GREEN BAY, Wis.--(BUSINESS WIRE)--July 20, 2006--
Associated Banc-Corp (Nasdaq:ASBC):
-- Net income up 13% over the second quarter of '05
-- Wholesale funding reduced by $1.6 billion since September '05
-- Net interest margin improvement of 11 bp vs. first quarter of
'06
-- Credit quality remains solid
Associated Banc-Corp (Nasdaq:ASBC) earned $.63 per diluted share
in the second quarter of 2006, up 11 percent from $.57 per diluted
share for the second quarter of 2005. For the six months that ended
June 30, 2006, diluted earnings per share were $1.23, up 6 percent
from $1.16 per diluted share for the comparable period in 2005.
Net income for the second quarter of 2006 was $83.5 million, up 13
percent compared to $74.0 million earned in the second quarter of
2005. For the year to date, net income was $165.3 million for 2006, up
9 percent over $151.5 million for the comparable six months of 2005.
Book value per share rose to $17.20 as of June 30, 2006, up 9 percent
compared to a year earlier.
For the second quarter of 2006, return on average assets (ROA) was
1.58 percent, up from 1.44 percent for the second quarter of last
year. Return on average equity (ROE) grew to 14.86 percent for the
second quarter, versus 14.62 percent for the comparable quarter last
year. For the first six months of 2006, ROA was 1.55 percent and ROE
was 14.51 percent, compared to 1.49 percent and 15.07 percent,
respectively, last year.
Return on average tangible equity (which is a non-GAAP measure
that excludes average goodwill and other intangible assets from
average equity) was 24.31 percent for the first half of 2006, versus
23.38 percent in the first half of 2005.
Average loans grew to $15.5 billion for second quarter 2006, up 5
percent, on an annualized basis, over first quarter 2006 average
loans, and up 10 percent over the comparable quarter last year.
Average home equity loans grew 18 percent and commercial loans grew 8
percent, annualized, between first and second quarters of 2006.
As of June 30, 2006, the allowance for loan losses represented
1.32 percent of total loans and covered 197 percent of nonperforming
loans. Nonperforming loans declined to $103 million, representing 0.67
percent of total loans, compared to $110 million (or 0.71 percent of
loans) at March 31, 2006, and $113 million (or 0.80 percent) at June
30, 2005. The provision for loan losses, approximating net charge-offs
for each quarterly period, was $3.7 million, $4.5 million, and $3.7
million, respectively, for the second quarter of 2006, the first
quarter of 2006, and the comparable second quarter of 2005. On a
year-to-date basis, the provision for loan losses was $8.2 million for
2006, versus $6.0 million for the comparable first half of 2005. Net
charge-offs represented 0.11 percent of average loans, compared to
0.08 percent for the comparable first half of 2005.
Average deposits for second quarter were $13.5 billion, up 6
percent annualized over first quarter 2006 average deposits, and up 12
percent over the comparable quarter last year.
Associated's net interest margin for the second quarter of 2006
was 3.59 percent, compared to 3.48 percent for first quarter 2006 and
3.63 percent for the second quarter of 2005.
Since Sept. 30, 2005, and after adjusting for a fourth quarter
2005 acquisition, wholesale funding has been reduced by $1.6 billion,
through the use of investment cash flows and improved deposit flows.
This initiative has reduced the ratio of wholesale funding to total
funding from 34 percent at Sept. 30, 2005, to 27 percent at June 30,
2006, and benefited the second quarter 2006 net interest margin.
Core fee-based revenues including trust service fees, service
charges on deposits, card-based and other non-deposit fees, and retail
commissions totaled $59.7 million for the second quarter of 2006, up 8
percent over both the first quarter of 2006 and the second quarter of
2005.
Net mortgage banking income was $5.8 million for the second
quarter of 2006, up from $4.4 million in the first quarter, and $2.4
million for the second quarter of 2005. Included in net mortgage
banking for these same periods were valuation adjustments on the
mortgage servicing asset consisting of a $1.9 million recovery, a $1.4
million recovery, and a $2.5 million additional valuation expense, for
the respective quarters.
All other noninterest income sources combined totaled $11.7
million for the second quarter of 2006, an increase of $.5 million (5
percent) over the previous quarter, and up $7.7 million over the
comparable second quarter of 2005. Other noninterest income for the
second quarter of 2005 reflected a $6.7 million net loss on
derivatives no longer accounted for as hedges.
