GREEN BAY, Wis.--(BUSINESS WIRE)--
Associated Banc-Corp (NASDAQ:ASBC):
-- Net income of $75.8 million
-- Solid growth in core fee-based income
-- Net charge offs at 14 bp of average loans
-- First National Bank of Hudson successfully integrated
-- Accelerated stock buyback of 2 million shares executed in June
Associated Banc-Corp (NASDAQ:ASBC) earned $75.8 million, or $.59
per share, in the second quarter of 2007. Comparatively, net income
was $73.4 million ($.57 per share) for the first quarter of 2007 and
$83.5 million ($.63 per share) for the second quarter of 2006.
Return on average assets (ROA) was 1.48 percent, 1.46 percent and
1.58 percent for the second quarter of 2007, the first quarter of 2007
and the second quarter of 2006, respectively. The return on average
equity (ROE) for the same quarters was 13.49 percent, 13.35 percent
and 14.86 percent, respectively. Return on average tangible equity
(which is a non-GAAP measure that excludes average goodwill and other
intangible assets from average equity) was 23.14 percent in the second
quarter of 2007, versus 22.63 percent in the first quarter of 2007 and
25.18 percent in the second quarter of 2006.
Net income was $149.2 million, or $1.16 per share, for the six
months ending June 30, 2007, compared to net income of $165.3 million,
or $1.23 per share, for the first half of 2006.
The first and second quarters of 2006 benefited from the
resolution of certain multi-jurisdictional tax issues and changes in
exposure of uncertain tax positions, resulting in the reduction of tax
liabilities and income tax expense, and positively impacting earnings
per share by approximately $.06 for the first quarter and $.03 for the
second quarter.
Loans at June 30, 2007, were $15.2 billion, up $0.3 billion (or 8
percent annualized) over the first quarter of 2007, largely due to the
acquisition of First National Bank of Hudson on June 1, 2007.
Excluding the acquired loans, loan growth came from commercial and
industrial (up $118 million or 12 percent annualized), home equity (up
$52 million or 10 percent annualized) and real estate construction
loans (up $28 million or 5 percent annualized). Declines occurred in
commercial real estate (down $105 million), residential mortgages
(down $72 million) and other consumer loans (down $16 million). On
average, loans were $15.1 billion for the second quarter of 2007, up 3
percent annualized over the first quarter. The ratio of loans to
deposits improved to 108 percent at June 30, 2007, compared to 113
percent at June 30, 2006.
Average deposits were $13.7 billion for the second quarter of
2007, up 4 percent annualized over the first quarter. Compared to a
year ago, noninterest-bearing deposits excluding the acquisition were
up $141 million, or 6 percent.
Net interest income for the second quarter of 2007 was $157.5
million and the net interest margin was 3.53 percent. Each experienced
compression in comparison to the first quarter of 2007. "Despite the
challenging environment, we remain focused on our strategies and are
seeing momentum in commercial loan and demand deposit growth, combined
with a continued increase in core fee income," Associated Chairman and
CEO Paul S. Beideman said.
Net charge offs to average loans were 14 basis points for the
second quarter of 2007. The loan loss reserve ratio was 1.36 percent
and the provision for loan losses approximated net charge off levels.
At June 30, 2007, nonperforming loans represented 1.19 percent of
total loans, with commercial nonperforming loans up 18 percent over
March 31. "Nonperforming loans have increased largely as a result of
the softer real estate markets and longer resolution periods. We
believe net charge offs will stabilize at Associated's historical
levels of 18 to 22 basis points," Beideman said.
Noninterest income for the second quarter of 2007 was up 11
percent over the first quarter and increased 18 percent over the
second quarter of last year. On a year-to-date basis, core fee-based
revenue was $123.9 million, up $9.0 million or 8 percent over the
six-month period last year, with solid growth in deposit service
charges (11 percent), trust service fees (15 percent), card-based and
other fees (10 percent) and a 3 percent decline in insurance
commissions.
Net mortgage banking income remained strong for the second quarter
of 2007. The quarterly results were affected by a $3.8 million
favorable valuation reserve recovery, while the first quarter of 2007
included a $7.8 million gain on a March 2007 bulk servicing sale and
an unfavorable $1.2 million valuation reserve expense. On a
year-to-date basis, excluding valuation reserve changes and bulk
servicing gains, core net mortgage banking income was $8.3 million for
the first half of 2007, compared to $6.6 million last year.
