GREEN BAY, Wis.--(BUSINESS WIRE)--
Associated Banc-Corp (NASDAQ: ASBC):
-- Net income $316.6 million for 2006
-- Net charge offs 12 basis points of average loans for the year
-- Margin of 3.62% for 2006
-- Deposits up 5% over prior year end
-- Accelerated stock buyback executed in fourth quarter
Associated Banc-Corp (NASDAQ: ASBC) earned $0.57 per diluted share
in the fourth quarter of 2006, compared to $0.64 in the fourth quarter
of 2005. Net income for the fourth quarter of 2006 was $74.5 million,
compared to $87.6 million for the fourth quarter of 2005.
The fourth quarters of both years included certain items that
impact comparability between the year-over-year quarters. The fourth
quarter of 2006 included a $2.1 million market valuation loss on the
transfer of $0.3 billion of residential mortgages to loans held for
sale and $1.8 million of severance expense, while the fourth quarter
of 2005 included a $5.3 million gain on the sale of $1.5 billion of
its mortgage portfolio serviced for others. Excluding these items, as
well as asset and investment sales gains (losses) from both quarters,
earnings per share were essentially level on a comparable quarter
basis.
Associated earned $2.38 per diluted share in 2006, versus $2.43 in
2005. Net income for 2006 was $316.6 million, versus $320.2 million in
2005.
"While the operating environment in 2006 was challenging, we made
meaningful progress toward improving the quality of earnings and
executing our strategic objectives. We reduced wholesale funding by
nearly $2 billion, realigned resources to increase focus on markets
with more potential, improved fee income contribution and sustained
credit quality. In addition, we aggressively managed expenses while
continuing to focus on core deposit growth," Associated Chairman and
CEO Paul S. Beideman said.
Return on average assets (ROA) and return on average equity (ROE)
for 2006 were 1.50 percent and 13.89 percent, respectively. This
compares to an ROA of 1.53 percent and an ROE of 15.24 percent in
2005. Return on average tangible equity (which is a non-GAAP measure
that excludes the average of goodwill and other intangible assets from
average equity) was 23.31 percent for 2006 compared to 23.47 percent
in 2005. Book value per share rose to $17.44 as of Dec. 31, 2006,
compared to $17.15 a year earlier.
Deposits at Dec. 31, 2006, were $14.3 billion, up 5 percent over
year-end 2005, with growth in noninterest-bearing demand, money
market, and time deposits overcoming declines in savings and
interest-bearing demand deposits. Average deposits for 2006 were up 9
percent over 2005.
At Dec. 31, 2006, loans were $14.9 billion (impacted by a $0.3
billion transfer of residential mortgages to loans held for sale in
December) compared to loans of $15.2 billion at year-end 2005. Without
the transfer, loans were unchanged between year-end 2006 and 2005.
Commercial, financial and agricultural loans grew $260 million, or 8
percent, and home equity loans grew $140 million, or 7 percent during
2006. These increases helped offset decreases in residential mortgages
and installment loans, while commercial real estate loans were level.
Average loan balances in 2006 were up 7 percent compared to 2005. At
year-end 2006, the ratio of loans to deposits was 104 percent compared
to 112 percent at year-end 2005.
In 2006 net charge offs were 0.12 percent of average loans
compared to net charge offs of 0.09 percent of average loans in 2005.
The allowance for loan losses at Dec. 31, 2006, was 1.37 percent of
total loans compared to 1.34 percent at Dec. 31, 2005.
Associated's net interest income for 2006 was $669.5 million,
versus $672.3 million for 2005. Net interest margin was 3.62 percent
for 2006, versus 3.64 percent for 2005. The company's wholesale
funding reduction strategy decreased the amount of lower-yielding
securities in the investment portfolio and reduced the level of
higher-costing wholesale borrowings. This, coupled with growth in
average deposits, contributed to the company improving its margin in
each of the last three quarters of 2006, despite the unfavorable yield
curve.
Total noninterest income was $295.5 million for 2006, up 2 percent
from $291.1 million for 2005. Core fee-based revenues (including trust
service fees, service charges on deposit accounts, card-based and
other non-deposit fees, and retail commissions) totaled $233.0
million, up 8 percent over $215.8 million for 2005, due to a
combination of increased volumes and improved pricing.
Net mortgage banking income was $14.8 million for 2006, compared
to $36.4 million in 2005. The majority of this decrease was
attributable to the $2.1 million loss on market valuation associated
with the fourth quarter 2006 transfer of $0.3 billion of portfolio
loans to loans held for sale, the $5.3 million gain on the bulk
servicing sale in fourth quarter 2005, and less favorable valuation
recoveries on the mortgage servicing rights asset in 2006.
