GREEN BAY, Wis.--(BUSINESS WIRE)--
Associated Banc-Corp (Nasdaq:ASBC):
-- Net income $76.9 million
-- Net interest margin stable at 3.63%, up 7 bp over 3rd quarter
of 2005
-- Net charge offs at 10 basis points of average loans
-- Wholesale funding reduced by $2.4 billion since Sept. 2005;
strategy fully executed
-- Accelerated stock buyback executed in 3rd quarter; another
anticipated for 4th quarter
Associated Banc-Corp (Nasdaq:ASBC) earned $76.9 million, or $.58
per diluted share, for the third quarter of 2006, compared to net
income of $81.0 million, or $.63 per diluted share, for the third
quarter of 2005.
For the nine months ended Sept. 30, 2006, net income was $242.1
million, up 4 percent over $232.5 million for the comparable period in
2005. Earnings per diluted share were $1.81 and $1.79 for the first
nine months of 2006 and 2005, respectively.
For the third quarter of 2006, return on average assets (ROA) was
1.46 percent, compared to 1.56 percent for the third quarter of last
year. Return on average equity (ROE) was 13.36 percent for the third
quarter, versus 15.85 percent for the comparable quarter last year.
For the first nine months of 2006, ROA was 1.52 percent and ROE was
14.12 percent, compared to ROA of 1.51 percent and ROE of 15.33
percent last year. Book value per share rose to $17.44 as of Sept. 30,
2006, up 8 percent compared to a year earlier.
Return on average tangible equity (which is a non-GAAP measure
that excludes average goodwill and other intangible assets from
average equity) was 23.64 percent for the first nine months of 2006,
versus 23.78 percent for the comparable period of 2005.
"While operating in a challenging banking environment, we are
focused on margin improvement, deposit growth, sustained credit
quality and prudent expense management. We have undertaken several
important initiatives to manage risk and improve the contribution of
our commercial banking business," Associated President and CEO Paul S.
Beideman said.
Since Sept. 30, 2005, and after adjusting for a fourth quarter
2005 acquisition, wholesale funding has been reduced by $2.4 billion,
through the use of investment cash flows and improved deposit flows.
This initiative reduced the ratio of wholesale funding to total
funding from 34 percent at Sept. 30, 2005, to 23 percent at Sept. 30,
2006.
Associated's net interest margin benefited from both the reduction
in higher-costing wholesale funding and the increased percentage of
loans to earning assets. The net interest margin for the third quarter
of 2006 was 3.63 percent compared to 3.56 percent for the third
quarter of 2005.
Between the third quarter periods, average loans grew $1.2 billion
to $15.4 billion for third quarter 2006 (with $1.0 billion added from
the State Financial acquisition in fourth quarter 2005), and average
investments declined $1.2 billion in support of the wholesale funding
reduction strategy, leaving average earning assets unchanged at $19.0
billion. Average total deposits increased $1.8 billion (with $1.0
billion added from the State Financial acquisition).
As of Sept. 30, 2006, the allowance for loan losses represented
1.33 percent of total loans and covered 158 percent of nonperforming
loans. Nonperforming loans increased to $129 million, representing
0.84 percent of total loans, compared to $111 million (or 0.78
percent) at Sept. 30, 2005. The provision for loan losses,
approximating net charge offs for each quarterly period, was $3.8
million and $3.3 million, respectively, for the comparable third
quarter periods of 2006 and 2005. On a year-to-date basis, the
provision for loan losses was $12.0 million for 2006, versus $9.3
million for 2005, and net charge offs represented 0.10 percent of
average loans for 2006, versus 0.09 percent for the comparable
nine-month period of 2005.
Core fee-based revenues including trust service fees, service
charges on deposits, card-based and other non-deposit fees, and retail
commissions totaled $57.6 million for the third quarter of 2006, up 7
percent over $53.9 million for the comparable quarter of 2005. On a
year-to-date basis, core-fee based revenues were $172.5 million, up 8
percent over $160.1 million for the nine month periods of 2006 and
2005, respectively.
Net mortgage banking income was $2.8 million (including $0.5
million of valuation expense on the mortgage servicing asset) for the
third quarter of 2006, down from $12.0 million (including a $4.5
million valuation recovery) in the third quarter of last year. On a
year-to-date basis, net mortgage banking income was down $11.2 million
(46 percent), as this industry continues to experience a slowdown.