Noninterest expenses remain controlled, with an efficiency ratio
of 53.23 percent and 52.73 percent for the three and six months ending
June 30, 2007, respectively. Noninterest expense was up $4.5 million
or 4 percent over the first quarter of 2007, with a $2.2 million
increase in personnel costs and a $2.3 million increase in
non-personnel costs, both impacted by the integration of First
National Bank of Hudson.
During the second quarter of 2007, Associated repurchased 2
million shares of its common stock at a total purchase cost of $66
million. During the second quarter, the company paid a dividend of 31
cents per share, up 7 percent from the second-quarter dividend in
2006.
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
800-936-9754. The number for international callers is 973-935-2048.
Participants should ask the operator for the Associated Banc-Corp
second quarter 2007 earnings call, or for call ID number 8962999. A
replay of the call will be available starting at 6 p.m. CDT on July 19
through August 10, 2007, by calling 877-519-4471 (toll-free)
domestically or 973-341-3080 internationally. The call ID number,
8962999, 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 300 banking offices serving over 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.
Six pages of tables follow.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
Jun07 vs
June 30, December 31, Dec06
(in thousands) 2007 2006 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $432,887 $458,344 (5.6%)
Interest-bearing deposits in
other financial institutions 10,828 10,505 3.1%
Federal funds sold and
securities purchased under
agreements to resell 18,729 13,187 42.0%
Investment securities available
for sale, at fair value 3,373,700 3,436,621 (1.8%)
Loans held for sale 75,135 370,758 (79.7%)
Loans 15,154,232 14,881,526 1.8%
Allowance for loan losses (206,493) (203,481) 1.5%
------------ ------------
Loans, net 14,947,739 14,678,045 1.8%
Premises and equipment, net 198,453 196,007 1.2%
Goodwill 929,168 871,629 6.6%
Other intangible assets, net 100,599 109,234 (7.9%)
Other assets 761,902 717,054 6.3%
------------ ------------
Total assets $20,849,140 $20,861,384 (0.1%)
============ ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,466,130 $2,756,222 (10.5%)
Interest-bearing deposits,
excluding Brokered CDs 10,859,588 10,922,274 (0.6%)
Brokered CDs 751,900 637,575 17.9%
------------ ------------
Total deposits 14,077,618 14,316,071 (1.7%)
Short-term borrowings 2,416,371 2,042,685 18.3%
Long-term funding 1,932,194 2,071,142 (6.7%)
Accrued expenses and other
liabilities 194,046 185,993 4.3%
------------ ------------
Total liabilities 18,620,229 18,615,891 0.0%
Stockholders' Equity
Preferred stock - -
Common stock 1,278 1,304 (2.0%)
Surplus 1,038,517 1,120,934 (7.4%)
Retained earnings 1,250,989 1,189,658 5.2%
Accumulated other
comprehensive loss (38,714) (16,453) 135.3%
Treasury stock, at cost (23,159) (49,950) (53.6%)
------------ ------------
Total stockholders' equity 2,228,911 2,245,493 (0.7%)
------------ ------------
Total liabilities and
stockholders' equity $20,849,140 $20,861,384 (0.1%)
============ ============
Jun07 vs
June 30, Jun06
(in thousands) 2006 % Change
----------------------------------------------------------------------
Assets
Cash and due from banks $429,625 0.8%
Interest-bearing deposits in
other financial institutions 21,567 (49.8%)
Federal funds sold and
securities purchased under
agreements to resell 14,344 30.6%
Investment securities available
for sale, at fair value 3,505,471 (3.8%)
Loans held for sale 54,016 39.1%
Loans 15,405,630 (1.6%)
Allowance for loan losses (203,411) 1.5%
------------
Loans, net 15,202,219 (1.7%)
Premises and equipment, net 198,279 0.1%
Goodwill 875,727 6.1%
Other intangible assets, net 116,175 (13.4%)
Other assets 710,931 7.2%
------------
Total assets $21,128,354 (1.3%)
============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,276,463 8.3%
Interest-bearing deposits,
excluding Brokered CDs 10,851,591 0.1%
Brokered CDs 518,354 45.1%
------------
Total deposits 13,646,408 3.2%
Short-term borrowings 2,561,092 (5.7%)
Long-term funding 2,472,869 (21.9%)
Accrued expenses and other
liabilities 173,125 12.1%
------------
Total liabilities 18,853,494 (1.2%)
Stockholders' Equity
Preferred stock -
Common stock 1,324 (3.5%)
Surplus 1,183,047 (12.2%)
Retained earnings 1,119,036 11.8%
Accumulated other
comprehensive loss (28,047) 38.0%
Treasury stock, at cost (500) NM
------------
Total stockholders' equity 2,274,860 (2.0%)
------------
Total liabilities and
stockholders' equity $21,128,354 (1.3%)
============
N/M = Not Meaningful.