Noninterest expense grew a modest 3 percent between 2006 and 2005,
including the full year impact of the acquisition of State Financial.
The effective tax rate for 2006 was 29.60 percent, versus 31.86
percent for 2005. The decline was primarily due to the resolution of
certain multi-jurisdictional tax issues, as well as changes in
exposure of uncertain tax positions in 2006, both resulting in the
reduction of tax liabilities and income tax expense.
The company paid dividends of $1.14 per share in 2006, up 8
percent from $1.06 in 2005, making 2006 Associated's 36th consecutive
year of increasing dividends.
Associated repurchased approximately 8 million shares of its
common stock in 2006 at an average cost of $32.83 per share.
Associated starts 2007 with an authorization to repurchase
approximately 1.4 million additional shares.
Associated will host a live conference call for investors and
analysts at 3 p.m. CST 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 2006 earnings call, or for call ID number 8298239. A replay
of the call will be available from 6 p.m. CDT today through Feb. 1 by
calling 877-519-4471 (toll-free) domestically or 973-341-3080
internationally. The call ID number, 8298239, is required to access
the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified bank holding company with total assets of $21 billion.
Associated has more than 315 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 to be filed on Form 10-K.
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
December 31 December 31
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $458,344 $460,230 (0.4%)
Interest-bearing deposits in other
financial institutions 10,505 14,254 (26.3%)
Federal funds sold and securities
purchased
under agreements to resell 13,187 17,811 (26.0%)
Securities available for sale, at
fair value 3,436,621 4,711,605 (27.1%)
Loans held for sale 370,758 57,710 542.5%
Loans 14,881,526 15,206,464 (2.1%)
Allowance for loan losses (203,481) (203,404) 0.0%
------------ ------------
Loans, net 14,678,045 15,003,060 (2.2%)
Premises and equipment, net 196,007 206,153 (4.9%)
Goodwill 871,629 877,680 (0.7%)
Other intangible assets, net 109,234 120,358 (9.2%)
Other assets 717,054 631,221 13.6%
------------ ------------
Total assets $20,861,384 $22,100,082 (5.6%)
============ ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,756,222 $2,504,926 10.0%
Interest-bearing deposits,
excluding Brokered CDs 10,922,274 10,538,856 3.6%
Brokered CDs 637,575 529,307 20.5%
------------ ------------
Total deposits 14,316,071 13,573,089 5.5%
Short-term borrowings 2,042,685 2,666,307 (23.4%)
Long-term funding 2,071,142 3,348,476 (38.1%)
Accrued expenses and other
liabilities 185,993 187,232 (0.7%)
------------ ------------
Total liabilities 18,615,891 19,775,104 (5.9%)
Stockholders' Equity
Preferred stock - -
Common stock 1,304 1,357 (3.9%)
Surplus 1,120,934 1,301,004 (13.8%)
Retained earnings 1,189,658 1,029,247 15.6%
Accumulated other comprehensive
loss (16,453) (3,938) 317.8%
Deferred compensation - (2,081) (100.0%)
Treasury stock (49,950) (611) N/M
------------ ------------
Total stockholders' equity 2,245,493 2,324,978 (3.4%)
------------ ------------
Total liabilities and
stockholders' equity $20,861,384 $22,100,082 (5.6%)
============ ============
N/M = Not Meaningful.