Noninterest expenses remain controlled, with the efficiency ratio
at 49.82 percent, 51.00 percent and 50.03 percent for the second
quarter of 2006, the first quarter of 2006 and the second quarter of
2005, respectively. Noninterest expense was $124.7 million for the
second quarter of 2006, up $1.2 million (1 percent) over the first
quarter of 2006, and up $8.3 million (7 percent) compared to the
second quarter of 2005.
Income tax expense was $33.7 million for the second quarter of
2006, down from $34.4 million for the second quarter of 2005. The
current quarter includes a $4.2 million reduction of income tax
expense related to changes in exposure of uncertain tax positions.
Associated settled the March 2006 repurchase of 4 million shares
of its common stock during the second quarter.
"We are pleased with many aspects of our second quarter results,
including our reduced wholesale funding, fee income growth and asset
quality. We will continue working to strengthen the quality and
sustainability of our earnings growth through implementation of our
strategic priorities," Associated President and CEO Paul S. 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
second quarter 2006 earnings call, or for call ID number 7595441. A
replay of the call will be available from 6 p.m. CDT today through
July 27 by calling 877-519-4471 (toll-free) domestically or
973-341-3080 internationally. The call ID number, 7595441, 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
June 30 December 31
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $429,625 $460,230 (6.6%)
Interest-bearing deposits in other
financial institutions 21,567 14,254 51.3%
Federal funds sold and securities
purchased under agreements to resell 14,344 17,811 (19.5%)
Investment securities available
for sale, at fair value 3,505,471 4,711,605 (25.6%)
Loans held for sale 54,016 57,710 (6.4%)
Loans 15,405,630 15,206,464 1.3%
Allowance for loan losses (203,411) (203,404) 0.0%
------------ ------------
Loans, net 15,202,219 15,003,060 1.3%
Premises and equipment 198,279 206,153 (3.8%)
Goodwill 875,727 877,680 (0.2%)
Other intangible assets, net 116,175 120,358 (3.5%)
Other assets 710,931 631,221 12.6%
------------ ------------
Total assets $21,128,354 $22,100,082 (4.4%)
============ ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,276,463 $2,504,926 (9.1%)
Interest-bearing deposits,
excluding Brokered CDs 10,851,591 10,538,856 3.0%
Brokered CDs 518,354 529,307 (2.1%)
------------ ------------
Total deposits 13,646,408 13,573,089 0.5%
Short-term borrowings 2,561,092 2,666,307 (3.9%)
Long-term funding 2,472,869 3,348,476 (26.1%)
Accrued expenses and other
liabilities 173,125 187,232 (7.5%)
------------ ------------
Total liabilities 18,853,494 19,775,104 (4.7%)
Stockholders' Equity
Preferred stock - -
Common stock 1,324 1,357 (2.4%)
Surplus 1,183,047 1,301,004 (9.1%)
Retained earnings 1,119,036 1,029,247 8.7%
Accumulated other comprehensive
income (loss) (28,047) (3,938) 612.2%
Deferred compensation - (2,081) (100.0%)
Treasury stock, at cost (500) (611) (18.2%)
------------ ------------
Total stockholders' equity 2,274,860 2,324,978 (2.2%)
------------ ------------
Total liabilities and
stockholders' equity $21,128,354 $22,100,082 (4.4%)
============ ============
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
June 30
(in thousands) 2005 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $412,212 4.2%
Interest-bearing deposits in other
financial institutions 11,236 91.9%
Federal funds sold and securities
purchased under agreements to resell 44,325 (67.6%)
Investment securities available for
sale, at fair value 4,794,983 (26.9%)
Loans held for sale 112,077 (51.8%)
Loans 14,054,506 9.6%
Allowance for loan losses (190,024) 7.0%
------------
Loans, net 13,864,482 9.6%
Premises and equipment 179,667 10.4%
Goodwill 679,993 28.8%
Other intangible assets, net 113,010 2.8%
Other assets 541,729 31.2%
------------
Total assets $20,753,714 1.8%
============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $2,250,482 1.2%
Interest-bearing deposits,
excluding Brokered CDs 9,356,368 16.0%
Brokered CDs 491,781 5.4%
------------
Total deposits 12,098,631 12.8%
Short-term borrowings 2,775,508 (7.7%)