All other noninterest income sources combined totaled $12.6
million for the third quarter of 2006, an increase of $1.5 million (13
percent) over the comparable third quarter of 2005, particularly due
to income on bank owned life insurance. All other noninterest income
sources totaled $35.4 million for the first nine months of 2006,
versus $25.8 million last year, with other noninterest income for 2005
including a $6.7 million net loss on derivatives no longer accounted
for as hedges.
Noninterest expense grew 5 percent between both the three-month
and nine-month periods ending Sept. 30, 2006, and 2005, reflecting the
larger operating base of the company attributable to the State
Financial acquisition during the fourth quarter of 2005. While up in
absolute terms, noninterest expenses remain controlled, with the
efficiency ratio at 50.19 percent and 50.33 percent respectively, for
the three and nine months ending Sept. 30, 2006.
The effective tax rate for the nine month period of 2006 was 28.92
percent, versus 32.10 percent for the comparable period of 2005. The
year-to-date decline was primarily due to the first quarter 2006
resolution of certain multi-jurisdictional tax issues, as well as
changes in exposure of uncertain tax positions in the second quarter
of 2006, both of which resulted in the reduction of tax liabilities
and income tax expense.
During the third quarter of 2006, Associated repurchased 2 million
shares of its common stock at an average price of $31.43 per share for
a total cost of approximately $63 million, leaving approximately 3.3
million shares remaining available for repurchase under its
outstanding Board of Directors authorization.
"We anticipate buying back additional common stock in the fourth
quarter similar in size to our previous actions, as we weigh market
opportunities, capital levels, growth prospects and other investment
opportunities," Beideman said.
Associated will host a conference call for investors and analysts
at 3 p.m. CDT today. The toll-free dial-in number for the live call is
888-694-4769. The number for international callers is 973-582-2757.
Participants should ask the operator for the Associated Banc-Corp
third quarter 2006 earnings call, or for call ID number 7980287. A
replay of the call will be available from 6 p.m. CDT today through
October 26 by calling 877-519-4471 (toll-free) domestically or
973-341-3080 internationally. The call ID number, 7980287, is required
to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified multibank holding company with total assets of $21
billion. Associated has more than 320 banking offices serving more
than 180 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 filed on Form 10-K.
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
September 30, December 31
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $367,406 $460,230 (20.2%)
Interest-bearing deposits in other
financial institutions 27,627 14,254 93.8%
Federal funds sold and securities
purchased under agreements to
resell 34,752 17,811 95.1%
Investment securities available for
sale, at fair value 3,436,774 4,711,605 (27.1%)
Loans held for sale 87,330 57,710 51.3%
Loans 15,284,608 15,206,464 0.5%
Allowance for loan losses (203,442) (203,404) 0.0%
------------- ------------
Loans, net 15,081,166 15,003,060 0.5%
Premises and equipment 196,201 206,153 (4.8%)
Goodwill 871,629 877,680 (0.7%)
Other intangible assets, net 112,544 120,358 (6.5%)
Other assets 711,094 631,221 12.7%
------------- ------------
Total assets $20,926,523 $22,100,082 (5.3%)
============= ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,534,686 $2,504,926 1.2%
Interest-bearing deposits,
excluding Brokered CDs 11,043,222 10,538,856 4.8%
Brokered CDs 630,637 529,307 19.1%
------------- ------------
Total deposits 14,208,545 13,573,089 4.7%
Short-term borrowings 2,004,982 2,666,307 (24.8%)
Long-term funding 2,272,654 3,348,476 (32.1%)
Accrued expenses and other
liabilities 169,962 187,232 (9.2%)
------------- ------------
Total liabilities 18,656,143 19,775,104 (5.7%)