----------------------------------------------------------------------
Consolidated Statements of
Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended,
December 31,
---------------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $282,918 $252,443 12.1%
Interest and dividends on
investment securities and
deposits in other financial
institutions
Taxable 29,962 41,486 (27.8%)
Tax-exempt 9,794 10,325 (5.1%)
Interest on federal funds sold
and securities purchased under
agreements to resell 292 289 1.0%
---------------- ----------
Total interest income 322,966 304,543 6.0%
Interest Expense
Interest on deposits 98,757 66,934 47.5%
Interest on short-term
borrowings 31,971 26,828 19.2%
Interest on long-term funding 26,174 35,186 (25.6%)
---------------- ----------
Total interest expense 156,902 128,948 21.7%
---------------- ----------
Net Interest Income 166,064 175,595 (5.4%)
Provision for loan losses 7,068 3,676 92.3%
---------------- ----------
Net interest income after
provision for loan losses 158,996 171,919 (7.5%)
Noninterest Income
Trust service fees 9,941 9,055 9.8%
Service charges on deposit
accounts 24,214 23,073 4.9%
Mortgage banking, net 1,735 12,166 (85.7%)
Card-based and other nondeposit
fees 11,267 10,033 12.3%
Retail commissions 15,053 13,624 10.5%
Bank owned life insurance income 5,102 3,022 68.8%
Asset sale gains, net 91 2,766 N/M
Investment securities gains
(losses), net (436) 1,179 N/M
Other 7,568 6,126 23.5%
---------------- ----------
Total noninterest income 74,535 81,044 (8.0%)
Noninterest Expense
Personnel expense 68,315 68,619 (0.4%)
Occupancy 10,971 10,287 6.6%
Equipment 4,300 4,361 (1.4%)
Data processing 8,033 7,972 0.8%
Business development and
advertising 4,365 4,999 (12.7%)
Stationery and supplies 1,737 1,869 (7.1%)
Other intangible amortization 1,999 2,418 (17.3%)
Other 24,678 25,014 (1.3%)
---------------- ----------
Total noninterest expense 124,398 125,539 (0.9%)
---------------- ----------
Income before income taxes 109,133 127,424 (14.4%)
Income tax expense 34,632 39,783 (12.9%)
---------------- ----------
Net Income $74,501 $87,641 (15.0%)
================ ==========
Earnings Per Share:
Basic $0.58 $0.65 (10.8%)
Diluted $0.57 $0.64 (10.9%)
Average Shares Outstanding:
Basic 129,202 135,684 (4.8%)
Diluted 130,366 137,005 (4.8%)
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income
(Unaudited)
Associated Banc-Corp
For The Year Ended,
December 31,
-----------------------
(in thousands, except per share
amounts) 2006 2005 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $1,106,903 $889,374 24.5%
Interest and dividends on investment
securities and deposits in other
financial institutions
Taxable 131,952 164,404 (19.7%)
Tax-exempt 39,434 39,310 0.3%
Interest on federal funds sold and
securities purchased under
agreements to resell 1,090 937 16.3%
------------ ----------
Total interest income 1,279,379 1,094,025 16.9%
Interest Expense
Interest on deposits 363,953 213,052 70.8%
Interest on short-term borrowings 129,791 89,356 45.3%
Interest on long-term funding 116,086 119,362 (2.7%)
------------ ----------
Total interest expense 609,830 421,770 44.6%
------------ ----------
Net Interest Income 669,549 672,255 (0.4%)
Provision for loan losses 19,056 13,019 46.4%
------------ ----------
Net interest income after provision
for loan losses 650,493 659,236 (1.3%)
Noninterest Income
Trust service fees 37,484 35,017 7.0%
Service charges on deposit accounts 91,593 86,783 5.5%
Mortgage banking, net 14,801 36,395 (59.3%)
Card-based and other nondeposit fees 42,661 37,439 13.9%
Retail commissions 61,256 56,604 8.2%
Bank owned life insurance income 16,155 9,942 62.5%
Asset sale gains, net 304 3,945 N/M
Investment securities gains (losses),
net 4,722 4,116 N/M
Other 26,525 20,845 27.2%
------------ ----------
Total noninterest income 295,501 291,086 1.5%
Noninterest Expense
Personnel expense 283,431 274,941 3.1%
Occupancy 43,825 38,961 12.5%
Equipment 17,466 16,792 4.0%
Data processing 31,451 29,534 6.5%
Business development and advertising 16,857 17,661 (4.6%)
Stationery and supplies 7,082 6,956 1.8%
Other intangible amortization 8,903 8,607 3.4%
Other 87,200 87,011 0.2%
------------ ----------
Total noninterest expense 496,215 480,463 3.3%
------------ ----------
Income before income taxes 449,779 469,859 (4.3%)