Long-term funding 3,685,078 (32.9%)
Accrued expenses and other
liabilities 176,062 (1.7%)
------------
Total liabilities 18,735,279 0.6%
Stockholders' Equity
Preferred stock -
Common stock 1,280 3.4%
Surplus 1,062,702 11.3%
Retained earnings 934,287 19.8%
Accumulated other comprehensive
income (loss) 29,608 (194.7%)
Deferred compensation (3,814) (100.0%)
Treasury stock, at cost (5,628) (91.1%)
------------
Total stockholders' equity 2,018,435 12.7%
------------
Total liabilities and
stockholders' equity $20,753,714 1.8%
============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended,
June 30,
---------------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $278,573 $213,420 30.5%
Interest and dividends on
investment securities
and deposits with other
financial institutions
Taxable 32,649 41,834 (22.0%)
Tax-exempt 9,786 9,507 2.9%
Interest on federal funds sold
and securities purchased under
agreements to resell 289 182 58.8%
------------- -------------
Total interest income 321,297 264,943 21.3%
Interest Expense
Interest on deposits 88,076 48,087 83.2%
Interest on short-term
borrowings 34,126 21,731 57.0%
Interest on long-term funding 30,696 28,451 7.9%
------------- -------------
Total interest expense 152,898 98,269 55.6%
------------- -------------
Net Interest Income 168,399 166,674 1.0%
Provision for loan losses 3,686 3,671 0.4%
------------- -------------
Net interest income after
provision for
loan losses 164,713 163,003 1.0%
Noninterest Income
Trust service fees 9,307 8,967 3.8%
Service charges on deposit
accounts 22,982 22,215 3.5%
Mortgage banking, net 5,829 2,376 145.3%
Card-based and other nondeposit
fees 11,047 8,790 25.7%
Retail commissions 16,365 15,370 6.5%
Bank owned life insurance income 3,592 2,311 55.4%
Asset sale gains, net 354 539 N/M
Investment securities gains, net 1,538 1,491 N/M
Other 6,194 (355) N/M
------------- -------------
Total noninterest income 77,208 61,704 25.1%
Noninterest Expense
Personnel expense 74,492 66,934 11.3%
Occupancy 10,654 9,374 13.7%
Equipment 4,223 4,214 0.2%
Data processing 7,099 6,728 5.5%
Business development and
advertising 4,101 4,153 (1.3%)
Stationery and supplies 1,784 1,644 8.5%
Other intangible amortization 2,281 2,292 (0.5%)
Other 20,026 20,995 (4.6%)
------------- -------------
Total noninterest expense 124,660 116,334 7.2%
------------- -------------
Income before income taxes 117,261 108,373 8.2%
Income tax expense 33,712 34,358 (1.9%)
------------- -------------
Net Income $83,549 $74,015 12.9%
============= =============
Earnings Per Share:
Basic $0.63 $0.57 10.5%
Diluted $0.63 $0.57 10.5%
Average Shares Outstanding:
Basic 132,259 128,990 2.5%
Diluted 133,441 130,463 2.3%
N/M - Not meaningful.
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Six Months Ended,
June 30,
---------------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $539,588 $413,729 30.4%
Interest and dividends on
investment securities
and deposits with other
financial institutions
Taxable 71,765 82,868 (13.4%)
Tax-exempt 19,949 19,230 3.7%
Interest on federal funds sold
and securities purchased under
agreements to resell 538 264 103.8%
------------- -------------
Total interest income 631,840 516,091 22.4%
Interest Expense
Interest on deposits 165,954 92,520 79.4%
Interest on short-term
borrowings 67,370 38,900 73.2%
Interest on long-term funding 63,248 52,089 21.4%
------------- -------------
Total interest expense 296,572 183,509 61.6%
------------- -------------
Net Interest Income 335,268 332,582 0.8%
Provision for loan losses 8,151 5,998 35.9%
------------- -------------
Net interest income after
provision for
loan losses 327,117 326,584 0.2%
Noninterest Income
Trust service fees 18,204 17,295 5.3%
Service charges on deposit
accounts 43,941 40,880 7.5%
Mortgage banking, net 10,233 12,260 (16.5%)
Card-based and other nondeposit
fees 20,933 17,901 16.9%
Retail commissions 31,843 30,075 5.9%
Bank owned life insurance income 6,663 4,479 48.8%
Asset sale gains, net 124 237 N/M
Investment securities gains, net 3,994 1,491 N/M
Other 12,046 8,459 42.4%
------------- -------------
Total noninterest income 147,981 133,077 11.2%
Noninterest Expense
Personnel expense 143,795 139,919 2.8%
Occupancy 22,412 19,262 16.4%
