GREEN BAY, Wis.--(BUSINESS WIRE)--Oct. 20, 2005--Associated
Banc-Corp (NASDAQ:ASBC):
-- EPS up 11% over 3Q '04
-- Deposits excluding brokered CDs up 5.7% (annualized) over 2Q
'05
-- Net charge-offs .09% of average loans (annualized)
-- Efficiency ratio improves to 47.9%
-- Fee income growth continues
Associated Banc-Corp (NASDAQ:ASBC) earned $.63 per diluted share
in the quarter ended Sept. 30, 2005, up 10.5 percent compared to $.57
per diluted share for both the second quarter of 2005 and the third
quarter of 2004. For the nine months ended Sept. 30, 2005, diluted
earnings per share were $1.79, up 6.5 percent from $1.68 per diluted
share in the same period in 2004.
For the third quarter of 2005, return on average assets (ROAA) was
1.56 percent, return on average tangible equity (ROATE) was 24.55
percent and book value per share was $16.12, compared to 1.44 percent,
22.65 percent, and $15.80, respectively, for the second quarter of
2005. Comparatively, for the third quarter of 2004 ROAA was 1.60
percent, ROATE was 21.69 percent, and book value per share was $13.19.
For the first nine months of 2005, ROAA was 1.51 percent and ROATE was
23.78 percent, compared to 1.62 percent and 21.98 percent,
respectively, for the nine months ended Sept. 30, 2004.
"Noninterest income remained strong in the third quarter. While
our net interest income continued to be under pressure from a
challenging interest rate environment, we experienced solid growth in
commercial and industrial loans and in retail loans. We achieved this
growth while maintaining excellent credit quality, and our focus on
expense management continues to deliver positive operating leverage,"
Associated President and CEO Paul S. Beideman said.
Two acquisitions significantly affect comparisons with 2004
periods.
1) Associated's acquisition of First Federal Capital Corp on Oct.
29, 2004. 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.
2) The April 1, 2004, acquisition of Jabas Group, Inc., an employee
benefits firm, affects the year-to-date comparison of retail
commission income and noninterest expenses.
Net income was $81.0 million for the third quarter of 2005. This
compares to $74.0 million for the quarter ended June 30, 2005, and
$63.4 million for the third quarter of 2004. On a year-to-date basis,
net income was $232.5 million, up 24 percent from $187.4 million for
the comparable period of 2004.
Associated's net interest income for the third quarter of 2005 was
$164.1 million, compared to $166.7 million for the second quarter of
2005, and $133.2 million in the year-earlier quarter. For the first
nine months of 2005, net interest income was $496.7 million, up from
$394.2 million for the comparable year-to-date period of 2004.
Net interest margin for the third quarter was 3.56 percent,
compared to 3.63 percent for the second quarter of 2005 and 3.76
percent for the third quarter of 2004. On a year-to-date basis, the
net interest margin was 3.62 percent, versus 3.79 percent for the
comparable period last year.
"Last quarter we indicated that based on our balance sheet
dynamics and the current interest rate environment, the margin would
compress in the third quarter and then stabilize and show improvement
for the fourth quarter of 2005," said Beideman. "We remain confident
that this improvement will occur.
"Additionally, we are undertaking a new initiative that applies
cash flows from maturing investments to reduce wholesale borrowings by
$1.0 to $1.5 billion over the next 12 months, resulting in further
improvement to the margin. We intend to use capital that is freed up
from this initiative to buy back shares so that our efforts are
accretive to shareholders. A measured approach to reducing borrowed
funds affords management the flexibility to respond to changing market
conditions and deliver the greatest value for our shareholders,"
Beideman explained.
"We experienced growth in most core deposit categories in the
third quarter and we see this trend continuing in the fourth quarter.
Deposit growth is key to improving our margin and increasing net
interest income," he said.
Period end loans at Sept. 30, 2005, were $14.1 billion, up
slightly from June 30, and up 30 percent over a year earlier,
including the First Federal acquisition. Since June 30, both home
equity loans and commercial and industrial loans grew 16 percent,
annualized. Sequential quarter growth in these areas was offset by
lower real estate construction and residential mortgage loan balances.
Average loan balances for the third quarter of 2005 yielded 6.22
percent, 18 basis points higher than in the second quarter of 2005 and
97 basis points above the year-earlier quarter.
Deposits at Sept. 30, 2005, were $12.2 billion. Deposits,
excluding brokered CDs, increased by 5.7 percent, annualized, since
June 30, 2005, across most deposit categories. Deposits were up 26
percent over a year earlier, including the acquisition of First
Federal. In the third quarter of 2005, average non-brokered
interest-bearing deposits cost 2.08 percent, 16 basis points more than
in the previous quarter and 70 basis points more than in the
year-earlier quarter.