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three
Months Ended
June 30, 2Q07 vs 2Q06
(in thousands, except per share
amounts) 2007 2006 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $276,981 $278,573 (0.6%)
Interest and dividends on
investment securities and
deposits in other financial
institutions
Taxable 30,583 32,649 (6.3%)
Tax-exempt 9,785 9,786 (0.0%)
Interest on federal funds sold
and securities purchased under
agreements to resell 324 289 12.1%
------------ ------------
Total interest income 317,673 321,297 (1.1%)
Interest Expense
Interest on deposits 101,780 88,076 15.6%
Interest on short-term
borrowings 35,423 34,126 3.8%
Interest on long-term funding 22,995 30,696 (25.1%)
------------ ------------
Total interest expense 160,198 152,898 4.8%
------------ ------------
Net Interest Income 157,475 168,399 (6.5%)
Provision for loan losses 5,193 3,686 40.9%
------------ ------------
Net interest income after
provision for loan losses 152,282 164,713 (7.5%)
Noninterest Income
Trust service fees 10,711 9,307 15.1%
Service charges on deposit
accounts 25,545 22,982 11.2%
Mortgage banking, net 9,696 5,829 66.3%
Card-based and other nondeposit
fees 11,711 11,047 6.0%
Retail commissions 15,773 16,365 (3.6%)
Bank owned life insurance income 4,365 3,592 21.5%
Asset sale gains, net 442 354 N/M
Investment securities gains, net 6,075 1,538 N/M
Other 7,170 6,194 15.8%
------------ ------------
Total noninterest income 91,488 77,208 18.5%
Noninterest Expense
Personnel expense 76,277 74,492 2.4%
Occupancy 11,321 10,654 6.3%
Equipment 4,254 4,223 0.7%
Data processing 7,832 7,711 1.6%
Business development and
advertising 5,068 4,101 23.6%
Other intangible amortization 1,718 2,281 (24.7%)
Other 26,174 21,198 23.5%
------------ ------------
Total noninterest expense 132,644 124,660 6.4%
------------ ------------
Income before income taxes 111,126 117,261 (5.2%)
Income tax expense 35,301 33,712 4.7%
------------ ------------
Net Income $75,825 $83,549 (9.2%)
============ ============
Earnings Per Share:
Basic $0.59 $0.63 (6.3%)
Diluted $0.59 $0.63 (6.3%)
Average Shares Outstanding:
Basic 127,606 132,259 (3.5%)
Diluted 128,750 133,441 (3.5%)
For The Six
Months Ended First half
June 30, 07 vs 06
(in thousands, except per share
amounts) 2007 2006 % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $550,942 $539,588 2.1%
Interest and dividends on
investment securities and
deposits in other financial
institutions
Taxable 61,109 71,765 (14.8%)
Tax-exempt 19,579 19,949 (1.9%)
Interest on federal funds sold
and securities purchased under
agreements to resell 507 538 (5.8%)
------------ ------------
Total interest income 632,137 631,840 0.0%
Interest Expense
Interest on deposits 200,079 165,954 20.6%
Interest on short-term
borrowings 70,606 67,370 4.8%
Interest on long-term funding 44,931 63,248 (29.0%)
------------ ------------
Total interest expense 315,616 296,572 6.4%
------------ ------------
Net Interest Income 316,521 335,268 (5.6%)
Provision for loan losses 10,275 8,151 26.1%
------------ ------------
Net interest income after
provision for loan losses 306,246 327,117 (6.4%)
Noninterest Income
Trust service fees 21,020 18,204 15.5%
Service charges on deposit
accounts 48,567 43,941 10.5%
Mortgage banking, net 19,246 10,233 88.1%
Card-based and other nondeposit
fees 23,034 20,933 10.0%
Retail commissions 31,252 31,843 (1.9%)
Bank owned life insurance income 8,529 6,663 28.0%
Asset sale gains, net 2,325 124 N/M
Investment securities gains, net 7,110 3,994 N/M
Other 13,105 12,046 8.8%
------------ ------------
Total noninterest income 174,188 147,981 17.7%
Noninterest Expense
Personnel expense 150,324 143,795 4.5%
Occupancy 22,908 22,412 2.2%
Equipment 8,648 8,811 (1.8%)
Data processing 15,510 15,751 (1.5%)
Business development and
advertising 9,473 8,350 13.4%
Other intangible amortization 3,379 4,624 (26.9%)
Other 50,538 44,388 13.9%
------------ ------------
Total noninterest expense 260,780 248,131 5.1%
------------ ------------
Income before income taxes 219,654 226,967 (3.2%)
Income tax expense 70,434 61,711 14.1%
------------ ------------
Net Income $149,220 $165,256 (9.7%)
============ ============
Earnings Per Share:
Basic $1.17 $1.24 (5.6%)
Diluted $1.16 $1.23 (5.7%)
Average Shares Outstanding:
Basic 127,796 133,678 (4.4%)
Diluted 129,034 134,903 (4.4%)
N/M - Not meaningful.