Equipment 8,811 8,232 7.0%
Data processing 14,347 13,021 10.2%
Business development and
advertising 8,350 8,092 3.2%
Stationery and supplies 3,558 3,488 2.0%
Other intangible amortization 4,624 4,286 7.9%
Other 42,234 41,276 2.3%
------------- -------------
Total noninterest expense 248,131 237,576 4.4%
------------- -------------
Income before income taxes 226,967 222,085 2.2%
Income tax expense 61,711 70,600 (12.6%)
------------- -------------
Net Income $165,256 $151,485 9.1%
============= =============
Earnings Per Share:
Basic $1.24 $1.17 6.0%
Diluted $1.23 $1.16 6.0%
Average Shares Outstanding:
Basic 133,678 129,383 3.3%
Diluted 134,903 130,868 3.1%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands,
except per share
amounts) 2Q06 1Q06 4Q05 3Q05 2Q05
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $278,573 $261,015 $252,443 $223,202 $213,420
Interest and
dividends on
investment
securities
and deposits with
other financial
institutions
Taxable 32,649 39,116 41,486 40,050 41,834
Tax-exempt 9,786 10,163 10,325 9,755 9,507
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 289 249 289 384 182
--------- --------- --------- --------- ---------
Total interest
income 321,297 310,543 304,543 273,391 264,943
Interest Expense
Interest on deposits 88,076 77,878 66,934 53,598 48,087
Interest on short-
term borrowings 34,126 33,244 26,828 23,628 21,731
Interest on long-
term funding 30,696 32,552 35,186 32,087 28,451
--------- --------- --------- --------- ---------
Total interest
expense 152,898 143,674 128,948 109,313 98,269
--------- --------- --------- --------- ---------
Net Interest Income 168,399 166,869 175,595 164,078 166,674
Provision for loan
losses 3,686 4,465 3,676 3,345 3,671
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 164,713 162,404 171,919 160,733 163,003
Noninterest Income
Trust service fees 9,307 8,897 9,055 8,667 8,967
Service charges on
deposit accounts 22,982 20,959 23,073 22,830 22,215
Mortgage banking,
net 5,829 4,404 12,166 11,969 2,376
Card-based and other
nondeposit fees 11,047 9,886 10,033 9,505 8,790
Retail commissions 16,365 15,478 13,624 12,905 15,370
Bank owned life
insurance income 3,592 3,071 3,022 2,441 2,311
Asset sale gains
(losses), net 354 (230) 2,766 942 539
Investment
securities gains,
net 1,538 2,456 1,179 1,446 1,491
Other 6,194 5,852 6,126 6,260 (355)
--------- --------- --------- --------- ---------
Total noninterest
income 77,208 70,773 81,044 76,965 61,704
Noninterest Expense
Personnel expense 74,492 69,303 68,619 66,403 66,934
Occupancy 10,654 11,758 10,287 9,412 9,374
Equipment 4,223 4,588 4,361 4,199 4,214
Data processing 7,099 7,248 7,240 7,129 6,728
Business development
and advertising 4,101 4,249 4,999 4,570 4,153
Stationery and
supplies 1,784 1,774 1,869 1,599 1,644
Other intangible
amortization 2,281 2,343 2,418 1,903 2,292
Other 20,026 22,208 25,746 22,133 20,995
--------- --------- --------- --------- ---------
Total
noninterest
expense 124,660 123,471 125,539 117,348 116,334
--------- --------- --------- --------- ---------
Income before income
taxes 117,261 109,706 127,424 120,350 108,373
Income tax expense 33,712 27,999 39,783 39,315 34,358
--------- --------- --------- --------- ---------
Net Income $83,549 $81,707 $87,641 $81,035 $74,015
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.63 $0.60 $0.65 $0.63 $0.57
Diluted $0.63 $0.60 $0.64 $0.63 $0.57
Average Shares
Outstanding:
Basic 132,259 135,114 135,684 127,875 128,990
Diluted 133,441 136,404 137,005 129,346 130,463
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per share
& full time
equivalent
employee data) YTD 2006 YTD 2005 2nd Qtr 2006 1st Qtr 2006
----------------------------------------------------------------------
Summary of Operations
Net interest
income 335,268 332,582 168,399 166,869
Provision for
loan losses 8,151 5,998 3,686 4,465
Asset sale gains
(losses), net 124 237 354 (230)
Investment
securities
gains, net 3,994 1,491 1,538 2,456
Noninterest income
(excluding
securities &
asset gains) 143,863 131,349 75,316 68,547
Noninterest
expense 248,131 237,576 124,660 123,471
Income before
income taxes 226,967 222,085 117,261 109,706
Income taxes 61,711 70,600 33,712 27,999
