11,174,856 595,748 5.33
Investments and other 4,028,036 196,902 4.89
-----------------------
Total earning assets 15,202,892 792,650 5.21
Other assets, net 1,162,870
------------
Total assets $16,365,762
============
Interest-bearing liabilities:
Savings deposits $ 967,930 $ 3,487 0.36%
Interest-bearing demand deposits 2,406,280 19,874 0.83
Money market deposits 1,628,208 14,259 0.88
Time deposits, excluding Brokered
CDs 3,042,933 76,930 2.53
-----------------------
Total interest-bearing deposits,
excluding Brokered CDs 8,045,351 114,550 1.42
Brokered CDs 232,066 3,686 1.59
-----------------------
Total interest-bearing
deposits 8,277,417 118,236 1.43
Wholesale funding 4,590,953 96,259 2.10
-----------------------
Total interest-bearing liabilities 12,868,370 214,495 1.67
Noninterest-bearing demand 1,867,111
Other liabilities 130,675
Stockholders' equity 1,499,606
------------
Total liabilities and
stockholders' equity $16,365,762
============
----------
Net interest income and rate
spread (1) $ 578,155 3.54%
==========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $ 25,528
==========
Year ended December 31, 2003
-----------------------------------
Average Interest Average
(in thousands) Balance Income / Yield /
Expense Rate
-----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,450,523 $ 329,695 5.11%
Residential mortgage 2,377,438 142,359 5.99
Retail 1,794,538 107,808 6.01
------------ ----------
Total loans 10,622,499 579,862 5.46
Investments and other 3,324,333 172,405 5.19
------------ ----------
Total earning assets 13,946,832 752,267 5.39
Other assets, net 1,023,028
------------
Total assets $14,969,860
============
Interest-bearing liabilities:
Savings deposits $ 928,147 $ 4,875 0.53%
Interest-bearing demand deposits 1,827,304 15,348 0.84
Money market deposits 1,623,438 15,085 0.93
Time deposits, excluding Brokered
CDs 3,063,873 84,957 2.77
-----------------------
Total interest-bearing deposits,
excluding Brokered CDs 7,442,762 120,265 1.62
Brokered CDs 178,853 2,857 1.60
-----------------------
Total interest-bearing
deposits 7,621,615 123,122 1.62
Wholesale funding 4,233,621 93,480 2.21
-----------------------
Total interest-bearing liabilities 11,855,236 216,602 1.83
Noninterest-bearing demand 1,677,891
Other liabilities 135,743
Stockholders' equity 1,300,990
------------
Total liabilities and
stockholders' equity $14,969,860
============
----------
Net interest income and rate
spread (1) $ 535,665 3.56%
==========
Net interest margin (1) 3.84%
Taxable equivalent adjustment $ 24,903
==========
----------------------------------------------------------------------
Three months ended December 31,
2004
-----------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
-----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 7,702,801 $ 104,124 5.29%
Residential mortgage 2,552,396 36,050 5.63
Retail 2,603,197 39,751 6.07
-----------------------
Total loans 12,858,394 179,925 5.52
Investments and other 4,579,082 53,967 4.71
-----------------------
Total earning assets 17,437,476 233,892 5.31
Other assets, net 1,518,969
------------
Total assets $18,956,445
============
Interest-bearing liabilities:
Savings deposits $ 1,087,220 $ 959 0.35%
Interest-bearing demand deposits 2,525,312 5,688 0.90
Money market deposits 1,918,149 5,012 1.04
Time deposits, excluding Brokered
CDs 3,634,972 23,703 2.59
-----------------------
Total interest-bearing
deposits, excluding Brokered
CDs 9,165,653 35,362 1.53
Brokered CDs 278,812 1,473 2.10
-----------------------
Total interest-bearing
deposits 9,444,465 36,835 1.55
Wholesale funding 5,317,413 32,258 2.38
-----------------------
Total interest-bearing liabilities 14,761,878 69,093 1.85
Noninterest-bearing demand 2,214,181
Other liabilities 157,671
Stockholders' equity 1,822,715
------------
Total liabilities and
stockholders' equity $18,956,445
============
----------
Net interest income and rate
spread (1) $164,799 3.46%
==========
Net interest margin (1) 3.74%
Taxable equivalent adjustment $6,342
==========
Three months ended December 31,
2003
-----------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
-----------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,436,734 $80,185 4.88%
Residential mortgage 2,105,442 31,045 5.86
Retail 1,812,550 26,325 5.75
-----------------------
Total loans 10,354,726 137,555 5.23