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except per
share amounts) 2Q07 1Q07 4Q06 3Q06 2Q06
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $276,981 $273,961 $282,918 $284,397 $278,573
Interest and dividends on
investment securities
and deposits in other
financial institutions
Taxable 30,583 30,526 29,962 30,225 32,649
Tax-exempt 9,785 9,794 9,794 9,691 9,786
Interest on federal
funds sold and
securities purchased
under agreements to
resell 324 183 292 260 289
-------- -------- -------- -------- --------
Total interest income 317,673 314,464 322,966 324,573 321,297
Interest Expense
Interest on deposits 101,780 98,299 98,757 99,242 88,076
Interest on short-term
borrowings 35,423 35,183 31,971 30,450 34,126
Interest on long-term
funding 22,995 21,936 26,174 26,664 30,696
-------- -------- -------- -------- --------
Total interest
expense 160,198 155,418 156,902 156,356 152,898
-------- -------- -------- -------- --------
Net Interest Income 157,475 159,046 166,064 168,217 168,399
Provision for loan losses 5,193 5,082 7,068 3,837 3,686
-------- -------- -------- -------- --------
Net interest income after
provision for loan
losses 152,282 153,964 158,996 164,380 164,713
Noninterest Income
Trust service fees 10,711 10,309 9,941 9,339 9,307
Service charges on
deposit accounts 25,545 23,022 24,214 23,438 22,982
Mortgage banking, net 9,696 9,550 1,735 2,833 5,829
Card-based and other
nondeposit fees 11,711 11,323 11,267 10,461 11,047
Retail commissions 15,773 15,479 15,053 14,360 16,365
Bank owned life insurance
income 4,365 4,164 5,102 4,390 3,592
Asset sale gains
(losses), net 442 1,883 91 89 354
Investment securities
gains (losses), net 6,075 1,035 (436) 1,164 1,538
Other 7,170 5,935 7,568 6,911 6,194
-------- -------- -------- -------- --------
Total noninterest
income 91,488 82,700 74,535 72,985 77,208
Noninterest Expense
Personnel expense 76,277 74,047 68,315 71,321 74,492
Occupancy 11,321 11,587 10,971 10,442 10,654
Equipment 4,254 4,394 4,300 4,355 4,223
Data processing 7,832 7,678 8,033 7,668 7,711
Business development and
advertising 5,068 4,405 4,365 4,142 4,101
Other intangible
amortization 1,718 1,661 1,999 2,280 2,281
Other 26,174 24,364 26,415 23,478 21,198
-------- -------- -------- -------- --------
Total noninterest
expense 132,644 128,136 124,398 123,686 124,660
-------- -------- -------- -------- --------
Income before income
taxes 111,126 108,528 109,133 113,679 117,261
Income tax expense 35,301 35,133 34,632 36,791 33,712
-------- -------- -------- -------- --------
Net Income $75,825 $73,395 $74,501 $76,888 $83,549
======== ======== ======== ======== ========
Earnings Per Share:
Basic $0.59 $0.57 $0.58 $0.58 $0.63
Diluted $0.59 $0.57 $0.57 $0.58 $0.63
Average Shares
Outstanding:
Basic 127,606 127,988 129,202 131,520 132,259
Diluted 128,750 129,299 130,366 132,591 133,441
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per share &
full time
equivalent 2nd Qtr 1st Qtr
employee data) YTD 2007 YTD 2006 2007 2007
----------------------------------------------------------------------
Summary of
Operations
Net interest income 316,521 335,268 157,475 159,046
Provision for loan
losses 10,275 8,151 5,193 5,082
Asset sale gains,
net 2,325 124 442 1,883
Investment
securities gains
(losses), net 7,110 3,994 6,075 1,035
Noninterest income
(excluding
securities & asset
gains) 164,753 143,863 84,971 79,782
Noninterest expense 260,780 248,131 132,644 128,136
Income before
income taxes 219,654 226,967 111,126 108,528
Income taxes 70,434 61,711 35,301 35,133
Net income 149,220 165,256 75,825 73,395