Net income 165,256 151,485 83,549 81,707
Taxable
equivalent
adjustment 13,170 12,396 6,503 6,667
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $1.24 $1.17 $0.63 $0.60
Diluted 1.23 1.16 0.63 0.60
Dividends 0.56 0.52 0.29 0.27
Market Value:
High $34.83 $33.89 $34.45 $34.83
Low 30.69 30.11 30.69 32.75
Close 31.53 33.58 31.53 33.98
Book value 17.20 15.80 17.20 16.98
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 6.56% 5.60% 6.74% 6.38%
Interest-bearing
liabilities rate 3.51 2.27 3.65 3.37
Net interest
margin 3.53 3.65 3.59 3.48
Return on average
assets 1.55 1.49 1.58 1.52
Return on average
equity 14.51 15.07 14.86 14.16
Return on
tangible average
equity (2) 24.31 23.38 25.18 23.48
Efficiency ratio (3) 50.40 49.88 49.82 51.00
Effective tax
rate 27.19 31.79 28.75 25.52
Dividend payout
ratio (4) 45.16 44.44 46.03 45.00
----------------------------------------------------------------------
Average Balances
Assets $21,567,709 $20,521,530 $21,266,792 $21,871,969
Earning assets 19,624,955 18,837,181 19,342,628 19,910,420
Interest-bearing
liabilities 16,959,965 16,173,550 16,717,761 17,204,860
Loans 15,422,315 14,031,228 15,515,789 15,327,803
Deposits 13,427,789 12,213,580 13,534,725 13,319,664
Wholesale funding 5,739,755 6,119,944 5,391,108 6,092,275
Stockholders'
equity 2,297,002 2,027,615 2,254,933 2,339,539
Stockholders'
equity / assets 10.65% 9.88% 10.60% 10.70%
----------------------------------------------------------------------
At Period End
Assets $21,128,354 $21,518,860
Loans 15,405,630 15,539,187
Allowance for
loan losses 203,411 203,408
Goodwill 875,727 875,727
Mortgage
servicing
rights, net 69,282 68,116
Other intangible
assets, net 46,893 49,174
Deposits 13,646,408 13,616,870
Wholesale funding 5,033,961 5,496,039
Stockholders'
equity 2,274,860 2,244,695
Stockholders'
equity / assets 10.77% 10.43%
Tangible equity /
tangible assets (5) 6.69% 6.41%
Shares
outstanding, end
of period 132,283 132,167
Shares
repurchased
during period 31 4,030
Average per share
cost of shares
repurchased
during period $ - $33.63
Year-to-date
shares
repurchased
during period 4,061 4,030
YTD average per
share cost of
shares
repurchased
during period $33.38 $33.63
----------------------------------------------------------------------
Selected trend information
Average full time
equivalent
employees 5,112 5,147
Trust assets
under
management, at
market value $5,200,000 $5,200,000
Mortgage loans
originated for
sale 359,361 246,724
Portfolio
serviced for
others 8,134,000 8,050,000
Mortgage
servicing
rights, net /
Portfolio
serviced for
others 0.85% 0.85%
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except per
share & full time equivalent
employee data) 4th Qtr 2005 3rd Qtr 2005 2nd Qtr 2005
----------------------------------------------------------------------
Summary of Operations
Net interest income 175,595 164,078 166,674
Provision for loan losses 3,676 3,345 3,671
Asset sale gains (losses), net 2,766 942 539
Investment securities gains,
net 1,179 1,446 1,491
Noninterest income (excluding
securities & asset gains) 77,099 74,577 59,674
Noninterest expense 125,539 117,348 116,334
Income before income taxes 127,424 120,350 108,373
Income taxes 39,783 39,315 34,358
Net income 87,641 81,035 74,015
Taxable equivalent adjustment 6,766 6,347 6,174
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.65 $0.63 $0.57
Diluted 0.64 0.63 0.57
Dividends 0.27 0.27 0.27
Market Value:
High $33.23 $34.74 $33.89
Low 29.09 30.29 30.11
Close 32.55 30.48 33.58
Book value 17.15 16.12 15.80
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets yield 6.12% 5.83% 5.71%
Interest-bearing liabilities
rate 2.98 2.66 2.42
Net interest margin 3.59 3.56 3.63
Return on average assets 1.58 1.56 1.44
Return on average equity 14.99 15.85 14.62
Return on tangible average
equity (2) 22.70 24.55 22.65
Efficiency ratio (3) 48.38 47.90 50.03
Effective tax rate 31.22 32.67 31.70
Dividend payout ratio (4) 41.54 42.86 47.37
----------------------------------------------------------------------
Average Balances
Assets $22,022,165 $20,607,901 $20,574,770
Earning assets 20,080,758 18,960,035 18,916,921
Interest-bearing liabilities 17,090,134 16,198,492 16,207,719
Loans 15,154,225 14,163,827 14,084,246