Asset quality remained steady, with third quarter net charge-offs
of $3.3 million, compared to net charge-offs of $3.6 million for the
second quarter of 2005 and $3.0 million for the third quarter of 2004.
For the first nine months of 2005, net charge-offs were $9.0 million
(0.09 percent of average loans, annualized), versus $13.7 million
(0.17 percent of average loans, annualized) for the first nine months
of 2004. The provision for loan losses tracked with the related net
charge-off levels for each of the comparative periods, except in the
third quarter of 2004 when no provision was recorded. Nonperforming
loans at Sept. 30, 2005, were $110.7 million, representing 0.78
percent of loans, compared to $112.5 million or 0.80 percent of loans
at June 30, 2005, and 0.84 percent of loans at Sept. 30, 2004. The
allowance for loan losses was 1.35 percent of total loans at Sept. 30,
2005.
Noninterest income was $77.0 million for the third quarter of
2005, compared to $61.7 million for the second quarter of 2005, and
$47.2 million for the third quarter of 2004, with year-to-date
noninterest income at $210.0 million, or 39 percent higher than the
same nine-month period in 2004.
Excluding net mortgage banking income and a $6.7 million net loss
on derivatives from the second quarter of 2005, noninterest income was
$65.0 million for the third quarter of 2005, compared to $66.1 million
for the second quarter of 2005 and $46.5 million for the third quarter
of 2004. For the nine months ended Sept. 30, 2005, noninterest income
excluding net mortgage banking income and the second quarter
derivative loss was $192.5 million, or 41 percent higher than $136.9
million for the first nine months of 2004. The derivative instruments
that lost hedge accounting treatment were terminated in the third
quarter of 2005, which will remove potential earnings volatility in
the future.
Net mortgage banking income of $12.0 million for the third quarter
of 2005 was $9.6 million higher than in the second quarter of 2005,
with an additional $2.6 million in mortgage banking income and $7.0
million from improved value in the mortgage serving rights asset -
that is, a $4.5 million valuation recovery in the third quarter,
following a $2.5 million provision against the asset in the second
quarter.
Service charges on deposit accounts of $22.8 million were up $0.6
million (11 percent annualized) over the second quarter of 2005. Trust
service fees were $8.7 million in the third quarter of 2005, compared
to $9.0 million in the second quarter of 2005. Retail commissions were
$12.9 million, down from $15.4 million in the second quarter of 2005
and up from $11.9 million in the third quarter of 2004, reflecting the
seasonality of insurance income.
Noninterest expense was $117.3 million for the third quarter of
2005, compared to $116.3 million for the second quarter of 2005 and
$89.0 million for the third quarter of 2004. On a year-to-date basis,
noninterest expense was $354.9 million, versus $267.9 million for the
comparable nine-month period in 2004, largely due to the timing of the
acquisitions mentioned earlier.
Personnel expense for the third quarter of 2005 was $66.4 million,
down slightly ($0.5 million) from the second quarter of 2005, notably
from lower severance costs following branch staffing reductions and
back office efficiencies. All other noninterest expenses were $50.9
million, up $1.5 million or 3 percent over $49.4 million for the
second quarter of 2005.
The efficiency ratio moved favorably, declining to 47.90 percent
from 50.03 percent between the third and second quarters of 2005, and
was 49.20 percent for the first nine months of 2005.
"We anticipate we will meet consensus earnings estimates for 2005,
based on our current trends and planned strategies," Beideman added.
Associated closed its acquisition of State Financial Services
Corp, a $1.5 billion financial services company based in Milwaukee, on
Oct. 3, 2005.
During the third quarter, the company paid a dividend of 27 cents
per share, up 8 percent from the year-earlier dividend.
Associated did not repurchase any shares during the third quarter.
Year-to-date repurchases remain at 2.5 million shares at an average
price of $33.05 per share, including 2 million shares repurchased in
the second quarter under an accelerated share repurchase program.