Taxable equivalent
adjustment 13,284 13,170 6,724 6,560
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $1.17 $1.24 $0.59 $0.57
Diluted 1.16 1.23 0.59 0.57
Dividends 0.60 0.56 0.31 0.29
Market Value:
High $35.43 $34.83 $33.49 $35.43
Low 32.14 30.69 32.14 33.16
Close 32.70 31.53 32.70 33.60
Book value 17.56 17.20 17.56 17.54
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 7.01% 6.56% 6.99% 7.03%
Interest-bearing
liabilities rate 4.04 3.51 4.06 4.02
Net interest margin 3.57 3.53 3.53 3.62
Return on average
assets 1.47 1.55 1.48 1.46
Return on average
equity 13.42 14.51 13.49 13.35
Return on tangible
average equity (2) 22.89 24.31 23.14 22.63
Efficiency ratio
(3) 52.73 50.40 53.23 52.22
Effective tax rate 32.07 27.19 31.77 32.37
Dividend payout
ratio (4) 51.28 45.16 52.54 50.88
----------------------------------------------------------------------
Average Balances
Assets $20,466,452 $21,567,709 $20,558,803 $20,373,075
Earning assets 18,519,978 19,624,955 18,605,024 18,433,986
Interest-bearing
liabilities 15,755,186 16,959,965 15,834,843 15,674,645
Loans 15,020,844 15,422,315 15,082,850 14,958,148
Deposits 13,630,815 13,427,789 13,702,872 13,557,958
Wholesale funding 4,472,630 5,739,755 4,482,437 4,462,713
Stockholders'
equity 2,241,460 2,297,002 2,253,872 2,228,909
Stockholders'
equity / assets 10.95% 10.65% 10.96% 10.94%
----------------------------------------------------------------------
At Period End
Assets $20,849,140 $20,507,413
Loans 15,154,232 14,856,003
Allowance for loan
losses 206,493 203,495
Goodwill 929,168 871,629
Mortgage servicing
rights, net 55,829 48,342
Other intangible
assets, net 44,770 40,953
Deposits 14,077,618 13,980,967
Wholesale funding 4,348,565 4,075,919
Stockholders'
equity 2,228,911 2,236,134
Stockholders'
equity / assets 10.69% 10.90%
Tangible equity /
tangible assets
(5) 6.31% 6.75%
Shares outstanding,
end of period 126,910 127,497
Shares repurchased
during period,
including
settlements 2,000 1,909
Average per share
cost of shares
repurchased during
period $32.81 $35.74
Year-to-date shares
repurchased during
period, including
settlements 3,909 1,909
YTD average per
share cost of
shares repurchased
during period $34.24 $35.74
----------------------------------------------------------------------
Selected trend
information
Average full time
equivalent
employees 5,069 5,089
Trust assets under
management, at
market value $6,100,000 $5,900,000
Mortgage loans
originated for
sale 455,928 338,802
Portfolio serviced
for others 6,571,000 6,087,000
Mortgage servicing
rights, net /
Portfolio serviced
for others 0.85% 0.79%
(in thousands,
except per share &
full time
equivalent 4th Qtr 3rd Qtr 2nd Qtr
employee data) 2006 2006 2006
----------------------------------------------------------------------
Summary of
Operations
Net interest income 166,064 168,217 168,399
Provision for loan
losses 7,068 3,837 3,686
Asset sale gains,
net 91 89 354
Investment
securities gains
(losses), net (436) 1,164 1,538
Noninterest income
(excluding
securities & asset
gains) 74,880 71,732 75,316
Noninterest expense 124,398 123,686 124,660
Income before
income taxes 109,133 113,679 117,261
Income taxes 34,632 36,791 33,712
Net income 74,501 76,888 83,549
Taxable equivalent
adjustment 6,568 6,495 6,503
----------------------------------------------------------------------
Per Common Share
Data (1)
Net income:
Basic $0.58 $0.58 $0.63
Diluted 0.57 0.58 0.63
Dividends 0.29 0.29 0.29
Market Value:
High $35.13 $32.58 $34.45
Low 32.13 30.27 30.69
Close 34.88 32.50 31.53
Book value 17.44 17.44 17.20