Income tax expense 133,134 149,698 (11.1%)
------------ ----------
Net Income $316,645 $320,161 (1.1%)
============ ==========
Earnings Per Share:
Basic $2.40 $2.45 (2.0%)
Diluted $2.38 $2.43 (2.1%)
Average Shares Outstanding:
Basic 132,006 130,554 1.1%
Diluted 133,132 131,931 0.9%
N/M - Not meaningful.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, 4Q06 3Q06 2Q06 1Q06 4Q05
except per share
amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $282,918 $284,397 $278,573 $261,015 $252,443
Interest and
dividends on
investment
securities
and deposits with
other financial
institutions
Taxable 29,962 30,225 32,649 39,116 41,486
Tax-exempt 9,794 9,691 9,786 10,163 10,325
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 292 260 289 249 289
--------- --------- --------- --------- ---------
Total interest
income 322,966 324,573 321,297 310,543 304,543
Interest Expense
Interest on deposits 98,757 99,242 88,076 77,878 66,934
Interest on short-
term borrowings 31,971 30,450 34,126 33,244 26,828
Interest on long-
term funding 26,174 26,664 30,696 32,552 35,186
--------- --------- --------- --------- ---------
Total interest
expense 156,902 156,356 152,898 143,674 128,948
--------- --------- --------- --------- ---------
Net Interest Income 166,064 168,217 168,399 166,869 175,595
Provision for loan
losses 7,068 3,837 3,686 4,465 3,676
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 158,996 164,380 164,713 162,404 171,919
Noninterest Income
Trust service fees 9,941 9,339 9,307 8,897 9,055
Service charges on
deposit accounts 24,214 23,438 22,982 20,959 23,073
Mortgage banking,
net 1,735 2,833 5,829 4,404 12,166
Card-based and other
nondeposit fees 11,267 10,461 11,047 9,886 10,033
Retail commissions 15,053 14,360 16,365 15,478 13,624
Bank owned life
insurance income 5,102 4,390 3,592 3,071 3,022
Asset sale gains
(losses), net 91 89 354 (230) 2,766
Investment
securities gains
(losses), net (436) 1,164 1,538 2,456 1,179
Other 7,568 6,911 6,194 5,852 6,126
--------- --------- --------- --------- ---------
Total
noninterest
income 74,535 72,985 77,208 70,773 81,044
Noninterest Expense
Personnel expense 68,315 71,321 74,492 69,303 68,619
Occupancy 10,971 10,442 10,654 11,758 10,287
Equipment 4,300 4,355 4,223 4,588 4,361
Data processing 8,033 7,668 7,711 8,039 7,972
Business development
and advertising 4,365 4,142 4,101 4,249 4,999
Stationery and
supplies 1,737 1,787 1,784 1,774 1,869
Other intangible
amortization 1,999 2,280 2,281 2,343 2,418
Other 24,678 21,691 19,414 21,417 25,014
--------- --------- --------- --------- ---------
Total
noninterest
expense 124,398 123,686 124,660 123,471 125,539
--------- --------- --------- --------- ---------
Income before income
taxes 109,133 113,679 117,261 109,706 127,424
Income tax expense 34,632 36,791 33,712 27,999 39,783
--------- --------- --------- --------- ---------
Net Income $74,501 $76,888 $83,549 $81,707 $87,641
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.58 $0.58 $0.63 $0.60 $0.65
Diluted $0.57 $0.58 $0.63 $0.60 $0.64
Average Shares
Outstanding:
Basic 129,202 131,520 132,259 135,114 135,684
Diluted 130,366 132,591 133,441 136,404 137,005
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per share &
full time
equivalent
employee data) YTD 2006 YTD 2005 4th Qtr 2006 3rd Qtr 2006
----------------------------------------------------------------------
Summary of
Operations
Net interest income 669,549 672,255 166,064 168,217
Provision for loan
losses 19,056 13,019 7,068 3,837
Asset sale gains
(losses), net 304 3,945 91 89
Investment
securities gains
(losses), net 4,722 4,116 (436) 1,164
Noninterest income
(excluding
securities & asset
gains) 290,475 283,025 74,880 71,732
Noninterest expense 496,215 480,463 124,398 123,686
Income before
income taxes 449,779 469,859 109,133 113,679
Income taxes 133,134 149,698 34,632 36,791
Net income 316,645 320,161 74,501 76,888
Taxable equivalent
adjustment 26,233 25,509 6,568 6,495
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $2.40 $2.45 $0.58 $0.58
Diluted 2.38 2.43 0.57 0.58
Dividends 1.14 1.06 0.29 0.29
Market Value:
High $35.13 $34.74 $35.13 $32.58
Low 30.27 29.09 32.13 30.27
Close 34.88 32.55 34.88 32.50
Book value 17.44 17.15 17.44 17.44
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 6.79% 5.84% 6.95% 6.89%