Stockholders' Equity
Preferred stock - -
Common stock 1,324 1,357 (2.4%)
Surplus 1,183,169 1,301,004 (9.1%)
Retained earnings 1,156,869 1,029,247 12.4%
Accumulated other comprehensive
income (loss) (6,122) (3,938) 55.5%
Deferred compensation - (2,081)(100.0%)
Treasury stock, at cost (64,860) (611) N/M
------------- ------------
Total stockholders' equity 2,270,380 2,324,978 (2.3%)
------------- ------------
Total liabilities and
stockholders' equity $20,926,523 $22,100,082 (5.3%)
============= ============
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
September 30
(in thousands) 2005 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $386,151 (4.9%)
Interest-bearing deposits in other
financial institutions 14,598 89.3%
Federal funds sold and securities
purchased under agreements to
resell 103,481 (66.4%)
Investment securities available for
sale, at fair value 4,708,730 (27.0%)
Loans held for sale 98,473 (11.3%)
Loans 14,107,137 8.3%
Allowance for loan losses (190,080) 7.0%
------------
Loans, net 13,917,057 8.4%
Premises and equipment 174,086 12.7%
Goodwill 679,993 28.2%
Other intangible assets, net 115,692 (2.7%)
Other assets 543,470 30.8%
------------
Total assets $20,741,731 0.9%
============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,256,774 12.3%
Interest-bearing deposits, excluding
Brokered CDs 9,516,792 16.0%
Brokered CDs 407,459 54.8%
------------
Total deposits 12,181,025 16.6%
Short-term borrowings 2,778,993 (27.9%)
Long-term funding 3,545,458 (35.9%)
Accrued expenses and other
liabilities 173,690 (2.1%)
------------
Total liabilities 18,679,166 (0.1%)
Stockholders' Equity
Preferred stock -
Common stock 1,281 3.4%
Surplus 1,064,833 11.1%
Retained earnings 978,489 18.2%
Accumulated other comprehensive
income (loss) 21,776 (128.1%)
Deferred compensation (3,814) (100.0%)
Treasury stock, at cost - N/M
------------
Total stockholders' equity 2,062,565 10.1%
------------
Total liabilities and
stockholders' equity $20,741,731 0.9%
============
N/M = Not Meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income
(Unaudited)
Associated Banc-Corp
For The Three Months Ended,
September 30,
---------------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $284,397 $223,202 27.4%
Interest and dividends on
investment securities and
deposits in other financial
institutions
Taxable 30,225 40,050 (24.5%)
Tax-exempt 9,691 9,755 (0.7%)
Interest on federal funds sold
and securities purchased under
agreements to resell 260 384 (32.3%)
-------------- ------------
Total interest income 324,573 273,391 18.7%
Interest Expense
Interest on deposits 99,242 53,598 85.2%
Interest on short-term borrowings 30,450 23,628 28.9%
Interest on long-term funding 26,664 32,087 (16.9%)
-------------- ------------
Total interest expense 156,356 109,313 43.0%
-------------- ------------
Net Interest Income 168,217 164,078 2.5%
Provision for loan losses 3,837 3,345 14.7%
-------------- ------------
Net interest income after
provision for
loan losses 164,380 160,733 2.3%
Noninterest Income
Trust service fees 9,339 8,667 7.8%
Service charges on deposit
accounts 23,438 22,830 2.7%
Mortgage banking, net 2,833 11,969 (76.3%)
Card-based and other nondeposit
fees 10,461 9,505 10.1%
Retail commissions 14,360 12,905 11.3%
Bank owned life insurance income 4,390 2,441 79.8%
Asset sale gains, net 89 942 N/M
Investment securities gains, net 1,164 1,446 N/M
Other 6,911 6,260 10.4%
-------------- ------------
Total noninterest income 72,985 76,965 (5.2%)
Noninterest Expense
Personnel expense 71,321 66,403 7.4%
Occupancy 10,442 9,412 10.9%
Equipment 4,355 4,199 3.7%
Data processing 7,190 7,129 0.9%
Business development and
advertising 4,142 4,570 (9.4%)
Stationery and supplies 1,787 1,599 11.8%
Other intangible amortization 2,280 1,903 19.8%
Other 22,169 22,133 0.2%
-------------- ------------
Total noninterest expense 123,686 117,348 5.4%
-------------- ------------
Income before income taxes 113,679 120,350 (5.5%)
Income tax expense 36,791 39,315 (6.4%)
-------------- ------------