----------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets
yield 6.95% 6.89% 6.74%
Interest-bearing
liabilities rate 3.93 3.84 3.65
Net interest margin 3.64 3.63 3.59
Return on average
assets 1.43 1.46 1.58
Return on average
equity 13.19 13.36 14.86
Return on tangible
average equity (2) 22.31 22.32 25.18
Efficiency ratio
(3) 50.26 50.19 49.82
Effective tax rate 31.73 32.36 28.75
Dividend payout
ratio (4) 50.00 50.00 46.03
----------------------------------------------------------------------
Average Balances
Assets $20,635,203 $20,891,001 $21,266,792
Earning assets 18,713,784 18,968,584 19,342,628
Interest-bearing
liabilities 15,765,774 16,070,975 16,717,761
Loans 15,233,207 15,404,223 15,515,789
Deposits 13,748,444 13,884,404 13,534,725
Wholesale funding 4,547,042 4,636,853 5,391,108
Stockholders'
equity 2,240,143 2,283,933 2,254,933
Stockholders'
equity / assets 10.86% 10.93% 10.60%
----------------------------------------------------------------------
At Period End
Assets $20,861,384 $20,926,523 $21,128,354
Loans 14,881,526 15,284,608 15,405,630
Allowance for loan
losses 203,481 203,442 203,411
Goodwill 871,629 871,629 875,727
Mortgage servicing
rights, net 66,620 67,931 69,282
Other intangible
assets, net 42,614 44,613 46,893
Deposits 14,316,071 14,208,545 13,646,408
Wholesale funding 4,113,827 4,277,636 5,033,961
Stockholders'
equity 2,245,493 2,270,380 2,274,860
Stockholders'
equity / assets 10.76% 10.85% 10.77%
Tangible equity /
tangible assets
(5) 6.67% 6.77% 6.69%
Shares outstanding,
end of period 128,747 130,216 132,283
Shares repurchased
during period,
including
settlements 1,957 2,000 31
Average per share
cost of shares
repurchased during
period $33.11 $31.43 $-
Year-to-date shares
repurchased during
period, including
settlements 8,018 6,061 4,061
YTD average per
share cost of
shares repurchased
during period $32.83 $32.74 $33.38
----------------------------------------------------------------------
Selected trend
information
Average full time
equivalent
employees 5,084 5,117 5,112
Trust assets under
management, at
market value $5,800,000 $5,500,000 $5,200,000
Mortgage loans
originated for
sale 374,427 388,914 359,361
Portfolio serviced
for others 8,330,000 8,226,000 8,134,000
Mortgage servicing
rights, net /
Portfolio serviced
for others 0.80% 0.83% 0.85%
----------------------------------------------------------------------
(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) 2007 2006 % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $203,495 $203,408 0.0%
Balance related to acquisition 2,991 - N/M
Provision for loan losses 5,193 3,686 40.9%
Charge offs (7,258) (7,423) (2.2%)
Recoveries 2,072 3,740 (44.6%)
-------------------
Net charge offs (5,186) (3,683) 40.8%
-------------------
Ending Balance $206,493 $203,411 1.5%
===================
Six months ended
June 30,
-----------------------------
(in thousands) 2007 2006 % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance $203,481 $203,404 0.0%
Balance related to acquisition 2,991 - N/M
Provision for loan losses 10,275 8,151 26.1%
Charge offs (14,127) (13,485) 4.8%
Recoveries 3,873 5,341 (27.5%)
-------------------
Net charge offs (10,254) (8,144) 25.9%
-------------------
Ending Balance $206,493 $203,411 1.5%
===================
Credit Quality Jun07 vs
Mar07
Jun 30, Mar 31,
2007 2007 % Change
------------------------------
Nonaccrual loans $171,303 $146,864 16.6%
Loans 90 or more days past due and
still accruing 8,446 6,131 37.8%
Restructured loans - 25 (100.0%)
--------------------
Total nonperforming loans 179,749 153,020 17.5%