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 1466121. A taped play back of the
call will be available through Oct. 28 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. With the acquisition of State Financial, Associated has more
than 320 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-CorpSeptember 30, December 31,
(in thousands) 2005 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $386,151 $389,311 (0.8%)
Interest-bearing deposits in
other financial institutions 14,598 13,321 9.6%
Federal funds sold and securities
purchased under agreements to resell 103,481 55,440 86.7%
Securities available for sale,
at fair value 4,708,730 4,815,344 (2.2%)
Loans held for sale 98,473 64,964 51.6%
Loans 14,107,137 13,881,887 1.6%
Allowance for loan losses (190,080) (189,762) 0.2%
------------- -------------
Loans, net 13,917,057 13,692,125 1.6%
Premises and equipment 174,086 184,944 (5.9%)
Goodwill 679,993 679,993 0.0%
Intangible assets 115,692 119,440 (3.1%)
Other assets 543,470 505,254 7.6%
------------- -------------
Total assets $20,741,731 $20,520,136 1.1%
============= =============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,256,774 $2,347,611 (3.9%)
Interest-bearing deposits,
excluding Brokered CDs 9,516,792 10,077,069 (5.6%)
Brokered CDs 407,459 361,559 12.7%
------------- -------------
Total deposits 12,181,025 12,786,239 (4.7%)
Short-term borrowings 2,778,993 2,926,716 (5.0%)
Long-term funding 3,545,458 2,604,540 36.1%
Accrued expenses and other
liabilities 173,690 185,222 (6.2%)
------------- -------------
Total liabilities 18,679,166 18,502,717 1.0%
Stockholders' Equity
Preferred stock - -
Common stock 1,281 1,300 (1.5%)
Surplus 1,064,833 1,127,205 (5.5%)
Retained earnings 978,489 858,847 13.9%
Accumulated other comprehensive
income 21,776 41,205 (47.2%)
Deferred compensation (3,814) (2,122) 79.7%
Treasury stock, at cost - (9,016) (100.0%)
------------- -------------
Total stockholders' equity 2,062,565 2,017,419 2.2%
------------- -------------
Total liabilities and
stockholders' equity $20,741,731 $20,520,136 1.1%
============= =============
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpSeptember 30,
(in thousands) 2004 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $286,799 34.6%
Interest-bearing deposits in other
financial institutions 10,381 40.6%
Federal funds sold and securities
purchased under agreements to resell 63,105 64.0%
Securities available for sale, at fair value 4,166,760 13.0%
Loans held for sale 72,266 36.3%
Loans 10,830,627 30.3%
Allowance for loan losses (175,007) 8.6%
-------------
Loans, net 10,655,620 30.6%
Premises and equipment 131,288 32.6%
Goodwill 232,564 192.4%
Intangible assets 69,863 65.6%
Other assets 447,115 21.6%
-------------
Total assets $16,135,761 28.5%
=============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $1,867,905 20.8%
Interest-bearing deposits,
excluding Brokered CDs 7,623,042 24.8%
Brokered CDs 186,326 118.7%
-------------
Total deposits 9,677,273 25.9%
Short-term borrowings 2,956,626 (6.0%)
Long-term funding 1,911,797 85.5%
Accrued expenses and other liabilities 136,600 27.2%
-------------
Total liabilities 14,682,296 27.2%
Stockholders' Equity
Preferred stock -
Common stock 1,105 15.9%
Surplus 585,274 81.9%
Retained earnings 824,909 18.6%
Accumulated other comprehensive
income 49,265 (55.8%)
Deferred compensation (1,981) 92.5%
Treasury stock, at cost (5,107) (100.0%)
-------------
Total stockholders' equity 1,453,465 41.9%
-------------
Total liabilities and
stockholders' equity $16,135,761 28.5%
=============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended,
September 30,
---------------------------
(in thousands, except per share
amounts) 2005 2004 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $223,202 $142,389 56.8%
Interest and dividends on investment
securities and deposits with
other financial institutions
Taxable 40,050 31,590 26.8%
Tax-exempt 9,755 10,255 (4.9%)
Interest on federal funds sold
and securities purchased under
agreements to resell 384 241 59.3%
------------- -------------
Total interest income 273,391 184,475 48.2%
Interest Expense
Interest on deposits 53,598 27,191 97.1%
Interest on short-term
borrowings 23,628 10,262 130.2%
Interest on long-term funding 32,087 13,806 132.4%
------------- -------------
Total interest expense 109,313 51,259 113.3%
------------- -------------
Net Interest Income 164,078 133,216 23.2%
Provision for loan losses 3,345 - N/M
------------- -------------
Net interest income after
provision for loan losses 160,733 133,216 20.7%
Noninterest Income
Trust service fees 8,667 7,773 11.5%
Service charges on deposit
accounts 22,830 13,672 67.0%
Mortgage banking, net 12,000 618 N/M
Credit card and other
nondeposit fees 9,505 6,253 52.0%
Retail commissions 12,905 11,925 8.2%
Bank owned life insurance income 2,441 3,580 (31.8%)
Asset sale gains, net 942 309 N/M
Investment securities gains
(losses), net 1,446 (6) N/M
Other 6,229 3,034 105.3%
------------- -------------
Total noninterest income 76,965 47,158 63.2%
Noninterest Expense
Personnel expense 66,403 53,467 24.2%
Occupancy 9,412 6,939 35.6%
Equipment 4,199 3,022 38.9%
Data processing 7,129 5,865 21.6%
Business development and
advertising 4,570 3,990 14.5%
Stationery and supplies 1,599 1,214 31.7%
Other intangible amortization 1,903 935 103.5%
Other 22,133 13,599 62.8%
------------- -------------
Total noninterest expense 117,348 89,031 31.8%
------------- -------------
Income before income taxes 120,350 91,343 31.8%
Income tax expense 39,315 27,977 40.5%
------------- -------------
Net Income $81,035 $63,366 27.9%
============= =============
Earnings Per Share:
Basic $0.63 $0.58 8.6%
Diluted $0.63 $0.57 10.5%
Average Shares Outstanding:
Basic 127,875 110,137 16.1%
Diluted 129,346 111,699 15.8%
N/M - Not meaningful.