Net Income $76,888 $81,035 (5.1%)
============== ============
Earnings Per Share:
Basic $0.58 $0.63 (7.9%)
Diluted $0.58 $0.63 (7.9%)
Average Shares Outstanding:
Basic 131,520 127,875 2.9%
Diluted 132,591 129,346 2.5%
Consolidated Statements of Income
(Unaudited)
Associated Banc-Corp
For The Nine Months Ended,
September 30,
---------------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $823,985 $636,931 29.4%
Interest and dividends on
investment securities and
deposits in other financial
institutions
Taxable 101,990 122,918 (17.0%)
Tax-exempt 29,640 28,985 2.3%
Interest on federal funds sold
and securities purchased under
agreements to resell 798 648 23.1%
-------------- ------------
Total interest income 956,413 789,482 21.1%
Interest Expense
Interest on deposits 265,196 146,118 81.5%
Interest on short-term borrowings 97,820 62,528 56.4%
Interest on long-term funding 89,912 84,176 6.8%
-------------- ------------
Total interest expense 452,928 292,822 54.7%
-------------- ------------
Net Interest Income 503,485 496,660 1.4%
Provision for loan losses 11,988 9,343 28.3%
-------------- ------------
Net interest income after
provision for
loan losses 491,497 487,317 0.9%
Noninterest Income
Trust service fees 27,543 25,962 6.1%
Service charges on deposit
accounts 67,379 63,710 5.8%
Mortgage banking, net 13,066 24,229 (46.1%)
Card-based and other nondeposit
fees 31,394 27,406 14.6%
Retail commissions 46,203 42,980 7.5%
Bank owned life insurance income 11,053 6,920 59.7%
Asset sale gains, net 213 1,179 N/M
Investment securities gains, net 5,158 2,937 N/M
Other 18,957 14,719 28.8%
-------------- ------------
Total noninterest income 220,966 210,042 5.2%
Noninterest Expense
Personnel expense 215,116 206,322 4.3%
Occupancy 32,854 28,674 14.6%
Equipment 13,166 12,431 5.9%
Data processing 21,537 20,150 6.9%
Business development and
advertising 12,492 12,662 (1.3%)
Stationery and supplies 5,345 5,087 5.1%
Other intangible amortization 6,904 6,189 11.6%
Other 64,403 63,409 1.6%
-------------- ------------
Total noninterest expense 371,817 354,924 4.8%
-------------- ------------
Income before income taxes 340,646 342,435 (0.5%)
Income tax expense 98,502 109,915 (10.4%)
-------------- ------------
Net Income $242,144 $232,520 4.1%
============== ============
Earnings Per Share:
Basic $1.82 $1.80 1.1%
Diluted $1.81 $1.79 1.1%
Average Shares Outstanding:
Basic 132,951 128,825 3.2%
Diluted 134,119 130,252 3.0%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands,
except per share
amounts) 3Q06 2Q06 1Q06 4Q05 3Q05
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $284,397 $278,573 $261,015 $252,443 $223,202
Interest and
dividends on
investment
securities and
deposits with other
financial
institutions
Taxable 30,225 32,649 39,116 41,486 40,050
Tax-exempt 9,691 9,786 10,163 10,325 9,755
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 260 289 249 289 384
--------- --------- --------- --------- ---------
Total interest
income 324,573 321,297 310,543 304,543 273,391
Interest Expense
Interest on deposits 99,242 88,076 77,878 66,934 53,598
Interest on short-
term borrowings 30,450 34,126 33,244 26,828 23,628
Interest on long-
term funding 26,664 30,696 32,552 35,186 32,087
--------- --------- --------- --------- ---------
Total interest
expense 156,356 152,898 143,674 128,948 109,313
--------- --------- --------- --------- ---------
Net Interest Income 168,217 168,399 166,869 175,595 164,078
Provision for loan
losses 3,837 3,686 4,465 3,676 3,345
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 164,380 164,713 162,404 171,919 160,733
Noninterest Income
Trust service fees 9,339 9,307 8,897 9,055 8,667
Service charges on
deposit accounts 23,438 22,982 20,959 23,073 22,830
Mortgage banking,
net 2,833 5,829 4,404 12,166 11,969
Card-based and other
nondeposit fees 10,461 11,047 9,886 10,033 9,505
Retail commissions 14,360 16,365 15,478 13,624 12,905
Bank owned life
insurance income 4,390 3,592 3,071 3,022 2,441
Asset sale gains
(losses), net 89 354 (230) 2,766 942
Investment
securities gains,