Interest-bearing
liabilities rate 3.71 2.57 3.93 3.84
Net interest margin 3.62 3.64 3.64 3.63
Return on average
assets 1.50 1.53 1.43 1.46
Return on average
equity 13.89 15.24 13.19 13.36
Return on tangible
average equity (2) 23.31 23.47 22.31 22.32
Efficiency ratio
(3) 50.31 48.99 50.26 50.19
Effective tax rate 29.60 31.86 31.73 32.36
Dividend payout
ratio (4) 47.50 43.27 50.00 50.00
----------------------------------------------------------------------
Average Balances
Assets $21,162,099 $20,921,575 $20,635,203 $20,891,001
Earning assets 19,229,849 19,181,630 18,713,784 18,968,584
Interest-bearing
liabilities 16,434,947 16,410,899 15,765,774 16,070,975
Loans 15,370,090 14,347,707 15,233,207 15,404,223
Deposits 13,623,703 12,462,981 13,748,444 13,884,404
Wholesale funding 5,161,192 6,207,846 4,547,042 4,636,853
Stockholders'
equity 2,279,376 2,101,389 2,240,143 2,283,933
Stockholders'
equity / assets 10.77% 10.04% 10.86% 10.93%
----------------------------------------------------------------------
At Period End
Assets $20,861,384 $20,926,523
Loans 14,881,526 15,284,608
Allowance for loan
losses 203,481 203,442
Goodwill 871,629 871,629
Mortgage servicing
rights, net 66,620 67,931
Other intangible
assets, net 42,614 44,613
Deposits 14,316,071 14,208,545
Wholesale funding 4,113,827 4,277,636
Stockholders'
equity 2,245,493 2,270,380
Stockholders'
equity / assets 10.76% 10.85%
Tangible equity /
tangible assets
(5) 6.67% 6.77%
Shares outstanding,
end of period 128,747 130,216
Shares repurchased
during period 1,957 2,000
Average per share
cost of shares
repurchased during
period $33.11 $31.43
Year-to-date shares
repurchased during
period 8,018 6,061
YTD average per
share cost of
shares repurchased
during period $32.83 $32.74
----------------------------------------------------------------------
Selected trend
information
Average full time
equivalent
employees 5,084 5,117
Trust assets under
management, at
market value $5,800,000 $5,500,000
Mortgage loans
originated for
sale 374,427 388,914
Portfolio serviced
for others 8,330,000 8,226,000
Mortgage servicing
rights, net /
Portfolio serviced
for others 0.80% 0.83%
----------------------------------------------------------------------
----------------------------------------------------------------------
(in thousands,
except per share &
full time
equivalent
employee data) 2nd Qtr 2006 1st Qtr 2006 4th Qtr 2005
----------------------------------------------------------------------
Summary of
Operations
Net interest income 168,399 166,869 175,595
Provision for loan
losses 3,686 4,465 3,676
Asset sale gains
(losses), net 354 (230) 2,766
Investment
securities gains
(losses), net 1,538 2,456 1,179
Noninterest income
(excluding
securities & asset
gains) 75,316 68,547 77,099
Noninterest expense 124,660 123,471 125,539
Income before
income taxes 117,261 109,706 127,424
Income taxes 33,712 27,999 39,783
Net income 83,549 81,707 87,641
Taxable equivalent
adjustment 6,503 6,667 6,766
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $0.63 $0.60 $0.65
Diluted 0.63 0.60 0.64
Dividends 0.29 0.27 0.27
Market Value:
High $34.45 $34.83 $33.23
Low 30.69 32.75 29.09
Close 31.53 33.98 32.55
Book value 17.20 16.98 17.15
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 6.74% 6.38% 6.12%
Interest-bearing
liabilities rate 3.65 3.37 2.98
Net interest margin 3.59 3.48 3.59
Return on average
assets 1.58 1.52 1.58
Return on average
equity 14.86 14.16 14.99
Return on tangible
average equity (2) 25.18 23.48 22.70
Efficiency ratio
(3) 49.82 51.00 48.38
Effective tax rate 28.75 25.52 31.22
Dividend payout
ratio (4) 46.03 45.00 41.54
----------------------------------------------------------------------
Average Balances
Assets $21,266,792 $21,871,969 $22,022,165
Earning assets 19,342,628 19,910,420 20,080,758
Interest-bearing
liabilities 16,717,761 17,204,860 17,090,134
Loans 15,515,789 15,327,803 15,154,225
Deposits 13,534,725 13,319,664 13,282,910
Wholesale funding 5,391,108 6,092,275 6,280,793
Stockholders'
equity 2,254,933 2,339,539 2,320,134
Stockholders'
equity / assets 10.60% 10.70% 10.54%
----------------------------------------------------------------------
At Period End
Assets $21,128,354 $21,518,860 $22,100,082
Loans 15,405,630 15,539,187 15,206,464
Allowance for loan
losses 203,411 203,408 203,404