Deposits 13,282,910 12,133,719 12,069,719
Wholesale funding 6,280,793 6,307,705 6,326,418
Stockholders' equity 2,320,134 2,027,785 2,030,929
Stockholders' equity / assets 10.54% 9.84% 9.87%
----------------------------------------------------------------------
At Period End
Assets $22,100,082 $20,741,731 $20,753,714
Loans 15,206,464 14,107,137 14,054,506
Allowance for loan losses 203,404 190,080 190,024
Goodwill 877,680 679,993 679,993
Mortgage servicing rights, net 68,841 78,688 74,103
Other intangible assets, net 51,517 37,004 38,907
Deposits 13,573,089 12,181,025 12,098,631
Wholesale funding 6,014,783 6,324,451 6,460,586
Stockholders' equity 2,324,978 2,062,565 2,018,435
Stockholders' equity / assets 10.52% 9.94% 9.73%
Tangible equity / tangible
assets (5) 6.59% 6.72% 6.49%
Shares outstanding, end of
period 135,602 127,985 127,743
Shares repurchased during
period 974 - 2,111
Average per share cost of
shares repurchased during
period $30.82 $ - $33.10
Year-to-date shares
repurchased during period 3,496 2,522 2,522
YTD average per share cost of
shares repurchased during
period $32.43 $33.05 $33.05
----------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 5,113 4,815 4,889
Trust assets under management,
at market value $5,000,000 $4,900,000 $4,800,000
Mortgage loans originated for
sale 356,280 498,343 385,677
Portfolio serviced for others 8,028,000 9,492,000 9,479,000
Mortgage servicing rights, net
/ Portfolio serviced for
others 0.86% 0.83% 0.78%
----------------------------------------------------------------------
(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
June 30,
----------------------------
(in thousands) 2006 2005 % Change
---------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $203,408 $189,917 7.1%
Provision for loan losses 3,686 3,671 0.4%
Charge offs (7,423) (5,650) 31.4%
Recoveries 3,740 2,086 79.3%
-------------------
Net charge offs (3,683) (3,564) 3.3%
-------------------
Ending Balance $203,411 $190,024 7.0%
===================
Financial Summary and Comparison
Associated Banc-Corp Six months ended
June 30,
----------------------------
(in thousands) 2006 2005 % Change
---------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $203,404 $189,762 7.2%
Provision for loan losses 8,151 5,998 35.9%
Charge offs (13,485) (11,333) 19.0%
Recoveries 5,341 5,597 (4.6%)
-------------------
Net charge offs (8,144) (5,736) 42.0%
-------------------
Ending Balance $203,411 $190,024 7.0%
===================
----------------------------------------------------------------------
Credit Quality
2Q06 vs
June 30, Mar 31, 1Q06
2006 2006 % Change
-----------------------------
Nonaccrual loans $95,426 $102,824 (7.2%)
Loans 90 or more days past due and still
accruing 7,591 7,068 7.4%
Restructured loans 29 31 (6.5%)
-------------------
Total nonperforming loans 103,046 109,923 (6.3%)
Other real estate owned 14,947 11,676 28.0%
-------------------
Total nonperforming assets 117,993 121,599 (3.0%)
===================
Provision for loan losses 3,686 4,465 (17.4%)
Net charge offs 3,683 4,461 (17.4%)
Allowance for loan losses / loans 1.32% 1.31%
Allowance for loan losses /
nonperforming loans 197.40 185.05
Nonperforming loans / total loans 0.67 0.71
Nonperforming assets / total assets 0.56 0.57
Net charge offs / average loans
(annualized) 0.10 0.12
Year-to-date net charge offs / average
loans 0.11 0.12
Credit Quality
2Q06 vs
Dec 31, Sept 30, June 30, 2Q05
2005 2005 2005 % Change
---------------------------------------
Nonaccrual loans $95,313 $107,298 $109,698 (13.0%)
Loans 90 or more days past due
and still accruing 3,270 3,354 2,806 170.5%
Restructured loans 32 33 35 (17.1%)
-----------------------------
Total nonperforming loans 98,615 110,685 112,539 (8.4%)
Other real estate owned 11,336 10,017 3,685 305.6%
-----------------------------
Total nonperforming assets 109,951 120,702 116,224 1.5%
=============================
Provision for loan losses 3,676 3,345 3,671 0.4%
Net charge offs 3,635 3,289 3,564 3.3%
Allowance for loan losses /
loans 1.34% 1.35% 1.35%
Allowance for loan losses /
nonperforming loans 206.26 171.73 168.85
Nonperforming loans / total
loans 0.65 0.78 0.80
Nonperforming assets / total
assets 0.50 0.58 0.56
Net charge offs / average