Other real estate owned 19,237 16,439 17.0%
--------------------
Total nonperforming assets 198,986 169,459 17.4%
====================
Provision for loan losses 5,193 5,082 2.2%
Net charge offs 5,186 5,068 2.3%
Allowance for loan losses / loans 1.36% 1.37%
Allowance for loan losses /
nonperforming loans 114.88 132.99
Nonperforming loans / total loans 1.19 1.03
Nonperforming assets / total assets 0.95 0.83
Net charge offs / average loans
(annualized) 0.14 0.14
Year-to-date net charge offs / average
loans 0.14 0.14
Credit Quality Jun07 vs
Jun06
Dec 31, Sept 30, June 30,
2006 2006 2006 % Change
----------------------------------------
Nonaccrual loans $136,734 $123,743 $95,426 79.5%
Loans 90 or more days past
due and still accruing 5,725 4,826 7,591 11.3%
Restructured loans 26 28 29 (100.0%)
------------------------------
Total nonperforming
loans 142,485 128,597 103,046 74.4%
Other real estate owned 14,417 13,866 14,947 28.7%
------------------------------
Total nonperforming
assets 156,902 142,463 117,993 68.6%
==============================
Provision for loan losses 7,068 3,837 3,686 40.9%
Net charge offs 7,029 3,806 3,683 40.8%
Allowance for loan losses /
loans 1.37% 1.33% 1.32%
Allowance for loan losses /
nonperforming loans 142.81 158.20 197.40
Nonperforming loans / total
loans 0.96 0.84 0.67
Nonperforming assets / total
assets 0.75 0.68 0.56
Net charge offs / average
loans (annualized) 0.18 0.10 0.10
Year-to-date net charge offs
/ average loans 0.12 0.10 0.11
Period End Loan Composition Jun07 vs
Mar07
Jun 30, Mar 31,
2007 2007 % Change
--------------------------------
Commercial, financial & agricultural $3,958,911 $3,788,800 4.5%
Real estate - construction 2,137,276 2,084,883 2.5%
Commercial real estate 3,703,464 3,723,289 (0.5%)
Lease financing 88,967 89,524 (0.6%)
-----------------------
Commercial 9,888,618 9,686,496 2.1%
Home equity (a) 2,144,357 2,042,284 5.0%
Installment 865,474 869,719 (0.5%)
-----------------------
Retail 3,009,831 2,912,003 3.4%
Residential mortgage 2,255,783 2,257,504 (0.1%)
-----------------------
Total loans $15,154,232 $14,856,003 2.0%
=======================
Period End Loan Jun07 vs
Composition Jun06
Dec 31, Sept 30, June 30,
2006 2006 2006 % Change
--------------------------------------------
Commercial, financial &
agricultural $3,677,573 $3,549,216 $3,505,819 12.9%
Real estate -
construction 2,047,124 2,186,810 2,122,136 0.7%
Commercial real estate 3,789,480 3,755,037 3,872,819 (4.4%)
Lease financing 81,814 79,234 74,919 18.8%
-----------------------------------
Commercial 9,595,991 9,570,297 9,575,693 3.3%
Home equity (a) 2,164,758 2,166,312 2,151,858 (0.3%)
Installment 915,747 940,139 945,123 (8.4%)
-----------------------------------
Retail 3,080,505 3,106,451 3,096,981 (2.8%)
Residential mortgage 2,205,030 2,607,860 2,732,956 (17.5%)
-----------------------------------
Total loans $14,881,526 $15,284,608 $15,405,630 (1.6%)
===================================
(a) Home equity includes home equity lines and residential mortgage
junior liens.
Period End Deposit Composition Jun07 vs
Mar07
Jun 30, Mar 31,
2007 2007 % Change
--------------------------------
Demand $2,466,130 $2,425,248 1.7%
Savings 966,673 903,738 7.0%
Interest-bearing demand 1,900,227 1,805,658 5.2%
Money market 3,564,539 3,880,744 (8.1%)
Brokered CDs 751,900 650,084 15.7%
Other time deposits 4,428,149 4,315,495 2.6%
-----------------------
Total deposits $14,077,618 $13,980,967 0.7%
=======================
Customer Repo Sweeps (b)
$900,964 $945,019 (4.7%)
(b) Included within short-term
borrowings.