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Nine Months Ended,
September 30,
---------------------------
(in thousands, except per share
amounts) 2005 2004 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $636,931 $415,090 53.4%
Interest and dividends on investment
securities and deposits with
other financial institutions
Taxable 122,918 93,389 31.6%
Tax-exempt 28,985 30,757 (5.8%)
Interest on federal funds sold
and securities purchased under
agreements to resell 648 336 92.9%
------------- -------------
Total interest income 789,482 539,572 46.3%
Interest Expense
Interest on deposits 146,118 81,401 79.5%
Interest on short-term
borrowings 62,528 24,042 160.1%
Interest on long-term funding 84,176 39,959 110.7%
------------- -------------
Total interest expense 292,822 145,402 101.4%
------------- -------------
Net Interest Income 496,660 394,170 26.0%
Provision for loan losses 9,343 11,065 (15.6%)
------------- -------------
Net interest income after
provision for loan losses 487,317 383,105 27.2%
Noninterest Income
Trust service fees 25,962 23,684 9.6%
Service charges on deposit
accounts 63,710 39,210 62.5%
Mortgage banking, net 24,260 14,285 69.8%
Credit card and other nondeposit
fees 27,406 17,998 52.3%
Retail commissions 42,980 34,444 24.8%
Bank owned life insurance income 6,920 10,576 (34.6%)
Asset sale gains, net 1,179 749 N/M
Investment securities gains
(losses), net 2,937 1,356 N/M
Other 14,688 8,908 64.9%
------------- -------------
Total noninterest income 210,042 151,210 38.9%
Noninterest Expense
Personnel expense 206,322 159,355 29.5%
Occupancy 28,674 21,275 34.8%
Equipment 12,431 8,899 39.7%
Data processing 20,150 17,666 14.1%
Business development and
advertising 12,662 10,704 18.3%
Stationery and supplies 5,087 3,869 31.5%
Other intangible amortization 6,189 2,651 133.5%
Other 63,409 43,483 45.8%
------------- -------------
Total noninterest expense 354,924 267,902 32.5%
------------- -------------
Income before income taxes 342,435 266,413 28.5%
Income tax expense 109,915 78,982 39.2%
------------- -------------
Net Income $232,520 $187,431 24.1%
============= =============
Earnings Per Share:
Basic $1.80 $1.70 5.9%
Diluted $1.79 $1.68 6.5%
Average Shares Outstanding:
Basic 128,825 110,182 16.9%
Diluted 130,252 111,614 16.7%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except 3Q05 2Q05 1Q05 4Q04 3Q04
per share amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees
on loans $223,202 $213,420 $200,309 $179,612 $142,389
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 40,050 41,834 41,034 37,631 31,590
Tax-exempt 9,755 9,507 9,723 10,047 10,255
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 384 182 82 260 241
--------- --------- --------- --------- ---------
Total interest
income 273,391 264,943 251,148 227,550 184,475
Interest Expense
Interest on deposits 53,598 48,087 44,433 36,835 27,191
Interest on short-
term borrowings 23,628 21,731 17,169 14,898 10,262
Interest on long-
term funding 32,087 28,451 23,638 17,360 13,806
--------- --------- --------- --------- ---------
Total interest
expense 109,313 98,269 85,240 69,093 51,259
--------- --------- --------- --------- ---------
Net Interest Income 164,078 166,674 165,908 158,457 133,216
Provision for loan
losses 3,345 3,671 2,327 3,603 -
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 160,733 163,003 163,581 154,854 133,216
Noninterest Income
Trust service fees 8,667 8,967 8,328 8,107 7,773
Service charges on
deposit accounts 22,830 22,215 18,665 16,943 13,672
Mortgage banking,
net 12,000 2,376 9,884 6,046 618
Credit card and
other nondeposit
fees 9,505 8,790 9,111 8,183 6,253
Retail commissions 12,905 15,370 14,705 12,727 11,925
Bank owned life
insurance income 2,441 2,311 2,168 2,525 3,580
Asset sale gains
(losses), net 942 539 (302) 432 309
Investment
securities gains
(losses), net 1,446 1,491 - (719) (6)
Other 6,229 (355) 8,814 4,793 3,034
--------- --------- --------- --------- ---------
Total noninterest
income 76,965 61,704 71,373 59,037 47,158
Noninterest Expense
Personnel expense 66,403 66,934 72,985 65,193 53,467
Occupancy 9,412 9,374 9,888 8,297 6,939