Goodwill 875,727 875,727 877,680
Mortgage servicing
rights, net 69,282 68,116 68,841
Other intangible
assets, net 46,893 49,174 51,517
Deposits 13,646,408 13,616,870 13,573,089
Wholesale funding 5,033,961 5,496,039 6,014,783
Stockholders'
equity 2,274,860 2,244,695 2,324,978
Stockholders'
equity / assets 10.77% 10.43% 10.52%
Tangible equity /
tangible assets
(5) 6.69% 6.41% 6.59%
Shares outstanding,
end of period 132,283 132,167 135,602
Shares repurchased
during period 31 4,030 974
Average per share
cost of shares
repurchased during
period $- $33.63 $30.82
Year-to-date shares
repurchased during
period 4,061 4,030 3,496
YTD average per
share cost of
shares repurchased
during period $33.38 $33.63 $32.43
----------------------------------------------------------------------
Selected trend
information
Average full time
equivalent
employees 5,112 5,147 5,113
Trust assets under
management, at
market value $5,200,000 $5,200,000 $5,000,000
Mortgage loans
originated for
sale 359,361 246,724 356,280
Portfolio serviced
for others 8,134,000 8,050,000 8,028,000
Mortgage servicing
rights, net /
Portfolio serviced
for others 0.85% 0.85% 0.86%
----------------------------------------------------------------------
(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
December 31,
---------------------------
(in thousands) 2006 2005 % Change
----------------------------------------- ----------------------------
Allowance for Loan Losses
Beginning balance $203,442 $190,080 7.0%
Balance related to acquisition - 13,283 (100.0%)
Provision for loan losses 7,068 3,676 92.3%
Charge offs (10,574) (11,142) (5.1%)
Recoveries 3,545 7,507 (52.8%)
-------------------
Net charge offs (7,029) (3,635) 93.4%
-------------------
Ending Balance $203,481 $203,404 0.0%
===================
Year Ended
December 31,
----------------------------
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $203,404 $189,762 7.2%
Balance related to acquisition - 13,283 (100.0%)
Provision for loan losses 19,056 13,019 46.4%
Charge offs (30,507) (27,743) 10.0%
Recoveries 11,528 15,083 (23.6%)
-------------------
Net charge offs (18,979) (12,660) 49.9%
-------------------
Ending Balance $203,481 $203,404 0.0%
===================
----------------------------------------------------------------------
Credit Quality 4Q06 vs
3Q06
Dec 31, Sept 30,
2006 2006 % Change
----------------------------
Nonaccrual loans $136,734 $123,743 10.5%
Loans 90 or more days past due and still
accruing 5,725 4,826 18.6%
Restructured loans 26 28 (7.1%)
-------------------
Total nonperforming loans 142,485 128,597 10.8%
Other real estate owned 14,417 13,866 4.0%
-------------------
Total nonperforming assets 156,902 142,463 10.1%
===================
Provision for loan losses 7,068 3,837 84.2%
Net charge offs 7,029 3,806 84.7%
Allowance for loan losses / loans 1.37% 1.33%
Allowance for loan losses / nonperforming
loans 142.81 158.20
Nonperforming loans / total loans 0.96 0.84
Nonperforming assets / total assets 0.75 0.68
Net charge offs / average loans
(annualized) 0.18 0.10
Year-to-date net charge offs / average
loans 0.12 0.10
Credit Quality 4Q06 vs
4Q05
June 30, March 31, Dec 31,
2006 2006 2005 % Change
------------------------------------
Nonaccrual loans $95,426 $102,824 $95,313 43.5%
Loans 90 or more days past due and
still accruing 7,591 7,068 3,270 75.1%
Restructured loans 29 31 32 (18.8%)
---------------------------
Total nonperforming loans 103,046 109,923 98,615 44.5%
Other real estate owned 14,947 11,676 11,336 27.2%
---------------------------
Total nonperforming assets 117,993 121,599 109,951 42.7%
===========================
Provision for loan losses 3,686 4,465 3,676 92.3%
Net charge offs 3,683 4,461 3,635 93.4%
Allowance for loan losses / loans 1.32% 1.31% 1.34%
Allowance for loan losses /
nonperforming loans 197.40 185.05 206.26
Nonperforming loans / total loans 0.67 0.71 0.65
Nonperforming assets / total
assets 0.56 0.57 0.50
Net charge offs / average loans
(annualized) 0.10 0.12 0.10
Year-to-date net charge offs /
average loans 0.11 0.12 0.09
----------------------------------------------------------------------
Period End Loan Composition 4Q06 vs
3Q06
Dec 31, Sept 30,
2006 2006 % Change
----------------------------------
Commercial, financial &
agricultural $3,677,573 $3,549,216 3.6%