Period End Deposit Jun07 vs
Composition Jun06
Dec 31, Sept 30, June 30,
2006 2006 2006 % Change
--------------------------------------------
Demand $2,756,222 $2,534,686 $2,276,463 8.3%
Savings 890,380 959,650 1,031,993 (6.3%)
Interest-bearing demand 1,875,879 1,712,833 1,975,364 (3.8%)
Money market 3,822,928 3,959,719 3,434,288 3.8%
Brokered CDs 637,575 630,637 518,354 45.1%
Other time deposits 4,333,087 4,411,020 4,409,946 0.4%
-----------------------------------
Total deposits $14,316,071 $14,208,545 $13,646,408 3.2%
===================================
Customer Repo Sweeps (b)
$875,099 $895,766 $885,503 1.7%
(b) Included within
short-term borrowings.
---------------------------------------------------------------------
N/M - Not meaningful.
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Six months ended June 30, 2007
---------------------------------
Average Interest Average
(in thousands) Balance Income / Yield /
Expense Rate
---------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,697,338 $360,976 7.51%
Residential mortgage 2,345,020 71,331 6.10
Retail 2,978,486 120,172 8.10
----------------------
Total loans 15,020,844 552,479 7.41
Investments and other 3,499,134 92,942 5.31
----------------------
Total earning assets 18,519,978 645,421 7.01
Other assets, net 1,946,474
-----------
Total assets $20,466,452
===========
Interest-bearing liabilities:
Savings deposits $905,620 $1,911 0.43%
Interest-bearing demand deposits 1,816,668 17,684 1.96
Money market deposits 3,771,053 71,265 3.81
Time deposits, excluding
Brokered CDs 4,325,023 97,001 4.52
----------------------
Total interest-bearing
deposits, excluding Brokered
CDs 10,818,364 187,861 3.50
Brokered CDs 464,192 12,218 5.31
----------------------
Total interest-bearing
deposits 11,282,556 200,079 3.58
Wholesale funding 4,472,630 115,537 5.20
----------------------
Total interest-bearing liabilities 15,755,186 315,616 4.04
Noninterest-bearing demand
deposits 2,348,259
Other liabilities 121,547
Stockholders' equity 2,241,460
-----------
Total liabilities and stockholders'
equity $20,466,452
===========
-----------
Net interest income and rate spread
(1) $329,805 2.97%
===========
Net interest margin (1) 3.57%
Taxable equivalent adjustment $13,284
===========
Six months ended June 30, 2006
---------------------------------
Average Interest Average
(in thousands) Balance Income / Yield /
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
deposits 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
===========
Three months ended June 30, 2007
---------------------------------
Average Interest Average
Balance Income / Yield /
Expense Rate
---------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,811,861 $182,536 7.46%
Residential mortgage 2,333,225 35,948 6.17
Retail 2,937,764 59,351 8.09
----------------------
Total loans 15,082,850 277,835 7.38
Investments and other 3,522,174 46,562 5.29
----------------------
Total earning assets 18,605,024 324,397 6.99
Other assets, net 1,953,779
-----------
Total assets $20,558,803
===========
Interest-bearing liabilities:
Savings deposits $928,207 $1,110 0.48%
Interest-bearing demand deposits 1,833,762 9,097 1.99
Money market deposits 3,723,407 35,172 3.79
Time deposits, excluding
Brokered CDs 4,339,520 49,407 4.57
----------------------
Total interest-bearing
deposits, excluding Brokered
CDs 10,824,896 94,786 3.51
Brokered CDs 527,510 6,994 5.32
----------------------
Total interest-bearing
deposits 11,352,406 101,780 3.60
Wholesale funding 4,482,437 58,418 5.23
----------------------
Total interest-bearing liabilities 15,834,843 160,198 4.06
Noninterest-bearing demand
deposits 2,350,466
Other liabilities 119,622
Stockholders' equity 2,253,872
-----------
Total liabilities and stockholders'
equity $20,558,803
===========
-----------
Net interest income and rate spread
(1) $164,199 2.93%
===========
Net interest margin (1) 3.53%
Taxable equivalent adjustment $6,724
===========
Three months ended June 30, 2006
---------------------------------
Average Interest Average
Balance Income / Yield /
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
deposits 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
===========
(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
Media:
Cindy Moon-Mogush, Corporate Communications, 920-431-8034