Equipment 4,199 4,214 4,018 3,855 3,022
Data processing 7,129 6,728 6,293 5,966 5,865
Business development
and advertising 4,570 4,153 3,939 4,271 3,990
Stationery and
supplies 1,599 1,644 1,844 1,567 1,214
Other intangible
amortization 1,903 2,292 1,994 1,699 935
Other 22,133 20,995 20,281 19,119 13,599
--------- --------- --------- --------- ---------
Total noninterest
expense 117,348 116,334 121,242 109,967 89,031
--------- --------- --------- --------- ---------
Income before income
taxes 120,350 108,373 113,712 103,924 91,343
Income tax expense 39,315 34,358 36,242 33,069 27,977
--------- --------- --------- --------- ---------
Net Income $81,035 $74,015 $77,470 $70,855 $63,366
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.63 $0.57 $0.60 $0.57 $0.58
Diluted $0.63 $0.57 $0.59 $0.57 $0.57
Average Shares
Outstanding:
Basic 127,875 128,990 129,781 123,509 110,137
Diluted 129,346 130,463 131,358 125,296 111,699
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except YTD 2005 YTD 2004 3rd Qtr 2005 2nd Qtr 2005
per share & full
time equivalent
employee data)
----------------------------------------------------------------------
Summary of
Operations
Net interest income 496,660 394,170 164,078 166,674
Provision for loan
losses 9,343 11,065 3,345 3,671
Asset sale gains
(losses), net 1,179 749 942 539
Investment
securities gains
(losses), net 2,937 1,356 1,446 1,491
Noninterest income
(excluding
securities & asset
gains) 205,926 149,105 74,577 59,674
Noninterest expense 354,924 267,902 117,348 116,334
Income before
income taxes 342,435 266,413 120,350 108,373
Income taxes 109,915 78,982 39,315 34,358
Net income 232,520 187,431 81,035 74,015
Taxable equivalent
adjustment 18,743 19,186 6,347 6,174
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $1.80 $1.70 $0.63 $0.57
Diluted 1.79 1.68 0.63 0.57
Dividends 0.7900 0.7267 0.2700 0.2700
Market Value:
High $34.74 $32.19 $34.74 $33.89
Low 30.11 27.09 30.29 30.11
Close 30.48 32.07 30.48 33.58
Book value 16.12 13.19 16.12 15.80
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 5.68% 5.12% 5.83% 5.71%
Interest-bearing
liabilities rate 2.40 1.58 2.66 2.42
Net interest margin 3.62 3.79 3.56 3.63
Return on average
assets 1.51 1.62 1.56 1.44
Return on average
equity 15.33 18.00 15.85 14.62
Return on tangible
average equity (2) 23.78 21.98 24.55 22.65
Efficiency ratio (3) 49.20 47.63 47.90 50.03
Effective tax rate 32.10 29.65 32.67 31.70
Dividend payout
ratio (4) 43.89 42.75 42.86 47.37
----------------------------------------------------------------------
Average Balances
Assets $20,550,636 $15,495,898 $20,607,901 $20,574,770
Earning assets 18,878,583 14,452,594 18,960,035 18,916,921
Interest-bearing
liabilities 16,181,956 12,232,593 16,198,492 16,207,719
Loans 14,075,913 10,609,581 14,163,827 14,084,246
Deposits 12,186,667 9,636,138 12,133,719 12,069,719
Stockholders'
equity 2,027,672 1,391,116 2,027,785 2,030,929
Stockholders'
equity / assets 9.87% 8.98% 9.84% 9.87%
----------------------------------------------------------------------
At Period End
Assets $20,741,731 $20,753,714
Loans 14,107,137 14,054,506
Allowance for loan
losses 190,080 190,024
Goodwill 679,993 679,993
Mortgage servicing
rights, net 78,688 74,103
Other intangible
assets 37,004 38,907
Deposits 12,181,025 12,098,631
Stockholders'
equity 2,062,565 2,018,435
Stockholders'
equity / assets 9.94% 9.73%
Tangible equity /
tangible assets (5) 6.72% 6.49%
Shares outstanding,
end of period 127,985 127,743
Shares repurchased
during period - 2,111
Average per share cost of shares repurchased
during period $- $33.10
Year-to-date shares repurchased
during period 2,522 2,522
YTD average per share cost of shares
repurchased during period $33.05 $33.05
----------------------------------------------------------------------
Selected trend
information
Average full time equivalent
employees 4,815 4,889
Trust assets under management,
at market value $4,900,000 $4,800,000
Mortgage loans
originated for sale 498,343 385,677
Portfolio serviced
for others 9,492,000 9,479,000
Mortgage servicing rights,