Real estate - construction 2,047,124 2,186,810 (6.4%)
Commercial real estate 3,789,480 3,755,037 0.9%
Lease financing 81,814 79,234 3.3%
-------------------------
Commercial 9,595,991 9,570,297 0.3%
Home equity (a) 2,164,758 2,166,312 (0.1%)
Installment 915,747 940,139 (2.6%)
-------------------------
Retail 3,080,505 3,106,451 (0.8%)
Residential mortgage 2,205,030 2,607,860 (15.4%)
-------------------------
Total loans $14,881,526 $15,284,608 (2.6%)
=========================
Period End Loan 4Q06 vs
Composition 4Q05
June 30, March 31, Dec 31,
2006 2006 2005 % Change
-----------------------------------------------
Commercial, financial &
agricultural $3,505,819 $3,571,835 $3,417,343 7.6%
Real estate -
construction 2,122,136 1,981,473 1,783,267 14.8%
Commercial real estate 3,872,819 4,024,260 4,064,327 (6.8%)
Lease financing 74,919 62,600 61,315 33.4%
--------------------------------------
Commercial 9,575,693 9,640,168 9,326,252 2.9%
Home equity (a) 2,151,858 2,121,601 2,025,055 6.9%
Installment 945,123 957,877 1,003,938 (8.8%)
--------------------------------------
Retail 3,096,981 3,079,478 3,028,993 1.7%
Residential mortgage 2,732,956 2,819,541 2,851,219 (22.7%)
--------------------------------------
Total loans $15,405,630 $15,539,187 $15,206,464 (2.1%)
======================================
(a) Home equity includes home equity lines and residential
mortgage junior liens.
----------------------------------------------------------------------
Period End Deposit Composition 4Q06 vs
3Q06
Dec 31, Sept 30,
2006 2006 % Change
------------ ---------------------
Demand $2,756,222 $2,534,686 8.7%
Savings 890,380 959,650 (7.2%)
Interest-bearing demand 1,875,879 1,712,833 9.5%
Money market 3,822,928 3,959,719 (3.5%)
Brokered CDs 637,575 630,637 1.1%
Other time deposits 4,333,087 4,411,020 (1.8%)
------------ ------------
Total deposits $14,316,071 $14,208,545 0.8%
============ ============
Customer Repo Sweeps (b) $875,099 $895,766 (2.3%)
Period End Deposit 4Q06 vs
Composition 4Q05
June 30, March 31, Dec 31,
2006 2006 2005 % Change
---------------------------------------------
Demand $2,276,463 $2,319,075 $2,504,926 10.0%
Savings 1,031,993 1,074,938 1,079,851 (17.5%)
Interest-bearing demand 1,975,364 2,347,104 2,549,782 (26.4%)
Money market 3,434,288 2,863,174 2,629,933 45.4%
Brokered CDs 518,354 567,660 529,307 20.5%
Other time deposits 4,409,946 4,444,919 4,279,290 1.3%
------------------------------------
Total deposits $13,646,408 $13,616,870 $13,573,089 5.5%
====================================
Customer Repo Sweeps (b) $885,503 $917,380 $822,221 6.43%
(b) Included within short-term borrowings.
----------------------------------------------------------------------
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Year ended December 31, 2006
--------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
--------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,527,264 $707,405 7.43%
Residential mortgage 2,760,454 160,758 5.82
Retail 3,082,372 241,313 7.83
-----------------------
Total loans 15,370,090 1,109,476 7.22
Investments and other 3,859,759 196,136 5.08
-----------------------
Total earning assets 19,229,849 1,305,612 6.79
Other assets, net 1,932,250
------------
Total assets $21,162,099
============
Interest-bearing liabilities:
Savings deposits $1,012,966 $3,824 0.38%
Interest-bearing demand deposits 1,997,355 34,895 1.75
Money market deposits 3,324,362 119,506 3.59
Time deposits, excluding Brokered
CDs 4,388,147 177,860 4.05
-----------------------
Total interest-bearing
deposits, excluding Brokered
CDs 10,722,830 336,085 3.13
Brokered CDs 550,925 27,868 5.06
-----------------------
Total interest-bearing deposits 11,273,755 363,953 3.23
Wholesale funding 5,161,192 245,877 4.76
-----------------------
Total interest-bearing liabilities 16,434,947 609,830 3.71
Noninterest-bearing demand 2,349,948
Other liabilities 97,828
Stockholders' equity 2,279,376
------------
Total liabilities and stockholders'
equity $21,162,099
============
----------
Net interest income and rate spread
(1) $695,782 3.08%
==========
Net interest margin (1) 3.62%
Taxable equivalent adjustment $26,233
==========
Net Interest Income Analysis -
Taxable Equivalent Basis
Associated Banc-Corp Year ended December 31, 2005
---------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