loans (annualized) 0.10 0.09 0.10
Year-to-date net charge offs /
average loans 0.09 0.09 0.08
----------------------------------------------------------------------
Period End Loan 2Q06 vs
Composition 1Q06
June 30, 2006 Mar 31, 2006 % Change
------------------------------------
Commercial, financial &
agricultural $3,505,819 $3,571,835 (1.8%)
Real estate - construction 2,122,136 1,981,473 7.1%
Commercial real estate 3,872,819 4,024,260 (3.8%)
Lease financing 74,919 62,600 19.7%
--------------------------
Commercial 9,575,693 9,640,168 (0.7%)
Home equity (a) 2,151,858 2,121,601 1.4%
Installment 945,123 957,877 (1.3%)
--------------------------
Retail 3,096,981 3,079,478 0.6%
Residential mortgage 2,732,956 2,819,541 (3.1%)
--------------------------
Total loans $15,405,630 $15,539,187 (0.9%)
==========================
Period End Loan 2Q06 vs
Composition 2Q05
Dec 31, 2005 Sept 30, 2005 June 30, 2005 % Change
--------------------------------------------------
Commercial,
financial &
agricultural $3,417,343 $3,213,656 $3,086,663 13.6%
Real estate -
construction 1,783,267 1,519,681 1,640,941 29.3%
Commercial real
estate 4,064,327 3,648,169 3,650,726 6.1%
Lease financing 61,315 57,270 53,270 40.6%
----------------------------------------
Commercial 9,326,252 8,438,776 8,431,600 13.6%
Home equity (a) 2,025,055 1,878,436 1,806,236 19.1%
Installment 1,003,938 1,024,356 1,025,621 (7.8%)
----------------------------------------
Retail 3,028,993 2,902,792 2,831,857 9.4%
Residential
mortgage 2,851,219 2,765,569 2,791,049 (2.1%)
----------------------------------------
Total loans $15,206,464 $14,107,137 $14,054,506 9.6%
========================================
(a) Home equity includes home equity lines and residential mortgage
junior liens.
--------------------------------------------------------------------
Period End Deposit 2Q06 vs
Composition 1Q06
June 30, 2006 Mar 31, 2006 % Change
-------------------------------------
Demand $2,276,463 $2,319,075 (1.8%)
Savings 1,031,993 1,074,938 (4.0%)
Interest-bearing demand 1,975,364 2,347,104 (15.8%)
Money market 3,434,288 2,863,174 19.9%
Brokered CDs 518,354 567,660 (8.7%)
Other time deposits 4,409,946 4,444,919 (0.8%)
---------------------------
Total deposits $13,646,408 $13,616,870 0.2%
===========================
Period End Deposit 2Q06 vs
Composition 2Q05
Dec 31, 2005 Sept 30, 2005 June 30, 2005 % Change
---------------------------------------------------
Demand $2,504,926 $2,256,774 $2,250,482 1.2%
Savings 1,079,851 1,074,234 1,117,922 (7.7%)
Interest-bearing
demand 2,549,782 2,252,711 2,227,188 (11.3%)
Money market 2,629,933 2,240,606 2,094,796 63.9%
Brokered CDs 529,307 407,459 491,781 5.4%
Other time
deposits 4,279,290 3,949,241 3,916,462 12.6%
-----------------------------------------
Total deposits $13,573,089 $12,181,025 $12,098,631 12.8%
=========================================
----------------------------------------------------------------------
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Six months ended June 30, 2006
------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,515,862 $342,716 7.17%
Residential mortgage 2,844,536 81,658 5.75
Retail 3,061,917 116,414 7.63
----------------------
Total loans 15,422,315 540,788 7.00
Investments and other 4,202,640 104,222 4.96
----------------------
Total earning assets 19,624,955 645,010 6.56
Other assets, net 1,942,754
------------
Total assets $21,567,709
============
Interest-bearing liabilities:
Savings deposits $1,059,838 $1,923 0.37%
Interest-bearing demand deposits 2,264,235 19,378 1.73
Money market deposits 2,988,491 49,648 3.35
Time deposits, excluding Brokered
CDs 4,381,112 82,569 3.80
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 10,693,676 153,518 2.89
Brokered CDs 526,534 12,436 4.76
----------------------
Total interest-bearing deposits 11,220,210 165,954 2.98
Wholesale funding 5,739,755 130,618 4.53
----------------------
Total interest-bearing liabilities 16,959,965 296,572 3.51
Noninterest-bearing demand 2,207,579
Other liabilities 103,163
Stockholders' equity 2,297,002
------------
Total liabilities and stockholders'
equity $21,567,709
============
---------
Net interest income and rate spread (1) $348,438 3.05%