net 1,164 1,538 2,456 1,179 1,446
Other 6,911 6,194 5,852 6,126 6,260
--------- --------- --------- --------- ---------
Total
noninterest
income 72,985 77,208 70,773 81,044 76,965
Noninterest Expense
Personnel expense 71,321 74,492 69,303 68,619 66,403
Occupancy 10,442 10,654 11,758 10,287 9,412
Equipment 4,355 4,223 4,588 4,361 4,199
Data processing 7,190 7,099 7,248 7,240 7,129
Business development
and advertising 4,142 4,101 4,249 4,999 4,570
Stationery and
supplies 1,787 1,784 1,774 1,869 1,599
Other intangible
amortization 2,280 2,281 2,343 2,418 1,903
Other 22,169 20,026 22,208 25,746 22,133
--------- --------- --------- --------- ---------
Total
noninterest
expense 123,686 124,660 123,471 125,539 117,348
--------- --------- --------- --------- ---------
Income before income
taxes 113,679 117,261 109,706 127,424 120,350
Income tax expense 36,791 33,712 27,999 39,783 39,315
--------- --------- --------- --------- ---------
Net Income $76,888 $83,549 $81,707 $87,641 $81,035
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.58 $0.63 $0.60 $0.65 $0.63
Diluted $0.58 $0.63 $0.60 $0.64 $0.63
Average Shares
Outstanding:
Basic 131,520 132,259 135,114 135,684 127,875
Diluted 132,591 133,441 136,404 137,005 129,346
----------------------------------------------------------------------
Selected Quarterly
Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per
share & full
time equivalent
employee data) YTD 2006 YTD 2005 3rd Qtr 2006 2nd Qtr 2006
----------------------------------------------------------------------
Summary of
Operations
Net interest
income 503,485 496,660 168,217 168,399
Provision for
loan losses 11,988 9,343 3,837 3,686
Asset sale gains
(losses), net 213 1,179 89 354
Investment
securities
gains, net 5,158 2,937 1,164 1,538
Noninterest
income
(excluding
securities &
asset gains) 215,595 205,926 71,732 75,316
Noninterest
expense 371,817 354,924 123,686 124,660
Income before
income taxes 340,646 342,435 113,679 117,261
Income taxes 98,502 109,915 36,791 33,712
Net income 242,144 232,520 76,888 83,549
Taxable
equivalent
adjustment 19,665 18,743 6,495 6,503
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $1.82 $1.80 $0.58 $0.63
Diluted 1.81 1.79 0.58 0.63
Dividends 0.85 0.79 0.29 0.29
Market Value:
High $34.83 $34.74 $32.58 $34.45
Low 30.27 30.11 30.27 30.69
Close 32.50 30.48 32.50 31.53
Book value 17.44 16.12 17.44 17.20
----------------------------------------------------------------------
Performance
Ratios
(annualized)
Earning assets
yield 6.67% 5.68% 6.89% 6.74%
Interest-bearing
liabilities
rate 3.62 2.40 3.84 3.65
Net interest
margin 3.56 3.62 3.63 3.59
Return on
average assets 1.52 1.51 1.46 1.58
Return on
average equity 14.12 15.33 13.36 14.86
Return on
tangible
average equity
(2) 23.64 23.78 22.32 25.18
Efficiency ratio
(3) 50.33 49.20 50.19 49.82
Effective tax
rate 28.92 32.10 32.36 28.75
Dividend payout
ratio (4) 46.70 43.89 50.00 46.03
----------------------------------------------------------------------
Average Balances
Assets $21,339,661 $20,550,636 $20,891,001 $21,266,792
Earning assets 19,403,761 18,878,583 18,968,584 19,342,628
Interest-bearing
liabilities 16,660,455 16,181,956 16,070,975 16,717,761
Loans 15,416,219 14,075,913 15,404,223 15,515,789
Deposits 13,581,666 12,186,667 13,884,404 13,534,725
Wholesale
funding 5,368,157 6,183,220 4,636,853 5,391,108
Stockholders'
equity 2,292,597 2,027,672 2,283,933 2,254,933
Stockholders'
equity / assets 10.74% 9.87% 10.93% 10.60%
----------------------------------------------------------------------
At Period End
Assets $20,926,523 $21,128,354
Loans 15,284,608 15,405,630
Allowance for
loan losses 203,442 203,411
Goodwill 871,629 875,727
Mortgage
servicing
rights, net 67,931 69,282
Other intangible
assets, net 44,613 46,893
Deposits 14,208,545 13,646,408
Wholesale
funding 4,277,636 5,033,961
Stockholders'
equity 2,270,380 2,274,860
Stockholders'
equity / assets 10.85% 10.77%
Tangible equity
/ tangible
assets (5) 6.77% 6.69%
Shares
outstanding,
end of period 130,216 132,283
Shares
repurchased