net / Portfolio serviced for others 0.83% 0.78%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except 1st Qtr 2005 4th Qtr 2004 3rd Qtr 2004
per share & full
time 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 15.62 15.56 13.19
----------------------------------------------------------------------
Performance Ratios (annualized)
Earning assets yield 5.51% 5.31% 5.14%
Interest-bearing liabilities rate 2.13 1.85 1.64
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%
Tangible equity / tangible
assets (5) 6.59% 6.54% 7.54%
Shares outstanding, end of
period 129,622 129,695 110,206
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%
----------------------------------------------------------------------
(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
September 30,
----------------------------------------
(in thousands) 2005 2004 % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $190,024 $177,980 6.8%
Provision for loan losses 3,345 - N/M
Charge offs (5,268) (3,770) 39.7%
Recoveries 1,979 797 148.3%
----------------------------
Net charge offs (3,289) (2,973) 10.6%
----------------------------
Ending Balance $190,080 $175,007 8.6%
============================
Nine months ended
September 30,
---------------------------------------
(in thousands) 2005 2004 % Change
-------------------------------------------------------------
Allowance for Loan
Losses
Beginning balance $189,762 $177,622 6.8%
Provision for loan
losses 9,343 11,065 (15.6%)
Charge offs (16,601) (16,492) 0.7%
Recoveries 7,576 2,812 169.4%
--------------------------
Net charge offs (9,025) (13,680) (34.0%)
--------------------------
Ending Balance $190,080 $175,007 8.6%
==========================
----------------------------------------------------------------------
3Q05 vs
Credit Quality 2Q05
Sept 30, 2005June 30, 2005 % Change
----------------------------------------
Nonaccrual loans $107,298 $109,698 (2.2%)
Loans 90 or more days past due
and still accruing 3,354 2,806 19.5%
Restructured loans 33 35 (5.7%)
----------------------------
Total nonperforming loans 110,685 112,539 (1.6%)
Other real estate owned 10,017 3,685 171.8%
----------------------------
Total nonperforming assets 120,702 116,224 3.9%
============================
Provision for loan losses 3,345 3,671 (8.9%)
Net charge offs 3,289 3,564 (7.7%)
Allowance for loan losses / loans 1.35% 1.35%
Allowance for loan losses /
nonperforming loans 171.73 168.85
Nonperforming loans / total loans 0.78 0.80
Nonperforming assets / total assets 0.58 0.56
Net charge offs / average
loans (annualized) 0.09 0.10
Year-to-date net charge offs /
average loans 0.09 0.08
Credit Quality 3Q05 vs
3Q04
Mar 31, 2005Dec 31, 2004Sept 30, 2004 % Change
------------------------------------------------
Nonaccrual loans $99,835 $112,761 $81,124 32.3%
Loans 90 or more days
past due and still
accruing 3,068 2,153 10,309 (67.5%)
Restructured loans 36 37 39 (15.4%)
---------------------------------------
Total nonperforming
loans 102,939 114,951 91,472 21.0%
Other real estate
owned 4,019 3,915 4,526 121.3%
---------------------------------------
Total nonperforming
assets 106,958 118,866 95,998 25.7%
=======================================
Provision for loan
losses 2,327 3,603 - N/M
Net charge offs 2,172 3,598 2,973 10.6%
Allowance for loan
losses / loans 1.36% 1.37% 1.62%
Allowance for loan
losses /
nonperforming loans 184.49 165.08 191.32
Nonperforming loans /
total loans 0.74 0.83 0.84
Nonperforming assets /
total assets 0.52 0.58 0.59
Net charge offs /
average loans
(annualized) 0.06 0.11 0.11
Year-to-date net
charge offs / average
loans 0.06 0.15 0.17
----------------------------------------------------------------------
3Q05 vs
Period End Loan Composition 2Q05
Sept 30, 2005June 30, 2005 % Change
----------------------------------------
Commercial, financial &
agricultural $3,213,656 $3,086,663 4.1%
Real estate - construction 1,519,681 1,640,941 (7.4%)
Commercial real estate 3,648,169 3,650,726 (0.1%)
Lease financing 57,270 53,270 7.5%
----------------------------
Commercial 8,438,776 8,431,600 0.1%
Home equity (a) 1,878,436 1,806,236 4.0%
Installment 1,024,356 1,025,621 (0.1%)
----------------------------