=========
Net interest margin (1) 3.53%
Taxable equivalent adjustment $13,170
=========
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Six months ended June 30, 2005
-------------------------------
(in thousands) Interest Average
Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,328,884 $241,201 5.76%
Residential mortgage 2,857,510 79,361 5.56
Retail 2,844,834 94,025 6.64
----------------------
Total loans 14,031,228 414,587 5.90
Investments and other 4,805,953 113,900 4.74
----------------------
Total earning assets 18,837,181 528,487 5.60
Other assets, net 1,684,349
------------
Total assets $20,521,530
============
Interest-bearing liabilities:
Savings deposits $1,126,486 $2,053 0.37%
Interest-bearing demand deposits 2,475,344 13,423 1.09
Money market deposits 2,111,396 16,682 1.59
Time deposits, excluding Brokered
CDs 4,038,479 56,151 2.80
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 9,751,705 88,309 1.83
Brokered CDs 301,901 4,211 2.81
----------------------
Total interest-bearing deposits 10,053,606 92,520 1.86
Wholesale funding 6,119,944 90,989 2.96
----------------------
Total interest-bearing liabilities 16,173,550 183,509 2.27
Noninterest-bearing demand 2,159,974
Other liabilities 160,391
Stockholders' equity 2,027,615
------------
Total liabilities and stockholders'
equity $20,521,530
============
---------
Net interest income and rate spread (1) $344,978 3.33%
=========
Net interest margin (1) 3.65%
Taxable equivalent adjustment $12,396
=========
----------------------------------------------------------------------
Three months ended
June 30, 2006
------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,605,422 $178,429 7.35%
Residential mortgage 2,811,824 40,712 5.79
Retail 3,098,543 60,064 7.76
----------------------
Total loans 15,515,789 279,205 7.15
Investments and other 3,826,839 48,595 5.08
----------------------
Total earning assets 19,342,628 327,800 6.74
Other assets, net 1,924,164
------------
Total assets $21,266,792
============
Interest-bearing liabilities:
Savings deposits $1,054,523 $980 0.37%
Interest-bearing demand deposits 2,145,715 8,986 1.68
Money market deposits 3,174,513 28,296 3.58
Time deposits, excluding Brokered
CDs 4,411,156 43,121 3.92
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 10,785,907 81,383 3.03
Brokered CDs 540,746 6,693 4.96
----------------------
Total interest-bearing deposits 11,326,653 88,076 3.12
Wholesale funding 5,391,108 64,822 4.76
----------------------
Total interest-bearing liabilities 16,717,761 152,898 3.65
Noninterest-bearing demand 2,208,072
Other liabilities 86,026
Stockholders' equity 2,254,933
------------
Total liabilities and stockholders'
equity $21,266,792
============
---------
Net interest income and rate spread (1) $174,902 3.09%
=========
Net interest margin (1) 3.59%
Taxable equivalent adjustment $6,503
=========
Three months ended
June 30, 2005
-------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,391,627 $125,299 5.91%
Residential mortgage 2,877,900 39,942 5.55
Retail 2,814,719 48,648 6.92
----------------------
Total loans 14,084,246 213,889 6.04
Investments and other 4,832,675 57,228 4.74
----------------------
Total earning assets 18,916,921 271,117 5.71
Other assets, net 1,657,849
------------
Total assets $20,574,770
============
Interest-bearing liabilities:
Savings deposits $1,133,629 $1,041 0.37%
Interest-bearing demand deposits 2,349,997 6,677 1.14
Money market deposits 2,106,829 9,287 1.77
Time deposits, excluding Brokered
CDs 4,005,390 28,903 2.89
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 9,595,845 45,908 1.92
Brokered CDs 285,456 2,179 3.06
----------------------
Total interest-bearing deposits 9,881,301 48,087 1.95
Wholesale funding 6,326,418 50,182 3.14
----------------------
Total interest-bearing liabilities 16,207,719 98,269 2.42
Noninterest-bearing demand 2,188,418
Other liabilities 147,704
Stockholders' equity 2,030,929
------------
Total liabilities and stockholders'
equity $20,574,770
============
---------
Net interest income and rate spread (1) $172,848 3.29%
=========
Net interest margin (1) 3.63%
Taxable equivalent adjustment $6,174
=========
(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