during period 2,000 31
Average per
share cost of
shares
repurchased
during period $31.43 $-
Year-to-date
shares
repurchased
during period 6,061 4,061
YTD average per
share cost of
shares
repurchased
during period $32.74 $33.38
----------------------------------------------------------------------
Selected trend
information
Average full
time equivalent
employees 5,117 5,112
Trust assets
under
management, at
market value $5,500,000 $5,200,000
Mortgage loans
originated for
sale 388,914 359,361
Portfolio
serviced for
others 8,226,000 8,134,000
Mortgage
servicing
rights, net /
Portfolio
serviced for
others 0.83% 0.85%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except per
share & full time equivalent
employee data) 1st Qtr 2006 4th Qtr 2005 3rd Qtr 2005
----------------------------------------------------------------------
Summary of Operations
Net interest income 166,869 175,595 164,078
Provision for loan losses 4,465 3,676 3,345
Asset sale gains (losses), net (230) 2,766 942
Investment securities gains,
net 2,456 1,179 1,446
Noninterest income (excluding
securities & asset gains) 68,547 77,099 74,577
Noninterest expense 123,471 125,539 117,348
Income before income taxes 109,706 127,424 120,350
Income taxes 27,999 39,783 39,315
Net income 81,707 87,641 81,035
Taxable equivalent adjustment 6,667 6,766 6,347
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.60 $0.65 $0.63
Diluted 0.60 0.64 0.63
Dividends 0.27 0.27 0.27
Market Value:
High $34.83 $33.23 $34.74
Low 32.75 29.09 30.29
Close 33.98 32.55 30.48
Book value 16.98 17.15 16.12
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets yield 6.38% 6.12% 5.83%
Interest-bearing liabilities
rate 3.37 2.98 2.66
Net interest margin 3.48 3.59 3.56
Return on average assets 1.52 1.58 1.56
Return on average equity 14.16 14.99 15.85
Return on tangible average
equity (2) 23.48 22.70 24.55
Efficiency ratio (3) 51.00 48.38 47.90
Effective tax rate 25.52 31.22 32.67
Dividend payout ratio (4) 45.00 41.54 42.86
----------------------------------------------------------------------
Average Balances
Assets $21,871,969 $22,022,165 $20,607,901
Earning assets 19,910,420 20,080,758 18,960,035
Interest-bearing liabilities 17,204,860 17,090,134 16,198,492
Loans 15,327,803 15,154,225 14,163,827
Deposits 13,319,664 13,282,910 12,133,719
Wholesale funding 6,092,275 6,280,793 6,307,705
Stockholders' equity 2,339,539 2,320,134 2,027,785
Stockholders' equity / assets 10.70% 10.54% 9.84%
----------------------------------------------------------------------
At Period End
Assets $21,518,860 $22,100,082 $20,741,731
Loans 15,539,187 15,206,464 14,107,137
Allowance for loan losses 203,408 203,404 190,080
Goodwill 875,727 877,680 679,993
Mortgage servicing rights, net 68,116 68,841 78,688
Other intangible assets, net 49,174 51,517 37,004
Deposits 13,616,870 13,573,089 12,181,025
Wholesale funding 5,496,039 6,014,783 6,324,451
Stockholders' equity 2,244,695 2,324,978 2,062,565
Stockholders' equity / assets 10.43% 10.52% 9.94%
Tangible equity / tangible
assets (5) 6.41% 6.59% 6.72%
Shares outstanding, end of
period 132,167 135,602 127,985
Shares repurchased during
period 4,030 974 -
Average per share cost of
shares repurchased during
period $33.63 $30.82 $-
Year-to-date shares
repurchased during period 4,030 3,496 2,522
YTD average per share cost of
shares repurchased during
period $33.63 $32.43 $33.05
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 5,147 5,113 4,815
Trust assets under management,
at market value $5,200,000 $5,000,000 $4,900,000
Mortgage loans originated for
sale 246,724 356,280 498,343
Portfolio serviced for others 8,050,000 8,028,000 9,492,000
Mortgage servicing rights, net
/ Portfolio serviced for
others 0.85% 0.86% 0.83%
----------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits & stock
dividends.
(2) Return on tangible average equity = Net income divided by average
equity excluding average goodwill & 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, & asset sales gains, net.
(4) Ratio is based upon basic earnings per share.