Investments and other 3,474,266 45,133 5.19
-----------------------
Total earning assets 13,828,992 182,688 5.22
Other assets, net 1,023,398
-------------
Total assets $14,852,390
=============
Interest-bearing liabilities:
Savings deposits $922,336 $878 0.38%
Interest-bearing demand deposits 2,179,546 4,353 0.79
Money market deposits 1,572,197 3,391 0.86
Time deposits, excluding Brokered
CDs 3,067,720 20,132 2.60
-----------------------
Total interest-bearing
deposits, excluding Brokered
CDs 7,741,799 28,754 1.47
Brokered CDs 162,116 493 1.21
-----------------------
Total interest-bearing
deposits 7,903,915 29,247 1.47
Wholesale funding 3,733,731 20,074 2.12
-----------------------
Total interest-bearing liabilities 11,637,646 49,321 1.68
Noninterest-bearing demand 1,775,874
Other liabilities 129,703
Stockholders' equity 1,309,167
-------------
Total liabilities and
stockholders' equity $14,852,390
=============
---------
Net interest income and rate
spread (1) $133,367 3.54%
=========
Net interest margin (1) 3.81%
Taxable equivalent adjustment $6,230
=========
----------------------------------------------------------------------
(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.
Selected Data on First Federal Acquisition
Associated Banc-Corp
On October 29, 2004, the Corporation consummated its acquisition
of First Federal Capital Corp, based in La Crosse, Wisconsin. The
acquisition was accounted for under the purchase method; thus, the
results of operations of First Federal prior to the consummation date
were not included in the accompanying consolidated financial
statements. As of acquisition, First Federal operated a $4 billion
savings bank with over 90 banking locations serving more than 40
communities in Wisconsin, northern Illinois, and southern Minnesota,
building upon and complimenting the Corporation's footprint.
Per the definitive agreement First Federal shareholders received
0.9525 shares (restated for the Corporation's 3-for-2 stock split in
May 2004) of the Corporation's common stock for each share of First
Federal common stock held, an equivalent amount of cash, or a
combination thereof. The Merger Agreement provided that the aggregate
consideration paid by the Corporation for the First Federal
outstanding common stock must be equal to 90% stock and 10% cash, with
the cash consideration based upon the Corporation's closing stock
price on the effective date of the merger. The Corporation's closing
stock price on October 29, 2004 was $34.69 per share. The value of the
common stock consideration was based upon the Corporation's average
market price surrounding the date of signing and announcing the
definitive agreement. Based upon the aforementioned values for the 90%
stock/10% cash, the Corporation issued approximately 19.4 million
shares of common stock (valued at approximately $535 million) and $75
million in cash.
To record the transaction, the Corporation assigned estimated fair
values to the assets acquired and liabilities assumed. The excess cost
of the acquisition over the estimated fair value of the net assets
acquired was allocated to identifiable intangible assets with the
remainder then allocated to goodwill. The following table summarizes
the estimated fair value of the assets acquired and liabilities
assumed of First Federal at the date of the acquisition.
(In millions, except shares issued)
Investment securities available for sale $ 665
Loans 2,742
Allowance for loan losses (15)
Other assets 256
Mortgage servicing rights 32
Intangible assets 21
Goodwill 452
-----------------
Total assets acquired 4,153
-----------------
Deposits 2,701
Borrowings 768
Other liabilities 56
Total liabilities acquired 3,525
-----------------
Net assets acquired $ 628
=================
Cash consideration $ 90
Stockholders' equity addition 538
-----------------
$ 628
=================
Shares issued (actual) 19,446,813
=================
Loans:
Commercial $ 1,075
Residential mortgage 786
Home equity 475
Installment 406
-----------------
Total loans $ 2,742
=================
Deposits:
Noninterest-bearing demand deposits $ 475
Interest-bearing demand deposits 239
Savings deposits 187
Money market deposits 573
Time deposits 1,227
-----------------
Total deposits $ 2,701
=================
CONTACT: Associated Banc-Corp
Investors:
Joe Selner, 920-491-7120
or
Media:
Jon Drayna, 920-491-7006
SOURCE: Associated Banc-Corp