---------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,574,996 $532,116 6.21%
Residential mortgage 2,875,438 161,095 5.60
Retail 2,897,273 198,086 6.84
------------------------
Total loans 14,347,707 891,297 6.21
Investments and other 4,833,923 228,237 4.72
------------------------
Total earning assets 19,181,630 1,119,534 5.84
Other assets, net 1,739,945
-------------
Total assets $20,921,575
=============
Interest-bearing liabilities:
Savings deposits $1,125,417 $3,877 0.34%
Interest-bearing demand deposits 2,337,462 26,611 1.14
Money market deposits 2,262,369 45,626 2.02
Time deposits, excluding Brokered
CDs 4,083,500 123,550 3.03
------------------------
Total interest-bearing
deposits, excluding Brokered
CDs 9,808,748 199,664 2.04
Brokered CDs 394,305 13,388 3.40
------------------------
Total interest-bearing deposits 10,203,053 213,052 2.09
Wholesale funding 6,207,846 208,718 3.36
------------------------
Total interest-bearing liabilities 16,410,899 421,770 2.57
Noninterest-bearing demand 2,259,928
Other liabilities 149,359
Stockholders' equity 2,101,389
-------------
Total liabilities and stockholders'
equity $20,921,575
=============
----------
Net interest income and rate spread
(1) $697,764 3.27%
==========
Net interest margin (1) 3.64%
Taxable equivalent adjustment $25,509
==========
----------------------------------------------------------------------
Three months ended
December 31, 2006
--------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
------------ ---------- --------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,505,699 $182,086 7.50%
Residential mortgage 2,628,382 38,753 5.87
Retail 3,099,126 62,771 8.06
------------ ----------
Total loans 15,233,207 283,610 7.33
Investments and other 3,480,577 45,924 5.27
------------ ----------
Total earning assets 18,713,784 329,534 6.95
Other assets, net 1,921,419
------------
Total assets $20,635,203
============
Interest-bearing liabilities:
Savings deposits $940,041 $903 0.38%
Interest-bearing demand deposits 1,729,355 7,945 1.82
Money market deposits 3,727,175 35,420 3.77
Time deposits, excluding Brokered
CDs 4,356,474 48,243 4.39
------------ ----------
Total interest-bearing
deposits, excluding Brokered
CDs 10,753,045 92,511 3.41
Brokered CDs 465,687 6,246 5.32
------------ ----------
Total interest-bearing deposits 11,218,732 98,757 3.49
Wholesale funding 4,547,042 58,145 5.02
------------ ----------
Total interest-bearing liabilities 15,765,774 156,902 3.93
Noninterest-bearing demand 2,529,712
Other liabilities 99,574
Stockholders' equity 2,240,143
------------
Total liabilities and stockholders'
equity $20,635,203
============
----------
Net interest income and rate spread
(1) $172,632 3.02%
==========
Net interest margin (1) 3.64%
Taxable equivalent adjustment $6,568
==========
Three months ended
December 31, 2005
---------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
---------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,222,512 $156,412 6.64%
Residential mortgage 2,905,463 41,482 5.68
Retail 3,026,250 55,120 7.25
------------------------
Total loans 15,154,225 253,014 6.58
Investments and other 4,926,533 58,295 4.73
------------------------
Total earning assets 20,080,758 311,309 6.12
Other assets, net 1,941,407
-------------
Total assets $22,022,165
=============
Interest-bearing liabilities:
Savings deposits $1,150,777 $800 0.28%
Interest-bearing demand deposits 2,210,056 7,082 1.27
Money market deposits 2,623,223 17,121 2.59
Time deposits, excluding Brokered
CDs 4,342,185 37,004 3.38
------------------------
Total interest-bearing
deposits, excluding Brokered
CDs 10,326,241 62,007 2.38
Brokered CDs 483,100 4,927 4.05
------------------------
Total interest-bearing deposits 10,809,341 66,934 2.46
Wholesale funding 6,280,793 62,014 3.87
------------------------
Total interest-bearing liabilities 17,090,134 128,948 2.98
Noninterest-bearing demand 2,473,569
Other liabilities 138,328
Stockholders' equity 2,320,134
-------------
Total liabilities and stockholders'
equity $22,022,165
=============
----------
Net interest income and rate spread
(1) $182,361 3.14%
==========
Net interest margin (1) 3.59%
Taxable equivalent adjustment $6,766
==========
(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