(5) Tangible equity to tangible assets = Stockholders' equity
excluding goodwill & other intangible assets divided by assets
excluding goodwill & other intangible assets. This is a non-GAAP
financial measure.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp Three months ended
September 30,
---------------------------
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $203,411 $190,024 7.0%
Provision for loan losses 3,837 3,345 14.7%
Charge offs (6,448) (5,268) 22.4%
Recoveries 2,642 1,979 33.5%
------------------
Net charge offs (3,806) (3,289) 15.7%
------------------
Ending Balance $203,442 $190,080 7.0%
==================
Financial Summary and Comparison
Associated Banc-Corp Nine months ended
September 30,
---------------------------
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $203,404 $189,762 7.2%
Provision for loan losses 11,988 9,343 28.3%
Charge offs (19,933) (16,601) 20.1%
Recoveries 7,983 7,576 5.4%
------------------
Net charge offs (11,950) (9,025) 32.4%
------------------
Ending Balance $203,442 $190,080 7.0%
==================
----------------------------------------------------------------------
Credit Quality
3Q06 vs
Sept 30, June 30, 2Q06
2006 2006 % Change
-----------------------------
Nonaccrual loans $123,743 $95,426 29.7%
Loans 90 or more days past due and still
accruing 4,826 7,591 (36.4%)
Restructured loans 28 29 (3.4%)
---------------------
Total nonperforming loans 128,597 103,046 24.8%
Other real estate owned 13,866 14,947 (7.2%)
---------------------
Total nonperforming assets 142,463 117,993 20.7%
=====================
Provision for loan losses 3,837 3,686 4.1%
Net charge offs 3,806 3,683 3.3%
Allowance for loan losses / loans 1.33% 1.32%
Allowance for loan losses / nonperforming
loans 158.20 197.40
Nonperforming loans / total loans 0.84 0.67
Nonperforming assets / total assets 0.68 0.56
Net charge offs / average loans
(annualized) 0.10 0.10
Year-to-date net charge offs / average
loans 0.10 0.11
Credit Quality
3Q06 vs
March 31, Dec 31, Sept 30, 3Q05
2006 2005 2005 % Change
---------------------------------------
Nonaccrual loans $102,824 $95,313 $107,298 15.3%
Loans 90 or more days past due
and still accruing 7,068 3,270 3,354 43.9%
Restructured loans 31 32 33 (15.2%)
-----------------------------
Total nonperforming loans 109,923 98,615 110,685 16.2%
Other real estate owned 11,676 11,336 10,017 38.4%
-----------------------------
Total nonperforming assets 121,599 109,951 120,702 18.0%
=============================
Provision for loan losses 4,465 3,676 3,345 14.7%
Net charge offs 4,461 3,635 3,289 15.7%
Allowance for loan losses /
loans 1.31% 1.34% 1.35%
Allowance for loan losses /
nonperforming loans 185.05 206.26 171.73
Nonperforming loans / total
loans 0.71 0.65 0.78
Nonperforming assets / total
assets 0.57 0.50 0.58
Net charge offs / average loans
(annualized) 0.12 0.10 0.09
Year-to-date net charge offs /
average loans 0.12 0.09 0.09
----------------------------------------------------------------------
Period End Loan Composition
3Q06 vs
2Q06
Sept 30, 2006 June 30, 2006 % Change
-------------------------------------
Commercial, financial &
agricultural $3,549,216 $3,505,819 1.2%
Real estate - construction 2,186,810 2,122,136 3.0%
Commercial real estate 3,755,037 3,872,819 (3.0%)
Lease financing 79,234 74,919 5.8%
----------------------------
Commercial 9,570,297 9,575,693 (0.1%)
Home equity (a) 2,166,312 2,151,858 0.7%
Installment 940,139 945,123 (0.5%)
----------------------------
Retail 3,106,451 3,096,981 0.3%
Residential mortgage 2,607,860 2,732,956 (4.6%)
----------------------------
Total loans $15,284,608 $15,405,630 (0.8%)
============================
Period End Loan
Composition 3Q06 vs
3Q05
Mar 31, 2006 Dec 31, 2005 Sept 30, 2005 % Change
------------------------------------------------
Commercial, financial
& agricultural $3,571,835 $3,417,343 $3,213,656 10.4%
Real estate -
construction 1,981,473 1,783,267 1,519,681 43.9%
Commercial real
estate 4,024,260 4,064,327 3,648,169 2.9%
Lease financing 62,600 61,315 57,270 38.4%
----------------------------------------
Commercial 9,640,168 9,326,252 8,438,776 13.4%
Home equity (a) 2,121,601 2,025,055 1,878,436 15.3%
Installment 957,877 1,003,938 1,024,356 (8.2%)
----------------------------------------
Retail 3,079,478 3,028,993 2,902,792 7.0%
Residential
mortgage 2,819,541 2,851,219 2,765,569 (5.7%)
----------------------------------------
Total loans $15,539,187 $15,206,464 $14,107,137 8.3%
========================================
(a) Home equity includes home equity lines and residential
mortgage junior liens.