Retail 2,902,792 2,831,857 2.5%
Residential mortgage 2,765,569 2,791,049 (0.9%)
----------------------------
Total loans $14,107,137 $14,054,506 0.4%
============================
Period End Loan Composition 3Q05 vs
3Q04
Mar 31, 2005Dec 31, 2004Sept 30, 2004 % Change
------------------------------------------------
Commercial, financial
& agricultural $2,852,462 $2,803,333 $2,479,764 29.6%
Real estate -
construction 1,569,013 1,459,629 1,152,990 31.8%
Commercial real estate 3,813,465 3,933,131 3,242,009 12.5%
Lease financing 50,181 50,718 49,423 15.9%
---------------------------------------
Commercial 8,285,121 8,246,811 6,924,186 21.9%
Home equity (a) 1,744,676 1,866,485 1,290,436 45.6%
Installment 1,048,510 1,054,011 672,806 52.3%
---------------------------------------
Retail 2,793,186 2,920,496 1,963,242 47.9%
Residential mortgage 2,844,889 2,714,580 1,943,199 42.3%
---------------------------------------
Total loans $13,923,196 $13,881,887 $10,830,627 30.3%
=======================================
(a) Home equity includes home equity lines and residential mortgage
junior liens.
----------------------------------------------------------------------
3Q05 vs
Period End Deposit Composition 2Q05
Sept 30, 2005June 30, 2005 % Change
----------------------------------------
Demand $2,256,774 $2,250,482 0.3%
Savings 1,074,234 1,117,922 (3.9%)
Interest-bearing demand 2,252,711 2,227,188 1.1%
Money market 2,240,606 2,094,796 7.0%
Brokered CDs 407,459 491,781 (17.1%)
Other time deposits 3,949,241 3,916,462 0.8%
----------------------------
Total deposits $12,181,025 $12,098,631 0.7%
============================
Period End Deposit 3Q05 vs
Composition 3Q04
Mar 31, 2005Dec 31, 2004 Sept 30, 2004% Change
------------------------------------------------
Demand $2,156,592 $2,347,611 $1,867,905 20.8%
Savings 1,137,120 1,116,158 936,975 14.6%
Interest-bearing
demand 2,485,548 2,854,880 2,334,072 (3.5%)
Money market 2,112,490 2,083,717 1,516,423 47.8%
Brokered CDs 218,111 361,559 186,326 118.7%
Other time deposits 4,084,043 4,022,314 2,835,572 39.3%
---------------------------------------
Total deposits $12,193,904 $12,786,239 $9,677,273 25.9%
=======================================
N/M - Not meaningful.
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Nine months ended
September 30, 2005
-------------------------------
Interest Average
(in thousands) Average Income/ Yield/
Balance Expense Rate
--------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,356,785 $375,704 5.93%
Residential mortgage 2,865,319 119,614 5.56
Retail 2,853,809 142,965 6.68
------------- ---------
Total loans 14,075,913 638,283 6.01
Investments and other 4,802,670 169,942 4.72
------------- ---------
Total earning assets 18,878,583 808,225 5.68
Other assets, net 1,672,053
-------------
Total assets $20,550,636
=============
Interest-bearing liabilities:
Savings deposits $1,116,871 $3,077 0.37%
Interest-bearing demand deposits 2,380,397 19,530 1.10
Money market deposits 2,140,763 28,505 1.78
Time deposits, excluding Brokered CDs 3,996,324 86,545 2.90
------------- ---------
Total interest-bearing deposits,
excluding Brokered CDs 9,634,355 137,657 1.91
Brokered CDs 364,381 8,461 3.10
------------- ---------
Total interest-bearing deposits 9,998,736 146,118 1.95
Wholesale funding 6,183,220 146,704 3.13
------------- ---------
Total interest-bearing liabilities 16,181,956 292,822 2.40
Noninterest-bearing demand 2,187,931
Other liabilities 153,077
Stockholders' equity 2,027,672
-------------
Total liabilities and stockholders'
equity $20,550,636
=============
---------
Net interest income and rate spread (1) $515,403 3.28%
=========
Net interest margin (1) 3.62%
Taxable equivalent adjustment $18,743
=========
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Nine months ended
September 30, 2004
-------------------------------
(in thousands) Interest Average
Average Income/ Yield/
Balance Expense Rate
--------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,668,508 $246,765 4.86%
Residential mortgage 2,042,406 86,403 5.63
Retail 1,898,667 82,655 5.81
------------ ----------
Total loans 10,609,581 415,823 5.18
Investments and other 3,843,013 142,935 4.96
------------ ----------
Total earning assets 14,452,594 558,758 5.12
Other assets, net 1,043,304
------------
Total assets $15,495,898
============
Interest-bearing liabilities:
Savings deposits $927,876 $2,528 0.36%
Interest-bearing demand deposits 2,366,312 14,186 0.80
Money market deposits 1,530,856 9,247 0.81
Time deposits, excluding Brokered CDs 2,844,147 53,227 2.50
------------ ----------
Total interest-bearing deposits,
excluding Brokered CDs 7,669,191 79,188 1.38
Brokered CDs 216,371 2,213 1.37
------------ ----------
Total interest-bearing deposits 7,885,562 81,401 1.38
Wholesale funding 4,347,031 64,001 1.94
------------ ----------
Total interest-bearing liabilities 12,232,593 145,402 1.58
Noninterest-bearing demand 1,750,576
Other liabilities 121,613
Stockholders' equity 1,391,116
------------
Total liabilities and stockholders'
equity $15,495,898
============
----------
Net interest income and rate spread (1) $413,356 3.54%
==========
Net interest margin (1) 3.79%
Taxable equivalent adjustment $19,186
==========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Three months ended
September 30, 2005
-------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
--------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,411,678 $134,503 6.26%
Residential mortgage 2,880,685 40,253 5.56
Retail 2,871,464 48,940 6.78
------------- ---------
Total loans 14,163,827 223,696 6.22
Investments and other 4,796,208 56,042 4.67
------------- ---------
Total earning assets 18,960,035 279,738 5.83
Other assets, net 1,647,866
-------------
Total assets $20,607,901
=============
Interest-bearing liabilities:
Savings deposits $1,097,955 $1,024 0.37%
Interest-bearing demand deposits 2,193,600 6,107 1.10
Money market deposits 2,198,538 11,822 2.13
Time deposits, excluding Brokered CDs 3,913,389 30,395 3.08
------------- ---------
Total interest-bearing deposits,
excluding Brokered CDs 9,403,482 49,348 2.08
Brokered CDs 487,305 4,250 3.46
------------- ---------
Total interest-bearing deposits 9,890,787 53,598 2.15
Wholesale funding 6,307,705 55,715 3.47
------------- ---------
Total interest-bearing liabilities 16,198,492 109,313 2.66
Noninterest-bearing demand 2,242,932
Other liabilities 138,692
Stockholders' equity 2,027,785
-------------
Total liabilities and stockholders'
equity $20,607,901
=============
---------
Net interest income and rate spread (1) $170,425 3.17%
=========
Net interest margin (1) 3.56%
Taxable equivalent adjustment $6,347
=========
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Three months ended
September 30, 2004
-------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,787,476 $85,971 4.96%
Residential mortgage 1,982,929 27,993 5.62
Retail 1,938,296 28,668 5.88
------------ ----------
Total loans 10,708,701 142,632 5.25
Investments and other 3,980,213 48,238 4.85
------------ ----------
Total earning assets 14,688,914 190,870 5.14
Other assets, net 1,041,537
------------
Total assets $15,730,451
============
Interest-bearing liabilities:
Savings deposits $945,881 $844 0.35%
Interest-bearing demand deposits 2,338,492 4,615 0.79
Money market deposits 1,516,812 3,294 0.86
Time deposits, excluding Brokered CDs 2,771,249 17,488 2.51
------------ ----------
Total interest-bearing deposits,
excluding Brokered CDs 7,572,434 26,241 1.38
Brokered CDs 235,844 950 1.60
------------ ----------
Total interest-bearing deposits 7,808,278 27,191 1.39
Wholesale funding 4,573,129 24,068 2.07
------------ ----------
Total interest-bearing liabilities 12,381,407 51,259 1.64
Noninterest-bearing demand 1,813,279
Other liabilities 116,165
Stockholders' equity 1,419,600
------------
Total liabilities and stockholders'
equity $15,730,451
============
----------
Net interest income and rate spread (1) $139,611 3.50%
==========
Net interest margin (1) 3.76%
Taxable equivalent adjustment $6,395
==========
----------------------------------------------------------------------
(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
Cindy Moon-Mogush (Media), 920-431-8034
SOURCE: Associated Banc-Corp