----------------------------------------------------------------------
Period End Deposit Composition
3Q06 vs
2Q06
Sept 30, 2006 June 30, 2006 % Change
-------------------------------------
Demand $2,534,686 $2,276,463 11.3%
Savings 959,650 1,031,993 (7.0%)
Interest-bearing demand 1,712,833 1,975,364 (13.3%)
Money market 3,959,719 3,434,288 15.3%
Brokered CDs 630,637 518,354 21.7%
Other time deposits 4,411,020 4,409,946 0.0%
---------------------------
Total deposits $14,208,545 $13,646,408 4.1%
===========================
Period End Deposit
Composition
3Q06 vs
3Q05
Mar 31, 2006 Dec 31, 2005 Sept 30, 2005 % Change
-------------------------------------------------
Demand $2,319,075 $2,504,926 $2,256,774 12.3%
Savings 1,074,938 1,079,851 1,074,234 (10.7%)
Interest-bearing
demand 2,347,104 2,549,782 2,252,711 (24.0%)
Money market 2,863,174 2,629,933 2,240,606 76.7%
Brokered CDs 567,660 529,307 407,459 54.8%
Other time deposits 4,444,919 4,279,290 3,949,241 11.7%
----------------------------------------
Total deposits $13,616,870 $13,573,089 $12,181,025 16.6%
========================================
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable
Equivalent Basis
Associated Banc-Corp Nine months ended
September 30, 2006
-------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,534,532 $525,319 7.27%
Residential mortgage 2,804,961 122,006 5.80
Retail 3,076,726 178,541 7.74
-----------------------
Total loans 15,416,219 825,866 7.09
Investments and other 3,987,542 150,212 5.02
-----------------------
Total earning assets 19,403,761 976,078 6.67
Other assets, net 1,935,900
------------
Total assets $21,339,661
============
Interest-bearing liabilities:
Savings deposits $1,037,542 $2,921 0.38%
Interest-bearing demand deposits 2,087,670 26,950 1.73
Money market deposits 3,188,616 84,086 3.53
Time deposits, excluding Brokered
CDs 4,398,820 129,618 3.94
-----------------------
Total interest-bearing deposits,
excluding Brokered CDs 10,712,648 243,575 3.04
Brokered CDs 579,650 21,621 4.99
-----------------------
Total interest-bearing deposits 11,292,298 265,196 3.14
Wholesale funding 5,368,157 187,732 4.62
-----------------------
Total interest-bearing liabilities 16,660,455 452,928 3.62
Noninterest-bearing demand 2,289,368
Other liabilities 97,241
Stockholders' equity 2,292,597
------------
Total liabilities and stockholders'
equity $21,339,661
============
-----------
Net interest income and rate spread
(1) $523,150 3.05%
===========
Net interest margin (1) 3.56%
Taxable equivalent adjustment $19,665
===========
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
===========
----------------------------------------------------------------------
Three months ended
September 30, 2006
------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,571,264 $182,603 7.47%
Residential mortgage 2,727,101 40,348 5.89
Retail 3,105,858 62,127 7.96
-----------------------
Total loans 15,404,223 285,078 7.29
Investments and other 3,564,361 45,990 5.16
-----------------------
Total earning assets 18,968,584 331,068 6.89
Other assets, net 1,922,417
------------
Total assets $20,891,001
============
Interest-bearing liabilities:
Savings deposits $993,677 $998 0.40%
Interest-bearing demand deposits 1,740,296 7,571 1.73
Money market deposits 3,582,339 34,438 3.81
Time deposits, excluding Brokered
CDs 4,433,660 47,049 4.21
-----------------------
Total interest-bearing deposits,
excluding Brokered CDs 10,749,972 90,056 3.32
Brokered CDs 684,150 9,186 5.33
-----------------------
Total interest-bearing deposits 11,434,122 99,242 3.44
Wholesale funding 4,636,853 57,114 4.83
-----------------------
Total interest-bearing liabilities 16,070,975 156,356 3.84
Noninterest-bearing demand 2,450,282
Other liabilities 85,811
Stockholders' equity 2,283,933
------------
Total liabilities and stockholders'
equity $20,891,001
============
-----------
Net interest income and rate spread
(1) $174,712 3.05%
===========
Net interest margin (1) 3.63%
Taxable equivalent adjustment $6,495
===========
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
===========
(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.
----------------------------------------------------------------------
Source: Associated Banc-Corp
Contact: Associated Banc-Corp
Investors:
Joe Selner, Chief Financial Officer, 920-491-7120
or
Media:
Cindy Moon-Mogush, Corporate Communications, 920-431-8034